Lawyers' professional responsibility [Sixth edition.] 9780455239095, 0455239096

Citation preview

Lawyers’ Professional Responsibility

Thomson Reuters (Professional) Australia Limited 19 Harris Street Pyrmont NSW 2009 Tel: (02) 8587 7000 Fax: (02) 8587 7100 [email protected] legal.thomsonreuters.com.au For all customer inquiries please ring 1300 304 195 (for calls within Australia only)

INTERNATIONAL AGENTS & DISTRIBUTORS

NORTH AMERICA Thomson Reuters Eagan United States of America

ASIA PACIFIC Thomson Reuters Sydney Australia

LATIN AMERICA Thomson Reuters São Paulo Brazil

EUROPE Thomson Reuters London United Kingdom

Lawyers’ Professional Responsibility

G E DAL PONT LLD

Professor Faculty of Law, University of Tasmania

SIXTH EDITION

LAWBOOK CO. 2017

Published in Sydney by Thomson Reuters (Professional) Australia Limited ABN 64 058 914 668 19 Harris Street, Pyrmont, NSW First edition ..........................................................................................1996 Second edition ......................................................................................2001 Third edition .........................................................................................2006 Fourth edition .......................................................................................2010 Fifth edition ..........................................................................................2013 Sixth edition .........................................................................................2017 National Library of Australia Cataloguing-in-Publication entry Dal Pont, G E (Gino Evan) Lawyers’ professional responsibility / Gino E Dal Pont. 6th ed Includes index. ISBN 9780455239095 (pbk) Legal ethics— Attorney and client. Lawyers—Discipline. 174.3 © 2017 Thomson Reuters (Professional) Australia Limited This publication is copyright. Other than for the purposes of and subject to the conditions prescribed under the Copyright Act, no part of it may in any form or by any means (electronic, mechanical, microcopying, photocopying, recording or otherwise) be reproduced, stored in a retrieval system or transmitted without prior written permission. Inquiries should be addressed to the publishers. All legislative material herein is reproduced by permission but does not purport to be the official or authorised version. It is subject to Commonwealth of Australia copyright. The Copyright Act 1968 permits certain reproduction and publication of Commonwealth legislation. In particular, s 182A of the Act enables a complete copy to be made by or on behalf of a particular person. For reproduction or publication beyond that permitted by the Act, permission should be sought in writing. Requests should be submitted online at http://www.ag.gov.au/cca, faxed to (02) 6250 5989 or mailed to Commonwealth Copyright Administration, Attorney-General’s Department, Robert Garran Offices, National Circuit, Barton ACT 2600. Editor: Lara Weeks Product Developer: Lucas Frederick Publisher: Robert Wilson Printed by Ligare Pty Ltd, Riverwood, NSW This book has been printed on paper certified by the Programme for the Endorsement of Forest Certification (PEFC). PEFC is committed to sustainable forest management through third party forest certification of responsibly managed forests. For more info: http://www.pefc.org.

Preface Perhaps the single most compelling reason to issue a new edition of this work is the enactment, since the fifth edition, of what is known as the Legal Profession Uniform Law. Its genesis stemmed from what was termed the draft Legal Profession National Law, which saw mention in the fifth edition. The change in terminology from “national” to “uniform” may speak of the fact that to date only two jurisdictions – New South Wales and Victoria – have joined the uniform scheme. More success in securing uniformity has been achieved vis-à-vis the professional rules governing solicitors, which are now practically uniform (under the banner of the Australian Solicitors’ Conduct Rules) across the Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria. Efforts to harmonise barristers’ rules have fallen further short of the mark, though, as three separate schemas operate in the Australian landscape. The flux in statutory and rule-based regulation of the legal profession dictates mention in this edition of not only the current regimes but also their immediate precursors. Consistent with the approach in earlier editions, frequent reference is made to case law and regulatory regimes outside Australia. So far as case law developments in Australia are concerned, lawyers’ professional responsibility continues to provide a steady stream of litigation that reaches adjudication. Of particular note are the High Court’s decisions in Attwells v Jackson Lalic Lawyers Pty Ltd1 (discussed at [5.325]) and Badenach v Calvert2 (discussed at [21.75]). For the purposes of this edition, the temporal line is drawn at 7 June 2016. Two early 2016 decisions of Carmody J, sitting in the Queensland Civil and Administrative Tribunal, came to my attention too late to influence the text, but should be noted. In the first of these, his Honour addressed questions of uncertainty and “general care and conduct” loadings in costs agreements,3 and in the second elaborated upon inquiry into mental illness in the admissions process.4 Mention should also be made of Hiley J’s wide-ranging professional discipline decision in Connop v Law Society Northern Territory5 and the Victorian ruling on readmission to practice in Petsinis v Victorian Legal Services Board.6 An instructive article by Professor Richard Mahoney, dealing with lawyers’ statements of personal opinion to the court, also arrived too late to make an appearance in the text of this edition.7

1 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572. 2 Badenach v Calvert (2016) 90 ALJR 610. 3 Turner v Macrossan & Amiet Pty Ltd [2016] QCAT 5 (5 January 2016). 4 Doolan v Legal Practitioners Admissions Board [2016] QCAT 98 (28 April 2016). 5 Connop v Law Society Northern Territory [2016] NTSC 38 (8 June 2016). 6 Petsinis v Victorian Legal Services Board [2016] VSC 389 (13 July 2016). 7 Mahoney, “Lawyers’ Statements of Personal Opinion to the Court” (2015) 14 Otago L Rev 147.

vi

Preface

I extend thanks to Lara Weeks for her editorial work. As always, the staff of the University of Tasmania Law Library very much deserve credit for their untiring assistance in securing access to relevant material.

G E DAL PONT Hobart 24 August 2016

Statute and Professional Rules Abbreviations With the objective of de-cluttering the footnotes in this work, various abbreviations have been adopted when reference is made to statute, professional rules or court rules that apply to the legal profession. The abbreviations used appear below. STATUTE In each Australian jurisdiction there is legislation directed at regulating the legal profession. The relevant legal profession legislation in force at the time of writing is the following: ACT NSW NT Qld SA Tas Vic WA

Legal Legal Legal Legal Legal Legal Legal Legal

Profession Act 2006 (commenced 1 July 2006) Profession Uniform Law (NSW) (commenced 1 July 2015) Profession Act 2006 (commenced 18 April 2007) Profession Act 2007 (commenced 1 July 2007) Practitioners Act 1981 Profession Act 2007 (commenced 31 December 2008) Profession Uniform Law (Vic) (commenced 1 July 2015) Profession Act 2008 (commenced 1 March 2009)

The relative recency of the effect of most of the above Acts has meant that on occasion this work makes reference to previous legislation. The abbreviations are as follows: ACT 1970 NSW 1987 NSW 2004 NT 1974 Qld 1952 Qld 1973 Qld 2004 Tas 1993 Vic 1996 Vic 2004 WA 1893 WA 2003

Legal Practitioners Act 1970 Legal Profession Act 1987 Legal Profession Act 2004 (operative 1 October 2005 to 30 June 2015) Legal Practitioners Act 1974 Queensland Law Society Act 1952 Trust Accounts Act 1973 (still in force but not in respect of lawyers) Legal Profession Act 2004 (from 1 July 2004 to 30 June 2007) Legal Profession Act 1993 Legal Practice Act 1996 (operative up to 11 December 2005) Legal Practice Act 2004 (operative from 12 December 2005 to 30 June 2015) Legal Practitioners Act 1893 (up to 31 December 2003) Legal Practice Act 2003 (from 1 January 2004 to 29 February 2009)

viii Statute and Professional Rules Abbreviations

The push towards the national regulation of the legal profession has meant that the book makes reference to (proposed) national regulatory schemes, abbreviated as follows: LPNL LPUL

Legal Profession National Law (post-COAG Draft, 31 May 2011) Legal Profession Uniform Law (New South Wales and Victoria)

The LPUL provisions are identical as between New South Wales and Victoria, but are nonetheless referenced by jurisdiction for the purposes of clarity and indexing. The New South Wales and Victorian legislation that applies the Legal Profession Uniform Law in those jurisdictions, which is not identical as between these jurisdictions, has not been abbreviated: Legal Profession Uniform Law Application Act 2014 (NSW); Legal Profession Uniform Law Application Act 2014 (Vic). Abbreviations have also been adopted for the purposes of the uniform evidence law, namely: Cth ACT NSW NT Tas Vic

Evidence Evidence Evidence Evidence Evidence Evidence

Act 1995 Act 2011 Act 1995 (National Uniform Legislation) Act 2011 Act 2001 Act 2008

PROFESSIONAL RULES In each jurisdiction rules have been enacted regulating the professional conduct of lawyers. The rules are abbreviated as follows: ASCR

ACT

NSW

NT Qld SA Tas Vic

Law Council of Australia, Australian Solicitors’ Conduct Rules (21 June 2011) (the predecessor being the Law Council of Australia’s Model Rules of Professional Conduct and Practice (March 2002)) Legal Profession (Solicitors) Conduct Rules 2015 (effective 1 January 2016; before this date, the relevant rules were the Legal Profession (Solicitors) Rules 2007 (effective 1 October 2007)) Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (effective 1 July 2015; from 1 January 2014 to 30 June 2015, the relevant rules were the Professional Conduct and Practice Rules 2013; before this date, the Professional Conduct and Practice Rules 1995 were extant) Rules of Professional Conduct and Practice (effective 10 April 2002) Australian Solicitors’ Conduct Rules (effective 1 June 2012) Australian Solicitors’ Conduct Rules (effective 25 July 2011) Rules of Practice 1994 Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 (effective 1 July 2015; before this date, the relevant rules were the Professional Conduct and Practice Rules 2005 (effective 30 June 2005))

Statute and Professional Rules Abbreviations

WA WA EPG

ix

Legal Profession Conduct Rules 2010 Law Society of Western Australia, Ethical and Practice Guidelines (25 August 2015)

Although the Australian Solicitors’ Conduct Rules now form the foundation for solicitors’ professional rules in the Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria, for the purposes of clarity and indexing the relevant rule for each jurisdiction is identified separately. In each jurisdiction there are also professional rules dedicated to lawyers who practise as counsel, which are in this text termed “barristers’ rules”. In 1993 the Australian Bar Association (ABA) propounded a Code of Conduct aimed at prompting national uniformity of professional rules applying to lawyers who practise solely as barristers, which was revised in 1995 to form the Model Rules. The latter saw substantial implementation in most jurisdictions, but was subsequently revised to form National Conduct Rules for barristers, the substance of which was implemented in New South Wales, Queensland, South Australia, Victoria and Western Australia, although the rule numbering varies between the jurisdictions. The New South Wales and Victorian rules follow the uniform law model, whereas those in Queensland, South Australia and Western Australia follow an earlier numbering sequence. The barristers’ rules in the Territories adopt a different numbering sequence, from an earlier version still of the ABA rules. The abbreviations adopted for the relevant barristers’ rules are the following: ACT

NSW

NT Qld SA

Tas Vic

WA

Legal Profession (Barristers) Rules 2014 (effective 5 September 2014; before this date, the relevant rules were the Legal Profession (Barristers) Rules 2008 (effective 4 November 2008)) Legal Profession Uniform Conduct (Barristers) Rules 2015 (effective 1 July 2015; before this date, the relevant rules were the Barristers’ Rules (8 August 2011)) Barristers’ Conduct Rules (effective 20 March 2003) Bar Association of Queensland, Barristers’ Conduct Rules (effective 23 December 2011) South Australian Bar Association Inc, Barristers’ Conduct Rules (effective 14 November 2013; replacing the former South Australian Bar Association Inc, Barristers’ Conduct Rules (effective 1 October 2010)) Tasmanian Bar Association, Professional Conduct Guidelines (references in paragraphs) Legal Profession Uniform Conduct (Barristers) Rules 2015 (effective 1 July 2015; before the date, the relevant rules were the Victorian Bar Inc, Practice Rules) Western Australian Bar Association, Western Australian Barristers’ Rules (effective 5 October 2011)

x

Statute and Professional Rules Abbreviations

On multiple occasions throughout the text, reference is made to professional rules or statements of law in other common law jurisdictions. The rules that attach to the abbreviations are the following: US Restatement Can CPC HK NZ Sing Scot UK

American Bar Association, Model Rules of Professional Conduct American Law Institute, Restatement of the Law Governing Lawyers (3rd ed, 2000) Federation of Law Societies of Canada, Model Code of Professional Conduct (as amended to 10 October 2014) Law Society of Hong Kong, Hong Kong Solicitors’ Guide to Professional Conduct, Vol 1 (2013) Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 (effective 1 August 2008) Legal Profession (Professional Conduct) Rules 2015 Law Society of Scotland Practice Rules 2011 SRA Code of Conduct 2011

COURT RULES Abbreviations adopted for court rules are the following: CPR RSC

UCPR

Court Procedures Rules 2006 (ACT) Rules of the Supreme Court (Supreme Court Rules 1987 (NT); Supreme Court Civil Rules 2006 (SA); Supreme Court Rules 2000 (Tas); Supreme Court (General Civil Procedure) Rules 2015 (Vic); Supreme Court Rules 1971 (WA)) Uniform Civil Procedure Rules (1999 in Qld; 2005 in NSW)

Table of Contents Preface .................................................................................................................................. ............................................................................................................................. v Statute and Professional Rules Abbreviations ..................................................................... .............................................................. vii Table of Cases .................................................................................................................... xvii Table of Statutes and Rules ............................................................................................. lxxix PART I: INTRODUCTION

........................................................................................

1

Chapter 1: The Concept of Professional Responsibility ...................................... .......................................

3

[1.05] Ethics .......................................................................................................................................... 3 [1.20] Professionalism ........................................................................................................................... 6 [1.50] Impact on the profession of changes in the legal landscape .................................................. 15 [1.90] Sources of lawyers’ professional responsibility ...................................................................... 21

Chapter 2: Admission to Practice ........................................................................... .........................................................................

37

[2.05] Requirements for admission .................................................................................................... 37 [2.55] Factors relevant to good fame and character .......................................................................... 45 [2.140] Requirements for practice ...................................................................................................... 62 [2.165] Application for readmission ................................................................................................... 67

Chapter 3: The Lawyer–Client Relationship ........................................................ .......................................................

73

[3.05] Creation of lawyer–client relationship ..................................................................................... 73 [3.80] Authority of lawyers under the retainer .................................................................................. 86 [3.150] Lawyers’ acceptance of work ................................................................................................ 95 [3.190] Termination of lawyer–client relationship ........................................................................... 100

PART II: LAWYERS’ DUTY TO THE CLIENT

................................................

111

Chapter 4: Duties to the Client and their Enforcement ...................................... ...................................

113

[4.05] Introduction ............................................................................................................................. 113 [4.20] Duty to be competent ............................................................................................................. 115 [4.40] Duty of loyalty and trust ........................................................................................................ 119 [4.70] Duties of confidence .............................................................................................................. 123 [4.80] Duty to promote quality and client care ............................................................................... 123 [4.90] Duty to promote access to justice ......................................................................................... 126 [4.135] Duty to encourage settlement .............................................................................................. 134 [4.145] Enforcement of duties – remedies for breach of duty ........................................................ 137

Chapter 5: Lawyers’ Duty to Clients in Tort ........................................................ ....................................................

149

[5.05] Introduction ............................................................................................................................ 150 [5.25] Scope of the duty of care ...................................................................................................... 155 [5.165] Standard of care ................................................................................................................... 178

xii Table of Contents

[5.260] Immunity for in-court acts or omissions ............................................................................. 196 [5.350] Limiting liability .................................................................................................................. 213

Chapter 6: Lawyer–Client Conflict and Influence ............................................... ............................................

217

[6.05] Proscription against lawyer–client conflict ............................................................................ 217 [6.40] Dealings with clients .............................................................................................................. 221 [6.105] Proscription against secret profits ........................................................................................ 233 [6.125] Undue influence by lawyer over client ............................................................................... 237 [6.140] Lawyer–client sexual relations ............................................................................................ 241

Chapter 7: Concurrent Conflicts ............................................................................ .........................................................................

247

[7.05] Nature of the conflict ............................................................................................................. 247 [7.30] Scope of proscription ............................................................................................................. 252 [7.95] Concurrent conflicts in contentious work .............................................................................. 264 [7.115] Concurrent conflicts in non-contentious work .................................................................... 268

Chapter 8: Acting against Former Clients ............................................................ .........................................................

277

[8.05] Context .................................................................................................................................... 278 [8.25] Interests that impact on decision to disqualify ..................................................................... 279 [8.70] Threshold for judicial intervention ........................................................................................ 286 [8.160] Disqualification – where no prior lawyer–client relationship ............................................. 302 [8.195] Scope for disqualification – extension to the firm .............................................................. 309 [8.260] Disqualification applications as abuses of process ............................................................. 323

Chapter 9: Duty to Account .................................................................................... .................................................................................

329

[9.05] The basic obligation ............................................................................................................... 329 [9.10] Trust money ............................................................................................................................ 330 [9.30] Accounting for trust money ................................................................................................... 332 [9.85] Verification of trust accounts ................................................................................................. 337 [9.100] External intervention over trust accounts ............................................................................ 338 [9.125] Failure to account ................................................................................................................. 340

Chapter 10: Confidentiality ..................................................................................... ..................................................................................

343

[10.05] Nature of the duty ................................................................................................................ 343 [10.20] Scope of the duty ................................................................................................................. 345 [10.45] Limits and exceptions to the duty ....................................................................................... 347 [10.140] Fulfilling the duty ............................................................................................................... 360 [10.185] Should the duty remain? .................................................................................................... 365

Chapter 11: Legal Professional Privilege ............................................................... ...........................................................

367

[11.05] Nature of the privilege ......................................................................................................... 368 [11.35] Purpose of the communication ............................................................................................ 373 [11.70] Communications covered by the privilege .......................................................................... 381 [11.175] Who is entitled to claim privilege? ................................................................................... 398 [11.205] Privilege claims in non-judicial proceedings .................................................................... 404 [11.225] Abrogation of privilege by statute ..................................................................................... 407 [11.245] Waiver of privilege ............................................................................................................. 410

xiii

Chapter 12: Privilege in Aid of Settlement ........................................................... ........................................................

423

[12.05] Context and rationale ........................................................................................................... 423 [12.10] Parameters of the privilege .................................................................................................. 425 [12.35] Exceptions to the privilege .................................................................................................. 431

Chapter 13: Employed (In-house) Lawyers .......................................................... .......................................................

439

[13.05] Background ........................................................................................................................... 439 [13.10] Ethical issues specific to employed lawyers ....................................................................... 440 [13.70] Government lawyers ............................................................................................................ 452

PART III: COSTS

....................................................................................................

465

Chapter 14: Costs Disclosure and Costs Agreements .......................................... .......................................

467

[14.15] Costs disclosure requirements .............................................................................................. 468 [14.75] Costs agreements .................................................................................................................. 478 [14.110] Contingent fee costs agreements ........................................................................................ 484 [14.150] Setting aside and variation of costs agreements ............................................................... 491

Chapter 15: Recovery of Costs from Clients ........................................................ .....................................................

501

[15.05] Foundation and parameters .................................................................................................. 501 [15.30] THE need to deliver a bill and wait the required time ...................................................... 503 [15.40] Costs assessment .................................................................................................................. 505 [15.100] Securing costs recovery ..................................................................................................... 513

Chapter 16: Solicitors’ Liens ................................................................................... ...............................................................................

519

[16.05] General principles ................................................................................................................ 519 [16.20] Retaining lien ....................................................................................................................... 521 [16.115] Particular lien ...................................................................................................................... 537

PART IV: LAWYERS’ DUTY TO THE ADMINISTRATION OF JUSTICE ...........................................................................................................

545

Chapter 17: Duty to the Court ............................................................................... ............................................................................

547

[17.05] Context .................................................................................................................................. 548 [17.35] Independence ........................................................................................................................ 552 [17.75] Candour in the presentation of the law ............................................................................... 561 [17.95] Candour in the presentation of the facts ............................................................................. 564 [17.150] Dealing with witnesses ...................................................................................................... 575 [17.190] Communications and relationship with judge ................................................................... 581 [17.200] Public disclosures and media communications ................................................................. 583 [17.215] Abuses of process .............................................................................................................. 585

Chapter 18: Particular Applications of the Duty to the Administration of Justice ................................................................................................................. ..............................................................................................................

601

[18.10] Prosecuting counsel .............................................................................................................. 602 [18.95] Criminal defence lawyers .................................................................................................... 618 [18.130] Duty of family lawyers in cases involving children ......................................................... 622

xiv Table of Contents

Chapter 19: Duty to Obey and Uphold the Law .................................................. ..............................................

627

[19.10] Client who behaves unlawfully ........................................................................................... 628 [19.50] Approach to the giving of advice ........................................................................................ 633

PART V: OTHER LAWYER RESPONSIBILITIES

...........................................

641

Chapter 20: Conduct of Practice ............................................................................ .........................................................................

643

[20.05] Solicitation of business ........................................................................................................ 644 [20.75] Practice names, stationery and premises ............................................................................. 656 [20.95] Conducting another business ............................................................................................... 660 [20.125] Sharing receipts with non-lawyers .................................................................................... 663 [20.135] Lawyer business structures ................................................................................................ 665 [20.175] Mediation by lawyers ......................................................................................................... 671 [20.205] Supervision and attendances .............................................................................................. 676 [20.220] Bankruptcy of lawyer ......................................................................................................... 679

Chapter 21: Relations with the Profession and Third Parties ............................ ........................

681

[21.10] Legal duties to third parties in tort ...................................................................................... 682 [21.90] Legal duties to third parties in contract .............................................................................. 698 [21.110] Legal duties to third parties in equity ............................................................................... 701 [21.130] Legal duties to third parties under statute ......................................................................... 703 [21.140] Professional duties owed to other lawyers ........................................................................ 706 [21.220] Professional duties in communicating with third parties .................................................. 722 [21.275] Professional duties to unrepresented parties ..................................................................... 730

Chapter 22: Undertakings ....................................................................................... ....................................................................................

733

[22.05] Context .................................................................................................................................. 733 [22.15] Liability in contract .............................................................................................................. 735 [22.25] Liability under the court’s jurisdiction ................................................................................ 738 [22.50] Professional disciplinary liability ........................................................................................ 742 [22.55] Steps to avoid liability on undertakings .............................................................................. 742

PART VI: DISCIPLINE OF LAWYERS

..............................................................

747

Chapter 23: The Disciplinary Jurisdiction ............................................................ .........................................................

749

[23.05] Role of the court .................................................................................................................. 749 [23.20] Nature of disciplinary proceedings ...................................................................................... 751 [23.85] Concept of professional misconduct .................................................................................... 762 [23.95] Disciplinary orders ............................................................................................................... 765 [23.115] Factors that impact on disciplinary orders ........................................................................ 769

Chapter 24: Disciplinary Procedures ..................................................................... ..................................................................

781

[24.10] Bringing misconduct to the attention of the relevant body ........................................................................................................................ 782 [24.35] Australian Capital Territory ................................................................................................. 787 [24.55] New South Wales and Victoria ............................................................................................ 789

xv

[24.90] Northern Territory ................................................................................................................ 793 [24.105] Queensland ......................................................................................................................... 794 [24.120] South Australia ................................................................................................................... 796 [24.135] Tasmania ............................................................................................................................. 798 [24.150] Western Australia ............................................................................................................... 800

Chapter 25: Types of Misconduct ........................................................................... .......................................................................

803

[25.10] Misconduct in the course of practice .................................................................................. 805 [25.95] Misconduct outside practice ................................................................................................ 820

Index

............................................................................................................................

839

Table of Cases A A v B [1984] 1 All ER 265 ............................................................................................................. 16.60 A v Hayden (1984) 156 CLR 532 ................................................................................................ 10.130 A v Law Society of Tasmania (2001) 10 Tas R 152 ........................................................................ 8.30 A & B, Marriage of (1990) FLC ¶92-126 ............................................................................. 8.60, 8.175 A (a minor), Re (1988) 10 Fam L 339 ........................................................................................... 5.205 A Barrister and Solicitor, Re (1972) 20 FLR 234 .......................................................................... 23.10 A Barrister and Solicitor, Re (1976) 11 ACTR 13 ............................................................. 25.50, 25.85 A Barrister and Solicitor, Re (1979) 40 FLR 1 .......... 3.170, 23.10, 23.20, 23.50, 23.60, 23.85, 25.50 A Barrister and Solicitor, Re (1979) 40 FLR 26 .... 6.80, 16.20, 16.45, 16.115, 16.125, 23.85, 23.110 A Barrister and Solicitor, Re (1979) 40 FLR 44 ............................................................................ 25.50 A Barrister and Solicitor, Re (1984) 73 FLR 79 ............................................................. 23.110, 23.135 A Firm of Solicitors, Re [1992] 1 All ER 353 .. 5.85, 7.95, 8.50, 8.55, 8.60, 8.80, 8.95, 8.105, 8.220 A Firm of Solicitors, Re [1995] 3 All ER 482 ..................................... 8.30, 8.70, 8.125, 8.195, 10.95 A Legal Practitioner v Law Society of Tasmania (2005) 13 Tas R 448 ....................................... 25.85 A Legal Practitioner, Re (1981) 55 FLR 405 ...................................................................... 23.20, 23.25 A Legal Practitioner, Re Application for Admission as (2004) 90 SASR 551 .................... 2.25, 2.130 A Ltd v B Ltd [1996] 1 WLR 665 ................................................................................................. 22.05 A Medical Practitioner, Re [1995] 2 Qd R 154 ............................................................................. 1.125 A Practitioner, Re [1941] SASR 48 .................................................................................................. 9.65 A Practitioner, Re [1960] SASR 178 ................................................................................. 23.15, 23.100 A Practitioner, Re (1975) 12 SASR 166 ........................................... 7.20, 7.120, 23.15, 23.110, 25.60 A Practitioner, Re (1982) 30 SASR 27 ............................................... 2.170, 9.65, 23.05, 23.20, 25.50 A Practitioner, Re (1984) 36 SASR 590 ......................................................................... 23.105, 23.155 A Practitioner, Re (1997) 95 A Crim R 467 ................................................................................. 25.100 A Practitioner, Re [2002] WASCA 93 .......................................................................................... 25.135 A Practitioner, Re (2004) 145 A Crim R 557 ................................................................................. 25.10 A Practitioner, Re [2004] WASCA 283 ........................................................................................ 25.135 A Practitioner of the Supreme Court, Re [1940] SASR 154 ......................................................... 25.50 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 .. 23.10, 25.130 A Solicitor, Re [1907] 2 KB 539 .................................................................................................... 22.45 A Solicitor, Re [1912] 1 KB 302 .................................................................................................... 23.15 A Solicitor, Re (1952) 69 WN (NSW) 356 ..................................................................... 23.110, 25.105 A Solicitor, Re [1960] VR 617 ................................................................... 23.10, 23.85, 23.100, 25.90 A Solicitor, Re [1961] Ch 491 ...................................................................................................... 25.105 A Solicitor, Re [1966] 1 WLR 1604 ............................................................................................... 22.25 A Solicitor, Re (1991) 104 FLR 212 ..................................................................................... 9.65, 9.105 A Solicitor, Re [1993] QB 69 ......................................................................................................... 23.50 A Team Diamond Headquarters Pty Ltd v Main Road Property Group Pty Ltd (2009) 25 VR 189 ................................................................................................................................ 17.245 A159 of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1087 .................................................................................................................................. 17.260 AA v Board of the Australian Crime Commission [2010] FCA 553 .......................................... 11.255 AAG Investments Ltd v BAA Airports Ltd [2010] EWHC 2844 (Comm) .................................. 12.65 ABN Amro Bank Canada v Gowling, Strathy and Henderson (1994) 20 OR (3d) 779 ................ 5.25

xviii Table of Cases

ACN 007 838 584 Pty Ltd v Zurich Australian Insurance Ltd (1997) 69 SASR 374 ................. 7.105 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 ............................. 8.30, 17.185, 21.110 AJG, Re [2004] QCA 88 ................................................................................................................... 2.70 AJH Lawyers Pty Ltd v Hamo [2010] VSC 225 ............................................................................. 5.35 AMC Commercial Cleaning (NSW) Pty Ltd v Coade [2013] NSWSC 192 .............................. 16.150 AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1988) 13 NSWLR 486 ................ 12.90 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 .......................... 1.75, 20.50 AWB Ltd v Cole (2006) 152 FCR 382 .......................................... 11.30, 11.45, 11.50, 11.130, 11.225 Aaronisle Pty Ltd v Thorpe [2005] WASC 87 ............................................................................. 15.110 Abdul-Karim v Attorney-General’s Department [1999] NSWSC 79 ............................. 16.130, 16.150 Abedi v Penningtons (a firm) [2000] 2 Costs LR 205 ................................................................... 3.215 Able Demolitions and Excavations v Barry Kenna & Co [2016] VSC 96 ................................... 15.65 Abriel v Rothman [2004] NSWCA 40 ........................................................................................... 5.315 Abruzzese v David Jones Ltd (No 1) [2003] FMCA 280 ............................................................ 16.100 Abse v Smith [1986] 1 QB 536 ............................................................................................. 8.10, 17.95 Accent Management Ltd v Commissioner of Inland Revenue [2013] 3 NZLR 364 .................... 17.20 Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325 ................ 17.80 Across Australia Finance Pty Ltd v Bassenger [2008] NSWSC 799 ................................. 3.130, 3.145 Actew Corporation Ltd v Mihaljevic [2007] ACTSC 39 .................................... 11.45, 11.100, 11.275 Acton v Graham Pearce & Co (a firm) [1997] 3 All ER 909 ....................................................... 5.335 Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152 ............................ 8.35 Adams v Bank of New South Wales [1984] 1 NSWLR 285 ...................................... 9.15, 9.65, 19.35 Adamson v Queensland Law Society Inc [1990] 1 Qd R 498 ........................................... 23.50, 23.85 Adamson v Williams [2001] QCA 38 ............................................................................................... 3.55 Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 ............................................................. 4.165 Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 .......................................... 11.250, 11.270 Admiral Management Services Ltd v Para-Protect Europe Ltd [2002] 1 WLR 2722 .................. 12.40 Afkos Industries Pty Ltd v Pullinger Stewart (a firm) [2001] WASC 69 ..................................... 17.60 Agassi v Robinson (Inspector of Taxes) [2006] 1 WLR 2126 ...................................................... 2.145 Agnew, Re (1981) 311 NW 2d 869 ................................................................................................ 19.50 Ahmu v R [2014] NSWCCA 312 ................................................................................................... 4.205 Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 948 .................... 12.15 Akins v Abigroup Ltd (1998) 43 NSWLR 539 .............................................................................. 11.25 Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 ............................ 16.15, 16.125, 16.135 Akzo Nobel Chemicals Ltd v Commission [2011] 2 AC 338 ....................................................... 13.50 Al-Kandari v J R Brown & Co (a firm) [1988] QB 665 ........................................ 21.10, 21.45, 22.10 Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd [2016] EWHC 486 (Comm) ... 12.20, 12.25, 12.35 Alessio v Daniels (unreported, SC(Vic), Kaye J, 19 October 1983) ............................................. 16.40 Alfred Crompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2) [1972] 2 QB 102 ....................................................................................................... 11.145, 13.05 Ali v New Zealand Law Society [2014] NZHC 1111 .................................................................... 2.125 Ali v R (2005) 79 ALJR 662 ............................................................................................... 4.200, 4.205 Alister v R (1984) 154 CLR 404 .................................................................................................... 18.10 Allen Allen & Hemsley v Deputy Commissioner of Taxation (1989) 20 FCR 576 ..................... 11.95 Allied Finance & Investments Ltd v Haddow & Co [1983] NZLR 22 ............................. 21.15, 22.10 Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 ............... 23.85 Allitt v Sullivan [1988] VR 621 ...................................................................................... 11.210, 11.215 Alpine Holdings Pty Ltd v Feinauer [2008] WASCA 85 .............................................................. 5.325 Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 3) (2009) 262 LSJS 265 ............. 12.30, 12.35 Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 5) (2010) 272 LSJS 1 .......................... 11.270 Amadio Pty Ltd v Henderson (1998) 81 FCR 149 .......................................................................... 5.70

Table of Cases xix

Ambarde v Attorney-General for Trinidad & Tobago [1936] AC 322 .......................................... 19.05 Amcor Ltd v Barnes [2011] VSC 341 ................................................................................. 11.55, 11.60 American Airlines Inc, Re (1992) 972 F 2d 605 ........................................................................... 8.270 Amirbeaggi v Business in Focus (Australia) Pty Ltd [2008] NSWSC 421 ....................... 14.90, 15.35 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 ............. 11.190, 11.195 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 ............................ 11.250 Anastaplo, Re (1961) 366 US 82 ...................................................................................................... 2.45 Andalee Pty Ltd v Delfield Investments Pty Ltd [2009] WASC 55 ................................................ 7.20 Andersen v Lockhart [1991] 1 Qd R 501 ..................................................................................... 16.100 Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22 ..................................... 17.190 Anderson, Marriage of (1982) FLC ¶91-251 .................................................................................. 4.140 Anglo-Dutch Petroleum v Greenberg Peden (2011) 352 SW 3d 445 ............................................. 3.25 Angus v McLachlan (1883) 23 Ch D 330 ...................................................................................... 16.90 Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 ................................................................. 4.05 Apotex Pty Ltd v Les Laboratoires Servier (No 5) (2011) 199 FCR 62 ...................................... 12.20 Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 ................................................. 11.125 Apple Inc v Samsung Electronics Co Ltd (No 2) [2012] FCA 1358 .......................................... 11.145 Appleby v Myers (1867) LR 2 CP 651 .......................................................................................... 3.200 Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 ......................................... 11.140 Archer Capital 4A Pty Ltd v Sage Group plc (No 2) (2013) 306 ALR 384 .............................. 11.145 Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112 ...................................... 21.135 Arndale v Kingley (No 3) [2011] FamCAFC 128 ....................................................................... 18.145 Arno v Forsyth (1986) 9 FCR 576 ............................................................................................... 11.210 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 . 3.150, 5.260, 5.275, 5.280, 5.285, 5.290, 5.295, 5.300, 5.305, 5.310, 5.345 Arundell v Williams Winter & Higgs (2005) 158 A Crim R 16 ................................................... 5.270 Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Ltd (No 2) [2014] FCA 481 .................................................................................................................................... 11.115 Ashby v Russell [1997] ANZ Conv R 321 .................................................................................... 5.175 Ashmore v Corporation of Lloyd’s [1992] 1 WLR 446 ................................................................ 17.40 Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 ...... 8.30, 8.40, 8.200 Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2007] NSWSC 350 .............. 8.200 Assistant Treasurer and Minister for Competition Policy and Consumer Affairs v Cathay Pacific Airways Ltd (2009) 179 FCR 323 .................................................................. 11.265 Astley v Austrust Ltd (1999) 197 CLR 1 ........................................................... 3.30, 4.155, 5.05, 5.65 Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22 ........................................................ 14.200 Atkinson v Pengelly [1995] 3 NZLR 104 ..................................... 16.10, 16.15, 16.45, 16.155, 21.100 Attard v James Legal Pty Ltd [2009] NSWSC 811 ....................................................................... 5.315 Attard v James Legal Pty Ltd (2010) 80 ACSR 585 .......................................................... 5.220, 5.315 Attorney-General v Bax [1999] 2 Qd R 9 .......... 19.45, 23.20, 23.105, 23.120, 23.130, 23.140, 25.15 Attorney-General v Clough [2002] 1 Qd R 116 ............................................................... 23.170, 25.15 Attorney-General v Gregory (unreported, CA(Qld), 4 December 1998) .................................... 17.160 Attorney-General v Kehoe [2001] 2 Qd R 350 .............................................................................. 23.65 Attorney-General v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 ........................ 15.80 Attorney-General v Trueman (1843) 11 M & W 694; 152 ER 983 ............................................ 16.100 Attorney-General v Walmsley (1843) 12 M & W 179; 152 ER 1160 ........................................ 16.100 Attorney-General (NT) v Kearney (1985) 158 CLR 500 .. 11.60, 11.65, 11.130, 11.145, 13.40, 13.45 Attorney-General (NT) v Maurice (1986) 161 CLR 475 ........... 11.05, 11.15, 11.225, 11.245, 11.260, 11.270 Attorney-General for Queensland v Lovitt [2003] QSC 279 ......................................................... 17.25 Attorney Grievance Commission v Lebowitz (1981) 431 A 2d 88 ............................................. 20.125

xx Table of Cases

Attorney Grievance Commission of Maryland v Shoup (2009) 410 Md 462 ..................... 3.60, 6.100 Attorney M v Mississippi Bar (1992) 621 So 2d 220 ................................................................. 21.180 Attorney U v Mississippi Bar (1996) 678 So 2d 963 ......................................................... 24.20, 24.25 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 ... 5.260, 5.270, 5.295, 5.310, 5.320, 5.325, 5.345 Auckland Standards Committee v Flewitt [2010] LCDT 12 ....................................................... 25.135 Auckland Standards Committee 3 of New Zealand Law Society v W [2011] 3 NZLR 117 ............................................................................................................................................... 22.50 Auckland Standards Committee No 1 v Murray [2014] NZLCDT 88 .......................................... 6.140 Auckland Standards Committee No 1 v Murray [2015] NZLCDT 6 ............................................ 6.140 Audsley v R (2014) 44 VR 506 .................................................................................................... 17.245 Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508 ........... 8.90, 8.270, 10.25 Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526 .............................................................................................................. 11.25 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547 ................................................................................................... 11.115, 11.170 Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) ATPR ¶42-200 ............................................................................................................................ 13.85 Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia SRL (No 2) (2012) 287 ALR 760 ............................................................................................ 11.260 Australian Competition and Consumer Commission v Sampson [2011] FCA 1165 ..... 21.135, 21.220 Australian Competition and Consumer Commission v Telstra Corp Ltd (2000) 96 FCR 317 ............................................................................................................................................. 11.170 Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 ...................................................................... 22.20, 22.25, 22.40, 22.45, 22.70 Australian Hospital Care Pty Ltd v Duggan (No 2) [1999] VSC 131 .................. 11.30, 11.140, 13.50 Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324 ................................................................................................................................................. 7.45 Australian Receivables Ltd v Tekitu Pty Ltd (deed administrators appointed) (2012) 260 FLR 243 ............................................................................................................................. 16.140 Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253 ...................... 11.105 Australian Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 .......................................................................................................................... 11.60, 11.65 Australian Securities and Investments Commission v Rich [2004] NSWSC 1089 ...................... 13.05 Australian Securities and Investments Commission v Somerville (2009) 77 NSWLR 110 ............................................................................................................................................. 21.135 Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 .................................................................................................................................. 11.75, 11.170 Austrust Ltd v Astley (1993) 60 SASR 354 ..................................................................................... 5.65 Austrust Ltd v Astley (1996) 67 SASR 207 ..................................................................................... 5.65 Autore v Folino-Gallo [2014] NSWSC 777 ................................................................................... 14.30 Aveling v UBS Capital Markets Australia Holdings Ltd (No 3) [2005] FCA 1320 ................... 11.100 Avonwick Holdings Ltd v Webinvest Ltd [2014] EWCA Civ 1436 .................................. 12.05, 12.80 Avonwick Holdings Ltd v Webinvest Ltd [2014] EWHC 3322 (Ch) ........................................... 12.10 Awwad v Geraghty & Co (a firm) [2001] QB 570 ...................................................................... 14.120

B B v Auckland District Law Society [2004] 1 NZLR 326 .............................................................. 11.15 B, Re [1981] 2 NSWLR 372 ............................... 2.35, 2.45, 2.130, 5.300, 17.65, 17.95, 19.05, 23.10 B (a Solicitor), Re [1986] VR 695 ............................................................................................... 23.100

Table of Cases xxi

BBGP Managing General Partner Ltd v Babcock & Brown Global Partners [2011] Ch 296 ............................................................................................................................................... 11.60 BF Goodrich Company v Formosa Plastics Corporation (1986) 638 F Supp 1050 .......... 8.190, 8.245 BGM v Australasian Lawyers Group Pty Ltd [2014] WASC 290 .............................................. 14.190 BHP Billiton Ltd v Parker (No 2) [2014] SASC 6 ...................................................................... 14.185 BJH v State of Western Australia [2011] WASCA 4 ..................................................................... 4.205 BRJ v Council of New South Wales Bar Association [2016] NSWSC 146 ...................... 6.40, 23.145 BT Australasia Pty Ltd v New South Wales (1996) 140 ALR 268 ............................................... 11.25 BT Australasia Pty Ltd v New South Wales (No 7) (1998) 153 ALR 722 ................................. 11.250 BT Australasia Pty Ltd v New South Wales (No 8) (1998) 154 ALR 202 ................................. 11.275 Babcock & Brown DIF III Global Co-Investment Fund LP v BBLP LLC [2015] VSC 453 ................................................................................................................................... 10.10, 10.20 Bachoo Mohan Singh v Public Prosecutor [2010] 1 SLR 966 ...................................................... 17.75 Bacon v Purcell (1916) 22 CLR 307 .............................................................................................. 3.215 Badenach v Calvert (2016) 90 ALJR 610 ...................................................................................... 21.75 Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 ..................................................... 17.20 Bailey v Director-General, Department of Land and Water Conservation (2009) 74 NSWLR 333 .................................................................................................................. 11.30, 11.270 Bailey v Raymond Sullivan McGlashan [1997] ANZ Conv R 620 .............................................. 7.120 Baird v Hastings & Co (Solicitors) [2014] PNLR 17 ............................................... 3.55, 5.100, 5.220 Baird v State Bar of Arizona (1971) 401 US 1 ................................................................................ 2.45 Baker v Campbell (1983) 153 CLR 52 ............. 4.70, 10.05, 10.40, 11.05, 11.10, 11.15, 11.55, 11.70, 11.135, 11.155, 11.205, 11.210, 11.225, 11.235 Baker v Evans (1987) 77 ALR 565 .............................................................................................. 11.185 Baker v Legal Services Commissioner (No 2) [2006] 2 Qd R 249 ....................... 3.195, 3.210, 25.70 Baker v Sheridan (2005) Aust Torts Reports ¶81-788 ................................................................... 5.100 Baker Johnson Lawyers v Jorgensen [2002] QDC 205 .................................................... 14.80, 14.140 Balabel v Air-India [1988] Ch 317 ............................................................................................... 11.130 Balamoan v Holden & Co (1999) 149 NLJ Rep 898 .................................................................... 5.195 Balch v Symes (1823) Turn & R 87; 37 ER 1028 ........................................................................ 16.90 Balkin v Peck (1998) 43 NSWLR 706 ........................................................................................... 19.70 Bandwill Pty Ltd v Spencer-Laitt (2000) 23 WAR 390 ............................................................... 17.230 Bank of Ireland Mortgage Bank v Coleman [2009] 3 IR 699 ................................ 22.10, 22.20, 22.30 Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (“The Good Luck”) [1992] 2 Lloyd’s Rep 540 ................................................................................. 11.190 Banksia Mortgages Ltd v Croker [2010] NSWSC 535 ................................................................ 11.245 Bannerman Brydone Folster & Co v Murray [1972] NZLR 411 .................................................. 5.165 Bannister, Re (1975) 5 ACTR 100 .................................................................... 1.90, 4.55, 13.05, 25.90 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 ................... 5.20, 5.50 Bar Association of Queensland v Lamb [1972] ALR 285 ................................................ 6.140, 17.180 Barbaro v R (2014) 253 CLR 58 .................................................................................................... 18.90 Barclay v Clarke (a firm) [2014] QSC 20 ...................................................................................... 14.60 Barclays Bank plc v Estates & Commercial Ltd [1997] 1 WLR 415 ......................................... 16.140 Barclays Bank plc v Eustice [1995] 4 All ER 511 ........................................................................ 11.60 Barclays Bank plc v Weeks Legg & Dean (a firm) [1998] 3 WLR 656 ...................................... 22.20 Bare v Small [2011] VSC 639 ............................................................................................. 11.30, 11.60 Bari v Rosen [2012] 5 Costs LR 851 ............................................................................................... 3.25 Bariamis v Coadys [2007] VCAT 645 ............................................................................................ 14.40 Barnes v Commissioner of Taxation (2007) 242 ALR 601 ........................................................... 11.30 Barnes v Commissioner of Taxation (2007) 64 ATR 553 .............................................................. 11.30 Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 ..................................... 12.05, 12.10, 12.20 Barneys Blu-Crete Pty Ltd v Australian Workers’ Union (1979) 43 FLR 463 .......................... 17.120

xxii Table of Cases

Barrak Corporation Pty Ltd v Kara Group of Companies Pty Ltd [2014] NSWCA 395 ............ 17.45 Barratt v Gough-Thomas [1951] Ch 242 ................................................................... 7.20, 16.20, 16.35 Barrett v Whitten (1992) 15 Fam LR 693 .................................................................................... 14.155 Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No 2) (2011) 193 FCR 479 ...................................................................................................................................... 12.15 Barristers’ Board v Darveniza (2000) 112 A Crim R 438 .................................... 2.100, 23.30, 25.135 Barristers’ Board v Marbellup Nominees Pty Ltd [1984] WAR 335 ............................................ 2.145 Barristers’ Board v Pratt [2002] QCA 532 ................................................................................... 25.115 Barristers’ Board v Young [2001] QCA 556 ................................................................... 23.135, 25.175 Barron v Ward Kellner Pty Ltd (2006) 17 NTLR 195 .................................................................... 8.30 Barrott v Barrott [1964] NZLR 988 ............................................................................................... 17.60 Barry v Butlin (1838) 2 Moo 480; 12 ER 1089 ............................................................................ 6.130 Bartle v GE Custodians [2010] 1 NZLR 802 ............................................................ 3.05, 5.130, 21.20 Bass (a Pseudonym) v R [2014] VSCA 350 .................................................................................. 4.205 Bassett, Re [1934] NZLR 690 .......................................................................................................... 9.40 Bates v State Bar of Arizona (1977) 433 US 350 .......................................................................... 20.05 Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 ............... 17.265 Batrouney v Forster [2016] VSCA 80 ............................................................................ 9.65, 9.70, 9.75 Baulch v Lyndoch Warrnambool Inc (2010) 27 VR 1 ................................................................... 17.30 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 ............................................................................................................................................. 17.245 Bayer v Balkin (1995) 31 ATR 295 ................................................................................................ 19.70 Bays v Theran (1994) 639 NE 2d 720 ........................................................................................... 8.190 Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1 ..................... 3.05, 4.185 Bear v Waxman [1912] VLR 252 ................................................................................................. 14.170 Beba Enterprises Pty Ltd v Gadens Lawyers (2013) 41 VR 590 .................................................. 15.65 Bechara v Atie [2005] NSWCA 268 ........................................................................ 16.65, 16.70, 16.75 Beckwith, Re (1993) 43 FCR 256 .................................................................................................. 15.30 Beevis v Dawson [1957] 1 QB 195 .............................................................................................. 21.140 Beggs v Attorney-General [2006] 2 NZLR 129 ............................................................................. 17.50 Bektas v McGarvie [2015] VSC 78 ................................................................................................ 23.10 Belan v Casey [2002] NSWSC 58 .................................................................................................... 8.30 Bell v Vahexi Pty Ltd (1998) 40 ATR 459 ..................................................................................... 5.255 Bell, Re [2005] QCA 151 ............................................................................................. 2.65, 2.90, 2.135 Bell, Re (unreported, CA(Qld), Thomas, Williams and Derrington JJ, 6 December 1991) ......................................................................................................................................... 23.145 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 225 FLR 1 ............ 3.80, 5.80 Bellanto, Ex parte [1963] NSWR 1556 .......................................................................................... 17.25 Belsham v Arthur [1992] ANZ Conv R 85 .................................................................................... 21.30 Bendigo and Adelaide Bank Ltd v Stamatis [2013] NSWSC 248 .............................................. 11.275 Benecke v National Australia Bank Ltd (1993) 35 NSWLR 110 ................................................. 10.90 Beneficial Finance Corporation Co Ltd v Conway (No 2) [1971] VR 594 ................................ 20.125 Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101 .............. 11.265 Bennett & Co v CLC Corporation (2001) 23 WAR 344 .................................................. 16.80, 16.105 Bennett Silvershein Associates v Furman (1991) 776 F Supp 800 ............................................... 8.190 Bentley v Gaisford [1997] QB 627 ............................................... 16.50, 16.75, 16.100, 16.105, 22.30 Berg, In the Matter of (1998) 955 P 2d 1240 ................................................................................ 6.145 Berger v United States (1935) 295 US 78 ...................................................................................... 18.35 Berjaya Group (Aust) Pty Ltd v Ariff [2007] NSWSC 174 .......................................................... 4.135 Bernard v State of Trinidad and Tobago [2007] 2 Cr App R 22 ................................................... 18.40 Berry v Kanakis (2002) NSW ConvR ¶56-022 .............................................................................. 4.170 Berry Trade Ltd v Moussavi [2003] EWCA Civ 715 .................................................................... 12.50

Table of Cases xxiii

Best Buy Co Worldwide Sales Corporation [2011] Bus LR 1166 ................................................ 12.25 Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30 ................................................................ 6.125 Bhanabhai v Commissioner of Inland Revenue [2007] 2 NZLR 478 ........................................... 22.65 Bhandari v Advocates Committee [1956] 1 WLR 1442 ..................................................... 23.10, 23.50 Biggar v McLeod [1978] 2 NZLR 9 ........................................................................ 5.265, 5.320, 5.325 Biggs v Hoddinott [1898] 2 Ch 307 ............................................................................................. 15.110 Bindon v Bishop [2003] 2 NZLR 136 .............................................................................................. 5.45 Binqld Finances Pty Ltd (in liq), Re (2015) 107 ACSR 163 ...................................................... 11.195 Biovision v CGU Insurance Ltd [2010] VSC 589 ......................................................................... 12.15 Birmingham (decd), Re [1959] 1 Ch 523 ....................................................................................... 16.50 Black v New Zealand Law Practitioners Disciplinary Tribunal (unreported, CA(NZ), 14 May 1999) ................................................................................................................................... 25.60 Black v Taylor [1993] 3 NZLR 403 ........................................... 1.125, 8.55, 8.60, 8.125, 8.140, 8.260 Blackwell v Barroile Pty Ltd (1994) 51 FCR 347 ........................................................................... 7.40 Blackwell v Chick [2015] NZCA 34 .............................................................................................. 4.160 Blanch v Deputy Commissioner of Taxation (2004) 58 ATR 113 ................................................ 22.35 Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48 ............................................ 14.60, 16.55 Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2014] 2 All ER 1104 ....................................................................................................... 3.205 Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015] 1 WLR 4307 ......................................................................................................... 3.205 Blumenfeld v Borenstein (1981) 276 SE 2d 607 ............................................................................. 7.60 Blyth and Fanshawe, Re (1882) 10 QBD 207 .................................................................. 3.105, 14.185 Blythe v Northwood (2005) 63 NSWLR 531 .................................................................................. 6.85 Boardman v Phipps [1967] 2 AC 46 ............................................................................ 4.55, 4.180, 6.80 Boase v Seven Network (Operations) Ltd [2005] WASC 174 ...................................................... 11.30 Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 ........................................ 5.170 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 ......... 5.165, 5.190, 5.205, 5.260, 5.280, 5.285, 5.295, 5.310, 5.315, 5.320 Bolger v Bolger (1985) 82 FLR 46 ........................................................................ 16.55, 16.60, 16.110 Bolitho v Banksia Securities Ltd (No 4) [2014] VSC 582 ............................................................ 17.20 Bolster v Law Society of New South Wales (unreported, CA(NSW), 20 September 1982) ......................................................................................................................................... 23.165 Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 ............... 16.25, 16.50, 16.75, 16.100, 16.110 Bolton v Law Society [1994] 1 WLR 512 ..... 1.85, 2.170, 4.05, 23.05, 23.20, 23.25, 23.105, 23.155, 23.170 Bond v Tuohy (1995) 56 FCR 92 ................................................................................................. 11.185 Bonds & Securities (Trading) Pty Ltd v Glomex Mines NL [1971] 1 NSWLR 879 ........... 6.05, 6.10 Bonsell v Development Consent Authority [2004] NTSC 64 ..................................................... 17.165 Borhani v Legal Practitioners Admissions Board [2013] QCA 14 ................................................ 2.125 Bosgard v Bosgard (2013) 49 Fam LR 612 ................................................................................... 17.20 Boulton Cleary & Kern, Matter of Bills of Costs of [1995] ANZ Conv R 321 ........................... 15.55 Bourdon, Re (1989) 565 A 2d 1052 ............................................................................................... 6.145 Bouttell v Rapisarda [2014] NSWSC 1192 .................................................................................... 17.90 Bowen v Stott [2004] WASC 94 ......................................................................................... 17.35, 17.50 Bowen, Matter of (1989) 542 NYS 2d 45 ...................................................................................... 6.145 Boyce v McIntyre (2009) 78 NSWLR 152 .................................................................................... 15.55 Boyce v Rendells [1983] 2 EGLR 146 ............................................................................................. 5.30 Boyd v Sandercock [1990] 2 Qd R 26 ......................................................................................... 18.120 Boyes v Collins (2000) 23 WAR 123 ................................................................................ 11.70, 11.110 Bracewell v Southall [2008] FamCA 687 ....................................................................................... 8.175 Brackenreg v KJB Law Pty Ltd (2015) 293 FLR 325 ................................................................ 16.125

xxiv Table of Cases

Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 ....................................... 3.200, 12.55 Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 ..................................................... 12.10, 12.20 Bradwell v Illinois (1873) 83 US 130 .............................................................................................. 2.40 Brady v Bale Boshev Solicitors (2009) 10 DCLR(NSW) 284 ...................................................... 14.80 Braham v Catalano [2013] VSC 437 ..................................................................................... 2.140, 3.10 Brakoulias v Karunaharan [2012] VSC 272 ................................................................................... 5.170 Brambles Holdings Ltd v Trade Practices Commission (No 3) (1981) 58 FLR 452 ...... 11.30, 11.180 Bransdon v Gilbert (2007) 212 FLR 28 ......................................................................................... 17.20 Bray v Ford [1896] AC 44 ................................................................................................................ 4.55 Break Fast Investments Pty Ltd v Rigby Cooke Lawyers (a firm) [2015] VSC 30 ....................... 8.85 Breen v Williams (1996) 186 CLR 71 .................................................................................. 4.40, 6.140 Brennan v McGuire [2008] ACTSC 119 ........................................................................................ 8.180 Brennan v State of Western Australia [2010] WASCA 19 ............................................................. 9.130 Brett v Solicitors Regulation Authority [2015] PNLR 2 ............................................................... 25.10 Brickenden v London Loan & Savings Co [1934] 3 DLR 465 .................................................... 4.185 Bridge Products Inc v Quantum Chemical Corporation 1990 WL 70857 .................................... 8.190 Bridges v Law Society of New South Wales [1983] 2 NSWLR 361 ................................ 2.175, 25.90 Bridgman, Re [1934] St R Qd 1 ................................................................................................... 23.155 Briginshaw v Briginshaw (1938) 60 CLR 336 ............................................................................... 23.50 Bristol & West Building Society v Fancy & Jackson (a firm) [1997] 4 All ER 582 ......... 5.90, 7.140 Bristol & West Building Society v May May & Merrimans (a firm) [1996] 2 All ER 801 ....................................................................................................................................... 5.90, 7.20 British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 ..... 8.40, 8.150, 8.270 British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524 .......................... 17.145 British Coal Corp v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113 .............................................. 11.255 British Waterways Board v Norman (1993) 26 HLR 232 ........................................................... 14.125 Broadbent v Medical Board of Queensland [2010] QCA 352 ........................................... 3.130, 3.145 Broadview Investments Co Pty Ltd v Corporate Interiors (New Zealand) Ltd (unreported, HC(NZ), Neazor J, 12 August 1998) .................................................................... 12.40 Brodie v Singleton Shire Council (2001) 206 CLR 512 ............................................................... 5.260 Brookfield v Yevad Products Pty Ltd [2006] FCA 1180 ............................................................. 11.170 Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1 ..................................................................................................................... 11.125 Brooke, Marriage of (unreported, Family Court (WA), 1994) ....................................................... 8.185 Brooks v Commissioner of Police of the Metropolis [2005] 1 WLR 1495 .................................. 18.45 Brooks v Medical Defence Association of Western Australia (1999) 94 FCR 164 ...................... 11.80 Brookville Carriers Flatbed GP Inc v Blackjack Transport Ltd (2008) 263 NSR (2d) 272 ................................................................................................................................... 8.105, 17.20 Brott v Maher (No 2) [2004] VSCA 220 ....................................................................................... 6.115 Brown v Bennett (No 2) [2002] 1 WLR 713 ............................................................................... 17.230 Brown v Daniel (1998) 180 FRD 298 ............................................................................................ 17.55 Brown v Federal Commissioner of Taxation (2002) 119 FCR 269 ................................... 12.15, 12.25 Brown v Guardian Royal Exchange Assurance plc [1994] 2 Lloyd’s Rep 325 ........................... 7.105 Brown v Inland Revenue Commissioners [1965] AC 244 ........................................ 1.125, 9.65, 23.85 Brown v Talbot & Olivier (1993) 9 WAR 70 .................................................... 14.175, 14.195, 14.200 Brownie Wills v Shrimpton [1998] 2 NZLR 320 .......................................................................... 21.15 Bruinsma v Menczer (1995) 40 NSWLR 716 ................................................................................ 12.95 Brunswick Hill Apartments Pty Ltd v CGU Insurance Ltd (2010) ANZ Ins Cas ¶61-870 ........................................................................................................................................ 11.50 Brusewitz v Brown [1923] NZLR 1106 ......................................................................................... 6.125 Bryant, Ex parte (1815) 1 Madd 49; 56 ER 19 ............................................................................. 16.15 Bryson v New South Wales Bar Association [2003] NSWADTAP 29 ....................................... 25.145

Table of Cases xxv

Buckingham County Council v Moran [1989] 3 WLR 152 .......................................................... 12.20 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705 .......................................................... 16.80, 16.100 Buick v Boesten [2013] FamCA 208 .............................................................................................. 8.265 Buksh v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 32 ...................................................................................................................................... 17.270 Bulk Materials (Coal Handling) Services Pty Ltd v Coal & Allied Operations Pty Ltd (1988) 13 NSWLR 689 ............................................................................................................ 11.190 Bullivant v Attorney-General (Vic) [1901] AC 196 ............................................... 11.15, 11.55, 11.185 Burbery Mortgage Finance & Savings Ltd (in receivership) v O’Neil [1995] ANZ Conv R 387 ................................................................................................................................. 22.75 Burbidge v Wolf [2008] NSWSC 60 .............................................................................................. 15.35 Bureau Interprofessionnel Des Vins de Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588 ..................................................................................................... 8.30, 8.210, 8.250 Burgess v McGarvie [2013] VSCA 142 ....................................................................................... 23.145 Burgess (Litigation Guardian of) v Wu (2003) 235 DLR (4th) 341 ............................................... 8.90 Burgundy Royale Investments Pty Ltd (receivers and managers appointed) (in liq) v Westpac Banking Corp (No 3) (1992) 37 FCR 492 ............................................................... 14.200 Burke v Chapman and Chubb (a firm) [2008] 2 FLR 1207 .......................................................... 3.180 Burke v LFOT Pty Ltd (2000) 178 ALR 161 .................................................................................. 3.60 Burmeister v O’Brien [2010] 2 NZLR 395 .................................................................................... 21.10 Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303 ............................. 5.15, 14.40 Bursill v Tanner (1885) 16 QBD 1 ................................................................................................. 11.85 Buseska v Sergio (1990) 102 FLR 157 .......................................................................................... 3.145 Butler v Countrywide Finance Ltd (1992) 5 PRNZ 447 ............................................................... 12.40 Butler v United States (1980) 414 A 2d 844 ................................................................................ 17.135 Buttes Gas and Oil Co v Hammer (No 3) [1981] QB 223 ............................................ 11.190, 11.260 Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (2009) 74 NSWLR 469 .............................................................................................................................. 11.115 Byrne v Production Magic Pty Ltd [2012] ACTSC 6 ................................................................... 8.265

C C-C Bottlers Ltd v Lion Nathan Ltd [1993] 2 NZLR 445 .............................................................. 9.95 CA & MEC McInally Nominees Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2001) 188 ALR 439 .............................................................................................................................. 5.115 CJ Redman Constructions Pty Ltd v Tarnap Pty Ltd [2006] NSWSC 173 ....................... 12.10, 12.15 CMA Assets Pty Ltd v John Holland Pty Ltd (No 4) [2013] WASC 77 ...................................... 12.80 CSR Ltd v D’Arcy [1999] NSWCA 216 ...................................................................................... 17.100 CT Bowring & Co (Insurance) Ltd v Corsi Partners Ltd [1994] 2 Lloyd’s Rep 567 ................ 17.260 CT Sheet Metal Works Pty Ltd v Hutchinson [2012] FCA 17 ...................................................... 22.10 CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588 ..................................................... 3.140 Cabassi v Vila (1940) 64 CLR 130 ................................................................................................ 5.290 Cachia v Hanes (1994) 179 CLR 403 ............................................................................................ 14.05 Cachia v Isaacs (1985) 3 NSWLR 366 ............................................................................... 3.200, 3.210 Cadbury Schweppes Inc v FBI Foods Ltd (1999) 167 DLR (4th) 577 .......................................... 4.55 Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) 246 ALR 137 ............................................... 11.170 Cadoks Pty Ltd v Wallace Westley & Vigar Pty Ltd (2000) 2 VR 569 ..................... 3.55, 5.35, 5.100 Cahill v Law Society of New South Wales (1988) 13 NSWLR 1 .................................................. 9.60 Calderbank v Calderbank [1976] Fam 93 ....................................................................................... 12.90 Caldwell v Sumpters [1972] Ch 478 ............................................................................................ 16.105 Caldwell v Treloar (1982) 30 SASR 202 ................................................................. 3.195, 3.210, 3.215 Callachor v Black (2000) 12 BPR 22,439 ...................................................................................... 7.120

xxvi Table of Cases

Cameron v Dennis (2006) 3 DCLR(NSW) 392 ............................................................................. 15.35 Cameron v Ofria [2008] NSWCA 159 ............................................................................................. 3.45 Camp v Legal Practitioners Complaints Committee [2007] WASC 309 .................................... 17.220 Campbell v Hamlet [2005] 3 All ER 1116 ..................................................................................... 23.50 Campbell, Ex parte (1870) LR 5 Ch App 703 ............................................................................... 11.90 Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386 ............................... 14.120 Campbelltown City Council v Toth (2004) 135 LGERA 336 ....................................................... 17.80 Canada Southern Petroleum v Amoco Canada Petroleum (1997) 48 Alta LR (3d) 382 ... 1.125, 8.240 Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 .. 7.40, 7.45, 7.80, 7.85, 8.150, 8.270, 17.20 Canadian Pacific Railway Co v Aikins, MacAulay & Thorvaldson (1998) 157 DLR (4th) 473 ............................................................................................................. 8.150, 8.260, 13.115 Canatan Holdings Pty Ltd v Audori Pty Ltd (unreported, FCA, Einfeld J, 1 August 1994) ......................................................................................................................................... 16.130 Canberra Residential Developments Pty Ltd v Brendas [2009] FCA 1484 ......................... 8.95, 20.90 Cannon v Tahche (2002) 5 VR 317 ..................................................................................... 18.45, 18.70 Canterbury-Westlands Standards Committee v Taffs [2013] NZLCDT 13 ................................. 25.150 Cao, Re [1996] ANZ Conv R 321 ..................................................................................... 16.50, 16.100 Capebay Holdings Pty Ltd v Sands [2002] WASC 287 .................................................................. 5.45 Capital Brake Service Pty Ltd v Meagher [2003] NSWCA 225 ................................................... 5.185 Capital Fire Insurance Association, Re (1883) 24 Ch D 408 ........................................... 16.80, 16.100 Carew Counsel Pty Ltd v French (2002) 4 VR 172 ......................................................... 5.165, 16.140 Carey v Freehills (2013) 303 ALR 445 ............................................................................... 13.60, 21.10 Carey v Korda (2012) 45 WAR 181 ............................................................................................. 11.100 Carey v Korda (No 2) (2011) 85 ACSR 331 ................................................................................ 11.100 Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 ... 8.30, 8.70, 8.90, 8.100, 8.120, 8.125 Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 .............. 5.55, 5.190, 5.200, 5.255 Carr v Inland Revenue Commissioners [1944] 2 All ER 163 ......................................................... 1.20 Carr v Swart [2007] NSWCA 337 ......................................................................... 5.100, 5.105, 20.120 Carr-Glynn v Frearsons (a firm) [1999] Ch 326 ............................................................................ 21.70 Carradine Properties Ltd v D J Freeman & Co [1999] Lloyd’s Law Rep PN 483 .............. 5.40, 5.45 Carrell v Carrell [1975] 2 NZLR 441 ................................................................................. 3.100, 3.145 Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 183 CLR 121 ........ 10.80, 11.15, 11.230 Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 ..... 8.125, 8.150, 21.115 Carver v Law Society of New South Wales (1998) 43 NSWLR 71 ................................. 23.55, 23.70 Carver v Legal Profession Disciplinary Tribunal (1991) 7 LPDR 8 ........................................... 21.100 Casey v Quabba [2005] QSC 356 ................................................................................................... 14.40 Cassaniti v Paragalli (2006) 229 ALR 416 ..................................................................................... 11.95 Cassegrain v CTK Engineering Pty Ltd [2008] NSWSC 457 ....................................................... 15.80 Cassis v Kalfus [2003] NSWSC 649 .............................................................................................. 6.100 Cassis v Kalfus (No 2) [2004] NSWCA 315 ................................................................................. 6.100 Castel Electronics Pty Ltd v Wilmoth Field Warne (a firm) [2012] VSC 481 ............................. 16.75 Castlereagh Motels Ltd v Davies-Roe (1967) 67 SR (NSW) 279 .................................................. 6.25 Catto v Hampton Australia Ltd (in liq) (2007) 251 LSJS 164 .................................................... 14.200 Causevic v The Queen (2008) 190 A Crim R 416 ......................................................................... 18.40 Cavell Leitch Pringle & Boyle v Thornton Estates Ltd [2008] 3 NZLR 637 ................................ 5.45 Celanese Canada Inc v Murray Demolition Corp [2006] 2 SCR 189 ......................................... 11.285 Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 .................................................................... 5.175 Cerini v McLeods (a firm) [2004] WASC 45 ............................................................................... 14.190 Chaina v Presbyterian Church (NSW) Property Trust (No 4) [2011] NSWSC 524 ..................... 16.65

Table of Cases xxvii

Chakera v Kuzamanovic [2003] VSC 92 ....................................................................................... 14.60 Chamberlain v Australian Capital Territory Law Society (1993) 43 FCR 148 ...................................... Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 ................................... 21.210 Chamberlain v Deputy Commissioner of Taxation (1991) 28 FCR 21 ....................................... 21.210 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 ....... 1.15, 1.125, 21.210, 21.215, 23.85, 23.110 Chamberlain v Ormsby [2005] NSWCA 454 ................................................................................. 5.325 Chamberlain v R (No 2) (1984) 153 CLR 521 .............................................................................. 4.200 Chamberlains v Lai [2007] 2 NZLR 7 . 5.260, 5.275, 5.280, 5.290, 5.295, 5.300, 5.305, 5.310, 5.320 Chan v Batemans [2009] WASC 177 ........................................................................................... 14.190 Chancliff Holdings Pty Ltd v Bell [1999] FCA 1783 .................................................................... 5.195 Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675 .............................................. 4.160 Chant v Brown (1849) 7 Hare 79; 68 ER 32 ............................................................................... 11.185 Chant v Brown (1852) 9 Hare 790; 68 ER 735 ........................................................................... 11.100 Chapman v Allan (1999) 74 SASR 274 ......................................................................................... 12.80 Chapman v Rogers [1984] 1 Qd R 542 .......................................................................................... 17.45 Chapman, Re [1977] 2 NZLR 196 ................................................................................................ 13.110 Chapple, Re (1884) 27 Ch 584 ....................................................................................................... 14.70 Chapters Inc v Davies, Ward & Beck LLP (2001) 52 OR (3d) 566 ............................................. 8.105 Cheddar Valley Engineering Ltd v Chaddlewood Homes Ltd [1992] 1 WLR 820 ...................... 12.25 Chen v City Convenience Leasing Pty Ltd [2005] NSWCA 297 ............................................... 11.250 Chen v Gu [2011] NSWSC 1622 .................................................................................................... 5.240 Cheney v Queensland Law Society Inc [2001] QSC 338 .............................................................. 25.90 Chern v Chern (2006) 263 DLR (4th) 318 ..................................................................................... 8.255 Chester v Cassidy Gibson Howlin (1995) 18 Fam LR 463 ......................................................... 16.130 Chisholm v State Transport Authority (1986) 41 SASR 317 ........................................................ 3.195 Christie v Wilson [1998] 1 WLR 1694 ........................................................................................... 8.110 Chubb, Matter of (1887) 3 QLJR 35 ............................................................................................ 21.225 Church v Price [2000] NSWSC 754 ............................................................................................... 10.25 Churchill v Connolly [2004] NSWCA 212 ...................................................................................... 7.85 Citibank Ltd, Re [1989] 1 Qd R 516 ................................................................................ 11.145, 13.40 Citibank Savings Ltd v Nicholson (1997) 70 SASR 206 .............................................................. 5.120 Citic Pacific Ltd v Secretary for Justice [2016] 1 HKC 157 ....................................................... 11.180 Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398 ............................................................ 5.135 Clairs Keeley (a firm) v Treacy (2003) 28 WAR 139 .................................................................. 14.120 Clairs Keeley (a firm) v Treacy [2005] WASCA 86 ...................................................................... 3.200 Clare v Joseph [1907] 2 KB 369 .................................................................................................. 14.150 Clark v Baker (1987) 4 BPR 9,476 .......................................................................... 7.80, 7.120, 20.180 Clark v Lucas Solicitors LLP [2010] 2 All ER 955 ...................................................................... 22.25 Clark, Greatbatch, White & White v R (1996) 91 A Crim R 46 ....................................... 4.210, 7.100 Clark Boyce v Mouat [1993] 3 NZLR 641 ............................................................... 5.130, 7.80, 7.120 Clarke v Great Southern Finance Pty Ltd (in liq) [2012] VSC 260 ............................................ 11.200 Clarkson v Clarkson (1972) 19 FLR 112 ..................................................................................... 18.130 Clay v Karlson (1997) 17 WAR 493 ................................................................................... 17.45, 17.60 Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 .............................................................................................................................. 11.55 Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 ................................................. 17.20 Clifford Harris & Co v Solland International Ltd [2005] 2 All ER 334 ........................... 16.90, 16.95 Clone Pty Ltd v Players Pty Ltd (in liq recs appt) (2012) 279 LSJS 1 ........................................ 11.55 Clos v Pugia (1992) 420 SE 2d 774 ............................................................................................. 21.270 Clowes, Ex parte (1968) 87 WN (Pt 1) (NSW) 364 ........................................................................ 6.40

xxviii

Table of Cases

Clyne v New South Wales Bar Association (1960) 104 CLR 186 ......... 5.315, 14.120, 17.75, 17.220, 23.25 Coadys (a firm) v Getzler (2007) 18 VR 288 .............................................................................. 14.105 Coburn v Colledge [1897] 1 QB 702 .................................................................................. 15.20, 15.30 Cockburn v Edwards (1881) 18 Ch D 449 ................................................................................... 15.110 Cockburn v GIO Finance Ltd [1996] NSWCA 109 ......................................................................... 5.75 Cockerill v Collins [1999] 2 Qd R 26 .......................................................................................... 11.225 Coe v New South Wales Bar Association [2000] NSWCA 13 ........................... 17.110, 23.60, 25.175 Cole v Elders Finance & Investment Co Ltd [1993] 2 VR 356 .................................................... 11.75 Coll v Floreat Merchant Banking Ltd [2014] EWHC 1741 (QB) .......................... 22.20, 22.25, 22.30 Colley v State of Western Australia [2015] WASCA 79 ................................................................ 4.205 Collins Thomson v Clayton [2002] NSWSC 366 .......................................................................... 12.20 Colonial Portfolio Services Ltd v Nissen (2000) 35 ACSR 673 ................................................... 8.265 Color Point Pty Ltd v Markby’s Communication Group Pty Ltd (unreported, FCA, Weinberg J, 27 November 1998) ................................................................................ 16.140, 16.150 Comcare v Foster (2006) 150 FCR 301 ........................................................................................ 11.110 Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 ............................................ 5.175 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 ........................................................................................................... 11.55, 11.65, 11.75, 11.175 Commisso v United Telecasters Sydney Pty Ltd [1999] NSWSC 51 ........................................... 19.40 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 .................................................. 4.175 Commonwealth v Vance (2005) 224 FLR 243 ........................................... 11.140, 13.40, 13.45, 13.50 Commonwealth Bank of Australia v Cooke [2000] 1 Qd R 7 .................................................... 17.175 Commonwealth Bank of Australia v Jackson McDonald (a firm) [2014] WASC 301 ................. 17.20 Commonwealth Bank of Australia v Kyriackou [2008] VSC 146 ....................................... 8.35, 8.155 Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 .................................................. 7.120 Compass Airlines Pty Ltd, Re (1992) 35 FCR 447 ...................................................................... 11.185 Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 ....... 11.170, 11.275 Computer Accounting & Tax Pty Ltd v Bowen Buchbinder Vilensky [2009] WASC 171 ............................................................................................................................................. 14.190 Concat LP v Unilever, PLC (2004) 350 F Supp 2d 796 ................................................................. 7.85 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 ........................................ 5.15 Condon v Legal Practitioners Conduct Board (2004) 234 LSJS 314 .......................................... 23.145 Connell v Odlum [1993] 2 NZLR 257 ........................................................................................... 21.65 Connell v Pistorino [2009] VSC 289 ................................................................................................ 8.40 Connolly v Dale [1996] QB 120 ................................................................................................... 17.175 Connolly v Standard Telephones and Cables Pty Ltd (1991) 28 FCR 581 .................................. 16.65 Connor (Debtors), Re [1996] 1 NZLR 244 .................................................................................... 12.55 Conquest v Maffey (1897) 22 VLR 616 ......................................................................................... 16.65 Conroy, Marriage of (1990) 103 FLR 233 ................................................................................... 16.100 Consortium Centre Pty Ltd, In the Matter of the [2012] NSWSC 898 ........................................ 17.20 Contractors Bonding Ltd v Snee [1992] 2 NZLR 157 .................................................................. 6.125 Contractors Bonding Ltd v Waterhouse [2012] 3 NZLR 826 ..................................................... 14.120 Cook v Leonard [1954] VLR 591 ...................................................................................... 11.85, 11.120 Cooke, Re (1889) 5 TLR 407 ........................................... 4.05, 17.95, 17.120, 17.220, 17.260, 21.205 Coomber, Re [1911] 1 Ch 723 ........................................................................................................ 6.130 Cooper v Winter [2013] NSWCA 261 .............................................................................................. 8.40 Cooper v van Heeren [2007] 3 NZLR 783 .................................................................................... 12.20 Cooperative Law Co, Re (1910) 198 NY 479 .............................................................................. 20.135 Copeland v Smith [2000] 1 WLR 1371 .......................................................................................... 17.80 Copini [1994] NSWLST 25 ............................................................................................................ 22.05 Coppola v Nobile (2012) 279 LSJS 543 ............................................................................. 17.45, 17.50

Table of Cases xxix

Cornall v Nagle [1995] 2 VR 188 ......................................................................................... 1.25, 2.145 Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 ......................................... 11.235 Corporate Group Holdings v Corporate Resources Group Ltd [1991] 1 NZLR 115 ................. 11.260 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 74 ALR 428 ..................... 8.120 Cosgriff v Issac Brott & Co [2008] VSC 515 ................................................................................ 16.70 Coshott v Sakic (1998) 45 NSWLR 667 ................................................................................. 3.55, 3.60 Coshott v Stegnajic [1984] 2 NSWLR 632 ....................................................................... 16.80, 16.160 Costa v Murcia Pestell Hillard Pty Ltd [2013] WASC 44 ............................................................. 14.80 Costa Rica Railway Co Ltd v Forwood [1901] 1 Ch 746 ............................................................. 4.180 Couch v United States (1973) 409 US 322 .................................................................................. 11.135 Council of the New South Wales Bar Association v Dwyer [2015] NSWCA 302 ...................... 2.140 Council of the Law Institute of Victoria v A Solicitor [1993] 1 VR 361 .............................. 7.25, 7.90 Council of the Law Society of New South Wales v Arraj [2014] NSWCATOD 117 .................... 4.30 Council of the Law Society of New South Wales v Beazley [2012] NSWADT 153 ................. 21.100 Council of the Law Society of New South Wales v Byrnes [2016] NSWCATOD 64 ............... 21.240 Council of the Law Society of New South Wales v Etherington [2016] NSWCATOD 31 ............................................................................................................................................... 25.155 Council of the Law Society of New South Wales v Gallego (No 2) [2015] NSWCATOD 10 ......................................................................................................................... 23.25 Council of the Law Society of New South Wales v Green (No 2) [2009] NSWADT 297 ................................................................................................................................. 23.130, 25.05 Council of the Law Society of New South Wales v Griffin [2016] NSWCATOD 40 ................. 25.40 Council of the Law Society of New South Wales v Narayanasamy [2014] NSWCATOD 18 ......................................................................................................................... 21.95 Council of the Law Society of New South Wales v Prosilis [2013] NSWADT 151 .................... 16.20 Council of the Law Society of New South Wales v Prosilis (No 2) [2014] NSWCATOD 2 ........................................................................................................................... 16.20 Council of the Law Society of New South Wales v Sandroussi [2012] NSWADT 40 ......... 4.25, 4.30 Council of the Law Society of New South Wales v Selim [2016] NSWCATOD 29 ................... 25.25 Council of the Law Society of New South Wales v Seymour [1999] NSWCA 117 .................... 2.145 Council of the Law Society of New South Wales v Treanor [2009] NSWADT 115 ................... 23.25 Council of the Law Society of New South Wales v Vaughan [2015] NSWCATOD 156 .............. 6.50 Council of the Law Society of New South Wales v Webb [2013] NSWCA 423 ......................... 23.90 Council of the Law Society of New South Wales v Wilson [2015] NSWCATOD 93 ................. 25.20 Council of the Law Society of the Australian Capital Territory v Legal Practitioner RH (No 2) [2015] ACAT 68 ............................................................................................................. 24.45 Council of the Law Society of the Australian Capital Territory v Legal Practitioner Y [2013] ACAT 8 ......................................................................................................................... 23.150 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D1” [2014] ACAT 17 .................................................................................................. 23.90, 25.155 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D2” [2014] ACAT 6 ................................................................................................................. 23.90 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D3” [2015] ACAT 7 ................................................................................................................. 24.10 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “HA” [2016] ACAT 55 .............................................................................................................. 23.90 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “N1” [2016] ACAT 36 ............................................................................................................... 23.90 Council of the New South Wales Bar Association v Hart [2011] NSWCA 64 ............................ 25.10 Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 ..................... 25.40 Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 ........... 2.140, 2.145 Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768 ....... 23.45, 25.145

xxx Table of Cases

Council of the New South Wales Bar Association v Franklin (No 2) [2014] NSWCA 428 ............................................................................................................................................. 25.110 Council of the New South Wales Bar Association v Perry [2007] NSWCA 111 ......................... 2.140 Council of the New South Wales Bar Association v Power (2008) 71 NSWLR 451 .................. 23.45 Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 .................... 23.160 Council of the New South Wales Bar Association v Slowgrove [2009] NSWADT 150 .............. 25.40 Council of the Queensland Law Society v Tunn [2004] QCA 412 ............................................. 23.125 Council of the Queensland Law Society Inc v Cummings [2004] QCA 138 .... 23.120, 23.140, 25.90 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 ....... 14.175, 14.205, 23.25, 25.75, 25.80 Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42 ........... 23.145, 25.10, 25.50 Council of the Queensland Law Society Inc v Whitman [2003] QCA 438 .................................. 24.30 Council of the Queensland Law Society Inc v Wright [2001] QCA 58 ....................................... 25.10 Countess Fitzwilliam v Inland Revenue Commissioners [1993] BTC 8003 ................................. 19.60 Country Law Services Pty Ltd v Duff (2007) 13 BPR 24,953 ....................................................... 6.65 Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 ... 22.05, 22.10, 22.30, 22.45, 22.55 County Personnel (Employment Agency) Ltd v Alan R Pulver & Co [1987] 1 WLR 916 ................................................................................................................................................. 5.65 Court v Berlin [1897] 2 QB 396 ..................................................................................................... 3.200 Courtney v State of Tasmania [2000] TASSC 83 .......................................................................... 18.45 Cousins v Cousins (unreported, CA(NSW), 18 December 1990) ................... 5.30, 5.75, 5.145, 5.195 Cowell v Simpson (1809) 16 Ves 275; 33 ER 989 ........................................................................ 16.90 Cox v Mosman & Isles, Love & Co [1909] St R Qd 45 ............................................................ 21.105 Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 ............................................................................................................... 3.95 Craig, Re (1952) 52 SR (NSW) 265 .............................................................................................. 14.70 Creative Typographics Pty Ltd v Glade-Wright [1999] TASSC 20 .............................................. 5.190 Credit Lyonnais SA v Russell Jones & Walker (a firm) [2003] Lloyd’s Rep PN 7 ....................... 5.35 Cressy v Johnson (No 2) [2009] VSC 42 ..................................................................................... 17.220 Crick, Re (1907) 7 SR (NSW) 576 ................................................................................................ 25.05 Crossley v Crowther (1851) 9 Hare 384; 68 ER 556 ...................................................................... 3.55 Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 .......................................................... 13.85 Curnuck v Nitschke [2001] NSWCA 176 ........................................................................................ 5.30 Currie v Commissioners of Inland Revenue [1921] 2 KB 332 ....................................................... 1.20 Cutts v Head [1984] Ch 290 ......................................................................... 12.05, 12.30, 12.80, 12.90 Côté v Rancourt [2004] 3 SCR 248 ................................................................................................. 5.25

D D v Hall [1984] 1 NZLR 727 ......................................................................................................... 4.190 D v NSPCC [1978] AC 171 ............................................................................................... 10.40, 11.135 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 ........ 8.50, 8.55, 8.85, 8.90, 8.95, 8.120, 8.140, 8.210, 8.220 D A Starke Pty Ltd v Yard [2012] SASC 19 ...................................................................... 10.65, 14.40 D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 ........... 25.70, 25.80 D’Alessandro & D’Angelo v Cooper (unreported, SC(WA), Owen J, 9 May 1995) ................... 25.80 D’Amore Construction (Windsor) Ltd v Lawyer’s Professional Indemnity Co (2005) 249 DLR (4th) 467 ..................................................................................................................... 21.10 D’Apice v Gutkovich (No 1) [2010] NSWSC 1336 .................................................................... 11.185 DJ Investment Group LLC v DAE/Westbrook LLC (2006) 147 P 3d 414 .................................. 17.55 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 .... 3.150, 3.170, 5.10, 5.260, 5.270, 5.275, 5.280, 5.285, 5.290, 5.295, 5.300, 5.305, 5.310, 5.320, 5.330, 5.335, 5.345, 20.05

Table of Cases xxxi

DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 .......................................... 11.70, 11.130 DTC (CNC) Ltd v Gary Sargeant & Co (a firm) [1996] 1 WLR 797 .......................................... 16.80 Dagle v Dagle Estate (1990) 70 DLR (4th) 201 .............................................................................. 9.40 Daher v Halabi [2014] FamCA 675 ................................................................................................ 8.165 “Daily Express” (1908) Ltd v Mountain (1916) 32 TLR 592 ..................................................... 11.100 Daintrey, Re [1893] 2 QB 116 ........................................................................................................ 12.10 Dale v Clayton Utz (a firm) (No 2) [2013] VSC 54 .......................................................... 1.125, 17.20 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 ....... 11.30, 11.70, 11.115 Dallison v Caffrey [1963] 1 QB 348 .............................................................................................. 18.55 Daly v Sydney Stock Exchange Ltd (1985) 160 CLR 371 ........................................................... 9.125 Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850 ................................................................................................................................... 6.145 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 ........................................................................................... 11.235 Darvall McCutcheon (a firm) v HK Frost Holdings Pty Ltd (in liq) (2002) 4 VR 570 .............. 5.205 Davey v Woolley, Hames, Dale & Dingwall (1982) 133 DLR (3d) 647 ........................................ 7.05 David v David [2009] NSWCA 8 ................................................................................................... 21.10 Davies v Camilleri (2000) 10 BPR 18,345 ........................................................................... 5.40, 5.110 Davies v Clough (1837) 8 Sim 262; 42 ER 171 .................................................................. 8.10, 17.20 Davies v Harrington (1980) 115 DLR (3d) 347 ............................................................................. 11.40 Davies & Davies v Nyland & O’Neil (1974) 10 SASR 76 ........................................................... 12.20 Davis, Re (1947) 75 CLR 409 ............................................................. 2.90, 2.95, 17.95, 23.10, 23.100 Davis, Re (unreported, CA(NSW), 27 October 1978) ..................................................................... 2.95 Davison v Council of the New South Wales Bar Association (2007) 69 ATR 402 ................... 25.170 Dawson v Law Society of New South Wales (unreported, CA(NSW), 21 December 1989) ................................................................................................................................ 2.165, 2.170 Day v Mead [1987] 2 NZLR 443 ..................................................................................................... 6.30 Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 ...................................................... 17.155, 24.10 Day v Rogers [2011] NSWCA 124 ................................................................................................. 5.320 Day, Marriage of (1994) 115 FLR 172 ............................................................................. 12.85, 18.130 De Groot v Nominal Defendant [2005] NSWCA 61 ................................................................... 21.190 De Groot, Re [2001] 2 Qd R 359 ................................................................................................. 16.140 De Jesus v R (1986) 61 ALJR 1 ..................................................................................................... 18.30 De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 ........ 23.20, 25.70, 25.75 De Pardo v Legal Practitioners Complaints Committee [2003] WASCA 274 .............................. 23.15 De Silva v The Queen (2013) 236 A Crim R 214 ......................................................................... 4.210 Deacon v Australian Capital Territory (2001) 147 ACTR 1 ........................................................ 17.175 Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 318 ALR 507 ................................................................................................................................ 8.40 Dean v Allin & Watts [2001] 2 Lloyd’s Rep 249 ............................................................... 21.10, 21.30 Defteros v Scott [2014] VSC 205 ................................................................................................... 2.145 Defteros v Scott [2014] VSCA 154 ................................................................................................ 2.145 Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 ...................................................................... 17.265 Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 .......................... 3.200, 3.210, 5.315 Del Castillo, Re (1998) 136 ACTR 1 .................................................................................... 2.90, 2.105 Deloitte Touche Tohmatsu v Cridlands Pty Ltd (2003) 134 FCR 474 .......................................... 4.160 Demer, Re [1967] 1 NSWR 167 ..................................................................................................... 23.45 Demetrios, Re [1993] 3 LPDR 3 .................................................................................................... 25.25 Dempsey v Legal Practitioners Admissions Board [2013] QCA 193 ................................ 2.170, 2.185 Dennis v Cameron [2007] NSWCA 228 ........................................................................................ 15.35 Dennis, Application of (unreported, CA(NSW), Samuels, Mahoney and Hope JJA, 23 December 1988) .............................................................................................................. 2.165, 2.170

xxxii

Table of Cases

Dennis Hanger Pty Ltd v Brown [2007] VSC 495 ........................................................................ 8.265 Deo, Re Application by (2005) 16 NTLR 102 ............................................................................... 2.115 Dessau v Peters, Rushton & Co Ltd [1922] 1 Ch 1 .................................................................... 16.100 Devy, Re (1996) 67 FCR 355 ......................................................................................................... 15.30 Dew v Richardson [1999] QSC 192 ................................................................... 3.55, 5.20, 5.50, 5.225 Di Suvero v New South Wales Bar Association [2001] NSWADTAP 9 ...................................... 25.40 Dibbs and Farrell, Re (1941) 41 SR (NSW) 249 ........................................................................... 15.75 Dicas v Stockley (1836) 7 C & P 587; 173 ER 258 ................................................................... 16.105 Dickie, Re (1916) 23 BCR 538 ........................................................................................................ 3.55 Diehm v Director of Public Prosecutions (Nauru) (2013) 88 ALJR 34 ........................................ 18.85 Dimos v Hanos [2001] VSC 173 ...................................................................................................... 3.45 Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63 ............... 11.70, 11.170 Dingwall v Commonwealth (1992) 39 FCR 521 ......................................................................... 11.255 Dinsdale v Commissioner of Inland Revenue (1998) 18 NZTC 13,583 ..................................... 11.135 Director of Consumer Affairs Victoria v Scully (No 2) [2011] VSC 239 ..................... 17.245, 21.275 Director of Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969 ............. 3.20 Director of Public Prosecutions v Avery (2009) 18 Tas R 401 ..................................................... 9.130 Director of Public Prosecutions v Ryan (unreported, FC(Vic), 7 April 1986) .............................. 9.130 Director of Public Prosecutions v Terrick (2009) 24 VR 457 ....................................................... 18.90 Director of Public Prosecutions v Werden [2006] VSC 397 ......................................................... 9.130 Director of Public Prosecutions (Cth) v A Legal Practitioner [2012] WASC 459 ............ 8.115, 8.145 Director of Public Prosecutions (Cth) v Kane (1997) 140 FLR 468 ........................................... 11.275 Director of Public Prosecutions (Cth) v Saxon (1992) 28 NSWLR 263 ...................................... 13.85 Director of Public Prosecutions (WA) v Bennett & Co (a firm) (2005) 151 A Crim R 516 ................................................................................................................................................. 8.90 Disciplinary Counsel v Furth (2001) 754 NE 2d 219 .................................................................... 20.75 Discipline of Bergren, Matter of (1990) 455 NW 2d 856 ............................................................. 6.145 District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258 ................................ 11.30 Dixon v Legal Practice Board of Western Australia [2012] WASC 79 .................. 2.165, 2.175, 2.185 Dixons Stores Group Ltd v Thames Television plc [1993] 1 All ER 349 .................................... 12.25 Dobler v Halverson (2007) 70 NSWLR 151 .................................................................................. 5.170 Doe d Bennett v Hale (1850) 15 QB 171; 117 ER 423 .................................................................. 3.40 Domain Paper (Australia) Pty Ltd v Galloway [2014] FCA 936 .................................................. 11.30 Dominic v Riz (2009) NSW ConvR ¶56-248 ................................................................................ 5.135 Donaghy v Council of Law Society of New South Wales (No 3) [2014] NSWCATOD 32 ............................................................................................................................................... 21.150 Donaghy v Council of the Law Society of New South Wales (No 2) [2015] NSWCA 224 ....................................................................................................... 24.40, 24.105, 24.140, 24.155 Donellan v Watson (1990) 21 NSWLR 335 ........................ 3.130, 3.145, 5.320, 5.325, 5.335, 11.175 Donnellan v Woodland (2012) NSW ConvR ¶56-307 ........................................................ 5.165, 5.325 Doolan v Renkon Pty Ltd (2011) 21 Tas R 156 .............................................................................. 5.55 Doran Constructions Pty Ltd (in liq), Re (2002) 168 FLR 116 .................................................. 11.195 Dore v Billinghurst [2006] QSC 140 .............................................................................................. 6.130 Doré v Barreau du Québec [2012] 1 SCR 395 ................................................................. 21.150, 25.40 Dow Chemical Canada Inc v Nova Chemicals Corp (2011) 205 ACWS (3d) 853 .......... 1.130, 8.200 Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386 ...................................................... 12.30, 12.80 Downey v O’Connell [1951] VLR 117 .......................................................................................... 13.70 Doyles Construction Lawyers v D’Jamirze [2004] NSWSC 507 ................................................ 16.125 Doyles Construction Lawyers v Harsands Pty Ltd (unreported, SC(NSW), McLelland CJ in Eq, 24 December 1996) ...................................................................................... 16.75, 16.150 Drake v Wight & Strickland Lawyers [2015] NSWSC 1090 ........................................................ 5.315 Drew, Re (1920) 20 SR (NSW) 463 ................................................................................. 23.20, 23.105

Table of Cases xxxiii

Dual Homes Victoria Pty Ltd v Moores Legal Pty Ltd [2016] VSC 86 ......................................... 5.15 Dubai Aluminium Co Ltd v Al Alawi [1999] 1 WLR 1964 .......................................................... 11.55 Duchess of Argyll v Beuselinck [1972] 2 Lloyd’s Rep 172 .......................................................... 5.185 Duchess of Argyll v Duke of Argyll [1967] 1 Ch 302 .................................................................. 8.165 Dundee Beach Pty Ltd v Maher [2006] NTSC 96 ............................................................... 8.30, 17.50 Dunstan, Re (2000) 155 FLR 189 .................................................................................................. 5.315 Durban Roodepoort Deep Ltd v Reilly [2004] WASC 269 ................................................ 8.120, 8.265 Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950 ....................................... 11.145, 13.45 Dye v Fisher Cartwright Berriman Pty Ltd [2010] NSWSC 895 .................................................. 15.55 Dyer v Dyer [2015] BCSC 2408 .................................................................................................... 8.220 Dyers v R (2002) 210 CLR 285 ..................................................................................................... 18.75

E E Surv Ltd v Goldsmith Williams Solicitors [2016] 4 WLR 44 ..................................................... 5.90 EPAS Ltd v AMP General Insurance Ltd [2007] QCA 212 ............................................................ 8.50 ERS Engines Pty Ltd v Wilson (unreported, SC(NSW), Young J, 21 September 1994) ............. 17.80 EVBJ Pty Ltd v Greenwood (1988) 20 ATR 134 ..................................................... 4.05, 19.50, 19.70 Eade v Vogiazopoulos [1999] 3 VR 889 ........................................................................................ 5.235 Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 ......................................................... 3.145 Eccles v Bryant & Pollock [1948] Ch 93 ....................................................................................... 3.120 Eden Refuge Trust v Hohepa [2011] 1 NZLR 197 ........................................................... 19.35, 21.125 Edgar v Auld (2000) 184 DLR (4th) 747 ....................................................................................... 11.40 Edith Haynes, Re (1904) 6 WALR 209 ............................................................................................ 2.40 Edman v Ross (1922) 22 SR (NSW) 351 ..................................................................................... 11.180 Edwards v Anderson [2009] NSWSC 373 ..................................................................................... 5.195 Edwards v Vic Land Rehabilitation Pty Ltd [2012] VSC 188 .................................................... 11.105 Edwards & Nosworthy v R (1997) 90 A Crim R 571 ................................................................. 17.245 Eiszele v Hurburgh [2011] TASSC 65 .............................................................. 7.10, 7.20, 7.140, 10.35 Elders Forestry Ltd v Bosi Security Services Ltd (No 2) (2010) 271 LSJS 100 ....................... 11.190 Elders Rural Finance Ltd v Tapp (1993) 113 FLR 351 ............................................................... 16.100 Elders Trustee & Executor Co Ltd v Estate of Herbert (1996) 111 NTR 25 ............................... 14.05 Eldridge, Re (1880) 82 NY 161 .................................................................................................... 17.165 Elguzouli-Daf v Commissioner of Police [1995] QB 335 ............................................................. 18.45 Ella v R (1991) 103 FLR 8 ............................................................................................................. 4.205 Ellis v Auckland District Law Society [1998] 1 NZLR 750 ....................................................... 23.110 Ellis v Law Society [2008] EWHC 561 (Admin) .......................................................................... 25.40 Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd (2003) 178 FLR 1 ................................................................................................................................................... 17.55 Emanuele v Hedley (1997) 137 FLR 339 ...................................................................................... 18.45 Emeritus Pty Ltd v Mobbs (1991) NSW ConvR ¶55-588 ................................................ 14.170, 16.60 Emerson v Sparrow (1871) LR 6 Ex 329 ..................................................................................... 18.100 Emirates Park Pty Ltd v Magic Millions Sales Pty Ltd [2002] FCA 1039 ................................ 21.215 English v Complaints Committee (1986) 41 SASR 217 ............................................................. 23.155 Enterprise Rent-A-Car Co v Shapiro (1998) 157 DLR (4th) 322 ................................................. 3.210 Epstein v Epstein [2008] FamCA 907 .............................................................................................. 8.85 Equiticorp Finance Ltd, Re (1992) 27 NSWLR 391 ................................................................... 17.165 Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737 ................................... 8.55, 8.65, 8.80, 8.95 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) [2003] VSC 268 ....................................... 16.110 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (2007) 18 VR 250 ......................... 14.85, 14.105 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 3) [2004] VSC 164 .......... 3.25, 3.55, 14.80 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 4) [2006] VSC 28 ............................. 14.105

xxxiv

Table of Cases

Erikson v Carr (1945) 46 SR (NSW) 9 ............................................................................................ 3.80 Ernst & Young v Butte Mining Co [1996] 1 WLR 1605 ............................................................ 21.215 Esanda Finance Corporation Ltd v Alvaro (unreported, SC(WA), Parker J, 18 December 1998) ......................................................................................................................... 3.145 Escott v Collision Clinic Ltd (1996) 141 Nfld & PEIR 16 ........................................................... 8.165 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 .. 5.260, 11.30, 11.40 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 .................................................... 22.35 Esso Australia Resources Pty Ltd v BHP Billiton Petroleum (Bass Strait) Pty Ltd [2007] VSCA 224 ....................................................................................................................... 10.90 Eurasian Natural Resources Corporation Ltd v Dechert LLP [2014] EWHC 3389 (Ch) ............ 10.90 European Hire Cars Pty Ltd v Beilby Poulden Costello [2009] NSWSC 526 ........................... 17.260 Evatt, Re (1967) 67 SR (NSW) 236 ................................................ 17.95, 23.25, 23.60, 23.105, 25.75 Evatt, Re (1987) 92 FLR 380 ................................................................................................ 2.75, 2.110 Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118 ................................................................. 22.10, 22.75 Everist v McEvedy [1996] 3 NZLR 348 ........................................................................................ 4.185 Evill, Re [1951] 2 TLR 265 ............................................................................................................ 4.100 Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113 ...................................................................................................... 17.245 Excel Securities plc v Masood [2010] Lloyd’s Rep PN 165 ......................................................... 5.240 Executive Homes Pty Ltd v First Haven Pty Ltd [1999] VSC 261 .............................................. 17.50 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 .................................................................... 11.275, 11.290 Eyre v Hughes (1876) 2 Ch D 148 ............................................................................................... 15.110

F FAI General Insurance Co Ltd v ACN 010 087 573 Pty Ltd (2000) 11 ANZ Ins Cas ¶61-464 ...................................................................................................................................... 11.195 FAI Traders Insurance Co Ltd v Ferrara (1996) 41 NSWLR 91 .................................................. 15.30 FAL Management Group Pty Ltd v Denham Constructions Pty Ltd [2015] NSWSC 1035 ........................................................................................................................................... 17.190 Fabricius, Re (1989) 91 ACTR 1 ............................................................................... 6.30, 6.40, 23.140 Faison v Thornton (1993) 863 F Supp 1204 ................................................................................ 21.270 Falland v Symbion Health Ltd (2010) 269 LSJS 189 ........................................................ 12.05, 12.25 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89 ........................................ 21.125 Farmer, Re (1997) 950 P 2d 713 .................................................................................................... 5.175 Farrer v Copley Singletons [1997] EWCA Civ 2127 ...................................................................... 3.35 Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 ............................ 6.25, 6.40, 7.30, 7.140 Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1 ..................................................................................................................................................... 8.35 Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 ................ 11.190, 11.195 Federation of Law Societies of Canada v Canada (Attorney General) [2015] 1 SCR 401 ................................................................................................................................... 10.10, 10.75 Feehan v Toomey [2014] VSC 488 ................................................................................................ 17.90 Feldman v A Practitioner (1978) 18 SASR 238 ................................................................. 5.320, 5.335 Felicity (No 4), Re [2015] NSWCA 19 .......................................................................... 17.260, 17.265 Fellingham v Rooke (unreported, HC(NZ), Thorp J, 26 February 1987) ..................................... 22.20 Felman v Law Institute of Victoria [1998] 4 VR 324 ................................................................... 2.145 Ferraro v PD Properties Pty Ltd (unreported, SC(NSW), McClelland CJ in Eq, 19 August 1993) .............................................................................................................................. 16.75 Fidock v Legal Profession Complaints Committee [2013] WASCA 108 ...................................... 25.10

Table of Cases xxxv

Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 ... 12.05, 12.10, 12.25 Finamore v Slater & Gordon (1994) 11 WAR 250 ........................................................................ 5.230 Financial Markets Authority v Hotchin [2014] NZHC 2732 ......................................................... 11.50 Finlay v Rowlands Anderson & Hine [1987] Tas R 60 ................................................................. 21.55 Fiorellino v Fiorellino (1996) 132 DLR (4th) 338 ....................................................................... 18.130 First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266 ................................ 12.30, 12.40 Firth v Centrelink (2002) 55 NSWLR 451 ................................................................................... 15.105 Firth v Centrelink (No 2) (2002) 55 NSWLR 494 ...................................................................... 15.105 Firth v Latham [2007] NSWCA 40 .............................................................................................. 17.265 Fischer v Howe (2013) 85 NSWLR 67 .......................................................................................... 21.60 Fittock v Legal Profession Conduct Commissioner (No 2) [2015] SASCFC 167 ............ 21.95, 23.90 Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) (2001) 188 ALR 566 ...................................... 21.10 Fladgate LLP v Harrison [2012] EWHC 67 (QB) ........................................................................... 3.55 Flanagan v Pioneer Permanent Building Society Ltd [2002] QSC 346 .......................................... 8.30 Fleeton v Fitzgerald (1998) 9 BPR 16,715 ...................................................................................... 3.60 Fletcher v Eden Refuge Trust [2012] 2 NZLR 227 ................................................ 9.65, 19.35, 21.125 Flexible Manufacturers Systems Pty Ltd v Lewis [2002] NSWSC 932 ....................................... 16.75 Florida Bar v Went for It Inc (1995) 515 US 618 ......................................................................... 20.55 Florida Bar v Wilson (1998) 714 So 2d 381 .................................................................................. 25.60 Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 ............ 17.245, 17.255 Fogerty-Young v Jason [2013] VSC 570 ........................................................................................ 8.265 Foley v Foley [2016] FCWA 41 ................................................................................. 8.70, 8.215, 8.240 Fonterra Brands (Australia) Pty Ltd v Viropoulos (2013) 304 ALR 332 .......................... 8.150, 8.155 Football League Ltd v Edge Ellison (a firm) [2006] EWHC 1462 (Ch) ........................... 5.130, 5.220 Ford v Financial Services Authority [2012] 1 All ER 1238 ............................................... 3.35, 11.195 Ford Motor Co of Canada Ltd v Osler, Hoskin & Harcourt (1996) 131 DLR (4th) 419 ............ 8.220 Fordham v Legal Practitioners Complaints Committee (1997) 18 WAR 467 .......... 8.95, 10.50, 25.60 Forestview Nominees Pty Ltd v Perron Investments Pty Ltd (1999) 162 ALR 482 .................... 3.100 Forney v Bushe (1954) 104 LJ 604 ................................................................................................ 3.205 Forster v Legal Services Board (2013) 40 VR 587 ...................................................................... 17.115 Fortin v Brunet (2009) 182 ACWS (3d) 840 ............................................................................... 21.115 Fortune v Bevan [2001] QCA 378 .................................................................................................... 5.60 Foster v Alfred Truman (a firm) [2003] EWHC 95 (QB) .............................................................. 5.205 Foster, Re (1950) 50 SR (NSW) 149 .............................................................. 1.30, 17.95, 23.05, 25.10 Fowler v Liddle [2012] FamCA 450 ................................................................................... 8.130, 8.265 Fowler, Corbett and Jessop v Toro Constructions Pty Ltd [2008] NSWCA 178 ....................... 17.265 Fox v Everingham (1983) 50 ALR 337 ................................................................................ 5.65, 5.220 Francis v Francis [1956] P 87 ......................................................................................................... 5.205 Franco v Frattelli’s Fresh Pasta Pty Ltd [2011] NSWSC 576 ..................................................... 17.245 Franicevich v Strong [1997] 1 NZLR 460 ..................................................................................... 16.35 Frankland River Olive Co Ltd v Charters Securities Pty Ltd [2004] WASC 88 ............................ 8.30 Fraresso v Wanczyk (1995) 40 CPC (3d) 123 ............................................................................... 17.45 Fraser v Bolt Burdon [2009] EWHC 2906 (QB) ........................................................................... 5.205 Fraser v Council of the Law Society of New South Wales (unreported, CA(NSW), 7 August 1992) .............................................................................................................................. 25.25 Fray v Voules (1859) 1 E & E 839; 120 ER 1125 ........................................................................ 3.145 Freeman v Health Insurance Commission (1997) 78 FCR 91 ....................................................... 11.65 Freeman v Vicchiarelli (1993) 827 F Supp 300 ............................................................................. 17.45 Freeman, Re [1993] 2 LPDR 3 ............................................................................................ 19.45, 25.25 Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 ....................................................................................................................................... 3.90, 3.95 French v Carter Lemon Camerons LLP [2013] PNLR 2 ............................................................... 3.205

xxxvi

Table of Cases

French v Carter Lemon LLP [2011] EWHC 3252 (QB) ............................................................... 3.205 Frigger v Clavey Legal Pty Ltd (No 3) [2015] WADC 21 ................................................ 1.125, 3.205 Frigger v Kitay (No 10) [2016] WASC 63 ......................................................................... 8.265, 17.20 Frigger v Shepherd [2014] WASC 477 ......................................................................................... 14.190 Fritz, Re [1995] 2 Qd R 580 .............................................................................................. 11.145, 13.40 Frost v Miller [2015] QSC 206 ............................................................................ 14.80, 14.115, 14.140 Frost v Wake Smith & Tofields Solicitors [2013] EWCA Civ 772 ............................................... 4.135 Frost, Re (1993) 863 P 2d 843 ...................................................................................................... 10.115 Frost & Sutcliffe v Tuiara [2004] 1 NZLR 782 ...................................................................... 5.30, 5.75 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 .......... 8.30, 8.55, 8.90, 8.105, 8.210, 10.10 Frugtniet v Board of Examiners [2002] VSC 140 ......................................................................... 2.105 Frugtniet v Board of Examiners [2005] VSC 332 ....................................................... 2.35, 2.60, 2.105 Frumar v Owners of Strata Plan 36957 (2006) 67 NSWLR 321 .................................................. 15.80 Fuld (deceased) (No 4), Estate of [1968] P 727 .......................................................................... 16.130 Fuller, Ex parte (1881) 16 Ch D 617 .............................................................................................. 16.35 Furlong v Wise & Young Pty Ltd [2016] NSWSC 647 .............................................................. 17.230 Furney, Re (1964) 20 ABC 166 .................................................................................................... 11.185

G G E Shaw & Associates (ACT) Pty Ltd v Narayan [2014] FCA 435 .......................................... 3.145 G P v The Queen (2010) 27 VR 632 .............................................................................................. 18.20 GBR Investment Ltd v Keung [2010] NZHC 411 ......................................................................... 8.120 GDD v R [2010] NSWCCA 62 ...................................................................................................... 18.40 GE Capital Corporate Finance Group Ltd v Anchors Trust Co [1995] 1 WLR 172 .................. 11.270 GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2000] FCA 593 ............................................................................................................................................. 11.190 GLS v Goodman Group Pty Ltd [2015] VSC 627 ........................................................................ 15.65 GPI Leisure Corp Ltd (in liq) v Yuill (1997) 42 NSWLR 225 .......................................... 12.10, 12.25 GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 ............. 11.45, 11.140, 11.160, 13.45 GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 ............................................ 11.285 Gabriel v Little [2013] WTLR 419 ................................................................................................... 5.35 Gadd, Re Application by [2013] NTSC 13 ...................................................................................... 2.60 Gagliano v Gagliano (1989) FLC ¶92-012 .................................................................. 8.85, 8.95, 8.140 Gainers Inc v Pocklington (1995) 125 DLR (4th) 50 ............................................... 8.95, 8.150, 8.170 Galambos v Perez [2009] 3 SCR 247 ............................................................................................... 6.40 Galderma Laboratories, LP v Actavis Mid Atlantic LLC (2013) 927 F Supp 2d 390 ................... 7.85 Galland, Re (1885) 31 Ch D 296 .................................................................................................. 16.110 Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 .......... 3.210, 16.55, 16.60, 16.70 Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235 ........................................... 8.175, 8.245 Garde-Wilson v Legal Services Board [2007] VSC 225 ............................................................... 25.40 Garde-Wilson v Legal Services Board (2008) 19 VR 398 ............................................................ 25.40 Garrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662 ........................................................ 21.140 Gartner v Carter [2004] FCA 258 ................................................................................................... 11.60 Gartside v Outram (1856) 26 LJ Ch 113 ...................................................................................... 10.130 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 ........ 10.35, 11.185, 21.55, 21.65, 21.70, 21.80 Gassman v State Bar (1976) 553 P 2d 1147 ................................................................................ 20.125 Gavaghan v Edwards [1961] 2 QB 220 ......................................................................................... 7.120 Gaynor v Chief of Defence Force (No 2) [2015] FCA 817 .......................................................... 11.45 Gazley v Wellington District Law Society [1976] 1 NZLR 452 ................................................. 17.220 Gedye, Re (1851) 14 Beav 56; 51 ER 208 .................................................................................. 16.110

Table of Cases xxxvii

Geelong School Supplies Pty Ltd v Dean (2006) 237 ALR 612 ....................................... 17.20, 17.50 Gemini Personnel Ltd v Morgan & Banks Ltd [2001] 1 NZLR 672 .......................................... 11.195 General Accident Assurance Co v Chrusz (2000) 180 DLR (4th) 241 .............................. 11.05, 11.40 General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd [1987] 1 NZLR 129 ............................................................................................................................................... 11.40 General Accident Fire & Life Assurance Corp Ltd v Tanter [1984] 1 WLR 100 ...................... 11.270 General Manager, Workcover Authority of New South Wales v Law Society of New South Wales (2006) 65 NSWLR 502 ........................................................................................ 13.45 Generics (UK) Ltd v Yeda Research and Development Co Ltd [2012] CP Rep 39 ....... 8.265, 13.115 Gentile v Nevada State Bar (1991) 501 US 1030 .......................................................................... 1.135 Geoffrey Silver & Drake v Baines [1971] 1 QB 396 .................................................................... 22.40 George v Pottinger [1969] Qd R 101 ............................................................................................. 3.120 Georgian American Alloys Inc v White and Case LLP [2014] 1 CLC 86 ................................... 8.220 Gerling Global General Insurance Co v Siskind Cromarty Ivey & Dowler (2002) 59 OR (3d) 555 ................................................................................................................................ 21.35 Geveran Trading Co Ltd v Skjevesland [2003] 1 WLR 912 .............................................. 8.165, 8.260 Giannarelli v Wraith (1988) 165 CLR 543 ...... 3.150, 4.05, 5.260, 5.265, 5.270, 5.280, 5.290, 5.300, 5.305, 5.320, 5.330, 5.335, 17.10, 17.40 Gibbins, Re [1995] 2 LPDR 6 ........................................................................................................ 19.45 Gibbs v New Zealand Law Society [2014] NZHC 1141 ............................................................... 2.115 Gigi Entertainment Pty Ltd v Macree (No 2) [2011] NSWSC 869 ................................... 16.65, 16.70 Gilbert v Shanahan [1998] 3 NZLR 528 .......................................................................................... 5.30 Giles v Thompson [1994] 1 AC 142 ............................................................................................. 14.115 Giles, Re (unreported, FC(ACT), 17 June 1994) ........................................................................... 2.170 Giles, Re Application by [2014] NTSC 30 ...................................................................................... 2.70 Giles, Re Application by (2005) 159 ACTR 1 ............................................................................... 2.170 Gill v Wynne [2016] FCWA 40 .................................................................... 8.150, 8.210, 8.220, 8.240 Gill & McAsey v Wainui Timber Co Ltd [1992] 1 NZLR 1 ........................................................ 22.25 Gillies v Director of Public Prosecutions (NSW) [2008] NSWCCA 339 ..................................... 4.205 Gilshenan and Luton v Commissioner of Taxation [1984] 1 Qd R 199 ....................................... 16.45 Ginelle Finance Pty Ltd v Diakakis (2007) NSW ConvR ¶56-174 ................................... 5.235, 5.350 Girotto v Phillips Fox (a firm) [2011] VSC 293 .............................................................................. 3.60 Gladstone, Re (1971) 25 DLR (3d) 43 ......................................................................................... 16.100 Glass, Re (2014) 316 P 3d 1199 ....................................................................................................... 2.75 Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 ......................... 11.140, 12.10 Glenorchy, City of v Addison (1967) 15 LGRA 259 ..................................................................... 3.115 Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 ..... 11.125, 11.130, 11.140 Goddard Elliott (a firm) v Fritsch [2012] VSC 87 ......... 3.10, 5.15, 5.190, 5.225, 5.255, 5.315, 5.325 Goldberg v Beckett [2015] NSWSC 1966 .................................................................................... 16.125 Goldberg v Ng (1995) 185 CLR 83 ..................................................................... 10.90, 11.190, 11.245 Goldfarb v Virginia State Bar (1975) 421 US 773 ............................................................... 1.55, 4.100 Goldsbro v Walker [1993] 1 NZLR 394 ....................................................................................... 21.135 Goldsmith v Villanueva [2000] NSWSC 1181 ............................................................................... 4.105 Goldsworthy v Brickell [1987] Ch 378 .......................................................................................... 6.125 Goody v Baring [1956] 1 WLR 448 ..................................................................................... 7.20, 7.120 Gore v Montague Mining Pty Ltd [2001] FCA 1214 .................................................................... 4.155 Gorman v Matthews (1897) 13 WN (NSW) 224 ........................................................................... 12.90 Gorman v Norton (1887) 8 LR (NSW) L 479 ............................................................................... 22.20 Gosling v Gaskell [1897] AC 575 ................................................................................................ 21.105 Gotha City v Sotheby’s [1998] 1 WLR 114 ................................................................................. 11.105 Grabber Industrial Products Central Ltd v Stewart & Co (2000) 73 BCLR (3d) 256 ................... 7.55 Graham v Bonnycastle (2004) 36 Alta LR (4th) 203 .................................................................... 21.85

xxxviii

Table of Cases

Graham v Hall (2006) 67 NSWLR 135 ......................................................................................... 5.235 Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560 .............................................................. 21.10 Granitgard Pty Ltd ACN 007 427 590 v Termicide Pest Control Pty Ltd ACN 093 837 337 (No 6) [2010] FCA 381 .................................................................................................... 21.150 Grant v Downs (1976) 135 CLR 674 ....................................................................... 11.10, 11.30, 11.40 Grant v Thirteenth Court of Appeals (1994) 888 SW 2d 466 ....................................................... 8.255 Grant, Bulcraig & Co, Re [1906] 1 Ch 124 ................................................................................... 15.40 Gray v Buss Merton (a firm) [1999] PNLR 882 .............................................................................. 3.55 Gray v Morris [2004] 2 Qd R 118 .................................................................................................... 5.15 Gray v Staffa [2004] WASC 131 ........................................................................................... 3.70, 13.60 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 .......... 11.150, 11.270, 11.275 Great Southern Managers Australia Ltd (recs and mgrs apptd) (in liq) v Clarke (2012) 36 VR 308 ................................................................................................................................. 11.200 Green v Berry [2001] 1 Qd R 605 ................................................................................................. 4.175 Green v Schneller [2003] NSWSC 202 ........................................................................................ 21.205 Green & Clara v Bestobell Industries Pty Ltd [1982] WAR 1 ...................................................... 4.180 Greenough v Gaskell (1833) 1 My & K 98; 39 ER 618 ............................................................... 11.20 Gregory v Queensland Law Society Inc [2002] 2 Qd R 583 ............................................. 2.170, 2.185 Grey v City of Marion (2006) 159 A Crim R 357 ............................................................. 17.45, 18.25 Grey, Re [1892] 2 QB 440 ................................................................................................... 22.25, 22.30 Grieves v Tully [2011] FamCA 617 ............................................................................................... 17.20 Griffis, Marriage of (1991) 14 Fam LR 782 ................. 4.65, 4.190, 8.130, 10.10, 10.15, 10.40, 10.50 Griffiths v Evans [1953] 1 WLR 1424 ............................................................................................. 3.55 Griffiths v Griffiths (1843) 2 Hare 587; 67 ER 242 ....................................................................... 16.65 Grimwade v Meagher [1995] 1 VR 446 ........................................................... 8.10, 8.55, 17.20, 17.35 Grinham v Tabro Meats Pty Ltd [2012] VSC 491 ......................................................................... 5.170 Grofam Pty Ltd v Australia and New Zealand Banking Group Ltd (1993) 45 FCR 445 ......... 11.125, 11.140, 11.150 Grogan v Orr [2001] NSWCA 114 .................................................................................. 15.105, 16.150 Groia v Law Society of Upper Canada (2015) 382 DLR (4th) 337 .............................. 21.140, 21.145 Groom v Cheesewright [1895] 1 Ch 730 .......................................................................... 16.15, 16.150 Groom v Crocker [1939] 1 KB 194 ........................................................ 3.30, 3.100, 4.05, 5.05, 7.105 Gruzman, Re (1968) 70 SR (NSW) 316 ................................................................ 17.75, 17.95, 17.100 Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596 .......... 11.40 Gugiatti v City of Stirling (2002) 25 WAR 349 ................................................................. 8.120, 17.50 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 ... 11.175, 11.190, 11.275 Gulbis v Strikis [2012] NSWSC 807 .............................................................................................. 16.75 Gummow v Bloom [1930] VLR 81 .................................................................................................. 3.55 Guss v Law Institute of Victoria Ltd [2006] VSCA 88 ........................................ 17.65, 23.140, 25.10 Guy v Churchill (1887) 35 Ch D 489 ............................................................................................ 16.15

