Bechara v Legal Services Commissioner - [2010] NSWCA 369

No judgment structure available for this case.

New South Wales

Court of Appeal

CITATION: Bechara v Legal Services Commissioner [2010] NSWCA 369

HEARING DATE(S): 31 August 2010

JUDGMENT DATE:
21 December 2010

JUDGMENT OF: McColl JA at 1; Young JA at 2; McClellan CJ at CL at 8

DECISION: Appeal dismissed with costs.

CATCHWORDS: LEGAL PRACTITIONERS – professional misconduct – appeal from Administrative Decisions Tribunal – legal practitioner acted for three clients whose proceedings were heard together with evidence in one being evidence in the other – whether practitioner’s failure to apportion hearing costs constituted professional misconduct – appeal dismissed

LEGISLATION CITED: Legal Profession Act 1987 (NSW)
District Court Rules 1973 (NSW)
Legal Profession Regulation 1994 (NSW)
Legal Profession Act 2004
Supreme Court Act 1970

CATEGORY: Principal judgment

CASES CITED: A Goninan & Co v Atlas Steels [2003] NSWSC 956
Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79
Bechara v Kobeissi [2005] NSWSC 192
Boguslawski & Anor v Gdynia Amerkya Linie (No. 2) [1951] 2 KB 328
Carter v Newcastle Wallsend Coal Co (1909) 9 SR (NSW) 474
Centennial Coal Company Ltd v Xstrata Coal Pty Ltd (2009) 76 NSWLR 129, 146-7
Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186
Council of the NSW Bar Association v Meakes [2006] NSWCA 340
Credit Connect v Carney; Credit Connect v Smit [2010] NSWSC 910
Hoshott v Council of the Law Society of New South Wales (Supreme Court of NSW, Meagher, Sheller and Stein JJA, 17 December 1997, Unreported)
Howes v Law Society of the Australian Capital Territory (Supreme Court of ACT, Gallop ACJ, Higgins and Crispin JJ, 23 July 1998, Unreported)
In re Metropolitan Coal Consumers' Association (Grieb's Case) (1890) 45 Ch D 606
International Financial Society v Smith (1896) 22 VLR 114
Law Society of New South Wales v Foreman (1991) 24 NSWLR 238
Law Society of New South Wales v Moulton [1981] 2 NSWLR 736
Law Society of NSW v Harvey [1976] 2 NSWLR 154
Legal Services Commissioner v Bechara (No 2) [2009] NSWADT 145
Legal Services Commissioner v Bechara (No 3)) [2009] NSWADT 313
Legal Services Commissioner v Bechara [2008] NSWADT 215
Legal Services Commissioner v Nikolaidis (No 3) [2005] NSWADT 200
Malouf v Jezairy [2003] NSWSC 762
Maria Bechara v Mohamed Kobeissi (26 March 2007, Unreported)
Meade v Queensland Ambulance Service [1996] QSC 62
Murray v Legal Services Commissioner [1999] NSWCA 70; (1999) 46 NSWLR 224
New South Wales Bar Assn v Livesey [1982] 2 NSWLR 231
NSW Bar Association v Cummins [2001] NSWCA 284,
O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204
Oppenshaw v Whitehead; Mucklow v Whitehead (1854) 9 Exch 304; (1854) 156 ER 163
Pester; Leslie v Hydro-Electric Corporation (1997) 7 Tas R 233
Prentice v Cummins [2002] FCA 1503; (2002) 124 FCR 67
Price v Clinton [1906] 2 Ch 487
R v Hore; Ex parte Brisbane City Council [1969] Qd R 75
Re Veron; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) NSW 136 Evatt v Bar Association of New South Wales (1968) 117 CLR 177
Re Walker; Ex parte Kemp (1887) 3 WN (NSW) 123
Su v So, Verekers Lawyers v So [2010] NSWCA 119
Tucker v Graham (1869) 8 SCR (NSW) 341
Veghelyi v Council of the Law Society of New South Wales (New South Wales Court of Appeal, Kirby P, Mahoney and Priestley JJA, 6 October 1995)
Wade v Licardy (1993) 33 NSWLR 1
Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279

TEXTS CITED: Attending on More Than One Client: Whether there is a Requirement to Apportion” (2008) 46 Law Society Journal 44.
Quick on Costs (Lawbook Company, 1996)
Apportioning Costs when Acting for More Than One Client” (2009) 47 Law Society Journal 30

PARTIES: Maria Bechara (appellant)
Legal Services Commissioner (respondent)

FILE NUMBER(S): CA 2009/325901

COUNSEL: P Neil SC/P Doyle-Gray (appelant)
C A Webster (respondent)

SOLICITORS: Bechara & Company Lawyers (appellant)
Legal Services Commissioner (respondent)

LOWER COURT JURISDICTION: NSW Administrative Decisions Tribunal

2009/325901

McCOLL JA
YOUNG JA
McCLELLAN CJ at CL
TUESDAY 21 DECEMBER 2010

BECHARA v LEGAL SERVICES COMMISSIONER

Judgment

1 McCOLL JA: I agree with McClellan CJ at CL.

2 YOUNG JA: I have read in draft the reasons of McClellan CJ at CL and I agree that the appeal should be dismissed for the reasons he gives.

3 The core matter involved in this appeal is how far a solicitor who acts in substantially identical cases heard together (or one after the other) can justify charging each client for the total number of hours spent by the instructing solicitor in court or associated attendances.

4 I agree with what McClellan CJ at CL says in paras [138] and [139] that where a solicitor is retained to act for multiple clients whose proceedings are heard together with evidence in one being evidence in the other (regardless of whether the proceedings are formally consolidated), and the clients are charged on a time-costed basis, there must be an apportionment of time spent on matters common to two or more of the proceedings. One unit of time cannot be charged more than once.

5 I also agree that the precise mechanism of apportionment will depend on the circumstances of the case. There will be some cases where there are some special features of a particular client’s case that are absent from the others such as where it is sought to be shown that the negligence affected the clients in different ways so that damages need to be established by different evidence in each case. There the apportionment would need to factor in some broad brush approach to the time devoted to each client with the balance shared equally. In other cases, an equal apportionment would be appropriate. However as his Honour notes, in all cases, the apportionment must pay due regard to the principle that one unit of time may not be charged more than once.

6 Although some confusion could have been caused by reference to the relatively few and ancient authorities in this area of the law, it would seem to me that, as his Honour has demonstrated and the evidence before the Tribunal supported, solicitors of good repute would not charge each client for the full amount of time spent as this appellant has deliberately done.

7 After the draft was prepared, the appellant referred us to Centennial Coal Company Ltd v Xstrata Coal Pty Ltd (2009) 76 NSWLR 129, 146-7. I must confess I did not find any assistance from that case.

: This appeal is concerned with the conduct of a legal practitioner who acted for more than one client in proceedings in the District Cout. The Administrative Decisions Tribunal found that the appellant had charged grossly excessive amounts of professional costs. She was found guilty of professional misconduct, reprimanded and fined. She claims that the Tribunal made a number of errors of law and seeks to have the Tribunal’s orders set aside.

The relevant facts

9 The circumstances from which the controversy arose are not complex. The relevant events occurred prior to the repeal of the Legal Profession Act 1987 (NSW) (“LPA 1987”).

10 In 1997, three persons, who were members of the same family (“the clients”) suffered injuries on three different days within the same premises. Two of the clients were aged in their seventies, were frail and could not speak English, while the third had just turned 18. Each client brought proceedings for common law damages in the District Court against the NSW Land and Housing Commission. The appellant was retained to act for each of them.

11 The appellant provided each client with a copy of her usual conditional costs agreement. Clause 3 was in the following terms:

“We will charge you, subject to the successful outcome of the Work at the following hourly rates for each hour engaged on your Work:-

We will charge you at the 6 minute time costing, which means that each unit is the equivalent of 6 minutes. …”

12 Because each of the accidents happened in similar circumstances, it was agreed before the commencement of the hearing that the proceedings would be heard together with evidence in one proceeding being evidence in the other. There was no order for consolidation under Part 12 Div 3 of the District Court Rules 1973 (NSW). The clients were represented during the hearing by the one barrister, Mr Serge Galitsky. The appellant herself only attended court when judgment was handed down. A junior solicitor was present throughout the hearing. The proceedings were contested, the hearing lasting six days. Judgment was reserved.

13 Each plaintiff was successful and recovered verdicts of $98,005; $27,446 and $30,050 respectively plus orders for costs.

14 Between March and June 2003, the appellant prepared three itemised bills of costs (“the solicitor/client bills”). She separately charged each client for the time her junior solicitor spent at court at the rate of $250 per hour for each hour of the hearing, making a total of $750 per hour. In addition, the appellant separately charged each client $280 per hour ($840 per hour in total) for her attendance when judgment was delivered. A summary of the solicitor’s costs for the hearing is as follows:

Date	Toufika Hussein	Mohamed Hussein	Fatemah Hussein	Total
13/11/01	Day 1 (75 units)	$1,875	$1,875	$1,875	$5,625
14/11/01	Day 2 (77 units)	$1,925	$1,925	$1,925	$5,775
15/11/01	Day 3 (80 units)	$2,000	$2,000	$2,000	$6,000
16/11/01	Day 4 (60 units)	$1,500	$1,500	$1,500	$4,500
19/11/01	Day 5 (30 units)	$750	$750	$750	$2,250
25/02/02	Day 6 (75 units)	$1,875	$1,875	$1,875	$5,625
$9,925	$9,925	$9,925	$29,775
08/04/02	Delivery of judgment (37 units)	$1,036	$1,036	$1,036	$3,108
$10,961	$10,961	$10,961	$32,883
25% premium	$2,740.25	$2,740.25	$2,740.25	$8,220.75
TOTAL	$13,701.25	$13,701.25	$13,701.25	$41,103.75
TOTAL incl GST	$15,071.38	$15,071.38	$15,071.38	$45,213.18

15 The appellant made no attempt to identify the time spent on the matter of each client or the nature of the work actually undertaken by the junior solicitor during each hour of the hearing. Nor was any attempt made to apportion between the clients costs common to all matters.

