Legal Practice Board v Adams - [2001] WASC 78

JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS

CITATION: THE LEGAL PRACTICE BOARD -v- ADAMS [2001] WASC 78

CORAM: HASLUCK J

HEARD: 8 MARCH 2001

DELIVERED : 30 MARCH 2001

FILE NO/S: CIV 1533 of 1999

BETWEEN: THE LEGAL PRACTICE BOARD
Applicant
AND
MICHAEL JOHN ADAMS
Respondent

Catchwords:

Legal practitioners - Motion for contempt - Work performed by a person other than a legal practitioner - Suing out of writs - Drawing and preparing documents relating to legal proceedings - Imposition of penalty

Legislation:

Legal Practitioners Act1893, s 76, s 77, s 78, s 81

Result:

Fine imposed

Representation:

Counsel:

Applicant: Mr B J H Goetze
Respondent: In person

Solicitors:

Applicant: Minter Ellison
Respondent: In person

Case(s) referred to in judgment(s):

Attorney‑General v Quill Wills Ltd (1990) 3 WAR 500
Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335
Barristers' Board v Palm Management Pty Ltd [1984] WAR 101
Cornall v Nagle [1995] 2 VR 188
D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191
The Legal Practice Board v Said, unreported; SCt of WA (Scott J); Library No 940608; 31 October 1994

Case(s) also cited:

Said v The Legal Practice Board, unreported; FCt SCt of WA; Library No 950466; 7 September 1995

