Lin and Han
[2015] FCCA 2395
•4 September 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| LIN & HAN | [2015] FCCA 2395 |
| Catchwords: FAMILY LAW – Practice and procedure – where the substantive proceedings relate to an application to set aside a Binding Financial Agreement – adequacy of legal advice provided to the applicant – conduct of legal practitioner – referral to Legal Services Commissioner. |
| Legislation: Family Law Act 1975, ss.90G, 90K |
| Incorporated Law Institute of New South Wales -v- R D Meagher (1909) 9 CLR 655 Other Articles Cited: |
| Applicant: | MR LIN |
| Respondent: | MS HAN |
| File Number: | PAC 290 of 2014 |
| Judgment of: | Judge Harman |
| Hearing dates: | 3, 4, 23 June 2015 |
| Date of Last Submission: | 24 July 2015 |
| Delivered at: | Parramatta |
| Delivered on: | 4 September 2015 |
REPRESENTATION
| Counsel for the Applicant: | Mr Greenaway |
| Solicitors for the Applicant: | Watts McCray Lawyers |
| Counsel for the Respondent: | Mr Sansom |
| Solicitors for the Respondent: | Ren Zhou Lawyers |
| Counsel for Mr Zhang: | Ms Traill |
ORDERS
I request that the Registrar of the Court forward to the Legal Services Commissioner of New South Wales a copy of each of the following:
(a)These reasons;
(b)Transcript of the evidence of Mr Zhang, solicitor, 3 and 4 June 2015;
(c)Copy of the submissions filed on behalf of Mr Zhang, 24 July 2015;
(d)Copy of the relevant documents as contained within Exhibit A2 and comprising:
(i)The checklist for advice regarding the Financial Agreement;
(ii)The Financial Agreement;
(iii)Correspondence between the attorneys for the parties (or either of them) and Mr Zhang;
(iv)The draft Affidavit of Mr Zhang (noting that the Affidavit has not been sworn, Mr Zhang contests that it accurately reflects the evidence that he would have given, Mr Zhang denies that he has provided any information or instruction leading to the preparation of the Affidavit or its contents but noting the annexures thereto);
(v)Copy of the file cover (both outside and in).
IT IS NOTED that publication of this judgment under the pseudonym Lin & Han is approved pursuant to s.121(9)(g) of the Family Law Act 1975 (Cth).
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PARRAMATTA |
PAC 290 of 2014
| MR LIN |
Applicant
And
| MS HAN |
Respondent
REASONS FOR JUDGMENT
These reasons are delivered with respect to a discrete issue within the proceedings and which does not directly bear upon the substantive issue for determination.
The substantive proceedings are between an Applicant, Mr Lin, and Respondent, Ms Han. Mr Lin and Ms Han are a former husband and wife and are now the parties to financial proceedings.
These reasons relate not to the substantive merits of the case nor, in fact, any issue as between the parties. These reasons are delivered with respect to referral of the conduct of an attorney, Mr Shijing Zhang, to the Legal Services Commissioner.
Background
The proceedings between these parties were commenced by an Application Initiating proceedings filed by Mr Lin 23 January 2014. That Application sought certain Orders, including to set aside a Binding Financial Agreement or a document purporting to be a Binding Financial Agreement.
A Response to the Application has been filed by Ms Han opposing the relief sought by Mr Lin.
The Binding Financial Agreement purportedly entered into between the parties and the property dealt with thereby is not the significant issue in dispute at this time. Suffice to record that the “Agreement” provided for a payment by Ms Han to Mr Lin in the sum of $100,000 in return for which Mr Lin was to surrender his right, title, and interest in a parcel of real estate and various other assets. The “Agreement” has not yet been performed.
On 22 April 2014, Orders were made by the Court and of the Court’s own motion requiring that notice be given to Mr Zhang as to:
a)The existence of the proceedings;
b)The adjourned return date of the proceedings, 20 May 2014;
c)The fact that a notification to the Legal Services Commissioner might be made with respect to Mr Zhang’s conduct in the event that his file with respect to purported advice to Mr Lin was not delivered up to the husband’s attorneys (pursuant to an authority that had been executed by the husband and delivered unto Mr Zhang) or as may be required in response to any subpoena served upon Mr Zhang.
The above occurred in circumstances whereby Mr Lin maintained that he had received no advice with respect to the Binding Financial Agreement signed by him (in which case, the Certificate of independent legal advice attached to the Agreement might be suggested to be false) or, in the alternative, that the advice that had been received by him was so deficient as to compel that the Agreement be set aside. An authority for uplift of the file had been provided prior to the first return date and it was suggested that the file was misplaced.
Following the above Order and notice of its contents to Mr Zhang having been given by the attorneys for the parties, further correspondence passed between Mr Zhang and those attorneys.
The evidence suggests that on 7 July 2014 that Mr Zhang had provided to the Applicant’s attorneys a copy of the signed Binding Financial Agreement, together with a “checklist” suggested by Mr Zhang to have been compiled by him at the time that advice was given. Those documents were suggested to be the totality of Mr Zhang’s file.
As material had not been produced by Mr Zhang in accordance with the husband’s authority as previously delivered, a subpoena for Mr Zhang to attend Court to give evidence was issued by the solicitors for Ms Han (the Respondent) 29 April 2015.
On 21 May 2015, a subpoena to produce documents and give evidence was issued at the request of Mr Lin’s attorneys and served upon Mr Zhang some short time later.
There is no issue that prior to the issue of the above subpoena that communication had occurred between Mr Zhang and the attorneys for Ms Han, those attorneys seeking to engage Mr Zhang as a witness in the wife’s case. So much is apparent from:
a)Material produced by Mr Zhang;
b)Mr Zhang’s evidence during his attendance at the hearing of these proceedings;
c)The evidence of the wife per her Affidavit.
