NSW Bar Association v Meakes
[2006] NSWCA 340
•6 December 2006
NEW SOUTH WALES COURT OF APPEAL
CITATION: NSW Bar Association v Meakes [2006] NSWCA 340
FILE NUMBER(S):
40186/06
HEARING DATE(S): 12 September 2006
DECISION DATE: 06/12/2006
PARTIES:
The Council of the New South Wales Bar Association
Timothy Meakes
JUDGMENT OF: Tobias JA Bryson JA Basten JA
LOWER COURT JURISDICTION: Administrative Decisions Tribunal
LOWER COURT FILE NUMBER(S): ADT 052017/05
LOWER COURT JUDICIAL OFFICER: Karpin A; Norton S; Taksa L
COUNSEL:
A: M McCulloch SC / T A Berberian
R: M Einfeld QC / G Travers
SOLICITORS:
A: Eakin McCaffery Cox, Sydney
R: Verekers Solicitors, Sydney
CATCHWORDS:
LEGAL PROFESSION – conduct of barrister – overcharging – failure to conform with provisions of the Legal Profession Act 1987 – appropriate penalty – whether conduct amounted to professional misconduct or unsatisfactory professional misconduct – whether a fine should be imposed – principles – PROCEDURE – right of appeal – jurisdiction of Court of Appeal – interaction between Legal Profession Act 1987 and Legal Profession Act 2004
LEGISLATION CITED:
Acts Interpretation Act 1901 (Cth), s 8
Interpretation Act 1987, s 30
Legal Profession Act 1987, ss 127, 171C, 171F, pt 10
Legal Profession Amendment Act 2004
Legal Professional Act 2004, ss 562, 729A
Supreme Court Act 1970, s 75A
DECISION:
(a) Appeal allowed
(b) Set aside the orders made by the Administrative Decisions Tribunal on 8 March 2006
(c) The respondent be found guilty of professional misconduct with respect to the first ground of complaint made in the Information filed with the Tribunal on 3 June 2005 and guilty of unsatisfactory professional conduct with respect to the second ground of complaint contained in the said Information
(d) The respondent be publicly reprimanded
(e) The respondent to pay the costs of the appellant of and incidental to the proceedings before the Tribunal
(f) The respondent to pay the costs of the appellant of the appeal
JUDGMENT:
IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL
CA 40186/06
ADT 052017/05TOBIAS JA
BRYSON JA
BASTEN JAWednesday 6 December 2006
THE COUNCIL OF THE NEW SOUTH WALES BAR ASSOCIATION v TIMOTHY MEAKES
Judgment
TOBIAS JA: By an Information filed in the Administrative Decisions Tribunal (the Tribunal) on 3 June 2005, the appellant informed the Tribunal of a complaint made under Pt 10 of the Legal Profession Act 1987 (the 1987 Act) against Timothy Meakes, the respondent barrister. The appellant claimed that the conduct the subject of the complaint constituted professional misconduct or, alternatively, unsatisfactory professional conduct.
The proceedings were heard by the Tribunal on 14 September 2005 and determined on 8 March 2006. It was then ordered that the respondent be found guilty of unsatisfactory professional conduct in respect of the two complaints in the Information; that he be publicly reprimanded; and that he pay the appellant’s costs of and incidental to the proceedings before the Tribunal.
The first complaint was that the respondent, when acting as a barrister for Mr J Chitty in the matter of Chitty v Opat Coatings Pty Ltd, overcharged for the provision of legal services as itemised in his memoranda of fees dated 4 December 2000. The second complaint was that the respondent did not provide a fee agreement or a fee disclosure as required by Pt 11 of the 1987 Act.
The appellant contended before the Tribunal that in respect of the first complaint the respondent was guilty of gross overcharging in circumstances that constituted professional misconduct rather than unsatisfactory professional conduct. It accepted that so far as the second complaint was concerned that it amounted to no more than unsatisfactory professional conduct.
The Tribunal accepted the appellant’s submission that the respondent was guilty of gross overcharging but rejected its contention that in the circumstances his conduct amounted to professional misconduct. There was no issue with respect to the second complaint.
The appellant now appeals to this Court upon the ground that the Tribunal, having found that the respondent’s conduct amounted to gross overcharging, erred in failing to find that he was guilty of professional misconduct. It submits that if that error be established, this Court itself should find the respondent guilty of professional misconduct. Further, in addition to confirming the orders made by the Tribunal, it should order the respondent pay a fine in an amount not exceeding $50,000 pursuant to s171C(1)(d) of the 1987 Act. That amount represents the maximum fine that can be imposed under that provision although the limit has now been raised to $75,000 under s562(7) of the Legal Professional Act 2004 Act (the 2004 Act).
At the conclusion of the hearing of the appeal, the parties were asked to file supplementary written submissions as to the interaction of the 1987 Act and the 2004 Act, which commenced on 1 October 2005 and which repealed the 1987 Act. These submissions were relevant to the status and nature of the appeal, given that notice of the appeal had been filed on 5 April 2006 against the decision of the Tribunal made on 8 March 2006. These dates both followed the commencement of the 2004 Act and the repeal of the 1987 Act (under which the Information had been filed and heard).
The submissions sought were duly filed and have been most helpful. Each reaches the same conclusion, and while their reasons differ this is not in a manner which requires the Court to resolve those differences. Suffice it to say that the parties are in agreement that the appeal to this Court is governed by either by s729A(2) of the 2004 Act (as the respondent contends) or by s171F(2) of the 1987 Act (in the form in which it stood immediately prior to its repeal by the 2004 Act on 1 October 2004. both provisions are identical in their terms. In the result, it is common ground that s75A of the Supreme Court Act 1970 applies to the appeal and that the appeal is to be by way of rehearing and not by way of a new hearing or a hearing de novo.
The relevant facts
It is convenient to set out the relevant facts as alleged in the particulars to the first complaint contained in the Information. They were as follows:
(a)On 7 June 1999, the respondent received a brief from Mr Stephen Spinak to act for Mr Chitty in relation to a potential claim against Mr Chitty’s employer, Opat Coatings Pty Limited.
(b)The respondent did not provide a disclosure of his fees as required by Pt 11 of the 1987 Act and in particular, did not disclose the basis upon which he proposed to charge as required by that Act.
(c)Mr Chitty and Mr Spinak attended a conference with the respondent on 7 June 1999 for which he charged a fee of $895. It was alleged that the charge was excessive for the work performed.
(d)The respondent held a further conference with Mr Spinak on 8 August 1999 for which he charged a fee of $895. It was alleged that that charge was excessive for the work performed.
(e)On 27 September 1999 the respondent perused briefed material for which he charged a fee of $990. It was alleged that this charge was excessive for the work performed.
(f)On 28 September 1999 the respondent perused additional briefed material, prepared a memorandum of advice, drafted a statement of claim and particulars pursuant to Pt 9 r27 of the District Court Rules. The charges rendered for those attendances were respectively $990, $895 and $1,550, a total of $3,435. It was alleged that these charges were excessive for the work performed.
(g)On 7 February 2000 the respondent had a conference with Mr Spinak in relation to evidence, quantum and liability for which he charged a fee of $1,595. It was alleged that this charge was excessive.
(h)On 10 December 2000 the respondent had a further conference with Mr Spinak and provided a further advice on evidence and quantum for which he charged a fee of $1,595. It was alleged that the charge was excessive for the work performed.
(i)On 6 November 2000 the respondent had a conference with Mr Spinak and Mr Chitty and prepared a memorandum of advice for which he charged a fee of $1,695. It was alleged that that charge was also excessive.
(j)On 29 November 2000 the respondent consulted with Mr Spinak and Mr Gambi, counsel for Opat Coatings Pty Ltd, and perused additional briefed materials for which he charged a fee of $1,595. It was alleged that the charge was excessive for the work performed.
(k)On 30 November 2000 the respondent charged a fee of $3,495 for preparation for a District Court arbitration hearing to be held the following day, a conference with the plaintiff and Mr Spinak and an advice on quantum and settlement. It was alleged that the charge was excessive for the work performed.
(l)On 1 December 2000 the respondent charged a brief on hearing fee of $3,495. It was alleged that the charge was excessive for the work performed.
(m)On 4 December 2000 the respondent prepared two memoranda of fees for the legal services referred to in particulars (c) to (l) above and which reflected the fees charged on each of those occasions. To the total of those charges he added an uplift factor of 25%. It was alleged that that uplift factor was excessive and out of all proportion to the work done and was not pursuant to any agreement with the client.
(n)The total charged by the respondent in his memoranda of fees dated 4 December 2000 was $25,891 (excluding GST). The total fees so charged were alleged to be excessive for the work performed.
