LEGAL SERVICES AND COMPLAINTS COMMITTEE and BUTLER
[2023] WASAT 124
•13 DECEMBER 2023
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
CITATION: LEGAL SERVICES AND COMPLAINTS COMMITTEE and BUTLER [2023] WASAT 124
MEMBER: JUDGE K GLANCY, DEPUTY PRESIDENT
MR J O'SULLIVAN, SENIOR MEMBER
MS R LAVERY, MEMBER
HEARD: 6, 7 SEPTEMBER 2023 AND 16 NOVEMBER 2023
DELIVERED : 13 DECEMBER 2023
FILE NO/S: VR 114 of 2022
BETWEEN: LEGAL SERVICES AND COMPLAINTS COMMITTEE
Applicant
AND
JOHN WESLEY BUTLER
Respondent
Catchwords:
Vocational regulation - Legal practitioner - Allegations of professional misconduct - Allegation of invoicing and receiving payment for legal services from client who the practitioner knew, or ought to have known, lacked capacity to understand costs agreement, the invoices and her rights in relation to the invoices, or in circumstances where the practitioner had real doubt about the client's capacity to understand those matters - Finding of professional misconduct
Legislation:
Interpretation Act 1984 (WA), s 37
Legal Profession Act 2008 (WA), s 5(a), s 198, s 295, s 295(1), s 295(4), s 295(6), s 296(7), s 402, s 403, s 403(1)(a), s 404, s 428, s 438, s 438(1), s 438(2), s 439, s 440, s 441, s 442
Legal Profession Uniform Law Application Act 2022 (WA), s 6, s 260(a)
Result:
The Practitioner is guilty of professional misconduct
Category: B
Representation:
Counsel:
| Applicant | : | P Cahill SC & CR Bailey |
| Respondent | : | S Penglis SC & B Tariq |
Solicitors:
| Applicant | : | Legal Services and Complaints Committee |
| Respondent | : | Fletcher Law |
Cases referred to in decision(s):
Borchert v Terry [2009] WASC 322
Briginshaw v Briginshaw (1938) 60 CLR 336
Fradgley v Pocklington (No 2) [2011] QSC 355
Gibbons v Wright [1954] HCA 17; (1954) 91 CLR 423
Goddard Elliott (firm) v Fritsch [2012] VSC 87
Hakuna Matata Corporation Pty Ltd v McDonald Pynt Lawyers [No 2] [2012] WASC 513
Kyle v Legal Professionals’ Complaints Committee [1999] WASCA 115
Legal Profession Complaints Committee and Goldsmith [2022] WASAT 43
Legal Services and Complaints Committee and Goldsmith [2022] WASAT 43 (S)
Legal Services and Complaints Committee and Lourey [No 2] [2023] WASAT 77
Legal Services Commissioner v Pennisi [2023] QCAT 118
Palmer v Dolman [2005] NSWCA 361
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction and outcome
By application dated 22 December 2022, the Legal Services and Complaints Committee (Applicant) referred to the State Administrative Tribunal for determination a complaint that Mr John Wesley Butler (Practitioner) had engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act2008 (WA) (LP Act). The Practitioner was the principal of the Australasian Lawyers' Group Pty Ltd, trading as Butler's Lawyers and Notaries in Nedlands (Firm).
On 6 September 2023, we gave leave to the Applicant to amend the Ground and the Statement of Facts and Contentions in accordance with its Minute of Second Further Amended Annexure A. On 16 November 2023, we gave the Applicant leave to make a further amendment to the Minute of Second Further Amended Annexure A to correct what was clearly an accidental omission of a word from that document.[1]
[1] The amendment was the insertion of the word 'diligent' after the word 'competent' in line 4 of the introductory paragraph.
The only Ground alleged against the Practitioner is that he caused his firm to receive fees (or did not take steps to stop it from receiving fees) in circumstances where he knew, or ought to have known, that the client (to whom we refer throughout these reasons for decision as MT) lacked capacity to make complex financial decisions or to understand any detailed or complex legal or financial matters, including the Firm's costs agreement pursuant to which the fees were charged or, alternatively, where there existed in his mind a real doubt as to her capacity to do so.
For the reasons set out below we have found the Practitioner guilty of professional misconduct.
The issues
The primary issues to be determined in this case are:
1.Did the Practitioner know, or ought to have known, that MT lacked capacity to understand the Firm's costs agreements, invoices and her rights in relation to the invoices at the time when his Firm received payment for invoices rendered for legal work performed for her?
2.If not, was there in the Practitioner's mind a real doubt as to MT's capacity to understand the Firm's costs agreements, invoices and her rights in relation to the invoices at the time when his Firm received payment for invoices rendered for legal work performed for her?
3.If the answer to 1 or 2 is yes, did receiving the payments in those circumstances amount to a breach of the Practitioner's professional obligations; and
4.If so, does that conduct amount to professional misconduct or unsatisfactory professional conduct?
Before we can determine those issues, we must also determine whether this matter is to be resolved pursuant to the LP Act or the Legal Profession Uniform Law Application Act 2022 (WA) (Application Act). That issue arises because, although the conduct and the complaint about it occurred before the commencement of the Application Act, the complaint was referred to the Tribunal after the commencement of the Application Act.
The applicable law
On 23 February 2022, the LPCC informed the Practitioner that it had resolved that, pursuant to s 428 of the LP Act, to refer certain matters concerning the Practitioner's conduct in regard to MT's matter to the Tribunal.[2] The application was filed in the Tribunal on 22 December 2022.
[2] Exhibit 1.68.
Because the LP Act was repealed on 1 July 2022 by s 260(a) of the Application Act which also, by s 6, provides that the Legal Profession Uniform Law (WA) (Uniform Law) applies as a law of Western Australia on and from 1 July 2022, we must consider the issue of which legislation governs this proceeding.[3]
[3] The Practitioner does not challenge the Tribunal's jurisdiction: Practitioner's written closing submissions in reply dated 9 November 2023, para 1.
The Applicant submits that the matter is to be determined under the LP Act because s 37 of the Interpretation Act 1984 (WA) (Interpretation Act) applies, with the result that the LP Act continues to apply to the proceeding.
Section 37 of the Interpretation Act provides as follows:
37.General savings on repeal
(1)Where a written law repeals an enactment, the repeal does not, unless the contrary intention appears –
(a)revive anything not in force or existing at the time at which the repeal takes effect;
(b)affect the previous operation of the enactment repealed or anything duly done or suffered under the enactment;
(c)affect any right, interest, title, power or privilege created, acquired accrued, established or exercisable or any status or capacity existing prior to the repeal;
(d)affect any duty, obligation, liability, or burden of proof imposed, created, or incurred prior to the repeal;
(e)subject to section 11 of the Criminal Code and section 10 of the Sentencing Act 1995, affect any penalty or forfeiture incurred or liable to be incurred in respect of an offence committed against that enactment;
(f)affect any investigation, legal proceeding or remedy in respect of any such right, interest, title, power, privilege, status, capacity, duty, obligations, liability, burden of proof, penalty or forfeiture,
and any such investigation, legal proceeding or remedy may be instituted, continued, or enforced, and any such penalty or forfeiture may be imposed and enforced as if the repealing written law had not been passed or made.
(2)The inclusion in the repealing provisions of an enactment of any express saving with respect to the repeals effected thereby shall not be taken to prejudice the operations of this section with respect to those repeals.
In our view, s 37 of the Interpretation Act operates to preserve the operation of the LP Act in respect of this proceeding.