H H v R [1996] 1 NZLR 299 ............................................................................................................. 6.140 H v S [2016] NZHC 409 ................................................................................................................. 17.45 H & W Wallace Ltd (in liq), Re [1994] 1 NZLR 235 .............. 16.15, 16.120, 16.125, 16.130, 16.140 H Lundbeck A/S v Sandoz Pty Ltd [2011] NSWSC 1297 .......................................................... 21.110 H Stanke & Sons Pty Ltd v von Stanke (2006) 95 SASR 425 ................... 8.60, 8.265, 11.285, 17.20 HIH Insurance Ltd (in liq), Re [2014] NSWSC 922 ..................................................................... 3.115 Hagipantelis v Legal Services Commissioner of New South Wales (2010) 78 NSWLR 82 ................................................................................................................................................. 20.50

Table of Cases xxxix

Haira v Burbery Mortgage Finance & Savings Ltd (in receivership) [1995] 3 NZLR 396 ..................................................................................................................................... 7.30, 7.120 Hale v Illinois Committee on Character and Fitness (2003) 335 F 3d 678 .................................... 2.40 Hall v Bennett Estate (2003) 64 OR (3d) 191 ............................................................................... 21.60 Hall v Foong (1995) 65 SASR 281 ......................................................................... 5.165, 5.185, 5.245 Hall v United States (1969) 419 F (2d) 582 .................................................................................. 18.10 Halvanon Insurance Co Ltd v Central Reinsurance Corp [1988] 1 WLR 1122 ......................... 16.135 Hamdan v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 211 ALR 642 ..................................................................................................................................... 11.90 Hamilton and Dixon Group Sipp v Hastings and Co (Solicitors) [2015] PNLR 17 .................... 10.50 Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267 ....................................................................... 16.75 Hammond, Re (2011) 56 So 3d 199 ............................................................................................... 6.145 Hampton, Re [2002] QCA 129 ..................................................................................... 2.75, 2.90, 2.115 Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833 .............................. 8.90, 8.150, 8.265, 17.20 Hanave Pty Ltd v LFOT Pty Ltd (1999) 168 ALR 318 .................................................................. 3.60 Hancock v Arnold (2008) Aust Torts Reports ¶81-973 ........................................................ 4.85, 14.20 Hancock v Rinehart [2016] NSWSC 12 ......................................................................................... 11.30 Hanflex Pty Ltd v N S Hope & Associates [1990] 2 Qd R 218 ........................................ 5.165, 5.220 Hannebery v Legal Ombudsman [1998] VSCA 142 ...................................................................... 23.40 Hansen v Macro Engineering (Aust) Pty Ltd [1948] VLR 198 .................................................... 3.145 Hansen v Young [2004] 1 NZLR 37 ................................................................................................ 3.55 Haralovic & Carr v Law Society of New South Wales (No 2) [2007] NSWADT 97 .................. 23.75 Harbour Inn Seafoods Ltd v Switzerland General Insurance Co Ltd [1990] 2 NZLR 381 ............................................................................................................................................. 11.255 Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393 ....................... 21.10, 21.15 Harle v McGarvie [2015] VSC 697 .............................................................................................. 17.115 Harley v McDonald [1999] 3 NZLR 545 ....................................................................................... 5.205 Harley v McDonald [2001] 2 AC 678 ............................................................................................ 5.315 Harmony Shipping Co SA v Saudi Europe Line Ltd [1979] 1 WLR 1380 ................................ 17.175 Harold v Legal Complaints Review Officer [2012] 2 NZLR 559 ...................................... 1.130, 1.140 Harrington v Lowe (1996) 190 CLR 311 ....................................................................................... 12.10 Harris, Marriage of (1977) FLC ¶90-276 ..................................................................................... 18.145 Harrison, Re (2002) 84 SASR 120 .......................................................................... 2.170, 2.175, 2.185 Harrison, Re (unreported, FC(SA), 23 December 1992) ............................................................... 2.175 Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] 3 NZLR 103 ............................................................................................................................................... 24.30 Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557 ........................... 11.255 Harvard Investments Ltd v City of Winnipeg (1994) 6 WWR 127 .............................................. 17.45 Harvey v Goodman Law Pty Ltd [2011] NSWSC 340 ................................................................. 15.55 Harvey v Law Society of New South Wales (1975) 49 ALJR 362 ............................................... 23.10 Harvey v Phillips (1956) 96 CLR 235 ................................................................................ 3.130, 3.145 Hastingwood Property Ltd v Saunders Bearman Anselm (a firm) [1991] Ch 114 ....................... 22.45 Hatty v Pilkinton (No 2) (1992) 35 FCR 433 ................................................................................ 19.40 Hawkes, Re [1898] 2 Ch 1 ............................................................................................................ 16.100 Hawkes Bay Standards Committee v Beecham [2012] NZLCDT 29 ......................................... 25.150 Hawkins v Clayton (1988) 164 CLR 539 ........................... 3.65, 4.155, 5.05, 5.25, 5.30, 5.165, 21.50 Hawkins v Gaden (1925) 37 CLR 183 ........................................................................................... 22.75 Hawkins Hill Gold Mining Co v Briscoe (1887) 8 LR (NSW) (Eq) 123 ..................................... 3.115 Hawksford v Hawksford [2005] NSWSC 796 ............................................................................. 11.120 Hawksford v Hawksford [2008] NSWSC 31 ............................................................................... 11.125 Headfall Baseball LLC v Elwood (2013) 999 F Supp 2d 199 ........................................................ 3.60 Health Care Complaints Commission v Karalasingham [2007] NSWCA 267 ............................... 2.35

xl

Table of Cases

Heath v Ivens (1991) 57 BCLR (2d) 391 ....................................................................................... 21.55 Hellard v Irwin Mitchell [2013] EWHC 3008 (Ch) ....................................................................... 5.205 Hellenic Mutual War Risks Association (Bermuda) Ltd v Harrison (the “Sagheera”) [1997] 1 Lloyd’s Rep 160 ........................................................................................................ 11.195 Helm v Helm [2011] NSWSC 1595 ............................................................................................. 16.150 Henderson v Amadio (No 1) (1995) 62 FCR 1 ............................................................................... 5.65 Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 ................................................................... 5.05 Henderson Borough Council v Auckland Regional Authority [1984] 1 NZLR 16 ........... 13.35, 17.65 Hendriks v McGeoch (2008) NSW ConvR ¶56-216 ........................................................................ 3.65 Heron Wood Pty Ltd v Ampol Petroleum (Vic) Pty Ltd [1999] VSC 83 ..................................... 12.30 Herrmann v Withers LLP [2012] PNLR 28 ........................................................................ 5.190, 5.245 Herron v Jones (1982) 637 SW 2d 569 .......................................................................................... 8.255 Hertsmere Primary Care Trust v Rabinda-Anandh [2005] 3 All ER 274 ................................... 21.205 Heslop v Cousins [2007] 3 NZLR 679 ............................................................................... 3.205, 16.45 Heydon v NRMA Ltd (2000) 51 NSWLR 1 ........................... 5.30, 5.165, 5.180, 5.190, 5.205, 5.220 Hickman v Lapthorn [2006] PNLR 20 ........................................................................................... 5.230 Hicks v Russell Jones & Walker [2007] EWHC 940 (Ch) ............................................................ 5.190 Hill v Halo Architectural Design Services Pty Ltd [2013] NSWSC 878 .................................... 17.190 Hill v Rose [1990] VR 129 ............................................................................................................. 4.185 Hill v Shell Oil Co (2002) 209 F Supp 2d 876 ........................................................................... 21.240 Hill v Van Erp (1997) 188 CLR 159 ..................................... 21.15, 21.55, 21.65, 21.70, 21.75, 21.80 Hilliard, Re (1845) 2 Dow & L 919; 59 RR 880 .................................................... 22.25, 22.30, 22.55 Hilton v Barker Booth & Eastwood [2002] Lloyd’s Rep PN 500 ....................................... 7.20, 10.35 Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567 .............................. 7.10, 7.20, 7.140 Himmel, Re (1988) 533 NE 2d 790 ............................................................................................... 24.20 Hksar v Yeung Wai Birney [2012] HKCA 109 .............................................................................. 11.85 Hoad v Nationwide News Pty Ltd (1998) 19 WAR 468 ............................................................. 11.265 Hodge v Ufra-Sexton, LP (2014) 758 SE 2d 314 ............................................................... 8.240, 8.255 Hodgekiss, Re (1959) 62 SR (NSW) 340 ................. 23.15, 23.50, 23.75, 23.85, 23.135, 25.10, 25.50 Hodgins v Cantrill (1997) 26 MVR 481 ........................................................................................ 5.230 Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1997] FSR 178 ................................ 12.65 Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1998] FSR 530 ................................ 12.65 Hodgson v Amcor Ltd (No 2) [2011] VSC 204 ......................................... 11.30, 11.55, 11.60, 11.100 Hoefler v Tomlinson (1995) 60 FCR 452 ....................................................................................... 12.70 Hogan v Howard Finance Ltd (1987) ASC ¶55-594 ..................................................................... 5.100 Holborow v MacDonald Rudder [2002] WASC 265 .......................................................... 8.30, 17.230 Holdsworth v M R Anderson and Associates Pty Ltd (unreported, SC(Vic), Phillips J, 26 August 1994) ........................................................................................................................... 7.20 Holdway v Acuri (No 2) [2007] QSC 378 .......................................................................... 5.195, 5.205 Holdway v Acuri Lawyers [2009] 1 Qd R 18 .................................................................... 5.195, 5.205 Holmes v Alfred McAlpine Homes (Yorkshire) Ltd [2006] EWHC 110 (QB) ............................ 14.80 Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419 ................................................... 11.265 Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66 ....................... 17.255, 20.185 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 ............... 4.40, 4.45 House v Altimas [2012] FamCA 625 ............................................................................................. 8.105 Howe v Fischer (2014) 12 ASTLR 66 ........................................................................................... 21.60 Howell v Macquarie University [2008] NSWCA 26 .......................................................... 11.45, 11.65 Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd [2007] FCA 933 ............................................. 11.265 Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8) [2014] VSC 567 ............................................................................................................................................... 5.315 Hughes v Hughes [1958] P 224 ........................................................................................... 16.15, 16.60 Hughes v Janrule Pty Ltd [2011] ACTCA 23 .............................................................................. 17.190

Table of Cases xli

Hughes v Kingston Upon Hull City Council [1999] QB 1193 ................................................... 14.120 Hugo v R (2000) 113 A Crim R 484 .............................................................................................. 18.10 Hunt v A [2008] 1 NZLR 368 ........................................................................................................ 5.245 Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 .................. 4.160 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 ........... 5.275, 17.215, 25.105 Huntingdale Village Pty Ltd v Mallesons Stephen Jaques [2013] WASC 48 ............................... 14.50 Hurlingham Estates Ltd v Wilde & Partners (1996) 37 ATR 261 ................................................. 5.255 Hursey, Re (2011) 719 SE 2d 670 ................................................................................................ 10.175 Hutchings v Clarke (1993) 112 FLR 450 .......................................................................... 12.85, 18.130 Hutchins v Cap Coast Telecoms Pty Ltd (in liq) (No 2) [2015] FCA 946 ................................. 11.285 Hutchinson v Davis [1940] NZLR 490 .......................................................................................... 17.45

I IAG New Zealand Ltd v Jackson (2013) ANZ Ins Cas ¶61-982 .................................................. 5.350 IPM Group Pty Ltd, Re [2015] NSWSC 240 .......................................................... 8.40, 8.265, 21.245 ISTIL Group Inc v Zahoor [2003] 2 All ER 252 ......................................................................... 11.280 IVI Pty Ltd v Baycrown Pty Ltd (2005) Q ConvR ¶54-612 ......................................................... 3.140 IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 ................................................. 3.120, 3.125, 3.140 Ian West Indoor and Outdoor Services Pty Ltd v Australian Posters Pty Ltd [2011] VSC 287 .................................................................................................................................... 21.115 Iannello v Sharpe (2006) NSW ConvR ¶56-162 ............................................................................ 3.120 Iannello v Sharpe (2007) 69 NSWLR 452 ..................................................................................... 3.120 Ibrahim v Pham [2005] NSWSC 246 ................................................................. 5.15, 5.25, 5.220, 7.75 Ibrahim v Pham [2007] NSWCA 215 ................................................................. 5.15, 5.25, 5.220, 7.75 Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222 ........................................... 11.60 Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 ................. 1.15, 2.30 Independent Management Resources Pty Ltd v Brown [1987] VR 605 ....................................... 8.120 Inland Revenue, Commissioner of v Bhanabhai [2006] 1 NZLR 797 ............................... 22.30, 22.35 Inland Revenue, Commissioner of v Bhanabhai [2007] 2 NZLR 478 .......................................... 22.30 Inland Revenue, Commissioner of v West-Walker [1954] NZLR 191 ......... 4.70, 10.05, 11.15, 11.70, 11.135, 11.225 Inland Revenue, Commissioners of v Maxse [1919] 1 KB 647 ...................................................... 1.20 Insbury Pty Ltd v Craig [1990] 1 Qd R 309 .................................................................................. 3.145 Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 ......... 11.170 Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 ......................................................................................................................................... 17.175 International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co (1958) 100 CLR 644 .................................................................................................................... 3.80 Iowa Supreme Court Attorney Disciplinary Board v Blessum (2015) 861 NW 2d 575 . 6.145, 25.110 Iowa Supreme Court Attorney Disciplinary Board v Bowles (2011) 794 NW 2d 1 .................... 6.140 Iowa Supreme Court Attorney Disciplinary Board v McGrath (2006) 713 NW 2d 682 .. 6.140, 6.145 Iowa Supreme Court Attorney Disciplinary Board v Monroe (2010) 784 NW 2d 784 ............... 6.140 Iowa Supreme Court Attorney Disciplinary Board v Moothart (2015) 860 NW 2d 598 ........... 21.170 Iowa Supreme Court Board v Miller (1997) 568 NW 2d 665 .................................................... 10.115 Iowa Supreme Court Board of Professional Ethics and Conduct v Furlong (2001) 625 NW 2d 711 ................................................................................................................................. 6.145 Iowa Supreme Court Disciplinary Board v Monroe (2010) 784 NW 2d 784 .............................. 6.145 Ipswich Interstate Transport Terminal Pty v Roles (unreported, SC(Qld), Derrington J, 1 March 1995) .............................................................................................................................. 6.95 Ireland v Trilby Misso Lawyers [2011] 2 Qd R 320 ............................................... 3.200, 3.210, 14.80 Irvine v Shaw [1992] ANZ Conv R 83 ............................................................................................ 3.70

xlii Table of Cases

Islam v Duncan (2000) 156 FLR 167 ........................................................................................... 11.280 Ismail v Richards Butler (a firm) [1996] QB 711 ................................................... 16.60, 16.65, 16.70 Ismail-Zai v State of Western Australia [2007] WASCA 150 ........................ 8.30, 8.145, 8.155, 10.15 Italiano v Lake [2015] VSC 189 ..................................................................................................... 8.265

J J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA) (1992) 38 FCR 452 ........................................................................................ 11.105, 11.110, 11.170 J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 ....................... 14.120 J R Bryant (Constructions) Pty Ltd v Daniels (unreported, CA(NSW), Sheller, Powell and Cole JJA, 20 March 1996) .................................................................................................. 3.145 JMA Accounting Pty Ltd v Commissioner of Taxation (2004) 139 FCR 537 ............................ 11.210 JRL, Re (1986) 161 CLR 342 ....................................................................................................... 17.190 JSC BTA Bank v Solodchenko (No 3) [2013] Ch 1 ...................................................................... 11.90 Jackson v Richards (2005) 12 BPR 23,091 .................................................................................. 16.150 Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289 .......................................................................................... 2.30, 2.35, 2.65, 2.90, 2.105 Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 ............................................................................ 2.30, 2.35, 2.65, 2.90, 2.105 Jadwan Pty Ltd v Porter (No 2) (2004) 13 Tas R 219 ....................................................... 12.05, 12.25 Jager v Medical Complaints Tribunal (2004) 12 Tas R 446 .......................................................... 23.15 Jaha v Defteros [2012] VSC 512 .................................................................................................... 14.90 Jalmoon Pty Ltd, Re [1986] 2 Qd R 264 ....................................................................................... 16.45 Jalmoon Pty Ltd (in liq) v Bow [1997] 2 Qd R 62 ................................................................ 4.65, 9.05 Jamison v Government Insurance Office of New South Wales (1988) 5 ANZ Ins Cas ¶60-870 ...................................................................................................................................... 11.105 Janesland Holdings Pty Ltd v Simon [2000] ANZ Conv R 112 ................................................... 5.110 Jankowski v Mastoris [1996] ANZ Conv R 324 ............................................................................ 16.70 Jauncey v Law Society of New South Wales (unreported, CA(NSW), 1 February 1989) .......... 2.170, 23.105 Jean v Roger David Stores Pty Ltd (unreported, FCA, Olney J, 18 April 1997) ......................... 16.60 Jedda Investments Pty Ltd v Krambousanos (1997) 72 FCR 138 ................................................ 5.100 Jeffrey v Associated National Insurance Co Ltd [1984] 1 Qd R 238 ........................................... 17.45 Jenner, Re (2007) 250 LSJS 74 .................................................................................................... 20.220 Jennings v Zilahi-Kiss, Zilahi-Kiss and MK Tremaine & Co Pty Ltd (1972) 2 SASR 493 ........................................................................................................................ 5.165, 5.180, 5.220 Jess v Jess [2015] FamCA 822 ..................................................................................................... 11.200 Jindi (Nominees) Pty Ltd v Dutney (1993) 26 ATR 206 ............................................................... 19.70 John D Hope & Co v Glendinning [1911] AC 419 ....................................................................... 16.10 John Fox v Bannister, King and Rigbeys [1988] QB 925 ...................................... 22.30, 22.40, 22.45 Johns v Cassel (1993) FLC ¶92-364 ............................................................................................. 16.125 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 ...... 9.45, 9.70, 16.20, 16.45, 16.110, 16.130, 23.60, 24.30, 25.50 Johnson v Buttress (1936) 56 CLR 113 ......................................................................................... 6.125 Johnson v Perez (1988) 166 CLR 351 .................................................................................... 5.05, 5.60 Johnston v Schurr [2016] 1 NZLR 403 .......................................................................................... 3.205 Jones v Baker (2002) 10 BPR 19,115 ............................................................................... 15.110, 17.80 Jones v Brian K Deegan & Associates [2011] SASC 44 ................................................................. 3.55 Jones v Foxall (1852) 15 Beav 388; 51 ER 588 ............................................................................ 12.05 Jones v Jones (1847) 5 Notes of Cases in the Ecclesiastical and Maritime Courts 134 ............ 21.235 Jones v Linton (1881) 44 LT 601 ................................................................................................. 15.110

Table of Cases xliii

Jovetic v Stoddart & Co (1992) 7 WAR 208 ............................................................................... 14.195 Judge v Chiropractors Board of South Australia (2004) 89 SASR 94 ................... 20.05, 20.35, 20.65 Jung v Templeton [2010] 2 NZLR 255 .......................................................................................... 5.230 Justice and Attorney-General, Minister for v Brown (unreported, CA(Qld), Fitzgerald P, Davies and Demack JJ, 11 June 1993) ...................................................................................... 25.10

K K(R) v K(S) (2006) 269 DLR (4th) 224 ...................................................................................... 17.140 K & L Gates Australia, LLC v Swindells [2016] VCC 173 .......................................................... 15.65 KLM v Western Australia (2009) 194 A Crim R 503 .................................................................... 4.210 Kain v Wynn Williams & Co [2013] 1 NZLR 498 ..................................................................... 14.120 Kalenik v Apostolidis (No 3) [2009] VSC 475 .............................................................................. 12.35 Kallinicos v Hunt (2005) 64 NSWLR 561 ....................................................................................... 8.30 Kandola v Mirza Solicitors LLP [2015] PNLR 19 .......................................................................... 5.20 Kang v Kwan [2001] NSWSC 698 ................................................................................................. 11.60 Karam v Palmone Shoes Pty Ltd (No 4) [2016] VSC 261 ......................................................... 16.130 Karapataki v Karapataki [2011] FMCAfam 6 ................................................................................ 8.150 Karpenko v Paroian, Courey, Cohen and Houston (1981) 117 DLR (3d) 383 ................. 5.225, 5.230 Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 .................... 14.185, 14.205 Kavia Holdings Pty Ltd v Werncog Pty Ltd [1999] NSWSC 839 .............................................. 17.125 Kay v R (1998) 100 A Crim R 367 .............................................................................................. 13.110 Kaye v Woods (No 2) [2016] ACTSC 87 .................................................................................... 21.165 Kayteal Pty Ltd v Dignan [2011] NSWSC 197 .................................................................. 4.160, 5.115 Keddie v Stacks/Goudkamp Pty Ltd (2012) 293 ALR 764 ................................................ 5.20, 17.265 Keefe v Marks (1989) 16 NSWLR 713 ......................................................................................... 5.320 Keesing v Adams [2010] NSWSC 336 ................................................................................. 3.45, 14.10 Kekatos v Council of the Law Society of New South Wales [1999] NSWCA 288 ..................... 2.145 Kekatos v Sansom [2009] NSWCA 171 ......................................................................................... 5.165 Kellar v Williams [2004] UKPC 30 .............................................................................................. 14.120 Kelley v Corston [1998] QB 686 ........................................................................................ 5.225, 5.325 Kelly v Hogan [2004] NSWSC 238 ............................................................................................... 14.60 Kelly v Jowett (2009) 76 NSWLR 405 ................................................................................... 3.35, 7.40 Kelly and Department of Treasury and Finance (No 2), Re (2002) 19 VAR 330 ........................ 22.35 Kelso v McCulloch (unreported, SC(NSW), Young J, 24 October 1994) ....................... 16.10, 16.150 Ken Tugrul v Tarrants Financial Consultants Pty Ltd [2014] NSWSC 437 ............................... 21.140 Kennedy v Baker (2004) 135 FCR 520 ........................................................................................ 11.215 Kennedy v Baker (No 2) (2004) 138 FCR 414 .............................................................. 11.210, 11.215 Kennedy v Broun (1863) 13 CBNS 677; 143 ER 268 .................................................................... 3.40 Kennedy v Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJR 563 .................................................................................................................................. 17.160 Kennedy v Cynstock Pty Ltd (1993) 3 NTLR 108 ............................................... 7.105, 11.85, 17.250 Kennedy v Legal Profession Admission Board of New South Wales [2012] NSWSC 33 .......... 2.170 Kennedy v McGeechan [1978] 1 NSWLR 314 .............................................................................. 17.80 Kennedy v Wallace (2004) 142 FCR 185 ...................................... 11.20, 11.30, 11.45, 11.130, 11.150 Kennedy v Wallace (2004) 208 ALR 424 ................................................... 11.20, 11.30, 11.45, 11.150 Kennedy & Cahill, Marriage of (1995) 118 FLR 60 ............................................ 3.160, 3.225, 17.195 Kenny v South Australia (1987) 46 SASR 268 ............................................................................. 13.85 Keppie v Law Society of Australian Capital Territory (1983) 62 ACTR 9 ....................... 22.50, 22.75 Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149 ....................... 23.50, 23.60 Kerly, Son & Verden, Re [1901] Ch 467 ....................................................................................... 22.05 Kershaw v Whelan [1996] 2 All ER 404 ....................................................................................... 10.90

xliv Table of Cases

Kestel v Superannuation Complaints Tribunal (2010) 276 ALR 112 ............................................ 3.125 Khan v Khan (No 2) [2008] NSWSC 119 ..................................................................................... 5.240 Khudados v Hayden [2007] EWCA Civ 1316 ............................................................................. 17.105 Kim v Oh [2013] 2 NZLR 825 ....................................................................................................... 1.125 King v King [2012] QCA 81 .......................................................................................................... 4.105 King v R (1986) 161 CLR 423 ....................................................................................................... 18.20 Kingley v Arndale (No 2) (2010) 255 FLR 326 .......................................................................... 18.145 Kingston v State Fire Commission (1998) 8 Tas R 152 .............................................................. 11.275 Kirby v Centro Properties Ltd (No 2) (2012) 87 ACSR 229 ......................................... 11.125, 11.130 Kirk v Commissioner of Australian Federal Police (1988) 19 FCR 530 ......................... 16.45, 16.100 Kison v Papasian (1994) 61 SASR 567 .......................................................................... 16.130, 16.140 Kizildag v R [2013] NSWCCA 125 ............................................................................................... 4.205 Klienwort Benson Australia Ltd v Armitage (unreported, SC(NSW), Cole J, 26 April 1989) ........................................................................................................................................... 5.190 Knibbs v Knibbs [2009] FamCA 840 ........................................................................................... 18.145 Knight v Carter [2015] NSWSC 609 ............................................................................................ 21.150 Knowles, Re [1984] VR 751 ........................................................................................................... 4.210 Knox v Till [1999] 2 NZLR 753 .................................................................................................... 21.85 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604 .................... 8.240, 8.245 Kohai v R [2015] 1 NZLR 833 ...................................................................................................... 18.40 Kolavo v Pitsikas [2003] NSWCA 59 ............................................................................................ 5.230 Komacha v Orange City Council (unreported, Rath J, SC(NSW), 30 August 1979) ................. 11.180 Koncz v Koncz (2013) 50 Fam LR 116 ......................................................................................... 8.255 Konia v Morley [1976] 1 NZLR 455 ............................................................................................. 11.30 Konigsberg v State Bar of California (1957) 353 US 252 ..................................................... 2.40, 2.45 Kontvanis v O’Brien (No 2) [1958] NZLR 516 ................................................................. 3.130, 3.145 Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 .............................................. 8.10, 17.35, 17.60 Korean Air Lines Co Ltd v Australian Competition and Consumer Commission (No 3) (2008) 247 ALR 781 .................................................................................................................. 12.15 Kossatz, Marriage of (1993) FLC ¶92-386 .................................................................................... 8.165 Kotowicz v Law Society of New South Wales (No 2) (unreported, CA(NSW), 7 August 1987) .............................................................................................................................. 2.165 Kousouros v O’Halloran [2015] WTLR 1023 .............................................................................. 11.280 Koutsourais v Metledge & Associates [2004] NSWCA 313 ......................................................... 15.35 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205 ........................................... 5.15, 5.140 Kowalski v Stanley [2014] SASC 198 ........................................................................................... 15.55 Krambousanos v Jedda Investments Pty Ltd (1996) 64 FCR 348 ................................................ 5.100 Krieger v Law Society of Alberta (1997) 149 DLR (4th) 92 ............................................ 18.45, 18.70 Kriss v Legal Practitioners Board [2002] NSWSC 967 ................................................................. 2.175 Krok v Szaintop Homes Pty Ltd (No 1) [2011] VSC 16 ............................................................. 11.195 Kubin v Miller (1992) 801 F Supp 1101 ........................................................................................ 17.45 Kumar v Legal Services Commissioner [2015] NSWCA 161 ....................................................... 25.50 Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 .... 11.60, 11.65, 11.95, 11.100, 11.165 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 .............. 17.05, 17.95, 17.110, 17.130, 23.65, 25.10 Kyriackou v Commonwealth Bank of Australia [2009] VSCA 241 .................................... 8.35, 8.155 Kyriackou v Martin [2014] VSC 122 .................................................................................. 16.60, 16.70 Kyriacou v Kogarah Municipal Council (1995) 88 LGERA 110 .................................................... 5.65

L L v Canterbury District Law Society [1999] 1 NZLR 467 ................................................ 2.170, 2.190

Table of Cases xlv

L v K (Freezing Orders: Principles and Safeguards) [2014] Fam 35 .......................................... 21.110 L (A Minor), Re [1997] AC 16 ..................................................................................................... 17.175 L (Minors) (Care Proceedings: Solicitors), Re [2001] 1 WLR 100 ................................................ 7.55 L T King Pty Ltd v Besser (2002) 172 FLR 140 .................................................... 5.15, 21.45, 21.130 LM v K Lawyers [2015] WASC 244 .............................................................................................. 3.180 LM v K Lawyers (No 2) [2015] WASC 245 ................................................................................. 15.65 Lafarge Construction Materials Precast Division v Lawson Lundell Lawson & McIntosh (1996) 136 DLR (4th) 280 .......................................................................................... 8.60 Lai v Chamberlains [2005] 3 NZLR 291 ........ 3.150, 5.260, 5.280, 5.290, 5.300, 5.305, 5.310, 5.345 Lakey v Lakey [2008] FMCAfam 827 ................................................................................ 8.245, 8.255 Lakic v Prior [2016] VSC 293 ........................................................................................... 3.205, 15.110 Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 2) [2010] WASC 217 ............ 11.30 Lander v Council of the Law Society of the Australian Capital Territory (2009) 231 FLR 399 .................................................................................................................................... 21.220 Lander v Mitson (1988) 83 ALR 466 ........................................................................................... 11.210 Langsam v Beachcroft LLP [2011] EWHC 1451 (Ch) .................................................................. 5.205 Lashansky v Legal Practice Board [2006] WASC 247 ................................................... 16.125, 16.145 Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217 .......................... 11.100 Latilla v Inland Revenue Commissioners [1943] AC 377 ............................................................. 19.60 Lavellee, Rackel & Heintz v Canada (Attorney-General) (2000) 184 DLR (4th) 25 .................. 11.85 Law Institute of Victoria v Gough (unreported, SC(Vic), Hansen J, 10 February 1995) .......... 23.165, 25.55 Law Institute of Victoria Ltd v Maric (2008) 21 VR 1 ................................................................. 2.145 Law Institute of Victoria Ltd v Nagle [2005] VSC 35 .................................................................. 22.10 Law Society v Waddingham [2012] 6 Costs LO 832 .................................................................... 23.50 Law Society (Solicitors Regulation Authority) v Emeana [2013] EWHC 2130 (Admin) ......... 23.115, 24.30, 25.05 Law Society of New South Wales v Bouzanis [2006] NSWADT 55 .......................................... 25.155 Law Society of New South Wales v Bruce (1996) 40 NSWLR 77 .............................................. 9.125 Law Society of New South Wales v Dennis (1981) 7 Fam LR 417 ................................. 19.45, 25.25 Law Society of New South Wales v Farr [2009] NSWADT 108 ................................................ 23.150 Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 ............... 23.15, 23.135, 25.90 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 ............ 14.05, 14.150, 14.205, 23.15, 23.20, 23.25, 23.135, 23.150, 23.155, 23.170, 25.10 Law Society of New South Wales v Georgas [2008] NSWADT 82 ............................................. 25.25 Law Society of New South Wales v Graham [2007] NSWADT 67 ............................................ 21.100 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 ...... 4.60, 5.100, 6.05, 6.10, 6.25, 6.30, 6.40, 6.55, 25.55 Law Society of New South Wales v Holt [2003] NSWSC 629 ........................................... 8.30, 8.120 Law Society of New South Wales v McCarthy [2003] NSWADT 188 ...................................... 21.100 Law Society of New South Wales v McElvenny [2002] NSWADT 166 ...................................... 25.10 Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 ............. 23.105, 25.35, 25.90 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 ........... 1.125, 4.25, 6.55, 23.85, 23.135, 25.50 Law Society of New South Wales v Nguyen [2009] NSWADT 199 ............................................ 25.60 Law Society of New South Wales v Pearson [2005] NSWADT 206 .......................................... 23.150 Law Society of New South Wales v Seymour (unreported, CA(NSW), 14 April 1982) ............. 23.45 Law Society of New South Wales v Starky (unreported, CA(NSW), 13 August 1979) ............ 23.165 Law Society of New South Wales v Stormer (No 2) [2011] NSWADT 9 ................................. 23.150 Law Society of New South Wales v Treanor [2005] NSWADT 285 ............................................ 22.50 Law Society of New South Wales v Vosnakis [2007] NSWADT 42 .......................................... 25.155 Law Society of New South Wales v Waterhouse [2002] NSWADT 204 ...................................... 22.35

xlvi Table of Cases

Law Law Law Law Law

Society Society Society Society Society

of of of of of

Newfoundland and Labrador v Regular (2011) 336 DLR (4th) 1 ...................... 6.140 Singapore v Gopalan Nair [2011] 4 SLR 607 ..................................................... 25.40 Singapore v Nor’ain bte Abu Bakar [2009] 1 SLR(R) 753 ................................ 17.10 Singapore v Tan Phuay Khiang [2007] 3 SLR(R) 477 ........................................ 1.130 Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 ......... 5.20, 5.45, 7.20, 7.120, 25.60 Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 ............................ 6.130, 23.50 Law Society of Singapore v Yap Bock Heng Christopher [2014] 4 SLR 877 ............................... 6.50 Law Society of South Australia v De Souza [2003] SASC 316 ................................................... 25.30 Law Society of South Australia v Jordan (unreported, FC(SA), 21 August 1998) ........... 24.30, 25.35 Law Society of South Australia v Liddy [2003] SASC 379 ........................................................ 25.115 Law Society of South Australia v Murphy (1999) 201 LSJS 456 ................................... 23.120, 25.85 Law Society of South Australia v Rodda (2002) 83 SASR 541 ................................................. 25.115 Law Society of Tasmania v LH [2003] TASSC 90 ........................................................................ 23.65 Law Society of Tasmania v Matthews [2010] TASSC 60 ........................................................... 25.100 Law Society of Tasmania v R (a Practitioner) [2006] TASSC 108 ............................................ 25.175 Law Society of Tasmania v Richardson [2003] TASSC 9 ................................................. 2.120, 2.125 Law Society of Tasmania v Schouten [2003] TASSC 143 .......................................................... 25.170 Law Society of Tasmania v Scott [2007] TASSC 30 ....................................................... 23.150, 25.85 Law Society of Tasmania v Scott (No 2) [2007] TASSC 72 .......................................................... 2.90 Law Society of Tasmania v Turner (2001) 11 Tas R 1 .................................................... 23.85, 23.165 Law Society of Tasmania v Walker (unreported, SC(Tas), Cox J, 30 November 1988) .............. 23.85 Law Society of Upper Canada v Besant [2014] ONLSTA 50 ..................................................... 18.110 Law Society of the Australian Capital Territory v Burns (2012) 6 ACTLR 282 ... 23.10, 23.45, 25.35 Law Society of the Australian Capital Territory v Chamberlain (1993) 116 ACTR 1 ............... 21.215 Law Society of the Australian Capital Territory v Gates [2006] ACTSC 126 ................ 23.105, 25.50 Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 ............... 6.105, 14.120 Law Society of the Australian Capital Territory and Chamberlain, Re (1993) 116 ACTR 1 ....................................................................................................................................... 23.10 Law Society of the Australian Capital Territory and Roche, Re (2002) 171 FLR 138 ............. 14.120, 14.190, 14.205, 23.130, 25.80 Laws v GWS Machinery Pty Ltd [2006] NSWSC 492 ............................................................... 11.275 Layton v Stewart [1994] ANZ Conv R 283 ................................................................................... 7.130 Le Brasseur & Oakley, Re [1896] 2 Ch 487 ..................................................................... 5.305, 21.100 Le Serve v Great Wall Resources Pty Ltd [2010] NSWSC 1213 ................................................... 3.55 Le Soleil Hospitality Inc v Louie (2010) 200 ACWS (3d) 872 .................................................... 8.265 Le Soleil Hospitality Inc v Louie (2011) 201 ACWS (3d) 616 .................................................... 8.265 Leary v Federal Commissioner of Taxation (1980) 32 ALR 221 ........................................ 5.105, 6.40 Leda Pty Ltd v Weerden (2007) 63 ACSR 636 ......................................................... 4.170, 5.45, 5.245 Leda Pty Ltd v Weerden (No 2) (2006) 62 ATR 100 ............................................... 4.170, 5.45, 5.245 Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262 .................................... 5.40 Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532 ................................................ 6.130 Lee v Korean Society of Victoria [2014] VSC 316 ....................................................................... 17.20 Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liq) (1935) 53 CLR 250 ................................................................................................................................... 16.25, 16.90 Leerdam v Noori (2009) 227 FLR 210 .......................................................................................... 5.315 Legal Contribution Trust v Bailey [2004] WASC 175 ................................................................... 3.210 Legal Practice Board v Clohessy [2006] WASC 21 ...................................................................... 2.140 Legal Practice Board v Mullally [2003] WASC 225 ..................................................................... 2.140 Legal Practice Board v Ridah [2004] WASC 263 ............................................................................ 2.05 Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2013] ACTSC 134 ..................................................................................................................... 23.25

Table of Cases xlvii

Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2014] ACTSC 13 ......................................................................................................... 23.140, 25.10 Legal Practitioner v Council of the Law Society of the Australian Capital Territory (No 2) [2015] ACTSC 317 .............................................................................................................. 23.150 Legal Practitioners Complaints Committee v Browne (2006) 42 SR (WA) 342 .......................... 20.20 Legal Practitioners Complaints Committee v Bull [2006] WASAT 217 ..................................... 25.135 Legal Practitioners Complaints Committee v Camp [2010] WASC 188 ...................................... 25.65 Legal Practitioners Complaints Committee v Chang [2007] WASAT 86 ..................................... 17.65 Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 ................... 25.45, 25.50 Legal Practitioners Complaints Committee v Dixon [2006] WASCA 27 ................................... 25.175 Legal Practitioners Complaints Committee v Eley [2007] WASC 148 ........................... 23.120, 25.85 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29 .............. 21.165, 24.15 Legal Practitioners Complaints Committee v Lashansky [2007] WASC 211 ................ 23.130, 23.135 Legal Practitioners Complaints Committee v McKerlie [2007] WASC 119 ............................... 25.110 Legal Practitioners Complaints Committee v Mijatovic [2008] WASC 214 .............................. 23.120 Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129 ............................. 25.145 Legal Practitioners Complaints Committee v Pepe [2008] WASAT 246 .................................... 17.160 Legal Practitioners Complaints Committee v Pepe [2009] WASC 39 ............................... 6.150, 17.65 Legal Practitioners Complaints Committee v Reyburn (2009) 62 SR (WA) 340 ......................... 14.40 Legal Practitioners Complaints Committee v Richardson [2008] WASAT 116 ............................ 23.25 Legal Practitioners Complaints Committee v Segler (2009) 63 SR (WA) 43 ............................ 21.225 Legal Practitioners Complaints Committee v Segler (2009) 67 SR (WA) 280 ................. 19.05, 19.50 Legal Practitioners Complaints Committee v Stevens [2006] WASC 314 .................................. 25.170 Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9 ....................................... 23.120 Legal Practitioners Complaints Committee v Tomlinson [2006] WASC 211 ................ 23.145, 25.140 Legal Practitioners Complaints Committee v Trowell (2009) 61 SR (WA) 125 .......................... 25.65 Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1 ..... 3.05, 10.130, 17.200, 25.65 Legal Practitioners Complaints Committee v Verschuer Edward [2007] WASC 287 .................. 25.55 Legal Practitioners Complaints Committee v Walton [2006] WASC 213 ..................................... 25.65 Legal Practitioners Conduct Board v Boyes (2001) 83 SASR 449 ............................................... 25.50 Legal Practitioners Conduct Board v Boylen (2003) 229 LSJS 32 ................................. 23.25, 23.170 Legal Practitioners Conduct Board v Colton (2012) 113 SASR 467 ............................... 24.125, 25.35 Legal Practitioners Conduct Board v Dudek (2006) 245 LSJS 346 ................................ 23.30, 23.145 Legal Practitioners Conduct Board v Hannaford (2002) 83 SASR 277 .......................... 23.150, 25.20 Legal Practitioners Conduct Board v Hay (2001) 83 SASR 454 ..................................... 23.125, 25.35 Legal Practitioners Conduct Board v Jones (2010) 272 LSJS 529 ............................................. 23.150 Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371 .................... 23.125, 23.150, 25.35 Legal Practitioners Conduct Board v Kudra [2014] SASCFC 37 ............................................... 21.170 Legal Practitioners Conduct Board v Le Poidevin (2001) 83 SASR 443 ................................... 23.125 Legal Practitioners Conduct Board v Lind (2011) 110 SASR 531 ............................................... 25.85 Legal Practitioners Conduct Board v Lind (No 2) (2011) 277 LSJS 247 ..................................... 25.85 Legal Practitioners Conduct Board v Morel (2004) 88 SASR 401 .................................. 6.140, 23.105 Legal Practitioners Conduct Board v Nicholson (2006) 243 LSJS 293 ........................ 23.105, 23.140 Legal Practitioners Conduct Board v Pertl [2014] SASCFC 88 .................................................... 23.45 Legal Practitioners Conduct Board v Phillips (2002) 83 SASR 467 .......................................... 23.145 Legal Practitioners Conduct Board v Potter (2012) 8 ASTLR 401 ............................................. 23.145 Legal Practitioners Conduct Board v Power [2013] SASCFC 118 ............................................. 25.120 Legal Practitioners Conduct Board v Rowe [2012] SASCFC 144 ................................................ 25.25 Legal Practitioners Conduct Board v Trueman (2003) 225 LSJS 503 ............................. 23.30, 23.145 Legal Practitioners Conduct Board v Viscariello [2013] SASCFC 37 .......................................... 25.10 Legal Practitioners Conduct Board v Warburton [2014] SASCFC 65 ........................................ 23.130

xlviii

Table of Cases

Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116 ............................................ 21.270 Legal Profession Board of Tasmania v Haque [2015] TASSC 5 .................................................. 25.35 Legal Profession Complaints Committee v A Legal Practitioner [2013] WASAT 37 (S) .......... 23.150 Legal Profession Complaints Committee v Amsden [2014] WASAT 57 .................................... 21.220 Legal Profession Complaints Committee v Bachmann [2011] WASC 309 ................................ 23.170 Legal Profession Complaints Committee v Barber [2015] WASAT 99 ........................................ 25.10 Legal Profession Complaints Committee v Bates [2012] WASAT 150 ........................................ 18.45 Legal Profession Complaints Committee v Brennan [2010] WASC 198 ...................................... 25.50 Legal Profession Complaints Committee v Brickhill [2013] WASC 369 ........................ 17.145, 25.10 Legal Profession Complaints Committee v Caine [2010] WASAT 178 ...................................... 17.155 Legal Profession Complaints Committee v Carlose [2012] WASAT 104 ................................... 17.260 Legal Profession Complaints Committee v Chin [2012] WASC 467 ............................................ 23.90 Legal Profession Complaints Committee v Detata [2012] WASCA 214 .............. 22.05, 22.50, 23.110 Legal Profession Complaints Committee v Fitzpatrick [2011] WASC 320 .................................. 25.85 Legal Profession Complaints Committee v Giudice [2015] WASAT 10 ........................... 25.10, 25.90 Legal Profession Complaints Committee v Johnston [2013] WASAT 159 ................................... 25.65 Legal Profession Complaints Committee v Khosa [2015] WASAT 107; [2015] WASAT 107 (S) ........................................................................................................................................ 22.50 Legal Profession Complaints Committee v Love [2014] WASAT 84 ........................................... 20.15 Legal Profession Complaints Committee v Love [2014] WASC 389 .............................. 23.145, 25.20 Legal Profession Complaints Committee v Masten [2011] WASC 71 .......................................... 25.50 Legal Profession Complaints Committee v O’Halloran [2011] WASAT 95 ............................... 14.205 Legal Profession Complaints Committee v O’Halloran [2013] WASC 430 ................................. 25.70 Legal Profession Complaints Committee v Wells [2014] WASAT 112 .......................................... 3.10 Legal Profession Complaints Committee v in de Braekt (2011) 75 SR (WA) 336 ....... 21.145, 21.195 Legal Profession Complaints Committee v in de Braekt (2012) 80 SR (WA) 134 .................... 21.145 Legal Profession Complaints Committee v in de Braekt [2012] WASAT 58 (S) ....................... 21.145 Legal Profession Complaints Committee v in de Braekt [2013] WASC 124 . 21.145, 21.170, 23.135, 25.40 Legal Profession Conduct Commissioner v Alderman [2015] SASCFC 11 ................................. 2.140 Legal Profession Conduct Commissioner v Kassapis [2015] SASCFC 37 ................................. 23.145 Legal Profession Tribunal v Moir (Legal Profession Tribunal Proceeding No T0311 of 1998) ........................................................................................................................................... 6.140 Legal Services Board v Delahunty [2011] VSC 453 ..................................................................... 9.110 Legal Services Board v Di Cioccio [2012] VSC 41 ...................................................................... 25.50 Legal Services Board v Forster (2010) 29 VR 277 ........................................................................ 9.110 Legal Services Board v Foster (No 3) [2012] VSC 640 ................................................................ 19.05 Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 ...................................................... 9.125 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 ...................................................... 25.120 Legal Services Board v Werden [2011] VSC 74 ............................................................................ 9.125 Legal Services Board v Williams [2009] VSC 561 ..................................................................... 25.120 Legal Services Commission v Nguyen [2006] LPT 7 ................................................................... 25.25 Legal Services Commissioner v Adamakis [2013] VCAT 1970 .................................................... 23.60 Legal Services Commissioner v Barrett [2012] VCAT 1800 ....................................................... 14.115 Legal Services Commissioner v Blaker [2013] VCAT 87 ............................................................. 25.60 Legal Services Commissioner v Bone [2014] QCA 179 ............................................................... 23.50 Legal Services Commissioner v Bosscher [2016] QCAT 75 ....................................................... 17.225 Legal Services Commissioner v Bradshaw [2008] LPT 9 ........................................................... 21.270 Legal Services Commissioner v Bryden (No 2) [2012] NSWADT 112 ........................................ 20.50 Legal Services Commissioner v Bryden (No 3) [2012] NSWADT 225 ....................................... 20.50 Legal Services Commissioner v CBD [2012] QCA 69 ............................................................... 25.125 Legal Services Commissioner v Clapin [2011] QCAT 339 ........................................................... 23.25

Table of Cases xlix

Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal Legal

Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services Services

Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner Commissioner

v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v

Comino [2011] QCAT 387 ........................................................... 3.10 Comito [2011] VCAT 497 .......................................................... 25.25 Cooper [2011] QCAT 209 ........................................................ 21.145 Farnham [2009] LPT 4 ............................................................... 22.50 Ford [2008] LPT 12 ..................................................................... 3.10 Foster [2016] QCAT 101 ............................................................ 25.30 Garrett [2009] LPT 12 .............................................................. 21.165 Ge [2016] NSWCATOD 25 ....................................................... 25.30 Grosser [2014] VCAT 1533 ....................................................... 25.30 Hewlett [2008] LPT 3 .............................................................. 25.170 Jayakody [2008] VCAT 2075 ..................................................... 23.25 Keddie [2012] NSWADT 106 .................................................... 25.70 Lamplugh [2012] VCAT 279 ..................................................... 25.25 Laurie [2011] QCAT 335 ........................................................... 23.25 Long [2012] VCAT 193 ................................................ 23.25, 25.170 Lynch [2015] VCAT 772 .......................................................... 21.220 McCristal [2011] VCAT 231 ...................................................... 23.30 McNamara [2011] VCAT 1228 .................................................. 25.60 Mercader [2011] VCAT 2062 .................................................. 21.270 Moore [2010] VCAT 742 ......................................................... 25.160 Mould [2015] QCAT 440 ............................. 3.20, 3.55, 14.10, 25.90 Mullins [2006] LPT 12 ............................................................ 21.165 Murphy [2015] QCAT 381 ....................................................... 21.265 Nikolaidis (No 3) [2005] NSWADT 200 .................................. 25.85 Nomikos [2013] VCAT 1682 ........................................ 20.85, 21.135 Nomikos [2014] VCAT 251 .......................................... 20.85, 21.135 PFM [2014] VSC 341 ................................................................ 25.30 Piva [2009] VCAT 1981 ............................................................. 23.25 Puryer [2012] QCAT 48 ........................................................... 25.175 Rose [2007] VCAT 2180 ............................................................ 3.235 Sampson [2013] VCAT 1177 ................................................... 21.135 Sampson [2013] VCAT 1439 ................................................... 21.135 Scott [2009] LPT 7 ..................................................................... 25.65 Scott [2014] QCA 266 .................................................................. 2.90 Simon [2014] VCAT 1179 ......................................................... 22.65 Sing [2007] 2 Qd R 158 .......................................................... 21.225 Spicehandler [2012] VCAT 630 ................................................. 25.30 Stirling [2012] VCAT 347 ........................................................ 25.170 Stirling [2013] VSCA 374 .......................................................... 23.60 Tampoe [2009] LPT 14 ................................................... 10.95, 25.65 Testart [2007] VCAT 2234 ....................................................... 20.220 Turley [2008] LPT 4 .................................................................. 25.40 Voll [2008] QCA 293 ............................................................... 21.165 Walter [2011] QSC 132 .................................................... 1.30, 2.145 Wen [2016] NSWCATOD 36 ................................................... 23.140 Winning [2008] LPT 13 ........................................................... 21.145 Wright [2010] QSC 168 ............................................................... 3.70 Wright [2012] 2 Qd R 360 ............................................... 3.70, 14.50 XBY [2016] QCAT 102 ........................................................... 23.145 Zaghini [2005] LPT 4 ................................................................ 22.50 de Brenni [2011] QCAT 340 ........................................................ 3.10 Reymond [2014] NSWCATOD 14 ............................................ 6.130

l

Table of Cases

Legal Services Society v British Columbia (Information & Privacy Commissioner) (1996) 140 DLR (4th) 372 ....................................................................................................... 11.100 Legione v Hateley (1983) 152 CLR 406 ........................................................................................ 3.135 Leibowitz v Eighth Judicial District Court (2003) 78 P 3d 515 ................................................... 8.255 Leitch v Reynolds (2005) Aust Torts Reports ¶81-806 .................................................................. 4.175 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 ............................................ 17.265, 21.190 Lenehan, Ex parte (1948) 77 CLR 403 .......................................................... 2.25, 2.130, 2.165, 25.05 Lennar Mare Island, LLC v Steadfast Insurance Co (2015) 105 F Supp 3d 1100 .... 7.50, 7.85, 8.265 Lester v Lester [2007] SASC 298 ................................................................................................... 17.50 Levicom International Holdings BV v Linklaters (a firm) [2010] PNLR 29 ................................ 5.250 Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 ................................................. 3.145 Lewis v Hillhouse [2005] QCA 316 ............................................................................................... 5.280 Lewis v Ogden (1984) 153 CLR 682 ............................................................................................. 17.25 Lewis v Powell [1897] 1 Ch 678 .................................................................................................. 16.100 Lewis v Real Estate Institute of New Zealand Inc [1995] 3 NZLR 385 .................................... 20.115 Lewis, In the Matter of (1992) 415 SE 2d 173 .............................................................................. 6.145 Lewis Blyth & Hooper (a firm) v Smith (2015) 48 WAR 467 ........................................ 14.45, 14.205 Lewis Blyth and Hooper v Dennis [2007] WASC 177 ...................................................... 3.200, 3.210 Li v Wu [2012] FCA 164 ................................................................................................................ 8.120 Liati v Fitzsimons (1996) 68 FCR 402 ........................................................................................... 15.30 Liatos v Silid [2009] FamCA 674 ................................................................................................... 8.165 Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 ....................................... 11.170 Libke v R (2007) 230 CLR 559 .......................................................................................... 18.35, 18.40 Lillicrap v Nalder & Son (a firm) [1993] 1 WLR 94 .................................................................... 10.90 Lindquist, Re (2009) 262 LSJS 182 ............................................................................................. 20.220 Little v Law Institute of Victoria (No 3) [1990] VR 257 ................................................................ 5.15 Little v Spreadbury [1910] 2 KB 658 ............................................................................................. 3.130 Littler v Price [2005] 1 Qd R 275 .................................................................................................... 5.70 Liu v Adamson (2003) 12 BPR 22,205 ............................................................................. 6.135, 15.110 Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547 ................................. 12.20, 12.100 Liveri, Re [2006] QCA 152 ............................................................................................................ 2.125 Lloyd v Grace Smith & Co [1912] AC 716 ................................................................................. 20.205 Locke v Camberwell Health Authority [1991] 2 Med LR 249 ..................................................... 5.205 Loescher v Dean [1950] Ch 491 ......................................................................................... 16.40, 16.45 Long, Re [1929] VLR 318 .............................................................................................................. 16.50 Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9,606 ................................................ 3.120 Longstaff v Birtles [2002] 1 WLR 470 ................................................................................... 6.80, 6.90 Lougheed Enterprises Ltd v Armbruster (1992) 63 BCLR (2d) 316 ............................................ 17.40 Love v Robbins (1990) 2 WAR 510 ........................................................................ 5.340, 18.20, 18.45 Lucantonio v Kleinert [2009] NSWSC 853 ................................................................................... 5.220 Lucantonio v Kleinert [2011] NSWSC 753 ............................................................. 4.170, 5.100, 5.205 Lucke v Cleary (2011) 111 SASR 134 ........................................................................................... 3.145 Luke v Wansbroughs (a firm) [2003] EWHC 3151 (QB) .............................................................. 5.225 Lupker v Shine Lawyers Pty Ltd [2015] QSC 278 ........................................................................ 3.200 Ly, Re (1995) 62 FCR 432 ............................................................................................................ 16.105 Lyell v Kennedy (No 3) (1884) 27 Ch D 1 .................................................................... 11.260, 11.270 Lyndon v R [2014] NSWCCA 112 ...................................................................................... 18.25, 18.30 Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421 ......................................................................... 5.20

M M J Leonard Pty Ltd v Bristrol Custodians Ltd (in liq) [2013] NSWSC 1734 ......................... 15.110

Table of Cases li

MAM Mortgages Ltd (in liq) v Cameron Bros (No 2) [2001] 1 Qd R 46 ................................. 11.270 MCF, Re Application for Admission as a Legal Practitioner by [2015] QCA 154 ........................ 2.60 M, Matter of [1998] 3 LPDR 23 .................................................................................................... 25.10 Mabbett v Josef & Sons Contracting Pty Ltd (in liq) [2006] NSWSC 1452 ................................. 5.40 MacArthur v Bank of New York (1981) 524 F Supp 1205 ........................................................... 17.45 MacDonald Estate v Martin (1990) 77 DLR (4th) 249 ... 1.125, 8.70, 8.80, 8.95, 8.100, 8.125, 8.215 MacLean v Arklow Investments Ltd [1998] 3 NZLR 680 ............................................................ 1.125 Macaulay, Ex parte (1930) 30 SR (NSW) 193 ............................................................................... 25.50 Macedonia Pty Ltd v Federal Commissioner of Taxation (1987) 18 ATR 929 .......................... 11.135 Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 ................................................................................... 11.15, 11.250 Mack, Re (1968) 88 WN (Pt 1) (NSW) 68 .................................................................................. 23.105 Mackenzie v Mackintosh (1891) 64 LT 706 .................................................................................. 16.45 Mackman v Stengold Pty Ltd (1991) ATPR ¶41-105 ......................................................... 5.15, 21.135 Macquarie Bank Ltd v Myer [1994] 1 VR 350 .................................................................... 8.55, 8.170 Macteldir Pty Ltd v Dimovski (2005) 226 ALR 773 ..................................................................... 17.80 Maddison v Goldrick [1976] 1 NSWLR 651 ............................................................................... 11.155 Maestrale v Aspite (2012) 9 ASTLR 575 ....................................................................................... 21.60 Magnamain Investments Pty Ltd v Baker Johnson Lawyers [2008] QSC 245 .......................... 16.105 Magripilis v Baird [1926] St R Qd 89 ........................................................................................... 3.140 Magro v Magro (1989) FLC ¶92-005 ............................................................. 8.60, 8.125, 8.130, 8.140 Maguire v Makaronis (1997) 188 CLR 449 ......................................................................... 4.180, 6.65 Maher v Millennium Markets Pty Ltd [2004] VSC 174 ................................................................ 6.115 Maidment, Re (1992) 23 ATR 629 ......................................................... 23.15, 23.135, 23.140, 23.170 Mair v Mazzitti (No 1) (2003) 231 LSJS 186 ................................................................................ 12.80 Majinski v State of Western Australia (2013) 226 A Crim R 552 .............................................. 17.165 Major Projects Pty Ltd v Sibmark Pty Ltd [1992] ANZ Conv R 349 ............................... 16.60, 16.75 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 ........................................................................ 4.175 Malfanti v Legal Profession Disciplinary Tribunal (unreported, CA(NSW), 23 August 1993) ........................................................................................................................................... 23.65 Mallard v R (2005) 224 CLR 125 ....................................................................................... 18.10, 18.50 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 ........... 5.85, 7.40, 8.85, 8.90, 8.145, 8.195, 8.205 Mancini v Legal Practitioners Conduct Board [2014] SASCFC 31 ................................ 21.95, 23.105 Mancini v Mancini [1999] NSWSC 800 ........................................................................................ 8.120 Mandelman, Re (1994) 514 NW 2d 11 .......................................................................................... 10.65 Manlio (No 2), Re [2016] VSC 130 ............................................................................................... 24.10 Mann v Carnell (2000) 201 CLR 1 ................................................................................... 11.25, 11.245 Mann v Hulme (1961) 106 CLR 136 ............................................................................................... 9.05 Manna Hill Mining Co Pty Ltd v Iles Selley Lawyers [2004] FCA 1175 ........................ 8.120, 8.150 Mantella v Mantella (2006) 80 OR (3d) 270 ................................................................................. 21.35 Mantonella Pty Ltd v Thompson (2009) 255 ALR 367 ....................................................... 4.185, 7.90 Manville Canada Inc v Ladner Downs (1992) 88 DLR (4th) 208 ................................................ 8.260 Maraj (a legal practitioner), Re (1995) 15 WAR 12 ................................ 23.30, 23.100, 23.170, 25.50 Maranda v Richer [2003] 3 SCR 193 ........................................................................................... 11.100 March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506 ........................................................ 4.160 Marcolongo v Mattiussi [2000] NSWSC 834 .............................................................. 6.90, 6.95, 6.100 Margetson & Jones, Re [1897] 2 Ch 314 ....................................................................... 21.235, 21.270 Marinangeli v Marinangeli (2004) 132 ACWS (3d) 798 ............................................................... 8.130 Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 178 ALR 322 ....................................... 8.210, 8.215 Markham v Markham [2009] FamCA 754 ..................................................................................... 8.265

lii

Table of Cases

Marks v GIO Australia Holdings Ltd (No 2) (1996) 66 FCR 128 ................................................ 12.95 Marks & Spencer plc v Freshfields Bruckhaus Deringer (a firm) [2004] 1 WLR 2331 ................ 7.45 Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404 ........................ 5.220 Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 ............................ 7.25, 7.70, 7.80, 7.115, 7.125 Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 1254 .............................. 11.95 Marsh v Joseph [1897] 1 Ch 213 ................................................................................................... 22.25 Marsh v Sofaer [2004] PNLR 24 .................................................................................................... 10.20 Marshall v Prescott [2013] NSWCA 152 ..................................................................................... 11.190 Marshall v Prescott [2015] NSWCA 110 ....................................................................................... 10.20 Marshall v Prescott (No 3) [2013] NSWSC 1949 .......................................................................... 10.20 Martin v Martin (No 2) (2014) 51 Fam LR 492 .......................................................................... 11.175 Martin v The Queen (2013) 238 A Crim R 449 ............................................................................ 4.200 Mason v Mills & Reeve [2011] WTLR 1589 ....................................................................... 5.25, 5.255 Mason & Taylor, Re (1878) 10 Ch D 729 ..................................................................................... 16.35 Masters v Dobson Mitchell & Allport [2014] TASSC 31 .................................................. 4.140, 5.225 Matrix Securities Ltd v Theodore Goddard (a firm) [1998] PNLR 290 ................ 5.165, 5.205, 5.255 Matthews v R (2014) 44 VR 280 ................................................................................................... 18.90 Maurice Blackburn Pty Ltd v Burmingham [2009] VSC 20 ......................................................... 14.80 Maxwell, Ex parte (1955) 72 WN (NSW) 333 ................................................................... 3.100, 3.210 Maxwell-Smith v S & E Hall Pty Ltd (2014) 86 NSWLR 481 ............................................. 8.30, 8.40 May v Burcul (unreported, CA(NSW), 18 October 1982) .............................................................. 3.55 May v Mijatovic (2002) 26 WAR 95 ......................................................................... 5.50, 5.200, 5.335 Mayes, Re [1974] 1 NSWLR 19 ......................................................................................... 23.85, 25.90 McCabe v British Tobacco Australia Services Ltd [2002] VSC 73 ............................................ 17.145 McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579 ......................................... 5.350 McCarthy v St Paul International Insurance Co Ltd (2007) 157 FCR 402 .................................. 5.350 McCaskill v Mirror Newspapers Ltd [1984] 1 NSWLR 66 .......................................................... 11.75 McClung (deceased), Re [2006] VSC 209 ..................................................................................... 14.70 McCullough v R [1982] Tas R 43 .................................................................................................. 18.35 McCullough v Riffert (2010) 59 ETR (3d) 235 ............................................................................. 21.60 McD v McD [1983] 3 NSWLR 81 ................................................................................................... 3.10 McDonald v Legal Services Commissioner [2015] VSC 237 ..................................................... 21.220 McDonald Crawford v Morrow (2004) 28 Alta LR (4th) 62 ...................................................... 14.145 McDougall’s Application, Re [1982] 1 NZLR 141 ...................................... 22.25, 22.30, 22.65, 22.70 McFaddens (a firm) v Platford [2009] PNLR 26 ........................................................................... 5.200 McGillivray and Mitchell, Marriage of (1998) 23 Fam LR 238 .............................. 8.60, 8.150, 8.265 McGeoch v Hendriks [2007] ANZ Conv R 361 .............................................................................. 3.65 McGowan v Commissioner of Stamp Duties (2001) 47 ATR 357 ...................................... 3.05, 3.200 McInnes v Twigg (1992) 16 Fam LR 185 ...................................................................................... 14.80 McKaskell v Benseman [1989] 3 NZLR 75 ................................................................ 4.65, 5.80, 10.65 McKenna v Hunter & New England Local Health District [2013] NSWCA 476 ........................ 5.170 McKenzie v Director-General of Conservation and Natural Resources [2001] VSC 220 ........... 16.75 McLaren v Legal Practitioners Disciplinary Tribunal (2010) 26 NTLR 45 ................................ 21.195 McLaughlin v Dungowan Manly Pty Ltd (No 3) [2011] NSWSC 717 ...................................... 17.245 McMaster v Byrne [1952] 3 DLR 337 ........................................................................................... 4.190 McMillan v McMillan (2000) FLC ¶93-048 ....................................................................... 8.130, 8.255 McNamara v Commonwealth Trading Bank of Australia (1984) 37 SASR 232 .......................... 5.120 McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382 ............... 3.05, 3.55, 14.90 McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129 .................. 14.185, 14.205 McQuarrie, Hunter v Foote (1982) 143 DLR (3d) 354 ................................................................. 3.200 McVey v Denis (1984) 55 ALR 201 ............................................................................................... 3.205 McWilliam v McWilliam [1969] 1 NSWR 159 ............................................................................. 15.90

Table of Cases liii

Medcalf v Mardell [2003] 1 AC 120 .............................................................................................. 5.315 Medina County Bar Association v Grieselhuber (1997) 678 NE 2d 535 .......................... 20.35, 20.75 Medlin v State Government Insurance Commission (1995) 182 CLR 1 ...................................... 4.160 Mednis v Chand [2003] NSWSC 680 .............................................................................................. 3.45 Meek v Fleming [1961] 2 QB 366 .................................................................................... 17.30, 17.115 Meerkin & Apel v Rossett Pty Ltd [1998] 4 VR 54 .............................................................. 3.55, 3.70 Meguerditchian v Lightbound [1917] 2 KB 298 ............................................................................ 16.15 Mehjoo v Harben Barker (a firm) [2014] 4 All ER 806 ................................................................ 5.255 Meinhard v Salmon (1928) 164 NE 545 .......................................................................................... 4.40 Meissner v R (1995) 184 CLR 132 .............................................................................................. 18.110 Melamed v ITT Continental Baking Co (1979) 592 F 2d 290 ...................................................... 8.260 Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 3) [2014] VSC 340 ................................................................................................................................... 1.125, 17.20 Melbourne Steamship Co v Moorehead (1912) 15 CLR 333 ........................................................ 13.85 Mellifont v Queensland Law Society Inc [1981] Qd R 17 ................................................ 25.15, 25.50 Melrose Cranes and Rigging Pty Ltd v Manitowoc Crane Group Australia Pty Ltd [2012] NSWSC 904 .................................................................................................................. 11.160 Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511 ......... 11.245, 11.275 Melvey, Re (1966) 85 WN (Pt 1) (NSW) 289 ................................................................ 14.115, 23.155 Mendolin Court Pty Ltd v Delrayne (unreported, SC(Vic), Gillard J, 8 September 1997) ........................................................................................................................................... 8.150 Menmel Pty Ltd v Great Australian Bite Pty Ltd (1997) ATPR ¶41-553 ................................... 21.135 Mensinga v Director of Public Prosecutions [2003] ACTCA 1 .................................................... 18.45 Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 ....................................................................................... 12.05, 12.30, 12.35 Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612 ................................................................................................... 7.105, 11.195 Mercer v Graves (1872) LR 7 QB 499 ........................................................................................ 16.125 Metcash Trading Ltd v Hourigan’s IGA Umina Pty Ltd (2003) 11 BPR 21,129 ........................... 5.15 Meter Cabs Ltd, Re [1911] 2 Ch 557 .............................................................................. 16.115, 16.140 Meteyard v Love (2005) 56 ACSR 487 ........................................................................................ 11.160 Metsikas v Quirk (No 2) [2010] NSWSC 757 ............................................................................... 5.175 Mezrano v Alabama State Bar Association (1983) 434 So 2d 732 ............................................... 20.35 Micarone v Perpetual Trustees Australia Ltd (1999) 75 SASR 1 ...................................... 5.100, 5.120 Michael Wilson & Partners Ltd v Nicholls [2009] NSWSC 763 .................................................. 11.15 Michaels v Taylor Woodrow Developments Ltd [2001] Ch 493 ................................................... 17.90 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384 ............................. 5.220 Miles, Re (1966) 84 WN (Pt 1) (NSW) 163 ....................................................................... 23.85, 25.90 Miller v Commissioner of Inland Revenue (1997) 18 NZTC 13,001 ........................................... 13.45 Miller v Commissioner of Inland Revenue [1999] 1 NZLR 275 ................................................ 11.265 Millhouse v Mullens [2015] FamCA 754 ....................................................................................... 17.20 Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62 ............................ 8.90, 8.125, 8.130 Mills v R [1995] 1 WLR 511 ......................................................................................................... 7.100 Mills v Rogers (1899) 18 NZLR 291 ............................................................................................. 16.45 Milte, Re (1991) 22 ATR 740 ....................................................................................................... 23.140 Milu v Smith [2004] QSC 27 ......................................................................................................... 5.195 Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 4) [2014] WASC 282 .......................................... 21.140 Minister Administering the Crown Lands Consolidation Act & Western Lands Act v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201 .............................................. 17.220 Minkin v Landsberg [2016] 1 WLR 1489 ........................................................................................ 5.25 Mintel International Group Ltd v Mintel (Australia) Pty Ltd (2000) 181 ALR 78 ...................... 8.150 Minter v Priest [1929] 1 KB 655 .................................................................................................. 11.125

liv Table of Cases

Minter v Priest [1930] AC 558 .......................................................................................... 10.40, 11.130 Mississippi Bar v Attorney ST (1993) 621 So 2d 229 ................................................................ 21.180 Mitchell v Burell [2008] NSWSC 772 ........................................................................................... 17.50 Mitchell v Pattern Holdings Pty Ltd [2000] NSWSC 1015 ......................................................... 21.115 Mitry Lawyers v Barnden [2014] FCA 918 ................................................................................. 17.260 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 ............................................................................................................................................... 11.50 Moage Ltd (in liq), Re (1998) 153 ALR 711 ................................................................................. 19.10 Moage Ltd (in liq), Re (1998) 82 FCR 10 ..................................................................................... 11.65 Modra v State of Victoria (2012) 205 FCR 445 .......................................................................... 17.245 Moffat v Wetstein (1996) 135 DLR (4th) 298 ................ 4.40, 8.55, 8.135, 8.150, 8.220, 8.260, 8.270 Mohamed v Alaga & Co (a firm) [2000] 1 WLR 1815 ............................................................... 20.125 Mohamed v Farah [2004] NSWSC 482 ......................................................................................... 3.145 Moleirinho v Talbot and Olivier Lawyers Pty Ltd [2014] WASCA 65 ........................................ 14.40 Moline & Comcare, Re (2003) 77 ALD 224 ................................................................................. 13.85 Moloney v Coppola [2012] NSWSC 728 ..................................................................................... 15.110 Moloney v Marler & Darvall [2004] QCA 310 ............................................................................. 16.40 Momibo Pty Ltd v Adam (2004) 1 DCLR (NSW) 316 ............................................................... 17.265 Moody v Cox [1917] 2 Ch 71 ...................................................................................... 5.80, 7.20, 7.120 Moore v Scenic Tours Pty Ltd [2015] NSWSC 237 ...................................................................... 17.20 Moore, Re (1997) 494 SE 2d 804 .................................................................................................. 5.175 Morel, Re [2015] SASCFC 20 ............................................................................................ 2.165, 6.140 Morris v Morris [2015] NZHC 2315 .............................................................................................. 8.150 Morris v Southwark London Borough Council [2011] 2 All ER 240 ......................................... 14.120 Morris, Re [1908] 1 KB 473 ........................................................................................................... 16.95 Morris Fletcher & Cross’ Bill of Costs, Re [1997] 2 Qd R 228 ................... 1.30, 4.55, 14.15, 14.205 Morrison v Judd [1996] ANZ Conv R 193 .................................................................................... 17.60 Morrissey v New South Wales Bar Association [2006] NSWSC 323 .......................................... 2.110 Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836 .......... 4.65, 5.80, 5.90, 10.20 Moseley v Solicitors Regulation Authority [2013] BPIR 855 ............................................ 23.15, 23.30 Moseley, Re (1925) 25 SR (NSW) 174 ............................................................................... 23.10, 25.85 Moss v Eagleston [2014] NSWSC 6 .............................................................................................. 5.195 Moss v Moss (No 2) (1900) 21 LR (NSW) Eq 253 ........................................................................ 4.40 Moss, Re (1866) LR 2 Eq 345 ........................................................................................................ 3.205 Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 6) (2010) 223 FCR 261 .................................................................................................................. 14.95 Moy v Pettman Smith (a firm) [2005] 1 WLR 581 ................................................ 5.200, 5.225, 5.280 Mundraby v Commonwealth (2001) 184 ALR 737 ....................................................................... 11.80 Mungar v Legal Practice Board of Western Australia [2009] WASC 135 .................................... 2.165 Municipal Insurance Associations of British Columbia v British Columbia (Information & Privacy Commissioner) (1996) 143 DLR (4th) 134 ........................................................... 11.100 Murdoch v Brown [2013] FamCA 586 ........................................................................................... 17.20 Murfett Legal Pty Ltd v Frigger [2015] WASC 406 .................................................................... 15.110 Murphy v Bar Association of New South Wales (2001) 49 ATR 48 .......................................... 25.170 Murphy v Legal Services Commissioner [2013] QSC 70 ........................................................... 17.230 Murphy v Liesfield [1930] VLR 142 ................................................................................................ 3.55 Murray v Macquarie Bank Ltd (1991) 33 FCR 46 ............................................................... 7.120, 8.50 Murray v Metropolitan Life Insurance Co (2009) 583 F 3d 173 .................................................. 17.45 Murray v Schreuder (2009) 1 ASTLR 340 ..................................................................................... 11.30 Myers v Elman [1940] AC 282 ....................................................... 17.110, 23.10, 23.35, 23.85, 25.10 Myers v Rothfield [1939] 1 KB 109 ............................................................................................... 23.85

Table of Cases lv

N N (a solicitor), Re [2010] QSC 267 .................................................................................. 5.195, 18.125 NIML Ltd v MAN Financial Australia Ltd (No 2) [2004] VSC 510 .......................................... 17.230 NRMA Ltd v Morgan (1999) 31 ACSR 435 ...................................................................... 5.190, 5.220 NT Pubco Pty Ltd v Strazdins [2014] NTSC 8 ............................................................................. 5.315 NZ Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 .......................... 17.215, 17.220 Naczek v Dowler [2011] FamCAFC 179 ....................................................................................... 17.20 Nasr v Vihervaara (2005) 91 SASR 222 .......................................................... 8.30, 8.70, 8.105, 8.120 National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 ........................... 22.10 National Employers’ Mutual General Insurance Association v Waind (1979) 141 CLR 648 ............................................................................................................................................. 11.155 National Home Loans Corp plc v Giffen Couch & Archer (a firm) [1997] 3 All ER 808 ............ 5.90 National Labour Relations Board v Harvey (1965) 349 F 2d 900 ................................................ 11.85 National Standards Committee v Sarah [2014] NZLCDT 2 ........................................................ 25.135 National Westminster Finance New Zealand Ltd v Bryant [1989] 1 NZLR 513 ......................... 22.05 Nauru Phosphate Royalties Trust v Business Australia Capital Mortgage Pty Ltd (in liq) [2008] NSWSC 833 ................................................................................ 21.245, 21.260, 21.270 Nayyar v Sapte [2010] PNLR 15 ...................................................................................................... 5.60 Neagle v Power [1967] SASR 373 ................................................................................................. 5.220 Neale v Lady Gordon Lennox [1902] 1 KB 838 ........................................................................... 3.145 Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow (a firm) [1995] 1 All ER 976 .................................................................................................................................. 10.90 Nelson v Nelson [1997] 1 All ER 970 ........................................................................................... 3.205 Nelson, Re (1991) 106 ACTR 1 ............ 3.100, 3.180, 6.30, 9.65, 9.70, 15.110, 22.05, 23.25, 23.105, 23.110, 23.155, 25.10, 25.50, 25.85 Netterville v Mississippi State Bar (1981) 397 So 2d 878 .......................................................... 21.180 Nettles v R (1985) 21 DLR (4th) 103 ............................................................................................ 5.340 Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 ........................... 11.190 Neumegen v Neumegen & Co [1998] 3 NZLR 310 ...................................................................... 20.75 New South Wales Bar Association v Bland [2010] NSWADT 34 ................................................ 4.140 New South Wales Bar Association v Bryson [2003] NSWADT 19 ............................................ 25.145 New South Wales Bar Association v Caffrey (No 4) [2008] NSWADT 190 ................................ 23.25 New South Wales Bar Association v Cairns [2008] NSWADT 34 ............................................. 17.220 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 ........... 23.45, 25.160, 25.170 New South Wales Bar Association v Davis (1963) 109 CLR 428 .................................................. 2.95 New South Wales Bar Association v Evatt (1968) 117 CLR 177 .................................... 23.135, 25.75 New South Wales Bar Association v Hamman (1999) 217 ALR 553 .............. 23.105, 25.160, 25.170 New South Wales Bar Association v Howen (No 2) [2008] NSWADT 252 .............................. 23.145 New South Wales Bar Association v Jetnikoff (unreported, NSWCA, Kirby P, Clarke and Cripps JJA, 18 December 1992) ......................................................................................... 25.30 New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 ......... 3.40, 17.65, 17.95, 23.50, 23.130 New South Wales Bar Association v Maddocks (unreported, CA(NSW), Kirby P, Samuels and McHugh JJA, 23 August 1988) ............................................................ 21.225, 23.130 New South Wales Bar Association v Meakes [2006] NSWCA 340 ....................... 23.20, 23.60, 25.70 New South Wales Bar Association v Murphy (2002) 55 NSWLR 23 ........................................ 25.170 New South Wales Bar Association v Punch [2008] NSWADT 78 ................................ 17.125, 18.105 New South Wales Bar Association v Sahade [2005] NSWADT 159 ............................. 23.160, 25.100 New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 ................................ 23.160 New South Wales Bar Association v Somosi (2001) 48 ATR 562 ................................ 25.160, 25.170 New South Wales Bar Association v Stevens (2003) 54 ATR 25 ............................................... 25.170

lvi Table of Cases

New South Wales Bar Association v Tedeschi (No 3) [2003] NSWADT 174 ............................. 23.75 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 .............. 17.95, 17.175, 21.205, 23.75 New South Wales Bar Association v Young (2003) 54 ATR 22 ................................................. 25.170 New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 ................... 14.170, 14.200 New Zealand Law Society v B [2013] NZCA 156 ...................................................................... 23.110 New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 ......................... 21.15 Newcastle International Airport Ltd v Eversheds LLP [2014] 1 WLR 3073 ...................... 3.35, 13.60 Newcrest Mining (WA) Ltd v Commonwealth (1993) 40 FCR 507 ........................................... 11.270 Newen, Re [1903] 1 Ch 812 ........................................................................................................... 3.130 Newfoundland Telephone Co v Board of Commissioners of Public Utilities [1992] 1 SCR 623 .......................................................................................................................... 23.55, 23.70 Newman v Phillips Fox (1999) 21 WAR 309 ......................................... 8.30, 8.50, 8.70, 8.215, 8.220 Nicholson v Icepak Coolstores Ltd [1999] 3 NZLR 475 .............................................................. 7.105 Nicholson v Knaggs [No 2] [2009] VSC 187 ................................................................................ 16.70 Nicholson, Re (1883) 53 LJ Ch 302 ............................................................................................... 16.35 Nickelby Pty Ltd v Holden (unreported, SC(NSW), Young J, 31 March 1994) ............... 22.25, 22.30 Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44 ......................... 11.160 Nicolaou v Truman Facilities Pty Ltd [2014] NSWSC 1459 ........................................................ 10.90 Niesig v Team I (1990) 76 NY 2d 363 ........................................................................................ 21.255 Nikolaidis v Legal Services Commissioner [2007] NSWCA 130 ................................................. 23.85 Nikolaidis v Satouris (2014) 317 ALR 761 ........................................................................ 5.265, 5.315 Nikolay v Peters [2011] 1 SLR 663 ............................................................................................... 8.105 Nikolic v Nikolic [2002] NSWCA 248 .......................................................................................... 5.130 Nix v Whiteside (1986) 475 US 157 ............................................................................... 17.130, 17.135 Nixon v Slater & Gordon (2000) 175 ALR 15 ................................................................. 20.25, 21.130 Nocton v Lord Ashburton [1914] AC 932 ........................................................................................ 4.05 Nodnara Pty Ltd v Deputy Commissioner of Taxation (1997) 140 FLR 336 .............................. 12.25 Noone v Mericka [2012] VSC 101 ............................................................................................... 20.115 Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc (No 2) [2011] VSC 153 ........................................................................................................................ 21.275 Norberg v Wynrib (1992) 92 DLR (4th) 449 ................................................................................. 6.140 Norman v O’Mahony [2006] FCA 1169 ....................................................................................... 11.255 North v Loomes [1919] 1 Ch 378 .................................................................................................. 3.120 North & South Trust Co v Berkeley [1971] 1 WLR 470 ................................................................ 5.80 North West Construction Co Pty Ltd (in liq) v Marian [1965] WAR 205 .................................. 16.130 Nostrame v Santiago (2011) 22 A 3d 20 ........................................................................................ 3.200 Nova, an Alberta Corp v Guelph Engineering Co (1984) 5 DLR (4th) 755 ................................ 11.40 Novotny v Cropley [2005] NSWCA 26 ....................................................................................... 21.275 Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 .............................................................................. 3.120 Nuclear Utility Technology and Environmental Corporation Inc v Australian Broadcasting Corporation [2009] NSWSC 78 ........................................................................ 21.190 Nudd v R (2006) 80 ALJR 614 ........................................................................................... 4.200, 4.205 Nulle, Re (1980) 620 P 2d 214 ....................................................................................................... 19.50

O O Builders & Associates, Inc v Yuna Corp (2011) 19 A 3d 966 .................................................. 8.190 O’Brien v Hooker Homes Pty Ltd (1993) ASC ¶56-217 ............................................................... 5.135 OG (A Lawyer), Re (2007) 18 VR 164 ..................................................................... 2.70, 2.120, 2.125 O’Neill v Wilson [2011] QSC 220 ................................................................................................. 14.95 OP & TP, Re (2002) 172 FLR 47 ................................................................................................... 4.200

Table of Cases lvii

O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 ................. 11.10, 11.205 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 ... 5.80, 6.25, 6.40, 6.45, 6.65, 6.115, 17.95, 23.50, 23.60, 23.100, 25.10 O’Rourke v Darbishire [1920] AC 581 ........................................................................................... 11.65 O’Sullivan, Re [1937] St R Qd 50 ................................................................................................... 3.55 Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] 1 WLR 1803 ................................. 12.65 Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2011] 1 AC 662 ............................ 12.40, 12.65 Official Assignee of Collier v Creighton [1993] 2 NZLR 534 ........................................................ 6.30 Official Trustee in Bankruptcy v Kioussis (2000) NSW Conv R ¶55-936 ................................... 16.40 Ofulue v Bossert [2009] 1 AC 990 ..................................................................................... 12.20, 12.35 Ohralik v Ohio State Bar Association (1978) 436 US 447 ............................................................ 20.55 Ontario Securities Commission, Re (1983) 146 DLR (3d) 73 ...................................................... 11.95 Onyeledo, Re Application by [2015] NTSC 60 ............................................................................. 2.125 Ooi v Medical Board of Queensland [1997] 2 Qd R 176 ............................................................. 23.50 Orio Holdings Pty Ltd v Costi & Co (No 1) [2007] SASC 403 ..................................................... 3.55 Orlov v New Zealand Law Society [2013] 3 NZLR 562 ............................................................ 17.220 Orlov v New Zealand Lawyers and Conveyancers Disciplinary Tribunal [2015] 2 NZLR 606 ................................................................................................................................. 21.150 Orr v Grogan (2000) NSW ConvR ¶55-931 ................................................................................ 15.105 Orrong Strategies Pty Ltd v Village Roadshow Ltd (2007) 207 FLR 245 ...................... 2.145, 11.135 Orszulak v Hoy (1989) Aust Torts Reports ¶80-293 ...................................................................... 5.100 Osferatu v Osferatu (2015) 301 FLR 295 ............................................................................. 8.85, 8.130 Osland v Secretary to the Department of Justice (2008) 234 CLR 275 ............. 11.245, 11.265, 13.45 Ott v Fleishman [1983] 5 WWR 721 ..................................................................... 10.20, 10.95, 10.150 Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818 ................ 6.50, 17.20 Ouwens v Ace Builders Pty Ltd (1989) 52 SASR 344 ................................................................. 21.40 Owen, Re [2005] 2 NZLR 536 .............................................................................................. 2.60, 2.130 Owens v First Family Financial Services Inc (2005) 379 F Supp 2d 840 .................................... 8.255 Owens v Owens [2009] FMCAfam 1397 ....................................................................................... 17.25 Owners Corporation Strata Plan 62285 v Betona Corporation (NSW) Pty Ltd [2006] NSWSC 216 ............................................................................................................................... 3.145 Owners – Strata Plan No 45205 v Andreones Pty Ltd [2009] NSWSC 1189 ..................... 3.25, 14.80 O’Halloran v Legal Profession Complaints Committee [2013] WASCA 59 .............................. 14.205 O’Neill v Hayley (No 1) (2015) 301 FLR 374 ............................................................................ 17.100

P P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 ..................... 13.85 P & V Industries Pty Ltd v Porto (No 3) [2007] VSC 113 ........................................................... 11.55 P and P v Legal Aid Commission of New South Wales (1995) 19 Fam LR 1 .......................... 18.145 PLP v McGarvie [2014] VSCA 253 ............................................................................................. 21.170 PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456 ............................. 14.80, 14.95, 16.70 Packer v Deputy Commissioner of Taxation (Qld) [1985] 1 Qd R 275 ............. 11.95, 11.100, 11.130 Padden v Bevan Ashford (a firm) [2012] 1 WLR 1759 ..................................................... 5.120, 5.195 Paino v MDN Mortgages Pty Ltd [2009] NSWSC 898 ................................................................ 17.50 Palace Gallery Pty Ltd v Police (2008) 258 LSJS 420 ................................................................ 11.110 Palios Meegan & Nicholson Holdings Pty Ltd v Shore (2010) 108 SASR 31 ............................ 5.190 Paramasivam v Flynn (1998) 90 FCR 489 ..................................................................................... 6.140 Paramount Lawyers Pty Ltd v Maneschi [2012] NSWSC 877 ....................................................... 3.45 Paroz v Clifford Gouldson Lawyers [2012] QDC 151 ....................................................... 14.80, 14.95 Parry-Jones v Law Society [1969] 1 Ch 1 .......................................................................... 10.15, 10.70 Patience, Ex parte (1940) 40 SR (NSW) 96 ........................... 16.105, 16.120, 16.125, 16.130, 16.150

lviii Table of Cases

Patterson v Cohen [2005] NSWSC 635 ......................................................................................... 14.60 Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 ............................................ 3.120 Peake v Vernon & Thompson (1990) 49 BCLR (2d) 245 ............................................................. 21.55 Pearlman v National Life Assurance Co of Canada (1917) 39 OLR 141 ..................................... 12.40 Peart v Bushell (1827) 2 Sim 38; 57 ER 705 ................................................................................ 22.25 Peat v Clayton [1906] 1 Ch 659 ................................................................................................... 16.100 Pegrum v Fatharly (1996) 14 WAR 92 ................................................... 3.60, 3.65, 3.70, 5.115, 7.140 Pelly v Wathen (1851) 1 De GM & G 16; 42 ER 457 ................................................................ 16.100 Pencious v Pencious [2012] FamCA 74 ....................................................................................... 21.150 Penn v Bristol & West Building Society [1997] 1 WLR 1356 ................................................... 21.105 Pentelow v Bell Lawyers Pty Ltd [2013] NSWSC 111 ................................................................... 3.45 People v Good (1995) 893 P 2d 101 .............................................................................................. 6.140 People of the State of New York v Belge (1975) 372 NYS 2d 798 ........................................... 10.100 Pepe v Legal Practice Board of Western Australia [2016] WASC 54 ........................................... 2.185 Perak Hanjoong Simen Sdn Bhd v Perindustrian Tenaga Mix Sun Bhd [2008] 8 MLJ 567 ............................................................................................................................................... 1.115 Perazzoli v BankSA (No 2) [2016] FCA 260 .................................................................. 11.120, 11.130 Perfection Fresh Australia Pty Ltd v Melbourne Market Authority (No 2) [2013] VSC 342 ............................................................................................................................................. 21.245 Permanent Custodians Ltd v King [2009] NSWSC 600 ................................................................ 7.160 Permanent Trustee Australia Ltd v Boulton & Lynjoe Pty Ltd (1994) 33 NSWLR 735 ............. 5.220 Pero Mortgages Ltd v Mike Pero [2015] 3 NZLR 246 ................................................................... 7.45 Perpetual Trustee Co Ltd v Cowley [2010] QSC 65 ........................................... 17.100, 17.130, 24.10 Perpetual Trustee Co Ltd v Miller [2011] NSWSC 1406 .............................................................. 17.50 Perry v Smith (1842) 9 M & W 681; 152 ER 288 ...................................................................... 11.195 Petersen v Moloney (1951) 84 CLR 91 ........................................................................................... 3.80 Petroulias, Re [2005] 1 Qd R 643 .............................................................................. 2.75, 2.105, 2.110 Phelps v Stewarts (a firm) [2007] PNLR 32 .................................................................................... 5.40 Philippa Power & Associates v Primrose Couper Cronin Rudkin [1997] 2 Qd R 266 ................ 16.45 Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 ............ 8.30, 8.50, 8.210, 8.225 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146 .................................................. 3.120 Piatt, Re (1999) 724 A 2d 1210 ......................................................................................... 6.145, 21.170 Pickard v Brown-Jones [2014] FCWA 12 ............................................................................. 6.50, 17.20 Pickering v Auckland District Law Society [1985] 1 NZLR 1 ................................................... 23.170 Pickersgill v Riley [2004] PNLR 31 ................................................................................................. 5.45 Pihiga Pty Ltd v Roche (2011) 278 ALR 209 ................................................................................ 12.40 Pilkinton v Hatty (1992) 66 ALJR 868 .......................................................................................... 19.40 Pillai v Messiter (No 2) (1989) 16 NSWLR 197 ........................................................................... 23.85 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 ................................................................. 7.10 Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 ........................ 8.35, 8.120, 8.150 Pinsky v Statewide Grievance Commission (1990) 578 A 2d 1075 ............................................ 21.250 Piper Alderman (a firm) v Australian Medic-Care Company Ltd (2011) 278 LSJS 137 .... 3.55, 14.90 Piper Double Glazing Ltd v DC Contracts [1994] 1 WLR 777 .................................................... 2.145 Pirone v Craig J Roberts (Solicitor) Pty Ltd (2006) 244 LSJS 284 ................................................ 3.05 Pittorino v Meynert [2001] WASC 245 .......................................................................................... 17.45 Players Pty Ltd (in liq) (receivers appointed) v Clone Pty Ltd (2013) 115 SASR 547 .. 11.55, 11.245 Polkinghorne v Holland (1934) 51 CLR 143 ........................................................... 3.100, 5.100, 5.110 Polon v Dorian [2014] NSWSC 571 ............................................................................................ 21.135 Polperro Holdings Pty Ltd v Vincent (unreported, SC(WA), Murray J, 16 September 1996) ............................................................................................................................................. 3.55 Poly Software International Inc v Su (1995) 880 F Supp 1487 ........................................... 3.75, 8.190 Porter v Australian Prudential Regulation Authority [2009] FCA 1148 ...................................... 17.190

Table of Cases lix

Portuguese Cultural and Welfare Centre v Talbot Olivier Pty Ltd (No 2) [2015] WASC 54 ................................................................................................................................. 14.155, 15.110 Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25 ..................................................... 21.160 Pott v Jones Mitchell [2004] 2 Qd R 298 ............................................................................. 8.95, 8.240 Potters v Loppert [1973] Ch 399 ...................................................................................................... 9.15 Powell v Powell [1900] 1 Ch 243 .................................................................................................. 6.125 Powers v Zuro (2009) 178 ACWS (3d) 32 .................................................................................... 8.180 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 .................... 11.20, 11.160 Prees v Coke (1871) 6 Ch App 645 .............................................................................................. 15.110 Prekookeanska Plovidba v LNT Lines Srl [1988] 3 All ER 897 .................................................. 16.45 Premier Capital (China) Ltd v Sandhurst Trustees Ltd [2012] VSC 611 ...................................... 17.50 Presrod Pty Ltd v Wollongong City Council [2010] NSWLEC 192 ............................................. 3.130 Prestia v Aknar (1996) 40 NSWLR 165 ........................................................................................... 5.15 Prestwich v Poley (1865) 18 CBNS 805; 144 ER 662 .................................................................. 3.100 Priest v State of New South Wales [2006] NSWSC 1281 ............................................................. 13.45 Priest v State of New South Wales [2007] NSWSC 41 ................................................................. 13.85 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 . 8.30, 8.70, 8.80, 8.85, 8.120, 8.125, 8.210, 8.215, 8.220, 8.245, 10.10, 13.115 Prince Removal & Storage Pty Ltd v Roads Corporation [2012] VSC 245 ............................... 11.255 Principe v Assay Partners (1992) 154 Misc 2d 702 ..................................................................... 21.170 Prior, Marriage of (2002) 168 FLR 221 ....................................................................................... 21.275 Pritchard Joyce & Hinds (a firm) v Batcup [2009] PNLR 28 ....................................................... 5.165 Procter v Raleys Solicitors [2015] PNLR 24 ................................................................................... 5.40 Propend Ltd v Commissioner of the Australian Federal Police (1995) 79 A Crim R 453 ......... 11.270 Prothonotary v Del Castillo [2001] NSWCA 75 ................................................................... 2.90, 2.135 Prothonotary v Jackson [1976] 2 NSWLR 457 ................................................................. 17.65, 23.110 Prothonotary of Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 .......... 25.50 Prothonotary of Supreme Court of New South Wales v Montenegro [2015] NSWCA 409 ............................................................................................................................................. 25.150 Prothonotary of the Supreme Court of New South Wales v Alcorn [2007] NSWCA 288 ........... 6.120 Prothonotary of the Supreme Court of New South Wales v Carr [2003] NSWCA 2 ................ 25.100 Prothonotary of the Supreme Court of New South Wales v Chapman (unreported, CA(NSW), 14 December 1992) ............................................................................................... 23.110 Prothonotary of the Supreme Court of New South Wales v Costello [1984] 3 NSWLR 201 ...................................................................................................................... 23.85, 23.100, 25.40 Prothonotary of the Supreme Court of New South Wales v Darveniza (2001) 121 A Crim R 542 .................................................................................................................... 2.100, 25.135 Prothonotary of the Supreme Court of New South Wales v Holt [2008] NSWCA 136 ............ 23.130 Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325 ............................................................................................................................................. 25.160 Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 ................................................................................................................................... 2.140, 23.45 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 ....... 2.80, 23.130, 23.145, 23.155, 25.135 Prothonotary of the Supreme Court of New South Wales v Pangallo (1993) 67 A Crim R 77 ............................................................................................................................... 23.05, 25.105 Prothonotary of the Supreme Court of New South Wales v Ritchard (unreported, CA(NSW), 31 July 1987) .......................................................................................................... 23.45 Prothonotary of the Supreme Court of New South Wales v Sharp [2006] NSWCA 27 ............ 25.105 Prothonotary of the Supreme Court of New South Wales v Sukkar [2007] NSWCA 341 ........ 25.135 Prothonotary of the Supreme Court of New South Wales v Tatar [2005] NSWCA 104 ............... 2.95

lx

Table of Cases

Prothonotary of the Supreme Court of New South Wales v Trimarchi [2003] NSWCA 385 ............................................................................................................................................... 25.50 Provident Capital Ltd v Anderson (No 3) [2013] NSWSC 705 .................................................. 21.220 Provident Capital Ltd v Papa (2013) 84 NSWLR 231 .................................................................. 5.140 Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] EWCA Civ 1154 ............................................................................................................................................. 12.05 Prus-Grzybowski v Everingham (1986) 87 FLR 186 ................................................................... 11.270 P’s Bill of Costs, Re (1982) 8 Fam LR 489 ................................................................................ 14.170 Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd (2007) 34 WAR 279 ................................................................................................................ 11.170, 17.175 Public Trustee v By Products Traders Pte Ltd [2005] 3 SLR(R) 449 .................... 1.130, 17.10, 17.95 Puddephatt v Leith [1916] 2 Ch 168 ............................................................................................ 16.135 Purcell v Bacon (1914) 19 CLR 241 .............................................................................................. 3.215 Purcell v District Attorney (1997) NE 2d 436 ............................................................................. 10.110 Pursley, Re [1995] 4 LPDR 5 .......................................................................................... 21.235, 21.270 Puryer v Legal Services Commissioner [2012] QCA 300 ........................................................... 25.175 Putti v Simpson (1975) 6 ALR 47 .................................................................................................... 4.05

Q QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 ............................. 3.55, 3.210, 14.80 QUBE Logistics (Vic) Pty Ltd v Wimmera Container Line Pty Ltd [2013] VSC 695 . 11.250, 11.275 Quad Consulting v Bleakey (1991) 27 FCR 86 ............................................................................. 12.80 Quann v Wilson & Atkinson (a firm) [2015] WASC 229 ................................................................ 8.70 Queensland Art Gallery Trustees v Henderson Trout [2000] QCA 93 .......................................... 21.55 Queensland Law Society Inc v Carberry [2000] QCA 450 ......................................................... 23.105 Queensland Law Society Inc v Sande (No 2) [1998] 1 Qd R 273 ............................................... 2.145 Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281 .............................................. 11.210 Quick, Re (17 March 2003) ............................................................................................................ 24.05 Quigley v Legal Practitioners Complaints Committee [2003] WASCA 228 ................................ 23.15 Quinlivan v Legal Profession Complaints Committee [2012] WASCA 263 ................................. 20.85 Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 .................................. 23.25, 23.145, 23.155

R R R R R R R R R R R R R R R R R R

v Allison (2003) 138 A Crim R 378 ......................................................................................... 18.110 v Anderson (1991) 53 A Crim R 421 .............................................................................. 18.10, 18.80 v Apostilides (1984) 154 CLR 563 ...................................................................... 18.75, 18.80, 18.85 v Ataou [1988] QB 798 ............................................................................................................. 11.230 v Atkinson (1988) 4 CRNZ 1 .................................................................................................... 11.165 v B (RB) (2001) 152 CCC (3d) 437 .................................................................... 18.10, 18.25, 18.30 v Bakhuis (2012) 112 SASR 536 ................................................................................................ 4.205 v Bathgate (1946) 46 SR (NSW) 281 ......................................................................................... 18.25 v Batt [1996] Crim LR 910 ........................................................................................................... 7.65 v Bazan [2010] SASCFC 50 ....................................................................................................... 4.210 v Bell (1980) 146 CLR 141 ................................................ 11.10, 11.15, 11.55, 11.60, 11.85, 11.90 v Bernstein [2008] VSC 254 ....................................................................................................... 9.130 v Birks (1990) 19 NSWLR 677 .................................................................................................. 4.210 v Bourchas [2002] NSWCCA 373 ............................................................................................ 18.120 v Brown [1998] AC 367 .............................................................................................................. 18.50 v Brown (2002) 5 VR 463 .......................................................................................................... 4.205 v Busson (2007) 248 LSJS 444 ....................................................................................... 18.80, 18.85

Table of Cases lxi

R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R

v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v

Butt (2012) 102 WCB (2d) 438 ............................................................................................. 10.100 Calway [2005] VSCA 266 ....................................................................................................... 4.205 Carter [2003] 2 Qd R 402 ........................................................................................................ 4.210 Casey (1986) 20 A Crim R 191 ............................................................................................... 18.90 Chahine [2006] NSWCCA 99 .................................................................................................. 4.205 Chamandy (1934) 61 CCC 224 ............................................................................................... 18.20 Chaplin (1995) 96 CCC (3d) 225 ................................................................................. 18.45, 18.70 Chapman (1958) 26 WWR 385 ............................................................................................. 17.165 Ciseau (unreported, CAQld, 8 November 1994) ..................................................................... 18.40 Claus (2000) 181 DLR (4th) 759 ............................................................................................. 11.05 Cocks (2012) 291 CCC (3d) 21 ............................................................................................... 7.100 Cole (unreported, CCA(NSW), 10 May 1974) ....................................................................... 9.130 Cox & Railton (1884) 14 QBD 153 ........................................................................................ 11.55 Craig [1975] 1 NZLR 597 ..................................................................................................... 11.230 DBB [2012] QCA 96 .................................................................................................... 4.205, 4.210 DDR [1998] 3 VR 580 ................................................................................................. 18.30, 18.40 Dann [1997] Crim LR 46 ......................................................................................................... 8.145 Day [2000] QCA 313 ........................................................................................ 18.30, 18.35, 18.40 Derby Magistrates’ Court [1996] AC 487 .................................................................. 11.15, 11.230 Deriz (1999) 109 A Crim R 329 .................................................................................. 18.35, 18.75 Dick [1982] Tas R 252 ............................................................................................................. 17.80 Dunbar & Logan (1982) 138 DLR (3d) 221 ......................................................................... 11.230 Dunwoody (2004) 212 ALR 103 ................................................................................ 11.60, 11.185 Farooqi [2014] 1 Cr App R 8 .................................................................................................. 17.40 Farquharson [2009] VSCA 307 ................................................................................................ 18.60 Felderhof (2004) 68 OR (3d) 481 ......................................................................................... 21.145 Fisher (2009) 22 VR 343 ....................................................................................................... 17.190 Forde (1986) 19 A Crim R 1 ................................................................................................... 17.45 Forsyth (1990) 20 ATR 1818 ........................................................................................ 19.40, 19.75 Freeman (1985) 3 NSWLR 303 ................................................................................... 17.65, 19.40 Glass (1994) 73 A Crim R 299 ................................................................................................ 18.90 Goodyear [2005] 1 WLR 2532 .............................................................................................. 18.125 Grant [2006] VSC 235 ............................................................................................................. 9.130 Gray [1977] VR 225 ................................................................................................................ 23.40 Gulliford (2004) 148 A Crim R 558 ........................................................................................ 18.90 H [2004] 2 AC 134 .................................................................................................................. 18.55 HAU [2009] QCA 165 ............................................................................................................. 18.50 Hodges (unreported, CA(NZ), 19 August 2003) ..................................................................... 18.30 Howse [2002] VSC 197 ........................................................................................................... 9.130 Hunter & Sara (1999) 105 A Crim R 223 ................................................................... 4.210, 7.100 Hurst [2011] SASCFC 152 ...................................................................................................... 4.210 Ireland (1987) 49 NTR 10 ....................................................................................................... 18.90 Japaljarri (2002) 134 A Crim R 261 ........................................................................................ 5.195 Jensen (2009) 23 VR 591 ........................................................................................................ 18.75 Just [2003] VSC 274 ................................................................................................................ 9.130 KCH (2001) 124 A Crim R 233 ............................................................................................ 18.125 KNP (2006) 67 NSWLR 227 ....................................................................................... 18.25, 18.40 Kaufman (2000) 151 CCC (3d) 566 ........................................................................................ 18.25 Kemp [2009] 1 Qd R 532 ........................................................................................................ 18.40 Kennedy (1997) 94 A Crim R 341 .......................................................................................... 18.20 Keogh (No 2) [2015] SASC 180 .................................................................................. 18.50, 18.55 Kesik [2006] VSC 493 ............................................................................................................. 9.130

lxii Table of Cases

R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R R

v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v v

Khazaal (2006) 167 A Crim R 565 ..................................................................... 8.55, 17.20, 22.50 Kneebone (1999) 47 NSWLR 450 ............................................................................... 18.75, 18.80 Lavery (No 2) (1979) 20 SASR 430 .......................................................................... 17.220, 18.90 Lilydale Magistrates Court [1973] VR 122 ........................................................................... 17.190 Lindskog (1997) 117 CCC (3d) 551 ........................................................................................ 8.145 Liristis [2004] NSWCCA 287 .................................................................................................. 18.25 Livermore (2006) 67 NSWLR 659 ................................................................... 18.20, 18.30, 18.40 Lucas [1973] VR 693 .................................................................................................... 18.20, 18.55 M [1991] 2 Qd R 68 ................................................................................................................ 18.30 MG (2007) 69 NSWLR 20 ......................................................................................... 17.200, 18.15 MacNeil-Brown (2008) 20 VR 677 ......................................................................................... 18.90 McLoughlin [1985] 1 NZLR 106 ............................................................................................ 4.205 McLure (2001) 195 DLR (4th) 513 ....................................................................................... 11.230 Minshull Street Crown Court [2002] EWHC 3077 (Admin) ................................................. 11.85 Momodou [2005] 1 WLR 3442 ............................................................................................. 17.165 Moore (1995) 77 A Crim R 577 .............................................................................................. 18.20 Munroe [1995] 4 SCR 53 ........................................................................................................ 18.35 Munroe (1995) 96 CCC (3d) 431 ............................................................................................ 18.35 Munt [2015] VSC 132 .............................................................................................................. 9.130 ND [2004] 2 Qd R 307 ............................................................................................................ 4.205 NE [2004] 2 Qd R 328 ............................................................................................................ 4.205 Neil [2002] 3 SCR 631 .................................................................................. 6.05, 7.40, 7.85, 7.95 Nerbas [2012] 1 Qd R 362 .................................................................................................... 17.130 Noble (2000) 117 A Crim R 541 ........................................................................................... 17.165 O’Sullivan (unreported, CCANSW, 17 December 1992) ....................................................... 18.30 Omid [2012] QCA 4 ................................................................................................................. 4.210 O’Connell (1844) 7 Ir LR 261 ................................................................................................. 17.10 P (2001) 53 NSWLR 664 .......................................................................................................... 3.10 Paddon [1999] 2 Qd R 387 ...................................................................................................... 4.205 Parsons (1992) 72 CCC (3d) 137 .............................................................................................. 8.85 Pearce (unreported, SC(WA), McKechnie J, 13 July 2004) ........................................ 19.40, 19.60 Pelly (2015) 122 SASR 84 ...................................................................................................... 18.40 Perrier (dec) [2008] VSCA 97 ................................................................................................. 4.205 Pugh (2005) 158 A Crim R 302 ............................................................................................ 18.125 Punnett [2006] 1 NZLR 133 .................................................................................................... 4.210 R [1994] 4 All ER 260 ........................................................................................................... 17.175 Roulston [1976] 2 NZLR 644 .................................................................................................. 18.35 Rugari (2001) 122 A Crim R 1 ................................................................................................ 18.35 Rumpf [1988] VR 466 ........................................................................................................... 18.120 Russell-Jones [1995] 3 All ER 239 ......................................................................................... 18.80 Russo (2004) 11 VR 1 ............................................................................................................. 18.40 S [1998] 3 NZLR 392 .............................................................................................................. 17.40 S(F) (2000) 144 CCC (3d) 466 .................................................................................... 17.75, 18.40 Secretary of State for India in Council, ex parte Ezekiel [1941] 2 KB 169 ......................... 17.45 Shaw (1991) 57 A Crim R 425 .............................................................................................. 17.175 Sheikh (2004) 144 A Crim R 124 ........................................................................................... 18.15 Shepherd [2001] 1 NZLR 161 ............................................................................................... 17.170 Sheppard [2005] QCA 235 ........................................................................................... 4.205, 4.210 Sherratt [2013] QCA 78 ........................................................................................................... 4.205 Shirose (1999) 133 CCC (3d) 257 ............................................................................... 11.65, 13.45 Siu (1998) 124 CCC (3d) 301 ................................................................................................. 18.25 Skondin [2015] QCA 138 ........................................................................................................ 4.205

Table of Cases lxiii

R v Smith (2000) 114 A Crim R 8 ................................................................................................. 9.130 R v Solicitors’ Disciplinary Tribunal [1988] VR 757 .................................................................... 23.60 R v Spiteri (2004) 61 NSWLR 369 ..................................................................................... 18.55, 18.60 R v Stewart (Eric) [2009] 3 NZLR 425 ......................................................................................... 18.30 R v Storer (1993) 65 A Crim R 130 ............................................................................................... 16.75 R v Sungsuwan [2006] 1 NZLR 730 .............................................................................................. 4.200 R v Sweeney (1987) 39 CCC (3d) 182 ........................................................................................ 17.165 R v Szabo [2001] 2 Qd R 214 .......................................................................................................... 7.65 R v Taffs (No 1) (1990) 6 CRNZ 262 .......................................................................................... 11.230 R v Tait & Bradley (1979) 24 ALR 473 ........................................................................................ 18.90 R v Thomas (unreported, CANZ, Henry, Tipping and Salmon JJ, 15 December 1998) .............. 18.30 R v Tighe & Maher (1926) 26 SR (NSW) 94 ...................................................................... 4.05, 19.40 R v Turner [1970] 2 QB 321 .............................................................................. 17.190, 18.110, 18.125 R v Uljee [1982] 1 NZLR 561 .......................................................................................... 10.40, 11.300 R v Ulman-Naruniec (2003) 143 A Crim R 531 ..................................................... 18.50, 18.55, 18.70 R v Vaughan [2011] QCA 224 ........................................................................................................ 4.205 R v Visitors to Lincoln’s Inn [1992] 3 WLR 994 ............................................................................ 8.10 R v Ward [1993] 1 WLR 619 ......................................................................................................... 18.70 R v Webb [2004] QCA 448 ............................................................................................................. 18.40 R v Wheatley [2012] QCA 55 .................................................................................. 18.30, 18.35, 18.40 R v White (1995) 77 A Crim R 531 ............................................................................................... 3.225 R v White (1997) 114 CCC (3d) 225 ............................................................................................. 17.65 R v Wilkes (2001) 122 A Crim R 310 ......................................................................................... 18.125 R v Wilton (1981) 26 SASR 362 .................................................................................................... 18.90 R, Matter of [1998] 3 LPDR 26 ..................................................................................................... 19.50 R & P Gangemi Pty Ltd v D & G Luppino Pty Ltd (2012) V ConvR ¶54-815 .......................... 17.20 R & T Thew Ltd v Reeves (No 2) [1982] QB 1283 .......................................................... 22.30, 23.25 R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 ................................................................................................................................ 11.135, 11.235 RDCW Diamond (Pty) Ltd v Da Gloria [2007] NSWSC 1325 .................................................. 17.260 RP Howard Ltd v Woodman Matthews & Co (a firm) [1983] BCLC 117 ................................... 13.60 Raats v Gascoigne Wicks [2006] NZHC 598 ................................................................................... 7.20 Rabin v Mendoza & Co [1954] 1 WLR 271 ........................................................... 12.05, 12.30, 12.80 Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 ......................... 16.60, 16.65, 16.75 Ragg v Magistrates’ Court of Victoria (2008) 18 VR 300 ............................................................ 18.55 Rajasooria v Disciplinary Committee [1955] 1 WLR 405 ............................................... 17.110, 23.15 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 ...... 3.195, 4.70, 4.190, 8.05, 8.55, 8.80, 8.90, 8.245, 10.05 Ralls v United States (1995) F 2d 223 ........................................................................................... 11.85 Ramcoomarsingh v Administrator General [2003] WTLR 291 ..................................................... 6.130 Ramsay v Boeing Welfare Benefit Plan Committee (1987) 662 F Supp 968 ............................... 17.45 Ranclaud v Cabban [1988] ANZ Conv R 134 ................................................................................. 3.55 Rank Film Distributors Ltd v ENT Ltd (1994) 4 Tas R 281 ....................................................... 11.190 Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [2005] WASC 255 ........................................................................................................... 8.30, 17.20, 17.185 Rapid Road Transit Company, Re [1909] 1 Ch 96 ...................................................................... 16.100 Raunio v Hills (2001) 116 FCR 518 ............................................................................................. 11.105 Rawlinson & Hunter Trustees SA v Serious Fraud Office (No 2) [2015] 1 WLR 797 .............. 11.275 Rayner v Pethick (2006) 243 LSJS 471 ......................................................................................... 12.90 Read, Re (2006) 243 LSJS 368 ......................................................................................... 20.220, 24.10 Redfern v Mineral Engineers Pty Ltd [1987] VR 518 ................................................................... 15.50 Redowood Pty Ltd v Goldstein Technology Pty Ltd [2004] NSWSC 515 ................................. 21.190

lxiv Table of Cases

Reed Executive plc v Reed Business Information Ltd [2004] 1 WLR 3026 ................................ 12.90 Rees v Bailey Aluminium Products Pty Ltd (2008) 21 VR 478 ...................................... 17.30, 17.220 Rees v Sinclair [1974] 1 NZLR 180 ...................................... 5.265, 5.270, 5.280, 5.305, 5.320, 5.335 Regent Leisuretime Ltd v Skerrett [2007] PNLR 9 ....................................................................... 5.205 Regina v Ulcay [2008] 1 WLR 1209 .............................................................................................. 17.10 Registe v State (2010) 697 SE 2d 804 ......................................................................................... 13.120 Registrar-General v Gill (unreported, CA(NSW), 16 August 1994) ............................................. 9.125 Regular v Law Society of Newfoundland and Labrador (2011) 336 DLR (4th) 1 ........................ 3.60 Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 ...................................................... 17.215 Reilly, Re (unreported, FC(SA), 10 April 1996) ............................................................................ 2.170 Relationships Australia v Pasternak (1996) 20 Fam LR 604 ......................................................... 11.25 Reliance Finance Corp Pty Ltd v Heid [1982] 1 NSWLR 466 ................................................... 16.140 Ren Nominees Pty Ltd v MS Cognosis Pty Ltd (No 1) [2013] FCA 916 .................................. 21.140 Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434 .......................... 15.65 Resolution Trust Corporation v Bright (1993) 6 F 3d 336 .......................................................... 17.165 Rexstraw v Johnson [2003] NSWCA 287 ...................................................................................... 5.115 Reynolds v Whittens (2002) 57 NSWLR 271 ................................................................................ 14.60 Rhode, Marriage of (1983) 9 Fam LR 159 .................................................................................... 16.60 Rhodes v Fielder, Jones & Harrison [1918–19] All ER Rep 846 ............................................... 21.100 Rich v Harrington (2007) 245 ALR 106 ....................................................................................... 11.145 Richard Buxton (a firm) v Mills-Owens [2010] 1 WLR 1997 ...................................................... 3.205 Richardson v Lander (1948) 65 WN (NSW) 74 .......................................................................... 14.170 Richardson v Lander (No 2) (1948) 65 WN (NSW) 81 ................................................................ 15.75 Richardson v R (1974) 131 CLR 116 ...................................................................... 17.40, 18.75, 18.85 Richtoll Pty Ltd v WW Lawyers (in liq) Pty Ltd [2016] NSWSC 438 .......................................... 5.25 Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234 ............................................................................................................................................. 11.190 Ridgeway, Disciplinary Proceedings Against (1990) 462 NW 2d 671 .......................................... 6.145 Rigoli Lawyers v Arman (2009) 40 Fam LR 676 .............................................................. 3.205, 16.60 Riley v Bankstown City Council [2005] NSWSC 748 ................................................................ 17.265 RinRim Pty Ltd v Deutsche Bank Australia Ltd [2013] NSWSC 1654 ..................................... 11.265 Rio Tinto Ltd v Commissioner of Taxation (2006) 235 ALR 127 ................................... 11.130, 13.45 Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132 ............................... 11.105 Ritz Hotel Ltd v Charles of the Ritz Ltd [No 4] (1987) 14 NSWLR 100 ................................. 11.150 Riz v Perpetual Trustee Australia Ltd (2008) NSW ConvR ¶56-198 ............................................ 5.135 Roads Corporation v Love [2010] VSC 253 ................................................................................ 17.155 Roadway Express Inc v Piper (1980) 447 US 752 ...................................................................... 17.245 Robb, Re (1996) 134 FLR 294 .... 3.180, 4.105, 14.115, 14.120, 14.130, 15.30, 15.55, 21.100, 23.10, 23.20, 23.85, 23.155, 25.50 Roberts v Cashman [2000] NSWSC 770 ......................................................................................... 5.80 Roberts v Goldenberg (1997) NSW ConvR ¶55-809 ..................................................................... 7.160 Robertson v Slater Vecchio (2008) 81 BCLR (4th) 46 .................................................................. 8.220 Robins v Goldingham (1872) LR 13 Eq 440 ................................................................................. 16.60 Robson v Kemp (1802) 4 Esp 233; 170 ER 703 ......................................................................... 16.100 Rochefoucauld v Boustead (1896) 65 LJ Ch 794 ........................................................................ 11.195 Rodgers v Rodgers (1964) 114 CLR 608 ................................................................ 12.05, 12.10, 12.25 Rogers v Whitaker (1992) 175 CLR 479 ....................................................................................... 5.165 Rogerson v Law Society of the Northern Territory (1993) 88 NTR 1 ................................ 9.95, 23.60 Rohowskyj v S Tomyn & Co [2015] VSC 511 .............................................................................. 15.55 Rolfe v The Queen (2007) 173 A Crim R 168 .............................................................................. 4.205 Romeo v Asher (1991) 29 FCR 343 ............................................................................................... 23.55 Romer & Haslam, Re [1893] 2 QB 286 ......................................................................................... 3.195