An Affidavit was ultimately prepared by Ms Han’s attorneys intended by them to be executed by Mr Zhang. Mr Zhang denies any involvement in providing information as to the contents of that document. Certainly, Mr Zhang declined to sign the document as offered. Correspondence certainly occurred between Ms Han’s attorneys and Mr Zhang regarding the possibility of an Affidavit being prepared, sworn, and filed. A meeting occurred at one point. That much is, again, clear and apparent from each of the above sources.
A file was ultimately produced by Mr Zhang in response to the subpoena issued by Mr Lin’s attorneys. The file was produced at the commencement of the hearing of these proceedings (two days) 3 June 2015 and marked Exhibit A2.
Produced by Mr Zhang as part of his file are two pieces of correspondence from Ren Zhou lawyers (the solicitors for Ms Han, the Respondent) dated 5 May 2015. First of the letters 5 May 2014, Exhibit A for the purpose of this determination, contains the following:
We understand that on 29 January 2013 your firm was engaged by Mr Lin, the Applicant husband, to provide independent legal advice in relation to the binding financial agreement (“Agreement”) executed between Mr Lin and Ms Han. We further understand that you signed a Section 90G certificate. We enclose a copy of the Agreement for your reference.
On 23 January 2014, the Applicant husband, by way of an Initiating Application, commenced the above proceedings at the Federal Circuit Court of Australia seeking for, among others, an order to set aside the Agreement under sections 90K of the Family Law Act 1975.
In the Applicant husband’s Affidavit affirmed on 21 January 2014, he alleged that he attended your office for a conference on 29 January 2013. During the conference, he signed the Agreement with you and you signed a Section 90G Certificate. He further alleged that:
32. During my conference with Mr Zhang, he did not ask me anything about my marriage breakdown or even discuss with me the terms of the Agreement. To the best of my knowledge and belief he did not make any detailed notes during our conference.
33. I did not receive advice as to the effect of the Agreement, or as to the advantages and disadvantages of entering into the Agreement with [our client] during my conference with Mr Zhang.
34. I did not receive any written advice from Mr Zhang either prior to, or upon signing the agreement.
Because of the above, the Applicant husband alleged that the Agreement was not binding on the parties pursuant to section 90G(1)(b) of the Family Law Act 1975.
In the circumstances, would you urgently provide the following information to our office:
1. Your confirmation that you did provide the Applicant husband independent legal advice pursuant to section 90G(1)(b) of the Family Law Act 1975 in relation to the Agreement. If so,
(a) Whether the advice was given orally or in writing;
(b) If the advice was given in writing, please provide your firm’s file notes and your firm’s entire file in relation to the Agreement;
(c) If the advice was given orally, the identities of all persons present in the conference, and whether you can provide a statement and/or affidavit to the legal advice you given (sic) to Mr Lin in relation to the Agreement.
We await your prompt rely (sic).
The second letter, 5 May 2014, provided advice of the Order 22 April, 2014.
It would appear clear from the evidence in the proceedings to date (each of the parties having filed Affidavit evidence and Mr Zhang having given oral evidence and having been cross-examined) that negotiation did occur between Mr Zhang and the wife’s attorneys regarding the preparation of an Affidavit (as described above).
During his evidence Mr Zhang was clear that he had indicated to the wife’s attorney’s by email that he was prepared to execute an Affidavit as to his dealings with Mr Lin, the instructions provided to him by the husband and the advice given by Mr Zhang to Mr Lin, provided that a sum certain was transferred into his trust account to cover the costs and expenses of preparation of such an Affidavit.
This is also conceded by Mr Zhang in submissions provided by his Counsel, wherein he refers to (and as is already addressed in the transcript of evidence 3 and 4 June 2015) a meeting occurring at his office with the wife’s attorneys whereat he agreed to prepare an Affidavit subject to advance payment of $2200.
Mr Zhang attended Court 3 June 2015 and gave oral evidence for a portion of the 3 and 4 June 2015 respectively. At the conclusion of that evidence the proceedings were adjourned to enable Mr Zhang to:
a)Make notification to Lawcover as to the facts and circumstances of the case (if he had not already done so); and
b)To attend with legal representation, should he so desire, for the purpose of making submissions as to why a referral of the transcript of the proceedings and relevant documentation should not be made to the Legal Services Commissioner.
On the date fixed for Mr Zhang’s attendance 23 June 2015, Mr Zhang appeared with Counsel. Adjournment was sought and the proceedings were put over generally with a direction for written submissions to be filed by close of business 24 July 2015. Written submissions were filed on that date. Neither of the parties sought to be afforded the opportunity to make submissions of their own regarding any referral as might be considered necessary or appropriate nor to have the opportunity to receive the submissions of Mr Zhang and respond thereto. The matter has, accordingly, proceeded on the basis of:
a)The Transcript of Mr Zhang’s evidence 3 and 4 June 2015;
b)Written submissions provided by Counsel for Mr Zhang and filed 24 July 2015; and
c)The contents of the file produced by Mr Zhang.
The file produced by Mr Zhang
On 3 June, 2015 Mr Zhang produced to the Court and, after some discourse with respect to its production, a file cover on which was handwritten “Financial Agreement [Mr Lin]”. At the bottom of the file is, again handwritten, a number, SZ1301-1505. The file cover and its contents are marked as Exhibit A2 in the substantive proceedings.