We note that in Legal Services and Complaints Committee and Goldsmith [2022] WASAT 43 (S) (Goldsmith), the Tribunal held that the LP Act continued to apply to those proceedings which concerned conduct that had occurred prior to 1 July 2022. That matter was not on all fours with this one because, in that case, the conduct had been referred to the Tribunal and had been the subject of findings by the Tribunal before 1 July 2022. Nevertheless, it is a case where the Tribunal analysed the Application Act and found:
(a) there was nothing in the Application Act which gave rise to a 'contrary intention' for the purposes of s 37 of the Interpretation Act;
(b) those proceedings dealt with an inchoate liability of Mr Goldsmith which arose under the terms of the LP Act; and
(c) by reason of s 37, the referral must continue to be dealt with pursuant to the terms of the LP Act, including questions of penalty, costs and compensation.
We find that the analysis in that case provides support for our conclusion in relation to the operation of s 37 of the Interpretation Act in this case.
Section 438(1) of the LP Act provides that the Tribunal has jurisdiction to make a finding that an Australian legal practitioner has engaged in unsatisfactory professional conduct or professional misconduct. Section 438(2) provides that if, after it has completed a hearing in relation to a referral under Part 13, the Tribunal is satisfied that the practitioner is guilty of misconduct, the Tribunal may –
(a)make and transmit a report on the finding to the Supreme Court (full bench); or
(b)make any one or more of the orders specified in ss 439, 440 and 441 of the LP Act.
It is not presently necessary to set out the orders which can be made pursuant to ss 439, 440 and 441 because we are presently only dealing with the liability aspect of the proceeding. A separate hearing will be held in relation to penalty in the event that the Applicant's allegations are made out and the Practitioner is found guilty of unsatisfactory professional conduct or professional misconduct.
While the Applicant in this matter is the LSCC, where we refer to things which were, as a matter of fact, done by the LPCC before the Application Act commenced, we will refer to it as the LPCC, and where we refer to provisions of the LP Act we will do so in the present tense for the sake of convenience.
Meaning of 'professional misconduct' and 'unsatisfactory professional conduct'
The expression 'professional misconduct' is defined in s 403 of the LP Act as follows:
403.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
(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 the purposes of 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 or for the grant or renewal of a local practising certificate.
It is apparent from its terms that the definition is inclusive rather than exhaustive.
The expression 'unsatisfactory professional conduct', is defined in s 402 of the LP Act as follows:
403.Unsatisfactory professional conduct
For the purposes of this Act —
unsatisfactory professional conduct includes 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.
Again, the definition is expressed to be inclusive rather than exhaustive. That this is the case is reinforced by the terms of s 404 of the LP Act which identifies particular conduct which is capable of constituting unsatisfactory professional conduct or professional misconduct. Those examples are said to be given 'without limiting section 402 or 403'. None of the conduct identified in s 404 is relevant in this case.
The position in Western Australia is that the two limbs of the common law test of professional misconduct, which were articulated in Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115 (Kyle),[4] but with reference to 'unprofessional conduct' (which we now call professional misconduct) still apply as separate bases for a finding of professional misconduct. That position was recently explained in detail by the Tribunal in Legal Services and Complaints Committee and Lourey.[5] We adopt that reasoning without repeating it.
[4] Kyle v Legal Professionals' Complaints Committee [1999] WASCA 115.
[5] Legal Services and Complaints Committee and Lourey [No 2] [2023] WASAT 77.
The two limbs of professional misconduct identified in Kyle are:
1.conduct which would reasonably be regarded as disgraceful or dishonourable by practitioners of good repute and competence (the first limb); and
2.conduct which involved a substantial or consistent failure to reach a reasonable standard of competence and diligence (the second limb).
Section 442 of the LP Act permits the Tribunal to make a finding that a practitioner has engaged in unsatisfactory professional conduct even though the referral to it alleged professional misconduct.
The allegation
We next set out in full the Ground upon which the Applicant says we can find the Practitioner guilty of professional misconduct.[6]
[6] See Minute of Second Further Amended Annexure A as amended with leave of the Tribunal on 16 November 2023.
Between about 7 October 2016 and 3 October 2017 (the period), the practitioner, John Wesley Butler (Practitioner), engaged in professional misconduct within the meaning of sections 403 and 438 of the Legal Profession Act 2008 (WA), as made applicable by section 37 of the Interpretation Act 1994 (WA), in that his conduct involved a substantial and/or consistent failure to reach or maintain a reasonable standard of competence and, and/or would reasonably be regarded as disgraceful or dishonourable to practitioners of good repute and competence, in that the practitioner caused his firm to receive payment of legal fees, alternatively as legal practice director of the firm, did not take any steps to prevent his firm from receiving payment of legal fees:
(a) in respect of invoices that he rendered, or caused his firm to render, to MT (client) invoices for fees and disbursements totalling $97,747.19, of which $13,986.06 was billed after 18 September 2017;
(b) which invoices included fees:
(i)for work which was properly characterised as relating to detailed or complex legal and financial matters; and
(ii)rendered in accordance with the terms of one or more costs agreements provided by the firm to the client;
(c)[deleted]
in circumstances where the practitioner knew or ought to have known that the client lacked capacity, alternatively, that there was a real doubt about the capacity of the client to make complex financial decisions or understand any detailed or complex legal or financial matters, including the Firm's cost agreements, in that the practitioner knew the following on about the following dates:
(d)during the period, the client had no extant attorney appointed to manage her financial affairs;
(e)on 31 August 2016, Dr Tracy Ryan, consultant older adult psychiatrist, had opined that
(i)the client did not have capacity to understand any detailed or complex legal or financial matters regarding her affairs, which included understanding the Practitioner's firm's cost agreement; and
(ii)an attorney should be appointed with immediate effect;
(f)on about 28 December 2016, and an employee of his firm had made an application (Application) to the SAT:
(i)pursuant to section 40(1) of the Guardianship and Administration Act 1990 (WA) for an administrator to be appointed to the client's estate; and
(ii)which raised the issue of the client's capacity;
(g)on about 7 March 2017, a member of the SAT stated that they considered there were serious matters to be determined as to the client's capacity and the application should continue in the SAT;
(h)on about 18 September 2017, the practitioner conceded there was evidence upon which the SAT could make an administration order; and
(i)on about 10 October 2017, the SAT appointed an administrator to the client's estate as it held that the client was unable to make reasonable judgments in respect of matters relating to all or any part of her estate.
At this point it is important to note that the Applicant does not seek any finding of professional misconduct or unsatisfactory professional conduct against the Practitioner based on the performance of the work for MT, or on the amounts charged for the work or by the issuing of the invoices to MT. We are not required to make any findings about those matters. To determine the application, we are not required to, indeed nor could we, make any finding about MT's actual capacity at any point in time.
Onus and standard of proof and inferences
As the Tribunal recently restated in Goldsmith,[7] the procedure in disciplinary proceedings is in substance, adversarial. Accordingly, it is 'appropriate to apply rules relating to the standard of proof that would apply to the proof of matters in civil proceedings'.[8] That is, the LSCC has the onus of proving the allegations against the Practitioner to the civil standard (i.e. on the balance of probabilities).
[7] Legal Profession Complaints Committee and Goldsmith [2022] WASAT 43 (Goldsmith) at [30] Allanson SP, Jackson DP, Povey OM).
[8] Goldsmith at [30] (Allanson SP, Jackson DP, Povey OM).
