Franconi v Legal Practitioners Complaints Committee
[2001] WASCA 431
•21 DECEMBER 2001
FRANCONI -v- LEGAL PRACTITIONERS COMPLAINTS COMMITTEE [2001] WASCA 431
| SUPREME COURT OF WESTERN AUSTRALIA | Citation No: | [2001] WASCA 431 | |
| THE FULL COURT (WA) | |||
| Case No: | FUL:23/2001 | 12 DECEMBER 2001 | |
| Coram: | WALLWORK J WHEELER J OLSSON AUJ | 21/12/01 | |
| 11 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in part | ||
| B | |||
| PDF Version |
| Parties: | MAURO FRANCONI LEGAL PRACTITIONERS COMPLAINTS COMMITTEE |
Catchwords: | Legal practitioners appeal Professional misconduct Misleading client Excessive fees Turns on own facts |
Legislation: | Nil |
Case References: | Nil Bradshaw v Medical Board of Western Australia (1990) 3 WAR 322 Briginshaw v Briginshaw (1938) 60 CLR 336 D'Alessandro v Legal Practitioners Complaints Committee, unreported; FCt SCt of WA; Library No 950440; 25 August 1995 Myers v Elman (1940) AC 282 New South Wales Bar Association v Evatt (1968) 117 CLR 177 Re Hodgekiss (1962) 62 SR(NSW) 340 Warren v Coombes (179) 142 CLR 531 Weaver v Law Society of New South Wales (1979) 142 CLR 201 |
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA TITLE OF COURT : THE FULL COURT (WA) CITATION : FRANCONI -v- LEGAL PRACTITIONERS COMPLAINTS COMMITTEE [2001] WASCA 431 CORAM : WALLWORK J
- WHEELER J
OLSSON AUJ
- Appellant
AND
LEGAL PRACTITIONERS COMPLAINTS COMMITTEE
Respondent
Catchwords:
Legal practitioners appeal - Professional misconduct - Misleading client - Excessive fees - Turns on own facts
Legislation:
Nil
Result:
Appeal allowed in part
(Page 2)
Category: B
Representation:
Counsel:
Appellant : Mr R I Viner QC
Respondent : Mr B J H Goetze
Solicitors:
Appellant : Terrace Law
Respondent : Minter Ellison
Case(s) referred to in judgment(s):
Nil
Case(s) also cited:
Bradshaw v Medical Board of Western Australia (1990) 3 WAR 322
Briginshaw v Briginshaw (1938) 60 CLR 336
D'Alessandro v Legal Practitioners Complaints Committee, unreported; FCt SCt of WA; Library No 950440; 25 August 1995
Myers v Elman (1940) AC 282
New South Wales Bar Association v Evatt (1968) 117 CLR 177
Re Hodgekiss (1962) 62 SR(NSW) 340
Warren v Coombes (179) 142 CLR 531
Weaver v Law Society of New South Wales (1979) 142 CLR 201
(Page 3)
1 WALLWORK J: I agree with the reasons for judgment of Wheeler J and to the orders proposed by her Honour.
2 WHEELER J: This is an appeal against both the finding of the Legal Practitioners Disciplinary Tribunal ("the Tribunal") in respect of the practitioner's conduct, and the penalty imposed as a result of that finding.
3 In summary, the findings of fact which the Tribunal made and which were not challenged were as follows. In May 1997, the client approached the practitioner to seek redress against a Canadian company in a claim essentially involving wrongful termination of his employment. The client did not agree to sign a costs agreement, but did agree to pay some $500 for the editing of the letter of demand to be prepared by the client and, if the matter was not then satisfactorily resolved, he agreed to pay $1,000 for an opinion from "an experienced London based lawyer" with a "maximum budget" if approved of $10,000.
4 The approved letter was sent to the ex-employer in May 1997. In June 1997 the ex-employer offered to settle by payment of $US25,000 in full satisfaction of any and/all claims. The client was minded to accept this, but after discussion with the practitioner determined to reject that offer and make a counter-offer.
5 The practitioner wrote to the ex-employer stating that his client would accept $US49,000 with an additional $US4,900 for his legal fees, with the client also retaining possession of a computer and scanner which was claimed by the employer. When a copy of this letter was sent to the client he wrote to the practitioner on 3 July saying: "I do not recall either discussing with you, or agreeing to, or instructing you to cut yourself in for $US4,900. Can you please explain what this is about?" The practitioner replied that he considered that it was a good idea to get the ex-employer to pay the client's costs as his claim had been substantially reduced from the initial claim, and commenting that it was unlikely the ex-employer would pay what was asked.