(o)In about November 2002 the respondent repaid the sum of $12,500 to Mr Chitty following the letter’s application for an assessment of the respondent’s fees. The respondent also paid the costs of Mr Chitty’s solicitor in the amount of $2,500 relating to the assessment process.
In the respondent’s reply to the Information filed on 30 June 2005, he did not admit the facts alleged in the particulars to the first complaint but did admit that the total fees of $25,891 charged in his memoranda of fees dated 4 December 2000 were, in all the circumstances, excessive. In other words, he admitted that in total the fees were excessive but not that any particular individual charge was excessive. He further admitted that he did not provide a specific fee agreement in respect of his retainer by Mr Spinak on behalf of Mr Chitty in the matter of Chitty v Opat Coatings Pty Ltd. He denied that he was guilty of professional misconduct but did seek to contest a finding that he was guilty of unsatisfactory professional conduct.
The nature of the fees charged by the respondent for the legal services provided
The evidence before the Tribunal was wholly documentary. Of particular relevance for present purposes was an expert report dated 21 February 2005 prepared by Mr Michael Robinson, barrister, who had had extensive experience in the common law/personal injury jurisdictions and 10 years experience as a Supreme Court Costs Assessor. Mr Robinson dealt with each item contained in the respondent’s two memoranda of fees and expressed various findings with respect thereto. The respondent did not challenge those findings.
Relevantly, Mr Robinson opined that the rates chargeable by an ordinary competent barrister of the respondent’s experience in the area of personal injury litigation relating to industrial accidents similar to that sustained by Mr Chitty should not exceed $375 per hour or $3,000 per day. It was common ground that the respondent had charged an hourly rate of $425 and a daily rate of $3,495.
Based upon the rates noted above, Mr Robinson concluded that the total amount that the respondent should have charged Mr Chitty in respect of the legal services provided was $12,937.50 excluding any allowance for uplift and GST.
On the other hand, the amount in fact charged by the respondent excluding any allowance for uplift and GST, was $19,675 which was 52% higher than the amount which Mr Robinson considered to be fair and reasonable for the services provided. When the uplift of $4,920 charged by the respondent is added to the amount of $19,675 to give a total of $24,596, the difference between that amount and the $12,937 adopted by Mr Robinson is 90%. If one takes into account GST both in respect of the total amount charged by the respondent ($25,891) and that determined as reasonable by Mr Robinson ($14,231), the overcharge was a little less than 82%.
Mr Robinson accepted that the hourly rate of $375 and the daily rate of $3,000 determined by him as reasonable and appropriate for a barrister of the respondent’s standing could be either increased or decreased by 10% to take account of variation between costs assessors. The Tribunal (at [36]) favoured the respondent by adding 10% to the hourly and daily rates determined by Mr Robinson which resulted in a decrease in the extent of the respondent’s overcharging from approximately 82% to approximately 66%.
In my opinion a more appropriate comparison would be to exclude GST and accept Mr Robinson’s maximum rates without the 10% variation as in his opinion that variation could either be more or less than the figures he adopted. This would result in an overcharge of closer to 90%. However, the appellant did not challenge the Tribunal’s conclusion that the percentage overcharge was 66%, which is the basis upon which this Court must approach the issues in the appeal.
Nevertheless, the Tribunal determined (at [40]) that a legal practitioner of good repute and competency would not have charged fees which exceeded those which such a practitioner would have charged by 66%. The Tribunal was satisfied that the amount of the overcharge represented “gross overcharging” and that finding was not challenged by the respondent.
To appreciate the differential determined by Mr Robinson, it is necessary to first set out the contents of the respondent’s memoranda of fees and then to compare them with Mr Robinson’s description of analysis.
The respondent’s memoranda of fees comprised two separate memorandum, each dated 4 December 2000. Two memoranda were prepared because the legal services referred to in the second memorandum attracted GST whereas those in the first memorandum did not. The first memorandum was as follows:
| 7/06/99 | Conference with the plaintiff and Mr Spinak/Preliminary Advices | $895.00 |
| 18/08/99 | Further conference Mr Spinak, Advice on Evidence | $895.00 |
| 27/09/99 | Perusal of all briefed material | $990.00 |
| 28/09/99 | Perusal of additional briefed material | $990.00 |
| Memorandum of Advice | $895.00 | |
| Draft Statement of Claim and part 9 Rule 27 Particulars | $1,550.00 | |
| 7/02/00 | Conference Mr R Spinak/Advices on Evidence, Quantum and Liability | $1,595.00 |
| 10/02/00 | Further consultation Mr R Spinak/Further advice on Evidence and Quantum | $1,595.00 |
| Plus 25% | $2,351.00 | |
| TOTAL: | $11,756.00 |
The second memorandum was as follows:
| 6/11/00 | Conferences with Mr S Spinak and the plaintiff/Memorandum of Advice | $1,695.00 |
| 29/11/00 | Consultations Mr S Spinak and Mr Gambi, counsel for the defendant, Perusal of all additional briefed material | $1,595.00 |
| 30/11/00 | Preparation for District Court Arbitration Hearing/Conference with the plaintiff and Mr S Spinak/Advices on Quantum and Settlement | $3,495.00 |
| 1/12/00 | District Court Arbitration Hearing/Conference | $3,495.00 |
| Plus 25% | $2,570.00 | |
| Plus GST @ 10% | $1,285.00 | |
| TOTAL: | $14,135.00 |
I set out hereunder Mr Robinson’s reconstruction of these memoranda comprising three columns. The first is the date(s) upon which the services were rendered; the second contains Mr Robinson’s the services rendered by the respondent and the third sets out the fees which Mr Robinson concluded were chargeable by an ordinary competent barrister of the respondent’s experience practising in the relevant jurisdiction. To that I have added a fourth column setting out the fees actually charged by the respondent so an appropriate comparison can be more easily made.
| Date | Item | Calculations: Mr Robinson | Calculations:Respondent |
| 7/6/1999 | Reading 46 pages and conference – 2 hours would be a reasonable time | $750.00 | $895.00 |
| 18/8/1999 | Update conference and 7 line advice, allow 1.5 hours | $562.50 | $895.00 |
| 27-28/9/1999 | Both items taken together. Since I am to assume that no further material was briefed, this item could only relate to a re-perusal of some 50 pages for the purpose of drafting a straightforward Statement of Claim and Pt 9 r27 Particulars, which largely recite matters in the Statement of Claim. The advice is 1 page. Allow 3 hours for both dates. | $1,125.00 | $990.00 $4,425.00 |
| 7/2/2000 and 10/2/2000 | The advices were verbal, and there appears to be duplication. At this point in preparation of the Plaintiff’s case there would have been a need for some contact between the counsel and solicitor. Allow 4 hours in total for both items | $1,500.00 | $1,595.00 $3,190 |
| 6/11/2000 | A re-perusal of the brief would have been required, the brief having grown by some 40 pages. Allowing for the conference and a 2 page advice on an opening settlement offer, 4 hours should be allowed | $1,500.00 | $1,695.00 |
| 29/11/000 | The additional briefed material appears to be 13 pages. For multi-consultations with the persons described, it is difficult to see how more than 3 to 4 hours could have been spent on this work – allow 4 hours | $1,500.00 | $1,595.00 |
| 30/11/2000 | This claim appears to be for a full day’s preparation, conference with the Plaintiff and solicitor and advices. It is highly likely that counsel would have worked on the brief some hours on this day, particularly in view of the matter being settlement on the evening of the day. It is not known whether Mr Meakes had other matters to attend on this (or the next day, and on the facts on which I am asked to express an opinion, it is not possible to say whether what appears to be a full day’s charge is fair and reasonable. No doubt the settlement concerned could have been achieved with 2 hours work in some circumstances. However, assuming that preparation did take all day, which it may have, allow one day | $3,000.00 | $3,495.00 |
| 1/12/2000 | If the day was set aside for this matter and no other work was attended to, then the claim for the day is fair and reasonable and should be allowed | $3,000.00 | $3,495.00 |
| TOTAL: | $12,937.50 | $19,675.00 (Emphasis added.) |
The above totals do not include the uplift of $4,921 charged by the respondent and all figures exclude GST.
The decision of the Tribunal as to whether the respondent was guilty of professional misconduct
As I have already observed, the Tribunal was satisfied that the overcharge by the respondent constituted gross overcharging. The question that then arose was whether in the circumstances that conduct amounted to professional misconduct or to only unsatisfactory professional misconduct.
The Tribunal referred (at [43]) to s127 of the 1987 Act which, relevantly, defined professional misconduct to include
“(a)unsatisfactory professional conduct, where the conduct is such that it involves a substantial … failure to reach reasonable standards of competence and diligence.”
Section 127(2) defines “unsatisfactory professional conduct” to include
“conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.”
