Legal Services Commissioner v Bechara - [2009] NSWADT 145

CITATION: Legal Services Commissioner v Bechara [2009] NSWADT 145

DIVISION: Legal Services Division

PARTIES:
APPLICANT
Legal Services Commissioner
RESPONDENT
Maria Bechara

FILE NUMBER: 062023

HEARING DATES: 26 February, 2009, 27 February 2009, 2 April 2009, 3 June 2009

DATE OF DECISION:
18 June 2009

BEFORE: Haylen W - J (Deputy President); Barnes M - Judicial Member; O'Neill A - Non-Judicial Member

CATCHWORDS: Professional misconduct - deliberate charging of grossly excessive costs - failure to apportion costs of joint hearing involving three clients

CASES CITED: Bechara v Kobeissi [2005] NSW SC 192
Briginshaw v Briginshaw (1938) 60 CLR 336)
Brown v West (1990) 169 CLR 195
Carter v Newcastle Wallsend Coal Co (1909) 9 SR(NSW) 474
Council of the Queensland Law Society Inc v Roche [2004] 2
Wd R 574 re de Jersey CJ.
D'Alessandro v Legal Practitioners Complaints Committee [1995] 15 WAR 198 at 211 per Ipp J
Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [120]
Legal Services Commissioner v Galitsky[2008] NSWADT 48
Legal Services Commissioner v Maria Bechara [2008] NSWADT 215)
Leon Nikoliadis v Legal Services Commissioner [2007] NSWCA 130
Malouf v Jazairy (2003) NSW SC 762
Mercantile Mutual Life Insurance Co Ltd & anor v Australian Securities Commission and ors (1992-3) 112 ALR 563)
Moore v Attorney-General (Irish Free State) [1935] AC 484
Murray v Legal Services Commissioner (1999) 46 NSW LR 224
New South Wales Bar Association v Meakes [2006] NSWCA 340
R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487
R v Moore; Ex parte Graham (1977) 138 CLR 164
Re: Veron; Ex parte Law Society of New South Wales (1966) 84 WN(NSW) 136
Veghelyi v The Law Society of New South Wales(1989) 17 NSWLR 669

REPRESENTATION:
APPLICANT
C Champion, barrister
RESPONDENT
P Neil, SC P Doyle Gray, barrister

ORDERS: 1.That conduct amounts to professional misconduct and the Tribunal so finds
2.The matter shall be listed again at a convenient time to consider the appropriate orders to be made.

1 The Respondent practitioner, Ms Maria Bechara, was admitted as a solicitor in December 1991 and was an employed solicitor between May 1992 and November 1994. In November 1994 she commenced practice as a sole practitioner having a general practice but mainly focusing on workers' compensation and common law personal injury cases.

2 Between March and April 2000 there was contact between members of the Hussein family and Ms Bechara's firm ultimately leading to Ms Bechara accepting instructions to commence personal injury actions on behalf of three members of the Hussein family. Mohamed Hussein was aged 72 at the time of taking instructions and claimed that, on 11 September 1997, he had fallen at the Punchbowl rented family home and was injured. His wife, Toufika Hussein, was aged 74 at the time of giving instructions and said that, on 20 August 1997, she also fell at the Punchbowl home and injured herself. Mrs Hala Hussein was Mr Mohamed and Mrs Toufika Hussein's daughter-in-law and lived with her daughter, Fatemah, at the Punchbowl home. At the time of giving instructions Fatemah was 18 years old and said that, on 27 August 1997, she had fallen at the Punchbowl home and injured herself.

3 After considering the material brought to her by the Hussein family, Ms Bechara decided to act for them on a speculative basis in their common law claims for damages. On or about 8 April 2000 each of the Hussein family were provided with a "conditional costs agreement between solicitor and client" in which Ms Bechara set out the basis upon which she would act for the them in each of their cases. Clause 3 of each of the costs agreements dealt with charges and expenses (costs) and was in the following terms:

We will charge you, subject to the successful outcome of the Work at the following hourly rates for each hour engaged on your Work:-
(i) Partner/Principal of firm - $280

(ii) Solicitor - $250

(iii) Paralegal - $200

(iv) Secretary or other support staff - $150

We will charge you at the 6 minute time costing, which means that each unit is the equivalent of 6 minutes. We will incur expenses on your behalf which we will ask you to pay. ...

In the costs agreement "the Work" was defined as their common law claim for damages involving negotiating a settlement and taking court proceedings if the matter did not settle, preparing the matter for hearing and taking appropriate instructions to bring the matter to conclusion if not settled.

4 The three matters could not be settled and proceeded to trial. Prior to trial the NSW Land and Housing Corporation, being the same defendant in each case, proposed that the cases be heard together and on counsel's advice the plaintiffs accepted that proposal. The matters then came before the District Court and were heard over six days commencing on 13 November 2001. On the first day of the hearing the parties confirmed that the evidence in each matter would be evidence in the others. Counsel for the plaintiffs noted, however, that they were three distinct cases arising from the use of the same premises and that he would proceed "plaintiff by plaintiff" starting with the occurrence of the first injury in time. In the judgment the trial judge noted that, although different issues applied to each plaintiff, there was a "commonality of issues to a certain point". The trial judge made the following orders:

1. Verdict and judgement for Tafika Hussein for $98,000.05 and costs.
2. Verdict and judgement for Fatemah Hussein for $30,050 and costs.

3. Verdict and judgement for Mohamed Hussein for $27,446.45 and costs.

5 Following these verdicts in the District Court, Ms Bechara had prepared, under her supervision, a solicitor/client bill of costs. Effectively, under the bill of costs, each of their clients was charged $250 per hour during the hearing of the matter and that cost was billed for the six hearing days. Each client was therefore billed for the full hours of the hearing on each of the six days and no apportionment was made reflecting the time in which the hearing was actually concerned with matters relevant to one of the plaintiffs, nor was any calculation made based on the fact that the court time was spent on matters concerning all of the clients or some of them.

6 By letter dated 22 December 2004 Mr John Eric McIntyre a solicitor and costs assessor, wrote to the office of the Legal Services Commissioner regarding the billing of Ms Bechara and Mr Galitsky, counsel engaged for the plaintiffs in the District Court. Mr McIntyre had been appointed as a costs assessor and had recently concluded assessments in relation to the party/party bill of costs prepared by Ms Bechara. During the course of the assessments he called for and sighted the solicitor's costs agreement and the solicitor/client bill of costs. Mr McIntyre noted that there were unusual aspects of the matter, with the three plaintiffs all being members of the same family who had sustained injuries at the same premises but on different dates with the defendant in each set of proceedings being the same. He understood that all three matters were heard together in the District Court over six days, beginning on 13 November 2001.

7 Having recorded this background, Mr McIntyre stated in his letter as follows:

My examination of the solicitor/client bill of costs in each matter suggests that the solicitor and the barrister may have engaged in conduct which involves the deliberate charging of grossly excessive amounts of costs. There were numerous examples in the bill of costs where each client had been separately charged at the full agreed rate for attendances which were carried out simultaneously. For example, the total time spent at Court by the solicitor for the plaintiff instructing counsel on the hearing was not divided by the three cases. The same applied to counsel's fees. This resulted in the solicitor charging amounts up to $6,000 for one day in court. The barrister also charged the three clients on the same basis.
Whilst I did not assess the solicitor/client bill of costs, it was in my view readily apparent from an examination of the solicitor/client bill of costs in each matter that both the solicitor and counsel had failed to properly apportion the amounts claimed over the three matters when that clearly should have been done.

I do not have sufficient information to determine whether or not the conduct was deliberate but I am satisfied that there is sufficient information to require me to refer the matter to you pursuant to s 208Q of the Legal Profession Act, 1987 and I so do.

8 Section 208Q(1) of the Legal Profession Act 1987 provided that, if a costs assessor considered that any conduct of a barrister or solicitor involved the deliberate charging of grossly excessive amounts of costs, the costs assessor "must refer the matter to the Commissioner". The deliberate charging of grossly excessive amounts of costs was declared to be professional misconduct by sub-section (2). After receiving Mr McIntyre's letter and referral pursuant to s 208Q of the Legal Profession Act in late January 2005, the Legal Services Commissioner initiated a complaint against Ms Bechara pursuant to the provisions of s 134 of the Legal Profession Act. The complaint so initiated claimed that the solicitor in the three matters in the District Court "deliberately charged grossly excessive amounts of costs". At the same time the Legal Services Commissioner asked the costs assessor to provide copies of his certificates as to the determination of party/party costs and accompanying reasons in the three matters and they were duly supplied shortly thereafter.

9 By late February 2005 Ms Bechara had responded to the complaint. In that reply Ms Bechara raised a number of matters including the lack of appropriate particulars, the fact that the Legal Services Commissioner had initiated the complaint based on Mr McIntyre's letter before seeking Ms Bechara's response to that letter and the fact that Mr McIntyre was unable to say whether the alleged conduct was deliberate. Ms Bechara further stated that she assumed that the substance of the complaint was that she had failed to apportion the costs but contested any obligation to apportion the costs, especially having regard to the terms of the costs agreement which did not require such an approach. Ms Bechara noted that, while the three matters involved members of the same family, the time and circumstances of each accident was different and up until the time of the hearing each matter was conducted separately. Ms Bechara also noted that, although she continued to assert her right to charge a separate fee for each matter, she had written to each of the plaintiffs and informed them that she was prepared to accept a reduction in the firm's costs and disbursements.

10 Between March 2005 and late September 2005 the Legal Services Commissioner and Ms Bechara exchanged correspondence in relation to these matters. In those exchanges the Legal Services Commissioner explained his practice in relation to s 208Q referrals and provided particulars claiming that Ms Bechara had failed to apportion costs common to the three matters. In her replies Ms Bechara continued to assert that she had made charges based on her costs agreement with each of the plaintiffs. She noted that the Legal Services Commissioner was unable to point to any authority directly on the point that would lead to an obligation upon her to apportion costs according to the work performed in each matter. By letter dated 16 April 2005, Ms Bechara informed the Legal Services Commissioner that she was not prepared to accept the party/party costs in full satisfaction of her costs in each of the matters but denied that she had deliberately charged grossly excessive costs in the matters. She also explained that her preparedness to accept a reduction in costs and disbursements in each matter did not arise as a result of the Legal Services Commissioner's complaint. By the end of August 2005 the Legal Services Commissioner was considering the proposal to reduce fees to the Hussein family in relation to these three matters but noted that the judgment in the District Court indicated that, at the hearing, there was a commonality on issues to a certain point only. The Legal Services Commissioner wished to investigate that aspect more closely and asked to be provided with the transcript of the hearing. Ms Bechara duly supplied copies of the transcript to the Legal Services Commissioner.