6 After some delay, the ex-employer forwarded a facsimile to the practitioner dated Monday 11 August 1997 which would have been received at the latest on Tuesday 12 August 1997 and would have been available to the practitioner in the morning of Wednesday 13 August. That facsimile relevantly read:-
"1. Concerning items a) and b) of your letter [a claim for damages and for costs respectively], after long and difficult internal discussions, I have succeeded in
(Page 4)
- obtaining an increase of our offer from US$25,000 to US$45,000, in full and final settlement of this matter.
- 2. We agree with your items c) and e) [relating to the computer and scanner and some other matters]. In your calculations, you have to take into account the value of the portable computer and scanner (ie US$6,000 approx.)."
7 The practitioner did not forward a copy of that facsimile to his client but by facsimile sent on 13 August 1997 wrote to the ex-employer saying that he would be prepared to recommend that the client settle on the basis of that letter, but suggesting that the practitioner would:
"… like you to reframe it as follows:
1. Payment of $35,000 to our client.
2. Payment of $4,000 to us for our fees.
3. Acceptance of items (c), (d), (e) and (f) of our counter-offer."
8 This document was also not sent to the client. On the same day, it appears that the practitioner sent a facsimile to the client in these terms:-
"Negotiations are continuing.
We know they will go up – Maybe not as far as we wanted – Perhaps around $30-35000 US and pay our costs on top and allow you to kept the equipment.
Would you settle around these parameters?"
9 On 14 August the client telephoned the practitioner asking whether anything had been received from the ex-employer. The practitioner was said not to be available but the practitioner's secretary rang back about 45 minutes later saying that the practitioner had left the office, but had left a note saying that lots of negotiations were going on. There was a note on the practitioner's file in the practitioner's handwriting dated that day and addressed to his secretary saying "Ring and advise lots of negotiations. Tell him no more and don't give him" (sic).
(Page 5)
10 On 15 August the ex-employer wrote to the practitioner with an offer framed essentially as the practitioner had suggested. On 18 August 1997, the practitioner advised his client:-
"Herewith final letter from above with final offer of $US35,000 to you.
You will note they have allowed:
US$6,000 for equipment in your possession.
US$4,000 for legal fees.
The offer therefore represents a total of $45,000 from their point of view and they will not go any higher.
This offer represents a considerable increase on their original offer and they are paying your costs in full also.
Kindly advise if you are prepared to settle on this basis."
11 The practitioner enclosed a copy of the "reframed" offer.
12 The client believed the practitioner should not receive $US4,000 for costs, which led to an argument on 18 August 1997 when the solicitor offered to settle for $2,000 in costs. The client terminated the solicitor's retainer and instructed new solicitors who requested an itemised bill of costs. The bill was duly supplied by the practitioner, totalling $4,154, and it was subsequently taxed and allowed at $1,359.
13 Although the Tribunal did not in its reasons refer to the evidence of the practitioner in relation to these matters, his explanations for not sending a copy of the offer dated 11 August 1997 to his client were variously that he "just wanted to tidy up loose ends and then present him with a final offer"; would be "speculating" as to why he did not ask his secretary to send a copy to the client; and simply "didn't know" why he had not done so.
14 As I have noted, none of these findings of fact are challenged by the appellant. What is challenged, is the drawing of the inference found in the following two paragraphs which I quote from the decision of the Tribunal:-
"… we make the following findings based upon an acceptance of the clients evidence the overwhelming inferences to be drawn
(Page 6)
- from correspondence and memoranda as well as the statements made in the practitioner's answer. We find that the practitioner deliberately failed to advise his client of the offer dated 11 August 1997 (and faxed on 12 August 1997), because he had reached a decision that he wanted to protect himself for his claim for costs in an amount which he could not possibly justify. He knew this was already being questioned by his client. The client wanted all monies involved in the settlement be paid directly to himself. The offer contained in the ex-employer's facsimile of about 12 August 1997 differed from the (reframed) offer which was requested by the practitioner in his facsimile sent on 13 August 1997 in one respect only, and that related to the practitioner's costs.
The practitioner indicated in his answer that he "sought to protect his position". The client believed that irrespective of what the practitioner may claim, he would be responsible for the practitioner's reasonable fees. We find that the practitioner's actions in failing to disclose the offer of about 12 August 1997 which initially offered the overall value of $45,000 but which did not mention solicitor's fees was deliberately withheld from the client, and that the suggested compromise of fixing the practitioner's costs at $US4,000 which was initiated to the ex-employer by the practitioner was done deliberately so as to support a wholly unjustified and grossly excessive claim for costs, and that this was clearly detrimental to the practitioner's client."