There was no contest that, at the very least, gross overcharging by the respondent amounted to “unsatisfactory professional conduct” as defined. The issue that then arose was whether that conduct involved
“a substantial … failure to reach reasonable standards of competence and diligence”
on the part of the respondent, or whether the conduct satisfied the general law test of “professional misconduct”. The test articulated in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 referred to “infamous conduct in a professional respect”, which was defined by Lopes LJ in these terms:
“If it is shown that a medical man, in the pursuit of his profession, has done something with regard to it which would reasonably be regarded as disgraceful or dishonourable by his professional brethren of good repute and competency”.
it was then open to say that he had been guilty of “infamous conduct in a professional respect”.
That definition has been applied to members of the legal profession: Re Veron; Ex parte Law Society of New South Wales (1966) 84 WN (Pt 1) (NSW) 136 at 143. In that case it was held that the charging of grossly excessive costs may amount to professional misconduct.
Before the Tribunal the appellant relied upon the following passage from the judgment of Mahoney JA in Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995) in which his Honour, under the heading “Gross over-charging”, observed as follows (omitting citations):
“It is, in my opinion, settled for this Court that gross over-charging may of itself constitute professional misconduct. It was in earlier times some times suggested that gross overcharging did not justify a summary application against a solicitor for professional misconduct unless there was involved, as it was described, an element of ‘wilful fraud’ … It is, in my opinion, now established that gross overcharging as such may constitute professional misconduct and that, on an application such as this, it is not necessary to prove in addition that the lawyer was guilty of fraud or the like … These principles, in my opinion, have been established by the Veron and Evatt cases.”
After referring to the fact that in Evatt v Bar Association of New South Wales (1968) 117 CLR 177, the High Court acted upon the view expressed in Veron and that it was proper that this view of what constituted professional conduct be maintained, Mahoney JA continued:
“In deference to Mr Roberts’ submissions it is, I think, relevant to consider first the reason why gross overcharging, as such, may be held professional conduct. The court has traditionally and for centuries exercised control over ‘the excessive fees and other unnecessary demands’ made by solicitors of the court … Clients are, or may frequently be, in a vulnerable position vis-a-vis their solicitors; the presumption of undue influence is, I think, based at least in part upon the fact that when making decisions, clients ordinarily or at least frequently place trust in their solicitors. They ordinarily are not in a position to know without investigation what work must be done and what charges are fair and reasonable; they ordinarily assume that the solicitor will make only such charges.
Solicitors are, on the other hand, informed, or in a position to inform themselves, of what work may be required and what a fair and reasonable charge is. They are, in that sense, in a position of advantage and trust is placed in them. Clients are entitled to be protected against the abuse of such an advantage. It is, I am inclined to think, the fact that that advantage has misused which may, in a particular case, warrant what the solicitor does being characterised as professional misconduct.”
His Honour then went on to consider the principles on which charges were to be characterised as gross overcharges in the relevant sense. I shall return to those principles later in these reasons.
The Tribunal observed (at [46]) that in Veghelyi Mahoney JA had noted that gross overcharging was likely to constitute professional misconduct if the client the subject of the overcharging was found to be vulnerable. The Tribunal then continued in the following terms:
“47.The Tribunal accepts that the majority of non corporate clients of legal practitioners are likely to be in a vulnerable position vis a vis their legal representatives. There is nothing in the material before the Tribunal which would lead to a finding that the client in this case was more vulnerable than the general class of inexperienced lay clients. He, nonetheless, can be classed as vulnerable on the basis that he was a lay client and one who had not had the assistance of information regarding the fees that might be rendered in his case.
48.The Tribunal is satisfied that the client was a vulnerable client to the limited extent referred to and that the quantum of overcharging should be characterized as gross overcharging.”
The Tribunal then observed (at [49]) that gross overcharging may constitute professional misconduct but that such a finding (even to the degree of 66%) must be viewed in the light of the circumstances of the particular complaint. According to the Tribunal, that required
“an assessment of the extent to which, in all the circumstances, the overcharging falls short of fair and reasonable conduct on the part of the practitioner. The finding of gross overcharging per se does not necessarily lead to a finding of professional misconduct.”
The Tribunal then had regard to the material tendered on behalf of the respondent. In particular the Tribunal considered his conduct after the initial complaint was brought to his attention in March 2001. Reference was made to a letter from the respondent’s solicitors to the appellant dated 27 August 2003 in which it was asserted that Mr Chitty’s matter was one of considerable complexity and difficulty because, although he had a substantial claim, it was a difficult case on liability. It was contended that it was a matter that would have justified the retention of senior counsel but that the respondent had carried out the work without that assistance resulting in a considerable saving to Mr Chitty. Furthermore, the letter went on to deny that the respondent had overcharged Mr Chitty and, further, that he denied any “over servicing” in the matter.
With respect to the 25% uplift, the respondent acknowledged that he had not complied with the provisions of the 1987 Act, which would otherwise have entitled him to charge the uplift, and that he had breached his obligations to Mr Chitty in that respect. However, he asserted that because of his longstanding relationship with his solicitor, the latter was fully aware of the basis upon which the respondent would render his fees which included his intention to apply the uplift.
The Tribunal referred (at [52]) to a further letter from the respondent’s solicitors to the appellant dated 30 August 2004, in which they advised that they had been instructed to concede that “in some respects” the respondent’s fees were excessive. However, the extent of that excess was a matter of opinion. The letter reiterated the respondent’s view that the matter was complex – an assertion I am prepared to accept for present purposes. The letter also noted that the fees at issue had not been the subject of any formal costs assessment and that the respondent’s recollection of the fees had been adversely affected by the passage of time, given that they had been rendered between four and six years earlier.
This was a somewhat disingenuous response given that the initial complaint was made on behalf of Mr Chitty on 19 March 2001 and referred to the respondent by the appellant on 26 April 2001 somewhat less than five months after the memoranda of fees had been rendered. The Tribunal noted (at [52]) that the appellant referred to this letter “as a qualified admission of guilt”.
The Tribunal noted (at [53]) that at the hearing the respondent conceded, through his then senior counsel, that his charges represented an overcharge. However, he did not concede that he had grossly overcharged Mr Chitty. Furthermore, on his counsel’s advice, he did not give evidence before the Tribunal. However, he gave an undertaking that within 28 days of the hearing he would pay to Mr Chitty the difference between Mr Robinson’s assessment of the proper fees he was entitled to charge and the amount retained by him as his fees following the negotiated settlement of Mr Chitty’s original complaint in 2002.
The Tribunal noted (at [48]) that it had not received any evidentiary assistance from the respondent that might have given some insight into the mode he had adopted for arriving at the total fees he had rendered. However the Tribunal determined (at [54]), rather inconsistently, that it was not persuaded in the circumstances of the matter, and having regard to the admissions made by the respondent and the steps taken by him to reimburse Mr Chitty, that
“his decision not to give evidence, based on his counsel’s advice, warrants adverse criticism from the Tribunal.”
The Tribunal’s final conclusions were expressed in the following terms:
“55This complaint first came to light in March 2001. The Respondent early took steps to deal with the complaint in a responsible manner. He made restitution on the basis of an agreed settlement pursuant to which Chitty withdrew his complaint. The Respondent met the costs of that settlement process.
56The Respondent tendered references from senior members of the profession, attesting to his competence, hard work and conscientiousness as counsel. Each of the referees is aware of the complaints brought against the Respondent. They regard his behaviour in this matter as out of character for the Respondent. There is also reference to the distress caused to the Respondent by this complaint, and his concern about the damage done to his professional reputation. The referees have known the Respondent on a professional basis for all or most of his career at the bar, now extending over 21 years.
57Having regard to the totality of the circumstances of this matter, and to the Respondent’s lengthy period in the profession without prior or subsequent blemish, the Tribunal is persuaded that despite the high percentage overcharge, the Respondent should be found guilty of unsatisfactory professional conduct rather than professional misconduct.”
The appellant’s submissions on the appeal
The appellant submitted that the Tribunal erred at [57] of its judgment when determining whether its finding of gross overcharging justified the characterisation of the respondent’s conduct as professional misconduct. This was because the Tribunal had regard to a series of legally irrelevant circumstances when determining that issue, including that:
(a)The respondent took steps early to deal with the complaint in a responsible manner after it had first come to light in March 2001 (Judgment [55]);
(b)He had made restitution to Mr Chitty pursuant to an agreed settlement with him which caused Mr Chitty to withdraw his complaint and had further met Mr Chitty’s solicitor’s costs of that settlement process (Judgment [55]);
(c)Senior members of the profession had, in character references, attested to the respondent’s competence, hard work and conscientiousness as counsel and each regarded his behaviour in the present matter as out or character (Judgment [56];
(d)The proceedings had caused the respondent distress and concern with respect to damage to his professional reputation (Judgment [56]);
(e)He had practiced as a barrister for some 21 years without prior or subsequent blemish (Judgment [56]);
(f)His decision not to give evidence based on his counsel’s advice did not warrant adverse criticism (Judgment [54]); and
(g)Through his counsel he had given an undertaking to pay Mr Chitty within 28 days of the hearing the difference between Mr Robinson’s assessed proper fee and the amount he had retained as he fee following the negotiated settlement of Mr Chitty’s complaint in 2004 (Judgment [53]).