Table of Cases lxv

Rondel v Worsley [1969] 1 AC 191 .... 3.150, 5.260, 5.270, 5.280, 5.290, 5.300, 5.305, 17.10, 17.40, 17.85, 17.95, 17.220 Rooks Rider (a firm) v Steel [1994] 1 WLR 818 .......................................................................... 22.50 Rosenberg v Jaine [1983] NZLR 1 ...................... 11.15, 11.70, 11.85, 11.120, 11.130, 11.175, 11.225 Rosenberg Estate v Black (2001) 110 ACWS (3d) 560 ................................................................. 21.60 Rosin v MacPhail (1997) 142 DLR (4th) 304 ...................................................................... 8.90, 8.150 Ross v Caunters [1980] Ch 297 ........................................................................................... 21.10, 21.55 Ross Ambrose Group Pty Ltd v Renkon Pty Ltd [2009] TASSC 86 .............................................. 5.55 Roth Estate v Juschka (2016) 129 OR (3d) 261 ............................................................................ 7.130 Royal Bank of Scotland v Etridge (No 2) [1998] 4 All ER 705 ................................................... 5.120 Royce v Royce [2012] FamCA 400 .................................................................................................. 8.85 Roylance v General Medical Council (No 2) [2000] 1 AC 311 ........................................ 23.70, 25.05 Ruddock v Vadarlis (2001) 110 FCR 491 ...................................................................................... 4.105 Runsvold v Idaho State Bar (1996) 925 P 2d 1118 ..................................................................... 21.250 Rush v Cavenaugh (1845) 2 Pa 187 ............................................................................................... 19.80 Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 ..... 12.05, 12.25, 12.30, 18.130 Rusonik v Law Society of Upper Canada (1988) 28 OAC 57 ...................................................... 23.70 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 ....... 4.55, 7.40, 8.55, 8.85, 8.95, 8.210, 8.215, 8.220, 8.245, 8.260 Russells v McCardel [2014] VSC 287 ...................................................... 14.15, 14.35, 14.140, 14.145 Russo v Dupree (1989) 217 ALR 54 ................................................................................... 22.15, 22.20 Ryan v Starr [2005] NSWSC 170 ................................................................................................... 3.120 Rybak v Langbar International Ltd [2011] PNLR 16 .................................................................. 17.120 Ryder v Lee (2008) 41 Fam LR 77 ................................................................................... 11.95, 11.100

S S v Legal Practice Board of Western Australia (2004) 29 WAR 173 .................................... 2.80, 2.90 S (a solicitor), Re [1985] VR 343 ............................................................................ 2.165, 2.170, 2.185 SOBH v Police Force of Victoria [1994] 1 VR 41 ........................................................................ 18.50 SQMB v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 205 ALR 392 ................................................................................................................................... 11.260 SZFDZ v Minister for Immigration and Multicultural Affairs (2006) 155 FCR 482 ................. 17.270 SZTMH v Minister for Immigration and Border Protection (2015) 145 ALD 630 .................... 17.270 Sabin v Ackerman (2014) 846 NW 2d 835 ...................................................................................... 3.35 Sacca v Adam and R Stuart Nominees Pty Ltd (1983) 33 SASR 429 ......................................... 19.70 Saffron Walden Second Benefit Building Society v Rayner (1880) 14 Ch D 406 ....................... 3.125 Saif Ali v Sydney Mitchell & Co [1980] AC 198 ............................ 5.290, 5.295, 5.305, 5.320, 5.335 St George Bank Ltd v O’Reilly (1999) 150 FLR 27 ................................................................... 17.255 Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525 .............................................................. 21.135 Salfinger v Niugini Mining (Australia) Pty Ltd [2007] FCA 470 ................................................. 8.240 Salsbury v Law Society [2009] 1 WLR 1286 ................................................................................ 23.15 Saltoon v Lake [1978] 1 NSWLR 52 ........................................................................................... 17.230 Samenic Ltd v APM Group (Aust) Pty Ltd [2011] VSC 194 ....................................................... 11.50 Samootin v Official Trustee in Bankruptcy (No 2) [2012] FCA 316 .......................................... 11.195 Samper v Hade (1889) 10 LR (NSW) 270 ....................................................................................... 5.20 Samuels v New Zealand Law Society [2014] NZHC 3026 ............................................................. 2.75 Sanchez v Lee (2013) 49 Fam LR 567 ............................................................................................ 6.50 Sande v Registrar, Supreme Court of Queensland (1996) 64 FCR 123 ................................ 1.25, 2.50 Sandstrom v Sandstrom (1994) 880 P 2d 103 .............................................................................. 21.250 Sanko Steamship Co Ltd v Sumitomo Australia Ltd (1992) 37 FCR 353 .................................. 11.170 Sanna v Wyse and Young International Pty Ltd (No 1) [2015] NSWSC 580 .............................. 8.165

lxvi Table of Cases

Saragas v Martinis [1976] 1 NSWLR 172 ................................................................................... 17.245 Sargent v ASL Developments Ltd (1974) 131 CLR 634 ................................................................. 3.80 Saunders v Commissioner, Australian Federal Police (1998) 160 ALR 469 .............................. 11.210 Saunders v Edwards [1987] 1 WLR 1116 ...................................................................................... 19.45 Saunders v Legal Profession Admission Board [2015] NSWSC 1839 ........................................... 2.60 Saunders, Re Application by (2011) 29 NTLR 204 ......................................................................... 2.60 Savage v Taylor [1996] ANZ Conv R 385 ....................................................................................... 3.35 Savic v R [2008] NSWCCA 312 .................................................................................................... 4.205 Savings & Investment Bank Ltd (in liq) v Fincken [2004] 1 WLR 667 ...................................... 12.50 Sawley, Re (1894) 15 LR (NSW) 147 ................................................................................ 25.05, 25.10 Scallan v Scallan [2001] NSWSC 1078 .............................................................................. 17.50, 17.60 Scammell & Co v WorkCover Corporation (2006) 95 SASR 278 ................................ 16.125, 16.160 Scarfone, Re [1998] 2 LPDR 26 ......................................................................................... 19.45, 25.25 Schering Corporation v Cipla Ltd [2005] FSR 25 ......................................................................... 12.25 Schiliro & Gadens Ridgeway (1995) 19 Fam LR 196 ..................................................... 3.105, 14.195 Schipp v Cameron (unreported, SC(NSW), Einstein J, 9 July 1998) ........................................... 6.100 Schneider v Leigh [1955] 2 QB 195 ............................................................................................. 11.185 Schreuder v Murray (No 2) (2009) 41 WAR 169 .......................................................................... 11.30 Schueler v Smith [2010] FMCA 777 ..................................................................................... 6.50, 17.20 Schware v Board of Bar Examiners of New Mexico (1957) 353 US 232 ..................................... 2.45 Scott v Handley (1999) 58 ALD 373 ............................................................................................. 13.85 Scottsdale Homes Pty Ltd v Gemkip Pty Ltd [2008] QSC 326 .......................................... 5.45, 5.165 Scroope v Legal Services Commissioner [2013] NSWCA 178 ..................................................... 25.70 Seale v Perry [1982] VR 193 .............................................................................................. 21.15, 21.80 Seamez (Australia) Pty Ltd v McLaughlin [1999] NSWSC 9 ...................................................... 5.230 Seare, Re (2013) 493 BR 158 ...................................................... 1.30, 3.205, 4.85, 4.95, 5.25, 21.265 Secretary, Department of Health v Proudfoot (1993) 114 FLR 384 ................................ 11.145, 13.40 Sedrak v Starr [2010] NSWCA 228 ............................................................................................... 17.80 Seidler v Seidler [2010] FMCAfam 1394 ........................................................................................ 8.55 Selen v Selen [2009] FamCA 309 ............................................................................ 8.130, 8.265, 17.50 Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 ........... 8.35, 8.70, 8.90, 8.95, 8.105, 8.125, 8.150 Separate Representative v JHE and GAW (1993) 16 Fam LR 485 ............................................ 18.145 Serobian v Commonwealth Bank of Australia [2010] NSWCA 181 .......................................... 21.275 Seven Network Ltd v News Ltd [2005] FCA 142 ......................................................................... 13.45 Seven Network Ltd v News Ltd [2005] FCA 864 ....................................................................... 11.265 Seven Network Ltd v News Ltd (2006) 151 FCR 450 .................................................................. 12.30 789Ten Pty Ltd v Westpac Banking Corp Ltd (2005) 215 ALR 131 .......................................... 11.160 Sevic v Roarty (1998) 44 NSWLR 287 ........................................................................................ 11.255 Sewell v Zelden [2010] NSWSC 1180 ............................................................................................. 6.80 Seymour v The Queen (2006) 162 A Crim R 576 ......................................................................... 4.210 Shafron v Australian Securities and Investments Commission (2012) 247 CLR 465 .................. 13.30 Shand v Doyle [1997] ANZ Conv R 134 ..................................................................................... 21.100 Shand v M J Atkinson Ltd (in liq) [1966] NZLR 551 ..................................................... 16.45, 16.105 Shannon v Shannon [2005] 3 NZLR 757 ..................................................................................... 11.260 Shannon, Will of [1977] 1 NSWLR 210 ........................................................................................ 14.70 Shapero v Kentucky Bar Association (1988) 486 US 466 .............................................................. 1.30 Sharp v Rata International Pty Ltd [2013] VSC 328 ..................................................................... 13.65 Sheehan, Re (1990) 13 Fam LR 736 ............................................................................................ 14.120 Sheffield v Eden (1878) 10 Ch D 291 ............................................................................................ 16.35 Shehata v Hussein [2004] NSWSC 617 .............................................................................. 3.130, 4.140 Sheonandan Prasad Singh v Abdul Fateh Mahammad Reza (1935) 62 Ind App 196 .................. 3.130

Table of Cases lxvii

Shepherd Construction Ltd v Pinsent Masons LLP [2012] BLR 213 ........................................... 5.255 Sheraz Pty Ltd v Vegas Enterprises Pty Ltd (2015) 48 WAR 93 .................................................. 17.45 Shillington v Harries [2013] NSWSC 1202 ................................................................................... 14.50 Shiokawa v Pacific Coast Savings Credit Union (2005) 250 DLR (4th) 656 ................................ 5.90 Shlosberg v Avonwick Holdings Ltd [2016] EWHC 1001 (Ch) ...................................... 11.70, 11.285 Sibley & Co v Teachbyte Ltd [2008] EWHC 2665 (Ch) ................................................................ 3.55 Sidney v Auckland District Law Society [1996] 1 NZLR 431 ........................................ 23.20, 23.155 Sievwright v Ward [1935] NZLR 43 ............................................................................................ 14.120 Silkzoom Pty Ltd v Property Shop Port Douglas Pty Ltd [2010] QSC 343 .................................. 5.20 Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (No 3) (2004) 214 ALR 621 ..................................... 12.95 Silverman v Erlich Beer Corp (1987) 687 F Supp 67 ................................................................... 13.80 Simersall, Re (1992) 35 FCR 584 .................................................................................................... 9.30 Simes, Jacobsen & Steel v Gough & Irving (unreported, HC(NZ), Cook J, 3 August 1984) ................................................................................................................................ 22.25, 22.40 Simmons v Liberal Opinion Ltd [1911] 1 KB 966 ...................................................................... 21.105 Sims v Chong (2015) 230 FCR 346 ............................................................................................... 5.315 Sims v Craig Bell & Bond [1991] 3 NZLR 535 ........ 4.55, 5.80, 6.25, 6.30, 6.40, 6.55, 9.35, 20.205 Singapore Airlines Ltd v Sydney Airports Corporation Ltd [2004] NSWSC 380 ...................... 11.250 Singer v Trustee of the Property of Munro [1981] 3 All ER 215 ................................................. 3.125 Singh v Auckland District Law Society [2002] 3 NZLR 392 ......................................................... 2.35 Singh v Legal Services Commissioner [2013] QCA 384 ............................................... 17.160, 23.130 Singla v Stockler [2012] EWHC 1176 (Ch) ................................................................................... 10.50 Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103 ................ 14.200, 14.205 Siskamanis v Pandeli Barbayannis & Co (a firm) (unreported, FC(Vic), 25 March 1993) ........................................................................................................................................... 5.195 Sisson v Standards Committee 2 of the Canterbury-Westland Branch of the New Zealand Law Society [2013] NZAR 416 .................................................................................. 24.30 Skjerpen v Johnson [2007] BCJ No 1896 ...................................................................................... 8.150 Skye Properties Ltd v Wu (2003) 247 DLR (4th) 151 .................................................................. 8.210 Slaveski v State of Victoria [2009] VSC 540 ................................................. 8.55, 8.120, 8.265, 8.270 Smirnios v Byrne (No 2) [2009] VSC 86 ...................................................................................... 14.35 Smith v Gould (Ruling No 1) [2012] VSC 210 .................................................................. 12.20, 12.25 Smith v Jones [1999] 1 SCR 455 ................................................................................................... 11.15 Smith v Lewis Blyth & Hooper [2013] WASC 408 ......................................................... 14.45, 14.205 Smith v Moloney (2005) 92 SASR 498 ......................................................................................... 5.225 Smith v New South Wales Bar Association (1992) 176 CLR 256 .............. 23.20, 23.25, 23.55, 23.60 Smith v O’Neill [2014] NSWSC 1119 ........................................................................................... 6.130 Smith, Re (2013) 991 NE 2d 106 ................................................................................................... 10.50 Smith (deceased), Re (1916) 16 SR (NSW) 422 ........................................................................... 14.70 Smits v Roach (2004) 60 NSWLR 711 ............................................................................. 3.210, 14.120 Smits v Roach (2006) 227 CLR 423 ................................................................................. 3.210, 14.120 Smorgon v Australia & New Zealand Banking Group Ltd (1976) 134 CLR 475 ........................ 11.15 Smyrnis v Legal Practitioners Admission Board [2003] NSWCA 64 ........................................... 23.45 Snell, Re (1877) 6 Ch D 105 .......................................................................................................... 16.35 Snopkowski v Jones (Legal Practice) [2008] VCAT 1943 ............................................................ 5.255 Soia v Bennett [2003] WASC 158 .................................................................................................. 16.90 Solicitor-General v Miss Alice [2007] 2 NZLR 783 ........................................................ 10.130, 22.25 Solicitor “X” v Nova Scotia Barristers’ Society (1999) 171 DLR (4th) 310 .................... 23.55, 23.70 Solicitors’ Liability Committee v Gray (1997) 77 FCR 1 ...................................... 5.100, 5.105, 5.110 Somatra Ltd v Sinclair Roche & Temperley (a firm) [2000] 1 WLR 2453 ...................... 12.20, 12.80 Somerville v Australian Securities Commission (1995) 60 FCR 517 ........................................... 13.40 Sorby v Commonwealth (1983) 152 CLR 281 ............................................................................. 11.235

lxviii

Table of Cases

South Australia v Barrett (1995) 64 SASR 73 ............................................................................. 11.180 South Black Water Coal Ltd v McCullough Robertson (a firm) (unreported, SC(Qld), Muir J, 8 May 1997) .................................................................................................................... 8.60 South Bucks District Council v Flanagan [2002] 1 WLR 2601 ........................................ 3.100, 3.145 South Shropshire District Council v Amos [1986] 1 WLR 1271 ...................................... 12.20, 12.25 Southbourne Investments Ltd v Greenmount Manufacturing Ltd [2008] 1 NZLR 30 ................. 3.110 Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (a firm) (1998) 84 FCR 472 ................................................................................................................. 11.190, 11.250 Southern Cross Commodities Pty Ltd (in liq) v Crinis [1984] VR 697 ............................ 11.15, 11.85 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 ...... 11.55, 11.60, 11.65, 11.225 Southern Law Society v Westbrook (1910) 10 CLR 609 ..... 2.30, 5.130, 23.20, 23.25, 23.50, 23.110, 23.135 Southwell v Jackson [2012] QDC 65 ............................................................................................. 3.180 Sovereign Motor Inns Pty Ltd v Bevillesta Pty Ltd [2000] NSWSC 521 .................................. 11.250 Sparnon v Apand Pty Ltd (1996) 68 FCR 322 ................................................................... 11.25, 11.45 Spaulding v Adams [2012] TASSC 61 ........................................................................................... 6.100 Spaulding v Adams [2013] TASFC 8 ............................................................................................. 6.100 Spector v Ageda [1973] Ch 30 ......................................................................... 5.80, 6.10, 7.120, 24.10 Spence v Gerard Malouf & Partners Pty Ltd [2010] NSWSC 764 ................................... 3.210, 14.80 Spicers Paper (NZ) v Whitcoulls Group Ltd [1996] 1 NZLR 72 ................................................ 11.275 Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 .............................................. 7.15, 8.35 Spiteri v Rocisano (2009) 22 VR 596 ............................................................................................ 4.160 Stamp Duties, Commissioner of v Byrnes [1911] AC 386 ............................................................ 19.60 Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 .............................. 11.265 Stark v Dennett [2007] QSC 171 .................................................................................................... 16.65 Stark v Dennett [2008] 2 Qd R 72 ...................................................................................... 16.60, 16.65 State Central Authority v Blyth [2010] FamCA 90 ........................................................................ 11.90 State Government Insurance Commission (SA) v Paneros (1988) 48 SASR 349 ........................ 7.105 State ex rel Pitts v Roberts (1993) 857 SW 2d 200 .................................................................... 21.270 State ex rel Thompson v Dueker (2011) 346 SW 3d 390 ............................................................. 8.190 State ex rel Wal-Mart Stores Inc v Kortum (1997) 559 NW 2d 496 ............................................ 8.105 State of New South Wales v Jackson [2007] NSWCA 279 .............................................. 11.45, 11.105 State of Victoria v Davies (2003) 6 VR 245 ................................................................................ 11.260 Statewide Computer Services Pty Ltd (in liq), Re [1992] 2 Qd R 647 ...................................... 16.140 Stax Claimants v Bank of Nova Scotia Channel Islands Ltd [2007] EWHC 1153 (Ch) ............. 12.05 Steele, Re (1994) 48 FCR 236 ...................................................................................................... 11.185 Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 ............................................. 3.165, 17.260 Steve v The Queen (2008) 189 A Crim R 68 ................................................................................ 4.210 Stevens v Canada (Privy Council) (1998) 161 DLR (4th) 85 ............................... 11.95, 11.100, 13.40 Stewart v Australian Crime Commission (2012) 206 FCR 347 .................................................. 11.150 Stewart v Canadian Broadcasting Association (1997) 150 DLR (4th) 24 ....................... 4.190, 10.130 Stewart v Layton (1992) 111 ALR 687 ...................................................................... 4.55, 4.180, 7.130 Stewart v Strevens [1976] 2 NSWLR 321 ........................................................................ 16.45, 16.130 Stillman v Rusbourne [2015] NSWCA 410 ................................................................................... 5.325 Stirkis v Legal Services Commissioner [2012] NSWADT 68 ....................................................... 16.20 Stirling v Legal Services Commissioner [2013] VSCA 374 ........................................................ 23.145 Stocznia Gdanska SA v Latvian Shipping Co (No 2) [1999] 3 All ER 822 .............................. 14.120 Stoddart & Co v Jovetic (1993) 8 WAR 420 .................................................................. 14.180, 14.195 Stokes, Re (2008) 38 WAR 208 ...................................................................................................... 2.165 Strahan v Strahan [2012] FamCA 214 ............................................................................. 11.140, 11.150 Strange v Hybinett [1988] VR 418 ............................................................................................... 17.220

Table of Cases lxix

Strategic Financial and Project Services Pty Ltd v Bank of China [2012] FCA 327 ................. 11.100 Stringer v Flehr & Walker (2003) Aust Torts Reports ¶81-718 .................................. 3.60, 3.70, 21.25 Strong v Woolworths Ltd (2012) 248 CLR 182 ............................................................................. 4.165 Strother v 3464920 Canada Inc [2007] 2 SCR 177 ................................................................ 3.55, 6.75 Stuart, Re [1893] 2 QB 201 .......................................................................................................... 14.170 Studer v Boettcher [2000] NSWCA 263 ........................................................................................ 5.225 Stumore v Campbell & Co [1892] 1 QB 314 ................................................................................ 16.40 Styles v O’Brien (2007) 16 Tas R 268 ............................................................................................. 8.30 Styles v O’Brien [2007] TASSC 13 .................................................................................................. 8.30 Subramaniam v The Queen (2004) 79 ALJR 116 .......................................................................... 18.20 Sudath v Health Care Complaints Commission (2012) 84 NSWLR 474 ................................... 25.105 Sugden v Sugden (2007) 70 NSWLR 301 ..................................................................................... 11.70 Suitors’ Fund Act 1964 (WA), Re (2002) 135 A Crim R 48 ....................................................... 17.250 Sullivan v Dan [1997] ANZ Conv R 589 ....................................................................................... 5.100 Sullivan v Dan (1998) NSW ConvR ¶55-854 ................................................................................ 5.100 Sumitomo Corp v Credit Lyonnias Rouse Ltd [2002] 1 WLR 479 ................................... 11.75, 11.80 Summerville v Walsh (unreported, CA(NSW), 26 February 1998) ................................... 5.175, 21.55 Sunland Waterfront (BVI) Ltd v Prudential Investments Ply Ltd (No 4) [2010] FCA 863 ............................................................................................................................................. 11.180 Supasave Retail Ltd v Coward Chance (a firm) [1991] 1 All ER 668 .............................. 8.145, 8.220 Super 1000 Pty Ltd v Pacific General Securities Ltd [2007] NSWSC 171 .................................. 3.205 Super Worth International Ltd v Commissioner of the Independent Commission Against Corruption [2015] HKEC 2325 .................................................................................. 11.135 Sutanto Henny v Suriani Tani [2004] SGHC 7 .............................................................................. 17.75 Sutton v A J Thompson Pty Ltd (1987) 73 ALR 233 .................................................................. 21.135 Sutton, Re Application by [2016] NTSC 9 ............................................................................. 2.60, 2.90 Swaab v Sayed [2013] NSWSC 887 .............................................................................................. 14.80 Swain Mason v Mills & Reeve [2012] WTLR 1827 ............................................................ 5.25, 5.255 Swanwick, Matter of (1883) 1 QLJR 117 .................................................................................... 21.225 Swart v Carr [2006] NSWSC 1302 ................................................................................................ 5.100 Swidler v United States (1998) 524 US 399 ..................................................................... 10.35, 10.100 Swinburne v David Syme & Co [1909] VLR 550 ......................................................................... 17.95 Swindle v Harrison [1997] 4 All ER 705 ....................................................................................... 4.185 Swinfen v Lord Chelmsford (1860) 5 H & N 890; 157 ER 1436 ................................................ 5.315 Swirski v Hachey (1995) 132 DLR (4th) 122 ................................................................................ 10.90 Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 ............ 11.250, 13.45 Sydney South West Area Health Service v MD (2009) 260 ALR 702 ......................................... 5.170 Sykes v Midland Bank Executor & Trustee Co Ltd [1971] 1 QB 113 ........................................... 5.65 Symonds v Vass [2007] NSWSC 1274 ............................................................................... 3.55, 14.150 Symonds v Vass (2009) 257 ALR 689 ..................................................................... 3.55, 5.320, 14.150 Szarfer v Chodos (1986) 54 OR (2d) 664 ...................................................................................... 6.140 Szmulewicz v Recht [2011] VSC 368 ............................................................................................ 14.70

T T v L (2000) 160 FLR 63 ............................................................................................................. 18.145 T J Board & Sons Pty Ltd v Castello [2008] VSC 91 ....................................................... 8.155, 17.20 TKWJ v R (2002) 212 CLR 124 ......................................................................................... 4.200, 4.205 TSB Bank plc v Robert Irving & Burns (a firm) [2000] 2 All ER 826 ...................................... 11.195 Tabcorp Holdings Ltd v Victoria [2013] VSC 302 ...................................................................... 11.200 Talbot & Olivier v Shann [2005] WASCA 34 ........................................................................ 5.45, 6.80 Tamlura NV v CMS Cameron McKenna [2009] EWHC 538 (Ch) ............................................ 21.205

lxx Table of Cases

Tan v Commissioner of the New South Wales Police [2012] NSWSC 1580 ............................... 11.75 Tapoohi v Lewenberg (No 2) [2003] VSC 410 ............................................................................ 20.180 Target Holdings Ltd v Redferns (a firm) [1996] AC 421 ....................................................... 4.65, 9.05 Tarzia v National Australia Bank (unreported, FC(FCA), 12 October 1995) .................... 5.110, 5.120 Tasmanian Sandstone Quarries Pty Ltd v Legalcom Pty Ltd (2010) 270 LSJS 519 ........ 5.100, 5.220 Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd (2009) 263 LSJS 87 ........................................................................................................................... 5.100, 5.220 Tau v Durie [1996] 2 NZLR 190 .................................................................................................. 11.265 Tauber v Tauber (2009) 98 OR (3d) 633 ........................................................................................ 8.180 Taxation, Commissioner of v Donoghue (2015) 329 ALR 400 ................................................... 11.280 Taxation, Commissioner of v Rio Tinto Ltd (2006) 151 FCR 341 ............................................. 11.265 Taxation, Federal Commissioner of v Citibank Ltd (1989) 20 FCR 403 ......... 11.175, 11.210, 11.225 Taxation, Federal Commissioner of v Coombes (1999) 92 FCR 240 ......... 11.15, 11.70, 11.85, 11.90, 11.245, 11.270 Taxation, Federal Commissioner of v Everett (1980) 143 CLR 440 .......................................... 20.130 Taxation, Federal Commissioner of v Spotless Services Ltd (1996) 186 CLR 404 ..................... 11.45 Taxation, Federal Commissioner of v Westraders Pty Ltd (1979) 38 FLR 306 ........................... 19.65 Taxation, Federal Commissioner of v Westraders Pty Ltd (1980) 144 CLR 55 ........................... 19.65 Taylor v McGillivray (1994) 110 DLR (4th) 64 ............................................................................ 6.140 Taylor v Queensland Law Society [2002] QCA 30 ....................................................................... 2.190 Taylor v Ribby Hall Leisure Ltd [1998] 1 WLR 400 ............................................. 22.25, 22.30, 22.35 Taylor v Schofield Peterson [1999] 3 NZLR 434 ................................. 7.80, 7.90, 7.115, 7.120, 7.145 Taylor v The Queen (2009) 78 NSWLR 198 ................................................................................. 4.210 Taylor, Re [1891] 1 Ch 590 ............................................................................................................ 16.50 Taylor, Re [1950] VLR 476 ............................................................................................................ 4.180 Taylor, Re [1997] 1 Qd R 533 ........................................................................................................ 2.190 Taylor, Stileman & Underwood, Re [1891] 1 Ch 590 ................................................................... 16.90 Teachers Health Investments Pty Ltd v Julian (2001) NSW ConvR ¶55-990 .............................. 5.175 Techfarm Pty Ltd v AXA Insurance Australia Ltd [2004] WASC 166 ......................................... 11.45 Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 277 ........................ 11.25 Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 ............. 11.25, 11.250, 11.265 Teltschik v Williams & Jensen PLLC (2010) 683 F Supp 2d 33 .................................................... 3.60 Temby v Chambers Investment Planners Pty Ltd [2010] FMCA 783 ............................................ 6.50 Temwood Holdings Pty Ltd v Western Australian Planning Commission [2003] WASCA 112 .............................................................................................................................. 11.265 Tenenbaum, Re (2005) 880 A 2d 1025 ......................................................................................... 21.170 Thatcher v Douglas, The Times, 8 January 1996 ......................................................................... 17.220 Thevenaz v Thevenaz (1986) FLC ¶91-748 .................................................................. 5.80, 8.50, 8.85 Thom, Re (1918) 18 SR (NSW) 70 ................................................................................. 17.110, 17.115 Thom, Re (1962) 80 WN (NSW) 968 ............................................................................................ 23.85 Thomas v Legal Practitioners Admission Board [2005] 1 Qd R 331 .................................... 2.60, 2.90 Thomas v SMP (International) Pty Ltd [2010] NSWSC 822 ...................................................... 17.230 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 ................................................................. 17.120 Thompson v Duffin (2009) 105 SASR 181 ......................................................................... 18.10, 18.20 Thompson v Howley [1977] 1 NZLR 16 ..................................................... 3.130, 3.135, 3.145, 5.205 Thompson v Mikkelsen (unreported, SC(NSW), Wootten J, 3 October 1974) ............................. 7.120 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2004] QB 916 ............................................................................................................................ 11.20 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2005] 1 AC 610 ............................................................................................................ 11.20, 11.130 Tibmor Pty Ltd v Nashlyn Pty Ltd [1989] 1 Qd R 610 .............................................................. 16.105 Tip Top Dry Cleaners Pty Ltd v Mackintosh (1998) 39 ATR 30 .................................................. 5.255

Table of Cases lxxi

Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (1998) 83 FCR 397 ................................... 11.170 Tkacz, Re (2006) 206 FLR 171 ........................................................................................................ 2.60 Tobin v Melrose [1951] SASR 139 .............................................................................................. 16.110 Todd (No 2), Re (1910) 10 SR (NSW) 490 ..................................................................................... 9.45 Tom Hoskins plc v EMW Law (a firm) [2010] ECC 20 ................................................................. 3.55 Tomasevic v Carbone [2015] VSC 302 .......................................................................................... 15.55 Tombling v Universal Bulb Co Ltd [1951] 2 TLR 289 ....................................................... 4.05, 17.95 Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378 .............................................. 12.35 Tony Azzi (Automobiles) Pty Ltd v Volvo Car Australia Pty Ltd (2007) 71 NSWLR 140 ............................................................................................................................................... 12.95 Toronto Harbour Commissioners v THC Parking Inc (1999) 175 DLR (4th) 536 ..................... 17.190 Tower v Minister of National Revenue (2002) 219 DLR (4th) 151 ............................................ 11.135 Towers v Atkins (No 2) [2015] FCCA 3537 ................................................................... 21.145, 21.205 Towney v Minister for Land and Water Conservation (NSW) (1997) 76 FCR 401 ................... 11.250 Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69 ......................................... 12.25, 12.80 Trade Practices Commission v Arnotts Ltd (No 5) (1990) 21 FCR 324 .................................... 17.175 Trade Practices Commission v CC (New South Wales) Pty Ltd (1994) 125 ALR 94 ................. 13.65 Trade Practices Commission v Sterling (1979) 36 FLR 244 ................. 11.30, 11.130, 11.160, 11.165 Travel Air International Pty Ltd v Bastion [2012] NSWSC 28 ..................................................... 3.145 Treadwell v Hickey [2010] NSWSC 1119 ................................................................................... 17.265 Treloar v Treloar [1968] NZLR 1085 ............................................................................................. 7.120 Trendtex Trading Corp v Crédit Suisse [1980] QB 629 .............................................................. 14.115 Trepca Mines Ltd (No 2), Re [1963] Ch 199 ............................................................................... 14.115 Trevorrow v South Australia (No 4) (2006) 94 SASR 64 ........................................................... 11.280 Trevorrow v State of South Australia (No 2) (2005) 94 SASR 1 ............................................... 11.275 Trkulja v Barrow [2013] VSC 227 ................................................................................................. 17.50 Trumbull County Bar Association v Makridis (1996) NE 2d 31 ................................................ 21.245 Trust Co of Australia v Perpetual Trustees WA Ltd (1997) 42 NSWLR 237 ..................... 5.20, 5.165 Trustees of the Legal Contribution Trust v Bailey [2004] WASC 175 .............................. 3.195, 3.200 Tsangaris v Gaymark Investments Pty Ltd (1986) 82 FLR 269 .................................................... 3.145 Tuckiar v R (1934) 52 CLR 335 ....................................................................................... 17.40, 18.105 Tugrul v Tarrants Financial Consultants Pty Ltd (in liq) [2013] NSWSC 1971 ........................ 17.190 Turf Enterprises Pty Ltd, Re [1975] Qd R 266 .............................................................................. 12.80 12 Years Juice Foods Australia Pty Ltd v Commissioner of Taxation [2015] FCA 741 ............ 11.180 Twidale v Bradley [1990] 2 Qd R 464 ........................................................................................... 5.165 Twigg v Keady (1996) 135 FLR 257 ................................................................. 16.125, 16.135, 16.140 Twigg v Kung (2002) 55 NSWLR 485 ........................................................................................ 15.105 Twigg & Co v Rutherford (1996) 20 Fam LR 862 ...................................................................... 14.170 Twigg & Twigg v Kung (1994) 121 FLR 227 ............................................................................... 14.80 Twinsectra Ltd v Yardley [2002] 2 AC 164 ...................................................................... 19.35, 21.125 Two Solicitors, Re (1911) 7 Tas LR 78 .......................................................................................... 6.115 Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2011] NSWSC 156 ............................................................................................................................... 16.60 Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2011] NSWSC 22 ................................................................................................................................. 16.75 Tyrell v Bank of London (1862) 10 HLC 26; 11 ER 934 ............................................................... 4.45 Tziniolis, Ex parte (1966) 67 SR (NSW) 448 .................................................................................. 2.35

U UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 ................ 8.150, 8.265, 17.20 Udall v Capri Lighting Ltd (in liq) [1988] QB 907 ..................................... 22.10, 22.25, 22.30, 22.50

lxxii Table of Cases

Ullinger v Giles [2013] WASC 117 .............................................................................................. 14.190 Un v Schroter [2002] NTSC 2 ........................................................................................................ 3.180 Underwood v Cox (1912) 26 OLR 303 .......................................................................................... 12.40 Underwood Son & Piper v Lewis [1894] 2 QB 306 ..................................................................... 3.200 Unilateral Investments Ltd v VNZ Acquisitions Ltd [1993] 1 NZLR 468 ................................. 11.190 Unilever plc v Procter & Gamble Co [1999] 1 WLR 1630 ............................................... 12.20, 12.55 Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436 .......................................................... 12.35 Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 ............. 17.95, 17.100, 17.245 Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 .... 7.45, 8.125, 8.210, 8.215, 10.15, 10.20 United Mining & Finance Corp Ltd v Becher [1910] 2 KB 296 ........................... 22.10, 22.25, 22.45 United States of America v Philip Morris Inc (No 1) [2004] 1 CLC 811 .................................... 11.50 Upjohn v United States (1981) 449 US 383 ................................................................................. 11.180 Uppu v Minister for Immigration and Citizenship (No 2) [2012] FMCA 157 ........................... 17.270 Urbaniak-Bak v Prail [2014] ACTSC 171 ...................................................................................... 3.205 Urbaniak-Bak v Prail [2015] ACTCA 39 ............................................................................ 3.205, 3.210

V VAW (Kurri Kurri) Pty Ltd v Scientific Committee (2001) 116 LGERA 89 ............................. 11.250 Vagg v McPhee [2011] NSWSC 1584 ............................................................................................ 21.80 Vagg v McPhee (2013) 85 NSWLR 154 ........................................................................................ 21.80 Vakauta v Kelly (1989) 167 CLR 568 ............................................................................................ 8.265 Vallant Hooker & Partners v Proceedings Commissioner [2001] 2 NZLR 357 ........................... 16.30 Valvo, Application by [2014] NTSC 27 ........................................................................................... 2.60 Van Der Lee v New South Wales [2002] NSWCA 286 ................................................................ 11.60 Van Der Sluis v Health Waikato Ltd [1995] 1 ERNZ 478 ............................................................ 12.55 Van Erp v Hill (1995) Aust Torts Reports ¶81-317 ....................................................................... 21.65 Vance v McCormack (2004) 184 FLR 62 .............................................................. 11.140, 13.45, 13.50 Vandervell’s Trusts (No 2), Re [1974] Ch 269 .............................................................................. 17.55 Varawa v Howard Smith & Co Ltd (1910) 10 CLR 382 ................................................... 11.15, 11.55 Vardas v South British Insurance Co Ltd [1984] 2 NSWLR 652 ................................................. 11.75 Vasik v Vasik (2007) 38 Fam LR 262 ............................................................................................ 8.130 Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 ................................................ 17.45 Vella v Bowden (No 3) [2014] WASC 98 ........................................................................................ 9.15 Vella v Gustafson [2009] QSC 424 ......................................................................................... 3.55, 3.60 Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343 ..................................................... 4.160 Vella v R (1990) 47 A Crim R 119 ..................................................................................... 18.10, 18.40 Ventouris v Mountain [1991] 1 WLR 607 .................................................................................... 11.155 Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd (No 4) [2011] NSWSC 720 ....................... 14.85 Verduci v Golotta (2010) 15 BPR 28,865 ........................................................................... 6.125, 7.140 Vernon v Bosley (No 2) [1999] QB 18 ........................................................................... 17.100, 18.120 Veron, Re (1966) 84 WN (Pt 1) (NSW) 136 .................................... 23.85, 24.30, 25.50, 25.70, 25.75 Verson Clearing International v Ward & Partners (1996) 9 ANZ Ins Cas ¶61-352 .......... 7.105, 16.75 Vertzayias v King [2011] NSWCA 215 .......................................................................................... 7.160 Victorian Bar Inc v Himmelhoch [1999] VSC 222 ........................................................ 21.220, 25.140 Victorian Lawyers RPA v Constantinou (Legal Profession Tribunal Proceeding No T0368 and T0410 of 1998) ........................................................................................................ 6.145 Victorian Legal Services Commissioner v Anderson [2015] VCAT 1157 .................................... 20.85 Victorian Legal Services Commissioner v Hume [2015] VCAT 1818 .......................................... 25.60 Victorian Legal Services Commissioner v Lewenberg [2016] VCAT 439 .................................. 17.160

Table of Cases lxxiii

Victorian Legal Services Commissioner v Lewenberg (No 2) [2016] VCAT 556 ........ 17.160, 23.170 Victorian Legal Services Commissioner v Logan [2016] VCAT 544 ......................................... 20.170 Victorian Legal Services Commissioner v McBain [2015] VCAT 1545 ....................................... 14.70 Victorian Legal Services Commissioner v McDonald [2016] VCAT 21 .................................... 21.145 Victorian Legal Services Commissioner v Mingos [2016] VCAT 918 ............................ 23.105, 24.30 Victorian Legal Services Commissioner v Rhoden [2016] VSC 67 .............................................. 14.70 Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726 ....... 7.40, 8.35, 8.95, 8.125 Vincenti, Re (1989) 554 A 2d 470 ................................................................................................ 21.170 Vincenzo v Vincenzo [2014] FamCA 46 ........................................................................................ 8.140 Virgtel Ltd v Zabusky (No 2) [2009] QCA 349 .......................................................................... 17.245 Virzi v Grand Trunk Warehouse and Cold Storage Co (1983) 571 F Supp 507 ........................ 21.165 Visa USA, Inc v First Data Corp (2003) 241 F Supp 2d 1100 ....................................................... 7.85 Viscariello v Legal Profession Conduct Commissioner [2015] SASC 4 ...................................... 17.20 Viscariello v Livesey [2013] SASC 99 ......................................................................................... 24.125 Viselle v Grieve (2014) 18 DCLR (NSW) 75 ................................................................................ 14.80 Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission (2007) 161 FCR 122 ................................................................................................................. 11.160 Vlamaki v Sookias & Sookias [2015] 6 Costs Lo 827 ........................................................ 3.25, 3.210 Vogt v Legal Practitioners Complaints Committee [2009] WASCA 202 ...................................... 25.10 Voli v Inglewood Shire Council (1963) 110 CLR 74 ...................................................................... 5.05 Volker v Dunwell [2013] FamCAFC 169 ....................................................................................... 8.130 Volpes v Permanent Custodians Ltd [2005] NSWSC 111 ................................................ 12.30, 20.195 Von Stieglitz v Comcare (2014) 64 AAR 356 ................................................................... 11.30, 11.125 Voss, Re Disciplinary Proceedings Against (2011) 795 NW 2d 415 ............................................ 6.145 Voth Bros Construction (1974) Ltd v North Vancouver Board of School Trustees (1981) 23 CPC 276 ..................................................................................................................... 11.40 Vukmurica v Betyounan [2008] NSWCA 16 ................................................................................... 3.35 Vulic v Bilinsky [1983] 2 NSWLR 472 .................................................................... 3.180, 5.60, 5.190

W W v Auckland Standards Committee 3 of New Zealand Law Society [2012] NZAR 1071 ............................................................................................................................................. 22.50 WAFI v Minister for Immigration [2002] FMCA 179 ................................................................... 4.105 WFM Motors Pty Ltd v Maydwell [1994] ANZ Conv R 454 ........................................... 16.40, 16.45 Wade v Licardy (1993) 33 NSWLR 1 ................................................................................ 22.10, 22.25 Wadsworth, Re (1886) 34 Ch D 155 ............................................................................................ 16.155 Wagdy Hanna & Associates Pty Ltd v National Library of Australia (2004) 185 FLR 367 ..................................................................................................................................... 8.35, 8.240 Waikato Bay of Plenty Lawyers’ Standards Committee No 1 v Pou [2014] NZLCDT 86 ............................................................................................................................................... 25.150 Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 .................................................. 4.05, 7.120, 21.10 Waiviata Pty Ltd v New Millennium Publications Pty Ltd [2002] FCA 98 ................................... 8.40 Wake v Wake (unreported, FC(Fam Ct), 9 February 1998) .......................................................... 8.130 Wakim v McNally (2002) 121 FCR 162 ........................................................................................ 5.205 Walker v Chruszcz [2006] EWHC 64 (QB) ................................................................................... 5.225 Walker v D’Alessandro [2010] VSC 15 ......................................................................................... 14.70 Walker v Geo H Medlicott & Son (a firm) [1999] 1 WLR 727 ........................................ 21.55, 21.65 Walker v Wilsher (1889) 23 QBD 335 ......................................................... 12.05, 12.70, 12.80, 12.90 Wallace v Canadian Pacific Railway [2013] 2 SCR 649 .................................................... 1.125, 3.205 Wallace v Kam (2013) 250 CLR 375 ............................................................................................. 4.165

lxxiv

Table of Cases

Wallersteiner v Moir (No 2) [1975] QB 373 ................................................................................ 14.115 Walsh v Law Society of New South Wales (1999) 164 ALR 405 ................................... 23.90, 23.155 Walsh v Legal Practitioners Conduct Board (2016) 125 SASR 111 ............................................. 23.15 Walsh v State of Western Australia [2011] WASCA 119 ............................................................... 18.80 Walter v Buckeridge (No 5) [2012] WASC 495 ............................................................................ 14.60 Wamsley, Re (2000) 725 NE 2d 75 ................................................................................................ 20.45 Wan v McDonald (1992) 33 FCR 491 ..................................................................... 7.120, 7.130, 8.125 Ward v Lewis (1896) 22 VLR 410 ................................................................................................. 21.10 Ward v R (1981) 3 A Crim R 171 ................................................................................................ 17.175 Ward v Sharp (1884) 53 LJ Ch 313 .............................................................................................. 15.110 Wardell v New South Wales Bar Association (2002) 50 ATR 302 ............................................. 25.170 Wardrope v Dunne [1996] 1 Qd R 224 ........................................................................................ 11.265 Warman International Ltd v Dwyer (1995) 182 CLR 544 ............................................................... 4.40 Warmingtons v McMurray (1936) 52 TLR 381 ............................................................................. 3.205 Waterford v Commonwealth of Australia (1987) 163 CLR 54 ........................... 11.140, 11.145, 13.40 Waterhouse v Law Society of New South Wales [2003] NSWADTAP 20 ................................... 22.35 Watkins v De Varda [2003] NSWCA 242 ............................................................... 21.10, 21.20, 21.40 Watson v Ebsworth & Ebsworth (a firm) [2008] VSC 510 ........................................................... 5.220 Watson v Ebsworth & Ebsworth (a firm) (2010) 31 VR 123 ........................................................ 5.220 Watson v Lyon (1855) 7 De GM & G 288; 44 ER 113 .............................................................. 16.105 Watson v Rodwell (1879) 11 Ch D 150 ....................................................................................... 15.110 Watt v Law Society of Upper Canada (2005) 255 DLR (4th) 701 ............................................... 2.170 Watt v Watt (1988) 12 Fam LR 589 ............................................................................................... 12.90 Watts v Public Trustee (WA) [1980] WAR 97 ............................................................................... 21.55 Waugh v British Railways Board [1980] AC 521 .......................................................................... 11.40 Waugh v H B Clifford & Sons Ltd [1982] Ch 374 ................................................. 3.130, 3.135, 3.145 Waxman v Waxman (1997) 150 DLR (4th) 370 ............................................................................ 8.165 Weare, Re [1893] 2 QB 439 .............................................................................................. 20.95, 25.105 Weaver v Law Society of New South Wales (1979) 53 ALJR 585 ................................... 23.20, 23.25 Webb v MacDonald [2010] NPC 12 ............................................................................................... 4.140 Webster v Shueard (2012) 113 SASR 99 ............................................................................ 22.05, 22.20 Weedman, Re [1996] FCA 1112 .......................................................................................... 16.60, 16.75 Weiss v Barker Gosling (1993) 16 Fam LR 728 ................................................... 6.125, 6.130, 14.170 Weller v Phipps (2010) 7 ASTLR 29 ............................................................................................. 5.220 Wells v D’Amico [1961] VR 672 ................................................................................................... 3.130 Welsh v Hole (1779) 1 Dougl 238; 99 ER 155 ........................................................................... 16.130 Wentworth v Lloyd (1864) 10 HL Cas 589; 11 ER 1154 .............................................................. 11.15 Wentworth v New South Wales Bar Association (1992) 176 CLR 239 ........ 2.30, 23.10, 23.20, 23.55 Wentworth v New South Wales Bar Association (unreported, CA(NSW), 14 February 1994) ............................................................................................................................................. 2.65 Wentworth v Rogers [1999] NSWCA 403 ..................................................................................... 17.40 Wentworth v Rogers [2002] NSWSC 709 ........................................................................ 14.90, 14.160 Wentworth v Rogers [2005] NSWSC 143 ...................................................................................... 14.90 Wentworth v de Montford (1988) 15 NSWLR 348 ....................................................................... 3.230 Werden v Legal Services Board (2012) 36 VR 637 ...................................................................... 9.125 West London Pipeline & Storage Ltd v Total UK Ltd [2008] 2 CLC 258 ................................... 11.30 Western Australia v Ward (1997) 76 FCR 492 .............................................................................. 17.20 Westgold Resources NL v St Barbara Mines Ltd [2002] WASC 264 ................................. 8.30, 10.15 Westmelton (Vic) Pty Ltd (receiver and manager appointed) v Archer [1982] VR 305 ... 6.125, 6.130 Westminster Airways Ltd v Kuwait Oil Co Ltd [1951] 1 KB 134 ............................................... 11.30 Weston v Connor (unreported, CA(Vic), 9 February 1998) ......................................................... 15.110 Westpac Banking Corporation v 789Ten Pty Ltd (2005) 55 ACSR 519 ..................................... 11.160

Table of Cases lxxv

Westpac Banking Corporation v Newey [2013] NSWSC 533 ...................................................... 17.20 Wheat v United States (1988) 486 US 153 .................................................................................... 7.100 Wheeler v Le Marchant (1881) 17 Ch D 675 .............................................................................. 11.160 Wheeler, Re [1991] 2 Qd R 690 .......................................................................................... 19.35, 25.15 Wheller v Wheller [2012] FamCA 356 .......................................................................................... 8.130 White v Bini [2003] FCA 669 ........................................................................................................ 16.50 White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 .............................. 3.125, 4.185 White v Jones [1995] 2 AC 207 ........................................................ 21.15, 21.55, 21.60, 21.65, 21.70 White v Overland [2001] FCA 1333 ............................................................................................ 17.245 White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 ........... 5.205, 17.245, 17.255 White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298 ............................................................................................................................................. 11.135 Whitehead v Lord (1852) 7 Ex 691; 155 ER 1126 ........................................................................ 3.205 Whitehead v McLeish [2007] EWHC 1060 (QB) .......................................................................... 5.230 Whitehorn v R (1983) 152 CLR 657 ............................................................ 18.10, 18.40, 18.75, 18.80 Whittingham v Crease & Co (1978) 88 DLR (3d) 353 ................................................................. 21.55 Whyte v LM Investment Management Ltd (in liq) (recs and mgrs apptd) [2015] QSC 303 ............................................................................................................................................... 14.50 Widdison, Re (1995) 539 NW 2d 671 .................................................................................... 2.70, 2.90 Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) (2011) 194 FCR 250 ............................................................................................................................................. 14.205 Wild v Simpson [1919] 2 KB 544 .................................................................................................. 3.210 Wilkinson v Feldworth Financial Services Pty Ltd (1998) 29 ACSR 642 ...................... 5.210, 21.135 Williams v Gibbons [1994] 1 NZLR 273 ....................................................................................... 3.110 Williams v Hull [2009] EWHC 2844 (Ch) ..................................................................................... 12.25 Williams v Kim Management Pty Ltd [2013] 1 Qd R 387 ......................................................... 17.120 Williams v Quebrada Railway Co [1895] 2 Ch 751 ...................................................................... 11.55 Williamson v Schmidt [1998] 2 Qd R 317 ................................................................................... 21.115 Willson v Angela Gibson Law Corp (2008) 87 BCLR (4th) 319 ...................................... 22.05, 22.25 Wilson v Collingwood Store Pty Ltd (2014) 41 VR 531 .............................................................. 18.25 Wilson v Department of Human Services – Re Anna [2010] NSWSC 1489 ............................. 17.190 Wimmera Industrial Metals Pty Ltd v Iluka Midwest Ltd [2002] FCA 653 .............................. 17.175 Wingfield & Blew (Solicitors), Re [1904] 2 Ch 665 .......................................................... 3.200, 16.60 Winters v Mischon de Reya [2008] EWHC 2419 (Ch) ................................................................. 1.125 Wintle v Nye [1959] 1 WLR 284 ................................................................................................... 6.130 Withers v Standards Committee No 3 of the Canterbury Westland Branch [2014] NZHC 611 ................................................................................................................................... 25.60 Withers LLP v Rybak [2012] 1 WLR 1748 ........................................................................ 16.40, 16.45 Witten-Hannah v Davis [1995] 2 NZLR 141 ................................................................................... 6.30 Wombat Securities Pty Ltd, Re [2011] NSWSC 194 ....................................................................... 6.50 Wong v 407527 Ontario Ltd (2000) 179 DLR (4th) 38 ................................................................ 5.110 Wong v Kelly (1999) 154 FLR 200 .................................................................................................. 3.05 Woodgate v Keddie (2006) Aust Contract R ¶90-247 ................................................................... 14.80 Woodgate v Keddie (2007) 242 ALR 234 ...................................................................................... 14.80 Woollahra Municipal Council v Westpac Banking Corp (1994) 33 NSWLR 529 ..................... 11.255 Woolley v Ritchie [1999] ANZ Conv R 385 .................................................................................... 6.50 Woolworths Ltd v Fels (2002) 213 CLR 598 ............................................................................... 11.235 Woolworths Ltd v Kelly (1991) 22 NSWLR 189 ............................................................................ 6.25 Worby v Rosser [2000] PNLR 140 ................................................................................................. 21.85 World Medical Manufacturing Corporation v Phillips Ormonde & Fitzpatrick Lawyers [2000] VSC 196 ............................................................................................................................ 8.35

lxxvi

Table of Cases

Worrell v Power & Power (1993) 46 FCR 214 ................................................. 16.130, 16.140, 16.150 Worrell v Woods (1999) 90 FCR 264 ........................................................................................... 11.185 Worth v Worth [2016] FamCA 4 .................................................................................................... 17.20 Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWCA 354 ............................................................................................................................................. 21.115 Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWSC 356 ............................................................................................................................................. 21.115 Wright v Carter [1903] 1 Ch 27 ..................................................................................................... 6.130 Wright v Paton Farrell [2006] SC 404 ........................................................................................... 5.260 Wright, Re (1984) 1 FCR 51 ............................................................................................... 16.35, 16.40 Wroe v Seed (1863) 4 Giff 425; 66 ER 773 .................................................................................... 9.40 Wyn v Van den Broek (2011) 205 ACWS (3d) 898 ...................................................................... 8.180 Wyndham City Council v CSR Ltd [1998] VSC 156 ...................................................................... 8.85

X X (an infant) v Wollcombe Young [2001] Lloyd’s Rep PN 274 ................................................... 21.60 X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1 ......................................................... 1.125 X and Y v Z (2015) 123 SASR 298 ............................................................................................. 11.130 XX Firm v ZZ Firm [2013] FamCA 1007 ...................................................................... 16.140, 16.155 XY v Board of Examiners [2005] VSC 250 ........................................................................... 2.80, 2.90 Xabregas v Owners – Strata Plan No 79205 [2014] NSWSC 1027 ........................................... 17.260 Xu v Council of the Law Society of New South Wales [2009] NSWCA 430 ............................. 16.30

Y Y v M [1994] 3 NZLR 581 ................................................................... 17.125, 17.220, 17.230, 17.235 Yaktine v Perpetual Trustees Victoria Ltd (2005) 13 ANZ Ins Cas ¶61-637 ...................... 5.75, 5.350 Yamaji v Westpac Banking Corp (No 1) (1993) 42 FCR 431 .................................. 8.10, 17.45, 17.50 Yara Australia Pty Ltd v Oswal (2013) 41 VR 302 ..................................................................... 17.245 Yarrow v Pettigrew [2012] NZHC 1146 ......................................................................................... 8.150 Yates Property Corporation v Boland (1998) 85 FCR 84 ....................................... 5.190, 5.205, 5.220 Yerkey v Jones (1939) 63 CLR 549 ............................................................................................... 5.175 Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738 . 11.245, 12.30, 12.35, 12.80 Yong Jun Qin v Minister for Immigration and Multicultural Affairs (1997) 75 FCR 155 .......... 13.85 Yonge v Toynbee [1910] 1 KB 215 .............................................................................................. 21.105 Yorke v Lucas (1985) 158 CLR 661 ............................................................................................ 21.135 Young v Davidovic Pty Ltd (2011) 255 FLR 422 ......................................................................... 16.20 Young v Hones [2013] NSWSC 1429 ............................................................................................ 5.315 Young v Hones [2014] NSWCA 337 .............................................................................................. 5.315 Young v Robson Rhodes (a firm) [1999] 3 All ER 524 ................................................................ 8.220 Young, Re (1989) 776 P 2d 1021 ................................................................................................... 19.50 Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 ................................... 4.185 Yung v Adams (1997) 150 ALR 436 .............................................................................................. 23.60 Yunghanns v Elfic Ltd (unreported, SC(Vic), Gillard J, 3 July 1998) ............................... 8.150, 8.155 Yunghanns v Elfic Pty Ltd (2000) 1 VR 92 ...................................................................... 11.30, 11.195

Z Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1 .................................. 23.50, 25.100 Z v New South Wales Crime Commission (2007) 231 CLR 75 ...................................... 11.85, 11.240 Z, Re [2010] 2 FLR 132 ........................................................................................................ 8.85, 8.265

Table of Cases lxxvii

Zaicos v Law Institute of Victoria (unreported, SC(Vic), Nathan J, 19 July 1995) ..................... 25.60 Zaidi v Health Care Complaints Commission (1998) 44 NSWLR 82 .......................................... 23.65 Zakka v Elias [2013] NSWCA 119 ..................................................................................... 5.35, 20.205 Zalfen v Gates [2006] WASC 296 .................................................................................................. 8.220 Zandas v Zandas [2014] FCCA 1184 ............................................................................................. 24.10 Zani v Lawfirst Pty Ltd [2014] WASC 75 .......................................................................... 8.150, 8.210 Zbiegien, Re (1988) 433 NW 2d 871 ............................................................................................... 2.70 Zelino v Budai (2001) 47 ATR 488 ................................................................................................ 24.10 Zentai v O’Connor (No 2) (2010) 183 FCR 180 ................................................. 11.145, 11.265, 13.05 Zeus Chemical Products Pty Ltd v Jaybee Design & Marketing Pty Ltd (1998) 41 IPR 491 ............................................................................................................................................... 3.230 Zhen v Downer [2006] ACTSC 120 ............................................................................................... 3.130 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 .. 1.15, 23.05, 23.20, 23.25, 23.50, 23.100, 25.05, 25.105, 25.160 Zizza v Seymour [1976] 2 NSWLR 135 ........................................................................................ 15.30

Table of Statutes and Rules Commonwealth/National Anti-Money Laundering and Counter-Terrorism Financing Act 2006: 10.75, 19.15 s s s s s s s s

6(2): 10.75, 19.15 41: 10.75, 19.15 43: 10.75, 19.15 242: 10.75 327(2): 19.15 328: 19.15 329: 19.15 330: 19.15

Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No 1) Ch 23: 10.75 para 40.2: 10.75

Archives Act 1983 s 24: 13.70

Australian Passports Act 2005 s 54: 16.30

Australian Solicitors’ Conduct Rules: 1.120, 1.140, 4.135, 6.15, 6.110, 7.30, 8.75, 8.230, 10.105, 10.110, 10.115, 16.70, 17.85, 17.205, 18.90, 20.40, 21.195, 22.05 r 2: 1.140 r 2.1: 1.125 r 2.3: 1.125 r 8.3: 7.160 r 8.4: 7.160 r 9.1: 10.15 r 10: 8.45, 8.195 r 11: 7.80 r 11.3: 7.80 r 11.4: 7.80 r 11.5: 7.30, 7.80, 7.120 rr 20.2.2(iii) to (v): 18.105

Sch 2, Australian Consumer Law: 4.145, 5.15, 6.135, 15.110, 20.15, 20.25, 21.130, 21.135 s 2(1): 5.15, 21.135 s 18: 4.160, 5.15 s 18(1): 20.15, 20.25, 20.75, 21.130 s 20: 5.315 s 21: 5.315 s 236(1): 21.135 Pt 2-3: 6.135, 15.110 Pt 5-2: 21.130

Corporations Act 2001: 5.355, 7.155, 20.170, 21.135, 23.90 s 6: 20.170 s 12: 20.170 s 17: 20.170 s 50: 7.150 s 79: 21.135 s 180(1): 13.30 s 477(2)(a): 11.185 s 477(2)(m): 11.185 s 601FA: 9.125 s 766A: 5.100 s 766B(5): 5.100 s 911A(1): 5.100 s 1311(1): 5.100 Ch 5C: 6.60, 7.155, 9.125, 20.170 Pt 5: 20.170 Pt 7.6: 7.155 Pt 9.4AAA: 10.135

Corporations Law: 16.80 s 530B(1): 16.80

Corporations Regulations 2001 reg 7.1.35A: 5.100 reg 7.1.40: 5.100

Crimes Act 1914 s 29D: 19.40

Criminal Code Act 1995: 2.60 s 135.4: 19.40

Banking Act 1959: 6.60 Competition and Consumer Act 2010: 1.55, 20.50 s 45C: 1.55 s 47: 1.55 s 155: 11.235 s 155(7B): 11.235 Pt VIA: 4.160

Evidence Act 1995: 11.05, 11.25 s 4: 11.25 s 41: 17.230 s 117(1): 11.105, 11.125, 11.140, 11.145, 11.150, 11.165, 11.180, 11.185, 13.40 s 118: 11.20, 11.25, 11.160, 11.170 s 118(b): 11.165 s 119: 11.20, 11.25, 11.160, 11.170

lxxx Table of Statutes and Rules Evidence Act 1995 — cont s 120: 11.155 s 121(1): 11.185 s 122: 11.250 s 122(1): 11.250 s 122(2): 11.250 s 122(3): 11.250, 11.275 s 122(5)(b): 11.200 s 122(5)(c): 11.190 s 123: 11.230 s 124: 11.200 s 125: 11.55, 11.60 s 125(1)(a): 11.60 s 125(1)(b): 11.60 s 131: 12.05, 12.15, 12.20 s 131(1): 12.15 s 131(1)(a): 12.30 s 131(2): 12.35 s 131(2)(a): 12.80 s 131(2)(b): 12.80 s 131(2)(d): 12.30 s 131(2)(e): 12.40 s 131(2)(f): 12.40 s 131(2)(g): 12.60 s 131(2)(h): 12.95 s 131(2)(i): 12.85, 18.130 s 131(2)(j): 12.60 s 131(2)(k): 12.60 s 131(5)(b): 12.100 s 131(5)(c): 12.30 s 133: 11.30 s 140: 23.50

Family Law Act 1975: 18.145 s s s s s s s s s s s s s s s s s

55A(1)(b)(i): 18.130 60D: 18.135 60D(2): 18.135 60CA: 18.130 65AA: 12.85 67L: 12.85, 18.130 67V: 12.85, 18.130 68L: 18.145 68L(4): 18.145 68LA: 18.145 68LA(4): 18.145 68LA(5): 18.145 68LA(7): 18.145 68LA(8): 18.145 79: 4.200 79(4): 18.130 79A: 4.200

Family Law (Family Dispute Resolution Practitioner) Regulations 2008: 20.185 Family Law Legislation Amendment (Family Violence and Other Measures) Act 2011: 18.135

Federal Court of Australia Act 1976 s s s s s s s

24(1)(b): 4.200 33C(1): 7.110 37M: 11.275, 17.245 37N(4): 17.245 53A(1): 4.135, 20.180 53B: 20.195 53C: 20.195

Financial Transactions Reports Act 1988: 10.75, 19.15 s 3(1): 10.75, 19.15 s 3(7): 19.15 s 15A: 10.75 s 15A(1): 19.15 s 15A(2): 19.15 s 28(3): 19.15 Sch 3A: 10.75, 19.15

Freedom of Information Act 1982: 13.125 Income Tax Assessment Act 1936 s 177D: 11.45 s 263: 11.225

Income Tax Assessment Act 1997 s 108-5: 20.130

Judiciary Act 1903 s 55E(2)(c): 13.40 s 55E(3): 13.70 s 55F: 13.80 s 55Q(1): 13.40 s 55Q(2): 13.70 s 55R: 13.80 s 55ZF: 13.85 s 55ZG: 13.85 Pt VIIIB: 1.65

Legal Profession National Law (draft) s s s s s s s s

2.2.11(1): 2.30 2.2.12: 2.30 6(1): 20.220 8.3.2(a): 1.110 8.3.2(b): 1.110 9.1.3: 1.120 9.1.6: 1.120 9.1.7: 1.120

Migration Act 1958: 17.270 s 486E(1): 17.270 s 486E(2): 17.270 s 486F(1): 17.270 s 486I(1): 17.270 Pt 8B: 17.270

Migration Litigation Reform Act 2005: 17.270

Table of Statutes and Rules lxxxi

Australian Capital Territory

Model Rules of Professional Conduct and Practice (Law Council of Australia): 7.150, 17.05 r 3.1.3: 10.105 r 5: 13.05 r 8.5: 7.150 r 8.6: 7.155 r 12.1: 4.05 r 14.6: 17.85 r 14.10: 17.105 r 20.7(iii): 18.80 r 23.4: 16.65 r 23.5: 16.65 r 30.1: 24.15 r 31.1: 24.15 r 33.1.2: 20.55 r 33.2: 6.110

Mutual Recognition Act 1992: 2.50 s 4(1): 2.50 s 17: 2.50 s 17(1): 2.50

Privacy Act 1988: 10.180, 13.125 s 6C(1): 10.180 s 6D(1): 10.180 s 52: 10.180 Sch 1: 10.180

Public Governance, Performance and Accountability Act 2013: 13.125 s 13: 13.125 s 27: 13.125 s 28: 13.125

Public Interest Disclosure Act 2013: 10.135 Public Service Act 1999: 13.125 s 10: 13.125 s 13: 13.125 s 15(1): 13.125

Tax Agent Services Act 2009 s 50-5: 1.25 s 90-5: 1.25

Trade Practices Act 1974: 13.65 s 52(1): 20.15, 20.25, 21.130 s 82(1): 21.135 s 155: 11.235 s 155(1): 11.235 s 155(2): 11.235 s 155(7B): 11.235 Pt IV: 1.55

Treasury Legislation Amendment (Professional Standards) Act 2004: 5.355 Uniform Admission Rules: 2.10, 2.15

ACT Civil and Administrative Tribunal Act 2008 s s s s s s s s s

30: 23.65 38: 23.65 79: 24.50 82: 24.50 83: 24.50 84: 24.50 85: 24.50 86: 24.50 116: 23.55

Agents Act 2003 Pt 3: 20.115

Children and Young People Act 2008 s 354: 10.135, 18.130

Civil Law (Wrongs) Act 2002: 5.170 s 41: 4.155 s 45(1): 4.165 s 45(2): 4.165 s 186: 17.265 s 188(1): 17.265 s 188(2): 17.265 s 188(3): 17.265 s 189: 21.190 s 189(1): 17.265 s 195(1): 4.135, 20.180 Ch 7A: 4.160 Pt 14.1: 15.20 Pt 14.2: 17.265 Sch 4: 5.355

Competition Policy Reform Act 1996: 1.55 Court Procedures Act 2004 s 52C: 20.190 s 52C(3): 20.190 s 52D: 20.195

Court Procedures Rules 2006 r 1.08: 17.245 r 21: 11.275, 17.245 r 1012: 16.75 r 1760: 15.40 r 1761: 15.40 r 3605: 2.10 r 3606: 2.15 Sch 1, cl 1.2(1): 17.175

Criminal Code 2002 s s s s

300: 6.120 353(1): 6.120 356(2): 6.120 357(2): 6.120

lxxxii

Table of Statutes and Rules

Criminal Code 2002 — cont s 706(1): 17.145

Evidence Act 2011: see section entries under Evidence Act 1995 (Cth) Legal Aid Act 1977 s 13: 13.110 s 92: 13.110

Legal Practitioners Act 1970 Pt 15B: 2.160

Legal Profession Act 2006: 1.100 Dictionary: 25.100 s 7: 2.140 s 8: 2.140 s 11(1): 2.75 s 11(1)(a): 2.20 s 11(1)(c): 2.60 s 11(1)(m): 2.80 s 16: 2.140 s 17: 20.80 s 22: 2.20 s 23: 2.20 s 28: 17.10 s 29: 2.30 s 29.7(iv): 18.80 s 30: 2.30 s 61: 24.15, 25.165 s 72: 2.155 s 73: 2.155 s 102: 20.170 s 107(1): 20.170 s 107(2): 20.170 s 110(1): 20.170 s 117: 20.170 s 118(1): 20.170 s 134(1): 20.160 s 135(1): 20.160 s 137(1): 20.160 s 137(2): 20.160 s 139(b): 20.160 s 139(d): 20.160 s 140: 20.160 s 141: 20.160 s 144: 20.160 s 145: 20.160 s 146(1): 20.160 s 153: 2.160 s 155: 2.160 s 157(1): 2.160 s 157(2): 2.160 s 157(3): 2.160 s 160: 20.80 s 170: 2.160 s 174: 2.160 s 210(1): 9.10 s 212(1): 9.20

s 212(2): 9.20 s 221: 9.05 s 222: 9.05 s 223A(1): 9.65 s 223A(2): 9.65 s 223A(4): 9.65 ss 223 to 225: 9.65 s 224(1): 9.10 s 224A(1): 9.65 s 224A(2): 9.65 s 224A(4): 9.65 s 225(1): 9.10 s 227: 9.80 s 228: 9.45 s 229(1)(a): 9.75, 16.45 s 229(1)(b): 9.70 s 229(1)(c): 9.65 s 230(1): 9.50 s 231: 9.55 s 231(2): 24.15, 25.50 s 232: 9.35 s 233(1): 9.60 s 233(2): 9.60 s 241(1): 9.90 s 246: 9.90 s 247: 9.90 s 248: 9.95 s 251(1)(b): 9.80 s 253: 9.65 s 259: 9.65 s 261: 14.140, 15.30, 15.65 s 261A(1): 14.50 s 261A(1)(a): 15.55 s 269: 14.20 s 270: 14.30 s 271(1): 14.35, 14.45 s 271(2): 14.45 s 272: 14.55 s 273: 14.65 s 274: 14.145 s 275(1)(a): 14.35 s 275(1)(b): 14.35 s 275(2): 14.35 s 276: 5.80, 14.20 s 277: 14.60 s 278: 5.80, 14.20 s 279: 14.10, 15.05 s 280: 15.110 s 281A: 14.50 s 282(1): 14.75 s 282(2): 14.90 s 282(3): 14.80, 14.95 s 282(5): 15.65 s 283(1): 14.140 s 283(2): 14.125 s 283(3)(a): 14.80, 14.140 s 283(3)(c)(i): 14.80

Table of Statutes and Rules lxxxiii Legal Profession Act 2006 — cont ss 283(3)(c) to (e): 14.140 s 283(4): 14.140 s 283(5): 14.140 s 283(6): 14.140 s 284(1): 14.145 s 284(2): 14.145 ss 284(3): 14.145 s 284(4): 14.145 s 284(4)(a): 14.145 s 285: 14.135 s 286: 14.80 s 287(1): 14.90, 14.100 s 287(2): 14.100 s 287(3): 14.100 s 287(4): 14.100 s 287(5): 14.100 s 288(1): 14.155 s 288(3): 14.160 s 288(3)(h): 14.160 s 288(5): 14.160 s 288(6): 14.160 s 288(8): 14.160 s 289(1): 15.30 s 289(4): 15.30 ss 292(1) to (3): 15.30 s 292(7): 15.30 s 292(10): 15.30 s 293(1): 3.210 s 294A(1): 15.55 s 294A(2): 15.55 s 294A(5): 15.55 s 294A(6): 15.55 s 294A(7): 15.55 ss 296(1) to (3): 15.55 s 298(b): 15.55 s 300(1): 15.60 s 300(2): 15.60 s 300A(1): 15.65 s 300B: 15.70 s 302(2): 15.75 s 303: 24.10, 25.75 s 304A: 15.65 s 311: 5.350 s 316: 9.125 s 328: 9.125 s 330: 9.125 s 343: 9.125 s 348: 9.125 s 374: 9.125 s 386: 23.90 s 387: 23.90 s 389: 23.90 s 389(a): 22.50 s 389(b): 25.70 s 389(c): 25.100, 25.165 s 389(d): 20.220 s 394: 24.35

s 399: 24.35 s 401: 24.35 s 406: 24.35 s 407: 24.35 s 409: 24.35 s 410(1)(a): 24.40 s 410(1)(b): 24.40 s 410(1)(c): 24.40 s 411: 24.40 s 412: 24.40 s 413: 24.40 s 413(2)(b): 23.80 s 416: 24.40 s 417: 23.55 s 420: 23.65 s 425: 24.45 s 425(3)(e): 23.80 s 426: 24.45 s 427(1): 24.45 s 433(1): 23.75 s 433(2): 23.75 s 433(3): 23.75 s 442(2)(b): 16.85 s 448: 23.80 s 462: 22.25, 23.10 s 470: 10.90 s 472: 10.90 s 479: 9.100 s 480(2)(a): 9.110 s 480(2)(c): 9.105 s 490: 9.115 s 493(1)(c): 9.115 s 494: 9.105 ss 499 to 501: 9.105 s 583: 1.115 s 585: 1.115 s 586: 1.115 s 587A: 23.55 Ch 4: 24.05 Ch 5: 9.100 Pt 2.4, Div 2.4.7: 20.220 Pt 2.7: 2.160 Pt 3.4: 9.125 Pt 4.4: 10.90, 23.60 Pt 4.8: 23.35 Div 2.6.2: 20.170 Div 2.6.3: 20.160 Div 3.2.7: 15.40 Sch 4, cl 4.3(1): 5.355 Sch 4, cl 19: 5.355 Sch 4, cl 20: 5.355

Legal Profession (Barristers) Rules 2008 (superseded): 1.120 rr 18 to 20: 17.40 r 85(c): 3.170 r 92: 21.100 r 99(a): 14.80

lxxxiv

Table of Statutes and Rules

Legal Profession (Barristers) Rules 2008 — cont r 100: 14.80

Legal Profession (Barristers) Rules 2014: 1.120 r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

1: 17.10 9: 1.130 15: 17.10 16: 4.05 17B: 18.125 19.6: 17.85 20: 18.25 21: 17.95 22: 17.100 23: 17.105 24: 17.120 24A: 17.120 25: 17.85 26: 17.85 27: 17.85 28: 17.85 30: 18.120 31: 17.100 32: 17.130 33: 18.105 33(b): 18.105 33(b)(iii) to (v): 18.105 34: 17.140 34(c): 10.125 35: 17.225 36: 17.220, 17.225 37: 17.230 38: 17.230 39: 17.230 41: 17.250 42: 17.250 42A: 17.250 43: 17.160, 17.165 44: 17.165 46: 17.155 47: 17.155 48: 17.170 49: 17.175 50: 17.175 51: 21.155 52: 21.155 53: 21.215 54(a): 21.265 54(b): 21.265 54(c): 21.265 55(a): 21.280 56: 17.190 57: 17.190 58: 17.190 59(a): 17.205 59(b): 17.205 61: 17.190 62: 18.10 63: 18.20

r 64: 18.30 r 65: 18.10 r 66: 18.55, 18.60 r 66A: 18.60 r 66B(a) to (d): 18.75 r 66B(d): 18.80 r 66B(e): 18.80 r 66B(f): 18.80 r 66B(g): 18.80 r 66B(h): 18.80 r 67: 18.60 r 69: 18.65 r 70: 18.65 r 71: 18.90 r 73: 4.05 r 74: 3.45 r 75: 3.45 r 81: 20.135 r 84: 1.55 r 85: 3.150 r 86: 3.170 r 87(a): 3.160, 8.75 r 87(c): 3.160, 17.45 r 87(d): 3.160, 17.45 r 87(e): 3.160 r 87(f): 3.160 r 87(g): 3.160 r 87(h): 3.160 r 87(i): 3.160, 17.195 r 88: 3.160, 17.45 r 89: 3.160 r 91(b): 3.170 r 91(c): 3.170 r 91(e): 3.170 r 91(f): 3.170 r 92: 3.170 r 93: 3.225 r 95: 3.225 r 96: 3.225 r 97: 3.225 r 98: 3.225 r 99: 3.225 r 99A: 3.225 r 100: 3.225 r 102: 3.225 r 103: 10.30, 10.70 r 103(b): 10.95 r 103(c): 10.50 r 104: 10.50 r 105: 10.65 r 106: 10.65 r 107 to 110: 3.225 rr 108 to 110: 3.225 r 111: 3.225, 6.20 r 113: 4.30 r 115.2: 3.45 r 116.1: 20.05

Table of Statutes and Rules lxxxv Legal Profession (Barristers) Rules 2014 — cont r 116.2(a): 20.15 r 116.2(c): 20.30 r 122: 21.170 r 122.3: 21.170

Legal Profession Regulation 2007 r 57: 9.40 r 58: 9.40 r 62: 9.70 Div 6.3: 9.35

Legal Profession (Solicitors) Conduct Rules 2015: 1.120 Glossary: 6.130, 7.35, 8.190, 8.195, 21.170 r 2.2: 1.125 r 2.3: 1.125 r 3.1: 17.10 r 4.1.1: 4.05 r 4.1.2: 21.140 r 4.1.3: 3.180 r 5.1: 19.05 r 6.1: 22.05 r 6.2: 22.65 r 7.1: 4.05 r 7.2: 4.135 r 8.1: 5.20 r 9: 10.15 r 9.1: 10.15, 10.30, 10.60 r 9.2.1: 10.50 r 9.2.2: 10.70 r 9.2.3: 10.65 r 9.2.4: 10.105 r 9.2.5: 10.105 r 9.2.6: 10.90 r 10.2: 8.75 r 10.2.1: 8.45 r 10.2.2: 8.230 r 11: 7.40, 7.150 r 11.1: 7.30 r 11.2: 7.30 r 11.3: 7.30 r 11.4: 7.30 r 11.4.2: 7.50 r 12.1: 6.05 r 12.2: 6.125 r 12.3: 6.60 r 12.4.1: 14.70 r 12.4.2: 6.130 r 12.4.3: 6.110 r 12.4.4: 20.70 r 13.1: 3.200 r 13.2: 3.205 r 13.3: 3.205 r 14.1: 3.220, 16.60 r 14.2: 3.235 r 15.1: 16.70 r 16.1: 3.235

r 17: 4.05 rr 17.1 to 17.3: 17.40 r 17.3: 18.25 r 17.4: 17.65 r 18.1: 17.190 r 19.1: 17.95 r 19.2: 17.100 r 19.3: 17.105 r 19.4: 17.120 r 19.5: 17.120 r 19.7: 17.85 r 19.8: 17.85 r 19.9: 17.85 r 19.10: 18.120 r 19.11: 17.100 r 19.12: 17.105 r 20.1: 17.130 r 20.2: 18.105 r 20.2.2: 18.105 r 20.3: 17.140 r 20.3.3: 10.125 r 21.1: 17.225 r 21.2: 17.225 r 21.3: 17.220 r 21.4: 17.230 r 21.5: 17.230 r 21.6: 17.230 r 21.7: 17.240 r 21.8: 17.225 r 22: 21.155 r 22.1: 21.155 r 22.3: 21.215 r 22.4: 21.280 r 22.5: 17.190 r 22.6: 17.190 r 22.7: 17.190 r 22.8: 17.250 r 23.1: 17.175 r 23.2: 17.175 r 24.1.1: 17.160 r 24.1.2: 17.165 r 24.2: 17.165 r 25.1: 17.155 r 25.2: 17.155 r 26.1: 17.170 r 27: 17.45 r 28.1: 17.205 r 29.1: 18.10 r 29.2: 18.20 r 29.3: 18.30 r 29.4: 18.10 r 29.5: 18.55, 18.60 r 29.6: 18.60 r 29.7: 18.75 r 29.7(i): 18.80 r 29.7(ii): 18.80 r 29.7(iii): 18.80

lxxxvi

Table of Statutes and Rules

Legal Profession (Solicitors) Conduct Rules 2015 — cont r 29.8: 18.60 r 29.10: 18.65 r 29.11: 18.65 r 29.12: 18.90 r 30.1: 21.215 r 31.1: 11.290 r 31.2: 11.290 r 32.1: 21.195 r 33.1.1: 21.265 r 33.1.2: 21.265 r 33.1.3: 21.265 r 33.1.4: 21.265 r 34.1.1: 21.220 r 34.1.2: 21.225 r 34.2: 20.55 r 35.1: 21.95 r 36.1: 20.05, 20.15 r 36.2: 20.40 r 37: 20.30 r 37.1: 20.205 r 39: 20.95, 20.100, 20.105 r 39.1: 20.90 r 40.1: 20.125 r 42.1: 21.170 r 43: 24.30 r 71(e): 18.90 r 117: 20.40

Legal Profession (Solicitors) Rules 2007 (superseded): 1.120 r 1.3(a): 3.180 r 1.3(b): 4.25 rr 7.4 to 7.7: 7.150 r 7.5: 7.150 r 38.2(d): 20.40 r 38.4: 20.55 r 38.5: 20.55 Schs 1 to 3: 7.150

Limitation Act 1985 s 8(1): 4.180 s 11(1): 4.180, 15.20

Mediation Act 1997 s 10: 20.190

Mutual Recognition (ACT) Act 1992: 2.50 Partnership Act 1963 s 14: 20.205, 22.75 s 16: 20.205, 22.75

Public Interest Disclosure Act 2012: 10.135, 13.25

Supreme Court Act 1933 s 10: 15.40 s 37E: 15.85

Wills Act 1968 s 12A: 21.65

New South Wales Administrative Decisions Tribunal Act 1997 s 71(1): 23.65 s 88(1): 23.75 s 137: 23.55

Children and Young Persons (Care and Protection) Act 1998 s 29(1): 10.135, 18.130

Civil and Administrative Tribunal Act 2013: 24.85 s 83: 24.85 s 89: 23.55 Sch 5, Pt 4, Div 4, cl 21(4): 23.65 Sch 5, Pt 4, Div 4, cl 22(1): 23.65 Sch 5, Pt 4, Div 4: 24.85

Civil Liability Act 2002 s 3: 14.145 s 5D(1): 4.165 s 5D(3): 4.165 s 5O(2): 5.170 s 5O(3): 5.170 s 5O(4): 5.170 s 50(1): 5.170 Pt 4: 4.160

Civil Procedure Act 2005 s 18J(1): 4.135 s 26(1): 4.135, 20.180 s 56: 11.275, 17.245 ss 56 to 60: 17.245

Competition Policy Reform (New South Wales) Act 1995: 1.55 Contracts Review Act 1980: 5.175, 6.135, 15.110 Conveyancers Licensing Act 2003: 1.25 Conveyancing Act 1919 s 37A: 11.60

Crimes Act 1900 s s s s

192F(1): 17.145 249A: 6.120 249B(1): 6.120 249B(3): 6.120

Criminal Appeal Act 1912 s 6(1): 4.200

Director of Public Prosecutions Act 1986 s 13: 18.15

Table of Statutes and Rules lxxxvii

Evidence Act 1995: see section entries under Evidence Act 1995 (Cth) Fair Trading Act 1987 s 4(1): 5.15

Law Reform (Miscellaneous Provisions) Act 1965 s 9(1): 4.155

Legal Aid Commission Act 1979 s 25: 13.110 s 26: 13.110 s 38A: 10.75

Legal Practitioners Admission Rules 2005 Sch 4, r 96: 2.15 Sch 5, r 95: 2.10

Legal Profession Act 1987 s 38I(1): 3.45 s 38I(3): 3.45 s 38I(4): 3.45 s 61(9): 9.10 s 90A: 9.125 Pt 3, Div 2A: 20.145 Pt 3C: 2.160 Pt 10: 24.05 Pt 10A: 20.140 Pt 11, Div 5C: 17.265

Legal Profession Act 2004: 15.95 s s s s s s s s s s s s s s s s s s s s s s s s s s s

4(1): 14.50, 25.100, 25.165 5: 2.140 6: 2.140 9(1): 2.20, 2.75 9(1)(c): 2.60 9(1)(m): 2.80 14: 2.140 15: 20.80 26: 2.20 31: 2.30 33: 17.10 35: 2.30 36: 2.30 67: 24.15, 25.165 83(1): 3.45 83(3): 3.45 83(4): 3.45 100: 2.155 151(1): 20.170 165(1): 20.160 166(1): 20.160 168(1): 20.160 168(2): 20.160 170(b): 20.160 170(d): 20.160 171: 20.160 172: 20.160

s 175: 20.160 s 176: 20.160 s 177(1): 20.160 s 183: 2.160 s 186: 2.160 s 188(1): 2.160 s 188(2): 2.160 s 188(3): 2.160 s 191: 20.80 s 201: 2.160 s 205: 2.160 s 243(1): 9.10, 9.25 s 244(1): 9.20 s 244(2): 9.20 s 246(4): 9.25 s 253: 9.05 s 254: 9.05 s 255A(1): 9.65 s 255A(2): 9.65 s 255A(4): 9.65 ss 255 to 257: 9.65 s 256(1): 9.10 s 256A(1): 9.65 s 256A(2): 9.65 s 256A(4): 9.65 s 257(1): 9.10 s 259: 9.80 s 260: 9.45 s 261(1)(a): 9.75, 16.45 s 261(1)(b): 9.70 s 261(1)(c): 9.65 s 262(1): 9.50 s 263: 9.55 s 263(2): 24.15, 25.50 s 264: 9.35 s 265(1): 9.60 s 265(2): 9.60 s 266: 9.65 s 274(1): 9.90 s 277: 9.90 s 278: 9.90 s 278(2): 9.95 s 278(3): 9.95 s 281(1)(b): 9.80 s 283: 9.65 s 302(1): 14.140, 15.30, 15.65, 15.70 s 302A(1): 14.50 s 302A(1)(a): 15.55 s 309: 14.20 s 310: 14.30 s 311(1): 14.35, 14.45 s 311(2): 14.45 s 312: 14.55 s 313: 14.65 s 314: 14.145 s 315(1)(a): 14.35 s 315(1)(b): 14.35

lxxxviii Table of Statutes and Rules Legal Profession Act 2004 — cont s 315(2): 14.35 s 316: 5.80, 14.20 s 317: 14.60 s 318: 5.80, 14.20 s 318A: 14.50 s 319: 14.10, 15.05 s 320: 15.110 s 322(1): 14.75 s 322(2): 14.90 s 322(3): 14.80, 14.95 s 322(5): 15.65 s 323(1): 14.140 s 323(2): 14.125 s 323(3)(a): 14.80, 14.140 ss 323(3)(c) to (e): 14.140 s 323(4A): 14.140 s 323(4B): 14.140 s 323(5): 14.140 s 324(1): 14.145 s 324(2): 14.145 s 324(3): 14.145 s 324(4): 14.145 s 324(5): 14.145 s 325: 14.135 s 326: 14.80 s 327(1): 14.90, 14.100 s 327(2): 14.100 s 327(3): 14.100 s 327(3A): 14.100 s 327(4): 14.100 s 328(1): 14.155 s 328(1A): 14.155 s 328(2): 14.160 s 328(4): 14.160 s 328(5): 14.160 s 328(7): 14.160 s 331(1): 15.30 s 331(4): 15.30 s 332A(4): 15.30 s 332A(5): 15.30 s 334(1): 3.210 s 336: 15.95 s 345(1): 17.265 s 345(2): 17.265 s 345(4): 17.265 s 347(2): 17.265 s 347(4): 17.265 s 348: 21.190 s 350(1): 15.55 s 350(2): 15.55 s 350(4): 15.55 s 350(5): 15.55 ss 352(1) to (3): 15.55 s 355(b): 15.55 s 359(3)(b): 15.65 s 361(1): 15.65 s 362: 15.70

s 363(1): 15.60 s 363(2): 15.60 s 369(3)(a): 15.75 s 369(3)(c): 15.75 s 370: 15.80 s 393: 24.10, 25.75 s 395A: 15.65 s 406: 5.350 s 419: 9.125 s 434: 9.125 s 436: 9.125 s 448: 9.125 s 456: 9.125 s 483: 9.125 s 496: 23.90 s 497: 23.90 s 498(1): 23.90 s 498(1)(a): 22.50 s 498(1)(b): 25.70 s 498(1)(c): 25.100, 25.165 s 498(1)(d): 20.220 s 558: 23.65 s 560: 23.65 s 566(1): 23.75 s 566(2): 23.75 s 566(3): 23.75 s 571(2)(b): 16.85 s 577: 23.80 s 590: 22.25, 23.10 s 591: 23.55 s 601: 23.55 s 603: 10.90 s 604(1): 10.90 s 605: 10.90 s 615: 9.100 s 616(2)(a): 9.110 s 616(2)(c): 9.105 s 626: 9.115 s 629(1)(b): 9.115 s 630: 9.105 ss 635 to 637: 9.105 s 673: 9.90 s 686(1): 1.45 s 686(2): 1.45 s 688(1): 1.45 s 708: 1.115 s 711: 1.115 s 712: 1.115 s 728(1)(b): 16.75 Ch 5: 9.100 Ch 6: 10.90, 23.60 Ch 7, Pt 7: 1.110 Ch 7, Pt 7.3: 1.45 Pt 2.4, Div 7: 20.220 Pt 2.6, Div 3: 20.160 Pt 2.7: 2.160 Pt 3.1, Div 3: 9.90

Table of Statutes and Rules lxxxix Legal Profession Act 2004 — cont Pt 3.2, Div 10: 17.265 Pt 3.2, Div 11: 15.40 Pt 3.2, Div 11, subdiv 5: 15.85 Pt 3.2, Div 11, subdiv 6: 15.85 Pt 3.4: 9.125 Pt 4.9: 23.35 Pt 7.3: 15.95 Sch 5, s 390(1): 15.40

Legal Profession Admission Rules 2005 Form 10: 2.125

Legal Profession Amendment (Incorporated Legal Practices) Act 2000: 20.145 Legal Profession Regulation 2002 cl 139(1): 20.50 cl 140G: 20.50 cl 142A: 17.145

Legal Profession Regulation 2005: 17.145 cl 24(1): 20.50 cl 24(2): 20.50 cl 34(1): 20.50 cl 82: 9.40 cl 83: 9.40 cl 88: 9.70 cl 128: 15.80 cl 177(1): 17.145 cl 177(2): 17.145 cl 177(3): 17.145 cl 177(4): 17.145 cl 177(5): 17.145 Pt 8, Div 3: 9.35

Legal Profession Uniform Admission Rules 2015: 1.120 r r r r r r r r r

5: 2.10 6: 2.15 10(1): 2.20 10(1)(d): 2.125 10(1)(h): 2.60 10(1)(i): 2.75 10(1)(j): 2.75 10(1)(k): 2.80 19: 2.125

Legal Profession Uniform Conduct (Barristers) Rules 2015: 1.120 r r r r r r r r r

4(a): 17.10 7: 1.130 9(a): 20.95 9(b): 20.95 10: 20.95 11: 3.45, 20.80 12: 20.135 13: 3.45 17: 3.150

r 18: 3.170 r 19: 1.55 r 22: 3.45 r 23: 17.10 r 24: 17.95 r 25: 17.100 r 26: 17.105 r 27: 17.120 r 28: 17.120 r 29: 17.85 r 30: 17.85 r 31: 17.85 r 32: 17.85, 20.145 r 33: 18.120 r 34: 17.100 r 35: 4.05 r 35A: 17.225 r 35B: 17.225 r 38: 18.125 rr 42 to 44: 17.40 r 44: 18.25 r 45: 17.190 r 47: 6.125 r 48: 6.60 r 49: 21.155 r 50: 21.155 r 51: 21.215 r 52(a): 21.265 r 52(b): 21.265 r 52(c): 21.265 r 53: 21.280 r 54: 17.190 r 55: 17.190 r 56: 17.190 r 57: 17.250 r 58: 17.250 r 59: 17.250 r 60: 17.225 r 61: 17.225 r 62: 17.225 r 63: 17.225 r 64: 17.220, 17.225 r 65: 17.230 r 66: 17.230 r 67: 17.230 r 68: 17.240 r 69(a): 17.160 r 69(b): 17.165 r 70: 17.165 r 71: 17.155 r 72: 17.155 r 73: 17.170 r 74: 17.175 r 75: 17.175 r 76: 17.205 r 77: 17.205 r 78: 17.205

xc Table of Statutes and Rules Legal Profession Uniform Conduct (Barristers) Rules 2015 — cont r 79: 17.130 r 80: 18.105 r 80(e) to (g): 18.105 r 81: 17.140 r 81(c): 10.125 r 82: 10.105 r 83: 18.10 r 84: 18.20 r 85: 18.30 r 86: 18.10 r 87: 18.55, 18.60, 18.90 r 88: 18.60 r 89(a): 18.75 r 89(b): 18.75 r 89(i): 18.80 r 89(ii): 18.80 r 89(iv): 18.80 r 89(iii): 18.80 r 90: 18.80 r 91: 18.60 r 93: 18.65 r 94: 18.65 r 101(b): 3.160 r 101(d): 3.160, 17.45 r 101(e): 3.160, 17.45 r 101(f): 3.160 r 101(g): 3.160 r 101(h): 3.160 r 101(i): 3.160 r 101(j): 3.160, 17.195 r 101(l): 3.160 r 102: 3.160 r 103: 3.160, 8.75 r 105(b): 3.170 r 105(c): 3.170 r 105(d): 3.170, 3.225 r 105(f): 3.170, 3.225 r 105(g): 3.225 r 105(h): 3.170 r 105(j): 3.170 r 105(k): 3.170 r 105(l): 3.170, 3.225 r 105(m): 3.170 r 106: 3.225, 14.80 r 107: 3.225, 20.105 r 108: 3.225 r 109: 3.225 r 110: 3.225 r 111: 3.225 r 114: 10.30, 10.70 r 114(a): 10.95 r 114(b): 10.50 r 115: 10.50 r 116: 10.65 r 117: 10.65 r 118: 3.225

r 119: 3.225 r 120: 3.225, 6.20 r 124: 17.10

Legal Profession Uniform Continuing Professional Development (Barristers) Rules 2015: 1.120, 4.30 Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015: 1.120, 4.30 Legal Profession Uniform General Rules 2015: 1.120, 2.160 r 5(1): 15.30 r 42: 9.70 r 52: 9.40 r 53: 9.40 r 72: 14.55 r 72A(2): 14.60 Pt 4.2, Div 2: 9.35

Legal Profession Uniform Law: 1.100 s 5(1): 5.355 s 6(1): 2.140, 14.50, 15.70, 20.170, 25.100, 25.165 s 8: 4.125 s 9: 2.140 s 10(1): 2.140 s 16(1)(a): 2.30 s 17: 2.30 s 17(2)(b): 2.60, 2.125 s 19: 2.30 s 19(3): 2.30 s 21: 2.20, 5.355 s 24: 5.355 s 25: 17.10 s 33: 20.170 s 34(1): 20.170 s 38: 20.170 s 38(2): 11.145 s 43: 2.155 s 45(1)(b): 2.155 s 58: 2.160 ss 60 to 62: 2.160 s 62(1): 2.160 s 62(3): 2.160 s 69(2): 2.160 s 69(3): 2.160 s 69(4): 2.160 s 88: 24.15, 25.165 s 91: 24.15 s 103: 20.170 s 105: 20.170 s 111: 20.170 s 128(1): 9.10, 9.25 s 129(1): 9.10 s 129(2)(a): 9.25 s 129(2)(b): 9.20

Table of Statutes and Rules xci Legal Profession Uniform Law — cont s 129(2)(c): 9.20 s 136: 9.05 s 137: 9.05 ss 138 to 140: 9.65 s 139: 9.10 s 140(1): 9.10 s 144(1): 9.65 s 144(2): 9.75 s 144(2)(a): 16.45 s 144(2)(b): 9.70 s 144(2)(c): 9.65 s 145: 9.80 s 146: 9.45 s 147: 9.35 s 147(3): 9.60 s 147(4): 9.60 s 148: 9.50 s 154: 9.55 s 154(2): 24.15, 25.50 s 155(1): 9.90 s 159(1): 9.90 s 159(2): 9.95 s 159(3): 9.95 s 165(2): 9.95 s 169(2)(b): 9.80 s 170: 14.140 s 170(1): 14.55, 14.165 s 170(2): 14.55, 14.165 s 171(1): 14.50, 15.55 s 171(1)(a): 5.80 s 171(2)(b): 5.80 s 172(2): 14.165, 15.60, 15.70, 25.70 s 172(4): 14.165, 15.15, 25.80 s 173: 14.05 s 174(1): 14.25, 14.45 s 174(1)(b): 14.40 s 174(2): 14.25 s 174(2)(b): 14.25, 14.40 s 174(3): 14.35 s 174(4): 14.55 s 174(5): 14.55 s 174(6): 14.35 s 174(7): 14.55 s 174(8): 14.55 s 175: 14.30 s 176: 14.50 s 177: 14.65 s 178: 14.60 s 180(1): 14.75 s 180(2): 14.90 s 180(3): 14.80, 14.95 s 180(4): 15.65 s 181(1): 14.140 s 181(2)(a): 14.35 s 181(2)(b): 14.80, 14.140 s 181(2) to181(4): 14.140 s 181(5): 14.140

s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

181(7): 14.125 182(1): 14.145 182(2): 14.145 182(2)(a): 14.145 182(3): 14.145 183: 14.135 184: 14.80 185(1): 14.90, 14.100 185(2): 14.100 185(3): 14.100 185(4): 14.100 190: 5.80, 14.20 192: 14.25 193(1): 3.210 194(1): 15.30 194(2)(b): 15.30, 15.40 198(1): 15.55 198(3): 15.55 198(4): 15.55 198(7): 15.55 199(2)(a): 15.65 199(2)(b): 15.60 200(1): 15.60, 15.70 200(2): 15.60 201: 15.80 202: 24.10, 25.75 204: 15.75 206: 15.110 211: 5.350 219: 9.125 221: 9.125 230: 9.125 233: 9.125 246: 9.125 256(1): 24.65 258(1)(a): 20.170 264: 22.25, 23.10 266(1): 24.60 266(2): 24.60 267(1): 24.60 267(2): 24.60 268(1): 24.60 269(1): 24.60 269(2): 24.60 270: 24.60 271: 24.60 276: 24.65 277: 24.65 278: 24.65 279: 24.65 280: 24.65 281: 24.65 283: 24.70 286: 24.75 287: 15.95, 24.75 288: 15.95 288(2): 24.75

xcii Table of Statutes and Rules Legal Profession Uniform Law — cont s 288(4): 24.75 s 290(1): 24.75 s 290(2): 24.75 s 291: 15.95 s 291(1): 24.80 s 291(2): 24.80 s 292: 24.80 s 296: 23.90 s 297: 23.90 s 298: 23.90 s 298(1)(f): 20.220 s 298(b): 22.50 s 298(d): 25.70 s 298(e): 25.100, 25.165 s 299(1): 24.70 s 300(1): 24.85 s 301(1): 23.65 s 301(3): 23.65 s 302(1): 24.85 s 302(6): 24.85 s 303(1): 23.75 s 303(2): 23.75 s 303(3): 23.75 s 308(4): 16.85 s 314: 24.85 s 314(3): 24.85 s 319: 23.55 s 321: 10.90 s 326: 9.100 s 327(2)(a): 9.110 s 327(2)(c): 9.105 s 336: 9.115 s 340(1)(c): 9.115 s 341: 9.105 ss 345 to 347: 9.105 s 391(1): 1.110 s 394(2): 1.110 s 398(2): 1.110 s 402(2): 1.110 s 419: 1.45, 1.120 s 420: 1.120 s 427: 1.115 s 427(5): 1.120 s 427(6): 1.120 s 428(3): 1.120 s 467: 23.55 s 472(1)(b): 16.75 Ch 6: 9.100 Ch 7: 10.90, 23.60 Pt 3.4: 2.160 Pt 3.5, Div 4, Subdiv 2: 20.220 Pt 3.7, Div 2: 20.170 Pt 4.2, Div 4: 9.90 Pt 4.5: 9.125 Pt 5.5: 23.35 Sch 1, cl 2(1): 1.45 Sch 4, cl 18(3): 14.55

Legal Profession Uniform Law Application Act 2014: 1.100, 1.110, 17.265 s 11(1): 2.30, 24.60 s 22: 24.60 s 44(2)(a): 13.80 s 46: 9.65 s 47: 9.65 s 68(2): 15.55 s 93C: 15.40 s 106: 5.350 s 152: 23.80 Pt 3: 1.110 Pt 3, Div 2: 1.45, 24.60 Pt 3, Div 3: 1.45 Pt 7: 15.40 Pt 7, Div 5: 15.85 Pt 7, Div 6: 15.85 Sch 1: 15.20 Sch 2: 17.265 Sch 2, cl 2(1): 17.265 Sch 2, cl 2(2): 17.265 Sch 2, cl 2(4): 17.265 Sch 2, cl 3: 17.265 Sch 2, cl 4(1): 17.265 Sch 2, cl 4(2): 17.265 Sch 2, cl 4(4): 17.265 Sch 2, cl 5: 21.190 Sch 2, cl 5(1): 17.265 Sch 6, cl 1: 15.40

Legal Profession Uniform Law Application Regulation 2015 reg 41: 15.80

Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 Glossary: 6.130, 7.35, 8.190, 8.195, 21.170 r 2: 20.20 r 2.2: 1.125 r 2.3: 1.125 r 3.1: 17.10 r 4.1.1: 4.05 r 4.1.2: 21.140 r 4.1.3: 3.180 r 5.1: 19.05 r 6: 20.35 r 6.1: 22.05 r 6.2: 22.65 r 7.1: 4.05 r 7.2: 4.135 r 8.1: 5.20 r 9.1: 10.15, 10.30, 10.60 r 9.2.1: 10.50 r 9.2.2: 10.70 r 9.2.3: 10.65 r 9.2.4: 10.105 r 9.2.5: 10.105 r 9.2.6: 10.90

Table of Statutes and Rules xciii Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 — cont r 10.2: 8.75 r 10.2.1: 8.45 r 10.2.2: 8.230 r 11: 7.40 r 11.1: 7.30 r 11.2: 7.30 r 11.3: 7.30 r 11.4: 7.30 r 11.4.2: 7.50 r 12.1: 6.05 r 12.2: 6.125 r 12.3: 6.60 r 12.4.1: 14.70 r 12.4.2: 6.130 r 12.4.3: 6.110 r 12.4.4: 20.70 r 13.1: 3.200 r 13.2: 3.205 r 13.3: 3.205 r 14.1: 3.220, 16.60 r 14.2: 3.235 r 15.1: 16.70 r 16.1: 3.235 rr 17.1 to 17.3: 17.40 r 17.3: 18.25 r 17.4: 17.65 r 18.1: 17.190 r 19.1: 17.95 r 19.2: 17.100 r 19.3: 17.105 r 19.4: 17.120 r 19.5: 17.120 r 19.6: 17.85 r 19.7: 17.85 r 19.8: 17.85 r 19.9: 17.85 r 19.10: 18.120 r 19.11: 17.100 r 19.12: 17.105 r 20.1: 17.130 r 20.2: 18.105 r 20.2.2: 18.105 r 20.2.2(iii) to (v): 18.105 r 20.3: 17.140 r 20.3.3: 10.125 r 21.1: 17.225 r 21.2: 17.225 r 21.3: 17.220 r 21.4: 17.230 r 21.5: 17.230 r 21.6: 17.230 r 21.7: 17.240 r 21.8: 17.225 r 22: 21.155 r 22.1: 21.155 r 22.3: 21.215

r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

22.4: 21.280 22.5: 17.190 22.6: 17.190 22.7: 17.190 22.8: 17.250 23.1: 17.175 23.2: 17.175 24.1.1: 17.160 24.1.2: 17.165 24.2: 17.165 25.1: 17.155 25.2: 17.155 26.1: 17.170 27: 17.45 28.1: 17.205 29.1: 18.10 29.2: 18.20 29.3: 18.30 29.4: 18.10 29.5: 18.55, 18.60 29.6: 18.60 29.7: 18.75 29.7(i): 18.80 29.7(ii): 18.80 29.7(iii): 18.80 29.8: 18.60 29.10: 18.65 29.11: 18.65 29.12: 18.90 30.1: 21.215 31.1: 11.290 31.2: 11.290 32.1: 21.195 33.1.1: 21.265 33.1.2: 21.265 33.1.3: 21.265 33.1.4: 21.265 34.1.1: 21.220 34.1.2: 21.225 34.2: 20.55 35.1: 21.95 36.1: 20.05, 20.15 36.2: 20.40 37: 4.05 37.1: 20.205 39.1: 20.90 40.1: 20.125 42.1: 21.170 43: 24.30 46: 20.70

Legal Profession Uniform Legal Practice (Solicitors) Rules 2015: 1.120, 5.125 Glossary: 20.110 r 7.1: 20.85 r 7.2: 20.85 r 8.1.1: 20.95 r 8.1.2: 20.100

xciv Table of Statutes and Rules Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 — cont r 8.1.3: 20.105 r 8.1.4: 20.95 r 8.2: 20.110 r 11: 5.125

Limitation Act 1969 s 14(1)(a): 15.20

Maintenance, Champerty and Barratry Abolition Act 1993 s 4: 14.120 s 6: 14.120

Mutual Recognition (NSW) Act 1992: 2.50 New South Wales Crime Commission Act 1985 s 18B(4): 11.240

Partnership Act 1892 s 10: 20.205, 22.75 s 12: 20.205, 22.75

Professional Conduct and Practice Rules 1995: 1.120 r 18.2: 21.255 r 44: 20.215

Professional Conduct and Practice Rules 2013: 1.120 rr 1 to 43: 1.120 rr 43 to 60: 1.120

Professional Standards Act 1994: 5.355 Property, Stock and Business Agents Act 2002 Pt 2: 20.115

Public Interest Disclosures Act 1994: 10.135, 13.25

Succession Act 2006 s 8: 21.60 s 27: 21.65

Uniform Civil Procedure Rules 2005 Sch 7, cl 2(1): 17.175

Workers Compensation Regulation 2003 cl 75: 20.50

Workers Compensation Regulation 2010 cl 79: 20.50

Workers’ Compensation Act 1926 s 56(2): 16.80, 16.160

Northern Territory Agents Licensing Act 1979 s 5: 1.25

Pt 3: 20.115

Barristers’ Conduct Rules: 1.120 r 1: 17.10 r 9: 1.130 r 15: 17.10 r 16: 4.05 r 17B: 18.125 rr 18 to 20: 17.40 r 20: 18.25 r 21: 17.95 r 22: 17.100 r 23: 17.105 r 23.2: 21.265 r 24: 17.120 r 24A: 17.120 r 25: 17.85 r 26: 17.85 r 27: 17.85 r 28: 17.85 r 29: 17.105 r 30: 18.120 r 31: 17.100 r 32: 17.130 r 33: 18.105 r 33(b): 18.105 r 33(b)(iii) to (v): 18.105 r 34: 17.140 r 34(c): 10.125 r 35: 17.225 r 36: 17.220 r 37: 17.230 r 38: 17.230 r 39: 17.230 r 40: 17.240 r 41: 17.250 r 42: 17.250 r 42B: 17.250 r 43: 17.160, 17.165 r 44: 17.165 r 46: 17.155 r 47: 17.155 r 48: 17.170 r 49: 17.175 r 50: 17.175 r 51: 21.155 r 52: 21.155 r 53: 21.215 r 54(a): 21.265 r 54(b): 21.265 r 54(c): 21.265 r 55(a): 21.280 r 56: 17.190 r 57: 17.190 r 58: 17.190 r 59(a): 17.205 r 59(b): 17.205 r 61: 17.190

Table of Statutes and Rules xcv Barristers’ Conduct Rules — cont r 62: 18.10 r 63: 18.20 r 64: 18.30 r 65: 18.10 r 66: 18.55, 18.60 r 66A: 18.60 r 66B(a) to (d): 18.75 r 66B(d): 18.80 r 66B(e): 18.80 r 66B(f): 18.80 r 66B(g): 18.80 r 66B(h): 18.80 r 67: 18.60 r 69: 18.65 r 70: 18.65 r 71: 18.90 r 73: 4.05 r 74: 3.45 r 75: 3.45 r 80: 3.45 r 81: 20.135 r 84: 1.55 r 85: 3.150 r 85(c): 3.170 r 86: 3.170 r 87(a): 3.160, 8.75 r 87(c): 3.160, 17.45 r 87(d): 3.160, 17.45 r 87(e): 3.160 r 87(f): 3.160 r 87(g): 3.160 r 87(h): 3.160 r 87(i): 3.160, 17.195 r 88: 3.160, 17.45 r 89: 3.160 r 91(b): 3.170 r 91(c): 3.170 r 91(e): 3.170 r 91(f): 3.170 r 92: 3.170, 21.100 r 93: 3.225 r 95: 3.225 r 96: 3.225 r 97: 3.225 r 98: 3.225 r 99: 3.225 r 100: 3.225 r 100(a): 14.80 r 102: 3.225 r 103: 10.30, 10.70 r 103(b): 10.95 r 103(c): 10.50 r 104: 10.50 r 105: 10.65 r 106: 10.65 r 107 to 110: 3.225 rr 108 to 110: 3.225

r 111: 3.225, 6.20

Care and Protection of Children Act 2007 s 27(1): 10.135, 18.130

Competition Policy Reform (Northern Territory) Act: 1.55 Criminal Code s 102: 17.145 s 236: 6.120 s 411: 4.200

Evidence (National Uniform Legislation) Act 2011: see section entries under Evidence Act 1995 (Cth) Law Reform (Miscellaneous Provisions) Act 1956 s 16(1): 4.155

Legal Aid Act 1990 s 13: 13.110 s 55: 13.110

Legal Practitioners Act 1974 s 47(2)(a): 9.95 Pt XII: 2.160

Legal Practitioners Disciplinary Tribunal Rules 2011: 24.100 Legal Practitioners (Incorporation) Act 1989: 20.140

Legal Profession Act 2006: 1.100 s s s s s s s s s s s s s s s s s s s s s s s s

4: 14.50, 25.100, 25.165 5: 2.140 5(1): 5.355 6: 2.140 11(1): 2.75 11(1)(a): 2.20 11(1)(c): 2.60 11(1)(m): 2.80 18: 2.140 22: 5.355 25: 5.355 28: 17.10 30: 2.20 31: 2.20 62: 24.15, 25.165 79: 2.155 80: 2.155 120: 20.170 125(1): 20.170 125(2): 20.170 128(1): 20.170 134: 20.170 135(1): 20.170 151(1): 20.160

xcvi Table of Statutes and Rules Legal Profession Act 2006 — cont s 152(1): 20.160 s 154(1): 20.160 s 154(2): 20.160 s 156(b): 20.160 s 156(d): 20.160 s 157: 20.160 s 158: 20.160 s 161: 20.160 s 162: 20.160 s 163(1): 20.160 s 169: 2.160 s 172: 2.160 s 174(1): 2.160 s 174(2): 2.160 s 174(3): 2.160 s 177: 20.80 s 187: 2.160 s 191: 2.160 s 235(1): 9.10, 9.25 s 236(1): 9.20 s 236(2): 9.20 s 245: 9.05 s 246: 9.05 ss 247 to 249: 9.65 s 248(1): 9.10 s 249(1): 9.10 s 252: 9.80 s 253: 9.45 s 254(1)(a): 9.75, 16.45 s 254(1)(b): 9.70 s 254(1)(c): 9.65 s 255(1): 9.50 s 256: 9.55 s 256(2): 24.15, 25.50 s 257: 9.35 s 258(1): 9.60 s 258(2): 9.60 s 259: 9.65 s 270(1): 9.90 s 273: 9.90 s 274: 9.90 s 275: 9.95 s 279(2)(b): 9.80 s 281: 9.65 s 290(1): 20.50 s 292(1): 20.55 s 293(1): 20.70 s 295(1): 14.140, 15.30, 15.65, 15.70 s 296(1): 14.50 s 296(1)(a): 15.55 s 303: 14.20 s 304: 14.30 s 305(1): 14.35, 14.45 s 305(2): 14.45 s 306: 14.55 s 307: 14.65 s 308: 14.145

s 309(1)(a): 14.35 s 309(1)(b): 14.35 s 309(2): 14.35 s 310: 5.80, 14.20 s 311: 14.60 s 312: 5.80, 14.20 s 313: 14.50 s 314: 14.10, 15.05 s 315: 15.110 s 317(1): 14.75 s 317(2): 14.90 s 317(3): 14.80, 14.95 s 317(5): 15.65 s 318(1): 14.140 s 318(2): 14.125 s 318(3)(a): 14.80, 14.140 s 318(3)(c)(i): 14.80 ss 318(3)(c) to (e): 14.140 s 318(4): 14.140 s 318(5): 14.140 s 318(6): 14.140 s 319(1): 14.145 s 319(2): 14.145 s 319(3): 14.145 s 319(4): 14.145 s 320: 14.135 s 321: 14.80 s 322(1): 14.90, 14.100 s 322(2): 14.100 s 322(3): 14.100 s 322(4): 14.100 s 322(5): 14.100 s 323(1): 14.155 s 323(2): 14.160 s 323(4): 14.160 s 323(5): 14.160 s 323(7): 14.160 s 324(1): 15.30 s 324(4): 15.30 s 327(4): 15.30 s 327(5): 15.30 s 328(1): 3.210 s 330(1): 15.95 s 330(3): 15.95 s 332(1): 15.55 s 332(2): 15.55 s 332(5): 15.55 s 332(6): 15.55 ss 334(1) to (3): 15.55 s 336(b): 15.55 s 339(1): 15.65 s 340: 15.70 s 341(1): 15.60 s 341(2): 15.60 s 343: 15.65 s 350(3): 15.75 s 351: 15.85