16 The appellant subsequently prepared three party/party bills of costs (“the party/party bills”) which contained the same items as the solicitor/client bills. The appellant entered into negotiations with the defendant’s solicitor seeking agreement as to the amount to be paid for party/party costs. On 25 August 2003 the appellant wrote to the clients offering to reduce her fees if costs were compromised. However, agreement could not be reached and the costs were ultimately assessed by a costs assessor, Mr John McIntyre, pursuant to clause 26.15 of the Legal Profession Regulation 1994 (NSW). On 22 December 2004, Mr McIntyre assessed party/party costs and disbursements in the sum of $37,776.62; $27,277.10 and $27,040.02 respectively. In the course of assessing the party/party costs, he called for and sighted each of the solicitor/client bills.

17 After he had completed his assessments, Mr McIntyre wrote to the Office of the Legal Services Commissioner (“the Commissioner”). He was critical of both the appellant and Mr Galitsky for charging each client separately at the full agreed rate for attendances which were carried out simultaneously. Mr McIntyre was of the view that the costs of attending court during the hearing should have been apportioned. However, he did not suggest the manner in which they should be apportioned. Mr McIntyre expressed concern that the appellant may have engaged in conduct “which involves the deliberate charging of grossly excessive amounts.”

18 On 17 January 2005, Mr McIntyre’s determination and reasons were sent to the appellant. That material did not indicate a concern that the appellant had overcharged her clients. On this date the appellant again offered to reduce her fees.

19 On 20 January 2005, the Commissioner initiated a complaint pursuant to s 134(2) of the LPA 1987 alleging that the appellant had “deliberately charged grossly excessive amounts of costs”. The Commissioner’s complaint was amended on 8 March 2005 to include the following particulars:

“1. The solicitor simultaneously conducted three personal injury actions on behalf of three members of the same family … against the same Defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before His Honour Judge Walmsley for seven days commencing on 13 November 2001.

2. The solicitor failed to apportion costs common to the three matters.”

20 On the same day, the Commissioner wrote to the appellant and, inter alia, invited her to respond “generally to the allegation that you have deliberately charged grossly excessive amounts of costs.”

21 The appellant responded by letter dated 25 February 2005. In that letter she contended that the circumstances of each matter were different, each matter was conducted separately up until the time of the hearing and accordingly her costs agreement entitled her to charge a separate fee for each matter. She insisted that nothing in her costs agreements required an apportionment of costs. Notwithstanding this, she said that she had contacted the clients advising them that she was prepared to accept a reduction in the firm’s costs and disbursements.

22 The appellant complained about the course adopted by the Commissioner. Adopting a similar view to that which had apparently been taken by Mr Galitsky, she wrote:

“(a) Your letter enclosed a ‘Record of Decision’ to initiate complaints based on the letter from Costs Assessor Mr John Eric McIntyre dated 22 December, 2004. I note that you did not seek my response to the letter prior to initiating your own complaint.

(b) I note you have failed to provide proper particulars of your complaint, as you are required to do by Section 137 of the Legal Profession Act 1987. Instead you have annexed to Mr McIntyre’s, [sic] which makes some general complaint.

(c) Mr McIntyre considered there was basis under Section 208Q of the Legal Profession Act 1987 to refer this matter to you. You have decided to proceed under Section 134 of the same Act, and to rely on Section 136. You have not furnished me with any particulars, which are required by Section 136. Instead, you request that I ‘respond generally to the allegation.’

Am I to understand that you embrace Mr McIntyre’s conclusions? Do you make the same ‘allegations?’

(d) I note that McIntyre states (page 2):

‘I do not have sufficient information to determine whether or not the conduct was deliberate, but I am satisfied that there is sufficient information to require me to refer the matter to you pursuant to Section 208Q of the Legal Profession Act 1987 and I do so.’

It would seem that Mr McIntyre was of the view that both Counsel and Solicitor were somehow obliged to apportion the costs over the three matters. Indeed he says (page 1):

‘…both the Solicitor and Counsel have failed to properly apportion the amounts claimed over the three matters when that clearly should have been done.’

Mr McIntyre has formed the view as to the conduct of both Solicitor and Client and attributed a ‘failure’ to perform an apportionment that was ‘clearly’ obligatory. I am left to second guess whether you embrace each facet of this complaint. I consider this inherently unfair.”

23 The Commissioner responded by letter dated 8 March 2005 in the following terms:

“(a) It is not my practice to seek a Practitioner’s response to a section 208Q referral before making a complaint based on the referral and there is no requirement that I do so.

(b) I believe the basis of Mr McIntyre’s referral, and my complaint based on it, is clear, namely that you failed to apportion costs common to the three matters. For the sake of clarity, the complaint and relevant particulars are as follows:

Complaint

Fatemah Hussein v New South Wales Land & Housing Commission, Toufika Hussein v New South Wales Land & Housing Commission

Mohamed Hussein v New South Wales Land & Housing Commission

Particulars

1. The solicitor simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohamed Hussein and Toufika Hussein, against the same Defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before His Honour Judge Walmsley for seven days commencing on 13 November 2001.

2. The solicitor failed to apportion costs common to the three matters.

…

New South Wales Bar Association v Amor-Smith

The Legal Services Commissioner v Nikolaidis (No 2)

24 The appellant responded on 18 April 2005, adopting an aggressive stance. She wrote, inter alia:

“No sensible particulars were provided in the initial determination and in light of the amended complaint it is necessary to further canvas the inadequacy of particulars of that complaint.

However the present particulars in respect of the amended complaint still are inadequate. The charge is serious: you provide no indication of how my conduct is ‘deliberate’ (an issue on which McIntyre reserved, see page 2 of his referral), nor of how the ‘overcharging’ is said to be ‘gross.’ Each of these matters begs the question, but your correspondence is silent on every issue. It is not for me to formulate requests, but for you, in fulfilment of your statutory duty, to formulate the proper complaint.

I reserve my right to take appropriate proceedings with regard to this complaint.

I do not know whether your comments in paragraph lettering (b) is meant to constitute particulars of my alleged misconduct or merely argument.

I have set out my position about my costs with respect to each member of the Hussein family in my letter to you of 25 February, 2005.

At no stage have you indicated what quantum was appropriate to charge in this case. At no stage have you indicated the proper basis of apportionment.

I respectfully suggest the entire tenor of your comment is one of conclusion. You have prejudged the issue and you are promoting your own theory of the law, or what you believe the law should be.

I have charged fees in accordance with my Costs Agreement.

I note no allegation is raised with regard to my disclosed fee rate. Accordingly, I deny that any of my costs constitute overcharging, ‘gross’ or otherwise.

I note your concession there appears to be no authority directly on the ‘point’ regarding the alleged requirement of apportionment. Notwithstanding this you continue with the assertion that you ‘do not see there can be any doubt about the requirement for apportionment.’ The proposition you so confidentially propound is not free from doubt on the contrary your view is not followed in practice adopted by Counsel or to my understanding by solicitors.

I respectfully submit that your subjective view, or indeed an unsupported assertion, that a rule requiring apportionment exists, can neither provide a proper criterion for judging a practitioner’s conduct nor constitute a particular instance of breach.

may be

issue

It appears to me that your entire treatment of the referral and the process of formulating the complaint, betrays an attitude of invincible bias.

The substance of your complaint is that of overcharging, yet you have not told me what the proper costs should be in each case. In the course of your letter you invite me to reduce my costs, without any indication of the appropriate basis of charging, rate(s) of costs, hourly rate etc or indeed the proper basis of charge.

I note your response of ‘noted’ to paragraph numbered 4 in my correspondence to you of 25 February, 2005. Do you intend to initiate a similar complaint against Mr McIntyre who has charged a separate fee in each matter?

As to paragraph numbered 9 of your correspondence, I accept that I am responsible for the bills.

Please find enclosed as requested a copy of the Judgment of His Honour Judge Walmsley delivered on 8 April, 2002.

I, like Mr Galitsky, decline to respond in open correspondence, to your enquiry as to whether I would be prepared to reduce my costs. Also, like Mr Galitsky, I believe it is impossible for you to further conduct a proper enquiry and accordingly I invite you to withdraw or dismiss your complaint.”

25 The Commissioner continued to investigate the matter and obtained the transcript of the original proceedings. On 15 March 2006 he wrote to the appellant saying:

“Against this background, my preliminary view is that costs of the hearing should either have been divided so as to charge each Plaintiff for that part of the hearing relating to their claim, and/or apportioned so as to charge each Plaintiff a proportion of the total costs of the hearing. I note in the party/party costs assessment, the Costs Assessor apportioned costs of the hearing so as to allow each Plaintiff to recover one-third. You charged each Plaintiff the total costs of the hearing. I believe this may constitute conduct involving the deliberate charging of grossly excessive amounts of costs, which is declared by the Act to be professional misconduct.

You deny you have deliberately charged grossly excessive amounts of costs.

Whilst you have agreed to accept a reduction in costs and disbursements, you state this was always your intention and was not the result of my complaint. The reduction does not appear to be based on any division or apportionment of costs.

I draw your attention to the following provisions of the Legal Profession Act 1987, which apply to this complaint by virtue of clause 16 to Schedule 9 to the Legal Profession Act 2004:

155 Decision after investigation of complaint

(1) After a Council or the Commissioner has completed an investigation into a complaint against a legal practitioner, the complaint is to be dealt with in accordance with this section.

(2) The Council or the Commissioner must institute proceedings in the Tribunal with respect to the complaint against the legal practitioner if satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.

(3) However, if the Council or the Commissioner is satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct (but not professional misconduct), the Council or the Commissioner may instead:

(a) reprimand the legal practitioner, or

(b) dismiss the complaint if satisfied that the legal practitioner is generally competent and diligent and that no other material complaints have been made against the legal practitioner.

(4) The Council or the Commissioner is to dismiss the complaint against the legal practitioner if satisfied that there is no reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct.