11 By letter dated 15 March 2006 the Legal Services Commissioner wrote to Ms Bechara and informed her that he had given consideration to the transcript of the hearing where it was agreed that the matters would be heard at the same time and the evidence in each would be evidence in the other cases. It was noted that counsel for the plaintiffs had indicated that the cases arose from the same set of premises and that there was a commonality of issue, namely, the problem of a lack of drop in the discharge pipe from the upstairs units allowing water to pond and seep. Two witnesses gave evidence of that problem. It was further noted that each plaintiff gave evidence in relation to his or her own injuries. Against that background the Legal Services Commissioner stated that his preliminary view was that the costs of the hearing should either have been divided so as to charge each plaintiff for that part of the hearing relating to their claim and/or, apportioned so as to charge each plaintiff a proportion of the total cost of the six day hearing. Ms Bechara had charged each plaintiff the total cost of the hearing. The Legal Services Commissioner stated that he believed that this may constitute conduct involving the deliberate charging of grossly excessive amounts of costs which was declared by the Act to be professional misconduct. He noted that Ms Bechara had denied that she had deliberately charged grossly excessive amounts of costs and that, while she had indicated a preparedness to accept a reduction in costs, that proposal had not appeared to be based on any division or apportionment of the costs.

12 In the letter of 15 March 2006, the Legal Services Commissioner then set out the provisions of s 155 of the Legal Profession Act and stated that he was now required to determine if he was satisfied that there was sufficient evidence to create a reasonable likelihood of a finding of unsatisfactory professional conduct or professional misconduct should the matter be brought before the Legal Services Division of the Administrative Decisions Tribunal. The Legal Services Commissioner asked for Ms Bechara's submissions in relation to that determination, asking that she address specifically whether the conduct outlined in the letter amounted to professional misconduct or unsatisfactory professional conduct and she was specifically asked to address the appropriate course of action under s 155(3) and (5). Those sub-sections refer to the penalty that may be imposed for unsatisfactory professional conduct and the course to be taken should the Legal Services Commissioner decide to dismiss the complaint or, to reprimand the practitioner and the possibility of requiring the payment of compensation. Ms Bechara was invited to provide any general comments she may have about the matter and have the response available within 28 days at the latest. The Legal Services Commissioner concluded the letter saying that, if the response had not been received within that period, he would proceed to make his determination on the basis of material already to hand.

13 Ms Bechara did not respond to that letter from the Legal Services Commissioner (later claiming that she did not receive it) and on 3 July 2006 he determined that there was a reasonable likelihood that Ms Bechara would be found guilty of unsatisfactory professional conduct or professional misconduct and recorded his decision and the reasons for his decision.

14 On 25 September 2006 the Legal Services Commissioner filed in the Tribunal an application for original decision seeking the following orders against Ms Bechara.

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

3. An order that the Respondent be fined.

4. An order that the Respondent be publicly reprimanded.

5. An order that the Respondent pay the costs of and incidental to the filing and hearing of the Information.

6. Such other orders as the Tribunal sees fit.

15 The grounds and particulars in support of the application were as follows:

Ground 1

The Respondent in the matters of Fatemah Hussein v New South Wales Land & Housing Commission, Toufika Hussein v New South Wales Land & Housing Commission and Mohamed Hussein v New South Wales Land and Housing Commission deliberately charged grossly excessive amounts of costs.

Particulars 1.1.

The Respondent simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohamed Hussein and Toufika Hussein, against the same Defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before his Honour Judge Walmsley for seven days commencing on 13 November 2001 and it was agreed that evidence in each would be evidence in the others.

Particulars 1.2

The Respondent failed to apportion costs common to the three matters.

Particulars 1.3

The Respondent charged each client the total costs of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportioning such costs so as to charge each client a proportion of the total costs of the hearing.

16 The applications regarding Ms Bechara and Mr Galitsky were listed before the Tribunal late in August 2007 with the apparent intention that the cases be heard consecutively. At an early stage in the proceedings concerning Ms Bechara the Tribunal, then differently constituted, raised concerns with the sufficiency of the original particulars and it was suggested that Mr McIntyre's affidavit did not set out how the fees were grossly excessive or to what extent they were grossly excessive or by what amount. After ventilating these matters and after some discussion, counsel for the Legal Services Commission accepted the Tribunal's "invitation" to provide further particulars and a timetable was agreed to allow that to occur and for the respondent's solicitor to respond. Later in the same week of August 2007 the Tribunal heard the case involving Mr Galitsky. In that matter there was significant argument as to the status of Mr McIntyre's affidavit as expressing an expert opinion and considerable argument as to whether a case had been properly made out against Mr Galitsky. After hearing argument the Tribunal determined that Mr McIntyre's evidence did not qualify as expert opinion and that the views that he expressed did not expose any real expertise or valid basis for the opinions he had formed. In the light of those findings it was held that the Legal Services Commissioner was unable to establish a basis for finding that Mr Galitsky was guilty of professional misconduct and the application was duly dismissed (see Legal Services Commissioner v Galitsky [2008] NSWADT 48).

17 Anticipating that similar difficulties would arise in the now adjourned case involving Ms Bechara, the Legal Services Commissioner not only filed further particulars but also filed an application seeking leave to rely on an affidavit and exhibited report of Ms Castle purporting to be an independent expert's report prepared for the purposes of the proceedings involving Ms Bechara. Ms Bechara opposed the granting of leave but after hearing argument, the Tribunal granted leave to the Legal Services Commissioner to file and rely on Ms Castle's report and arrangements were made for the respondent to consider the contents of that report and to file any further material arising from the contents of Ms Castle's report (see Legal Services Commissioner v Maria Bechara [2008] NSWADT 215).

18 In mid-October 2007, the Legal Services Commissioner filed further particulars, after dealing with objections, pursuant to the order made by the Tribunal in August 2007. The further particulars were as follows:

2. The Respondent simultaneously conducted three personal injury actions on behalf of three members of the same family.

3. ...

4. ...

5. Although the accidents giving rise to the injuries did not occur at the same time, all three accidents had the same genesis.

6. The proceedings were heard together by His Honour, Judge Walmsley on 13,14,15, 16 and 19 November 2001 and 25 January 2002.

7. It was agreed at the hearing that evidence in one proceeding would be evidence in the others.

8. The Respondent had briefed Mr Galitisky of Counsel to appear at the hearing on behalf of all three clients.

9. The annexed Chronology of Hearing details what occurred on each day of the hearing with the exception of 26 January 2002 for which a transcript is not available.

10. His Honour, Judge Walmsley delivered his judgment on 8 April 2002.

11. During the period March - June, 2003, the Respondent provided each client with an itemised solicitor/client bill of costs for the following total amounts:

Mohamed Hussein $ 83,475.58

Fatemah Hussein $ 84,152.23

13/11/01
Mark 42
Attendance by junior solicitor at District Court Sydney for the first day for hearing before His Honour Walmsley J. Matter adjourned until 14/11/01: 75 unit/s
1875.00

14/11/01
Mark 42
Attendance by junior solicitor at District Court Sydney for the second day for hearing before His Honour Walmsley J. Matter adjourned until 15/11/01: 77 unit/s
1925.00

15/11/01
Mark 42
Attendance by junior solicitor at District Court Sydney for the third day for hearing before His Honour Walmsley J. Matter adjourned until 16/11/01: 80 unit/s
2000.00

16/11/01
Mark 43
Attendance by junior solicitor at District Court Sydney for the fourth day for hearing before His Honour Walmsley J. Matter adjourned until 19/11/01: 60 unit/s
1500.00

19/11/01
Mark 43
Attendance by junior solicitor at District Court Sydney for the fifth day for hearing before His Honour Walmsley J. Matter adjourned until 25/2/02 so as to allow the Client to obtain the transcript of the previous days hearing so that the Client can appropriately cross examine the Defendant's witnesses: 30 unit/s
750.00

25/2/02
Mark 56
Attendance by junior solicitor at the District court part heard matter before His Honour Walmsley J. Matter concluded and His Honour reserved his judgment: 75 unit/s
1875.00

18/04/02
Mark 58
Attendance of principal to District Court regarding judgment: 37 units
1036.00

13. The same items appeared in the bills of costs prepared by the Respondent for the party/party assessment.
14. The Respondent charged the three clients an amount totalling $32,883.00 for 43.4. hours work.

15. At the 6 day hearing the Respondent was represented by a junior solicitor for whose attendance she charged the 3 clients a total of $29,775. The time spent by the junior solicitor at the hearing totals 39.7 hours. The junior solicitor was, in effect, charged out at $750.00 an hour.

16. On or about 18 April 2000, the Respondent had provided each of the clients with a copy of her conditional costs agreement. Paragraph 3 of each costs agreement stated that the Respondent would charge each client the following rates 'for each hour engaged in [your] Work'.

partner/principal $280.00
solicitor $250.00

paralegal $200.00

It further stated that the Respondent would charge at the 6 minute time costing.

17. The conditional costs agreements were each provided to the respective clients prior to the hearing of the 3 matters being consolidated.
18. The Respondent charged each client $250 per hour for each hour of the six day hearing of the 3 matters being a total of $750.00 per hour, without reference to either the time actually spent on each matter.

19. In addition to the contractual requirement imposed on the Respondent by her own costs agreement that she only charge each client for the work actually undertaken by her for the client, she was also bound:

By her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989; Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995 at [3] at page 4) at pages 4-5) to only charge for work actually performed by her for each individual client.
By her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5,8 and 9.

By her statutory obligation pursuant to section 208A of the Legal professional Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work.

20. In charging each client the full amount quoted in her costs agreement the Respondent was in breach of:

The terms of her costs agreement in that she failed to apportion the time spent in Court by her junior solicitor with the result that each client was charged for time spent exclusively on matters relating to the other clients. She clearly stated in each costs agreement that she would charge only for work performed for the recipient of the costs agreement.
Her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989); Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995 at [3] at page 4) at pages 4-5) to only charge for work actually performed by her for each individual client. Breach of that obligation resulted in each client being charged for time spent in court on matters exclusively relating to the other clients.

Her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5,8 and 9. Her breach is three-fold: firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients; and thirdly, charging $750 per hour ... Her obligation under s 208A of the Legal Profession Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work. Her breach is three-fold: firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients, and, thirdly, charging $750 per hour without reference to the nature of the actual work undertaken by the junior solicitor during each hour.

21. Alternately, in the circumstances, the Respondent, in order to meet her obligations both under her costs agreements, at law and pursuant to the Legal Professional Act 1987 should have apportioned her costs equally amongst the clients. Apportionment in the circumstances would, most likely, have resulted in a fair and reasonable fee being charged to each client, and a measure of justice and fairness achieved between the Respondent and the clients.
22. The Respondent was actively involved in finalising each of the bills both in the form in which they were sent to each client and the form used for the party/party assessment. The conduct of the Respondent complained of was deliberate in that she clearly intended to charge each client the costs set out in their respective bills.

