Boland v Legal Profession Board of Tasmania
[2016] TASSC 63
•12 December 2016
[2016] TASSC 63
COURT: SUPREME COURT OF TASMANIA
CITATION: Boland v Legal Profession Board of Tasmania [2016] TASSC 63
PARTIES: BOLAND, Christopher John
v
BOXALL, Andrea
LEGAL PROFESSION BOARD OF TASMANIA
FILE NO: 274/2015
DELIVERED ON: 12 December 2016
DELIVERED AT: Hobart
HEARING DATE: 29 June 2016
JUDGMENT OF: Tennent J
CATCHWORDS:
Professions and Trades – Lawyers – Complaints and discipline – Tasmania – Legal Profession Board finding of unsatisfactory professional conduct following complaint – Application for redetermination of complaint by Supreme Court – Redetermination by way of re-hearing.
Legal Profession Act 2007, ss 420, 421 and 458.
Aust Dig Professions and Trades [1274]
REPRESENTATION:
Counsel:
Applicant: A Wood
First Respondent NA
Second Respondent: K Cuthbertson
Solicitors:
Applicant: Chris Boland Lawyers Pty Ltd
First Respondent: NA
Second Respondent: Tremayne Faye & Rheinberger
Judgment Number: [2016] TASSC 63
Number of paragraphs: 132
Serial No 63/2016
File No 274/2015
CHRISTOPHER JOHN BOLAND v LEGAL PROFESSION BOARD of TASMANIA
REASONS FOR JUDGMENT TENNENT J
12 December 2016
The applicant, Christopher John Boland, is a legal practitioner. The applicant acted for the complainant, Andrea Boxall, between 2006 and 2010. On 11 August 2010, the complainant lodged a written complaint in respect of the applicant with the Legal Profession Board of Tasmania (the Board). The complaint was investigated, and a determination made to refer it for a hearing. The Board conducted a hearing in respect of 12 particulars, and, on 26 September 2014, delivered its decision and reasons for decision. In its decision, the Board dealt individually with the particulars of complaint. It found the factual basis for particulars 1, 2, 3, 4, 8, 9, 10 and 11 was established. It did not so find in relation to particulars 5, 6 and 7. As to particular 12, the Board determined this to be a "catch-all" allegation based on the conduct particularised in particulars 1, 2 and 3, and determined that no disciplinary issues beyond those already dealt with arose. Under the heading "Decision", the Board said the following:
"Having completed the Hearing of the complaint, the Board is required to decide whether it is, or it is not, satisfied that the Practitioner is guilty of unsatisfactory professional conduct. In reaching its decision, the Board has considered the Practitioner's established conduct as a whole, rather than considering whether or not, standing alone, the Practitioner's established conduct under each particular, amounted to unsatisfactory professional conduct.
In preparing and authorising the filing of Consent Orders which did not require the Complainant's husband to make a cash payment to the Complainant should the sale of the matrimonial assets not allow for the agreed apportionment of net assets; in advising the Complainant not to sign the contracts for the sale of the matrimonial home in the face of a Court Order requiring the Complainant to do so; by so doing, causing the Complainant to pay legal costs associated with an application to enforce the Court Orders; by failing to obtain instructions to, or an authority to engage Counsel, and in failing to provide a statement as to the estimated costs of engaging Counsel; by failing to advise the Complainant of increases in fees and costs to be charged; by charging for his work in retaining Counsel and overcharging the Complainant as so found; the Board is satisfied that the Practitioner's conduct fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent practitioner.
Accordingly, the Board is satisfied that the Practitioner is guilty of unsatisfactory professional conduct within the meaning of s420 of the Act.
The Board invites and calls upon the parties to make submissions as to what, if any, Determinations it should make under s454 (2) of the Act, and adjourns the further Hearing of the complaint to a date to be fixed."
On 19 November 2014, those further submissions were made. On 30 March 2015, the Board delivered its determination. It then gave notice of that as follows:
"Take Notice that, having completed a hearing under Part 4.5 of the Legal Profession Act 2007 ('the Act') of the Complainant's complaint against the Legal Practitioner and being satisfied that the Practitioner, an Australian legal practitioner, is guilty of unsatisfactory professional conduct, the Board makes the following determinations under s454 (2) of the Act:
Determinations
1 A Determination under s454 (2) (a) of the Act that the Practitioner be reprimanded.
2 A Determination under s454 (2) (e) of the Act that the Practitioner repay fees paid by the Complainant in the sum of $11,300.00 within 30 days from the date of this notice.
3 A Determination under s454 (2) (m) of the Act that the Practitioner pay to the Board the fixed sum of $30,000.00 of the costs incurred by the Board in investigating and hearing the complaint within 30 days from the date of this notice."
On 20 April 2015, the applicant filed an originating application by which he sought the following orders:
"1Determination, by way of rehearing by the Supreme Court (or in such other manner as the Supreme Court may direct) under section 458 of the Legal Profession Act 2007, of the matter to which the determination of the Second Respondent made against the Applicant and dated 30 March 2015, relates – such rehearing to be limited to paragraphs 1, 2, 3, 4, 8, 10, and 11 of the First Respondent's amended particulars of complaint dated 8 March 2013 or as to such part of the matter as the Court may direct;
2A stay, until further order, of the determination of the Second Respondent made against the Applicant on the complaint of the First Respondent and dated 30 March 2015;
3Costs."
The applicant did not challenge by his originating application the Board's finding in respect of particular 9. That particular was as follows:
9Breached paragraph 3.1 of the Retainer Agreement dated 17 November 2006 and section 143D of the Legal Profession Act 1993 or section 299 of the Legal Profession Act 2007 by failing to advise the Complainant of increases in the fees and costs to be charged.
Particulars
(a) Paragraph 3.1 of the Retainer Agreement between the Practitioner and the Complainant, relating to fees and charges, provides '... The firm will give the client prior notice of any increase.'
(b) The costs agreement dated 17 November 2006 between the Practitioner and the Complainant provided that:
(i)the Practitioner's hourly rate was $220 an hour (including GST);
(ii)an employed solicitor's hourly rate was $176 an hour (including GST); and
(iii)a clerk's hourly rate was $77 an hour (including GST).
(c) The Practitioner increased his fees on 13 January 2009, as follows:
(iv)the Practitioner's hourly rate became $275 an hour (including GST);
(v)an employed solicitor's hourly rate became $220 an hour (including GST); and
(vi)a clerk's hourly rate became $125 an hour (including GST).
(d) The Practitioner failed to notify the Complainant of the increase in his fees and notwithstanding that, charged the Complainant the increased fees."
The conclusions reached by the Board in relation to particular 9 therefore remain, and were as follows:
"In evidence before the Board the Practitioner admitted that he did not give prior notice of a change in his hourly rate. It was submitted on his behalf however that notice of the increase in rate was given by sending the itemised invoices to the Complainant which indicated changes in the hourly rate. It was common ground that the only way the Complainant could have had notice of the increase from the invoices was if she had undertaken a calculation requiring division of the fee charged for an item by the time spent on that item.
The Board accepts the submissions made on behalf of the Complainant that the giving of notice necessarily requires the giving of knowledge or bringing of fact to attention.
The Practitioner concedes that the manner in which the notice was given to the Complainant may have been less than ideal but submits nonetheless that notice was given.
The Board does not accept the submissions made on behalf of the Practitioner and is satisfied that the Practitioner failed to give prior notice of any increase in his fees in breach of his retainer. In evidence, the Practitioner accepted that he had a contractual obligation to give prior notice of any fee increases and went on to say that unfortunately in some cases he did not.
The Board finds the factual basis of this Particular established."
Nature of hearing before this Court
The Legal Profession Act 2007 (the Act), s 458, provides:
"Application against determinations
(1) The complainant, or the Australian legal practitioner who is the subject of the complaint, who is served with a notice of the determination of the Board in relation to a complaint may, within 21 days after the date of that determination –
(a)apply to the Tribunal or Supreme Court to have the matter to which the determination relates determined by the Tribunal or Supreme Court; and
(b)make an application to the Tribunal or Supreme Court to stay the determination pending the finalisation of the application.
(2) For the purposes of this section, a decision of the Board to dismiss a complaint under section 433 (Summary dismissal of complaints), section 451 (Dismissal of complaint) or section 454(1) (Determination of Board) is a determination of the Board.
(3) The determination of a matter pursuant to an application made under subsection (1)(a) is to be by way of a re-hearing."
As a preliminary matter, the parties sought a ruling from the Chief Justice as to the nature of a re-hearing pursuant to s 458(3). At [9] and [10] of his reasons as to this issue (see Boland v Boxall [2016] TASSC 30), his Honour said:
"9 On such an appeal by way of rehearing, the issues for determination are defined by the grounds of appeal. Since this proceeding is not an appeal, but one involving a re-determination, the issues are not so confined. The Board must bear the onus of proving, on the balance of probabilities, facts amounting to unsatisfactory professional conduct, and any facts that it wishes to rely upon in seeking particular determinations under s 454. That section provides for practitioners to be admonished or reprimanded, fined, required to waive or repay fees, or required to pay costs, amongst other things. Unless otherwise ordered, the parties may not rely upon any evidence other than the record of the proceedings before the Board and the documents or other exhibits that were before the Board.
10 I did not make a formal determination on 22 December 2015. I now determine that a s 458(3) re-hearing is a fresh hearing of a matter of complaint at which, unless otherwise ordered, the parties may rely only upon the record of the proceedings before the Legal Profession Board of Tasmania and the documents or other exhibits that were before the Board. I make no comment as to what approach the judge should take if a party seeks to give or adduce additional evidence at such a re-hearing."
Neither counsel cavilled with this ruling. However, it gave rise to another preliminary issue.
On 7 June 2016, counsel for the applicant filed written submissions. Paragraph 1 of those submissions reads as follows:
"1.1On 2nd May 2016, the Applicant, via Counsel, invited the Second Respondent (the Board) to admit the following facts:
1.1.1On 11th August 2010, Chris Boland Lawyers Pty filed a claim (Action M/2010/49) against Mrs Boxall in the Magistrates Court of Tasmania in the sum of $17,675.38 claimed as the amount owing under invoice 4333 together with interest and costs.
1.1.2Mrs Boxall was represented in the action by the Hobart Community Legal Service.
1.1.3The Hobart Community Legal Service, on behalf of Mrs Boxall, defended the claim:
1 raising grounds of defence under ss 143A, 143B, 143D of the Legal Profession Act 1993;
2 raising grounds of defence under rule 19.03 of the Family Law Rules 2004;
3 alleging that the total bills for invoices 3759, 3912 and 4333 contained itemized charges for work that was 'duplicitous' (sic)
4 alleging that the total bills for invoices 3759, 3912, 3914 and 4333 contained itemized charges for work that were excessive and unreasonable
5 alleging negligence on the part of the practitioner in relation to the conduct of Mrs Boxall's property division and the consent orders made in relation thereto, resulting in additional and unnecessary legal costs being charged.
1.1.4Mrs Boxall was represented by Hobart Community Legal Service in negotiating a compromise of action M/2010/49.