The file contained numerous documents and which can be enumerated as follows:
a)Several copies of the Binding Financial Agreement;
b)A copy of the subpoena filed 29 April 2015;
c)A Copy of the Affidavit which had been drafted by the wife’s attorney’s to be sworn by Mr Zhang, but which has not been sworn. Annexed to the draft Affidavit is various correspondence passing between Mr Zhang and those for Ms Han;
d)An email from Mr Zhang addressed to the solicitors for Ms Han, dealing with preparation of an Affidavit. An email chain is produced. The relevant portion of that chain is communication from Mr Zhang to Ms Han’s attorneys, indicating:
Dear [Mr Lin],
We charge $350.00 per hour and will take me 5.72 hours to draft the affidavit. Please transfer $2200 into our trust account below for draft affidavit if you have agreed [banking details then provided]. We shall start to draft it after receiving the payment. Kind regards, Terry Zhang.
e)Copies of various documents filed by the parties in these proceedings whether provided by one party or the other;
f)Several copies of the letters 5 May 2014 from Ms Han’s attorneys to Mr Zhang, together with a copy of the Orders 22 April 2014;
g)Correspondence from Zhang Shijing Lawyers to Mr Lin’s attorneys (Watts McCray) dated 7 May 2013;
h)A number of emails between Mr Zhang and the solicitors for Ms Han;
i)Copies of relevant sections of the Succession Act 2006, Supreme Court Rules 1970 (regarding witness expenses) and the Federal Circuit Court Rules 2001 (again regarding witness expenses and subpoena);
j)A document headed “Australian Encyclopaedia of Forms and Precedents – 30.40 Checklist for Drafting Effective Financial Consent Orders”;
k)Finally, a document headed “Checklist for Advice Regarding the Financial Agreement”.
The last of the above documents assumes some significance.
The file cover that is produced by Mr Zhang has written within the inside right cover “Charge $150”. On the inside left cover, there are three brief notes regarding conferences or telephone communications on 24, 25, and 28 April 2015, and relating to negotiations between
Mr Zhang and the wife’s attorney’s for execution of an Affidavit by
Mr Zhang.
At the conclusion of Mr Zhang’s evidence there is no issue (it is set out in the submissions filed on behalf of Mr Zhang) that the Court had commented:
I’m not seeing from this witness’s evidence how the most basic compliance with statements of ethics of the Law Society, Solicitors’ Conduct Rules, let alone the body of common law that exists in relation to a practitioner’s obligations are even known to the witness, let alone discharged…Based on the evidence of this witness, have been nothing but a disservice by the legal profession (sic) – not those involved in the case at the moment. It is extraordinary…It is breathtaking.
Following Mr Zhang’s evidence (Counsel for the parties and each of them had agreed that Mr Zhang’s evidence would be taken first it being fundamental to the issue of whether the Agreement could stand or must be set aside) agreement was reached that the Binding Financial Agreement would be set aside. The parties continue their litigation with respect to Part VIII relief.
Mr Zhang’s submissions
A detailed and carefully drawn submission is filed on behalf of Mr Zhang. A number of issues are raised therein and I propose to address briefly, and as eruditely as I can, the matters raised. Before doing so, I make clear that the opportunity afforded to Mr Zhang to make submissions as to why a referral to the Legal Services Commissioner should not be made had apprehended a number of difficulties with Mr Zhang’s evidence, and potentially disclosing:
a)Incompetence or failure to follow any accepted practice as regards file management;
b)Breach of client confidence;
c)Failure to provide advice or any adequate advice;
d)Failure to provide a receipt or account.
Further issues are raised in the submissions filed on behalf of Mr Zhang and which I will also seek to address.
Finally, and before addressing the matters raised in the submissions filed on behalf of Mr Zhang, I make clear, as was commented to Mr Zhang during his evidence 3 and 4 June 2015 that I do not propose to determine any action in negligence nor professional complaint. That this was made clear to Mr Zhang at the conclusion of his evidence is conceded as such at paragraph 40 of the written submissions (and Mr Zhang’s Counsel submits representative of pre-judgment) in that I had observed:
I appreciate its not an action in negligence, not a professional complaint – but Lawcover would have had an interest and might have been here providing some representation for the witness, which might make things run a bit more smoothly if nothing else [if a notification had been made to Lawcover].
On the last occasion that the matter was before the Court Mr Zhang’s Counsel advised that a notification to Lawcover has now, in fact, been made.
Pre-judgment
The submission filed on behalf of Mr Zhang alleges that an adverse finding as to Mr Zhang’s credit had been drawn before he had even taken the witness box. I reject that that is so. The basis upon which pre-judgment is suggested is summarised at paragraph 35 (page 6) of the submissions:
It is submitted that prior to Mr Zhang even getting in the witness box that your Honour had formed an adverse view and so had counsel for each party. Your Honour and both counsel clearly knew the seriousness of the allegations that were being made against Mr Zhang but he did not. He thought he was being subpoenaed to produce his file and give evidence if needs be in relation to any advice. He had no opportunity to cross-examine the applicant husband who had made the allegations against him.
With respect to Mr Zhang and his Counsel that is simply not correct. The seriousness of the circumstances of the case was clear and apparent. I am concerned that they are suggested to not have been clear and apparent to Mr Zhang. The allegations that were made by Mr Lin (as to the absence of advice or competent advice) had been clearly made known to Mr Zhang approximately one year prior to his giving evidence.
The basis upon which it is submitted that an adverse view of Mr Zhang had been formed by the Court and by Counsel for each party “before he had even taken the witness box” is unclear.
The seriousness of the allegations raised was not unclear. Upon the production of Mr Zhang’s file it was clear that there was a complete absence of:
a)Retainer Agreement or Cost Disclosure;
b)Account or any accounting at all provided to Mr Lin;
c)A receipt or any financial document of any nature;
d)Any file note beyond that written on the inside of the cover, “Charge $150”.
To the extent that it is suggested that Mr Zhang had not had the opportunity to “cross-examine the Applicant husband”, there is no basis for such a submission. Mr Zhang is not a party to the proceedings, merely a witness. Mr Zhang had no basis upon which to cross-examine.
Criticism is raised that Counsel for both parties were permitted to cross-examine Mr Zhang, notwithstanding that he was called as a witness pursuant to a subpoena issued by the Applicant’s solicitors. The circumstances of the matter, I am satisfied, could and should have made clear to Mr Zhang that his evidence was likely to be treated as hostile or adverse to the Applicant’s cause.
Certainly, and as is referred to at paragraph 34 of the submissions, (wherein the bench had commented to Counsel for each party, “You are both entitled to have a fair crack as it were”) might well be taken to make clear that both parties had to cross-examine Mr Zhang with such vigour as was considered appropriate. Throughout the submissions filed on behalf of Mr Zhang, the comment as to “pre-judgment” is repeated.
