Law Society of NSW v Maria Bechara

[2008] NSWADT 215

CITATION:	Legal Services Commissioner v Maria Bechara [2008] NSWADT 215 This decision has been amended. Please see the end of the decision for a list of the amendments.
DIVISION:	Legal Services Division
PARTIES:	APPLICANT : Legal Services Commissioner RESPONDENT: Maria Bechara
FILE NUMBER:	062023
HEARING DATES:	23 June 2008 3 July 2008 8 July 2008
SUBMISSIONS CLOSED:	8 July 2008
DATE OF DECISION:	4 August 2008
BEFORE:	Haylen W - J (Deputy President); Barnes M - Judicial Member; O'Neill A - Non Judicial Member
CATCHWORDS:	Evidence - Leave to rely on new expert report
LEGISLATION CITED:	Legal Profession Act 2004
CASES CITED:	J L Holding Pty Ltd (1996-7) 189 CLR 146
REPRESENTATION:	C Champion, barrister Doyle Gray, barrister
ORDERS:	Leave is granted to the Legal Services Commissioner to rely on Ms Castle's report. The parties should discuss an appropriate timetable to allow the Respondent solicitor to file any further material arising from the contents of Ms Castle's report.

1 In September 2006, the Legal Services Commissioner filed an Application pursuant to the provisions of the Legal Profession Act 2004 seeking that the Respondent solicitor, Ms Maria Bechara, be subject to the following Orders:

(1) An Order that the Disciplinary Application be joined with the Disciplinary Application against the instructed barrister, Mr Serge Galitsky.

(2) A finding that the Respondent is guilty of professional misconduct.

(3) An Order that the Respondent be fined.

(4) An Order that the Respondent be publicly reprimanded.

(5) An Order that the Respondent pay the costs of, and incidental to, the filing and hearing of the Information.

(6) Such other Orders as the Tribunal sees fit.

2 The Respondent solicitor had acted in relation to three personal injury cases on behalf of three members of the same family. Although the accidents giving rise to the injuries did not occur at the same time, they all arose in similar circumstances. All three matters were heard together in the District Court over a period of six days and the parties accepted that the evidence in each matter should be evidence in the other matters. The Respondent briefed counsel, Mr Serge Galitsky, to act in each matter. It seems apparent that it was the expectation of the Respondent and Mr Galitsky that the matters would be heard consecutively but at the suggestion of the presiding Judge, the matters were heard together. During the hearing, a solicitor from Ms Bechara's firm attended court to instruct counsel. A separate fees agreement was entered into by the Respondent solicitor with each of the three plaintiffs and, inter alia, provided for the payment of $250 per hour for the services of a solicitor, other than a partner or principal of the firm who was to be charged out at a slightly higher rate. In relation to the hearing, the Respondent charged each client $250 per hour for each hour of the six day hearing, resulting in the solicitor being actually charged at the rate of $750 per hour during the hearing.

3 Having regard to these circumstances, the Legal Services Commissioner alleged that the Respondent solicitor "deliberately charged grossly excessive amounts of costs" and had failed "to apportion costs common to the three matters" and further, that the Respondent solicitor had charged each client the total cost of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportion such costs so as to charge each client a proportion of the total cost of the hearing. The Legal Services Commissioner also commenced disciplinary proceedings against Mr Serge Galitsky, counsel briefed in the three matters. In both matters, the Legal Services Commissioner relied on an affidavit sworn by a legal costs assessor, Mr McIntyre. The matters were listed for hearing before the Tribunal with Ms Bechara's matter to be dealt with first, followed by the hearing of Mr Galitsky's matter.

4 When Ms Bechara's matter was listed before the Tribunal in late August 2007, at an early stage in the proceedings the Tribunal took the unusual (but in the circumstances reasonable) step of inviting the Legal Services Commissioner to provide further particulars, having raised a concern with the sufficiency of the original particulars. The particulars were described as "grossly inadequate" and it was also suggested that Mr McIntyre's expert opinion did not set out how the fees were grossly excessive or to what extent they were grossly excessive or by what amount. The Tribunal drew attention to the fact that the matter was not simply one concerned with the interests of the Legal Services Commissioner or the solicitor but also involved the public interest: it was appropriate that the matter be properly ventilated and that the issues be properly explored in the public interest. After some short discussion, counsel for the Legal Services Commissioner accepted the Tribunal's "invitation" to provide further particulars and a timetable was agreed to allow that to occur and for the Respondent solicitor to respond. In the circumstances, the Tribunal did not regard itself as being part-heard in the matter and reserved the question of costs.