1.1.5On 22 June 2011, the Magistrates Court (Civil Division) ordered by consent:
1 that Mrs Boxall pay Chris Boland Lawyers Pty the sum of $8,000 within 28 days of the date of order;
2 that Mrs Boxall pay an outstanding invoice from BDO in the sum of $2,750.00 within 28 days of the date of order and that indemnify and she keep indemnified Chris Boland Lawyers Pty in respect of amounts owing to BDO;
3 that there be no order as to costs.
1.2The facts, which the Board was invited to agree are evidenced by the Documents that the Practitioner has included as 'Exhibits A and B' in Book 6.
1.2.1Whilst the Second Respondent has filed a submission opposing the admission of fresh evidence, it remains unclear whether it is prepared to admit the facts that it was invited to admit, though the facts would seem uncontroversial and may bear upon an issue concerning the appropriateness of sanctions that disturb the outcome of the costs litigation.
1.3It is submitted that the compromise and its true scope are matters that may be more relevant to the choice of sanctions if it is found that conduct of the Practitioner amounted to unsatisfactory professional conduct than to the threshold question of whether the conduct proven against the Practitioner does amount to unsatisfactory professional conduct. That is subject to one qualification – namely that the fact that the practitioner did compromise his claim for unpaid fees by way of fair settlement and consent orders is a matter that may properly be taken into account in assessing and the totality of the Practitioner's conduct."
On 24 June 2016, the applicant filed an interlocutory application by which he sought the following order:
"That the following documents be admitted into evidence in these proceedings;
A Claim (Action No M/2010/49) dated 3 August 2010.
B Defence dated 15 October 2010.
C Defence dated 7 April 2011.
D Amended Claim dated 13 April 2011.
E Consent Judgment dated 22 June 2011."
These documents related to proceedings initiated by the applicant in the Magistrates Court Civil Division to recover legal costs from the complainant. The interlocutory application of the applicant in these proceedings was supported by an affidavit of the applicant sworn 24 June 2016. At par 13 of that affidavit, the applicant said:
"The documents aforesaid have been made available to or sourced by the Board during its investigation and documents identified as Annexure A, C and D are recorded as documents numbered 23, 24 and 25 of the Board's List of Documents in Book No 2 (of 3) entitled 'Directions Hearing'."
At the commencement of the hearing before me, the Court was advised that the Board was not prepared to admit the facts sought to be admitted, nor was it prepared to consent to the interlocutory application. In general terms, counsel for the Board submitted that the material was not relevant to the issue I needed to determine. To facilitate the hearing generally, it was agreed the documents sought to be admitted would be taken de bene esse, and the question of whether they were relevant to the issue I needed to determine, or could be said in any event to constitute fresh evidence, would be determined later.
As to the hearing generally, the complainant took no part in the proceedings, electing to abide by the decision of the Court. Further, it was accepted that, because this was a re-hearing, the Board bore the onus of satisfying the Court as to the particulars of complaint sought to be challenged, and the ultimate finding in relation to those.
The law
The complaint against the applicant asserts that he engaged in unsatisfactory professional conduct. That term is defined in the Act, s 420, to include:
"conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner."
Section 421 contains a definition of the term "Professional misconduct". Section 422 then relevantly provides:
"(1) Without limiting section 420 or 421, the following conduct is capable of constituting unsatisfactory professional conduct or professional misconduct:
(a)conduct consisting of a contravention of this Act, the regulations or the legal profession rules;
(b) charging of excessive legal costs in connection with the practice of law;
…
(2) Conduct of a person consisting of a contravention referred to in subsection (1)(a) is capable of constituting unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention."
The concept of unsatisfactory professional conduct did not appear in the relevant legislation which predated the Act [the Legal Profession Act 1993 (the Old Act)]. That legislation provided for the concepts of unprofessional conduct and professional misconduct. Professional misconduct was defined to include conduct of a practitioner which resulted in:
"(a) a contravention or failure to comply with –
(i) any provision of this Act or any regulations, rules or by-laws made under this Act; or
(ii) any terms and conditions imposed under this Part; or
(b)fiduciary default; or
(c)any serious neglect or undue delay; or
(d)the charging of excessive fees or costs; or
(e)consistent or substantial failure to reach reasonable standards of competence and diligence;".
Unprofessional conduct was defined to include:
"(a) professional conduct that falls short of a standard of conduct that a member of the public is entitled to expect of a practitioner of good repute and competency; and
(b)conduct of a kind referred to in paragraphs (c), (d) and (e) of the definition of professional misconduct but of a lesser degree of seriousness."
The concept of unprofessional conduct related to what might be considered less serious conduct. Crawford J (as he then was) said in relation to the definition of unprofessional conduct in Law Society of Tasmania v Turner and Kench [2001] TASSC 129 at [49]-[51]:
"49 … It follows that in this State, unprofessional conduct extends to conduct which might reasonably be held to violate, or to fall short of, to a substantial degree, the standard of professional conduct observed or approved of by members of the profession who are of good repute and competency (the so called common law test); professional conduct that falls short of a standard of conduct that a member of the public is entitled to expect of a practitioner of good repute and competency (par(a) of the definition in s56); and conduct which results in any serious neglect or undue delay, or in the charging of excessive fees or costs, or in consistent or substantial failure to reach reasonable standards of competence and diligence, but of a lesser degree of seriousness than conduct of that nature which would amount to professional misconduct (par(b) of the definition in s56).
50 In a general sense, professional misconduct should be regarded in this State as a more grave form of misconduct than unprofessional conduct. There may well be an overlap and the same conduct might in some cases amount to both of those things. However, the view expressed by Nettlefold J in the Full Court in Law Society of Tasmania v Walker 56/1988 at 7, that 'unprofessional conduct' should not be regarded as a less heinous category of conduct, is no longer a generally correct view, having regard to what is contained in par(b) of the definition of unprofessional conduct in s56. The Full Court was of course concerned with a disciplinary complaint under the previous legislation, the Legal Practitioners Act 1959, which did not contain the terms 'professional misconduct' and 'unprofessional conduct', let alone define them. The view I have expressed accords with what was said by the Attorney-General in his second reading speech concerning the Legal Profession Bill in the House of Assembly on 12 May 1993 when he referred to 'the less serious "unprofessional conduct" complaints' and to 'the more serious complaints involving "professional misconduct".'
51 Counsel for Mr Kench submitted that notwithstanding that s56 includes within the definition of unprofessional conduct what is contained in par(a), that is to say 'professional conduct that falls short of a standard of conduct that a member of the public is entitled to expect of a practitioner of good repute and competency', in a case in which no iniquity or moral turpitude or obliquity is involved, if the conduct does not amount to professional misconduct it is impossible for it to amount to unprofessional conduct, because practitioners of good repute and competency could not possibly regard the conduct as falling short of a standard the public are entitled to expect. I reject that submission because the definition of unprofessional conduct says no such thing. In my view par(a) should be given its literal meaning and that professional conduct that falls short of a standard of conduct that a member of the public is entitled to expect of a practitioner of good repute and competency amounts to unprofessional conduct under the Act. I am mindful that the literal meaning of the words may mean that all manner of human errors, mistakes and shortcomings on the part of practitioners in the course of their professional work may render them liable to disciplinary proceedings. However, if complaints are made alleging unprofessional conduct of a relatively trivial or minor character so far as gravity is concerned, then the consequence may only be one of admonishment or reprimand by the Council under s61(2)(a), or reprimand, caution or determination that the practitioner should apologise by the Council under s65B(2)(a), (b) or (f), dismissal of the complaint, admonishment or reprimand by the Disciplinary Tribunal under s76(1)(a) or (b), or dismissal of the complaint, admonishment or reprimand by the Court under s81(b). Although there is merit in an argument that only relatively serious transgressions should render legal practitioners liable to complaints and disciplinary proceedings, it is, in my view, one better addressed to Parliament, rather than by the Court adding words by implication to the statutory definition of unprofessional conduct."
Counsel for the Board submitted that the approach taken by Crawford J in Kench and Turner was the same approach as should be taken to the concept of unsatisfactory professional conduct.
In Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209, the Administrative Decisions Tribunal considered a complaint from the relevant legal body about a practitioner. The definition of unsatisfactory professional conduct with which the tribunal was dealing was the same as that in Tasmania. The tribunal said at [47]–[51]:
"47 Whilst unsatisfactory professional conduct includes conduct which falls short of the requisite standard of competence and diligence, it is not limited, by the terms of the LPA, to such conduct. Nonetheless, it is helpful first to examine what constitutes 'unsatisfactory professional conduct' within s 496. 'Unsatisfactory professional conduct' under s 496 has 3 elements:
a) the conduct must occur in connection with the practice of law;
b) it must fall short of a standard of competence and diligence;
c) that standard is set by reference to what a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
48 There was no dispute in the present matters that all the relevant conduct the subject of the two proceedings occurred in connection with the Barrister's practice of the law.
49 For the reasons given by the Tribunal in New South Wales Bar Association v Bland [2010] NSWADT 34 at [193] and as held in New South Wales Bar Association v Miller [2010] NSWADT 300 at [15], some assistance as to the nature and content of the requisite standard can be gained from a consideration of cases dealing with allegations of breaches of contractual or tortious duties by legal practitioners.
50 In Heydon v NRMA Limited [2000] NSWCA 374; (2000) 51 NSWLR 1 the New South Wales Court of Appeal held, at [146] and [147] per Malcolm AJA:
146 Both barristers and solicitors owe a duty of care to those whom they advise or for whom they act. In the present context, their duty is to exercise reasonable care and skill in the provision of professional advice. The standard of care and skill is that which may be reasonably expected of practitioners.
147 In this context the content of the duty of care and the liability is the same whether it is founded on contract in the case of a solicitor, or whether it is founded on a duty of care in tort in the case of a barrister. In each case the duty is to apply the relevant degree of skill and exercise reasonable care to carrying out the task. There is no implied undertaking that the advice is correct, but only that the requisite degree of professional skill and care has been exercised in the giving of the advice.
51 Thus in order to satisfy the requisite standard of diligence and competence under s 496 it is not necessary for the legal practitioner to be correct in all advice given, submissions made or forensic decisions taken. It will be sufficient if the legal practitioner has exercised the diligence and competence that a member of the public is entitled to expect of a reasonably competent practitioner in giving the advice, making the submissions or taking the forensic decisions. The authorities indicate that the following, among other things, are reasonably to be expected of legal practitioners:
a) Basic legal knowledge and keeping abreast of developments in the legal practitioner's field of practice - Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 751;
… ."