As I have stated, each of these matters were asserted to be irrelevant considerations in the determination of the characterisation of the respondent’s conduct.
The appellant placed reliance on certain remarks made by Kirby P in Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 422–3, where it was stated that (omitting citations):
“Litigants look to this Court, ultimately, to protect them from overcharging by legal practitioners where this is so high as to constitute professional wrongdoing. The courts of other Australian jurisdictions have begun to deal determinedly with gross over-charging by legal practitioners where this is proved to amount to professional misconduct … No amount of costs agreements, pamphlets and discussion with vulnerable clients can excuse unnecessary over-servicing, excessive time charges and over-charging where it goes beyond the bounds of professional propriety. Time charges have a distinct potential to result in overcharging … I depart from this case with a real sense of disquiet that what may arguably be the most serious issue revealed by it may not have been fully considered in a way protective of the true standards of the legal profession and the legitimate expectations of the community.”
In the same case, Mahoney JA observed (at 440–1):
“It has frequently been said that disciplinary procedures and the orders made in the course of them are directed not to the punishment of the solicitor but to the protection of the public. This, of course, is true. The protection of the public has been described as, for example, the primary purpose or primary object of such proceedings … In the relevant sense, the protection of the public is in my opinion not confined to the protection of the public against further default by the solicitor in question. It extends also to the protection of the public against similar defaults by other solicitors and has, in this sense, the purpose of publicly marking the seriousness of what the instant solicitor has done.”
Although the appellant accepted that the matters referred to by the Tribunal as militating against a finding of professional misconduct would be relevant to the issue of penalty, it was submitted that they were irrelevant for the purpose of determining whether or the not the respondent’s conduct constituted professional misconduct. It was therefore submitted that the only circumstances relevant to that issue were those that were directly related to the circumstances in which the overcharging occurred.
The appellant thus submitted that if the circumstances relied upon by the Tribunal in its finding that the respondent should not be found guilty of professional misconduct were eliminated, it would follow that the Tribunal’s decision was devoid of reasons and on that ground alone should be set aside. However, in my opinion that is an inappropriate way of approaching the Tribunal’s decision. It is plain that, rightly or wrongly, the Tribunal was not persuaded that, despite the high percentage overcharge, the respondent should be found guilty of professional misconduct by reason of the circumstances that the appellant submitted were irrelevant to the Tribunal’s consideration of that issue.
The respondent’s submissions on the appeal
The appellant submitted that the present case could be distinguished from cases such as Veron, Evatt, New South Wales Bar Association v Amor-Smith (2003) NSWADT 239, The Legal Services Commissioner v Nikolaidis (No 2) [2004] NSWADT 248, Foreman and Law Society of New South Wales v Bannister (1993) 4 LPDR 24. This was because the present case concerned only one instance of overcharging, namely, when the respondent rendered his memoranda of fees on 4 December 2000. In other words, he only charged Mr Chitty once, albeit with respect to services provided on ten occasions over a period of 18 months, between 7 June 1999 and 1 December 2000.
It followed, so it was submitted, that the respondent only addressed his mind to the quantum of fees to be charged when he rendered his memoranda. He was therefore less culpable than if he had overcharged by rendering a separate memorandum of fees on each occasion that he provided the legal services set out in his memoranda.
It was further submitted that Mr Chitty was not a vulnerable client within the meaning of Veghelyi (as per the statement of Mahoney JA set out at [27] above), or at least that he was no more vulnerable that any other worker/plaintiff involved in personal injury litigation. Furthermore, the degree of Mr Chitty’s vulnerability was ameliorated by the fact that under cover of a letter dated 29 September 1999, the respondent’s solicitor, Mr Spinak, had sent an unsigned costs agreement to Mr Chitty in which it had been made clear that the respondent would require an uplift payment of 25% of the fees payable in the event of a successful outcome either by way of verdict or settlement and in which it was noted that the respondent’s fees for all work apart from appearances would be at the rate of $425 per hour or part thereof and $2,950 per day.
As it turned out, however, this document (which was headed “Costs Disclosure Statement, Offer and Agreement of Timothy Meakes”) was not only unsigned but also related to a totally different client in unrelated litigation.
This inconvenient fact was countered by the unsubstantiated submission that the respondent would have expected that his solicitor would have explained to Mr Chitty, had he so requested, that although this document did not relate to the proceedings in which he was involved, it did indicate the basis, in terms of the 25% uplift and the hourly and daily rates, upon which the respondent would render fees in Mr Chitty’s matter. It followed, therefore, that Mr Chitty was not as vulnerable as might otherwise have been the case, given that he had received some pre-warning of the fees that would be charged.
Reliance was then placed upon the passage in the judgment of Mahoney JA in Veghelyi in which his Honour considered the principles on which the charges in that case were characterised as gross overcharges. In that case, his Honour noted the practitioner’s submission that although the consequences of overcharging were serious, in the context of the present day practice of law, it might be difficult to determine whether charges could be characterised as gross overcharges in a particular case.
Mahoney JA then noted that a solicitor’s entitlement to remuneration was conventionally stated in terms of what was fair and reasonable in the circumstances. Where charges went so beyond that threshold that they became grossly disproportionate, professional misconduct might be involved. However, to determine of what charges would be considered fair and reasonable in a particular case, it would be necessary to consider a range of factors.
In that context, his Honour referred to s208G of the 1987 Act, which provided that in assessing what constituted a fair and reasonable amount of costs, a costs assessor was to have regard to any or all of some five matters. These included the skill, labour and responsibility displayed on the part of the practitioners; the complexity or difficulty of the matter; the quality of the work performed and the level of expertise appropriate thereto; the place where and circumstances in which the services were provided; the time within which the work was to be performed; and the outcome of the matter.
Mahoney JA then concluded in the following terms:
“These are, in my opinion, relevant factors for present purposes. Such factors assist in the determination both of what is fair and reasonable and what is grossly disproportionate. But in the end, the quantification of costs remains an exercise in judgment, upon the result of which minds may legitimately differ.
Mr Roberts, in his submissions, placed reliance upon this. The finding of professional misconduct should not, the submission suggested, turn upon an error of judgment. His submission 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.”
Drawing upon the foregoing passage for the purposes of the present case, it is apparent that Mahoney JA set out the factors, including those referred to in s208G of the 1987 Act, that are relevant to the question of whether there was any overcharge in the first place.
Considering those factors, it is to be noted that the respondent in the present case did not rely upon the terms of any written costs agreement with Mr Chitty or calculate his costs accordingly, except in respect of the particular daily and hourly rates that he charged. Further, the present is not a case in which the quantification of the respondent’s charges resulted from the fact that he had an excessive view of the value of his own services. The latter could only be reflected in his charge out rate, whether hourly or daily. Finally, it could not be suggested in the present case that in determining the amount charged for each of the legal service itemised in his memoranda, the respondent merely committed an error of judgment. The fact that he did not give evidence to support any such suggestion requires that it be disregarded.
The respondent next relied upon the following passage from the judgment of Ipp J, with whom Pidgeon and Franklyn JJ agreed, in D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 214:
“The enquiry into what amounts to grossly excessive or unreasonable costs would ordinarily involve, first, a determination of what, in the particular circumstances, would be a reasonable sum to charge. The resolution of that question would often turn on multiple factors, including the amount at which the costs in question was or would likely be taxed, the difficulty of the case, the novelty or complexity of the legal issues presented, the experience of the practitioner, the quality of his or her work, the amount of time spent by the practitioner on the matter, the responsibility involved, the amount or value of the subject matter in issue, and any costs agreement that might have been entered into.”
It is apparent that the foregoing passage is consistent with the remarks of Mahoney JA in Veghelyi(to which I have referred in [49]–[51] above), in particular, those assessing what is a fair and reasonable amount of costs in accordance with the matters required to be taken into account by a costs assessor and which are set out in s208G of the 1987 Act: cf De Pardo v Legal Practitioners Complaints Committee [2000] FCA 335 per French J at [45], with whom Whitlam J agreed.
The respondent therefore accepted that the factors referred to by Ipp J in D’Alessandro and by Mahoney JA in Veghelyiwere those which were to be taken into account in determining whether gross overcharging amounted to professional misconduct. However, these factors were taken into account by the Tribunal with the consequence that no error in its determination that the respondent’s conduct did not amount to professional misconduct had been established.