The only basis suggested for pre-judgment is the comment quoted above (paragraph 33) inquiring as to Lawcover notification. The very fact that an attorney is about to enter the witness box, alleged by a former client, on oath, to have failed to provide advice or competent advice, might be considered a sufficient trigger to make notification to one’s statutory insurer. I would suggest that being served with a subpoena to give evidence (having previously been advised by the wife’s attorney of the husband’s case) would cause any competent attorney to immediately notify Lawcover and seek advice and assistance.
The fact that one is approached by the solicitors for the Respondent seeking consent to provide an Affidavit as to the advice given to one’s client might signal that a notification to Lawcover was appropriate (whether with respect to previous dealings with the client or the approach from the wife’s attorneys) or at least spark a phone call to the Ethics section of the Law Society.
If the above were not sufficient, one would have hoped that a practising attorney, served with a subpoena to produce their file and to attend Court to give evidence, would be conscious that a notifiable event may have occurred or be about to occur.
I am conscious, as had been made clear throughout the proceedings and including at the conclusion of evidence 4 June 2015 that a notification to Lawcover can be made by the attorney only. It is not open to the client or the other party to make such a notification. Indeed, it is the obligation of the insured to notify a reportable circumstance as soon as it is known. The “notifiable circumstance” should have been known to Mr Zhang well prior to the Court’s Order compelling him to give notice.
Again, at paragraph 66, it is suggested:
Also, it is obvious from your Honour’s comments after the first day of cross-examination, your Honour had formed a view in relation to Mr Zhang’s evidence. Your Honour found the evidence extraordinary.
Indeed, that is so. The evidence of Mr Zhang 3 June, 2015 was extraordinary. That evidence had included evidence on oath by Mr Zhang, for example, that:
a)He did not and could not locate a copy of the receipt that was suggested to have been issued to Mr Lin;
b)He did not have any file notes, having either made none or having made them on scrap paper but having discarded them into the wastepaper bin immediately upon conclusion of his conference with Mr Lin (it is now asserted, although it was not his evidence, that the documents were either lost or stolen).
Mr Zhang’s evidence was, as is submitted by his Counsel, difficult to follow, internally inconsistent and, at times, implausible.
It is suggested at paragraph 67 that the proceedings should have been adjourned at the conclusion of day 1 and Mr Zhang afforded the opportunity to have Counsel represent him. Indeed, that invitation had been extended to Mr Zhang previously. He seemed oblivious as to why such a suggestion would be put to him, asserting that he had “done no wrong”. Mr Zhang was reassured that it was not suggested that he had “done wrong”, but simply that legal Counsel might have been advisable, if not advantageous, in the circumstances and in light of that alleged.
I make clear that Mr Zhang’s evidence was “extraordinary”. Mr Zhang was very difficult to follow and, I accept, not purely due to language difficulties under which he would appear to labour and to which I shall return (as they are addressed in the submissions put on his behalf). Mr Zhang demonstrated:
a)Evasiveness;
b)Defensiveness;
c)Argumentativeness (at one point pointing at the husband’s Counsel, raising his voice and protesting “You bad barrister”;
d)A lack of appreciation of the seriousness of the allegations raised by his former client, Mr Lin;
e)A lack of appreciation of his duty to the Court to provide clear, frank, and candid evidence and to respond to questions put to him by Counsel in a fashion that was responsive.
Mr Zhang’s evidence was problematic due to its internal inconsistencies and at times its implausibility, something which one would not expect from a solicitor and proctor of the Supreme Court of New South Wales.
To the extent that it is suggested that leave had not been granted to the parties or either of them to cross-examine Mr Zhang, I again make clear that the inference that such leave was granted is and was irresistible. Mr Zhang was and could not be described as having been called by the husband as a witness in the husband’s case. He was clearly adverse.
To the extent that it is suggested the factors in section 38 and 192 of the Evidence Act 1995 were not considered, again, the submission is without merit. It is conceded by Mr Zhang that he had been served with a subpoena issued at the request of solicitors for each of the parties. Accordingly, one would envisage that, irrespective of which party was seen to have “called” Mr Zhang (and in reality he was called as the Court’s witness) cross-examination might flow.
Each of those factors was, in fact, considered, although specific reasons were not delivered on the day. It was not necessary to deliver a Judgment with respect to the Application to set aside the Binding Financial Agreement as ultimately this occurred by consent and upon it being apparent to all (perhaps save Mr Zhang) that Mr Zhang’s evidence was so unsatisfactory and so unsafe that the Agreement could not be allowed to stand.
Incompetence
The file maintained by Mr Zhang would appear to comprise one single sheet of paper, being that headed “Checklist for Advice Regarding the Financial Agreement”.
Mr Zhang’s evidence was to the effect that Mr Lin was referred to him by the then solicitors for the wife, that Mr Lin attended upon his office without appointment and stayed at the office in conference with Mr Zhang for somewhere between 15 and 45 minutes. During that time, it is suggested that the following was attended to (being the boxes upon the checklist which are ticked):
·Explanation the context of the financial agreement;
·Timing;
·Assets;
·Contributions;
·Costs;
·Chattel transfer;
·Real property transfer;
·Sale of property;
·Super;
·Indemnities;
·Spousal maintenance;
·Tax issues;
·Third parties;
·Release and forever quits claim to the other party;
·Effect of the agreement on the rights of that party;
·The advantages to the party of making the agreement;
·The disadvantages to the party of making the agreement;
·Ask the client whether he/she has any question;
·Answer the client’s question;
·Is the Client satisfied all of the terms of the financial agreement? (sic) If not, what content/reasons? Yes.
The Agreement, on its face, has some deficiencies in drafting. Whether they would have been sufficient to warrant interference with the Agreement by and of themselves is another matter. However, the Agreement covers issues which are not addressed in the advice suggested by the checklist to have been given and would appear to address issues that were not necessary in relation to the Agreement as drafted.