23. Her knowledge that the amounts charged were grossly excessive is reflected in the fact that she informed each of the clients that on the party/party assessment the costs would be apportioned by the costs assessor (as they were) and her immediate agreement in her response to the Objections to the party/party bills prepared by her to the apportionment of the costs of the hearing.

19 The respondent practitioner contested a number of these further particulars mostly on the basis that the further particulars fell outside of the original complaint and particulars. These objections remained unresolved until well into the hearing of the substantive proceedings. That situation should not have been allowed to develop.

SOME PRELIMINARY MATTERS

20 Although the whole of the case was argued before the Tribunal, there are some matters that may be dealt with as preliminary matters. As indicated, one matter was the subject of written submissions after the evidence had closed but raised an issue that may truly be regarded as a preliminary issue and should be dealt with as such. The issue was described as an allegation of denial of natural justice. This issue arises in the context of Mr McIntyre's referral to the Legal Services Commissioner, the way in which the Legal Services Commissioner dealt with the matter before proceeding in the Tribunal, and the evidence ultimately relied upon by the Legal Services Commissioner

21 Primarily, the respondent practitioner relied upon the decision of the Court of Appeal in Murray v Legal Services Commissioner (1999) 46 NSWLR 224 where the Court held that the failure of the Legal Services Commissioner to provide the practitioner with a copy of the complaint and allow time for the practitioner to respond to that complaint resulted in a denial of procedural fairness such that a decision to institute proceedings in the Tribunal with respect to the complaint was vitiated. Nothing of that nature has occurred in the present matter. The Legal Services Commissioner received a referral from Mr McIntyre and initiated a complaint in relation to Ms Bechara. The complaint was forwarded to Ms Bechara and there was considerable correspondence between the Legal Services Commissioner and the respondent practitioner about the issue of alleged overcharging and whether or not the amounts charged fell within the terms of the costs agreement with each client. At the conclusion of that exchange of correspondence and after the Legal Services Commissioner considered the transcript of proceedings in the District Court and the cost assessor's reasons, he advised the respondent practitioner that he had reached the point where, pursuant to s 155 of the 1987 Act, he should form the opinion that there was a reasonable likelihood that the legal practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. The respondent practitioner was invited to make submissions in relation to that matter and any of the options that might flow from a conclusion limited to unsatisfactory professional conduct and the consequences associated with such findings. The respondent practitioner did not avail herself of that opportunity and no further submissions were received from her. In evidence she stated that she did not received this correspondence. Some months later, under s 155, the Legal Services Commissioner formed the requisite opinion alleging unsatisfactory professional conduct or professional misconduct. Proceedings were commenced in the Tribunal.

22 The respondent practitioner's submission, however, raised a different issue. It was submitted that the Legal Services Commissioner's affidavit filed on 9 January 2008 made it plain that, before the proceedings were commenced, he understood "the elements of the complaint and that information about those elements was absent" when proceedings were commenced in September 2006. Reference was made to the Legal Services Commission regarding the evidence of Ms Castle as being "critical". It was said to be important that the Legal Services Commissioner expressed the view that the Tribunal should not determine the matter unaided by the evidence contained within Ms Castle's report. The substance of the argument for the respondent practitioner was that the Legal Services Commissioner, at the time he was required to make the decision under s 155 of the 1987 Act, could not have had all the material necessary for him to make the determination in the way described in Murray's case and to reach the degree of satisfaction necessary to allow him to conclude that there was a reasonable likelihood that the practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. The respondent practitioner then submitted that the institution of the proceedings was "vitiated", apparently relying on the approach in Murray and alleged that the proceedings were not properly commenced and could not be maintained. The procedural fairness point was said to arise because a finding against the respondent practitioner would deny procedural fairness since it would entail making an adverse finding regarding proceedings that were commenced which could not properly be maintained. It is difficult to treat the point so described as a procedural fairness point but it appears that the respondent practitioner really wishes to raise another point under the label of a procedural fairness issue.

23 In dealing with this point it is necessary to consider what was recorded by the Legal Services Commissioner pursuant to the provisions of s 156 (requiring the Commissioner to cause a record of his decision in respect to a complaint, together with the reasons for the decision, to be kept in respect of each investigation conducted under Division 5 of the 1987 Act). The record of decision was an annexure to Mr Mark's affidavit in the proceedings. On 3 July 2006 the Legal Services Commissioner recorded that, pursuant to the terms of s 155(2) of the 1987 Act, there was a reasonable likelihood that the respondent practitioner could be found guilty of professional misconduct or unsatisfactory professional conduct in relation to the three matters in which she appeared because she had deliberately charged grossly excessive amounts of costs. The reasons for that decision were as follows:

1. The practitioner simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohamed Hussein and Toufika Hussein, against the same defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before his Honour Judge Walmsley for seven days commencing on 13 November 2001 and it was agreed that evidence in each would be evidence in the others.
2. The practitioner failed to apportion costs common to the three matters.

3. The practitioner charged each client the total costs of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportioning such cost so as to charge each client a proportion of the total cost of the hearing.

24 It is known that the Legal Services Commissioner instituted an investigation into the costs charged by the respondent practitioner in these three District Court matters because of a referral by Mr McIntyre pursuant to s 208Q of the 1987 Act. As a costs assessor, Mr McIntyre expressed his opinion that there was a failure to properly apportion the amounts claimed over the three matters when that "clearly should have been done". Pursuant to s 155 of the 1987 Act, the Legal Services Commissioner at the time had to be satisfied that there were was a reasonable likelihood that the practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. At that time he had Mr McIntyre's reference and opinion as a costs assessor, including his reasons in the party/party assessment, he had the various responses from the respondent practitioner, he had been informed by her that, although she was willing to modify the costs, she was not prepared to apportion them and he had access to the transcript of the proceedings in order to see how they were conducted. Mr McIntyre is a very experienced practitioner and costs assessor who had previously served as a councillor of the Law Society and as its President. As already noted, Ms Bechara's was informed of the process and entered into an exchange of correspondence with the Legal Services Commissioner and there was no denial of procedural fairness arising from these actions by the Legal Services Commissioner. At this point it is difficult to understand how it could be suggested by the respondent practitioner that the Legal Services Commissioner could not have not been satisfied that there was a reasonable likelihood that a Tribunal would find her guilty in accordance with s 155(2). There was no cross-examination of the Legal Services Commissioner as to how he reached the state of satisfaction requiring him to commence proceedings in the Tribunal and in any event, as pointed out in Murray, that course may have been inhibited by the provisions of s 171R.

25 The "procedural fairness point" appears to arise from Mr Mark's second affidavit sworn on 9 January 2008 and filed in support of an application to be permitted to file additional evidence namely, the report and opinion of Ms Castle who was an experienced costs assessor. In the course of that affidavit Mr Mark records that, in the Galitsky matter, Mr McIntyre's report was subjected to detailed submissions with the respondent objecting to it being admitted into evidence substantially on the contention that the evidence constituted a bare expression of opinion based on an assumption of the existence of and obligation to apportion counsel's fees. Although Mr McIntyre's opinion was ultimately admitted into evidence by the Tribunal, it was admitted for the purpose of providing the Tribunal with an example of the manner in which an experienced costs assessor approached the issue of charging counsel's fees in the circumstances under consideration. Mr Mark noted that the Tribunal was a specialist Tribunal and the members could apply their own personal experience in determining whether the fees charged by the respondent practitioner constituted gross overcharging but nevertheless stated that the Tribunal would be better placed to consider the matter by having before it Ms Castle's detailed report. It was in that context that, by way of submission rather than evidence, Mr Mark stated that the applicant was seeking to adduce the evidence of Ms Castle's report because it was "critical to the applicant's case". The evidence from Mr Mark, given on a motion to adduce further evidence, was not an admission that he had no basis for his action under s 155 but was a comment about the possible state of the evidence before the Tribunal (Mr McIntyre's evidence not yet having been considered). From that statement concerning the form of the evidence before the Tribunal, the respondent practitioner has assumed that the material considered by the Legal Services Commissioner at the time he came to address the matters referred to in s 155(2) of the 1987 Act was so deficient that he could not have reached the state of satisfaction required by the Act. There was simply no evidence to support that bare assertion and it is a matter that was capable of being addressed as a preliminary issue, with the parties and as advised, taking all necessary steps to meet the point. This course was not taken at an appropriate time or in any appropriate way and is, in any event, unable to succeed based as it is on a mere assertion and on assumptions as to what was considered by the Legal Services Commissioner. The respondent practitioner's denial of procedural fairness point is not made out.

26 It is possible that the respondent practitioner's real point was that there was a total failure of the process for referral to the legal Services Commissioner because Mr McIntyre had not satisfied himself that the overcharging was "deliberate". The point, however, was never put with such clarity. Section 208Q of the 1987 Act proceeded on the basis of a costs assessor considering any conduct of a solicitor involving "the deliberate charging of grossly excessive amounts of costs". In his letter of referral, Mr McIntyre did say that he did not have "sufficient information to determine whether or not the conduct was deliberate" but asserted that he had sufficient information to require him to refer the matter pursuant to s 208Q.

27 The role of the costs assessor under s 208Q is not to be confused with the obligations imposed on the Legal Services Commissioner under s 155 - the costs assessor is not required to be satisfied that there is a reasonable likelihood that the practitioner will be found guilty by the Tribunal of unsatisfactory professional misconduct or professional misconduct. The cost assessor is to carefully delineate and assess the material and if he "considers" that there was deliberate overcharging, he is obliged to refer the matter to the Legal Services Commissioner. Mr McIntyre had seen the party/party costs and had called for the solicitor/client bill of costs and was aware that the total time spent in court by the solicitor was not divided or apportioned. As he said in his letter of referral and in his affidavits, he was satisfied that there was sufficient information to require him to refer the matter to the Legal Services Commissioner. In his affidavit after setting out matters he had considered he stated:

On the basis of that information I formed the opinion that the solicitor and the barrister engaged in this litigation may have engaged in conduct involving the deliberate charging of grossly excessive amounts of costs.

28 Following referral of such a matter it is the Legal Services Commissioner who investigates the matter and makes the assessment required by s 155. In no sense did s. 208Q require Mr McIntyre to determine whether the overcharging was deliberate - all he was required to do was to express a considered opinion. In this case there was no flaw in the referral by Mr McIntyre that would operate so as to vitiate the entire investigation of the Legal Services Commissioner.