(5) If a Council or the Commissioner decides to dismiss a complaint or to reprimand a legal practitioner under subsection (3) and the complainant requested a compensation order in connection with the complaint, the Council or the Commissioner may require the payment of compensation by the legal practitioner or the successful mediation of the consumer dispute before the decision takes effect.

(6) If a Council or the Commissioner decides to reprimand a legal practitioner under this section and the practitioner does not consent to the reprimand, the practitioner may appeal to the Tribunal against the decision. Section 171N applies to an appeal under this subsection.

I must now determine if I am satisfied that there is sufficient evidence to create a reasonable likelihood of a finding of unsatisfactory professional conduct or professional misconduct should the matter be brought before the Legal Services Division of the Administrative Decisions Tribunal. Accordingly, I seek your submissions in relation to that determination. I ask that you address specifically whether the conduct outlined above amounts to professional misconduct or unsatisfactory professional conduct and, in the event that your submissions address a finding of unsatisfactory professional conduct, I invite you to address specifically the appropriate course of action under subsections 3 and 5 of section 155 above.

You are welcome to provide any comments you may have generally about the matter. I look forward to receiving your response as soon as possible and at the latest, within 28 days. If your response is not received within that period I will proceed to make my determination on the basis of the material already to hand.”

26 The appellant says, and her evidence was not challenged, that she did not receive this letter and as a consequence did not respond to it.

27 In late June 2005 the appellant notified the Commissioner that she had offered to substantially reduce her fees. The Commissioner had previously invited the appellant to reduce her hearing costs to the amounts allowed by Mr McIntyre but she declined to do so.

28 On 3 July 2006, the Commissioner determined that he was satisfied that there was a reasonable likelihood that the Legal Services Division of the Administrative Decisions Tribunal (“the Tribunal”) would find the appellant guilty of professional misconduct or unsatisfactory professional conduct. The Commissioner’s “Reasons for Decision” were as follows:

“ Complaint 1

1. The practitioner simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohammed Hussein and Toufika Hussein, against the same Defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before his Honour Judge Walmsley for seven days commencing on 13 November 2001 and it was agreed that evidence in each would be evidence in the others.

2. The practitioner failed to apportion costs common to the three matters.

3. The practitioner charged each client the total costs of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportioning such costs so as to charge each client a proportion of the total costs of the hearing.

At s 155(2), the Legal Profession Act 1987 states that where I am satisfied there is a reasonable likelihood that a legal practitioner will be found guilty of professional misconduct or unsatisfactory professional conduct. I must institute Tribunal proceedings.

Given the factors outlined in paragraphs above, I consider there is a reasonable likelihood the Practitioner will be found guilty of professional misconduct or unsatisfactory professional conduct and accordingly resolve to refer the Practitioner to the Tribunal.”

29 On 25 September 2006, the Commissioner filed an application together with particulars in the Tribunal. The application read in part:

“Ground 1

Fatemah Hussein v New South Wales Land & Housing Commission, Toufika Hussein v New South Wales Land & Housing Commission

Mohamed Hussein v New South Wales Land & Housing Commission

Particulars 1.1

The Respondent simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohammed Hussein and Toufika Hussein, against the same Defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before his Honour Judge Walmsley for seven days commencing on 13 November 2001 and it was agreed that evidence in each would be evidence in the others.

Particulars 1.2

The Respondent failed to apportion costs common to the three matters.

Particulars 1.3

The Respondent charged each client the total costs of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportioning such costs so as to charge each client a proportion of the total costs of the hearing.”

30 On 20 August 2007 the Tribunal ordered the Commissioner to file further particulars. Those further particulars, which are subject to Grounds 8 and 9 of this appeal, were filed on 15 October 2007. The relevant particulars were as follows:

“19. In addition to the contractual requirement imposed on the Respondent by her own costs agreement that she only charge each client for the work actually undertaken by her for the client, she was also bound:

By her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989; Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995 at [3] at page 4) at pages 4-5) to only charge for work actually performed by her for each individual client.

By her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5, 8 and 9.
By her statutory obligation pursuant to section 208A of the Legal Profession Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work.

20. In charging each client the full amount quoted in her costs agreement, the Respondent was in breach of:

The terms of her costs agreements in that she failed to apportion the time spent in Court by her junior solicitor with the result that each client was charged for time spent exclusively on matters relating to the other clients. She clearly stated in each costs agreement that she would charge only for work performed for the recipient of the costs agreement;

Her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989); Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal , 6 October 1995 at [3] at page 4) at pages 4 – 5) to only charge for work actually performed by her for each individual client. Breach of that obligation resulted in each client being charged for time spent in court on matters exclusively relating to the other clients;

Her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5, 8 and 9. Her breach is three-fold: firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients; and thirdly, charging $750 per hour without reference to the nature of the actual work undertaken by the junior solicitor during each hour.

Her obligation under section 208A of the Legal Profession Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work. Her breach is three-fold; firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients; and, thirdly, charging $750 per hour without reference to the nature of the actual work undertaken by the junior solicitor during each hour.

21. Alternatively, in the circumstances, the Respondent, in order to meet her obligations both under her costs agreements, at law and pursuant to the Legal Profession Act 1987 should have apportioned her costs equally amongst the clients. Apportionment in the circumstances would, most likely, have resulted in a fair and reasonable fee being charged to each client, and a measure of justice and fairness achieved between the Respondent and the clients.”

31 At around the same time the further particulars were supplied, the Commissioner indicated that he intended to rely upon a report prepared by Ms Michelle Castle, an expert in legal costing issues (“the Castle report”). Ms Castle stated in her report that although she was not aware of any relevant authority, the general principle emerging from cost assessments was that a lawyer could not charge the same unit of time more than once. She said that an experienced cost assessor would have apportioned the costs of the hearing by reference to the time actually spent on each client’s case, or more likely, by apportioning the time equally amongst the clients.

32 The information in the Castle report was obtained at some time after 20 August 2007 and did not form part of the Commissioner’s original application to the Tribunal. The Tribunal ordered the Commissioner to make an interlocutory application for leave to rely upon the Castle report. Leave was granted on 4 August 2008 (Legal Services Commissioner v Bechara [2008] NSWADT 215 (“the interlocutory decision”). The interlocutory decision is the subject of Ground 7 of this appeal.

33 The matter was heard by the Tribunal in February 2009. Judgment was handed down on 18 June 2009 (Legal Services Commissioner v Bechara (No 2) [2009] NSWADT 145) (“the liability decision”). The liability decision is lengthy, reflecting in part the manner in which the proceedings were conducted and the issues raised. The Tribunal concluded that the appellant was guilty of professional misconduct being not “mere overcharging, an error of judgment or an example of the excessive view of her own worth.” By charging the full costs to each client for each of the six hearing days, the Tribunal concluded, the appellant “deliberately charged grossly excessive fees”. The Tribunal found that the appellant was guilty of professional misconduct. The Tribunal determined the appellant’s penalty separately (Legal Services Commissioner v Bechara (No 3)) [2009] NSWADT 313) (“the penalty decision”).

34 The appellant gave evidence before the Tribunal. She denied ever intending to overcharge her clients. She stated that when she sent the solicitor/client bills to her clients, she did not intend that the clients would be obliged to pay the amounts set out therein because what she truly intended to charge them depended on the amount received on assessment of party/party costs.

35 When cross-examined, the appellant accepted that one of the reasons for agreeing to the defendant’s proposal that the matters be heard together was the likely time and cost savings. She agreed that she charged each client the full amount of the time that was spent in court. She denied that she sought to bill the maximum amount which she thought she could “get away with”. She maintained that she honestly believed that, given that the three matters were separate, she was entitled to charge each client separately for her presence at the hearing. She denied that she deliberately decided not to ascertain the time spent in court that was particularly referable to each client as against the time spent on matters common to all three clients. She disagreed with the suggestion that, in view of the terms of the costs agreements, she knew that she could only actually charge for time spent on work actually undertaken for the particular client. In response to the assertion that she sent the solicitor/client bills “with full knowledge that there had been no assessment made as to whether all of that time was spent on behalf of all three clients”, the appellant stated that she disagreed with the words “full knowledge” but accepted that no assessment had been made.

36 The appellant admitted that in her response to the defendant’s Notices of Objections, she had conceded that the costs of the hearing days should be apportioned as between the related proceedings, however she maintained that she made this concession in order to facilitate settlement of the party/party costs issue.

Legislative framework

37 This appeal is brought pursuant to ss 729A(1) and (5) of the Legal Profession Act 2004 and s 48(2)(f) of the Supreme Court Act 1970. The appeal is by way of rehearing: Supreme Court Act s 75A(6), Legal Profession Act 2004 ss 729A(2) and (3).

38 The appellant was charged with a breach of s 208Q of the LPA 1987. Subsection (2) provides:

“(2) For the purposes of this Act, the deliberate charging of grossly excessive amounts of costs and deliberate misrepresentations as to costs are each declared to be professional misconduct.”

39 Accordingly the issue which required resolution was whether the appellant deliberately charged her clients grossly excessive costs.

40 The Commissioner’s original complaint was lodged before the LPA 1987 was repealed and accordingly clause 16 of the Savings and Transitional provisions in Schedule 9 of the LPA 2004 applies. Clause 16 of Schedule 9 has the consequence that the complaint must be dealt with pursuant to the relevant provisions of the LPA 1987.

41 The relevant provisions of the LPA 1987 are as follows:

“134 Making of complaints

(1) A complaint may be made under this Part about the conduct of a legal practitioner.

(2) A complaint may be made by:

…

155 Decision after investigation of complaint

(1) After a Council or the Commissioner has completed an investigation into a complaint against a legal practitioner, the complaint is to be dealt with in accordance with this section.

(2) The Council or the Commissioner must institute proceedings in the Tribunal with respect to the complaint against the legal practitioner if satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.

…

(1) When considering an application relating to a bill of costs, the costs assessor must consider:

(a) whether or not it was reasonable to carry out the work to which the costs relate, and

(b) whether or not the work was carried out in a reasonable manner, and

(2) A costs assessor is to determine the application by confirming the bill of costs or, if the assessor is satisfied that the disputed costs are unfair or unreasonable, by substituting for the amount of the costs an amount that, in his or her opinion, is a fair and reasonable amount.