Counsel for the applicant referred to a decision of the Court of Appeal in New South Wales in Council of the Law Society of New South Wales v Webb [2013] NSWCA 423 in which the court dealt with an appeal against a decision of the New South Wales Administrative Decisions Tribunal about a practitioner. The court there confirmed the tribunal's reasoning. Meagher JA, with whom Leeming JA and Simpson J agreed, said at [14]–[16]:
"14 The Tribunal found that the events within the respondent's knowledge that led to the transfers of the monies to Mr Lee imposed on him 'a duty to take reasonable steps to ensure that these transfers genuinely were in accordance with the wishes of the purchaser clients': [88]. That finding is not challenged on appeal. The Tribunal concluded:
'[102] In our opinion, the negligence displayed by the Solicitor in failing to take steps such as are outlined in Ground 6 was not 'mere negligence' (to adopt the terminology in Pitsikas), but was sufficiently serious to warrant a 'black mark'. It fell short of 'the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner'. It therefore amounted to unsatisfactory professional conduct under section 496 of the LP Act.'
15 The reference to Pitsikas is to In the matter of Spero Pitsikas (1995) 1 LPDR 5. In that application the Legal Professional Disciplinary Tribunal emphasised the difference between mere negligence and negligence which was sufficiently serious to warrant some response from a professional body responsible for maintaining standards, so as to constitute unsatisfactory professional conduct; but not of sufficient significance to raise an issue as to the practitioner's competence or fitness to practise.
16 The Tribunal then addressed whether the respondent's unsatisfactory professional conduct involved a 'substantial' failure to reach or maintain the required standard of competence and diligence. It concluded that it did not on the basis that the conduct was not sufficiently serious or important to call into question his fitness and competence to continue in practice. In the Tribunal's language, the respondent's failures to satisfy himself as to the authenticity of Mr Lee's agency were not failures to meet the required standard in a way which was 'meaningful or relevant to the legal practitioner's ability to practise law': [112]. That understanding of the sense in which 'substantial' is used in this part of the definition adopts as correct what the Tribunal had earlier said in Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 at [40]. This aspect of the Tribunal's reasoning and conclusion is not challenged on appeal."
There seems no dispute between the parties as to the principles extracted from the authorities to which I have referred.
Counsel for the Board also dealt with the issue of overcharging. At [31]–[33] of her written submissions she said:
"31It is well settled that the charging of grossly excessive costs by a lawyer is professional misconduct: see discussion in Dal Pont, Lawyers' Professional Responsibility, 5th Edition, Lawbook Company, 2013 at [25.55]. Although this complaint alleges unsatisfactory professional conduct, the principles relevant to consideration of the circumstances in which overcharging amounts to professional misconduct provide a useful guide.
32In Legal Services Commissioner v Keddie [2012] NSWADT 106, The Tribunal considered a number of cases and other resources concerning when overcharging amounts to professional misconduct. The following matters were identified at [74]-[76]:
a the conclusion of overcharging depends largely on the degree and frequency of overcharging;
b in assessing whether a lawyer has charged fees grossly exceeding those that would be charged by lawyers of good repute and competency consideration is given to factors such as the amount of the costs, the novelty or complexity of the legal issues, the experience of the lawyer, the quality of his or her work, the amount of time spent on the matter, the responsibility involved, the amount of value or value of the subject matter in issue and any costs agreement entered into;
c the rationale for Courts exercising control over the fees charged by lawyers stems for a recognition that clients are, or may frequently be, in a vulnerable position vis-à-vis their solicitors, that they frequently place their trust in their solicitors, are ordinarily not in a position to know what work must be done and what charges are fair and reasonable and ordinarily assume that the solicitor will make only such charges.
33Section 422(1)(b) of the Act refers to 'excessive charging'. It is submitted that the term 'excessive charging' is analogous to overcharging. In circumstances of excessive charging properly characterised as gross, such conduct may constitute professional misconduct. Excessive charging falling short of the description of gross may constitute unsatisfactory professional conduct."
Counsel for the applicant did not disagree generally, but submitted that excessive charging was always a question of degree, and that whilst overcharging falling short of the degree that would characterise it as "gross" may sometimes constitute unsatisfactory professional conduct, it will not do so in all cases. Counsel extracted remarks from The Law Society of The Australian Capital Territory v Ernest David Lardner and William Charles Andrews [1998] ACTSC 187 at [73], [104], [123], [124], [128] and [142] in support of his submission. There is no substantial difference between the principles espoused by each counsel.
Submissions for the Board
Counsel for the Board, in dealing with the particulars, dealt with them in batches. She identified those batches as being:
· The Consent Order allegations (particulars 1, 2 and 11.1).
· The House Contract allegations (particulars 3 and 4).
· The Counsel allegations (particulars 8 and 10).
· The Overcharging allegations (particulars 11.2 and 11.3).
I found this a useful method of identification, and have adopted it for the purpose of these reasons.
In dealing with the evidence, I am mindful that much of it was not in dispute, and that it was how the facts put should be interpreted which was the focus of this hearing. I am also mindful that the applicant has sought to challenge the complainant's credit in his submissions.
The Consent Order allegations – particulars 1, 2 and 11.1
These particulars were as follows:
"1 Failed to competently prepare Consent Orders filed on 11 September 2008 ('the Consent Orders').
Particulars
The Practitioner failed to include a provision in the Consent Orders that if the net proceeds of sale of the former matrimonial home when paid to the Complainant would be inadequate to provide her with 62.5% of the net assets, then the Husband was required to make a cash payment within fourteen (14) days of the settlement of the sale of the former matrimonial home to achieve such % outcome in the Complainant's favour.
2 Was negligent in respect of the filing of the Consent Orders.
Particulars
Upon becoming aware there was disagreement between the parties as to whether a cash payment was required to be made to the Complainant when:
(a) it was agreed that the Complainant should receive 62.5% of the net assets; and
(b) that the value of all assets and liabilities of the marriage had been agreed;
the Practitioner permitted and/or authorised (by letter to Dobson Mitchell & Allport ('DMA') dated 18 August 2008) the filing of the incompetently drafted Consent Orders as alleged in paragraph 1 which he had previously advised the Complainant to sign.
11Overcharged the Complainant:
11.1 by charging an estimated $16,616.53 for fees directly relating to setting aside the Consent Orders,
Particulars
The Practitioner issued invoices on the matrimonial file (Matter No 06166) as shown in the table that follows, which also identifies the value of the items of work relating to seeking to persuade DMA to agree his interpretation of the drafted Consent Orders and/or setting aside the Orders.
Invoice Date Total Value of work to set aside/persuade DMA to agree with him Item No of work 3759 19.9.08 $18,585.78 $770.0001 All work completed subsequent to 11.8.08 3912 18.2.09 $8,778.88 $8,778.882 All work on the invoice. 4088 12.8.09 $3,932.65 $3,932.65 All work on the invoice 11.8.09 $3,025.00 $3,025.003 Mr Gunson's invoice 4333 18.5.10 $16,940.79 $110.004 Costs incurred on 12.8.09 & 13.8.09 Total $51,263.10 $16,616.53 [Footnotes:
1 Including GST and 4.1% of disbursements of $559.27 (including GST)
2 Including GST and disbursements
3 Including GST, paid from money held on trust on behalf of the Complainant on 12.8.09
4 Including GST but not disbursements which totalled $3,152.90 + $37.89 GST.]"
The complainant instructed the applicant in November 2006 in relation to resolving matters with her estranged husband consequent upon their separation. Negotiations in relation to a financial settlement began between the applicant and the husband's solicitors in about February 2007. The major assets of the complainant and her husband were their home at 13 Karambi Street, Chigwell, subject to a mortgage, and their interest in a family business known as J & R Trashpacks. Significant issues in the negotiations were the value of these two assets and, in particular, how the business interest should be dealt with.
Some time, I infer, early in the second half of 2007, an application for property settlement was filed with the Federal Magistrates Court. Correspondence passed between the applicant and the husband's solicitors in an attempt to negotiate a settlement. In August 2007, the applicant drafted some proposed orders to settle the proceedings, and sent them to the complainant for her approval. In substance, the orders provided for the transfer of the former matrimonial home to the complainant subject to the existing mortgage, and for the sale of the parties' interest in the family business and a division of the net proceeds of sale as to 65% to the complainant and 35% to the husband. I infer that proposal was put to the husband's solicitors some time in September 2007.
On 31 March 2008, the complainant and her husband and their respective solicitors attended a conciliation conference in the context of the proceedings in the Federal Magistrates Court. No agreement was reached. The applicant recorded the complainant's rejected proposal to settle apparently made at that conference in a letter to her dated 1 April 2008. In effect, the settlement proposed was that the complainant keep the family home subject to its mortgage, she relinquish her interest in the family business and the husband pay her $25,000. By letter dated 3 April 2008 from the applicant to the husband's solicitors, that offer was withdrawn. On 4 April 2008, the applicant put a further settlement proposal, effectively in the same terms as that withdrawn the day before, but with a cash adjustment in favour of the complainant of $30,000.
By letter dated 9 April 2008, the husband's solicitors put a proposal effectively in the same terms as that put by the applicant, but with the cash adjustment figure being $20,000. By letter dated 15 April 2008, the applicant rejected that proposal, but sought a cash adjustment of $27,000. The husband's solicitors responded noting a rejection of their client's offer, and indicating that a valuation of the former matrimonial home needed to be organised.
By letter dated 8 May 2008, the applicant put a further settlement proposal to the husband's solicitors on behalf of the complainant. The proposal sought a cash adjustment of $25,000, and it was noted that, if the former matrimonial home had to be sold, then the complainant would not relinquish her interest in the family business.
Until that point, all the settlement proposals which had passed between the parties involved assets being allocated between the parties, with varying cash payments to be made by the husband. None were framed in terms of an overall percentage split of net assets as between the parties.
On 24 June 2008, the husband's solicitors put a further proposal to settle. It provided for the sale of the matrimonial home, and a division of the net assets of the parties as to 57.5% to the complainant and 42.5% to the husband. The net assets to be the subject of that percentage division included the net proceeds of sale of the home, and the family business interest at a specified value. Paragraph 6 of the proposal then provided that, to give effect to the percentage division proposed, "the following assets will be allocated, or transferred, as appropriate" to each party. There were then two headings under which various assets and resources were listed, one for the complainant and one for the husband, and the last item in each was said to be "such share of the net sale proceeds as is necessary to give effect to the Division".
While the applicant's ledgers indicate dealings between him and the complainant, and between him and the husband's solicitors between 24 June and late July 2008, the actual correspondence and emails do not appear to have been before the Board. A letter dated 22 July 2008 from the applicant to the complainant noted that the proceedings in the Federal Magistrates Court were listed for hearing in the sittings to commence 4 August 2008. The applicant had clearly not prepared any affidavit for the complainant for the purpose of those proceedings as at that date, and sought from her a chronology of events for the purpose of preparing one.
On 29 July 2008, the applicant wrote to the complainant again enquiring when he was to receive her instructions. He also sent to her a draft letter and an "Offer of Settlement" which he proposed sending to the husband's solicitors subject to her approval. The applicant discussed this material with the complainant and a number of amendments were made. Ultimately, on 31 July, a revised settlement offer was put by the applicant to the husband's solicitors. The proposal was essentially in the same format as that put by the husband's solicitors in June 2008, subject to changes to the percentage division proposed, and values of assets being allocated. By a further letter of 4 August to the husband's solicitors, the applicant corrected one of the figures in the proposed orders.