29 It is to be remembered that any person could complain to the Legal Services Commissioner about the conduct of a legal practitioner (s 134(2). The Commissioner could have treated Mr McIntyre's letter as a complaint under s 134(2) if there was doubt about it as a referral under s 208(Q). Once he commenced an investigation and had grounds under s 155 to commence proceedings in the Tribunal, it mattered not that he thought he was acting under a s 208Q referral when in fact he was acting on a complaint made under s 134. It had long been accepted that the validity of decisions, including administrative determinations, is unaffected by mistaking the source of the power to make them. (Brown v West (1990) 169 CLR 195; Moore v Attorney-General (Irish Free State) [1935] AC 484; R v Bevan; Ex parte Eliasand Gordon (1942) 66 CLR 452 at 487; R v Moore; Ex parte Graham (1977) 138 CLR 164; Mercantile Mutual Life Insurance Co Ltd and anor v Australian SecuritiesCommission and ors (1992) 112 ALR 563)

30 A further issue that might appropriately be described as a preliminary issue was the operation of s 208C of the 1987 Act and how it affected the jurisdiction of the Tribunal and the evidence that could be received by the Tribunal in these proceedings. The respondent practitioner again pointed out that there was a costs agreement with each of her clients and although they had been served with a detailed bill of costs, none of them had contested those costs set out in the bill. The significance of these matters was said to be firstly, pursuant to the provisions of s 208C of the 1987 Act, a costs assessor was obliged to decline to assess a bill of costs where the disputed costs were subject to a costs agreement that complied with Division 3 and the costs agreement specified the amount of the costs or the dispute related only to the rates specified in the agreement for calculating the costs. It was argued that, had the clients raised any dispute, then the only possibility was that if circumstances were shown to exist under s 208C(2) then the costs assessor would resolve any other dispute by applying the costs specified in the costs agreement and was not at liberty to set some other rate. The second point made by the respondent practitioner was that, as no complaint was made by the client, there was no jurisdiction in the Tribunal to embark upon a determination of what may have been the outcome of a solicitor/client assessment on the footing of a notional dispute sought to be raised by the Legal Services Commissioner or, the possibility that the Hussein family could have (but did not) raise a dispute. The Legal Services Commissioner could not raise a theoretical dispute when none existed in order to test, through the Tribunal, the existence of its apportionment obligation theory. The operation of s 208C(1) could not be circumvented.

31 The terms of s 208C of the 1987 Act are as follows:

208C Costs Agreements not subject to assessment
(1) A costs assessor is to decline to assess a bill of costs if:

(a) the disputed costs are subject to a costs agreement that complies with Division 3, and

(b) the costs agreement specifies the amount of the costs or the dispute relates only to the rate specified in the agreement for calculating the costs.

(2) If the dispute relates to any other matter, costs are to be assessed on the basis of that specified rate despite section 208A. The costs assessor is bound by a provision for the payment of a premium that is not determined to be unjust under section 208D

(3) This section does not apply to any provision of a costs agreement that the costs assessor determines to be unjust under s 208D.

(4) This section does not apply to a costs agreement applicable to the costs of legal services if a barrister or solicitor failed to make a disclosure in accordance with Division 2 of the matters required to be disclosed by section 175 or 176 in relation to those costs.

32 In the course of submissions senior counsel for the respondent practitioner accepted that s 208C (1)(b) firstly referred to a costs agreement that specified total costs, being a lump sum agreement and that the cost agreement in these three matters was not a lump sum agreement but set an hourly rate for work to be performed on the case. Secondly, it was accepted that, to the extent there is a dispute and one being raised by the Legal Services Commissioner, the dispute did not relate to the rates specified in the agreement for calculating the costs. It will be remembered that, in the party/party costs, Mr McIntyre did not reduce the hourly rate charged at $250 for a junior solicitor but apportioned the amount so that each client paid for one-third of the time spent on each hearing day. The dispute was about how that rate was applied not whether that rate of $250 per hour should be applied or some other lower rate. In those circumstances, s 208C(2) permitted such disputed costs to be assessed by a costs assessor on the basis of the specified rate despite the provisions of s 208A dealing with the general approach to assessing a bill and concentrating upon unfair or unreasonable costs. Further, by s 208C(3), the section did not apply to any provision of a costs agreement that a costs assessor determined to be unjust under s 208D. Under s 208D, a costs assessor may determine whether a term of the particular costs agreement entered into by a barrister or solicitor and the client is unjust in the circumstances relating to it at the time it was made.

33 Having regard to the matters referred to above, the respondent practitioner's point is misconceived. It appears to proceed on the basis that the statutory scheme operates so that firstly, no issue (including a disciplinary issue) can now be raised about fees when the clients did not take the point and secondly, if an issue could be raised but was not raised by the clients, the Tribunal cannot deal with the issue effectively acting on a de facto costs assessment. Having regard to the terms of the respondent practitioner's costs agreement, a costs assessor was not shut out of assessing the bill of costs by s 208C(1) and could have dealt with any dispute about apportionment on the rates specified in the costs agreement under s 208C (2). In addition, there was also room for the operation of s 208D in relation to a costs assessor determining that the costs agreement was unjust if the circumstances were shown to support such a finding.

34 The respondent practitioner's argument also leaves out of consideration the provisions of s 153 of the 1987 Act. For the purposes of investigating a complainant, the Legal Services Commissioner could apply under Pt 11 (Legal fees and other costs covering the provisions of s 173 through to s 208V) for an assessment of costs claimed by a legal practitioner and Pt 11 would apply to such an application as if the Commissioner were a client of the legal practitioner. That provision undermines the conceptual basis of the submissions for the respondent practitioner on this point.

Further, the respondent practitioner's submissions also proceed on the erroneous basis that the Tribunal will effectively act, in effect, as a cost assessor in conducting the proceedings whereas the Tribunal is required to engage in a very different task, namely, determining whether or not the amounts charged were deliberately charged at grossly excessive rates such as to lead to the conclusion that the respondent practitioner is guilty of professional misconduct. In undertaking that exercise the Tribunal may be assisted by the evidence of a cost assessor as to what may be reasonably allowed on a solicitor/client assessment but not every charge disallowed as being unreasonable will necessarily raise issues of misconduct.

35 There are also other matters that demonstrate the error in the approach urged on behalf of the respondent practitioner. In Veghelyi v The Law Society of New South Wales(1989) 17 NSWLR 669, the Court of Appeal dealt with a challenge to the finding of the previous disciplinary Tribunal that a solicitor was guilty of professional misconduct by gross overcharging. Mahoney JA dealt with the history of regulating legal fees and why gross overcharging had been held to be professional misconduct. His Honour noted that the court had traditionally and for centuries exercised control over the "excessive fees and other unnecessary demands" made by solicitors of the court, noting that clients may frequently be in a vulnerable position in relation to their solicitors. The lack of equality of knowledge and understanding between the client and the solicitor of what is an appropriate fee and what might be a fair and reasonable charge meant that clients were entitled to be protected against the abuse of such an advantage in the hands of the solicitor. His Honour then stated:

The determination of what are the principles upon which charges are to be categorised for this purpose and the categorisation of charges in a particular case each pose particular problems. Mr Roberts' argument has, in my opinion correctly suggested that the
consequences of-overcharging are serious and that, in the context of the present day practice of law, it may be difficult to determine whether, in a particular case, charges are to be so categorised.

36 In noting that a solicitor's entitlement to remuneration is conveniently stated in terms of what was fair and reasonable in the circumstances, his Honour acknowledged the principles stated in such terms was "inherently indeterminative". His Honour then turned to his attention to what might fall within the category of fair and reasonable costs stating:

.... Mr Roberts, in his submissions, placed reliance upon this. A finding of professional misconduct should not, the submission suggested, turn upon an error of judgment. His submissions suggested further that it would be wrong to categorise as grossly excessive and so professional misconduct a solicitor's quantification of costs where the solicitor relied upon the terms of a written costs agreement and calculated his costs accordingly or where the quantification resulted from the fact that he had an excessive view of the value of his own services.

37 His Honour accepted that the fact that the charges had been calculated in accordance with the costs agreement made with the solicitor was an important fact but noted there were limits. There could be circumstances in which costs, even though calculated in accordance with the costs agreement, would in total be unacceptably excessive. Mahoney JA, in expressing himself in that manner, clearly contemplated that the existence of a costs agreement and charging in accordance with its terms could not avoid scrutiny of the solicitor's conduct on the basis of overcharging. In a separate judgment, Priestley JA appeared to accept the Tribunal's determination that the existence of a valid fee agreement (a matter found in favour of the appellant solicitor) did not end the matter. The Tribunal was still required to determine whether the costs "actually charged by the solicitor" pursuant to the agreement represented such a gross overcharge as to introduce a connotation of disgraceful or dishonourable conduct and justify a finding of professional misconduct. His Honour then noted that there was evidence of the opinion of two experienced solicitors that the charges were unjustified and excessive. Priestley JA was satisfied that this evidence had a proper basis and was an adequate basis for the opinion expressed. Having satisfied himself that there was a proper basis for the opinions for both views, his Honour concluded that it was open to the Tribunal to act on this evidence and, indeed, on that material his Honour would come to the same conclusion as the Tribunal. Kirby P concurred with the judgment of Priestley JA. Having regard to these judgments it is clear that the existence of a costs agreement will not operate to exclude investigation of the costs actually charged by a practitioner and will not prevent a finding of professional misconduct for the charging of grossly excessive costs. That line of reasoning is quite contrary to the propositions put forward on behalf of the respondent practitioner and the suggestion that the fact that there has been no client complaint means that s 208C operates to prevent the Legal Services Commissioner pursuing the issue by investigation and by proceedings before this Tribunal. Further, it demonstrates that there is no irregularity in deciding an issue of overcharging by a solicitor on the properly admitted evidence of the opinion of other experienced solicitors.

