Legal Profession Board of Tasmania v A Legal Practitioner

[2022] TASSC 54

[2022] TASSC 54

COURT:	SUPREME COURT OF TASMANIA
CITATION:	Legal Profession Board of Tasmania v A Legal Practitioner [2022]
TASSC 54
PARTIES:	LEGAL PROFESSION BOARD OF TASMANIA
v
A Legal Practitioner
FILE NO:	535/2022
DELIVERED ON:	24 August 2022
DELIVERED AT:	Hobart
JUDGMENT OF:	Geason J
CATCHWORDS:

Professions and Trades – Lawyers – Complaints and discipline – Tasmania – Legal Profession Board alleging professional misconduct following complaint – Practitioner failed to comply with costs disclosure obligations – Practitioner breached fiduciary duties – Practitioner grossly overcharged Complainants – Practitioner made false or misleading statements to Complainants – Declaration of professional

misconduct.

Law Society of Tasmania v Turner 11 Tas R 1 referred to.
Legal Profession Act 2007, s 421.

Aust Dig Professions and Trades [1274].

REPRESENTATION:

Counsel:

Applicant:	Chris Gunson SC
Respondent:	Peter Slipper

Solicitors:

Applicant:	Tremayne Fay Rheinberger
Respondent:	In Person

Judgment Number:	[2022] TASSC 54
Number of paragraphs:	16

Serial No 54/2022 File No 535/2022

LEGAL PROFESSION BOARD OF TASMANIA v A LEGAL PRACTITIONER

REASONS FOR JUDGMENT GEASON J
24 August 2022

1            On 15 August 2022 the Court made a declaration that the respondent was guilty of professional misconduct, and made consequential orders on the basis of that declaration.

The conduct

2   The conduct engaged in by the practitioner was particularised as follows:

[That he]

"(a) failed to comply with costs disclosure obligations under Division 3 of Part 3.3 of

the Legal Profession Act 2007 and in particular:

(i) contrary to s291(1)(c) failed to disclose to Mr J and Mrs JJ (Complainants) an

estimate of the total legal costs if reasonably practicable or, if it was not

reasonably practicable to estimate the total legal costs, a range of estimates of

the total legal costs and an explanation of the major variables that will affect the

calculation of those costs;

(ii) not having elected to receive remuneration under a costs agreement in

accordance with r84 of the Rules of Practice 1994, and not having entered into

a cost agreement in accordance with Division 5 of Part 3.3 of the Legal

Profession Act, charged professional fees by reference to time in contravention

of rr84(2) and 85 of the Rules of Practice;

(b)	breached fiduciary duties owed to the Complainants by failing to provide:
(i) full and complete disclosure in relation to his proposed costs as required by

Division 3 of Part 3.3 of the Legal Profession Act;

(ii)  advice that by charging on a time basis he proposed to depart from the

requirements of r85 of the Rules of Practice as to the calculation of his costs;

(iii) advice that the standard residential conveyancing practice in Tasmania is to

charge a fixed fee for ‘routine’ transactions;

(iv) advice that there were competent solicitors and licensed conveyancers in

greater Hobart who would be prepared to perform the Complainants’

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conveyancing at considerably less cost for each transaction than the costs likely

to be charged by him;

(v) advice that his time costed fees would be considerably higher than the amounts

that would be charged by competent solicitors or licensed conveyancers in

greater Hobart;

(vi) advice that he proposed to provide an unusually thorough or cautious service

that other competent solicitors and licensed conveyancers would consider

unnecessary or unwarranted;

(c) grossly overcharged the Complainants in that he:

(i) charged legal costs for administrative or non-legal work;

(ii) charged for work that was unnecessary and spent inordinate amounts of time

on other matters;

(iii) charged total legal costs that were many times in excess of what other

competent and reputable solicitors or licensed conveyancers would charge for

transactions of a similar nature;

(d) made false or misleading statements to the Complainants regarding the legal costs

charged by the other solicitors to the transactions in an email dated 6 June 2018, and

in particular:

(i) asserted that the fees charged by Ms DM of $1,223.64 did not include the

$2,000 deposit that had been released to Ms M, in circumstances in which he

knew that Ms M fees were $1,223.64 and the $2,000 was payable to the real

estate agent;

(ii) asserted that the fees charged by another legal practitioner were $10,049.55, in

circumstances in which he knew that another legal practitioner had not

charged professional fees of $10,049.55 or alternatively had no reason to

believe that another legal practitioner had charged professional fees of

$10,049.55."

Facts

3             The Court received evidence from the Board, the Law Society of Tasmania, and another lawyer, (who gave evidence as an expert) with respect to the quantum of fees charged. That evidence established, among other things, that the practitioner had charged $14,542.91 in excess of that which might reasonably have been charged for the work done.