On 7 August 2008 at 12.26pm, the husband's solicitor sent an email to the applicant indicating he was seeing the husband at 3pm that day, and anticipated receiving instructions to accept the complainant's offer. The solicitor also said:
"… as we are both already in breach of the filing deadline, we should try to conclude this ASAP. Could you have your offer put into the form of Minutes of Consent Orders, sign it and forward it to me by fax or email before 3.00pm?"
The applicant spoke to the complainant, and she gave instructions to proceed subject to one caveat. As a consequence, the applicant prepared a Minute of Orders, and sent it unsigned to the husband's solicitors. The covering letter advised that the orders "remain subject to Mr Byrne's further advice and/or Mrs Boxall's decision to have the Jackson Street property formally valued". Mr Byrne was the accountant who had valued the family business, and the Jackson Street property was the premises from which the business then operated or was about to move to.
The husband's solicitors responded the same day. They answered some queries raised by the applicant in a letter of 31 July 2008, and said that their client was prepared to conclude the proceedings on the terms of the proposed minutes. They also said:
"To ensure that there are no further delays or unsubstantiated claims from your client's end, we will await delivery of Minutes of Consent Orders signed by your client and/or your office on her behalf for Mr Boxall to sign and forward to the Court."
The applicant had the complainant sign the minute of orders he had prepared, and, on 11 August 2008, the applicant sent that to the husband's solicitors. In the covering letter the applicant said:
"The same are forwarded on the basis that;
1settlement remains subject to any amendment to the valuation of J & R Trashpacks by Mr Byrnes, and
2dividends being declared and equalised between the parties in J & R Trashpacks.
Finally, as your client will be required to pay Mrs Boxall a cash payment of about $40,000 we are instructed to advise that a Contract of Sale cannot be entered into until your client can provide proof that the additional funds will be available at or prior to signing a contract. The fund can naturally be retained and paid on settlement."
The minute of orders signed by the complainant contained no requirement that the husband make any cash payment to the complainant over and above any share of the house sale proceeds. The minute also made no reference to any equalisation of dividends.
At 10.04am on 12 August 2008, the husband's solicitors advised the applicant that:
"I don't agree with your interpretation of the proposed Orders. As long as that is understood, I am content to file the document with the Court."
The next day at 1.14pm the applicant responded saying:
"Please particularize what you don't agree with.
I see no purpose in filing Orders only to have a future dispute."
At 3.58pm the husband's solicitors replied saying:
"The proposed Orders require no payment from Mr Boxall. Can I file the document?"
On 18 August, the applicant wrote to the husband's solicitors in the following terms:
"In reply to your email of 13 August 2008 and with all due respect, I cannot see how you draw your conclusion.
Firstly, I note there has been a typographical error in the counter-offer and consent orders. The percentage split was intended to be 62.5% to Mrs Boxall and 37.5% (not 38.5%) to Mr Boxall.
Secondly, once a value is attributed to the home (albeit estimated) on the basis of the discussion, if Mr Boxall is to retain items and cash attributed to him he must pay Mrs Boxall, on my calculations allowing for the sale price of the home at $260,000 about $74,000-$75,000 after all liabilities are paid. Please refer to our draft reconciliation enclosed.
I cannot see any circumstance where your suggestion 'no Money' will be payable to prevail.
If you are content to amend 38.5% to 37.5% I am content for you to proceed to file the Consent Orders."
On 25 August, the applicant wrote to the husband's solicitors again. He said:
"It appears the writer misunderstood Mrs Boxall's recent instructions as to the current balance of the mortgage registered against 13 Karambi Street, Chigwell in Tasmania.
She has today instructed it is about $170,000 not $137,000.
We therefore forward amended reconciliation (draft) 25/8/08.
Whatever the case it is clear to us that Mr Boxall will be required to make to Mrs Boxall a considerable cash payment. He could, of course, re finance his motor vehicle or arrange a release for or of Mrs Boxall in respect of the same. If the $8,000 cash from the sale of the motor cycle remains available the cash to be raised by him would reduce correspondingly that is, about $42,000."
The applicant wrote again to the husband's solicitors on 1 September. He said:
"Dear Sirs
RE: MATRIMONIAL PROPERTY SETTLEMENT – BOXALL
We refer to our recent correspondence to you culminating in our letter of 25 August 2008.
Do you remain content to file the Proposed Consent Orders on the basis of the 62.5% :37.5% split in favour of Mrs Boxall? If not may we please receive your detailed reasons?
Should we not hear from you by 5.00pm Friday 5 September 2008 the only option is to have the matter relisted.
With all due respect Mr Boxall cannot retain all the assets he desires without borrowings. A suitable solution, as initially put to you at the Conciliation Conference, is for all the 'remaining' partners to contribute proportionately to their current equity holdings and purchase Mrs Boxalls interest in the partnership. This would provide available cash and at the same time maintain 'equities' within the partnership.
We await your earliest return."
The husband's solicitors replied by email the next day as follows:
"Chris,
Thank you for your letter dated 1 September 2008.
We are still agreeing to disagree, I think. The final point I need to clarify about the proposed Orders is what you consider to be a 'dividend' under Paragraph 7(a)(v) in circumstances where Mr Boxall is working in the partnership, his drawings have been used to maintain the mortgage payments and to pay child support and your client does not want to pay taxation in relation to her involvement in the partnership?"
On 2 September, the applicant then said:
"Dear Mr Trezise
With all due respect we cannot see what there is in disagreement.
The dividend refers to the 'J & R Trashpacks' partnership which currently continues and not that between our respective clients which has dissolved.
The partnerships are separate and distinct.
We await your further return."
Emails continued between the applicant and the husband's solicitors about dividends and the family partnership. There was nothing in the email exchange which indicated that the complainant would not agree to the orders being submitted to the court or that the applicant no longer agreed to the minute being lodged with the court.
On 8 September 2008, the husband's solicitors sent the signed minute of consent orders to the Federal Magistrates Court with a request that orders be made in terms of it. On 10 September 2008, the applicant wrote to the court and said:
"We were given to understand that Consent Orders were to be entered into.
As they have not been proceeded with to date we respectfully request that the matter be relisted, at the earliest opportunity, for directions."
The letter was copied to the husband's solicitors. On 11 September, a staff member from the husband's solicitors' office rang the applicant's office and left a message to the effect the consent orders had been sent to the court. On 12 September, the applicant telephoned the court and was told the orders had been made the day before. He is noted as saying, "Disregard my letter".
On 16 September, the applicant wrote to the complainant saying he was pleased to advise that the orders were made on 11 September.
Nothing seems to have happened for some weeks after the orders were actually made. Then, on 14 October 2008, the applicant wrote to the husband's solicitors. He said:
"Dear colleagues
RE: MATRIMONIAL PROPERTY SETTLEMENT – BOXALL
We refer to our previous correspondence and continue to await your confirmation that your client has sufficient funds available to meet his liability to Mrs Boxall upon the settlement of a sale of 13 Karambi Street, Chigwell.
We have provided you with our draft reconciliation and in light thereof fail to see how you can choose to 'agree to disagree'.
What is required is clear and unequivocal advice from you and undertaking that Mr Boxall has sufficient funds.
As explained, while we understand the property has been listed for sale, no contract can be entered into until we receive your advice in the terms hereof.
We await your earliest return."
The husband's solicitors replied as follows:
"Dear Sir,
Boxall
I refer to your letter dated 14 October 2008.
We will achieve nothing by going over old ground. The Order has been made, in the terms of the document which you drew, and the parties are obliged to comply with it. Paragraph 1 prescribes arrangements for the sale of 13 Karambi Street. If your client impedes the sale, Mr Boxall will not hesitate to exercise the liberty to apply for further Orders in relation to the marketing and sale of the property. In that event, he will also be seeking an Order that your client pay his costs of that exercise on an indemnity basis."
About the end of October 2008, a contract of sale in respect of the family home was presented to the complainant to sign. She refused to sign it on the advice of the applicant. As a consequence, on 28 October 2008, the husband's solicitors, having warned the applicant they intended to do so, applied to the Federal Magistrates Court for orders to oblige the complainant to sign the contract as the court orders made 11 September required her to.
The applicant then, on 29 October, wrote to the husband's solicitors. It was a lengthy letter and canvassed the same matters previously raised about the complainant requiring a cash payment from her husband. On 31 October, the husband's application went before Federal Magistrate Baker. The applicant indicated to her Honour that the complainant would sign the contract of sale if there was a declaration made by the court in the following terms:
"The court declares that upon the said contract of sale becoming unconditional. The respondent shall be entitled to retain the full net proceeds of sale and further, that each party shall retain their respective interest in the partnership J and R Trashpacks."
That clearly represented a substantive variation to the orders already made, and her Honour declined to make that order. She did order the complainant to sign the Jensen contract.
On 6 November 2008, the applicant sought advice from counsel about what he should do to resolve what he saw as an impasse. In his letter seeking advice, the applicant told counsel that his letters to the husband's solicitors dated 18 and 25 August 2008 and 1 September 2008, had gone unanswered. That was not correct. On 10 December, counsel advised the applicant there was a problem with the orders and advised that the only way to correct the "anomaly" was an application to vary the consent orders.
An application was made to the Federal Magistrates Court on 15 April 2009. That application was listed before the court in May but did not proceed because of the way it had been drafted. A fresh date was given for August. Ultimately on 11 August 2009, the orders were set aside by consent. That left the proceedings for property settlement on foot and they proceeded to hearing. A federal magistrate ultimately ordered the parties' assets be divided as to 62.5% to the complainant and 37.55% to the husband, and required the husband to pay the complainant $47,699 to achieve that result.
Discussion about the Consent Order allegations
It is necessary to set out the terms of the consent orders as drafted by the applicant and signed by the complainant to be able to understand the submissions made by the applicant's counsel. The terms were as follows:
"1That the Husband and the Wife do all such things and sign all such documents as are necessary to effect the sale of the property known and 13 Karambi Street, Chigwell and comprised in Certificate of Title Volume 55822 Folio 35 (the Property'), on such terms as the parties may agree or, failing agreement, as may be ordered by the Court.
2 That pending completion of the sale of the Property in Paragraph 1 above:-
(a) the Wife will have sole use and occupation of the Property;
(b) neither party will further encumber the Property without the written consent of the other party;
(c) liberty will be reserved to each party to apply for further Orders in relation to the marketing and sale of the Property;
3 That upon completion of the sale of the Property, the gross sale proceeds will be applied as follows:-
(a) in payment of the real estate agents commission and costs of the sale;
(b) in payment of the legal costs of acting on the sale and the usual disbursements incurred in completing the conveyancing of the sale;
(c) in payment of the amounts secured under the mortgage No C535405 together with payment of any costs referable to the discharge of that mortgage;
(d) the balance then remaining ('the net sale proceeds') to be applied as set out below.
4That the Husband continue to pay mortgage re payments (principal and interest) and all rates and taxes for the Property to the date of settlement.