38 The general thrust of these conclusions, contrary to the submissions put forward on behalf of the respondent practitioner, are further supported by the decision of the Court of Appeal in New South Wales Bar Association v Meakes [2006] NSWCA 340. That case was an appeal against a decision of the Tribunal finding a barrister guilty of unsatisfactory professional conduct and that he be publicly reprimanded and pay the costs of proceedings before the Tribunal. The Bar Association appealed seeking a finding of professional misconduct in circumstances where the Tribunal found that there was gross overcharging by the barrister. Although the barrister resisted attempts to have his fees assessed, when application was finally made to appoint a costs assessor the matter was settled by the repayment of certain monies and the client withdrew his complaint. The Bar Association, nevertheless, proceeded to investigate the matter and ultimately made its own complaint against the barrister in relation to the overcharging, alleging professional misconduct or alternatively, unsatisfactory misconduct. In relation to the respondent practitioner's submissions in the present matter, the relevance of that case is that, although the client's complaint was settled and withdrawn, there was no suggestion that the Bar Association could not proceed with disciplinary charges arising from the same conduct. The absence of a formal costs assessment (the matter having settled before that took place) was not suggested as inhibiting the jurisdiction of the Tribunal. In this case, the barrister did not rely upon the terms of a written costs agreement. The evidence for the Bar Association before the Tribunal primarily consisted of an expert report prepared by a barrister with extensive experience in the common law/personal injury jurisdiction and with ten years' experience as a Supreme Court costs assessor. That evidence expressed views as to the rates chargeable by an ordinarily competent barrister of the respondent's experience in the area of personal injury litigation and also expressed the opinion that the amounts charged by the barrister were in excess of those considered rates. While the Court of Appeal was ultimately of the view that the overcharging was closer to 90 per cent than the 66 per cent found by the Tribunal, both the Court and the Tribunal concluded that the amount of the overcharging represented "gross overcharging"

39 In Riley - Solicitors Manual (Butterworths) it is noted in several places that the proof of the existence of a costs agreement is no bar to disciplinary proceedings being brought against a legal practitioner arising out of a complaint of overcharging. In every case the relevant inquiry was whether the practitioner had charged fees grossly exceeding those that would be charged by lawyers of good repute and competency (eg at 15,020.20 and 35,085) citing D'Alessandro v Legal Practitioners Complaints Committee [1995] 15 WAR 198 at 211 per Ipp J; Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [120]; Council of the Queensland Law Society Inc v Roche [2004] 2 Wd R 574 re de Jersey CJ. Having regard to the entirety of the Legislative scheme as well as the authorities referred to above, the respondent practitioner's submissions cannot be sustained to the extent that they challenged the jurisdiction of the Tribunal to entertain the application or the investigation conducted by the Legal Services Commissioner, including the decision to proceed with the application before this Tribunal. These authorities also support the admissibility of expert evidence and evidence regarding the usual and acceptable practice of charging.

40 As the case developed a major issue was the legal practitioner's obligations under her costs agreement and the proper construction of the terms of the costs agreement. On this approach the opinions given by Mr McIntyre and Ms Castle were generally helpful, being primarily addressed to the existence of a general obligation to charge only for work performed.

Ms Castle's Evidence and Report

41 Ms Castle was asked by the Legal Services Commissioner to provide an independent expert's report in relation to the fees charged by the respondent practitioner for the six hearing days the Hussein family matters were before the District Court. Ms Castle was a solicitor and until late 2007, was a principal of a legal costs firm specialising in the provision of legal costing services to the legal profession. Those services included the preparation of bills of costs, notices of objection, response to notices of objection, submissions for the purposes of costs assessments being conducted through the costs assessment system, advice, experts' report and like services. From 1991 Ms Castle was responsible for performing research, writing articles and practice notes on a wide range of legal costing issues. She was the author of the three volume loose leaf publication on legal costs and "Costs Guide New South Wales" published by the Law Book Co between 1996 and 2006, had written newsletters and articles on costs as well as a chapter on costs in "Practical Forms and Precedents" published by the Law Book Co.

42 As an expert witness Ms Castle's status in relation to costs and the assessment of costs was not questioned by the respondent practitioner but it was said, amongst a number of objections, that her report dealt with matters of law not fact and proceeded on the basis that there could be some assessment of the respondent practitioner's costs despite the provisions of s 208C of the 1987 Act. As earlier dealt with in this Decision, on the Tribunal's approach, s 208C presents no barrier in receiving Ms Castle's report into evidence. The remaining objections were overruled on the basis that Ms Castle had clearly set out the basis upon which she had expressed her opinion and to the extent that the operation of certain provisions of the 1987 Act might be stated, such statements represented the basis upon which her opinion was formed and were open to be overturned by the respondent practitioner as was any other assumed basis from which an opinion was formed. The Tribunal was in no doubt that Ms Castle was eminently qualified to express opinions about the practice of costs assessing, including in the context of contested costs in a solicitor/client costs assessment and what costs were professionally acceptable or unacceptable.

43 Ms Castle responded to a number of specific questions. Firstly, she was asked if she was aware of any decision or guideline applicable in circumstances, such as those under consideration in the respondent practitioner's case, where the solicitor had an obligation to apportion costs equally between the clients or to apportion costs to reflect the time actually spent on each client's matter. Ms Castle replied that she was unaware of any court or tribunal decision directly on point but stated that the general principle emerging from the practice of costs assessment and from taxation practice is that a lawyer "cannot charge the same unit of time more than once". By way of example she said that, if a lawyer spent between 10.00 am and 11.00 am drafting a document that was relevant to two clients, a lawyer could not charge that hour for both clients: an apportionment must be made so that the total time charged is the total time spent. Where an hour was spent, only one hour could be charged. The apportionment was made either equally or in accordance with the time actually spent where it was possible to ascertain what time was attributable to each client. Ms Castle stated that, in terms of costs assessment practice, it was the solicitor's "obligation" to make the apportionment. The bills sent to the clients then reflected that apportionment. To the extent that apportionment was not made, a costs assessor would disallow as unreasonable any costs that exceeded the apportioned value of the amount charged.

44 Ms Castle was then asked if the respondent practitioner's clients had challenged each bill of costs, would an experienced costs assessor have approached the solicitor/client assessment on the basis set out in s 208A of the 1987 Act (namely, on the basis of whether the amount charged was fair and reasonable in the circumstances). Ms Castles stated that, if such a challenge had occurred, an experienced costs assessor would have approached the solicitor/client assessment first by reference to what was provided for in the costs agreement. That agreement governed their contractual rights and obligations subject to the costs agreement being valid and to the overriding requirement to the Legal Profession Act. The effect of ss 208A and 208B of the 1987 Act was to require a costs assessor only to allow such costs as were "fair and reasonable". Costs assessors took the view that ss 208A and 208B provided an overriding statutory requirement that operated independently of any costs agreement and that a solicitor should only be allowed on assessment such costs as were "fair and reasonable". This was the way in which costs assessors would approach the matter.

45 The next question was, would an experienced costs assessor have allowed the respondent practitioner to charge each client the full amount (based on the time spent) for each day of the hearing, or required the respondent practitioner to apportion costs between the clients equally or required her to apportion costs between the clients to reflect the time actually spent on each client's matter. In relation to this question Ms Castle stated that a costs assessor should not have and on current costs assessment practices would not have, allowed the respondent practitioner to charge each client the full amount based on the time spent for each day of the hearing. There were two reasons for this: first in construing the costs agreement, a costs assessor would most likely interpret Cl 3 in the way such clauses are customarily interpreted. Clause 3 read - "we will charge you for each hour engaged on your Work". That sentence was routinely interpreted to mean "for each hour engaged exclusively on your work". The hourly rate charge was charged for the work in that context and that was the way such clauses were interpreted on a costs assessment. Ms Castle said that she had not seen such a clause interpreted in the way as had been used by the respondent practitioner. Ms Castle then said to the extent that the clause meant otherwise, namely, that the client would be charged for each hour engaged on their work even if the solicitor was also charging others for the same work, that it was a most unusual clause and the charges made under it would be likely to be reduced pursuant to ss 208A and 208B on the basis that they were not fair and reasonable. Secondly, by Cl 3 the costs agreement was "vulnerable to being set aside" by a costs assessor under s 208D because it was unjust with the result that the charge that had not been apportioned would be reduced on the basis that, under ss 208A and 208B ,they were not fair and reasonable. To the extent that a costs agreement purported to charge in the way utilised by the respondent legal practitioner it was "vulnerable to being set aside" under s 208D unless the client's attention was specifically drawn to Cl 3 and its effect and to the fact that the routine practice of solicitors is to apportion costs in such circumstances, that is, not charge in the way the respondent practitioner sought to charge, so that the client was fully informed that, in retaining her, the client was choosing to pay more than he or she should expect to pay other solicitors. Ms Castle stated that costs assessors regularly exercised the power under s 208D to set aside costs agreements where the costs agreement contained a clause that resulted in unfair or unreasonable charges being charged to the client. This was particularly where the client was at a disadvantage in terms of education, intellect, language, commercial sophistication and the like.

46 In relation to what was the correct approach to apportionment, namely, an equal division or a calculation based on the time actually spent on each case Ms Castle stated that the approach taken by costs assessors in apportioning costs between multiple clients or parties in a party/party context was as follows:

(a) where there was sufficient evidence to indicate the time actually spent, or attractable, to each particular client, that time was allowed to be charged to the client;
(b) where there was insufficient evidence, or it would be artificial to apportion costs other than equally, then an equal apportionment would be made.

47 On a solicitor/client costs assessment, Ms Castle stated that the solicitor bore the onus of proving that that the costs had been correctly charged in accordance with the costs agreement. Where time was spent for more than one client it was to be appropriately apportioned according to the principles referred to earlier. Where the solicitor's bill failed to apportion costs, the costs assessor must make the apportionment. Often there was insufficient evidence to do other than make an equal apportionment. A costs assessor had power to call for a wide range of documents and could have called for the transcripts to establish a more appropriate manner in which to make the apportionment in relation to the hearing days. This exercise involved looking at how long each of the plaintiffs were involved in giving evidence, what other witnesses were involved and whose matter their evidence went to and like matters. Often it was too difficult to make an accurate apportionment so an equitable apportionment was made.

48 In cross-examination Ms Castle said that, in her report, she made no reference to s 208C because it did not directly arise in relation to the topic she was asked to cover. Strictly speaking it was unnecessary to address the operation of s 208C for her to reach her opinion because she considered she was being asked, theoretically, if the matter proceeded to assessment what a costs assessor's opinion would be. She considered whether the matter could proceed to assessment and in her opinion it could have been assessed but nevertheless she understood the question to be theoretical, namely, if the matter proceeded to a costs assessment what would be the approach of a costs assessor to the charging for the hearing days. In her view, on the facts that she was asked to assume, the prohibiting operation of s 208C did not arise. Approaching the matter on that basis, Ms Castle's view was that the solicitor's obligation was to charge in accordance with the costs agreement and that the matter of charging in the bill revealed a manner of charging contrary to the terms of the costs agreement. The costs agreement would have required the costs to be apportioned. The respondent practitioner was entitled to charge in accordance with the costs agreement and the proper construction of the costs agreement was that, where work was done which benefited all three clients, it did not permit each client to be charged that entire amount of time.