One is left entirely unclear as to what instructions, if any, were provided by Mr Lin to Mr Zhang as no file note exists. As indicated, Mr Zhang initially advised he had not made file notes and later suggested that file notes had been made by him on scrap paper but then discarded into a waste bin following the conference. Mr Zhang, through his Counsel, now submits that the documents were lost or stolen in some fashion.
It is difficult to understand how, in a conference of 15 to 45 minutes with a client Mr Zhang had not previously met, that Mr Zhang could have taken full and proper instructions as to the financial history of the parties, provided advice as to that which would likely occur if the parties had engaged in proceedings under Part VIII of the Family Law Act 1975 and to then also address the benefits or disadvantages of the Agreement as drafted let alone give advice to amendments that were desirable.
Mr Zhang’s evidence as to his advice addressing the advantages and disadvantages of the document as drafted is also somewhat problematic. When pressed to provide particulars of the advice in fact given as to the “advantages and disadvantages” of entering into the Agreement, that recited appeared to be largely non-legal advice, such as a desire to avoid conflict, to remain happy in life and to save face.
The Certificate annexed to the Agreement would also appear deficient, (although I need not determine whether sufficient to warrant the Agreement being interfered with on that basis alone ).
Section 90G of the Family Law Act 1975 is clear and specific as to that which must be addressed by a Certificate signed by a legal practitioner who has given independent legal advice. Pursuant to section 90G of the Act advice must be given as to the effects of the Agreement on the rights of that party and the advantages and disadvantages at the time that advice was provided of entering into the Agreement. There is, of course, no record of the advice suggested by Mr Zhang to have been provided. Mr Lin, on oath, denies that any advice was given. I remain concerned as to how advice of a sufficient, thorough nature to comply with any reasonable standard of professional conduct could have been given within the timeframe alleged.
Further issues arise regarding concerns as to competence, including:
a)The failure to keep or to retain file notes;
b)The failure to confirm in writing advice given or instructions received;
c)The failure to comply in a prompt and timely fashion with the authority initially provided by Mr Lin’s solicitors to release the file to his attorneys or, following service of a subpoena, to produce documents to the Court. It has taken over a year for any document to be provided;
d)The suggestion by Mr Lin that he requires an interpreter for the purpose of giving evidence in the proceedings (for example, paragraph 23 of the submissions on Mr Zhang’s part);
e)The suggestion that Mr Zhang “did not fully understand the proceedings and his role in the proceedings” (paragraph 32). For an attorney to not understand the issues that were in dispute between the parties (particularly when he has had a conference with the solicitors for the Respondent and has received correspondence from the attorneys for both together with the parties’ documents) is difficult to comprehend.
It is submitted on behalf of Mr Zhang with respect to the last of the above proposition:
It is clear from a reading of the transcript that at the outset Mr Zhang had difficulty understanding the questions. Many of the cross examiner’s questions were met by further questions and the cross-examiner was asked to repeat again the question until your Honour intervened.
That is indeed so. How an attorney admitted to practice and licensed to do so can have difficulty in understanding questions (including, due to language competence) or in formulating responses to questions is difficult to understand.
Perhaps Mr Zhang’s ability to be responsive was hampered by the absence of file notes. Mr Zhang suggested (after having conceded that no file notes had been produced by him in response to either the authority or the various subpoena) that he had written down notes on a scrap piece of paper and then disposed of that paper (paragraph 56 of the submissions).
Further, Mr Zhang did not establish any clear retainer with the client (paragraph 82 of the submissions), such that further communication between the wife’s attorneys and Mr Zhang’s office continued for some time and until ultimately Mr Zhang advised the wife’s attorney’s that he was no longer retained. There is nothing in Mr Zhang’s evidence to suggest he sought instructions from the husband with respect to this correspondence.
Fundamental to my concern as to the competence of the advice provided to Mr Zhang (and leading to the conclusion drawn at page 27 line 30 of the Transcript) is the fact that I could not accept the evidence of this witness as the basis for any satisfaction that this litigant, the husband, had received advice let alone competent advice.
The above lack of confidence in Mr Zhang’s evidence arises from the totality of his evidence but perhaps arises principally from Mr Zhang’s response at page 35 line 45 of the Transcript to the following:
QBecause without knowing that [a particular piece of information] the client’s not in a position to say whether he or she wants to enter the agreement, is he?
ANo. He know everything. He told me – he said don’t explain to me, the misses [the wife’s then attorney] she already explained to me.
QI see. I see?
ASo he know everything. As I have to stop him. I have explained to him many, many times.
QSo just ...?
AThis is my duty to explain to them.
QSo just to be clear you’re saying to me and the court that this client told you “The misses [name omitted] has explained it to me many time, you don’t need to?
AThat’s correct.
QIs that right?
AYes.
QAnd I take it that you followed his instruction and didn’t give him the advice?
ASorry?
QYou didn’t give him the advice because he didn’t want it; is that what you’re saying?
AYes. At the beginning they don’t want to be given advice.
QNot “they” at the beginning...?
ANo, he. Sorry. I apologise.
QTell him?
A He. Correct.
QSo did you give him the advice or not?
AI said of course I gave him the advice.
It is then submitted at paragraph 62:
It was clear by this stage Mr Zhang was getting into trouble with English, he was sick, was under pressure and was misunderstanding the questions, he could not express himself and he was not afforded the services of a translator.
I am troubled by the above as:
a)Mr Zhang had suggested, prior to taking the witness box, that he was unwell. Mr Zhang was offered the opportunity of adjournment. He declined it;
b)Mr Zhang had been afforded the opportunity of independent legal advice throughout the proceedings, let alone when attending to give evidence;
c)If Mr Zhang was under pressure, it was not extraordinary pressure beyond that which would be expected for any witness giving evidence in proceedings let alone a legal practitioner familiar with the litigation process;
d)If Mr Zhang had difficulty in participating in the proceedings in the English language that is a matter of concern by and of itself.
I do not, for one moment, suggest that Mr Zhang being bilingual is problematic. Far from it. However, what seems to be suggested is that Mr Zhang is not bilingual or at least not sufficiently adept at the English language to appear before the Court without a translator.