The respondent made the following further submissions:
(a)Mr Robinson did not opine in his report that the respondent had not spent more than the number of hours that he had attributed to each of the legal services itemised in his memoranda of fees as reasonable.
(b)There was no evidence that the respondent embarked on charging for work that he did not perform or for hours that he did not spend and neither of those matters could be inferred from Mr Robinson’s report.
(c)Mr Robinson had assessed what he regarded as the total amount properly chargeable by an ordinary competent barrister practising in the area of personal injuries relating to industrial accidents and having the competence and experience of the respondent at rates which, when 10% was added to them, fell just short of the rates actually charged by the respondent. Furthermore, the rates that he had determined were those that he deemed would be fair and reasonable on an assessment of practitioner/client costs had those costs been assessed under Div 6 of Pt 11 of the 1987 Act. It would be wrong, it was submitted, to treat that which would be fair and reasonable on such an assessment as providing the answer to the question of whether the overcharging by the respondent was so excessive as to amount to professional misconduct as distinct from unsatisfactory professional conduct.
(d)A possible explanation for the respondent’s overcharging was that he had achieved a good outcome and, as a consequence, his exuberance at doing so resulted in a misguided attempt to charge what he thought was appropriate and which amounted to no more than an error of judgment.
(e)According to his solicitor’s letter to the appellant dated 12 August 2003, the respondent did not retain his diaries for more than approximately one year, such that the diaries for the period in question had been discarded. However, he had marked his backsheet with the dates the legal services had been performed and the nature of those services but not the time taken in providing them. Accordingly, the proper inference was that when he rendered his memoranda of fees he only charged what he thought was a reasonable fee in the circumstances.
(f)The fact that there was a solicitor interposed between the respondent and the client was a factor in the respondent’s favour as he was entitled to regard his solicitor as an intermediary in any fee dispute with the client. Furthermore, there was no suggestion that the solicitor in question had queried the respondent’s charges. (This is not surprising given that the evidence was that the respondent had a longstanding professional relationship with the solicitor in question.)
(g)The character evidence tendered by the respondent of his post-event conduct went to the issue of his culpability in that it could be inferred from that evidence that he lacked a contumelious attitude to the client. In other words, it could not have been his intention to “rip off” the client rather than attempting, when he came to determine the fees to be charged for the services rendered by him prior to 4 December 2000, to cast his mind back 18 months in a genuine attempt to charge a reasonable fee.
(h)Therefore, in the circumstances, his conduct was inappropriate but not dishonourable and did not deserve the label of professional misconduct as distinct from unsatisfactory professional conduct.
As to the failure of the respondent to give evidence before the Tribunal, reliance was placed upon the following passage in the judgment of this Court in Veron at 141–2:
“The jurisdiction [of the court] is a special one and it is not open to the respondent when called upon to show cause, as an officer of the Court, to lie by and engage in a battle of tactics, as was the case here, and to endeavour to meet the charges by mere argument. We are well aware that if a solicitor is called upon to show cause he may do so in several ways. He may (a) argue that the material before the Court discloses no evidence of misconduct; (b) argue that the facts adduced in evidence do not warrant a finding of misconduct; (c) meet the situation by denial or explanation, in either case upon oath, of the truth or of the significance of the fact deposed to. It is the last alternative in the main with which the respondent was faced here. Yet, as we have said, no denial or explanation was forthcoming, the respondent having sought what refuge was available in argument from the Bar table.”
Although the respondent conceded that on the facts it was open to the Tribunal to infer that he intended to charge excessive fees, it was maintained that an equally available inference was that that was not the case but that at all times he attempted, wrongly as it turned out, to charge what he thought was a reasonable fee in the circumstances. It was in this context that character evidence was available on the question of whether the inference could be drawn that the respondent intended to charge fees which he knew ought or ought to have known were grossly excessive.
The appellant’s submissions in reply
In reply, the appellant referred the Court to the transcript of argument before the Tribunal in which senior counsel for the respondent (who did not appear on the appeal) accepted that the respondent’s overcharging was deliberate in the sense that he intended to charge the fees in question and that it was not a mistake to do so. That concession does not, of course, amount to an admission that the respondent was aware at the time that the fees charged were excessive.
The transcript of argument reveals, firstly, that then senior counsel for the respondent submitted that the clearest evidence of contrition was the respondent’s offer to repay Mr Chitty the difference between the amount assessed by Mr Robinson as being a proper charge for the services rendered and the amount retained after the 2002 settlement with Mr Chitty. Second, it is apparent that senior counsel acknowledged that the character evidence was tendered only on the question of penalty. He submitted that, notwithstanding that a direction had been made by the Tribunal for the filing of affidavits, the respondent was not relying upon any affidavits but was “casting [himself] on the mercy of the Court”.
Did the Tribunal err in finding that the respondent’s conduct did not constitute professional misconduct?
In my opinion, the Tribunal erred by taking into account considerations that were irrelevant to the issue of whether the respondent’s conduct amounting to gross overcharging constituted professional misconduct. Each of the matters relied upon by the Tribunal and which I have summarised in [37] above was, in my view, irrelevant to that issue.
For example, the character evidence relied upon by the Tribunal was only tendered by the respondent on the question of penalty. This was consistent with the decision of this Court in Health Care Complaints Commission v A Medical Practitioner (2001) NSWCA 158 at [47], where Stein JA, with whom Powell JA and Rolfe AJA agreed on this point, observed:
“47.Nonetheless, it is plain that the Tribunal is not entitled to take character into account in considering whether a practitioner is guilty of unsatisfactory professional conduct. It is difficult to see, given the admission of careless conduct by the respondent, (which was accepted by the Tribunal) what probative force such evidence would have. It had no relevance to the consequences which might flow from the inadvertent error. It could, of course, be relevant to credit, but the mistake made by the practitioner involved no issue of credibility. The character was, by its very nature, relevant to penalty, should the tribunal get to that issue.”
Furthermore, the Tribunal made an error of fact when it found (at [55]) that the respondent had taken “early steps” to deal with the complaint in a responsible manner after it came to light in March 2001. This is simply not so. The respondent’s own chronology, which was attached to his solicitor’s letter to the appellant dated 30 May 2003, noted that on 26 April 2001 the appellant wrote to the respondent. In this letter, the appellant advised him that Mr Laurie Ferguson MP (Mr Chitty’s local member) had forwarded a complaint to the Legal Services Commissioner, who had in turn requested the Bar Council to investigate the complaint under s141 of the 1987 Act and, relevantly, had required the respondent to have his costs assessed.
On 3 July 2001 the appellant wrote to the respondent requesting the name of the costs assessor appointed by the Court. However, on 20 September 2001 the respondent wrote to the appellant confirming that neither he nor his solicitor intended to apply to the Supreme Court for an assessment of their respective costs. By letter dated 2 October 2001, the respondent’s solicitors submitted that the nature of the complaint was vague and that no further action would be taken unless Mr Chitty himself sought an assessment of the respondent’s costs by a court appointed costs assessor.
This was acknowledged in a letter by the appellant to the respondent’s solicitors dated 17 October 2001 in which the respondent’s assertion that he was not obliged to seek an assessment of his costs was noted. Eventually Mr Chitty engaged a solicitor who made application to the Supreme Court for assessment of the respondent’s fees on 21 January 2002. The appellant was advised of this on 1 February 2002, and a costs assessor was appointed for this purpose on 20 March 2002. This step, apparently, prompted the respondent and/or his solicitors into action, which resulted in the negotiation of a settlement between the respondent and Mr Chitty. This was ultimately effected on 21 November 2002. As a result the respondent refunded the sum of $12,500 to Mr Chitty, together with an additional $2,500 representing his costs arising from the assessment process and his solicitor’s costs of $6,500.
Because this settlement was reached, the Supreme Court costs assessment did not proceed and Mr Chitty withdrew his complaint, no doubt to the respondent’s relief. It must have come as a surprise to him when the appellant took up the cudgels on 10 April 2003 by making its own complaint against the respondent pursuant to s.134(2) of the 1987 Act alleging professional misconduct or, alternatively, unsatisfactory professional conduct.
The point I seek to make with respect to the above history is that it does not justify a finding that after becoming aware of Mr Chitty’s complaint in April 2001, the respondent took steps to deal with the complaint “in a responsible manner”. He denied the complaint, declined to take the positive step of having his costs assessed by a court-appointed assessor as had been requested of him, denied that he had any obligation to take that action and contended that if Mr Chitty wished to have the respondent’s costs assessed, it was a matter for him to do so.
When Mr Chitty ultimately took that action in February 2002, the respondent was apparently galvanised into action by negotiating a settlement of the matter before any formal assessment took place – no doubt for the plain purpose of repaying money to Mr Chitty which would result in the withdrawal of his complaint. I do not regard that conduct as in any way “responsible”.