5That the net assets of the parties be divided between them so that the Wife receives 62.5% of the assets and the Husband receives 38.5% of the assets ('the Division').
6That for the purposes of the calculation of the Division under Paragraph 4 above, the net assets shall be and are limited to:-
(a) the net sale proceeds;
(b) the Husband's Subaru car with a value of $37,000.00;
(c) the proceeds of sale attributed to Husband's Suzuki motor cycle with a value of $8,000.00;
(d) the Wife's Toyota car with a value of $12,000.00;
(e) the parties' interest in the partnership known as 'J & R Trashpacks' ABN 19 122 140 064 ('the partnership') with a value of $95,000.00 (or such value as may be increased by Mr Ross Byrne);
(f) the Husband's superannuation interest with a value of $26,000.00
(g) the Wife's superannuation interest with a value of $4,060.00;
(h) the Wife's furniture and household items with a value of $5,000.00
(i) the Husband's chattels and sports memorabilia with a value of $4,200.00;
Less
(j) the Husband's Subaru finance liability to $37,000.00 (or lesser amount as at settlement date)
(k) the Wife's finance liability of $12,000.00 (or lesser amount as at settlement date)
7That to give effect to the Division:-
(a) the following assets will be allocated, or transferred, as appropriate to the Wife;
(i) the Wife's car;
(ii) the Wife's furniture and household items;
(iii) the Wife's superannuation interest;
(iv)such share of the net sale proceeds as is necessary to give effect to the Division;
(v)any dividend declared or to be declared in the partnership for the parties interest therein at 30 June 2008;
(b) the following assets and liabilities will be allocated, or transferred, as appropriate to the Husband;
(i) the Husband's Subaru car;
(ii) the parties interest in the partnership;
(iii) the Husband's superannuation interest;
(iv) the Husband's chattels and sports memorabilia;
(v)such share of the net sale proceeds as is necessary to give effect to the Division;
8 That the Husband be solely responsible for and indemnify the Wife against any liability arising from her involvement in the partnership, including taxation liabilities;
9 That unless otherwise specified in this Offer:-
(a)each party will be solely entitled to the exclusion of the other to all property in the possession of such party as at this date;
(b)each party will be solely liable for and indemnify the other against any liability encumbering any form of property to which that party is entitled pursuant to this Offer; and
(c)each party will be solely liable for their respective debts.
10 That all extant applications be otherwise dismissed with no Order as to costs."
Counsel for the applicant emphasised a number of times during his submissions that, in effect, the Board was bound by its precise particulars. In the applicant's counsel's written submissions, the response to particular 1 was that the issue of a cash payment by the husband was never expressly agreed to. There continued, it was submitted, to be active disagreement between the applicant and the husband's solicitors as to whether such a requirement was implied by the terms of the orders drafted. It was submitted that the applicant could not be liable for negligence, incompetence or unsatisfactory professional conduct for failing to include in draft minutes of consent orders provisions which had not been agreed, nor indeed, in the terms articulated by the Board, ever discussed. With respect, that submission must be rejected.
The applicant's own correspondence indicates that he knew very well that, having regard to the estimated value of the home, the amount owing under the mortgage, the likely sale costs relating to the home, and the values attributed to other assets, a cash payment would be required from the husband to the complainant to give effect to the settlement contained in the document he drafted. Against that background, he included no provision for such a payment in the orders he prepared and, initially, sent unsigned to the husband's solicitors.
Notwithstanding clear statements from the husband's solicitor that, in his view, the proposed orders did not lend themselves to an interpretation that the orders implied a cash payment, the applicant had the complainant sign the minute of proposed orders, and then sent that signed document to the husband's solicitors. By the very words of the document, the proposed orders drafted by the applicant were intended to be an end to the parties' dispute. The document was not expressed to be a draft only. It was not expressed to be a draft subject to the inclusion of further necessary terms as and when they were agreed by further negotiations. It was not expressed to reflect any form of interim agreement, or partial settlement.
There is other evidence which contradicts the response to particular 1 articulated in the written submissions of counsel for the applicant. In the applicant's letter of instruction to counsel dated 7 November 2008, the applicant advised counsel that:
"While there is no express provision for any cash adjustment, I have been operating on the basis that such a provision is implied if a final distribution envisaged in paragraphs 7(a) and 7(b) is to be achieved."
Further, in an affidavit sworn 16 March 2009, the applicant acknowledged that the consent orders he drafted needed variation because, inter alia, they omitted to provide a mechanism to adjust the distribution in terms of cash.
There is also some evidence from the applicant which might inform the situation. When the applicant was being cross-examined by counsel for the Board, in the proceedings before it, he was questioned about why there was no provision for a cash payment in the orders he drew. Commencing at line 40 on page 133 of the transcript of the proceedings and continuing, the following exchange occurred:
"Mr Boland, you presented a document that constituted - a form, an offer, in a form that was capable of acceptance by merely the application of a signature, and that would constitute a binding agreement.....So the philosophy was in negotiation, see the cross and seek the cross conditional, upon there being a cash payment, so it could not have been accepted at all. It was just in negotiations and I've made countless offers on that. Many times the drafts are put forward but – it wasn't on the basis this is my client's offer. It was sent under a covering letter, conditional upon. It was in negotiations.
And it was conditional upon a cash payment being made?.....Yes, negotiations –
So why did you put that in the consent - .....Because as I've said before, there would not have been that order because Mr Boxall wasn't going to pay any money.
Okay.....This came across from Mr Trezise who was quite clear that he wasn't going to pay the money, but the money could have come from the other partners, because they actually came to my office and discussed a fifty thousand payment. When we tried to revive that, that just didn't exist.
All right, so Mr Boland it was a strategic move because you made a judgment that other parties, who were not actually parties to the litigation, would come up with some money?.....No, we were locking in there - this was negotiations. That's who things proceed with negotiations. This is not a fait accompli, it is putting it up to people to make them fully aware of where we're coming from and how we'd like to settle this. We don't mind whether we take the assets or we take the cash."
The applicant in that questioning appeared to try to justify his actions on the basis that this was just all negotiations, they were not concluded negotiations, and the set of orders he prepared did not represent his client's offer. With respect, that suggestion is a nonsense given the matters I identified at [51] above. It can clearly be inferred from the exchange above that the applicant made a conscious decision not to put a specific provision in the document he sent which provided for the husband to make a cash payment, because he knew from his correspondence with the husband's solicitors that the husband would not agree to that.
The applicant was at this time in the position that there was a looming court hearing date. He was not prepared for such a hearing, and was engaged in last minute negotiations to settle the proceedings without a hearing. That cannot be said to be an unusual situation for a practitioner to find themselves in. However, it does not justify preparing a set of proposed consent orders which, on their face, could not be implemented as he wanted them to be.
Having regard to the above summary of facts, I am satisfied that the factual basis for particular 1 has been made out by the Board. Having taken into account the principles extracted above as to what would amount to unsatisfactory professional conduct, I am satisfied that the applicant's conduct in preparing the consent orders in the form he did, absent a provision for a cash payment, was conduct which fell so far short of that which would be required of a competent practitioner as to amount to unsatisfactory professional conduct. It was not "mere negligence".
As to particular 2, counsel for the applicant in his written submissions embarked on a consideration of the law relating to the making of consent orders. In substance, he argued that it was not the parties who made the orders, it was a court. With respect, that did not address the drafted particular, and fundamentally disclosed a lack of understanding of the process in which the applicant had been engaged. Counsel for the applicant also made further submissions, in effect, blaming the making of the consent orders on the behaviour of the husband's solicitors. Counsel also submitted that the applicant did not permit or authorise the making of the consent orders on any basis other than that the husband's solicitors accepted that a cash payment to the complainant from her husband would be necessary. It was submitted that was the "true contextual reading" of the applicant's letter of 18 August 2008.
The letter of 18 August to which counsel referred is set out at [39] above and, in the preceding paragraphs, the contents of the emails and letters which led up to it are also set out. With respect, at the point the applicant received the email timed at 3.58pm on 13 August 2008 from the husband's solicitors, he had to have been in no doubt that the position of the husband was that no cash payment would be made. Against that background, in his letter of 18 August, while he raises the cash payment issue yet again, the applicant clearly tells the husband's solicitors they can file the documents with the court, subject only to correcting a typographical error. At no time thereafter did the applicant say to either the husband's solicitors or the court that his consent to filing was withdrawn, for example because the husband's solicitors had not agreed to a cash payment. The applicant, after the orders were made, even wrote to the complainant by a letter dated 16 September telling her the orders had been made. The applicant said nothing to the complainant to the effect that he had not done anything to result in the orders being made, and that there was now a problem because orders had been made in terms of the minute the complainant signed.
The applicant prepared a set of proposed orders which could not give effect to the settlement he envisaged or the complainant expected to receive. He then had the complainant sign them. By his letter to the husband's solicitors, he then clearly authorised the filing of that document with the court. He did not say "you cannot file that document until such time as we have resolved what is clearly a dispute between us". It may be that the husband's solicitors took advantage of a situation which presented itself. However, that does not detract from the fact that the applicant clearly authorised the husband's solicitors to lodge the memo of consent orders with the court. I am satisfied, in the circumstances, that the factual basis for particular 2 has been made out by the Board and that the conduct, as found, is conduct that fell so far short of that which would be required of a competent practitioner as to amount to unsatisfactory professional conduct.
The next particular identified by counsel for the Board under the heading "Consent Order allegations" was particular 11.1. That particular contained an assertion that the applicant overcharged the complainant by charging her for the work that he did in seeking to persuade the husband's solicitors to agree to his interpretation of the minute of orders he drafted and/or setting aside the orders ultimately made on 11 September 2008 in terms of that draft. The Board relied, in respect of this particular, on the affidavit of Robyn Malcolm sworn 12 March 2013, and her oral evidence which supplemented that. Ms Malcolm was an investigator in the employ of the Board.
Ms Malcolm identified a number of invoices which covered work done between 12 August 2008 (that is the day after the consent orders were signed by the complainant) and 13 August 2009 which she said related to work connected with the setting aside of the consent orders. She calculated that $16,616.53 had been charged for that work. Ms Malcolm was briefly cross-examined about her calculations. However, in that cross-examination she was not challenged as to the quantum of fees she said was attributable to setting aside the orders.
The applicant said the following about this particular at pars 150 to 156 of his affidavit sworn 27 March 2013:
"150I deny that the sum of $16,616.53 directly relates to setting aside the Consent Orders; and I deny that the invoicing of that sum amounts to overcharging.
151The application to set aside the Consent Orders was, in the circumstances, a necessary and carefully considered action to take. It was a course that was recommended by Mr Gunson of Counsel. Mr Gunson wrote to me on 11 August 2009 outlining the case authorities and legal principles upon which he had intended to rely and which supported the necessity to have the Consent Orders set aside.
152Moreover, the setting aside of the Consent Orders was a necessary action to have taken in Andrea's interests to reinstate Mr Boxall's application for a matrimonial property settlement and Andrea's response to it, as no true settlement had been reached in respect of them.