Table of Statutes and Rules xcvii Legal Profession Act 2006 — cont s 352(1): 15.85 s 362: 15.85 s 363: 15.85 s 366: 15.40 s 370: 24.10, 25.75 s 376: 5.350 s 382: 9.125 s 397: 9.125 s 399: 9.125 s 410: 9.125 s 418: 9.125 s 445: 9.125 s 464: 23.90 s 465: 23.90 s 466(1): 23.90 s 466(1)(a): 20.50, 22.50 s 466(1)(b): 25.70 s 466(1)(c): 25.100, 25.165 s 466(1)(d): 20.220 s 471: 24.90 s 472: 24.90 s 477: 24.90 s 478: 24.90 s 480: 24.90 s 488: 24.90 s 491: 24.90 s 493: 24.90 ss 496 to 499: 24.95 s 499(2)(a): 23.80 s 504: 23.55 s 506: 24.100 s 507(1): 24.100 s 507(2): 23.65 s 508(3): 23.65 s 511: 24.100 s 513(1): 24.95 s 521: 23.65 s 523: 23.65 s 525: 24.100 s 525(3)(e): 23.80 s 529(1): 23.75 s 529(2): 23.75 s 529(3): 23.75 s 533: 24.100 s 534(2)(b): 16.85 s 541: 23.80 s 554: 22.25, 23.10 s 560: 23.55 s 562: 10.90 s 563: 10.90 s 564: 10.90 s 565: 10.90 s 571: 9.100 s 572(2)(a): 9.110 s 572(2)(c): 9.105 s 582: 9.115 s 585(1)(c): 9.115

s 586: 9.105 ss 591 to 593: 9.105 s 677: 23.55 s 693: 1.115 s 694: 1.115 s 695: 1.115 Ch 5: 9.100 Pt 2.3, Div 6: 20.220 Pt 2.6, Div 2: 20.170 Pt 2.6, Div 3: 20.160 Pt 2.7: 2.160 Pt 3.1, Div 3, subdiv 1: 9.90 Pt 3.3, Div 8: 15.40 Pt 3.5: 9.125 Pt 4.5: 24.90 Pt 4.6: 10.90, 23.60 Pt 4.12: 23.35 Pt 7.5: 15.95

Legal Profession Admission Rules 2007 r 5: 2.15 Sch 3, r 4: 2.10 Sch 4, r 5: 2.15

Legal Profession Regulations 2007 r 63: 9.40 r 64: 9.40 r 68: 9.70 Pt 3.1, Div 3: 9.35 Sch 2: 4.30

Limitation Act 1981 s 12(1)(a): 15.20

Mutual Recognition (NT) Act 1992: 2.50 Partnership Act 1997 s 14: 20.205, 22.75 s 16: 20.205, 22.75

Professional Conduct Rules r 14.1: 19.55

Professional Standards Act 2004: 5.355 Proportionate Liability Act 2005 Pt 2: 4.160

Public Interest Disclosure Act 2008: 10.135, 13.25

Rules of Professional Conduct and Practice: 1.120 Definitions: 20.110 r 1.1: 3.180 r 2.1: 10.30, 10.60 r 2.1.1: 10.50 r 2.1.2: 10.70 r 2.1.3: 10.105 r 2.2: 10.15, 10.40

xcviii

Table of Statutes and Rules

Rules of Professional Conduct and Practice — cont r 3: 8.75, 8.195 r 4: 13.05 r 5.1: 3.200 r 5.2: 3.205 r 5.3: 3.205 r 6.2: 3.235 r 6.3: 16.60 r 6.4: 16.70 r 6.5: 3.230 r 7.1: 7.35 r 7.2: 7.30, 7.40 r 7.3: 7.30 r 8.1.2: 6.125 r 8.1(a): 6.05 r 8.2: 6.05 r 9.1: 10.15, 14.70 r 9.2: 6.130 r 10.1: 6.60 r 10.2: 6.60 r 10A.1: 4.85 r 10A.3: 4.135 r 10A.4: 4.140 r 10A.6: 18.125 r 10A.7: 4.135 r 11.1.1: 17.130 r 11.2: 17.225, 17.230 r 12: 17.225, 17.230 r 13: 17.45, 17.55 r 14: 18.105 r 15: 17.130 r 16: 17.65 r 17: 4.05 r 17.1: 4.05 r 17.2: 4.05 rr 17.3 to 17.5: 17.40 r 17.5: 18.25 r 17.6: 17.95 r 17.7: 17.100 r 17.8: 17.105 r 17.9: 17.120 r 17.10: 17.120 r 17.12: 17.85 r 17.13: 17.85 r 17.14: 17.85 r 17.15: 17.105 r 17.16: 18.120 r 17.17: 17.100 r 17.18: 17.130 r 17.19: 18.105 r 17.19(b): 18.105 r 17.19(b)(v): 18.105 r 17.20: 17.140 r 17.20(c)(ii): 10.125 r 17.21: 17.225 r 17.22: 17.220 r 17.23: 17.230 r 17.24: 17.230

r 17.26: 17.230 r 17.27: 17.240 r 17.28: 17.165 r 17.29: 17.165 r 17.30: 17.155 r 17.31: 17.155 r 17.32: 17.170 r 17.33: 17.175 r 17.34: 17.175 r 17.35: 21.155 r 17.36: 21.155 r 17.38(a): 21.265 r 17.38(b): 21.265 r 17.38(c): 21.265 r 17.39(a): 21.280 r 17.40: 17.190 r 17.41: 17.190 r 17.42: 17.190 r 17.43(b)(ii): 17.205 r 17.43(b)(iii): 17.205 r 17.45: 17.190 r 17.46: 18.10 r 17.47: 18.20 r 17.48: 18.30 r 17.49: 18.10 r 17.50: 18.55, 18.60 r 17.51: 18.60 rr 17.52(a) to (d): 18.75 r 17.52(e): 18.80 r 17.52(f): 18.80 r 17.52(g): 18.80 r 17.52(h): 18.80 r 17.52(i): 18.80 r 17.53(a): 18.60 r 17.53(b): 18.60 r 17.53(c): 18.60 r 17.55: 18.65 r 17.56: 18.65 r 17.57: 18.90 r 18: 21.140 r 19: 22.05 r 19.6: 17.85 r 19A: 22.65 r 20: 22.65 r 21: 3.220 r 21.3: 16.60 r 21.4: 16.65 r 21.5: 16.65 r 22.1: 3.220 r 23.1: 21.265 r 24: 21.95 r 25: 22.05 r 26.2: 21.220 r 26.3: 21.225 r 27: 20.85 r 28.1: 20.95 r 28.1.1: 20.100

Table of Statutes and Rules xcix Rules of Professional Conduct and Practice — cont r 28.1.2: 20.105 r 28.1.3: 20.95 r 28.2: 20.110 r 29.1.1: 20.70 r 29.1.2: 20.55 r 29.2: 6.110 r 29.12: 18.90 r 30.1: 21.100

Supreme Court Rules r 1.10: 11.275, 17.245 r 37.05: 16.75 r 48.13(1): 4.135, 20.180

Wills Act 2000 s 27: 21.65

Queensland 2007 Barristers Rule: 1.120 Australian Solicitors’ Conduct Rules Glossary: 6.130, 7.35, 8.190, 8.195, 21.170 r 2.2: 1.125 r 2.3: 1.125 r 3.1: 17.10 r 4.1.1: 4.05 r 4.1.2: 21.140 r 4.1.3: 3.180 r 5.1: 19.05 r 6.1: 22.05 r 6.2: 22.65 r 7.1: 4.05 r 7.2: 4.135 r 8.1: 5.20 r 9.1: r 9.1: 10.15, 10.30, 10.60 r 9.2.1: 10.50 r 9.2.2: 10.70 r 9.2.3: 10.65 r 9.2.4: 10.105 r 9.2.5: 10.105 r 9.2.6: 10.90 r 10.2: 8.75 r 10.2.1: 8.45 r 10.2.2: 8.230 r 11: 7.40 r 11.1: 7.30 r 11.2: 7.30 r 11.3: 7.30 r 11.4: 7.30 r 11.4.2: 7.50 r 12.1: 6.05 r 12.2: 6.125 r 12.3: 6.60 r 12.4.1: 14.70

r 12.4.2: 6.130 r 12.4.3: 6.110 r 12.4.4: 20.70 r 13.1: 3.200 r 13.2: 3.205 r 13.3: 3.205 r 14.1: 3.220, 16.60 r 14.2: 3.235 r 15.1: 16.70 r 16.1: 3.235 rr 17.1 to 17.3: 17.40 r 17.3: 18.25 r 17.4: 17.65 r 18.1: 17.190 r 19.1: 17.95 r 19.2: 17.100 r 19.3: 17.105 r 19.4: 17.120 r 19.5: 17.120 r 19.6: 17.85 r 19.7: 17.85 r 19.8: 17.85 r 19.9: 17.85 r 19.10: 18.120 r 19.11: 17.100 r 19.12: 17.105 r 20.1: 17.130 r 20.2: 18.105 r 20.2.2: 18.105 rr 20.2.2(iii) to (v): 18.105 r 20.3: 17.140 r 20.3.3: 10.125 r 21.1: 17.225 r 21.2: 17.225 r 21.3: 17.220 r 21.4: 17.230 r 21.5: 17.230 r 21.6: 17.230 r 21.7: 17.240 r 21.8: 17.225 r 22: 21.155 r 22.1: 21.155 r 22.3: 21.215 r 22.4: 21.280 r 22.5: 17.190 r 22.6: 17.190 r 22.7: 17.190 r 22.8: 17.250 r 23.1: 17.175 r 23.2: 17.175 r 24.1.1: 17.160 r 24.1.2: 17.165 r 24.2: 17.165 r 25.1: 17.155 r 25.2: 17.155 r 26.1: 17.170 r 27: 17.45

c

Table of Statutes and Rules

Australian Solicitors’ Conduct Rules — cont r 28.1: 17.205 r 29.1: 18.10 r 29.2: 18.20 r 29.3: 18.30 r 29.4: 18.10 r 29.5: 18.55, 18.60 r 29.6: 18.60 r 29.7: 18.75 r 29.7(i): 18.80 r 29.7(ii): 18.80 r 29.7(iii): 18.80 r 29.7(iv): 18.80 r 29.8: 18.60 r 29.10: 18.65 r 29.11: 18.65 r 29.12: 18.90 r 30.1: 21.215 r 31.1: 11.290 r 31.2: 11.290 r 32.1: 21.195 r 33.1.1: 21.265 r 33.1.2: 21.265 r 33.1.3: 21.265 r 33.1.4: 21.265 r 34.1.1: 21.220 r 34.1.2: 21.225 r 34.2: 20.55 r 35.1: 21.95 r 36.1: 20.05, 20.15 r 36.2: 20.40 r 37.1: 20.205 r 39: 4.05 r 39.1: 20.90 r 40.1: 20.125 r 42.1: 21.170 r 43: 24.30 r 45: 20.70 r 93(e): 18.90

Barristers’ Conduct Rules: 1.120 r r r r r r r r r r r r r r r r r

5(a): 17.10 10: 1.130 13(a): 20.95 13(b): 20.95 14: 20.95 15: 3.45 16: 20.135 17: 3.45 20.2: 18.105 21: 3.150 22: 3.170 23: 1.55 24B: 3.45 25: 17.10 26: 17.95 27: 17.100 28: 17.105

r 29: 17.120 r 30: 17.120 r 31: 17.85 r 32: 17.85 r 33: 17.85 r 34: 17.85 r 35: 18.120 r 36: 17.100 r 37: 4.05 r 40: 18.125 rr 41 to 43: 17.40 r 43: 18.25 r 44: 17.190 r 46: 6.125 r 48: 21.155 r 49: 21.155 r 50: 21.215 r 47: 6.60 r 51(a): 21.265 r 51(b): 21.265 r 51(c): 21.265 r 52: 21.280 r 53: 17.190 r 54: 17.190 r 55: 17.190 r 56: 17.250 r 57: 17.250 r 58: 17.250 r 59: 17.225 r 60: 17.225 r 61: 17.225 r 62: 17.225 r 63: 17.220, 17.225 r 64: 17.230 r 65: 17.230 r 66: 17.230 r 67: 17.240 r 68(a): 17.160 r 68(b): 17.165 r 69: 17.165 r 70: 17.155 r 71: 17.155 r 72: 17.170 r 73: 17.175 r 74: 17.175 r 75: 17.205 r 76: 17.205 r 77: 17.205 r 78: 17.130 r 79: 18.105 r 79(e) to (g): 18.105 r 80: 17.140 r 80(c): 10.125 r 81: 10.105 r 82: 18.10 r 83: 18.20 r 84: 18.30

Table of Statutes and Rules ci Barristers’ Conduct Rules — cont r 85: 18.10 r 86: 18.55, 18.60 r 87: 18.60 r 88: 18.80 r 88(a): 18.75 r 88(b): 18.75 r 88(c)(i): 18.80 r 88(c)(ii): 18.80 r 88(c)(iv): 18.80 r 88(c)(iii): 18.80 r 89: 18.60 r 91: 18.65 r 92: 18.65 r 93: 18.90 r 95(a): 3.160 r 95(b): 3.160 r 95(d): 3.160, 17.45 r 95(e): 3.160, 17.45 r 95(f): 3.160 r 95(g): 3.160 r 95(h): 3.160 r 95(i): 3.160 r 95(j): 3.160, 17.195 r 95(l): 3.160 r 95(m): 3.160, 8.165 r 96: 3.160 r 97: 3.160, 8.75 r 99(b): 3.170 r 99(c): 3.170 r 99(d): 3.170, 3.225 r 99(f): 3.170, 3.225 r 99(g): 3.225 r 99(h): 3.170 r 99(j): 3.170 r 99(k): 3.170 r 99(l): 3.170, 3.225 r 99(m): 3.170 r 100: 3.225, 14.80 r 101: 3.225 r 102: 3.225 r 103: 3.225 r 104: 3.225 r 105: 3.225 r 108: 10.30, 10.70 r 108(a): 10.95 r 108(b): 10.50 r 109: 10.50 r 110: 10.65 r 111: 10.65 r 112: 3.225 r 113: 3.225 r 114: 3.225, 6.20 r 116: 17.10

Civil Liability Act 2003 s 11(1): 4.165 s 11(3): 4.165

s 22(1): 5.170 Ch 2, Pt 2: 4.160

Civil Proceedings Act 2011 s 43: 4.135, 20.180 s 44: 4.135, 20.180

Competition Policy Reform (Queensland) Act 1996: 1.55 Criminal Code s s s s s s

129: 17.145 442A: 6.120 442B: 6.120 442C: 6.120 590AB(2): 18.55 668E: 4.200

Law Reform Act 1995 s 10: 4.155

Legal Aid Queensland Act 1997 s 74: 13.110 s 75: 13.110

Legal Profession Act 2004 (repealed) Ch 3: 24.05

Legal Profession Act 2007: 1.100, 9.05 s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

4: 9.05 4F: 9.05 5: 2.140 6: 2.140 6(1): 5.355 9(1): 2.75 9(1)(a): 2.20 9(1)(c): 2.60 9(1)(m): 2.80 13: 22.25, 23.10 22: 5.355 22(2): 5.170 22(3): 5.170 22(4): 5.170 24: 2.140 25: 5.355, 20.80 31: 2.20 32: 2.20 38: 17.10 39: 2.30 68: 24.15, 25.165 74: 2.155 75: 2.155 112: 20.170 117(1): 20.170 117(2): 20.170 120(1): 20.170 127: 20.170 128(1): 20.170 144(1): 20.160

cii Table of Statutes and Rules Legal Profession Act 2007 — cont s 145(1): 20.160 s 147(1): 20.160 s 147(2): 20.160 s 149(1)(b): 20.160 s 149(1)(d): 20.160 s 150: 20.160 s 151: 20.160 s 154: 20.160 s 155: 20.160 s 156(1): 20.160 s 162: 2.160 s 165: 2.160 s 167(1): 2.160 s 167(2): 2.160 s 167(3): 2.160 s 180: 2.160 s 184: 2.160 s 223: 1.115 s 227: 1.115 s 229: 1.115 s 237(1): 9.10, 9.25 s 238(1): 9.20 s 238(2): 9.20 s 247: 9.05 s 248: 9.05 s 250(1): 9.65 s 250(2): 9.65 s 250(4): 9.65 ss 250 to 252: 9.65 s 251(1): 9.10 s 252(1): 9.65 s 252(2): 9.65 s 252(4): 9.65 s 253(1): 9.10 s 256: 9.80 s 257: 9.45 s 258(1)(a): 9.75, 16.45 s 258(1)(b): 9.70 s 258(1)(c): 9.65 s 259(1): 9.50 s 260: 9.55 s 260(2): 24.15, 25.50 s 261: 9.35 s 261(1): 9.60 s 261(2): 9.60 s 268(1): 9.90 s 273: 9.90 s 274: 9.90 s 281(1)(b): 9.80 s 300: 14.140, 15.30, 15.40, 15.65 s 301(1): 14.50, 15.55 s 308: 14.20 s 309: 14.30 s 310(1): 14.35, 14.45 s 310(2): 14.45 s 311: 14.55 s 312: 14.65

s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

313: 14.145 314(1)(a): 14.35 314(1)(b): 14.35 314(2): 14.35 315: 5.80, 14.20 316: 14.60 317: 5.80, 14.20 318: 14.50 319: 14.10, 15.05 320: 15.110 322(1): 14.75 322(2): 14.90 322(3): 14.80, 14.95 322(3)(c)(i): 14.80 322(5): 15.65 323(1): 14.140 323(2): 14.125 323(3)(a): 14.80, 14.140 323(3)(c) to (e): 14.140 323(4): 14.140 323(5): 14.140 324(1): 14.145 324(2): 14.145 324(4): 14.145 324(5): 14.105 325: 14.135 326: 14.80 327(1): 14.90, 14.100 327(2): 14.100 327(3): 14.100 327(4): 14.100 327(5): 14.100 328(1): 14.155 328(2): 14.160 328(4): 14.160 328(5): 14.160 328(5)(a): 14.160 328(5)(b): 14.160 328(7): 14.160 329(1): 15.30 329(4): 15.30 332(4): 15.30 332(5): 15.30 333(1): 3.210 335(1): 15.55 335(2): 15.55 335(5): 15.55 335(6): 15.55 337(1) to (3): 15.55 338(b): 15.55 340(1): 15.65 341(1): 15.60 341(2): 15.60 342(2): 15.75 343: 24.10, 25.75 344: 15.65 353: 5.350

Table of Statutes and Rules ciii Legal Profession Act 2007 — cont s 356: 9.125 s 372: 9.125 s 373(1)(b): 9.125 s 374: 9.125 s 386: 9.125 s 396: 9.125 s 418: 23.90 s 419: 23.90 s 420: 23.90 s 420(a): 22.50 s 420(b): 25.70 s 420(c): 25.100, 25.165 s 420(d): 20.220 s 429: 24.105 s 432: 24.105 s 435: 24.105 s 436(1): 24.105 s 436(2): 24.105 s 439(3)(b): 24.105 s 440: 15.95, 24.105 s 447: 24.105 s 448(1): 24.105 s 453: 24.110 s 456(2)(e): 23.80 s 456(2) to (4): 24.110 s 458(2): 24.110 s 458(2)(a): 23.80 s 462(1): 23.75 s 462(2): 23.75 s 462(4): 23.75 s 464(b): 16.85 s 468(1): 24.115 s 468(2): 24.115 s 468(3): 24.115 s 469(1): 24.115 s 472: 23.80 s 491(1): 10.90 s 497: 9.100 s 498(2)(a): 9.110 s 498(2)(c): 9.105 s 508: 9.115 s 511(1)(c): 9.115 s 512: 9.105 ss 517 to 519: 9.105 s 621: 24.105 s 643(5): 23.65 s 644: 23.65 s 645(1)(c): 23.65 s 649(1): 23.50 s 705: 9.95 s 707: 23.55 s 713: 9.65 Ch 5: 9.100 Pt 2.4, Div 7: 20.220 Pt 2.7, Div 8: 20.160 Pt 2.7, Divs 2 to 7: 20.170 Pt 2.8: 2.160

Pt 3.3, Div 3: 9.90 Pt 3.3, Div 6: 9.65 Pt 3.4, Div 7: 15.40 Pt 3.6: 9.125 Pt 4.5: 15.95, 24.105 Pt 4.6: 10.90, 23.60 Pt 4.10: 23.35 Pt 7.1: 1.45, 24.105 Pt 7.3: 24.105 Sch 2: 14.50, 25.100, 25.165

Legal Profession Regulation 2007 r 53: 9.40 r 54: 9.40 r 58: 9.70 Pt 3.3, Div 1: 9.35

Legal Profession (Solicitors) Rule 2007: 1.120 r 2: 4.85 r 8.5: 7.150 r 8.6: 7.155

Limitation of Actions Act 1974 s 10(1)(a): 15.20

Mutual Recognition (Qld) Act 1992: 2.50 Partnership Act 1891 s 13: 20.205, 22.75 s 15: 20.205, 22.75

Personal Injuries Proceedings Act 2002 s s s s

66(1): 66(3): 67(1): 68(1):

20.50 20.50 20.55 20.70

Professional Standards Act 2004: 5.355 Property Occupations Act 2014 Pt 4: 20.115

Public Interest Disclosure Act 2010: 10.135, 13.25

Queensland Civil and Administrative Tribunal Act 2009: 24.105 s 20(2): 24.115 s 24(1): 24.115

Queensland Law Society Act 1952 Pt 3.4, Div 3: 4.85 Pt 4A: 4.85

Queensland Law Society Administration Rule 2005 Pt 6: 4.30

Solicitors Handbook: 4.85 para 4.09: 4.85 para 8.03.1: 4.100

civ Table of Statutes and Rules

Succession Act 1981 s 15(1): 21.55 s 33: 21.65

Supreme Court (Legal Practitioner Admission) Rules 2004 r 6: 2.10 r 7: 2.15 r 7A: 2.15 App A: 2.10 App B: 2.15

Trust Accounts Act 1973: 9.05 Uniform Civil Procedure Rules 1999 r 5: 11.275, 17.245 r 738: 15.80 r 742: 15.85 r 743A: 15.55 r 743E: 15.55 r 743F: 15.55 r 743I: 15.80, 15.85 Ch 17, Pt 5: 15.40

South Australia Australian Solicitors’ Conduct Rules Glossary: 6.130, 7.35, 8.190, 8.195, 14.20, 21.170 r 2.2: 1.125 r 2.3: 1.125 r 3.1: 17.10 r 4.1.1: 4.05 r 4.1.2: 21.140 r 4.1.3: 3.180 r 5.1: 19.05 r 6.1: 22.05 r 6.2: 22.65 r 7.1: 4.05 r 7.2: 4.135 r 8.1: 5.20 r 9.1: 10.15, 10.30, 10.60 r 9.2.1: 10.50 r 9.2.2: 10.70 r 9.2.3: 10.65 r 9.2.4: 10.105 r 9.2.5: 10.105 r 9.2.6: 10.90 r 10.2: 8.75 r 10.2.1: 8.45 r 10.2.2: 8.230 r 11: 7.40 r 11.1: 7.30 r 11.2: 7.30 r 11.3: 7.30 r 11.4: 7.30 r 11.4.2: 7.50 r 12.1: 6.05

r 12.2: 6.125 r 12.3: 6.60 r 12.4.1: 14.70 r 12.4.2: 6.130 r 12.4.3: 6.110 r 12.4.4: 20.70 r 13.1: 3.200 r 13.2: 3.205 r 13.3: 3.205 r 14.1: 3.220, 16.60 r 14.2: 3.235 r 15.1: 16.70 r 16B: 14.20 r 16.1: 3.235 rr 17.1 to 17.3: 17.40 r 17.3: 18.25 r 17.4: 17.65 r 18.1: 17.190 r 19.1: 17.95 r 19.2: 17.100 r 19.3: 17.105 r 19.4: 17.120 r 19.5: 17.120 r 19.6: 17.85 r 19.7: 17.85 r 19.8: 17.85 r 19.9: 17.85 r 19.10: 18.120 r 19.11: 17.100 r 19.12: 17.105 r 20.1: 17.130 r 20.2: 18.105 r 20.2.2: 18.105 r 20.2.2(iii) to (v): 18.105 r 20.3: 17.140 r 20.3.3: 10.125 r 21.1: 17.225 r 21.2: 17.225 r 21.3: 17.220 r 21.4: 17.230 r 21.5: 17.230 r 21.6: 17.230 r 21.7: 17.240 r 21.8: 17.225 r 22: 21.155 r 22.1: 21.155 r 22.3: 21.215 r 22.4: 21.280 r 22.5: 17.190 r 22.6: 17.190 r 22.7: 17.190 r 22.8: 17.250 r 23.1: 17.175 r 23.2: 17.175 r 24.1.1: 17.160 r 24.1.2: 17.165 r 24.2: 17.165

Table of Statutes and Rules cv Australian Solicitors’ Conduct Rules — cont r 25.1: 17.155 r 25.2: 17.155 r 26.1: 17.170 r 27: 17.45 r 28.1: 17.205 r 29.1: 18.10 r 29.2: 18.20 r 29.3: 18.30 r 29.4: 18.10 r 29.5: 18.55, 18.60 r 29.6: 18.60 r 29.7: 18.75 r 29.7(i): 18.80 r 29.7(ii): 18.80 r 29.7(iii): 18.80 r 29.7(iv): 18.80 r 29.8: 18.60 r 29.10: 18.65 r 29.11: 18.65 r 29.12: 18.90 r 30.1: 21.215 r 31.1: 11.290 r 31.2: 11.290 r 32.1: 21.195 r 33.1.1: 21.265 r 33.1.2: 21.265 r 33.1.3: 21.265 r 33.1.4: 21.265 r 34.1.1: 21.220 r 34.1.2: 21.225 r 34.2: 20.55 r 35.1: 21.95 r 36.1: 20.05, 20.15 r 36.2: 20.40 r 37.1: 20.205 r 39: 4.05 r 39.1: 20.90 r 40.1: 20.125 r 42.1: 21.170 r 43: 24.30 r 45: 20.70 r 93(e): 18.90

Barristers’ Conduct Rules: 1.120 r r r r r r r r r r r r r

5(a): 17.10 10: 1.130 13(a): 20.95 13(b): 20.95 14: 20.95 16: 20.135 20.2: 18.105 21: 3.150 22: 3.170 23: 1.55 25: 17.10 26: 17.95 27: 17.100

r 28: 17.105 r 29: 17.120 r 30: 17.120 r 31: 17.85 r 32: 17.85 r 33: 17.85 r 34: 17.85 r 35: 18.120 r 36: 17.100 r 40: 18.125 rr 41 to 43: 17.40 r 43: 18.25 r 44: 17.190 r 46: 6.125 r 47: 6.60 r 48: 21.155 r 49: 21.155 r 50: 21.215 r 51(a): 21.265 r 51(b): 21.265 r 51(c): 21.265 r 52: 21.280 r 53: 17.190 r 54: 17.190 r 55: 17.190 r 56: 17.250 r 57: 17.250 r 58: 17.250 r 59: 17.225 r 60: 17.225 r 61: 17.225 r 62: 17.225 r 63: 17.220, 17.225 r 64: 17.230 r 65: 17.230 r 66: 17.230 r 67: 17.240 r 68(a): 17.160 r 68(b): 17.165 r 69: 17.165 r 70: 17.155 r 71: 17.155 r 72: 17.170 r 73: 17.175 r 74: 17.175 r 75: 17.205 r 76: 17.205 r 77: 17.205 r 78: 17.130 r 79: 18.105 rr 79(e) to (g): 18.105 r 80: 17.140 r 80(c): 10.125 r 81: 10.105 r 82: 18.10 r 83: 18.20 r 84: 18.30

cvi Table of Statutes and Rules Barristers’ Conduct Rules — cont r 85: 18.10 r 86: 18.55, 18.60 r 87: 18.60 r 88(a): 18.75 r 88(b): 18.75 r 88(c)(i): 18.80 r 88(c)(ii): 18.80 r 88(c)(iv): 18.80 r 88(c)(iii): 18.80 r 88A: 18.80 r 89: 18.60 r 91: 18.65 r 92: 18.65 r 93: 18.90 r 95(a): 3.160 r 95(b): 3.160 r 95(d): 3.160, 17.45 r 95(e): 3.160, 17.45 r 95(f): 3.160 r 95(g): 3.160 r 95(h): 3.160 r 95(i): 3.160 r 95(j): 3.160, 17.195 r 95(l): 3.160 r 95(m): 3.160, 8.165 r 96: 3.160, 17.45 r 97: 3.160, 8.75 r 99(b): 3.170 r 99(c): 3.170 r 99(d): 3.170, 3.225 r 99(f): 3.170, 3.225 r 99(g): 3.225 r 99(h): 3.170 r 99(j): 3.170 r 99(k): 3.170 r 99(l): 3.170, 3.225 r 99(m): 3.170 r 100: 3.225, 14.80 r 101: 3.225 r 102: 3.225 r 103: 3.225 r 104: 3.225 r 105: 3.225 r 108: 10.30, 10.70 r 108(a): 10.95 r 108(b): 10.50 r 109: 10.50 r 110: 10.65 r 111: 10.65 r 112: 3.225 r 113: 3.225 r 114: 3.225 r 116: 17.10 r 117: 21.170 r 119: 21.170 rr 124 to 128: 4.30 r 136: 24.15

r 136(c): 23.65 rr 137 to 144: 24.05 r 141: 24.30 r 143: 10.90 r 174(c): 24.05

Civil Liability Act 1936 s s s s

34(1): 4.165 34(2): 4.165 40: 5.190 41(1): 5.170

Competition Policy Reform (South Australia) Act 1996: 1.55 Conveyancers Act 1994: 1.25 Criminal Law Consolidation Act 1935 s 146(1)(f): 6.120 s 148(1): 6.120 s 148(2): 6.120 s 149: 6.120 s 150(3): 6.120 s 150(4): 6.120 s 243: 17.145 s 353(1): 4.200 Sch 11: 14.120

Evidence Act 1929 s s s s s s s s s s

67C: 12.05 67C(1): 12.100 67C(2): 12.35 67C(2)(a): 12.80 67C(2)(b): 12.80 67C(2)(c): 12.80 67C(2)(d): 12.30 67C(2)(e): 12.40 67C(2)(g): 12.85 67C(2)(h): 12.60

LPEAC Rules 2004 rr 2.1 to 2.3: 2.10 r 2.4: 2.15 r 3A: 4.30 r 5.1: 2.15 r 7.6: 2.20, 2.30 r 8(a): 2.20 App A: 2.10

Land Agents Act 1994 Pt 2: 20.115

Land and Business (Sale and Conveyancing) Act 1994 s 3: 20.70 s 29(1): 20.70

Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 s 4(1): 4.155

Table of Statutes and Rules cvii Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 — cont Pt 3: 4.160

Legal Practitioners Act 1981: 1.100, 23.90 s 5(1): 9.125, 23.90, 25.100, 25.165 s 5(2): 5.355 s 15: 2.30 s 15(1): 2.20 s 19: 5.350 s 20AH: 24.15, 25.165 s 21(1): 2.140 s 22(1)(b): 9.70 s 23: 5.355, 20.80 s 23A: 17.10 s 23B: 2.155 ss 24 to 30: 20.140 s 26: 5.355 s 31: 9.65 s 31(1): 9.05, 16.45 s 31(3)(b): 9.70 s 31(4): 9.35 s 31(6)(a): 9.45 s 33: 9.90 s 34: 9.90 s 37: 9.95 s 39: 16.75 s 39(3): 16.75 s 41(1): 9.70 s 41(2): 5.170 s 41(3): 5.170 s 41(4): 5.170 s 42: 15.40 s 42(1): 15.40 s 42(1a): 15.40 s 42(1b): 15.85 s 42(5): 15.55 s 42(6): 14.75, 14.90, 14.95 s 42(7): 15.65 s 44: 9.110 s 45(1): 9.100 s 45(3): 9.115 s 45(4): 9.115 s 49: 20.220 s 49(1): 20.220 s 52AA: 2.155 s 52AAB: 2.155 s 53: 9.65 s 57: 9.125 s 60(1): 9.125 s 65: 9.125 s 68: 23.90 s 70: 23.90 s 70(a): 22.50 s 70(b): 25.70 s 70(c): 25.100, 25.165 s 70(d): 20.220 s 71(2): 24.120

s 71(3): 1.45, 24.120 s 76(3): 10.90, 23.60 s 77A(3): 10.90, 23.60 s 77B(1): 24.120 s 77C(1): 24.120 s 77J(1): 24.120 s 77J(1)(a): 24.120 s 77J(1)(b): 24.120 s 77J(2): 24.120 s 77K: 24.125 s 77L: 24.120 s 77N(1): 24.120 s 77N(3): 24.120 s 77N(3) to 77N(10): 24.120 s 77O: 24.120 ss 78 to 81: 24.125 s 81(2): 23.55 s 82(2): 24.125 s 82(3): 24.125 s 82(4): 24.125 s 82(5): 24.125 s 82(6): 24.125 s 84: 10.90, 23.60 s 84A(1): 23.65 s 84A(2): 23.65 s 85(1): 23.75 s 86(1): 24.130 s 86(3): 24.130 s 89(1): 24.130 s 89(1b): 23.45 s 89(2): 24.130 s 89(3): 22.25, 23.10 s 89C: 23.80 s 95BA(2): 9.125 Pt 3, Div 2B: 20.220 Pt 3, Div 9: 9.100 Pt 5: 9.125 Pt 6: 1.45 Pt 6, Div 2: 1.45 Sch 3, cl1: 14.140 Sch 1: 20.170 Sch 1, cl 2: 20.170 Sch 1, cl 8(1): 20.170 Sch 1, cl 8(2): 20.170 Sch 1, cl 11: 20.170 Sch 1, cl 16: 20.170 Sch 1, cl 17(1): 20.170 Sch 2, cl 1(1): 9.10, 9.20, 9.25 Sch 2, cl 11: 9.05 Sch 2, cl 12: 9.05 Sch 2, cl 14(1): 9.65 Sch 2, cl 15(1): 9.10 Sch 2, cl 17(1): 9.10 Sch 2, cl 20: 9.80 Sch 2, cl 21: 9.45 Sch 2, cl 22(1)(a): 9.75, 16.45 Sch 2, cl 22(1)(c): 9.65

cviii Table of Statutes and Rules Legal Practitioners Act 1981 — cont Sch 2, cl 23: 9.50 Sch 2, cl 24(2): 9.55, 24.15, 25.50 Sch 2, cl 25: 9.35 Sch 2, cl 26(1): 9.60 Sch 2, cl 26(2): 9.60 Sch 2, cl 31(2): 9.95 Sch 2, cl 34: 9.90 Sch 2, cl 39: 9.90 Sch 2, cl 39(3): 9.95 Sch 2, cl 39(4): 9.95 Sch 2, cl 42(1)(b): 9.80 Sch 2, Pt 3, Div 1: 9.90 Sch 2, cll 13 to 17: 9.65 Sch 3: 15.55 Sch 3, cl 1: 14.50, 15.30 Sch 3, cl 2(1)(a): 15.55 Sch 3, cl 2(2): 14.50 Sch 3, cl 10: 14.20 Sch 3, cl 10(1)(b): 14.20 Sch 3, cl 11: 14.30 Sch 3, cl 12(1): 14.35, 14.45 Sch 3, cl 12(2): 14.45 Sch 3, cl 13: 14.55 Sch 3, cl 14: 14.65 Sch 3, cl 15: 14.145 Sch 3, cl 16(1)(a): 14.35 Sch 3, cl 16(1)(b): 14.35 Sch 3, cl 16(2): 14.35 Sch 3, cl 17: 5.80, 14.20 Sch 3, cl 18: 14.60 Sch 3, cl 19: 5.80, 14.20 Sch 3, cl 20: 14.50 Sch 3, cl 21: 14.10, 15.05 Sch 3, cl 22: 15.110 Sch 3, cl 24(1): 14.75 Sch 3, cl 24(2): 14.90 Sch 3, cl 24(3): 14.80, 14.95 Sch 3, cl 24(5): 15.65 Sch 3, cl 25(1): 14.90, 14.140 Sch 3, cl 25(2): 14.125 Sch 3, cl 25(3): 14.140 Sch 3, cl 25(3)(a): 14.80, 14.140 Sch 3, cl 25(3)(c)(i): 14.80 Sch 3, cl 25(4): 14.140 Sch 3, cl 25(5): 14.140 Sch 3, cl 25(6): 14.140 Sch 3, cl 26(1): 14.145 Sch 3, cl 26(2): 14.145 Sch 3, cl 26(3): 14.145 Sch 3, cl 26(4): 14.145 Sch 3, cl 26(4)(a): 14.145 Sch 3, cl 27: 14.135 Sch 3, cl 28: 14.80 Sch 3, cl 29(1): 14.100 Sch 3, cl 29(2): 14.100 Sch 3, cl 29(3): 14.100 Sch 3, cl 29(4): 14.100

Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch Sch

3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 3, 4:

cl 29(5): 14.100 cl 30(1): 14.155 cl 30(2): 14.160 cl 30(4): 14.160 cl 30(5): 14.160 cl 30(7): 14.160 cl 31(1): 15.30 cl 31(41): 15.30 cl 34(4): 15.30 cl 34(5): 15.30 cl 37: 15.55 cl 37(1): 15.55 cl 37(4): 15.55 cl 37(5): 15.55 cl 39: 15.55 cl 41: 15.40 cl 41(1): 15.85 cl 44(c): 15.55 cl 46(1): 15.60 cl 46(2): 15.60 cl 47(1): 15.65 cl 48: 15.70 cl 49: 15.75 cl 50: 24.10, 25.75 cl 51: 15.65 23.60

Legal Practitioners (Miscellaneous) Amendment Act 2013: 1.45, 1.105, 14.20, 14.90, 20.170, 23.90, 24.120 Legal Practitioners Regulations 2014 r 20: 9.35 r 40: 9.40 r 41: 9.40 reg 45: 9.70 r 52: 9.90 Pt 6: 9.35

Legal Services Commission Act 1977 s s s s

22(2): 13.110 30: 13.110 31: 13.110 31A: 13.110

Limitation of Actions Act 1936 s 35(a): 15.20

Mutual Recognition (SA) Act 1993: 2.50 Partnership Act 1891 s 10: 20.205, 22.75 s 12: 20.205, 22.75

Professional Standards Act 2004: 5.355 Real Property Act 1886: 20.70 Rules of Professional Conduct and Practice: 1.120, 14.20

Table of Statutes and Rules cix Rules of Professional Conduct and Practice — cont r 9.1: 5.20 r 15.1: 19.55 r 16A.3: 10.75 r 16B.2.4: 14.65 r 16C: 14.140, 14.160 r 16C.1: 14.135 r 16C.2.9: 14.145 r 35.1: 21.240

Supreme Court Act 1935 s 65(1): 4.135, 20.180

Supreme Court Admission Rules 1999 r 6(a): 2.20, 2.30 r 7A: 2.30

Supreme Court Civil Rules 2006 r 3: 11.275, 17.245

Whistleblowers Protection Act 1993: 10.135, 13.25

Wills Act 1936 s 25AA: 21.65

Workers Rehabilitation and Compensation Act 1986: 18.10, 18.20 s 95: 16.160

Tasmania Alternative Dispute Resolution Act 2001 s s s s s s

5(1): 4.135, 20.180 6: 20.200 9: 20.185 10(4): 20.195 10(5): 20.195 11: 20.190

Civil Liability Act 2002 s 13(1): 4.165 s 13(3): 4.165 Pt 9A: 4.160

Competition Policy Reform (Tasmania) Act 1996: 1.55 Conveyancing Act 2004: 1.25 Criminal Code s s s s

99: 17.145 266(1): 6.120 266(3)(a): 6.120 402: 4.200

Evidence Act 2001: see section entries under Evidence Act 1995 (Cth) Legal Aid Commission Act 1990

s 11: 13.110

Legal Profession Act 1993: 1.115 s 55: 2.160 ss 148 to 162: 20.140

Legal Profession Act 2007: 1.100 s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

4(1): 9.10, 14.50, 25.100, 25.165 5: 2.140 5(1): 5.355 6: 2.140 9(1): 2.75 9(1)(a): 2.20 9(1)(c): 2.60 9(1)(m): 2.80 13: 2.140 14: 20.80 24: 5.355 25(1)(b): 2.15 26: 2.20 27: 2.20, 5.355 31(3): 2.30 37: 17.10 45: 5.350 73: 24.15, 25.165 79: 2.155 80: 2.155 113: 20.170 118(1): 20.170 118(2): 20.170 121(1): 20.170 127: 20.170 128(1): 20.170 144(1): 20.160 145(1): 20.160 147(1): 20.160 147(2): 20.160 149(b): 20.160 149(d): 20.160 150: 20.160 151: 20.160 154: 20.160 155: 20.160 156(1): 20.160 162: 2.160 165: 2.160 167(1): 2.160 167(2): 2.160 167(3): 2.160 170: 20.80 180: 2.160 184: 2.160 221: 1.115 221A(1): 1.120 221A(2): 1.120 221A(4): 1.120 225: 1.115 227: 1.115

cx Table of Statutes and Rules Legal Profession Act 2007 — cont s 231(1): 9.10, 9.25 s 232(1): 9.20 s 232(2): 9.20 s 241: 9.05 s 242: 9.05 s 244(1): 9.65 s 244(2): 9.65 s 244(4): 9.65 ss 244 to 246: 9.65 s 245(1): 9.10 s 246(1): 9.65 s 246(2): 9.65 s 246(4): 9.65 s 247(1): 9.10 s 250: 9.80 s 251: 9.45 s 252(1)(a): 9.75, 16.45 s 252(1)(b): 9.70 s 252(1)(c): 9.65 s 253(1): 9.50 s 254: 9.55 s 254(2): 24.15, 25.50 s 255: 9.35 s 256(1): 9.60 s 256(2): 9.60 ss 257 to 259: 9.65 s 266(1): 9.90 s 270: 9.90 s 271: 9.90 s 271(2): 9.95 s 271(3): 9.95 s 274(1)(b): 9.80 s 283: 14.140, 15.30, 15.40, 15.65 s 284(1): 14.50 s 284(1)(a): 15.55 s 291: 14.20 s 293: 14.30 s 294(1): 14.35, 14.45 s 294(2): 14.45 s 295: 14.55 s 296: 14.65 s 297: 14.145 s 298(1)(a): 14.35 s 298(1)(b): 14.35 s 298(2): 14.35 s 299: 5.80, 14.20 s 300: 14.60 s 301: 5.80, 14.20 s 302: 14.50 s 303: 14.10, 15.05 s 304: 15.110 s 306(1): 14.75 s 306(2): 14.90 s 306(3): 14.80, 14.95 s 306(5): 15.65 s 307(1): 14.140 s 307(2): 14.125

s 307(3)(a): 14.80, 14.140 s 307(3)(c)(i): 14.80 ss 307(3)(c) to (e): 14.140 s 307(4): 14.140 s 307(5): 14.140 s 307(6): 14.140 s 308(1): 14.145 s 308(2): 14.145 s 308(3): 14.145 s 308(4): 14.145 s 308(4)(a): 14.145 s 309: 14.135 s 310: 14.80 s 311(1): 14.90, 14.100 s 311(2): 14.100 s 311(3): 14.100 s 311(4): 14.100 s 311(5): 14.100 s 312(1): 14.155, 14.160 s 312(2): 14.160 s 312(4): 14.160 s 312(5): 14.160 s 312(7): 14.160 s 313(1): 15.30 s 313(4): 15.30 s 316(4): 15.30 s 316(5): 15.30 s 317(1): 3.210 s 319(1): 15.55 s 319(2): 15.55 s 319(5): 15.55 s 319(6): 15.55 ss 321(1) to (3): 15.55 s 323(b): 15.55 s 327(1): 15.60 s 327(2): 15.60 s 328(1): 15.65 s 329: 15.70 s 331(2): 15.75 s 332: 24.10, 25.75 s 333: 15.85 s 334(1): 15.85 s 338: 15.65 s 350: 9.125 s 365: 9.125 s 371: 9.125 s 384: 9.125 s 392: 9.125 s 414(2): 9.125 s 420: 23.90 s 421: 23.90 s 422(1): 23.90 s 422(1)(a): 22.50 s 422(1)(b): 25.70 s 422(1)(c): 25.100, 25.165 s 422(1)(d): 20.220 s 427: 24.135

Table of Statutes and Rules cxi Legal Profession Act 2007 — cont s 433(1): 24.135 s 436: 24.135 s 442: 24.135 s 445: 24.135 s 446: 24.135 s 449: 24.135 s 450: 24.140 s 451: 24.140 s 453: 24.140 s 454(1): 24.140 s 454(2): 24.140 s 456: 24.140 s 458(1): 24.145 s 458(3): 24.145 s 460: 23.55 s 464: 24.145 s 466(7): 24.145 s 466(7)(b): 24.145 s 467(3): 23.65 s 467(5)(a): 23.65 s 470: 24.145 ss 471 to 474: 24.145 s 481(1): 23.75 s 481(2): 23.75 s 481(3): 23.75 s 484: 24.145 s 485: 24.145 s 486: 24.145 s 487: 24.145 s 491(2)(b): 16.85 s 497: 23.80 s 510: 22.25, 23.10 s 515: 23.55 s 516: 10.90 s 517: 10.90 s 518: 10.90 s 523: 9.100 s 524(2)(a): 9.110 s 524(2)(c): 9.105 s 534: 9.115 s 537(1)(c): 9.115 s 538: 9.105 ss 543 to 545: 9.105 s 589: 24.135 s 591: 1.45 s 661(2): 1.115 Ch 5: 9.100 Pt 2.3, Div 7: 20.220 Pt 2.5, Div 2: 20.170 Pt 2.5, Div 3: 20.160 Pt 2.6: 2.160 Pt 3.2, Div 4: 9.90 Pt 3.3, Div 7: 15.40 Pt 3.5: 9.125 Pt 3.5, Div 2: 9.65 Pt 4.4: 10.90, 23.60 Pt 4.9: 23.35

Pt 7.1: 1.45 Sch 1: 24.140

Legal Profession Amendment Act 2013: 1.120 Legal Profession (Board of Legal Education) Rules 2010: 2.30 Pt 3: 2.15 Sch 1: 2.10

Legal Profession (Disciplinary Tribunal) Rules 1995 r 12: 23.65

Legal Profession Regulations 2008 r 4: 1.115 r 48: 9.40 r 49: 9.40 r 53: 9.70 Pt 3: 9.35

Limitation Act 1974 s 4(1)(a): 15.20

Mutual Recognition (Tas) Act 1993: 2.50 Partnership Act 1891 s 15: 20.205, 22.75 s 17: 20.205, 22.75

Professional Conduct Guidelines (Bar Association) para para para para para para para para para para para para para para para para para

3: 4.05 4: 4.05 5: 22.55 7: 5.150 9: 4.140 15: 10.65 24: 10.30, 10.70 25(b): 5.95 28: 6.20 29: 17.225 34: 17.95 40: 17.130 41: 17.230 46: 18.125 51: 18.120 56: 18.105 57: 18.10

Professional Standards Act 2005: 5.355 Property Agents and Land Transactions Act 2005 Pt 4: 20.115

Public Interest Disclosures Act 2002: 10.135, 13.25

Rules of Practice 1994: 1.115, 1.120, 3.45 r 3: 7.35

cxii Table of Statutes and Rules Rules of Practice 1994 — cont r 4(1): 20.215 r 4.1.3: 3.180 r 4(1A): 20.215 r 4(2): 20.215 r 5(1): 20.90, 20.95 r 5(1)(a): 20.100 r 5(2): 20.110 r 6: 20.75 r 6(5): 20.75 r 7: 20.05 r 7(1): 20.15, 20.30, 20.35 r 7(2): 20.40 r 8: 20.55 r 8(1): 20.65 r 9: 20.185 r 10(1): 4.20 r 10(2): 4.85 r 11(1): 10.15, 10.30, 10.50 r 11(2): 6.25 r 11(3): 6.25 r 11.4.2: 7.50 r 12: 7.30 r 12(1): 7.30 r 12(2): 7.30, 7.40 r 12(3): 7.30 r 14: 3.130 r 16: 10.75 r 80(1): 14.70 r 85(1): 3.210 r 89(2): 3.45 r 89(3): 3.45 r 89A: 3.45 r 94: 3.150 r 94(2): 3.160 r 94(2)(g): 3.160, 17.45 r 94(2)(h): 3.160, 17.45 r 94(2)(i): 3.160 r 94(2)(j): 3.160 r 94(2)(k): 3.160 r 95: 3.205 r 95(1): 17.45 r 95(2): 3.160 Pt 8: 1.120 para 1: 3.150, 3.170

Rules of the Supreme Court r 518(1): 4.135, 20.180

Supreme Court Act 1959 s 10: 15.40

Wills Act 2008 s 42: 21.65

Wrongs Act 1954 s 4(1): 4.155

Victoria Abolition of Obsolete Offences Act 1969 s 4: 14.120

Access to Justice Act 2006 s 256(1): 1.35

Civil Procedure Act 2010: 5.315 s 7: 11.275, 17.245 s 10(1): 17.95, 17.245, 21.130 ss 16 to 27: 5.315 s 17: 17.05 s 18(c): 17.215 s 18(d): 17.220 s 19: 17.245 s 20: 17.245 s 21: 17.95, 21.130 s 22: 4.140 s 25: 17.245 s 29: 17.245 s 29(1): 4.140, 17.215, 17.220, 21.130 s 29(1)(c): 5.315 s 42(1): 17.220 s 66: 4.135, 20.180

Competition Policy Reform (Victoria) Act 1995: 1.55

Consumer Credit (Victoria) and Other Acts Amendment Act 2008: 7.135 Conveyancers Act 2006: 1.25 Crimes Act 1958 s 175(1): 6.120 s 176(1): 6.120 s 177: 6.120 s 568: 4.200 Pt I, Div 5: 17.145

Crimes (Document Destruction) Act 2006: 17.145

Criminal Procedure Act 2009 s 42: 18.55 s 185: 18.55

Estate Agents Act 1980: 20.115 Pt 3: 20.115

Evidence Act 2008: see section entries under Evidence Act 1995 (Cth) Financial Institutions (Vic) Act 1992 Pt 6: 7.155

Legal Aid Act 1978 s 16: 13.110 s 16(2)(a): 5.330

Table of Statutes and Rules cxiii Legal Aid Act 1978 — cont s 31: 10.75 s 43: 13.110

Legal Practice Act 1996: 1.45 s 102(3): 14.105 s 122: 15.95 s 317: 20.125 Pt 2B: 2.160 Pt 5: 24.05 Pt 10: 20.140

Legal Profession Act 2004 s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

1.2.1: 25.100, 25.165 1.2.1(1): 14.50 1.2.2: 2.140 1.2.3: 2.140 1.2.6: 2.20 1.2.6(1): 2.75 1.2.6(1)(c): 2.60 1.2.6(1)(m): 2.80 2.2.2: 2.140 2.2.3: 20.80 2.3.3(1)(ab): 2.125 2.3.6: 2.30 2.3.9: 17.10 2.3.10: 2.30 2.4.27: 24.15, 25.165 2.4.32: 2.155 2.7.20(1): 20.170 2.7.36(1): 20.160 2.7.37(1): 20.160 2.7.39(1): 20.160 2.7.39(2): 20.160 2.7.41(b): 20.160 2.7.41(d): 20.160 2.7.42: 20.160 2.7.43: 20.160 2.7.46: 20.160 2.7.47: 20.160 2.7.48(1): 20.160 2.8.1: 2.160 2.8.4: 2.160 2.8.6(1): 2.160 2.8.6(2): 2.160 2.8.6(3): 2.160 2.8.9: 20.80 2.8.18: 2.160 2.8.22: 2.160 3.2.3(1): 3.45 3.2.13: 1.115 3.2.17: 1.115 3.2.18: 1.115 3.3.2(1): 9.10, 9.25 3.3.3(1): 9.20 3.3.3(2): 9.20 3.3.11: 9.05 3.3.13: 9.05

s 3.3.14(1): 9.65 s 3.3.14A(1): 9.65 s 3.3.14A(4): 9.65 ss 3.3.14 to 3.3.16: 9.65 s 3.3.15(1): 9.10 s 3.3.15A(1): 9.65 s 3.3.15A(4): 9.65 s 3.3.16(1): 9.10 s 3.3.18: 9.80 s 3.3.19: 9.45 s 3.3.20(1)(a): 9.75, 16.45 s 3.3.20(1)(b): 9.70 s 3.3.20(1)(c): 9.65 s 3.3.21(1): 9.50 s 3.3.22: 9.55 s 3.3.22(2): 24.15, 25.50 s 3.3.25: 9.35 s 3.3.26(1): 9.60 s 3.3.26(2): 9.60 ss 3.3.31 to 3.3.44: 9.90 s 3.3.47: 9.90 s 3.3.49: 9.95 s 3.3.52(1): 9.90 s 3.4.2: 14.140, 15.30, 15.65 s 3.4.2A: 14.50 s 3.4.2A(1)(a): 15.55 s 3.4.9: 14.20 s 3.4.10: 14.30 s 3.4.11(1): 14.35, 14.45 s 3.4.11(2): 14.45 s 3.4.12: 14.55 s 3.4.13: 14.65 s 3.4.14: 14.145 s 3.4.15(1)(a): 14.35 s 3.4.15(1)(b): 14.35 s 3.4.15(2): 14.35 s 3.4.16: 5.80, 14.20 s 3.4.17: 14.60 s 3.4.18: 5.80, 14.20 s 3.4.18A: 14.50 s 3.4.19: 14.10, 15.05 s 3.4.20: 15.110 s 3.4.26(1): 14.75 s 3.4.26(2): 14.90 s 3.4.26(3): 14.80, 14.95 s 3.4.26(5): 15.65 s 3.4.27(1): 14.140 s 3.4.27(2): 14.125 s 3.4.27(3)(a): 14.80, 14.140 s 3.4.27(3)(c) to (e): 14.140 s 3.4.27(4): 14.140 s 3.4.27(4A): 14.140 s 3.4.27(5): 14.140 s 3.4.28(1): 14.145 s 3.4.28(2): 14.145 s 3.4.28(3): 14.145 s 3.4.28(4): 14.145

cxiv Table of Statutes and Rules Legal Profession Act 2004 — cont s 3.4.28(4)(a): 14.145 s 3.4.29: 14.135 s 3.4.30: 14.80 s 3.4.31(1): 14.90, 14.100 s 3.4.31(2): 14.100 s 3.4.31(3): 14.100 s 3.4.31(4): 14.100 s 3.4.31(5): 14.100 s 3.4.32(1): 14.155 s 3.4.32(2): 14.160 s 3.4.32(4): 14.160 s 3.4.32(5): 14.160 s 3.4.32(7): 14.160 s 3.4.33(1): 15.30 s 3.4.33(4): 15.30 s 3.4.36(4): 15.30 s 3.4.37(1): 3.210 s 3.4.38(1): 15.55 s 3.4.38(2): 15.55 s 3.4.38(5): 15.55 s 3.4.38(6): 15.55 s 3.4.40(1): 15.55 s 3.4.40(2): 15.55 s 3.4.40(2A): 15.55 s 3.4.41(1)(b): 15.55 s 3.4.44(1): 15.60 s 3.4.44(2): 15.60 s 3.4.44A(1): 15.65 s 3.4.44B: 15.70 s 3.4.45(2): 15.75 s 3.4.46: 24.10, 25.75 s 3.4.47: 15.85 s 3.4.48A: 15.65 s 3.5.2: 5.350 s 3.6.2: 9.125 s 3.6.5: 9.125 s 3.6.6: 9.125 s 3.6.7: 9.125 s 3.6.19: 9.125 s 3.6.26: 9.125 s 3.315A(2): 9.65 s 4.2.2(a): 15.95 s 4.3.17(1)(a): 23.35 s 4.3.17(1)(e): 16.85 s 4.4.2: 23.90 s 4.4.3: 23.90 s 4.4.4: 23.90 s 4.4.4(a): 22.50 s 4.4.4(b): 25.70 s 4.4.4(c): 25.100, 25.165 s 4.4.4(d): 20.220 s 4.4.6(b): 22.50 s 4.4.11(6)(a): 10.90 s 4.4.19(a): 23.35 s 4.4.26: 23.80 s 4.4.39: 22.25, 23.10 s 5.2.1: 9.100

s 5.2.2(2)(a): 9.110 s 5.2.2(2)(c): 9.105 s 5.4.4: 9.115 s 5.4.8(1)(c): 9.115 s 5.5.1: 9.105 ss 5.5.6 to 5.5.8: 9.105 s 6.2.5: 1.45 s 211: 5.350 Ch 5: 9.100 Ch 6: 1.110 Pt 2.4, Div 7: 20.220 Pt 2.7, Div 3: 20.160 Pt 2.8: 2.160 Pt 3.3, Div 3: 9.90 Pt 3.3, Div 6: 9.65 Pt 3.4, Div 7: 15.40 Pt 3.6: 9.125 Pt 4.3, Div 3: 15.95 Pt 4.4, Div 3: 10.90, 23.60 Pt 6.2: 1.45 Pt 6.3: 1.45

Legal Profession (Admission) Rules 2008 (superseded) r 2.05: 2.10 r 3.01: 2.15 rr 3.01 to 3.04: 2.15 rr 3.05 to 3.15: 2.15

Legal Profession General Rules 2015 r 52: 9.40 r 53: 9.40 Pt 4.2, Div 2: 9.35

Legal Profession Practice Act 1958 s 94: 20.125

Legal Profession Regulations 2005 r 3.3.28: 9.40 r 3.3.29: 9.40 r 3.3.34: 9.70 Pt 3.3, Div 3: 9.35

Legal Profession Uniform Admission Rules 2015 r r r r r r r r r r r

5: 2.10 6: 2.15 6(2)(b): 2.15 9: 2.15 10(1): 2.20 10(1)(d): 2.125 10(1)(h): 2.60 10(1)(i): 2.75 10(1)(j): 2.75 10(1)(k): 2.80 19: 2.125

Legal Profession Uniform Conduct (Barristers) Rules 2015: 1.120

Table of Statutes and Rules cxv Legal Profession Uniform Conduct (Barristers) Rules 2015 — cont r 4(a): 17.10 r 7: 1.130 r 9(a): 20.95 r 9(b): 20.95 r 10: 20.95 r 11: 3.45 r 12: 20.135 r 13: 3.45 r 17: 3.150 r 18: 3.170 r 19: 1.55 r 22: 3.45 r 23: 17.10 r 24: 17.95 r 25: 17.100 r 26: 17.105 r 27: 17.120 r 28: 17.120 r 29: 17.85 r 30: 17.85 r 31: 17.85 r 32: 17.85 r 33: 18.120 r 34: 17.100 r 35: 4.05 r 38: 18.125 rr 42 to 44: 17.40 r 44: 18.25 r 45: 17.190 r 47: 6.125 r 48: 6.60 r 49: 21.155 r 50: 21.155 r 51: 21.215 r 52(a): 21.265 r 52(b): 21.265 r 52(c): 21.265 r 53: 21.280 r 54: 17.190 r 55: 17.190 r 56: 17.190 r 57: 17.250 r 58: 17.250 r 59: 17.250 r 60: 17.225 r 61: 17.225 r 62: 17.225 r 63: 17.225 r 64: 17.220, 17.225 r 65: 17.230 r 66: 17.230 r 67: 17.230 r 68: 17.240 r 69(a): 17.160 r 69(b): 17.165 r 70: 17.165

r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

71: 17.155 72: 17.155 73: 17.170 74: 17.175 75: 17.175 76: 17.205 77: 17.205 78: 17.205 79: 17.130 80: 18.105 80(e) to (g): 18.105 81: 17.140 81(c): 10.125 82: 10.105 83: 18.10 84: 18.20 85: 18.30 86: 18.10 87: 18.55, 18.60, 18.90 88: 18.60 89(a): 18.75 89(b): 18.75 89(i): 18.80 89(ii): 18.80 89(iv): 18.80 89(iii): 18.80 90: 18.80 91: 18.60 93: 18.65 94: 18.65 101(b): 3.160 101(d): 3.160, 17.45 101(e): 3.160, 17.45 101(f): 3.160 101(g): 3.160 101(h): 3.160 101(i): 3.160 101(j): 3.160, 17.195 101(l): 3.160 102: 3.160 103: 3.160, 8.75 105(b): 3.170 105(c): 3.170 105(d): 3.170, 3.225 105(f): 3.170, 3.225 105(g): 3.225 105(h): 3.170 105(j): 3.170 105(k): 3.170 105(l): 3.170, 3.225 105(m): 3.170 106: 3.225, 14.80 107: 3.225 108: 3.225 109: 3.225 110: 3.225 111: 3.225

cxvi Table of Statutes and Rules Legal Profession Uniform Conduct (Barristers) Rules 2015 — cont r 114: 10.30, 10.70 r 114(a): 10.95 r 114(b): 10.50 r 115: 10.50 r 116: 10.65 r 117: 10.65 r 118: 3.225 r 119: 3.225 r 120: 3.225, 6.20 r 124: 17.10

Legal Profession Uniform Continuing Professional Development (Barristers) Rules 2015: 4.30 Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015: 4.30 Legal Profession Uniform General Rules 2015: 2.160 r 5(1): 15.30 r 42: 9.70 r 72A(2): 14.60

Legal Profession Uniform Law: 1.100 s 5(1): 5.355 s 6(1): 2.140, 14.50, 15.70, 20.170, 25.100, 25.165 s 8: 4.125 s 9: 2.140 s 10(1): 2.140 s 16(1)(a): 2.30 s 17: 2.30 s 17(2)(b): 2.60, 2.125 s 19: 2.30 s 19(3): 2.30 s 21: 2.20 s 23: 5.355 s 25: 17.10 s 26: 5.355 s 33: 20.170 s 34(1): 20.170 s 38: 20.170 s 38(2): 11.145 s 43: 2.155 s 45(1)(b): 2.155 s 58: 2.160 ss 60 to 62: 2.160 s 62(1): 2.160 s 62(3): 2.160 s 69(2): 2.160 s 69(3): 2.160 s 69(4): 2.160 s 88: 24.15, 25.165 s 91: 24.15 s 103: 20.170 s 105: 20.170

s 111: 20.170 s 128(1): 9.10, 9.25 s 129(1): 9.10 s 129(2)(a): 9.25 s 129(2)(b): 9.20 s 129(2)(c): 9.20 s 136: 9.05 s 137: 9.05 ss 138 to 140: 9.65 s 139: 9.10 s 140(1): 9.10 s 144(1): 9.65 s 144(2): 9.75 s 144(2)(a): 16.45 s 144(2)(b): 9.70 s 144(2)(c): 9.65 s 146: 9.45, 9.80 s 147: 9.35 s 147(3): 9.60 s 147(4): 9.60 s 148: 9.50 s 154: 9.55 s 154(2): 24.15, 25.50 s 155(1): 9.90 s 159(1): 9.90 s 159(2): 9.95 s 159(3): 9.95 s 165(2): 9.95 s 169(2)(b): 9.80 s 170: 14.140 s 170(1): 14.55, 14.165 s 170(2): 14.55, 14.165 s 171(1): 14.50, 15.55 s 171(1)(a): 5.80 s 171(2)(b): 5.80 s 172(2): 14.165, 15.60, 15.70, 25.70 s 172(4): 14.165, 15.15, 25.80 s 173: 14.05 s 174(1): 14.25, 14.45 s 174(1)(b): 14.40 s 174(2): 14.25 s 174(2)(b): 14.25, 14.40 s 174(3): 14.35 s 174(4): 14.55 s 174(5): 14.55 s 174(6): 14.35 s 174(7): 14.55 s 174(8): 14.55 s 175: 14.30 s 176: 14.50 s 177: 14.65 s 178: 14.60 s 180(1): 14.75 s 180(2): 14.90 s 180(3): 14.80, 14.95 s 180(4): 15.65 s 181(1): 14.140

Table of Statutes and Rules cxvii Legal Profession Uniform Law — cont s 181(2)(a): 14.35 s 181(2)(b): 14.80, 14.140 s 181(2) to181(4): 14.140 s 181(5): 14.140 s 181(7): 14.125 s 182(1): 14.145 s 182(2): 14.145 s 182(2)(a): 14.145 s 182(3): 14.145 s 183: 14.135 s 184: 14.80 s 185(1): 14.90, 14.100 s 185(2): 14.100 s 185(3): 14.100 s 185(4): 14.100 s 190: 5.80, 14.20 s 192: 14.25 s 193(1): 3.210 s 194(1): 15.30 s 194(2)(b): 15.30, 15.40 s 198(1): 15.55 s 198(3): 15.55 s 198(4): 15.55 s 198(7): 15.55 s 199(2)(a): 15.65 s 199(2)(b): 15.60 s 200(1): 15.60, 15.70 s 200(2): 15.60 s 201: 15.80 s 202: 25.75 s 204: 15.75 s 206: 15.110 s 219: 9.125 s 221: 9.125 s 230: 9.125 s 233: 9.125 s 246: 9.125 s 256(1): 24.65 s 258(1)(a): 20.170 s 264: 22.25, 23.10, 24.10 s 266(1): 24.60 s 266(2): 24.60 s 267(1): 24.60 s 267(2): 24.60 s 268(1): 24.60 s 269(1): 24.60 s 269(2): 24.60 s 270: 24.60 s 271: 24.60 s 276: 24.65 s 277: 24.65 s 278: 24.65 s 279: 24.65 s 280: 24.65 s 281: 24.65 s 283: 24.70 s 286: 24.75

s 287: 15.95, 24.75 s 288: 15.95 s 288(2): 24.75 s 288(4): 24.75 s 290(1): 24.75 s 290(2): 24.75 s 291: 15.95 s 291(1): 24.80 s 291(2): 24.80 s 292: 24.80 s 296: 23.90 s 298: 23.90 s 298(1)(f): 20.220 s 298(b): 22.50 s 298(d): 25.70 s 298(e): 25.100, 25.165 s 299(1): 24.70 s 300(1): 24.85 s 301(1): 23.65 s 301(3): 23.65 s 302(1): 24.85 s 302(6): 24.85 s 303(1): 23.75 s 303(2): 23.75 s 303(3): 23.75 s 308(4): 16.85 s 314: 24.85 s 314(3): 24.85 s 319: 23.55 s 321: 10.90 s 326: 9.100 s 327(2)(a): 9.110 s 327(2)(c): 9.105 s 336: 9.115 s 340(1)(c): 9.115 s 341: 9.105 ss 345 to 347: 9.105 s 419: 1.45 s 427: 1.115 s 467: 23.55 s 472(1)(b): 16.75 s 497: 23.90 r 11: 20.80 r 32: 20.145 r 107(3): 20.105 Ch 6: 9.100 Ch 7: 10.90, 23.60 Pt 3.4: 2.160 Pt 3.5, Div 4, Subdiv 2: 20.220 Pt 3.7, Div 2: 20.170 Pt 4.2, Div 4: 9.90 Pt 4.5: 9.125 Pt 5.5: 23.35 Sch 1, cl 2(1): 1.45 Sch 4, cl 18(3): 14.55

Legal Profession Uniform Law Application Act 2014: 1.100

cxviii

Table of Statutes and Rules

Legal Profession Uniform Law Application Act 2014 — cont s 10(1): 2.30, 24.60 s 32: 1.45 s 35: 1.45 s 51: 24.60 s 97: 15.85 s 99(1): 24.80 s 99(4): 24.80 s 99(5): 24.80 s 150: 23.80 Pt 3: 1.110 Pt 3, Div 2: 1.45 Pt 3, Div 3: 24.60 Pt 5, Div 1: 9.65

Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 Glossary: 6.130, 7.35, 8.190, 8.195, 21.170 r 2.2: 1.125 r 2.3: 1.125 r 3.1: 10.60, 17.10 r 4.1.1: 4.05 r 4.1.2: 21.140 r 4.1.3: 3.180 r 5.1: 19.05 r 6.1: 22.05 r 6.2: 22.65 r 7.1: 4.05 r 7.2: 4.135 r 8.1: 5.20 r 9.1: 10.15, 10.30 r 9.2.1: 10.50 r 9.2.2: 10.70 r 9.2.3: 10.65 r 9.2.4: 10.105 r 9.2.5: 10.105 r 9.2.6: 10.90 r 10.2: 8.75 r 10.2.1: 8.45 r 10.2.2: 8.230 r 11: 7.40 r 11.1: 7.30 r 11.2: 7.30 r 11.3: 7.30 r 11.4: 7.30 r 12.1: 6.05 r 12.2: 6.125 r 12.3: 6.60 r 12.4.1: 14.70 r 12.4.2: 6.130 r 12.4.3: 6.110 r 12.4.4: 20.70 r 13.1: 3.200 r 13.2: 3.205 r 13.3: 3.205 r 14.1: 16.60 r 14.2: 3.235

r 15.1: 16.70 r 16.1: 3.235 rr 17.1 to 17.3: 17.40 r 17.3: 18.25 r 17.4: 17.65 r 18.1: 17.190 r 19.1: 17.95 r 19.2: 17.100 r 19.3: 17.105 r 19.4: 17.120 r 19.5: 17.120 r 19.6: 17.85 r 19.7: 17.85 r 19.8: 17.85 r 19.9: 17.85 r 19.10: 18.120 r 19.11: 17.100 r 19.12: 17.105 r 20.1: 17.130 r 20.2: 18.105 r 20.2.2: 18.105 rr 20.2.2(iii) to (v): 18.105 r 20.3: 17.140 r 20.3.3: 10.125 r 21.1: 17.225 r 21.2: 17.225 r 21.3: 17.220 r 21.4: 17.230 r 21.5: 17.230 r 21.6: 17.230 r 21.7: 17.240 r 21.8: 17.225 r 22: 21.155 r 22.1: 21.155 r 22.3: 21.215 r 22.4: 21.280 r 22.5: 17.190 r 22.6: 17.190 r 22.7: 17.190 r 22.8: 17.250 r 23: 3.220 r 23.1: 17.175 r 23.2: 17.175 r 24.1.1: 17.160 r 24.1.2: 17.165 r 24.2: 17.165 r 25.1: 17.155 r 25.2: 17.155 r 26.1: 17.170 r 27: 17.45 r 28.1: 17.205 r 29.1: 18.10 r 29.2: 18.20 r 29.3: 18.30 r 29.4: 18.10 r 29.5: 18.55, 18.60 r 29.6: 18.60

Table of Statutes and Rules cxix Legal Profession Uniform Law Australian Solicitors’ Conduct Rules 2015 — cont r 29.7: 18.75 r 29.7(i): 18.80 r 29.7(ii): 18.80 r 29.7(iii): 18.80 r 29.7(iv): 18.80 r 29.8: 18.60 r 29.10: 18.65 r 29.11: 18.65 r 29.12: 18.90 r 30.1: 21.215 r 31.1: 11.290 r 31.2: 11.290 r 32.1: 21.195 r 33.1.1: 21.265 r 33.1.2: 21.265 r 33.1.3: 21.265 r 33.1.4: 21.265 r 34.1.1: 21.220 r 34.1.2: 21.225 r 34.2: 20.55 r 35.1: 21.95 r 36.1: 20.05, 20.15 r 36.2: 20.40 r 37: 4.05 r 37.1: 20.205 r 38.2: 13.40 r 39.1: 20.90 r 40.1: 20.125 r 42.1: 21.170 r 43: 24.30 r 46: 20.70

Legal Profession Uniform Legal Practice (Solicitors) Rules 2015: 1.120, 5.125, 19.85 r r r r r r r r

11: 5.125 13: 22.55 37: 17.230 109(b): 19.85 109(c): 19.85 156: 18.115 165: 3.45 168 to 171: 3.45

Limitation of Actions Act 1958 s 5(1)(a): 15.20

Mutual Recognition (Vic) Act 1993: 2.50 Partnership Act 1958 s 14: 20.205, 22.75 s 16: 20.205, 22.75

Professional Conduct and Practice Rules 2005: 1.120, 14.140 r 2A.1: 14.140 r 2A.2(a) to (c): 14.140 r 2A.2(d): 14.140

r r r r r r

2A3: 14.140 8.5: 7.150, 7.160 8.6: 7.155, 7.160 8.8: 7.155 30.1: 24.15 31.1: 24.15

Professional Standards Act 2003: 5.355 s 59(2): 5.170 s 59(3): 5.170 s 59(4): 5.170

Protected Disclosure Act 2012: 10.135, 13.25 Sale of Land Act 1962 s s s s s

29A(1): 7.135 29W: 7.135 29W(7): 7.135 32: 2.145 33: 7.135

Supreme Court Act 1986 s 17D(1)(ea): 15.40

Supreme Court (General Civil Procedure) Rules 2015 r 50.07: 4.135, 20.180 r 63.37(2): 15.85 r 63.57: 15.85 Form 44A, cl 1: 17.175

Trustee Companies Act 1984: 7.155 Unclaimed Money Act 2008: 9.65 Victorian Civil and Administrative Tribunal Act 1998: 24.85 s s s s

62(1): 23.65 101: 23.65 143: 23.55 148: 24.85

Wills Act 1997 s 31: 21.65 s 32: 21.65

Wrongs Act 1958 s 26(1): 4.155 s 32(2): 14.120 s 51(1): 4.165 s 51(3): 4.165 s 58: 5.190 s 59(1): 5.170 Pt IVAA: 4.160

Western Australia Barristers’ Rules: 1.120 r 5(a): 17.10

cxx Table of Statutes and Rules Barristers’ Rules — cont r 10: 1.130 r 13(a): 20.95 r 13(b): 20.95 r 14: 20.95 r 15: 3.45 r 16: 20.135 r 17: 3.45 r 21: 3.150 r 22: 3.170 r 23: 1.55 r 24B: 3.45 r 25: 17.10 r 26: 17.95 r 27: 17.100 r 28: 17.105 r 29: 17.120 r 30: 17.120 r 31: 17.85 r 32: 17.85 r 33: 17.85 r 34: 17.85 r 35: 18.120 r 36: 17.100 r 37: 4.05 r 40: 18.125 rr 41 to 43: 17.40 r 43: 18.25 r 44: 17.190 r 46: 6.125 r 47: 6.60 r 48: 21.155 r 49: 21.155 r 50: 21.215 r 51(a): 21.265 r 51(b): 21.265 r 51(c): 21.265 r 52: 21.280 r 53: 17.190 r 54: 17.190 r 55: 17.190 r 56: 17.250 r 57: 17.250 r 58: 17.250 r 59: 17.225 r 60: 17.225 r 61: 17.225 r 62: 17.225 r 63: 17.220, 17.225 r 64: 17.230 r 65: 17.230 r 66: 17.230 r 67: 17.240 r 68(a): 17.160 r 68(b): 17.165 r 69: 17.165 r 70: 17.155 r 71: 17.155

r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

72: 17.170 73: 17.175 74: 17.175 75: 17.205 76: 17.205 77: 17.205 78: 17.130 79: 18.105 79(e) to (g): 18.105 80: 17.140 80(c): 10.125 81: 10.105 82: 18.10 83: 18.20 84: 18.30 85: 18.10 86: 18.55, 18.60 87: 18.60 88(a): 18.75 88(b): 18.75 88(c)(i): 18.80 88(c)(ii): 18.80 88(c)(iv): 18.80 88(c)(iii): 18.80 88A: 18.80 89: 18.60 91: 18.65 92: 18.65 93: 18.90 95(a): 3.160 95(b): 3.160 95(d): 3.160, 17.45 95(e): 3.160, 17.45 95(f): 3.160 95(g): 3.160 95(h): 3.160 95(i): 3.160 95(j): 3.160, 17.195 95(l): 3.160 95(m): 3.160, 8.165 96: 3.160 97: 3.160, 8.75 99(b): 3.170 99(c): 3.170 99(d): 3.170, 3.225 99(f): 3.170, 3.225 99(g): 3.225 99(h): 3.170 99(j): 3.170 99(k): 3.170 99(l): 3.170, 3.225 99(m): 3.170 100: 3.225, 14.80 101: 3.225 102: 3.225 103: 3.225 104: 3.225

Table of Statutes and Rules cxxi Barristers’ Rules — cont r 105: 3.225 r 108: 10.30, 10.70 r 108(a): 10.95 r 108(b): 10.50 r 109: 10.50 r 110: 10.65 r 111: 10.65 r 112: 3.225 r 113: 3.225 r 114: 3.225, 6.20 r 116: 17.10 r 117: 21.170 r 119: 21.170

Civil Liability Act 2002: 5.170 s 5C(1): 4.165 s 5C(3): 4.165 s 5PB: 5.170 s 17(1): 20.50 s 17(3): 20.50 s 19(1): 20.55 s 20(1): 20.70 Pt 1F: 4.160

Competition Policy Reform (Western Australia) Act 1996: 1.55 Corruption, Crime and Misconduct Act 2003 s 171: 17.145

Criminal Code s s s s s

132: 17.145 529: 6.120 531: 6.120 546(1): 6.120 689(1): 4.200

Criminal Procedure Act 2004 ss 95(6) to (9): 18.55

Ethical and Practice Guidelines cl cl cl cl cl cl cl cl cl cl cl cl cl cl cl cl cl

3.3: 21.225 5.4: 7.25 5.7: 7.50 5.8: 7.50 7.9: 17.125 7.13: 17.235 8.6: 21.165 8.10: 21.160 8.11: 21.160 9: 20.175 9.28: 20.175 9.30: 20.180 9.31: 20.180 9.35: 20.190 12.5: 20.45 12.6: 20.45 12.7: 20.35

cl cl cl cl cl cl cl

12.8: 20.20 12.9: 20.20, 20.35 14.7: 3.235 15.1.2: 10.175 16: 10.155 16.4.6: 10.155 17: 10.155

Fair Trading Act 1987 (repealed) s 4(1): 5.15

Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 s 4(1): 4.155

Legal Aid Commission Act 1976 s 50A: 13.110 s 51: 13.110 s 64: 13.110

Legal Practice Act 2003 Pt 8: 2.160

Legal Profession Act 2008: 1.100 s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

3: 14.50, 15.40, 25.100, 25.165 4: 2.140 5: 2.140 5(1): 5.355 8(1): 2.75 8(1)(a): 2.20 8(1)(c): 2.60 8(1)(m): 2.80 12: 2.140 13: 20.80 22: 2.20 23: 2.20 26(2): 2.30 29: 17.10 34: 5.355 37: 5.355 40: 5.350 62: 24.15, 25.165 68: 2.155 69: 2.155 100: 20.170 105(1): 20.170 105(2): 20.170 108(1): 20.170 115: 20.170 116(1): 20.170 131(1): 20.160 132(1): 20.160 134(1): 20.160 134(2): 20.160 136(b): 20.160 136(d): 20.160 137: 20.160 138: 20.160 141: 20.160

cxxii

Table of Statutes and Rules

Legal Profession Act 2008 — cont s 142: 20.160 s 143(1): 20.160 s 149: 2.160 s 152: 2.160 s 154(1): 2.160 s 154(2): 2.160 s 154(3): 2.160 s 157: 20.80 s 167: 2.160 s 171: 2.160 s 205(1): 9.10, 9.25 s 206(1): 9.20 s 206(2): 9.20 s 214: 9.05 s 215: 9.05 s 217(1): 9.65 s 217(2): 9.65 s 217(4): 9.65 ss 217 to 219: 9.65 s 218(1): 9.10 s 219(1): 9.65 s 219(2): 9.65 s 219(4): 9.65 s 220(1): 9.10 s 223: 9.80 s 224: 9.45 s 225(1)(a): 9.75, 16.45 s 225(1)(b): 9.70 s 225(1)(c): 9.65 s 226(1): 9.50 s 227: 9.55 s 227(2): 24.15, 25.50 s 228: 9.35 s 229(1): 9.60 s 229(2): 9.60 s 237(1): 9.90 s 240: 9.90 s 241: 9.90 s 241(2): 9.95 s 243(1)(b): 9.80 s 251: 14.140, 15.30, 15.65 s 253(1): 14.50 s 253(1)(a): 15.55 s 260: 14.20 s 261: 14.30 s 262(1): 14.35, 14.45 s 262(2): 14.45 s 263: 14.55 s 264: 14.65 s 265: 14.145 s 266(1)(a): 14.35 s 266(1)(b): 14.35 s 266(2): 14.35 s 267: 5.80, 14.20 s 268: 14.60 s 269: 5.80, 14.20 s 270: 14.50

s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s s

271: 14.10, 15.05 272: 15.110 280(2): 15.70 282(1): 14.75 282(2): 14.90 282(3): 14.80, 14.95 282(5): 15.65 283(1): 14.140 283(2): 14.125 283(3)(a): 14.80, 14.140 283(3)(c)(i): 14.80 283(3)(c) to (e): 14.140 283(4): 14.140 283(5): 14.140 284(1): 14.145 284(2): 14.145 284(3): 14.145 284(4): 14.145 284(4)(a): 14.145 285: 14.135 286: 14.80 287(1): 14.90, 14.100 287(2): 14.100 287(3): 14.100 287(4): 14.100 287(5): 14.100 288(2): 14.155 288(3): 14.160 288(5): 14.160 288(6): 14.160 288(8): 14.160 289(1): 15.30 289(4): 15.30 292(4): 15.30 292(5): 15.30 293(1): 3.210 295(2): 15.55 295(3): 15.55 295(6): 15.55 295(7): 15.55 295(8): 15.55 297(1) to (3): 15.55 298(b): 15.55 301(1): 15.60 301(2): 15.60 302(1): 15.65 303: 15.70 304(2): 15.75 307: 24.10, 25.75 308: 15.85 309: 15.65 334: 9.125 349: 9.125 350(3)(b): 9.125 351: 9.125 363: 9.125 371: 9.125

Table of Statutes and Rules cxxiii Legal Profession Act 2008 — cont s 402: 23.90 s 403: 23.90 s 404: 23.90 s 404(a): 22.50 s 404(b): 25.70 s 404(c): 25.100, 25.165 s 404(d): 20.220 s 410: 24.150 s 410(1): 24.150 s 415(1): 24.150 s 417: 24.150 s 421: 24.150 s 423: 24.150 s 424(1)(a): 24.155 s 424(1)(b): 24.155 s 424(1)(c): 24.155 s 425: 24.155 s 426: 24.155 s 426(2)(a): 23.80 s 428: 24.155 s 430(1): 23.55 s 434: 23.65 s 435(1): 24.155 s 436: 24.150 s 438(1): 24.160 s 439: 24.160 s 439(d): 23.80 s 440: 24.160 s 441: 24.160 s 444(2): 24.160 s 448(2)(b): 16.85 s 452: 23.80 s 465: 22.25, 23.10 s 467: 10.90 s 468: 10.90 s 469: 10.90 s 474: 9.100 s 475(2)(a): 9.110 s 475(2)(c): 9.105 s 485: 9.115 s 488(1)(c): 9.115 s 489: 9.105 ss 494 to 496: 9.105 s 536: 24.150 s 555(2): 24.150 s 557: 24.150 s 572: 24.150 s 573: 24.150 s 581: 1.115 s 591: 23.55 s 852: 1.115 Pt 5, Div 7: 20.220 Pt 7, Div 2: 20.170 Pt 7, Div 3: 20.160 Pt 8: 2.160 Pt 9, Div 3: 9.90 Pt 10, Div 8: 15.40

Pt Pt Pt Pt Pt Pt Pt

12: 12, 13, 13, 14: 16, 16,

9.125 Div 4: 9.65 Div 6: 10.90, 23.60 Div 11: 23.35 9.100 Div 1: 1.45 Div 2: 1.45, 24.150

Legal Profession (Admission) Rules 2009 r r r r

6: 2.10 7(2)(a): 2.15 7(2)(b): 2.15 7(2)(c): 2.15

Legal Profession Conduct Rules 2010: 1.120 r 3: 3.230, 6.130, 8.195, 17.10 r 5: 17.10 r 6(1)(a): 4.05 r 6(1)(b): 21.140 r 6(1)(c): 3.180, 4.20 r 6(2): 19.05 r 7(a): 5.20 r 7(b): 4.05 r 7 (c): 4.05 r 7(d): 4.05 r 7(e): 3.180 rr 7(e) to (g): 4.20 r 7(f): 3.180 r 7(g): 3.180 r 7(h): 4.100 r 8: 4.05 r 9(1): 10.30, 10.60 r 9.1: 10.60 r 9(2): 10.15 r 9(3)(a): 10.50 r 9(3)(b): 10.70 r 9(3)(c): 10.65 r 9(3)(d): 10.105 r 9(3)(e): 10.105 r 9(3)(f): 10.90 r 9(3)(g): 10.90 r 10(1): 4.05 r 10(2): 4.85 r 12: 6.05 r 13(1): 8.195 r 13(1)(b): 8.190 r 13(2): 8.75 r 13(3)(a): 8.45 r 13(3)(b): 8.230 r 14: 7.40 r 14(1): 7.30 r 14(2): 7.30 r 14(3): 7.30, 7.50 r 15(2): 6.05 r 15(4): 6.25 r 15(5)(a)(iii): 14.70 r 15(5)(b): 6.130 r 15(6): 6.60

cxxiv

Table of Statutes and Rules

Legal Profession Conduct Rules 2010 — cont r 15(7): 6.60 r 15(7A): 6.60 r 16(1): 4.05, 19.05 r 16.2: 19.05 r 16(4): 20.205 r 17(1): 21.170 r 17(3): 20.215 r 17(4): 20.215 r 17(5): 21.170 r 18(3): 14.160 r 18(5)(a): 20.70 r 18(5)(b): 6.115 r 19(2): 20.80 r 19.6: 17.85 r 20(1)(a): 20.95 r 20(1)(b): 20.100 r 20(1)(c): 20.95 r 20(2): 20.110 r 21(1): 13.05 r 22(2): 22.05 r 22(3): 22.05 r 23: 21.215 r 24: 11.290 r 25: 21.95 r 26: 21.100 r 27(1): 3.200 r 27(1)(a): 3.205 r 27(1)(c): 3.205 r 27(1)(d): 3.205 r 27(1)(e): 3.205 r 27(1)(f): 3.205 r 27(2): 3.205 r 27(3): 3.205 r 27(4): 3.205 r 28(2): 16.60 r 28(3): 3.235 r 28(4): 3.235 r 29: 16.70 r 30: 3.235 r 31: 3.220 r 32(1) to 32(3): 17.40 r 32(3): 18.25 r 33(1): 17.190 r 33(3): 3.160 r 34(1): 17.95 r 34(2): 17.100 r 34(3): 17.105 r 34(4): 17.120 r 34(5): 17.120 r 34(7): 17.85 r 34(8): 17.85 r 34(9): 17.85 r 34(10): 17.85 r 34(11): 17.105 r 34(12): 18.120 r 35(1): 17.130 r 35(2): 18.105

r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

35(3): 18.105 35(3)(c): 18.105 35(4): 17.140 35(4)(c): 10.125 36: 17.100 36(1): 17.250 36(2): 17.225 36(3): 17.225, 17.230 36(4): 17.220 36(5): 17.230 36(7): 17.230 36(8): 17.230 36(9): 17.240 36(10): 17.225 37(1): 21.155 37(2): 21.155 37(3): 21.215 37(4)(a): 21.265 37(4)(b): 21.265 37(4)(c): 21.265 37(4)(d): 21.265 37(5): 21.280 37(6): 17.190 37(7): 17.190 38(1): 17.175 38(2): 17.175 39: 4.05 39(1): 17.160 39(2): 17.165 39(3): 17.165 40(1): 17.155 40(2): 17.155 41: 17.170 42: 17.45 42(2): 17.55 43(2): 17.205 43(3): 17.205 44(2): 18.10 44(3): 18.55, 18.60 44(4): 18.20 44(5): 18.30 44(6): 18.10 44(7): 18.60 44(9): 18.65 44(10): 18.65 44(11): 18.90 44(12): 18.30 45: 20.70 45(1): 20.05, 20.15 45(1)(e): 20.30 45(2): 20.40 46: 20.90 47: 20.125 48(1): 19.85 48(2): 19.85 50: 24.30 93(e): 18.90

Table of Statutes and Rules cxxv Legal Profession Conduct Rules 2010 — cont Sch 1: 3.160

Legal Profession Regulations 2009 r 60: r 61: r 65: Pt 7,

9.40 9.40 9.70 Div 3: 9.35

Legal Profession Rules 2009 Pt 2, Div 1: 4.30

Limitation Act 2005 s 13: 15.20 s 27(1): 4.180

Mutual Recognition (WA) Act 1995: 2.50 Partnership Act 1895 s 17: 20.205, 22.75 s 19: 20.205, 22.75

Professional Conduct Rules: 1.120 r 13.2: 5.150 Sch 6: 3.220

Professional Standards Act 1997: 5.355 Public Interest Disclosure Act 2003: 10.135, 13.25

Real Estate and Business Agents Act 1978 Pt 3: 20.115

Rules of the Supreme Court 1971 O O O O O O

1 r 4B: 11.275 1, r 4B: 17.245 4A, Div 2: 4.135, 20.180 66, r 55: 15.85 66, r 56: 15.85 84, r 7: 16.75

Settlement Agents Act 1981 Pt III: 1.25

State Administrative Tribunal Act 2004 s s s s s s

32(2): 23.65 39(1): 23.65 61: 23.65 87: 23.75 163: 23.55 164: 23.55

Unclaimed Money Act 1990: 9.65 Western Australian Barristers’ Rules: 1.120 r 58: 17.205

Wills Act 1970 s 50: 21.65

cxxvi

Table of Statutes and Rules

Canada Model Code of Professional Conduct: 1.140 r 3.1-1: 4.20 r 3.2-2, cmt [2]: 3.10 r 3.1-1, cmt [5]: 3.180 r 3.1-1, cmts [5], [6]: 3.180 r 3.1-1, cmt [9]: 5.245 r 3.1-1, cmt [10]: 5.150 r 3.2-1, cmt [11]: 6.140 r 3.2-4: 4.140 r 3.2-7: 19.05 r 3.2-7, cmt [1]: 19.15 r 3.2-8: 13.60 r 3.3-1: 10.30 r 3.3-1, cmt [8]: 10.150 r 3.3-3: 10.105 r 3.3-7: 10.45 r 3.4-2, cmt [4]: 7.85 r 3.4-8: 7.145 r 3.4-9: 7.145 r 3.4-11: 8.230 r 3.4-11, cmt [2]: 8.230 r 3.4-20: 8.230 r 3.4-23, cmt [2]: 8.255 r 3.7-2: 3.205 r 4.1-1, cmt [2]: 4.110 r 5.1-2A: 17.145 r 6.02(2): 21.160 r 7.1-3: 24.20 r 7.1-3, cmt [1]: 24.20 r 7.2-1, cmt [2]: 21.150 r 7.2-1, cmt [3]: 21.145 r 7.2-2: 21.215 r 7.2-3: 21.180 r 7.2-9: 21.275 r 7.2-8: 21.255 Ch I: 2.25 Ch III: 19.50

Canada – Ontario Access to Justice Act 2006 s 256(1): 1.35 Sch C: 1.25

Law Society Act 1990 s 1(8).5: 1.25

Hong Kong Hong Kong Solicitors’ Guide to Professional Conduct principle 4.01, cmt [3]: 14.40

principle principle principle principle principle principle principle principle principle principle

5.01, cmt [3]: 21.200 5.18, cmt [5]: 5.150 6.01, cmt [1]: 4.20 7.02, cmt [7]: 6.70 7.05, cmt [2]: 6.130 8.01, cmt [16]: 10.105, 10.115 11.03: 24.20 14.05: 22.20 14.05, cmt [1]: 22.20 14.05, cmt [2]: 22.20

New Zealand Companies Act 1955 s 237(1): 16.80

Companies Act 1993 s 263(1): 16.80

Fair Trading Act 1986 s 9: 20.75

Lawyers and Conveyancers Act 2006: 1.25, 20.170

Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 r r r r r r r r r r r r r r r r r r r r r r r r r r r r r r

1.2: 7.60 2.3: 17.215, 17.225 2.8: 24.20 2.9: 24.20 3.4: 4.85 3.5: 4.85 4: 3.155 5.6.4: 7.60 5.6.5: 7.60 5.7: 6.145 5.7.1: 6.145 7.3: 5.80 7.4: 5.95 7.5: 5.95 8.2(a): 10.105 8.2(b): 10.105 8.3: 10.120 8.04: 17.230 8.4(e): 10.65 8.4(f): 10.85 8.7.1(c): 8.85 8.7.3: 8.230 8.7.4: 8.230 8.7.5: 8.230 10.2.4: 21.245 10.8: 21.180 11.2(b): 20.55 12: 21.275 13.4: 4.135 13.9.2: 11.175

Table of Statutes and Rules cxxvii Lawyers and Conveyancers Act (Lawyers: Conduct and Client Care) Rules 2008 — cont r 16.7: 20.120 r 16.8: 20.120 r 16.9: 20.120

Passports Act 1992 s 33: 16.30

Rules of Professional Conduct for Barristers and Solicitors: 6.145 r r r r r r r r

1.01, cmt (3): 6.145 4.01, cmt (3): 20.35 4.04: 1.140 5.2: 19.50 6.07: 22.75 8.02: 17.240 8.05: 1.140 10.08: 17.180

Tax Administration Act 1994 ss 20B to 20G: 11.135

Singapore Legal Profession (Professional Conduct) Rules 1998 (superseded) s 31(1): 8.105

Legal Profession (Professional Conduct) Rules 2015: 1.140 r r r r r r r r r r

4: 1.140 5(2)(b): 5.80 5(4): 3.10 6(3)(a): 10.65 7(4): 21.185 8(2): 21.275 10(5): 19.50 21(2): 8.105 26(5)(g): 3.205 39(2): 20.70

United Kingdom Attorneys and Solicitors Act 1870 s 4: 14.155

Courts and Legal Services Act 1990 s 58: 14.120 s 58A: 14.120

Law Society of Scotland Practice Rules 2011: 1.140 r B1.13.4: 21.275

Legal Services Act 2007: 1.45, 20.170 Money Laundering Regulations 2007: 19.15

Proceeds of Crime Act 2002: 19.15 SRA Code of Conduct 2011: 1.140 IB(2.1) to IB(2.3): 21.170 IB(3.6): 7.85 IB(8.5): 20.60 IB(11.9): 20.85 IB(11.7): 21.275 O(1.16): 4.35 O(2.1) to O(2.6): 21.170 O(3.6)(c): 7.90 O(3.6)(d): 7.90 O(3.6)(e): 7.90 O(3.7): 7.85 O(8.3): 20.60 O(10.4): 24.20

SRA Disciplinary Procedure Rules 2011 App 3: 23.100

Solicitors’ Code of Conduct 2007 (superseded): 1.140

The Guide to the Professional Conduct of Solicitors r 4: 10.135 r 11: 17.180

United States Internal Revenue Code s 7525: 11.135

Model Rules of Professional Conduct: 1.140, 4.95 r 1.1: 3.180, 4.20 r 1.2(c): 4.95 r 1.2(d): 19.05, 19.50 r 1.4: 4.85, 5.80 r 1.5, cmt [5]: 14.115 r 1.6, cmt [14]: 10.45 r 1.6(b)(1): 10.110 r 1.6(b)(2): 10.110 r 1.6(b)(3): 10.110 r 1.6(b)(7): 10.45 r 1.6(c): 10.145 r 1.6(c), cmt [18]: 10.145 r 1.7: 7.60, 17.45 r 1.7, cmt [20]: 7.150 r 1.7, cmt [22]: 7.85 r 1.7, cmt [23]: 7.100 r 1.7(b): 7.90 r 1.8(j): 6.145 r 1.9: 17.45 r 1.10(a): 8.235 r 1.11, cmt [4]: 13.120 r 1.11, cmt [5]: 13.115 r 1.11(a): 13.120

cxxviii

Table of Statutes and Rules

Model Rules of Professional Conduct — cont r 1.11(c): 13.120 r 1.13(b): 13.60 r 1.13, cmt [3]: 13.60 r 1.13(c): 13.60 r 1.14(b): 3.10 r 1.18, cmt [2]: 8.270 r 1.18(b): 8.190 r 1.18(c): 8.190 r 2.1: 5.150 r 2.4: 20.175 r 2.4(b): 20.180 r 3.2: 17.245 r 3.3(a)(3): 17.130 r 3.3(a)(3), cmt [11]: 17.130 r 3.5(b): 17.190 r 3.7(a)(3): 17.55 r 3.7(b): 17.45 r 4.1(a), cmt [2]: 21.160 r 4.2, cmt [2]: 21.255 r 4.2, cmt [3]: 21.235 r 4.2, cmt [4]: 21.265 r 4.4, cmt [2]: 11.295 r 4.4(b): 11.290 r 5.3, cmt [3]: 20.210 r 5.3, cmt [6]: 20.210 r 6.1: 4.110, 4.125 r 6.1(b)(2): 4.100 r 7.1, cmt [3]: 20.35 r 7.2, cmt [5]: 20.70 r 7.3(a): 20.55, 20.60

r 7.3(b): 20.60 r 7.4(d): 20.40 r 8.3(a): 24.20

Restatement of the Law (3d) of the Law Governing Lawyers s s s s s s s s s s s s s s s s s s s

5(3): 24.20 5(3), cmt i: 24.25 14(1)(b): 3.60 35, cmts c, d: 14.115 35(1), cmt f(i): 14.125 35(1), cmt g: 14.125 35, cmt c: 14.115 66(2): 10.120 94(2): 19.50 94(3): 5.150 94, cmt e: 19.50 96, cmt b: 13.60 97, cmt c: 13.105 99(1), cmt d: 21.235, 21.265 99(2), cmt k: 21.245 101, cmt b: 13.70 109(1), cmt b: 17.200 116, cmt b: 17.165 123, cmt f: 8.255

Sarbanes-Oxley Act 2002: 13.60 15 17 17 17

USC § 7245: 13.60 CFR § 205: 13.60 CFR § 205.3(b)(1): 13.60 CFR § 205.3(d)(2): 13.60

PART I Introduction Chapter 1: The Concept of Professional Responsibility ........................................ 3 Chapter 2: Admission to Practice ........................................................................... 37 Chapter 3: The Lawyer–Client Relationship ........................................................ 73

Chapter 1

The Concept of Professional Responsibility [1.05] ETHICS ...................................................................................................................................... 3 [1.05] Concept(s) of ethics ........................................................................................................... 3 [1.10] Concept of legal ethics ...................................................................................................... 4 [1.15] Confluence between ethics and legal ethics .................................................................. 5 [1.20] PROFESSIONALISM ............................................................................................................... 6 [1.20] Law as a profession ........................................................................................................... 6 [1.25] Special skill and learning .................................................................................................. 7 [1.30] Public service ...................................................................................................................... 8 [1.40] Self-regulation or autonomy .......................................................................................... 12 [1.50] IMPACT ON THE PROFESSION OF CHANGES IN THE LEGAL LANDSCAPE .. 15 [1.55] Impact of competition law ............................................................................................. 15 [1.70] Impact of changes in societal attitudes and perceptions .......................................... 17 [1.90] SOURCES OF LAWYERS’ PROFESSIONAL RESPONSIBILITY .................................. 21 [1.95] General law ....................................................................................................................... 22 [1.100] Statute ............................................................................................................................... 22 [1.115] Professional rules ........................................................................................................... 25

ETHICS Concept(s) of “ethics”

[1.05] It has been, and remains, the practice to refer to issues of professional responsibility as “ethics”. Yet the term “ethics” has many and varied connotations and no precise and unequivocal meaning. “Ethics” means different things to different people. In its common usage, many equate ethics with morality.1 Yet morality, perhaps even more than ethics, is a difficult concept to define. In an age when many do not ascribe to homogenous principles on moral issues, morality has become a matter strictly for the individual. Many so-called rules of legal ethics, in any event, make little effort to define or explore the moral dimensions of legal practice.2 They may even prescribe conduct immoral by community standards. For 1 Some distinguish ethics from morality on the basis that “ethics” is the critical evaluation of moral beliefs and practices of a particular culture. In other words, “morals” describes what “ethics” studies. See Campbell, “Legal Ethics in General Practice – Commentary” in Legal Ethics (Legal Research Foundation, October 1994), p 59. 2 For example, the rules relating to advertising (see [20.05]–[20.50]), failing to respond to communications (see [25.85]), and the use of intemperate language (see [21.145]).

4

Lawyers’ Professional Responsibility

[1.10]

instance, the duty of confidentiality to a client may dictate non-disclosure of information in circumstances where the public would perceive the morally correct behaviour would be to disclose.3 Some locate ethics somewhere in between law and morality,4 while others tie it with a sense of honesty and integrity and so consider that persons who display “greater” honesty and integrity exhibit a “higher” standard of ethics than those who display lesser doses of these desirable attributes. But to speak of degrees of honesty or integrity is to devalue the absoluteness of those very concepts, for a person who is partially honest or of variable integrity can equally be branded as dishonest or lacking integrity. Some commentators resort to moral philosophy, adopting the concepts of teleological and deontological ethics.5 The best known teleological theory – utilitarianism – focuses on the consequences or results of a particular action as determinative of its “rightness” and thus the resolution of an ethical dilemma. That which engenders the greatest amount of favourable consequences – maximal utility – should prevail.6 Yet utilitarianism can justify action which may be objectively unethical, by the favourable consequence of that action. Many see the lawyer’s role in this light: the favourable consequence for the client justifies conduct that some may perceive as unethical. Deontologists instead maintain that the “right” action is independent of its consequences; “rightness” is to be assessed by reference to a system of rules that may need to be ranked hierarchically to ensure consistency.7 What is ethical is in no way influenced by social norms of particular societies (relativism) or by each individual (subjectivism). For example, the notion that lawyers must foster truth above all else exhibits a deontological flavour. Concept of “legal ethics”

[1.10] Although the phrase “legal ethics” is in common use, rarely is it explicitly associated with teleology, deontology or other ethical systems. It has been observed that “articulating the distinctions highlighted by moral philosophy will not lead to easy answers or eliminate the very real dilemmas that a lawyer faces”.8 The phrase “legal ethics”, moreover, is an oxymoron to the extent that “legal” implies 3 The American Lake Pleasant case, in which attorneys Armani and Belge failed to disclose the fact that their client had committed two other murders for which he had not been charged, is a striking example of this: see [10.100]. 4 For example, a leading American commentator on legal ethics defines ethics as “imperatives regarding the welfare of others that are recognised as binding upon a person’s conduct in some more immediate and binding sense than law and in some more general and impersonal sense than morals”: Hazard, Ethics in the Practice of Law (Yale University Press, 1978), p 1 (emphasis in original). 5 A concise discussion of the relevant theories in the context of “legal ethics” is found in Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 72–75. 6 For more detailed analyses of utilitarian ethics see Velasquez and Rostankowski (eds), Ethics: Theory and Practice (Prentice-Hall Inc, 1985), Ch 4; Sommers, Right and Wrong: Basic Readings in Ethics (Harcourt Brace Jovanovich, 1986), Ch 2. 7 Singer, Practical Ethics (Cambridge University Press, 1979), p 3. 8 Morgan and Rotunda, Problems and Materials on Professional Responsibility (4th ed, Foundation Press Inc, 1987), pp 18–19.

[1.15]

1 The Concept of Professional Responsibility

5

mandatory rules, whereas “ethics” for many connotes discretionary rules.9 In this latter sense, some use the term “ethics” to distinguish rules that are professionally binding on a lawyer (ethical rules) from rules that are legally binding (legal rules). But such a practice conveys the incorrect impressions that the ethical and legal rules are mutually exclusive, and that legal rules are more important than ethical rules. For these reasons, and also due to the many and varying connotations attached to the term “ethics”, in this book the phrase “professional responsibility” is generally used in place of the term “ethics”. The phrase serves to convey the notion that professionalism carries with it responsibility and duty. And it avoids the legitimate criticism that “[t]he rules governing the conduct and working practices of lawyers, which come within the rubric of what lawyers, judges and legislatures term ‘legal ethics’, generally have little to do with the social construct that is ethics in the proper sense”.10 Confluence between “ethics” and “legal ethics”

[1.15] The foregoing is not to suggest that issues of professional responsibility lack an ethical dimension; indeed, the opposite is true. Central to professional responsibility is honesty in members of the legal profession, a concept often viewed as the core of ethical behaviour, both within and outside the profession.11 It is reflected in copious statements by the courts, legislatures, regulatory bodies and the like, extolling the need for unwavering honesty in members of the profession. Unless lawyers display what has been judicially described as “the overriding duty of honesty that [they] owe to the Courts, their clients and to their fellow practitioners”,12 public and judicial confidence in the proper administration of justice will, it is reasoned, be undermined.13 9 Patterson, “An Essay on Teaching Professional Responsibility” (1999) 19 Northern Illinois U Law Rev 333 at 335. 10 Bagaric and Dimopoulos, “Legal Ethics is (Just) Normal Ethics: Towards a Coherent System of Legal Ethics” (2003) 3 QUTLJJ 367 at 368. Similar remarks have been made by other commentators: see, for example, Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 68 (“Most of what is called ‘legal ethics’ is really discourse on the law of professional regulation or self-congratulatory encomia on professional solidarity and tradition”); Shaffer, “The Legal Ethics of Radical Individualism” (1987) 65 Texas L Rev 963 at 963 (“Most of what American lawyers and law teachers call legal ethics is not ethics. Most of what is called legal ethics is similar to rules made by administrative agencies. It is regulatory. Its appeal is not to conscience, but to sanction”). 11 Cf the remarks of Sir Owen Dixon in a 1953 address to law students at the University of Melbourne: “[W]hen you speak of professional ethics you have in mind rather the habits and customs of the profession than any notions about honest dealing that you suppose to be peculiar to the profession. For common honesty is common honesty in every walk of life. The conception will not give way to the prejudices of any calling. The notions of proper conduct of ordinary men and women who have been denied the benefits of a course in moral philosophy are intuitive or instructive” (Jesting Pilate and Other Papers and Addresses (Law Book Co, 1965), p 129). 12 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 155 per Black CJ. 13 Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681 per Isaacs J (in the context of honesty with the court); Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 298 per Kitto J, at 301 per Taylor J.

6

Lawyers’ Professional Responsibility

[1.20]

To the extent that ethical behaviour, as generally understood, encompasses unselfishness and its allied call for self-restraint, it translates into the legal arena not only through the claims to status as a professional (with its attendant focus on public service: see [1.30], [1.35]), but in the strict application of fiduciary law in lawyers’ dealings with clients. Fiduciary duties aim to promote loyalty by lawyer to client (see [4.40]); to foster what has been described as “disinterested altruism”.14 The attendant duty to eschew conflicts of interest – between lawyers and client interests – highlights the unselfishness that fiduciary law promotes, especially as lawyers are arguably the only true professionals that attract the full force of fiduciary law. It also arguably evinces a public dimension, reflecting the broader role of members of the legal profession in fostering the objects and ideals of legal process.15 That unwavering honesty and client loyalty do not always coincide overlays the ethical dimensions of lawyers’ professional responsibility. As these ethical virtues may not infrequently conflict, part and parcel of a lawyer’s ethical decision-making process involves, like other ethical dilemmas, the need to prioritise competing ethical virtues. To this end, the “overriding” or “paramount” duty of the lawyer to the administration of justice (see [17.10]) serves as a yardstick for this ethical ordering, but does not always dictate an easily attainable (or palatable) solution. As such, legal practice will present the lawyer with challenges of a truly ethical nature.

PROFESSIONALISM Law as a profession

[1.20] Although no single definition of a profession attracts universal acceptance, three core attributes commonly surface: special skill and learning;16 public service as the principal goal; and autonomy or self-regulation. Each is discussed below. Subsidiary hallmarks include a unique jargon and collegiality. Legal practice has long been described as a profession, antedating the scholarly debate over the meaning of a profession.17 Scholars traditionally premised conceptions of a profession on the characteristics of those occupations and callings already perceived 14 Birks, “The Content of Fiduciary Obligation” (2000) 34 Israel L Rev 3 at 12–22. 15 See Woolley, “The Lawyer as Fiduciary: Defining Private Law Duties in Public Law Relations” (2015) 65 UTLJ 285. 16 Skill and learning, in particular, figure prominently in judicial attempts to define or describe a profession: see, for example, Commissioners of Inland Revenue v Maxse [1919] 1 KB 647 at 657 per Scrutton LJ (the term profession “involves the idea of an occupation requiring either purely intellectual skill, or of manual skill controlled, as in painting or sculpture, or surgery, by the intellectual skill of the operator, as distinguished from an occupation which is substantially the production or sale or arrangements for the production or sale of commodities”); Currie v Commissioners of Inland Revenue [1921] 2 KB 332 at 343 per Scrutton LJ (the man is “a member of an organized professional body with a recognized standard of ability enforced before he can enter it and a recognized standard of conduct enforced while he is practising it”); Carr v Inland Revenue Commissioners [1944] 2 All ER 163 at 166 per du Parcq LJ (“one must see that he has some special skill of ability or some special qualifications derived from training or experience”); Brundage, The Medieval Origins of the Legal Profession (University of Chicago Press, 2008), pp 489–491. 17 See generally Brundage, The Medieval Origins of the Legal Profession (University of Chicago Press, 2008).

[1.25]

1 The Concept of Professional Responsibility

7

as professions; medicine, law and theology being prime examples. This process of observation, as opposed to induction, has produced important ramifications. It has opened the door to other occupations and callings, for reasons of status amongst others, to lay claim to being a profession.18 But it has also prompted some to reassess whether the practice of law continues to deserve the status and privileges that are part of professionalism.19 In fact, each of the above attributes of a profession has been assailed in the context of the practice of law, much of this attack being launched within the last three decades or so. Special skill and learning

[1.25] Entry to the legal profession has been, and continues to be, restricted to those who fulfil certain academic and practical requirements: see [2.05]–[2.15]. This serves to vest in lawyers a virtual monopoly on legal work, as persons who do not meet these requirements are prohibited by statute from carrying out legal work: see [2.140]. Entry restrictions on the practice of law, it is reasoned, function to foster public confidence that those who practise law are worthy of that confidence by virtue of their mastery of a subject beyond the understanding of the general public.20 Yet driven in part by concerns over the high cost of legal services, and associated impediments to access to justice, calls have surfaced to deprive the legal profession of its monopoly on legal work by permitting others to carry out legal tasks of a “routine” or “simple” nature.21 The (then) Trade Practices Commission in a 1994 report concluded that the profession was beset by restrictive practices that prevented vigorous competition, recommending that some areas of legal practice be opened up to appropriately trained non-lawyers, including conveyancing, taxation, wills and probate, simple incorporations, uncontested divorce, simple civil claims and welfare advocacy.22 These recommendations were reiterated in 2014 in a report issued by the Productivity Commission.23 The foregoing has served to herald that the days of the profession’s monopoly on legal work may well be in the past. Now most Australian jurisdictions empower non-lawyer conveyancers to perform certain conveyancing services for reward, subject to a licensing regime established by statute.24 Taxation advice (and not only 18 Carr v Inland Revenue Commissioners [1944] 2 All ER 163 at 167 per du Parcq LJ (“There are professions to-day which nobody would have considered to be professions in times past”). 19 See, for example, Susskind, The End of Lawyers? Rethinking the Nature of Legal Services (OUP, 2008), Ch 2; Morgan, The Vanishing American Lawyer (OUP, 2010), Ch 2. 20 Cornall v Nagle [1995] 2 VR 188 at 209–210 per JD Phillips J. 21 Cf Rhode, “Professionalism in Perspective: Alternative Approaches to Nonlawyer Practice” (1996) 22 NYU Rev L & Soc Change 701. 22 Trade Practices Commission, Study of the Professions: Legal (Final Report, March 1994). 23 Productivity Commission, Access to Justice Arrangements (Inquiry Report Overview, No 72, 5 September 2014), p 21. 24 Conveyancers Licensing Act 2003 (NSW); Agents Licensing Act (NT), s 5 (applies to, inter alia, conveyancing agents); Conveyancers Act 1994 (SA); Conveyancing Act 2004 (Tas); Conveyancers Act 2006 (Vic); Settlement Agents Act 1981 (WA), Pt III. As to the history of conveyancers in Australia see

8

Lawyers’ Professional Responsibility

[1.30]

in the context of compliance) falls heavily within the accountants’ domain. Indeed, statute requires a person to be a registered tax agent in order to provide a “tax agent service”.25 There have been similar calls,26 and a yielding to corresponding pressures elsewhere. For instance, under the Legal Services Act 1997 (UK), the Institute of Chartered Accountants of England and Wales can now issue licences to enable its members to undertake probate work,27 thereby becoming the first non-legal body in the United Kingdom to actually regulate legal services. In 2007 the Canadian province of Ontario licensed paralegals to assist clients there with small claims matters, traffic offences, landlord-tenant disputes, administrative matters and minor criminal offences.28 And five years later, in an initiative that has attracted interest from other States in the United States, Washington State introduced a regime to qualify and licence non-lawyer “Legal Technicians” to provide limited legal advice on domestic relations.29 Public service

[1.30] A profession is different from other occupations, it has been said, because “it places clients in a position of trust because they typically cannot evaluate the quality of service”, which in turn “presupposes that the practitioner’s self-interest is overbalanced by devotion to serving both the client’s interest and the public good”.30 The distinction between a profession and a trade, business or occupation has, to this end frequently been phrased in terms of public service. Street CJ made the point as follows in Re Foster:31 Sande v Registrar, Supreme Court of Queensland (1996) 64 FCR 123 at 135–145 per Lockhart J. See also Lawyers and Conveyancers Act 2006 (NZ), which creates a new profession of conveyancing practitioners to carry out conveyancing work in competition with lawyers, and applies essentially the same regulatory scheme to both. 25 Tax Agent Services Act 2009 (Cth), s 50-5 (a “tax agent service” being defined in s 90-5). See further Marks, “Getting the Right Advice – Lawyer or Tax Agent?” (2013) 87 (May) LIJ 34. 26 See, for example, Levin, “The Monopoly Myth and Other Tales About the Superiority of Lawyers” (2014) 82 Fordham L Rev 2611; Rigertas, “The Legal Profession’s Monopoly: Failing to Protect Consumers” (2014) 82 Fordham L Rev 2683. 27 Legal Services Act 1997 (UK), Sch 5, cl 2A. 28 Law Society Act 1990 (Ont), s 1(8).5 (as amended by the Access to Justice Act 2006 (Ont), Sch C). 29 See Cooper, “Access to Justice Without Lawyers” (2014) 47 Akron L Rev 205 at 217–221. 30 Re Seare (2013) 493 BR 158 at 182 (Bkrtcy Ct, Nevada), citing from American Bar Association, “‘… In the Spirit of Public Service’: A Blueprint for Rekindling of Lawyer Professionalism” (1986), p 10. 31 Re Foster (1950) 50 SR (NSW) 149 at 151, remarks endorsed by Daubney J in Legal Services Commissioner v Walter [2011] QSC 132 at [19]. See also Pound, The Lawyer from Antiquity to Modern Times (West Publishing Co, 1953), p 5 (“The term [‘profession’] refers to a group of men pursuing a learned art as a common calling in the spirit of public service – no less a public service because it may incidentally be a means of livelihood. Pursuit of the learned art in the spirit of a public service is the primary purpose. Gaining a livelihood is incidental, whereas in a business or trade it is the entire purpose”); Shapero v Kentucky Bar Association (1988) 486 US 466 at 488 per O’Connor J (“One distinguishing feature of any profession, unlike other occupations that may be equally respectable, is that membership entails an ethical obligation to temper one’s selfish pursuit of economic success by adhering to standards of conduct that could not be enforced either by legal fiat or through the discipline of the market”).