5 Later in the same week of August 2007, the Tribunal heard the Galitsky matter. In that matter there was significant argument as to the status of Mr McIntyre's affidavit as expressing an expert opinion and considerable argument as to whether a case had been properly made out against Mr Galitsky. After hearing argument, the Tribunal determined that Mr McIntyre's evidence did not qualify as expert opinion and that the views he expressed did not expose any real expertise or valid basis for the opinions he had formed. In light of these findings, it was held that the Legal Services Commissioner was unable to establish a basis for finding that Mr Galitsky was guilty of professional misconduct and the Application was duly dismissed.

6 In an apparent recognition of these unfolding circumstances and the likely inadequacy of its expert evidence in the Respondent solicitor's case, the Legal Services Commissioner not only filed further particulars but also filed an Application seeking leave to rely on the affidavit and exhibited report of Ms Castle, purporting to be an independent expert report prepared for the purposes of the proceedings involving Ms Bechara. Ms Castle stated that she had an extensive history in a wide range of legal costing issues.

7 In that report, Ms Castle indicated that she was not aware of any court order or Tribunal decision directly on point but referred to general principles emerging from the practice of cost assessments and from taxation practice that a lawyer could not charge the same unit of time more than once. A lawyer spending an hour drafting documents relevant to two clients could not charge both clients for the hour but had to apportion those costs, either by reference to the work actually performed or by equally dividing the costs between the two clients. Ms Castle then offered an opinion as to how an experienced costs assessor would deal with Ms Bechara's clients and the Respondent's claim that each be charged the full fee of $250 per hour for each hour spent during the hearing of the District Court proceedings. Consideration was to be given to both the costs agreement and the principle that costs agreements only provided for hours spent on the work of the client who was the subject of that agreement, as well as the overriding principle that a solicitor would only be allowed, on assessment, such costs as were "fair and reasonable". In Ms Castle's opinion a costs assessor should not, and would not, have allowed Ms Bechara to charge each client the full amount for each day of the hearing and the costs would have to be apportioned as to the time actually spent on each client's case or, more likely in the circumstances of this case, by apportioning the time equally between the three clients.

8 The Respondent solicitor opposes the Application to allow the filing of Ms Castle's affidavit and report and contends that no case has been made out to allow the Legal Services Commissioner to rely on this new evidence in relation to, potentially, a new issue. Despite the variety of grounds raised to oppose the course sought to be adopted by the Legal Services Commissioner, in oral submissions, counsel for the Respondent solicitor frankly accepted that in almost any other jurisdiction this Application would be routinely dealt with and any prejudice to the Respondent solicitor would be adequately met by a costs order in the Respondent's favour. The jurisprudence that would normally allow fresh evidence to be called and to protect the Respondent's interests by a costs order derived from jurisdictions where costs were readily available and followed the event. That was not the position under s 566 of the Legal Profession Act - that provision was primarily aimed at the circumstances in which a costs order may be made against a legal practitioner. Where an order was able to be made in favour of a practitioner, that order would be for payment of costs from the Public Purpose Fund and not from the Applicant Legal Services Commissioner as in this case.

9 Counsel for the Respondent Solicitor pointed to the extensive history of Directions whereby the matters were prepared for hearing and the fact that additional evidence from Mr McIntyre had been allowed against the opposition of the Respondent. Over a considerable period of time, it was argued, the Applicant had ample opportunity to present its evidence and had been prepared to proceed on the basis of Mr McIntyre's evidence prior to the intervention of the Tribunal. What was now proposed was a second attempt to rectify the Applicant's evidentiary case. There was as much a public interest in having the Tribunal's proceedings efficiently dealt with as there was a public interest in ensuring the proper conduct of legal practitioners. There was no adequate reason advanced as to why this evidence had not been filed in a timely way, and the Respondent solicitor challenged the submission that the evidence was to be properly considered as "critical" to the case put forward by the Legal Services Commissioner.

10 It was also submitted that if the proposed evidence was allowed, it had the potential to open up a new area of factual enquiry and that would place burdens upon the Respondent solicitor in analysing those claims and adequately meeting them.There was also the strain of litigation to be considered where the Respondent was a personal litigant. Ms Bechara had been facing these proceedings for over 18 months and they were grave charges that were brought against her.