Further, as the allegations against the Practitioner are serious, the Tribunal must have regard to the nature and consequences of the facts sought to be established, the seriousness of the allegations made against the Practitioner, the inherent unlikelihood of an experienced practitioner behaving in the manner alleged and the gravity of the consequences that might flow from a finding of professional misconduct in determining whether that standard has been met.[9]
[9] Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw).
The Applicant's case relies significantly on inferences which it says we can draw in particular from the actions of the Practitioner. In the case of Palmer v Dolman,[10] Ipp JA set out principles that are now well established in determining whether an inference of fraud or other serious misconduct may be drawn from circumstantial evidence in civil proceedings.[11] In Goldsmith, the Tribunal identified those principles as they applied in that matter saying the Tribunal must:
1.consider the weight to be given to the united force of all of the circumstances taken together;
2.apply the standard of proof at the final stage in the reasoning process;
3.weigh the inference to be drawn from the proved facts against realistic possibilities as distinct from possibilities that might be regarded as fanciful; and
4.find the allegation is not proved where there are competing possibilities of equal likelihood or where the choice between them can only be resolved by conjecture.[12]
[10] Palmer v Dolman [2005] NSWCA 361 (Palmer v Dolman).
[11] Palmer v Dolman at [41].
[12] Goldsmith at [31].
We will need to apply the Briginshaw principles in determining whether, in all of the circumstances, we should draw the inferences which would lead to findings of misconduct.
In these reasons, when we express ourselves to be satisfied, and make a finding, we do so on the balance of probabilities and on the basis of evidence which we regard as clear and cogent, having regard to what was said in Briginshaw.
The hearing and the evidence
The hearing took place on 6 and 7 September 2023. Oral closing submissions were made on 16 November 2023.
The Applicant's case was a documentary one.
The Practitioner's witness statement dated 10 July 2023 was tendered as his evidence in chief.[13] He gave oral evidence in cross‑examination and re-examination.
[13] Exhibit 11, witness statement of John Wesley Butler sworn 10 July 2023.
Mr Richard Ellis also gave evidence in the Practitioner's case. His witness statement, dated 7 July 2023, was admitted into evidence as an exhibit[14] and he was cross-examined and re-examined.
[14] Exhibit 12, witness statement of Richard Hilton Ellis sworn 7 July 2023.
The Practitioner also tendered various documents in his case.
Unless we have identified to the contrary in our factual findings, we accept the truth of the contents of all of the documentary evidence.
The Practitioner
We are satisfied and make the following findings of fact in relation to the Practitioner and his practice as a lawyer.
The Practitioner was admitted to legal practice in Western Australia on 2 March 1978.[15]
[15] Exhibit 11, para 1.
At all material times the Practitioner;
1.was an Australian legal practitioner within the meaning of s 5(a) of the LP Act;
2.practised as the sole legal practice director of The Australasian Lawyers' Group Pty Ltd, trading as Butler's Lawyers and Notaries in Nedlands;[16]
3.held himself out as practising as a solicitor specialising in, among other things, the areas of wills, estates and guardianship and administration;[17] and
4.held equity in the Firm.[18]
[16] Exhibit 11, para 2 and at ts 59 – 60, 6 September 2023.
[17] Exhibit 11, para 3.
[18] ts 58 – 59, 6 September 2023.
Credibility of witnesses
The Practitioner
We accept that the Practitioner gave truthful evidence about many uncontentious and independently verifiable issues.
In particular, we accept the Practitioner's evidence that, and find that, he had little or no independent recollection as to key events and as to his state of mind at relevant times.[19]
[19] ts 65, 67 – 74, 78 – 104, 6 September 2023.
We also accept that the Practitioner gave truthful evidence that, and we find that, despite this lack of independent recollection he had not recently read almost any of the key documents referred to in this case.[20] It was his evidence that re-reading the documents during the hearing in cross-examination as questions about particular documents were put to him did not refresh his memory. While it was frustrating that the Practitioner was having to spend time reading documents before questions about them could be asked by the Applicant in the course of the hearing, we did not find that his failure to read them in advance of the hearing affected our view of his credibility.
[20] ts 64, 65, 70, 71, 75, 84, 6 September 2023 and 120, 7 September 2023.
Nevertheless, for reasons we set out in detail below, we did not accept some of the Practitioner's evidence. Individually and in combination, those matters have caused us to find that the Practitioner's evidence that he did not turn his mind to the question of MT's capacity to understand the Firm's costs agreements and invoices in the course of dealing with MT's matters was not credible.
We find that the Practitioner on occasions sought to disassociate himself from conduct or statements made at the time of the events the subject of this proceeding which were damaging to his case. For example, where the documents reveal that the Firm took certain decisions or steps that were unhelpful to his case the Practitioner tried to cast responsibility for those decisions or steps on others, particularly Ms Motroni, who was a junior solicitor employed in the Firm who had specifically asked the Practitioner to become involved in MT's matter because he had a great deal more experience than she did in dealing with capacity issues.
The example we set out in [47(3)] below is one such example of that type of evidence given by the Practitioner. Another is seen in the answers which the Practitioner gave in cross-examination to questions about an invoice which was sent to MT on 7 October 2016 in relation to the wills and estate planning advice and assistance which the Firm was giving to MT where the following exchange took place:[21]
Yes, but you charged [MT] pursuant to the costs agreement even though Ms Motroni had reported Dr Ryan's opinion that she didn't understand the costs agreement?‑‑‑That's what has happened, yes.
Well that's what you've done?‑‑‑I didn't do it. It has happened – my firm did it.
Well, you're responsible for it?‑‑‑Yes. I'm responsible.
[21] ts 91, 6 September 2023.
The repeated attempts which the Practitioner made to avoid responsibility for decisions or actions in which we find he was clearly involved at the time caused us to doubt the credibility of the Practitioner's evidence as to his state of mind or beliefs.
It was apparent to us that the Practitioner was also most reluctant to make concessions about his state of mind or knowledge which were obviously appropriate given the contents of contemporaneous documents. We refer to the following by way of examples:
1.The Practitioner agreed that he had settled a letter to MT dated 2 September 2016,[22] in which MT was informed that the Firm could no longer act for her because Dr Ryan had expressed the opinion that MT could not understand the Firm's costs agreements and which informed MT that the next step should be to have the Public Trustee appointed as her administrator. Yet, despite having settled the letter, the Practitioner did not accept that the letter expressed the views which he held at the time.[23]
We simply did not accept his evidence that it was Ms Motroni's decision and that the settling of the letter by him did not mean that he agreed with its contents and that he had held the views expressed in it. We rejected that evidence as implausible, particularly in circumstances where he was the principal of the Firm, had become involved in MT's matter specifically because of his experience in dealing with issues of capacity and professional responsibility and where there was no evidence that he had expressed any contrary view at the time.
2,Although the Practitioner accepted that the application made to the Tribunal pursuant to the Guardianship and Administration Act 1990 (WA) (GA Act) was not made for the purposes of resolving MT's capacity to execute an enduring power of guardianship (EPG) or an enduring power of attorney (EPA),[24] the Practitioner did not agree that the application must therefore have been made for the purpose of resolving concerns about MT's capacity in relation to more complex matters.[25] We have found that to have been the only other possible reason for making the application and we find the Practitioner's unwillingness to accept that proposition both unreasonable and a matter which caused us to doubt his credibility as to his state of mind at the time.