[1.35]

1 The Concept of Professional Responsibility

9

A trade or business is an occupation or calling in which the primary object is the pursuit of pecuniary gain. Honesty and honourable dealing are, of course, expected from every man, whether he be engaged in professional practice or in any other gainful occupation. But in a profession, pecuniary success is not the only goal. Service is the ideal, and the earning of remuneration must always be subservient to this main purpose.

The ideal of public service as a hallmark of professionalism was equally well captured almost half a century later by Sir Daryl Dawson, speaking extrajudicially, when he said that “it was the subordination of personal aims and ambitions to the services of a particular discipline and the promotion of its function in the community which marked out a profession”.32 Yet in that speech, his Honour made cutting remarks regarding norms of legal practice in Australia, their thrust targeting the transition from what he termed “trustee professionalism” (the use of knowledge in the service of client or the community) to “expert professionalism” (the marketing of expertise per se), and its implications for the ideal of public service. He elaborated the point as follows:33 Accessibility, efficiency and cost are nowadays important considerations in the provision of legal services and they are properly at the forefront of any scrutiny of the legal profession. Nevertheless, the new emphasis upon the marketplace and marketing techniques is not just a shift in language … It is the shift from social trustee professionalism to expert professionalism which explains why the practice of a profession is now regarded as a commercial activity, albeit a commercial activity of a somewhat special kind. Thus, in the law, activities which were previously regarded as incompatible with professionalism are now seen as important in fostering the competition which is necessary in a free market. I am thinking of such things as advertising,34 contingency fees,35 the opening of the profession to para-legals and the conduct of multi-disciplinary practices.36

Similar concerns have been expressed in judgments, a Queensland judge remarking that, as lawyers do not operate in an unregulated market, “[i]f their legal obligations do not accord with fashionable theories of human behaviour in the marketplace they must be unfashionable with as much fortitude as they can muster”.37 Ironically, perhaps, the initiatives listed in the concluding sentence of the above extract from Sir Daryl Dawson have been promoted as benefiting clients, by reducing the cost of legal services and thus improving access to justice (see [1.25] as to paralegals; [14.115] as to contingency fees; [20.05], [20.10] as to advertising) and fostering greater efficiency (see [20.150]–[20.165] as to multi-disciplinary practices).

[1.35] The advent of the mega-firm is often cited as the single greatest threat to public service, and to the concept of professionalism in general. The (then) Dean of Yale Law School, in an influential book,38 expressed the concern that the best 32 Dawson, “The Legal Services Market” (1996) 5 JJA 147 at 148. 33 Dawson, “The Legal Services Market” (1996) 5 JJA 147 at 148 (footnotes supplied). 34 As to lawyer advertising see [20.05]–[20.50]. 35 As to contingency fees see [14.110]–[14.145]. 36 As to multi-disciplinary practices see [20.150]–[20.165]. 37 Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228 at 247 per Fryberg J. 38 Kronman, The Lost Lawyer: Failing Ideals of the Legal Profession (Harvard University Press, 1993).

10

Lawyers’ Professional Responsibility

[1.35]

graduates go to large firms where time charging39 is the rule coupled with a mercantile attitude that lets the client dictate the course of disputes (the latter, incidentally, being supported by Australian empirical research some 20 years later).40 This, inter alia, led him to conclude that in the hands of today’s lawyers the stewardship of the legal institutions in the United States has been poor, and that the profession of today will not bequeath the same profession of quality and integrity it inherited. These comments align with those of Sir Daryl Dawson cited earlier, and indeed other judges,41 that law today is more about business than the values of professionalism42 (although this should be read as suggesting that the profession has historically eschewed commercialism).43 That this has prompted calls for professionalism to be redefined for the purposes of large commercial practice shows how far the pendulum has swung. Informed by

39 The former Chief Justice of the United States Supreme Court, William Rehnquist, in an address to the Catholic University School of Law Commencement on 25 May 1996, pondered that “if a law firm simply counts the number of hours spent and sends a bill for that amount, perhaps there isn’t a great difference between the law firm, on the one hand, and the office supply vendor who simply counts the number of pencils furnished and sends a bill for that amount, on the other” (unpublished, but cited in Kirby, “Legal Professional Ethics in Times of Change” (1996) 14 Aust Bar Rev 170 at 175). As to the ethics of time charging see [14.205]. 40 See Bagust, “The Legal Profession and the Business of Law” (2013) 35 Syd L Rev 27 (where, stemming from interviews with 50 lawyers in ten large commercial firms in Melbourne, it was found that in the major corporate law firm environment, in particular, lawyers are increasingly acting as functionaries to the dictates of their (powerful) corporate clients). 41 See, for example, the following observation by a former Chief Justice of United States Supreme Court: “[T]he practice of law has always been a subtle blend between a ‘calling’ such as the ministry, where compensation is all but disregarded, and the selling of a product, where compensation is all important. The movement over the past twenty-five years has been to increase the emphasis on compensation – to make the practice of law more like a business” (Rehnquist, “Dedicatory Address: The Legal Profession Today” (1987) 62 Ind LJ 151 at 157). These laments are not new, even though the “business-like” aspect of practice is often heralded as a recent phenomenon. For instance, Harlan Stone, before his appointment as Chief Justice of the United States Supreme Court, lamented that the increased demand of business and finance for the best lawyers has “[a]t its worst … made the learned profession of an earlier day the obsequious servant of business, and tainted it with the morals and manners of the market place in its most anti-social manifestations”: Stone, “The Public Influence of the Bar” (1934) 48 Harv L Rev 1 at 7. See also Pound, The Lawyer from Antiquity to Modern Times (West Publishing Co, 1953), p 354. 42 At the same time, though, at least in the United States, where several large law firms have gone bankrupt, or significantly downsized, in the wake of the Global Financial Crisis, it has been argued that allowing the market a free hand in this regard may ultimately reveal the large law firm to be a precarious business model: see Ribstein, “The Death of Big Law” [2010] Wis L Rev 749. 43 See Allsop, “Professionalism and Commercialism: Conflict or Harmony in Modern Legal Practice?” (2010) 84 ALJ 765 at 769 (“One needs to be careful with terminology and language: ‘professionalism – good; commercialism – bad’. Such a mantra is not only misleading, but it is dangerous. The practice of law and an acute appreciation of commercial enterprise have always been intimately related”).

[1.35]

1 The Concept of Professional Responsibility

11

the observation that “the idea of a unified and homogenous solicitors profession is past its sell by date”,44 the following comments by an English commentator deserve quotation:45 [F]irms serving influential clients and operating in the corporate sector are reorganising their firm structures and redefining their concept of professionalism so that it entails a strong commercial-entrepreneurial element, whereas those firms serving individual, non-influential clients and markets are seeking to retain the older, more social service, version of professionalism, which apparently held sway across most of the profession in the recent past. These tensions ensure that the two segments will have different, and indeed possibly conflicting, interests in the future … The new organisational structures of many large law firms, the increasingly entrepreneurial and managerial skills required of partners and staff, the demanding nature of the corporate client, and, indeed, inter-professional links, all reflect the fact that at the large firm end of the profession the nature of professionalism has altered. These professionals no longer have the control of the professional–client relationship, they are no longer evaluated on purely technical criteria and they no longer view themselves as having a social service role. Rather, to be a professional in these organisations means to successfully engage the market, to identify solely with the client who is accepted on ability to pay rather than need, to manage budgets and staff, etc. These are the values of business rather than the professions, at least in traditional terms.

The foregoing has, inter alia, driven calls to move from a “one size fits all” set of professional rules to one that is more contextual regarding the nature of the relevant practice.46 A senior Australian barrister even surmised that the “businessservices part of the legal profession” leave the profession “and join with the management consultants, accountants, finance brokers and merchant bankers”.47 Few may go this far – some instead have called for the establishment of a formal ethical infrastructure48 or regular ethics auditing49 in larger law firms – but it 44 Hanlon, “A Profession in Transition? Lawyers, the Market and Significant Others” (1997) 60 Mod L Rev 798 at 822. 45 Hanlon, “A Profession in Transition? Lawyers, the Market and Significant Others” (1997) 60 Mod L Rev 798 at 799, 820. 46 See, for example, Wilkins, “Legal Realism for Lawyers” (1990) 104 Harv L Rev 468; Sporkin, “The Need for Separate Codes of Professional Conduct for the Various Specialties” (1993) 7 Geo J Leg Ethics 149. Cf Wald, “Resizing the Rules of Professional Conduct” (2014) 27 Geo J Leg Ethics 227 (who sides against contextualisation per se, but calls for the relevant rules to be revised to fit the nature of modern legal practice). 47 Walker, “Lawyers and Money” (2005) 1 Orig L Rev 10 at 17. 48 See, for example, Parker, Evans, Haller, Le Mire and Mortensen, “The Ethical Infrastructure of Legal Practice in Larger Law Firms: Values, Policy and Behaviour” (2008) 31 UNSWLJ 158. In the United States an emerging trend is to appoint a law firm in house “general counsel” to ensure the firm’s compliance with professional responsibility rules and standards, and to manage professional liability risks: see Hazard, “‘Lawyer for Lawyers’: The Emerging Role of Law Firm Legal Counsel” (2005) 53 Kansas L Rev 795; Richmond, “Essential Principles for Law Firm General Counsel” (2005) 53 Kansas L Rev 805; Chambliss, “The Professionalization of Law Firm In-House Counsel” (2006) 84 NC L Rev 1515; Rotunda, “Why Lawyers are Different and Why We are the Same: Creating Structural Incentives in Large Law Firms to Promote Ethical Behavior – In-House Ethics Counsel, Bill Padding, and In-House Ethics Training” (2011) 44 Akron L Rev 679 at 704–705 (noting that, according to a 2005 survey, 70% of the largest 197 law firms in the United States had a designated general counsel, usually a partner in the firm). In Australia some law firms have appointed a designated “ethics partner” for this purpose: see Parker et al, at 178–180.

12

Lawyers’ Professional Responsibility

[1.40]

prompts the question whether professional associations can properly regulate and control this new, corporate, professional service elite, and whether this role should instead be entrusted to government. Indeed, the trend has been to transfer regulatory functions from professional association to governmental entity: see [1.45]. This provides a segue to discussing the third indicium of professionalism – the profession’s ability to regulate itself. Self-regulation or autonomy

[1.40] The attribute of a profession that it be autonomous and independent of outside control does not stand alone, but is a corollary of it supplying a public service and requiring special skill and learning. Only those occupations and callings that exhibit the requisite skill and learning and, importantly, engage primarily in public service so as to attract the confidence of the community, merit self-regulation. What is at issue in “professionalisation” is, in the words of one commentator, “the belief that people who have the expertise to provide services ought to be entrusted with a substantial measure of control over these services and the working conditions in which they are provided”.50 Yet the increasing trend to permit non-lawyers to perform some legal work, coupled with the concerns raised over the reality of public service, has opened to attack the profession’s claim to self-regulation. Another extract from Sir Daryl Dawson’s speech addresses this problem:51 One aspect of social trustee professionalism was a large degree of self-regulation by the profession itself. This was not only because it was the practitioners of a profession who alone possessed the knowledge necessary to ensure the maintenance of proper standards but also because it was they who, above all others, could be trusted to apply the appropriate discipline for the purpose. With the change from the notion of a trust to that of a marketing exercise, reliance is placed upon market forces to produce services of the required standard. And because governments understand competition and the mechanisms necessary to ensure its existence, self-regulation is no longer seen as adequate and, indeed, is seen as inconsistent with a competitive environment. There is an obvious tension between trust and competition which is reflected in an evident desire to remove from the professions, particularly the legal profession, the capacity to regulate their own activities and to introduce a greater degree of public control. It is the free play of market forces, not the voluntary maintenance of professional standards, in which we now place our faith and, in this regard, there is little distinction to be drawn between the practice of a profession and any other form of commercial activity. 49 See, for example, Chu, “Ethics Auditing: Should it be Part of Large Firms’ Ethical Infrastructure?” (2008) 11 Legal Ethics 16. In a parallel initiative, the Legal Profession Uniform Law, as it applies in New South Wales and Victoria from 1 July 2015, empowers the relevant Legal Services Commissioner to initiate an audit of the compliance of a law practice with the Uniform Law, the Uniform Rules and other applicable professional obligations if there are reasonable grounds to do so, based on the conduct of the practice or a complaint against it: NSW, s 256(1); Vic, s 256(1). 50 Bickenbach, “The Redemption of the Moral Mandate of the Profession of Law” (1996) 9 Can J of Law & Juris 51 at 52. See also Pound, The Lawyer from Antiquity to Modern Times (West Publishing Co, 1953), p 361 (“It cannot be insisted too strongly that the idea of a profession is inconsistent with performance of its functions, exercise of its art, by or under the supervision of a government bureau”). 51 Dawson, “The Legal Services Market” (1996) 5 JJA 147 at 148–149.

[1.45]

1 The Concept of Professional Responsibility

13

Of course, the profession has never been truly self-regulating in any event.52 Courts have long possessed authority to regulate lawyers, who are officers of the court: see [17.10]. Legislative regulation has also been a staple of legal practice, as appears from longstanding legal profession statutes: see [1.100]–[1.110]. The latter, in Australia, has expanded in time, raising the spectre of increasing governmental regulation. This has seen resistance from the profession, on the basis that government does not understand the dynamics of the legal process and so should not interfere with the mechanisms of justice. State control, it is feared, could undermine the crucial independence of the adversarial system. Yet autonomy of legal institutions is conferred so that those institutions can better serve the community. The counter-argument, therefore, is that if autonomy chiefly serves the profession, external control is justified because autonomy without accountability spells absolute power and potential corruption, which then reduces public confidence in those institutions. A concern here is that professional bodies such as law societies perform the potentially conflicting roles of both representative body and regulator.

[1.45] Recent times have witnessed, to this end, the steady contraction in the regulatory function of law societies and bar associations as professional bodies, in favour of a bodies constituted under statute and comprised partly of lay membership. In particular, as disciplinary proceedings have historically been the profession’s chief means of self-regulation, many of the regulation initiatives have focused here. This must ostensibly be seen against the backdrop of public and governmental doubt regarding professional associations’ inclination or ability to properly address complaints, and discipline their members. For this reason statute in New South Wales created the office of the Legal Services Commissioner53 – appointed on the recommendation of the Attorney-General, being a person independent of the profession who need not be a lawyer but must be familiar with the nature of the legal system and legal practice – whose function includes receiving and investigating complaints regarding the conduct of lawyers. The same office, with parallel functions, is reiterated for the purposes of the Legal Profession Uniform Law as from 1 July 2015:54 see [24.60]. There is, also for the purposes of the Uniform Law, a Victorian Legal Services Commissioner,55 ensuing upon an office of the same name under the former legislation.56 There is likewise a Legal Services Commissioner in Queensland,57 with similar functions. In Tasmania and Western Australia complaints against lawyers are now directed to, and 52 See Zacharias, “The Myth of Self-Regulation” (2009) 93 Minn L Rev 1147 (who suggests that “self-regulation” should be replaced by reference to “co-regulation”; query in Australia). 53 NSW 2004, s 686(1), 686(2), 688(1) (and see generally NSW 2004, Pt 7.3). On the decline in self-regulation in the New South Wales legal profession see Parker, “Justifying the New South Wales Legal Profession 1976 to 1997” (1997) 2 Newc L Rev 1. 54 Legal Profession Uniform Law Application Act 2014 (NSW), Pt 3, Div 2. 55 Legal Profession Uniform Law Application Act 2014 (NSW), Pt 3, Div 3. 56 See generally Vic 2004, Pt 6.3. 57 Qld, Pt 7.1.

14

Lawyers’ Professional Responsibility

[1.45]

investigated by, statutorily created bodies that include lay membership.58 This was so in South Australia prior to significant amendments that took effect on 1 July 2014,59 whereupon the office of the Legal Profession Conduct Commissioner, who need not be legally qualified,60 was created for complaints handling and investigation purposes.61 Only in the Territories do complaints handling and investigation remain in the province of relevant professional bodies: see [24.35], [24.90]. Also, the power to make disciplinary determinations now lies, inter alia, in general administrative tribunals, outside the profession’s control, in the Australian Capital Territory, New South Wales, Queensland, Victoria and Western Australia.62 The impingement on self-regulation has extended beyond disciplinary procedures. Under the former Victoria Act, the Legal Services Board – the (then) peak regulatory body for Victorian lawyers – was responsible for the administration of the funding for the regulatory system, policy setting and all non-disciplinary functions, including the approval of practice rules, trust account administration and claims against the Fidelity Fund. Critically, the Board was independent of the profession, comprising, inter alia, non-lawyer representatives appointed by the Attorney-General.63 This ensued upon statements from the then Victorian AttorneyGeneral, uttered shortly before the enactment of the predecessor to the 2004 Act,64 that “[a] system of pure self-regulation in an area as critical to the public as the provision of legal services is unacceptable”.65 This led Tasmania and Western Australia to follow suit in establishing boards with similar functions and objectives.66 The commencement of the Legal Profession Uniform Law in New South Wales and Victoria has seen the creation of three uniform regulatory authorities – namely the Legal Services Council, the Commissioner for Uniform Legal Services Regulation and the Admissions Committee – for the purposes of securing uniformity in core aspects in regulating the profession in those jurisdictions: see [1.110]. The Council,

58 See Tas, Pt 7.1 (Legal Profession Board, the functions of which are listed in s 591); WA, Pt 16 Div 2 (Legal Profession Complaints Committee, which is a committee of the Legal Practice Board). 59 SA, Pt 6 prior to its amendment by the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), created and empowered the Legal Practitioners Conduct Board. 60 SA, s 71(3) (requiring that the Commissioner nonetheless be a person who, in the opinion of the Attorney-General, “is familiar with the nature of the legal system and legal practice” and “possesses sufficient qualities of independence, fairness and integrity”). 61 SA, Pt 6, Div 2, as amended by the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA). 62 In the Australian Capital Territory, the ACT Civil and Administrative Tribunal (see [24.45]); in New South Wales, the Administrative Decisions Tribunal (see [24.85]); in Queensland, the Queensland Civil and Administrative Tribunal (see [24.115]); in Victoria, the Victorian Civil and Administrative Tribunal (see [24.85]); and in Western Australia, the State Administrative Tribunal (see [24.145]). 63 Vic 2004, s 6.2.5 (and see generally Vic 2004, Pt 6.2). 64 Namely the Legal Practice Act 1996 (Vic) (repealed). 65 Reforming the Legal Profession: An Agenda for Change (Attorney-General, Victoria), cited in Evans, “Profession Faces Shake-up” (1994) 68 LIJ 568. See also Law Reform Commission of Victoria, Access to the Law: Accountability of the Legal Profession (Discussion Paper No 24, July 1991), paras 28–36. 66 See Tas, Pt 7.1 (Legal Profession Board); WA, Pt 16 Div 1 (Legal Practice Board).

[1.55]

1 The Concept of Professional Responsibility

15

on which sit representatives appointed by both government and the profession,67 may inter alia make Legal Profession Uniform Rules for the purposes of the Uniform Law.68 Yet the current Victorian legislation, in implementing the Uniform Law, nonetheless retains the Legal Services Board,69 where three of the seven members appointed by government must be laypersons.70 Initiatives of these kinds are not confined to Australia. In the United Kingdom, for instance, the Legal Services Act 2007 abolished the Law Society’s regulatory function, instead delegating it to a separate and independent Solicitors Regulation Authority.

IMPACT ON THE PROFESSION OF CHANGES IN THE LEGAL LANDSCAPE [1.50] The gradual erosion of the hallmarks that substantiate profession status cannot but impact upon legal practice. Opening up legal or quasi-legal work to non-lawyers necessarily places the profession in direct competition, not only with its own members,71 but with others. But successive governments have generally considered that increased competition for legal services will promote public benefit – ostensibly in the form of lower costs – rather than undermine it. Discussed below are several other incidents of the competition agenda for the legal profession, not all contrary to its interests, although none can necessarily be touted as providing greater motivation to behave in an ethical or professional fashion: see [1.55]–[1.65]. Shifts in governmental policy are not alone in impacting upon the legal landscape. Changes in societal attitudes and perceptions cannot but influence the environment in which the profession provides legal services: see [1.70]–[1.85]. Impact of competition law Application of competitive conduct rules

[1.55] The Hilmer Report recommended that the competitive conduct rules in Pt IV of the (then) Trade Practices Act 1974 (Cth) (now the Competition and Consumer Act 2010 (Cth)) be extended to include all non-incorporated businesses, thus opening up the conduct of law firms to the scrutiny of the Australian Competition and Consumer Commission.72 This was achieved by each jurisdiction enacting legislation to apply Pt IV to individuals and partnerships, which fall outside the 67 NSW, Sch 1, cl 2(1); Vic, Sch 1, cl 2(1). 68 NSW, s 419; Vic, s 419. 69 Legal Profession Uniform Law Application Act 2014 (Vic), Pt 3, Div 2. 70 Legal Profession Uniform Law Application Act 2014 (Vic), ss 32, 35. 71 The notion stated by Harvard Law Dean, Roscoe Pound, over 50 years ago that “the member of a profession does not regard himself as in competition with his professional brethren”, and “is not bartering his services as is the artisan nor exchanging the products of his skill and learning as the farmer sells wheat or corn” (The Lawyer from Antiquity to Modern Times (West Publishing Co, 1953), p 10) seems strangely quaint today. 72 Report by the Independent Committee of Inquiry, National Competition Policy (AGPS, August 1993), pp 136, 357. See generally Baxt, “Professions and the Challenge of Competition: Why the Hilmer Report and its Endorsement Create New Opportunities for the Professions” (1995) 8 Corp & Bus LJ 1.

16

Lawyers’ Professional Responsibility

[1.60]

Commonwealth’s constitutional competence.73 The provisions of the Competition and Consumer Act targeting lawyer practices are those dealing with anti-competitive arrangements, chiefly price fixing74 and third line forcing.75 Scales of legal costs were seen as a form of price fixing.76 Third line forcing, being the insistence on the acquisition of other services from a third party as a condition of supply of services, was a concern where a barrister required a particular junior to be briefed as a condition of accepting a brief. Such a practice is now generally prohibited by the barristers’ rules.77 Direct access to counsel and more flexible business structures

[1.60] Other topics under the spotlight by reason of the competition catchcry include the structure of legal practices, and the need for counsel to be briefed by a solicitor. The rules requiring lawyers to practise as sole practitioners or in partnership denied, it was argued, competitive advantages and the limitation of liability inherent in a corporate structure. It, coupled with the traditional rule prohibiting the sharing of receipts from legal practice (see [20.125]), was also said to inhibit the formation of multi-disciplinary practices. The lack of direct access to counsel was criticised as adding cost and delay, and duplication of services. As a result, the traditional professional prohibition on direct access to counsel has been lifted (see [3.45]), and statute now envisages and regulates incorporated legal practices (see [20.170]) and multidisciplinary practices (see [20.150]–[20.165]). Competition in the public sector

[1.65] The focus on competition has impacted beyond the private profession. It is similarly the catchword for public sector lawyers now that private sector lawyers can tender for some government work. Commonwealth departments and agencies have, since 1 July 1995, been free to choose their legal service providers for a broad range of legal services, which were previously provided by the Attorney-General’s Department or in-house lawyers in other departments. In a further initiative designed to increase efficiency and competitiveness in the public sector, in 1999 a 73 Competition Policy Reform Act 1996 (ACT); Competition Policy Reform (New South Wales) Act 1995 (NSW); Competition Policy Reform (Northern Territory) Act (NT); Competition Policy Reform (Queensland) Act 1996 (Qld); Competition Policy Reform (South Australia) Act 1996 (SA); Competition Policy Reform (Tasmania) Act 1996 (Tas); Competition Policy Reform (Victoria) Act 1995 (Vic); Competition Policy Reform (Western Australia) Act 1996 (WA). See Bhojani, “Solicitor Breaches of the Trade Practices Act” (1999) 24 ACCC Journal 27. 74 Competition and Consumer Act 2010 (Cth), s 45C. 75 Competition and Consumer Act 2010 (Cth), s 47. 76 See the discussion in Trade Practices Commission, Study of the Professions: Legal (Final Report, March 1994), Ch 8. Note, to this end, the parallel experience in the United States, where the early 1930s and 1940s saw state bar associations, wishing to increase attorney incomes, begin to publish “suggested” minimum fee schedules that set standard pricing for a variety of legal services. The Supreme Court in Goldfarb v Virginia State Bar (1975) 421 US 773 held that minimum fee schedules violated antitrust (competition) law, which in turn gave force to time charging to become the predominant method of lawyer compensation: see Pardau, “Bill, Baby, Bill: How the Billable Hour Emerged as the Primary Method of Attorney Fee Generation and why Early Reports of its Demise May be Greatly Exaggerated” (2013) 50 Idaho L Rev 1 at 2–3. As to time charging see [14.205]. 77 ACT, r 84; NSW, r 19; NT, r 84; Qld, r 23; SA, r 23; Vic, r 19; WA, r 23.

[1.70]

1 The Concept of Professional Responsibility

17

new statutory authority, the Australian Government Solicitor (AGS), was established.78 As the AGS is financially independent from the Commonwealth, the AGS resembles a private firm in many respects, meaning that it is a player in the Commonwealth legal services market in its own right. This is designed to stimulate private and public legal service providers to contain or reduce costs and increase the quality of their service, and in turn enhance government agencies’ ability to ensure that they receive value for money in purchasing legal services. With the push to open government legal services to the private sector, and the quasi-privatisation of the AGS, competitive pressure is placed on government lawyers akin to that which applies in the private sector, with its attendant potential to impact adversely on their lawyers’ professional standards. Impact of changes in societal attitudes and perceptions Consumerism and “affluenza”

[1.70] A singular feature of the 1990s and much of the first decade of the twenty-first century is a rise in consumerism. No profession has been immune to this trend, heralded in part by a marked decrease in client loyalty and willingness to question the once unquestionable. The advice or service of professionals is less sacrosanct in the public mind than in the past; professionals’ greater knowledge and experience in their field provides no shield against customer dissent. And consumerism carries with it the right to complain where a service does not meet the standard expected by, usually, an uninformed client. It may also translate into a more cynical view of the profession and its motives. This is not to suggest that lawyers have ever been exceedingly popular, but the evidence shows that consumerism has, amongst other things, inclined the public mind further against the profession.79 Two social commentators have branded contemporary consumerism “affluenza”, reflecting on what they view as a “consumption binge” grounded chiefly in credit.80 The underlying notion – that many want more and more, and want it now – could be described by a less value-neutral term: greed. It is questionable how realistic it is to expect members of the legal profession to be immune to these societal gravitational pulls. Well before any affluenza epidemic, studies in the United States showed a dramatic increase within a generation of students entering

78 Judiciary Act 1903 (Cth), Pt VIIIB. 79 For example, a Morgan poll, the Image of Professions survey, conducted in April 2015 found that only 31% of respondents rated lawyers “high” or “very high” in ethics and honesty, lawyers ranking 15th out of the 30 professions listed. Curiously, State Supreme Court judges and High Court judges enjoyed far higher ratings, even though all are sourced from the legal profession (69% and 68% respectively). See http://www.roymorgan.com. An American Gallup poll, Honesty/Ethics in Professions,conducted in late 2015 presented lawyers in an even less flattering public light, recording only a 21% “high” or “very high” rating in ethics and honesty: see http://www.gallup.com. 80 Hamilton and Denniss, Affluenza: When Too Much is Never Enough (Allen & Unwin, 2005).

18

Lawyers’ Professional Responsibility

[1.75]

tertiary studies valuing the idea of “being very well off financially”.81 In the United States there have been manifold documented examples of already wealthy lawyers overtaken by greed.82 Perhaps the swing of the economic pendulum evident in the recent “global financial crisis” may prompt the “reassertion of more traditional values” and “renewed emphasis on the moral code that underpins the traditional authority of our profession”.83 To the extent that greed corresponds with the desire for more money – which it usually does – it is not that most lawyers need more money. But what is ironic is that a society premised on greed decries that characteristic when it perceives it within the legal profession. A leading American commentator, in this respect, has noted that “[o]f all the traits the public dislikes in attorneys, greed is at the top of the pecking order”.84 The standards the public exhibits thus differ from those it expects of its lawyers. Both the law and the public expect lawyers to exhibit the basic ethical attributes of unselfishness and honesty, noted earlier at [1.15], without necessarily reflecting these attributes themselves. This ethical dichotomy cannot help but create tension, especially if the public perceives lawyers as greedy and self-interested. If that perception is accurate, it surely impacts on matters of ethical behaviour, because greed and self-interest rarely promote unyielding honesty. Regulatory trend

[1.75] Were the expectation that lawyers assist the public to fulfil its increased consumerism and greed, but at the same time display neither of these characteristics, not sufficient to strain motivations for ethical behaviour, the regulatory trend to treat the profession as any other service provider takes a further step in that direction. As noted earlier, regulators seem enamoured with competition policy as the vehicle to maximise public good, and yet criticise the profession for adopting a mercantile attitude to the provision of legal services. In an extra-judicial presentation, a former Chief Justice of New South Wales has remarked in this regard that:85 [t]here may be an element of self-fulfilling prophecy in the application of competition principles to the law. If lawyers are treated as if they are only conducting a business, then 81 See Schiltz, “On Being a Happy, Healthy, and Ethical Member of an Unhappy, Unhealthy, and Unethical Profession” (1999) 52 Vanderbilt L Rev 871 at 896–897 (citing statistics that in 1970 some 39% of students entering college rated “being very well off financially” as an “essential” or “very important” life goal, whereas in 1993 that figure had almost doubled to 75%). 82 See Lerman, “The Slippery Slope from Ambition to Greed to Dishonesty: Lawyers, Money and Professional Integrity” (2002) 30 Hofstra L Rev 879. 83 Spigelman, “Legal Infrastructure Will be Tested by the Economic Crisis” (2009) 47 (Mar) LSJ 62 at 64. See also Barton, Glass Half Full – The Decline and Rebirth of the Legal Profession (OUP, 2015) (who argues, more generally, that consumers of legal services and, ultimately, the legal profession, will benefit from changes in the legal market driven in large part by financial crises). 84 Rhode, “The Professionalism Problem” (1998) 39 William & Mary L Rev 283 at 285. 85 Spigelman, “Are Lawyers Lemons? Competition Principles and Professional Regulation” (2003) 77 ALJ 44 at 50. See also APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 at [29] per Gleeson CJ and Heydon J (“In recent years legislatures decided that it was in the public interest that lawyers should be encouraged to adopt a more mercantile approach to the provision of legal services. Some lawyers responded with enthusiasm. Authorities appear to have been surprised to discover that, when lawyers promote their services, litigation increases”).

[1.80]

1 The Concept of Professional Responsibility

19

they will behave accordingly to an even greater degree than they do now. The ethic of service which emphasises honesty, fidelity, diligence and profession self-restraint may, progressively, be lost.

Competition policy is directed at ensuring that the profession delivers its services like any other business – and so its members seek ways of securing a greater market share and generating a greater profit margin – but at the same time the profession is subject to considerable regulation directed at ensuring it does not behave like any other business. Aside from the copious general law requirements imposed on lawyers – apart from the strict application of fiduciary proscriptions, lawyers are unique in the general law’s ability to set aside costs agreements (see [14.155]–[14.205]) – statute increasingly expects of lawyers standards of behaviour not mirrored in other service providers. No other service provider is, for example, subject to prescriptive statutory costs disclosure obligations (see [14.15]–[14.70]) or to a process of costs revision (whether via taxation or assessment) (see [15.40]–[15.95]). Treading this regulatory tightrope is unlikely to generate fewer client complaints, or a reduction in client expectations. Many of these regulatory endeavours play directly into the modern consumerist culture, and Australia is not unique in this experience.86 The future may therefore see lawyers, more so than in the past, as convenient scapegoats for client frustrations and dissatisfactions. Lawyer dissatisfaction

[1.80] It is perhaps unsurprising that dissatisfaction with the profession is not limited to “consumers” of legal services. It is mirrored within the profession; studies reveal that many lawyers are dissatisfied with their choice of profession,87 and for this (and arguably other) reasons evince higher than average rates for depression, anxiety, drug abuse, divorce and suicide.88 Findings of a Law Council of Australia survey of young lawyers indicate that nearly half were considering leaving their current positions.89 Much of the dissatisfaction has stemmed from excessive workloads, commercialisation, pressure to attract clients and the competitive marketplace. Each of these matters, at its root, is grounded in the profession’s focus on money ahead of (almost) anything else. Yet empirical research 86 See Hurlburt, The Self-Regulation of the Legal Profession in Canada and in England and Wales (Law Society of Alberta, Alberta Law Reform Institute, 2000), p 65 (referring to equivalent trends in Canada and the United Kingdom). 87 See Seligman, Verkuil and Kang, “Why Lawyers are Unhappy” (2005) 10 Deakin L Rev 49. 88 See Chan, Poynton and Bruce, “Lawyering Stress and Work Culture: An Australian Study” (2014) 37 UNSWLJ 1062 (questionnaire of 965 lawyers revealed that the proportion who experienced moderate to extremely severe levels of depression (32%), anxiety (28%) and stress (26%) were much higher than the population norm (13%), and that effort-reward balance, over-commitment, work-family conflict, organisational culture and practice ethos strongly correlated with depression, anxiety and stress); Krill, Johnson and Albert, “The Prevalence of Substance Use and Other Mental Health Concerns Among American Attorneys” (2016) 10 J Addict Med 46 (surveys from nearly 13,000 US attorneys revealed that 20.6% of respondents screened positive for hazardous, harmful and potentially alcohol-dependent drinking, and that levels of depression (28%), anxiety (19%) and stress (23%) exceeding rates in the general populations). See further Rovzar, “Putting the Plug in the Jug: The Malady of Alcoholism and Substance Addiction in the Legal Profession and a Proposal for Reform” (2015) 10 U Mass L Rev 426 at 431–444. 89 See Barrett, “What do Young Lawyers Want?” (2004) 78 ALJ 428.

20

Lawyers’ Professional Responsibility

[1.85]

brands “[p]sychological factors related to self, others, meaningful and personally engaging work, and supportive work supervision” as better predictors of happiness than external “success” factors relating to financial rewards and status.90 Impact on ethical behaviour?

[1.85] The upshot of the foregoing is that, inter alia, the modern legal environment – including as it does inroads into lawyers’ monopoly on legal work, forced competition, increasing government regulation and an excess supply of law graduates91 – has the capacity to threaten the profession’s claim to ethical status.92 When coupled with the tendency of human nature – studies showing that lawyers’ willingness to violate their professional duties depends on the exposures to temptation, client pressures and collegial attitudes in their practice setting93 – it is legitimate to query whether ethical behaviour and professionalism are likely to be fostered in modern legal practice. There are other variables, of course, including the firm by which a lawyer is employed, the type of work he or she does, and the attitudes of colleagues. A novice lawyer exposed to unethical or unprofessional practices may tend to reflect those practices, and rationalise them from her or his own ethical perspective, ultimately leading to the whittling away of any true ethical precept. There is the further concern that “[o]rganizational reward structures and regulatory frameworks are not well constructed to reinforce ethical conduct”.94 It may be pondered, say, whether billing targets are conducive to motivating ethical behaviour; these may instead motivate padding out time sheets, a practice that, aside from being unprofessional, may become so routine as to lose its ethical stigma. This can hardly be conducive to ethical and professional conduct in other aspects of lawyers’ practices, the potential ultimate result being that lawyers become little more than many salespeople, so used to peddling their product as to be unable to differentiate the ethical from the unethical.

90 See Krieger and Sheldon, “What Makes Lawyers Happy? A Data Driven Prescription to Redefine Professional Success” (2015) 83 Geo Wash L Rev 554 at 626 (involving a sample of 6226 US lawyers, and also finding that public service lawyers were happier and more satisfied than other lawyers, including those in the most prestigious, highly paid positions: at 627). 91 See Barker, “An Avalanche of Law Schools: 1989 to 2013” (2013) 6 J Australasian Law Teachers Assn 1. 92 See Richard, “Professionalism: What Rules do we Play By?” (2002) 30 Southern UL Rev 15 at 24–27. 93 Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 at 559. An Australian study has indicated that “corporate aspirations” (namely some lawyers’ desires to achieve high incomes in large firms by representing big business) do affect the moral choices that lawyers make: see Evans, “Lawyers’ Perceptions of Their Values: An Empirical Assessment of Monash University Graduates in Law, 1980–1998” (2001) 12 Legal Ed Rev 209 at 263. 94 Rhode, “If Integrity is the Answer, What is the Question?” (2003) 72 Fordham L Rev 333 at 335.

[1.90]

1 The Concept of Professional Responsibility

21

And yet, as there is little about a course of legal education that can assure ethical or professional behaviour,95 it is at the coalface of practice that the ethical dimension must be tested. No simple solution therefore exists. Ultimately, true professionalism, in the words of one commentator, “resides not in some declaration of aspiration, and still less in some hoped-for epiphany, but rather in the prosaic day-to-day decisions which are the stuff and measure of professional life”.96 Perhaps it is for this reason that Kirby J, who against the background of modern society’s questioning of fundamental values, in a 1996 address said that “[w]ithout some kind of spiritual foundation for our society we can do little else than to reach back into the collective memory of our religious past or to rely on consensus declarations as to contemporary human values”.97 The spiritual foundation his Honour envisaged was not necessarily one grounded in religion, but one directed at a deep-seated commitment to a cause, in similar vein to religious fervour. The modern profession certainly cannot bask in a bygone era when, as de Tocqueville observed of the nineteenth century American legal profession, it was “the only enlightened class whom the people do not distrust”.98 Though the modern legal and societal environment may prove more challenging in this regard than the past, for the reasons noted earlier, an English judge’s remark that “a profession’s most valuable asset is its collective reputation and the confidence which that inspires”99 should not be forgotten. In an area as fundamental to society as the proper administration of justice, a lack of public confidence is a real concern. As a result, there is greater need for the profession to convince the community of its public service role than in perhaps any previous time, a process that requires that the profession demonstrate by its actions that being professional is far more about responsibility than about status.

SOURCES OF LAWYERS’ PROFESSIONAL RESPONSIBILITY [1.90] It has been judicially observed that it is in the public interest, and for the protection of the public, that the professional activities of lawyers be regulated and controlled more than any other profession or vocation.100 The main sources of lawyers’ professional responsibility are the general law, statute and professional rules, each addressed in turn below. Professional bodies may also issue guidelines (or the like) from time to time regarding matters of professional conduct. 95 See Willging and Dunn, “The Moral Development of the Law Student: Theory and Data Education” (1981) 31 J Leg Ed 306; Landsman and McNeel, “Moral Judgment of Law Across Three Years: Influences of Gender, Political Ideology and Interest in Altruistic Law (2004) 45 S Tex L Rev 891 (each involving empirical studies that query improvements reasoning in the course of law study).

on Legal Students Practice” in moral

96 DeCoste, “Towards a Comprehensive Theory of Professional Responsibility” (2001) 50 UNBLJ 109 at 122. 97 Kirby, “Legal Professional Ethics in Times of Change” (1996) 14 Aust Bar Rev 170 at 183. 98 de Tocqueville, “The United States: A Unique Government of Lawyers”, extracted in Gerson (ed), Lawyers’ Ethics: Contemporary Dilemmas (Transaction Books, 1980), p 8. 99 Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR. 100 Re Bannister (1975) 5 ACTR 100 at 104 per Fox J.

22

Lawyers’ Professional Responsibility

[1.95]

General law

[1.95] At a most basic level, it is the general law that governs most incidents of lawyers’ relationships with their clients, the court and third parties. As between lawyer and client, the relationship is one of contract, which also attracts a duty of care in tort: see Chs 3–5. Fiduciary law overlays the lawyer–client relationship, and impacts upon the retainers a lawyer can and cannot accept, the disclosure he or she must make, and the transactions in which he or she can engage: see Chs 6 and 7. Confidentiality also lies at the core of the lawyer–client relationship, whether under contract or in equity, and forms the main foundation for restraining lawyers from acting against former clients (see Ch 8) and the doctrine of legal professional privilege (see Ch 11). It, moreover, gives rise to some of the most challenging ethical issues facing lawyers: see Ch 10. Contract, tort and equity can, in specified circumstances, be the source of legal duties owed by lawyers to third parties: see Ch 21. Overriding each of these duties is the lawyer’s paramount duty to the court, capable of being enforced in various ways by the courts: see Ch 17. Statute

[1.100]

Lawyers are subject to numerous statutory obligations. The legal profession legislation in each jurisdiction,101 inter alia, establishes bodies that govern and regulate the profession, prescribes disciplinary processes (see Ch 24), sets parameters for legal practice, and casts on lawyers various obligations to clients, which include trust accounting (see Ch 9) and costs disclosure and recovery (see Chs 14, 15). Model Laws trend

[1.105]

The legal profession legislation historically displayed little uniformity between jurisdictions. Although the Law Council of Australia recognised the value of uniformity back in 1994, the real impetus for change was the resolution by the Standing Committee of Attorneys-General (SCAG) in 2001 to develop model laws. This prompted a lengthy consultation process, which in April 2004 resulted in the release by SCAG of Model Laws, later revised in a second edition in July 2006. The Model Laws were intended to form the foundation for “uniform” legislation regulating the legal profession in each Australian jurisdiction. In its Statement on National Practice the Law Council of Australia identified targeted the aims underscoring “uniformity” at benefiting the profession more so than emphasising benefits to consumers of legal services: • to enable integrated delivery of legal services on an Australia-wide basis which is commensurate with existing and future market demand for legal services; • to streamline State and Territory regulation to allow lawyers to practise “seamlessly” within Australia; • to enable Australian law firms to compete nationally and internationally and market themselves to international companies looking to invest in Australia; and

101 Legal Profession Act 2006 (ACT); Legal Profession Uniform Law (NSW); Legal Profession Uniform Law Application Act 2014 (NSW); Legal Profession Act 2006 (NT); Legal Profession Act 2007 (Qld); Legal Practitioners Act 1981 (SA); Legal Profession Act 2007 (Tas); Legal Profession Uniform Law (Vic); Legal Profession Uniform Law Application Act 2014 (Vic); Legal Profession Act 2008 (WA).

[1.110]

1 The Concept of Professional Responsibility

23

• to encourage competition leading to greater choice and other benefits for consumers. But “uniformity” here did not mean identity. The Model Laws envisaged scope for diversity by promulgating three forms of provisions: core uniform (CU) provisions (requiring textual uniformity); core non-uniform (CNU) provisions (not requiring textual uniformity); and non-core (NC) provisions. The following are the main areas in which uniformity was sought, and indeed largely achieved, and so were expressed as either exclusively or principally core uniform or core non-uniform in nature: • standards for law degrees and practical legal training; • a national practising certificate scheme; • rules for trust accounts and fidelity funds; • definitions of misconduct; • the regulation of incorporated legal practices and multidisciplinary practices; • requirements for the disclosure of information on costs to clients; and • the system governing the entitlements of foreign lawyers to practise the law of their home country within Australia. Between 2004 and 2008 all bar South Australia followed the Model Laws’ path (South Australia adopted most of the core aspects of the Model Laws scheme, albeit under the auspices of its existing statute, as from 1 July 2014),102 though a cursory perusal of the Acts reveal that, outside the above areas, uniformity proved elusive. Even within those areas, respective legislatures fine-tuned provisions, and in any case adopted diverse numbering schemes, making comparison not straightforward. A perusal also reveals that the legislation is more lengthy and detailed than its predecessors, being prescriptive rather than principle-based, a result of the “twin pressures of the profession wanting every obligation to be specified in minute detail so they knew exactly what was required of them … and consumers wanting every obligation in minute detail so that the profession could not wriggle out of them”.103 Post-Model Laws: Legal Profession National (and now Uniform) Law

[1.110]

The lack of uniformity, notwithstanding Acts passed across Australia pursuant to the Model Laws’ schema, led the federal Government, via the auspices of the Council of Australian Governments (COAG), to draft a “Legal Profession National Law”, released in 2011, intended as the foundation for a national uniform scheme via agreement by the States and Territories to implement the national law.

102 South Australia did not come on board with the Model Laws chiefly as a result of a political deadlock relating to the means through which trust account fraud victims should be compensated. In March 2012, however, the South Australian Attorney-General announced that new legislation would be brought before the parliament in 2012, to include, inter alia, opening the door to non-lawyers becoming directors of incorporated legal practices, the replacement of the Legal Practitioners Conduct Board by a new Legal Conduct Commissioner, and new costs disclosure obligations. This ensued pursued to the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), which took effect on 1 July 2014. 103 Wilkins, “Agenda for Reform: National Regulation of the Legal Profession” (2009) 47 (Aug) LSJ 50 at 51.

24

Lawyers’ Professional Responsibility

[1.110]

The draft Legal Profession National Law envisaged the creation of a National Legal Services Board, to be responsible for the general administration, implementation and application of the Law and the National Rules, and the policies and practices it determines or adopts in connection therewith. The Board was to be granted various functions, including admission to practice, approval of professional indemnity insurance policies, the making of National Rules, and the issuing of guidelines about the Law and directions to local regulatory bodies. An original sticking point related to the appointment of the Board’s members. An early draft of the Law, which empowered the Standing Committee of Attorneys-General to appoint members, was slated for a perceived undermining the profession’s independence from government.104 In response, the Law was redrafted to give the relevant professional bodies the power to nominate appointees for three of its seven members. There nonetheless remained concern, especially in smaller jurisdictions, regarding the role for the proposed national regulatory body, which, it was feared, could be monopolised by the interests of the professions in larger jurisdictions, including by appointments to that body. A broader concern was that the proposed Board, when coupled with the proposed National Legal Services Commissioner – appointed by the Standing Committee with the Board’s concurrence, charged with the ensuring that “complaints against legal practitioners and disputes and other issues involving law practices are dealt with in a timely and effective manner” and that “compliance with requirements of [the] Law and the National Rules by law practices”105 – would impose simply another, unnecessary and expensive, level of bureaucracy. As these national offices were not to supplant State and Territory regulatory offices, there remained uncertainty as to practicalities in the operating relationship between the relevant offices. There was an attendant concern that the “national” profession, as conceptualised in the draft Legal Profession National Law, pandered to the interests of the large national law firms; smaller law firms, it was (and for many remains) feared, it could bring few if any benefits.106 The foregoing explains why the national (“uniform”) regulatory offices under what ultimately translated to the Legal Profession Uniform Law, to date implemented only in New South Wales and Victoria from 1 July 2015 (although there were murmurings of Queensland and Western Australia coming on board in the near future at the time of writing), have had their remit restrained. The Uniform Law creates three new regulatory authorities directed at uniformity in core aspects in regulating participating jurisdictions: the Legal Services Council, the Commissioner

104 See, for example, Spigelman, “Towards a National Judiciary and Profession” (2010) 33 Aust Bar Rev 1 at 7 (who opined that “a vocation structured in this manner had no right to call itself a profession” because “[t]he regulation of a profession cannot be conducted by a body appointed by the executive arm of government”). The Chief Justice of Victoria voiced similar concerns in an extrajudicial address: Warren, “Legal Ethics in the Era of Big Business, Globalisation and Consumerism” (Address to the Joint Law Societies Ethics Forum, Melbourne, 20 May 2010), p 7. 105 Legal Profession National Law (draft), s 8.3.2(a) and 8.3.2(b). 106 Spigelman, “Towards a National Judiciary and Profession” (2010) 33 Aust Bar Rev 1 at 6–7.

[1.115]

1 The Concept of Professional Responsibility

25

for Uniform Legal Services Regulation and the Admissions Committee. The objectives of the Council are prescribed as to:107 • monitor the implementation of the Uniform Law and ensure its consistent application across participating jurisdictions; • ensure that the Legal Profession Uniform Framework remains efficient, targeted and effective, and promotes the maintenance of professional standards; and • ensure that the Legal Profession Uniform Framework appropriately accounts for the interests and protection of clients of law practices. The Council consists of five members drawn from participating jurisdictions, each appointed by the host Attorney-General, on the recommendation of Standing Committee of Attorneys-General108 (three members, one as Chair), the Law Council of Australia and the Australian Bar Association (one member each).109 The Commissioner for Uniform Legal Services Regulation is charged with promoting compliance with the Uniform Framework, ensuring consistent and effective implementation of the disciplinary provisions of the Uniform Framework via appropriate guidelines, and raising awareness of that Framework and its objectives.110 The Admissions Committee is established by the Council, and is responsible, inter alia, for developing Admission Rules and advising the Council on matters relating to admission.111 Importantly, the Uniform Law maintains the core roles of “local regulatory authorities” within the State or Territory in question. In New South Wales, these include the Legal Profession Admission Board, the Legal Services Commissioner, the Law Society Council and the Bar Council, each given authority for this purpose by the Legal Profession Uniform Law Application Act 2014 (NSW).112 In Victoria, likewise, the Victorian Legal Admissions Board, Legal Services Board and Legal Services Commissioner retain core local functions under parallel legislation.113 Professional rules Promulgation of rules

[1.115]

The promulgation of professional rules by lawyers’ professional bodies has been a relatively recent phenomenon in Australia. By the mid-1980s “codes of professional ethics” had only been adopted by law societies in Western Australia (in 1983) and South Australia (in 1984), and the New South Wales Law Reform Commission’s 1979 recommendation that a code of ethics be drafted for lawyers in

107 LPUL, s 394(2). 108 The Standing Committee of Attorneys-General is given a general supervisory role in relation to the Legal Services Council, the Commissioner for Uniform Legal Services Regulation and local regulatory authorities to ensure they are fulfilling their duties under the Uniform Law consistently with the objectives of the Uniform Law: LPUL, s 391(1). 109 LPUL, Sch 1, cl 2(1). 110 LPUL, s 398(2). 111 LPUL, s 402(2). 112 See Legal Profession Uniform Law Application Act 2014 (NSW), Pt 3 (formerly NSW 2004, Pt 7). 113 See Legal Profession Uniform Law Application Act 2014 (Vic), Pt 3 (formerly Vic 2004, Ch 6).

26

Lawyers’ Professional Responsibility

[1.115]

that State had yet to be acted upon.114 In a submission to the Commission, the New South Wales Law Society saw no need for a code because “the standards of conduct expected of a solicitor are well known and understood by the members of the profession and basically by the public at large”.115 Since then, rules of professional conduct have found their way into each Australian State and Territory.116 Australia was a late starter in this regard. The American Bar Association, for instance, adopted its original Canons of Professional Ethics in 1908, which were based on a code of ethics adopted by the Alabama Bar Association over 20 years earlier. The twentieth, and now twenty-first, century has witnessed various subsequent iterations of this document. Even so, it appears that the development of written codes or rules in this context is a predominantly twentieth century phenomenon.117 Whereas professional bodies – typically Law Societies and Bar Associations – were the traditional promulgators of rules of professional practice, directed to their members, as an exercise in self-regulation, pursuant to the Model Laws, and now in New South Wales and Victoria the Uniform Law, the rules have received a statutory foundation. Although regulatory bodies, draft or otherwise have input into rules, their implementation is generally premised on public notice being given inviting comments.118 Once the rules take force, they are binding on lawyers119 but do not have effect to the extent that they are inconsistent with the legal profession legislation or its regulations.120

114 Disney, Basten, Redmond, Ross and Bell, Lawyers (2nd ed, Law Book Co., 1986), p 81. 115 Cited in Sexton and Maher, The Legal Mystique: The Role of Lawyers in Australian Society (Angus and Robertson, 1982), p 169. See also Perak Hanjoong Simen Sdn Bhd v Perindustrian Tenaga Mix Sun Bhd [2008] 8 MLJ 567 at [26] per Rohana Yusuf J (remarking that, even without relevant professional rules, “basic conscience, professionalism, integrity and common sense would dictate that … [a]voiding a conflict of interest is expected in every profession but is even more so demanded in the profession that is sworn to uphold justice”). 116 The statement in the text may need qualification for Tasmania, where the closest equivalent to professional rules – the Rules of Practice 1994 (Tas) – which take the form of delegated legislation, are at best patchy in addressing issues of professional responsibility. It appears that legislators had intended to repeal the Rules of Practice by the Legal Profession Act 2007 (Tas) (see s 661(2), which never commenced). The Rules of Practice, although made by the Council of the Law Society of Tasmania pursuant to the former Legal Profession Act 1993 (Tas), appear to retain force under its 2007 successor. This is presumably by reason of s 221 of the 2007 Act, which empowers the prescribed authority (which is the Law Society: Legal Profession (Prescribed Authorities) Regulations 2008 (Tas), reg 4) to make rules about legal practice in Tasmania engaged in by Australian legal practitioners (other than those practising solely as barristers). 117 See Hurlburt, The Self-Regulation of the Legal Profession in Canada and in England and Wales (Law Society of Alberta, Alberta Law Reform Institute, 2000), pp 94–101. 118 ACT, s 583; NSW, s 427 (formerly NSW 2004, s 708); NT, s 693; Qld, s 223; Tas, s 225; Vic, s 427 (formerly Vic 2004, s 3.2.13). 119 Act, s 585; NT, s 694; Qld, s 227; Tas, s 227; WA, s 581. Prior to 1 July 2015, equivalent statutory provision was made in New South Wales and Victoria: NSW 2004, s 711; Vic 2004, s 3.2.17. 120 ACT, s 586; NT, s 695; Qld, s 229; WA, s 582. Prior to 1 July 2015, equivalent statutory provision was made in New South Wales and Victoria: NSW 2004, s 712; Vic 2004, s 3.2.18.

[1.120]

1 The Concept of Professional Responsibility

27

Tendency towards uniformity

[1.120]

The trend towards uniformity has also influenced the content of professional rules. For instance, the terms of the (then) Law Council of Australia’s Model Rules of Professional Conduct and Practice, issued in 2002, were implemented, in substantially similar form, in professional rules in the Territories, New South Wales, South Australia, Queensland and Victoria.121 Tasmania and Western Australia instead followed their own schema.122 Excepting South Australia, Tasmania and Victoria,123 the barristers’ rules aligned closely to the (then) Australian Bar Association’s Model Rules.124 As a belated response to the Australian Law Reform Commission’s call to prioritise development and implementation of national model professional practice rules,125 the draft Legal Profession National Law envisaged that the proposed National Legal Profession Board make Legal Profession National Rules, to include provisions designated as “Legal Profession Conduct Rules”.126 This has translated to the terms of the Legal Profession Uniform Law,127 which like its draft predecessor makes provision for development of these rules by the Law Council of Australia (for solicitors) and the Australian Bar Association (for barristers), following a process of consultation.128 The implementation of the rules rests submission of the draft by the Legal Services Council to the Standing Committee of Attorneys-General.129 The latter has the power of veto for rule(s) that would impose restrictive or anti-competitive practices, that are not in the public interest (or otherwise not in the public interest because of conflict with the objectives of the Law), or impact on the public funding of the scheme for the regulation of the profession.130

121 Legal Profession (Solicitors) Rules 2007 (ACT) (superseded); Professional Conduct and Practice Rules 1995 (NSW) (superseded); NT: Rules of Professional Conduct and Practice; Legal Profession (Solicitors) Rule 2007 (Qld) (superseded); SA: Rules of Professional Conduct and Practice (superseded); Law Institute of Victoria, Professional Conduct and Practice Rules 2005 (superseded). 122 Rules of Practice 1994 (Tas); Law Society of WA, Professional Conduct Rules (superseded). 123 The (former) South Australian and Victorian barristers’ rules are an amalgam of the Model Rules and the Australian Bar Association’s earlier 1993 Code of Conduct: SA Bar Association Inc, South Australian Barristers’ Conduct Rules (superseded); Vic Bar Inc, Practice Rules (superseded). The Tasmanian rules, drafted much earlier (and the continuing staus of which remains unclear), followed their own unique schema: Tas Bar Association, Professional Conduct Guidelines. 124 Legal Profession (Barristers) Rules 2008 (ACT) (superseded); NSW: Barristers’ Rules (superseded); NT: Barristers’ Conduct Rules; Qld: 2007 Barristers Rule (superseded); WA: Bar Association Conduct Rules (superseded). 125 Australian Law Reform Commission, Managing Justice: A Review of the Federal Civil Justice System (Report No 89, 2000), recommendation 13 (and see the discussion at paras 3.49–3.71). 126 LPNL, s 9.1.3. 127 LPUL, ss 419, 420. 128 LPUL, s 427(5) (cf LPNL, s 9.1.6). 129 LPUL, s 427(6). 130 LPUL, s 428(3) (cf LPNL, s 9.1.7).

28

Lawyers’ Professional Responsibility

[1.120]

In advance of the intended commencement of the Legal Profession National Law, in June 2011 the Law Council of Australia signed off on the final draft of the Australian Solicitors’ Conduct Rules (ASCR), in place of its former Rules of Professional Conduct and Practice. These have since translated to constitute solicitors’ professional conduct rules in the Australian Capital Territory,131 New South Wales (replaced by parallel rules under the auspices of the Legal Profession Uniform Law),132 Queensland133 and South Australia,134 as well as “Legal Profession Conduct Rules” under the Uniform Law implemented in New South Wales and Victoria from 1 July 2015.135 This leaves only the Northern Territory,136 Tasmania137 and Western Australia138 to follow the path of the Australian Solicitors’ Conduct Rules. In the same vein, in 2010 the Australian Bar Association promulgated National Conduct Rules, again superseding earlier rules, which at the time saw implementation at bar association level in New South Wales, Queensland, South Australia and Western Australia. The Northern Territory followed (and still retains) an earlier version of the Association’s proposed national rules,139 while Victoria followed its own course.140 Queensland and Western Australia retain the said rules at the time of writing,141 whereas new barristers’ (although not markedly different) rules have since ensued elsewhere, excepting the Northern Territory and Tasmania,142 regrettably not in identical form, including in New South Wales and Victoria under the Legal Profession Uniform Law.143 131 Legal Profession (Solicitors) Conduct Rules 2015 (ACT) (as from 1 January 2016). 132 Professional Conduct and Practice Rules 2013 (NSW) (as from 1 January 2014; beyond replicating the Australian Solicitors’ Conduct Rules in rr 1–43, the 2013 rules added “practice rules” in rr 43–60, some of which have since translated to the Legal Profession Uniform Legal Practice (Solicitors) Rules 2015) (superseded as from 1 July 2015). 133 Australian Solicitors’ Conduct Rules (as from 1 June 2012: Legal Profession (Australian Solicitors Conduct Rules) Notice 2012 (Qld)). 134 Australian Solicitors’ Conduct Rules (as from 25 July 2011). 135 Legal Profession Uniform Legal Practice (Solicitors) Rules 2015. The Legal Profession Uniform Law also makes provision for the enactment of other rules regulating the legal profession, namely “Admission Rules” (see Legal Profession Uniform Admission Rules 2015: see [2.10], [2.15]), “Legal Practice Rules” (see Legal Profession Uniform General Rules 2015), Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (as part of the “Legal Profession Conduct Rules”) and “Continuing Professional Development Rules” (see Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015; Legal Profession Uniform Continuing Professional Development (Barristers) Rules 2015: see [4.30]): LPUL, s 420. 136 See NT: Rules of Professional Conduct and Practice. 137 See Rules of Practice 1994 (Tas). 138 See Legal Profession Conduct Rules 2010 (WA). 139 The Northern Territory retains Barristers’ Conduct Rules enacted on 14 March 2002, representing an earlier version of the Australian Bar Association’s conduct rules. 140 Victorian Bar Inc, Practice Rules (superseded). 141 Bar Association of Queensland, Barristers’ Conduct Rules (commencing on December 2011); Western Australian Bar Association, Western Australian Barristers’ Rules (commencing on 5 October 2011). 142 The Tasmanian Bar Association had, well before attempts by the Australian Bar Association to promulgate national conduct rules, issued “Professional Conduct Guidelines”, the status of which nowadays appears spent, as these do not appear on the Association’s website. The latter instead contains a link to Pt 8 of the Rules of Practice 1994 (Tas), which only cursorily address questions of

[1.125]

1 The Concept of Professional Responsibility

29

Role of professional rules

[1.125]

Professional rules, judicially described as “an important aspect of the self-regulation of the legal profession”144 that promotes its “good governance”,145 serve as a standard of conduct in disciplinary proceedings, as a guide for action in a specific case, and as a demonstration of the profession’s commitment to integrity and public service.146 As to the first of these, professional rules express the profession’s collective judgment as to the standards expected of its members.147 This explains why the rules are of direct relevance in determining whether disciplinary proceedings should be commenced against a lawyer and in the hearing of those proceedings. They are “a reliable and important indicator of the accepted opinion of the members of the profession”.148 Accordingly, they are of assistance in determining matters of misconduct before a court, although a court is not bound to apply them.149 The court may also resort to professional rules, where appropriate, as an indicator of the requisite standard of care in tort (see [5.165]), and of the reasonable expectations of the parties in cases of alleged conflict of interest or breach of confidentiality.150 But they cannot supplant the law as set out in judicial decisions,151 or provide a private cause of action against a lawyer152 (unless the terms of the relevant rule clearly confer such a right).153 barristerial professional responsibility. The Legal Professional Act 2007 (Tas) was, however, amended by the Legal Profession Amendment Act 2013 (Tas), as from 1 January 2014, to make provision for the Tasmanian Bar to make rules about legal practice in Tasmania engaged in by Australian legal practitioners who practise solely as barristers (s 221A(1)). These rules may adopt, either wholly or in part and with or without modification, and either specifically or by reference, the extant Australian Bar Association model rules (s 221A(2)), and rescind Pt 8 of the Rules of Practice (s 221A(4)). The Tasmanian Bar has yet to exercise this power. 143 See Legal Profession (Barristers) Rules 2014 (ACT) (commencing on 20 August 2014); Legal Profession Uniform Conduct (Barristers) Rules 2015 (NSW); Legal Profession Uniform Conduct (Barristers) Rules 2015 (Vic) (apply in New South Wales and Victoria, as from 1 July 2015) (cf the intervening Barristers’ Rules 2014 (NSW)); South Australian Bar Association Inc, Barristers’ Conduct Rules (commencing on 14 November 2013). 144 Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 3) [2014] VSC 340 at [42] per Ferguson J. 145 Wallace v Canadian Pacific Railway [2013] 2 SCR 649 at [15] per McLachlin CJC. 146 See Dal Pont, “What Are Rules of Professional Conduct For?” [1996] NZLJ 254 at 256–266. 147 X Ltd v Morgan-Grampian (Publishers) Ltd [1991] 1 AC 1 at 20 per Lord Donaldson MR (“[o]ne of the hallmarks of a profession is that it gives clear and unambiguous guidance to its members on issues of professional ethics and conduct”); Black v Taylor [1993] 3 NZLR 403 at 409 per Richardson J. 148 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 154 per Black CJ. The point is also made in ACT, rr 2.2, 2.3; NSW, rr 2.2, 2.3; Qld, rr 2.2, 2.3; SA, rr 2.2, 2.3; Vic, rr 2.2, 2.3. 149 Brown v Inland Revenue Commissioners [1965] AC 244 at 258 per Lord Reid; MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 256–257 per Sopinka J; Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 154–155 per Black CJ; Re a Medical Practitioner [1995] 2 Qd R 154 at 164 per Dowsett J. 150 MacLean v Arklow Investments Ltd [1998] 3 NZLR 680 at 693 per Gault J. 151 Canada Southern Petroleum v Amoco Canada Petroleum (1997) 144 DLR (4th) 30 at 38 (CA(Alta)); Wallace v Canadian Pacific Railway [2013] 2 SCR 649 at [16] per McLachlin CJC. See, for example, Dale v Clayton Utz (No 2) [2013] VSC 54 at [168] per Hollingworth J (remarking that “a lawyer’s ethical

30

Lawyers’ Professional Responsibility

[1.125]

As to the second role, professional rules provide guidance on issues of professional responsibility, aiding lawyers to answer questions or resolve dilemmas of that kind.154 In this context, the rules are of especial utility to inexperienced lawyers. They further serve to convey to lawyers an impression of the standard expected in their dealings with clients, the court and the community. The professional rules can therefore be used by lawyers to justify their actions as the professionally correct approach required in various situations. This provides an element of security, in that abiding by a rule is a defence to a charge of misconduct.155 Moreover, professional rules recognise the importance that lawyers and the community share an understanding of what is expected and permissible behaviour in the performance of a lawyer’s professional role.156 Common rules also serve to create a community in which members perceive a norm in dealing with one another.157 The third role for professional rules is as a public relations document that highlights the seriousness with which lawyers view their professional responsibilities. In turn, the community is invited to place trust and confidence in the profession in the assurance that its members will reflect the standards of conduct espoused in those rules. In so doing, it is the standards the profession voluntarily sets for itself, not those set by others, that justify its claim for that trust. Critical to professionalism, it has been said, is that those standards exceed those

obligations under professional conduct rules are not the same as the circumstances in which the court will exercise its exceptional inherent jurisdiction to deprive a party of the counsel of their choosing”, and that while “[i]t may well be that conduct of a type that the court would enjoin would also be in breach of the practice rules … the converse does not necessarily follow”); Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 3) [2014] VSC 340 at [42] per Ferguson J. 152 See ASCR, r 2.3 (replicated in the ACT; NSW; Qld; SA; Vic) (“A breach of these Rules … cannot be enforced by a third party”); Dura (Australia) Constructions Pty Ltd v Hue Boutique Living Pty Ltd (No 5) [2014] VSC 400 at [258] per Dixon J (“It is not for the court to enforce professional conduct rules”); Frigger v Clavey Legal Pty Ltd (No 3) [2015] WADC 21 (where Herron DCJ ruled that it was not an implied term of the retainer between the parties that the lawyer was contractually obliged or bound to comply or act in accordance with the professional rules: at [299]–[313]). 153 Winters v Mischon de Reya [2008] EWHC 2419 (Ch) at [95] per Henderson J; Kim v Oh [2013] 2 NZLR 825 at [118] per Cooper J. 154 ASCR, r 2.1 (“The purpose of these Rules is to assist solicitors to act ethically and in accordance with the principles of professional conduct established by the common law and these Rules”) (applies in the ACT; NSW; Qld; SA; Vic). Following an empirical study in Ontario, the extent to which this represents the practice has, however, been queried in that jurisdiction: see Wilkinson, Walker and Mercer, “Do Codes of Ethics Actually Shape Legal Practice?” (2000) 45 McGill LJ 645 (noting that only 16% of the 180 lawyers interviewed referred to the applicable professional rules in solving ethical problems). 155 Brown v Inland Revenue Commissioners [1965] AC 244 at 258 per Lord Reid; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 756 per Hutley JA. 156 See Hazard, Ethics in the Practice of Law (Yale University Press, 1978), p 5. 157 Zacharias, “Specificity in Professional Responsibility Codes: Theory, Practice, and the Paradigm of Prosecutorial Ethics” (1993) 69 Notre Dame L Rev 223 at 231.

[1.130]

1 The Concept of Professional Responsibility

31

that can be externally imposed, for if they do not there is no basis for the privileged status of a profession.158 The words of a former President of the New Zealand Law Society are instructive in this context:159 As they represent the judgment of the profession on how its own members should conduct themselves they, therefore, exceed both in breadth and particularly the requirements of the ordinary law of the land and the dictates of moral philosophy or science. Because they record what should be, they provide a sound and compelling distillation of good judgment to guide, lead and limit the instinctive reactions of the lawyer in the pursuit of his or her profession in those situations where the prospect of personal gain, the opportunity for commercial advantage, whether personal or for the client, might cloud the quality of professional judgment required to be exercised.

Importantly, even if a rule is rarely employed, it is nonetheless a statement that the profession views the issue seriously, and that those who breach it fall short of the standards of professionalism that the public is entitled to demand of lawyers.

[1.130]

The foregoing should be read subject to the caveat that professional “rules” cannot be viewed as exhaustive of lawyers’ ethical responsibilities,160 and so the absence of a rule directed at a specific form of (mis)conduct does not preclude a disciplinary finding.161 Nor should professional rules be construed as legal rules. The tendency to “legalise” professional ethics by reducing it to precise rules162 should not prompt an ethos within which a lawyer’s first thought, instead of being whether a particular act would be unprofessional, is one whether the rules prohibit it.163 In this regard, Sir Gerard Brennan, in a conference address, said that “[i]f ethics were reduced merely to rules a spiritless compliance would soon be replaced by skilful evasion”.164 In similar vein, a Singaporean judge has stressed that it is:165 158 Benson, “The Profession of the Future” (1979) 53 ALJ 497 at 500. 159 Potter, quoted in Harley, “Ethics, Professionalism and Success” (1993) 15 (Oct) LSB (SA) 14. 160 The barristers’ rules generally provide, to this end, that they should not be read as if they are a complete or detailed code of conduct for barristers: ACT, r 9; NSW, r 7; NT, r 9; Qld, r 10; SA, r 10; Vic, r 7; WA, r 10. See also Public Trustee v By Products Traders Pte Ltd [2005] 3 SLR(R) 449 at [55] per VK Rajah J (“Ethical rules and conventions can never exhaustively prescribe or proscribe standards of professional conduct. Using established standards as basic guides, solicitors must draw on their own internalised moral compasses to guide them through the myriad of conflicting priorities they have to regularly address and make in practice”); Harold v Legal Complaints Review Officer [2012] 2 NZLR 559 at [32] per Asher J (“The rules are not the only source of ethical standards”). 161 Dow Chemical Canada Inc v Nova Chemicals Corp (2011) 205 ACWS (3d) 853 at [70] per Wittmann CJQB (QB(Alta)). See, for example, the multiple instances where lawyers in the United States were disciplined for engaging in sexual relations with clients preceding the enactment of a dedicated professional rule on the point, discussed at [6.145]. 162 See Glenn, “Professional Structures and Professional Ethics” (1990) 35 McGill LJ 424 at 434 (noting a movement away from “the idea of broad standards of conduct to precise rules of professional conduct”). 163 Hazard, “The Future of Legal Ethics” (1991) 100 Yale LJ 1239 at 1255. 164 Brennan, Ethics and Procedure, Bar Association of Queensland Conference, Noosa, 3 May 1992. 165 Law Society of Singapore v Tan Phuay Khiang [2007] 3 SLR(R) 477 at [100], [120] per VK Rajah. More broadly, on the interpretation of professional rules, see Chen, “Judicial Developments in Ethical Lawyering in Singapore” (2013) 25 SAcLJ 395 at 396–401.

32

Lawyers’ Professional Responsibility

[1.135]

axiomatic that it is the spirit and intent, rather than just the plain letter, of the professional ethical rules that breathe life and legitimacy into the standards that are relevant in assessing whether a lawyer has discharged his professional obligations, and … that a rigid and formalistic adherence to the codes of practice without a proper appreciation of their spirit, purport and intent may from time to time lead to ethical blindness.

The rules should accordingly never be seen as an excuse to abdicate professional judgment, and may to this end counterbalance the concurrent trend that makes legal profession legislation more prescriptive: see [1.105]. Should professional rules be positive or aspirational, brief or detailed?

[1.135]

There is debate about whether professional rules should be positive or aspirational, basic or complex.166 In entering this debate, it must be remembered that the purposes those rules serve must determine their nature and form. A purely aspirational set of rules may motivate lawyers to higher standards of conduct and may similarly indicate to the community the standards the profession aims to achieve. Positive rules risk being viewed as maximum standards of conduct, which lawyers may seek to find ways and means to circumvent. Yet rules that prescribe the impossible are apt to produce discouragement and disdain. Moreover, aspirational rules are commonly phrased in broad terms, adopting concepts that are not objectively quantifiable, such as “timely”, “competent”, “diligent” and “honourable”. They may also be of limited use to lawyers seeking guidance on a particular matter or a regulatory or disciplinary body seeking to determine issues of misconduct. Some argue that any professional rules should be stated briefly and in the broadest of terms – a “ten commandments” approach. They maintain that many issues of professional responsibility are matters for a lawyer’s individual judgment, and resent perceived encroachment on that judgment, pointing to a time when there was apparently no need for detailed professional rules. These persons would probably approve of the New South Wales Law Society’s Statement of Ethics, which reads as follows:167 We acknowledge the role of our profession in serving our community in the administration of justice. We recognise that the law should protect the rights and freedoms of members of society. We understand that we are responsible to our community to observe high standards of conduct and behaviour when we perform our duties to the courts, our clients and our fellow practitioners. Our conduct and behaviour should reflect the character we aspire to have as a profession. This means that as individuals engaged in the profession and as a profession: • • • •

We We We We

primarily serve the interests of justice. act competently and diligently in the service of our clients. advance our clients’ interests above our own. act confidentially and in the protection of all client information.

166 See further Dal Pont, “Drafting Rules of Professional Conduct” [1996] NZLJ 313 at 314–316. 167 The terms of the Statement were proclaimed by the Council of the Law Society on 11 December 2003 (replacing the former 1994 statement): see Shirvington, “Revised Statement of Ethics Reflects our Great Heritage” (2004) 42 (Feb) LSJ 38. The Statement was lightly revised in 2009: see Monaghan, “Communicating with Clients and the Community” (2009) 47 (Sept) LSJ 41.

[1.140]

1 The Concept of Professional Responsibility

33

• We act together for the mutual benefit of our profession. • We avoid any conflict of interest and duties. • We observe strictly our duty to the Court of which we are officers to ensure the proper and efficient administration of justice. • We seek to maintain the highest standards of integrity, honesty and fairness in all our dealings. • We charge fairly for our work.

Yet the usefulness of this statement, the substance of which incidentally has been adopted in Victoria168 and Western Australia,169 for lawyers desirous of guidance on a particular issue may be queried. After all, lawyers who consult professional rules rarely do so merely out of intellectual curiosity, but in search for a clear directive, or at least strong guidance, on an issue.170 Irrespective of the correctness or otherwise of such a perception, a one-page so-called statement of ethics may convey to the public and regulators that lawyers’ professional responsibilities are minimal. One commentator has opined in this context:171 the move to more definite rules is not only inevitable but also desirable. Intuition or appeals to secular or other morality are no substitute for a framework of rules. Not only is there no consensus over the former, but in some important respects the correct ethical position is not immediately apparent. Issues of legal ethics do not come labelled as such but arise in particular contexts of legal practice. Without definite rules it is not only difficult to see how professional behaviour will be constrained but the problems of teaching legal ethics would be considerably compounded.

That New South Wales, Victorian and Western Australia lawyers are subject to professional rules that extensively elaborate the above Statement of Ethics is indicative of the need for more detailed rules. The professional rules in all jurisdictions are predominantly black letter positive rules,172 and are also rather lengthy. Those who contend that the rules should be otherwise arguably attach insufficient weight to the lawyer’s need for guidance, the professional body’s need for clear standards of conduct, and the regulator’s and community’s need for confidence in the profession. Also, the argument that an honourable profession needs no statement of “ethics” overlooks that the profession must not only be honourable, but be seen to be honourable. Should a rule-commentary approach be adopted?

[1.140]

The foregoing is not to say that professional rules should be read and interpreted as one would a statute, in which each word is scrutinised for its legal

168 By the Law Institute of Victoria, under the heading “Code of Ethics”. 169 By the Law Society of Western Australia, albeit under the heading “Summary of Ethical Principles”. 170 Cf Gentile v Nevada State Bar (1991) 501 US 1030 where the Supreme Court of the United States reversed a State disciplinary tribunal ruling that the lawyer be reprimanded on the grounds that the rule in question was unconstitutionally vague. The fact that the lawyer was found in violation of the rules after having studied them and making a conscious effort at compliance showed that the rule was insufficiently clear. 171 Cranston, “Legal Ethics and Professional Responsibility” in Cranston (ed), Legal Ethics and Professional Responsibility (Clarendon Press, 1995), p 31. 172 Regarding the transformation of so-called “rules of ethics” into positive law see Strassberg, “Taking Ethics Seriously: Beyond Positivist Jurisprudence in Legal Ethics” (1995) 80 Iowa L Rev 901.

34

Lawyers’ Professional Responsibility

[1.140]

meaning. As noted earlier, the spirit of the rules, as well as the letter, must be borne in mind. In this context, the “rule-commentary” approach, adopted in some jurisdictions, deserves mention. On its face, it appears a useful means of combining the brief and the complex, the aspirational and the prescriptive. It also may provide additional guidance to lawyers and professional bodies, and convey to regulators and the community the onerous professional responsibility lawyers must fulfil. It is important, though, that the status of the commentary be made clear, as to whether it is equivalent to the rule, or subordinate to it. This is addressed in the United States Model Rules of Professional Conduct, which state that “[c]omments do not add obligations to the Rules but provide guidance for practising in compliance with the Rules”.173 Similarly, the Law Society of Scotland Practice Rules 2011, which make provision for “Guidance” to “assist solicitors … to meet the standards of good professional and ethical practice”, stipulate that “the Guidance does not have a status equivalent to the Rules” but is “principally intended to assist [solicitors] with the interpretation of the Rules and the identification of good practice”. The rules then add:174 Meticulous adherence to every point in the Guidance is not mandatory in the same way as it is for a Rule, but non-compliance will be taken into account should it be alleged that there has been a breach of a Rule, inadequate professional service, unsatisfactory professional conduct or professional misconduct. If you have chosen to depart from the Guidance in a particular situation, you will be required to justify your decision if a claim or complaint is made.

Conversely, while the Model Code of Professional Conduct issued by the Federation of Law Societies of Canada likewise includes commentary to its rules, they view commentaries as contextualising the rules, and to encompass, together with the rules, the ethical standard of practice of law in Canada. To this end, it appears that the commentaries are not intended to be subordinate to the rule, in part driven, it seems, from the rules themselves being relatively brief as compared to rules elsewhere. That in the former New Zealand rules the commentary qualified an absolute rule more than once175 may explain why the current New Zealand rules eschew any commentary. Concerns over rule-commentary approaches include that the commentary may:176 • be inconsistent with the rule; • be given less scrutiny than the rules in relation to its ethical implications; • cause the rules to be excessively long;177 173 US Scope [1]. 174 See http://www.lawscot.org.uk. 175 See, for example, Rules of Professional Conduct for Barristers and Solicitors, rr 4.04 (cmt (2)), 8.05 (cmt (1)) (superseded), and the discussion in Harold v Legal Complaints Review Officer [2012] 2 NZLR 559 at [32]–[43] per Asher J (as to the status of the commentary). 176 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), para 3.79. 177 Cf the American Bar Association’s Model Rules of Professional Conduct, which adopt a rulecommentary approach, and exceed 100 pages in length (in small print).

[1.140]

1 The Concept of Professional Responsibility

35

• lead to litigation, time being spent on debating the application of the rule; • encourage lawyers to adopt a legalistic rather than ethical approach; and • quickly become out of date because without a body resourced to monitor and update commentary. The Australian Law Reform Commission, in recommending that the Law Council of Australia convene a working group to coordinate the drafting of commentary to legal practice standards, to be issued as part of, or a supplement to, national model professional rules,178 considered most of the above fears to be unfounded.179 In its opinion, a rule-commentary approach would assist in developing a common service ideal, offer better guidance for lawyers in the application of the rule, be better suited to teaching legal ethics and clarify the rule in particular circumstances.180 The Law Council of Australia’s commentary to the Australian Solicitors’ Conduct Rules, although patchy, represents a (delayed) response to this end; it makes clear the commentary “does not constitute part of the Rules and is provided only as guidance”.181 The Ethics Centre of Queensland Law Society has commenced issuing “Guidance Statements” relating to the Australian Solicitors’ Conduct Rules, abidance to which, it is said, may make it be easier for a lawyer to account for his or her actions “if a complaint is later made to the Legal Services Commission”.182 But while adhering to the Guidelines may represent “a standard of good practice”, it is made clear that they lack statutory effect and provide no cast-iron defence to complaints of misconduct. In an approach with what appears a similar object, the Western Australian Law Society has collated a document entitled Ethical and Practice Guidelines from “a reservoir of papers and articles written by Western Australian practitioners to ensure consistency with Western Australian practice”.183 Again, it is made clear that it is “not a substitute for an understanding of and compliance with the relevant ethical rules of law” but “to serve as a practical guide to practitioners on ethical and proper conduct in their day to day practices”. The introduction of the Solicitors Regulation Authority Code of Conduct 2011, in place of the Solicitors’ Code of Conduct 2007 as from 6 October 2011, brought with it a new approach to professional rules in the United Kingdom. Termed “OutcomesFocused Regulation”, rather than containing prescriptive rules supported by guidance (as per its predecessor), the 2011 Code comprises mandatory outcomes (denoted “O” followed by a parenthesised chapter and outcome number) and non-mandatory indicative behaviours (denoted by “IB” again followed by a 178 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), recommendation 14 (see the discussion at paras 3.72–3.83). 179 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), para 3.80. 180 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), para 3.81. 181 ASCR, r 2 (commentary). 182 See http://www.qls.com.au/knowledge_centre/ethics. 183 Law Society of Western Australia, Ethical and Practice Guidelines, p 3 (as at 25 August 2015 at the time of writing), at http://www.lawsocietywa.asn.au.

36

Lawyers’ Professional Responsibility

[1.140]

parenthesised chapter and outcome number).184 “Outcomes” describe what solicitors are expected to achieve in order to comply with the ten mandatory “Principles”185 in specific contexts. “Indicative behaviours” provide non-mandatory examples of the kind of behaviours that may establish whether or not a solicitor has achieved the relevant Outcomes and complied with the Principles. They are usually prefaced with the words “Acting in the following way(s) may tend to show that you have [or have not] achieved these outcomes and therefore complied with the Principles”. As the general substance of the obligations contained in the 2011 Code is, however, little different from its predecessor, it remains to be seen whether “Outcomes-Focused Regulation” will generate any change in practice. The same may be observed regarding the “Code of Conduct” issued by the United Kingdom Bar Standards Board,186 which identifies “Core Duties” (CD1–CD10), before prefacing each “Conduct Rule” by “outcomes”, then followed by “rules” and “guidance”. Lying somewhere between the above English approach, and a rule-commentary approach, is that adopted by the Singaporean Legal Profession (Professional Conduct) Rules 2015. In sub-rule (1) of each rule, the 2015 Rules contain the “principles” underscoring the rule. But the document itself omits any explanation as to the status of the principles as opposed to the substantive content of the rules.187

184 See http://www.sra.org.uk. 185 The Principles are the following: (1) uphold the rule of law and the proper administration of justice; (2) act with integrity; (3) not allow your independence to be compromised; (4) act in the best interests of each client; (5) provide a proper standard of service to your clients; (6) behave in a way that maintains the trust the public places in you and in the provision of legal services; (7) comply with your legal and regulatory obligations and deal with your regulators and ombudsmen in an open, timely and co-operative manner; (8) run your business or carry out your role in the business effectively and in accordance with proper governance and sound financial and risk management principles; (9) run your business or carry out your role in the business in a way that encourages equality of opportunity and respect for diversity; and (10) protect client money and assets. 186 Found in the Bar Standards Board Handbook (2nd ed, 2015), at http://www.barstandardsboard.org.uk. 187 The “principles guiding interpretation of these Rules” found in r 4 of the Legal Profession (Professional Conduct) Rules 2015 (Sing) do not address the point.

Chapter 2

Admission to Practice [2.05] REQUIREMENTS FOR ADMISSION ................................................................................ 37 [2.05] Educational requirements ............................................................................................... 37 [2.20] Character-based requirements ....................................................................................... 39 [2.50] Admission pursuant to the mutual recognition regime ........................................... 44 [2.55] FACTORS RELEVANT TO GOOD FAME AND CHARACTER ................................... 45 [2.60] Previous criminal behaviour .......................................................................................... 46 [2.65] Previous improper conduct in the curial process ...................................................... 47 [2.70] Previous improper conduct in the course of education, a profession or employment ...................................................................................................................... 48 [2.80] Infirmity ............................................................................................................................. 51 [2.85] Non-disclosure of prior impropriety upon admission .............................................. 52 [2.130] Mitigating factors ........................................................................................................... 60 [2.140] REQUIREMENTS FOR PRACTICE ................................................................................. 62 [2.140] Entitlement to practise law premised upon practising certificate ........................ 62 [2.155] Practice by interstate lawyers ...................................................................................... 65 [2.160] Practice by foreign lawyers .......................................................................................... 65 [2.165] APPLICATION FOR READMISSION ............................................................................. 67 [2.165] Curial approach .............................................................................................................. 67 [2.170] Need for evidence of redemption and rehabilitation .............................................. 67 [2.175] Weight given to findings of tribunal that ordered removal ................................... 69 [2.180] Importance of candour upon readmission ................................................................ 69 [2.185] Time elapsed between removal and readmission application ............................... 70 [2.190] Readmission subject to condition(s) ........................................................................... 70

REQUIREMENTS FOR ADMISSION Educational requirements

[2.05] In addition to character-based requirements (discussed at [2.20]–[2.45]), the special skill and learning at the core of a profession (see [1.25]) dictates that admission is premised on the fulfilment of educational requirements. These aim, it has been judicially observed, to ensure that those “who follow the high calling of a legal practitioner are competent and skilled to advise their clients and to attend to their affairs”.1 Educational prerequisites are divided into academic and practical components. 1 Legal Practice Board v Ridah [2004] WASC 263 at [13] per McKechnie J.

38

Lawyers’ Professional Responsibility

[2.10]

Academic requirements

[2.10] Significant uniformity exists within Australia so far as the academic requirements are concerned. This followed the drafting of the Uniform Admission Rules by the Consultative Committee of State and Territory Law Admitting Authorities (known as the Priestley Committee).2 The academic requirements propounded by the Rules involve completion of a tertiary academic course in Australia, including the equivalent of at least three years’ full-time study of law, that is recognised in at least one Australian jurisdiction as a sufficient academic qualification to practise law. The Rules specify the areas of legal knowledge in which an applicant for admission must demonstrate understanding and competence via completing that academic course. Each jurisdiction altered its admission rules in response to the Priestley Committee’s report, and adopted the knowledge areas propounded in the report.3 Practical legal training requirements

[2.15] The Uniform Admission Rules identified the practical requirements for admission as the successful completion of at least one year’s articles of clerkship with a lawyer, a recognised practical legal training (PLT) course, or a combination of each. The most common model is for completion of a PLT course (increasingly, together with work placements) to carry admission.4 In some jurisdictions the academic and practical legal training requirements have been collapsed within the one institution, to be completed contemporaneously. Except in the Australian Capital Territory, New South Wales and Tasmania, applicants may serve at least one year of articles or supervised work experience as an alternative to a PLT course.5 2 The Committee, chaired by New South Wales Court of Appeal judge Mr Justice Priestley, released a discussion paper in April 1992, and its Report on Uniform Practical Legal Training Requirements in February 1994. The latter contained the Uniform Admission Rules. The Law Council of Australia endorsed these in its Blueprint for the Structure of the Legal Profession (July 1994). The Law Admissions Consultative Committee, in collaboration with the Australasian Practical Legal Education Council, most recently revised the “Practical Legal Training Competency Standards for Entry-level Lawyers” in January 2015. For a critical analysis of the Uniform Admission Rules see Garkawe, “Admission Rules” (1996) 21 Alt LJ 109. 3 Court Procedures Rules 2006 (ACT), r 3605; Legal Profession Uniform Admission Rules 2015 (NSW), r 5, Sch 1 (Legal Practitioners Admission Rules 2005 (NSW), r 95, Sch 5); Legal Profession Admission Rules 2007 (NT), r 4, Sch 3; Supreme Court (Legal Practitioner Admission) Rules 2004 (Qld), r 6, App A; LPEAC Rules 2004 (SA), rr 2.1–2.3, App A; Legal Profession (Board of Legal Education) Rules 2010 (Tas), Sch 1; Legal Profession Uniform Admission Rules 2015 (Vic), r 5, Sch 1 (formerlyLegal Profession (Admission) Rules 2008 (Vic), r 2.05); Legal Profession (Admission) Rules 2009 (WA), r 6. 4 Court Procedures Rules 2006 (ACT), r 3606; Legal Profession Uniform Admission Rules 2015 (NSW), r 6, Sch 2 (formerly Legal Practitioners Admission Rules 2005 (NSW), r 96, Sch 4); Legal Profession Admission Rules 2007 (NT), r 5, Sch 4; Supreme Court (Legal Practitioner Admission) Rules 2004 (Qld), r 7, App B; LPEAC Rules 2004 (SA), r 2.4; Tas, s 25(1)(b); Legal Profession (Board of Legal Education) Rules 2010 (Tas), Pt 3; Legal Profession Uniform Admission Rules 2015 (Vic), r 6, Sch 2 (formerly Legal Profession (Admission) Rules 2008 (Vic), rr 3.01–3.04); Legal Profession (Admission) Rules 2009 (WA), r 7(2)(b), (c). 5 Legal Profession Admission Rules 2007 (NT), r 5; Supreme Court (Legal Practitioner Admission) Rules 2004 (Qld), r 7A, Pt 2A (“supervised workplace experience”); LPEAC Rules 2004 (SA), r 5.1 (which envisages the completion of articles where a law graduate is unable to obtain entry into the Legal

[2.25]

2 Admission to Practice

39

Character-based requirements

[2.20] The basic character requirement is good fame and character; some jurisdictions also require that an applicant be a fit and proper person to be admitted but this seems to add little to the threshold.6 Only at the admission stage must this hurdle be overcome; unlike the swelling practice in the United States,7 law school admission in Australia is not premised on any character inquiry or threshold (although there are compelling reasons to argue that law schools should inform their students of the character threshold to be faced upon admission).8 A prospective applicant may seek early consideration of character and suitability for admission from the relevant admission body.9 Reason for character-based requirements

[2.25] The reason for inquiry into fame and character is that a person admitted to the profession is held out as fit to be entrusted by the public with their affairs and confidences, in whose integrity the public can be confident.10 Were the profession to admit persons who have previously shown disrespect for the law, or have some other matter adverse to their trustworthiness or integrity, a member of the public may lack confidence in the profession as a whole. As explained in the Canadian professional rules:11 Practice course in the year for which he or she wishes to serve in articles); Legal Profession Uniform Admission Rules 2015 (Vic), rr 6(2)(b), 9, Sch 3 (“supervised workplace training”) (formerly Legal Profession (Admission) Rules 2008 (Vic), rr 3.01, 3.05–3.15); Legal Profession (Admission) Rules 2009 (WA), r 7(2)(a). 6 ACT, ss 11(1)(a), 22; Legal Profession Uniform Admission Rules 2015 (NSW), r 10(1) (formerly NSW, s 9(1)); NT, ss 11(1)(a), 30; Qld, ss 9(1)(a), 31; SA, s 15(1); LPEAC Rules 2004 (SA), r 7.6; Supreme Court Admission Rules 1999 (SA), r 6(a), Form 3; Tas, ss 9(1)(a), 26; Legal Profession Uniform Admission Rules 2015 (Vic), r 10(1) (formerly Vic, s 1.2.6); WA, ss 8(1)(a), 22. 7 In the United States, the past 30 years or so has witnessed an increase in the number of law schools that inquire into applicants’ character and fitness (for instance, criminal history) in their application documentation, as part of the school’s overall analysis of applicants’ suitability to pursue law study. There is no consistency, however, in the object of these inquiries. Some law schools view this process as part of an active role to assess fitness to practice law; others see their role as merely educational. See generally Dzienkowski, “Character and Fitness in Inquiries in Law School Admissions” (2004) 45 S Tex L Rev 921; Fortney, “Law Student Admissions and Ethics – Rethinking Character and Fitness Inquiries” (2004) 45 Sth Tex L Rev 983. There exist, in any case, serious questions over issues of both capacity and ethics in law schools engaged in ethical screening: see, for example, McDowell, “The Usefulness of ‘Good Moral Character’” (1994) 33 Washburn LJ 323 at 328–329 (noting a justifiable reluctance to make a serious effort to condition entrance on character requirements, for reasons including: “first, the difficulty of obtaining sufficient reliable evidence; secondly, the possibility that character might change or be improved in the course of professional education; and finally, a profession’s expertise may be studied and mastered by those who have no intention of ever practicing”: at 328). 8 See McCulley, “School of Sharks? Bar Fitness Requirements of Good Moral Character and the Role of Law Schools” (2001) 14 Geo J Leg Ethics 839. 9 ACT, s 23; NSW, s 21 (formerly NSW 2004, s 26); NT, s 31; Qld, s 32; LPEAC Rules 2004 (SA), r 8(a); Tas, s 27; Vic, s 21; WA, s 23. 10 Ex parte Lenehan (1948) 77 CLR 403 at 426 per Rich J (dissenting but not on the law); Re Application for Admission as a Legal Practitioner (2004) 90 SASR 551 at [29] per Doyle CJ. 11 Can CPC, r 2.1-1, cmt [1].

40

Lawyers’ Professional Responsibility

[2.30]

Integrity is the fundamental quality of any person who seeks to practise as a member of the legal profession. If a client has any doubt about his or her lawyer’s trustworthiness, the essential element in the true lawyer-client relationship will be missing. If integrity is lacking, the lawyer’s usefulness to the client and reputation within the profession will be destroyed, regardless of how competent the lawyer may be.

Not all agree that efforts into character screening at the stage of admission are justified, a core concern being an absence of empirical evidence to link prior misconduct with misconduct as a lawyer.12 In place of character screening, some suggest, greater resources should be allocated to disciplinary enforcement.13 Responsibility for character assessment

[2.30] In each jurisdiction, it is the Supreme Court that admits a person to practise as a lawyer. The court must accordingly be confident of an applicant’s good fame and character, and exercises a responsibility to the public and the profession not to accredit persons as worthy of that confidence who cannot establish the right to it.14 Protection of the public, to this end, is “a significant feature of admission proceedings”,15 just as it informs the sanction in professional disciplinary proceedings: see [23.20]. Statute makes provision for an admission board (or the like) to advise the court as to an applicant’s fame and character.16 The Legal Profession Uniform Law, as enacted in New South Wales and Victoria, rests makes the court’s jurisdiction to admit a person as a lawyer, inter alia, upon the designated local regulatory

12 See, for example, Swisher, “The Troubling Rise of the Legal Profession’s Good Moral Character” (2008) 82 St John’s L Rev 1037, (who argues that character screening is meritless also because, inter alia, it reveals “an impoverished role for forgiveness and redemption” (at 1063) and that its emphasis on criminal records “disproportionately impacts certain racial groups and socioeconomic classes” (at 1064)). Years earlier two Australian commentators suggested that “[e]ither effective screening procedures should be introduced, or the attempt to vet the character of applicants for the profession should be abandoned”: Basten and Redmond, “Character Review of Intending Lawyers” (1979) 3 UNSWLJ 117 at 144. 13 Being the recommendation of Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 (see at 589–592). Cf Woolley, “Tending the Bar: The ‘Good Character’ Requirement for Law Society Admission” (2007) 30 Dalhousie LJ 27 (who, rather than calling the abolition of character screening, advocates that the screening process should be reformed to ensure that it better fulfils its purposes: see at 73–77). 14 Incorporated Law Institute of New South Wales v Meagher (1909) 9 CLR 655 at 681 per Isaacs J; Southern Law Society v Westbrook (1910) 10 CLR 609 at 619 per O’Connor J; Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 251 per Deane, Dawson, Toohey and Gaudron JJ. 15 Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 at [23] per Johnson J (affd Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289). 16 ACT, ss 29, 30 (Legal Practitioners Admission Board); NSW, ss 17, 19 (NSW Admission Board) (formerly NSW 2004, ss 31, 35, 36); NT, s 35 (Legal Practitioners Admission Board); Qld, s 39 (Legal Practitioners Admission Board); SA, s 15 (Board of Examiners); LPEAC Rules 2004 (SA), r 7.6; Supreme Court Admission Rules 1999 (SA), rr 6(a), 7A; Tas, s 31(3) (Board of Legal Education: see Legal Profession (Board of Legal Education) Rules 2010 (Tas)); Vic, ss 17, 19 (Victorian Legal Admissions board) (formerly Vic 2004, ss 2.3.6, 2.3.10; Board of Examiners); WA, s 26(2) (Legal Practice Board).

[2.40]

2 Admission to Practice

41

authority17 – being the local admission board18 – having supplied the court with a (current) “compliance certificate” in respect of the person.19 That certificate must state that the applicant has satisfied the local admissions board that he or she has met the prescribed educational requirements and is a fit and proper person to be admitted.20 “Good fame and character”

[2.35] The phrase “good fame and character”, though given statutory recognition, bears no special or technical meaning; instead, the words assume their ordinary meaning.21 While “fame” and “character” do overlap, the distinction lies in that “fame” focuses on an applicant’s reputation in the public arena whereas “character” involves a more objective evaluation relating to an applicant’s quality, judged by her or his former acts and motives.22 After all, a person “can only be judged by what he has done and what he has professed in the past and, properly judged, what he claims of himself when he makes an application for admission”.23 Particularly important is evidence going to an applicant’s honesty, given that “the demands of honesty and fair dealing are probably greater in the legal profession than any other profession”.24 It follows that an applicant whose past evinces dishonesty faces a considerable hurdle in establishing good character: see [2.50]–[2.60]. [2.40] The concept of “good fame and character” merits two important background observations. First, it has a level of fluidity about it, influenced by the norms of the particular society and particular time. For instance, in 1800s America a requirement of “good fame and character” did not prevent the admission of persons with convictions for serious offences, including murder.25 A 1985 study showed that 19th century America saw “almost no instances of denial of admission 17 Under the draft Legal Profession National Law, the proposed National Legal Services Board was charged with this responsibility. This proposed body proved a casualty of the translation to the Legal Profession Uniform Law, reflecting a concern that a national body could impinge on individual jurisdictions’ domains. Provision in the draft National Law for the National Board to refer a matter that may raise a significant issue as to suitability to the parallel relevant State or Territory body for “local advice” (LPNL, s 2.2.11(1)), and for it to delegate to such a body the conduct of any litigation arising as a result of the exercise of admission functions (LPNL, s 2.2.12), proved insufficient to allay this concern. 18 See Legal Profession Uniform Law Application Act 2014 (NSW), s 11(1); Legal Profession Uniform Law Application Act 2014 (Vic), s 10(1). 19 NSW, s 16(1)(a); Vic, s 16(1)(a), 19. 20 NSW, s 19(3); Vic, s 19(3). 21 Health Care Complaints Commission v Karalasingham [2007] NSWCA 267 at [45] per Basten JA. 22 Ex parte Tziniolis (1966) 67 SR (NSW) 448 at 475 per Holmes JA; Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 at [56] per Johnson J (affd Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289). 23 Re B [1981] 2 NSWLR 372 at 381 per Moffitt P (CA). See also Singh v Auckland District Law Society [2002] 3 NZLR 392 at [45] per Harrison J (HC). 24 Frugtniet v Board of Examiners [2005] VSC 332 at [27] per Gillard J. 25 See Roots, “When Lawyers Were Serial Killers: Nineteenth Century Visions of Good Moral Character” (2001) 22 Northern Illinois UL Rev 19 at 22–32.

42

Lawyers’ Professional Responsibility

[2.40]

on character-related grounds”,26 and that “[a]ffidavits from personal references generally satisfied admission requirements, and such documents were easily obtained”.27 The main impediment to admission was gender, on the grounds that the “natural and proper timidity and delicacy which belongs to the female sex evidently unfits it for many of the occupations of civil life”.28 This led the researcher to opine that “the moral fitness requirement … functioned primarily as a cultural showpiece”.29 Although the 19th century American approach was evidently coloured by the nature of 1800s American society, particularly in frontier locations, which differed significantly from modern “civilised” society, it should not be assumed that matters going to “good fame and character” are incapable of boundary-shifting in modern Australian society. For instance, only in relatively recent times, ostensibly triggered by adverse media coverage, have courts and professional bodies seen fit to view tax evasion by lawyers as deserving of professional sanction, and thus going to fame and character as a (prospective) lawyer. The moral and professional dynamic has changed in this respect. The trend is now to make conviction for a tax offence a disclosable event on seeking or renewing a practising certificate: see [25.165]. Second, the very fluidity of the “good fame and character” requirement has made it a malleable tool to deny admission to those whom the society of the day dictates should be denied the privilege of practising law. In one of the leading American cases on the issue, a Supreme Court made the following remark regarding the term “good moral character”:30 It can be defined in an almost unlimited number of ways, for any definition will necessarily reflect the attitudes, experiences, and prejudices of the definer. Such a vague qualification, which is easily adapted to fit personal views and predilections, can be a dangerous instrument for arbitrary and discriminatory denial of the right to practice law.

Perhaps unsurprisingly, therefore, the record evinces various attempts to deny admission on grounds that would now be counter to anti-discrimination laws. American history records that it was only in the 1920s, with an influx of immigrants threatening the profession’s standing, that questions over “good fame and character” truly took piqued.31 This racist motivation prompted the constitution of “moral fitness committees” to investigate applicants’ moral character, described by 26 Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 at 497. 27 Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 at 497–498. 28 Bradwell v Illinois (1873) 83 US 130 at 141 per Bradley J. Womens’ admission to practice in Australia was likewise punctuated by opposition, including by the judiciary (see, for example, Re Edith Haynes (1904) 6 WALR 209), until statute altered the position, progressively between the jurisdictions, in the early twentieth century: see Mason, Lawyers Then and Now – An Australian Legal Miscellany (Federation Press, 2012), pp 131–133. 29 Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 at 493. 30 Konigsberg v State Bar of California (1957) 353 US 252 at 262–263 per Black J (footnote omitted). 31 Rhode, “Moral Character as a Professional Credential” (1985) 94 Yale LJ 491 at 499. The feeling was so strong that it even permeated law school admission policies. The so-called “Jewish problem” facing Yale Law School’s Board of Admissions in 1922 led the Dean to suggest that students with foreign parents be required to remain in college longer than native-born Americans before being admitted to law school. He urged the school not to use grades as a basis for limiting enrolment into law schools because this would admit foreign students rather than those of old American parentage,

[2.45]

2 Admission to Practice

43

one commentator as “a prejudicial moralist intrusion in the admissions process”.32 Remnants of this era remain in the United States, where State Bar admissions committees commonly inquire into psychiatric treatment, substance abuse33 and, in some States, armed forces discharge, marital status, financial condition, law suit involvement and employment discharge(s).34 Yet statistics continue to reveal that (as in Australia) very few applicants are ultimately denied admission.

[2.45] Australian courts have been wary of any insinuation that the concept of “good fame and character” could serve as a de facto discriminatory tool. This is apparently what motivated Moffitt P in Re B to utter the following statement:35 If a person meets the requisite learning standards and is of good fame and character so he meets the requirement that he be a fit and proper person to be admitted to practise as a barrister, it hardly need be said there is no other discretionary bar to admission, whether on the basis of race, colour, religion, sex, political outlook or otherwise … It follows from the foregoing … that in itself being a radical in a political sense or being what might be regarded by some as an extremist in views on sex, religion or philosophy provides no bar to admission as a barrister, unless of course, the attitude of the prospective or practising causing Yale to become “a school with an inferior student body ethically and socially”: Perlman, “Toward a Unified Theory of Professional Regulation” (2003) 55 Florida L Rev 977 at 1009, citing from Stevens, Law School: Legal Education in America from the 1850s to the 1980s (University of North Carolina Press, 1983), p 101. In 1928 Pennsylvania introduced a requirement that all prospective lawyers undergo a character investigation at the commencement of law school and again upon applying to the Bar. This resulted in a reduction of 16% in the number of Jewish lawyers and virtually no blacks gained entry: MacKenzie, Lawyers and Ethics; Professional Responsibility and Discipline (Carswell, 1993), pp 23–25. The racism underscoring admissions policies has come full circle, as it appears that now applicants who espouse racist causes are likely to be denied admission for lacking good moral character: see, for example, Hale v Illinois Committee on Character and Fitness (2003) 335 F 3d 678 (although the judgment involved a procedural matter, it recounts the events surrounding the respondent’s decision to deny admission to the applicant, who was the leader of an organisation dedicated to racism and anti-Semitism). 32 Langford, “Barbarians at the Bar: Regulation of the Legal Profession Through the Admissions Process” (2008) 36 Hofstra L Rev 1193 at 1208. 33 In 2008 the American Bar Association passed a Model Rule on Conditional Admission to the Bar, which serves to grant conditional admission to practice to applicants who have suffered substance abuse or mental health issues that may otherwise have precluded their admission. Under the rule, admission is conditional on an applicant complying with conditions directed at detecting a relapse or other behaviour that could render her or him unfit to practise law. Various commentators have endorsed such an approach: see, for example, Hearn, “2008 Ethics Year in Review” (2009) 49 Santa Clara L Rev 1237 at 1263–71; Lyerly, “Conditional Admission: A Step in the Right Direction” (2009) 22 Geo J Leg Ethics 299. 34 See Stone, “The Bar Admission Process, Gatekeeper or Big Brother: An Empirical Study” (1995) 15 Northern Illinois UL Rev 331. The National Conference of Bar Examiners and American Bar Association Section of Legal Education and Admissions to the Bar, in its Comprehensive Guide to Bar Admission Requirements 2016, lists the following conduct that warrants further investigation to this end: “[U]nlawful conduct; academic misconduct; making of false statements, including omissions; misconduct in employment; acts involving dishonesty, fraud, deceit or misrepresentation; abuse of legal process; neglect of financial responsibilities; neglect of professional obligations; violation of an order of a court; evidence of mental or emotional instability; evidence of drug or alcohol dependency; denial of admission to the bar in another jurisdiction on character and fitness ground; disciplinary action by a lawyer disciplinary agency or other professional disciplinary agency of any jurisdiction” (p viii, III.13). 35 Re B [1981] 2 NSWLR 372 at 380.

44

Lawyers’ Professional Responsibility

[2.50]

barrister can be seen to render him not a fit and proper person because his character, reputation or likely conduct fall short of the standards expected of a practising barrister.

His Honour’s reference to radical political views may well have been informed by the American experience spanning the 1950s to the 1970s where the Supreme Court reversed multiple decisions of bar admissions committees refusing admission to applicants with communist affiliations.36 Some have viewed the “good fame and character” requirement not so much as discriminatory but as anti-competitive. For instance, an Issues Paper prepared by the Tasmanian Department of Justice and Industrial Relations, dealing with National Competition Policy Legislation Review, surmised that the requirement “may constitute unjustifiable restriction on competition depending on how this standard is interpreted and applied by the Supreme Court”.37 It added that criteria to determine whether a person is of good character to be admitted “should be based on ensuring that the applicant is competent to provide legal services”. Yet surely “good fame and character” is directed at a concept different in nature from academic or practical competence. Admission pursuant to the mutual recognition regime

[2.50] The Mutual Recognition Act 1992 (Cth), and its equivalents in each State and Territory,38 is designed to “establish the legal framework for the mutual recognition by the States and Territories of each other’s differing regulatory standards regarding goods and occupations”.39 In the context of the legal profession, the mutual recognition scheme is directed at the reciprocal recognition of admission to practice. The operative provision of the Act, s 17(1), reads:40 [A] person who is [admitted] in the first State for an occupation is, by this Act, entitled after notifying the local [admission] authority of the second State for the equivalent occupation: (a) to be [admitted] in the second State for the equivalent occupation; and (b) pending such [admission], to carry on the equivalent occupation in the second State.

As the mutual recognition regime is concerned with the recognition of admission to practice, not the recognition of academic or practical legal studies, it is of practical use only to persons already admitted in one Australian jurisdiction who seek to be admitted in another. The national practising certificate regime – under which 36 See, for example, Schware v Board of Bar Examiners of New Mexico (1957) 353 US 232; Konigsberg v State Bar of California (1957) 353 US 252; Baird v State Bar of Arizona (1971) 401 US 1. Cf Re Anastaplo (1961) 366 US 82. 37 Department of Justice and Industrial Relations (Tas), National Competition Policy Legislation Review: Legal Profession Act 1993 (Issues Paper, July 2000), para 3.1. 38 Mutual Recognition (ACT) Act 1992; Mutual Recognition (NSW) Act 1992; Mutual Recognition (NT) Act 1992; Mutual Recognition (Qld) Act 1992; Mutual Recognition (SA) Act 1993; Mutual Recognition (Tas) Act 1993; Mutual Recognition (Vic) Act 1993; Mutual Recognition (WA) Act 1995. 39 Sande v Registrar, Supreme Court of Queensland (1996) 64 FCR 123 at 130 per Lockhart J. See generally Bini, “Mutual Recognition and the Reference Power” (1998) 72 ALJ 696. 40 The text of s 17 actually reads “registered” and “registration” in place of “admitted” and “admission”. The latter have been substituted because s 4(1) of the Mutual Recognition Act 1992 (Cth) defines “registration” to mean, inter alia, admission. On the meaning of “local registration authority”, see s 4(1).

[2.55]

2 Admission to Practice

45

holders of a practising certificate in one jurisdiction may practise in a jurisdiction in which they are not admitted: see [2.155] – has, however, reduced the importance of mutual recognition.

FACTORS RELEVANT TO “GOOD FAME AND CHARACTER” [2.55] As noted at [2.35], the determination of an applicant’s fame and character is made by reference to her or his previous behaviour in the main. This does not dictate that an applicant who has behaved in a fashion inconsistent with the expectations of a lawyer will behave this way again if admitted to practice. No one can profess the ability to accurately predict the behaviour of a person once admitted, as is evident from the fact that the vast majority of persons removed from practice met the good fame and character threshold at the time of their admission. Moreover, what empirical research exists, which derives from the United States, suggests that the correlation between application data and subsequent discipline is very low and that the prospect of discipline more closely aligns with career trajectory, form of practice and gender than any underlying propensity to engage in misconduct.41 And nor has integrity testing attained a level of sophistication sufficient to address this discomfiture.42 Yet previous behaviour cannot be discounted in the admission equation, even in the absence of defensible predictive value. The fame and character inquiry cannot be divorced from preserving the reputation of the profession, and in particular the confidence that the public can have in persons held out as fit to practise law. Perception may, in this regard, prove more important than reality: it accordingly performs at least a “symbolic” role.43 Elaborated below are factors that negatively affect an applicant’s fame and character. Importantly, the integrity of the admissions process in Australia is heavily reliant upon applicants’ candid and full disclosure of anything adverse to their fame and character: see [2.85]–[2.125]. The inquiry, to this end, is of a reactive rather than proactive nature: and applicant’s “good” fame and character is revealed not by matters that substantiate what is “good” – that positive or conclusive evidence of good character may prove difficult to substantiate explains an historical avoidance of any actual investigation to this

41 See Levin, Zozula and Siegelman, “The Questionable Character of the Bar’s Character and Fitness Inquiry” (2015) 40 Law & Soc Inquiry 51 (stemming from an analysis of 1343 Connecticut bar applicants between 1989 and 1992, which revealed, inter alia, that lawyer discipline is disproportionately imposed on sole practitioners or small firm lawyers, and that male bar applicants were significantly more likely to be disciplined than female applicants). Out of the same study, its principal author has opined that “[i]t is ironic that bar applicants bear the burden of demonstrating that they possess good character in the continued absence of reliable evidence that the character and fitness inquiry seeks information that identifies who will become a problematic lawyer”: Levin, “The Folly of Expecting Evil: Reconsidering the Bar’s Character and Fitness Requirement” [2014] BYUL Rev 775 at 799. 42 See, for example, Huberman, “Integrity Testing for Lawyers: Is it Time?” (1997) 76 Can Bar Rev 47. 43 Levin, Zozula and Siegelman, “The Questionable Character of the Bar’s Character and Fitness Inquiry” (2015) 40 Law & Soc Inquiry 51 at 79.