153The subsequent litigation was necessary in order to ensure that Andrea attained a fair division of the matrimonial assets and was, moreover, undertaken against a background of an ongoing disagreement as to the value of the Partnership.
154My interpretation of the Consent Orders was a considered interpretation and one which it was reasonable to adopt. It produced an outcome not so very different from the outcome attained following trial.
155On the other hand, it was not reasonable for Mr Boxall, or his lawyers, to adopt an interpretation of the Consent Orders, which would have evaded the Net Asset Division by reversing the agreed percentages. The agreed percentages were shown at trial to reflect a just and equitable division.
156Ms Malcolm's calculations are wrong.
aThey merely aggregate fees invoiced from a given date on the false assumption that everything done was for the purpose of setting aside the Consent Orders;
bThey do not take into account discounts applied at the time of charging and shown on the invoices."
Paragraph 156 is the only part of that material which deals with the issue of quantum. The cross-examination of the applicant about the issue did not elicit any further detail as to quantum, and it was not dealt with in re-examination.
The evidence before the Board, however, reflected that, in relation to invoice 4088, the applicant wrote down the amount he claimed for himself so that it equalled what he then had in trust after he paid Mr Gunson's invoice. The applicant's part of the invoice was written down from $3,932.65 to $2,475, a write down of $1,457.65. That reduced the amount asserted to be referrable to the relevant work under particular 11.1 to $15,158.88.
It was also accepted by counsel for the Board that there was some merit in the criticism that the calculations done by Ms Malcolm did not attempt to isolate precisely in invoices 3912 and 4088 what work was referable to setting aside or varying the consent orders, and what work may have related to other matters. Her submission ultimately was that, even with that acknowledgment, a large proportion of the fees identified in those invoices was indeed referable to the relevant work.
The applicant's counsel, in his written submissions, put the following to the Court:
"15.1The basis of this complaint lies in an implied criticism of the Practitioner to be derived from the Particulars where it is stated that costs were incurred on:
Items of work relating to seeking to persuade DMA to agree his interpretation of the drafted consent orders and/or setting aside the orders.
15.2There is no attempt in evidence to distinguish what costs related to the contested interpretation; what costs related to variation and what costs related to setting the orders aside. And indeed there should not be, because those different courses are all proper courses for the Practitioner to have pursued in the circumstances with which he was faced.
15.3To have done otherwise would have been to abandon the Complainant to the injustice of consent orders obtained unconscionably. That cannot be the measure of satisfactory conduct expected of a reasonably competent Practitioner.
15.4Neither is there any strong affidavit evidence in support of the complaint.
15.4.1The Affidavit of Ms Malcolm (paragraph 6) [3/2.6] says only that the Complainant believed that the matter was complete at the time she signed the consent orders.
15.4.2The Complainant's belief is not relevant in this context.
15.4.3Either there was an enforceable agreement capable of being properly formalised in Consent Orders or there was not. The overwhelming evidence is that there was not.
15.4.4Once that is accepted, regardless of how much sympathy one may have for the Complainant in circumstances where her expectations were disappointed, it cannot be said that any costs flow from the Practitioner's failure to have an agreement formalised in Consent Orders. It is the parties who must agree; not the Practitioner.
15.4.5The complainant's affidavit and evidence takes the matter no further.
15.5The need to deal with the Consent Orders arose from the simple fact that they were obtained in unconscionable circumstances. Despite what anybody else might have said about their enforceability along the way, when they were ultimately challenged, they were set aside by consent. See paragraphs 151 to 155 of the Practitioner's Affidavit [4/42.151 to 4/43.155]."
Leaving aside the issue of quantum, with respect, the submissions of counsel for the applicant reveal a complete lack of insight by the applicant into the behaviour expected of a competent practitioner. In blunt terms, the applicant had prepared a memo of consent orders which did not achieve its aim. He then facilitated its conversion into actual court orders, knowing at the time there was going to be a problem because the orders did not provide for a cash payment his client wanted, and which he knew her husband would not agree to pay. Having created that situation, I agree it was inevitable that the orders would need to be set aside. However, had the applicant acted competently in the first place and prepared orders which gave effect to what his client wanted, steps to persuade the husband's solicitors to accept the applicant's interpretation of the orders and to set the orders aside would not have been required. The actions the applicant undertook after the orders were actually made, and for which he charged the complainant, would not have been required but for the applicant's conduct. Common sense, let alone the standards of a competent practitioner, with respect, dictated the applicant should not have charged the complainant to correct a situation he largely created by his own lack of competence.
It follows that, not only am I satisfied that the factual basis for this complaint has been made out by the Board, I am also satisfied that the applicant's conduct fell so far short of the standard required of a competent practitioner that it amounted to unsatisfactory professional conduct.
As to the issue of quantum, the amount ultimately relied on by the Board was $15,158.88. That was against a background of a concession about Ms Malcolm's identification of items. I note that, although I have to look at this afresh, the Board was unable to be precise about quantum, and in fact said it could only be satisfied the amount would be at least $10,000. Given the state of the evidence before me, I can well understand that caution. I have been through the invoices attached to Ms Malcolm's affidavit, and the evidence as to the sequence of events which occurred between 12 August 2008 and when the consent orders were eventually set aside. It is clear that a significant portion of the costs incurred in that period related to attempts by the applicant to have the husband's solicitors accept his views about the orders and have them set aside. I am unable to be satisfied the entirety of the amount of $15,158.88 is referable to that conduct. However, equally, I am unable to be precise as to how much of that amount is referable to the conduct complained of, but would agree with and adopt the Board's approach that the figure would be at least $10,000.
The House Contract allegations
These allegations are contained in particulars 3 and 4 which are as follows:
"3 Provided negligent and/or incompetent advice to the Complainant.
Particulars
Advised the Complainant not to sign a contract with respect to the sale of the former matrimonial home to Jensen and/or Hardwicke and Allen ('the Contract') when the Court had made an order on 11 September 2008 that the Complainant 'do all such things and sign all such documents as are necessary to effect the sale of the former matrimonial home'.
(a) By telephone on 22 October 2008 the Practitioner advised the Complainant 'not to sign anything …';
(b) The Practitioner's employed solicitor during a telephone conversation with the Complainant on 27 October 2008 advised her, 'not to sign anything until Chris has spoken with her …';
(c) By a letter dated 1 December 2008, in relation to the sale of the matrimonial home to Jensen, the Practitioner advised the Complainant, 'in our view you should not do anything until Counsel's advice is received.
4 Caused the Complainant to pay the Husband's legal costs with respect to an application filed with the Federal Magistrates Court on 30 October 2008
Particulars
(a) the Practitioner gave erroneous and poor advice to the Complainant not to sign the Contract; and
(b) the Practitioner failed to advise the Complainant to sign the Contract, before DMA made application for her to do so on the 30 October 2008."
The orders made by the Federal Magistrates Court on 11 September 2008 provided specifically that the complainant do all such things and sign all such documents as were necessary to effect the sale of the former matrimonial home. After the court orders were made, the former matrimonial home was put up for sale. On or about 22 October 2008, an offer was made by Jensen to buy it for $261,000. The complainant spoke to the applicant about the offer on 22 October. At the time she did so, the complainant did not know the price offered, and had been asked to see the agent after her husband had signed the contract. The applicant's file note records that the applicant advised her not to sign anything, but to have the agent fax him a copy of the contract. The contract was faxed by the agent to the applicant later that day. A subsequent file note of the applicant indicates that he spoke to the agent some time thereafter, and advised that the complainant would not be signing the contract until issues relating to the property settlement were resolved. The applicant noted he said, "won't have a partial settlement".
On 27 October, the complainant spoke to an employed solicitor in the applicant's office. The file note then made records that the complainant told the solicitor that her husband had rung her and said "she had better sign the contract or else". It also records that the solicitor advised her not to sign the contract until the applicant had spoken to her.
Prior to the contract of sale being presented, there had been ongoing correspondence between the applicant and the husband's solicitors in which the applicant reiterated that the complainant would not sign a contract until such time as the husband confirmed he had sufficient funds to make an adjusting cash payment. On 15 October, the husband's solicitors wrote to the applicant in the following terms:
"We will achieve nothing by going over old ground. The Order has been made, in the terms of the documents which you drew, and the parties are obliged to comply with it. Paragraph 1. prescribes arrangements for the sale of 13 Karambi Street. If your client impedes the sale, Mr Boxall will not hesitate to exercise the liberty to apply for further Orders in relation to the marketing and sale of the property. In that event, he will also be seeking an Order that your client pay his costs of that exercise on an indemnity basis."
The applicant responded by letter dated 21 October. He went over the same dispute and ultimately said:
"Unless you have the courtesy to respond in an appropriate way then I suggest you take the application as foreshadowed by you. Delay can only be detrimental to any sale. In any application for costs I will present the chronology of correspondence sent to you including this letter putting Mrs Boxall's concerns and position."
By letter dated 29 October, the applicant confirmed the complainant was not in a position to sign any contract until the husband's solicitors confirmed that the husband had funds available to achieve full settlement. He further said that, unless cash was raised by the husband, the complainant was entitled to retain her interest in the family business.
On 30 October 2008, the husband's solicitors filed an urgent application with the Federal Magistrates Court by which the husband sought an order that the complainant sign the Jensen contract. It was so ordered the next day at which time the issue of costs was reserved. That issue could not be resolved by agreement, and at the request of the husband's solicitors was relisted before the court for argument. The day before the hearing, the applicant wrote to the husband's solicitors indicating the complainant agreed to pay the costs in the amount sought.
The contract of sale was signed by the complainant on 14 November 2008. On or about 24 November 2008, a second offer to purchase was made by Hardwicke and Allen. It was sent to the applicant by the real estate agent at the complainant's request on 27 November 2008. At that point in time, the Jensen contract remained on foot but was not unconditional. The applicant advised the complainant in a letter dated 1 December not to do anything until counsel's advice was received and, in any event, suggested that she negotiate further to get an increased offer.
At that point in time, the applicant had sought advice from Mr Theobold of counsel about the difficulties with the court orders, and was waiting for his advice.
On 2 December 2008, the husband's solicitors wrote to the applicant pointing out that this was a more advantageous offer, and again threatened an application to the Federal Magistrates Court. On 17 December 2008, the husband's solicitors filed an application with the Family Court of Australia seeking an order, inter alia, that the complainant sign the second contract. The matter was listed for the next day. After the applicant received notice of that application and an accompanying affidavit, the applicant consented to an order that the complainant sign the contract.
The applicant's counsel's response to particular 3 was that it was incumbent upon the applicant to give advice to the complainant concerning any defect there may have been with the orders, at least to the extent of advising her what action she might take to have the orders which provided for the sale of the home varied or set aside. He did that. There was no negligence or incompetence in advising the complainant to adopt a precautionary approach to the extent she not sign the contract. He also submitted that, in any event, the complaint was limited by the particulars. On the first occasion, the applicant had not seen the contract. On the second occasion, the advice was given by an employed solicitor, and on the third occasion, the applicant was waiting for advice from counsel.