In my opinion, the Tribunal also erred in declining to criticise the respondent’s decision not to give sworn evidence at the hearing. It is true that in professional disciplinary proceedings the onus of proving misconduct lies with the party bringing the charges and, it should be noted, a practitioner is not required to give evidence. However, as this Court observed in Coe v NSW Bar Association [2000] NSWCA 13, there is an expectation that legal practitioners will mount the witness box to provide some explanation as to their conduct, rather than simply relying upon evidence from the Bar table. In Coe, Meagher JA (at [21]), with the agreement of Priestley JA, repeated with approval the following observations made by the Tribunal in that case and which are apposite to the present case:
“In the circumstances where a prima facie [case] against a legal practitioner has been presented and where the practitioner wishes the Tribunal to accept an explanation as to how the conduct came about it is inappropriate and irregular for the legal practitioner to attempt to do so through submission from the Bar table. If he wishes the Tribunal to accept some explanation as to how the conduct came to take place then in our view he has an obligation to meet the situation by explanation on oath.”
In this case there were many questions left open which only the respondent could answer. This was illustrated by five inferences that this Court was asked by the respondent to draw with respect to his conduct. The first was that the respondent had not charged for work that he did not perform or hours that he did not spend.
The second was that the gross overcharging was explained by the achievement of a good outcome in the circumstances; and that the respondent’s exuberance in that success caused him to charge what he thought was appropriate, which amounted to no more than an error of judgment on his part.
The third was that as the respondent had no diary entries for the time spent in the provision of the services itemised in his memoranda of fees, he only charged what he thought was reasonable in the circumstances.
The fourth was that in any event his solicitor accepted the charges as reasonable (or at least did not complain about them) and it was his expectation that if there was a problem with the charges, the matter would have been taken up between the client and the solicitor.
The fifth was that he did not intend to “rip off” Mr Chitty and that he was unaware when he rendered his memoranda of fees on 4 December 2000 that his fees were excessive – an allegation he did not admit until his solicitor’s letter to the appellant of 30 August 2004 stating no more than that those solicitors had been instructed by the respondent that “in some respects, his fees were excessive”. How these inferences could be drawn in the absence of any evidence from the respondent to support them was never explained.
It is also pertinent to observe that the appellant’s senior counsel was unable to provide a responsive answer when asked what inferences the Court should draw as to how or why the respondent charged fees which were grossly excessive, and as to the basis on which he charged the fees he did.
Yet these were the very matters which were wholly within the knowledge of the respondent and which he was did not offer to answer in the witness box. On the contrary, he chose the safety of the well of the Tribunal. Notwithstanding the advice of his then senior counsel, the respondent’s refusal to enter the witness box and provide evidence with respect to the matters referred to should have been the subject of harsh criticism by the Tribunal. Moreover, if that evidence had otherwise been relevant to the issue, his refusal to provide it would have significantly detracted from the weight to be attached to the tendered character references. In these circumstances, the only inference one can draw from the respondent’s refusal to give sworn testimony in this matter was that his evidence would not have assisted his case in resisting a finding of professional misconduct.
The Tribunal should not have been required to speculate as to the basis upon which the respondent charged the fees he did. As an experienced barrister with an unblemished record, one would have expected him, as Meagher JA expressed it in Coe, to have mounted the witness box and explained the mysteries surrounding charges which had been found to be grossly excessive. In my opinion the failure of the respondent to give sworn evidence was inexcusable.
When one compares the fees charged by the respondent to those considered appropriate by Mr Robinson (as set out in the table at [21] above), it becomes even more apparent that some explanation was needed from the respondent. This is so, in particular, with reference to the services provided on 27–28 September 1999 in respect of which the respondent charged a total of $4,425 as against an allowance by Mr Robinson of $1,125. The memorandum of advice for which he charged $895 comprised one page containing five paragraphs of one sentence each. The draft statement of claim was a standard document and the Pt 9 r27 particulars merely reiterated the particulars in the draft statement of claim. He charged $1,550 for these documents. Whatever the complexities that might have been involved in this matter, they were certainly not reflected in the draft statement of claim.
On 7 and 10 February 2000, the respondent charged fees of $1,595 on each day in circumstances where Mr Robinson assessed a proper fee of $1,500 for both items. A fee of $1,595 for each day based upon the respondent’s hourly rate of $425 per hour translates in him having spent 3.75 hours on each occasion. Given that the respondent declined to take the witness stand, there is no explanation as to whether or not he did so in conference with his solicitor (Mr Chitty was not present on either occasion) and why it took so long.
On 6 November 2000 the respondent had a conference with his solicitor and Mr Chitty and produced a memorandum of advice comprising two pages. This did not contain a great deal of information apart from the calculation of an amount in respect of an offer to be made to the defendant. The document also stated that the respondent had explained in conference to Mr Chitty the difficulties associated with having such an offer accepted. The fee of $1,700 at the rate of $425 per hour translates into four hours for the conference and the production of the memorandum. There is no explanation as to why the amount actually charged was $5 less than this figure. The same comment applies to the services provided on 29 November 2000.
Although the Information contained a separate complaint against the respondent with respect to the 25% uplift that he charged in his memoranda of fees, the fact that he did so in circumstances where he must have been aware that he was not lawfully entitled to do so is a further factor which contributed to the Tribunal’s finding of gross overcharging. In my opinion, that was a matter of some significance which could not be explained in the absence of evidence from the respondent as either an error of judgment or a mistake. It was conceded to have been deliberate and thus open to the inference that it was dishonest. That inference is more readily drawn on the basis of the submissions that were made, notwithstanding that a further explanation could have been proffered by the respondent had he entered the witness box. I am of the view that it is open to this Court to draw the more negative inferences on the available evidence: Jones v Dunkel (1959) 101 CLR 298; Payne v Parker [1976] 1 NSWLR 191 at 201.
Furthermore, in my opinion Mr Robinson’s evidence leaves open the inference that the respondent charged for time that was not spent in providing the services in question. Again, that is an inference which is more readily drawn from the evidence that was provided by the appellant in the absence of any evidence on that issue from the respondent. As the matter may have been clearly elucidated by the respondent, his absence from the witness box renders it impossible to give any weight to the hypothetical alternative explanations may have been proffered by his counsel.
One alternative inference open on the evidence was that the respondent had no idea how long he had spent in the provision of the services in respect of each item and, therefore, thought of what he considered an appropriate fee without any attempt to relate it to the hours he had in fact expended. Again, such an inference can be readily drawn on the available evidence, notwithstanding that the complexion of the inference may have been altered by further explanation from the respondent as to whether or not this was so.
At the very least, the evidence permits the inference that the respondent was grossly reckless in charging fees in respect of which he had no idea of the time spent on the provision of each service or as to whether they were justified or not, given his alleged lack of knowledge (if that is the case). At its highest, the respondent’s conduct was dishonest; at its lowest, it was highly irresponsible. In my opinion, in either case it was conduct which in the circumstances would be reasonably regarded by barristers of good repute and competency as disgraceful or dishonourable.
Alternatively, it was conduct which should reasonably have been held to violate, or to fall short of, to a substantial degree, the standard of professional conduct approved of by members of the Bar of good repute and competency: cf Re R (Practitioner of the Supreme Court) [1927] SASR 58 at 60; De Pardo at [41]. In that respect, it was also unsatisfactory professional conduct which involved a substantial failure on the part of the respondent to reach reasonable standards of competence and diligence within the meaning of s.127(1)(a) of the 1987 Act. In short, it amounted to professional misconduct.
Before leaving this aspect of the matter, I should make it clear that the factors relied upon by the respondent referred to in the summary of the relevant part of the judgment of Mahoney JA in Veghelyi and in the passage from the judgment of Ipp J in D’Alessandro, which are set out in [49] and [54] above respectively, are in my opinion irrelevant to the determination of whether the Tribunal’s finding of gross overcharging was properly characterised as professional misconduct in the circumstances in which the fees were charged. Those factors were relevant only to the antecedent question of whether the fees charged were so excessive as to constitute gross overcharging. They had no further part to play once that finding was made in the determination of whether the gross overcharging in question constituted professional misconduct.
It follows from the foregoing that in my opinion the Tribunal was in error in taking into account factors which were irrelevant to the question of whether the respondent’s conduct constituted professional misconduct and which provided the foundation for the Tribunal’s negative answer to that question. That being so, the Tribunal’s finding that the respondent’s conduct only amounted to unsatisfactory professional conduct must be set aside and this Court must decide the issue for itself.
For the reasons set out in the preceding paragraphs, in my opinion the respondent’s conduct in the particular circumstances of this case should be found to be professional misconduct. At the end of the day, the respondent made the fatal error of declining to give evidence to explain how the charges came about.