46

Lawyers’ Professional Responsibility

[2.60]

end – but in the absence of evidence indicative of “bad” fame or character. “In effect”, it has been said, “we use a weak concept of moral character and a strong presumption in favor of its presence”.44 Previous criminal behaviour

[2.60] Previous criminal convictions are clearly relevant to an applicant’s fame and character.45 Not all criminality prevents admission; it depends on the nature of the crime(s), how long ago it occurred, and if the applicant has been rehabilitated in the intervening period. Some forms of criminal behaviour, though, are almost prima facie evidence of unfitness to practise, mostly where dishonesty was involved. In Thomas v Legal Practitioners Admission Board46 the applicant’s commission of nine offences over three months involving misappropriation of $8,640 of his employer’s money were held to indicate “present unsuitability to practise in a profession in which absolute trust must be of the essence”. Even supposedly minor convictions can preclude admission if they evince dishonesty. In Re Application by Saunders,47 for instance, the applicant’s conviction on five counts of breaching the Criminal Code Act 1995 (Cth) as a result of receiving two years of Austudy benefits while failing to declare his employment earnings to Centrelink, coupled with an attitude lacking candour to the court, led Riley CJ to refuse him admission.48 Not every social security infraction necessarily precludes admission. Minor infraction(s) that speak of carelessness rather than dishonesty may not prove insurmountable hurdles provided that they are fully disclosed.49 The latter, coupled with an evident understanding of the nature of the misconduct, may even salve more serious Centrelink offending where rehabilitation in the interim can be established.50 A court may be more inclined to overlook a prior conviction, even for dishonesty, if it arose out of events in the applicant’s youth, stemming from immaturity. Again, 44 McDowell, “The Usefulness of ‘Good Moral Character’” (1994) 33 Washburn LJ 323 at 329. 45 Whether an applicant “has been convicted of an offence in Australia or a foreign country”, the nature of the offence, how long ago it was committed, and the person’s age when it was committed, are among the “suitability matters” listed in the legal profession legislation: ACT, s 11(1)(c); Legal Profession Uniform Admission Rules 2015 (NSW), r 10(1)(h) (“matters” under NSW, s 17(2)(b)) (formerly NSW 2004, s 9(1)(c)); NT, s 11(1)(c); Qld, s 9(1)(c); Tas, s 9(1)(c); Legal Profession Uniform Admission Rules 2015 (Vic), r 10(1)(h) (“matters” under Vic, s 17(2)(b) (formerly Vic 2004, s 1.2.6(1)(c)); WA, s 8(1)(c). 46 Thomas v Legal Practitioners Admission Board [2005] 1 Qd R 331 at 335 per de Jersey CJ. 47 Re Application by Saunders (2011) 29 NTLR 204. 48 It should be noted that the same applicant was admitted to practice in New South Wales four years later, stemming from compelling evidence of his rehabilitation, such as to reflect a change in his “intrinsic character”: Saunders v Legal Profession Admission Board [2015] NSWSC 1839 at [100] per Schmidt J. 49 See, for example, Re Application by Sutton [2016] NTSC 9 (admission granted in this instance even though the infractions in question were incompletely disclosed in her first admission affidavit). 50 Cf Application of Valvo [2014] NTSC 27 (where Barr J would have been willing to admit the applicant, notwithstanding the seriousness of his Centrelink offending at a much earlier age, but for, inter alia, the applicant’s failure to candidly and comprehensively disclose, and acknowledge (until pressed in cross-examination), the full extent of his moral culpability in the offending: at [37]).

[2.65]

2 Admission to Practice

47

full disclosure, in tandem with evidence of restoration of integrity are of especial value here. In Re Owen,51 for example, the applicant had earlier in life been convicted of numerous offences, including for burglary at ages 25 and 27. He turned over a new leaf at age 30, and completed a law degree, seeking admission at age 38. What led the New Zealand High Court to grant admission was evidence of the applicant’s reformed character, in view of the intervening period of positive behaviour.52 The nature of the previous offence(s) will prove a weighty consideration in this regard. If it was minor, and stemmed from conduct that revealed no sustained course of dishonesty, the court may be more inclined to accept that a subsequent unblemished record substantiates present good fame and character.53 The same, moreover, may be said of offences that do not involve dishonesty. In Re an Application for Admission as a Legal Practitioner by MCF54 what influenced the Queensland Court of Appeal, in admitting an applicant convicted for possessing and transmitting child exploitation material, were findings that, inter alia, the conduct was at the lower end of the scale of seriousness for this kind of offending, the applicant had readily sought professional help, and had since been rehabilitated. The position is otherwise when the offences are serious and of comparative recency. In Frugtniet v Board of Examiners,55 for instance, the applicant had over a period of 25 years, including up to shortly before applying for admission, been charged or convicted with a litany of offences relating to theft, perjury and fraud. This, remarked Gillard J, placed a heavy burden on him to persuade the court of good character,56 which he was unable to discharge by evidence of rehabilitation. It would take “many years of blameless conduct”, his Honour reasoned, before one could have any confidence that the applicant has “turned over a new leaf … to pursue a blameless and honest career”.57 Similarly, serious convictions for the possession and distribution of child pornography may well preclude admission given case law involving striking off for this behaviour: see [25.120], [25.125]. Previous improper conduct in the curial process

[2.65] An applicant’s previous behaviour in the course of litigation is relevant to fame and character, especially where that behaviour, had it been perpetrated in by 51 Re Owen [2005] 2 NZLR 536. 52 Re Owen [2005] 2 NZLR 536 at [38] per Panckhurst and Fogarty JJ. 53 See, for example, Re Tkacz (2006) 206 FLR 171 (where an applicant who had years earlier been convicted of acting corruptly in the discharge of his functions as a public officer was admitted; Murray and Templeman JJ were influenced in so ruling by findings that: (i) the events giving rise to the conviction antedated the applicant’s commencement of legal study; (ii) those events suggested a failure to properly distinguish between his own interests and those of his employer rather than a flagrant disregard for the law; (iii) the applicant received no personal benefit from the events; and (iv) the amount involved and fine imposed were not great: at [71]–[77]); Re Application by Gadd [2013] NTSC 13 (where Blokland J was willing to admit an applicant who nine years earlier, between ages 23 and 25, pleaded guilty to possessing stolen property, and had other criminal charges dismissed or set aside, in view of a demonstrated willingness to accept responsibility for his failings, his subsequent rehabilitation and compelling character references). 54 Re an Application for Admission as a Legal Practitioner by MCF [2015] QCA 154 at [18] per the court. 55 Frugtniet v Board of Examiners [2005] VSC 332. 56 Frugtniet v Board of Examiners [2005] VSC 332 at [19]. 57 Frugtniet v Board of Examiners [2005] VSC 332 at [70].

48

Lawyers’ Professional Responsibility

[2.70]

a practising lawyer, would have attracted disciplinary sanction. For instance, to have made false statements or adduced false evidence, or sworn false statutory declarations or affidavits, in legal proceedings misaligns with the requirements of integrity and honesty essential for admission as a lawyer. This was the finding of Johnson J in Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board,58 who found that the applicant had a decade earlier knowingly made a false statutory declaration and knowingly given false evidence in related proceedings, even though she did not stand convicted of any criminal offence out of these events. Her persistence in an attitude of having been victimised, and incomplete disclosure of the events in question, influenced his Honour in refusing her application. This finding was affirmed on appeal.59 The making of baseless and insupportable allegations of serious misconduct on the part of others prior to her admission led the New South Wales Court of Appeal to refuse the applicant admission in Wentworth v New South Wales Bar Association.60 The same fate met the applicant in Re Bell,61 who, as a party to an acrimonious family law case, swore and filed affidavits threatening judicial officers, and had unresolved contempt proceedings for alleged breaches of the court’s orders. This revealed, said the Queensland Court of Appeal, the applicant’s “inability to distinguish between vigorous but legitimate advocacy of a position and a reaction to an adverse decision of the courts which is entirely unacceptable in an officer of the court”.62 In refusing the application, their Honours emphasised that applicants should display respect for the court’s authority and vigilance in complying with its orders.63 Previous improper conduct in the course of education, a profession or employment Academic misconduct

[2.70] Improper conduct in the course of study, whether or not law study, may impede an application for admission, even if full disclosure is made. In Re AJG,64 for instance, the applicant disclosed a finding of misconduct against him at a PLT course, which involved substantial copying from another student. The Queensland Court of Appeal ruled it inappropriate, without pause, to “accept as fit to practise an applicant who responds to stress by acting dishonestly to ensure his personal advancement”. In particular, de Jersey CJ, with whom Jerrard JA and Philippides J concurred, remarked: 58 Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338. 59 Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289. 60 Wentworth v New South Wales Bar Association (unreported, CA(NSW), 14 February 1994). 61 Re Bell [2005] QCA 151. 62 Re Bell [2005] QCA 151 at [12]. 63 Re Bell [2005] QCA 151 at [17]. 64 Re AJG [2004] QCA 88. Cf Re Zbiegien (1988) 433 NW 2d 871, where, on facts similar to Re AJG, a majority of the Supreme Court of Minnesota held that “[w]e cannot conclude … that a single incident of plagiarism while in law school is necessarily sufficient evidence to prove lack of good character and fitness to practice law”: at 875.

[2.70]

2 Admission to Practice

49

Legal practitioners must exhibit a degree of integrity which engenders in the Court and in clients unquestioning confidence in the completely honest discharge of their professional commitments. Cheating in the academic course which leads to the qualification central to practice and at a time so close to the application for admission must preclude our presently being satisfied of this applicant’s fitness.

That the relevant admission board did not oppose the admission, viewing it as a one-off aberration due to financial and domestic stressors, did not sway the court. But it did envisage that the application could be relisted upon the expiry of six months. At that time the applicant was admitted. In so far as the character of plagiarism is concerned, note should be made of the remarks of the dissenters in the Supreme Court of Minnesota’s judgment in Re Zbiegien:65 Examples abound where those who have plagiarised, or engaged in substantially similar conduct, have sustained onerous consequences. Young men and women enrolled at the nation’s service academies have been deprived of education and careers in the officer corps for cheating; high government officials have gone to prison for lying; a president of the country has left office in dishonor as a result of his dishonesty; a newspaper critic of a metropolitan newspaper lost his position for plagiarising a review; a professor of psychology at Harvard University Medical School resigned after it was revealed that he had plagiarised another’s work in an article written in a professional journal; and a candidate for the presidency of a university who reportedly had plagiarised a portion of a research paper withdrew his candidacy under pressure. I suggest that these examples reflect societal concerns that people in responsible positions – such as is an attorney at law – be held to a high degree of integrity.

The increasingly rigorous approach to academic misconduct in this context was reiterated by the Supreme Court of Victoria in Re OG (A Lawyer),66 which took a further step, as the applicant had been disciplined arising out of collusion in a non-law subject, absent a formal disciplinary committee determination; the alleged misconduct was instead dealt with “in house”.67 Taken in tandem with incomplete candour in his admission application, this led the court to revoke the applicant’s admission. When it comes to plagiarism and other academic misconduct, the nature of the misconduct and, in particular its disclosure (see [2.120], [2.125]) coupled with evidence of contrition, understanding and rehabilitation, inform the admission decision. In Re Application by Giles,68 for example, Mansfield J found an applicant to be currently of good fame and character, and fit and proper to be admitted, despite an incident of academic dishonesty four years earlier. What influenced his Honour was the applicant’s candour with the relevant admission board and the court, and apparent insight into his wrongdoing and remorse for it, against a backdrop of four years of blameless behaviour in the intervening period.69

65 Re Zbiegien (1988) 433 NW 2d 871 at 880 per Kelley J (footnote omitted). 66 Re OG (A Lawyer) (2007) 18 VR 164. 67 On this point see also Re Widdison (1995) 539 NW 2d 671 at 679 (where incidents of plagiarism and collusion, though not the subject of a formal finding by a disciplinary committee, when coupled with a failure to disclose the plagiarism finding, led to the applicant being refused admission). 68 Re Application by Giles [2014] NTSC 30. 69 Re Application by Giles [2014] NTSC 30 at [27].

50

Lawyers’ Professional Responsibility

[2.75]

Improper in a professional or employment context

[2.75] That an applicant has been disciplined whilst practising law elsewhere is directly relevant to her or his fame and character in an application for admission in a new jurisdiction.70 Improprieties whilst practising another profession, or pursuing a trade or occupation, will also likely be germane, should they cast doubt over aspects of the applicant’s character crucial to the practice of law. In Re Hampton,71 for example, the applicant’s nurse registration had been cancelled for inappropriate dealings with females in his care, and in performing a nursing service while not a registered nurse. In refusing admission, de Jersey CJ considered that the applicant’s behaviour displayed a lack of “appropriate professional judgment and discretion”.72 Although accepting that the derelictions did not directly translate to practice as a lawyer, his Honour’s concern was the attitude underscoring them, one that “would raise risks were he to practice as a solicitor”.73 That the applicant had failed to candidly disclose these matters upon his initial application confirmed the court’s concerns over his character.74 A more recent illustration, which generated comment and debate in the United States, involved Stephen Glass, a journalist who became infamous for fabricating material for more than 40 articles over two years for several magazines, which included falsehoods that reflected negatively on individuals, political groups and ethnic minorities. Once suspicions were aroused, he sought to avoid detection, lobbied strenuously to keep his job and, following his exposure, did not fully cooperate to identify his fabrications. In denying his application for admission to practise law some 12 years later, what influenced the Supreme Court of California were findings that his “conduct as a journalist exhibited moral turpitude sustained over an extended period”, which was “motivated by professional ambition” and “betrayed a vicious, mean spirit and a complete lack of compassion for others, along with arrogance and prejudice against various ethnic groups”.75 In each of these respects, the court surmised, “his misconduct bore directly on his character in matters that are critical to the practice of law”, and was exacerbated by the fact that it took place while (at night school) he was pursuing a law degree.76 That many of his efforts in the intervening period were directed primarily at advancing his own 70 Re Evatt (1987) 92 FLR 380; Re Petroulias [2005] 1 Qd R 643; Samuels v New Zealand Law Society [2014] NZHC 3026. In fact, the statutory “suitability matters” for admission are mostly concerned with disciplinary matters arising out of legal practice in another jurisdiction: ACT, s 11(1); NSW 2004, s 9(1) (repealed); NT, s 11(1); Qld, s 9(1); Tas, s 9(1); Vic 2004, s 1.2.6(1) (repealed); WA, s 8(1). In New South Wales and Victoria, the relevant matters for this purpose include “whether the person has been the subject of any disciplinary action, howsoever expressed, in any profession or occupation in Australia or in a foreign country” and “whether the person has been the subject of disciplinary action, howsoever expressed, in any profession or occupation that involved a finding adverse to the person”: Legal Profession Uniform Admission Rules 2015 (NSW), r 10(1)(i), 10(1)(j); Legal Profession Uniform Admission Rules 2015 (Vic), r 10(1)(i), 10(1)(j). 71 Re Hampton [2002] QCA 129. 72 Re Hampton [2002] QCA 129 at [25]. 73 Re Hampton [2002] QCA 129 at [25]. 74 Re Hampton [2002] QCA 129 at [26] per de Jersey CJ, at [36], [37] per White J. 75 Re Glass (2014) 316 P 3d 1199 at 1214. 76 Re Glass (2014) 316 P 3d 1199 at 1214.

[2.80]

2 Admission to Practice

51

well-being rather than returning something to the community, Glass had not, ruled the court, sustained his heavy burden of demonstrating rehabilitation and fitness for the practice of law.77 Infirmity

[2.80] The need to protect the public from “the damage that could be caused by an unsuitable person, for example by a possibly mentally unstable legal practitioner, handling their affairs”78 is relevant to whether or not an applicant should be admitted.79 It must be understood that questions over an applicant’s mental illness or infirmity, in particular, do not by themselves target fame and character; they ordinarily involve no moral or ethical assessment, but instead target questions of fitness.80 In S v Legal Practice Board of Western Australia81 the Western Australian Court of Appeal envisaged that if an applicant’s depression is sufficiently severe and longstanding as to potentially lead to the neglect of client affairs, it is relevant to fitness. But the court sought to distance itself from any view that longstanding depression, coupled with the taking of anti-depressant medication, would be a ground by itself to deny admission. In so concluding, their Honours reasoned as follows:82 Depression per se – even depression leading on one occasion to a suicide attempt – does not seem to us necessarily to detract from a person’s capacity to perform any of the duties required of a practitioner. One would need expert evidence in relation to the matter before such a view could possibly be formed, since it is contrary to ordinary experience. Many persons in the community – including no doubt many members of the legal profession – suffer from depression, and yet are able to fulfil their duties in an honest and competent way. 77 Re Glass (2014) 316 P 3d 1199 at 1202. 78 XY v Board of Examiners [2005] VSC 250 at [32] per Habersberger J. 79 See ACT, s 11(1)(m) (“whether the applicant is currently unable to satisfactorily carry out the inherent requirements of practice as an Australian legal practitioner”); Legal Profession Uniform Admission Rules 2015 (NSW), r 10(1)(k) (formerly NSW 2004, s 9(1)(m)) (like ACT); NT, s 11(1)(m) (“material inability to engage in legal practice”); Qld, s 9(1)(m) (like ACT); Tas, s 9(1)(m) (like ACT); Legal Profession Uniform Admission Rules 2015 (Vic), r 10(1)(k) (like ACT) (formerly Vic 2004, s 1.2.6(1)(m); whether the person currently has a material mental infirmity); WA, s 8(1)(m) (like ACT). See also Law Admissions Consultative Committee, Disclosure Guidelines for Applicants for Admission to the Legal Profession (Law Council of Australia, June 2015), cl 7 (“Matters which an applicant might be wise to disclose include any condition which might affect the applicant’s present ability to engage in legal practice – such as physical impairment, mental illness or addictions”); Gibson, “Psychiatric Disability and the Practising Lawyer in Australia” (2012) 20 JLM 391 at 395–396. 80 See Bartlett and Haller, “Disclosing Lawyers: Questioning Law and Process in the Admission of Australian Lawyers” (2013) 41 Fed L Rev 227 at 248 (who emphasise the importance of separating this criterion from matters that go to good fame and character because, inter alia, “[p]otential lawyers are judged on what they do rather than what they are”; emphasis in original). Cf Brown, “Mad to Ask: Stigma Creation and the Questionable Character of State Bar Mental Health Inquiries” (2015) 24 S Cal Rev L & Soc Just 369 (who fears that inquiry, upon disclosure, into mental illness or mental health treatment, and its potential consequences for admission, may incline applicants against disclosure or even disincline persons from seeking treatment: at 386–387). 81 S v Legal Practice Board of Western Australia (2004) 29 WAR 173 at [45] per the court. 82 S v Legal Practice Board of Western Australia (2004) 29 WAR 173 at [44] per the court.

52

Lawyers’ Professional Responsibility

[2.85]

In fact, courts are wary of exacting too high a standard from applicants who have suffered a documented psychiatric or psychological illness, at least in the face of evidence that the illness has been successfully treated or is under effective control. In XY v Board of Examiners,83 arising out of trauma associated with sexual abuse as a child, the applicant had been hospitalised on psychiatric grounds on multiple occasions, and convicted on numerous criminal charges, including for resisting arrest, assaulting protective services officers and police, threats to kill a police officer, and damage to property. The evidence revealed that the applicant had engaged in alcohol abuse, attempted to harm herself, and overdosed on prescription drugs. And she had been diagnosed with borderline personality disorder. Yet what led Habersberger J to grant her admission were that: her criminal offending had not evidenced dishonesty but could be explained by her poor mental state; she had not been charged with any criminal offences within the preceding eight years; and medical evidence was virtually unanimous that her mental health was such that she was now fit to engage in practice.84 The only qualification to the favourable opinions that she remained vulnerable to alcohol was addressed by an undertaking that she continue to attend Alcoholics Anonymous as an appropriate safeguard.85 Non-disclosure of prior impropriety upon admission

[2.85] In making its determination as to an applicant’s fame and character upon admission, the court relies heavily on the advice of the relevant admission board: see [2.30]. In turn, unless there is something evident in an applicant’s past, admission boards have not historically engaged in investigations into an applicant’s character. Instead, they have relied on affidavits by lawyers, objections to admission and, in particular, candid disclosure by applicants. The trend, as to the latter, is to cast upon applicants an ever-broadening duty of disclosure by affidavit86 (though it should not be assumed that its strictness is uniform across jurisdictions),87 coupled 83 XY v Board of Examiners [2005] VSC 250. 84 XY v Board of Examiners [2005] VSC 250 at [31], [46], [47]. 85 XY v Board of Examiners [2005] VSC 250 at [52]. On this point see also the disciplinary case of Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320, where a lawyer who had been convicted of importing a small quantity of cocaine to feed her addiction was allowed to remain in practice subject to her undertaking, for a period of two years, to undergo regular medical testing to ensure she was free of any illicit drugs: see [25.135]. 86 See Law Admissions Consultative Committee, Disclosure Guidelines for Applicants for Admission to the Legal Profession (Law Council of Australia, June 2015) (recommending the disclosure of, inter alia, intervention orders, apprehended violence orders and general misconduct, the latter including offensive behaviour, workplace or online bullying, property damage, sexual harassment or racial vilification: cl 5). 87 See Bartlett and Haller, “Disclosing Lawyers: Questioning Law and Process in the Admission of Australian Lawyers” (2013) 41 Fed L Rev 227 (who note that Victoria had ostensibly adopted a more stringent approach to disclosure than New South Wales, as 2009 statistics published by the Legal Admissions Consultative Committee reveal that Victorian applicants are much more likely to make “minor disclosures” than their New South Wales counterparts, translating to only 5% of applications having no disclosures in Victoria, but 87% having no disclosures in New South Wales: at 255–260); Bartlett and Haller, “Admission to Legal Practice in Queensland – Cases and Processes” (2015) 35

[2.90]

2 Admission to Practice

53

with steps to require universities to certify whether or not an applicant has engaged in any misconduct in the course of her or his tenure as a tertiary student. Importance of complete candour and disclosure

[2.90] Whether or not specified by admission rules, or contained in an affidavit or declaration, courts have emphasised the general law requirement that an applicant be candid regarding anything in her or his prior behaviour or experience that may impact negatively on fame and character, namely as regards his or her “honesty, candour, respect for the law or ability to meet professional standards”.88 This candour is crucial, as foreshadowed above, because of the heavy reliance placed on an applicant’s assertions, and in turn, explains calls to err on the side of “excessive disclosure”. In Re Del Castillo the Australian Capital Territory Full Court made the point as follows:89 [A]pplicants have a duty of frankness. An attitude that begrudges information which may raise eyebrows, whether logically it ought to raise them, is not consistent with such an attitude. It is common throughout Australia for applicants for admission to legal practice to disclose quite minor charges. Those standards are to be encouraged. Applicants need not fear that the court will seek to substitute a demand for perfection for the requirement that fitness to practise be demonstrated by showing good fame and character.

A South Dakota court has stated that “[h]e acts at his peril who treats the rules for admission to the bar with the indifference accorded an unsolicited invitation to join a book club”.90 Comprehensive and candid disclosure of relevant information speaks of a proper perception of an applicant’s duty, a characteristic directed to good character.91 It follows that a failure to disclose conduct that should have been disclosed can preclude admission even if, had that conduct been fully and candidly disclosed, it would not necessarily have done so. Here non-disclosure is the main basis for substantiating a lack of good fame and character, for it evidences a lack of the candour and honesty expected of a practising lawyer (see [17.05], [17.10]).92 It moreover belies an assertion that an applicant’s good fame and character has been restored by later meritorious behaviour. For example, in Thomas v Legal Practitioners Qld Lawyer 170 (where the same authors lament, inter alia, the different approaches to investigating disclosures as between New South Wales, Queensland and Victoria). Whether the Legal Profession Uniform Law, albeit at present operative only in New South Wales and Victoria, will prove a watershed for consistent disclosure obligations remains to be seen. 88 Law Admissions Consultative Committee, Disclosure Guidelines for Applicants for Admission to the Legal Profession (Law Council of Australia, June 2015), cl 4. 89 Re Del Castillo (1998) 136 ACTR 1 at 7. See also Re Hampton [2002] QCA 129 at [26] per de Jersey JA; S v Legal Practice Board of Western Australia (2004) 29 WAR 173 at [47] (CA); Re Bell [2005] QCA 151 at [5]; XY v Board of Examiners [2005] VSC 250 at [61] per Habersberger J; Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 at [59]–[61] per Johnson J (affd Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289); Legal Services Commissioner v Scott [2014] QCA 266 at [9] per Alan Wilson J, with whom Fraser JA and Atkinson J concurred; Re Application by Sutton [2016] NTSC 9 at [100] per Hiley J. 90 Re Widdison (1995) 539 NW 2d 671 at 679. 91 Thomas v Legal Practitioners Admission Board [2005] 1 Qd R 331 at 334 per de Jersey CJ. 92 Re Davis (1947) 75 CLR 409 at 426 per Dixon J; Law Society of Tasmania v Scott (No 2) [2007] TASSC 72 at [20] per Tennent J.

54

Lawyers’ Professional Responsibility

[2.90]

Admission Board93 the appellant did not fully disclose his misappropriation of funds from an employer. That the offences occurred seven years earlier when the appellant was aged 20 and were explainable in part by financial pressure, that he had pleaded guilty and repaid the money stolen, and had since been gainfully employed in a business involving the handling of money, did not, according to the court, outweigh his lack of candour. In refusing the appellant admission, de Jersey CJ reasoned as follows:94 Although the criminal offences were committed some years ago, the manner of the applicant’s disclosure of them constitutes very recent evidence of his unsuitability to practise, for want of appreciation of the need to arm the Board with all the information relevant to the performance of its publicly important role. Unless some further significant feature intrudes, that the appellant committed those offences should not forever bar him from taking steps prerequisite to admission to the legal profession. He was on the way to demonstrating fitness, nevertheless. It is, however, the intervention of this new feature, the absence of candid and forthright disclosure, which has set back that progression. High standards of probity and openness are expected of practitioners and those who seek to be practitioners … In this case those standards were not met.

The court will, though, consider the reason(s) for the lack of full disclosure. If the applicant’s motivation was not one of secrecy, but an oversight, genuine mistake, or an understandable error of judgment, the outcome may prove more lenient. In Legal Services Commissioner v Scott95 the respondent omitted to disclose a failure to declare income to the Australian Tax Office and Centrelink between 2004 and 2008. The Queensland Court of Appeal nonetheless saw no cause for revoking her admission, as she proffered a satisfactory and corroborated explanation for her omission, namely a lapse of memory caused by a motor vehicle accident. Coupled with full disclosure of other (adverse) matters at her admission, immediate candour upon recalling the undeclared income, and apparent insight and remorse, the court ruled that to revoke her admission “would be to punish her for an oversight for which, on the available evidence, she was blameless”.96 At the same time, that an applicant acted in accordance with advice from an informed person in not making a particular disclosure, while relevant,97 is unlikely to prove decisive.98 93 Thomas v Legal Practitioners Admission Board [2005] 1 Qd R 331. 94 Thomas v Legal Practitioners Admission Board [2005] 1 Qd R 331 at 335 (paragraph breaks omitted). See also at 336 per McMurdo P (remarking that the appellant’s lack of disclosure demonstrated “a lack of insight into his serious past misconduct and a lack of understanding of his duty to make full and accurate disclosure to the Board”). 95 Legal Services Commissioner v Scott [2014] QCA 266. 96 Legal Services Commissioner v Scott [2014] QCA 266 at [53] per Alan Wilson J, with whom Fraser JA and Atkinson J concurred. 97 See, for example, XY v Board of Examiners [2005] VSC 250, where the applicant’s failure to disclose that her position as a volunteer worker at a legal service had been terminated because of threatening statements she had made to another volunteer did not prevent her admission as she had sought and followed advice on the point from a highly respected clergyman, and was misled by the confusing statements in the admission pack: at [56]–[71] per Habersberger J. 98 See, for example, Re Del Castillo (1998) 136 ACTR 1, where an applicant’s failure to disclose, on the advice of his instructors at the ANU Legal Practice Workshop, that he had stood trial for murder and been acquitted six years earlier, did not prevent the court from inclining towards a finding of present unfitness. The court nonetheless elected to await the determination of the applicant’s New South

[2.100]

2 Admission to Practice

55

Disclosure of criminal convictions

[2.95] As prior criminal convictions relate directly to perceptions as to an applicant’s attitude to the law, it is critical that full disclosure be made.99 Convictions for offences involving dishonesty are particularly relevant. In the leading case, Re Davis,100 the appellant failed to disclose his conviction 12 years earlier for breaking, entering and stealing. The High Court struck his name from the roll, Latham CJ reasoning as follows:101 In this case … the [appellant] was not only guilty of a grave criminal offence in 1934, but in 1944, and again as recently as 1946, he induced two solicitors to give him certificates of character without disclosing to them that he had been convicted of that criminal offence, and he presented to the Board certificates so obtained. It would not be reasonable to require a candidate to disclose to the Board, or even to persons whom he approached with a request for certificates, every wrongdoing of his life. But a conviction for housebreaking is so obviously a relevant matter when character is under consideration that there can be no room for doubt in the present case as to the duty to disclose it both to the Board and to the persons from whom he obtained certificates of character.

Likewise, in Prothonotary of the Supreme Court of New South Wales v Tatar102 the New South Wales Court of Appeal removed from the roll a lawyer who omitted to disclose, upon his admission, two recent convictions for fraudulent credit card applications, one of which had been quashed. That subsequent to admission he was convicted of multiple charges relating to forgery of documents and the opening of fictitious bank accounts strengthened the court’s resolve.103

[2.100]

Though convictions for dishonesty are especially probative of an applicant’s character, an attitude of candour generally dictates that all convictions be disclosed. Convictions, after all, reveal disrespect for the law, which persons admitted to practice are sworn to uphold.104 The relevant admission board or court can then ascertain its significance or otherwise. Where, for instance, an applicant failed to disclose a 1998 conviction for supplying a dangerous drug, the New South Wales Court of Appeal in Prothonotary of the Supreme Court of New South Wales v Wales proceedings prior to making a final assessment as to his fitness. In the New South Wales proceedings, the Court of Appeal held that the applicant was a fit and proper person to remain in practice: Prothonotary v Del Castillo [2001] NSWCA 75.

99 See generally Le Mire, “Striking Off: Criminal Lawyers and Disclosure of their Convictions” (2005) 79 ALJ 641. 100 Re Davis (1947) 75 CLR 409. 101 Re Davis (1947) 75 CLR 409 at 416. See also at 426 per Dixon J. The appellant’s later application for readmission was rendered unsuccessful by reason, for the most part, of that grave omission: New South Wales Bar Association v Davis (1963) 109 CLR 428. He ultimately succeeded in being readmitted in 1978, aged 64: Re Davis (unreported, CA(NSW), 27 October 1978). 102 Prothonotary of the Supreme Court of New South Wales v Tatar [2005] NSWCA 104. 103 Prothonotary of the Supreme Court of New South Wales v Tatar [2005] NSWCA 104 at [15] per Giles JA, with whom Spigelman CJ and Beazley JA concurred. 104 The Law Admissions Consultative Committee has recommended, to this end, that “[o]ffences resulting in a court-ordered fine or other sanction or else an administrative penalty, such as traffic or public transport offences, may need to be disclosed in circumstances where the frequency or number of fines, or the failure to pay fines, may give rise to concern in the eyes of an Admitting Authority or a Court about the applicant’s respect for the law”: Disclosure Guidelines for Applicants for Admission to the Legal Profession (Law Council of Australia, June 2015), cl 5(c).

56

Lawyers’ Professional Responsibility

[2.105]

Darveniza105 held this to deny fitness to practise. The applicant’s belief that the circumstances surrounding the convictions raised no question concerning his fitness to practise, according to their Honours, itself “demonstrated a basic failure to appreciate the standards of behaviour required of a legal practitioner”.106 Disclosure of criminal charges

[2.105]

The case law recognises that charges for criminal offences are relevant to an applicant’s fame and character, and so should be fully disclosed.107 This provides grounds to more closely investigate the circumstances surrounding the charge, and the extent to which these affect the applicant’s fame and character. After all, “[c]harges may be laid incorrectly, and acquittals must be respected as such, but the facts which give rise to the charges may … bear upon a person’s fitness to practice”.108 The Australian Capital Territory Full Court in Re Del Castillo, in which the applicant failed to disclose that he had stood trial for murder and been acquitted six years earlier, expanded on this point as follows:109 It is true that the bare facts that a person has been tried for a charge, even a very serious one, and acquitted do not logically tend to the detriment of that person’s character nor of his or her fame. But experience shows that matters are often otherwise. The acquittal may be on entirely unmeritorious grounds or it may occur in circumstances which nevertheless reveal untoward collateral behaviour on the part of the accused. Particularly, but not only, in cases where serious harm has been wholly or in part caused by an accused person, and the court has evidently accepted that there was a reasonable chance that the circumstances were exculpatory (as in the present case), it is likely that, logically or not, some people will consider the fame and/or character of the accused to be defective.

There is consequently no principle of double jeopardy applicable in proceedings for admission following an acquittal in criminal proceedings based on the same facts.110 This does not mean that effect is not given to an acquittal, or the withdrawal of the charges, but that any adverse inference against an applicant because he or she has been charged but not convicted is premised on a full and proper investigation.111

105 Prothonotary of the Supreme Court of New South Wales v Darveniza (2001) 121 A Crim R 542. 106 Prothonotary of the Supreme Court of New South Wales v Darveniza (2001) 121 A Crim R 542 at [17] per Sheller JA with whom Powell JA and Hodgson CJ in Eq concurred. The Queensland Court of Appeal made similar remarks in removing the same applicant from the roll of barristers in that jurisdiction: Barristers’ Board v Darveniza (2000) 112 A Crim R 438 at [44] per Thomas JA, with whom McMurdo P and White J concurred. 107 See, for example, Frugtniet v Board of Examiners [2002] VSC 140; Re Petroulias [2005] 1 Qd R 643; Frugtniet v Board of Examiners [2005] VSC 332. 108 Frugtniet v Board of Examiners [2002] VSC 140 at [14] per Pagone J. 109 Re Del Castillo (1998) 136 ACTR 1 at 7. 110 Jackson (previously known as Subramaniam) v Legal Practitioners Admission Board [2006] NSWSC 1338 at [92] per Johnson J (affd Jackson (formerly Subramaniam) v Legal Practitioners Admission Board [2007] NSWCA 289). 111 Frugtniet v Board of Examiners [2005] VSC 332 at [22] per Gillard J.

[2.115]

2 Admission to Practice

57

Disclosure of professional disciplinary proceedings

[2.110]

As previous professional disciplinary proceedings and sanctions in another jurisdiction assume direct relevance to an applicant’s fame and character in an application for admission in a new jurisdiction (see [2.75]), this is clearly information that should be fully disclosed to admitting authorities.112 The point is the more significant for an applicant disciplined outside Australia, as the information concerning that event, and circumstances leading up to it, may be not as generally available or notorious. In Morrissey v New South Wales Bar Association,113 for instance, the applicant, whose career in the United States was “marked by wilful disobedience of court orders and rules” and “episodes of violence”, failed to make full disclosure upon seeking admission in New South Wales, an omission exacerbated by maintaining this stance in relation to former employers in Australia and those asked to act as referees. Notwithstanding his attempt to justify some of the adverse professional and other findings against him in the United States by reference to political vendettas, McClelland CJ at CL found the applicant unfit to practise.

[2.115]

Candour also requires the full disclosure of disciplinary proceedings and sanctions arising out of the practice of a profession or occupation other than law. In Re Hampton,114 discussed at [2.75], de Jersey CJ held that the cancellation of the applicant’s registration as a nurse should have been disclosed, making the following observations to this end:115 A moment’s reflection would have convinced any reasonable person in doubt, of the relevance to this application of a previous professional disbarment, and of the circumstance of the applicant’s concededly having acted as a professional contrary to a statutory prohibition – even though no conviction was recorded. All of those matters are potentially highly significant to the assessment of fitness to practise as a solicitor. The applicant either having failed to appreciate that, or having determined not voluntarily to place those matters before the Board, provides further confirmation that he is not a person who should at this stage be held out by the court as fit to practise as a solicitor.

Similarly, in Re an Application by Deo116 incomplete disclosure of indiscretions as an accountant (failing to be fully independent of the client when conducting an audit of the client), coupled with the applicant’s attempt to tailor evidence to assist his cause, led Martin CJ to refuse him admission. Again, an attitude of complete candour will likely reflect more positively on an applicant in this context. In Gibbs v New Zealand Law Society117 Keane J admitted an applicant who had, years earlier, committed serious misconduct as a police officer by repeated unauthorised access to an intelligence database. In so ruling, his Honour was influenced by the applicant’s candour and frankness in disclosing the 112 Re Evatt (1987) 92 FLR 380; Re Petroulias [2005] 1 Qd R 643. 113 Morrissey v New South Wales Bar Association [2006] NSWSC 323 at [153]. 114 Re Hampton [2002] QCA 129. 115 Re Hampton [2002] QCA 129 at [28]. See also at [36], [37] per White J. 116 Re an Application by Deo (2005) 16 NTLR 102. 117 Gibbs v New Zealand Law Society [2014] NZHC 1141.

58

Lawyers’ Professional Responsibility

[2.120]

misconduct and the fact that her unauthorised access to the database was driven out of a genuine (and ultimately well founded) concern for her nephew’s safety. Disclosure of academic misconduct

[2.120]

Findings of academic misconduct, unlike criminal or most professional disciplinary matters, are not usually on the public record. Applicants therefore carry an even greater onus to make full disclosure of such findings, especially where they smack of dishonesty.118 In this context, “[i]ncreasingly, there is an expectation that even ancient peccadillos should not be left out”, the Victorian Supreme Court has noted, even though in the past, perhaps, the obligation was not always seen as going quite so far.119 Certainly Crawford J in Law Society of Tasmania v Richardson,120 decided in 2003, did not conceive an applicant’s duty to extend so far. That the defendant failed to disclose a finding of academic misconduct did not, said his Honour, adversely affect his fitness to practise, or his honesty and trustworthiness, before opining that an applicant need not disclose “all aspects of his or her past life that might be open to criticism or arguably amount to examples of imperfections of character or performance”.121 Although the case was unusual – the defendant’s decision was based on advice from his parents (both practising lawyers), the law society (unsuccessfully) sought to have the parents struck off for moving their son’s admission, and questions were raised over the university process surrounding the misconduct finding – it goes against the clear direction of subsequent authority. “The result of the decision”, it has been said, “undermine[s] the standard procedure for admission which relies on the candour of applicants”.122

[2.125]

Crawford J ostensibly focused too heavily on whether the defendant would have been denied admission had disclosure been made (in the circumstances, most likely not), at the expense of the separate and more pertinent issue of the impact of the non-disclosure itself and the motivation for it.123 The law’s modern approach is more rigorous. In Re OG (A Lawyer),124 discussed at [2.70], that the applicant had been informally disciplined for collusion in a non-law subject, when coupled with incomplete candour in his admission application, led the court to 118 The issue has generated some academic commentary: see, for example, Corbin and Carter, “Is Plagiarism Indicative of Prospective Legal Practice?” (2007) 17 Leg Ed Rev 53; Bartlett, “Student Misconduct and Admission to Legal Practice – New Judicial Approaches” (2008) 34 Mon ULR 309; Wyburn, “Disclosure of Prior Student Academic Misconduct in Admission to Legal Practice: Lessons for Universities and the Courts” (2008) 8 QUTLJJ 314. 119 Re OG (A Lawyer) (2007) 18 VR 164 at [123] per Nettle JA and Mandie J. 120 Law Society of Tasmania v Richardson [2003] TASSC 9. 121 Law Society of Tasmania v Richardson [2003] TASSC 9 at [80]. 122 Le Mire, “Striking Off: Criminal Lawyers and Disclosure of their Convictions” (2005) 79 ALJ 641 at 647. Other commentators have also queried the decision in Richardson: see, for example, Bartlett, “Student Misconduct and Admission to Legal Practice – New Judicial Approaches” (2008) 34 Mon ULR 309 at 318–319. 123 The latter was the basis of the Law Society’s argument: see Law Society of Tasmania v Richardson [2003] TASSC 9 at [82]. 124 Re OG (A Lawyer) (2007) 18 VR 164.

[2.125]

2 Admission to Practice

59

revoke his admission. The decision reveals, as do others,125 that even a single finding of academic misconduct, if unaccompanied by complete disclosure, may operate to preclude admission, at least for a time. It stands to reason that repeated instances of plagiarism, which are not candidly disclosed, speak against the requisite good fame and character.126 And it goes without saying that misrepresentations in an admission application hardly align with candour.127 In the wake of Re OG, the Victorian legal profession legislation was amended to require, for the purposes of assessing fitness and propriety for admission, explicit consideration of whether the applicant has been disciplined at a university or PLT course.128 Now for the purposes of the Legal Profession Uniform Law, applicable in New South Wales and Victoria, in considering whether a person is a fit and proper person to be admitted the relevant admission board must have regard, inter alia, to any “student conduct report”.129 The latter, which forms part of an application for a compliance certificate, must reveal whether or not the applicant was the subject of any disciplinary action taken by a university or PLT provider and, if so, its outcome.130 The Victorian Legal Admissions Board expects a student conduct report to disclose academic and general misconduct,131 here not confined to misconduct proven as a result of formal proceedings.132 Disclosure should include instances where a student has received a warning, marks have been deducted, an allegation was made, or an investigation took place, even if the student was subsequently exonerated.133 While the New South Wales Legal Profession Admission Board also 125 See, for example, Re Application by Onyeledo [2015] NTSC 60. 126 See, for example, Re Liveri [2006] QCA 152 (where the applicant had, between the ages of 25 and 27, committed serious plagiarism on more than one occasion, and displayed an unwillingness to subsequently acknowledge that misconduct, the court remarked that the latter aspect was “at least as significant as the academic dishonesty itself”: at [21]); Ali v New Zealand Law Society [2014] NZHC 1111 (where the applicant’s repeated instances of plagiarism while at university, coupled with incomplete disclosure to persons invited to act as referees, inclined Faire J against admission). 127 See, for example, Borhani v Legal Practitioners Admissions Board [2013] QCA 14 (where the applicant, whose application for admission wrongly claimed that he had been awarded a law degree with First Class Honours, was refused admission; note that this was premised on matter coming to the attention of the Board prior to admission; note that misrepresentations, including in relation to CVs, in most cases come to light post-admission, in which event they are addressed by way of the disciplinary process: see [25.30]). 128 Vic 2004, s 2.3.3(1)(ab). See also the former Legal Profession Admission Rules 2005 (NSW), Form 10 (which provided for a declaration by an applicant relating to the absence of academic disciplinary action, or otherwise a requirement to attach a signed and dated disclosure of the matter, with an authority to obtain relevant documents from the university). 129 LPUL, s 17(2)(b); Legal Profession Uniform Admission Rules 2015, r 10(1)(d). 130 Legal Profession Uniform Admission Rules 2015, r 19. 131 For this purpose, “general misconduct” is includes, but is not limited to, offensive behaviour, property damage, sexual harassment, racial vilification or other breach of the rules of conduct of the educational institution. 132 See http://www.lawadmissions.vic.gov.au/ (“Application for a Compliance Certificate for Admission as a Lawyer”, Pt D). 133 In this regard, the expectation follows that introduced by the (then) Victorian Board of Examiners via a 2009 practice direction.

60

Lawyers’ Professional Responsibility

[2.130]

envisages disclosure of both academic and general misconduct, it appears to target proven (as opposed to alleged) misconduct.134 Increasing focus on student misconduct in questions over fitness and propriety, in any case, vests in universities an expanded role, in an environment where the student is the customer, and universities have vested reputational interests in not publicising misconduct. It accordingly highlights, it has been suggested, the need for universities to “establish and maintain clear and robust procedures for handling, including properly recording, any incidents of academic misconduct”.135 Mitigating factors Age at which misconduct occurred and subsequent redemption

[2.130]

Aside from the nature of the previous improper act, what may influence a court in favour of an applicant is that the act was committed at a young age and that since then the applicant’s behaviour has been redeeming. This is what influenced the court in Re Owen,136 discussed at [2.60], even though the applicant was in his twenties when the offending conduct occurred. A leading Australian case, Ex parte Lenehan,137 is to the same end. There the applicant, whilst in his twenties, was employed as a legal clerk in a practice where disreputable practices were pursued and pecuniary dishonesty was commonplace. He failed to account for moneys received, retained a sum exceeding that to which he was entitled, and paid himself from trust funds without authority. His record subsequently became one of respectable work and achievement, including service in the armed forces. The High Court admitted the applicant, reasoning as follows:138 The appellant having made an unfortunate beginning under very bad example so acted within the ages of 25 and 28 as to raise a presumption against his fitness for the profession of a solicitor. From the age of 28 to 45 he has behaved in such a way as to raise a strong presumption that he has redeemed his early errors and that they did not reflect any permanent defect of character … the false steps of youth and early manhood are not always final proof of defective character and unfitness … [T]his court ought to give effect to the view that the adverse conclusions that might otherwise be drawn from an unsatisfactory beginning may be displaced by a completely satisfactory subsequent career sustained over a lengthy period of time.

Redeeming behaviour is reflective of, and ordinarily coincident with, expressions of remorse for earlier misconduct.139 But where past indiscretions and attitudes persist 134 See http://www.lpab.justice.nsw.gov.au (“Guide for Applicants for Admission as a Lawyer in NSW”, p 25). 135 Wyburn, “Disclosure of Prior Student Academic Misconduct in Admission to Legal Practice: Lessons for Universities and the Courts” (2008) 8 QUTLJJ 314 at 341. 136 Re Owen [2005] 2 NZLR 536. 137 Ex parte Lenehan (1948) 77 CLR 403. See also Re Application for Admission as a Legal Practitioner (2004) 90 SASR 551. 138 Ex parte Lenehan (1948) 77 CLR 403 at 424–425 per Latham CJ, Dixon and Williams JJ. 139 Cf Simon, “What’s Remorse Got to Do, Got to Do With it? Bar Admission for Those With Youthful Offences” [2010] Mich St L Rev 1001 (who notes (at 1004) that unlike applicants who were convicted of serious felonies, “prompt bar admission is a realistic prospect and remorse is an often-discussed factor for applicants who committed youthful offenses”, but voices the concern (at 1019) that “there is scant, if any, empirical evidence that a youthful offender who does not express

[2.135]

2 Admission to Practice

61

beyond youth, revealing a sustained course of conduct incompatible with being a lawyer, declarations of remorse ring hollow, and admission will be denied. This occurred in Re B,140 where the applicant had during her university student days been convicted for various offences, including obscene publication, trespass, damage to property and using obscene words. Evidence revealed that she had published material expressing her defiance of the law, the courts and of authority generally. There are indications in the New South Wales Court of Appeal’s judgment that, had the matter stood there, she may have been admitted. But what ultimately led the court to deny admission was that, shortly before seeking admission, the applicant had been a party to a dummy bail agreement pursuant to which she pledged the money of a prisoner pretending it to be her own. In so ruling, Reynolds JA noted:141 It is not a question of any difference of view as to her political ideology or indeed a dislike of the vigour with which she has pursued the many causes she has espoused. It is rather a question of whether a person who aspires to serve the law can be said to be fit to do so when it is demonstrated that in the zealous pursuit of political goals she will break the law if she regards it as impeding the success of her cause.

External stressors at time of impropriety

[2.135]

Previous improprieties, it explainable by external and extreme stressors that are most unlikely to be replicated in legal practice, may not impede admission. This may explain the New South Wales Court of Appeal’s decision in Prothonotary v Del Castillo,142 where the applicant stood trial for murder, being ultimately acquitted. In the course of the police investigation the applicant had lied to police and gave false instructions to his lawyer. That he failed to disclose the charge upon his admission figured prominently in the Australian Capital Territory’s Full Court ruling against his admission (see [2.105]), but little emphasis on this aspect of the case appears in the New South Wales proceedings. Although the applicant’s conduct was inappropriate, their Honours did not view it as revealing a lack of standards because “[h]is conduct stemmed from a sudden response to a wholly unforeseen calamity placing extraordinary pressures on him nearly ten years ago”.143

On other occasions, courts have proven less yielding. In Re Bell,144 discussed at [2.65], the Queensland Court of Appeal accepted that the applicant’s behaviour, as a family law litigant, in threatening judicial officers could be explained by his genuine concern for his children’s welfare “whilst reacting emotionally and irrationally in the milieu of a traumatic family breakdown”. However, it was remorse presents a greater danger of violating the profession’s norms in the future than an applicant who does”; the author accordingly favours abandoning the (over-)use of remorse in admission cases, in so doing avoiding the need to ascertain the difficult question of whether or not an applicant is remorseful (at 1020–7)). 140 Re B [1981] 2 NSWLR 372. 141 Re B [1981] 2 NSWLR 372 at 402. 142 Prothonotary v Del Castillo [2001] NSWCA 75. 143 Prothonotary v Del Castillo [2001] NSWCA 75 at [99] per Heydon JA, with whom Mason P and Priestley JA concurred. 144 Re Bell [2005] QCA 151 at [12].

62

Lawyers’ Professional Responsibility

[2.140]

unwilling to accept that these were statements made by a person suitable for admission as a lawyer. Their Honours did, however, add that the rejection of the application would not necessarily preclude the applicant from realising his goal in the future, in that “[h]uman experience is that people sometimes behave atypically, irrationally, emotionally and unwisely when involved in a discordant marital break-up, especially where the custody and welfare of children is concerned”.145

REQUIREMENTS FOR PRACTICE Entitlement to practise law premised upon practising certificate

[2.140]

Beyond admission to practice, the prerequisite to practise as a lawyer is the issue of a practising certificate.146 The legislative trend is to distinguish an “Australian lawyer” (a person admitted to practice) from an “Australian legal practitioner” (an Australian lawyer holding a current practising certificate).147 Statute prohibits a person who does not hold makes it an offence, in some jurisdictions potentially punishable by imprisonment, for someone to practise law without a current practising certificate.148 This serves a protective function “to ensure that the public received legal advice and representation only from those who are properly qualified, are fit and proper and in every respect a person of good fame and character”.149 The point finds reiteration in the Legal Profession Uniform Law, which identifies relevant objectives as being “to ensure, in the interests of the administration of justice, that legal work is carried out only by those who are properly qualified to do so” and “to protect clients of law practices by ensuring that persons carrying out legal work are entitled to do so”.150 Also, to practise law without holding a current practising certificate is, for a person admitted to practice,

145 Re Bell [2005] QCA 151 at [19]. 146 In the Territories, New South Wales, Queensland and Tasmania it is the relevant professional body (the Law Society, or otherwise the Bar Association in New South Wales and Queensland) to which application is made for practising certificates. In Victoria and Western Australia an independent body – the Victorian Legal Services Board and the Legal Practice Board, respectively – is charged with receiving applications for, and issuing, practising certificates. In South Australia that task remains in the Supreme Court. 147 ACT, ss 7, 8; NSW, s 6(1) (formerly NSW 2004, ss 5, 6); NT, ss 5, 6; Qld, ss 5, 6; Tas, ss 5, 6; Vic, s 6(1) (formerly Vic 2004, ss 1.2.2, 1.2.3); WA, ss 4, 5. 148 ACT, s 16; NSW, s 10(1) (includes potential for imprisonment) (definition of “qualified entity”) (formerly NSW 2004, s 14); NT, s 18; Qld, s 24 (includes potential for imprisonment); SA, s 21(1); Tas, s 13 (includes potential for imprisonment); Vic, s 10(1) (includes potential for imprisonment) (definition of “qualified entity”) (formerly Vic 2004, s 2.2.2); WA, s 12. 149 Legal Practice Board v Mullally [2003] WASC 225 at [3] per Johnson J. See also Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [36]–[38] per McColl JA; Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 at [43] per Hall J; Legal Practice Board v Clohessy [2006] WASC 21 at [18] per E M Heenan J; Council of the New South Wales Bar Association v Perry [2007] NSWCA 111 at [20] per Mason P. 150 NSW, s 9; Vic, s 9.

[2.145]

2 Admission to Practice

63

capable of being unsatisfactory professional conduct or professional misconduct.151 He or she, in any event, owes to the “client” the same duties at general law as a certificated lawyer would owe.152

[2.145]

What is meant by the phrases “practising law”, or “engaging in legal practice”, for this purpose was expressed in inclusive terms by J D Phillips J in Cornall v Nagle:153 [A] person who is neither admitted to practice nor enrolled as a barrister and solicitor may “act or practise as a solicitor” in any of the following ways: (1) by doing something which, though not required to be done exclusively by a solicitor, is usually done by a solicitor and by doing it in such a way as to justify the reasonable inference that the person doing it is a solicitor … (2) by doing something that is positively proscribed by the Act or by Rules of Court unless done by a duly qualified legal practitioner … (3) by doing something which, in order that the public may be adequately protected, is required to be done only by those who have the necessary training and expertise in the law. For present purposes, it is unnecessary to go beyond the example of the giving of legal advice as part of a course of conduct and for reward.

That an uncertificated person describes herself or himself in other than an expressly legal title is no defence to a charge of practising as a lawyer, if he or she in fact performs lawyers’ work. The issue is one of substance, not form, as appears from the decision of Hall J in Council of the New South Wales Bar Association v Davison.154 There the defendant, who before the cancellation of his practising certificate as a barrister had specialised in local government, environmental and planning law, established a business to supply town planning advice. His Honour accepted that town planners and lawyers may in some contexts perform overlapping or similar functions, and that town planners must have an awareness and knowledge of relevant law, but added that “provision of legal advice on matters involving legal interpretation or on legal rights or duties is the preserve of the legal profession”.155 151 See, for example, Legal Profession Conduct Commissioner v Alderman [2015] SASCFC 11 (where the respondent, who practised law while not holding a practising certificate, failed to pay the fee invoices of counsel, and misled the Legal Practitioners Conduct Board regarding his continuing practise of the law, was struck off, even though he only acted for friends and acquaintances to assist them); Council of the New South Wales Bar Association v Dwyer [2015] NSWCA 302 (practitioner who surrendered his practising certificate but nonetheless continued to engage in legal practice as a barrister struck from the roll). 152 See, for example, Braham v Catalano [2013] VSC 437 (where the defendant, who illegitimately held himself out to the plaintiff as a practising solicitor, was found liable in tort and breach of fiduciary duty in representing the plaintiff in a conveyancing transaction). 153 Cornall v Nagle [1995] 2 VR 188 at 210. See also Barristers’ Board v Marbellup Nominees Pty Ltd [1984] WAR 335 at 340–342 per Brinsden J; Felman v Law Institute of Victoria [1998] 4 VR 324; Queensland Law Society Inc v Sande (No 2) [1998] 1 Qd R 273; Council of the Law Society of New South Wales v Seymour [1999] NSWCA 117 at [18]–[21] per Fitzgerald JA; Kekatos v Council of the Law Society of New South Wales [1999] NSWCA 288 at [16] per Giles JA; Legal Services Commissioner v Walter [2011] QSC 132 at [23]–[29] per Daubney J; See further Knowler and Spencer, “Unqualified Persons and the Practice of Law” (2014) 16 Flinders LJ 203. Cf the ostensibly more restrictive approach in England: see Piper Double Glazing Ltd v DC Contracts [1994] 1 WLR 777 at 786 per Potter J; Agassi v Robinson (Inspector of Taxes) [2006] 1 WLR 2126 at [46]–[49] per Dyson LJ. 154 Council of the New South Wales Bar Association v Davison [2006] NSWSC 65. 155 Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 at [59].

64

Lawyers’ Professional Responsibility

[2.150]

The evidence, catalogued in the follwoing extract from the judgment, revealed that the defendant had traversed into providing legal advice:156 On a significant number of occasions … the knowledge and skill applied by him was that of a specialist barrister in the fields of local government, planning and environmental law. The advice given on those occasions included advice as to the legal rights or powers of local government authorities and of others. On many occasions, the advice related to the preparation and conduct of proceedings instituted in the Land and Environment Court. In some instances, the defendant provided advice direct to clients. In other cases, the advice was tendered by him to solicitors on matters involving legal issues in performance of the contract or retainer made with Sydney Development Services. The advice required the defendant to employ his legal and other specialist knowledge and to exercise a measure of the skill and judgment of the specialist barrister.

What also influenced Hall J was that the defendant had undertaken no course of study in town planning or obtained any accreditation or affiliation with a professional planning association. His only qualification was that of legal practitioner, and only a short time elapsed from the cancellation of his practising certificate and the commencement of his new business.157 The decision in Davison does not, however, mean that a person who, in lawfully pursuing an occupation other than law, gives advice for reward on matters within her or his occupational expertise involving expressing an opinion about relevant legislation necessarily engages in legal practice.158 Nor does the drafting of an agreement make it reasonable to infer that the drafter is necessarily acting as a lawyer.159

[2.150]

The prohibition on unauthorised practice does not apply to a law practice incorporated under the legal profession legislation (see [20.170]) or to the practice of foreign law by an Australian-registered foreign lawyer in accordance with that legislation (see [2.160]). The legislative endorsement of multi-disciplinary partnerships dictates that nor does the said prohibition oust the legitimate sharing of receipts by lawyers with non-lawyers in this context: see [20.160].

156 Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 at [146]. 157 Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 at [137]. 158 Orrong Strategies Pty Ltd v Village Roadshow Ltd (2007) 207 FLR 245 at [827] per Habersberger J. See, for example, Felman v Law Institute of Victoria [1998] 4 VR 324; Law Institute of Victoria Ltd v Maric (2008) 21 VR 1 (where Neave JA, with whom Warren CJ and Kellam JA concurred, held that “it does not follow that because legal advice will sometimes be required in order to satisfy the requirements of s 32 of the Sale of Land Act 1962 (Vic), the preparation of a vendor’s statement inevitably requires the giving of legal advice” (at [51]), and ruled that the respondent conveyancer had not been “engaging in legal practice” contrary to statute in preparing statements under s 32); Defteros v Scott [2014] VSC 205 (where Kaye J held that a non-lawyer legal costs consultant was not engaging in legal practice contrary to the statutory proscription, but stressed that the decision rested on the facts, and was not to be taken as determining the broader question whether or not a costs consultant engages in legal practice: at [85]) (affd Defteros v Scott [2014] VSCA 154). 159 Orrong Strategies Pty Ltd v Village Roadshow Ltd (2007) 207 FLR 245 at [874] per Habersberger J.

[2.160]

2 Admission to Practice

65

Practice by interstate lawyers

[2.155]

Lawyers who lacked a practising certificate issued in the jurisdiction and who engaged in the practice of law within that jurisdiction were once at risk of being found to have engaged in unauthorised practice, although they held a practising certificate in another Australian jurisdiction. The national market for legal services, when coupled with the fact that legal work frequently transcends jurisdictional borders, has driven full interstate recognition of practising certificates via a national practising certificate scheme. It entitles a holder of a practising certificate issued in one Australian jurisdiction to practise in another Australian jurisdiction using that certificate without being admitted to practice or holding a practising certificate in that other jurisdiction. But an interstate lawyer may engage in practice only in accordance with her or his entitlement to practise in the home jurisdiction.160 Provision is made for circumstances in which he or she must keep professional indemnity insurance in the jurisdiction.161 Practice by foreign lawyers

[2.160]

The legal profession legislation other than in South Australia makes provision for practice within Australia of foreign lawyers, subject to registration and limitations on their scope of work.162 Initiatives of this kind followed in the wake of the Uruguay Round of free trade negotiations, in which Australia made commitments in relation to legal services.163 In line with this, the legislation generally identifies its purpose as to encourage and facilitate the internationalisation of the legal services sector by providing a framework for the regulation of the practice of foreign law in Australia by foreign-registered lawyers as a recognised aspect of legal practice in Australia.164 It prohibits a person without an Australian practising certificate from practising foreign law in an Australian jurisdiction unless he or she is:165 160 ACT, s 73; NSW, s 43 (formerly NSW 2004, s 100); NT, s 80; Qld, s 75; SA, s 23B; Tas, s 80; Vic, s 43 (formerly Vic 2004, s 2.4.32); WA, s 69. 161 ACT, s 72; NT, s 79; Qld, s 74; SA, ss 52AA, 52AAB; Tas, s 79; WA, s 68. The position is equivalent under the Legal Profession Uniform Law, enacted in New South Wales and Victoria, as the relevant regulatory authority may grant or renew an Australian practising certificate if satisfied that the applicant has the requisite professional indemnity insurance: NSW, s 45(1)(b); Vic, s 45(1)(b). 162 ACT, Pt 2.7; NSW, Pt 3.4 (formerly NSW 2004, Pt 2.7); NT, Pt 2.7; Qld, Pt 2.8; Tas, Pt 2.6; Vic, Pt 3.4 (formerly Vic 2004, Pt 2.8); WA, Pt 8. Although the current statutory framework follows the Model Laws, equivalent provision had existed in the previous legislation of the Territories, New South Wales, Victoria and Western Australia: ACT 1970, Pt 15B (with effect from 1 December 1997); NSW 1987, Pt 3C (with effect from 1 July 1999); NT 1974, Pt XII (with effect from 21 July 1999); Vic 1996, Pt 2B (with effect from 16 December 1997); WA 2003, Pt 8 (with effect from 1 April 2004). Cf the former Tas 1993, s 55. 163 See Miller and Gallacher, “The WTO and the Legal Profession: Opportunity or Threat?” (2003) 25 (July) LSB (SA) 20; Arup, “Law Without Borders?” (2003) 77 (Aug) LIJ 48. 164 ACT, s 153; NSW, s 58 (formerly NSW 2004, s 183); NT, s 169; Qld, s 162; Tas, s 162; Vic, s 58 (formerly Vic 2004, s 2.8.1); WA s 149. 165 ACT, s 155; NSW, ss 60–62 (formerly NSW 2004, s 186); NT, s 172; Qld, s 165; Tas, s 165; Vic, ss 60–62 (formerly Vic 2004, s 2.8.4); WA, s 152.

66

Lawyers’ Professional Responsibility

[2.160]

• a registered foreign lawyer166 who practises foreign law in accordance with the statutory limitations; or • a foreign lawyer who practises foreign law within the jurisdiction for less than a prescribed period without establishing an office or commercial legal presence in the jurisdiction. An application for registration as a foreign lawyer may be made to the relevant local body,167 which must register a person as a foreign lawyer who, inter alia, demonstrates an entitlement to practise in a foreign jurisdiction and an intention to practise foreign law in the Australian jurisdiction and, in a requirement not found in the Uniform Law, to establish an office or a commercial legal presence.168 The legal services that may be provided by an Australian registered foreign lawyer are restricted by statute, to include:169 • doing work, or transacting business concerning the relevant foreign law; • services that relate to arbitration proceedings of the kind prescribed by the regulations; • services (including appearances) that relate to proceedings before courts where knowledge of the relevant foreign law is essential; • services in relation to conciliation, mediation or other forms of consensual dispute resolution of the kind prescribed by the regulations; and • in New South Wales and Victoria, legal services of a kind specified in the Legal Profession Uniform General Rules 2015 for this purpose. Nothing in the foregoing authorises an Australian-registered foreign lawyer to practise Australian law,170 although the legislation allows her or him to advise on the effect of an Australian law if doing so is necessarily incidental to the practice of foreign law and the advice is expressly based on advice given on the Australian law by a domestic lawyer who is not an employee of the foreign lawyer.171

166 In New South Wales and Victoria, under the Legal Profession Uniform Law, a registered foreign lawyer holds an “Australian registration certificate”. 167 ACT, s 170 (Law Society Council); NSW, s 62(1) (Bar Council or the Law Society Council) (formerly NSW 2004, s 201); NT, s 187 (Law Society); Qld, s 180 (Law Society); Tas, s 180 (Law Society); Vic, s 62(1) (Victorian Legal Services Board) (formerly Vic 2004, s 2.8.18); WA, s 167 (Legal Practice Board). 168 ACT, s 174; NSW, s 62(3) (formerly NSW 2004, s 205); NT, s 191; Qld, s 184; Tas, s 184; Vic, s 62(3) (formerly Vic 2004, s 2.8.22); WA, s 171. 169 ACT, s 157(1); NSW, s 69(2) (formerly NSW 2004, s 188(1)); NT, s 174(1)); Qld, s 167(1)); Tas, s 167(1)); Vic, s 69(2) (formerly Vic 2004, s 2.8.6(1)); WA, s 154(1). 170 ACT, s 157(2); NSW, s 69(3) (formerly NSW 2004, s 188(2)); NT, s 174(2); Qld, s 167(2); Tas, s 167(2); Vic, s 69(3) (formerly Vic 2004, s 2.8.6(2)); WA, s 154(2). 171 ACT, s 157(3); NSW, s 69(4) (formerly NSW 2004, s 188(3)); NT, s 174(3); Qld, s 167(3); Tas, s 167(3); Vic, s 69(4) (formerly Vic 2004, s 2.8.6(3)); WA, s 154(3).

[2.170]

2 Admission to Practice

67

APPLICATION FOR READMISSION Curial approach

[2.165]

A person who has been struck off from legal practice may apply to be readmitted.172 Success on this application rests on a court being satisfied “on solid and substantial grounds”173 that the applicant is (again) fit to be granted the privileges and assume the responsibilities of legal practice. The onus is a heavy one, as an applicant for readmission, unlike an original applicant, must displace the decision as to unfitness that led to her or his removal.174 In discharging its responsibility, as in the case of the original disciplinary proceeding, the court performs a protective role, having primary regard to the protection of the public interest and the reputation of the profession:175 see [23.20]. Factors that influence the court in its decision include those discussed below. Need for evidence of redemption and rehabilitation

[2.170]

Crucial to an applicant’s case for readmission is evidence of efforts made to reestablish herself or himself, and to redeem her or his reputation before the profession and in the eyes of the public.176 The court looks for a “sufficient period of commendable conduct”,177 bearing in mind that “[t]he greater the fall from grace the more the ground to recover before reinstatement”.178 The conduct in question must address what led to the applicant’s removal. So, for example, an applicant struck off for dishonesty must show subsequent evidence of unblemished honesty, usually in an environment where honesty is critical. Here evidence of work experience within the legal arena, conducted with utmost integrity, is probative,179 whereas work in an occupation or industry entirely unrelated to law, even if 172 In a minority of US States there is a procedure for deploying permanent disbarment, without scope for readmission, ordinarily premised on some type of criminal activity: see discussion in Finkelstein, “Should Permanent Disbarment be Permanent?” (2007) 20 Geo J Legal Ethics 587. 173 Re S (a solicitor) [1985] VR 343 at 346 per Kaye J; Dawson v Law Society of New South Wales (unreported, CA(NSW), 21 December 1989) at 10 per Kirby P. 174 Ex parte Lenehan (1948) 77 CLR 403 at 422 per Latham CJ, Dixon and Williams JJ; Kotowicz v Law Society of New South Wales (No 2) (unreported, CA(NSW), 7 August 1987) at 3 per Samuels JA, at 19–20 per Kirby P; Application of Dennis (unreported, CA(NSW), Samuels, Mahoney and Hope JJA, 23 December 1988) at 2 per Samuels, Mahoney and Hope JJA; Re Stokes (2008) 38 WAR 208 at [32] per Martin CJ; Mungar v Legal Practice Board of Western Australia [2009] WASC 135 at [19]–[21] per the court; Re Morel [2015] SASCFC 20 at [20] per the court. 175 Dixon v Legal Practice Board of Western Australia [2012] WASC 79 at [27] per the court. 176 Re a Practitioner (1982) 30 SASR 27 at 32 per King CJ; Bolton v Law Society [1994] 1 WLR 512 at 518 per Sir Thomas Bingham MR. 177 Jauncey v Law Society of New South Wales (unreported, CA(NSW), 1 February 1989) at 15 per Clarke JA. 178 L v Canterbury District Law Society [1999] 1 NZLR 467 at 473 per Fisher, Paterson and Potter JJ. 179 See, for example, Re Reilly (unreported, FC(SA), 10 April 1996) (six former partners of a law firm who were struck off the roll for tax evasion were readmitted because, in the intervening six years, they had been employed as law clerks and had performed loyally and well in that employment); Kennedy v Legal Profession Admission Board of New South Wales [2012] NSWSC 33 (where what led Garling J to readmit the applicant was, inter alia, his exemplary conduct whilst working as a legal clerk and the contrition displayed for his earlier misconduct: at [113]).

68

Lawyers’ Professional Responsibility

[2.170]

meritorious, is less so.180 As such, a former lawyer against whom a finding for dishonesty has been made may be in a “catch-22” situation because that finding may scuttle opportunity for legally related work, which in turn is what the courts see as most probative of rehabilitation. On a readmission application, the court looks not only for an applicant who has expressed regret for the former misconduct, but one who has both understood and acknowledged its wrongfulness.181 So although “[a]cknowledgment of error does not itself displace unfitness … it is an indispensable starting point”.182 This is because a court in considering issues of fitness would unlikely be satisfied that past conduct would not be repeated without a genuine recognition of, and acceptance of, the wrongfulness of that conduct.183 Accordingly, a failure to acknowledge the seriousness of behaviour going to removal, or an attempt to downplay or deflect responsibility for it, will almost single-handedly deny readmission.184 Yet mere frankness in recognition of past errors and sincerity in the intention to avoid them in future are no more than words, which carry little weight if unsupported by actions that reflect those sentiments.185 So where the events giving rise to striking off caused loss to clients or others, a court expects an applicant for readmission is expected to have taken appropriate steps to redress the victims.186 A poor or no attempt at restoration may preclude a successful application.187 Also, 180 See, for example, Re Giles (unreported, FC(ACT), 17 June 1994) (that a lawyer who had been struck off for dishonest and incompetent conduct had worked in restaurants, the construction industry and drove taxis, in each case with nothing adverse to either his honesty or his competence, did not prevent the court considering his application to be premature; the applicant was finally readmitted by order of the court on 2 December 2005, having been gainfully employed as a law clerk in a law firm since 1996 and frankly conceded his previous misconduct and lack of understanding: Re an Application by Giles (2005) 159 ACTR 1); Re Harrison (2002) 84 SASR 120 (where an applicant struck off for, inter alia, retaining for his own purposes part of clients’ settlement moneys, and who had for years after worked competently and with apparent integrity within the trade union movement, was refused readmission). 181 Kennedy v Legal Profession Admission Board of New South Wales [2012] NSWSC 33 at [97] per Garling J (“Contrition is relevant to consider … because at its base is a recognition by an applicant for readmission of the wrongfulness of the earlier conduct which led to the striking off order, and an outward expression of renunciation of that conduct”). 182 Application of Dennis (unreported, CA(NSW), Samuels, Mahoney and Hope JJA, 23 December 1988) at 13 per Samuels JA. 183 Kennedy v Legal Profession Admission Board of New South Wales [2012] NSWSC 33 at [98] per Garling J. 184 Cf Watt v Law Society of Upper Canada (2005) 255 DLR (4th) 701 at [45]–[57] per Molloy J (where the applicant admitted gross negligence and expressed great remorse for that conduct, but did not admit the fraud finding that had led to his removal, the court nonetheless acceded to the readmission application; it was influenced in so ruling by findings that the applicant had behaved with complete integrity since removal, was most unlikely to re-offend, and was willing to concede the wrong, albeit not its level). 185 Gregory v Queensland Law Society Inc [2002] 2 Qd R 583 at [29] per Thomas JA. 186 Dempsey v Legal Practitioners Admissions Board [2013] QCA 193 at [27] per Holmes JA, with whom de Jersey CJ and Mullins J concurred (“One must question whether this court could properly hold the applicant out to the public as a reliable practitioner when there remains at least one client out of pocket from his previous practice”). 187 See, for example, Dawson v Law Society of New South Wales (unreported, CA(NSW), 21 December 1989).

[2.180]

2 Admission to Practice

69

long delay in effecting the restoration may lead the court to query the applicant’s motivation. In Re S (a solicitor),188 for instance, the substantial reimbursement of the fidelity fund by a solicitor struck off for dishonesty, 20 years after his first defalcation and shortly before his application for readmission, led Kaye J to doubt whether it was made out of a sense of repentance or remorse, but rather self-interest. Coupled with the fact that the applicant’s lapse was not a solitary one of a young man, but a continuing dishonest misappropriation over three years, this led his Honour to refuse the application. Weight given to findings of tribunal that ordered removal

[2.175]

On an application for readmission, the findings of the court or tribunal that ordered the removal are treated as correct and immutable, and must be accepted and not downplayed by the applicant. This explains why that court or tribunal must make a proper assessment of the lawyer’s conduct, and give reasons for its decision.189

As noted at [2.170], evidence adduced by an applicant must focus on how he or she has addressed failings that led to the striking off. The more serious those failings, the greater the hurdle an applicant faces to satisfy the court of present fitness, especially where they evidence sustained dishonest behaviour. In Re Harrison,190 for example, the applicant had been struck off for acting contrary to client instructions, misleading clients, retaining sums far exceeding proper costs on settling claims, and lacking candour with professional bodies and the court, without expressing contrition. The South Australian Full Court rejected his application for readmission ten years later, reasoning that:191 the fatal obstacle to the application is not any deficiency in the conduct of his case before the Board of Examiners, but the conduct which led to his striking off. It was not the conduct of a young and immature person nor an isolated act committed under stress. The applicant’s conduct in his mid forties towards the clients who placed their trust in him was flagrantly dishonest. That conduct, together with his behaviour in the subsequent proceedings, demonstrates a character so flawed as to preclude re-admission to the legal profession.

Where, conversely, the misconduct that led to the striking off stemmed from unique or isolated circumstances, the court may be more inclined to attribute weight to evidence of rehabilitation.192 Importance of candour upon readmission

[2.180]

The need for candour on a readmission application is even more important, were that possible, than on an application for admission (as to which see [2.90]), given that the applicant must overcome existing adverse findings that relate

188 Re S (a solicitor) [1985] VR 343 at 348. 189 Bridges v Law Society of New South Wales [1983] 2 NSWLR 361 at 368 per Hutley JA. 190 Re Harrison (unreported, FC(SA), 23 December 1992). 191 Re Harrison (unreported, FC(SA), 23 December 1992) at 15. See also Re Harrison (2002) 84 SASR 120 at [105], [106] per Bleby J, at [129], [130] per Besanko J (contra at [82] per Doyle CJ in dissent); Dixon v Legal Practice Board of Western Australia [2012] WASC 79 at [90]–[96] per the court. 192 See, for example, Kriss v Legal Practitioners Board [2002] NSWSC 967.

70

Lawyers’ Professional Responsibility

[2.185]

directly to fitness to practise. A lack of candour on an application for readmission will, as a result, almost invariably prejudice the application, especially if the lawyer was struck off for lack of candour in the first place. As in the case of admission, a failure to be candid with the court on readmission can potentially undermine an application that may in all likelihood have otherwise succeeded. Time elapsed between removal and readmission application

[2.185]

There is no set time within which an application for readmission can and cannot be made. It depends ultimately on the factors discussed above.193 Generally speaking, though, the elapsing of a short period is usually insufficient to substantiate rehabilitation.194 Even the passage of a long time does not by itself speak of rehabilitation, a point evident from cases in which readmission has been refused even two decades after the striking off where satisfactory rehabilitation was lacking.195 For this purpose, the inquiry surrounding “rehabilitation” is not confined to assessment of the likelihood of repetition of the disqualifying conduct (although this is hardly irrelevant);196 it is necessarily also informed by the broader objective of protecting the reputation and standards of the profession in the public eye.197 That a court declines to readmit on the basis that the application is premature conveys no suggestion that the applicant has been insufficiently punished; disciplinary proceedings are, after all, not aimed mainly at punishment: see [23.25]. Rather, it is that the court believes that insufficient time has passed to satisfy it that the requisite rehabilitation has occurred.198 Readmission subject to condition(s)

[2.190]

The court, if it determines that readmission is appropriate, need not do so unconditionally. Where it elects to impose a condition or undertaking on readmission, it is usually directed at monitoring what had caused the lawyer’s downfall. Conditions may be set to expire at a certain date, or be premised on an application to the court to have them expunged. As to the latter, the lawyer must prove that the circumstances that made the condition necessary have since disappeared; the case “must be founded upon a reversal of those reasons which

193 Gregory v Queensland Law Society Inc [2002] 2 Qd R 583 at [39] per Thomas JA. 194 See, for example, Dempsey v Legal Practitioners Admissions Board [2013] QCA 193 (where the court refused an application for readmission, made within four years of the appellant having been struck off for conduct including dishonestly and deliberately transferring funds from his trust account to his general account, sustained deception of clients, and charging excessive fees). 195 See, for example, Re S (a solicitor) [1985] VR 343 (17 years); Re Harrison (2002) 84 SASR 120 (20 years). 196 See, for example, Pepe v Legal Practice Board of Western Australia [2016] WASC 54 (where the court was influenced, in acceding to the application for readmission by a person who had previously been struck off by reason of a conviction for attempting to pervert the course of justice, by the fact that the offence was committed at a time when she suffered from a major depressive illness and was abusing alcohol, whereas at the time of reapplying, nearly 10 years later, she refrained from alcohol and her depression was in remission: at [21]). 197 Dixon v Legal Practice Board of Western Australia [2012] WASC 79 at [27], [34] per the court. 198 Gregory v Queensland Law Society Inc [2002] 2 Qd R 583 at [42] per Thomas JA.

[2.190]

2 Admission to Practice

71

had justified the original imposition of the restriction”.199 For example, in Re Taylor,200 a solicitor was readmitted on condition that he not practise on his own account or in partnership because of earlier trust account defalcations. The court acceded to his application to have the condition removed upon evidence that he had practised in this fashion for more than five years without fault.201 The result would have been otherwise had there been any evidence of misconduct in the intervening period.202

199 L v Canterbury District Law Society [1999] 1 NZLR 467 at 474 per the court. 200 Re Taylor [1997] 1 Qd R 533. 201 Taylor v Queensland Law Society [2002] QCA 30. 202 See, for example, L v Canterbury District Law Society [1999] 1 NZLR 467.

Chapter 3

The Lawyer–Client Relationship [3.05] CREATION OF LAWYER–CLIENT RELATIONSHIP .................................................... 73 [3.05] Retainer as a contract ...................................................................................................... 73 [3.20] Centrality of the retainer to lawyer and client duties and entitlements ............... 75 [3.25] Terms of the retainer ....................................................................................................... 76 [3.35] Parties to the retainer ...................................................................................................... 77 [3.50] Proof of the retainer ......................................................................................................... 80 [3.80] AUTHORITY OF LAWYERS UNDER THE RETAINER ................................................ 86 [3.80] Lawyer as agent ............................................................................................................... 86 [3.85] Forms of authority ........................................................................................................... 87 [3.100] Lawyers’ actual (express or implied) authority ....................................................... 88 [3.135] Lawyers’ ostensible authority ...................................................................................... 92 [3.150] LAWYERS’ ACCEPTANCE OF WORK ........................................................................... 95 [3.150] Counsel’s duty to accept a brief – cab rank principle ............................................ 95 [3.160] Grounds upon which counsel must or may decline a brief .................................. 96 [3.175] Acceptance of work by lawyers who practise other than solely as counsel ...... 98 [3.190] TERMINATION OF LAWYER–CLIENT RELATIONSHIP ........................................ 100 [3.195] Duty to complete work – doctrine of entire contract ............................................ 101 [3.200] Qualifications to the entire contract doctrine ......................................................... 101 [3.210] Impact of the entire contract doctrine on the recovery of fees ........................... 104 [3.220] Duties of lawyers on termination of retainer ......................................................... 106 [3.225] Return of brief by counsel .......................................................................................... 107 [3.230] Ownership of documents on termination of retainer ........................................... 108 [3.235] Retention of files and documents .............................................................................. 110

CREATION OF LAWYER–CLIENT RELATIONSHIP Retainer as a contract Core elements

[3.05] “Retainer” is the term used to describe a contract between a lawyer and client for the provision of legal services. It must accordingly be proved like any other contract,1 the terms of which determine the nature and scope of the contractual rights and obligations attendant to the relationship: see [3.25], [3.30]. 1 Wong v Kelly (1999) 154 FLR 200 at 206 per Stein JA; Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1 at [208] (CA); McGowan v Commissioner of Stamp Duties (2001) 47 ATR 357 at [10] per McPherson JA; McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382 at [31] (FC).

74

Lawyers’ Professional Responsibility

[3.10]

Contract, and thus a retainer, rests upon consensus ad idem (agreement), whether evidenced in writing or orally, or inferred from conduct. Proof of the requisite level of certainty2 and capacity (see [3.10]) is also required. There is some suggestion that consideration moving from the client is not essential to creating a retainer – whether as a means of encompassing services supplied pro bono3 or otherwise to reflect the client-focused nature of the retainer4 – but insofar as consideration goes to the client’s ability to enforce the retainer, there seems no impediment given coexisting tortious and equitable duties inherent in the consensus underscoring it. Capacity

[3.10] Capacity to contract lies at the heart of the lawyer-client relationship, as it does for other contracts. Aside from persons whose lack of capacity stems from minority, and are therefore represented by a tutor (or the like), the main concern for lawyers relates to clients who lack the mental capacity to give instructions for the purposes of a retainer and/or understand and act on advice received. A lawyer who is not reasonably satisfied that a prospective client possesses the mental capacity to give instructions must not act for or represent the client.5 A failure to be alert to issues of incapacity has the potential to generate liability in negligence,6 or even disciplinary consequences.7 Assessments of client capacity should not be confined to the commencement of the retainer; the validity of a lawyer’s representation of a client rests on continuing client capacity. Lawyers must be sensitive to indicia of dwindling capacity, and must not proceed unabated in the face of client supervening incapacity. In circumstances where an existing client loses capacity, the lawyer should approach a

2 The effect of uncertainty in the general law of contract can undermine the existence of an enforceable agreement in the first place (see, for example, Pirone v Craig J Roberts (Solicitor) Pty Ltd (2006) 244 LSJS 284 at [39] per Layton J), but more commonly impacts on construing the terms of the agreement, in particular as to the scope of a retainer. 3 See, for example, Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1 at [155]. 4 See, for example, Bartle v GE Custodians [2010] 1 NZLR 802 at [132] per Randerson J. 5 See Brereton, “Acting for the Incapable: A Delicate Balance” (2012) 35 Aust Bar Rev 244; Castles, “Mind the Gaps: Ethical Representation of Clients with Questionable Mental Capacity” (2015) 18 Legal Ethics 24. 6 See, for example, Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [418] per Bell J (who held that it is a breach of a lawyer’s tortious duty of care to take and act on instructions from a client whom the lawyer knew or should have known lacked the mental capacity to give instructions). 7 See, for example, Legal Services Commissioner v Ford [2008] LPT 12; Legal Services Commissioner v de Brenni [2011] QCAT 340; Legal Services Commissioner v Comino [2011] QCAT 387; Legal Profession Complaints Committee v Wells [2014] WASAT 112 (each involving lawyers found to have committed unsatisfactory professional conduct arising out of wills and/or powers of attorney whose donors lacked capacity). See further Hamilton and Cockburn, “Assessment of Capacity: Disciplinary Issues and Potential Liability” (2009) 29 (Mar) Proctor 15; Dal Pont, “Enduring Power” (2012) 86 (Apr) LIJ 74.

[3.20]

3 The Lawyer–Client Relationship

75

friend or relative of the client to make an application to declare the client incapable of managing her or his affairs8 or, in an exceptional case, even make the application personally on the client’s behalf.9 That the (alleged) lawyer lacks the capacity to represent a client, whether by reason of mental disability or in not being qualified or certified to provide legal services, does not prevent a retainer from arising, with the consequent duties, if the “client” was unaware of the mental disability or reasonably believed that he or she was being represented by a qualified practising lawyer.10 Freedom of contract curtailed

[3.15] The freedom of contract endemic to the general law of contract is curtailed vis-à-vis the retainer. In various circumstances lawyers are proscribed from accepting a retainer: see [3.160]–[3.185]. Barristers are in some circumstances professionally obliged to accept a brief: see [3.150]. Practical restrictions apply to the lawyer’s ability to terminate the retainer via the doctrine of entire contract: see [3.195]. And where a costs agreement forms part of the retainer, there is scope for its modification by a court (or even a costs assessor or taxing officer) to protect the client: see [14.150]–[14.205]. Centrality of the retainer to lawyer and client duties and entitlements

[3.20] The retainer is central to various incidents of the lawyer–client relationship. Most fundamentally, it identifies the client and prescribes the services expected. It thereby determines upon whose instructions the lawyer acts, the scope of the lawyer’s authority in carrying out those instructions (see [3.80]–[3.145]) and the scope of the lawyer’s duties. As to the latter, the retainer almost exclusively charts the parameters of the lawyer’s duty of care in tort to the client; with limited exceptions (see [5.30]), a lawyer owes no tortious duty to advise a client on matters outside the boundaries of the retainer. It sets the parameters for other duties owed by the lawyer too, including fiduciary duties (see [4.40]) and duties of confidentiality (discussed in Ch 10). Fiduciary duties ordinarily coincide temporally with the retainer, thereby precluding fiduciary duties of loyalty to former clients:11 see [8.05]. The retainer attracts duties of confidentiality, usually via an implied term (see [10.15]), that may not arise outside such a professional engagement and that 8 McD v McD [1983] 3 NSWLR 81 at 84 per Powell J. 9 R v P (2001) 53 NSWLR 664 at [63]–[65] per Hodgson JA, with whom Mason P concurred. This is a course also recommended in American and Canadian professional rules: US, r 1.14(b); Can CPC, r 3.2-9, cmt [2]. The Singaporean rules (r 5(4)) require a lawyer, “as far as reasonably possible, [to] continue to act for his or her client in the client’s best interests, after the client’s ability to make any decision is impaired because of any mental disability or for any other reason”. See further Dal Pont and Smith, “Lawyers Facing Supervening Client Incapacity” (2015) 89 (Aug) LIJ 34 (Pt I); (2015) 89 (Oct) LIJ 48 (Pt II). 10 See, for example, Braham v Catalano [2013] VSC 437 (where the defendant, who illegitimately held himself out to the plaintiff as a practising solicitor, was found liable in tort and breach of fiduciary duty in representing the plaintiff in a conveyancing transaction). 11 This is not to say that lawyers can never owe fiduciary duties to non-clients or ex-clients, but that the source of such duties must ordinarily stem from a relationship independent of the lawyer–client relationship: see [21.120].

76

Lawyers’ Professional Responsibility

[3.25]

survive the termination of the retainer because information can retain its confidentiality: see [10.35]. Also, the lack of a lawyer–client relationship, evidenced by a retainer, denies legal professional privilege that would otherwise apply to communications within that relationship: see [11.120]–[11.135]. The lawyer’s entitlements are generally determined by the existence and scope of the relevant retainer. Absent a retainer, the lawyer has no contractual claim to costs and disbursements from an alleged client:12 see [15.05]. The scope of the retainer moreover determines whether or not the lawyer’s acts or omissions come within the coverage of professional indemnity insurance. Terms of the retainer Express terms

[3.25] The retainer may include both express and implied terms. Usually, express terms are (or should be) documented in writing, in which case their meaning and scope is determined, like any other contract, on a process of construction. But unlike ordinary contracts between arm’s length parties, an ambiguity in those terms will likely be construed contra proferentem (that is, strictly) against the lawyer, at least for the typical (inexperienced) lay client.13 As the lawyer drafts the retainer, it is reasoned, he or she should not benefit from an ambiguous expression.14 Such an approach aligns with both the incidents of fiduciary law imposed on lawyers in client dealings (see [6.40]), and the law treating the lawyer–client relationship as one of influence (see [6.125]). Implied terms

[3.30] Various terms are implied into retainers as a matter of law, giving effect to the nature of the relationship created thereby. The basic implied term requires lawyers to use their best endeavours to protect client interests, and to exercise reasonable care and skill in carrying out by all proper means the client instructions under the retainer.15 This largely replicates the lawyer’s duty of care in tort; a lawyer who discharges duties negligently is therefore concurrently liable in tort and contract: see [5.05]. 12 See, for example, Director of Fair Work Building Industry Inspectorate v Abbott (No 7) [2015] FCA 969 (absence of a retainer with the alleged client dictated an inability to recover costs from that person); Legal Services Commissioner v Mould [2015] QCAT 440 at [82]–[84] per Carmody J (the absence of any contractual basis for seeking to recover fees meant that the respondent solicitor had committed unsatisfactory professional conduct by rendering a bill therefor). 13 Owners – Strata Plan No 45205 v Andreones Pty Ltd [2009] NSWSC 1189 (retainer construed strictly so as to deny solicitors professional and photocopying costs incurred after its termination). Bari v Rosen [2012] 5 Costs LR 851; Vlamaki v Sookias & Sookias [2015] 6 Costs LO 827. Cf Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 3) [2004] VSC 164 at [10], [11] per Byrne J (who declined to construe a costs agreement contra proferentem where the client was “an intelligent and experienced litigant who demonstrated himself to be well able to look after his own interests” (at [10]), “a very experienced professional litigant” and a “hands on client” (at [11])). 14 Anglo-Dutch Petroleum v Greenberg Peden (2011) 352 SW 3d 445 at 453 (“Construing client-lawyer agreements from the perspective of a reasonable client in the circumstances imposes a responsibility of clarity on the lawyer that should preclude a determination that an agreement is ambiguous in most instances”). 15 Groom v Crocker [1939] 1 KB 194 at 222 per Scott LJ; Astley v Austrust Ltd (1999) 197 CLR 1 at [47] per Gleeson CJ, McHugh, Gummow and Hayne JJ.

[3.35]

3 The Lawyer–Client Relationship

77

Also implied into the retainer are terms authorising the lawyer to do all things incidental to the object of the retainer (see [3.100]) and requiring the lawyer to maintain lawyer–client communications confidential (see [10.15]). That the retainer has traditionally been construed as an entire contract (see [3.195]), from which the client may withdraw without cause (see [3.200]), is likewise effected through the vehicle of contractual implication. Because a term implied in law is presumed to form part of the contractual (retainer) relationship, the onus of establishing that the term is modified or ousted in a particular retainer lies on the lawyer. Parties to the retainer Importance of identifying the client

[3.35] A lawyer should take reasonable measures to ascertain a client’s identity as soon as practicable before accepting instructions to act.16 In the simple scenario, the parties are likely to be clearly identified. Where a firm is retained, the retainer is usually with the firm, even though particular lawyers in the firm will have carriage of the matter.17 Challenges arise where multiple persons ostensibly instruct the lawyer. Particularly where there may be a conflict between the interests of those persons, the lawyer should make it clear at the outset for whom he or she acts, and actively dispel any assumption of a retainer with any other person in the matter. Challenges may also arise where instructions are received from an agent on behalf of a principal client, in which case it is important for the lawyer to take reasonable measures to ascertain the principal’s identity before accepting instructions. If lawyer is engaged to act for a corporate body, the body is the client to which the lawyer owes her or his duties – and so it is imperative that the lawyer identify who does, and does not, represent client:18 see [13.60]. For this purpose, a corporate entity may authorise an officer to instruct a lawyer in relation to a matter – provided that the officer has no personal interest conflicting with that of the entity19 but can simply be regarded as a human agency thereof – in which event the lawyer may ordinarily direct her or his advice as to the matter to that officer.20 Likewise, where a person who acts in some other representative capacity engages a lawyer – say a 16 Ford v Financial Services Authority [2012] 1 All ER 1238 at [39] per Burnett J (“In the ordinary course one would expect the lawyers concerned to establish with clarity the identities of the persons to whom they are giving advice, not least because they owe professional duties to clients, which affect the nature and extent of their legal liabilities”); Sher, “Commercial Transactions – Identifying the Client” (2013) 40 (May) Brief 29. 17 Kelly v Jowett (2009) 76 NSWLR 405 at [70] per McColl JA, at [96] per Barrett J. 18 Ford v Financial Services Authority [2012] 1 All ER 1238 at [39] per Burnett J (“Best practice would suggest that the retainer letter should make clear whether advice was being given to a corporate body alone or also to a number of identifiable directors or employees”). 19 Cf where the officer’s personal interests may conflict with those of the corporate entity: see Newcastle International Airport Ltd v Eversheds LLP [2014] 1 WLR 3073, mentioned in the notes to [13.60]. 20 Newcastle International Airport Ltd v Eversheds LLP [2014] 1 WLR 3073 at [80] per Rimer LJ, with whom Underhill and Moore-Bick LJJ concurred.

78

Lawyers’ Professional Responsibility

[3.40]

trustee (to act for the trust) or an executor (to act for the estate) – the personal interests of the trustee or executor usually lie outside the retainer.21 Client identity, to this end, is critical for the lawyer knowing from whom he or she may take instructions. In the case of joint clients, a lawyer must ensure that their authority to act represents the joint will of the clients. As the retainer is with each client – to whom duties are owed – the lawyer may communicate with and take instructions from one client only with the authority of the others.22 Any understanding regarding this authority should be clearly documented in writing. For instance, a lawyer who represents spouses in a transaction with a third party is well advised to secure a written agreement that each spouse is considered the agent for the other for the purposes of giving instructions binding on both.23 Retainer agreements with counsel

[3.40] A usage developed by the Bar itself, arguably prompted at least in part by the anti-competitive aim of maintaining some exclusive rights,24 dictated that counsel be instructed by a solicitor (often termed the “professional client”) rather than directly by a lay client in most matters. This usage came to be commended by the courts, in 1850 Lord Campbell CJ remarking that “the intervention of the attorney between the counsel and the party has greatly contributed, not only to the dignity of the Bar, but to the improvement of English jurisprudence”,25 and “is for the benefit of the suitors, and for the satisfactory administration of justice”.26 Statements to the same end continue to surface in modern judgments, in 1982 a New South Wales judge describing the practice as one “directed to ensuring the benefits which flow to clients and the community from legal representation which is independent of extraneous influence and has the benefits of objective detachment”.27 The professional prohibition against direct client access to the Bar had a significant by-product. It led to the barrister becoming what has been described as “perhaps the last inheritor of the classical Roman law’s exclusion of jurists from the law of contract”.28 Had barristers been professionally entitled, generally speaking, to accept a retainer directly from a lay client, there would have been little reason in principle to deny contractual force to the relationship so created. Not only did 21 Sabin v Ackerman (2014) 846 NW 2d 835 at 842–845. 22 Farrer v Copley Singletons [1997] EWCA Civ 2127, endorsed by Giles JA in Vukmurica v Betyounan [2008] NSWCA 16 at [48]. 23 See, for example, Vukmurica v Betyounan [2008] NSWCA 16 at [48]–[52] per Giles JA. Cf Savage v Taylor [1996] ANZ Conv R 385 (CA(NZ)), where a solicitor, who acted for a husband and wife in a property transaction and took instructions from the husband to disburse funds in a manner that ultimately caused their loss, was held liable to the wife because she had not authorised the moneys to be so disbursed. 24 In the face of solicitors, who had historically been procedural agents, becoming more general legal practitioners who had a right of audience in lower courts. 25 Doe d Bennett v Hale (1850) 15 QB 171; 117 ER 423 at 185 (QB), 429 (ER). 26 Doe d Bennett v Hale (1850) 15 QB 171; 117 ER 423 at 182 (QB), 428 (ER). 27 New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 233 per Moffitt P. 28 International Encyclopedia of Comparative Law, Vol VIII (“Specific Contracts”) Chs 9 (by Fisch), 14.

[3.45]

3 The Lawyer–Client Relationship

79

counsel lack a contractual relationship with the lay client; the relation of counsel and instructing solicitor, Erle CJ explained in 1863, rendered the parties “mutually incapable of making any contract of hiring and service concerning advocacy in litigation”.29

[3.45] According to the traditional approach, therefore, no retainer ensued between counsel and client, or between counsel and instructing solicitor. The former legal profession statutes in New South Wales and Victoria challenged this approach. The former New South Wales Act, and indeed its predecessor, entitled a barrister to contract for the provision of services with a client or another lawyer, even if the barrister had accepted a brief from a solicitor in the matter.30 The superseded Victorian Act simply allowed a lawyer, including counsel, to accept instructions in a matter from a client whether or not the client has retained another lawyer in that matter.31 Equivalent provision does not appear in the current New South Wales and Victorian Acts (pursuant to the Legal Profession Uniform Law). Nor had it been replicated by statute in other jurisdictions. The reason is that the legal profession legislation now envisages that an instructing solicitor and a barrister may enter into a costs agreement, which the statute declares can be enforced like any other contract: see [14.80]. In turn, this de facto lifts the traditional professional prohibition on counsel enforcing a fee claim in contract. But like the former New South Wales and Victorian provisions, it does not establish a statutory contract, vis-à-vis the solicitor or the client; nor does it compel barristers to contract.32 Instead, the existence of any contract, and the identity of the contracting parties and its terms, rest on the circumstances.33 Moreover, that barristers’ rules in the Territories, New South Wales, Queensland, Victoria and Western Australia, and the Rules of Practice 1994 in Tasmania, set restrictions on barristers accepting instructions directly from a lay client (a “direct access matter”) dictates that counsel can contract directly with a lay client outside of these restrictions. The rules require a barrister in a proposed direct access matter to inform the client of:34 29 Kennedy v Broun (1863) 13 CBNS 677; 143 ER 268 at 727 (CBNS), 287 (ER). 30 NSW 1987, s 38I(1), 38I(3), 38I(4); NSW 2004, s 83(1), 83(3), 83(4). 31 Vic 2004, s 3.2.3(1). 32 Under the former New South Wales provision, it followed, for instance, that a barrister who chose to enter into a contract for legal services could, via the statute, recover her or his fees at law pursuant to that contract, whereas a barrister who elected to render services on the conventional non-contractual basis was not entitled to recover fees at law and was left to the traditional extra-curial remedies: Keesing v Adams [2010] NSWSC 336 at [23] per Brereton J; Pentelow v Bell Lawyers Pty Ltd [2013] NSWSC 111 at [57] per Schmidt J. 33 Dimos v Hanos [2001] VSC 173 at [70], [71] per Gillard J; Mednis v Chand [2003] NSWSC 680 at [51] per Gzell J; Cameron v Ofria [2008] NSWCA 159; Keesing v Adams [2010] NSWSC 336 at [36]–[53] per Brereton J (noting that a costs agreement is a strong indication, though perhaps not an absolute one, of an intention that the barrister is to render services on a contractual basis: at [30]); Paramount Lawyers Pty Ltd v Maneschi [2012] NSWSC 877 at [57]–[71] per Rothman J. 34 ACT, r 115.2; NSW, r 22; NT, r 80; Qld, r 24B (see Supreme Court of Queensland, Practice Direction No 20, 2012, “Direct Access Briefing”); Tas, r 89A; Vic, r 22 (cf former Victorian Bar Inc, Practice Rules, rr 165, 168–171, 174); WA, r 24B.

80

Lawyers’ Professional Responsibility

[3.50]

• the effect of rules that prescribe the scope of barristers’ work;35 • the fact that circumstances may require the client to retain an instructing solicitor at short notice, and possibly during the case; • any other disadvantage that the barrister believes on reasonable grounds may, as a real possibility, be suffered if the client does not retain an instructing solicitor; • the relative capacity of the barrister in performing barrister’s work to supply the requested facilities or services to the client compared to the capacity of the barrister together with an instructing solicitor to supply them; and • other than in the Territories, a fair description of the barrister’s advocacy experience. Proof of the retainer

[3.50] Proving the existence of a retainer, and the identity of the client, is easiest where there is a written and signed document to this effect. Statute in no Australian jurisdiction requires retainers to be in writing, notwithstanding its advisability, although the statutory requirement that costs agreements be documented in writing (see [14.90]) provides an impetus to formalise retainers. Yet scope remains for a retainer to be effected orally (see [3.55]) or otherwise to be implied from the circumstances (see [3.60]–[3.75]). Oral retainers

[3.55] As the person alleging the existence of a contract bears the onus of proof, a lawyer alleging the existence of a retainer that is not in writing must adduce evidence in the form of words and/or conduct36 – which can include subsequent conduct37 – of the parties sufficient to satisfy a court that the retainer alleged in fact existed,38 or that an existing retainer has been varied in a particular way.39 35 ACT, rr 74, 75; NSW, rr 11, 13; NT, rr 74, 75; Qld, rr 15, 17; Tas, r 89(2), 89(3); Vic, rr 11, 13; WA, rr 15, 17. 36 Because courts endeavour to uphold commercial agreements, they are disinclined from construing a retainer (with a commercial client in particular) as unenforceable for past consideration; courts are more likely in this event to construe the consideration as executed, reflecting an understanding (though not clearly documented in writing) that the lawyers were to be remunerated on the basis of their standard fee structure: see, for example, QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 at [22]–[31] per Ann Lyons J. 37 For instance, conduct in paying costs: see, for example, Piper Alderman (a firm) v Australian Medic-Care Company Ltd (2011) 278 LSJS 137 at [36]–[44] per Stanley J. 38 Murphy v Liesfield [1930] VLR 142 at 145 per Irvine CJ, at 146 per Macfarlan J, at 147 per Lowe J; Coshott v Sakic (1998) 45 NSWLR 667 at 672 per Spigelman CJ; Hansen v Young [2004] 1 NZLR 37 at [37] per Heath J (CA); McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382 at [64] per Gray, Sulan and Layton JJ; Jones v Brian K Deegan & Associates [2011] SASC 44 at [13], [23] per Withers J; Fladgate LLP v Harrison [2012] EWHC 67 (QB) at [39] per Lang J. 39 Symonds v Vass [2007] NSWSC 1274 at [179] per Patten AJ ((noting courts’ wariness of variations to the retainer, especially those relating to costs, that favour the lawyer at the client’s expense, and the consequent scrutiny whether the client exercised a fully informed consent to variations of this kind) (point not addressed on appeal: Symonds v Vass (2009) 257 ALR 689).

[3.55]

3 The Lawyer–Client Relationship

81

It has been judicially observed that “[w]here the solicitor does not commit the terms of the retainer to writing that solicitor will be at a disadvantage”.40 Here the lawyer must overcome four main evidential difficulties. First, evidence of conduct is rarely, in and of itself, unequivocal.41 Second, the passage of time tends to blunt the accuracy of detailed recollection of the relevant events. Third, proof of an agreement of itself does not serve to define its exact scope.42 Words and conduct rarely address the details of the representation and a court will not substitute its view for the unexpressed view of (any of) the parties. This is particularly so where it is requested to imply a term that is advantageous to one party at the expense of the other.43 Moreover, the inability to determine the scope of a retainer with precision makes it more difficult for the lawyer to determine whether the engagement may give rise to a “client–client” conflict (see Chs 7, 8). Finally, where the evidence consists of the lawyer’s word against that of the client, all else being equal, the court ordinarily sides with the client. An oft-cited judicial pronouncement to this effect is that of Denning LJ in Griffiths v Evans,44 who reasoned that “the word of the client is to be preferred to the word of the solicitor” because “the client is ignorant and the solicitor is, or should be, learned”, and that a lawyer who does not take the precaution of getting a written retainer “has only himself to thank for being at variance with his client over it and must take the consequences”. There is Australian authority giving effect to this view, largely due to the special knowledge and position the lawyer is presumed to have as compared to clients.45 Moreover, it is reasoned:46 … it is the client who actually knows what he wants the solicitor to do, and so it is the solicitor’s business to ascertain the client’s wishes accurately, bearing in mind the possibility that the client, through ignorance of the correct terminology, may not have correctly expressed it.

40 Baird v Hastings & Co (Solicitors) [2014] PNLR 17 at [13] per Weatherup J. 41 See, for example, Orio Holdings Pty Ltd v Costi & Co (No 1) [2007] SASC 403 at [24]–[32] per Judge Lunn (where the solicitor was unable to prove to the court’s satisfaction the alleged client had accepted the retainer agreement by conduct). 42 See, for example, Cadoks Pty Ltd v Wallace Westley & Vigar Pty Ltd (2000) 2 VR 569 at [121]–[127] per Ashley J; Tom Hoskins plc v EMW Law (a firm) [2010] ECC 20 at [91]–[101] per Floyd J. 43 See, for example, Coshott v Sakic (1998) 45 NSWLR 667 at 673 per Spigelman CJ (involving an unsuccessful claim for remuneration by a solicitor in an oral retainer). 44 Griffiths v Evans [1953] 1 WLR 1424 at 1428. There were, however, earlier pronouncements to similar effect: see, for example, Crossley v Crowther (1851) 9 Hare 384; 68 ER 556 at 386 (Hare), 557 (ER) per Turner VC (“where there was a conflict as to the authority between the solicitor and the client without further evidence, weight must be given to the affidavit against, rather than to the affidavit of, the solicitor”); Re Dickie (1916) 23 BCR 538 at 541 per McPhillips JA. 45 Gummow v Bloom [1930] VLR 81 at 83 per Irvine CJ; Murphy v Liesfield [1930] VLR 142 at 144–145 per Irvine CJ, at 146 per Macfarlan J, at 147 per Lowe J (FC); Re O’Sullivan [1937] St R Qd 50 at 52–53 per Macrossan SPJ, at 66–67 per Henchman J (FC); Ranclaud v Cabban [1988] ANZ Conv R 134 at 138 per Young J (SC(NSW)) (who cited Denning LJ’s statement with apparent approval). 46 Gray v Buss Merton (a firm) [1999] PNLR 882 at 892–893 per Rougier J, remarks endorsed by Peter Smith J in Sibley & Co v Teachbyte Ltd [2008] EWHC 2665 (Ch) at [47], [48].

82

Lawyers’ Professional Responsibility

[3.60]

Though not unscathed in Australian courts47 – one appellate court has branded them as “perhaps more reflections on matters of policy than directives to a court to favour one party over the other when such contests emerge”48 – the view highlights the prudence of documenting instructions in writing and in some detail.49 Perhaps the main point is that where a retainer has not been reduced to writing, the court “should not … strain to resolve the ambiguities in favour of the lawyer over the client”.50 At the same time, the rider that “all else being equal” serves to curb a finding against the lawyer that is contrary to the relevant evidence.51 Implied retainers

[3.60] As is patent from the preceding discussion, like other contracts retainers need not be created by express words, whether written or oral; retainers can be inferred or implied from the circumstances, by reference to the intentions of the parties, objectively ascertained.52 In this context it is the existence of the retainer that is implied, not its terms. The onus rests on the person who alleges the existence of a retainer to prove this and, where this is material to the claim, to prove its terms. It is the lawyer on whom the onus lies where he or she seeks to recover fees from an alleged client.53 The alleged client may bear the onus if he or she wishes to make the lawyer accountable for breaching a duty, whether legal or equitable, which the retainer would attract, as in Pegrum v Fatharly,54 discussed at [3.65]. Of course, that a client succeeds in substantiating a retainer in this regard will not guarantee relief unless he or she can also establish a causal link between its breach and loss the client has suffered.55 47 See, for example, May v Burcul (unreported, CA(NSW), 18 October 1982) (where Reynolds AP said that such a direction to a jury would constitute a “plain misdirection”); Meerkin & Apel v Rossett Pty Ltd [1998] 4 VR 54 at 66 per Charles JA; Dew v Richardson [1999] QSC 192 at [10] per Chesterman J; Vella v Gustafson [2009] QSC 424 at [27] per Martin J (citing the remarks of Chesterman J with approval); Le Serve v Great Wall Resources Pty Ltd [2010] NSWSC 1213 at [22] per Hamilton AJ; Legal Services Commissioner v Mould [2015] QCAT 440 at [70], [71] per Carmody J). 48 Adamson v Williams [2001] QCA 38 at [20] per the court, sentiments endorsed by Byrne J in Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 3) [2004] VSC 164 at [61] (who declined to approach the task with a predisposition to prefer either witness). 49 Ranclaud v Cabban [1988] ANZ Conv R 134 at 138 per Young J (SC(NSW)) (“it has constantly been recognised that a written retainer is always advisable”). See also Polperro Holdings Pty Ltd v Vincent (unreported, SC(WA), Murray J, 16 September 1996) at 26 (who held that the proceedings in question made “patently obvious the wisdom of the obiter dicta of Denning LJ in Griffiths v Evans”, as the solicitor exposed himself by failing to adequately document what had occurred and the instructions that he received). 50 Strother v 3464920 Canada Inc [2007] 2 SCR 177 at [40] per Binnie J. 51 See, for example, Fladgate LLP v Harrison [2012] EWHC 67 (QB) at [55] per Lang J. 52 Pegrum v Fatharly (1996) 14 WAR 92 at 102 per Anderson J. 53 Coshott v Sakic (1998) 45 NSWLR 667 at 672 per Spigelman CJ. 54 Pegrum v Fatharly (1996) 14 WAR 92. 55 See, for example, Fleeton v Fitzgerald (1998) 9 BPR 16,715. In this case a solicitor who acted for the sublessor, but explained the sublease to the sublessee in detail, was held to be in a solicitor-client relationship with the sublessee, but was not held liable in tort for giving that explanation because his negligence was found not to have caused the sublessee’s loss. Rather, that loss was caused by the sublessee surrendering her sublease when she did not have to do so: at 16,720 per Beazley JA.

[3.60]

3 The Lawyer–Client Relationship

83

An implied retainer rests on proof of facts and circumstances sufficient to establish a tacit agreement to provide legal services.56 Its existence is determined by inference from objective facts, not merely from the lawyer’s belief as to which clients he or she was acting for.57 The reasonable expectations of the alleged client carry significant weight here,58 as the lawyer may always take steps to dissuade a belief that the lawyer acts for a person.59 The lawyer’s file (including letters and other correspondence) and diary notes, specifically regarding how he or she has referred to and dealt with the claimant, may prove useful.60 Aspects that may impact upon a client’s reasonable expectations of a retainer include the capacity in which the lawyer acted (say, giving advice in a non-legal capacity),61 who instructed the lawyer, who is liable for the lawyer’s charges, and whether a contractual relationship existed with the claimant in the past62 (as the court, in this event, may be readier to assume that the parties intended to resume that relationship).63

56 Pegrum v Fatharly (1996) 14 WAR 92 at 101 per Anderson J. See also at 95 per Ipp J. 57 Burke v LFOT Pty Ltd (2000) 178 ALR 161 at [85] per Heerey J. 58 Restatement §14(1)(b) (a relationship of lawyer and client arises when “the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services”); Teltschik v Williams & Jensen PLLC (2010) 683 F Supp 2d 33 at 45 (referring to factors including “whether the client perceived that an attorney-client relationship existed” and “whether the client sought professional advice or assistance from the attorney”). 59 Stringer v Flehr & Walker (2003) Aust Torts Reports ¶81-718 at [72]–[78] per Philippides J. 60 Compare, for example, Vella v Gustafson [2009] QSC 424 (where Martin J found that the defendant solicitor, in preparing documents for a money lending transaction, also acted for the lenders because, inter alia, what documentary evidence there was pointed to a solicitor–client relationship; the relevant correspondence used the terminology “my client”, “I am now instructed”, “I am strongly advising my client”, “note of initial instructions”: at [33]) with Girotto v Phillips Fox (a firm) [2011] VSC 293 (where Hollingworth J ruled that the defendant law firm, which had represented a client (OT) with whom the plaintiff invested moneys in a business venture, entered no implied retainer with the plaintiff because, inter alia: (1) the plaintiff was aware that the defendant was the solicitor for OT; (2) the defendant never sent a retainer letter to the plaintiff; (3) the defendant billed only OT in respect of the work connected with the transaction; (4) the plaintiff never discussed legal fees with the defendant; (5) the plaintiff never gave instructions to the defendant or asked the defendant for advice about the proposed transaction; and (6) the defendant never gave any advice about the transaction specifically addressed to the plaintiff: at [289]). 61 Hanave Pty Ltd v LFOT Pty Ltd (1999) 168 ALR 318 at [12], [13] per Moore J. See, for example, Attorney Grievance Commission of Maryland v Shoup (2009) 410 Md 462, where the Maryland Court of Appeals found no retainer between lawyer (S) and a purported client (W) with whom he had a romantic relationship, being influenced by evidence including that S charged no fee for his services and only sought to assist W in managing her financial affairs while in treatment for alcohol abuse, and that a loan from S to W was between a “boyfriend and girlfriend”. That W was also an attorney may have influenced this outcome. The court, however, cautioned that a personal relationship or close friendship with a purported “client” does not preclude a court from finding that a lawyer–client relationship exist: at 489. 62 Headfall Baseball LLC v Elwood (2013) 999 F Supp 2d 199 at 209. 63 See, for example, Regular v Law Society of Newfoundland and Labrador (2011) 336 DLR (4th) 1 at [33] per Wells JA (“The mere fact that the actual work on a matter has been completed, or indeed that a final account has been rendered in respect of work in that matter, does not mean that because there is no

84

Lawyers’ Professional Responsibility

[3.65]

[3.65] In Pegrum v Fatharly64 W wished to borrow money from the appellants. To save cost W proposed that the respondent, who was retained as solicitor for W’s group of companies, prepare all the documents, to which the appellants agreed. It was understood that the respondent would be the only solicitor involved in the dealing. Both parties attended on the respondent and supplied information to be put into the documents. The respondent prepared the documents, and W paid the appellants’ costs of so doing. The respondent knew that W and his companies were a bad risk and that the securities given by them were inadequate to secure the loan, but did not warn the appellants. When W was unable to repay the loan and the securities proved to be inadequate, the issue arose as to whether the respondent had acted as solicitor for the appellants. The Full Court of the Western Australian Supreme Court held that a solicitor–client relationship existed between the respondent and the appellants.65 That the respondent was being paid a monthly fee by W, and had acted for W in the past and would so act in the future, did not make the respondent W’s solicitor “in any exclusive sense”.66 The court remarked that “[t]he arrangement between the parties as to who should pay for the work is seldom material to the question for whom the work is done and to whom the professional duties are owed”,67 adding that it is not unusual for a person to engage a lawyer on the basis that the lawyer’s fees are to be paid by someone else. The respondent should, as a consequence, have disclosed details regarding W’s financial position; his failure to do so accordingly made him liable for the appellants’ loss.68 In so ruling, Anderson J made the following important remarks:69 Where both parties to a transaction consult the same solicitor and together give him the information needed to prepare the documents in which their respective rights and obligations are to be set out and the solicitor accepts responsibility to prepare the documents without any indication that he cannot fully discharge his professional duties to them both there is a strong bias towards finding that the solicitor tacitly agrees to act for both parties and to undertake the usual professional responsibilities to them both … In the absence of a clear indication by the solicitor that the solicitor does not accept one of the parties as his client it is natural in such a case to assume both are relying on him for professional advice and assistance. This follows from the mere fact that both have consulted him. There may be other circumstances which show that there is no reliance by one or other of the parties on the solicitor, but, if not, reliance should be inferred as a fact. And when a solicitor accepts responsibility to do professional work requiring special knowledge and skill and there is in fact a reliance on him to apply his expert knowledge specific agreement to act on a new matter, a subsequent office consultation is not in the character of a solicitor–client relationship”, especially where, as on the facts, it was in such close proximity to the prior engagement and it was in response to an invitation to the former client by the lawyer to consult him any time she had concerns). 64 Pegrum v Fatharly (1996) 14 WAR 92. 65 Pegrum v Fatharly (1996) 14 WAR 92 at 96–97 per Ipp J. 66 Pegrum v Fatharly (1996) 14 WAR 92 at 104 per Anderson J. 67 Pegrum v Fatharly (1996) 14 WAR 92 at 105 per Anderson J. 68 Pegrum v Fatharly (1996) 14 WAR 92 at 106–108 per Anderson J. 69 Pegrum v Fatharly (1996) 14 WAR 92 at 102.