…

(4) If the barrister or solicitor is liable under section 182 (3) to pay the costs of the costs assessment (including the costs of the costs assessor), the costs assessor is to determine the amount of those costs. The costs incurred by the client are to be deducted from the amount payable under the bill of costs and the costs of the costs assessor are to be paid to the Manager, Costs Assessment.

…

208C Costs agreements not subject to assessment

(1) A costs assessor is to decline to assess a bill of costs if:

(a) the disputed costs are subject to a costs agreement that complies with Division 3, and

(2) If the dispute relates to any other matter, costs are to be assessed on the basis of that specified rate despite section 208A. The costs assessor is bound by a provision for the payment of a premium that is not determined to be unjust under section 208D.

(3) This section does not apply to any provision of a costs agreement that the costs assessor determines to be unjust under section 208D.

(4) This section does not apply to a costs agreement applicable to the costs of legal services if a barrister or solicitor failed to make a disclosure in accordance with Division 2 of the matters required to be disclosed by section 175 or 176 in relation to those costs.

208D Unjust costs agreements

(1) A costs assessor may determine whether a term of a particular costs agreement entered into by a barrister or solicitor and a client is unjust in the circumstances relating to it at the time it was made.

(2) For that purpose, the costs assessor is to have regard to the public interest and to all the circumstances of the case and may have regard to:

(a) the consequences of compliance, or non-compliance, with all or any of the provisions of the agreement, and

(b) the relative bargaining power of the parties, and

(c) whether or not, at the time the agreement was made its provisions were the subject of negotiation, and

(d) whether or not it was reasonably practicable for the applicant to negotiate for the alteration of, or to reject, any of the provisions of the agreement, and

(e) whether or not any of the provisions of the agreement impose conditions that are unreasonably difficult to comply with, or not reasonably necessary for the protection of the legitimate interests of a party to the agreement, and

(f) whether or not any party to the agreement was reasonably able to protect his or her interests because of his or her age or physical or mental condition, and

(g) the relative economic circumstances, educational background and literacy of the parties to the agreement and of any person who represented any of the parties to the agreement, and

(h) the form of the agreement and the intelligibility of the language in which it is expressed, and

(i) the extent to which the provisions of the agreement and their legal and practical effect were accurately explained to the applicant and whether or not the applicant understood those provisions and their effect, and

(3) For the purposes of this section, a person is taken to have represented a person if the person represented the other person, or assisted the other person to a significant degree, in the negotiations process up to, or at, the time the agreement was made.

(4) In determining whether a provision of the agreement is unjust, the costs assessor is not to have regard to any injustice arising from circumstances that were not reasonably foreseeable when the agreement was made.

…

208Q Referral of misconduct to Commissioner

(1) If a costs assessor considers that any conduct of a barrister or solicitor involves the deliberate charging of grossly excessive amounts of costs or deliberate misrepresentations as to costs, the costs assessor must refer the matter to the Commissioner.

Professional misconduct

42 Before considering the statutory provisions, it is appropriate to remember the approach which the courts have taken to the supervision of the conduct of members of the legal profession. In NSW Bar Association v Cummins [2001] NSWCA 284, Spigelman CJ discussed the concept of professional misconduct. The Chief Justice said (at [50] – [51]):

“[50] It has not generally been useful or necessary to distinguish the terminology of ‘professional misconduct’ from other phrases such as a ‘fit and proper person’, ‘good fame and character’, ‘unprofessional conduct’, ‘unsatisfactory professional conduct’ etc. Statutory formulations differ from one jurisdiction to another. Some of the terminology, originally based on statute, has been adopted in cases decided under the inherent jurisdiction. In the exercise of this jurisdiction, it is not appropriate that the Court should indulge in the splitting of fine hairs on terminology.
[51] The words ‘professional misconduct’ are broad and general words. Their meaning may vary from one context to another. Their interpretation involves what is often referred to as an ‘ambiguity’, although I prefer to describe this kind of difficulty for an interpreter as one of ‘inexplicitness’ rather than ‘ambiguity’: see Repatriation Commission v Vietnam Veterans' Association of Australia NSW Branch Inc (2000) 48 NSWLR 548 at 577 [116].”

43 His Honour’s observations echo the High Court’s previous discussion in Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186 at 200:

“The rules which govern the conduct of members of a body of professional men, such as the Bar of New South Wales, may (though there is, of course, no logical dichotomy) be divided roughly into two classes. In the one class stand those rules which are mainly conventional in character. To say this is not to deny their importance from the point of view of the client. But they are designed primarily to regulate the conduct of members of the profession in their relations with one another. Many of these rules are reduced to writing, and they are from time to time interpreted, and perhaps modified to fit specific cases, by resolutions of the governing body of the profession. Examples of this class in the case of the Bar are the rule which forbids advertising, the rules with regard to retainers, the rule that one of Her Majesty's counsel must not appear without a junior. A breach of any of these rules is treated seriously, but would not warrant disbarment - at least unless it were shown to be part of a deliberate and persisent (sic) system of conduct.

Rules of the other class are not merely conventional in character. They are fundamental. They are, for the most part, not to be found in writing. It is not necessary that they should be reduced to writing, because they rest essentially on nothing more and nothing less than a generally accepted standard of common decency and common fairness. …”

44 As Clyne made plain, there are no fixed categories of professional misconduct. Much depends on whether the conduct falls outside “generally accepted standard[s] of common decency and common fairness”. Previous examples of professional misconduct have included wilfully misleading the court (New South Wales Bar Assn v Livesey [1982] 2 NSWLR 231); removing documents in contravention of a court order (Howes v Law Society of the Australian Capital Territory (Supreme Court of ACT, Gallop ACJ, Higgins and Crispin JJ, 23 July 1998, Unreported); permitting conflicts of interest to arise (Law Society of New South Wales v Moulton [1981] 2 NSWLR 736); failing to account for money received (Re Walker; Ex parte Kemp (1887) 3 WN (NSW) 123); misleading a client (Hoshott v Council of the Law Society of New South Wales (Supreme Court of NSW, Meagher, Sheller and Stein JJA, 17 December 1997, Unreported); gross neglect and delay (Legal Practitioners Conduct Board v Hay [2001] SASC 322; (2001) 83 SASR 454); failing to adequately supervise an unqualified clerk (Law Society of New South Wales v Foreman (1991) 24 NSWLR 238); breaching an undertaking given to another lawyer (Wade v Licardy (1993) 33 NSWLR 1); and, in certain situations, criminal and/or personal misconduct (Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279).

45 The present appeal must be determined having regard to section 208Q of the LPA 1987, which provides that deliberate charging of grossly excessive costs constitutes professional misconduct (see also Re Veron; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) NSW 136 at 144 (and authorities cited therein); Evatt v Bar Association of New South Wales (1968) 117 CLR 177; Veghelyi v The Law Society of New South Wales (NSW Court of Appeal, Kirby P, Mahoney and Priestley JJA, 6 October 1995, Unreported)). Mahoney J in Veghelyi explained why that is so (at 9 – 11):

“The Court has traditionally and for centuries exercised control over ‘the excessive fees and other unnecessary demands’ made by solicitors of the court: see, eg, Holdsworth's History of English Law, 2nd ed, Vol 6, 434; Vol 12, 56-62. Clients are, or may frequently be, in a vulnerable position vis-a-vis their solicitors; the presumption of undue influence is, I think, based at least in part upon the fact that when making decisions clients ordinarily or at least frequently place trust in their solicitors. They ordinarily are not in a position to know without investigation what work must be done and what charges are fair and reasonable; they ordinarily assume that the solicitor will make only such charges.

Solicitors are, on the other hand, informed, or in a position to inform themselves, of what work may be required and what are fair and reasonable charges. They are, in that sense, in a position of advantage and trust is placed in them. Clients are entitled to be protected against the abuse of such an advantage. It is, I am inclined to think, the fact that that advantage has been misused which may, in a particular case, warrant what the solicitor does being categorised as professional misconduct.”

46 His Honour went on to discuss the circumstances in which charges may be considered “excessive”. His Honour explained (at 9 – 12):

“A solicitor's entitlement to remuneration is conventionally stated in terms of what is fair and reasonable in the circumstances: see Re Stuart; Ex parte Cathcart (1893) 2 QB 201; Clare v Joseph (1907) 2 KB 369 at 372, 376, 378; New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 121-123, 127-128, 142-144. Where charges are so far beyond that as to be grossly disproportionate, professional misconduct may be involved. This is so in England and in Australia; a somewhat similar principle appears to have been adopted in the United States of America notwithstanding the different attitude taken in that country to lawyers' costs: see generally American Bar Association Model Rules of Professional Conduct, in particular R1.5 which provides ‘a lawyer's fee shall be reasonable ...’ and R8.4 which states that violation (or attempted violation) of any rule constitutes "professional misconduct". For a discussion of these rules, see G Hazard, Jr and WW Hodes, The Law of Lawyering, 2nd ed, 1990, Vol 1, and S Gillers and RD Simon, Jr, Regulation of Lawyers: Statutes and Standards, 1991. A principle stated in such terms is, of course, inherently indeterminative. But I do not think that it is possible to formulate the principle in terms which are more specific.

The determination of what in a particular case is fair and reasonable will require consideration of various factors. S208G of the Legal Profession Act 1987 provides:

‘208G. In assessing what is a fair and reasonable amount of costs, a costs assessor may have regard to any or all of the following matters:

(a) the skill, labour and responsibility displayed on the part of the barrister or solicitor responsible for the matter;

(b) the complexity, novelty or difficulty of the matter;
(c) the quality of the work done and whether the level of expertise was appropriate to the nature of the work done;

(d) the place where and circumstances in which the legal services were provided;

(e) the time within which the work was required to be done;

(f) the outcome of the matter.’