I should add that apart from the daily fee charged on 30 November and 1 December 2000, the balance of the fees were apparently charged at an hourly rate of $425. The unusual thing about the fees charged is that in most cases they are odd figures, not easily divisible by $425 to give the number of hours for which that rate was charged. Thus, for instance, $895 = 2.1 hours @ $425 per hour; $990 = 2.33 hours; $1,550 = 3.65 hours; $1,595 = 3.75 hours and $1,695 is $5 short of four hours. The impression one gets from these odd figures is that the respondent considered that charging $895 looked better than charging $900; $990 looked better than charging $1,000; $1,595 looked better than $1,600; and $1,695 looked better than charging $1,700. Of course, I am speculating, but these are the types of mysteries that the respondent could have laid to rest, had he given evidence.
Should a fine be imposed?
The appellant submits that once a finding of professional misconduct is made, it must follow that the orders of the Tribunal, which were based only on a finding unsatisfactory professional conduct, would be inadequate and that a fine should be imposed in addition to the existing orders, pursuant to s.171C(1)(d) of the 1987 Act (s562(4)(a) of the 2004 Act). In particular, it was submitted that it was important that any finding of professional misconduct should be accompanied by a penalty which would constitute an appropriate deterrent to both the respondent and others in the profession. Nothing less was required, it was argued, if the public was to be protected from the insidious conduct which gross overcharging was said to constitute. It was submitted that such a finding was required to mark this Court’s disapproval of conduct found to constitute professional misconduct.
There is much force in the appellant’s submissions given that, on one view, this Court’s refusal to impose a fine over and above the orders already made by the Tribunal would result in the perception that a finding of professional misconduct with respect to the respondent should not be the subject of any penalty greater than that considered appropriate to a finding of unsatisfactory professional conduct. In normal circumstances I would agree with that submission.
However, in the present case there are countervailing factors. First, it is now six and a half years since the conduct occurred and there is no suggestion that it has been repeated. Second, it is incorrect to say that the orders of the Tribunal will remain the same if a fine is not imposed for Order 1. It will now publicly record a finding of professional misconduct in respect of Complaint 1 and of unsatisfactory professional conduct in respect of Complaint 2 in the Information, rather than a finding of unprofessional conduct in respect of both complaints.
Third, the declaration of a finding of professional misconduct, as distinct from unsatisfactory professional conduct, itself constitutes a significant change in the orders of the Tribunal which will seriously reflect upon the respondent’s professional reputation. On the other hand, given that the respondent has quite properly refunded to Mr Chitty all that is owed to him together with interest and costs as a consequence of the finding of gross overcharging, it would, in the circumstances, be unreasonable to impose a fine of $10,000 or even $25,000, and would achieve nothing further in terms of protecting the public.
Fourth, given that the respondent will be ordered to pay the appellant’s costs of the appeal, to also impose a fine would place an unreasonable financial burden upon him. The Court’s disapproval of the respondent’s conduct will, in my opinion, be sufficiently marked by the orders that I propose.
Conclusion
In my opinion, the respondent’s conduct with respect to his gross overcharging of Mr Chitty should be found to constitute professional misconduct as a consequence of which I would propose the following orders:
(a)Appeal allowed;
(b)Set aside the orders made by the Administrative Decisions Tribunal on 8 March 2006;
(c)The respondent be found guilty of professional misconduct with respect to the first ground of complaint made in the Information filed with the Tribunal on 3 June 2005 and guilty of unsatisfactory professional conduct with respect to the second ground of complaint contained in the said Information;
(d)The respondent be publicly reprimanded;
(e)The respondent to pay the costs of the appellant of and incidental to the proceedings before the Tribunal;
(f) The respondent to pay the costs of the appellant of the appeal.
BRYSON JA: I agree with Tobias JA.
BASTEN JA: For the reasons given by Tobias JA, I agree that the appeal in this matter should be upheld and that the Respondent is guilty of professional misconduct with respect to the first ground of complaint. However, there is inconsistency between a finding that the Respondent is guilty of a more serious level of misconduct and the conclusion that the disciplinary order made by the Tribunal remains the appropriate expression of disapprobation. In addition to the reprimand, in my view the Respondent should be fined an amount of $15,000. It is necessary to set out my separate reasons for proposing that order.
Because the Court is taking a more serious view of the conduct of the practitioner than that adopted by the Tribunal, it is important to identify the statutory jurisdiction which permits the Court to take that course.
Jurisdiction of Court
The practitioner was briefed to provide legal services to the solicitor’s client on 7 June 1999. At that time, he was required to make a disclosure of matters relating to costs, as identified in s 175(2) of the Legal Profession Act 1987 (NSW) (“the 1987 Act”): see s 178(2). The legal services were provided between June 1999 and December 2000.
The statutory definition of “unsatisfactory professional conduct” and of “professional misconduct”, then found in s 127 of the 1987 Act, and set out at [23] above, has not changed substantially since that time. However, the definition relevantly deals with reasonable standards of competence and diligence. The conduct involved in the present case did not demonstrate lack of reasonable competence or diligence. Rather, the practitioner failed to comply with a statutory obligation of disclosure and charged excessive fees for the services provided. The latter misconduct involved a contravention of the high standards of honesty and integrity required in accordance with general law principles governing professional responsibility. Accordingly, no issue arises as to changes in the legislative scheme with respect to the substantive standards of professional conduct.
The proceedings before the Tribunal were commenced by the Appellant on 3 June 2005, by way of an information laid pursuant to s 167 of the 1987 Act. That Act was repealed on 1 October 2005, by the Legal Profession Act 2004 (NSW) (“the 2004 Act”), after the hearing by the Tribunal, but before its determination. Savings and transitional provisions in the 2004 Act made provision in relation to complaints then pending before the Tribunal in Schedule 9, cl 15, which reads as follows:
15 Pending complaints before Tribunal
(1)This clause applies to a complaint that was made under the old Act and in respect of which proceedings instituted under the old Act in the Tribunal were pending immediately before the commencement day.
(2)The complaint is to be dealt with as if this Act had not been enacted.
It is common ground that this provision operated in relation to the complaint before the Tribunal and that, in accordance with the 1987 Act, the Tribunal was empowered to make an order under s 171C of the 1987 Act, which, relevantly for present purposes, provided:
171C Determinations of Tribunal
(1)If, after it has completed a hearing relating to a complaint against a legal practitioner, the Tribunal is satisfied that the legal practitioner is guilty of professional misconduct or unsatisfactory professional conduct, the Tribunal may do any one or more of the following:
…
(d)order that the legal practitioner pay a fine specified in the order, not exceeding $50,000 if the legal practitioner is guilty of professional misconduct or not exceeding $5,000 if the legal practitioner is guilty of unsatisfactory professional conduct,
(e)publicly reprimand the legal practitioner or, if there are special circumstances, privately reprimand the legal practitioner … .
The Tribunal found the practitioner guilty of unsatisfactory professional conduct in respect of the two grounds of complaint and exercised the power of public reprimand.
A difference of view arose between the parties in this appeal as to the further operation of cl 15 of Schedule 9. Once the Tribunal had made its decision, did the 1987 Act continue to operate in relation to a possible appeal, or did the relevant right of appeal arise under the 2004 Act? The Appellant contended that cl 15 continued to operate, so that the right of appeal was that for which provision was made under s 171F, as in force immediately prior to the commencement of the 2004 Act. Section 171F was inserted in the 1987 Act by the Legal Profession Amendment Act 2004 (“the 2004 Amendment Act”, being Act No. 51, and not to be confused with the 2004 Act, which was Act No. 112 of 2004) and provided:
171F Appeals against orders and decisions of Tribunal
(1)An order or other decision made by the Tribunal under this Part may be appealed to the Supreme Court by a party to the proceedings in which the order or decision was made.
(2)Section 75A of the Supreme Court Act1970 accordingly applies to an appeal under this section, and the appeal is to be:
(a) by way of rehearing, and
(b)not by way of a new hearing (a de novo hearing).
(3)Subsection (2) does not affect the provisions of section 75A of the Supreme Court Act 1970 relating to the receipt of evidence by the Supreme Court.
… .
That provision commenced on 15 August 2004 and applied to decisions of the Tribunal made after its commencement and, indeed, to decisions of the Tribunal made before its commencement, where an appeal had not yet been lodged: Schedule 1 to the 2004 Amendment Act.