49 On the respondent practitioner's approach to the operation of the costs agreement, the costs charged for the hearing dates would be considered by a costs assessor to be unjust and in that context, s 208D was relevant. As Ms Castle understood it she had been asked about the approach of a costs assessor and her experience informed her that a costs assessor, seeing these three costs agreements and the charges made for the same work for each of the three clients might, of his or her own motion or prompted by a submission put, have made a finding that the costs agreements were unjust. Having read the pleadings and the application she had not been informed that the Legal Services Commissioner was not arguing that the costs agreements here were unjust but she was acting as an expert and obliged to answer the questions asked of her and it was her opinion that, as part of the costs assessor's approach to these matters, those provisions would be a relevant consideration. It was put to Ms Castle that, if there was no allegation against the practitioner that the costs agreement was unjust, then she would have to accept that the opinion she expressed on the potential operation of s 208D would fall away but that was a proposition that she could not accept. That was because a costs assessor would approach the matter as she had already stated, that is, would firstly look at the terms of the costs agreement but if the costs agreement was set aside then the costs assessor would have no term to apply and would only apply the test referred to in ss 208A and 208B. If the costs agreement stood and was considered to be valid, the costs assessor assessed the costs in accordance with the agreement as modified or subject to the overriding statutory tests of "fair and reasonable" costs.

50 Ms Castle accepted that, on the assumption that the costs agreement was valid and there was no suggestion that the costs agreement was unjust, the only persons capable of raising a dispute about the costs were the Hussein family or possibly the respondent practitioner.

51 Because of the way in which Ms Castle had approached the matter, she had no need to consider the authorities on the operation of s 208C although she was aware that the respondent practitioner had been a party to judgments in the Supreme Court about the operation of that section

Evidence of Mr McIntyre

52 Although Mr McIntyre was called only as to matters of fact and had not been qualified as an expert, he was cross-examined. His evidence was accepted by the respondent practitioner on a similar basis to its acceptance in the Galitsky proceedings. Mr McIntyre agreed that he had conducted only a party/party costs assessment in the Hussein matters but he had called for the solicitor/client bill for the purpose of establishing that the indemnity principle had not been breached. He explained the indemnity principle to be that where a costs assessor was assessing on a party/party basis, the assessor needed to ensure that the obligation on the client to pay the solicitor was not in a lesser sum than the amount claimed in the party/party bill, otherwise there would be a profiting on the party/party bill. Mr McIntyre accepted that, in approximately 2006, litigation solicitors were generally aware of the indemnity principle. The solicitor/client bill would usually be sighted in a party/party costs assessment where one party required the assessor to be satisfied that the indemnity principle was not breached. It was commonplace to be told that the solicitor/client bill and the party/party bill were in fact identical. Mr McIntyre said that, on an assessment on an indemnity basis, the general principle was to allow everything except those things that were regarded as "unfair or unreasonable" - the onus in relation to costs was "switched around". Party/party costs were assessed on a fair and reasonable basis and that may result, for one reason or another, in the whole of the amount of the costs claimed being granted. On an indemnity basis the principle was that the parties were entitled to all their costs unless the assessor formed the view that, for some reason, the costs were unfair and unreasonable or excessive.

53 Mr McIntyre was then cross-examined on the deregulation of legal costs in New South Wales from the middle of 1994 whereby litigation costs in personal injury matters were no longer governed by a scale of costs. This was accompanied by an obligation for solicitors to enter into costs agreements and under the 1987, Act in personal injury matters, practitioners were permitted to charge a success premium of up to 25 per cent. Mr McIntyre understood that, in certain cases, one justification for the conditional fee uplift was that the solicitor carried the cost of the disbursements in the matter. Mr McIntyre's experience was that it was common for costs agreements to provide for time-based charging in increments or units of time.

54 Mr McIntyre conducted a party/party assessment and was not involved in the solicitor/client assessment and therefore had no need to consider the operation of s 208C of the 1987 Act. In other matters he said that he had undertaken many solicitor/client assessments. Against that experience he accepted that there was a difference between costs of the same matter for the same work assessed on a party/party basis on the one hand and on a solicitor/client basis on the other. It was not unusual to see a bill prepared on a solicitor/client basis at a rate of $400 and the same rate being claimed on a party/party basis. The costs assessor might determine on a party/party basis a fair and reasonable hourly rate is $350 and there would be a difference between what was appropriate on a solicitor/client basis. It was also possible that, in relation to a solicitor/client arrangement, there was work performed on instruction that was not strictly necessary but which the client wished to have performed and that cost would be allowed on a solicitor/client basis but not on a party/party basis. This might occur with a client who was particularly demanding but where numerous telephone calls from the client would not be allowed on a party/party basis but would be allowed on a solicitor/client basis. It was not uncommon now to have the client attempt to have, on a solicitor/client assessment, the costs agreement set aside and only reasonable costs allowed.

55 In relation to Mr McIntyre's referral of these matters to the Legal Services Commissioner under s 208Q of the 1987 Act, he accepted that he had no material to determine whether the excessive rates were deliberately charged by the respondent practitioner. He understood his obligation under the Act was to be satisfied on a prima facie basis that there was excessive charging and if that were so, he had an obligation to report it so that the Legal Services Commissioner could then investigate the other elements in order to make out or justify an allegation of either unprofessional conduct or professional misconduct. His process of thinking was that he had been practising for a long time and he had never seen this type of charging before and had never seen it done before. He had been involved in litigation matters where he had acted for multiple clients and it was always his experience in such circumstances that the charges had been apportioned amongst the clients. In Mr McIntyre's view, because it was not apparent in the costs agreements, this charging arrangement by the respondent practitioner had been outside the costs agreement. If outside the costs agreement and if this charging regime had been disclosed to the client and they had accepted it, then he might have come to the conclusion that the charging was not excessive or deliberately overcharging. However, faced with the material that was before him he felt he had no alternative than to make a report and referral and this was the first and only time he had felt he had to do so.

56 Mr McIntyre agreed that the circumstances of the Hussein family litigation were unusual. In this case there were a number of objections by the defendant to the respondent practitioner's bill but she persisted in claiming the amount in her bill. Mr McIntyre agreed that, throughout the party/party assessment, the respondent practitioner maintained her entitlement to the costs charged for the hearing days and at no stage abandoned them. In cross-examination it was put to Mr McIntyre that, in his experience, it was commonplace for solicitor/client bills to be assessed in much higher amounts than the same bills assessed on a party/party basis but Mr McIntyre could not agree with the statement that they were "much higher". He understood the whole idea of statutory amendments under the deregulated systems was to try to ensure the recovery on a party/party basis was as near as possible to the solicitor/client costs. He now saw bills prepared on a party/party basis where the solicitor/client costs were in an almost identical amount and where there had been instances where the recovery had been as high as 95 per cent or more. Mr McIntyre confirmed that the reason he allowed hearing fees much less than those claimed for by the respondent solicitor was because the hearing fees had not been equally apportioned between the three cases. He made an allowance for each matter of one-third of the hearing costs for each day. Mr McIntyre accepted that, in making that assessment, he had not mentioned any authorities, publications or documents about costings that bore upon the issue but operated on his understanding of his obligation under the legislation and his experience as a solicitor and a costs assessor. On that basis he had formed the view that there had been gross overcharging and thus he had an obligation to report the matter to the Legal Services Commissioner. When Mr McIntyre first saw the bill he thought that the costs for the hearing days might have been claimed "somewhat casually" or had been put in "by accident". He expected to see an explanation to that effect.

The evidence of Mr Brabazon

57 To deal with the issues raised by Ms Castle's report, the respondent practitioner relied on the affidavit of Mark Brabazon, a barrister in private practice who between 1995 and 1999 had been a costs assessor under the 1987 Act and since that time had advised and appeared in a number of appeals and cases relating to legal costs. He had presented numerous papers on the subject. Mr Brabazon's affidavit took the unusual course of arguing why Ms Castle's report should not be accepted as expert evidence primarily because it was said to ultimately involve questions of the interpretation and application of statute law and the common law in New South Wales, that is, they were the opinions of a lawyer (as were his opinions) about the law in this jurisdiction. The Tribunal is unable to accept that description of Ms Castle's report. In exercising the role and functions of a costs assessor under the Act, it is necessary to have regard to the provisions of the Act that control and direct the costing task. To the extent that Ms Castle explained the practice of a costs assessor by reference to certain provisions of the Act and the way those provisions have been applied by costs assessors, Ms Castle merely set out the basis upon which her opinion had been formed. If it could be shown that Ms Castle had misapplied or misunderstood any of those provisions, then such a finding would undermine the basis of her opinion. Cases have already been cited where the evidence of experienced practitioners in the area of costs in a particular jurisdiction were received and used in determining the issue of misconduct and used without criticism of such a course. Disciplinary issues involving costs and allegations of overcharging by legal practitioners is a notoriously difficult area and besides its own experience as a specialist Tribunal, the Tribunal is entitled to the benefit of any opinion, including expert evidence properly brought forward that deals with the practice of, inter alia, costs assessing.

90 As earlier indicated, the respondent practitioner had consistently relied upon the terms of the costs agreement as permitting her to charge her three clients for the full six hearing days and that there was nothing in the costs agreement that required her to apportion that time. It is therefore necessary to consider the terms of the costs agreement and in particular Cl 3 that is reproduced in paragraph 3 of this Decision. In essence, that clause stated that the respondent practitioner, subject to the successful outcome of the work, would charge certain specified rates including $250 per hour for a solicitor "... for each hour engaged on your work". The work was defined as meaning the clients' common law claim for damages involving negotiating a settlement, taking court proceedings if the matter did not settle, preparing the matter for hearing and taking appropriate instructions to bring the matter to a conclusion. In cross-examination, the respondent practitioner accepted that Cl 3 meant that she would charge the client "for the work we did for that client and for no other clients"

91 That plainly appears to be the proper construction of Cl 3. At the time when the costs agreement was entered into, all the matters were being treated as separate matters and it was not in contemplation that the matters would be consolidated or heard together with the evidence in one case being the evidence in the others. There was no evidence to suggest that, at the time the costs agreement was entered, that some different costs regime would apply should the matters be consolidated or heard together. There is no evidence before the Tribunal that course was contemplated. The costs agreement was said to be in a standard form made available by the Law Society and had been adopted by the respondent practitioner in conducting many speculative common law claims for damages.