See also New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116. In that case, Gleeson CJ discussed the determination of ‘reasonable legal expenses’ by reference to ‘the market for legal services in which the client, as a consumer, is obliged to seek such services’ (at 124, 127-128). Kirby P set out eight general criteria for determining ‘reasonable legal expenses’ (at 142-144).

These are, in my opinion, relevant factors for present purposes. Such factors assist in the determination both of what is fair and reasonable and what is grossly disproportionate. But in the end, the quantification of costs remains an exercise in judgment, upon the result of which minds may legitimately differ.

…
It is, in my opinion, to be recognised that whether costs are fair and reasonable will depend upon - or at least be affected by - facts such as the size of the solicitor's firm, the resources employed or available to be employed by it, the value which the lawyers place upon their skill and expertise, and the urgency of the client's requirements. What is fair and reasonable for a large firm may be, in the ordinary case, grossly excessive for a sole practitioner. This is to be borne in mind, for example, in any assessment of the value of the evidence of other solicitors as to whether fees which have been charged are fair and reasonable. What is fair and reasonable, though still a matter of judgment by responsible practitioners, must be determined following an appropriate analysis of the practice of the particular solicitor.”

The appeal

47 The appellant raised 16 grounds of appeal.

Grounds 1 – 3

48 Grounds 1 – 3 are expressed as follows:

Ground 1 The Tribunal erred in law in failing to find that the Appellant had been denied procedural fairness in consequence of the institution of the proceedings in the Tribunal on 25 September 2006 when at the time the Respondent was not satisfied that there was a reasonable likelihood that the appellant would be found guilty of professional misconduct as required by subsection 155(2) of the Legal Profession Act 1997.

Ground 2 Alternatively, the Tribunal erred in law in failing to find that by reason of the Respondent not being so satisfied, the proceedings were vitiated such that the Tribunal lacked jurisdiction to make the findings and orders appealed against.

Ground 3 The Tribunal erred in law in failing to find that taking a course other than dismissing the proceedings would deny the Appellant natural justice.

49 In essence, these grounds challenged the Tribunal’s jurisdiction in light of the fact that the Commissioner’s decision under s 155(2) of the LPA 1987 was made before the Castle report, which the Commissioner described as “critical” to his case, was prepared.

50 The appellant’s argument relied on the decision of this Court in Murray v Legal Services Commissioner [1999] NSWCA 70; (1999) 46 NSWLR 224. The proceedings in Murray were instituted under the LPA 2004 but the transitional provisions applied and the effect of s 155 of the LPA 1987 was considered. This Court decided that the section should be understood to give rise to an expectation on the part of the legal practitioner that, following the investigation of a complaint, the Commissioner would provide the practitioner with an opportunity to make submissions to the Commission before proceedings were instituted in the Tribunal. The Court decided that the Commissioner’s failure to provide the practitioner with a copy of the complaint and an opportunity to respond to it vitiated the proceedings.

51 The appellant submitted that the decision in Murray meant that before instituting proceedings in relation to a practitioner in the Tribunal, the Commissioner was required to do more than formulate a prima facie case. It was submitted that the Commissioner was required to predict the outcome of the proceedings and form the belief that there was a reasonable likelihood that the appellant would be found to have engaged in unsatisfactory professional conduct or professional misconduct (Murray at [88] and [92]). That belief, it was submitted, had to be objectively reasonable.

52 It was further submitted that at the time of initiating proceedings against the appellant, the Commissioner could not have formed the relevant view on an objectively reasonable basis. The appellant submitted that without the Castle report or other evidence, the Commissioner could not reasonably have held the view that the appellant was guilty of professional misconduct and was accordingly not entitled to commence proceedings in the Tribunal.

53 It was further submitted that the Tribunal erred by misunderstanding the evidence before it on this issue, which led to its conclusion that it had jurisdiction to determine the matter.

54 In my opinion these grounds of appeal must fail. Before forming his opinion, the Commissioner had Mr McIntyre’s report (which included his opinion that the hearing costs should have been apportioned), the solicitor/client and party/party bills, the transcript of the first five days of the trial hearing and Walmsley DCJ’s judgment. Whether or not proper professional conduct required an apportionment was a question capable of being determined both by the Commissioner and the Tribunal without expert evidence. No doubt the Castle report was of assistance but the issue was one which could be resolved by the relevant person’s understanding of the proper obligation of a legal practitioner to his or her client. The essence of the allegation, which was the foundation for the Commissioner’s decision, was that the appellant had charged for work she had not done. In my opinion there were reasonable grounds for that opinion.

55 With respect to the allegation of a denial of procedural fairness it is apparent that the appellant was provided with a copy of Mr McIntyre’s letter to the Commissioner and the decision of the Commissioner to initiate a complaint pursuant to s 134(2) of the LPA 1987. She was later provided with an amended record of decision. That communication brought forward a detailed response from the appellant by letter dated 18 April 2005. At that time, and thereafter, the appellant has maintained that she was entitled to charge the agreed hourly fee for attending court for each client and was not required to apportion the fees. Her letter makes plain that her actions were deliberate and that she relied upon the costs agreements to support her position. Although she offered to reduce her fees, she did not offer to apportion them. The appellant said that she did not receive the Commissioner’s letter of 15 March 2006. This is unfortunate but there was no suggestion that the Commissioner did not take appropriate steps to forward it to her through the DX system.

56 The information relied on by the Commissioner in making his decision to initiate proceedings on 3 July 2006 was known to the appellant when she wrote her letter of 25 February 2005. The nature of the Commissioner’s concern was known to her and her response communicated to the Commissioner. The position is quite different to Murray where the problem arose from the fact that the solicitor was not given a full copy of the complaint material relied upon by the Commissioner before the Commissioner decided to initiate the proceedings.

57 The appellant emphasised that Mr McIntyre said in his letter of 22 December 2004 that he did not have sufficient information to determine whether or not the appellant’s conduct was deliberate as required by s 208Q of the LPA 1987. This was no doubt a statement made by him out of abundant caution. The appellant was responsible for the raising of the charge and forwarding of bills to the clients. The lack of apportionment was unlikely to have been an accident or a matter that was overlooked. If however there was initially any doubt that the appellant’s actions were deliberate, the appellant’s letter of 18 April 2005 confidently defended her position, making plain that her actions were deliberate and in her opinion consistent with her costs agreements.

58 Grounds 1 – 3 should be dismissed.

Grounds 4 - 6

59 Grounds 4 to 6 are as follows:

Ground 4 The Tribunal erred in law in finding that the costs agreements between the Appellant and her clients … were subject to assessments under s.208C of the Act.

Ground 5 The Tribunal erred in law in having regard to s.208C of the Act in circumstances where there was no allegation that any provision of the costs agreements was unjust under s.208D of the Act.

Ground 6 The Tribunal erred in law in finding that there was room for the operation of s.208D of the Act in relation to a costs assessor determining that the costs agreements were unjust if the circumstances were shown to support such a finding.

60 The essence of the appellant’s complaint was that there was no basis for concluding that the clients had not been billed fair and reasonable amounts, let alone that they had been charged grossly excessive amounts. Mr McIntyre did not assess the solicitor/client bills. Nor, according to the appellant, could he have assessed those bills. Section 208C of the LPA 1987 specifies the circumstances in which a costs assessor must decline to assess a bill of costs. Before s 208C can apply, there must be a costs agreement that complies with Div 3 of the LPA 1987 (s 208C(1)(a)). Section 208C does not apply where the cost assessor determines that the costs agreement is unjust under s 208D. The Commissioner did not allege that the costs agreements were non-compliant or unjust. Accordingly, it was submitted that s 208C of the LPA 1987 applied with the effect that Mr McIntyre would have been obliged to decline to assess the solicitor/client bills.

61 The Tribunal determined that a costs assessor was not shut out from assessing the solicitor/client bills by s 208C(1) and could have dealt with any dispute about apportionment under s 208C(2). It also found that there was room for the operation of s 208D. The appellant submitted that these conclusions ran contrary to authority (Malouf v Jezairy [2003] NSWSC 762; Bechara v Kobeissi [2005] NSWSC 192; Maria Bechara v Mohamed Kobeissi (26 March 2007, Unreported). It was said that the Tribunal was in error in distinguishing or rejecting those decisions.

62 According to the appellant, the only person who could have assessed the solicitor/client bills was the Commissioner: s 153 of the LPA 1987. However, the Commissioner did not apply for an assessment under this section.

63 The fairness and reasonableness of costs charged were to be determined by assessing the solicitor/client bills on a solicitor/client basis. Unless the solicitor/client bills were assessed, it was not possible to determine whether the clients had been billed fair and reasonable amounts or, if they had not, whether they had been charged grossly excessive costs.

64 The appellant submitted that the party/party assessments could not be relied on to suggest that the solicitor/client bills charged grossly excessive costs. The statutory regime for the assessment of party/party costs is fundamentally different to that which governs solicitor/client costs assessments. In a solicitor/client assessment, the rates specified in the costs agreement are applied (s 208C(2)). In a party/party assessment, the assessor is prevented from applying the terms of a costs agreement in determining the fair and reasonable costs (LPA 1987 s 208H(2)).

65 The appellant also submitted that if the solicitor/client bills had been assessed, then s 208C prevailed over the alleged obligation to apportion the hearing costs with the effect that the costs were enforceable as payment due under a contract.

66 The appellant pointed out that Ms Castle had accepted that, assuming the costs agreements were compliant and not unjust, the only persons capable of raising a dispute about them were the clients or possibly the appellant. The clients neither sought assessment nor complained about the quantum of costs; the Commissioner never sought an assessment of the bills; and because there was no issue that the agreements were non-compliant or unjust, assessment of the solicitor/client bills was barred by s 208C.

67 In the Commissioner’s view, the lack of a formal assessment of the solicitor/client bills did not preclude consideration of whether those bills charged grossly excessive costs. In any event, the bills were not immune from assessment. Although the precondition in s 208C(1)(a) was satisfied (the costs agreements being compliant with Division 3), it could not be said that the dispute “relates only to the rate specified in the agreement for calculating the costs” as required by s 208C(1)(b). The Commissioner submitted that a dispute about the manner in which the specified rates were applied (i.e., without any apportionment) was outside the remit of s 208C(1)(b) and that accordingly the bills were open to assessment: s 208C(2).