DELIBERATION

11 Although the Respondent solicitor has raised a number of matters for consideration and while it may be said that the Legal Services Commissioner has taken considerable time to obtain the expert evidence necessary to support the particulars of the claim, the circumstances of this case are such that it is appropriate that leave be granted to permit the Legal Services Commissioner to rely upon the affidavit and report of Ms Castle.

12 In dealing with this Application, it is significant that, although the matter was originally called for hearing, the Tribunal adjourned that hearing after taking the unusual step of inviting the Legal Services Commissioner to provide further particulars in order for the matter to be properly ventilated in the public interest. The Tribunal did not regard itself as part-heard in the hearing of the matter and that description of the case has not been put in question by the parties in relation to the present Application before the Tribunal.

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

14 As already mentioned, it is of some significance that in the course of argument, counsel for the Respondent solicitor accepted that in an ordinary costs jurisdiction a costs order would be an adequate response to any possible prejudice suffered by the Respondent solicitor. It does not follow, however, that a restricted costs jurisdiction such as provided in s 566 of the Legal Profession Act results in the present Application being rejected because there is a possibility that the costs associated with the Application, if granted, might not be recovered or fully recovered by the Respondent solicitor. The legislature has taken a public policy approach to costs in this Division of the Tribunal's jurisdiction: in some other jurisdictions, for similar reasons, there are no costs recoverable. In many cases, that is a reflection of the Legislature's concern that it is more important to provide a means of settling issues or ensuring public confidence in a process and that interest extends beyond imposing cost obligations on the parties or in limiting those obligations. Ultimately, costs are not imposed as a penalty where a full costs jurisdiction operates. In this case, costs should not be seen as a necessary penalty on the Legal Services Commissioner for the lateness of this expert evidence.

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

16 While the Respondent solicitor refers to the strain of litigation and the expectation that the case should be brought to trial in a timely way, the intervention of the Tribunal in relation to further particulars itself has played a role in requiring further time to conclude the hearing but that is the direct result of giving effect to the public interest as articulated by the Tribunal at the time of the adjournment. There was no medical or other evidence suggesting that the strain of the unresolved litigation was such that it was becoming harmful to the Respondent solicitor or her health in a way that would justify curtailing the evidence sought to be relied upon by the Legal Services Commissioner.

17 During the course of argument, some attention was given to the content of Ms Castle's report and its utility in assisting the Tribunal to deal with the claims made against Ms Bechara. It is not appropriate, however, in advance of the hearing of the matter to form a judgement about the content of the report other than to form the view that, if accepted, it has the capacity to bear upon the issues before the Tribunal. The Tribunal is of the view that the report has that capacity but it is inappropriate to express any further view about Ms Castle's report until the parties have had a full opportunity to debate the issues on the hearing of the substantive Application.

18 Ultimately, this Application calls for the exercise of a discretion in a context not too dissimilar to that considered by the High Court in Queensland in J L Holding Pty Ltd (1996-7) 189 CLR 146. There are a number of considerations in exercising such a discretion. In the present case it is relevant that a final hearing date has not yet been set following the adjournment, and the proposed new evidence will not bring undone a long settled hearing date to which the parties had been working. The issue raised by the Legal Services Commissioner appears not to be the subject of a ruling by the Tribunal or a Court: it is a point of some interest to the legal profession and the course proposed by the Applicant appears to be the only way in which the real merits of the issue can be litigated. The need for the new evidence is explained by reference to the issues raised in the Galitsky proceedings. Bearing in mind the need to do justice between the parties, the balance of considerations falls in favour of allowing the Legal Services Commissioner to argue the issue on the basis of the new evidence.

19 One further issue requires comment. In the course of addressing the Application for Leave to file and rely on Ms Castle's report, counsel for the Respondent solicitor raised issues as to natural justice in the context of an assertion that the original proceedings were not properly commenced. It is not necessary to detail how that argument was put but it is necessary to state that if such an application is to be pursued, it should be fully developed in an Application in its own right and should not be merely mentioned late in the submissions dealing with an Application for leave to rely on a further expert report. It might also be noted that the Respondent solicitor could have taken this point at a much earlier time.

20 For the Reasons expressed above, Leave is granted to the Legal Services Commissioner to rely on Ms Castle's report. The parties should discuss an appropriate timetable to allow the Respondent solicitor to file any further material arising from the contents of Ms Castle's report.

07/08/2008 - Amendment to applicant name - Paragraph(s) coversheet