The practitioner contended that Schedule 9, cl 15 of the 2004 Act should not be given so broad an interpretation, and should be understood to apply only to proceedings in relation to a complaint before the Tribunal. Once the Tribunal had made its determination, it was contended, rights of appeal arose under the 2004 Act. However, that required the application of s 729A of the 2004 Act, which, although in relevantly identical terms to s 171F of the 1987 Act, referred to orders or decisions made by the Tribunal “under this Act”: the decision in the present case having been made under the 1987 Act, s 729A did not, in its terms, apply. Nor, as at 1 October 2005, when it commenced, was there any transitional provision which expanded its operation. According to the practitioner, it is necessary to rely upon the Legal Profession Amendment Act 2006 (NSW) (“the 2006 Amendment Act”), which commenced on 2 June 2006. It introduced a number of further transitional provisions into Schedule 9 of the 2004 Act, including a new cl 17A dealing with proceedings before the Tribunal instituted on or after 1 October 2005 and a new cl 22A dealing with appeals instituted after that date. The latter provision is relied on in the present proceedings and provides as follows:
22A New appeals or reviews about old matters
(1)A matter arising under the old Act may be the subject of an appeal or review made or applied for on or after 1 October 2005 if the appeal or review could have been made or applied for had this Act not been enacted.
…
(8)Any decisions of the Supreme Court or the Tribunal or directions of the Supreme Court or the President of the Tribunal that:
(a)were made or given before the commencement of this clause, and
(b)would have been valid had the Legal Profession Amendment Act 2006 (which inserted this clause) been in force at the relevant time,
are taken to have been validly made or given.
The contention that there was a lacuna in relation to the right of appeal, with respect to a decision of the Tribunal made under the old Act, but after the commencement of the 2004 Act, may gain some support from the introduction of the new cl 22A in June 2006, although the substance of cl 22A is equally consistent with the view that it was designed to provide for alternative procedures, either under the old Act or the new Act or a combination of the two: see sub-cls 22A(2)-(4), which need not be set out here. Further, if there had been a lacuna, it is curious that sub-cl (8) seeks to validate decisions made by the Supreme Court or the Tribunal, prior to June 2006, but did not seek to validate appeals, as such.
The scope for legislative lacunae is more remote than is commonly believed. Certainly Parliamentary counsel seek, with increasing levels of detail and precision, to make provisions of a savings or transitional nature, when enacting new legislation. Understandably, not all cases will be covered. However, the savings and transitional effects of Part 4 of the Interpretation Act 1987 (NSW) will usually fill the gap and, indeed, would usually be sufficient in any event. Thus, s 30 of the Interpretation Act preserves rights, privileges, obligations and liabilities which have been acquired, have accrued or been incurred under the repealed legislation and preserves the remedies in respect of any such right, privilege, obligation, liability or penalty: s 30(1)(c) and (e). Such general provisions are effective, unless the mechanism for exercising the right is removed. The parties to proceedings before the Tribunal, commenced and determined under the 1987 Act, had at least a contingent right, prior to its repeal, to bring an appeal to this Court from a decision of the Tribunal once given, being a right of the kind which would be protected by s 30: see Esber v The Commonwealth (1992) 174 CLR 430, considering the operation of the equivalent provision of the Acts Interpretation Act 1901 (Cth), being s 8. Accordingly, it was not necessary for the Appellant to rely upon some implied retrospective operation of cl 22A of Schedule 9 of the 2004 Act. Nor was it necessary for the Appellant to construe cl 15 sufficiently widely to catch rights of appeal with respect to complaints dealt with by the Tribunal under the 1987 Act. Nevertheless, there is force in the Appellant’s contention that it should be so construed, a construction for which s 30 may be said to lend “strong support”: see Esber, 174 CLR at 438 (Mason CJ, Deane, Toohey and Gaudron JJ).
On this view, the appeal is brought under s 171F of the 1987 Act. If, on the other hand, cl 22A applies, and it could be brought under either the 1987 Act or the 2004 Act, it would be convenient for this Court to direct that it be dealt with in accordance with the provisions of the 1987 Act.
The effect of either provision is to invoke the powers of this Court under s 75A(6) of the Supreme Court Act, which confer on the Court “the powers and duties of the court, body or other person from whom the appeal is brought”. It was assumed for the purposes of the present appeal that the powers to be exercised by this Court should be treated as the powers of the Tribunal under the 1987 Act. Accordingly the power to impose a fine was limited to the amount set out at [103] above, although by the date of the Tribunal’s decision, the maximum fines had been increased under the 2004 Act to $10,000 in the case of unsatisfactory professional conduct and $75,000 in the case of professional misconduct: see, s 562(7).
Appropriate disciplinary order
In Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201-202, the High Court stated:
“Although it is sometimes referred to as ‘the penalty of disbarment’, it must be emphasised that a disbarring order is in no sense punitive in character. When such an order is made, it is made, from the public point of view, for the protection of those who require protection, and from the professional point of view, in order that abuse of privilege may not lead to loss of privilege.”
Such statements need to be read in their context, which in Clyne’s case, concerned conduct described as “tactics which ignore elementary ethical standards”: at p 201. See also New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 183-184. Descriptions of disciplinary orders denying any punitive character may, taken out of their context, appear to have an element of hyperbole. Such statements have also been made for particular purposes, including rejection of a contention that there might be an element of double jeopardy in an order of disbarment, following a criminal conviction and sentence: see, eg, Law Society of New South Wales v Bannister (1993) 4 LPDR 24 at 27 (Sheller JA, Gleeson CJ and Handley JA agreeing); see also Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 680-681 (Isaacs J).
In other circumstances, as noted by Sheller JA in Bannister, courts continue to use the language of punishment in making disciplinary orders: see, eg, Ex parte Macaulay (1930) 30 SR (NSW) 193 at 193-194 (Street CJ, Ferguson and Halse Rogers JJ concurring); see also Re Hodgekiss (1962) 62 SR (NSW) 340 at 343 (Owen J with whom Maguire J agreed), referring to “the proper penalty to be imposed”.
The point sought to be made in the authorities is, no doubt, that the Court or Tribunal making an order in disciplinary proceedings must have squarely in mind the protective purpose of the order, in the public interest. That is not to say that the adverse (punitive) effect on the practitioner should be ignored; clearly no order should be made which has more serious consequences for the practitioner than is reasonably necessary in execution of the protective purpose.
That being said, it may also be noted that the protective purpose may operate in different ways. First, by its direct effect upon the practitioner, the order will either remove that practitioner from membership of the profession (by disbarment or suspension) or will provide a deterrent against the repetition of such conduct (in the case of a fine or reprimand). There are also important but indirect effects to be considered. First, the order reminds other members of the profession of the public interest in the maintenance of high professional standards. Secondly and more specifically, it may give emphasis to the unacceptability of the kind of conduct involved in the disciplinary offence. Thirdly, by speaking to the public at large, it seeks to maintain confidence in the high standards of the profession. The underlying purpose is not self-aggrandisement on the part of the profession, but a recognition of the social value in the availability of the services provided to the public, combined with an understanding of the vulnerability of many who require such services.
In the present case, there are four factors which may be seen to militate against an order which would have an unduly punitive effect upon the practitioner. First, as Tobias JA notes, there has been a passage of some six years without further complaint since the conduct in question occurred. Secondly, the barrister was not approached directly by the lay client, but rather his services were obtained by a solicitor. In practical terms, as Tobias JA notes at [57(f)] above, the solicitor took no steps to protect the client and was unlikely to do so, given his personal relationship with the barrister. In some circumstances, the intervention of a solicitor might be seen as mitigating the seriousness of the conduct of a barrister; in the present case, the failure of the solicitor to protect his client rather identifies a weakness in the supposed protection which might be expected in a divided profession. These two factors are, in my view, largely neutral in the circumstances of the present case.
The third factor identified by Tobias JA is the increased seriousness of the reprimand, given the finding by this Court of professional misconduct, in place of the finding of unsatisfactory professional conduct made by the Tribunal. Fourthly, there is the fact that the practitioner will bear the burden of additional costs flowing from the outcome of this appeal.
In my view these further considerations also bear little weight. A finding of more serious misconduct than that adopted by the Tribunal should be seen as the justification for the imposition of an appropriate deterrent order, and not as itself a sufficient deterrent. To treat it otherwise is to diminish the quality of the adverse finding and to create an appearance that the disciplinary jurisdiction is protective of the professional, and not the public. So far as the question of costs is concerned, the costs burden flows from the unsuccessful resistance to the Appellant’s proceedings: the financial burden need not be ignored, but it does not form part of the disciplinary orders.
This is not a case in which it is necessary or appropriate to consider any additional order other than a fine. However, in my view the purposes identified above require that this Court give effect to its conclusions in relation to the nature of the misconduct by imposing a fine. To constitute professional misconduct under the general law standard, the conduct must be understood to be disgraceful or dishonourable in professional eyes. A finding of such misconduct, in the circumstances of the present case, warrants the imposition of a significant fine. Against a maximum available fine of $50,000, the imposition of a fine of $15,000 would be an appropriate order.
Otherwise, I agree with each of the orders proposed by Tobias JA.
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