HASLUCK J: This application is brought by the Legal Practice Board against the respondent, Michael John Adams, alleging that he is in contempt of the Supreme Court of Western Australia in that, not being a duly certificated legal practitioner, during the period from 8 December 1992 to 30 April 1995 at Perth he did directly or indirectly draw, prepare and sue out two writs of summons indorsed with statements of claim and commence two actions in the Supreme Court of Western Australia.
The application made by the Legal Practice Board is supported by two affidavits sworn by Brian Martin White. Mr White was present at the hearing and was cross‑examined upon his affidavits. Counsel for the applicant also tendered certified copies of the writs in question, being No 1276 of 1993 issued 19 March 1993 and No 1390 of 1993 issued 20 April 1993, and a certificate from the Registrar of the Supreme Court which established that the respondent had not been admitted as a legal practitioner and that his name does not appear on the Roll of Practitioners.
The respondent, Mr Adams, had appeared in person when programming orders were made and on the occasion of his first appearance he indicated that he would not be relying upon affidavit evidence. He represented himself at the hearing of the originating motion and, apart from cross‑examining Mr White, did not present any evidence in response to the case against him.
Counsel for the Legal Practice Board submitted that a contempt of the kind complained of had to be established beyond reasonable doubt. I accept that this is the appropriate standard of proof and will proceed accordingly in reviewing the evidence placed before me: Cornall v Nagle [1995] 2 VR 188.
The affidavit sworn by Mr White established that prior to 1985 he and his wife were, at all material times, the registered proprietors of certain farming land situate at East Pingelly in the State of Western Australia. His brother, John Trevor White, and his sons, Gary Brian White and Terrence Neil White, were also registered proprietors of farming lands in the same vicinity. For ease of reference, I will henceforth refer to the farming lands in question as "the property" and to the registered proprietors collectively as "the White family".
By four deeds executed contemporaneously on 26 March 1985, the White family sold the property to Clive Elliott Jennings Management Ltd for the total sum of $1,470,000. By a deed of novation dated 10 April 1985 between the Jennings company and Perpetual Trustees (WA) Ltd, Perpetual agreed to be bound by the provisions of the four deeds in lieu of the Jennings company. Pursuant to the four deeds and the deed of novation, the White family received various payments of money and also the issue of units in the rural property trust of which Perpetual was trustee.
In due course, the White family sought to redeem various units in the rural property trust, but allegedly did not receive the full value for the same. Further, Perpetual refused to redeem the balance of units held by the White family and a dispute arose.
Because of this dispute, Mr White contacted the Ministry of Fair Trading, then known as the Consumer Affairs Department. In consequence of that contact, he was referred to the respondent to these proceedings, namely, Mr Adams. I find that Mr Adams is not, and was not at any material time, a certificated legal practitioner.
According to Mr Brian White, on 8 December 1992, members of the White family met with Mr Adams at Mr White's home to discuss the claim against Perpetual for outstanding money. Mr Adams told the White family that he had been extensively trained to become a solicitor and that he had previously been a practising solicitor for a number of years. The White family then agreed to retain him to recover the money thought to be owing to them by Perpetual on the basis that the White family would pay to Mr Adams 10 per cent of any sum of money which was recovered, either by legal action or by settlement of an action. The White family also agreed to pay Mr Adams for his out‑of‑pocket expenses, namely, travel from Perth to Mandurah and return, postage and telephone expenses. Mr Adams later reiterated to the White family on many occasions that he had had extensive legal training and that he had been a practising solicitor. He quoted cases of settlements, divorces and other legal matters in which he had been involved.
I digress briefly to observe that in the course of cross‑examination Mr Adams suggested to Mr White that the White family had approached various solicitors, to no avail, and that the role of Mr Adams was limited to helping them sort through what had by now become a very large bundle of papers. In other words, he was simply acting in a clerical capacity. Mr White did not agree with this suggestion. I note also that Mr Adams did not give evidence in support of his suggestion and was unable to point to any document establishing the exact nature of his role.
In the weeks that followed, various meetings took place concerning advancement of the claim. Mr White said in evidence that the White family was advised by Mr Adams to issue notices of default to Perpetual in accordance with the requirements of the four deeds and the deed of novation and to commence legal proceedings. Mr Adams drafted two notices of default by hand and drafted a writ of summons and statement of claim against Perpetual. The evidentiary materials before me included copies of the handwritten drafts. According to Mr White, the respondent was instrumental in arranging for the various documents to be typed. Mr White agreed under cross‑examination that some of the amendments to the drafts were in his hand but he said that these were made at the respondent's direction. Mr White said in evidence that Mr Adams went with him to the Supreme Court to ensure that the two writs of summons were issued out of the court.
The writs in question are the two writs the subject of the present application that the respondent be punished for contempt, that is to say, the writ of summons in action 1276 of 1993 indorsed with a statement of claim between Brian Martin White, Lois Ada White, Gary Brian White and Terrence Neil White as plaintiffs and Perpetual Trustees (WA) Ltd as defendant; and the writ of summons in action 1390 of 1993 indorsed with a statement of claim between John Trevor White as plaintiff and Perpetual Trustees (WA) Ltd as defendant.
The address for service of the White family in respect of each of the actions was given as "C/- Summit Secretarial Services, 1174 Hay Street, West Perth, 6005". According to Mr White, this is the address of Summit, a business which provides secretarial services. Mr Adams told Mr White that he was accustomed to use Summit to type his documents and letters. Summit delivered various accounts to Mr White for typing undertaken by it for the White family at the request of Mr Adams.
I note that writ of summons 1276/1993 bears a handwritten notation to the effect that it was prepared by Brian Martin White and issued by him. Mr White said in evidence that these words were dictated to him by someone at the Court counter on the day the writ was issued and that Mr Adams was standing with him at the time. Writ of summons 1390/1993 bears typed endorsements to the effect that it was prepared and issued by the plaintiff John Trevor White.
After Perpetual entered an appearance, Mr Adams told Mr White that it would be necessary for the White family to instruct solicitors to act for it on each of the writs. Accordingly, in or about April 1993, Adams introduced the White family to a firm of solicitors who thereafter conducted the litigation on behalf of the White family.
On 10 December 1997, a mediation was held in respect of each of the actions. This resulted in a settlement from Perpetual to the White family in the sum of $200,000.
Between 8 December 1992 and 10 December 1997, the White family paid Mr Adams the sum of $51,305, plus an approximate further amount of at least $3,000 for meals and refreshments. These moneys exceeded 10 per cent of the settlement moneys received by the White family from Perpetual following settlement of the actions at mediation.
I pause to note that it was an agreed fact at the hearing that Mr Adams did receive the sum of $54,305 from the White family. There was an issue between the parties as to whether any part of this amount could be described as a fee referable to the period leading up to the issue of the writs. The suggestion raised by Mr Adams in cross‑examination was that the amount in question was reimbursement for time and out of pocket expenses associated with presentation of the claim, including a voluminous process of discovery, once the proceedings were under way.
The settlement was followed by a series of exchanges by letter between the White family and Mr Adams concerning Mr Adams' alleged entitlement to remuneration for his services. Copies of these exchanges form part of the evidentiary materials before me. It is not necessary to review the correspondence in detail. It is clear from the correspondence that Mr Adams was insisting upon an entitlement to a fee of 10 per cent of the funds recovered by the White family pursuant to the settlement. In a letter to Mr White dated 2 February 1998, Mr Adams said:
"All of you were participants in the original agreement made with me at your home when as a group you decided, under my tutelage, to embark upon litigation against Perpetual Trustees and Graham Quartermaine to recover the financial losses which you had sustained through those parties."