As to particular 4, the applicant's counsel's response was that there was no negligence or incompetence because ultimately the original orders were set aside, proving the advice given by the applicant was sound.
The applicant's retainer agreement provided that he was authorised as agent for the complainant to brief counsel to appear, confer, advise and draw and/or settle documents provided that, "except in circumstances of urgency or where it is impracticable", he was to discuss with and take into account the complainant's wishes when briefing counsel. Counsel for the applicant submitted that, properly construed, the retainer agreement did not make consultation with the complainant in the circumstances of this case a precondition to the applicant's right to engage counsel.
Leaving aside initially the particular facts of this case and focusing on the terms of the retainer agreement, clearly the applicant was authorised by his retainer to brief counsel. However, that authorisation was qualified as to the circumstances in which he could do so without firstly discussing the question with, and taking into account the wishes of, the complainant about it. He could only brief counsel without reference to the complainant in circumstances of urgency, or where it was impracticable to do so. That is, the applicant did not have an unfettered right to brief counsel. Unless the circumstances were urgent or it was impracticable for him to obtain it, the applicant had no authority to engage counsel without firstly discussing it with the complainant. There is, in my view, no other way to construe that paragraph in the retainer. I reject the submissions of counsel for the applicant to the contrary.
Against that background, it is necessary to look at the facts of this case. The complainant says she was not told of Mr Theobold's engagement until 10 November 2008. The applicant disputes that. The applicant said he "raised" with the complainant the need to obtain counsel's advice prior to 5 November. The applicant's evidence is equivocal as to when, prior to 5 November, that occurred. His ledger records do not disclose any attendance on the complainant between the attendance at court on 31 October, and when he spoke to her briefly on 7 November. Further, the applicant's evidence was that, when he briefed Mr Theobold by letter of 6 November 2008, he did so on his own behalf, and by implication, not on behalf of the complainant. That proposition is not supported by the applicant's ledger records.
There was no evidence to suggest that issues of urgency or impracticability impinged upon the ability of the applicant to discuss briefing counsel with the complainant. Therefore, the applicant had to discuss briefing Mr Theobold with the complainant before he did so. Absent that discussion, he did not have authority by reference to his retainer to brief Mr Theobold on the complainant's behalf. I am not satisfied the applicant had any such discussion with the complainant prior to briefing Mr Theobold by letter dated 6 November. In those circumstances, the applicant had no authority to brief Mr Theobold when he initially did so.
As to the briefing of Mr Gunson, there is again no suggestion that he was briefed in circumstances of urgency or impracticability, such as to override the need to discuss his being briefed with the complainant. Beyond saying it was inconceivable he would not have told the complainant about Mr Gunson's involvement, there is nothing in the applicant's ledger records to support any argument that the applicant did discuss briefing Mr Gunson before he actually did so. For the same reasons as before, absent that discussion, the applicant had no authority to brief. I am satisfied the applicant had no such discussion with the complainant and therefore, that he briefed Mr Gunson without authority.
The briefing of counsel by the applicant may very well ultimately have been required, and been to the complainant's benefit. These complaints do not address that aspect of the matter, but are confined to failures by the applicant to comply with legislative requirements and the terms of his retainer. Such requirements are there for a reason and that is to ensure that a client of a legal practitioner has rights when it comes to determining who they deal with and what they are charged.
I am satisfied that the factual basis for these complaints has been made out by the Board.
The Overcharging allegations
These allegations are contained in particulars 11.2 and 11.3. They assert that the applicant overcharged the complainant:
"11.2 by engaging in conduct and undertaking work that was unreasonable and/or unnecessary,
Particulars
The particulars are attached, see the expert opinion of Mr Woods of Grace Costs Consultants (see Annexure B).
11.3 by charging for work undertaken at increased rates which had not been advised to the Complainant in breach of the Retainer Agreement of 17 November 2006 and the Legal Profession Act 1993 or Legal Profession Act 2007,
Particulars
(a)
Invoice File No Hourly Rate inc GST Date Fees total Overcharge 3912 06166 $275 18.2.09 $8,712.00 (S6,969.60) $1,742.40 4088 06166 $275 12.8.09 $3,602.65 (S2,882.12) $720.53 3911 08179 $275 18.2.09 $1,127.50 (S902) $225.50 4333 06166 $275 18.5.10 $13,750.00 (S12,621.30) $2,750.00 3914 09001 $220 23.2.09 $1,155.00 $231 Total
$5,669.43 ($4,043.13)
Resulting in an estimated $5,669.43 overcharge (including GST).
(b) In respect of conveyancing (Matter No. 09001) by an estimated amount of $231 in that the work performed was charged at $200 plus GST when it ought not to have been charged at all by virtue of the provisions contained in section 143F of the Legal Profession Act 1993 or section 300 of the Legal Profession Act 2007."
The expert opinion of Mr Wood, the costs consultant, referred to in particular 11.2, was contained in two letters he wrote dated 21 August 2012 and 4 September 2012. Mr Wood wrote those letters after considering the applicant's files and the various invoices the applicant rendered to the complainant in respect of work done as encompassed by those files. Those letters, absent details about Mr Wood's qualifications, provided as follows:
Letter of 21 August
"I refer to your letter of instructions dated 25 July 2012 including copies of the practitioner's file, costs agreements, bills and particulars of the complaint against the practitioner.
I have accessed on a solicitor and own client basis the following tax invoices of Chris Boland Lawyers addressed to Andrea Boxall as follows:
Invoice number:
Date:
Amount charged:
Amount assessed:
3450
28/11/07
$1,071.81
$906.41 (inclusive of GST)
3539
19/02/08
$526.68
$432.80 (inclusive of GST)
3759
16/09/08
$18,585.78
$15,415.38 (inclusive of GST)
3912
18/02/09
$8,778.88
$5,455.18 (inclusive of GST)
4008
12/08/09
$3,932.65
$2,603.45 (inclusive of GST)
4333
18/05/10
$16,940.70
The practitioner filed a claim for $17,675.38 in the Magistrates Court with the claim settled by consent with $8,000.00 paid to the practitioner and $2,750.00 paid to the valuer
3911
18/02/09
$1,217.48
$825.46 (inclusive of GST)
3914
23/02/09
$1,425.70
$1,114.67 (inclusive of GST)
… ."
Letter of 4 September
"I refer to your letter of instructions dated 25 July 2012 and my assessment of costs set out in my report dated 21 August 2012.
In this second report my reasons for disallowing or reducing work concerning the tax invoices of Chris Boland Lawyers addressed to Andrea Boxall are as follows:
Invoice number:
Date:
Work disallowed/reduced:
3450
28/11/07
§ The invoice covers the restraining order and was presumably heard in the Magistrates' Court and the schedule of fees dated 1/10/06 attached to and referred at paragraph 3.1 of the Legal Services Family Law Costs Agreement dated 20 December 2006 ('Costs Agreement') provides Magistrates' Court matters are to be charged at the 80% rate.
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
§ 'Opening file' (14/11/07), and 'preparation for hearing' (23/11/07) are descriptions of work not specifically covered in the Costs Agreement and thus not allowable.
§ The $167.00 discount included in the invoice was taken into account in the assessment.
3539
19/02/08
§ The invoice covers the restraining order and was presumably heard in the Magistrates' Court and the schedule of fees dated 1/10/06 attached to and referred at paragraph 3.1 of the Legal Services Family Law Costs Agreement dated 20 December 2006 ('Costs Agreement') provides Magistrates' Court matters are to be charged at the 80% rate.
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
3759
16/09/08
§ Although 'attendance to file' is not a specified description of work covered in the Costs Agreement it is reasonable to assume the solicitor will have to review the file from time to time and the Costs Agreement has not included a loading uplift for 'care, skill and attention' which is allowed under the Family Law scale and other Court scales of costs – taking into account all of the above I allowed 'attendance to file' at 50% of the amount sought,
§ 'Opening file' (16/11/09) is not covered in the Costs Agreement and akin to an administrative rather than professional charge thus not allowable.
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
§ 24/5/07 – Solicitor's fault thus not allowable.
§ 21/4/08 and 2/5/08 – Draft letter to DMA not sent thus not allowable.
§ Total time to consider offer excessive for 29/7/08 to 31/7/08 period.
§ 4/8/07 letter to DMA rectifies solicitor's error in earlier letter and thus not allowable.
§ 18/8/08 communication pertained (in part) to correcting a typographical error and thus reduced.
§ 16/9/08 letter accounting to client is an administrative rather than skilled legal attendance thus not allowable.
3912
18/02/09
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
§ The higher fees set out in the scale of charges dated 13/1/09 were not allowed because the former client was never given any prior notice of the fee increases as required pursuant to Schedule 3.1 of the Costs Agreement – the previous 2006 rates continued to be applied.
§ 'Attendance to file' was reduced to 50% for the same reasons discussed previously.
§ The 24/9/08 reminder was not allowed.
§ Communications as to counsel's retainer and attending counsel prior to contacting the former client about engaging counsel on 5/8/11 (as required under paragraph 5.1.1 of the Costs Agreement) were not allowed.
§ Allow perusal of one Court notice only on 27/11/08.
§ Disallow the 15/12/08 letter to Theobald that could not be located on the file
§ Disallow the consideration of issues between solicitors sought on 27/11/08 and 6/2/09 noting there was no provision in the Costs Agreement to charge for these inter office communications.
§ Disallow perusing and consideration of the 16/12/08 facsimile from DMA noting there was no such letter on the file.
4008
12/08/09
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
§ The higher fees set out in the scale of charges dated 13/1/09 were not allowed because the former client was never given any prior notice of the fee increases as required pursuant to Schedule 3.1 of the Costs Agreement – the previous 2006 rates continued to be applied.
§ Attendances on new counsel, Mr Gunson, prior to the former client becoming aware of Mr Gunson's involvement on 11/8/09 (as required under 5.1.1 of the Costs Agreement) were not allowed.
§ 'Attendance to file' was reduced to 50% for the same reasons discussed previously.
4333
18/5/10
§ I refer to and repeat my comments in my initial report dated 10 August 2012 noting the Magistrates' Court claim settled by consent with $8,000.00 paid to the practitioner and $2,750.00 paid to the valuer.
3911
18/2/09
§ Skilled attendances (including telephone attendances) are to be charged at $182.00 per hour (in accordance with paragraph 3.2 of the Costs Agreement) and not the higher rates sought in the invoice.
§ The higher fees set out in the scale of charges dated 13/1/09 were not allowed because the former client was never given any prior notice of the fee increases as required pursuant to Schedule 3.1 of the Costs Agreement – the previous 2006 rates continued to be applied.
§ 'Attendance to file' was reduced to 50% for the same reasons discussed previously.
§ This is a conveyancing matter arising under the existing Costs Agreement but because this new matter commenced on or about the 27/11/08 the Tasmanian Legal Profession Act 2007 (the Act) rather than the Family Law Rules now applied. Pursuant to section 300(4) of the Act costs have been reduced by 12.5% due to the solicitor's failure to disclose fees and charges for engaging counsel (see s 293(1) of the Act), a significant change to the solicitor's initial estimate of the total costs (see s 299 of the Act) and a failure to provide any fee estimate in relation to the conveyancing (see s 291(c) of the Act).