[3.70]

3 The Lawyer–Client Relationship

85

and skill in the performance of that work, there exist “the elements which lie at the heart of the ordinary relationship between a solicitor and his client …”.70

A more recent example is McGeoch v Hendriks.71 There a solicitor (the defendant) attended a meeting of the plaintiff, his mother and his brother, at which the mother expressed her wish to organise her estate by transferring one farming property (A) to the brother and another farming property (B) to the plaintiff, the latter on the understanding that the plaintiff would either pay the stamp duty on the transfer or that she would devise B to him by will. The plaintiff’s choice of the former course was abandoned once the solicitor advised of its adverse effect on the mother’s pension. At the time the mother’s will devised B to the plaintiff, but the mother subsequently altered her will and left B to the children of the brother, thereby depriving the plaintiff of B on her death. Gzell J held that a retainer existed between the plaintiff and the solicitor, as the evidence revealed that the latter acted as the “family solicitor” at the relevant meeting; he did not confine himself to advising the mother alone but advised the plaintiff and his brother, and did not advise the plaintiff or his brother to seek independent advice.72 Failure to draw up and have executed an agreement that would protect the plaintiff’s interests by binding his mother not to alter her will with respect to the devise of B amounted to a breach of the retainer,73 a finding affirmed on appeal.74

[3.70] The foregoing should not be read as requiring a lawyer whose services are sought by two parties to a transaction to accept both as clients. He or she can refuse to do so and elect to act for one party only. This requires a clear statement as to the lawyer’s position,75 usually supported by documented advice to non-clients, whether file notes76 or a written communication, to take their own independent advice.77 It is difficult for a court to find that a person’s reasonable expectations support a retainer in the face of documented and clear communications of this kind. In any case, where the alleged client has not formally consulted the lawyer,

70 Citing from Hawkins v Clayton (1988) 164 CLR 539 at 578 per Deane J. 71 McGeoch v Hendriks [2007] ANZ Conv R 361. 72 McGeoch v Hendriks [2007] ANZ Conv R 361 at [48]–[54] (finding that the retainer was express or, in the alternative, implied). 73 In the alternative, Gzell J was satisfied that, even in the absence of a retainer, the defendant assumed a duty of care in tort to look after the plaintiff’s interests (see [21.20]), which had been breached: [2007] ANZ Conv R 361 at [55]–[57]. 74 Hendriks v McGeoch (2008) NSW ConvR ¶56-216 at [3]–[5] per Spigelman CJ, at [15]–[18] per Giles JA; contra at [64]–[66] per Basten JA dissenting. A different majority upheld the finding of liability in tort: at [69]–[81] per Basten JA, with whom Spigelman CJ agreed. Giles JA did not decide the point. 75 Pegrum v Fatharly (1996) 14 WAR 92 at 102 per Anderson J. 76 As was done by the solicitor in Stringer v Flehr & Walker (2003) Aust Torts Reports ¶81-718 (in successfully defending a claim by a person who alleged she was a client) but not in Gray v Staffa [2004] WASC 131 (where a serious question to be tried as to the existence of an implied retainer was found in an interlocutory application). 77 Irvine v Shaw [1992] ANZ Conv R 83.

86

Lawyers’ Professional Responsibility

[3.75]

and is in any case independently advised by other lawyers, it is likewise a challenge to conclude that a retainer has been created, especially in the case of an experienced client.78

[3.75] The issue of implied retainers may arise in the context of prospective clients – who approach a lawyer for either preliminary advice – nowadays including electronically, via email or the internet79 – or who interview various lawyers with a view to selecting whom to retain (sometimes termed a “beauty contest”). It assumes importance particularly vis-à-vis liability in tort (see [5.60]) and in determining whether the lawyer can be restrained from later acting against the prospective client (see [8.190]). Certainly where each party understands the professional relationship as potential, as opposed to actual or implied, it cannot be concluded that a retainer existed. In any case, prudence dictates that the lawyer make explicit to a prospective client what duties, if any, the lawyer is assuming.80 This is important because, even absent a retainer, the equitable doctrine of confidential information may shield some or all of the communications made in the course of a preliminary inquiry. AUTHORITY OF LAWYERS UNDER THE RETAINER Lawyer as agent

[3.80] There is no clearly established and all-encompassing general law definition of an “agent”.81 At its narrowest, agency connotes “an authority or capacity in one person to create legal relations between a person occupying the position of principal and third parties”.82 It can also, more broadly, cover a person authorised to affect legal rights and duties as between the principal and third parties.83 Wider again is the characterisation of an agent as “a person who has authority to act on behalf of a principal, either generally or in respect of some particular act or matter”.84 However characterised, the hallmarks of a lawyer–client relationship mark it as one of agency,85 whether to create legal rights and obligations for the client, affect those rights and obligations, or as only an authority to represent the client. Most of the 78 See, for example, Meerkin & Apel v Rossett Pty Ltd [1998] 4 VR 54 at 66 per Charles JA; Legal Services Commissioner v Wright [2010] QSC 168 at [17]–[19] per de Jersey CJ (appeal allowed but not on this specific point: Legal Services Commissioner v Wright [2012] 2 Qd R 360). 79 See Law Institute of Victoria, Guidelines on the Ethical Use of Social Media (29 November 2012) (“Practitioners should take particular care to avoid creating unintended solicitor-client relationships on social media channels”); Krawitz, “May it Tweet the Court: Ethical Considerations Involving Australian Lawyers’ Social Media Use” (2013) 2 JCivLP 85 at 91–93; Giesel, “The Attorney-Client Relationship in the Age of Technology” (2013) 32 Miss C L Rev 319. 80 Poly Software International Inc v Su (1995) 880 F Supp 1487 at 1491. 81 See Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [1.4]–[1.6]. 82 International Harvester Co of Australia Pty Ltd v Carrigan’s Hazeldene Pastoral Co (1958) 100 CLR 644 at 652 (FC). 83 Petersen v Moloney (1951) 84 CLR 91 at 94 per Dixon, Fullagar and Kitto JJ. 84 Erikson v Carr (1945) 46 SR (NSW) 9 at 12 per Jordan CJ. 85 See generally DeMott, “The Lawyer as Agent” (1998) 67 Fordham L Rev 301.

[3.95]

3 The Lawyer–Client Relationship

87

lawyer’s functions fall within the latter form of authority, but more generally the lawyer has been described as “the alter ego of the client”,86 such that “[t]he lawyer’s rights when acting for a client are not his or her own but are derivative rights”.87 The foregoing does not mean that the concept of agency envelops every retainer, or every aspect of a retainer. For purely advisory tasks, it is difficult to conceive of the lawyer acting as an agent, even broadly defined.88 But this is not misaligned with agency, as not every incident of an “agent’s” relationship with her or his principal necessarily bears the basal characteristics of agency. Agents generally may perform various functions, not all of which involve a representational characteristic. Forms of authority

[3.85] It is the authority arising out of the agency relationship that determines the extent to which the agent can represent the principal’s interests in a way capable of affecting the principal’s legal position. Authority takes two main forms, actual and ostensible, from which different consequences ensue. Actual authority

[3.90] Actual authority has been defined as “a legal relationship between principal and agent created by a consensual agreement to which they alone are parties”.89 Its scope is ascertained by applying the ordinary principles of construction of contracts, including referring to the express words used, any trade usages, and the course of dealings between the parties. It follows that an agent may, pursuant to actual authority, exercise not only those powers expressly conferred by the agency agreement (“express authority”) but also those implicit in position (termed “implied authority”).90 An agent who acts within her or his actual authority – whether express or implied – binds the principal; having authorised the agent to act in a certain way, the principal cannot dispute the consequences of the agent’s acts within that authority. Ostensible (or apparent) authority

[3.95] An agent may appear to have authority he or she in fact lacks, usually by virtue of being “held out” by the principal as authorised to act in a certain position.91 Where this is so, it is unfair to cast upon a third party with whom the agent is dealing the consequences of a lack of actual authority, in part because it is the principal who has, in a sense, been “responsible” for conveying the incorrect impression that the agent was authorised in the circumstances. For this reason, the 86 Sargent v ASL Developments Ltd (1974) 131 CLR 634 at 659 per Mason J. 87 Thompson, “Rules of Professional Conduct” [1995] NZLJ 128 at 128. 88 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 225 FLR 1 at [6177], [6178] per Owen J. 89 Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 502 per Diplock LJ. See generally Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), Chs 4, 5. 90 Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 488–489 per Willmer LJ. 91 See generally Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), Ch 20.

88

Lawyers’ Professional Responsibility

[3.100]

law recognises the concept of “ostensible” (or “apparent”) authority, binding the principal to the third party for acts within an agent’s ostensible authority, even if they fall outside actual authority. The chief legal vehicle through which this outcome is achieved is estoppel by representation, the representation being the principal’s “holding out” the agent to have the authority that he or she otherwise lacks.92 The principal, however, retains a cause of action for breach of contract against the agent for acting beyond actual authority. Lawyers’ actual (express or implied) authority

[3.100]

The terms of the retainer usually dictate, in general terms, the scope of the lawyer’s representation, and in turn determine the scope of the lawyer’s authority as an agent of the client. Where the terms are in writing the authority is express and its scope ascertained on a process of construction. Lawyers unsure as to whether or not an act is within their actual authority should seek prospective,93 preferably written, authority from their client.94 Within its confines, the retainer also carries with it the implied authority to do all things incidental to the object of the representation.95 A lawyer, it is said, “is the general agent of the client in all matters which may reasonably be expected to arise for decision in this cause”.96 Given the multiplicity of tasks a lawyer must fulfil in any retainer, it would otherwise be practically impossible (and costly) to refer every single matter to the client for instruction and consent. The task, so far as the scope of implied authority is concerned, is to determine whether, in view of the object(s) of the retainer, it could reasonably be said that the lawyer had authority to engage in the conduct in issue without prior client approval. The weightier the legal consequence for the client of the lawyer’s action, it appears, the readier the court is to find that the lawyer lacked authority. In South Bucks District Council v Flanagan,97 for example, the English Court of Appeal held that it was outside the implied authority of a solicitor, who had been retained by a local council to prosecute a breach of an enforcement notice, to agree to a withdrawal of that notice, as such an act “would be an action of great significance to the [council], extending far beyond the issue of the particular breach of the notice for which the prosecution has been brought”. 92 Freeman & Lockyer (a firm) v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480 at 494–495 per Willmer LJ, at 498 per Pearson LJ, at 503 per Diplock LJ; Crabtree-Vickers Pty Ltd v Australian Direct Mail Advertising & Addressing Co Pty Ltd (1975) 133 CLR 72 at 78–79 per Gibbs, Mason and Jacobs JJ. 93 Seeking retrospective authority risks the client denying authority, which is likely if the client is unhappy with the outcome of the representation: see Re Nelson (1991) 106 ACTR 1 at 16–17 per Higgins and Foster JJ. 94 Groom v Crocker [1939] 1 KB 194 at 222 per Scott LJ. 95 Polkinghorne v Holland (1934) 51 CLR 143 at 156 per Rich, Dixon, Evatt and McTiernan JJ; Ex parte Maxwell (1955) 72 WN (NSW) 333 at 336 per Roper CJ in Eq; Carrell v Carrell [1975] 2 NZLR 441 at 444–445 per Cooke J; Forestview Nominees Pty Ltd v Perron Investments Pty Ltd (1999) 162 ALR 482 at 503 per R D Nicholson J. 96 Prestwich v Poley (1865) 18 CBNS 805; 144 ER 662 at 816 (CBNS), 666 (ER) per Montague Smith J. 97 South Bucks District Council v Flanagan [2002] 1 WLR 2601 at [23] per Keene LJ, with whom Sumner J concurred.

[3.115]

3 The Lawyer–Client Relationship

89

The following examples illustrate the boundaries of lawyers’ implied authority. Implied authority to incur costs and disbursements

[3.105]

A lawyer has an implied authority to incur ordinary disbursements, such as service fees, filing fees, photocopying and the like.98 The position is different for unusual expenses, as noted by Baggallay LJ in Re Blyth & Fanshawe:99 [I]f an unusual expense is about to be incurred in the course of an action it is the duty of the solicitor to inform the client fully of it, and not to be satisfied simply by taking his authority to incur the additional expense, but to point out that such expense will or may not be allowed in taxation [assessment] as between party and party whatever the result of the trial.

It is good practice for lawyers to discuss with their clients major disbursements, such as an accountants’ or valuers’ fees, prior to incurring them.100 Certainly the briefing of counsel, as an important and expensive step in the litigation process, should not, except in situations of urgency, be pursued without prior client instruction or approval.101 Implied authority to receive money on a client’s behalf

[3.110]

A lawyer who acts in a transaction under which a client is to receive money from a third party may have implied authority to accept a bank cheque or cleared funds for this purpose.102 This does not include implied authority to accept payments other than in legal tender, such as by personal cheque,103 although an established practice as between lawyer and client may substantiate authority of this kind. No general implied authority to institute proceedings

[3.115]

The mere fact of acting as a lawyer does not confer authority to institute legal proceedings on a client’s behalf.104 The position is otherwise if a client confers on a lawyer express authority to institute suits generally, in which case no additional authority is necessary for the lawyer to institute a particular suit.105 But 98 Schiliro & Gadens Ridgeway (1995) 19 Fam LR 196 at 207 (FC). 99 Re Blyth & Fanshawe (1882) 10 QBD 207 at 210. See further Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2014), [5.26]–[5.34]. 100 Schiliro & Gadens Ridgeway (1995) 19 Fam LR 196 at 207 (FC). 101 Schiliro & Gadens Ridgeway (1995) 19 Fam LR 196 at 210 (FC). 102 Williams v Gibbons [1994] 1 NZLR 273. 103 Southbourne Investments Ltd v Greenmount Manufacturing Ltd [2008] 1 NZLR 30 at [19] per Blanchard J, delivering the reasons of the Supreme Court. 104 Hawkins Hill Gold Mining Co v Briscoe (1887) 8 LR (NSW) (Eq) 123 at 129–130 per Stephen J. In this case it was argued that, in cases of emergency, a solicitor’s inability to institute proceedings on behalf of a client by virtue of her or his general authority as solicitor would cause great hardship to clients outside the jurisdiction. His Honour rejected this contention, observing that “the power of instituting suits at [the solicitors’] own will, and perhaps for their own advantage, would be a dangerous one to put into the hands of solicitors”: at 130. See also Re HIH Insurance Ltd (in liq) [2014] NSWSC 922 at [5]–[17] per Brereton J. 105 Hawkins Hill Gold Mining Co v Briscoe (1887) 8 LR (NSW) (Eq) 123 at 130 per Stephen J.

90

Lawyers’ Professional Responsibility

[3.120]

an express authority to institute proceedings does not carry any implied authority to appeal, “particularly having regard to the expense to which the client would be put”.106 No general implied authority to contract

[3.120]

It is established that a lawyer lacks general implied authority to make contracts on behalf of a client.107 In the leading case, Pianta v National Finance & Trustees Ltd,108 vendors of land retained a solicitor to settle written terms of sale. The High Court found that while this impliedly authorised the solicitor to negotiate and agree with the respondent’s representatives as to the terms the respondent would accept, and to advise his clients on these matters, it did not authorise the solicitor to contract to sell the land on his clients’ behalf. Any such action required expree authority.109 Nor, apart from express authority, is a lawyer authorised to agree to a variation of a client’s contract.110 So a lawyer retained simply to effect the transfer of land does not possess the implied authority to vary or amend the relevant contract.111 No general implied authority to receive notices

[3.125]

Case law suggests that lawyers lack implied authority to receive notices on behalf of clients.112 A New South Wales judge has said that “[t]he fact that a client might be accustomed to retain the services of a particular solicitor or firm of solicitors in matters of a particular type does not constitute that solicitor or that firm of solicitors the client’s standing agent to receive notice of material facts”.113 An illustration is found in IVI Pty Ltd v Baycrown Pty Ltd,114 where the vendor of land purported to revoke its offer to sell by a communication the “buyer’s solicitor” nominated in the contract. The buyer had faxed its acceptance before receiving notice of the revocation, but after the notification to the solicitors in question. The revocation was held to be ineffective, McPherson JA reasoning as follows:115 106 City of Glenorchy v Addison (1967) 15 LGRA 259 at 260 (FC(Tas)). 107 Eccles v Bryant & Pollock [1948] Ch 93 at 106 per Cohen LJ; Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 at 586–588 per McPherson J; IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 at [4] per McPherson JA; Pavlovic v Universal Music Australia Pty Ltd [2015] NSWCA 313 at [20], [21] per Bathurst CJ, at [147]–[155] per Beazley P. 108 Pianta v National Finance & Trustees Ltd (1964) 180 CLR 146. 109 See, for example, North v Loomes [1919] 1 Ch 378 at 382–383 per Younger J; Ryan v Starr [2005] NSWSC 170 at [61]–[64] per White J. 110 George v Pottinger [1969] Qd R 101 at 107 per Lucas J; Longpocket Investments Pty Ltd v Hoadley (1985) 3 BPR 9,606 at 9,611 per Hope JA. 111 Nowrani Pty Ltd v Brown [1989] 2 Qd R 582 at 588 per McPherson J; Iannello v Sharpe (2006) NSW ConvR ¶56-162 at [10] per Windeyer J (revd on a different point: Iannello v Sharpe (2007) 69 NSWLR 452). 112 Singer v Trustee of the Property of Munro [1981] 3 All ER 215 at 218 per Walton J. 113 White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164 at [128] per Powell JA, citing as authority Saffron Walden Second Benefit Building Society v Rayner (1880) 14 Ch D 406 (see at 409 per James LJ, at 413 per Baggallay LJ, at 415 per Bramwell LJ). 114 IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205. 115 IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 at [3]. See also at [39], [40] per Keane JA.

[3.130]

3 The Lawyer–Client Relationship

91

the mere fact that a solicitor is acting for the offeree does not authorise him or her to receive such notice on behalf of the offeree or make his receipt of it the equivalent of communication of a notice of withdrawal or revocation to the offeree himself. It all depends on what the solicitor has been authorised to do on behalf of the offeree. The fact that, if in due course a contract transpires between offeror and offeree, someone has been nominated to be the offeree’s solicitor for the purpose of attending to settlement or completion of the contract is not enough. It does not make him or her in advance the agent of the offeree for the purpose of receiving notice of withdrawal or revocation of the offer before the contract has been formed or concluded.

The outcome would have differed, Keane JA added, had there been “a chain of correspondence passing between the solicitors acting upon instructions for each party”, in which case “there can be no doubt of the authority of the solicitor who has actually been instructed to conduct the negotiations”.116 It can be observed, more generally, that as it is not uncommon for transacting or litigating parties to reasonably assume that communications are effected via their legal representatives, receipt of notices directly related to the transaction or litigation cannot conclusively be said to fall outside lawyers’ implied authority generally. It depends on the circumstances, and the accepted practices of the profession and the parties. Implied authority to compromise

[3.130]

The weight of authority supports the proposition that “[i]n the absence of a special prohibition a solicitor has power to make a compromise with regard to the subject matter of the action, but not with regard to collateral matters”.117 In other words, a lawyer has implied authority to compromise on such terms as he or she thinks best for the client unless the client gives clear instructions restricting that authority.118 This approach has not passed without query, a New Zealand judge opining that:119 When the [client] instructs his solicitor to commence proceedings I find it difficult to suppose he would contemplate that once commenced the solicitor could settle without reference to him and with no recourse by him … If the authority exists it must be something imposed by the law as a necessary concomitant of the relation of solicitor and client in the particular instance. I cannot think there is anything in that relation which could justify it save only the apparent want of logic and cohesion in the disparity between actual and apparent authority. Nor does experience suggest that solicitors, in this country at all events, conduct the practice of litigation on the footing of the possession of such authority. 116 IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 at [33] (footnote 8). See, for example, Kestel v Superannuation Complaints Tribunal (2010) 276 ALR 112 at [18], [19] per Jagot J. 117 Little v Spreadbury [1910] 2 KB 658 at 663 per Bray J. See also Wells v D’Amico [1961] VR 672 at 676–677 per Gavan Duffy J; Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387 per Brightman LJ; Donellan v Watson (1990) 21 NSWLR 335 at 342 per Handley JA; Zhen v Downer [2006] ACTSC 120 at [25]–[31] per Crispin J; Across Australia Finance Pty Ltd v Bassenger [2008] NSWSC 799; Presrod Pty Ltd v Wollongong City Council [2010] NSWLEC 192 at [70]–[85] per Craig J. 118 Little v Spreadbury [1910] 2 KB 658 at 665 per Lord Coleridge J; Re Newen [1903] 1 Ch 812 at 817 per Farwell J. 119 Thompson v Howley [1977] 1 NZLR 16 at 25 per Somers J. See also Kontvanis v O’Brien (No 2) [1958] NZLR 516 at 518 per F B Adams J.

92

Lawyers’ Professional Responsibility

[3.135]

As the terms of a compromise or settlement reflect the final outcome of the suit for the client, it appears oddc for the lawyer to be entitled to determine these terms unless clearly authorised by the retainer. Moreover, if the lawyer possesses implied authority to compromise, the client’s recourse lies in proving negligence in effecting the compromise (which could be frustrated if effected by counsel: see [5.325]) or adducing evidence sufficient to vitiate the resulting contract (such as duress, undue influence, misrepresentation or mistake).120 In any case, prudent lawyers will always seek client instructions before effecting a compromise.121 Lawyers’ ostensible authority

[3.135]

Any instruction from a client that restricts the lawyer’s actual authority only affects third parties with notice of that restriction. If a client who has restricted the lawyer’s actual authority then places the lawyer in a position that usually carries with it a broader authority, the client is said to be “holding out” the lawyer to possess the broader authority.122 This “holding out” vests in the lawyer ostensible authority broader than actual authority, and so a lawyer may, in a particular case, have ostensible authority vis-à-vis the opposing litigant but lack actual authority from the client.123 The client is bound to third parties who, in relying upon this ostensible authority, contract with the lawyer. Below are noted two scenarios that illustrate the parameters of lawyers’ ostensible authority. Ostensible authority to act as “medium of communication”

[3.140]

A client who has previously authorised lawyers to make offers and other communications on her or his behalf may be held to “hold out” the lawyers as a medium of communication.124 But it is unlikely that merely nominating a lawyer to act in the event that a contract is concluded holds out the lawyer as a medium in respect of communications for pre-contractual negotiations. In IVI Pty Ltd v

120 Harvey v Phillips (1956) 96 CLR 235 at 243–244 (FC). See, for example, Shehata v Hussein [2004] NSWSC 617 at [18]–[22] per Barrett J (who refused to set aside the compromise merely on the ground that the client’s consent to it was grudging and reluctant, especially given that the client’s cause was weak); Broadbent v Medical Board of Queensland [2010] QCA 352 at [29] per Fraser JA. 121 Sheonandan Prasad Singh v Abdul Fateh Mahammad Reza (1935) 62 Ind App 196 at 200 per Lord Atkin; Harvey v Phillips (1956) 96 CLR 235 at 244 (FC); Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387–388 per Brightman LJ. This is a practice impliedly endorsed by Tas, r 14, which requires lawyers to advise the client before settling a litigious matter of the likely minimum amount that the client will receive if the matter is settled in accordance with the proposed settlement, and that the payments due from the settlement are no more than those of which the lawyer is reasonably aware at the time of settlement. 122 Legione v Hateley (1983) 152 CLR 406 at 421 per Gibbs CJ and Murphy J. 123 Thompson v Howley [1977] 1 NZLR 16 at 23–24 per Somers J; Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387 per Brightman LJ. 124 Magripilis v Baird [1926] St R Qd 89 at 91 per Isaacs J (HC). Cf CTM Nominees Pty Ltd v Galba Pty Ltd (1982) 2 BPR 9588 at 9590–1 per Needham J.

[3.145]

3 The Lawyer–Client Relationship

93

Baycrown Pty Ltd,125 discussed at [3.125], Philippides J, whose ruling was affirmed on appeal,126 held the purported revocation to be ineffective until it was notified to the buyer, reasoning as follows:127 I find that the only representations made by [the buyer] were that [the solicitors] were engaged in providing advice to it in respect of the contract and that it had nominated those solicitors to act on its behalf in the event of a contract being concluded. I do not consider that by those representations [the solicitors] were held out as a medium of communication in relation to the contractual negotiations. Those representations were not sufficient to clothe [the solicitors] with ostensible authority to receive the revocation email.

Again, though, each case must rest on its own facts, and in other circumstances, not difficult to imagine, it may be that lawyers for a purchaser have ostensible authority to receive communications from the vendor. Ostensible authority to compromise

[3.145]

The case law indicates that a lawyer retained in an action has ostensible authority, vis-à-vis the opposing litigant, to compromise the suit without actual proof of authority, if the compromise does not involve matters collateral to the action.128 This principle is grounded in practical concerns. Compromises often are made in court or in counsel’s chambers, and thus possibly without the client present, and so necessitating proof of actual authority would place “unnecessary impediments in the way of that convenient procedure”.129 A compromise exceeding the lawyer’s actual but not ostensible authority binds the client.130 The client’s recourse is against the lawyer for acting beyond authority,131 although such a course may be frustrated if counsel has effected the compromise within her or his immunity (as to which see [5.325]). Alternatively, the client may invite the court to exercise its discretion to set aside the compromise on the ground 125 IVI Pty Ltd v Baycrown Pty Ltd (2005) Q ConvR ¶54-612. 126 IVI Pty Ltd v Baycrown Pty Ltd [2005] QCA 205 at [7] per McPherson JA, at [46], [47] per Keane JA. 127 IVI Pty Ltd v Baycrown Pty Ltd (2005) Q ConvR ¶54-612 at [56]. 128 Kontvanis v O’Brien (No 2) [1958] NZLR 516 at 517–518 per F B Adams J; Thompson v Howley [1977] 1 NZLR 16 at 23–26 per Somers J; Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 387–388 per Brightman LJ; South Bucks District Council v Flanagan [2002] 1 WLR 2601 at [22]–[24] per Keene LJ; Owners Corporation Strata Plan 62285 v Betona Corporation (NSW) Pty Ltd [2006] NSWSC 216 at [45]–[49], [59] per Gzell J; Across Australia Finance Pty Ltd v Bassenger [2008] NSWSC 799; Lucke v Cleary (2011) 111 SASR 134. Cf Tsangaris v Gaymark Investments Pty Ltd (1986) 82 FLR 269 at 280–281 per Maurice J (who held that if counsel had ostensible authority to offer his client’s consent as a means of compromising the proceedings, then this authority extended to imposing conditions on that consent that might be fairly inferred from the surrounding circumstances that it was in the client’s interests to impose). 129 Waugh v H B Clifford & Sons Ltd [1982] Ch 374 at 388 per Brightman LJ. 130 Fray v Voules (1859) 1 E & E 839; 120 ER 1125 at 847 (E & E), 1128–9 (ER) per Lord Campbell CJ; Neale v Lady Gordon Lennox [1902] 1 KB 838 at 843 per Lord Alverstone CJ; Hansen v Macro Engineering (Aust) Pty Ltd [1948] VLR 198 at 202 per Fullagar J; Buseska v Sergio (1990) 102 FLR 157 at 159 per Higgins J; Travel Air International Pty Ltd v Bastion [2012] NSWSC 28 at [37]–[39] per Harrison AsJ; G E Shaw & Associates (ACT) Pty Ltd v Narayan [2014] FCA 435 at [70], [71] per Foster J. 131 Carrell v Carrell [1975] 2 NZLR 441 at 446 per Cooke J; Thompson v Howley [1977] 1 NZLR 16 at 24 per Somers J; Donellan v Watson (1990) 21 NSWLR 335 at 342–344 per Handley JA.

94

Lawyers’ Professional Responsibility

[3.145]

that to allow it to stand would involve grave injustice.132 As the other side is unlikely to be apprised of the lack of authority,133 this jurisdiction is in practice confined to exceptional cases. As explained by Fraser JA in Broadbent v Medical Board of Queensland:134 If the courts too readily disregard compromises of litigation made by the parties’ lawyers the important aim of promoting settlement of litigation will be hindered and resources will be wasted on investigating disputes which should properly be confined between lawyer and client who, unlike the opposite party, should readily be able to prove whether or not a particular compromise reflected the client’s instructions.

The curial caution in these cases is heightened, his Honour added, by email and other forms of virtually instantaneous communication, which facilitate obtaining express instructions in negotiations to compromise litigation, even where the clients are physically remote from the lawyers. The court’s jurisdiction in this context is most commonly exercised where the compromise was made by way of mistake. That the opponent or her or his lawyer induced or knew of the error presents grounds for exercising the jurisdiction,135 but it is not a prerequisite for this purpose; the court’s core concern is with the justice of allowing the compromise to stand. What satisfied Fraser JA, with whom Chesterman JA and McMurdo J agreed, in Broadbent that “the appropriately stringent test” was met were findings that:136 • the compromise was contrary to the applicant’s emphatic instructions; • the decision against which the applicant sought leave to appeal was of great importance to him, involving as it did conclusions that his conduct as a medical practitioner and surgeon fell short of the necessary professional standard of care; • the potentially serious consequential damage to his reputation could not effectively be remedied by leaving him free to pursue any damages claim he might have against his solicitors for failing to give effect to his instructions; • the applicant repudiated the compromise within hours of it being concluded and virtually immediately upon becoming aware that it bound him; and • the respondent did not argue that it had changed its position in reliance upon the compromise or that it would suffer any injustice (other than the loss of the compromise) were the compromise not enforced. The foregoing reveals that the jurisdiction is informed by the level of injustice or hardship suffered by the applicant were the compromise to stand, as compared to 132 Harvey v Phillips (1956) 96 CLR 235 at 243 (FC); Lewis v Combell Constructions Pty Ltd (1989) 18 NSWLR 528 at 538 per Finlay J; Insbury Pty Ltd v Craig [1990] 1 Qd R 309 at 313–315 per Byrne J. 133 Consistent with agency law generally, knowledge by the opposing lawyer of a lack of actual authority to compromise prevents the lawyer from enforcing a compromise outside actual authority. However, a mere awareness in the opposing lawyer that the lawyer has discussed, or is to discuss, a proposal to settle with her or his client before effecting settlement does not negate the existence of ostensible authority to compromise: Esanda Finance Corporation Ltd v Alvaro (unreported, SC(WA), Parker J, 18 December 1998) at 23. 134 Broadbent v Medical Board of Queensland [2010] QCA 352 at [36]. 135 Cf Easyfind (NSW) Pty Ltd v Paterson (1987) 11 NSWLR 98 (where Young J refused to set aside a settlement agreed pursuant to the mistake of one of the solicitors because there was no evidence that counsel for the opposing party had induced or deliberately cloaked the mistake). 136 Broadbent v Medical Board of Queensland [2010] QCA 352 at [38].

[3.150]

3 The Lawyer–Client Relationship

95

the level of injustice or detriment the opponent may suffer were the compromise set aside. Where the latter is minimal, and the former is substantial, the grounds for the exercise of the jurisdiction are more compelling.137

LAWYERS’ ACCEPTANCE OF WORK Counsel’s duty to accept a brief – cab rank principle

[3.150]

Lawyers who practise solely as barristers are professionally bound to accept a brief in any court in which they practise, a duty recognised by the barristers’ rules138 known as the “cab rank” principle.139 It has been branded as “a fundamental and essential part of a liberal legal system”.140 Brennan J explained its rationale in Giannarelli v Wraith:141 It is difficult enough to ensure that justice according to law is generally available; it is unacceptable that the privileges of legal representation should be available only according to the predilections of counsel or only on the payment of extravagant fees. If access to legal representation before the courts were dependent upon counsel’s predilections as to the acceptability of the cause or the munificence of the client, it would be difficult to bring unpopular cases to court and the profession would become the puppet of the powerful. If the cab rank rule be in decline … it would be the duty of the leaders of the Bar and of the professional associations to ensure its restoration in full vigour.

Yet practically speaking it has been judicially observed that “[i]n real life a barrister has a clerk whose enthusiasm for the unwanted brief may not be great, and he is free to raise the fee within limits”, meaning that “[i]t is not likely that the [cab rank] rule often obliges barristers to undertake work which they would not otherwise accept”.142 In any event, barristers are professionally required to decline briefs in certain circumstances and are conferred a discretion in this regard in others: see [3.160]–[3.170]. 137 See, for example, J R Bryant (Constructions) Pty Ltd v Daniels (unreported, CA(NSW), Sheller, Powell and Cole JJA, 20 March 1996) at 8 per Sheller JA (compromise effected as a result of a typing error, stipulating the compromise amount as $5,500 instead of $25,500, set aside because to hold the respondent to it would “cause him such hardship as to amount to injustice”); Mohamed v Farah [2004] NSWSC 482 at [67] per Barrett J (compromise effected by mistake set aside, though not fostered by the opponent, because to enforce the compromise “would not represent a just result of the kind the court is bound to impose in determining every dispute it is called upon to adjudicate”). 138 ACT, r 85; NSW, r 17; NT, r 85; Qld, r 21; SA, r 21; Tas, para 1 (see also Tas, r 94); Vic, r 17; WA, r 21. 139 Rondel v Worsley [1969] 1 AC 191 at 281 per Lord Upjohn. 140 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 739 per Lord Hobhouse. 141 Giannarelli v Wraith (1988) 165 CLR 543 at 580. See also Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 686–687 per Lord Hoffmann, at 739–740 per Lord Hobhouse; Lai v Chamberlains [2005] 3 NZLR 291 at [106] per Anderson P (“The cab rank rule protects minorities, the unpopular, the despised, the outcasts as well as the simply querulous”); D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [27] per Gleeson CJ, Gummow, Hayne and Heydon JJ. 142 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 678 per Lord Steyn. See also at 714 per Lord Hope (“Its value as a rule of professional conduct should not be underestimated, but its significance in daily practice is not great”).

96

Lawyers’ Professional Responsibility

[3.155]

[3.155]

Lawyers who practise other than solely as counsel, on the other hand, are not bound to accept work.143 So the cab rank principle does not apply in respect of lawyers who act as both solicitor and barrister in a given action, which most jurisdictions permit. Grounds upon which counsel must or may decline a brief Independence and disinterestedness

[3.160]

Counsel’s visible role as an advocate of justice causes any appearance of bias or unfair advantage to strike at the heart of public confidence in the legal system. The barristers’ rules in several jurisdictions, to this end, proscribe the acceptance of briefs wherein “the client’s interest in the matter is or would be in conflict with the barrister’s own interest or the interest of an associate”.144 The ensuing instances, found in barristers’ rules, give a flavour of the circumstances that may (or appear to) threaten the independence of counsel. Counsel must decline (and not continue in) a brief: • where counsel has information confidential to any person with different interests from those of the prospective client that may, as a real possibility, be helpful to the prospective client’s case, if the party entitled to the confidentiality has not consented to counsel using the information in the case;145 • where counsel has already advised or drawn pleadings for another party to the matter;146 • where counsel has already discussed in any detail (even on an informal basis) with another party with an adverse interest in the matter the facts out of which the matter arises;147 • involving appearance in a contested hearing before counsel’s parent, sibling, spouse, child or a member of counsel’s household, or before a bench of which such a person is a member;148 • representing a party to an arbitration in any proceedings arising out of the arbitration if counsel has advised the arbitrator in relation to the arbitration;149 143 Cf NZ r 4, which states that “[a] lawyer as a professional person must be available to the public and must not, without good cause, refuse to accept instructions from any client or prospective client for services within the reserved areas of work that are within the lawyer’s fields of practice”, and thus appears to apply the cab rank principle to all lawyers. 144 NSW, r 101(b); Qld, r 95(b); SA, r 95(b); Vic, r 101(b); WA, r 95(b). 145 ACT, rr 87(a), 89; NSW, rr 101(b), 103; NT, rr 87(a), 89; Qld, rr 95(a), 97; SA, rr 95(a), 97; Tas, r 94(2); Vic, rr 101(b), 103; WA, rr 95(a), 97. 146 NSW, r 101(l); Qld, r 95(l); SA, r 95(l); Tas, r 94(2); Vic, r 101(l); WA, r 95(l). 147 NSW, r 101(m); Qld, r 95(m); SA, r 95(m); Vic, r 101(m); WA, r 95(m). 148 ACT, r 87(i); NSW, r 101(j); NT, r 87(i); Qld, r 95(j); SA, r 95(j); Vic, r 101(j); WA, r 95(j). See also WA, r 33(3) (“A practitioner must not act as counsel for a client in a matter if the impartial administration of justice might be prejudiced or appear to be prejudiced because of the practitioner’s connection with the court or a member of the court”; Sch 1 lists examples of circumstance where a practitioner should not act as counsel for a client because of connections that may affect professional independence or impartial administration of justice). Cf Re Marriage of Kennedy & Cahill (1995) 118 FLR 60 (judgment set aside when the relationship between the wife’s solicitor and the trial judge was disclosed after the judgment was delivered). 149 ACT, r 87(h); NSW, r 101(i); NT, r 87(h); Qld, r 95(i); SA, r 95(i); Tas, r 94(2); Vic, r 101(i); WA, r 95(i).

[3.170]

3 The Lawyer–Client Relationship

97

• in which counsel has reasonable grounds to believe that he or she may, as a real possibility, be called as a witness, or which is an appeal from any decision, determination or award given after a hearing in which counsel was a witness150 (see [17.45]); • regarding which counsel knows or ought to know that her or his personal or professional conduct may be called into question;151 • regarding the assessment (or taxation) of costs of counsel’s briefing solicitor that includes a dispute as to the propriety of counsel’s fee, or concerns the recovery from a former client of costs in relation to a case in which counsel appeared for the client;152 and • in which counsel has a financial interest in the outcome, apart from a fee under a conditional costs (or speculative fee) agreement (as to which see [14.135]–[14.145]).153 That a barrister holds strong personal views adverse to the subject matter of the proposed representation is not in itself a ground for declining the brief. In such cases, a barrister should, on frankly disclosing those views to the prospective client, inquire as to whether the client still wishes to retain her or his services, in which case it is the barrister’s duty to “sink his feelings and use all his skill, knowledge and experience on his client’s behalf”.154 Competence

[3.165]

As the basis of admission and practice as a lawyer, with its consequent privileges, is largely competence-based, the public is justified in its expectation of competent legal representation. For this reason, counsel should not accept briefs outside their capacity, skill and experience.155

Practicality

[3.170]

A barrister may decline to accept a brief on grounds including the

following: • where the instructing solicitor does not agree to be responsible for the payment of the barrister’s fee156 or there are reasonable grounds to doubt that the fee will 150 ACT, r 87(c), 87(d) (cf r 88); NSW, r 101(d), 101(e); NT, rr 87(c), 87(d) (cf r 88); Qld, r 95(d), 95(e); SA, r 95(d), 95(e) (cf r 96); Tas, r 94(2)(g), 94(2)(h); Vic, r 101(d), 101(e); WA, r 95(d), 95(e). 151 ACT, r 87(e) (cf r 88); NSW, r 101(f) (cf r 102); NT, r 87(e) (cf r 88); Qld, r 95(f) (cf r 96); SA, r 95(f) (cf r 96); Tas, r 94(2)(i) (cf r 95(2)); Vic, r 101(f) (cf r 102); WA, r 95(f) (cf r 96). 152 ACT, r 87(g); NSW, r 101(h); NT, r 87(g)); Qld, r 95(h); SA, r 95(h); Tas, r 94(2)(j); Vic, r 101(h); WA, r 95(h). 153 ACT, r 87(f); NSW, r 101(g); NT, r 87(f); Qld, r 95(g); SA, r 95(g); Tas, r 94(2)(k); Vic, r 101(g); WA, r 95(g). 154 Mr Justice Wilson, Lectures on Advocacy and Ethics in the Supreme Court (Legal Research Foundation Inc, New Zealand, Publication No 15, 1979), p 36. 155 Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 at [30] per Davies JA. 156 NSW, r 105(c); Qld, r 99(c); SA, r 99(c); Tas, para 1; Vic, r 105(c); WA, r 99(c). See also ACT, r 85(c); NT, r 85(c) (under the guise of the cab rank principle, requiring a barrister to accept a brief to appear “if the fee offered on the brief is acceptable to the barrister”).

98

Lawyers’ Professional Responsibility

[3.175]

be paid promptly or in accordance with the costs agreement157 (but a barrister cannot legitimately decline a brief solely on the ground that the prospective client is legally aided, or set a fee higher than usual so as to deter the instructing solicitor from continuing to offer the brief);158 • where the barrister, being a Senior Counsel, considers on reasonable grounds that the brief also requires the services of a junior counsel and none has been briefed;159 • where there is a personal or business relationship between the barrister and the client or another party, a witness, or another legal practitioner representing a party;160 • where the brief is to appear before a judge whose relationship with the barrister is such as to make such appearance undesirable;161 • in accordance with the terms of a costs agreement that provide for return of a brief;162 • where other professional responsibilities dictate that he or she would be unable to devote adequate time to the matter;163 • where the instructing solicitor does not agree to requests by counsel regarding appropriate attendances by the solicitor;164 or • where the prospective client is also the prospective instructing solicitor, or a partner, employer or employee of that solicitor, and has refused counsel’s request to be instructed by a solicitor independent of the prospective client (and her or his firm).165 Acceptance of work by lawyers who practise other than solely as counsel

[3.175]

The grounds for counsel declining briefs discussed at [3.160]–[3.170] apply with equal force to lawyers who act as both barristers and solicitors, with the exception of those grounds that presuppose that the barrister and solicitor are different persons. For lawyers who practise as solicitors, the main concerns are competence and conflicting interests, each discussed below. Competence

[3.180]

A solicitor should not accept a retainer unless he or she can reasonably expect to serve the client honestly, fairly and with competence and diligence, and

157 ACT, rr 91(c), 92; NSW, r 105(d); NT, rr 91(c), 92; Qld, r 99(d); SA, r 99(d); Vic, r 105(d); WA, r 99(d). 158 ACT, r 86; NSW, r 18; NT, r 86; Qld, r 22; SA, r 22; Vic, r 18; WA, r 22; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [377] per Callinan J. 159 NSW, r 105(j); Qld, r 99(j); SA, r 99(j); Vic, r 105(j); WA, r 99(j). 160 NSW, r 105(k); Qld, r 99(k); SA, r 99(k); Vic, r 105(k); WA, r 99(k). 161 NSW, r 105(l); Qld, r 99(l); SA, r 99(l); Vic, r 105(l); WA, r 99(l). 162 NSW, r 105(m); Qld, r 99(m); SA, r 99(m); Vic, r 105(m); WA, r 99(m). 163 ACT, r 91(b); NSW, r 105(b); NT, r 91(b); Qld, r 99(b); SA, r 99(b); Tas, para 1; Vic, r 105(b); WA, r 99(b). See, for example, Re a Barrister and Solicitor (1979) 40 FLR 1 at 24 (FC(ACT)). 164 ACT, r 91(e); NSW, r 105(f); NT, r 91(e); Qld, r 99(f); SA, r 99(f); Vic, r 105(f); WA, r 99(f). 165 ACT, r 91(f); NSW, r 105(h); NT, r 91(f); Qld, r 99(h); SA, r 99(h); Vic, r 105(h); WA, r 99(h).

[3.180]

3 The Lawyer–Client Relationship

99

attend to the work required with reasonable promptness.166 To proceed on any other basis is, it has been said, “not being honest with the client”.167 A prudent solicitor who lacks knowledge or experience in a field should refer the client to another solicitor who possesses that experience or knowledge,168 or, with the client’s informed consent, engage a specialist to fill the gap in expertise or experience.169 Yet a solicitor who lacks the requisite knowledge or skill in an area of practice is not necessarily precluded from accepting instructions in that area. The solicitor’s professional responsibility may be fulfilled here if:170 • the solicitor is able, without undue delay and cost to the client, to obtain such knowledge and skill either through private study and research, or association with a lawyer competent in that field; or • where access to the relevant body of knowledge or to a lawyer of established competence in the field is not readily available – the solicitor warns the client of those facts and of the likely delay and cost of acquiring the requisite knowledge and skill and the client voluntarily consents to the solicitor acting in that matter. These exceptions rest on the ground that many solicitors, unlike most barristers, are generalists rather than specialists. Specialty is, after all, a justification for a separate Bar.171 With the exception of solicitors who practise in larger firms and who consequently specialise, and smaller boutique firms with particular specialties, solicitors cannot be expected to be fully conversant with the details of each aspect of law in which they purport to practise. This is especially so in light of the increasing voluminousness of case law and statutory developments in any single area of law. 166 ACT, r 4.1.3; NSW, r 4.1.3; NT, r 1.1; Qld, r 4.1.3; SA, r 4.1.3; Tas, r 10; Vic, r 4.1.3; WA, rr 6(1)(c), 7(e), 7(f), 7(g). 167 Can CPC, r 3.1-1, cmt [5]. 168 Un v Schroter [2002] NTSC 2 at [58] per Martin CJ. 169 LM v K Lawyers [2015] WASC 244 at [39] per Boyle R. 170 What appears in the text follows the terms of the (now repealed) Legal Profession (Solicitors) Rules 2007 (ACT), r 1.3(a). No equivalent rule existed in other Australian jurisdictions (although the Canadian rules make similar provision: see Can CPC, r 3.1-1, cmts [5], [6]), but the proposition cited in the text arguably expresses solicitors’ professional responsibility regarding acceptance of work outside their competence and skill: see Vulic v Bilinsky [1983] 2 NSWLR 472 at 483 per Miles J (“if a solicitor inexperienced and lacking knowledge in the field accepts instructions to act for a person … he should inform the client of his lack of experience and give the client the alternative to instruct a solicitor who has a degree of experience and expertise in that field. At the very least, if such inexperienced solicitor wishes to accept those instructions he should protect himself and his client by seeking advice from counsel”); Burke v Chapman and Chubb (a firm) [2008] 2 FLR 1207 at [53] per Plender J (“Where a solicitor is asked to give advice on a matter on which he does not hold himself out as competent to advise … he should make clear that this is the case, so that the client can go elsewhere if he judges appropriate”). See also US r 1.1 cmt [2], which envisages that “[a] lawyer need not necessarily have special training or prior experience to handle legal problems of a type with which the lawyer is unfamiliar”, and “can provide adequate representation in a wholly novel field through necessary study”. See further McLelland, “Attorney Competence or Lack Thereof – Under What Circumstances may an Attorney Ethically Handle a Matter in Which the Attorney is not Competent? Is an Ethical Rule Necessary to Restrain such an Attorney?” (1998) 22 J Legal Prof 297 (who argues that an ethical rule of this kind is not required “since the possibility of a malpractice suit should be deterrent enough”: at 307). 171 See Harper, “The Divided Profession: The Case For” (1990) 64 LIJ 244; Asher, “The Referral Rule” [1997] NZLJ 149.

100

Lawyers’ Professional Responsibility

[3.185]

Solicitors tempted to accept instructions beyond their level of competence may be disallowed their fees on a costs assessment (as to which see [15.40]–[15.90]) for time expended in learning the law,172 and face the prospect of liability in negligence to their client(s) (see Ch 5). Also, a failure to reach or attain a reasonable standard of competence and diligence can generate disciplinary sanction: see [23.85], [23.90]. Similar prospects arise where lawyers take on more work than they can competently perform.173 It has been judicially observed that “[a] solicitor has a clear duty to avoid situations where overwork or other sources of stress prevent the proper processing of matters undertaken for clients”.174 In Re Robb,175 for example, the workload the solicitors had undertaken was held not to mitigate the seriousness of the delay and attendant fiduciary breaches. They had assumed the workload voluntarily in a competitive market and, although the success of the practice generated profitability to the partners, it raised the risk that they would be unable to devote to every matter the attention it deserved.176 Conflicting interests

[3.185]

That a client places trust and confidence in a solicitor regarding the matters within the scope of the retainer has led courts from the earliest times to impose on solicitors fiduciary duties to their clients: see [4.40]–[4.60]. The primary fiduciary duty is to shun situations that raise conflicting interests, which here requires solicitors to refuse a retainer that is likely to give rise to a conflict either between the duty to the client and the solicitor’s personal interests (see Ch 6), or between her or his duties to other (current or former) clients (see Chs 7 and 8).

TERMINATION OF LAWYER–CLIENT RELATIONSHIP [3.190]

Termination of a retainer often coincides with completion of the business for which the lawyer was retained. For the duration of the retainer, the lawyer bears the weight of the onerous responsibility (in contract, equity and tort) to protect the client’s interest by all proper means. With its termination, much of this responsibility abates. This explains why prudent lawyers implement steps to formally terminate their retainer once the matter is concluded. It is critical, however, to appreciate that the lawyer’s duty of confidentiality to clients survives the termination of the retainer: see [10.35].

172 See, for example, Southwell v Jackson [2012] QDC 65 at [69]–[79] per McGill DCJ; LM v K Lawyers [2015] WASC 244. 173 See Dal Pont, “Too Much Work – Too Little Time” (2006) 80 (Mar) LIJ 78. 174 Re Nelson (1991) 106 ACTR 1 at 20 per Higgins and Foster JJ. 175 Re Robb (1996) 134 FLR 294. 176 Re Robb (1996) 134 FLR 294 at 314 (FC(ACT)).

[3.200]

3 The Lawyer–Client Relationship

101

Duty to complete work – doctrine of entire contract

[3.195]

A retainer has, as a general rule, traditionally been seen as an entire contract pursuant to which the lawyer undertakes to finish the business for which he or she is retained.177 In determining the scope of this business, the terms and general circumstances of the retainer are relevant inquiries. Though most commonly associated with contentious work, the entire contract doctrine also applies to non-contentious business. As a corollary of the doctrine, lawyers should not, as a matter of general principle, terminate the retainer without completing the work required by it. Qualifications to the entire contract doctrine

[3.200]

The foregoing is not an absolute rule. Aside from queries chiefly by Western Australian judges as to whether the presumption of entirety should be ousted by focusing on contractual intent178 and more generally whether the presumption should survive changes in the nature of litigation since its formulation in relation to solicitors was expounded in the late nineteenth century,179 there are limitations to its scope and application. The legal and professional responsibility of the lawyer in this regard is expressed in the professional rules, which read as follows:180 A [lawyer] with designated responsibility for a client’s matter must ensure completion of the legal services for that matter UNLESS: • the client has otherwise agreed; • the law practice is discharged from the engagement by the client; • the law practice terminates the engagement for just cause and on reasonable notice; or • the engagement comes to an end by operation of law.

The above reflect the position at general law.181 Little difficulty arises in the context of the first, second and fourth grounds for termination. Freedom of contract dictates that lawyer and client may mutually agree on the termination of the retainer,182 including by stipulating, in the document itself, the occasions wherein the lawyer can terminate.183 The fourth ground ostensibly targets events such as the death or 177 Re Romer & Haslam [1893] 2 QB 286 at 298 per Bowen LJ; Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 837 per Cozens-Hardy MR; Caldwell v Treloar (1982) 30 SASR 202 at 208–210 per Walters J; Chisholm v State Transport Authority (1986) 41 SASR 317 at 318–319 per Legoe J; Trustees of the Legal Contribution Trust v Bailey [2004] WASC 175 at [60] per Le Miere J; Baker v Legal Services Commissioner (No 2) [2006] 2 Qd R 249 at [3] per McPherson JA. 178 Trustees of the Legal Contribution Trust v Bailey [2004] WASC 175 at [60] per Le Miere J. 179 Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 at [67], [68] per Kennedy J; Clairs Keeley (a firm) v Treacy [2005] WASCA 86 at [41] per the court; Lewis Blyth and Hooper v Dennis [2007] WASC 177 at [52] per Newnes J. 180 ACT, r 13.1; NSW, r 13.1; NT, r 5.1; Qld, r 13.1; SA, r 13.1; Vic, r 13.1; WA, r 27(1). 181 Underwood Son & Piper v Lewis [1894] 2 QB 306; Court v Berlin [1897] 2 QB 396; Re Wingfield & Blew (Solicitors) [1904] 2 Ch 665; Cachia v Isaacs (1985) 3 NSWLR 366 at 377 per Hope JA. 182 Cachia v Isaacs (1985) 3 NSWLR 366 at 377 per Hope JA; McGowan v Commissioner of Stamp Duties (2001) 47 ATR 357 at [10] per McPherson JA. 183 See, for example, the retainer agreement in Ireland v Trilby Misso Lawyers [2011] 2 Qd R 320.

102

Lawyers’ Professional Responsibility

[3.205]

incapacity of one of the parties. The retainer may also end by frustration if the lawyer is removed from practice, but in this event there is arguably no independent entitlement to recover fees accrued.184 The second ground recognises that, in view of a lawyer’s position of trust and confidence and attendant capacity to influence the client’s legal position, clients should not be locked into a retainer with a lawyer in whom they lack trust and confidence. Hence, subject to the satisfaction of any lien of the lawyer to secure any outstanding costs (see Ch 16), implied into retainers is a term entitling the client to withdraw at any time without liability for breach of contract.185 Lawyers should therefore place no fetter upon or otherwise aim to discourage a client from changing legal adviser. The client’s right in this regard may be circumscribed, however, where the lawyer is an employee (for example, in-house counsel for an entity) by the terms of the employment contract and applicable unfair dismissal legislation.

[3.205]

There is no parallel entitlement for lawyers to terminate a retainer at will;186 the entire contract doctrine prevents it, informed by the social ideal that all should be able to secure legal representation. But there is scope for lawyers to withdraw from a retainer for “just cause” and upon reasonable notice. That a lawyer has an excessive workload,187 has other more remunerative work available,188 or has lost interest in the representation, are not just causes. Nor is the single fact that the client behaves in an offensive, harassing or controlling manner,189 or proves difficult,190 although persistent client behaviour of this kind may be a prelude to a loss of confidence by the client in the lawyer.191 Situations that do constitute “just causes” include where: 184 Appleby v Myers (1867) LR 2 CP 651. 185 Court v Berlin [1897] 2 QB 396 at 400–401 per A L Smith LJ; McQuarrie, Hunter v Foote (1982) 143 DLR (3d) 354 at 356–359 per Nemetz CJBC (CA(BC)); Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 at [34]–[49] per Baragwanath J (CA); Nostrame v Santiago (2011) 22 A 3d 20 at 23; Lupker v Shine Lawyers Pty Ltd [2015] QSC 278 at [22], [37] per Bond J. 186 Wallace v Canadian Pacific Railway [2013] 2 SCR 649 at [55] per McLachlin CJC; Re Seare (2013) 493 BR 158 at 181 (“Lawyers are not plumbers. They cannot indiscriminately dismiss clients at their whim [but] must continue to represent them even if initially rosy predictions turn sour”). 187 Lawyers who consider that their workload prevents them from devoting due time to the representation of a particular client have the option of seeking the client’s permission to terminate the retainer or, if the lawyer practises in partnership with others, delegating the relevant responsibility having so informed the client. 188 Wallace v Canadian Pacific Railway [2013] 2 SCR 649 at [56] per McLachlin CJC (“The desire to accept a new, potentially lucrative client did not provide good cause to withdraw services from [the existing client]”). 189 See Ethics Committee of the Law Institute of Victoria, R4814, August 2013: (2014) 88 (July) LIJ 72 (“It may not be permissible for a practitioner to terminate the retainer even where the relationship with the client has deteriorated to the extent that the client wishes to control and vet all communications by the practitioner and the practitioner is subjected to a multitude of phone calls and emails and may feel hindered in his ability to act”). 190 Urbaniak-Bak v Prail [2014] ACTSC 171 at [84] per Mossop M (affd Urbaniak-Bak v Prail [2015] ACTCA 39). Cf Dolan, “The Client from Hell” (2015) 89 (Jan/Feb) LIJ 42. 191 See Dal Pont, “The Boundaries of Client Discourtesy” (2016) 90 (Jan/Feb) LIJ 68.

[3.205]

3 The Lawyer–Client Relationship

103

• the client’s acts or omissions are inconsistent with continuing representation, thereby preventing the lawyer from properly performing her or his duties, such as where the client: – commits a significant breach of a costs agreement;192 – otherwise delays or refuses to pay the lawyer’s costs in breach of the retainer or costs agreement;193 – makes material misrepresentations about the facts of the matter to the lawyer;194 – insists that the lawyer commit a breach of the law195 or professional rules,196 including by insisting that the lawyer pursue unarguable points (see [17.260]–[17.275]);197 – gives a clear indication that he or she has retained, or will retain, another lawyer to carry out the subject matter of the retainer;198 or – clearly indicates that the necessary relationship of trust between the parties has broken down, to the extent that the basis for the retainer has been compromised;199 • the client is legally aided and the grant of legal aid is withdrawn or is otherwise terminated, and the client is unable to make any other satisfactory arrangements for payment of the lawyer’s costs that would be incurred if the retainer continued;200 • unrelated to the client’s acts or omissions, the continued representation would require the lawyer to commit a breach of professional rules, such as where the course of the matter: 192 WA, r 27(1)(a). See also Warmingtons v McMurray (1936) 52 TLR 381 at 382 per Goddard J (“the solicitor … does not undertake to finance his client”). On costs agreements generally see [14.75]–[14.145]. 193 See, for example, Super 1000 Pty Ltd v Pacific General Securities Ltd [2007] NSWSC 171 at [14], [15] per Gzell J (involving an application for leave to withdraw arising out of client’s inability or unwillingness to pay the lawyer’s costs); Heslop v Cousins [2007] 3 NZLR 679 at [146] per Chisholm J (but in this case his Honour held that the solicitor, by writing to the clients that “[t]he only impediments to settlement are rates and costs”, had not given the clients “reasonable notice” that he would terminate the retainer unless outstanding fees were paid: at [161]–[163]). 194 WA, r 27(1)(d). On client perjury see [17.130], [17.135]. 195 On the lawyer’s duty not to induce, assist or condone a breach of the law see Ch 19. 196 WA, r 27(1)(c). 197 See, for example, Richard Buxton (a firm) v Mills-Owens [2010] 1 WLR 1997. 198 See, for example, Rigoli Lawyers v Arman (2009) 40 Fam LR 676 at [39], [40] per Cronin J. 199 See, for example, French v Carter Lemon LLP [2011] EWHC 3252 (QB) (involving what the judge, John Bowers QC, described as “a wholesale breakdown in confidence” between lawyer and client as a result of complaints made by the client against the lawyers: at [19]) (affd French v Carter Lemon Camerons LLP [2013] PNLR 2); Frigger v Clavey Legal Pty Ltd (No 3) [2015] WADC 21 at [345]–[353] per Herron DCJ; Lakic v Prior [2016] VSC 293 at [106]–[108] per Macaulay J. The point is explicit in the Western Australian, Canadian and Singaporean rules: WA, r 27(1)(f) (“the mutual trust and confidence between the practitioner and the client has irretrievably broken down”); Can CPC, r 3.7–2 (although cmt [1] adds that “the lawyer should not use the threat of withdrawal as a device to force a hasty decision by the client on a difficult question”); Sing, r 26(5)(g). 200 ACT, r 13.3; NSW, r 13.3; NT, r 5.3; Qld, r 13.3; SA, r 13.3; Vic, r 13.3; WA, r 27(4). Although there is authority to the effect that the bankruptcy of a client automatically serves to terminate the retainer (Re Moss (1866) LR 2 Eq 345 at 348 per Lord Romilly MR), this may not always be so: see Nelson v Nelson [1997] 1 All ER 970 at 974–975 per Peter Gibson LJ.

104

Lawyers’ Professional Responsibility

[3.210]

– places the lawyer in a position of conflict between her or his own interests and those of the client, or between the lawyer’s duties to other (current or former) clients (see Chs 6–8); or – renders it likely that the lawyer will be called as witness on a material question of fact (see [17.40]);201 • a potential claim for negligence against the lawyer hangs contingently on the outcome of proceedings, in which case the lawyer may be disinclined to offer evidence exculpating the client; • continuing engagement in the matter is likely to have a seriously adverse effect upon the lawyer’s health;202 or • the client or the lawyer has died203 or lost mental capacity (although it should not be assumed that a client’s supervening mental incapacity necessarily terminates the retainer:204 see [3.10]). The first point above (client’s acts or omissions) must be read subject to the terms of professional rules that require a lawyer retained to act for a client who stands trial for a serious criminal offence not to terminate the retainer upon the client’s failure to make satisfactory arrangements for the payment of costs unless the lawyer has:205 • served written notice on the client of the lawyer’s intention, a reasonable time before the date appointed for commencement of the trial or the sittings of the court in which the trial is listed, providing the client at least seven days to make satisfactory arrangements for payment of the lawyer’s costs; and • given appropriate notice to the registrar of the court in which the trial is listed to commence. Impact of the entire contract doctrine on the recovery of fees

[3.210]

The main practical implication of the entire contract doctrine is that lawyers who, without just cause, terminate a retainer prior to fulfilling their responsibility under it forfeit a claim for costs206 for the work done prior to

201 Tas, r 95. 202 WA, r 27(1)(e); Forney v Bushe (1954) 104 LJ 604. 203 See, for example, Whitehead v Lord (1852) 7 Ex 691; 155 ER 1126 (death of the client enabled the solicitor to recover his costs before the action was terminated); McVey v Denis (1984) 55 ALR 201 at 204 per Hutley JA (CA(NSW)) (death of client). 204 See Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2014] 2 All ER 1104 at [28]–[44] per Phillips J (affd Blankley v Central Manchester and Manchester Children’s University Hospitals NHS Trust [2015] 1 WLR 4307). Cf Johnston v Schurr [2016] 1 NZLR 403 at [91]–[99] per William Young J, delivering the reasons of the court (accepting that a loss of client capacity may not result automatically in termination of the retainer, but on the facts finding that it had done so). 205 ACT, r 13.2; NSW, r 13.2; NT, r 5.2; Qld, r 13.2; SA, r 13.2; Vic, r 13.2; WA, r 27(3) (which is more detailed than its counterparts, and operates against the backdrop of r 27(2), pursuant to which “[a] practitioner who is engaged to represent a client charged with a serious offence must not terminate the engagement or otherwise cease to act for the client unless: (a) there are exceptional circumstances for termination of the engagement or ceasing to act; and (b) there is sufficient time for another practitioner to be engaged by the client and for that practitioner to master the case”). 206 As opposed to disbursements: Urbaniak-Bak v Prail [2015] ACTCA 39 at [65] per the court.

[3.210]

3 The Lawyer–Client Relationship

105

termination, and cannot claim costs on a quantum meruit basis.207 Lawyers may also forfeit their associated entitlement to enforce a retaining lien over the client’s file (see Ch 16).208 In practice, though, the rigour of this rule is mitigated. Not only does it lack application where the lawyer terminates for just cause and upon reasonable notice,209 it can be modified by the terms of the retainer. These may, for instance, provide for periodic billing, entitling the lawyer to charge for work completed up to the most recent periodic interval before termination,210 but a term entitling the lawyer to withdraw at will and recover costs owing arguably misaligns with fiduciary (and other) lawyer obligations.211 Also, a conditional costs agreement (see [14.135]–[14.145]) entitle the lawyer to terminate the retainer and claim costs incurred to date if the client rejects an offer of settlement that the lawyer considers reasonable, although this will ultimately rest on identifying the parameter(s) of reasonableness in the agreement itself; a failure to do so could be perceived as vesting an illegitimate unilateral discretion in the lawyer when it comes to termination and recovery of costs.212 The legal profession statutes entitle a law practice to issue a client an interim bill for part only of the legal services the practice was retained to provide,213 but it is unlikely that this was intended to oust the entire contract doctrine.214 The position 207 Wild v Simpson [1919] 2 KB 544 at 565–566 per Atkin LJ; Legal Contribution Trust v Bailey [2004] WASC 175 at [64] per Le Miere J; Smits v Roach (2004) 60 NSWLR 711 at [78]–[85] per Sheller JA (affd but on a different ground: Smits v Roach (2006) 227 CLR 423); Baker v Legal Services Commissioner (No 2) [2006] 2 Qd R 249 at [3] per McPherson JA. 208 See, for example, Spence v Gerard Malouf & Partners Pty Ltd [2010] NSWSC 764 (discussed at [14.80]); Ireland v Trilby Misso Lawyers [2011] 2 Qd R 320. 209 Ex parte Maxwell (1955) 72 WN (NSW) 333 at 337 per Herron J; Caldwell v Treloar (1982) 30 SASR 202 at 209 per Walters J; Cachia v Isaacs (1985) 3 NSWLR 366 at 377 per Hope JA. 210 Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 at 621 per Goff LJ; Enterprise Rent-A-Car Co v Shapiro (1998) 157 DLR (4th) 322 at 328 per Labrosse JA (describing the practice of sending periodic bills as making “good commercial sense”); Del Borrello v Friedman and Lurie (a firm) [2001] WASCA 348 at [68]–[70] per Kennedy J; Lewis Blyth and Hooper v Dennis [2007] WASC 177 at [55] per Newnes J; Vlamaki v Sookias & Sookias [2015] 6 Costs LO 827 at [10], [11] per Walker J. Especially where the client is sophisticated, its payment of periodic bills even in the absence of an explicit term to this effect in the contract will undermine its subsequent attempt to sustain an entire contract: see, for example, QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 at [34] per Ann Lyons J. 211 See Hricik, “Dear Lawyer: If you Decide it’s not Economical to Represent me, you can Fire me as your Contingent Fee Client, but I Agree I will Still Owe you a Fee” (2013) 64 Mercer L Rev 363. 212 This explains why, for instance, the opinion of a Connecticut ethics committee branding such a provision unethical: Connecticut Bar Association Committee on Professional Ethics, Op 95-24 (6 July 1995). See further Hricik, “Dear Lawyer: If you Decide it’s not Economical to Represent me, you can Fire me as your Contingent Fee Client, but I Agree I will Still Owe you a Fee” (2013) 64 Mercer L Rev 363 at 389–395. 213 ACT, s 293(1); NSW, s 193(1) (formerly NSW 2004, s 334(1)); NT, s 328(1); Qld, s 333(1); Tas, s 317(1); Vic, s 193(1) (formerly Vic 2004, s 3.4.37(1)); WA, s 293(1). 214 The surrounding provisions are aimed at client information and protection, and the relevant section does not entitle the lawyer to recover costs upon an interim bill (unless the retainer or costs agreement provides otherwise) but simply speaks of supplying an interim bill, presumably for the client’s information.

106

Lawyers’ Professional Responsibility

[3.215]

is clearer in Tasmania, where the rules entitle a lawyer, as to non-contentious work, to “charge a reasonable fee for work done, whether or not a matter is completed”.215

[3.215]

Moreover, reflecting the notion that whether or not a contract is an entire contract depends on its construction,216 courts have construed a retainer for work of a general nature as unlikely to be an entire contract, but as severable. A leading statement is that of Walters J in Caldwell v Treloar:217 [S]olicitors who undertake business of a general nature, or business involving a variety of matters … should not be held to do a single and entire thing and to be disentitled to be paid any remuneration until the whole business has been brought to finality. In matters of that kind, it would not be reasonable that solicitors should engage themselves for an indefinite time without payment … And so where there is a convenient break in the business being undertaken, the solicitors have a right to send a bill of costs for work done up to that point, and in default of payment, they are entitled, upon reasonable notice to the client, to put an end to the retainer … and sue for their costs.

On this reasoning, implied into a retainer of a general nature, or inferred from it, is a term entitling the lawyer to request her or his fee upon a convenient break in the proceedings.218 In Caldwell the appellant instructed the respondent law firm to act on her behalf in matters affecting her rights as a beneficiary in an estate. The respondent advised that the opinion of counsel should be obtained, but once it was obtained the appellant refused to pay for it. Following correspondence, the respondent informed the appellant that it would no longer act for her, and rendered its bill of costs for services to that date (including counsel’s fee), which it then sued for. Walters J held that the evidence did not support the conclusion that the respondent was bound by an entire contract to undertake litigation on behalf of the appellant, but rather a general employment to do whatever was necessary in the investigation of the several different matters on which she had instructed it. So on concluding any one of them the respondent was at liberty to claim its costs in respect of work done in that matter. In any case, the facts would arguably have supplied the respondent with good cause to terminate. It remains preferable, though, for reasons of certainty, for lawyers retained for business of a general nature to include in the retainer an express term dealing with the periodic payment of fees. Duties of lawyers on termination of retainer

[3.220]

Where a lawyer terminates a retainer for just cause, the prevailing ideal remains that the client in question must not be disadvantaged by reason of the termination.219 A lawyer who opts to terminate the retainer must accordingly take

215 Tas, r 85(1). 216 Purcell v Bacon (1914) 19 CLR 241 at 249 per Griffith CJ (revd on other grounds: Bacon v Purcell (1916) 22 CLR 307). 217 Caldwell v Treloar (1982) 30 SASR 202 at 210. 218 See Abedi v Penningtons (a firm) [2000] 2 Costs LR 205. 219 See generally Nelson, “When Clients Become ‘Ex-Clients’: The Duties Owed After Discharge” (2001) 26 J Legal Prof 233.

[3.225]

3 The Lawyer–Client Relationship

107

reasonable care to avoid foreseeable harm to the client, including giving due notice to the client and allowing reasonable time for the substitution of a new lawyer. The professional rules in most jurisdictions require a terminating lawyer to cooperate with the new lawyer and, subject to the satisfaction of any lien the former may have (see Ch 16), promptly turn over to the latter all documents the property of the former client.220 The following is good practice:221 When handing over a file to another solicitor or to the client, a solicitor should clearly indicate the impending work required to be done (including any impending limitation periods). If the file is handed over to the client, the client should also be informed as to the likely consequences of a failure to promptly attend to such matters and advised to seek alternate legal representation as soon as possible. Ideally, this should be done in writing.

In some jurisdictions, the rules state that a lawyer who intends to transfer to another lawyer the whole or part of her or his practice should give to each client reasonable notice in writing before delivering possession of the client’s documents to the new lawyer, including the client’s right to give a contrary direction in relation to the conduct of the client’s affairs and the delivery of the client’s documents.222 Return of brief by counsel

[3.225]

Barristers are entitled to return a brief, thereby terminating their retainer, in circumstances that include the following:

• where the conduct of the instructing solicitor or client prevents counsel from conducting effective representation, such as where:223 – counsel’s requests for appropriate attendances by the instructing solicitor have been refused; – counsel’s advice as to the preparation or conduct of the case other than its compromise has been rejected or ignored by the instructing solicitor; or – counsel’s fees have not been paid promptly or in accordance with the costs agreement and remain unpaid after reasonable notice. • where the impartiality of counsel or the court may be called into question, such as where the brief is to appear before a judge whose relationship with the barrister is such as to make such appearance undesirable.224 • where the continued representation impinges, as a real possibility, upon counsel’s duty of confidentiality to another client or a third party.225 220 ACT, r 14.1; NSW, r 14.1; NT, r 21; Qld, r 14.1; SA, r 14.1; Vic, r 23. 221 WA, Sch 6 (“Guide to Hand Over of Documents on Termination of Retainer (Civil and Criminal Matters)”) (superseded). 222 ACT, Guideline C1; NT, r 22.1; WA, r 31. 223 ACT, r 99; NSW, r 105(d), 105(f), 105(g); NT, r 99; Qld, r 99(d), 99(f), 99(g); SA, r 99(d), 99(f), 99(g); Vic, r 105(d), 105(f), 105(g); WA, r 99(d), 99(f), 99(g). 224 ACT, r 102; NSW, r 105(l); NT, r 102; Qld, r 99(l); SA, r 99(l); Vic, r 105(l); WA, r 99(l). See also Re Marriage of Kennedy & Cahill (1995) 118 FLR 60. 225 ACT, rr 107–110; NSW, rr 118, 119; NT, rr 107–110; Qld, rr 112, 113; SA, rr 112, 113; Vic, rr 118, 119; WA, rr 112, 113.

108

Lawyers’ Professional Responsibility

[3.230]

• where a conflict of interest arises, namely where: – counsel briefed to appear for two or more clients becomes aware that the interests of those clients may, as a real possibility, conflict;226 or – counsel believes on reasonable grounds that the interests of the client and those of the instructing solicitor may conflict.227 • where, in a brief accepted under a conditional fee agreement (as to which see [14.135]–[14.145]), the barrister and instructing solicitor, if any, consider on reasonable grounds that the client has unreasonably rejected a reasonable offer of compromise contrary to the barrister’s advice.228 In other circumstances, counsel must seek the express permission of the instructing solicitor (or the client in a direct access matter) before returning the brief; for example, in order to accept another brief229 or to attend a social occasion.230 Moreover, counsel must not return a brief to defend a charge of a serious criminal offence except with the client’s fully informed consent, or in circumstances that are exceptional where there is enough time for another counsel to take over the case properly before the hearing.231 The time requirement applies equally to all cases where counsel is permitted to return a brief.232 What is enough time will vary according to the nature and complexity of the brief. Ownership of documents on termination of retainer

[3.230]

On termination of a retainer, an issue may arise as to the ownership of documents that relate to the matter. This issue surfaces most frequently where the client changes lawyers and requests the delivery of documents the subject of the former retainer. Three important observations can be made in this regard. First, the client cannot call for the delivery of documents that are the lawyer’s property, even though in some circumstances the client may be entitled to inspect and make copies of them. Second, not all documents a lawyer holds relating to the affairs of the client necessarily belong to the client.233 Third, even if a document is the property of the client, its delivery may be subject to the former solicitor’s general lien where costs remain owed by the client to that lawyer: see Ch 16.

226 ACT, rr 108–110; NSW, r 119; NT, rr 108–110; Qld, rr 112, 113; SA, rr 112, 113; Vic, r 119; WA, rr 112, 113. 227 ACT, r 111; NSW, r 120; NT, r 111; Qld, r 114; SA, r 114; Vic, r 120; WA, r 114. 228 ACT, rr 99A, 100; NSW, r 106; NT, r 100; Qld, r 100; SA, r 100; Vic, r 106; WA, r 100. 229 ACT, r 95; NSW, r 108; NT, r 95; Qld, r 102; SA, r 102; Vic, r 108; WA, r 102. 230 ACT, r 96; NSW, r 109; NT, r 96; Qld, r 103; SA, r 103; Vic, r 109; WA, r 103. 231 ACT, r 93; NSW, r 107; NT, r 93; Qld, r 101; SA, r 101; Vic, r 107; WA, r 101. With regard to the principles governing counsel withdrawing from representation of a criminal defendant at trial, see R v White (1995) 77 A Crim R 531 at 534–536 per Barr AJ. 232 ACT, rr 97, 98; NSW, rr 110, 111; NT, rr 97, 98; Qld, rr 104, 105; SA, rr 104, 105; Vic, rr 110, 111; WA, rr 104, 105. 233 Wentworth v de Montford (1988) 15 NSWLR 348 at 353 per Hope JA.

[3.230]

3 The Lawyer–Client Relationship

109

The general principles regarding ownership of documents are concisely stated in the Northern Territory rules, which identify documents available to a client on termination of a retainer to include:234 documents prepared by a practitioner for the client, or predominantly for the purposes of the client, and for which the client has been, or will be, charged costs by the practitioner, [and] documents received by a practitioner from a third party in the course of the practitioner’s retainer for or on behalf of the client or for the purposes of a client’s business and intended for the use or information of the client.

The case law also highlights the importance of whether or not a client is charged for the creation of the document, and whether or not the document was created for a client’s benefit and protection.235 Those prepared for the client’s benefit,236 or prepared by a third party and sent to the lawyer other than at the latter’s expense, are the property of the client.237 A client is also entitled to documents brought into existence or received by a lawyer who acts only as agent for the client.238 Conversely, documents prepared by a lawyer for her or his own benefit and for which no charge is made,239 and documents sent by a client to the lawyer the property in which is intended to pass to the lawyer, are the lawyer’s property.240 In practice, these distinctions are often less clear; for example, the document(s) may have been created for mixed reasons, in which case the predominant purpose may be determinative.

234 NT, r 6.5. See also WA, r 3 (which defines “client documents” to mean “documents to which a client is entitled as a matter of law including but not limited to the following: (a) documents received from the client by a practitioner or the practitioner’s law practice; (b) documents prepared by a practitioner or the practitioner’s law practice for the client or predominantly for the purposes of the client or the client’s matter; (c) documents received by a practitioner or the practitioner’s law practice from a third party for or on behalf of the client or intended for the use or information of the client or for the purposes of the client’s matter”). 235 See Wentworth v de Montford (1988) 15 NSWLR 348 at 355–356 per Hope JA. 236 These may include case file instructions and briefs, briefs to counsel, letters written by the lawyer to third parties relating to the client’s business, communications between the lawyer and officers of the court and, depending on their predominant purpose, entries of attendance and proofs of evidence. See Wentworth v de Montford (1988) 15 NSWLR 348 at 358–361 per Hope JA. 237 These may include letters and documents received by the lawyer from third parties and receipts for disbursements made by the lawyer on behalf of the client. 238 Wentworth v de Montford (1988) 15 NSWLR 348 at 353 per Hope JA. 239 These may include cheque requisition forms regarding payment for or in respect of the client, records kept by a solicitor in relation to transactions concerning the moneys of a client held in a trust account, and internal records and memoranda as to work done or to be done. See Wentworth v de Montford (1988) 15 NSWLR 348 at 357–361 per Hope JA. Other examples include copies of letters received by the lawyer but not paid for by the client, inter-office memoranda and diary entries. 240 Zeus Chemical Products Pty Ltd v Jaybee Design & Marketing Pty Ltd (1998) 41 IPR 491 at 495 per Young J.

110

Lawyers’ Professional Responsibility

[3.235]

Retention of files and documents

[3.235]

Professional rules in most jurisdictions contain requirements relating to the retention of records. They provide that, subject to a court order to the contrary, a lawyer must retain documents241 to which a client is entitled for the duration of the retainer and at least seven years thereafter, or until such time as the lawyer gives them to the client or another person authorised by the client to receive them, or the client instructs the lawyer to deal with them in some other manner.242 But as many claims take much longer than this time to mature, the safe course is to store files for at least the time period equating to the ultimate bar set by the applicable limitations legislation unless there is a good client service or risk-management reason to destroy the documents earlier.243 The above rules also prohibit a lawyer from charging for the storage of documents, files or other property on behalf of (former) clients, or for their retrieval from storage, unless the (former) client has agreed in writing to the charge.244

241 A lawyer who, before the seven year period elapses, proposes to destroy hard copy documents after scanning the entire file into electronic form should, unless authorised by the retainer, first obtain client consent to this course: Ethics Committee of the Law Institute of Victoria, R4791, December 2012: (2014) 88 (Jan/Feb) LIJ 79. 242 ACT, r 14.2; NSW, r 14.2; NT, r 6.2 (six years); Qld, r 14.2; SA, r 14.2; Vic, r 14.2; WA, r 28(3) (seven years except where there are client instructions to the contrary). The Western Australian rules add that “[a] practitioner must not deal with or destroy any title deed, will, original executed agreement or any document or thing held by the practitioner for safe keeping for a client or former client other than in accordance with: (a) the instructions of the client or former client; or (b) the instructions of another person authorised by law to provide those instructions; or (c) an order of a court”: WA, r 28(4). See also “The Seven-Year Ditch” (2011) 85 (May) LIJ 74. 243 See MacDermott, “Storage of Files and Documents” (2006) 44 (May) LSJ 44; Dwyer, “Protocol to Retain, Archive and Destroy Client Files” (2007) 45 (Feb) LSJ 52; WA EPG, cl 14.7. 244 ACT, r 16.1; NSW, r 16.1; Qld, r 16.1; SA, r 16.1; Vic, r 16.1; WA, r 30. The charging of fees in this context will likely amount to unsatisfactory professional conduct: Legal Services Commissioner v Rose [2007] VCAT 2180.

PART II Lawyers’ Duty to the Client Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter Chapter

4: Duties to the Client and their Enforcement .................................... 113 5: Lawyers’ Duty to Clients in Tort ...................................................... 149 6: Lawyer–Client Conflict and Influence ............................................. 217 7: Concurrent Conflicts .......................................................................... 247 8: Acting against Former Clients .......................................................... 277 9: Duty to Account .................................................................................. 329 10: Confidentiality ................................................................................... 343 11: Legal Professional Privilege ............................................................. 367 12: Privilege in Aid of Settlement ......................................................... 423 13: Employed (“In-house”) Lawyers .................................................... 439

Chapter 4

Duties to the Client and their Enforcement [4.05] INTRODUCTION ................................................................................................................ 113 [4.05] Nature of duties to the client ....................................................................................... 113 [4.10] Schema of duties to the client ...................................................................................... 115 [4.20] DUTY TO BE COMPETENT .............................................................................................. 115 [4.20] What is competence? ..................................................................................................... 115 [4.25] Controls directed at competence ................................................................................. 116 [4.40] DUTY OF LOYALTY AND TRUST .................................................................................. 119 [4.40] Fiduciary duties .............................................................................................................. 119 [4.45] Lawyers as fiduciaries ................................................................................................... 120 [4.65] Other lawyer duties that have fiduciary overtones ................................................. 122 [4.70] DUTIES OF CONFIDENCE ............................................................................................... 123 [4.70] Confidentiality ................................................................................................................ 123 [4.75] Undue influence ............................................................................................................. 123 [4.80] DUTY TO PROMOTE QUALITY AND CLIENT CARE .............................................. 123 [4.80] Quality assurance ........................................................................................................... 123 [4.85] Client care rules – communicating with the client .................................................. 124 [4.90] DUTY TO PROMOTE ACCESS TO JUSTICE ................................................................ 126 [4.90] Duty tied closely to the quantum of legal costs ...................................................... 126 [4.100] Performance of cut-price legal work ........................................................................ 127 [4.105] Performance of pro bono publico work ................................................................... 129 [4.135] DUTY TO ENCOURAGE SETTLEMENT ..................................................................... 134 [4.145] ENFORCEMENT OF DUTIES – REMEDIES FOR BREACH OF DUTY ................. 137 [4.150] Breach of duties of competence ................................................................................. 138 [4.180] Breach of the duty of loyalty ..................................................................................... 142 [4.190] Breach of duties of confidence ................................................................................... 144 [4.200] Incompetence as a basis of setting aside a conviction or judgment .................. 144

INTRODUCTION Nature of duties to the client

[4.05] In characterising lawyers’ professional responsibility to their clients, the case law is replete with words such as skill, diligence, competence, honesty, honour,

114

Lawyers’ Professional Responsibility

[4.05]

loyalty, trustworthiness and integrity.1 This dictates that lawyers should treat clients fairly and in good faith, giving due regard to clients’ position of dependence, lawyers’ special training and experience, and the high degree of trust clients are entitled to place in lawyers.2 To this end, lawyers should give clear and timely advice to assist clients 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.3 Communications with clients should, therefore, be prompt, and effected in a form and manner consistent with the client’s knowledge and sophistication.4 Stated in more general terms, in all dealings, lawyers should strive to establish and maintain clients’ trust and confidence. These traits are aimed at ensuring that lawyers do all within their power and the law to protect and/or foster client interests.5 The prevailing notion of partisanship within the adversary system – and more generally in the representational nature of lawyers’ function – requires lawyers to give undivided fidelity to clients’ interests, unaffected by their own interests or those of other person(s) or by their perception of the public interest. At the same time, representing a client is not an endorsement of the client’s social, moral, political or economic views or activities. It is independent of these, a point r 12.1 of the former Law Council of Australia Model Rules of Professional Conduct and Practice phrased as follows:6 A practitioner must seek to advance and protect the client’s interests to the best of the practitioner’s skill and diligence, uninfluenced by the practitioner’s personal view of the client or the client’s activities, and notwithstanding any threatened unpopularity or criticism of the practitioner or any other person, and always in accordance with the law including these Rules.

Partisanship is not to be pursued at the expense of independence. Legal advice takes its value not merely from the lawyer’s special skill and knowledge, but because in giving that advice the lawyer exercises independent judgment: see 1 See, for example, Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR; Nocton v Lord Ashburton [1914] AC 932 at 956 per Lord Haldane LC; Apatu v Peach Prescott & Jamieson [1985] 1 NZLR 50 at 62 per Eichelbaum J; Bolton v Law Society [1994] 1 WLR 512 at 518–519 per Sir Thomas Bingham MR. 2 WA, r 7(b). 3 ACT, r 7.1; NSW, r 7.1; NT, r 17.2; Qld, r 7.1; SA, r 7.1; Vic, r 7.1; WA, r 10(1) (“A practitioner must take all reasonable and practicable steps to inform a client of the client’s rights and possible courses of conduct in relation to any matter in which the practitioner represents the client”). Equivalent provision is made in the barristers’ rules: ACT, r 17; NSW, r 37; NT, r 17; Qld, r 39; SA, r 39; Vic, r 37; WA, r 39. For an example of the importance of ensuring adequate instruction see Putti v Simpson (1975) 6 ALR 47 at 50–51. 4 EVBJ Pty Ltd v Greenwood (1988) 20 ATR 134 at 140 per Brownie J; WA, r 8. 5 Groom v Crocker [1939] 1 KB 194 at 222 per Scott LJ; Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 657 per Kirby P; ACT, r 4.1.1; NSW, r 4.1.1; Qld, r 4.1.1; SA, r 4.1.1; Vic, r 4.1.1; (which requires a solicitor to “act in the best interests of a client in any matter in which the solicitor represents the client”); WA, rr 6(1)(a), 7(d). 6 Only NT r 17.1 continues to make equivalent provision. See the following barristers’ rules: ACT, r 16; NSW, r 35; NT, r 16; Qld, r 37; Vic, r 35; WA, r 37. For judicial statements to the same effect see Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR; R v Tighe & Maher (1926) 26 SR (NSW) 94 at 108–109 per Street CJ; Tombling v Universal Bulb Co Ltd [1951] 2 TLR 289 at 297 per Denning LJ; Giannarelli v Wraith (1988) 165 CLR 543 at 579 per Brennan J.

[4.20]

4 Duties to the Client and their Enforcement

115

[17.10]. It follows that lawyers should give clients a candid opinion on any professional matter the subject of the representation,7 not one coated by what they believe clients wish to be told. Partisanship and fidelity also have limits in other respects, namely that lawyers must not further client causes by unfair or dishonest means,8 or by means otherwise inconsistent with their responsibility in the administration of justice (as to which see Ch 17). Schema of duties to the client

[4.10] The lawyer’s main legal duties to the client are directed to competence (or, more broadly, performance), loyalty and confidence. Generally speaking, competence is the domain of tort and contract law (see [5.05], although statute may play a role: see [5.15]), loyalty is fostered chiefly through fiduciary law (see [4.40]), and confidence is reflected by the duty of confidentiality and the application of the presumption of undue influence (see [4.70], [4.75]). A breach of these duties may be enforceable via civil action; the relevant remedies are addressed in the final part of this chapter: see [4.145]–[4.210]. The foregoing do not, however, exhaust lawyers’ duties to clients. The importance of maintaining trust and openness in the lawyer–client relationship impacts on the processes applicable to lawyer–client dealings, even if flaws in these processes do not always generate legal liability. The duties inherent in these processes can be brought within the umbrella of “quality assurance”: see [4.80]. Again, though not ordinarily sounding in legal liability for its breach, there is also the lawyer’s professional duty to promote access to justice: see [4.90]–[4.130]. Finally, duty-wise there is recognition that lawyers should not promote litigation but, where possible and appropriate in the interests of their client, encourage settlement of disputes: see [4.135], [4.140].

[4.15] Although Part II of this book focuses on lawyers’ duties to clients – and indeed much of the case law concentrates on these duties – lawyers may also owe legal and professional duties to persons other than their clients. Legal duties may be owed to non-clients, for instance, in tort (see [21.10]–[21.85]), in contract (see [21.90]–[21.115]), in equity (see [21.110]–[21.125]) or under statute (see [21.130], [21.135]). Professional rules prescribe other (non-legal) duties owed by lawyers to third parties, such as to other members of the profession, to opposing clients and to the community at large: see [21.140]–[21.280]. DUTY TO BE COMPETENT What is competence?

[4.20] Lawyers must use their best endeavours to complete any professional work competently and as soon as reasonably possible, and if it becomes apparent 7 WA, r 7(c) (which requires a lawyer to “be completely frank and open with the client”). Equivalent provision is found in the barristers’ rules in the Territories and Tasmania: ACT, r 73; NT, r 73; Tas, para 4. 8 Tas, para 3; WA, r 16(1).

116

Lawyers’ Professional Responsibility

[4.25]

that this cannot be done within a reasonable time, to inform the client immediately.9 Lawyer competence, though pivotal to public confidence in the profession and the administration of justice, lacks any generally accepted meaning; it instead takes its flavour from the perspective of the observer.10 Clients, for instance, often equate competence with outcomes, whereas judges refer to the lawyer’s conduct in relation to the curial process. Lawyers think of competence in terms of technical proficiency,11 and yet different lawyers do things in different ways, but each may be “competent”. As a result, any purported statement of the indicia of competence must necessarily be phrased in broad terms, such as the following:12 Legal competence is measured by the extent to which an attorney (1) is specifically knowledgeable about the fields of law in which he or she practises, (2) performs the techniques of such practice with skill, (3) manages such practices efficiently, (4) identifies issues beyond his or her competence relevant to the matter undertaken, bringing these to the client’s attention, (5) properly prepares and carries through the matter undertaken, and (6) is intellectually, emotionally, and physically capable. Legal incompetence is measured by the extent to which an attorney fails to maintain these qualities.

Controls directed at competence

[4.25] At a threshold level, lawyer competence derives from academic and practical legal training: see [2.05]–[2.15]. But this training is, by itself, no guarantee of the requisite level of competence in legal practice. For this reason, lawyers should decline work that they cannot competently perform: see [3.165], [3.180]. The latent danger in breaching this proscription may surface in liability for negligence, discussed in Ch 5. Incidents of negligent conduct can also potentially be visited with disciplinary sanction: see [23.85], [23.90]. The prospect of liability for incompetence may motivate lawyers to maintain competence in their chosen fields of practice, but ideally the source of this motivation should be professional duty rather than fear of sanction. It has been judicially recognised that a lawyer fit to remain on the roll “must make reasonable 9 This is stated in the professional rules in some jurisdictions (Tas, r 10(1); WA, rr 6(1)(c), 7(e)–(g)) but represents the general law in any event. 10 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 186. See also Hurlburt, The Self-Regulation of the Legal Profession in Canada and in England and Wales (Law Society of Alberta and Alberta Law Reform Institute, 2000), Appendix (“What is Competence?”). 11 In this context, it has been said that competent representation “requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation” (US, r 1.1). See also HK, principle 6.01, cmt [1] (“Competence … includes knowledge, skill, and the ability to use them effectively in the interests of a client”). Cf the view that “[t]he significant qualities distinguishing good from bad lawyers – and, thus, the areas for truly major concern about ‘competence’ – are matters of character, judgment, wisdom, morals, and attitude, not the business of technical proficiency”: Frankel, “Curing Lawyers’ Incompetence: Primum Non Nocere” (1977) 10 Creighton L Rev 613 at 618. 12 ABA-ALI Committee on Continuing Professional Education Model Peer Review System 11 (Discussion Draft, 15 April 1980). See also Can CPC, r 3.1-1 (defining a “competent lawyer” as “a lawyer who has and applies relevant knowledge, skills and attributes in a manner appropriate to each matter undertaken on behalf of a client and the nature and terms of the lawyer’s engagement”, before then listing what this includes).

[4.30]

4 Duties to the Client and their Enforcement

117

efforts to keep up with current developments in his field of practice”.13 The superseded Australian Capital Territory professional rules reiterated this point explicitly, requiring a lawyer to “take such steps as are reasonably necessary to maintain and improve his or her knowledge and skill in the fields of law in which he or she practises”.14 But commercial and time pressures strain many lawyers’ ability to maintain the requisite competence and, in any case, attempts at doing so through ad hoc and unstructured methods may prove of variable value. Continuing legal education

[4.30] Organised continuing legal education (CLE) (or continuing professional development, CPD) must be seen against this backdrop. That clients are not ordinarily positioned to judge the professional capacity of lawyers with whom they negotiate for service throws on the profession, it is reasoned, an obligation to take steps to certify that its members are capable of performing at levels of reasonable competence.15 To this end, law societies and bar associations in each jurisdiction conduct, or provide for, CLE for their members. Were CLE optional, many lawyers would relegate its importance to well down the list of priorities. Hence the push, following United States leads,16 to make CLE mandatory (hence “MCLE”). In Australia, this was pioneered in New South Wales, which introduced MCLE in 1987. While other States and Territories lagged, the debate was spurred by the Law Council of Australia’s 1994 recommendation, in its Blueprint for the Structure of the Legal Profession, that “persons practising as barristers and solicitors should complete ten hours of formal continuing legal education each year”. That MCLE forms part of the risk-management process underscoring liability capping under the professional standards regime (as to which see [5.355]) served to accelerate its widespread adoption. Formal MCLE schemes now operate in all Australian States and Territories.17 In line with the Law Council’s advice, these schemes broadly require lawyers to complete 10 units of MCLE in the 12 months preceding their application to renew 13 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 751 per Hutley JA. See also Council of the Law Society of New South Wales v Sandroussi [2012] NSWADT 40 at [39] (“clients, the public, other members of the profession and the courts are … entitled to expect a solicitor will be committed to continuing legal education as part of achieving and maintaining competence”). 14 Legal Profession (Solicitors) Rules 2007 (ACT), r 1.3(b) (repealed). 15 McKay, “Competence and the Professionally Responsible Lawyer” (1980) 29 Emory LJ 971 at 983. 16 MCLE was first introduced in Minnesota in 1975, and at the time of writing only five States in the United States had no MCLE. The MCLE requirements generally vary between 10 and 16 hours per annum. 17 Law Society of the ACT, CPD Guidelines: A Continuing Professional Development Scheme for Canberra’s Solicitors, 1 April 2015 (available at http://www.actlawsociety.asn.au) (effective 1 July 2010); Legal Profession (Barristers) Rules 2014 (ACT), r 113 (see ACT Bar Association, Continuing Professional Development Program Protocol, available at http:/www.austbar.asn.au); Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015 (NSW); Legal Profession Uniform Continuing Professional Development (Barristers) Rules 2015 (NSW); Legal Profession Regulations 2007 (NT), Sch 2; Queensland Law Society Administration Rule 2005 (Qld), Pt 6; Bar Association of Queensland, CPD Policy (available at http:/www.qldbar.asn.au; LPEAC Rules 2004 (SA), r 3A, App C (effective 1 April 2011); SA Bar Association Inc, Barristers’ Conduct Rules (SA), rr 124–128; Law Society of Tasmania, Practice Guideline No 4 (Continuing Professional Development Scheme) (available to members at

118

Lawyers’ Professional Responsibility

[4.35]

their practising certificate, although this may be increased under specialist accreditation regimes. Each hour of participation in an MCLE course entitles a lawyer to one MCLE unit. The rules generally make provision as to the form, content and instructors of such courses. The trend is to require periodical attendance at MCLE sessions on specific topics, ethics being one of these. Flexibility exists as to the form of MCLE instruction, including through private study of audio or video material, professional conference preparation and presentation, the publication of articles in legal publications, and membership of certain committees. Fulfilment of MCLE requirements is monitored through lcertification on lawyers’ annual application to renew their practising certificate. The rules also usually entitle the relevant professional body to require lawyers to furnish a record of their MCLE attendance, and render the failure to fulfil MCLE requirements as capable of generating a disciplinary sanction.18 The main advantages touted for MCLE are increased competency, the promotion of an educational habit, the enhancement of lawyers’ public image and thus confidence in the profession, and occasion for social and professional interaction. Opponents argue that there is no empirical evidence that MCLE secures greater competence or guarantees the acquisition of knowledge.19 Some see it as insulting to their own professional competence, and to the profession’s status generally, to impose a CLE obligation.20 Another concern is that mandating CLE may prompt lawyers to view it as a substitute for their own responsibility to maintain competence. Of course, whenever a duty is mandatory, there is a corresponding need for monitoring and attendant compliance costs. For these reasons, amongst others, the Solicitors Regulation Authority in the United Kingdom has, as part of a wider program moving from processes to outcomes,21 swum against the tide by revoking MCLE obligations.22 Instead it prescribes a high level description of competencies required of solicitors to inform their professional development needs, which accordingly can be tailored to the individual lawyer or firm practice.23 Other suggested initiatives

[4.35] Many clients’ inability to make any informed assessment of a lawyer’s competence has led some to suggest means to address this information asymmetry. http://www.taslawsociety.asn.au); Legal Profession Uniform Continuing Professional Development (Solicitors) Rules 2015 (Vic); Legal Profession Uniform Continuing Professional Development (Barristers) Rules 2015 (Vic); Legal Profession Rules 2009 (WA), Pt 2 Div 1. 18 See, for example, Council of the Law Society of New South Wales v Sandroussi [2012] NSWADT 40; Council of the Law Society of New South Wales v Arraj [2014] NSWCATOD 117. 19 As to the arguments for and against MCLE generally see further Cockburn, “Mandatory Continuing Legal Education: ‘Imprisonment in the Continuing Legal Education Classroom?’” (1996) 14 J of Prof Leg Ed 227 at 230–236. 20 See, for example, Frankel, “Curing Lawyers’ Incompetence: Primum Non Nocere” (1977) 10 Creighton L Rev 613 at 627–632. 21 Which is also evident in the nature and form of the relevant professional rules promulgated by the Authority: see [1.140]. 22 The existing 16 annual hours of MCLE ends from November 2016, with option to opt out from November 2015. 23 See http://www.sra.org.uk/.

[4.40]

4 Duties to the Client and their Enforcement

119

For instance, more than one commentator has recommended that lawyers disclose to prospective clients, or otherwise make publicly available, a record of successful claims against them for negligence as well as their disciplinary record. This, it is surmised, would give otherwise poorly informed clients a vehicle whereby to assess the competence and attitude or ethics of a potential legal representative.24 The push towards clients as “consumers” of legal services (see [1.70]), and thus lawyers as no more than service providers, should hardly make recommendations of this kind a surprise. But should they be implemented, they would single out lawyers, as no parallel obligations apply to other service providers, whether or not professionals. The relevant professional rules in the United Kingdom contain an initiative directed at competence, albeit in the course of the retainer. They require a lawyer to “inform current clients if you discover any act or omission which could give rise to a claim by them against you”.25 What informs this obligation is the fact that for many lawyer–client relationships, the lawyer is well positioned to “cover up” her or his errors, and the client correspondingly poorly positioned to discern lawyer errors. After all, many clients place the utmost trust in their lawyers, and unless evidence of lawyer negligence becomes patently clear, that trust may well preclude it coming to light. It stands to reason that notwithstanding the absence of any equivalent rule in Australia, the relationship of trust as between lawyer and client cannot flourish if not punctuated by lawyer candour, making it therefore unprofessional to “cover up” incompetence.

DUTY OF LOYALTY AND TRUST Fiduciary duties

[4.40] In circumstances where the relationship between persons can be characterised as fiduciary,26 equity mandates a demanding level of propriety of conduct exceeding the tortious standard of care27 and usually also the standards imposed by contracts.28 Although it is common to speak of fiduciary relationships, the relationship between two persons is simply the vehicle that attracts and defines the scope of fiduciary duties owed by one person to the other. Fiduciary duties are imposed where the nature of the relationship justifies the imposition of the fiduciary standard. The phrase “fiduciary relationship” is, in any case, misleading in that not all duties owed by a “fiduciary” are necessarily fiduciary duties.29 So focus on fiduciary duties avoids perpetuating the incorrect impression that “fiduciary” status infuses every aspect of the parties’ relationship. 24 See, for example, Berenson, “Is It Time for Lawyer Profiles?” (2001) 70 Fordham L Rev 645; Cooper, “Attorney Self-Disclosure” (2010) 79 U Cin L Rev 697. 25 UK, O(1.16). 26 See generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 4. 27 Cf the description of a fiduciary, in tort language, as a person who becomes a “special sort of neighbour”: McPherson, “Fiduciaries: Who Are They?” (1998) 72 ALJ 288 at 292. 28 Fiduciaries, it has been said, must conduct themselves “at a level higher than that trodden by the crowd”: Meinhard v Salmon (1928) 164 NE 545 at 546 per Cardozo CJ. 29 Breen v Williams (1996) 186 CLR 71 at 82 per Brennan CJ.

120

Lawyers’ Professional Responsibility

[4.45]

The central fiduciary duty is one of loyalty “unequalled elsewhere in the law”.30 Importantly, a duty is fiduciary only if it is one of loyalty. If no element of disloyalty is involved, a breach of duty is actionable through the primary bodies of law that govern the incidents of the relationship in question.31 The High Court in Breen v Williams32 interpreted the fiduciary element of loyalty as imposing proscriptive (negative) as opposed to prescriptive (positive) duties, Gaudron and McHugh JJ remarking that “the law of this country does not … impose positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed”. In so doing, the court rejected the use of fiduciary law as a vehicle to sustain an independent source of positive duties supporting a new civil wrong. It feared that to impose prescriptive duties via fiduciary law would lead equity to encroach upon and displace the role played by contract or tort law. Two principal fiduciary duties exemplify, and arguably exhaust, the requisite standard of undivided loyalty.33 The first is that a person must not, except with the informed consent of the person to whom he or she owes fiduciary duties (the “principal”), place herself or himself in a position where there is or may be a conflict between: • the duty as a fiduciary and her or his own interest or a duty to a third party; or • the duty as a fiduciary to two or more persons; in the same transaction or matter (the “no-conflict” duty). The second, which some view as a subset of the first, is the prohibition on a person profiting from a relationship giving rise to fiduciary duties, except with the informed consent of the principal (the “no-profit” duty). Lawyers as fiduciaries

[4.45] The lawyer–client relationship has traditionally been recognised attracting to fiduciary duties. As far back as 1862 an English judge remarked that “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”.34 It is the lawyer’s ability, via the retainer (see [3.05]), to affect the legal status of a client, coupled with the lawyer’s role as an officer of the court (see [17.10]) and clients’ frequent dependence on their lawyers’ skill and knowledge, that led courts of equity to impose onerous duties on lawyers.35 From another, though related, perspective, imposing fiduciary duties on lawyers may be 30 Moffat v Wetstein (1996) 135 DLR (4th) 298 at 315 per Granger J. 31 Finn, “The Fiduciary Principle” in Youdan (ed), Equity, Fiduciaries and Trusts (Carswell, 1989), p 28. 32 Breen v Williams (1996) 186 CLR 71 at 113. 33 Moss v Moss (No 2) (1900) 21 LR (NSW) Eq 253 at 258 per Simpson CJ; Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 67 per Gibbs CJ; Warman International Ltd v Dwyer (1995) 182 CLR 544 at 557–558 (FC). 34 Tyrell v Bank of London (1862) 10 HLC 26; 11 ER 934 at 44 (HLC), 941 (ER) per Lord Westbury LC. 35 Hospital Products Ltd v United States Surgical Corporation (1984) 156 CLR 41 at 97 per Mason J; Weinrib, “The Fiduciary Obligation” (1975) 25 UTLJ 1 at 4–8.

[4.55]

4 Duties to the Client and their Enforcement

121

seen as a way of minimising the “agency costs”36 that stem from lawyers having greater information and expertise than clients.37 Fiduciary duties translated to the lawyer–client relationship

[4.50] The fiduciary duties noted above translate directly to the lawyer–client relationship. Hence, a lawyer must shun situations involving a conflict between the lawyer’s personal interest and the duty to the client, and refrain from using the lawyer–client relationship in order to profit apart from a reasonable professional fee (a “lawyer–client” or “duty–interest” conflict): see Ch 6. As a lawyer ordinarily acts for multiple clients, the duty of loyalty proscribes the lawyer (or her or his firm) from concurrently acting for clients whose interests conflict (a “client–client” or “duty–duty” conflict): see Ch 7. Role and strictness of fiduciary duties

[4.55] In protecting the client by assuring zealous and loyal representation, and maintaining public perception of integrity of the profession and the administration of justice, fiduciary law is instrumental in defining and fulfilling two principal roles of the lawyer. For this reason, inter alia, courts apply the “no-conflict” and “no-profit” duties strictly; “[t]he law takes a hard line against faithless fiduciaries”.38 The stricter the responsibility, it is reasoned, the more likely that lawyers will be deterred from contemplating even the possibility of allowing other interests to prevail over client loyalty.39 Fiduciary duties are, to this end, so strict that they apply whether or not the fiduciary’s interest, or duty to a third party, actually impedes the loyal performance of the fiduciary’s duty. It is thus no defence to a fiduciary breach for the lawyer to maintain that he or she acted bona fide.40 Nor does the fact that the client benefited from the breach,41 that the work was delegated to a staff lawyer,42 or that the client was charged no fee,43 absolve the lawyer from a breach of fiduciary duty. Appeals to so-called “commercial reality” also do not displace lawyers’ fiduciary duties.44 So seriously are fiduciary duties perceived that their breach frequently constitutes the very indicia of professional misconduct: see [25.50]–[25.60]. 36 “Agency costs” are those costs of forming and maintaining a contract or trust relationship that limit the agent’s independence, including the expense involved in monitoring the agent’s performance. Although traditionally discussed in the context of the director–shareholder relationship, agency theory can explain the duties imposed on lawyers. 37 See Senate Standing Committee on Legal and Constitutional Affairs, Cost of Legal Services and Litigation in Australia Today: Legal Ethics (Discussion Paper No 5, February 1992), para 3.11. 38 Cadbury Schweppes Inc v FBI Foods Ltd (1999) 167 DLR (4th) 577 at 591 per Binnie J (SCC). 39 Bray v Ford [1896] AC 44 at 51 per Lord Herschell. 40 Boardman v Phipps [1967] 2 AC 46; Stewart v Layton (1992) 111 ALR 687 at 711 per Foster J. 41 Boardman v Phipps [1967] 2 AC 46. 42 Re Bannister (1975) 5 ACTR 100. On the duty to supervise staff see [20.205]. 43 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 543 per Richardson J. 44 Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228 at 247 per Fryberg J; Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 661 per Thomas J (dissenting).

122

Lawyers’ Professional Responsibility

[4.60]

Client consent to conflict

[4.60] The principal qualification to the application and strictness of fiduciary duties, in both the lawyer–client relationship and other relationships that attract those duties, is the consent of the principal (client). As fiduciary duties are directed at protecting the client’s interest in securing loyalty, it is open to the client to authorise or consent to a conflict that would otherwise substantiate a fiduciary breach. This authorisation or consent is premised upon a full understanding of the nature and implications of the conflict, and so at the very least is premised on the lawyer making full disclosure of the conflict:45 see [6.25]. Other lawyer duties that have fiduciary overtones

[4.65] Various other duties owed by lawyer to client are sometimes described as fiduciary, even though this description may be inaccurate. The lawyer’s duty of confidentiality, due to its similar genesis to fiduciary law and its fostering of lawyer–client loyalty, some brand as fiduciary.46 But determining whether information communicated within a relationship is confidential involves a different inquiry than determining whether or not a relationship attracts fiduciary duties, though there may be some overlap. Moreover, and particularly in the lawyer–client context, duties of confidentiality often outlast fiduciary duties, which ordinarily last only so long as the retainer. This explains why actions to restrain lawyers from acting against their former clients are grounded chiefly in guarding against the misuse of confidential information rather than avoiding a fiduciary breach: see [8.05], [8.10], [8.30]. The lawyer’s duty to disclose and use for a client’s benefit all material information coming into her or his possession concerning the client’s affairs,47 though sometimes perceived as fiduciary, is in most contexts better located within the lawyer’s tortious duty of care: see [5.80]–[5.95]. In so far as disclosure of information is concerned, fiduciary law imposes a duty to disclose any conflict with a view to giving full information upon which the client can decide whether or not to retain the lawyer in the matter. Another duty with fiduciary overtones is the lawyer’s duty to account for moneys received on behalf of others, whether from the client or from third parties for the client. In many circumstances the holding of moneys in this context serves to constitute the lawyer as a trustee of those moneys.48 As trustee, the lawyer is subject to onerous duties to account in respect of those moneys: see Ch 9. Part and parcel of those are fiduciary duties, as the trustee–beneficiary relationship is the archetypal fiduciary relationship. 45 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 170 per Street CJ. 46 See, for example, Marriage of Griffis (1991) 14 Fam LR 782 at 785 per Mullane J. 47 McKaskell v Benseman [1989] 3 NZLR 75 at 87 per Jeffries J; Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836 at 842 per Sir Thomas Bingham MR. 48 Target Holdings Ltd v Redferns (a firm) [1996] AC 421 at 437 per Lord Browne-Wilkinson; Jalmoon Pty Ltd (in liq) v Bow [1997] 2 Qd R 62 at 72 per Pincus JA and Helman J.

[4.80]

4 Duties to the Client and their Enforcement

123

DUTIES OF CONFIDENCE Confidentiality

[4.70] From the earliest times the lawyer–client relationship has been characterised as one of confidence.49 This translates into a duty on the lawyer to maintain inviolate clients’ confidences.50 The duty is sourced via an implied term in the retainer, and in equity, which recognises an independent doctrine directed to preserving the confidentiality of information: see [10.15]. The law jealously guards the confidentiality inherent in the lawyer–client relationship. It forms a core basis upon which a lawyer can be restrained from acting against a former client (see [8.05]) and provides the main justification for withholding from disclosure certain lawyer–client communications (on the ground that they come within legal professional privilege: see [11.105]). Undue influence

[4.75] The doctrine of undue influence aims to rectify abuses of relationships involving special confidence by conferring upon a person whose confidence has been abused in effecting a transaction the ability to rescind that transaction. The existence of a relationship that attracts fiduciary duties – such as the lawyer–client relationship – raises the presumption that a benefit secured by the fiduciary is a result of the abuse of confidence. In the lawyer–client scenario, the presumption of undue influence sees its principal use in claims to set aside gifts or other benefits the lawyer has received from the client in addition to the lawyer’s reasonable professional fee. The presumption is rebuttable by evidence that the gift or benefit was the independent and well-understood act of a client in a position to exercise free judgment based upon complete information: see [6.125], [6.130]. DUTY TO PROMOTE QUALITY AND CLIENT CARE Quality assurance

[4.80] Statistics reveal that most claims and potential claims against professional indemnity insurance arise from either a lack of common understanding between lawyer and client, or a lack of, or failure in, office systems designed to assist lawyers and support staff to deliver high-quality service and avoid oversights.51 Quality assurance certification may provide a means to reduce the incidence of claims, and so may attract a reduction in professional indemnity insurance premiums. It also serves purposes in addition to risk management; as a step to stave off vociferous attacks on lawyer professionalism, and as a marketing 49 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 840 per Fletcher Moulton LJ. 50 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 214 per Stanton J; Baker v Campbell (1983) 153 CLR 52 at 65 per Gibbs CJ. 51 MacDermott, “Law 9000 Provides Primary Risk Management Tools” (2004) 42 (July) LSJ 50 (in NSW estimating that the figure exceeds 80%).

124

Lawyers’ Professional Responsibility

[4.85]

advantage.52 To the extent that clients require suppliers of legal services to be quality assured, there are also competitive reasons to pursue certification. Some law firms have, to this end, sought accreditation under international quality assurance standards (such as ISO 9001), aiming to identify best practices, reduce waste, improve communication, training and continuous improvement, and ultimately to improve client service and satisfaction. That these standards are generic led to initiatives to target quality management certification to the profession. The main such initiative in Australia is LAW 9000,53 which utilises the internationally recognised ISO 9001 as its foundation and contains best-practice criteria specific to a legal practice. Its benchmarks require firms to establish, document, implement, maintain and review work processing systems and to measure outcomes. Certification is determined by an independent evaluator, and lasts for a set period. Client care rules – communicating with the client

[4.85] A lack of common understanding between lawyer and client, which may in turn generate both an expectation gap and client dissatisfaction,54 is best addressed by clear channels of communication. It is important that these channels of communication remain open throughout the retainer, and the lawyer, as the expert, must take the initiative in this regard. The professional rules in some jurisdictions state that, in the absence of client instruction to the contrary, clients should be apprised of all significant developments in any matter entrusted to their lawyer.55 And in the words of a New South Wales appellate judge, “[i]t is desirable that the prospective client be given a rough timetable as to the steps which may be required and when they are expected to occur”.56 It is perhaps at the outset of the retainer that there is the greatest opportunity to reduce expectation gaps. The drive for quality assurance saw the introduction of what are termed “client care rules”, teamed with moves to statutorily mandate extensive costs disclosure (see [14.15]–[14.60]) but not confined to matters pertaining to costs. The first Australian jurisdiction to enact a “client care rule” was 52 See Stein and Stein, Legal Practice in the 90s (Law Book Co, 1994), pp 15–19, Chs 9, 10; “Quality Assurance in Law Firms” (1996) 70 (Feb) LIJ 30; Franks, “What do Corporate Clients Really Think About Legal Services Quality?” (1996) 34 (July) LSJ 57. 53 LAW 9000 is the management system benchmark for legal practices, developed by QL Inc (now Quality in Law) and SAI Global in conjunction with the College of Law: see http:// www.collaw.edu.au. 54 Re Seare (2013) 493 BR 158 at 190 (“If the attorney and the client have different understandings of the goals of representation, viewed objectively, then the lawyer has not fulfilled the duty of competence”). 55 NT, r 10A.1; Tas, r 10(2); WA, r 10(2). See also US, r 1.4, which requires lawyers to, inter alia: (a) promptly inform the client of any decision or circumstance with respect to which the client’s informed consent is required; (b) reasonably consult with the client about the means by which the client’s objectives are to be accomplished; (c) keep the client reasonably informed about the status of the matter; and (d) promptly comply with reasonable requests for information. 56 Hancock v Arnold (2008) Aust Torts Reports ¶81-973 at [52] per Basten JA.

[4.85]

4 Duties to the Client and their Enforcement

125

Queensland, in 1993,57 and although the rule was subsequently rescinded following costs disclosure amendments to the relevant legislation,58 it was reintroduced on 26 April 2001 via the (then) Queensland Law Society’s Solicitors Handbook.59 The 2007 Queensland rules, which superseded the Solicitors Handbook, maintained reference to the client care concept by way of commentary to rule 2, which read: The Council of the Queensland Law Society considers it good practice that a solicitor, on or before the commencement of any matter, advise the client the name of the nominated Client Care Officer for the law practice and that if the client has any concern or query it is able to be referred, in the first instance, to the nominated Client Care Officer. The Client Care Officer could be a solicitor, or executive in the law practice, or a nominated solicitor outside the law practice, or a nominated person approved by the Queensland Law Society. Persons employed by the Queensland Law Society may also be appointed as Client Care Officer.