During the course of the correspondence, Mr Adams foreshadowed the commencement of proceedings in the Local Court to recover the amount allegedly due to him and submitted to Mr White a draft copy of the particulars of claim setting out the nature of his claim. According to those particulars, Mr Adams was consulted by the White family and as a consequence, during the "consulting period", Mr Adams attended upon members of the White family "for the purpose of drafting the defendants' correspondence, miscellaneous documents (other than legal documents) and other writings".
The Legal Practitioners Act1893 contains various provisions indicating that legal work may only be performed by a certificated legal practitioner.
Section 76 provides that no person other than a certificated practitioner shall directly or indirectly sue out any writ or process, nor commence or carry on proceedings in any court whatever of civil or criminal jurisdiction in Western Australia, nor act as a solicitor in any cause, matter or suit.
Section 77 provides that no person other than a certificated practitioner shall directly or indirectly perform or carry out or be engaged in any work in connection with the administration of law, or draw or prepare any deed, instrument, or writing relating to or in any manner dealing with or affecting real or personal estate or interest therein or any proceedings at law, civil or criminal or in equity.
Section 78 goes on to provide that nothing in s 77 shall extend to make any person liable to any penalty if such person satisfies the court that the person has not directly or indirectly been paid or remunerated or promised or expected pay or remuneration for the work or services so done.
By s 81 of the Legal Practitioners Act every person who acts contrary to the terms of the Act, or to any provision of or obligation imposed by or under the Act, shall be guilty of a contempt of the Supreme Court and may be dealt with accordingly by the said court or a Judge thereof in chambers on the motion of the Legal Practice Board.
In D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191, Malcolm CJ noted at 207 that the purpose of these provisions is to protect members of the public by ensuring that legal work is carried out only by persons who have obtained a proper legal education, leading to appropriate qualifications and who are subject to the disciplinary supervision of the courts in their practice of the law. For the purposes of the Act "legal work" is specifically defined in s 76 and s 77 as well as "any work connected with the administration of law".
I note in passing that discussion by members of the Full Court in that case allowed for the possibility that work of a menial or clerical kind undertaken by clerks, or other persons, might not be viewed as falling within the prohibitions reflected in s 76 and s 77. It followed that a practitioner was not at liberty to include in his remuneration any charge for clerical, secretarial or administrative work carried out by a law clerk, in the same way that such work, where carried out by a practitioner, may not be charged. Malcolm CJ also noted that the prohibition contained in s 76(1) should, having regard to s 77(1) of the Act, be confined to the specific matters stated in s 76(1).
In Barristers' Board v Palm Management Pty Ltd [1984] WAR 101 Brinsden J had occasion to consider the meaning of the expression "administration of law". He was of the view (at 107) that the expression "administration of law" is to be read as meaning "the practice of law" or "the practice of the law" and this meaning should be given to the phrase in s 77. He went on to suggest that the practice of law also includes the giving of legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments, including contracts, by which legal rights are either obtained, secured or given away, although such matters may not then or ever be the subject of proceedings in a court. If the giving of such advice and performance of such services affect important rights of a person under the law, and if the reasonable protection of the rights and property of those advised and served requires that the person giving such advice possess legal skill and a knowledge of the law greater than that possessed by the average citizen, then the giving of such advice and the performance of such services by one for another as a course of conduct constitutes the practice of the law.
Further, he cited with approval a proposition emerging from the decided case that where an instrument is to be shaped from a mass of facts and conditions, the legal effect of which must be carefully determined by a mind trained in the existing laws in order to ensure a specific result and to guard against others, more than the knowledge of the layman is required. A charge for such service brings it definitely within the term "practice of the law".
It is apparent from Cornall v Nagle (supra) that where a person in bringing documents into existence exercises his mind as to what is the appropriate form of words to accommodate the particular case, then this can be regarded as drawing or preparing a legal document. A process of that kind goes beyond mechanical or clerical tasks and is of a kind required to be performed by a solicitor. Also see Attorney‑General v Quill Wills Ltd (1990) 3 WAR 500; The Legal Practice Board v Said, unreported; SCt of WA (Scott J); Library No 940608; 31 October 1994.
I must now apply the relevant statutory provisions and principles emerging from the decided cases to the circumstances of the present case. I have already noted that Mr Adams was not a certificated legal practitioner and therefore the question is whether, during the period referred to in the originating motion, namely, from 8 December 1992, or thereabouts, to 30 April 1995, or thereabouts, he infringed the statutory prohibition by suing out the two writs of summons referred to earlier and commencing two actions in the Supreme Court.
It is apparent from the affidavit evidence of Mr White that Mr Adams played an active role in seeking to understand the facts underlying the dispute between the White family and Perpetual and in then refining the claims in the form of draft statements of claim. The evidence of Mr White establishes that Mr Adams acted in the same manner as a solicitor in purporting to take instructions from a client and then giving a shape to the facts and matters conveyed to him so that a claim could be advanced against a third party. It is material to note that in the course of discussion with members of the White family Mr Adams described himself as having been extensively trained to become a solicitor and that he had previously been a practising solicitor for a number of years.
It is apparent from the various handwritten drafts adduced in evidence that Mr Adams exercised skill in formulating the statements of claim in a way which would present the claims in their best light. He was not acting in a mechanical or clerical manner, but was exercising a degree of skill as to what matters should be relied upon by the claimants in order to obtain relief. I have noted that in one of his letters he refers to the litigation being embarked upon "under my tutelage". It is quite apparent from the subsequent correspondence that he expected to be remunerated for his services and there is evidence before the court from Mr White that he was, in fact, remunerated. I find that he was present when the writs were issued. Against the background I have described, an inference can be drawn that he attended at the court in order to ensure on each occasion that the suit was properly and effectively commenced.
Mr Adams argued in closing that at all material times he was simply acting as a consultant. He was acting essentially in a clerical capacity during the subject period, December 1992 to April 1995 and, in any event, he was not remunerated for legal work during that period. This meant, having regard to s 78 of the Legal Practitioners Act, that he could not be liable under s 77 of the Act for drawing or preparing any writing. He was not liable under s 76 for suing out the writs because the person suing out the writ is the person named on the face of the writ itself as having prepared and issued the writ, notwithstanding that the prohibition in s 76 is against "directly or indirectly" suing out any writ or process.
Against this background, I conclude that the respondent has infringed the prohibition contained in s 76 of the Legal Practitioners Act in that, while not being a certificated legal practitioner, in the name of members of the White family he sued out a writ and commenced proceedings on behalf of the White family. He acted as a solicitor. His actions amounted to the exercise of legal and intellectual skills of the kind commonly performed by a solicitor in the practice of the law and cannot be regarded merely as clerical or mechanical steps.
His supervisory role is neatly encapsulated in his own description of the proceedings being embarked upon under his "tutelage", a term indicating that the White family were being guided by him as he shaped their case and gave effect to their requirements. Quite clearly, this is the role usually performed by a solicitor. A solicitor who sends his filing clerk to court can still be regarded as suing out the writ. At the very least, in my view, a person acting essentially as a solicitor who is the guiding intelligence behind the issue of a writ will be regarded as indirectly suing out the writ.