15 The grounds of appeal are as follows:-
"1. The Tribunal erred in finding that the practitioner, by not disclosing to his client a facsimile offer dated 11 August 1997 by the client's ex-employer of US$45,000.00, engaged in unprofessional conduct which misled and deceived his client or which was likely to mislead and deceive his client because the practitioner in fact, as the Tribunal found, disclosed to his client on 18 August 1997 the offer of US$45,000.000 inclusive of a disclosed sum for the practitioner's costs and sought his client's instructions whether or not to settle on the disclosed basis.
(Page 7)
- 2. It was not a reasonable inference for the Tribunal to draw from the evidence and the facts as found that the practitioner deliberately did not disclose to the client the ex-employer's offer dated 11 August 1997 so as to support a wholly unjustified and grossly excessive claim for costs.
3. The proper inference to be drawn from all the evidence was that the practitioner acted innocently of any intention to mislead or deceive his client about the ex-employers offer to settle the clients claim for a total sum of US$45,000.00 inclusive of costs and after deduction of an agreed sum for reimbursement of computer equipment."
16 The difficulty with grounds 2 and 3 is that there appears to be no other inference which is reasonably open on the facts which I have summarised. The practitioner's claim for costs was grossly excessive; that follows from the very significant reduction made on taxation, with the practitioner allowed a little over one third of his bill. It is to be remembered that the amount of costs on the "reframed" offer was in US dollars, which at the relevant time would have amounted to something like $6,000, even more than the amount which the practitioner actually billed.
17 The only difference between the initial offer and the reframed offer was in relation to the issue of costs. The reframed offer, presented without the original offer and without the practitioner's suggestion that it be reframed, clearly suggested that the ex-employer was prepared to pay a sum of $US35,000 to the client and $4,000 to the practitioner in respect of costs. That is, from the client's point of view, a different thing from a lump sum offer of $US45,000. The difference, which relates to costs, can have been of no conceivable benefit to the client. There can have been no reason to suggest that the offer be reframed, and to keep the initial offer from the client, other than a desire to ensure, as far as possible, that the practitioner would receive an excessive amount by way of costs. That the client was prepared to dispute the amount allowed for costs and that the practitioner ultimately did not receive that sum does not detract from that conclusion.
18 So far as ground 1 is concerned, the subsequent disclosure of the reframed offer on 18 August does not answer the finding that the failure to disclose the offer dated 11 August was unprofessional conduct which misled and deceived or was likely to mislead and deceive the client. It is
(Page 8)
- the failure to disclose that lump sum offer as originally framed, and the presentation of the offer of the 18 August as if that were the first offer received from the ex-employer after the rejection of the offer of $25,000, which constitutes the conduct which was apt to mislead and deceive. For the reasons which I have given, that was conduct which was not directed to obtaining any benefit for the client, but can only have been intended to protect the practitioner's interest in respect of the excessive costs which he wished to claim. It is therefore my view that the appeal against the finding of unprofessional conduct cannot succeed.
19 So far as penalty was concerned, the orders of the Tribunal were that the practitioner be suspended from practice for a period of two years, fined $8,000, and ordered to pay the costs of the Legal Practitioner's Complaints Committee. Because of the Tribunal's finding that the practitioner had deliberately failed to advise his client of the first offer because he wished to protect himself in respect of an unjustifiable claim for costs, it was submitted to the Tribunal that it should make a report to the Full Court. The Tribunal did not take that course.
20 So far as the practitioner's personal circumstances were concerned, there were materials which were favourable to him. He had been in practice for a considerable time, had many favourable character references, and had apparently not practised since 1998, although there was in his curriculum vitae produced to the Tribunal and dated May 2000 some suggestion that he might wish to practice in the future. Although the Tribunal did not directly refer to this aspect, some of the character references make it plain that the practitioner had at approximately the relevant time been undergoing some serious personal difficulties.
21 However, there was also a record of a number of findings of unprofessional conduct against the practitioner in the past. In 1991 he had pleaded to guilty to one complaint of unprofessional conduct in issuing Local Court summonses in the name of his clients seeking recovery of legal fees without authority, and was fined. In 1994 he was found guilty of undue delay and failing to itemise professional costs in a taxable form, of grossly overcharging and of unprofessional conduct by deducting costs from monies held in trusts without authority to do so. He was fined in relation to those matters and reprimanded. In 1996 he was found guilty of undue delay and in 1997 he was found guilty of undue delay and unprofessional conduct, with this last finding apparently involving an element of misleading a client by attempting to blame another for delay attributable to himself.