3.The Practitioner did not accept that, despite resuming work for the client, the reason that his Firm had temporarily ceased to invoice MT for that work for a period of time in about September 2016 was because Dr Ryan had expressed an opinion that MT did not have the capacity to understand complex legal and financial matters and because he and Ms Motroni had decided to cease invoicing MT while they obtained a second medical opinion.[26] Rather, in his evidence the Practitioner maintained that he had no recollection of why the Firm ceased invoicing MT at that time and could not offer an explanation for doing so.[27] Yet, from the documents created at that time,[28] we find that the very reason the Firm had decided that it should not invoice MT was because a second opinion was to be obtained and considered.
[22] Exhibit 1.17.
[23] ts 70 – 72, 6 September 2023.
[24] ts 128, 7 September 2023.
[25] ts 127, 128 and 130, 7 September 2023.
[26] ts 140 – 142, 7 September 2023.
[27] ts 82 – 84, 6 September 2023.
[28] Exhibit 1.22; Exhibit 1.23; and Exhibit 1.25.
Those matters caused us to form the view that, in determining the Practitioner's knowledge or state of mind at the relevant time, where his evidence was inconsistent with the documentary evidence or an inference to be drawn from the documents, we prefer the contemporaneous documents or the inference to be drawn from those documents.
We do not believe the Practitioner's evidence which was to the effect that he was only concerned with:
(a)MT's capacity to provide instructions, and that he was satisfied that she had capacity to provide him with the instructions which she gave;
(b)that he considered that if the client had capacity to provide instructions, a practitioner is entitled to then be paid for the work carried out in accordance with those instructions; and
(c)that he never separately turned his mind to the issue of whether MT had the capacity to understand the Firm's costs agreements or invoices and therefore his entitlement to be paid.
There are several reasons for coming to that conclusion.
1.First, and importantly as we have already explained, we do not find him to be an entirely credible witness, particular in relation to his state of mind.
2.Secondly, his evidence that he did not turn his mind to the question of MT's capacity to understand the Firm's costs agreements and invoices is directly contradicted by the evidence he gave in cross-examination that it was his position that he ceased to continue acting for MT for a period of time in September 2016 because of concerns that she did not understand the Firm's costs agreement.[29]
3.Thirdly, it is implausible that the Practitioner did not turn his mind to any doubt as to MT's capacity in circumstances where he was party to the Firm's decision to cease to render invoices to her because of concerns about her capacity and to seek a second opinion from Dr Yew as to her capacity.
4.Fourthly, it is inherently implausible that, the Practitioner would not have informed Ms Motroni and other members of his Firm that he had satisfied himself as to her capacity to understand the costs agreements and invoices had he in fact done so, particularly in light of the repeated concerns expressed by them about her capacity to understand the costs agreement and their entitlement to invoice her and receive payment in those circumstances.
5.Fifthly, it is implausible that the Practitioner held no doubt as to MT's capacity to understand complex legal and financial matters including the Firm's costs agreements in circumstances where he was party to the decision to apply to the Tribunal for the appointment of an administrator or a declaration of capacity.
6.Finally, that the Practitioner could have held those beliefs is inconsistent with the evidence that he had resolved with Mr Ellis that documents held by the Firm for MT would be collected by Mr Ellis who would go through them with her and had provided instructions to his staff to that effect.
Mr Ellis
[29] ts 72, 6 September 2023.
Mr Ellis is an accountant. He accepted appointment as MT's attorney under an Enduring Power of Attorney in March 2017. His evidence, which we accept, was that he has never exercised any power under that document[30] although he did provide her with some assistance in relation to her bills after her husband died.
[30] ts 170, 7 September 2023.
We find that Mr Ellis gave his evidence honestly and was a reliable witness.
Factual findings relevant to the issues to be determined
We are satisfied of and make the following findings of fact in relation to this matter, most of which were not in dispute. The dispute in this matter being essentially as to what inferences we should draw as to the Practitioner's state of mind from the facts.
On or around 26 April 2017, MT, who was 89 years of age at the time, telephoned the Firm seeking legal advice.
At that time, MT had an existing EPA (2010 EPA) and an EPG, both of which were dated 24 August 2010, in which she appointed her husband, RT, as her attorney and guardian respectively.
On 2 May 2016, a junior solicitor employed in the Firm, Ms Motroni, and a law clerk at the Firm, Ms Wilkes, met with MT at her home. The file note of the meeting written by Ms Wilkes[31] records, and we find, that MT provided instructions to prepare a new EPA and a new EPG appointing someone other than RT as attorney and guardian respectively. MT informed them that she wanted to appoint a new guardian and attorney because her relationship with her husband had become strained and he had become physically disabled.
[31] Exhibit 3.4.
On 4 May 2016, Ms Motroni wrote to MT.[32] In that letter she attached a costs agreement. It identified the scope of work as:[33]
To prepare your Enduring Power of Attorney, to prepare your Enduring power of Guardianship and to attend with you at the meeting with Janene Bon from HHG Legal.
[32] Exhibit 5.
[33] Exhibit 5, page 74.
The costs agreement also estimated the cost of that work to be $800 – $1,000 plus GST and included a credit card authority for the client to sign which authorised the Firm to use the credit card to pay its costs.[34]
[34] Exhibit 5, page 54.
The 4 May 2016 letter also records that MT had expressed to Ms Motroni and Ms Wilkes her concerns that RT had been withdrawing funds from their joint bank account and suggested that she make an appointment to meet with a family lawyer from the Firm. Ms Motroni wrote that the appointment would be charged at a flat fee of $400, inclusive of GST and informed MT that she estimated that it would cost $400 – $600 for the family lawyer to write a letter to RT's solicitors and to attend to further correspondence about the matter.[35]
[35] Exhibit 5.
On 11 July 2016, MT's doctor, Dr Mitchell performed a Mini Mental State Examination (MMSE) on MT. The doctor's report of the results of that MMSE indicates, and we find, that MT scored 30 out of 30.[36]
[36] Exhibit 1.7.
A new EPA[37] and a new EPG[38] was prepared by the Firm and on 26 July 2016, they, together with a revocation of the 2010 EPA,[39] were signed by MT.
[37] Exhibit 1.9a.
[38] Exhibit 1.9.
[39] Exhibit 1.8.
The new EPA appointed Mr Ellis as MT's attorney and her son, IT, as her substitute attorney. Its terms provided that it would only come into effect upon the Tribunal declaring, pursuant to s 106 of the GA Act, that she did not have legal capacity.
The new EPA never came into effect because MT revoked her instructions to appoint IT as the substitute attorney before he signed it.
MT's husband, RT, died on 5 August 2016.[40]
[40] Exhibit 1.60.
On 31 August 2016, Ms Motroni sent an email to the Practitioner[41] in which she gave him a summary of a telephone conversation which she had had with Dr Tracy Ryan, who is an older adult psychiatrist at City Lower West Older Adult Mental Health Services. In the email, Ms Motroni informed the Practitioner that Dr Ryan had made an assessment of MT's capacity and determined that:
1.MT had capacity to understand and make minor financial decisions, including signing an EPA if the Firm was satisfied that she understood it;
2.MT had capacity to make a simple will provided that the Firm went through it in detail with MT and were satisfied that she understood it; and
3.MT did not have capacity to understand any detailed or complex legal or financial matters including the Firm's costs agreement.
[41] Exhibit 1.16.