It is a benefit to the community, the profession and litigants to have available in practice attorneys from culturally and linguistically diverse backgrounds. The profession should be representative of the broad and rich diversity of the community. It is of benefit to litigants from culturally and linguistically diverse communities to be able to retain attorneys from the same diverse background and with whom they can converse without the need for interpreters. However, to suggest that a legal practitioner requires the services of a translator (something which was never sought by Mr Zhang) is concerning. The Court conducts its affairs in the English language and those admitted to practice should have some basic proficiency in the language used by the Court.
Criticism is raised by Mr Zhang’s Counsel that that the conduct of Mr Zhang is questioned without the parties having yet given evidence. With respect to that complaint I note that:
a)The parties have given evidence on oath and by Affidavit;
b)The parties have not yet been cross-examined;
c)The view that I have formed of Mr Zhang’s evidence as unreliable and as not satisfying me that Mr Lin has received advice, let alone competent advice, is not based on preferring the evidence of a party over that of Mr Zhang. That view is based solely upon the evidence of Mr Zhang and its internal inconsistency, implausibility, tangential response to direct and simple questions and the inability to provide clear evidence as to relatively simple matters. Mr Zhang’s evidence was, especially as the witness is a practising attorney, “extraordinary”.
It is not for me to assess the competence of Mr Zhang. That is a matter for the Legal Services Commissioner. However, on the basis that Mr Zhang’s conduct and evidence raise concerns for me as to Mr Zhang’s competence, I am satisfied that a referral should be made. It is a matter for the Legal Services Commissioner to form their own views and take such action, including remedial action as they consider appropriate.
The Court has a responsibility to itself and the community to ensure the proper discharge by legal practitioners of their duties and responsibilities to the Court and to the public as discussed in Incorporated Law Institute of New South Wales -v- R D Meagher (1909) 9 CLR 655. Authorities such as Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465 are well known to law students let alone practitioners. Those within professions of trust and “special skill” have an obligation to ensure the competent discharge of their duties. This assuredly applied to legal practitioners.
In this case serious question is raised in my mind as to the level of competence brought to the address of Mr Lin’s affairs by Mr Zhang.
Breach of confidence
As is submitted on behalf of Mr Zhang, Mr Lin has impliedly, if not expressly, waived legal professional privilege in that he has asserted on oath that he has not received advice. A hypothetical question might arise as to whether evidence that no advice has been given or received is or could be a waiver of legal professional privilege. However, that is a matter for other fora and other times.
Section 118 of the Evidence Act 1995 provides:
Evidence is not to be adduced if, on objection by a client, the court finds that adducing the evidence would result in disclosure of:
(a) a confidential communication made between the client and a lawyer; or
(b) a confidential communication made between 2 or more lawyers acting for the client; or
(c) the contents of a confidential document (whether delivered or not) prepared by the client, lawyer or another person;
for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.
If one proceeds from the premise that Mr Lin has waived legal professional privilege by giving evidence that asserts he has not had legal advice then the issue of breach of confidence by the impugned attorney may still arise. Legal professional privilege is the right of the client not the attorney.
It is submitted that the issue of breach of confidentiality is a “non-entity”. I do not, with the greatest of respect, agree. If one has regards to the Australian Solicitors Conduct Rules 2011 (corresponding with the New South Wales Professional Conduct and Practice Rules 2013 (Solicitor’s Rules)) one locates the following:
Paramount duty to the court and the administration of justice.
A solicitor’s duty to the court and the administration of justice is paramount and prevails to the extent of inconsistency with any other duty.
Communication Of Advice
A solicitor must provide clear and timely advice to assist a client to understand relevant legal issues and to make informed choices about action to be taken during the course of a matter, consistent with the terms of the engagement.
And:
Confidentiality
A solicitor must not disclose any information which is confidential to a client and acquired by the solicitor during the client’s engagement to any person who is not:
9.1.1 a solicitor who is a partner, principal, director, or employee of the solicitor’s law practice; or
9.1.2 a barrister or an employee of, or person otherwise engaged by, the solicitor’s law practice or by an associated entity for the purpose of delivering or administering legal services in relation to the client,
EXCEPT as permitted in rule 9.2.
9.2 A solicitor may disclose confidential client information if:
9.2.1 the client expressly or impliedly authorises disclosure;
9.2.2 the solicitor is permitted or is compelled by law to disclose;
9.2.3 the solicitor discloses the information in a confidential setting, for the sole purpose of obtaining advice in connection with the solicitor’s legal or ethical obligations;
9.2.4 the solicitor discloses the information for the sole purpose of avoiding the probable commission of a serious criminal offence;
9.2.5 the solicitor discloses the information for the purpose of preventing imminent serious physical harm to the client or another person; or
9.2.6 the information is disclosed to the insurer of the solicitor, law practice, or associated entity.
Prima facie Mr Zhang has breached rule 9 of the New South Wales Professional Conduct and Practice Rules 2013 (Solicitor’s Rules) by engaging in discussion with the wife’s attorneys as to that which passed between Mr Zhang and his client Mr Lin. That such communications occurred is not controversial). Mr Zhang has provided or signalled his willingness to provide information to the point of seeking to be paid to prepare an Affidavit disclosing the client’s confidences and that which is suggested to have been given by way of advice. To do so could not be other than a breach of the client’s confidence.
For Mr Zhang to give evidence of his dealings with the husband from the witness box in response to a subpoena which compels him by law to do so is not a breach of confidence (rule 9.2.2 of the Rules).
However, whether the client has expressly or impliedly waived legal professional privilege by filing an Affidavit with the Court alleging the absence of legal advice (or incompetent or incomplete legal advice) I am not satisfied that this “expressly or impliedly authorises” breach of confidence or disclosure of confidential information by a client’s attorney and especially not when no recourse is had to the husband regarding this disclosure.
No receipt produced
Mr Lin alleges that he paid a sum of $150 to Mr Zhang. Mr Zhang agrees with this. The only record produced of this financial transaction is the handwritten note within the file cover.