(Page 9)
22 The Tribunal took the view that it had "sufficient power to discipline the practitioner without the necessity of reporting to the Full Court", and expressed the belief that it could "mark the seriousness of this unprofessional conduct with an order for suspension and fines".
23 Counsel for the practitioner points out that the two year suspension is the maximum period of suspension possible, and the fine of $8,000 very close to the maximum permitted fine of $10,000; indeed, taken together with a fine of $1,000 in respect of an uncontested finding of gross overcharging, the total fine for these related matters is very close to the maximum permitted. It is then argued, that the power to discipline a practitioner is entirely protective and that there is no element of punishment involved and, further, that there is a well understood distinction between conduct which is disgraceful or dishonourable and which would therefore warrant either striking off or suspension, and mere negligence or other undesirable conduct which nonetheless is not disgraceful or dishonourable and in respect of which a fine would be appropriate. It is submitted that it is difficult, with that distinction in mind, to contemplate circumstances where disgraceful or dishonourable conduct which calls for suspension should also warrant the imposition of a fine. It is submitted that imposition of both a suspension and a fine was more than was warranted to protect the public and more than was required to demonstrate disapproval of the relevant conduct. This submission was carefully framed in the way in which I have described, since it could not be argued that it is never open to the Tribunal to order both a suspension and a payment of a fine, the power to order "any one or more" of the specified matters being clearly set out in s 29A(3) of the Legal Practitioners Act 1893.
24 The first observation to make about this submission is that the conduct involved here was very serious. It involved a deliberate misleading of a client with a view to the practitioner's own financial gain and to the potential disadvantage of the client. The Tribunal's powers in such a case must be exercised so as to ensure that the public is protected from such conduct. Protection of the public from conduct of this kind is potentially achieved in a number of ways; so far as the individual practitioner is concerned, striking off or suspension is designed to ensure that the practitioner does not have the opportunity to repeat the conduct either at all or for a specified period, while some other sanction such as a fine may deter the individual practitioner from repeating the conduct in future. The consequences of such a suspension and the imposition of a fine may also have the effect, once publicised, of deterring other members of the profession from acting in like manner.
(Page 10)
25 So far as the suspension imposed in this case is concerned, the conduct was such that it was appropriate for the Tribunal to take the view that protection of the public required that the practitioner should be precluded from practicing at least for a time. The period of the suspension was not, in my view, inappropriate, having regard to that conduct. Although the practitioner had indicated to the Tribunal that he had "retired" from practice, that indication of course did not preclude him from returning to practice if he should change his mind at a future time. It was therefore proper for the Tribunal to take the view that the protection of the public demanded that it should ensure that that did not take place within the two years which it specified.
26 So far as the fine was concerned, it is to be noted that in the particular circumstances of this case, where the practitioner had apparently no desire to practice, full time, in the near future, a suspension might not be as keenly felt by that practitioner as it would be by many others. It was also the case that the particular practitioner in question had, as I have noted, been found guilty of unprofessional conduct in the past, in circumstances which suggested that he was prepared to pay insufficient regard to his professional obligations where his own costs were concerned. It was open to the Tribunal to take the view that it was necessary in those circumstances to impose a fine so as to bring home to the practitioner the seriousness of his behaviour and to deter him from any repetition of it. This was therefore, in my view, a case in which it was not inappropriate for the Tribunal to take the view that it was necessary to combine suspension with the imposition of a fine. It was also in my view a case where the conduct was of such seriousness that the Tribunal was entitled to take the view that even a suspension, on its own, would not sufficiently mark the seriousness of the conduct.
27 However, it is the case that the penalty imposed was very close to the maximum available, and it must be remembered that it was imposed upon a practitioner who had apparently ceased to derive income from practicing and who would be required to pay the fine at a time when he was at or towards the end of his practicing career. When a fine of that magnitude is coupled with a suspension, it may be said that it is going beyond what is required in the circumstances to protect the public, and exceeding what might be required to demonstrate disapproval of the conduct in question. Having regard to the personal circumstances of the practitioner, and to the fact that a suspension was imposed, and also to the fine of $1,000 imposed in relation to the related conduct of gross overcharging, it is my view that the fine of $8,000 is beyond the range of a sound discretionary judgment and should be reduced to the sum of $4,000.
(Page 11)
28 I would therefore allow the appeal in respect of the penalty imposed by the Tribunal and substitute, in respect of the finding of misleading conduct, a suspension from practice for a period of two years from 1 August 2000 together with a fine in the sum of $4,000, but I would otherwise dismiss the appeal.
29 OLSSON AUJ: I have had the advantage of reading the reasons for judgment of Wheeler J in draft.
30 I agree both with the conclusions to which she has come and the orders which she proposes.
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