In that email Ms Motroni also:
1.informed the Practitioner that Dr Ryan had recommended that an attorney be appointed;
2.informed the Practitioner that MT continued to believe that a trustee had been appointed to manage her affairs even though Ms Motroni and Dr Ryan had explained to her that that was not correct; and
3.raised with the Practitioner the possibility of applying to the Tribunal for the Public Trustee to be appointed MT's administrator and for Public Advocate to be appointed as her guardian.
Also on 31 August 2016, Dr Ryan sent an email to Ms Motroni[42] in which Dr Ryan said that, in the course of conducting her psychiatric assessment of MT, she had:
1.developed concerns about whether MT was capable of managing her finances independently because, while she appeared to understand and remember simple things, her ability to make and express complex decisions was less clear; and
2.formed the view that the appropriate thing to do was to refer the matter to the Tribunal so that, if necessary, an administrator and or guardian could be appointed.
[42] Exhibit 1.15.
On 6 September 2016, the Practitioner received a copy of Dr Ryan's email of 31 August 2016 because he was blind copied Ms Motroni's reply to Dr Ryan and the original email was part of the email chain.[43]
[43] Exhibit 1.19.
On 1 September 2016, Ms Motroni sent an email to the Practitioner in which she informed him that she thought the Firm should make an application to the Tribunal seeking the appointment of the Public Trustee as MT's administrator and the Public Advocate as MT's guardian.[44] In that email, Ms Motroni also informed the Practitioner that:
1.she agreed with Dr Ryan that, although MT appeared to understand the legal advice which the Firm was providing to her, MT was unable to retain the information and did not understand it in the long term;
2.she did not think that the Firm could ask MT to enter into any further costs agreements or ask her to sign the costs agreement for preparing the deed necessary to resolve the issue of the severance of the joint tenancy which they had already sent to her; and
3.she thought that MT might have the testamentary capacity to understand a very simple will.
[44] Exhibit 1.16.
On 2 September 2016, Ms Motroni and the Practitioner sent a letter to MT[45] which said, relevantly:
1.that as a result of Dr Ryan's assessment, the Firm could not continue to act for her under the existing costs agreements;
2.she did not have a valid enduring power of attorney;
3.they were going to write to Dr Ryan inviting her to apply to the Tribunal for guardianship and administration orders; and
4.they could continue to act for her in the event that the Tribunal was of the view that she did not need an administrator or guardian.
[45] Exhibit 1.17.
On 9 September 2016, Mr Motroni sent an email to a number of people, including the Practitioner, in which she said that the Firm could not represent the client from 9 September 2016.[46]
[46] Exhibit 1.18.
Ms Motroni's file note of 9 September 2016[47] records that, on that date, she and the Practitioner met with MT. The file note records that during the meeting Ms Motroni had a phone call with Dr Ryan in which Dr Ryan said that she would not retract her opinion about MT's capacity. The file note also records that it was agreed at the meeting that the Firm would arrange for a second opinion to be obtained as to MT's capacity. We find that the file note is an accurate record of what occurred in the course of that the meeting of 9 September 2016.
[47] Exhibit 1.21.
On 12 September 2016, Ms Motroni sent an email to members of the Firm, including the Practitioner, in which she said:[48]
1. until we know whether [MT] has capacity or not we will have to rely on Dr Ryan's assessment stating that she does not;
and
2. For this reason, I will record all of my time and [the Practitioner] will as well but we cannot charge it to her yet … . At the end of the day, we may have to heavily discount our invoice or not charge her for the time spent at all. On the other hand, if she has capacity, we may well be able to bill for everything we have done.
[48] Exhibit 1.23.
On 16 September 2016, Dr Ryan wrote a discharge summary upon her discharging MT from her care.[49] In the discharge summary, Dr Ryan said:
1.MT did not have a formal mental illness.
2.MT nevertheless had persistent and extreme circumstantiality of thought and tangentiality of thought.
3.She had concerns about MT's ability in relation to complex financial matters.
4.MT was otherwise independent in her daily living.
[49] Exhibit 1.24.
On 5 October 2016, Ms Motroni sent an email to the Practitioner and Ms Lothian stating that she had spoken to MT, who had informed her that she did not want to pay to have another capacity assessment undertaken. In the email she said that, due to Dr Ryan's assessment, the Firm nevertheless needed to get a second opinion about MT's capacity or to apply to the Tribunal to make an assessment regarding MT's capacity.[50]
[50] Exhibit 1.25.
On 10 October 2016, Ms Lothian sent an email to the Practitioner and Ms Motroni.[51] In that email she raised concerns about whether the Firm was doing what was best for the client particularly in light of having been told 'quite clearly' that MT did not have capacity to sign the Firm's costs agreements. She also said that in their last conversation the Practitioner had said that the Firm should help MT to obtain orders from the Tribunal but that since that time the Firm had 'continued pressing the capacity route' which the client was obviously not happy about and would not pay for. She expressed her opinion that the Firm should assist the client to obtain a 'case guardian order'.[52]
[51] Exhibit 1.26.
[52] Which we understand to be a reference to an administrator and a guardian.
On 10 October 2016, Ms Motroni sent an email in reply to Ms Lothian's email which was also sent to the Practitioner.[53] In it, she said that even if MT were to pay for a further report it would not negate Dr Ryan's opinion and therefore it would remain necessary to apply to the Tribunal for a determination of MT's capacity. She also recommended that the Firm bill the client at scale rates and then refer her to another solicitor to make the application to the Tribunal.
[53] Exhibit 1.26.
On 18 October 2016, Ms Motroni drafted a letter to Dr Tek Yew, an aged care physician and asked him to meet with MT for the purposes of providing an assessment as to her capacity to understand simple and complex financial and legal matters, including a new will, a new EPA, a new EPG and a costs agreement with the Firm.[54] In part, the letter stated:
[54] Exhibit 1.28.
In order for us to act for [MT], she must also enter into a number of Costs Agreements with us.
However, before she does so, we would appreciate confirmation that she has capacity to understand the nature and consequences of the Estate Agreement, our Costs Agreements and that she is able to act in her own best interests.
We also require a general assessment of her capacity to understand simple and complex financial and legal matters.
Specifically, in relation to the Estate Agreement and our Costs Agreements, [MT] must be able to understand the nature of these Agreements, as well as her obligations and rights under these Agreements.
…
Would you please advise us as to whether, in your opinion, [MT] has the capacity to:
(a)Understand and enter into our Costs Agreements;
…
(f)Understand simple and complex legal and financial matters.
The Practitioner at least discussed the contents of the letter to Dr Yew with Ms Motroni in the course of its preparation.[55]
[55] ts 94, 6 September 2023.
The letter of 18 October 2016 was not sent to Dr Yew.
On 18 November 2016, the Firm sent a costs agreement to Mr Ellis on behalf of MT.[56] At that time Mr Ellis had no legal authority to act as MT's attorney. The costs agreement:
1.provided that the scope of work was advising MT in relation to 'an application to the SAT in relation to administration of her estate; and
2.provided an estimate for that scope of work in the amount of $2,000 – $4,000 plus GST.
[56] Exhibit 1.29.
In November 2016, the Firm opened a file entitled 'Guardianship and Administration'.
On 29 November 2016, the Firm wrote to MT informing her that they had revised their fee estimate for the Guardianship and Administration matter noting that fees and disbursements of $17,218.65 incl GST had been incurred and that further work which had already been performed had not yet been billed. The Firm estimated that their further fees and disbursements for additional work was likely to be in the range of $4,000 – $6,000.[57]
[57] Exhibit 1.30.