3914
23/2/09
§ The higher fees set out in the scale of charges dated 13/1/09 were not allowed because the former client was never given any prior notice of the fee increases as required pursuant to Schedule 3.1 of the Costs Agreement – the previous 2006 rates continued to be applied.
§ Costs have been reduced by 12.5% due to the solicitor's failure to disclose fees and charges pursuant to the Act for the same reasons discussed previously.
§ The conveyancing work on this invoice was completed by the principal's employee solicitor so all work has been charged at $176.00 per hour (in accordance with attached Schedule dated 1 October 2006 pursuant to paragraph 3.1 of the Costs Agreement) and not the higher rates sought in the invoice."
Mr Wood's letters were before the Board as annexures to an affidavit of the complainant. That was perhaps an unusual way to put them before the Board. However, it is clear that it was done as a result of discussions at directions hearings, and that it was not anticipated that the applicant's counsel would take the approach he did before the Board. However, an issue arose during the hearing before the Board about the status of those letters. Then counsel for the Board submitted that they represented unchallenged evidence because counsel for the applicant had not sought to question Mr Wood. Counsel for the applicant submitted that the letters were not in the form of an affidavit of Mr Wood, and that therefore he had not been in a position to give notice to cross-examine Mr Wood. He submitted that the material in the letters was therefore not able to be tested, and it should be a matter for the Board as to what weight was given to the material in those circumstances. The parties were given the opportunity to consider calling Mr Wood to give evidence, but ultimately he was not called.
The issue was not the subject of any submission by counsel for the applicant before me. Instead, counsel relied on the applicant's criticisms of Mr Wood's material in the applicant's affidavit of 27 March 2013 where the applicant said at pars 157–159:
"157 I have seen Grace Costs Consultants' assessment of my fees. Very little of it seems to touch upon the reasonableness or necessity of the work which I undertook.
158 I say that the methodology used to produce the assessment is unsound and that the assessment is unreliable for the following reasons.
aThe assessors did not speak to me about the matter and obtained no submission from me;
bThe assessors did not make any inquiry about how my office operates or what work is involved in the item which is described in my invoices as 'opening file'.
cThe assessors made no inquiry of me as to why certain attendances required the time that was recorded against them.
dAttendances were reduced arbitrarily by 50% without disclosing any evidentiary basis for the reduction.
eThe assessment assumes that an item described as 'accounting to client' is an administrative attendance without observing from the file that the 'accounting' was an account given of a conversation with an opposing practitioner with regard to the sale of the matrimonial property.
fThe assessment has not distinguished between the Tasmanian Magistrates Court and the Federal Magistrates Court. It is based upon a construction of my retainer agreement and a conclusion that all attendances in any court having the word 'Magistrates' in its title attracted the 20% discount referred to in the Retainer Agreement. The assessors did not ask me about this. Had they done so I would have explained that the discount only applied to the State Magistrates Court.
gThe assessment reflects conclusions about my entitlement to retain Counsel, which are based upon assumptions that have been made without seeking any comment or submission from me.
hThe assessment disallowed consideration of issues between Mr Munting and myself in apparent disregard of clause 3.3 of the retainer agreement.
iThe assessment disallows or discounts attendances on the basis of findings made about breaches of the Legal Profession Acts, which are not supported factually and which are based on erroneous constructions of my documents.
11.3 – by charging for work undertaken at increased rates which had not been advised to the Complainant in breach of the Retainer Agreement of 17 November 2006 and the Legal Profession Act 1993 or the Legal Profession Act 2007
159 I repeat and rely upon what I said under Ground 9 above."
In his oral evidence before the Board, the applicant also criticised Mr Wood. He did so in very disparaging terms. The applicant repeatedly said Mr Wood was biased and had been led into making adverse assessments by the particulars. Counsel for the Board tendered to the Board copies of the letters of instruction to Mr Wood to deal with these assertions. There is absolutely nothing in those letters of instruction which is in any way untoward, and which might support the applicant's allegations.
As to the more specific complaints which were contained in the applicant's affidavit:
- The applicant admitted during cross-examination that he was wrong in his criticism at par 158(f) of his affidavit about Mr Wood not having applied a Magistrates Court discount to both the Tasmanian Magistrates Court and the Federal Magistrates Court work.
- The applicant conceded that, in relation to his complaint in par 158(d) in his affidavit, Mr Wood had in fact given an explanation as to why he discounted fees.
Also in relation to this particular, the applicant gave an explanation relating to, in effect, the mixing of charges at professional and clerk's rates for opening a file. It made little sense. The applicant suggested that he attended the client and took her details for the purpose of opening a file, and that he then charged for this as a separate item which seemed to include the time his secretary actually spent performing the administrative tasks of opening the file. Mr Wood had discounted this type of attendance essentially because this was an administrative attendance not covered by the applicant's costs agreement.
The applicant also criticised Mr Wood for not allowing amounts relating to his briefing Mr Theobold. He asserted that Mr Wood had been told of the Board's allegations that the applicant had briefed without authority, and had simply accepted that. With respect, that allegation was without foundation. Mr Wood had the applicant's file. He could no doubt see there had been no attendance on the client indicating the briefing of Mr Theobold was being considered, and noting a discussion with her about it. He could also read the retainer agreement. He, with respect, came to the same conclusion, quite reasonably in my view, that I have. Clearly, had that conclusion not been upheld, Mr Wood's assessment in relation to that could not have been sustained.
In his written submissions, counsel for the applicant dealt with particulars 11.2 and 11.3. In respect of particular 11.2, at par 19.1 of his submissions, he summarised some of the complainant's evidence about taxing of costs. With respect, none of the submissions under this heading have any real relevance to the particular. In pars 19.2-19.4, counsel dealt with Mr Wood's assessments. He submitted in relation to them:
"19.2The Practitioner is critical of the assessment of Grace Costs Consultants. Those criticisms are set out at paragraph 158 of the Practitioner's Affidavit [4/43.158 to 4/45]. With the exception of the Practitioner's criticism in paragraph (f), which was challenged to good effect during his cross examination, it is submitted that the remainder of the grounds of criticism are valid.
19.3Nevertheless, the test is not whether the Practitioner overcharged the Complainant – such may be commonly dealt with on taxation with no greater penalty than that a Practitioner may suffer some embarrassment with respect to paying or recovering the costs of the taxation – but, rather whether the Practitioner has charged excessively and in such a manner as to be found to have engaged in unsatisfactory professional conduct.
19.4In that respect it is submitted that the assessment of Grace Costs Consultants does not provide evidence of excessive overcharging such as would enable the Court to comfortably or confidently make a finding against the Practitioner."
As to the Board's position, counsel for the Board relied on Mr Wood's reports, and submitted the particulars had been made out. She further referred to Nikolaidis v Legal Services Commissioner [2007] NSWCA 130, where Beazley J said at [56] that "overcharging involves a comparison of two figures; the amount in fact charged and the amount which was in all the circumstances reasonable to charge". Counsel submitted that given Mr Wood's expert evidence, not challenged by cross-examination, the Court should accept his evidence as to what constituted reasonable charges.
As to the status of Mr Wood's material, it contains the views of an expert the applicant knew was to be relied on by the Board. In my view, the applicant could have challenged the material in what I might describe as the conventional way, that is by asking that Mr Wood be made available to be questioned about his assessments and thereby have them tested. The applicant chose not to do that, but to instead challenge the content of Mr Wood's material in his affidavit and orally. The applicant's challenges in that form proved certainly in part to be without foundation.
There is no basis, in my view, upon which counsel for the applicant could properly suggest Mr Wood's material could be largely disregarded. That submission was not directly put, but may be implied from the submissions made. In those circumstances, I accept the material contained in Mr Wood's material as largely unchallenged evidence of an expert. I accept, having regard to Mr Wood's assessments, and other evidence before the Board, that the applicant charged the complainant for work which was unnecessary and/or unreasonable, and that his conduct in so doing fell so far short of the standard to be expected from a competent practitioner that it amounts to unsatisfactory professional conduct.
As to particular 11.3(a), the Board relied on the affidavit material of Ms Malcolm, which has already been referred to, and her oral evidence. Particular 11.3 also needs to be considered against the background of particular 9. Particular 9 asserted the applicant failed to advise the complainant of increases in his fees. The Board found that particular proved, and that finding has not been challenged by the applicant. Particular 11.3 asserts the applicant charged for work done at the increased rates he had not advised the complainant about. The evidence clearly established that the applicant did charge at rates not advised. The applicant did not challenge, save to the extent which resulted in the figure in the table under particular 11.3(a) being reduced from $5,669.43 to $4,043.13, the calculations of Ms Malcolm as to the quantum of the overcharging. In the circumstances, I accept the figure is $4,043.13.
As to particular 11.3(b), neither counsel addressed this as a separate particular. The relevant invoice was invoice 3914. Both Mr Wood and Ms Malcolm dealt with the invoice, Ms Malcolm in her affidavit sworn 12 March 2013 and Mr Wood in his assessments. One of the reasons given for discounting the invoice by $231 was that the work had been done by an employed solicitor and his charge out rate was a lower one. There was also a discount for failing to advise about an increased rate. That overcharging is the subject in part of particular 11.3(a).
I am uncertain as to what separate, if any, complaint arises by reference to particular 11.3(b). It refers to the overcharge of $231 and the reason for that. It then suggests "it ought not to have been charged at all" by reference to sections in the legislation. Section 143F is one section. That deals with the effect on a taxation of costs of a failure by a practitioner to give certain information to a client. Because of my uncertainty about just what this apparently separate particular is directed at, the fact that the amount is already the subject of particular 11.3(a), and because of the amount involved, I make no separate finding in relation to it.
I accept therefore that, subject to the amendment to the figures which underpinned particular 11.3(a), and the manner in which I have dealt with 11.3(b), the factual basis for these complaints has been made out by the Board.
Material taken de bene esse
I am satisfied in the context of the findings that I have made that the material sought to be introduced by the applicant by his interlocutory application is not relevant to the issues I have determined and would not have assisted the applicant. I have therefore not taken it into account. I have not made any determination as to whether it might or might not be "fresh evidence". As to whether it may be relevant to consequential orders, I will hear counsel further.
Conclusions
I have in relation to most of the particulars I have dealt with made specific findings that the conduct of the applicant amounts to unsatisfactory professional conduct. As to others where that specific finding has not been made, but I have concluded that the factual basis for the complaint has been made out, I have considered the conduct complained of in light of the whole of the applicant's conduct found proved in these reasons. I am satisfied that, in that context, all complaints found proved give rise to a conclusion that the applicant's conduct amounted to unsatisfactory professional conduct.
Counsel indicated at the hearing that they only at this stage sought findings of the nature set out above and would seek to address the Court further as to other orders that might be made. Counsel will have liberty to apply to make further submissions as to how this matter is to be disposed of.
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