4             In August 2018 the Legal Profession Board of Tasmania (the Board) received a complaint from clients of the practitioner in respect of the professional costs charged on of the sale and purchase

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of two properties. They considered the fees charged for the professional work to be excessive. They had contacted the practitioner about the quantum of his fees. They very politely indicated some "confusion" with respect to them. The fees were in the amount of $16,590.00. They observed that the fee for the lawyer engaged by the other party to one of the transactions was in the amount of $1,223.64. They thought this "was a significant difference".

5   In response the practitioner wrote a lengthy email explaining his fee. He referred to the

following matters:

i.              The time expended in the sale by the vendor's lawyer was "in no comparison to the time

expended/engaged by us in the purchase….".

ii.             To the need to re-finance an existing home loan, discharge a mortgage, the "extensive time engaged in settling" the sale agreement and "resurrecting a sale", "securing variations/rent reimbursements etc.," and "numerous problems encountered/arising in the two transactions."

He further asserted that fees charged by the other lawyer did not include a sum of $2,000.00, which had been released to that practitioner, and that the fees charged by that practitioner were in fact $10,049.55.

6            The reply was dishonest. It was directed towards dissuading his clients from taking further action with respect to the quantum of his fees, and, securing payment of them.

7             That conduct compounded the seriousness of the initial overcharging.

8 The failure of the practitioner to enter into a formal costs agreement, and provide an estimate of his costs, as required under division 3 of part 3.3 of the Act facilitated the overcharging. An appropriate estimate of professional costs would have enabled the clients to make an informed choice and to obtain quotes elsewhere.

The Law

9

The role of courts and professional bodies in matters of overcharging is supervisory in nature. From the 1800's, it was "envisaged that lawyer-client costs agreements could be set aside by a Court, within its inherent jurisdiction, for lacking either 'fairness' or 'reasonableness'": Contextualising Lawyer Overcharging, Monash University Law Review Volume 42 No.2, pp 283, G E Dal Pont. The author observes that disciplinary responses from those overseeing the practice of the law were given statutory force in the 1990's, "more extensively traversing to statute in most jurisdictions in the mid- part of the first decade of the 21st century."

10   Professional misconduct is defined in the Legal Profession Act 2007 (The Act) as follows:

"Professional misconduct

(1) For the purposes of this Act –

professional misconduct includes –

(a) unsatisfactory professional conduct of an Australian legal practitioner, where

the conduct involves a substantial or consistent failure to reach or maintain a

reasonable standard of competence and diligence; and

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(b) conduct of an Australian legal practitioner whether occurring in connection

with the practice of law or occurring otherwise than in connection with the

practice of law that would, if established, justify a finding that the practitioner

is not a fit and proper person to engage in legal practice.

(2) For finding that an Australian legal practitioner is not a fit and proper person to

engage in legal practice as mentioned in subsection (1) , regard may be had to the

suitability matters that would be considered if the practitioner were an applicant for

admission to the legal profession under this Act or for the grant or renewal of a local

practising certificate."

11           Section 510 of the Act preserves the Court's inherent jurisdiction and powers. At common law professional misconduct "consists in behaviour on the part of a legal practitioner which would reasonably be regarded as disgraceful or dishonourable by legal practitioners of good repute and competency": Law Society of Tasmania v Turner 11 Tas R 1 [44].

Discussion

12           There can be no question that the conduct engaged in by the practitioner constituted professional misconduct at common law and the Court so held. It was, as I have said, dishonest, and disgraceful, as evidenced by the scale of the overcharging and the attempt to mislead the clients as to the reasons for it. Those attempts disguised the truth and were calculated to discourage any further action by the clients, a course which exploited the solicitor/client relationship, and the trust that had developed over a period of time.

13          To his credit, the practitioner acknowledged that to be so. He consented to orders in the terms sought by the Board as follows:

"1. That the respondent be admonished or reprimanded.

2. That the respondent apologise to his clients for the conduct the subject of the

complaint.

3. That the respondent pay to the client the sum of $14,542.91 inclusive of interest

within 30 days of the order of the Court.

4. That the respondent pay the applicant's costs of $28,000.00 within 45 days of the
order of the Court."

14           At the time of the hearing, the practitioner had already complied with the requirement that he apologise to his clients and repay them the specified sum. Accordingly, the Court's orders were amended with a notation to that effect.

15           If it is thought that a reprimand, the punitive component of the order, is unduly lenient, the Court records that it had regard to the fact that an apology had been given, that the clients had been re- paid, and that the practitioner had retired and was unlikely to practice again. It gave weight to the

Board’s submissions including that it considered a reprimand sufficient in the circumstances. The

practitioner’s retirement meant that the need to protect the public, an important objective of

disciplinary proceedings, was not relevant.

16           Practitioners should be in no doubt however, that an order striking off a practitioner will be within the range of orders properly considered by a court dealing with a practitioner guilty of

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overcharging clients. Such conduct, constitutes a fundamental breach of the professional obligations owed to a client. It squarely raise issues of a practitioner's suitability to continue in practice. In such cases an order striking off a practitioner may be necessary in order to protect the public.