On 28 December 2016, an application was made to the Tribunal pursuant to s 40 of the GA Act.[58] Ms Motroni was named as the Applicant. The application was said to be for:
1.an order appointing Mr Ellis as MT's administrator; and
2.a declaration as to whether MT has capacity 'so that we can continue with her legal work, including drafting her will, EPA, EPG and the Deed'.[59]
[58] Exhibit 1.33.
[59] Of course, the Tribunal does not make declarations as to capacity but rather may appoint an administrator for all or any part of a person's estate when it is satisfied that by reason of mental disability, a person is unable to make reasonable judgments in relation to all or any part of their estate. The Deed being a reference to the deed which was intended to settle the matters arsing as a result of RT's unilateral severing of the joint tenancy of their property.
The hearing of the Guardianship and Administration Act application (GAA Application) was listed for 7 March 2017. The Practitioner was to appear as counsel at the hearing. In preparation, on 3 March 2017, Ms Motroni wrote the Practitioner a briefing note[60] in which she confirmed that the application was for Mr Ellis to be appointed MT's administrator. She also referred to a medical report from Dr Mitchell and Dr Ryan's report stating that the MT's capacity was unclear. She also wrote that her view was that MT's capacity was fluctuating and that there were days when she clearly lacked the capacity to understand the complex legal situation she was in.
[60] Exhibit 1.40.
On 7 March 2017, the Practitioner appeared at the hearing of the GAA Application. He informed the Tribunal that he was not seeking to have an administrator appointed but rather a declaration that MT had capacity. Ms Motroni informed the Tribunal that MT 'doesn't understand what has happened with the severing of the joint tenancy' (a reference to an action taken by her husband RT before he died about which the Firm was providing legal advice to MT) and that she did not know whether MT had capacity to understand that that has happened'.[61]
[61] Exhibit 1.41.
The Tribunal Member hearing the matter informed the Practitioner that the Tribunal did not have jurisdiction to make a declaration of capacity following which the Practitioner sought to have the application dismissed.[62]
[62] Exhibit 1.41.
The Member refused to dismiss the application because she had formed the view, on the basis of the documents available, that there were serious matters to be considered about MT's capacity.[63]
[63] Exhibit 1.41.
During a break in the proceedings in the Tribunal, or at the end of the hearing but while they were still at the Tribunal, the Practitioner and Ms Motroni caused MT to execute a new EPA in which she appointed Mr Ellis as her attorney.
On 17 March 2017, the Firm wrote to the Tribunal seeking to have the GA Act proceeding (which had then been relisted to 22 March 2017) vacated and to discontinue Ms Motroni's application.[64] The letter said that the Firm had had MT sign an EPA because the Practitioner and Ms Motroni had formed the view that MT had capacity to understand the effect of the EPA. The letter also stated that MT had been examined by her general practitioner, Dr Mitchell, on 8 March 2017 at which time MT had scored 30/30 on her Mini Mental State Examination and that Dr Mitchell had certified MT as having capacity to sign the EPA.
[64] Exhibit 1.44.
At some time before 22 March 2017, the Firm sought advice from a barrister, Mr Eric Heenan, in relation to the GAA Application. On 5 April 2017, Ms Motroni sent an email to the Practitioner in which she referred to a discussion she had had that day with Mr Heenan regarding the brief which the Firm had provided him in relation to the GA Act proceeding.[65] She concluded the email saying:
… [Mr Heenan] closed the call by saying that there is enough evidence there to cast doubt as to [MT]'s capacity but if we are convinced that she has capacity there is no harm in letting her be assessed.
[65] Exhibit 1.47.
On 7 April 2017, two days after Mr Heenan's views were conveyed to the Practitioner by Ms Motroni, invoices were rendered to MT.
On 18 April 2017, a letter was sent from the Firm to Dr Yew.[66] The Practitioner settled the letter.[67] The letter says, relevantly:
[66] Exhibit 1.48.
[67] ts 139, 7 September 2023 and Exhibit 1.71.
…
We thank you for your willingness to assist us and our client [MT].
[MT]'s current involvement in proceedings with the State Administrative Tribunal prevents her from making a decision as to whether to contest the severance of the joint tenancy, at this point in time.
…
At the time of [RT]'s death [MT] was very traumatised, particularly due to the loss of her husband of 66 years and the severance of the joint tenancy of their home, which was done without her knowledge. As a result of [MT's] behaviour at the time, her son [IT] … rang [MT's] GP on a number of occasions to the extent that the GP felt compelled to arrange a psychiatric assessment of our client. Dr Tracey (sic) Ryan prepared a report which indicated that [MT] did not have capacity to deal with complex legal issues, effectively placing us in a position where we were unable to take instructions and act on those instructions, although we were confident that [MT] had capacity.
As a result we commenced proceedings in SAT in an endeavour to obtain a ruling that MT had capacity… .
Following the last appearance in SAT we were satisfied that MT had capacity and had her sign an EPA appointing Richard Ellis, with immediate effect. MT's capacity as confirmed by her GP who conducted a mini mental state examination in which she achieved a perfect score.
The Office of the Public Advocate is not happy with the appointment of Richard Ellis and has sought to replace us and to continue with the application in SAT in relation to MT. Further, SAT has ordered that MT undergo a further medical examination.
…
MT has indicated to us that she would like to update her current Will. …
We understand from your discussions with Ronelia Motroni that you will contact MT directly to schedule an appointment for her to come and see you.
…
The terms of that letter and the original letter to Dr Yew of 18 October 2016 were very different. The earlier unsent letter specifically asked for an assessment of MT's capacity to understand the costs agreement.
On 21 April 2017, the Firm received Dr Yew's report.[68] He expressed the view that MT had no cognitive impairment.
[68] Exhibit 1.50.
On 28 April 2017, the Firm received another report from Dr Yew.[69] In this report Dr Yew concluded that MT had a good understanding of the purpose and functions of an EPA and EPG and that, based on his prior cognitive assessment done that day, he had formed the opinion that MT had testamentary capacity. That opinion did not deal with the questions of her capacity to understand complex legal or financial matters generally or the Firm's costs agreements in particular.
[69] Exhibit 1.51.
On 26 April 2017, Mr Ellis and the Practitioner agreed that correspondence for MT would be left at reception and collected by Mr Ellis. The Practitioner's file note of the relevant discussion[70] says:
Re Teck Yew
Re cost
Re [MT]
Re confusion
We to hold all copies for [MT]
[Mr Ellis] will collect and do through with her once a fortnight
I am happy with this.
[70] Exhibit 3.36.
On 27 April 2017, Ms Swan, a senior law clerk at the Firm, sent an email to the Firm's 'support team' and 'lawyers' informing the recipients of the email of the arrangements which were being put in place for the provision of documents to MT.[71] The email was in slightly different terms to those recorded in the Practitioner's file note.
[71] Exhibit 3.38.
The register kept by the Firm reveals that there were only three occasions on which Mr Ellis collected correspondence meant for MT.[72]
[72] Exhibit 3,56.
The register also records against particular documents the notation 'JWB TOOK' and 'JWB visited client' on a number of occasions, all of which were after Mr Ellis had collected the document on the three occasions on which he did so. The initials JWB refer to the Practitioner.[73] From that evidence we find that despite the agreement which the Practitioner had with Mr Ellis that documents were to go to MT via Mr Ellis, and the instructions which were issued to staff about it,[74] some correspondence, including invoices, were still provided directly to MT by the Practitioner.
[73] ts 90, 6 September 2023.
[74] Exhibit 3.38.