92 On the basis of the meaning referred to above, Cl 3 obliged the client to pay for each hour spent on their work and no other client and so the question arises as to what should happen when the work performed for that hour involved performing the same task for one or more other clients? The evidence of Ms Castle and Mr McIntyre was to the same effect: a central rule of costs assessing and the ascertainment of the fairness and reasonableness of costs charged was that a lawyer could not charge the same unit of time more than once. Ms Castle spoke about this as being a general principle so that that where a lawyer spent one hour drafting a document that was relevant to two clients, the lawyer could not charge that hour to both clients but had to apportion the time so that the total time charged was the total time spent on the task: as one hour had been spent, only one hour could be charged. That concept also runs through the cases referred to in the commentaries referred to above. Mr McIntyre said that, when he saw how the respondent practitioner had charged for the hearing days, it was the first time he had seen that approach although he had conducted many solicitor/client assessments. He had been practising for many years and had never seen this type of charging and his experience was that, where there were multiple clients, the charges would be apportioned. He regarded the charges as outside the costs agreement and expected to see an apportionment for the hearing costs but when none was made he thought that the bill might have been rather casually put together or might have been explained as a mistake but that did not occur. Ms Castle had a similar approach indicating that the costs agreement clause in these three matters would normally be construed so as to require an apportionment of the hearing days. Ms Castle's view was, if the costs agreement was construed to allow the total cost of the hearing days to be charged to each client separately, then such a clause was vulnerable to being struck down for unfairness and in those circumstances a costs assessor in determining a fair and reasonable rate would apportion the costs. That apportionment took place because of the general principle that one unit of time worked could not be charged more than once.

93 There was no direct challenge to Ms Castle's evidence that the general principle and what was fair and reasonable was that a solicitor could not charge the same unit of time more than once. This principle was relied upon by the Legal Services Commissioner in the further particulars supplied at the invitation of the Tribunal but was not addressed in the evidence called for the respondent practitioner, nor was it directly dealt with in submissions. It may be accepted that a costs agreement may contain a specific provision allowing the charging of full costs rather than applying apportionment where one unit of time is attributable to more than one client but the provision would need to be fully disclosed to the client, together with information that other solicitors may apportion such costs. As already mentioned, nothing of this nature was disclosed to the Hussein family - not surprising in view of the fact that a joint hearing was not in contemplation at the time. Further, the respondent practitioner had little experience with cases that were heard at the same time. They were a rare occurrence in her practice yet she said she believed that the Law Society of New South Wales' pro forma costs agreement she used covered this type of case and entitled her to charge, in this case, for 18 hearing days when there were only 6 actual hearing days. It is to be recalled that the evidence of Mrs Castle was that, absent specific disclosure as to the operation of the clause, if the cost agreement did provide for the full charging of each hearing day by each client it would be struck down as unfair. A cost assessment would then proceed on the basis of allowing fair and reasonable costs and so the costs of the hearing days would be apportioned between the three clients. The Tribunal accepts that evidence.

94 Having regard to that evidence, the Tribunal's own experience and upon the proper construction of the clause, the costs agreement did not entitle the respondent practitioner to charge each client the full amount for attendances at the six-day hearing of the matters. Further, where the costs were incurred for more than one client during any hour of attendance then the costs of that hour had to be apportioned so that each client paid for the work actually performed for their case or, where appropriate, the time would be simply equally shared between them. While it follows from that conclusion that the respondent practitioner was in error in proceeding on the basis that the costs agreement for each client did not require her to apportion the costs of the hearing and was in error to the extent that she asserted the costs agreement actually permitted her to charge each client separately for the whole of the hearing time, that conclusion does not necessarily lead to a finding of professional misconduct.

95 In determining what was intended by the respondent practitioner it is relevant that the detailed bill of costs forwarded to the clients contained the statement that, unless objection was raised within 30 days, any monies held in trust would be applied to satisfy what was clearly intended to be conveyed as an obligation on the Hussein family to pay the amounts set out in the detailed bill of costs (see ss 192 of the 1987 Act 331 of the 2004 Act). The difficulty for the respondent practitioner and her evidence as to her usual practice about reducing costs in these speculative common law actions where verdicts were obtained for the plaintiffs was her other evidence that she was mindful of the "indemnity principle" and the need to demonstrate to the costs assessor that she was, indeed, intending to seek these costs from her clients. It appears to have been open to the respondent practitioner to have rendered a detailed bill of costs and to have made a provision either that she would seek from her client no more than what was allowed on a party/party costs assessment or, having knowledge of the modest size of the verdicts, to make a provision that she would seek no more than what was allowed on party/party costs assessment plus a nominated amount resulting from her assessment of the verdicts obtained. Such a step may have been more indicative of what she described as her "usual practice", but no such stipulation was made in the bill of costs. It follows from the respondent practitioner's "usual practice" in solicitor/client costs that, if her costs (or the costs of the hearing days) were not challenged on a party/party basis or were not subjected to assessment, then she would have received the full costs of the hearing days from each client. The respondent practitioner's usual practice, therefore, provides no support for the submission that she never intended to be paid the amounts in the bill of costs, especially as the respondent practitioner was mindful of avoiding being in breach of the indemnity principle.

96 These matters establish that the respondent practitioner intended to seek the payment of $250 per hour for each client for each of the six hearing days. Alone, those circumstances may not necessarily establish that it was her intention to seek, by charging those amounts, to receive what she knew to be grossly excessive amounts of the costs. The Tribunal is of the view that the deliberate act of overcharging is made out, firstly by reference to the terms of the costs agreements, secondly, by reference to the amount of the charges, and thirdly, by the operation of the general principle that a unit of time can only be charged once by a legal practitioner. The respondent practitioner acknowledged that, in each case, the costs agreement with each client allowed her to charge only for the work performed for that client. During the hearing there was substantial debate as to whether the word "exclusively" should be implied in the costs agreement so that it was to be read as enabling the respondent practitioner to charge only for the work "exclusively" performed for each client. The Tribunal does not find it necessary to imply the word "exclusively" in each agreement but from the terms of the costs agreement itself and the respondent practitioner's evidence about her costs agreement with these three clients, it is apparent that they were to be charged only for work relating to their own matter.

97 In cross-examination, in a general sense it was accepted by the respondent practitioner that there were likely to be some cost savings in having the three matters heard together although there was no precision as to the extent of those savings. What is obvious is that these three cases were heard together, with some savings and occupied a total of six days. The fact is that the respondent practitioner attended court through a junior solicitor for six days and in reality charged for 18 hearing days. She did that deliberately, knowing that was the effect of the detailed bills of costs served on each of the clients and in so doing must have been aware that such a claim was a deliberate charging of grossly excessive amounts of costs.

98 It might be asked whether these conclusions may be altered in light of the fact that, in the District Court, the parties agreed that the evidence in each matter would be evidence in the others. That was announced and accepted at the commencement of proceedings although there was no formal order for "consolidation". The respondent practitioner argued that, in accordance with the rules of the court, there was no consolidation of the actions. No party addressed the significance, if any, of this agreement as to the evidence. It is difficult to understand what the parties meant when they accepted that the evidence in each matter would be evidence in the other matters. These actions were described as common law claims for damages and involved three different plaintiffs suffering slip and fall type injuries on different days in two separate areas of the same residence owned by the same defendant. The source of the risks to each plaintiff was said to be a defect in the apartment above arising from faulty piping and the pooling of water. While it is understandable, especially in relation to the alleged cause of injuries, that some or similar expert evidence would be relevant to all cases, there would also be a class of evidence relating to the particular details of each plaintiff's accident that were unlikely to have any relevance for the other cases.

99 During the proceedings before the Tribunal counsel for the Legal Services Commissioner handed up an analysis of the time spent on each case and while initially resisted by the respondent practitioner, ultimately no objection was taken to the Tribunal receiving that calculation although it's worth and weight were questioned. That document showed that approximately 45 per cent of the six day hearing dealt with evidence that was relevant to all cases. Perusal of the transcript suggests that calculation to be reasonably accurate. In her evidence, the respondent practitioner stated that she had made no assessment of the time taken within the six days that was relevant to each of the three cases and had never turned her mind to that issue or the necessity to undertake such a task.

100 In the evidence called on behalf of the respondent practitioner and in the submissions made on her behalf there was no suggestion that, in fact at any time during the six day hearing, matters relevant to all three cases were being dealt with by the District Court. The approach adopted was that all three matters were in the list and in that sense were before the court and therefore, according to the terms of the costs agreement, the respondent practitioner was entitled to charge each client for each hour of the hearing. Absent an analysis supporting a finding that all three matters were relevant to the other matters, then it is difficult to give any significance to the court's acquiescence in the parties' agreement that the cases would proceed on the basis that evidence in one matter would be evidence in the others. That statement itself rather indicates that they were separate cases with some common features. As already observed in opening the case in the District Court, counsel for the plaintiffs stated that they were three "distinct cases" but all arising from the same premises and that he proposed to conduct the cases "plaintiff by plaintiff". There should have been no great difficulty therefore in charging each client for those parts of the hearing that related to their case even allowing that, from time to time, there would be evidence heard that related to all three cases.

101 There is also substance in the Legal Services Commissioner's submission that, even if these cases proceeded in such a way that the evidence in each matter was in fact relevant to the other matters, nevertheless there should have been an apportionment of the daily fees for the six-day hearing. If the cases had so close a connection then the Tribunal's experience leads to the expectation that the daily fees would simply be apportioned amongst the clients. Ultimately, for the operation of apportionment it mattered nought that the cases were intermingled to the extent that each case was before the Court for the full six days or, that there were times when that occurred and other times when only one or two of the cases were being considered. These matters were only relevant to the mechanism of apportionment and did not affect the requirement for apportionment.

102 In further written submissions also addressed orally, the parties put before the Tribunal calculations designed to indicate what amounts were actually charged by the respondent practitioner for the six-day hearing. This exercise was prompted by submissions for the respondent practitioner that, in compromising the costs issues on the party/party assessment and to ensure that the clients obtained some money from the proceedings, the solicitor/client costs were significantly reduced to the extent that it was initially suggested that nothing was charged for the hearing days although it was later acknowledged there may have been some charge but it was far less than the amount appearing in the bill of costs. Both parties produced calculations by reference to source documents held by the respondent practitioner but they were not in agreement as to what conclusion was indicated by the calculations.

103 Calculations for the respondent practitioner were carried out on the basis that, as there were no challenges to the other costs charged by the practitioner, if account was taken of the total actually paid to her and how that figure was significantly lower than the figure appearing in the bill of costs, then it had to be apparent that very little was paid by reference to the six-day hearing. It was accepted that calculation was theoretical and that in making concessions and compromising her costs, the respondent practitioner did not reduce her costs on a line-by-line basis or item-by-item basis but took a global approach. The calculations submitted on behalf of the applicant established that, in the matter of Toufika Hussein, the respondent practitioner had been paid just under 86 per cent of her professional costs as stated in the bill of costs, that in relation to Mohamed Hussein the respondent practitioner had been paid just under 35 per cent of her professional costs as stated in the bill of costs and that in relation to Fatemah Hussein, the respondent practitioner had been paid just under 38 per cent of her professional costs as stated in the bill of costs. For the purposes of this exercise, as the respondent practitioner took a global approach to reducing her solicitor/client costs, it is appropriate to take the same approach in attempting to establish what charges were actually made for the six-day hearing. On that global approach, in broad terms, there was a reduction of 14 or 15 per cent for those days in relation to Toufika Hussein, a reduction of approximately 65 per cent in relation to Mohamed Hussein and a reduction of a little over 62 per cent in relation to Fatemah Hussein. On this approach, in two of the three cases the respondent practitioner actually obtained what Ms Castle and Mr McIntyre would regard as a fair and reasonable fee after apportionment, while in the other case there has been a 14 per cent reduction in the fee when on a proper apportionment there should have been a sixty-six per cent reduction.