68 The Tribunal correctly rejected or distinguished the authorities cited by the appellant.

69 It was further submitted that the Commissioner’s power to institute a complaint did not depend on the presence of a client complaint: compare Veghelyi v Council of the Law Society of New South Wales (New South Wales Court of Appeal, Kirby P, Mahoney and Priestley JJA, 6 October 1995) and Council of the NSW Bar Association v Meakes [2006] NSWCA 340, both of which were considered by the Tribunal.

Determination

70 To my mind the absence of a formal assessment does not preclude consideration being given to whether the appellant is guilty of a breach of s 208Q of the LPA 1987. The essence of the Commissioner’s complaint was that the appellant, by applying her fee agreement in the manner which she did, had charged grossly excessive costs to each client. That issue was capable of being investigated and determined without the need for formal assessments. The essential question, and one which caused the Commissioner concern, was whether the appellant was entitled to charge single units of time more than once. That the individual costs agreements complied with Div 3 of the LPA 1987 and were not themselves unjust under s 208D was not to the point. The question was whether in the circumstances that these three cases were heard together, the appellant was entitled to charge each client for attendance at court as if the matters were heard separately.

71 I would dismiss these grounds of appeal.

Ground 7

72 Ground 7 is expressed in the following terms:

Ground 7 The Tribunal erred in law in admitting the report and evidence of Ms Castle as expert evidence and in relying on same to support its finding that the Appellant deliberately charged grossly excessive fees in the Hussein matters.

73 This ground of appeal concerns the interlocutory decision, the effect of which was to allow the Commissioner to rely on the Castle report.

74 It is necessary to appreciate the background against which the Castle report was admitted. The disciplinary proceedings were originally brought against both the appellant and Mr Galitsky. The basis of the allegation was the same in both matters. The Commissioner relied on the affidavit of Mr McIntyre. The matters were listed for hearing with the appellant’s matter proceeding first. At an early stage in the appellant’s hearing, the Tribunal formed the view that the original particulars were “grossly inadequate”. The Tribunal criticised Mr McIntyre’s affidavit on the basis that it failed to explain why the fees charged were grossly excessive, to what extent, or by what amount. The Tribunal observed that the public interest in proper ventilation of the relevant issues necessitated the provision of further and better particulars. The appellant’s hearing was adjourned to allow for the provision of those particulars.

75 In the meantime, the Tribunal heard the Galitsky matter. In that matter there was extensive argument about the quality of Mr McIntyre’s evidence. The Tribunal concluded that his evidence did not qualify as expert opinion and that the opinions he did express lacked proper foundation. The Tribunal determined that the Commissioner had failed to establish a basis for a finding of professional misconduct. The proceedings against Mr Galitsky were dismissed.

76 The Commissioner filed further particulars and, not surprisingly in the circumstances, sought leave to rely on the Castle report. The interlocutory decision of the Tribunal reads, in part:

“13 … While the Tribunal did not contemplate that anything more than additional particulars would be supplied by the Legal Services Commissioner, the circumstances altered dramatically a few days after the adjournment of Ms Bechara’s case when the associated case of Mr Galitsky was listed for hearing. In those proceedings, it became clear during the course of argument that there was a serious issue about the adequacy of Mr McIntyre’s evidence, and whether it could be properly regarded as providing an expert opinion that was relevant to the matters to be decided by the Tribunal. At this point the reality for the Legal Services Commissioner was that, not only were further particulars required, but consideration would have to be given to the adequacy of Mr McIntyre’s evidence in Ms Bechara’s case, having regard to the similarity of the issue, even though there may well have been differences in the professional legal services provided by the two legal practitioners. It could hardly be surprising that in such circumstances, the Legal Services Commissioner not only supplied further particulars but also applied for leave to rely on the affidavit and report of Ms Castle, thus placing the particulars within the framework of alleged obligations owed by Ms Bechara in seeking to recover appropriate fees for the work performed during the six day hearing in the District Court.

…

15 In this very matter, the Tribunal expressed the view that there was a public interest, extending beyond the immediate parties, that required the proper ventilation of the issues raised. That aspect of the public interest suggests that the issues should be properly ventilated unless there is some significant prejudice to the Respondent solicitor that fairness and justice would dictate that the new report should not be received. No such circumstances exist in the present case. The new report is relatively short and concise and refers to well-established obligations of legal practitioners. The report does not raise a new issue for determination by the Tribunal and the substance of the case remains unaltered.

…

18 … The issue raised by the Legal Services Commissioner appears not to be the subject of a ruling by the Tribunal or a Court: it is a point of some interest to the legal profession and the course proposed by the Applicant appears to be the only way in which the real merits of the issue can be litigated. The need for the new evidence is explained by reference to the issues raised in the Galitsky proceedings. …”

77 Ms Castle was engaged by the Commissioner to provide an independent expert report in relation to legal costing issues. Her report responds to the following four questions:

“1. “Are you aware of any decisions and/or guidelines applicable to the issue whether in circumstances such as those under consideration a solicitor has an obligation to:

a) Apportion costs between the clients equally;

Legal Profession Act 1987

3. If the answer to question 2 is ‘no’ please explain the approached an experienced costs assessor should have adopted.

4. Please explain whether in your opinion an experienced costs assessor should have:

allowed Ms Bechara to charge each client the full amount (based on time spent) for each day of the hearing. Please explain the reasons for that approach;

required Ms Bechara to apportion costs between the clients equally. Please explain the reasons for that approach;

required Ms Bechara to apportion costs between the clients to reflect the time actually spent on each client’s matter. Please explain the reasons for that approach and the manner in which that would have been achieved in these particular circumstances.”

78 The appellant did not dispute Ms Castle’s qualifications but submitted that the Castle report should not have been admitted for a number of reasons. First, insofar as it addressed practices of costs assessors rather than the law which they are bound to apply, the report was said to be irrelevant. In the appellant’s view, evidence about costs assessors’ practice of disregarding s 208C of the LPA 1987 could not be admissible. The practice of costs assessors was simply not relevant to the construction of clause 3 of the costs agreements.

79 Second, the report expressed opinions about matters of domestic law in circumstances where those opinions would determine the outcome of the proceedings. This was said to be prohibited by the rule in Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79 per Lindgren J at 83; see also Prentice v Cummins [2002] FCA 1503; (2002) 124 FCR 67 per Sackville J at 85. In Allstate, Lindgren J observed that evidence of opinion as to the application of a particular law was inadmissible because, inter alia, it would abdicate the judicial function (at 83). In Prentice, Sackville J cited Cross on Evidence as authority for the rule that “domestic law is not a matter for proof or disproof” (at 85).

80 The Castle report was also said to be defective because it overlooked the fact that the appellant’s solicitor/client bills could not have been assessed.

81 It was further submitted that the conclusions proffered by Ms Castle were contrary to law. The appellant submitted that the law could be summarised as follows:

“a. If a contract, properly interpreted, allows concurrent charging to multiple clients of work which bears the character of services concurrently to each of them, there is no room for a ‘guideline’ or principle of assessing practice to refuse it. If a contract, properly interpreted, requires such work to be apportioned, that is a matter of interpreting and applying the contract to extant facts. It does not require or proceed from any additional principle or guideline of costs assessment practice.

b. If a contract in the form of a costs agreement applies, there is no room for any set of ‘directions’ or ‘guidelines’ to apply other than the law of contract itself.

c. If the costs agreements, properly interpreted and applied, allowed full charge and recovery from each client, then an assessor would have been bound to assess accordingly (i.e. on a solicitor and client basis). If the costs agreements properly interpreted and applied allowed a full charge to each client but single recovery for a particular service provided to them in common, the full amount would still be properly billable to each and assessable accordingly, with the clients potentially enjoying rights of contribution and subrogation inter se. If the costs agreements properly interpreted and applied somehow required a fractional apportionment, that would have to be reflected in the assessment.”

82 By way of response to the evidence contained in the Castle report, the appellant relied on the affidavit of Mr Mark Brabazon, a barrister and formerly a costs assessor under the LPA 1987. Mr Brabazon had appeared and advised in a number of costs disputes and appeals and had presented numerous papers on the topic of legal costing. The Commissioner submitted that in the Tribunal’s view, it was Mr Brabazon and not Ms Castle who was expressing opinions on matters of domestic law.

83 The Commissioner took issue with the appellant’s submissions, claiming that they repeated much of the content of Mr Brabazon’s affidavit, whose opinions had been rejected by the Tribunal.

84 In the Commissioner’s view, there was no question as to the admissibility of the Castle report. The Tribunal had specifically requested from the Commissioner further particulars regarding the approach of costs assessors. In the circumstances, the relevance of the Castle report could not be doubted.

85 The Tribunal was satisfied that the appellant’s objections to the Castle report should be rejected. The Tribunal remarked as follows:

“42 … Ms Castle had clearly set out the basis upon which she had expressed her opinion and to the extent that the operation of certain provisions of the 1987 Act might be stated, such statements represented the basis upon which her opinion was formed and were open to be overturned by the [appellant] as was any other assumed basis from which an opinion was formed.”

86 The Tribunal continued:

“57 … Disciplinary issues involving costs and allegations of overcharging by legal practitioners is a notoriously difficult area and besides its own experience as a specialist Tribunal, the Tribunal is entitled to the benefit of any opinion, including expert evidence properly brought forward that deals with the practice of, inter alia, costs assessing.”

Determination

87 I have carefully reviewed the contents of the Castle report. In my view it was properly admitted.

88 Ms Castle’s evidence was that the solicitor’s obligation to apportion emerged from a general principle which, in her expert opinion, was routinely applied by costs assessors. That principle was that “a lawyer cannot charge the same unit of time more than once.” The Commissioner’s case was premised on the existence of an obligation to apportion. The appellant maintained throughout the proceedings that no such obligation existed. In the absence of any previous decisions directly on point, it was incumbent upon the Commissioner to identify the source of the alleged obligation to apportion. The Castle report identified a “general principle” as the source of that obligation. It stated that the obligation belongs to the solicitor, but where a bill of costs fails to make proper apportionment, a costs assessor will disallow those costs that exceed the apportioned value of the fees. Whether or not that principle was capable of being expressed more particularly, the evidence was undoubtedly relevant. It was for the appellant to expose its deficiencies if she could.