On 13 June 2017, the Practitioner and his wife had lunch at the University Club of Western Australia with MT.[75] MT was a member of the club.
[75] Exhibit 11 para 98.
Following their luncheon, although the Practitioner made his own decision about MT's capacity, he sought his wife's view as to MT's capacity because he believed that his wife had more experience with elderly people and he valued his wife's second opinion.[76] He asked her, in substance, if she had any reservations about MT's capacity. His wife told him she had no reservations at all and remarked that MT's knowledge of current affairs was more up-to-date than theirs.[77] In cross-examination, the Practitioner accepted that they did not discuss the Firm's costs agreement or invoices over lunch.[78]
[76] Exhibit 11 para 98 and ts 156, 7 September 2023.
[77] Exhibit 11 para 98.
[78] ts 156, 7 September 2023.
The Practitioner's evidence was that in about late July 2017, after he visited MT in hospital after she had had a fall, he began to doubt her capacity. He explained that he meant by that that he considered 'something significant had happened' and 'there was a difference' although he could not explain in cross-examination in what sense things were different for MT.[79]
[79] Exhibit 11 paras 102 – 103 and ts 156 – 157, 7 September 2023.
The Public Advocate obtained a report from Dr Lee dated 23 August 2017 for use in the GA Act proceeding.[80] In that report, Dr Lee concluded that MT likely suffered from mild cognitive impairment which would have implications for complex financial matters.
[80] Exhibit 1.55.
Dr Lee provided a second report dated 2 September 2017.[81] In that second report, Dr Lee expressed the opinion that MT had the capacity to make a will but lacked the in-depth understanding required to manage more complex financial matters. He also stated that it was possible that MT had never had the capacity to manage more complex matters. He also noted that MT had expressed dismay at having to pay her lawyer thousands of dollars per month for services for which she could not account.
[81] Exhibit 1.57.
On 10 October 2017, the Tribunal delivered its decision in relation to the GAA Application. The Tribunal made orders appointing the Public Trustee as MT's plenary administrator and appointed the Public Advocate as MT's limited guardian to make decisions in relation to MT's accommodation, the services to which she should have access and her medical treatment.[82] The Tribunal also made an order revoking the EPA dated 7 March 2017 by which MT appointed Richard Ellis as her attorney and the EPG dated 24 August 2010 by which she had appointed her son as her substitute enduring guardian.
[82] Exhibit 1.61.
After being appointed administrator, the Public Trustee did not challenge any of the bills issued by the Firm for work done prior to 16 October 2017. However, the Public Trustee refused to pay the Firm's invoice for work which had been done by the Firm after its appointment as administrator.
In cross-examination, the Practitioner accepted, and we find, that despite informing the LPCC that when concerns about MT's capacity arose, the Firm charged her at scale rates, it had in fact charged pursuant to the costs agreement.[83]
[83] ts 166, 7 September 2023.
Fees billed and payments received
We are satisfied and find that MT entered into a number of costs agreements with the Firm over the course of the Firm's engagement with her. There was a separate costs agreement for each of the Wills and Estate matter, the Estate of RT matter and the Guardianship and Administration Act matter.
We are satisfied and find that invoices were rendered to and payments received from MT in relation to those three matters after 31 August 2016 are as set out in the following table.[84]
[84] See invoices and credit card slip at Exhibit 3.55; Exhibit 1.69; Exhibit 1.70; and Exhibit 1.71.
Invoice Date Invoice No Amount Paid Date of Payment Wills and Estate File 07.10.16 17502 $3346.11 11.10.16 21.10.16 17544 $1596.23 24.10.16 04.11.16 17650 $1473.53 07.11.16 25.11.16 17776 $3318.37 28.11.16 16.12.16 17876 $784.25 19.12.16 06.01.17 17968 $1040.33 09.01.17 20.01.17 18089 $1265.46 23.01.17 03.02.17 18169 $374.52 06.02.17 10.03.17 18409 $316.90 27.03.17 24.03.17 18533 $1317.39 27.03.17 07.04.17 18631 $452.41 10.04.17 21.04.17 18712 $208.07 24.04.17 12.05.17 18832 $3541.37 15.05.17 26.05.17 18944 $600.72 29.05.17 16.06.17 19090 $511.09 19.06.17 30.06.17 19190 $400.13 03.07.17 28.07.17 19439 $410.80 01.08.17 11.08.17 19560 $1061.67 14.08.17 25.08.17 19622 $1773.35 28.08.17 08.09.17 19740 $3107.10 11.09.17 29.09.17 19954 $3358.74 03.10.17 SUBTOTAL $30,258.54 Estate of RT file 07.10.16 17501 $845.90 13.10.16 16.12.16 17882 $320.10 19.12.16 06.01.17 17970 $320.10 09.01.17 12.05.17 18834 $554.84 15.05.17 SUBTOTAL $2040.94 GAA file 25.11.16 17782 $747.74 28.11.16 16.12.16 17887 $213.40 19.12.16 06.01.17 17973 $810.92 09.01.17 20.01.17 18082 $499.36 Unclear - receipt not in evidence 17.02.17 18301 $1591.86 20.02.17 10.03.17 18410 $9786.52 27.03.17 24.03.17 18534 $$3220.21 27.03.17 07.04.17 18653 $3627.87 10.04.17 21.04.17 18707 $1965.42 24.04.17 12.05.17 18837 $2587.71 15.05.17 26.05.17 18940 $3122.04 29.05.17 16.06.17 19094 $5356.34 19.06.17 30.06.17 19195 $7609.84 03.07.17 14.07.17 19307 $1370.03 01.08.17 28.07.17 19441 $3305.56 01.08.17 11.08.17 19563 $1970.40 14.08.17 25.08.17 19621 $4246.66 20.08.17 08.09.17 19743 $277.42 11.09.17 29.09.17 19959 $10627.32 03.10.17 SUBTOTAL $62, 936.61 TOTAL $95,236.09
We also find that the Firm sent a further bill to the Public Trustee in respect of work undertaken after the Tribunal's decision of 10 October 2017. That was later written off.
In total, between 7 October 2016 and 3 October 2017 across the three files the Firm billed and received payment of in excess of $90,000 for work performed after 31 August 2016.
The Firm billed and received payment of around $13,986.06 after 18 September 2017.
Ethics and a regard for the conduct necessary to ensure the protection of the public and the special position that practitioners occupy must ultimately dictate the appropriate standards of conduct within the profession. In our view, the public is entitled to expect, and was entitled in 2016 and 2017 to expect, that a reasonably competent and diligent legal practitioner would not receive funds for work performed in circumstances where they had knowledge of, or a real doubt existed in their mind about, a client's lack of capacity to understand the basis upon which legal fees were charged, the invoice issued for the fees and their rights to challenge the bill.
It does not follow that because a practitioner is justified in acting on a client's instructions that they are entitled to payment for doing so. The question of capacity to give instructions and capacity to determine whether it is appropriate to pay an invoice rendered by a practitioner or to challenge the invoice are related but conceptually distinct matters.
We also do not accept the proposition put by the Practitioner that finding that reasonably competent and diligent members of the profession would understand that they must not receive from a client a payment for work are performed in circumstances where the practitioner knows, or ought to have known, that at the time the payment was received, the client lacked capacity to understand the basis upon which the fees were charged, the bill and their rights in relation to it, or in circumstances where the practitioner had a real doubt as to those matters will (to summarise the Practitioner's argument with a colloquial expression) set the cat among the pigeons within the profession.