104 Adopting the global approach significant issues are raised as to whether there has been professional misconduct in the charges made in the bill of costs. In Nikoliadis the Court spoke of the requirement to demonstrate a deliberate gross overcharging meaning that the overcharging had to be intentional, fully considered and not impulsive. Accidental overcharging would not suffice. There had to be an intention to charge the amounts and for the client to pay it. For there to be professional misconduct there must be significant personal misconduct and the practitioner must be guilty of a personal default, either by a deliberate wrongful act or by personal negligence. The practitioner needed to be personally implicated in the wrongdoing.

105 It is also to be recalled that, in Nikoliadis McColl JA at [166] spoke of the Tribunal, in finding that the practitioner in that case, although not the original author of the bill, had at all relevant times adopted the bill as if he were the author, was a finding that embraced both the appellant's conduct in permitting the bill to be rendered on his behalf as well as his conduct in submitting it for assessment and propounding its correctness throughout the disciplinary proceedings. Her Honour noted that, to the extent that finding encompassed conduct that occurred after the bill was rendered, it conflicted with the Tribunal's conclusion that the act of "sending" the bill completed the act of overcharging and that was a view with which she concurred. Hodgson JA agreed with her reasons and it is possible from the views expressed by Beazley JA in paragraph [85] her Honour was also of that view with the focus to be on the conduct constituting professional misconduct and how that was not dependent upon whether a client asserted a legal right after engaging in such conduct.

106 It was, nevertheless, urged upon the Tribunal by the respondent practitioner that it was appropriate to have regard to subsequent conduct in order to determine whether there had been professional misconduct. That course, however, is in direct conflict with the binding authority of at least the majority of the Court of Appeal in Nikoliadis. In the present case it can be said that, even if regard was given to the substance of the entire case including the conduct following the intentional overcharging, the Tribunal would conclude that professional misconduct occurred at that point. Undoubtedly, the subsequent conduct referred to by the respondent practitioner is of relevance as to what consequential orders should be made but those matters are for another day.

107 Lastly, reference should be made to some particular cases that featured in submission for the respondent practitioner. The respondent practitioner relied upon the decision of Master Malpass in Malouf v Jazairy (2003) NSW SC 762. So far as is relevant to the present proceedings, that case deals with the circumstances in which s 208D(2) can be relied upon to interfere with an otherwise valid costs agreement. It was noted that a determination made pursuant to s 208D had the effect that s 208C did not apply to the relevant provision having in mind that s 208C required a declining to assess where its provisions were met. In the way in which the Tribunal has approached the matter, the provisions of s 208D are not in issue.

108 In Bechara v Kobeissi [2005] NSW SC 192, Master Malpass again dealt with the provisions of 1987 Act and in particular the operation of s 208C. In that case it appears that there were two costs agreements, one being a conditional costs agreement between the solicitor and the client provided to the client but being undated and unsigned by the client and the other one was a copy of a costs agreement signed by the client's wife and provided by the solicitor. The reasons of the costs assessor made no mention of the costs agreement. It was assumed, therefore, that the costs assessor did not have regard to any question concerning what may have been a costs agreement and the provisions of s 208C of the 1987 Act. The matter then went to a costs panel and in its reasons the panel dealt with the matters of s 208C and the costs agreement. It was held that the panel did not properly appreciate and deal with the fact that the costs assessor had not turned his mind to whether there was a costs agreement and then the operation of s 208C. This decision has no relevance for the present matter.

109 The 2005 decision in Kobeissi resulted in the matter being submitted for re-consideration and it ultimately re-emerged to be dealt with by Whealy J in 2007 (unreported, 26 March 2007 15241/06). A new assessor had been appointed and Ms Bechara was moved to review that determination and so the costs came before a second review panel. The costs assessor had found the terms of the costs agreement unjust but the panel was of the view that the assessor had insufficient regard to the terms of the costs agreement and had failed to consider s 208C. Under s 208C the assessor had to enforce the rates in the costs agreement and was not able to substitute other rates. Whealy J found that the costs assessor, relying on s 208A, had not applied the relevant rate contained in the costs agreement but had substituted a different rate. That was prohibited by s 208C(2). His Honour found the same problem that had been identified by Master Malpass in Malouf. The grounds upon which a costs assessor was to have regard under s 208D were not to be treated as matters giving rise to breaches of the section. His Honour appears to deal with the matter on the basis that the client had not made any allegation or application that the costs agreement was unjust and in that regard, the costs assessor apparently moved on his own motion. Ultimately, this is another decision about the operation of s 208D and the effect of s 208C - neither being relevant to the present proceedings in light of the conclusions reached by the Tribunal on what has been described as the preliminary matters raised by the respondent practitioner.

110 Having regard to the many issues raised by the parties, the Tribunal concludes that the respondent practitioner is guilty of professional misconduct. The Tribunal accepts that a finding of professional misconduct is a most serious step and should not occur unless the matter warrants such a finding. In reaching this conclusion the Tribunal acknowledges the requuirement to be comfortably satisfied that the conduct amounts to professional misconduct, having regard to the seriousness of the allegation and its potential to have an adverse effect on the professional standing of the respondent practitioner (Briginshaw v Briginshaw (1938) 60 CLR 336). We are also guided by the following statements of the Court of Appeal in Re: Veron; Ex parte Law Society of New South Wales (1966) 84 WN(NSW) 136:

The Court does not sit as taxing officers dealing with individual items of costs. Nor is it such an approach realistic in the present circumstances. We are guided by experience and a broad sense of what is reasonable and fair and not by any narrow approach to questions of mere overcharging (at 142).

It is obvious to us from the evidence which we have heard that the conduct displayed on the solicitor's part, no exercise of special skill, no special attention and no special exertions such as might sometimes be found to permit, without departure from proper professional standards of conduct, of the charging of fees higher than those allowed by the ordinary scale (at 144).

111 In the present case the Tribunal is firmly of the view that the conduct of the respondent practitioner could not be appropriately described as mere overcharging, an error of judgement or an example of an excessive view of her own worth. Section 127(1)(c) of the 1987 Act states that, for the purposes of Pt 10 Div 1 (Complaints and Discipline) of the Act, professional misconduct includes conduct that is declared to be professional misconduct by any provision of the Act. In turn, s 208Q(2) states that, for the purposes of the Act, deliberate charging of grossly excessive amounts of costs is declared to be professional misconduct. In the present case, for reasons already outlined, the Tribunal is of the view that when the respondent practitioner charged the full costs to each client for each of the six hearing days, that the respondent practitioner deliberately charged grossly excessive fees. That conduct amounts to professional misconduct and the Tribunal so finds. The matter shall be listed again at a convenient time to consider the appropriate orders to be made.

CITATION:	Legal Services Commissioner v Bechara [2009] NSWADT 145
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Legal Services Commissioner RESPONDENT Maria Bechara
FILE NUMBER:	062023
HEARING DATES:	26 February, 2009, 27 February 2009, 2 April 2009, 3 June 2009
DATE OF DECISION:	18 June 2009
BEFORE:	Haylen W - J (Deputy President); Barnes M - Judicial Member; O'Neill A - Non-Judicial Member
CATCHWORDS:	Professional misconduct - deliberate charging of grossly excessive costs - failure to apportion costs of joint hearing involving three clients
CASES CITED:	Bechara v Kobeissi [2005] NSW SC 192 Briginshaw v Briginshaw (1938) 60 CLR 336) Brown v West (1990) 169 CLR 195 Carter v Newcastle Wallsend Coal Co (1909) 9 SR(NSW) 474 Council of the Queensland Law Society Inc v Roche [2004] 2 Wd R 574 re de Jersey CJ. D'Alessandro v Legal Practitioners Complaints Committee [1995] 15 WAR 198 at 211 per Ipp J Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [120] Legal Services Commissioner v Galitsky[2008] NSWADT 48 Legal Services Commissioner v Maria Bechara [2008] NSWADT 215) Leon Nikoliadis v Legal Services Commissioner [2007] NSWCA 130 Malouf v Jazairy (2003) NSW SC 762 Mercantile Mutual Life Insurance Co Ltd & anor v Australian Securities Commission and ors (1992-3) 112 ALR 563) Moore v Attorney-General (Irish Free State) [1935] AC 484 Murray v Legal Services Commissioner (1999) 46 NSW LR 224 New South Wales Bar Association v Meakes [2006] NSWCA 340 R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487 R v Moore; Ex parte Graham (1977) 138 CLR 164 Re: Veron; Ex parte Law Society of New South Wales (1966) 84 WN(NSW) 136 Veghelyi v The Law Society of New South Wales(1989) 17 NSWLR 669
REPRESENTATION:	APPLICANT C Champion, barrister RESPONDENT P Neil, SC P Doyle Gray, barrister
ORDERS:	1.That conduct amounts to professional misconduct and the Tribunal so finds 2.The matter shall be listed again at a convenient time to consider the appropriate orders to be made.

13/11/01 Mark 42	Attendance by junior solicitor at District Court Sydney for the first day for hearing before His Honour Walmsley J. Matter adjourned until 14/11/01: 75 unit/s	1875.00
14/11/01 Mark 42	Attendance by junior solicitor at District Court Sydney for the second day for hearing before His Honour Walmsley J. Matter adjourned until 15/11/01: 77 unit/s	1925.00
15/11/01 Mark 42	Attendance by junior solicitor at District Court Sydney for the third day for hearing before His Honour Walmsley J. Matter adjourned until 16/11/01: 80 unit/s	2000.00
16/11/01 Mark 43	Attendance by junior solicitor at District Court Sydney for the fourth day for hearing before His Honour Walmsley J. Matter adjourned until 19/11/01: 60 unit/s	1500.00
19/11/01 Mark 43	Attendance by junior solicitor at District Court Sydney for the fifth day for hearing before His Honour Walmsley J. Matter adjourned until 25/2/02 so as to allow the Client to obtain the transcript of the previous days hearing so that the Client can appropriately cross examine the Defendant's witnesses: 30 unit/s	750.00
25/2/02 Mark 56	Attendance by junior solicitor at the District court part heard matter before His Honour Walmsley J. Matter concluded and His Honour reserved his judgment: 75 unit/s	1875.00
18/04/02 Mark 58	Attendance of principal to District Court regarding judgment: 37 units	1036.00