89 Some of Ms Castle’s responses do concern matters of domestic law. For instance, in explaining the approach of an experienced costs assessor, Ms Castle discussed the effect of ss 208A and 208B of the LPA 1987. She remarked that:

190 The appellant and the Commissioner have each provided their own costs summaries. Notwithstanding that analysis of those summaries is made difficult by the fact that the parties have taken different approaches to the calculation of costs, I will endeavour to capture as accurately as possible the parties’ respective calculations.

191 The relevant calculations, according to the appellant, are as follows:

Hearing fees billed to client
Professional costs $10,961.00
Success premium (25%) $2,740.25
TOTAL HEARING FEES BILLED $13,701.00

Non-hearing fees billed to client
Total professional costs $62,869.20
Less hearing costs $51,908,20
Plus success premium (25%) $12,977.04
Plus disbursements (excl counsel’s fees) $5,480

$70,366.14

Plus further fees (not in dispute) $11,515.75
TOTAL NON-HEARING FEES BILLED $81,889.89

Amount billed minus amount paid
Hearing fees $13,701.00
Plus non-hearing fees $81,889.89
TOTAL BILLED $95,583.14
Total costs & disbursements paid $67,445.00
TOTAL billed less total paid $28,138.14

Profits costs foregone
Profit costs as per bill dated 31 March 2002 $71,752.72
Profit costs as per bill dated 6 June 2003 $10,264.50
TOTAL PROFIT COSTS $82,017.22
Less total costs & disbursements paid $67,445.00
PROFIT COSTS FOREGONE $14,572.22

192 The appellant did not reduce the hearing charges per se, but reduced her charges across the board. That was how the reduction of $28,138.14 was calculated. According to the appellant, because the hearing charges were, on any view of the evidence, less than the non-hearing charges, it could not be said that she actually charged anything for the hearing. To charge for the hearing, the hearing costs would have had to exceed the non-hearing costs. However, the hearing costs, properly understood, were reduced by more than 100%. That was the position even before the appellant was notified of the Commissioner’s complaint. Accordingly, it could not be said that the appellant received anything by way of profit costs as a result of the hearing.

193 The Commissioner did not take issue with the appellant’s calculations but criticised her approach to the calculation of costs as being inconsistent with the remarks of McColl JA in Nikolaidis at [166]. The Commissioner’s calculations read, in part, as follows:

Professional costs & disbursements for period after 30 June 2000 including GST & success fee (25%)

$78,586.49

PLUS

Disbursements (excl counsel’s fees) $5,480.90
$84,067.39
PLUS

Costs & disbursements April 2003 – Feb 2005 $11,515.75
Total costs & disbursements billed $95.583.14

Professional costs paid $67,445.00
Billed disbursements paid $4,186.70
TOTAL PAID $71,631.70

Professional costs unpaid $21,804.29
Billed disbursements unpaid $2,147.15
TOTAL UNPAID $23,951.33

194 The Tribunal’s calculations were arrived at by determining the percentage of solicitor/client costs that had been paid by January 2003, after the appellant had transferred funds from the client’s trust account to pay the December 2002 interim bills. The amounts are as follows:

195 The Commissioner argued that the appellant’s calculations emphasised the total amount unpaid by Toufika Hussein, including amounts rendered in further bills sent in January 2005. It was submitted that that total amount could not meaningfully assist in determining what the appellant actually received for the hearing.

196 In my view the appellant’s approach, which attributes all of the fee reductions towards the costs of the hearing, is artificial. As the Tribunal observed, her reductions were granted on a “global basis”. Her offer was not to waive the hearing costs in recognition of her misconduct but rather to reduce the costs of Toufika Hussein’s matter across the board in order to achieve a settlement of party/party costs. Those “global” reductions cannot be applied solely to offset the hearing costs.

197 Accordingly, I do not consider that the Tribunal was in error in concluding that the appellant reduced the hearing costs by 14 – 15%.

Weight given to appellant’s failure to reimburse Toufika Hussein

198 In the penalty decision, the Tribunal made reference to the protective purpose of disciplinary orders and the need for specific and general deterrence. It remarked (at [12]) that under normal circumstances it would have imposed a penalty at the higher end of the range. It observed that there were a number of mitigating circumstances, including the appellant’s clear prior record, her lack of experience in matters heard together, the fact that the “consolidation” came at the suggestion of the defendant to the proceedings, the degree of uncertainty as to the circumstances in which the apportionment obligation applies in joint hearings, the unlikelihood of further misconduct on the part of the appellant, and evidence of good character.

199 The Tribunal went on to observe the factors that did not advance the appellant’s case in mitigation of penalty. It found that, unlike in Meakes, there was “no restitution or repayment of costs obtained by the [appellant] where the Tribunal has found that there was actual gross-overcharging. It stated that there was “no attempt by reference to any calculation propounded by the [appellant] that would stand as an indication to the Tribunal that [she] has taken responsibility for her actions and has otherwise demonstrated contrition” (at [14]). There was no evidence that she had taken steps to prevent recurrence of the problem nor that she had contacted the clients and informed them of the findings of the Tribunal. Finally, the appellant was given numerous opportunities to apportion the hearing charges but “steadfastly refused to do so” (at [14]).

200 The appellant submitted that the Tribunal gave disproportionate weight to the lack of repayment of the amount which the Tribunal determined the appellant had overcharged Toufika Hussein. She emphasised the following matters:

1. The circumstances leading to the proceedings in the District Court were unusual and for that reason any punishment over and above a public reprimand would serve no deterrent function;

2. She received no profit costs;

3. Her conduct was not as serious as the conduct of the solicitor in Meakes ;

4. Ms Wilson’s article (published in December 2008) “did not unambiguously comment on this area of the law”;

5. The publicity which had attended the appellant’s case ensured that the profession was now advised of the apportionment obligation;

6. There was no evidence of any subsequent misconduct on the part of the appellant;

7. The clients never complained about the appellant’s charges; and

201 The Commissioner submitted that, notwithstanding the fee reductions, the appellant consistently maintained that she was entitled to charge the duplicated hearing fees. Accordingly, the Tribunal was correct to give substantial weight to the appellant’s failure to apportion her fees.

Determination

202 In my view the appellant’s submission is without merit. I have carefully reviewed the penalty decision and am in no doubt that the Tribunal was correct to consider, as one matter in aggravation of penalty, the appellant’s failure to make full financial restoration to Toufika Hussein. There is nothing to suggest that that matter was given excessive weight or that the decision in Meakes at [91] – [94] should govern the penalty appropriate to the present case. As the Tribunal correctly observed, the reductions which the appellant did make did not manifest any acknowledgement on the part of the appellant that her conduct was wrong. They were merely attempts to facilitate settlement of the party/party costs issue. The fact that they were made on a “global” basis tends to confirm the appellant’s determination to charge each client the full costs of the hearing.

203 For these reasons I would dismiss this ground of appeal.

Disputed factual findings

204 Apart from the grounds of appeal, the appellant challenged a number of factual findings made by the Tribunal. Some of the issues raised have already been discussed. However, some require further consideration.

(1). The Commissioner’s letter to the appellant dated 15 March 2006

205 It was not in dispute that the appellant did not respond to the Commissioner’s letter of 15 March 2006 inviting her to make further submissions. The appellant took issue with the Tribunal’s comment at [13] (“Ms Bechara did not respond to that letter … later claiming that she did not receive it”). A similar complaint was raised in relation to the Tribunal’s remark at [21] (“The respondent practitioner was invited to make submission in relation to that matter … [but] did not avail herself of that opportunity and no further submissions were received from her.”) The appellant submitted that her unchallenged evidence (that she did not receive the letter) was disregarded in favour of the unsubstantiated conclusion that she received the letter and consciously decided not to make any further submissions. It was said that her credit was improperly impugned and that this affected the Tribunal’s later finding that the appellant deliberately grossly overcharged her clients.

206 I do not read the Tribunal’s observations at [13] and [21] as suggesting that the appellant lied about receiving the Commissioner’s letter. It may be that the Tribunal’s use of the word “claiming” was unfortunate, but in my view it was not intended to convey anything other than that the appellant asserted that she never received the relevant correspondence. The Tribunal’s observation that the appellant did not avail herself of the opportunity to make further submissions was accompanied by an acknowledgement that the appellant gave evidence that she did not receive the letter.

207 I do not believe that the Tribunal made a finding inappropriately impugning the appellant’s credit.

(2). Mr McIntyre’s evidence

208 The appellant argued that the Tribunal treated Mr McIntyre as an expert rather than lay witness. Mr McIntyre had not been qualified as an expert and was called to give evidence on factual matters only. Yet it was submitted that the Tribunal relied on his evidence in reaching its conclusion that it was a “central rule of costs assessing and ascertainment of the fairness and reasonableness of costs charged that a lawyer could not charge the same unit of time more than once”. It also treated his evidence as the basis for a finding that the charges were outside the costs agreements and that an apportionment of the hearing charges would normally be expected.

209 The appellant took issue with the Tribunal’s “apparent acceptance” of Mr McIntyre’s evidence that he now saw bills prepared on a party/party basis where the solicitor/client costs were almost identical and that he had seen cases where recovery had been around 95%. The appellant’s position was that in her experience, party/party costs were assessed at a substantially lower figure than solicitor/client costs. In her view, there was no doubt that the clients’ matters fell into that description because the party/party costs would not have included the 25% success premium. Further, Mr McIntyre conceded that he had wrongly disallowed GST on the appellant’s costs and disbursements and the barrister’s fees. These matters alone would have led to a substantial difference between the party/party costs and the solicitor/client costs.