We anticipate that for most practitioners the case will never arise where there will be a reason not to issue the bill and receive payment. For we are not identifying the existence of a standard that requires a practitioner to positively establish that such a capacity exists before an invoice can be rendered and payment received. Rather, given the presumption of capacity and the need only to be reasonably satisfied as to capacity identified in Goddard Elliott, it will only be where a practitioner knows that the client lacks capacity to understand the basis upon which fees were charged, the invoices rendered and their rights in respect of those invoices, or where there exists a factual basis which causes the practitioner to have real doubts about those issues, that the obligation arises to take steps to ensure that they do not receive funds from the client until the client's capacity in those respects is established or a substitute decision maker who agrees to the payment is in place.
We do not accept the Practitioner's submission that the public policy concern, the protection of a vulnerable person, is adequately addressed by the existence of an entitlement that the client (including a client's administrator or attorney) has to tax the bill.
The protection of the public should not rest on a client who lacks capacity to understand the bill (or their legal representative, if one happens to have been appointed) having to take steps (which may never be taken), after the payment has been made. In our view, the public should first be protected by practitioners acting in their client's best interests.
The possibility that, on occasions, practitioners may have to carry debt is not a reason to find that it is appropriate for a practitioner to receive payment from a person in circumstances where that practitioner knows, or ought to know, that that person's lacks the capacity to understand the basis upon which the invoice is rendered, and to consider their rights in relation to the bill and the payment thereof, or where a real doubt about those matters exists in the practitioner's mind. Where a practitioner has a real doubt about a client's capacity to understand those matters or where they have actual knowledge that their client lacks that capacity, there are ways in which they can be addressed that are likely to facilitate the payment of appropriate bills. For example, an EPA may exist pursuant to which the attorney can make decisions about payment, or the practitioner may seek to have an administrator appointed who may then make decisions about the bills. The matter may even be able to be resolved simply by requesting the client to undergo an assessment by a relevant specialist in order to assist the practitioner to be satisfied that the client does have the requisite capacity.
Practical difficulties of the kinds identified by the Practitioner may well arise in circumstance where capacity fluctuates. But that fact should not mean that practitioners should be absolved of an overarching obligation to ensure that they do not take payment for services when they are on notice that the client does not understand the way the bill was arrived at, to assess it and consider their rights in relation to it or where real doubt about a client's capacity to understand those issues exists in the practitioner's mind. This is the case even where the client had been found to have the capacity to give the instructions to the practitioner in relation to the legal work.
No hard and fast rules about how to proceed can be derived from this case beyond the finding we make that, in circumstances where the Practitioner had at least real doubts about his client's capacity to understand complex legal and financial matters including his Firm's costs agreements, it was not appropriate for him to receive funds for that work in the way that he did.
Characterisation of the conduct
The Applicant says we can come to that view that the Practitioner's conduct amounted to professional misconduct having regard to the following matters:
1.the capacity concerns were raised by Dr Ryan in unambiguous terms and this is not merely a case of the Practitioner failing to notice or act on subtle signs exhibited by the client herself;
2.the conduct was directed at a highly vulnerable client;
3.the Practitioner personally benefited from the decision to recommence billing in October 2016;
4.the billing persisted over a significant period of time;
5.the billing persisted in the face of his colleagues, counsel and the Tribunal expressing concerns about her capacity to understand complex legal and financial matters including the Firm's costs agreements;
6.the amounts billed and paid by the client were significant for an individual; and
7.the Practitioner was made aware that the client was concerned that she did not understand the nature of the work being done and was concerned about the charges.
The Practitioner submits that even if we find (as we have) that the conduct was a departure from the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner, it did not amount to professional misconduct having regard to the following factors:
1.the conduct was a single course of conduct in relation to a single client;
2.the Practitioner was not taking advantage of a vulnerable client, there is no allegation that he overserviced or overcharged her or billed for work he did not do;
3.Dr Ryan's concerns were raised in ambiguous terms;
4.the conduct was the product of an unintentional mistake given the novelty of the case and the fact that the standard of conduct required was not obvious because there were no published statutory or other requirement or judicial authority setting out the standard;
5.there is no evidence that the client raised any concerns about the legal work or charges directly with the Practitioner; and
6.after the receipt of Dr Lee's report the issue of MT's capacity had still not been conclusively determined.
The Applicant submitted that if we find that the Practitioner never turned his mind to the question of whether he had a responsibility to cease to receive payment from MT when he had real doubts about her capacity to understand the costs agreement pursuant to which bills were rendered, the invoices and her rights in relation to the invoices, we should find that the Practitioner's conduct involved a failure of competence. Given that we have found that he did in fact turn his mind to that question we do not find the Practitioner's conduct involved a failure of meet the standard of competence which the public is entitled to expect of a reasonably competent practitioner.
The Applicant submitted that if we were to find that the Practitioner did turn his mind to the implications of his doubts about her capacity to understand the costs agreements, invoices and rights in relation to the invoices before the Firm received each payment for the invoice in the way that they did, we would find that his conduct involved a failure to meet the standard of diligence which the public is entitled to expect of a reasonably competent and diligent practitioner.
In our view, in receiving payment of fees or in not preventing his Firm from receiving payment for fees when the Practitioner had a real doubt about his client's capacity to understand the costs agreements, invoices and rights in relation to the invoices, his conduct lacked the diligence that the public is entitled to expect of a reasonable and competent legal practitioner.
Having considered all of the matters raised by the parties we have come to the view that the conduct amounted to a substantial and consistent failure to reach or maintain the reasonable standard of competence and diligence expected of an Australian legal practitioner. We therefore find that it amounts to professional misconduct in terms used in s 403(1)(a) of the LP Act and in the sense used in the second limb of the Kyle test. We have come to this conclusion because:
1.the conduct occurred repeatedly over an extended period of time;
2.MT's capacity to understand complex legal and financial matters, including the Firm's costs agreement, had been raised with the Practitioner, by an appropriately qualified medical practitioner and other member of the Firm and that the Practitioner was aware of those concerns; and
3.the implications for billing and the receipt of payment in light of those concerns had been considered by the Practitioner and, as the most experienced practitioner and principal of the Firm, he was party to the decision that the Firm could no longer act for her and the decision that it could not bill MT when the Firm recommenced acting for her, decisions which were subsequently superseded by the recommencement of work and later the recommencement of billing and the receipt of payment.
In coming to this decision, we acknowledge that it was not said, and we have not found, that the Firm did not carry out the work for which MT was billed and for which she paid or that she was overcharged for the work. For those reasons we do not find the Practitioner's conduct is to be regarded as disgraceful and dishonourable. We do not find his conduct to have been professional misconduct which meets the common law test as described in the first limb of Kyle.
Orders
Having set out our reasons for concluding that the Practitioner is guilty of professional misconduct we make the following orders:
The Tribunal orders:
1.Pursuant to s 438 of the Legal Profession Act 2008 (WA), the Practitioner is guilty of professional misconduct as defined in s 403(1)(a) of the Legal Profession Act 2008 (WA) and which conduct involved a substantial and/or consistent failure to reach a reasonable standard of competence and diligence.
2.The parties are to confer in relation to orders that should be made to programme the matter to a hearing in relation to penalty and costs and to provide the Tribunal with an agreed Minute by 24 January 2024.
3.If the parties cannot agree on the terms of an agreed Minute, then each party is to file their own Minute of Proposed Orders programming the matter to a hearing of penalty and costs by 24 January 2024.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS
Associate to Judge Glancy
13 DECEMBER 2023
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