Further, and in any event, I consider that Mr Adams engaged in work in connection with the administration of law for which he was remunerated in that he did draw and prepare writings relating to proceedings at law. It follows that he also infringed s 77 of the Legal Practitioners Act. I am satisfied that of the sum of $54,305 that was paid to Mr Adams, a portion of the said amount can properly be characterised as referable to the agreement negotiated on 8 December 1992 and to Mr Adams' work thereafter on the statements of claim.
It follows from these findings of infringement that the applicant is entitled to the relief sought in the originating motion alleging contempt of court and that the respondent, Mr Adams, must be punished for contempt of the Supreme Court of Western Australia in the manner allowed for by s 81 of the Legal Practitioners Act.
I now turn to penalties.
In Barristers' Board v Palm Management Pty Ltd (supra) the respondent company and its in‑house legal adviser were held to be in contempt in having prepared various deeds in the course of their tax minimisation service. Brinsden J viewed the contempts as serious and imposed fines of $500 for each offence, making $1,000 in all.
In Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335 a company carrying on business as a business consultant accepted instructions to establish a unit trust in circumstances that were held to infringe s 77 of the Act. At that time, it seems, the maximum penalty prescribed by the Act was the sum of $2,000. In the event, Brinsden J imposed a fine of $750 in relation to the principal contempt, $250 for a related matter and $50 for each of various subsidiary contempts.
The maximum penalty provision was removed by s 22 of the Legal Practitioners Amendment (Disciplinary and Miscellaneous Provisions) Act 1992 so that s 81 now provides that a person guilty of contempt "may be dealt with accordingly".
When I return to the circumstances of the present case I am obliged to keep steadily in mind that the matters complained of do not relate to the association of Mr Adams with the litigation over many years, for which he received a substantial fee, but to the specific acts of having drawn and prepared and subsequently sued out two writs on behalf of the White family. He negotiated a fee for his services but I am prepared to accept that his actions were prompted to some extent by a willingness to assist a family who had not been able to obtain legal representation. I am also prepared to accept that, in purporting to act as a consultant, Mr Adams may not have been fully aware of where the boundary lay between giving commercial advice with a view to assisting a claimant and acting as a solicitor contrary to the prohibitions contained in the Legal Practitioners Act. Nonetheless, I am conscious that the provisions of the Act exist for the protection of the public and it is therefore important that the fine imposed should reflect the seriousness of the offence.
The case against the respondent was presented on the basis that there was one contempt, albeit involving the issue of two writs, and alternative bases of liability. Having regard to the facts and matters I have just mentioned, I will fine Mr Adams $800. I will hear from the parties as to whether any further orders are required.