Mr Zhang sought to deflect any criticism for the failure to produce any accounting records to his secretary. That is entirely inappropriate. Mr Zhang is responsible for the proper administration of affairs within his office. Neither receipt nor tax invoice were produced. Both were called for by the subpoena. Mr Zhang did not offer any explanation as to why they were not or could not be produced. One can only infer that they do not exist.
Mr Zhang’s illness
It is submitted throughout Mr Zhang’s submissions that he was ill and that is offered as the explanation for his confused, convoluted, and tangential evidence. I have difficulty accepting that it is so.
Annexed to the submissions are two Medical Certificates dated 2 July 2015 with respect to Mr Zhang and suggesting that he suffers diabetes.
There is nothing to suggest that Mr Zhang’s diabetic condition affected the evidence that he gave on 3 and 4 June 2015, a full month prior to those letters.
Mr Zhang was offered opportunities for adjournment. He declined them. Mr Zhang was given time whenever it was requested.
To the extent that the submission is ultimately put that Mr Zhang required medical assistance or that his ability to withstand cross-examination was affected by illness on 3 and 4 June 2015 there is no evidence at all.
No chance of legal representation
Mr Zhang had never sought to be represented. Mr Zhang is not an “unsophisticated litigant”. He is a solicitor and proctor of the Supreme Court of NSW. Mr Zhang was well placed to consider whether his interests might benefit from independent legal advice and representation prior to taking the witness box. The Court raised the matter with Mr Zhang but no Application was made by Mr Zhang.
As is conceded in the submissions filed on behalf of Mr Zhang, directions had been made over a period of approximately 12 months prior to Mr Zhang being called to give evidence, which alluded to the desirability of or which required that a notification to Lawcover be made. The first indication to the Court that such a notification had been made was that offered by Mr Zhang’s Counsel following the conclusion of the hearing and when an Order had compelled that a notification be made.
If Mr Zhang was not in a position to understand the gravity of the situation and the seriousness of the allegations that were raised in the proceedings and involving him, such as to realise that a notification to Lawcover was appropriate, if not mandatory, then that is a concern by and of itself.
No interpreter provided
I make clear that it is not the role of the Court to provide interpreters for witnesses. If a witness believes that they require the assistance of an interpreter, it is a matter for them to arrange their own interpreter and to advise the Court that an interpreter is required.
I would be concerned if a practising solicitor seriously suggests that their English language skills are so deficient that they are unable to understand the questions of Counsel and to respond to those questions in a responsive fashion.
I reject the criticism that the failure to provide an interpreter to Mr Zhang in some way denied Mr Zhang due process and that this, in any way, affected his ability to follow, deal with or address cross-examination.
Summary
At paragraph 91 of the submissions filed on behalf of Mr Zhang, the following reasons are advanced for why notification or referral to the Legal Services Commissioner should not occur. I will address each individually:
a)An adverse view of Mr Zhang was formed prior to his giving evidence and prior to either party being cross-examined
An adverse view of Mr Zhang arose from his inability to produce material to the Court in response to a subpoena and, at the conclusion of his evidence, as a consequence of the internally inconsistent, implausible, and difficult to follow evidence given by him.
b)Mr Zhang was not afforded counsel
As indicated above, Mr Zhang had ample opportunity to instruct Counsel. Mr Zhang never sought to be represented even when this was raised.
If Mr Zhang had followed even the most rudimentary requirement of his insurance cover notification would have been made by him when he first became aware of these proceedings and that alleged within the proceedings as to a suggested lack of or inadequate advice. That is when the “notifiable circumstance” first arose. If that had occurred, Counsel may have been provided for Mr Zhang by his insurer.
c)Mr Zhang did not have the benefit of an interpreter
As a practising legal practitioner, I would not expect that Mr Zhang would require an interpreter. No Application was made by Mr Zhang at any time for an interpreter to be provided, nor did he seek to make arrangements to bring an interpreter with him, it being his expense and obligation in the circumstances.
d)There was no application by the parties to cross-examine Mr Zhang
As indicated above, the evidence of Mr Zhang is fundamental to these proceedings. After Mr Zhang’s evidence I was unable to accept his evidence as reliable. The non-acceptance of Mr Zhang’s evidence, without the need for any challenge to the evidence of either of the parties themselves, has been sufficient to now engage these parties in contested Part VIII proceedings.
I am not concerned that an Application was not expressly made by Counsel for either party to cross-examine Mr Zhang. Mr Zhang had been subpoenaed by each. Mr Zhang was, in effect, called as the Court’s witness and his compulsion to testify by his former client, the husband, clearly made him a witness adverse to the husband’s case and “hostile”.
e)A request for Lawcover notification was made prior to Mr Zhang giving evidence
I do not understand the basis upon which this is suggested to be a reason why notification should not be made. Clearly a “notifiable event” arose when and as a consequence of these proceedings being commenced in April 2014. It is at that time and upon material being forwarded to Mr Zhang (which occurred no later than 22 April 2014), that a notification should have been made by Mr Zhang.
The occurrence of a “notifiable event” does not determine a claim (nor does the identification of the need for that notification to be made). It simply acknowledges the existence of circumstances which may be argued to constitute a basis for relief.
In the event that either of these parties wishes to pursue a claim in negligence for loss that they allege that they have suffered as a consequence of the Binding Financial Agreement, the integrity of which has been called into question, a notification to Lawcover is something of a prerequisite. It is extraordinary that Mr Zhang would not have made such a notification at least 14 months prior to his giving evidence. The notification should have been made, at the latest, when Mr Zhang was served with a subpoena to give evidence in the proceedings.
f)Mr Zhang expressed he was feeling unwell
I note that the submission purports to place before the Court certain things that were “quite possible”. There is no evidence that Mr Zhang was at all hypoglycaemic or confused at the time of his giving evidence. He certainly did not deal with or address cross-examination well and, for whatever reason. I do not accept there is any evidence to suggest the reason was medical.
g)It is out of character for Mr Zhang to do anything unethical
The Court does not suggest that Mr Zhang has been “unethical”. The concerns raised by the Court are as to Mr Zhang’s competence and fitness to provide advice in family law matters. That concern arises from Mr Zhang’s evidence as to the practices adopted by him in this case. That is compounded by Mr Zhang’s failure to keep file notes (if they were made), issue appropriate receipts or comprehend or understand his duty of confidentiality to Mr Lin.