210 In the Commissioner’s view, the Tribunal’s discussion reflected an accurate summary of Mr McIntyre’s evidence. It was irrelevant that there was or may have been a substantial difference in the quantum of party/party and solicitor/client costs.

Determination

211 I see no force in the appellant’s submission. There is nothing to suggest that the Tribunal inappropriately treated Mr McIntyre as an expert witness. On the contrary, it was noted that Mr McIntyre was not qualified to give expert testimony. He was entitled to, and did, give evidence about his experience as a costs assessor, both generally and with regard to the present case. It is to be expected that some of this evidence would touch on the matters which led him to refer the matter to the Commissioner. I have reviewed the relevant remarks of the Tribunal. I am not persuaded that they reveal any error.

(3). The appellant’s evidence

212 The appellant drew attention to a number of aspects her evidence, including her belief that there was no obligation on a solicitor in her position to apportion hearing costs, in relation to which the Tribunal did not reach contrary findings.

213 As I have related (see above at [166]), it is evident that the Tribunal rejected the appellant’s evidence concerning her asserted belief in her entitlement to charge as she did.

(4). Settlement of costs between the appellant and the clients

214 Much of the material falling for consideration under this section repeats the submissions made in relation to grounds 13 and 14 of this appeal.

215 According to the appellant, the Commissioner relied on the following evidence elicited in the course of the appellant’s cross-examination:

“Q. You are aware that in the reply to the particulars provided by the Commissioner that the primary thrust of your defence is that you billed in accordance with the provisions of your costs agreement, the three costs agreements?

A. My position is I did bill in accordance with the rate set out in the costs agreements, yes.

Q. Go to paragraph 3, the first sentence of paragraph 3. You say you will be charging, subject to the success or outcome of the work, at the following hourly rate. Those hourly rates are stipulated below, but specifically you say those rates will be charged for each hour engaged on your work?

A. Yes.

Q. The use of the word ‘your’ in that context I would suggest certainly could not mean anything other than that you would be charging only for the work that was performed for the recipient of that costs agreement?

A. I understand that clause to mean that we would charge you, charge the client, for the work we did for that client.

Q. For that particular client?

A. For that client.

Q. No other client?

A. No.”

216 The appellant submitted that the Tribunal erroneously treated this as an admission that the appellant had deliberately breached clause 3 of her costs agreements. It was said that, even if an obligation to apportion existed (which was not conceded) it could not be reasoned, on the basis of the above evidence, that the appellant consciously breached that obligation. It was never put to the appellant that she did not believe that she (through the employed solicitor) was engaged on the work of all three clients for the entire duration of the hearing (Su v So, Verekers Lawyers v So [2010] NSWCA 119 at [38]).

217 The Commissioner criticised the appellant’s submission on the basis that it did not describe any finding made by the Tribunal which it challenged, nor did it articulate the finding contended for and the reasons why this Court should substitute those findings.

Determination

218 In my view the appellant’s submission is not to the point. The element of deliberateness in s 208Q of the LPA 1987 relates to the act of overcharging, not to the breach of a binding principle or rule. In the circumstances, I do not believe that it was necessary for the appellant to be cross-examined on her beliefs on the question of “simultaneous engagement”. She may well have believed that she was simultaneously engaged on the work of three clients at all times throughout the hearing. In my view that does not advance her case. The question that determines this appeal is whether the appellant, in duplicating her charges, deliberately charged grossly excessive costs.

219 The appellant argued that she believed that the Law Society’s pro forma costs agreement (which she used in the present case) entitled her to charge the full hearing costs to each client. The appellant criticised the Tribunal for making the “erroneous assumption” that the pro forma agreement did not provide this entitlement. The submission reads as follows:

Briginshaw

220 I have already determined that the Tribunal’s finding as to the appellant’s intentions was correct.

221 The appellant argued that the following remarks of the Tribunal were incompatible with a finding of guilt for professional misconduct:

“While there was no ambiguity about the principle of apportionment and the [appellant] was aware of the operation of the principle in connection with party/party costs, there was some lack of precision about the circumstances in which apportionment would be necessary when there was a joint hearing of claims by clients instructed by the same Solicitor. There is a lack of clear direction in professional journals and texts with much of the law being decided under very different cost regimes.” (penalty decision at [13])

222 The Commissioner argued that these remarks were not inconsistent with a finding of professional misconduct. The Tribunal determined at [106] of the liability decision that even if regard was had to the appellant’s subsequent conduct, “the Tribunal would conclude that professional misconduct occurred at some point.” It acknowledged, correctly, that subsequent conduct would be relevant to the penalty to be imposed.

Determination

223 In my view, the Tribunal was not suggesting that the appellant could be excused for believing that she was entitled to duplicate the hearing costs. To my mind, the “lack of precision” referred to by the Tribunal is a reference to the state of the law which was (as it frequently is) silent on the question to be decided. While there were previous decisions endorsing “double charging” under scale fee arrangements, there was no authority to like effect under time-costed fee arrangements. Insofar as the remarks acknowledge a “lack of clear direction” at the professional level, that is an matter for the profession to remedy and is not an appropriate basis for exonerating the appellant.

224 It was submitted that, there being no challenge to the appellant’s evidence that she believed she was entitled to charge the full hearing costs to each client, the appellant could only have held a mistaken belief. This “left no room for a finding of deliberate overcharging”. This point has already been discussed (see above at [154] – [160]).

Conclusion

225 In my judgment the appeal should be dismissed with costs.

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Citations

Bechara v Legal Services Commissioner [2010] NSWCA 369

Most Recent Citation

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Cited Sections

CITATION:	Bechara v Legal Services Commissioner [2010] NSWCA 369
HEARING DATE(S):	31 August 2010
JUDGMENT DATE:	21 December 2010
JUDGMENT OF:	McColl JA at 1; Young JA at 2; McClellan CJ at CL at 8
DECISION:	Appeal dismissed with costs.
CATCHWORDS:	LEGAL PRACTITIONERS – professional misconduct – appeal from Administrative Decisions Tribunal – legal practitioner acted for three clients whose proceedings were heard together with evidence in one being evidence in the other – whether practitioner’s failure to apportion hearing costs constituted professional misconduct – appeal dismissed
LEGISLATION CITED:	Legal Profession Act 1987 (NSW) District Court Rules 1973 (NSW) Legal Profession Regulation 1994 (NSW) Legal Profession Act 2004 Supreme Court Act 1970
CATEGORY:	Principal judgment
CASES CITED:	A Goninan & Co v Atlas Steels [2003] NSWSC 956 Allstate Life Insurance Co v Australia & New Zealand Banking Group Ltd (No 6) (1996) 64 FCR 79 Bechara v Kobeissi [2005] NSWSC 192 Boguslawski & Anor v Gdynia Amerkya Linie (No. 2) [1951] 2 KB 328 Carter v Newcastle Wallsend Coal Co (1909) 9 SR (NSW) 474 Centennial Coal Company Ltd v Xstrata Coal Pty Ltd (2009) 76 NSWLR 129, 146-7 Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186 Council of the NSW Bar Association v Meakes [2006] NSWCA 340 Credit Connect v Carney; Credit Connect v Smit [2010] NSWSC 910 Hoshott v Council of the Law Society of New South Wales (Supreme Court of NSW, Meagher, Sheller and Stein JJA, 17 December 1997, Unreported) Howes v Law Society of the Australian Capital Territory (Supreme Court of ACT, Gallop ACJ, Higgins and Crispin JJ, 23 July 1998, Unreported) In re Metropolitan Coal Consumers' Association (Grieb's Case) (1890) 45 Ch D 606 International Financial Society v Smith (1896) 22 VLR 114 Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 Law Society of NSW v Harvey [1976] 2 NSWLR 154 Legal Services Commissioner v Bechara (No 2) [2009] NSWADT 145 Legal Services Commissioner v Bechara (No 3)) [2009] NSWADT 313 Legal Services Commissioner v Bechara [2008] NSWADT 215 Legal Services Commissioner v Nikolaidis (No 3) [2005] NSWADT 200 Malouf v Jezairy [2003] NSWSC 762 Maria Bechara v Mohamed Kobeissi (26 March 2007, Unreported) Meade v Queensland Ambulance Service [1996] QSC 62 Murray v Legal Services Commissioner [1999] NSWCA 70; (1999) 46 NSWLR 224 New South Wales Bar Assn v Livesey [1982] 2 NSWLR 231 NSW Bar Association v Cummins [2001] NSWCA 284, O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 Oppenshaw v Whitehead; Mucklow v Whitehead (1854) 9 Exch 304; (1854) 156 ER 163 Pester; Leslie v Hydro-Electric Corporation (1997) 7 Tas R 233 Prentice v Cummins [2002] FCA 1503; (2002) 124 FCR 67 Price v Clinton [1906] 2 Ch 487 R v Hore; Ex parte Brisbane City Council [1969] Qd R 75 Re Veron; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) NSW 136 Evatt v Bar Association of New South Wales (1968) 117 CLR 177 Re Walker; Ex parte Kemp (1887) 3 WN (NSW) 123 Su v So, Verekers Lawyers v So [2010] NSWCA 119 Tucker v Graham (1869) 8 SCR (NSW) 341 Veghelyi v Council of the Law Society of New South Wales (New South Wales Court of Appeal, Kirby P, Mahoney and Priestley JJA, 6 October 1995) Wade v Licardy (1993) 33 NSWLR 1 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279
TEXTS CITED:	Attending on More Than One Client: Whether there is a Requirement to Apportion” (2008) 46 Law Society Journal 44. Quick on Costs (Lawbook Company, 1996) Apportioning Costs when Acting for More Than One Client” (2009) 47 Law Society Journal 30
PARTIES:	Maria Bechara (appellant) Legal Services Commissioner (respondent)
FILE NUMBER(S):	CA 2009/325901
COUNSEL:	P Neil SC/P Doyle-Gray (appelant) C A Webster (respondent)
SOLICITORS:	Bechara & Company Lawyers (appellant) Legal Services Commissioner (respondent)
LOWER COURT JURISDICTION:	NSW Administrative Decisions Tribunal