Conclusion
I have received considerable assistance from a paper prepared some time ago by Virginia Shirvington, the Senior Ethics Solicitor of the Law Society of New South Wales, titled “Avoiding A Breach of the Professional Conduct and Practice Rules”, 2001. Ms Shirvington commences with the opening words of the statement of ethics proclaimed by the Council of the Law Society of New South Wales 30 November 1994, namely:
The law should protect the rights and freedoms of members of the community. The administration of the law should be just. The lawyer practices law as an officer of the Court. The lawyer’s role is both to uphold the rule of law and serve the community in the administration of justice.
I am concerned that the evidence given by Mr Zhang (and the issues which arise as to the Certificate provided by him and the possible absence of advice or competent advice) has not advanced the rights and freedoms of members of the community and especially not these litigants. It is not only the husband who is affected by these issues. The wife has lost the benefit that the Binding Financial Agreement purported to give her. She was entitled to rely upon the Certificate given to her husband by a legal practitioner. These parties will now be embroiled in costly and time consuming contested litigation under the Family Law Act 1975.
With respect to the above duties, I otherwise incorporate that set out in the remainder of page 2 of the article by Ms Shirvington. I also incorporate that set out on pages 4 and 5 of that article. It is the duties that Ms Shirvington refers to and summarises that I am concerned have not been met by Mr Zhang:
…Isaacs J made the following statement in Incorporated Law Institute of New South Wales -v- R D Meagher (1909) 9 CLR 655 at 681 which is important in understanding the role of the lawyer in society:
“…there is therefore a serious responsibility on the court – a duty to itself, to the rest of the profession, to it suitors, and to the whole of the community to be careful not to accredit any person as worthy of public confidence who cannot satisfactorily establish his right to that credential.”
These comments are mirrored by the much later comments of Kirby P speaking of the barrister’s duty of candour to the courts in New South Wales Bar Association -v- Thomas (No 2) (1989) 18 NSWLR 193, a matter involving a failure of counsel to disclose during criminal proceedings how certain statements had been obtained. Kirby P said at p204:
“The rank of barrister is one of status. With it go obligations which cannot be shaken off or forgotten simply because the holder of the office has not been practising in the daily work of a barrister. If a person does not wish to assume the obligations to the Court of the barrister, that person should not seek admission by the Court as such. Once admitted, the additional duties of invariable candour as well as honesty to a Court prevail.”
As I noted above, solicitors are subject to the law (statute law and the common law) – so are all members of the community. However, the legal profession is in a different position in a two-fold way: a breach of the law might bring professional as well as legal sanctions but also, members of the legal profession may be excused from complying with the law as ordinary members of the community must where that is for the proper protection of the client eg where legal professional privilege/client legal privilege applies. This often raises vexed issues and requires lawyers to walk a fine line.
In Rondel -v- Worsley [1969] 1 AC 191 at 227; [1967] All ER 993 at 998 Lord Reid put the duty to the client and to the Court in perspective:
“Every Counsel has a duty to his client fearlessly to raise every issue, advance every argument and ask every question, however distasteful, which he thinks will help his client’s case. But, as an officer of the Court concerned in the administration of justice, he has an overriding duty to the Court, to the standards of his profession, and to the public...”
The solicitor/client relationship is the basis of professional practice. It is a relationship which obviously brings rewards but which also carries with it onerous responsibilities, risks and pressures.
The duty to the client is often described as paramount. This obviously means that in conducting a matter for a client your primary consideration is the client’s best interests, not those of the opposing party or anyone else including yourself.
However, the duty to the client cannot override the other duties referred to above.
A forceful commentary on the solicitor/client relationship is found in Tyrrell -v- Bank of London (1862) 10HLC26 where at pp 39-40 Lord Westbury said:
“…there is no relation known to society, of the duties of which it is more incumbent upon a court of justice strictly to require a faithful and honourable observance, than the relation between solicitor and client.”
There are many ways in which acting in accordance with the client’s wishes, and therefore on the face of it in accordance with the client’s interests, will interfere with the due administration of justice referred to by Lord Reid (see above.)
The crucial points in the Statement of Ethics and its acknowledgment of the lawyer’s role of upholding the rule of law and serving the community in the administration of justice vis-à-vis the solicitor’s duty to the court are that lawyers should:
• Act frankly and fairly in all dealings with the courts.
• Be trustworthy.
Crucial points vis-à-vis the solicitor/client relationship that lawyers should:
• Serve their clients’ interests competently.
• Communicate clearly with their clients.
• Keep the affairs of clients confidential, unless otherwise required by the law.
• Maintain and defend the rights and liberty of the individual.
• Avoid any conflict of interest.
Importantly, in terms of the “balancing act” which must be observed in putting the lawyer’s duties into context, the Statement of Ethics says:
“In fulfilling this role, lawyers are not obliged to serve the client’s interests alone, if to do so would conflict with the duty which lawyers owe to the Court and to serving the ends of justice.”
The above matters when applied to that discussed above cause me real concern as to Mr Zhang’s actions as revealed by his own evidence. I do not seek to be a tribunal of fact as regards any issue of professional misconduct or otherwise in these proceedings. I am simply concerned that sufficient would appear to arise from Mr Zhang’s own evidence to warrant a referral and investigation by the Legal Services Commissioner. It is for those reasons that I make Orders as follows (see Orders).
I certify that the preceding one hundred and one (101) paragraphs are a true copy of the reasons for judgment of Judge Harman
Associate:
Date: 4 September 2015
Key Legal Topics
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Civil Procedure
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Equity & Trusts
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Negligence & Tort
Legal Concepts
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Duty of Care
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