No equivalent appears in, or attached to, the current Queensland rules. On 25 May 1995 the Council of the New South Wales Law Society approved a “Client Care Guideline to Best Practice”,60 effective from 1 January 1996, directed to the same end. That it no longer appears on the Society’s website suggests that its substance is now seen as addressed by broadened costs disclosure requirements prescribed by the legal profession legislation. The same can be said regarding the Australian Capital Territory, which no longer makes specific “client care” provision in its rules, and more generally across Australia in the wake of expansive costs disclosure requirements: see [14.15]. By contrast, in the absence of broad statutory costs disclosure obligations, under the guise of “client care” the New Zealand professional rules require a lawyer, in advance, to give to a client in writing information on the principal aspects of client service, including how fees will be charged and recovered, professional indemnity insurance arrangements, coverage by the fidelity fund and complaints handling procedures.61 The rules also require lawyers, prior to undertaking significant work under a retainer, to supply in writing to the client, inter alia, a copy of the prescribed client care and service information.62

57 Namely via Qld: Solicitors Handbook, para 4.09 (Council Resolution, 11 February 1993; effective 5 April 1993). 58 Namely Queensland Law Society Act 1952 (Qld), Pt 4A (repealed) (now see Qld Pt 3.4 Div 3): see [14.20]. 59 Qld: Solicitors Handbook, para 4.09 (now superseded). 60 The full text of the rule is reproduced in (1995) 33 (Dec) LSJ 18. As to the background to the New South Wales “Client Care Guideline to Best Practice”, see New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report No 70, February 1993), paras 5.2–5.5 (recommendation 58). 61 NZ, r 3.4. 62 NZ, r 3.5 (referring to what is set out in the preface to the rules, and broadly setting out lawyers’ obligations to clients, and corresponding client legitimate expectations).

126

Lawyers’ Professional Responsibility

[4.90]

DUTY TO PROMOTE ACCESS TO JUSTICE Duty tied closely to the quantum of legal costs

[4.90] It is inconsistent with the role and purpose of the legal profession for it, or its members, to inhibit a person’s access to justice.63 The high cost of legal services inversely correlates with practical ability to access justice, and it seems that the push to promote competition in the provision of legal services (as to which see [1.55]–[1.65]) has not improved this accessibility to any great degree.64 Hence the opinion that, as a profession with a monopoly over the performance of legal services, “we have special obligations to be energetic and imaginative in producing the best quality justice at the lowest possible costs for those who use it”.65 Various features of the law governing lawyers’ costs reflect this obligation; for instance, the power to set aside unreasonable and unfair costs agreements (see [14.150]–[14.205]), formalities for a bill of costs,66 the temporal restrictions on a lawyer commencing proceedings to recover costs (see [15.30]), and clients’ right to have their costs reviewed by an independent person: see [15.40]–[15.90]. The recognition by both the courts and the legislature of the appropriateness of lawyers taking on certain clients on a speculative fee basis (see [14.110]–[14.145]) – where the lawyer is paid her or his ordinary fee if the client proves successful – is premised on promoting access to justice. It is for this reason, inter alia, that uplift fee agreements have received a statutory imprimatur (see [14.145]), whereby lawyers may recover more than their ordinary fee via an uplift component calculated as a percentage of that fee, should the client succeed. Access to justice is also the chief catchcry of proponents of percentage fees, whereby a lawyer’s fee is calculated as a percentage of what the client recovers in the proceeding, although these remain illegal in Australia: see [14.135].

[4.95] The “unbundling” of legal services (or sometimes termed “discrete task assistance” or “limited scope representation”) presents as a further vehicle whereby lawyers can contribute to improving access to justice.67 Branded a “half-way house 63 As to access to justice in a broader context see Lamb, Littrich and Murray, Lawyers in Australia (3rd ed, Federation Press, 2015), Chs 7–9. 64 It has been said, in the American context, that “[i]t is a shameful irony that the nation with the world’s highest concentration of lawyers has one of the least adequate systems for making legal services accessible”: Rhode, “Lawyers as Citizens” (2009) 50 Wm & Mary L Rev 1323 at 1330–1. 65 Burger, “The Role of the Law School in the Teaching of Legal Ethics and Professional Responsibility” (1980) 29 Cleveland State L Rev 377 at 378–379. 66 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [4.13]–[4.19]. 67 Indeed, the American Bar Association effected an amendment to its Model Rules of Professional Conduct in 2002 to expressly countenance limited-scope representation. Rule 1.2(c) envisages, to this end, that “[a] lawyer may limit the scope of the representation if the limitation is reasonable under the circumstances and the client gives informed consent”. Its aim was to “encourage attorneys to provide some assistance to low- and moderate-income litigants who could not otherwise afford full representation”: Struffolino, “Taking Limited Representation to the Limits: The Efficacy of Using Unbundled Legal Services in Domestic Relations Matters Involving Litigation” (2012) 2 St Mary’s J Legal Mal & Ethics 166 at 215. The Australian Productivity Commission, in being favourably disposed to the unbundling of legal services as an avenue to promote access to justice, nonetheless noted that such a practice runs counter to the convention of engaging a lawyer for the duration of a

[4.100]

4 Duties to the Client and their Enforcement

127

between full representation and no representation”,68 it involves lawyer and client agreeing that the lawyer will undertake only part of the legal work involved, leaving the client to perform the remaining work, or to engage another (cheaper) lawyer to assist.69 As this may foster not only cost savings for clients, but also clear duty (and liability) parameters for the lawyer, it behooves lawyers to approach “unbundling” engagements from a client centred perspective. Not every constraint on the scope of representation will adequately reflect or serve the client’s interests. It has been observed, to this end, that “[t]he duty of competence informs the agreement to unbundle by mandating the inclusion of those services reasonably necessary to achieve the client’s reasonable objectives”.70 Performance of cut-price legal work

[4.100]

No legal or professional prohibition applies to lawyers charging fees below an applicable scale or the current market price. This was not always so. In the not too distant past such a practice was branded unprofessional, as appears from the following remarks by an English judge in the 1950s:71 There is nothing worse in any profession than that there should be fee cutting … It is most undesirable for a profession that, where there is a scale or there is a recognised scale of fees, whether laid down by Act of Parliament or by custom, there should be competition among members of the profession to get or keep business by offering to charge less than the others are entitled to charge.

The same attitude had ensued in the United States, where the early 1930s and 1940s witnessed state bar associations publish “suggested” minimum fee schedules, the undercutting of which could manifest itself in disciplinary action. Only with the Supreme Court’s 1975 decision in Goldfarb v Virginia State Bar,72 which held minimum fees schedules violated antitrust law, was there a genuine shift in perspective.73 In Australia, attempts to increase competition within the legal profession following the recommendations of the (then) Trade Practices Commission were largely aimed at reducing the cost of legal services: see [1.25]. The cost of legal services also received the attention of, inter alia, the Senate Standing Committee on Legal and legal problem, namely the “entire contract” doctrine, supported by Australian professional rules (see [3.195]): Productivity Commission, Access to Justice Arrangements (Inquiry Report Overview, No 72, 5 September 2014), pp 20–21. Yet the entire contract doctrine must yield to the terms of the retainer – there is, after all, nothing in Australian law to proscribe parties to a retainer agreeing to limit its scope (see [5.25]) – and so does not form anything like an insurmountable impediment to unbundling. 68 Productivity Commission, Access to Justice Arrangements (Inquiry Report Overview, No 72, 5 September 2014), p 20. 69 Re Seare (2013) 493 BR 158 at 183. 70 Re Seare (2013) 493 BR 158 at 189. 71 Re Evill [1951] 2 TLR 265 at 268 per Lord Goddard CJ. 72 Goldfarb v Virginia State Bar (1975) 421 US 773. 73 See Pardau, “Bill, Baby, Bill: How the Billable Hour Emerged as the Primary Method of Attorney Fee Generation and why Early Reports of its Demise May be Greatly Exaggerated” (2013) 50 Idaho L Rev 1 at 2–3.

128

Lawyers’ Professional Responsibility

[4.100]

Constitutional Affairs,74 the Australian Law Reform Commission75 and, most recently, the Productivity Commission.76 Given this background, coupled with the prevailing (though not always well informed)77 public opinion that legal services are too expensive, charging reduced fees can hardly be branded unprofessional nowadays; to the contrary rather.78 There nonetheless remain concerns surrounding cut-price legal work. One is the link between time devoted to legal work (and hence cost, as legal work is often time-charged) and its quality. The problem is perpetuated because consumers of legal services are frequently unable to assess whether the proposed services are value for money. This leads many to distinguish lawyers simply on price, as if all legal services are no different from a routine task. The reality is that lawyers can rarely devote as much time to the task at hand as they would were money no object, and so must determine, in their professional judgment, a cost-effective and cost-efficient allocation of resources. And it is in any case unprofessional to perform work in such a manner as to increase the proper costs to a client.79 Undue pressure on prices of legal services, and continual price undercutting, could in turn motivate poor attitudes to professionalism. For instance, lawyers may quote a fee without due regard to whether the job can be done competently and cost effectively at that fee, which forces compromise in professional standards to accommodate the pricing regime. Persistent fee undercutting may, moreover, convey to the public the impression that lawyers overcharge and operate on huge margins. This led the Council of the Queensland Law Society to express the view that “it is neither in the interest of the profession nor in the interest of the public that fees for legal services be rendered at levels less than those which are necessary 74 See Senate Standing Committee on Legal and Constitutional Affairs, The Cost of Justice (Canberra, 1993). 75 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), Ch 4. 76 Productivity Commission, Access to Justice Arrangements (Inquiry Report Overview, No 72, 5 September 2014). 77 Those who allege that legal services are too expensive often overlook the onerous responsibilities and high standards expected of lawyers, the extent of lawyers’ training, the time required to gain professional experience, the labour-intensive nature of legal work, the complexity of the law (and the resultant increasing number of legal materials required), increased statutory regulation and accountability etc. Also, although the remuneration of certain lawyers is well above average, for many lawyers, especially sole practitioners and those who practise in regional areas, it is hardly substantial. 78 In the United States, for instance, there is an increasing focus on the provision of what has been (inaccurately) termed “low bono” services with the aim of improving access to justice for the persons who, though not sufficiently poor for pro bono and legal aid work, otherwise cannot afford the usual cost of legal services. It involves lawyers charging a lower rate for legal services, say, 40-50% lower than the prevailing market rate. The “low bono” concept is acknowledged under the American professional rules, which state that in addition to aspiring to provide 50 hours of free legal services each year (see [4.110]), lawyers should also “provide any additional services through … delivery of legal services at a substantially reduced fee to persons of limited means”: US, r 6.1(b)(2). See further Herrera, “Encouraging the Development of ‘Low Bono’ Law Practices” (2014) 14 U Md LJ Race, Religion, Gender & Class 1. 79 A point made explicit in WA, r 7(h).

[4.105]

4 Duties to the Client and their Enforcement

129

to provide a reasonable financial return to practitioners”.80 A further concern is that excessive competitive pressure on costs may encourage inappropriate methods of soliciting business (as to which see [20.05]–[20.70]). Performance of pro bono publico work Is pro bono service a professional duty?

[4.105]

As the core of professionalism is public service (see [1.30]), some maintain that the profession should play a part in fostering the availability of legal services to those members of the public who cannot otherwise access justice.81 Pursuing what is essentially an equity argument – that all should be equal before the law – they argue that the profession, because of its virtual monopoly on legal work, is the only body that can service this need, and so has a “special obligation to work to ensure that the legal system protects the rights of the members of society and their traditional freedoms”.82 The need, coupled with the reduction in availability of legal aid, has been exacerbated by the judicial and legislative creation of individual rights that require legal assistance to enforce or realise. Unless lawyers provide assistance, these remain unrealised expectations. So performing pro bono service83 is part and parcel of being a member of a profession,84 it is said. Indeed, pro bono work has a long history in the law, back to Roman times, translating to English law in the middle ages.85 Judges have weighed into the matter. One finds judicial statements that undertaking pro bono work is “a desirable, indeed a necessary part, of every solicitor’s practice”,86 involves acting “according to the highest ideals of the law”87 and “in the best traditions of the legal profession”,88 and is “an important expression of the continuing acceptance of their social responsibilities by members of the legal profession”.89 80 Qld: Solicitors Handbook, para 8.03.1 (now superseded). 81 See generally Rhode, “Pro Bono in Principle and in Practice” (2003) 53 J of Leg Ed 413. 82 Shepherd, “Pro Bono Work: The Wants and Wherefores” (1991) 18 (Nov) Brief 11. 83 “Pro bono publico” is a Latin expression meaning “for the good of the public”. Although commonly abbreviated simply to “pro bono”, such an abbreviation effectively deprives it of its substantive content, namely the “public” element. 84 See, for example, Baldwin, “‘Rethinking Professionalism’ – and then Living It!” (1992) 41 Emory LJ 433 at 436–450; Freedman, “Professionalism in the American Adversary System” (1992) 41 Emory LJ 467 at 470; Brown, “Rethinking the ‘Practice of Law’” (1992) 41 Emory LJ 451 at 452–465; Sossin, “The Public Interest, Professionalism, and Pro Bono Publico” (2008) 46 Osgoode Hall LJ 131 at 137. 85 See Brundage, “Legal Aid for the Poor and the Professionalization of Law in the Middle Ages” (1988) 9 J Leg Hist 169. 86 Goldsmith v Villanueva [2000] NSWSC 1181 at [17] per Adams J. 87 Ruddock v Vadarlis (2001) 110 FCR 491 at [216] per French J. 88 King v King [2012] QCA 81 at [15] per Chesterman JA. 89 WAFI v Minister for Immigration [2002] FMCA 179 at [16] per Raphael FM. Indeed, it has been argued that pro bono service is part of a lawyer’s social contract with society: see, for example, Lubet and Stewart, “A ‘Public Assets’ Theory of Lawyers’ Pro Bono Obligations” (1997) 145 U Penn L Rev 1245.

130

Lawyers’ Professional Responsibility

[4.110]

In light of the above, some hold the view that pro bono work should be mandatory,90 arguing that limited volunteerism as a professional response is unfair, impractical and inefficient. But the profession has, on the whole, strongly opposed any mandatory pro bono, manifested in the absence of any such obligation in the professional rules, in Australia or comparable jurisdictions, nor in Australia even a recognition of any aspirational target to this end: see [4.115]. On a philosophical level, opponents see it as “fundamentally wrong to transform what is in essence charitable conduct emanating from the highest sense of moral duty to an involuntary legal commitment activated by fear of sanctions”.91 Also, beyond infringing personal autonomy, opponents query why lawyers should be singled out to provide free services when other professionals are not.92 Entry barriers to legal practice, they note, are designed to serve the community, and so should not be used to justify additional obligations.93 Taking on legal aid work, remunerated at less than market rates, some view as a pro bono service to the community; similarly, accepting instructions on a speculative fee basis (see [14.110]) may be seen as an “unofficial and informal type of legal aid”.94 Should professional rules prescribe aspirational pro bono targets?

[4.110]

Consistent with the judicial admonitions noted above, the Canadian professional rules state that it is “in keeping with the best traditions of the legal profession to provide services pro bono and to reduce or waive a fee when there is hardship or poverty or the client or prospective client would otherwise be deprived of adequate legal advice or representation”.95 In Australia, most of the debate targets whether, in view of the merits of pro bono work, aspirational pro bono targets should be set by professional rules. Those who advocate an aspirational target cite r 6.1 of the American Bar Association’s Model Rules of Professional Conduct as a precedent. It reads as follows: Every lawyer has a professional responsibility to provide legal service to those unable to pay. A lawyer should aspire to render at least (50) hours of pro bono publico legal services per year. In fulfilling this responsibility, the lawyer should: (a) provide a substantial majority of the (50) hours of legal services without fee or expectation of fee to: (1) persons of limited means or (2) charitable, religious, civic, community, governmental and educational organisations in matters which are designed primarily to address the needs of persons of limited means; and (b) provide any additional services through:

90 See, for example, Torres and Stansky, “In Support of a Mandatory Public Service Obligation” (1980) 29 Emory LJ 997 at 1022–7; Harris, “Let’s Make Lawyers Happy: Advocating Mandatory Pro Bono” (1999) 19 Northern Illinois UL Rev 287; Devlin, “Breach of Contract? The New Economy, Access to Justice and the Ethical Responsibilities of the Legal Profession” (2002) 25 Dal LJ 335. 91 Kutak, “The Rules of Professional Conduct in an Era of Change” (1980) 29 Emory LJ 889 at 900. 92 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 952–953. 93 Cf Sossin, “The Public Interest, Professionalism, and Pro Bono Publico” (2008) 46 Osgoode Hall LJ 131 at 140. 94 Re Robb (1996) 134 FLR 294 at 314. 95 Can CPC, r 4.1-1, cmt [2].

[4.115]

4 Duties to the Client and their Enforcement

131

(1) delivery of legal services at no fee or substantially reduced fee to individuals, groups or organisations seeking to secure or protect civil rights, civil liberties or public rights, or charitable, religious, civic, community, governmental and educational organisations in matters in furtherance of their organisational purposes, where the payment of standard legal fees would significantly deplete the organisation’s economic resources or would be otherwise inappropriate; (2) delivery of legal services at a substantially reduced fee to persons of limited means; or (3) participation in activities for improving the law, the legal system or the legal profession. In addition, a lawyer should voluntarily contribute financial support to organisations that provide legal services to persons of limited means.

Although pressed to impose a mandatory pro bono requirement, the only amendment made to r 6.1 by the American Bar Association’s Commission on Evaluation of the Rules of Professional Conduct (“Ethics 2000 Commission”) was to add the first sentence.96 The rule leaves no doubt that pro bono service is part of being a legal professional,97 though it remains aspirational. Some States do, however, require lawyers to report their annual pro bono services. Rule 6.1 targets pro bono services to the economically disadvantaged in preference to charitable and non-profit organisations,98 and specifies a set hourly requirement. Reflecting the compromise needed to secure agreement to a rule of this kind, its commentary envisages that, in circumstances where it is not feasible for a lawyer to engage in pro bono services, the responsibility may be discharged by providing financial support to organisations that provide free legal services to persons of limited means reasonably equivalent to the value of the hours of service that would otherwise have been provided.99 Some view the latter as unacceptable, for it allows a buy-out of an ethical obligation.

[4.115]

In no Australian jurisdiction do professional rules directly address the issue of pro bono service. In 1998 the New South Wales Law Society’s Access to Justice Taskforce recommended that the Society should consider encouraging members to undertake a minimum of 10 hours per year of pro bono work or give the equivalent level of financial support to centres that provide legal services to those unable to pay for them.100 The same year saw the Victorian Law Institute

96 A new comment was added to r 6.1 (cmt [11]), to the effect that law firms should act reasonably to enable all lawyers in the firm to provide the pro bono legal services called for by r 6.1. 97 See Russell, “The Lawyer as Public Citizen: Meeting the Pro Bono Challenge” (2003) 72 UMKC L Rev 439. 98 This represents a shift from the previous r 6.1, which operated until February 1993. It read: “A lawyer should render public interest service. A lawyer may discharge this responsibility by providing professional services at no fee or a reduced fee to persons of limited means or to public service or charitable groups or organisations, by service in activities for improving the law, the legal system or the legal profession, and by financial support for organisations that provide legal services to persons of limited means.” The new rule is directed at improving access to the law for people who cannot afford legal services but are not poor enough for legal aid: cmt [6]. 99 See Maguire, Shearer and Field, “Reconsidering Pro Bono: A Comparative Analysis of Protocols in Australia, the United States, the United Kingdom and Singapore” (2014) 37 UNSWLJ 1164 at 1176–9. 100 New South Wales Law Society, Access to Justice Final Report (December 1998), recommendation 38 (see (1998) 36 (Oct) LSJ 44 at 45).

132

Lawyers’ Professional Responsibility

[4.120]

resolve that its members should dedicate a minimum of one hour per week to pro bono.101 Two years later the Australian Law Reform Commission recommended that “legal professional associations should urge members to undertake pro bono work each year in terms similar to that stated in the American Bar Association Model Rules for Professional Conduct rule 6.1”.102 More recently the National Pro Bono Resource Centre (now “Australian Pro Bono Centre”) broadcast an aspirational pro bono target of 35 hours per lawyer, based on consultations with the profession and the Centre’s national survey findings, said to reflect what many lawyers already do.103 The reticence to set purely aspirational targets via professional rules suggests that many in the profession harbour serious concerns regarding formalising a pro bono commitment. Any such commitment also sits somewhat uncomfortably with the application of competition law to the profession (see [1.55]–[1.65]) in an attempt to regulate it as a business. Some evidence, to this end, correlates a decline in commitment to pro bono work with the application of competition principles to the market for legal services.104

[4.120]

Those who favour setting an aspirational target contend it should be viewed as a formal statement of principle about the profession’s values, not a regulatory burden, raising it above a fuzzy concept of “doing good” and giving it form. Doing so via a professional rule, it is said, “will demonstrate leadership both within and outside the profession on an issue that is fundamental to law remaining a profession and not simply a business”.105 Others fear that setting a target to benchmark lawyers’ compliance efforts could open the door for a voluntary target to become compulsory.106 A related concern is that target setting is inconsistent with the volunteer spirit that should inform pro bono work. Work that is not truly voluntary, some say, may become routine, and ultimately weaken goodwill towards practical altruism and contribute to souring of lawyer attitudes to pro bono.107 There does, however, appear to be support for involving law students in pro bono

101 See Dale, “The Blessings of Pro Bono” (2004) 78 (Apr) LIJ 4. 102 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), recommendation 37 (see paras 5.12–5.20). 103 The Centre publishes the results of national pro bono surveys, and annual performance reports on the national pro bono aspirational target. The latest such report, issued in October 2015, reveals that the average number of pro bono hours per lawyer across all reporting signatories was 33.2 hours in 2014–2015. See http://probonocentre.org.au/. This figure is, however, likely to be skewed by the over-representation of efforts by lawyers in large law firms (19 of Australia’s 20 largest law firms being signatories to the target), which can support pro bono commitments more so than small firms and are, in any event, more likely to evince such a commitment in an effort to remain on panels to qualify for government legal work. 104 National Pro Bono Task Force, Recommended Action Plan for National Co-ordination and Development of Pro Bono Legal Services (ALRC, 2001), pp 29–30. 105 Corker, “Pro Bono: The Case for Aspirational Targets” (2005) 25 (June) Proctor 8 at 9. 106 Ferguson, “Perspectives on a Great Tradition: Proudly Pro Bono” (2005) 25 (Apr) Proctor 2 at 3. 107 Evans, “Pro Bono Targets New Look” (2004) 78 (Oct) LIJ 38.

[4.125]

4 Duties to the Client and their Enforcement

133

work as part of law school curricula,108 an initiative well established in the United States109 (New York now even mandating 50 hours of pro bono service as a prerequisite for admission to the Bar),110 but hampered in some Australian law schools by resourcing constraints.111 Defining “pro bono”

[4.125]

If any pro bono commitment is to be formalised, the term “pro bono” must be defined. Issues of definition take on greater significance because some large organisations, including governments, select legal service providers by reference to, inter alia, the firms’ pro bono commitment.112 Also, a definition highlights to the public what it is the profession considers as true public service, and may encourage work directed at areas of true public need, as is evident from the terms of the American r 6.1.113 While there is no generally accepted definition of “pro bono work”, the Law Council of Australia, via a 1992 resolution – subsequently translated in similar language into the Legal Profession Uniform Law114 – suggested that it encompass instances where: • a lawyer, without fee or without expectation of a fee or at a reduced fee, advises and/or represents a client in cases where the client has no other access to the courts and the legal system, and/or the client’s case raises a wider issue of public interest; • the lawyer is involved in free community legal education and/or law reform; or 108 The Australian Law Reform Commission has recommended that “law students should be encouraged and provided opportunity to undertake pro bono work as part of their academic or practical legal training requirements”: Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), p 308. 109 See Rosas, “Mandatory Pro Bono Publico for Law Students: The Right Place to Start” (2002) 30 Hofstra L Rev 1069 (noting that the American Bar Association altered its accreditation standards for law schools, requiring them to encourage students to participate in pro bono activities and provide opportunities for them to do so); Storrow and Turner, “Where Equal Justice Begins: Mandatory Pro Bono in American Legal Education” (2003) 72 UMKC L Rev 493. 110 See Walker, “New York State Bar’s New Pro Bono Requirement: Is it Worth the Uproar?” (2014) 38 J Leg Prof 329. 111 See McCrimmon, “Mandating a Culture of Service: Pro Bono in the Law School Curriculum” (2004) 14 Leg Ed Rev 53 (who concludes that a curriculum requirement that fosters a student’s commitment to pro bono work is a justifiable component of the undergraduate law degree, but expresses concern that attempts to implement it as a prerequisite to graduation without adequate resourcing may do more harm than good: at 75-76). 112 For example, all law firms seeking to be on one of the Commonwealth Government panels (pre-qualified service providers) must comply with the Legal Services Multi Use List (LSMUL) conditions regardless of whether they are engaged by government to undertake legal work. One condition requires firms to commit to pro bono legal work by either being a signatory to the National Pro Bono Aspirational Target, or to nominate a target value of Pro Bono Legal Services (as defined in the Target) over a financial year. 113 Cf the observation that the closer the possibility of regulation appears (whether by way of compulsory pro bono or simply mandatory reporting requirements on pro bono activities for lawyers), “the greater the desire becomes on the part of the profession to broaden the definition of pro bono itself”, that is, to encompass within its definition what the profession already does, or can do without too much sacrifice: Sossin, “The Public Interest, Professionalism, and Pro Bono Publico” (2008) 46 Osgoode Hall LJ 131 at 151. 114 LPUL, s 8 (applies in New South Wales and Victoria).

134

Lawyers’ Professional Responsibility

[4.130]

• the lawyer is involved in the giving of free legal advice and/or representation to charitable or community organisations. Pro bono coordination schemes

[4.130]

Although proponents of a pro bono obligation have enjoyed little success in securing its formal recognition, there has been progress in establishing schemes with the aim of coordinating pro bono work, building on a 1992 recommendation by the Senate Standing Committee on Legal and Constitutional Affairs.115 August 2002 saw the establishment of a National Pro Bono Resource Centre (since renamed the Australian Pro Bono Centre) to play a facilitative and coordinating role vis-à-vis pro bono activity, implementing the main recommendation of the National Pro Bono Task Force.116 The centre is, according to its website, “an independent centre of expertise that aims to grow the capacity of the Australian legal profession to provide pro bono legal services that are focused on increasing access to justice for socially disadvantaged and/or marginalised persons, and furthering the public interest”.117 Already existing, and performing a complementary role, was the Public Interest Law Clearing House (PILCH), now under the banner “Justice Connect” formed on 1 July 2013 upon the merger of PILCH in New South Wales and Victoria. It represents an independent, non-profit legal referral service that seeks ssist disadvantaged individuals to obtain legal assistance where they cannot afford a lawyer or obtain legal aid, and develop innovative and sustainable programs that target the unmet legal needs of particular client groups.118 Various professional bodies and law firms have also established their own schemes.

DUTY TO ENCOURAGE SETTLEMENT [4.135]

In contentious work, the lawyer’s core responsibility is to assist in the efficient and effective resolution of disputes consistent with client interests and objectives. Lawyers, to this end, will frequently exercise “moderating influences” in the interests of bringing clients closer to a resolution of their disputes.119 In 1989, the Law Council of Australia, to this end, pronounced a policy that lawyers should recognise that methods of resolving disputes other than by litigation “may be pursued productively before and even during the course of formal court or arbitral

115 See Senate Standing Committee on Legal and Constitutional Affairs, Cost of Legal Services and Litigation in Australia: Legal Aid: “For Richer and for Poorer” (Discussion Paper No 7, April 1992), Ch 6. 116 Recommended Action Plan for National Co-ordination and Development of Pro Bono Legal Services (ALRC, 2001), pp 14–25. 117 See http://probonocentre.org.au/. 118 Justice Connect’s website identifies, to this end, programs that target the homeless, migrants and asylum seekers, older clients with a legal issue associated with ageing, self-represented litigants in Fair Work and bankruptcy matters, and not-for-profit community organisations. See http:// www.justiceconnect.org.au/. 119 Berjaya Group (Aust) Pty Ltd v Ariff [2007] NSWSC 174 at [10] per Barrett J.

[4.135]

4 Duties to the Client and their Enforcement

135

proceedings”.120 Consistent with this policy, the Australian Solicitors’ Conduct Rules, as they apply in most Australian jusridictions, state that:121 A solicitor must inform the client or the instructing solicitor about the alternatives to fully contested adjudication of the case which are reasonably available to the client, unless the solicitor believes on reasonable grounds that the client already has such an understanding of those alternatives as to permit the client to make decisions about the client’s best interests in relation to the litigation.

And in New South Wales, for proceedings commenced on or after 1 October 2011, lawyers are statutorily required to advise clients of reasonably available alternatives (including alternative dispute resolution) in order to resolve or narrow the issues in dispute.122 A lawyer’s knowledge and understanding of processes for alternative dispute resolution will feed into her or his assessment of their utility.123 It thus behoves lawyers to keep abreast of current developments in alternative dispute resolution. For instance, a lawyer who believes that mediation may be in a client’s interests should encourage the client to attend a mediation conference, having informed the client of its purpose and potential benefits,124 and then prepared the client for 120 Law Council of Australia, Policy on Alternative Dispute Resolution (August 1989), para (4). 121 ACT, r 7.2; NSW, r 7.2; Qld, r 7.2; SA, r 7.2; Vic, r 7.2. See also to similar effec: NT, r 10A.3 (see also r 10A.7 which requires lawyers to bear in mind the cost and risk to the client of litigating, and give advice so as to allow clients to properly appreciate the risks and costs of litigation); NZ, r 13.4 (“A lawyer assisting a client with the resolution of a dispute must keep the client advised of alternatives to litigation that are reasonably available (unless the lawyer believes on reasonable grounds that the client already has an understanding of those alternatives) to enable the client to make informed decisions regarding the resolution of the dispute”). There have been calls for a similar rule-based obligation in the United States: see Breger, “Should an Attorney Be Required to Advise a Client of ADR Options?” (2000) 13 Geo J Leg Ethics 427; Fortin, “Reviving the Lawyer’s Role as Servant Leader: The Professional Paradigm and a Lawyer’s Ethical Obligation to Inform Clients About Alternative Dispute Resolution” (2009) 22 Geo J Leg Ethics 589. 122 Civil Procedure Act 2005 (NSW), s 18J(1). 123 It should not be assumed, though, that every form of alternative dispute resolution is necessarily appropriate for every client or for every form of dispute. For example, in the family law environment, although some have championed “collaborative law” – being a dispute resolution method in which lawyers and clients contractually agree by way of a limited retainer to negotiate settlement without resort to the courts, pursuant to which the lawyers in question are disqualified from representing the clients should the dispute remain unresolved – its potential for added time and cost, and for client misunderstanding of the limited nature of the retainer, may render it unsuitable in some instances: see Isaacs, “A New Way to Avoid the Courtroom: The Ethical Implications Surrounding Collaborative Law” (2005) 18 Geo J Leg Ethics 833; Ardagh, “Repositioning the Legal Profession in ADR Services: The Place of Collaborative Law in the New Family Law System in Australia” (2008) 8 QUTLJJ 238; Evers, “The Ethics of Collaborative Practice” (2009) 14 CFL 139; Kha, “Evaluating Collaborative Law in the Australian Context” (2015) 26 ADRJ 178. In 2011 the Law Council of Australia issued a document, entitled Australian Collaborative Practice Guidelines for Lawyers, addressing matters including confidentiality, competence and procedural fairness in the collaborative practice context, expressed in terms applicable to civil litigation generally (available at http://www.lawcouncil.asn.au/). As to the application of collaborative law more generally see Abney, “Moving Collaborative Law Beyond Family Disputes” (2014) 38 J Leg Prof 277. 124 Frost v Wake Smith & Tofields Solicitors [2013] EWCA Civ 772 at [37] per Tomlinson LJ, with whom Ryder LJ concurred.

136

Lawyers’ Professional Responsibility

[4.140]

participation therein.125 In any event, all major courts encourage mediation, and the trend is to confer with the power to mandate mediation.126 The court may take account of a failure to mediate in its costs order, especially in the face of non-compliance with an order to mediate.127 In any case, mediation may allow the parties to deal with commercial realities the court is precluded from addressing or taking into account, avoid publicity of the dispute and, if the parties contemplate continued relations, even serve to improve their relationship.128 The focus of mediated settlements, moreover, is on implementation and recovery, as in reaching a settlement the parties can inquire into each other’s capacity and/or resources to fulfil its terms. Even if mediation does not lead to settlement, it will most likely have sharpened the focus and understanding of the issues in dispute for the purposes of the trial.129

[4.140]

What underscores the foregoing is that lawyers should, where it is in their clients’ best interests, seek to settle a dispute out of court rather than commence or continue legal proceedings.130 This may, in some cases, legitimately involve placing pressure on the client to settle. As explained by Lindenmayer J in Marriage of Anderson:131 Counsel and solicitors representing clients involved in litigation in the courts frequently subject their clients to considerable pressure to compromise that litigation. That is a 125 As to the preparation stage in the family law environment see Cooper and Brandon, “How Lawyers and Family Dispute Resolution Practitioners Can Assist Families Work Towards Cooperative Parenting Arrangements” (2009) 14 CFL 85. 126 See Federal Court of Australia Act 1976 (Cth), s 53A(1); Civil Law (Wrongs) Act 2002 (ACT), s 195(1); Civil Procedure Act 2005 (NSW), s 26(1); NT RSC, r 48.13(1); Civil Proceedings Act 2011 (Qld), ss 43, 44; Supreme Court Act 1935 (SA), s 65(1); Alternative Dispute Resolution Act 2001 (Tas), s 5(1); Tas RSC, r 518(1); Civil Procedure Act 2010 (Vic), s 66; Vic RSC, r 50.07; WA RSC, O 4A Div 2. 127 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [8.46]–[8.48]. 128 See Mott and Vial, “Proposing Mediation: A Sign of Confidence” (1995) 69 LIJ 1240; Powell, “What is Suitable Mediation Fodder?” [1998] NZLJ 431. 129 See Moshinsky, “Conflict Management: The Role of Negotiation and Mediation” (1995) 69 LIJ 1010 at 1011. 130 NT, r 10A.4 (lawyer must always endeavour to achieve an appropriate resolution of the case at the earliest opportunity); Tas, para 9 (“A barrister should not lightly involve his client in litigation but should try to settle by friendly means any dispute in which his client may be concerned, provided he can, by such means, get proper satisfaction for his client”). See also Can CPC, r 3.2-4 (“A lawyer must advise and encourage a client to compromise or settle a dispute whenever it is possible to do so on a reasonable basis”). In Victoria, this obligation has been accorded a statutory foundation, as s 22 of the Civil Procedure Act 2010 (Vic) requires, inter alia, a lawyer to use “reasonable endeavours to resolve a dispute by agreement between the persons in dispute” unless it is not in the interests of justice to do so or the dispute is of a nature that only judicial determination is appropriate. A breach of this duty is amenable to sanction, including by way of costs: Civil Procedure Act 2010 (Vic), s 29(1). 131 Marriage of Anderson (1982) FLC ¶91-251 at 77,386–7. See, for example, Shehata v Hussein [2004] NSWSC 617 at [18]–[22] per Barrett J; Masters v Dobson Mitchell & Allport [2014] TASSC 31 at [79]–[81] per Pearce J (noting that where the plaintiff had unrealistically high expectations of her claim, and had demonstrated over time a particular reluctance to settle for anything less than an inflated amount, and the offer of settlement represented a generous assessment of her prospects of success, it was not improper for the defendant solicitor “to advise her in strong terms and impose considerable pressure on her to settle, provided she was not overborne”: at [81]).

[4.145]

4 Duties to the Client and their Enforcement

137

necessary and proper part of the function of such legal representatives in the proper discharge of their duties to their clients and the court. If every such compromise were to be open to attack by way of appeal by the client who subsequently thought better of it, there would be no end to litigation in this or any other court. If in any particular case a client under no legal disability has been so overborne by his legal representative that such representative has breached the duty which he owes to the client in relation to the litigation then in train … then the client’s proper remedy lies elsewhere than in an appeal against the orders made with his consent in that litigation.

The dividing line between, on the one hand, legitimate pressure or persuasion and, on the other, coercion, depends on the circumstances of the case, particularly the capacity of the client and the strength of the case. The lawyer’s role is to assist the client to make an informed decision and, for that purpose, to assess what is in the client’s best interests. This involves explaining the advantages and drawbacks of the available options, and proffering an opinion as to the preferable course. In so doing, lawyers should not unduly fear liability in negligence should the opinion prove inaccurate.132 Advice to compromise is not negligent merely because a court later considers that a more favourable outcome would, or might, have prevailed had the dispute been litigated to judgment (or a more favourable compromise might have become available later): see [5.225]. And consistent with the foregoing, it is also challenging to find that placing the client under pressure to settle is unprofessional and deserving of disciplinary sanction.133

ENFORCEMENT OF DUTIES – REMEDIES FOR BREACH OF DUTY [4.145]

A legal duty takes its colour from the remedies available to secure its enforcement. It is therefore important to appreciate, before engaging in the detailed treatment of lawyers’ duties to their clients that forms the remaining chapters in this Part, the remedies available to a client who is the victim of a lawyer’s breach of duty. The main focus of the ensuing discussion is on the civil remedies available for breaches of the duties of competence, loyalty and confidence that were noted earlier in this chapter. The chapter concludes by discussing those unusual circumstances in which lawyer incompetence may give a ground to set aside the judgment (most commonly a criminal conviction) rendered in the case. Breaches of statutory duties may entitle clients to redress from lawyers where the statute creates a private cause of action, such as duties imposed by the Australian Consumer Law: see [5.15]. Also discussed elsewhere are the potential professional disciplinary consequences of lawyer breaches of duty (see Chs 23–25), in respect of which the trend to give disciplinary tribunals and courts the power to make compensation orders in favour of complainants who allege that their lawyer’s unprofessional conduct has caused them loss should be noted: see [23.35].

132 See, for example, Webb v MacDonald [2010] NPC 12 (where counsel advised that he would have to advise the Legal Aid Board if the client refused to accept the settlement offer, in which case the client’s legal aid would be withdrawn, and counsel could no longer act; Vos J found that this form of “ultimatum” was not unprofessional, largely because of the weakness of the client’s case and the appropriateness of counsel’s advice to settle). 133 See, for example, New South Wales Bar Association v Bland [2010] NSWADT 34.

138

Lawyers’ Professional Responsibility

[4.150]

Breach of duties of competence

[4.150]

A breach of a lawyer’s duty of competence is usually remedied via a damages award, whether for breach of contract or for negligence. No such liability attaches, however, where the breach of duty comes within what is termed “barristerial immunity” (see [5.260]–[5.345]), or to the extent that the quantum of damages exceeds the statutory cap set by professional standards legislation (see [5.355]).

Remedies in contract and tort compared

[4.155]

The main aim of a damages award is compensatory. For breaches of contract, the damages ordinarily represent the difference between the position that would have been created by full performance of the retainer and the position that has actually been created by the breach. A claim for damages in tort is directed to putting the client in the position that he or she would have been in had the tort not been committed; the question to ask is how much worse off the client is as a result of the lawyer’s breach of duty. Contract and tort as a basis for liability differ also in that, at general law, contributory negligence is a defence in tort but not in contract,134 although statute has rectified this anomaly.135 So where the client’s own negligence has contributed to her or his loss, the court may reduce the quantum damages that would otherwise have been awarded to the client.

A further difference is that in contract damages are available as of right upon proof of a breach; in tort the availability of damages requires proof that the breach of duty caused the client loss. Lacking the causative element, a lawyer’s breach of the duty to be competent attracts only nominal damages in contract.136 This explains why, as a general principle, for limitation purposes, time runs from the date of the breach in contract, but is triggered by the occurrence of damage in tort.137 Need for causation

[4.160]

It has been judicially observed that notwithstanding an “understandable judicial reluctance to absolve a negligent lawyer from liability”, that liability cannot be imposed for a loss that would have been incurred “even if the lawyer had given competent advice”.138 The test of causation, to this end, is not only a “but for” test; the lawyer’s breach of duty must be a legally effective cause of the client’s loss. The law, to this end, approaches the question of causation as an exercise of pragmatic

134 Astley v Austrust Ltd (1999) 197 CLR 1 at [85]–[87] per Gleeson CJ, McHugh, Gummow and Hayne JJ. 135 Civil Law (Wrongs) Act 2002 (ACT), s 41; Law Reform (Miscellaneous Provisions) Act 1965 (NSW), s 9(1); Law Reform (Miscellaneous Provisions) Act 1956 (NT), s 16(1); Law Reform Act 1995 (Qld), s 10; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), s 4(1); Wrongs Act 1954 (Tas), s 4(1); Wrongs Act 1958 (Vic), s 26(1); Law Reform (Contributory Negligence and Tortfeasors Contribution) Act 1947 (WA), s 4(1). 136 See, for example, Gore v Montague Mining Pty Ltd [2001] FCA 1214. 137 Hawkins v Clayton (1988) 164 CLR 539 at 587–588 per Deane J, at 599–600 per Gaudron J. 138 Blackwell v Chick [2015] NZCA 34 at [115] per Harrison J, delivering the reasons of the court.

[4.160]

4 Duties to the Client and their Enforcement

139

common sense.139 The concern here relates to client attempts to cast on lawyers complete liability for loss generated largely by factors independent of the lawyer’s breach. The point is illustrated by the following example given by Selway J in Deloitte Touche Tohmatsu v Cridlands Pty Ltd:140 Assume, for example, that a lawyer is retained to give advice to a prospective borrower as to the terms of a mortgage to be given to secure a loan. The lawyer negligently advises that the mortgage has a particular meaning. In reliance upon that advice the borrower gives the mortgage. If properly advised the borrower would not have given the mortgage. As a result of giving the mortgage the borrower secures the loan. The borrower uses the loan to purchase and operate a business. For reasons that have nothing to do with the legal advice, the business fails. Clearly enough the lawyer may be liable for any losses suffered by the borrower in relation to the mortgage. But … the lawyer would not be liable for the losses on the failed business. True it is that “but for” the negligent advice those losses may not have occurred, but the effective legal cause of those business losses was not the breach of duty by the lawyer.

Attempts to cast liability on lawyers in such cases derived much of their force from the common law’s prescription that the liability of multiple tortfeasors was joint and several. This led plaintiffs to sue only those with “deep pockets” or insurance coverage, even though others may also have caused the loss. But the advent of apportionable liability under statute141 – that ousts joint and several liability, and limits a tortfeasor’s liability to the proportion of the loss he or she has caused, and thus puts an end to claims for contribution between defendants142 – dictates that a client who successfully sues a lawyer in tort will not secure damages for her or his entire loss from the lawyer if others also contributed to the loss.143 A judge must now assess the relative blameworthiness and the relevant causal potency of the negligence of each party.144

139 March v Stramare (E & MH) Pty Ltd (1991) 171 CLR 506 at 515–516 per Mason CJ; Medlin v State Government Insurance Commission (1995) 182 CLR 1 at 6 per Deane, Dawson, Toohey and Gaudron JJ. 140 Deloitte Touche Tohmatsu v Cridlands Pty Ltd (2003) 134 FCR 474 at [181]. 141 Civil Law (Wrongs) Act 2002 (ACT), Ch 7A; Civil Liability Act 2002 (NSW), Pt 4; Proportionate Liability Act 2005 (NT), Pt 2; Civil Liability Act 2003 (Qld), Ch 2, Pt 2; Law Reform (Contributory Negligence and Apportionment of Liability) Act 2001 (SA), Pt 3; Civil Liability Act 2002 (Tas), Pt 9A; Wrongs Act 1958 (Vic), Pt IVAA; Civil Liability Act 2002 (WA), Pt 1F. Equivalent provision is made in respect of claims for economic loss or damage to property in an action for damages for a contravention of s 18 the Australian Consumer Law (the proscription against misleading and deceptive conduct): Competition and Consumer Act 2010 (Cth), Pt VIA. See generally Walmsley, Abadee and Zipser, Professional Liability in Australia (3rd ed, Lawbook Co., 2016), pp 170–183. 142 See Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613 at [10]–[16] per French CJ, Hayne and Kiefel JJ; Warnick, “Proportionate Liability in the High Court” (2013) 87 ALJ 864. 143 See, for example, Chandra v Perpetual Trustees Victoria Ltd (2007) 13 BPR 24,675; Hunt & Hunt Lawyers v Mitchell Morgan Nominees Pty Ltd (2013) 247 CLR 613. 144 Vella v Permanent Mortgages Pty Ltd (2008) 13 BPR 25,343 at [591] per Young CJ in Eq; Spiteri v Rocisano (2009) 22 VR 596 at [105] per Kaye J. See, for example, Kayteal Pty Ltd v Dignan [2011] NSWSC 197 at [74], [75] per Brereton J (who found that the solicitors were responsible for

140

Lawyers’ Professional Responsibility

[4.165]

Impact of civil liability legislation on causation

[4.165]

The issue of causation must now be seen from the perspective of statutory civil liability reforms. Civil liability legislation, other than in the Northern Territory, states that a determination that negligence caused particular harm requires proof of two things.145 The first – that the lawyer’s negligence was a necessary condition of the occurrence of the harm (“factual causation”) has been construed as a “but for” test, namely “but for the negligent act or omission, would the harm have occurred?”.146 The second – that it is appropriate for the scope of negligence liability to extend to the harm so caused (scope of liability) – is an “entirely normative” determination rather than a factual one.147 The New South Wales, Queensland and Tasmanian statutes add that, where determining what a client would have done had the lawyer not been negligent is relevant to the issue of factual causation, the matter must be determined subjectively in the light of all relevant circumstances, except that any statement made by the client after suffering the harm about what he or she would have done is inadmissible.148 Though expressed differently, the equivalent Victorian and Western Australian provisions appear directed to a similar objective.149 An alternative approach here is found in the Australian Capital Territory and South Australian legislation. It states that if a person has been negligently exposed to a similar risk of harm by a number of different people (the defendants), and it is not possible to assign responsibility for causing the harm to any one or more of them, the court may continue to apply the established common law principle under which responsibility may be assigned to the defendants causing the harm. However, the court must consider the position of each defendant individually and state the reasons for bringing the defendant within the scope of liability.150 Challenges in assessing causation

[4.170]

Whether at general law, or under civil liability legislation, courts continue to be challenged by issues of causation. A challenge is to assess how the client would have behaved independently of the breach of duty. If the evidence shows that the client would have acted in the same fashion independent of the breach, the breach cannot be said to have caused the loss. The courts’ approach here one-eighth of the loss suffered by the lender for which they acted, remarking that, compared to the valuer and the borrower, the solicitors’ responsibility was “relatively slight”, albeit “exacerbated by the circumstance that a fundamental purpose of their engagement was to ensure that appropriate protections were in place”).

145 Civil Law (Wrongs) Act 2002 (ACT), s 45(1); Civil Liability Act 2002 (NSW), s 5D(1); Civil Liability Act 2003 (Qld), s 11(1); Civil Liability Act 1936 (SA), s 34(1); Civil Liability Act 2002 (Tas), s 13(1); Wrongs Act 1958 (Vic), s 51(1); Civil Liability Act 2002 (WA), s 5C(1). See Strong v Woolworths Ltd (2012) 248 CLR 182 at [17]-[30] per French CJ, Gummow, Crennan and Bell JJ; Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at [45]–[53] (FC); Wallace v Kam (2013) 250 CLR 375 at [14]–[17] (FC). 146 Adeels Palace Pty Ltd v Moubarak (2009) 239 CLR 420 at [45] (FC). 147 Wallace v Kam (2013) 250 CLR 375 at [14] (FC). 148 Civil Liability Act 2002 (NSW), s 5D(3); Civil Liability Act 2003 (Qld), s 11(3); Civil Liability Act 2002 (Tas), s 13(3). 149 Wrongs Act 1958 (Vic), s 51(3); Civil Liability Act 2002 (WA), s 5C(3). 150 Civil Law (Wrongs) Act 2002 (ACT), s 45(2); Civil Liability Act 1936 (SA), s 34(2).

[4.175]

4 Duties to the Client and their Enforcement

141

depends on its impressions of the client, the factors that motivate the client, and the client’s expertise and experience. In Berry v Kanakis,151 for example, the solicitor, who acted for a purchaser of property, failed to advise his client to secure a building inspection. The New South Wales Court of Appeal, though finding that this omission amounted to negligence, did not accept that the client, who was experienced in property dealings and keen to effect the transaction, would have acted differently had the solicitor given that advice.152 Likewise, in Leda Pty Ltd v Weerden (No 2)153 a tax adviser’s negligent failure to qualify the terms of advice to a client was held not to have been causative of the client’s loss because, inter alia, the client was a sophisticated operator aware of the risks of the transaction the subject of the advice. It has been judicially observed in this context that:154 [c]ontemporaneous statements, and the relevant surrounding circumstances, provide a sounder basis for evaluating what the particular plaintiff properly advised would have done, than self-serving statements made, even with the most honest of intentions, years after the event in the context of litigation that depends on them.

[4.175]

Issues of causation can also impact on the quantum of damages recoverable for a breach of duty. This arises most commonly in circumstances where the court is asked to place a monetary value on a lost chance. Deane, Gaudron and McHugh JJ in Malec v J C Hutton Pty Ltd explained the court’s task in this respect as follows:155 [I]n the case of an event which it is alleged would or would not have occurred, or might or might not yet occur, the approach of the court is different. The future may be predicted and the hypothetical may be conjectured … Where proof is necessarily unattainable, it would be unfair to treat as certain a prediction which has 51 per cent probability of occurring. Thus, the court assesses the degree of probability that an event would have occurred, or might occur, and adjusts its award of damages to reflect the degree of probability.

As such, it is the trial judge’s responsibility to assess the probability of the client having succeeded in the chance lost because of the lawyer’s negligence and to discount the damages awarded accordingly. It should be noted, in this regard, that a loss has value even if a court assesses the client’s prospects of success at less than 50% because the client may have, through the lawyer’s negligence, lost the prospect of a favourable settlement.156 A typical example relates to the negligent failure to institute an action on the client’s behalf within the limitation period; here the court must assess the likelihood that the client would have succeeded, or at least secured a settlement, 151 Berry v Kanakis (2002) NSW ConvR ¶56-022. 152 Berry v Kanakis (2002) NSW ConvR ¶56-022 at [43] per Giles JA, with whom Ipp AJA and Meagher JA concurred. 153 Leda Pty Ltd v Weerden (No 2) (2006) 62 ATR 100 at [70]–[85] per Gzell J (affd Leda Pty Ltd v Weerden (2007) 63 ACSR 636). 154 Lucantonio v Kleinert [2011] NSWSC 753 at [128] per Brereton J. 155 Malec v J C Hutton Pty Ltd (1990) 169 CLR 638 at 642–643. 156 Commonwealth v Amann Aviation Pty Ltd (1991) 174 CLR 64 at 119 per Deane J. See, for example, Leitch v Reynolds (2005) Aust Torts Reports ¶81-806 (where the court upheld the trial judge’s discounting of the value of a lost cause of action against a solicitor by 55%).

142

Lawyers’ Professional Responsibility

[4.180]

had the matter been brought within time. For instance, in Green v Berry157 the court determined that the client’s chances of success in a personal injuries claim against his employer, which had become statute barred due to his solicitor’s negligence, were 50%. As a result, the client was awarded 50% of the damages he would have recovered had the hypothetical action against his employer succeeded, less 50% of the workers’ compensation and social security payments he had already received. Breach of the duty of loyalty Breadth of remedial scope for fiduciary breaches

[4.180]

The ability to characterise a lawyer’s breach of duty as a fiduciary breach attracts various remedial advantages. Fiduciary breaches may be remedied by means of restitutionary-type relief,158 such as an account of profits or even a constructive trust, where the lawyer has generated a profit or secured property in breach of fiduciary duty. These remedies are not generally available for pure breaches of contract or negligence at common law. As an alternative, loss stemming from a fiduciary breach may open the door to equitable compensation159 which is not necessarily restricted by common law notions of causation, foreseeability or remoteness: see [4.185]. Compensation for loss as a result of a fiduciary default relating to trust moneys may also be secured by a claim on the fidelity fund: see [9.125]. The court may rescind a transaction entered into in breach of fiduciary duty,160 and a lawyer may be restrained from acting in breach of fiduciary duty by way of an injunction. Also, other than in the Australian Capital Territory161 and Western Australia,162 the time periods set by limitations legislation do not, as a general rule, apply to fiduciary breaches.163 Causation as a prerequisite to equitable compensation

[4.185]

Perhaps the main challenge for the courts in this context is the extent to which causation should form a prerequisite to relief via equitable compensation. Not entirely dissimilar to the challenges the courts have faced in applying causation at common law, the main difficulty focuses on how a remedy should take account of factors other than a fiduciary breach have caused the client’s loss. What makes this inquiry within an equitable framework more challenging is that it is made against the backdrop of various judicial statements that equitable

157 Green v Berry [2001] 1 Qd R 605. 158 Costa Rica Railway Co Ltd v Forwood [1901] 1 Ch 746 at 761 per Vaughan Williams LJ; Re Taylor [1950] VLR 476 at 479 per Herring CJ; Boardman v Phipps [1967] 2 AC 46 at 105 per Lord Hodson; Green & Clara v Bestobell Industries Pty Ltd [1982] WAR 1 at 5 per Burt CJ. 159 See, for example, Stewart v Layton (1992) 111 ALR 687, discussed at [7.130]. 160 See, for example, Maguire v Makaronis (1997) 188 CLR 449, discussed at [6.65]. 161 The Australian Capital Territory legislation, which prescribes a six-year limitation period for “an action on any cause of action” (Limitation Act 1985 (ACT), s 11(1)), which includes an action for breach of fiduciary duty (note the broad definition of the expression “cause of action” in s 8(1)). 162 In Western Australia an equitable action cannot be commenced after the later of: (a) six years after the cause of action accrued; or (b) three years since time started running, on equitable principles, for the commencement of the action: Limitation Act 2005 (WA), s 27(1). 163 See Dal Pont, Law of Limitation (Lexis Nexis Butterworths, 2016), [3.29].

[4.185]

4 Duties to the Client and their Enforcement

143

compensation, unlike common law damages, “is not limited or influenced by common law principles governing remoteness of damage, foreseeability or causation”.164 Causation-wise some have viewed this as meaning that once a fiduciary breach is shown, the fact that the client may have acted in the same fashion had the breach not occurred is no defence to a claim for equitable compensation (known as the Brickenden principle, after the Privy Council decision of that name).165 If correct, there is clearly a difference between equitable and common law “causation”. However, modern Australian judicial statements indicate that the Brickenden principle should not be taken at face value.166 The courts do not assume that lawyers should necessarily be liable to compensate a client for loss in the course of a retainer punctuated by a fiduciary breach without first considering what other factors influenced the client’s decision to act as he or she did. To this end, the New South Wales Court of Appeal has denied Brickenden is authority for “the general proposition that, in no case involving breach of fiduciary duty, may the court consider what would have happened if the duty had been performed”.167 The High Court subsequently remarked that “there is no equitable by-pass of the need to establish causation”.168 The modern judicial approach may be illustrated by the English Court of Appeal’s ruling in Swindle v Harrison.169 There a lawyer provided a client with a bridging loan of £75,000 for the purchase of a hotel, the loan being secured by way of first charge on the hotel. The lawyer breached his fiduciary duty in not disclosing that his firm was making a hidden profit on the loan: see [6.105], [6.110]. The main creditor, who had lent £80,000 on the security of the client’s house, took possession of the house when she defaulted on the loan. The client defended the lawyer’s claim for possession of the hotel by way of counterclaim for breach of fiduciary duty, seeking to recover damages as equitable compensation for the value of the equity she formerly had in her house. The client argued that, as the lawyer had committed a fiduciary breach, Brickenden dictated that the lawyer was liable to restore her to the position she was in when the breach of duty occurred, it being irrelevant whether or not she would have completed the purchase in any event. The English Court of Appeal rejected this argument, Evans LJ reasoning that:170 The failure to disclose cannot be said to have led to the making of the loan, even on a “but for” basis, precisely because the disclosure of the true facts would not have affected her decision to accept it. Since she would have accepted the loan and completed the purchase, even if full disclosure had been made to her, she would have lost the value of the equity in her home in any event. She cannot recover damages or compensation for that loss 164 Hill v Rose [1990] VR 129 at 144 per Tadgell J. 165 Brickenden v London Loan & Savings Co [1934] 3 DLR 465 at 469 (PC). 166 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [34.25]–[34.45]. 167 Beach Petroleum NL v Abbott Tout Russell Kennedy (1999) 48 NSWLR 1 at [444] (CA). 168 Youyang Pty Ltd v Minter Ellison Morris Fletcher (2003) 212 CLR 484 at [44] (FC). 169 Swindle v Harrison [1997] 4 All ER 705. 170 Swindle v Harrison [1997] 4 All ER 705 at 718 (emphasis in original).

144

Lawyers’ Professional Responsibility

[4.190]

except on proof either that the plaintiffs acted fraudulently or in a manner equivalent to fraud or that she would not have completed the purchase if full disclosure had been made ie if the breach of duty had not occurred.

Mummery LJ similarly observed that the loss the client suffered did not flow from the fiduciary breach but “from her own decision to take the risk involved in mortgaging her own home to finance her son’s restaurant business at the hotel”.171 This made it “contrary to common sense and fairness” to cast on the lawyer the whole risk of the transaction on the basis that he had failed to make full disclosure in a related loan transaction, when disclosure would not have affected the client’s decision to proceed with the purchase.172 The courts have been even more circumspect regarding attempts to throw liability on lawyers for their clients’ bad business judgment where the fiduciary breach has arisen out of a client–client (or duty–duty) conflict.173 Breach of duties of confidence Remedies for breach of confidence

[4.190]

The remedies available for a breach of the duty of confidentiality depend upon the source of the duty.174 Where sourced in contract or in equity, a threatened breach of confidence may be prevented by an injunction.175 For information that has already been illegitimately disclosed, if the duty is contractual, the cause of action is for breach of contract and the relevant remedy is damages. Suing in equity may generate liability for equitable compensation or an account of profits.176 Orders for delivery up or destruction of materials containing the confidential information may also be made, whether the action is in contract or in equity.177 Remedies for undue influence

[4.195]

Where the presumption of undue influence arises in the context of a lawyer–client transaction, and the lawyer is unable to rebut it, the client ordinarily may elect to rescind the transaction. As an equitable cause of action, there remains in the courts flexibility in moulding relief, including the award of compensation or the giving of allowances.178

Incompetence as a basis of setting aside a conviction or judgment

[4.200]

A lawyer’s lack of competence can generate implications beyond civil liability to the client. In some, albeit limited, circumstances it can form the

171 Swindle v Harrison [1997] 4 All ER 705 at 735. 172 Swindle v Harrison [1997] 4 All ER 705 at 735. 173 See, for example, Everist v McEvedy [1996] 3 NZLR 348; White v Illawarra Mutual Building Society Ltd [2002] NSWCA 164; Mantonella Pty Ltd v Thompson (2009) 255 ALR 367 (CA(Qld)). Conflicts of this kind are discussed in Ch 7. 174 See generally Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), Ch 16. 175 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 835 per Cozens-Hardy MR, at 840 per Fletcher Moulton LJ; D v Hall [1984] 1 NZLR 727 at 736 per Hillyer J; Stewart v Canadian Broadcasting Association (1997) 150 DLR (4th) 24 at 152–153 per Macdonald J. 176 See, for example, McMaster v Byrne [1952] 3 DLR 337 (PC) (liability to account). 177 Marriage of Griffis (1991) 14 Fam LR 782 at 786 per Mullane J. 178 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [7.275]–[7.295].

[4.205]

4 Duties to the Client and their Enforcement

145

foundation for setting aside a conviction or judgment on the ground that it has prompted a miscarriage of justice. Although potentially available outside the criminal law environment,179 the jurisdiction is most commonly sought to set aside a conviction.180 Here it is not limited to instances of incompetence because its focus is not on the lawyer’s incompetence per se but on whether or not there has been a miscarriage of justice as a result of a lawyer’s conduct.181 “It is the fairness of the process that is in question; not the wisdom of counsel”.182 References in the case law to “flagrant incompetence”, therefore, must not be viewed as setting the threshold for judicial intervention; proof of incompetence, though it may assist in substantiating a miscarriage of justice,183 is not essential to it and may not by itself necessarily justify a finding of a miscarriage of justice.

[4.205]

The prevailing judicial attitude is one of caution, starting from the presumption that a client is bound by her or his lawyer’s conduct of the trial. A concern is that to expose a trial lawyer’s multiple and often instinctive decisions in the course of a trial to routine judicial scrutiny would seriously hamper the lawyer’s conduct of the trial.184 Appellate judges, moreover, are rarely as well positioned as the trial lawyer to assess those considerations that influenced her or his decisions in conducting the trial, especially as they ordinarily do not know what was in the brief.185 Courts also fear that undue willingness to scrutinise trial lawyer decisions “would breed endless and pointless litigation”, 186 and deflect the focus from the facts to the relative competencies of counsel.187

179 Family law matters involving the interests of children have witnessed the greatest scope outside criminal law to apply the jurisdiction (pursuant to s 79A of the Family Law Act 1975 (Cth), which envisages that the court may vary an order, or make another order, under s 79 where it is satisfied that there has been a miscarriage of justice): see, for example, Re OP & TP (2002) 172 FLR 47. See further Dal Pont, Solicitors Manual (LexisNexis Butterworths), [12,160]. 180 The statutory basis for the jurisdiction is found in the following provisions: Criminal Appeal Act 1912 (NSW), s 6(1); Criminal Code (NT), s 411; Criminal Code (Qld), s 668E; Criminal Law Consolidation Act 1935 (SA), s 353(1); Criminal Code (Tas), s 402; Crimes Act 1958 (Vic), s 568; Criminal Code (WA), s 689(1). There is no statutory provision applying to the Federal Court in respect of appeals from Territory Supreme Courts, but case law indicates that s 24(1)(b) of the Federal Court of Australia Act 1976 (Cth) confers upon that court the same power: see Chamberlain v R (No 2) (1984) 153 CLR 521. 181 TKWJ v R (2002) 212 CLR 124 at [31] per Gaudron J, at [97] per McHugh J; Ali v R (2005) 79 ALJR 662 at [18] per Hayne J; Nudd v R (2006) 80 ALJR 614 at [6] per Gleeson CJ; R v Sungsuwan [2006] 1 NZLR 730 at [7] per Elias CJ, at [64]–[70] per Gault, Keith and Blanchard JJ, at [110]–[116] per Tipping J. 182 Nudd v R (2006) 80 ALJR 614 at [9] per Gleeson CJ. 183 Martin v The Queen (2013) 238 A Crim R 449 at [104] per Redlich JA, with whom Maxwell P and Neave JA concurred. 184 TKWJ v R (2002) 212 CLR 124 at [16] per Gleeson CJ, at [24] per Gaudron J. 185 The position may be different where the court is privy to the reasons why counsel acted as he or she did: see, for example, R v ND [2004] 2 Qd R 307. It has also been suggested that the matter could be remedied, in fairness to trial counsel, by making the allegation known to counsel so that he or she be given the opportunity to respond and that any such response be communicated to the court: R v Brown (2002) 5 VR 463 at [34] per Chernov JA. 186 Ella v R (1991) 103 FLR 8 at 10 per Asche CJ. 187 Nudd v R (2006) 80 ALJR 614 at [11] per Gleeson CJ.

146

Lawyers’ Professional Responsibility

[4.205]

The foregoing explains the judicial observation that “cases in which a conviction will be set aside on the basis of apparent incompetence of counsel will be few and far between”.188 Consistent with such a view, the case law reveals that • merely because in hindsight it may have been prudent for the lawyer to have acted differently; • valid criticisms can be made of the lawyer’s conduct of the trial;189 or • the lawyer made decisions without or contrary to instructions;190 are insufficient by themselves to substantiate a miscarriage of justice. In particular, where an appellate court discerns a rational tactical or other reason for the decision sought to be impugned, it will not intervene even if that decision worked to the accused’s disadvantage.191 In TKWJ v R,192 for example, defence counsel had planned to call evidence of good character, but upon discovering that the prosecution intended to call evidence to counter this, chose not to do so. The High Court held that the failure to call the evidence led to no miscarriage of justice because the decision was, in Gleeson CJ’s words, “understandable”, “not self-evidently unreasonable, or inexplicable” and “the kind of tactical decision routinely made by trial counsel, by which their clients are bound”.193 A similar outcome has ensued where the trial lawyer’s decision not to crossexamine on an aspect of the prosecution’s case194 or otherwise challenge the admissibility195 or authenticity196 of evidence, or advice to the client to give197 or

188 Ahmu v R [2014] NSWCCA 312 at [31] per Basten JA. 189 Ali v The Queen (2005) 79 ALJR 662 at [38] per Hayne J, at [98], [104] per Callinan and Heydon JJ. 190 See, for example, R v Vaughan [2011] QCA 224 (where Muir JA, with whom Margaret Wilson AJA and Philippides J concurred, remarked that “[i]f defence counsel did ignore the appellant’s instructions, the probabilities are that the appellant was well served by his counsel’s disobedience”, as “[i]t was apparent from the appellant’s conduct in relation to his appeal that, not only does he lack insight into his offending conduct, but that he has little, if any, ability to identify those arguments and considerations which might assist his cause”: at [31]). Cf R v McLoughlin [1985] 1 NZLR 106; R v Sheppard [2005] QCA 235. In any case, the court is not prepared to infer, in the absence of the clearest evidence, that counsel ignored instructions or acted contrary to them: R v Perrier (dec) [2008] VSCA 97 at [49]. In the absence of clear instructions to this end, the court may reasonably assume that the client acquiesced in the lawyer’s forensic strategy: see, for example, Colley v State of Western Australia [2015] WASCA 79. 191 R v Brown (2002) 5 VR 463 at [43] per Chernov JA; R v NE [2004] 2 Qd R 328 at [2] per McMurdo P. 192 TKWJ v R (2002) 212 CLR 124. 193 TKWJ v R (2002) 212 CLR 124 at [8]. Cf R v DBB [2012] QCA 96 (where counsel’s failure to adduce evidence of the accused’s good character was held to have amounted to a miscarriage of justice: at [51]–[58] per Muir JA). 194 See, for example, R v Brown (2002) 5 VR 463; BJH v State of Western Australia [2011] WASCA 4; Kizildag v R [2013] NSWCCA 125. 195 See, for example, Ali v R (2005) 79 ALJR 662; Savic v R [2008] NSWCCA 312. 196 See, for example, Gillies v Director of Public Prosecutions (NSW) [2008] NSWCCA 339 at [38]–[51] per the court. 197 See, for example, R v Paddon [1999] 2 Qd R 387.

[4.210]

4 Duties to the Client and their Enforcement

147

not give evidence,198 or not to vigorously pursue an alternative hypothesis in cross-examination or in addresses to the court,199 is objectively explainable as a tactical decision. That the trial lawyer is experienced,200 or that the Crown case was very strong,201 or that the trial judge has taken steps to correct errors that may tend to deny the accused a fair trial,202 may further disincline a court from interfering with the verdict.

[4.210]

The foregoing does not deny that a deliberate tactical choice by defence counsel can amount to a mistake sufficient to amount to a miscarriage of justice.203 Convictions have also been set aside where the trial lawyer’s ineptitude led to the suppression or inadmissibility of evidence of crucial importance,204 to the admission of inadmissible and prejudicial evidence,205 to the drawing of unforeseen and prejudicial inferences from a failure to cross-examine or address the jury,206 or to depriving the client of a significant chance of an acquittal.207 The potential for conflict between the interests of multiple accused represented by the same lawyer (see [7.100]) can also potentially amount to a miscarriage of justice. In R v Hunter & Sara,208 for example, counsel appeared for two accused with different interests, failing to advise them to secure separate representation or ensuring that they received independent legal advice on the matter. This, coupled with the poor conduct of the defence, was held to have generated a miscarriage of justice.209 But it should not be assumed that, as a matter of course, multiple representation of itself necessarily provides a ground for substantiating a miscarriage of justice.210

198 See, for example, R v NE [2004] 2 Qd R 328; R v Chahine [2006] NSWCCA 99 at [49], [50] per Rothman J; Rolfe v The Queen (2007) 173 A Crim R 168 at [137] per Giles JA; R v Skondin [2015] QCA 138. 199 See, for example, R v Bakhuis (2012) 112 SASR 536; R v Sherratt [2013] QCA 78. 200 See, for example, R v Brown (2002) 5 VR 463 at [43] per Chernov JA; R v Calway [2005] VSCA 266 at [103] per Hollingworth JA. 201 See, for example, Ali v R (2005) 79 ALJR 662; Nudd v R (2006) 80 ALJR 614 at [20] per Gleeson CJ, at [109] per Kirby J, at [159] per Callinan and Heydon JJ (describing the Crown case as “effectively unanswerable”); Bass (a Pseudonym) v R [2014] VSCA 350 (trial counsel’s serious errors in cross-examination and disclosure to the jury nonetheless did not substantiate a miscarriage of justice in view of the court’s finding that the evidence presented against the accused was “absolutely overwhelming”: at [130] per the court). 202 Nudd v R (2006) 80 ALJR 614 at [162] per Callinan and Heydon JJ. 203 See, for example, Seymour v The Queen (2006) 162 A Crim R 576 (where the deliberate introduction of the appellant’s entire criminal record into evidence by his defence counsel was held to generate a miscarriage of justice). 204 See, for example, Re Knowles [1984] VR 751; Taylor v The Queen (2009) 78 NSWLR 198; R v Bazan [2010] SASCFC 50; R v Hurst [2011] SASCFC 152; De Silva v The Queen (2013) 236 A Crim R 214. 205 See, for example, R v Carter [2003] 2 Qd R 402; Steve v The Queen (2008) 189 A Crim R 68. 206 See, for example, R v Birks (1990) 19 NSWLR 677; R v Punnett [2006] 1 NZLR 133 at 142–144 per Laurenson J; KLM v Western Australia (2009) 194 A Crim R 503. 207 See, for example, R v Sheppard [2005] QCA 235; R v Omid [2012] QCA 4; R v DBB [2012] QCA 96. 208 R v Hunter & Sara (1999) 105 A Crim R 223. 209 R v Hunter & Sara (1999) 105 A Crim R 223 at [55]–[70] per Wood CJ at CL. 210 See, for example, Clark, Greatbatch, White & White v R (1996) 91 A Crim R 46.

Chapter 5

Lawyers’ Duty to Clients in Tort [5.05] INTRODUCTION ................................................................................................................ 150 [5.05] Relationship between contractual and tortious liability ......................................... 150 [5.10] Liability in tort ................................................................................................................ 150 [5.15] Liability under statute for misleading or deceptive conduct ................................ 151 [5.20] Identifying the client’s interests .................................................................................. 153 [5.25] SCOPE OF THE DUTY OF CARE ................................................................................... 155 [5.25] Modifying the scope of the duty via the retainer .................................................... 155 [5.30] Can liability in tort arise outside the scope of the retainer? ................................. 156 [5.50] Impact of the circumstances in which advice is given or sought ......................... 161 [5.65] Impact of the nature of the transaction or dealing .................................................. 163 [5.80] Disclosure of information relevant to the representation ....................................... 165 [5.100] Can the duty of care include giving financial advice? ......................................... 169 [5.145] Can the giving of other non-legal advice come within the retainer? ................ 175 [5.165] STANDARD OF CARE .................................................................................................... 178 [5.165] Relevant standard ........................................................................................................ 178 [5.190] Raising the standard of care? ..................................................................................... 182 [5.195] Lowering the standard of care? ................................................................................. 183 [5.220] Relevance of expert evidence and professional rules ............................................ 187 [5.225] Standard of care in settlement advice ...................................................................... 188 [5.235] Failure to meet with a client ...................................................................................... 190 [5.245] Danger of supplying unqualified advice ................................................................. 192 [5.255] Standard of care in a specialised area – tax advice ............................................... 193 [5.260] IMMUNITY FOR IN-COURT ACTS OR OMISSIONS ............................................... 196 [5.260] Background ................................................................................................................... 196 [5.265] Justifications for the immunity .................................................................................. 197 [5.310] Justifications for removing the immunity ............................................................... 205 [5.315] Scope of the immunity ................................................................................................ 206 [5.345] Ouster of immunity by statute .................................................................................. 213 [5.350] LIMITING LIABILITY ...................................................................................................... 213 [5.350] Professional indemnity insurance ............................................................................. 213 [5.355] Professional standards regime ................................................................................... 214

150

Lawyers’ Professional Responsibility

[5.05]

INTRODUCTION Relationship between contractual and tortious liability

[5.05] Historically a lawyer’s duties of skill and care were seen to derive entirely from the contract of retainer, ordinarily via an implied term.1 But with the explosion of the belief that a cause of action in negligence was unavailable for pure economic loss, a lawyer who is negligent is now concurrently liable in tort and contract, and may also be liable in tort independently of an action in contract. It has been judicially noted, to this end, that the trend of modern authority endorses a tortious duty of care that “prima facie transcends that contained in the express or implied terms of the [retainer]”.2 Yet the law of tort has not gone so far as to supersede the law of contract in this context. The High Court in Astley v Austrust Ltd3 rejected the view4 that a tortious duty to take reasonable care ousts the need to imply a term to that effect into the retainer. Both causes of action remain; the mere fact that a contractual duty to take reasonable care is implied in law does not, according to the court, restrict reliance to solely a tortious cause of action.5 Their Honours were influenced by the differences in the elements, remedies and procedure relating to each cause of action, and by the fact that implied terms in contract are part of the consideration a promisor gives for a promisee’s agreement to pay for the promisor’s services.6 The tort duty arises aside from consideration, and not necessarily pursuant to the will of the parties. Liability in tort

[5.10] Today lawyers who fail to attain the standard of competence expected by law are almost invariably sued (and liable) in tort. This is because a lawyer is assumed to owe a client a duty of care in tort. The retainer, nonetheless, plays a crucial role in this regard, as it not only substantiates the existence of the relationship that has given rise to that duty (see [3.20]), in the vast majority of cases its terms chart the scope of the lawyer’s tortious duty of care. The general rule is that a lawyer is not liable in tort to a client in respect of events outside the scope of the retainer, although this cannot be stated categorically: see [5.30]–[5.45]. It follows that the first inquiry arising out of a claim in tort (or, for that matter, in contract) by a client against a lawyer is the scope of the lawyer’s duty of care, the 1 Groom v Crocker [1939] 1 KB 194 at 205 per Greene MR, at 222 per Scott LJ. 2 Hawkins v Clayton (1988) 164 CLR 539 at 574 per Deane J. See also Voli v Inglewood Shire Council (1963) 110 CLR 74 at 84 per Windeyer J; Johnson v Perez (1988) 166 CLR 351 at 363 per Wilson, Toohey and Gaudron JJ. 3 Astley v Austrust Ltd (1999) 197 CLR 1 (see Freilich, “Contributory Negligence and Breach of Contract: The Implications of Astley v Austrust Ltd” (2000) 29 UWALR 18). 4 Which had been proffered by Deane J in Hawkins v Clayton (1988) 164 CLR 539 at 583–585. 5 Astley v Austrust Ltd (1999) 197 CLR 1 at [45]–[47] per Gleeson CJ, McHugh, Gummow and Hayne JJ, following Henderson v Merrett Syndicates Ltd [1995] 2 AC 145 at 193–194 per Lord Goff. Their Honours ruled that the liability of a solicitor for damages for breach of the retainer to exercise reasonable care in advising a client was not reduced by the client’s contributory negligence, although this aspect of the ruling is now reversed by statute: see [4.155]. 6 Astley v Austrust Ltd (1999) 197 CLR 1 at [47], [48] per Gleeson CJ, McHugh, Gummow and Hayne JJ.

[5.15]

5 Lawyers’ Duty to Clients in Tort

151

discussion of which forms the first part of this chapter: see [5.50]–[5.160]. It is then necessary to ascertain whether or not, in acting as he or she did, the lawyer met the requisite standard of care, the treatment of which follows: see [5.165]–[5.255]. The foregoing is qualified by barristerial immunity,7 which protects lawyers from liability for negligence relating to work sufficiently connected with “in court” work in conducting litigation: see [5.260]–[5.345]. The chapter concludes with mention of professional indemnity insurance and the professional standards regime directed at prescribing caps on lawyer liability: see [5.350]–[5.355]. Liability under statute for misleading or deceptive conduct

[5.15] Lawyers may be liable for breaching the statutory proscription against misleading or deceptive conduct,8 although this has in the past been seen as more likely in the context of liability to third parties, not just because causes of action in contract or tort may not accrue in relation to non-clients, but also as the proscription is premised on the impugned conduct being “in trade or commerce”: see [21.135]. There were various judicial remarks to the effect that a lawyer–client relationship could not, in the usual case, be described as “in trade or commerce”.9 So making statements during the course of litigation,10 and giving professional advice or opinion,11 would unlikely be “in trade or commerce”. Yet under the Australian Consumer Law, replicating the position formerly only in New South Wales and Western Australia,12 the phrase “trade or commerce” is defined to include “any business or professional activity”,13 lawyers’ exposure to statutory liability vis-à-vis their clients is arguably not so constrained. Rather, that a person engages in professional activity as a lawyer is by itself no reason why the statutory proscription should not apply. In Kowalczuk v Accom Finance Pty Ltd14 the 7 In referring to a barrister’s “immunity”, the description is just another name for the conclusion that, as a matter of legal policy, barristers owe no actionable duty of care in the circumstances where the immunity operates. It does not matter, to this end, so far as the law of negligence is concerned, whether the lack of remedy against a barrister arises because he or she owes no duty of care enforceable by an action for damages or has what is described as an immunity from suit: D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [95] per McHugh J. 8 Australian Consumer Law, s 18. The Australian Consumer Law is found in the Competition and Consumer Act 2010 (Cth), Sch 2, and in s 18, as from 1 January 2011, replicates provisions formerly located in State and Territory fair trading legislation. See generally Lockhart, The Law of Misleading or Deceptive Conduct (4th ed, LexisNexis Butterworths, 2014). 9 See, for example, L T King Pty Ltd v Besser (2002) 172 FLR 140 at [24] per Osborn J; Metcash Trading Ltd v Hourigan’s IGA Umina Pty Ltd (2003) 11 BPR 21,129 at [51], [54] per Young CJ in Eq; Gray v Morris [2004] 2 Qd R 118 at [53] per McMurdo J. 10 Little v Law Institute of Victoria (No 3) [1990] VR 257 at 273 per Kaye and Beach JJ, at 292 per Ormiston J. 11 Prestia v Aknar (1996) 40 NSWLR 165 at 191 per Santow J; Ibrahim v Pham [2005] NSWSC 246 at [172] per Levine J (affd Ibrahim v Pham [2007] NSWCA 215). 12 See Fair Trading Act 1987 (NSW), s 4(1) (repealed); Fair Trading Act 1987 (WA), s 4(1) (repealed). 13 Australian Consumer Law, s 2(1). 14 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205 at [352]–[354] per Campbell JA, with whom Hodgson and McColl JJA concurred.

152

Lawyers’ Professional Responsibility

[5.15]

New South Wales Court of Appeal gave the following examples of ways in which a lawyer might engage in misleading or deceptive conduct in the course of professional activities: • in giving advice on the prospects of success of proposed litigation, or about how the courts are ultimately likely to decide a presently undecided legal question; • in making a specific representation of fact, including an implied representation; for instance, by undertaking a transaction that requires legal skills a lawyer represents that he or she has knowledge and skills suited to carrying out the task, and its completion may carry the implied representation that the task was performed in line with the degree of care and skill of a competent lawyer; • in expressing an opinion about the advantages and drawbacks of proposed courses of action. Even in those jurisdictions that formerly lacked statutory reference to a “professional activity” coming within “trade or commerce”, the tide had apparently turned. For instance, in Goddard Elliott (a firm) v Fritsch15 Bell J saw the phrase “trade or commerce” – which the case law defined as “activities or transactions which, of their nature, bear a trading or commercial character”16 – as “apt to describe the out-of-court provision of professional services by a lawyer to their client in litigation”. As the essential question is whether the activity or transaction is, by its nature, trading or commercial in character, what is at issue is the nature and substance of the activity or transaction. It is not to the point, reasoned his Honour, that the trader is a “professional”. Bell J was also influenced by the business focus a feature of modern legal practice (see [1.30], [1.35]), as appears from the following extract:17 The practice of law in that manner is now organised along commercial lines, whatever be the size of the firm. A lawyer or group of lawyers can practice as a proprietary limited company or even as a public company. While the position might traditionally have been thought otherwise, the nature and substance of the provision of legal services, even in litigation, is commercial. A lawyer … is a service provider who is in the business of providing legal services, including litigious legal services, to the client as a consumer. A lawyer in private practice … is a trader in legal services. By force of statute, the legislative protections which apply across the board in trade and commerce also apply to the provision of legal services by private legal practitioners, which is only appropriate. That conclusion detracts not one iota from the fundamental professional obligations which the lawyer owes to the client and also to the court as an officer of the court.

It follows that lawyers who engage in misleading or deceptive conduct vis-à-vis their clients in the course of the relevant retainer can face, in addition to claims in

15 Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [502]. 16 Concrete Constructions (NSW) Pty Ltd v Nelson (1990) 169 CLR 594 at 604 per Mason CJ, Deane, Dawson and Gaudron JJ. 17 Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [518]. See also Dual Homes Victoria Pty Ltd v Moores Legal Pty Ltd [2016] VSC 86 at [169], [170] per John Dixon J.

[5.20]

5 Lawyers’ Duty to Clients in Tort

153

tort, a claim grounded under statute.18 It is no longer necessary for lawyers to be somehow active in the operation of their clients’ businesses19 to be viewed as acting in “trade or commerce” for this purpose. Identifying the client’s interests

[5.20] The lawyer’s duty of care is directed at lawyers acting in their clients’ best interests. Accordingly, it is necessary at a preliminary stage to consider who determines the client’s interests and what these may be. A former iteration of the South Australian professional rules required lawyers to “use all reasonably available legal means that are consistent with the agreement pursuant to which they are retained to advance clients’ interests as the clients perceive them”.20 The lawyer ordinarily must, subject to the paramount duty to the administration of justice (see [17.10]), follow the client’s instructions,21 having informed the client of the risks and drawbacks of the proposed course of conduct.22 It is thus the client who dictates the objectives of the representation and consequently what are her or his best interests, an approach consistent with the remarks of Lord Hoffmann in Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd:23 [A] person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is, if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties … The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and, if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong.

18 See, for example, Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303 at [45] per White J (failure to provide a fresh reasonable estimate of costs to a client held to amount to misleading and deceptive conduct by omission; the same could be said of “under-quoting” a costs estimate in order to secure legal work: at [180]; as to costs estimates see [14.40]). 19 See, for example, Mackman v Stengold Pty Ltd (1991) ATPR ¶41-105 (the lending of the lawyer’s name to promote a business). 20 Rules of Professional Conduct and Practice, r 9.1 (emphasis supplied) (pre-1 March 2003). 21 ACT, r 8.1; NSW, r 8.1; Qld, r 8.1; SA, r 8.1; Vic, r 8.1; WA, r 7(a). 22 Samper v Hade (1889) 10 LR (NSW) 270 at 273 per Darley CJ; Lysaght Bros & Co Ltd v Falk (1905) 2 CLR 421 at 439 per O’Connor J. 23 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 214, approved by McLelland CJ in Eq in Trust Co of Australia v Perpetual Trustees WA Ltd (1997) 42 NSWLR 237 at 248–249.

154

Lawyers’ Professional Responsibility

[5.20]

Having been engaged to provide legal advice, the lawyer must inform and advise in a fashion capable of being understood by the client,24 but cannot force that advice on the client.25 A lawyer who, once that advice has been given is nonetheless instructed to proceed with an (inadvisable) course of action is not responsible in law for loss the client suffers by reason of that conduct.26 But the lawyer’s superior knowledge of the law and legal system means that he or she is often obliged to assist a client in defining the objectives of the representation, and in so doing identify the client’s best interests.27 The client may, without assistance, adopt unreasonable or unrealistic objectives.28 For this reason, it is prudent to specify the objectives of the representation in the retainer agreement itself. This will guide the lawyer as to client expectations and interests, and guard against clients who unjustifiably perceive that their interests have not been advanced or protected. It cannot be assumed that all clients wish to pursue a course that generates the maximum economic result; another outcome may be preferred. Provided that the client appreciates the risks and drawbacks of a course of action, this being properly documented, the lawyer is free to, and indeed must, pursue the matter as the client prescribes.29 The type and extent of advice required of a lawyer depends on the subject matter of the retainer and the nature of the client. Given their expertise in law, it is legal advice that is expected of lawyers, and it goes without saying that the provision of quality legal advice is the lawyer’s basic professional responsibility. This does not mean that lawyers are never engaged to give other than strictly legal advice. In-house and government lawyers, for instance, may be employed for business or political acumen as much as for legal skills. And commercial practice brings increasing client expectations of lawyers being entrepreneurial in their advice. Non-legal advice generally falls outside legal professional privilege (see [11.130]) 24 A lawyer who has given an explanation in terms the client reasonably appears to be able to understand, and to have understood, is not liable should the client later allege that he or she did not in fact understand what was said; the lawyer is, in this regard, no guarantor of the client’s subjective understanding: Kandola v Mirza Solicitors LLP [2015] PNLR 19 at [47] per Cooke J. 25 Keddie v Stacks/Goudkamp Pty Ltd (2012) 293 ALR 764 at [152] per Beazley JA, with whom Barrett JA and Sackville AJA concurred. 26 Dew v Richardson [1999] QSC 192 at [42] per Chesterman J. 27 Law Society of Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 at [60] per V K Rajah JA (HC) (“[solicitors] cannot be content with simply following the instructions of their clients blindly, whether it is for fear of reproach or rebuke, but must exercise practical wisdom in advising their clients”). 28 See Luban, “Paternalism and the Legal Profession” [1981] Wisc L Rev 454 at 493 (“If the client expresses ends which, due to imprudence or excessive moralism, seem self-destructive, it is the lawyer’s job to question the client’s competence where it may need questioning … When, on the other hand, the client is able to make his or her ends plausible to the lawyer, the check which he means to provide must give way”). 29 See, for example, Silkzoom Pty Ltd v Property Shop Port Douglas Pty Ltd [2010] QSC 343 at [37]–[42] per Jones J (where the evidence revealed that the solicitor advised that the client’s purchase of a rent roll was a really risky business and “fulfilled the obligations of his retainer in his advice as to the inadequacies of the [relevant] contract” (at [38]), adding that there was no obligation on the solicitor to advise the client in direct terms not to sign the contract).

[5.25]

5 Lawyers’ Duty to Clients in Tort

155

and also most likely the boundaries of professional indemnity insurance cover. It is appropriate, therefore, to investigate the extent to which lawyers should give non-legal advice: see [5.100]–[5.160].

SCOPE OF THE DUTY OF CARE Modifying the scope of the duty via the retainer

[5.25] As noted at [5.10], the scope of the lawyer’s duty of care in tort is, in the main, prescribed by the scope of the retainer.30 It follows that the scope of that duty can be confined by the retainer,31 operating as a de facto disclaimer of duty or responsibility for advising outside its scope.32 A lawyer who wishes to restrict the scope of the retainer should, especially where the client could be justified in expecting the lawyer to advise on a broader basis, make full and clear disclosure of the limits of the duty the lawyer is undertaking, and counsel the client to secure advice from another person outside those limits.33 This is best effected via express provision in the retainer itself,34 “in simple, concise and precise language”,35 although clear evidence of oral warnings may suffice.36 Ambiguity in this communication is likely resolved against the lawyer,37 but this does not mean a court will construe an evidently simple retainer to encompass a much broader obligation merely because its terms do not preclude the latter.38 30 Hawkins v Clayton (1988) 164 CLR 539 at 544 per Mason CJ and Wilson J. 31 Hawkins v Clayton (1988) 164 CLR 539 at 582 per Deane J. 32 See, for example, Richtoll Pty Ltd v WW Lawyers (in liq) Pty Ltd [2016] NSWSC 438 (where the instructions in the retainer were “[t]o act on the [lender’s] behalf in respect of preparation of the loan transaction documentation and upon settlement thereof” but stipulated that the law practice “has not conducted any due diligence in respect of this transaction and is not prepared to take any responsibility in respect there to”; the latter, reasoned Hoeben CJ at CL, functioned to protect the law practice from liability for not advising the client of the borrower’s capacity to pay: at [169]–[191]). 33 Côté v Rancourt [2004] 3 SCR 248 at [6] per Deschamps J (SCC). 34 See, for example, Ibrahim v Pham [2005] NSWSC 246 at [139] per Levine J (where the retainer expressly excluded the giving of any advice on the mortgage or investment in question, instead giving the strong recommendation to the client to seek independent advice on the matter, this served to protect the solicitor from liability in tort); also at [211] (fiduciary duty). This finding was affirmed on appeal: Ibrahim v Pham [2007] NSWCA 215. 35 ABN Amro Bank Canada v Gowling, Strathy and Henderson (1994) 20 OR (3d) 779 at [23] per Trafford J. 36 See, for example, Côté v Rancourt [2004] 3 SCR 248 (where the plaintiff retained a lawyer to defend her on criminal charges arising out of a fire at her business, and alleged that the lawyer had been negligent in not informing her that the right to sue her insurer in respect of the fire would expire due to limitation; yet as the evidence showed that the lawyer had disclosed to the plaintiff that he was not knowledgeable in civil law, and had advised her to consult specialists on the civil law aspect, the Supreme Court of Canada rejected the plaintiff’s claim). 37 See, for example, Mason v Mills & Reeve [2011] WTLR 1589 at [165]–[167] per Arnold J (noting that where there is scope for ambiguity in the clause(s) that purport to confine the scope of the retainer, and the general duty(ies) assumed under the retainer are broad, courts are disinclined to construe the ostensibly restraining clauses expansively for the lawyer’s benefit) (affd Swain Mason v Mills & Reeve [2012] WTLR 1827). 38 See, for example, Minkin v Landsberg [2016] 1 WLR 1489 (where the plaintiff, an experienced accountant, instructed the defendant solicitor to amend a draft consent order stemming from her divorce; the English Court of Appeal rejected her subsequent attempt to make the defendant liable

156

Lawyers’ Professional Responsibility

[5.30]

Restricting the scope of a retainer represents an avenue not merely to avoid unwanted responsibility (and with this the prospect of broader liability), it may also promote access to justice. Termed “unbundling”, the lawyer is retained to provide only some of the services the client needs, with the remaining services to be performed by the client and/or a less expensive lawyer: see [4.95]. The decision to “unbundle”, it has been said, “is specific to the particular circumstances of the client, the legal problem, and the court (or other decision-making forum)”, so that “[o]ne-size-fits-all is not appropriate”.39 Consistent with what was noted in the preceding paragraph, the client must be fully apprised of the services the lawyer is to provide under the (limited) retainer and, importantly, what services fall outside the retainer. The terms of the retainer can, conversely, expand the scope of the duty of care beyond what would have been its scope absent a specific provision to this effect. Lawyers should be wary of giving clients any impression that their duty under the retainer extends beyond what they are able and competent to fulfil. In particular, lawyers should avoid retainers that require giving financial advice, or in which clients may reasonably expect financial advice: see [5.100]–[5.140]. Unthinking acceptance of retainers of this kind may create greater exposure to liability in tort, which will likely fall outside professional indemnity insurance cover. Can liability in tort arise outside the scope of the retainer?

[5.30] The case law suggests that the retainer may not in every case chart the perimeters of the tortious duty of care. To the extent that defining the scope of lawyers’ duties by reference only to the client’s express instructions would be artificial, this makes sense. It stands to reason that “[m]atters which fairly and reasonably arise in the course of carrying out those instructions must be regarded as coming within the scope of the retainer”.40 But judicial remarks go further, the most cited being that of Deane J in Hawkins v Clayton,41 who opined that the tortious duty of care may require a lawyer to take positive steps “beyond the specifically agreed professional task or function” where necessary to “avoid a real and foreseeable risk of economic loss being sustained by the client”. Though there is no reported judicial statement rejecting Deane J’s observation out of hand, it is fair to say that the circumstances his Honour was envisaging should for professional negligence for failing to advise or warn her against entering into the consent order, King LJ expressing concern that were solicitors “put in a position that they felt unable to accept instructions to act on a limited retainer basis for fear that what they anticipated to be a modest and relatively inexpensive drafting exercise of a document (albeit complex to a lay person) may lead to them having imposed upon them a far broader duty of care requiring them to consider”: at [76]). 39 Re Seare (2013) 493 BR 158 at 186. 40 Gilbert v Shanahan [1998] 3 NZLR 528 at 537 per Tipping J. 41 Hawkins v Clayton (1988) 164 CLR 539 at 579. Although not cited in the judgment, Deane J’s remarks have judicial antecedents: see, for example, Boyce v Rendells [1983] 2 EGLR 146 at 149 per Lawton LJ (“if, in the course of taking instructions, a professional man like … a solicitor learns of facts which reveal to him as a professional man the existence of obvious risks, then he should do more than merely advise within the strict limits of his retainer. He should call attention to and advise upon the risks”).

[5.30]

5 Lawyers’ Duty to Clients in Tort

157

be seen as “very much the exception rather than the rule”.42 Judges have indicated that only in the rarest of cases will a lawyer who has fulfilled her or his retainer nonetheless be liable in tort.43 A rare case is Curnuck v Nitschke,44 where solicitors were retained in 1986 to pursue a damages claim related to the clients’ purchase of a truck. The matter had reached the stage where counsel had drafted a statement of claim, but no action had been commenced, and no particulars of the alleged damages had been provided to the solicitors, when the clients entered into a deed of arrangement with creditors in 1987. The following year, the trustee appointed by the deed reassigned to the clients the right of action in respect of their damages claim, but neither the clients nor the solicitors did anything until the action became barred by limitation in 1990. The clients alleged that the solicitors had been negligent in not warning them of the impending expiry of the limitation period, which the solicitors defended by arguing that the retainer had ended, and with it any contractual or tortious duty, once the clients executed the deed of arrangement. In ruling for the clients, Davies AJA proceeded on the assumption that the solicitors had no contractual duty to take any further action to pursue the clients’ cause of action, but stated that this did not mean that the solicitors had no tortious duties to the clients. According to his Honour, what gave rise both to a relationship of proximity, and a sufficient foreseeability of loss as to oblige the solicitors to warn the clients that the cause of action would be lost unless proceedings were instituted, was the combination of the following findings:45 • the solicitors were aware that the cause of action had been reassigned to the clients; • the papers relating to the action remained with them as the solicitors who had handled the matter; and • the cause of action would become valueless with the passing of the limitation period. Yet whether the tort duty truly went beyond the scope of the retainer must be queried. Indeed, the other judge who delivered a substantive judgment in the case, Fitzgerald AJA, found that, despite the clients’ execution of the deed of arrangement, the solicitors were obliged by their retainer to provide the clients with information and advice appropriate for a prudent finalisation of their relationship.46 In his Honour’s view, the solicitors had breached both their contractual and tortious obligation to the clients by failing to give appropriate advice before the limitation period expired.47 The third judge, Meagher JA, agreed with both Fitzgerald and Davies AJJA. 42 Frost & Sutcliffe v Tuiara [2004] 1 NZLR 782 at [12] per Tipping J (CA). 43 Cousins v Cousins (unreported, CA(NSW), 18 December 1990) at 2 per Meagher JA; Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [364] per McPherson AJA; Frost & Sutcliffe v Tuiara [2004] 1 NZLR 782 at [12] per Tipping J (CA). 44 Curnuck v Nitschke [2001] NSWCA 176. 45 Curnuck v Nitschke [2001] NSWCA 176 at [10]. 46 Curnuck v Nitschke [2001] NSWCA 176 at [62]. 47 Curnuck v Nitschke [2001] NSWCA 176 at [63], [64].

158

Lawyers’ Professional Responsibility

[5.35]

[5.35] Curnuck shows that it may be difficult to distinguish cases where the act or omission that provides the foundation for the duty of care comes within the scope of the retainer, from those where it falls outside that scope but nonetheless within the allegedly broader tortious duty of care. An expansive interpretation of the scope of the retainer itself could, after all, conceivably cover the circumstances envisaged by Deane J in Hawkins v Clayton noted earlier. An English judge has made the point in clear terms more recently:48 [I]f, in the course of doing that for which he is retained, he becomes aware of a risk or a potential risk to the client, it is his duty to inform the client. In doing that, he is neither going beyond the scope of his instructions nor is he doing “extra” work for which he is not to be paid. He is simply reporting back to the client on issues of concern that he learns as a result of, and in the course of, carrying out his express instructions …

His Lordship analogised that a dentist who, in treating a patient’s tooth, notices an adjacent tooth in need of treatment, must warn the patient accordingly. Although some have seen this “duty to warn” as a tortious extension beyond contractual parameters, it hardly a new phenomenon in the lawyer–client scenario (though it has received the greatest mileage in the doctor–patient context). Much of the case law on the scope of the lawyer’s duty of care involves an inquiry into what the lawyer should have brought to the client’s attention,49 which in turn often places in issue whether the lawyer has properly warned the client of a danger, liability or loss that may eventuate. A preferable course, therefore, is to consider the factors that influence the scope of the duty of care generally, rather than attempt to segregate the duty of care arising out of the retainer from the (allegedly) broader tortious duty of care: see [5.50]–[5.95]. These factors are not mutually exclusive and may be cumulative in a given factual situation. In any case, even if a duty of care in tort extends beyond the parameters of the retainer, the lawyer’s negligence cannot necessarily be assumed to have been the cause of the client’s loss, as the client may have acted the same way irrespective of the negligence: see [4.160]–[4.175].

48 Credit Lyonnais SA v Russell Jones & Walker (a firm) [2003] Lloyd’s Rep PN 7 at [28] per Laddie J. See also Cadoks Pty Ltd v Wallace Westley & Vigar Pty Ltd (2000) 2 VR 569 at [120] per Ashley J (who considered it too restrictive a construction of a retainer to say that, if an issue arises whose implications require legal understanding and whose resolution may sensibly require action by the lawyer, it is outside the retainer to take necessary action or to give necessary advice to the client because the issue is not itself the task which is to be concluded); AJH Lawyers Pty Ltd v Hamo [2010] VSC 225 at [34] per Beach J (“There can be no doubt that unless a solicitor’s retainer is specifically limited, he or she should exercise reasonable care and skill in giving necessary advice in and around the performance of the retainer”, describing this such advice as “holistic”; cited with apparent approval by Ward JA in Zakka v Elias [2013] NSWCA 119 at [68], with whom Emmett JA and Tobias AJA concurred). 49 See, for example, Gabriel v Little [2013] WTLR 419 at [86] per Robert Englehart QC (who ruled that although the solicitor had no duty to advise the plaintiff (G) as to the commercial risk inherent in the loan, from what he learned as G’s solicitor he should have explained to G that, although he was advancing £200,000, his funds were going to be applied substantially for the benefit of a co-venturer (L) and in reality L was putting nothing into the venture; this amounted to negligence for which the solicitor was liable).

[5.40]

5 Lawyers’ Duty to Clients in Tort

159

[5.40] The scope of the lawyer’s duty of care is influenced by the client’s apparent need for advice.50 An inexperienced client “will need and be entitled to expect the solicitor to take a much broader view of the scope of his retainer and of his duties than will be the case with an experienced client”.51 More may thus be expected of a lawyer regarding a client suffering a disadvantage (whether by reason of age, disability, business inexperience, lack of education or ignorance) or who is temporally fragile. The duty of care here may require the lawyer to more carefully explain the incidents of the representation. It may even dictate active steps that would not have been required had the client not been at a disadvantage; say, where a dealing within the retainer is improvident from the client’s perspective, or otherwise where the lawyer believes the client may be unduly influenced. In Davies v Camilleri,52 for example, the defendant borrowed money on the security of her home, having been led to believe by a mortgage broker that the money would be safely invested by and through him at a high return. The solicitor who drafted the mortgage document also acted for the lenders (the plaintiffs). The money advanced was lost, and the plaintiffs sought to enforce the mortgage against the defendant’s home. The defendant’s attempt to have the mortgage set aside as against the plaintiffs for unconscionable dealing failed because she was under no special disadvantage. But her claim against the solicitor succeeded, Bell J reasoning as follows:53 The solicitor acknowledged that clients who are uneducated or commercially unsophisticated need more explanation of transactions than do commercially sophisticated clients. Equally he accepted that where the consequences of a transaction have the potential to be serious for a client a greater level of explanation and assistance is required. He agreed that he took no steps to satisfy himself that [the defendant] had an understanding of the transaction. She asked no questions during the conference. It appeared to the solicitor that [the broker] wanted to control [the defendant] at the conference. He accepted that her silence should have rung alarm bells for him.

Her Honour remarked that, as the broker was paying the solicitor’s fee and the proceeds of the loan were to be advanced to the broker, it was incumbent on the

50 See Arthur, “Solicitors’ Common Law Liability: The Duty to Give Advice Beyond the Scope of the Express Retainer in Transactional Cases and the Application of the Loss of Chance Approach to Breach of Duty” (2008) 16 Waikato L Rev 57. 51 Carradine Properties Ltd v D J Freeman & Co [1999] Lloyd’s Law Rep PN 483 at 487 per Donaldson LJ. See also Mabbett v Josef & Sons Contracting Pty Ltd (in liq) [2006] NSWSC 1452 at [91] per Adams J; Procter v Raleys Solicitors [2015] PNLR 24 at [45]–[49] per Tomlinson LJ, with whom Kitchin and Gloster LJJ concurred. 52 Davies v Camilleri (2000) 10 BPR 18,345. 53 Davies v Camilleri (2000) 10 BPR 18,345 at [124]. See also Phelps v Stewarts (a firm) [2007] PNLR 32 (that the plaintiff was an “unsophisticated client” branded as “one of the most important circumstances having influence on the scope of the retainer”: at [28] per Bernard Livesey QC); Lederberger v Mediterranean Olives Financial Pty Ltd [2012] VSCA 262 at [100] per the court (involving an elderly client “plainly lacking in sophistication”, and so “not knowing what specific advice to ask for”, who was accordingly “ex facie reliant on her solicitors to advise her in relation to the hidden pitfalls and legal obscurities of accepting appointment as executrix, and thereby entering into a partnership for the debts and liabilities of which she alone would be personally liable”: at [103]).

160

Lawyers’ Professional Responsibility

[5.45]

solicitor to have interviewed the defendant in the broker’s absence in order to mitigate the potential for undue influence.54

[5.45] Conversely, for a well-advised client able to protect its own interests, the court is less inclined to adopt an expansive view of the scope of the lawyer’s duty of care. The case law reveals multiple examples of experienced clients who have unsuccessfully sought to throw on their lawyer liability for the consequences of their own commercial decisions.55 In this context, it has been judicially observed that a lawyer will not be assumed, without evidence, to have assumed the role of “commercial adviser” or “insurer against … commercial misjudgment”.56 Also, experienced clients may face a greater hurdle to establish causation as they are more likely than others to rely on their own judgment.57 The foregoing does not mean that the law of negligence accords less protection to experienced clients, but that the way advice is supplied, and possibly its scope, may differ. As explained by the High Court of Singapore:58 The scope of the advice to be rendered to the proverbial layman is not necessarily the same as that rendered to a sophisticated businessman. This is not surprising as the latter would be steeped in the ways of the commercial world and may have some knowledge of legal consequences. This is not to say, however, that a solicitor advising a savvy, commercially-minded client should immediately wash his hands clean from advising him of the potential ramifications of any decision, when it is potentially detrimental to his interests. Rather, the solicitor ought to tailor his advice to suit the needs of his client and not be afraid to ask probing questions.

54 Davies v Camilleri (2000) 10 BPR 18,345 at [125], [126]. 55 See, for example, Carradine Properties Ltd v D J Freeman & Co [1999] Lloyd’s Law Rep PN 483 (where the English Court of Appeal refused to accept that the solicitors should have asked their corporate client whether it had public liability insurance that would have covered its liability for damage caused by its demolition contractors to a third party, reasoning that the solicitors were entitled to assume that their experienced client would have told them if they lacked insurance); Pickersgill v Riley [2004] PNLR 31 (PC) (solicitor who warned his experienced businessman client of the risk of accepting a contractual indemnity from a limited company held to have discharged his duty, which did not extend to giving advice on the company’s financial position or the commercial wisdom of the dealing); Scottsdale Homes Pty Ltd v Gemkip Pty Ltd [2008] QSC 326 (solicitor retained by a client experienced in property development not required to repeat advice relating to the lodgment of a caveat); Cavell Leitch Pringle & Boyle v Thornton Estates Ltd [2008] 3 NZLR 637 (appellant lawyers held to owe no duty to an experienced client to advise on the transfer of risk in the purchase by the client of a marina complex). 56 Pickersgill v Riley [2004] PNLR 31 at [17] (PC). See also Bindon v Bishop [2003] 2 NZLR 136 at [28] per Harrison J (HC) (noting that the case law has evidenced some retreat from “a perceived position of imposing obligations which effectively treated solicitors as underwriters of commercial risks willingly assumed by their clients”). 57 See, for example, Leda Pty Ltd v Weerden (No 2) (2006) 62 ATR 100 at [70]–[85] per Gzell J (where a tax adviser’s negligent failure to qualify the terms of advice to a client was held not to have been causative of the client’s loss because, inter alia, the client was a sophisticated operator aware of the risks of the transaction the subject of the advice) (affd Leda Pty Ltd v Weerden (2007) 63 ACSR 636). 58 Law Society of Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 at [57] per V K Rajah JA (HC) (emphasis in original).

[5.50]

5 Lawyers’ Duty to Clients in Tort

161

Prudent lawyers will, in any case, err on the side of stating the obvious, and fully apprise experienced clients of their legal entitlements and obligations,59 even for legally trained clients,60 except where instructed otherwise. Impact of the circumstances in which advice is given or sought Advice given or sought in urgent or pressing circumstances

[5.50] The urgency or time pressure surrounding the occasion in which the lawyer’s advice is sought can influence the scope of the duty of care. Its impact relates mainly to qualifying the advice supplied, and properly apprising the client of the risks attached to the intended course of action. In May v Mijatovic,61 for example, the defendant solicitor was instructed by the plaintiff client to apply for an injunction at short notice. The injunction was subsequently dissolved, and the client held liable on his undertaking as to damages, when the evidence proved insufficient to support the injunction. The client sought to recover the damages from the solicitor. Hasluck J noted the need to strike a balance between a lawyer acting with sufficient resolution to achieve a result in an urgent matter, and acting with due care so as not to expose the client to liability. Where the claim clearly has no merit, or the lawyer lacks the necessary skill or experience to handle it, the lawyer must say so, irrespective of the client’s demands for immediate action.62 Otherwise, according to his Honour, the lawyer may follow the client’s instructions upon first acquainting the client with any real and foreseeable risks of loss that might stem from the contemplated action. On the facts, the solicitor had been negligent not for his mistake in following the client’s instructions, but in not advising the client of the risks of loss from that course. Hasluck J stated the general principle as follows:63 [T]he defendant was engaged by the plaintiff to act as the plaintiff’s solicitor, and that brought with it an obligation to alert the plaintiff to the possibility of adverse consequences. The defendant in that capacity was obliged to undertake a process of analysis of the claim sought to be brought and to advise the plaintiff of his opinion or, at least, of his preliminary views and of the adverse consequences that could follow. The role of a solicitor is not merely to put in a required form whatever the client wishes to say or believes to be relevant. The solicitor is required to exercise his independent judgment in order to ensure, if possible, that the client does not proceed in a manner that will result in loss.

The above derives from the fact that a lawyer is ordinarily retained to advise a client, not to decide for a client: see [5.20]. It follows that a lawyer who, having 59 See, for example, Capebay Holdings Pty Ltd v Sands [2002] WASC 287 (where Pullin J remarked that representations by a director and the financial controller of the client about their experience in relation to land transactions, though they may have justifiably affected the way the solicitors gave advice, did not mean that the client knew and understood the adverse economic consequences of an encroachment of buildings on neighbouring land). 60 See, for example, Talbot & Olivier v Shann [2005] WASCA 34 (lawyer found negligent for failing to advise a lawyer-client of the likely impact of fiduciary law and the presumption of undue influence on a transaction in which the latter was involved). 61 May v Mijatovic (2002) 26 WAR 95. 62 May v Mijatovic (2002) 26 WAR 95 at [147]. 63 May v Mijatovic (2002) 26 WAR 95 at [172].

162

Lawyers’ Professional Responsibility

[5.55]

accurately explained the risks of a course of action, is nevertheless instructed to proceed is not liable in law for loss the client suffers by reason of that course of action.64

[5.55] Lawyers should be wary of giving unqualified advice via telephone consultation, especially “off the cuff” advice without consulting the file and giving due consideration to the question(s) raised.65 Urgent advice given over the telephone should be appropriately qualified: see [5.245], [5.250]. Although advice supplied in an environment of urgency may influence the standard of care expected (see [5.200]), there is greater risk that a lawyer consulted over the telephone lacks full information than when a personal consultation is involved, coupled with the risk that advice may not be fully considered. Prudence dictates dissuading client belief that advice on material matters will be ensue upon a mere telephone (or email) inquiry. The risk of not doing so is illustrated by Carmody v Priestley & Morris Perth Pty Ltd,66 albeit in an accountant–client relationship. The client sought advice, in a “three minute telephone call”, concerning the purchase of property by a corporate trustee. The accountant failed to mention adverse tax implications of the proposed dealing although the client had not expressly raised the matter. The lengthy professional relationship, whereby advice was often supplied by telephone, was held to justify a belief in the client that the accountant was giving considered advice.67 This in turn attracted a duty of care in giving that advice, which had been breached. Preliminary advice supplied on a single occasion

[5.60] As the retainer is the principal determinant of whether or not a tortious duty of care applies (see [5.10]), it is important to identify the moment at which the lawyer is retained. A client may, in choosing whom he or she wishes to retain, interview several lawyers (colloquially known as a “beauty contest”), in the process disclosing information to each pertaining to the prospective retainer. In these circumstances the issue that is most likely to surface is not liability for negligence, but the client’s ability to disqualify, on the grounds of potential misuse of confidential information, a non-selected lawyer from acting against the client in the same or related matter: see [8.190]. But where a prospective client seeks preliminary advice from a lawyer on a single occasion, and retains no any other lawyer in the matter, it is legitimate to inquire whether the lawyer has, by giving that advice, assumed a duty of care to the client. It is possible, in these circumstances, for a duty of care to be assumed without a formal retainer, even an implied one, although most instances should see contract 64 Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd [1997] AC 191 at 214 per Lord Hoffmann; Dew v Richardson [1999] QSC 192 at [42] per Chesterman J. 65 See, for example, Ross Ambrose Group Pty Ltd v Renkon Pty Ltd [2009] TASSC 86 (affd Doolan v Renkon Pty Ltd (2011) 21 Tas R 156) (where the lawyer in question gave “off the cuff” telephone advice without consulting the client’s file, which advice proved incorrect, and gave rise to liability in negligence). 66 Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318. 67 Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 at [119], [120], [190], [191] per Hasluck J.

[5.65]

5 Lawyers’ Duty to Clients in Tort

163

and tort share the same ground. Ultimately, the issue is fact-specific, and may depend on the extent of the preliminary consultation and its object,68 the terms in which the advice is supplied, whether a fee was charged, and the reasonable expectation of a person in the shoes of the inquirer: see [3.60]. Also, in using social media, it is apt to be wary of posting anything that could be construed as legal advice, which could, from the perspective of the reader, translate to an expectation of a lawyer–client relationship.69 In Fortune v Bevan70 the Queensland Court of Appeal found that, under a law society scheme whereby a member of the public could obtain a 20-minute legal consultation for $20 a solicitor who had given verbal advice to an inquirer but failed to confirm the limitation period in writing thereafter, there had been no breach of the solicitor’s duty of care. It construed the parameters of the retainer restrictively because the inquiry was preliminary in nature, and terminated once the inquirer left the office after paying the $20.71 The outcome would have differed had a more usual form of consultation been involved, where it usually forms part of the retainer to confirm in writing what is required to give effect to the instructions.72 In each case, it nonetheless remains good practice to maintain a written record of the advice given, indicating its limited nature. Otherwise scope exists for a dispute with the client based entirely on credit. Impact of the nature of the transaction or dealing Transaction or dealing with unusual terms or characteristics

[5.65] A lawyer retained to effect a transaction must not only follow the client’s instructions, but also bring to the client’s attention any aspect or term that is unusual, or that could generate unexpected liabilities or obligations. The scope of the duty here rests on the client’s experience, the nature of the lawyer–client relationship, and the risks to which the client may be exposed.73 That the client is an experienced commercial operator is not by itself a reason to skimp on explanations of unusual terms, or even the salient features of the transaction. After all, lawyers are consulted precisely because of their legal expertise and foresight, 68 For instance, legal advice and assistance may have been supplied to a potential client for the purpose of seeking to persuade her or him to become a client (Nayyar v Sapte [2010] PNLR 15 at [147] per Hamblen J), in which event it may prove difficult to obviate a duty of care. 69 See Law Institute of Victoria, Guidelines on the Ethical Use of Social Media (29 November 2012); Krawitz, “May it Tweet the Court: Ethical Considerations Involving Australian Lawyers’ Social Media Use” (2013) 2 JCivLP 85 at 91–93. Although relating to the early days of the internet (and well before the social media phenomenon), the following counsel from an ethics opinion by the State Bar of Arizona (Formal Op 97-04 (1997)) remains extant: “[l]awyers should not answer specific legal questions from lay people through the Internet unless the question presented is of a general nature and the advice given is not fact-specific”. 70 Fortune v Bevan [2001] QCA 378. 71 Fortune v Bevan [2001] QCA 378 at [24] per White J. 72 See, for example, Vulic v Bilinsky [1983] 2 NSWLR 472 (disapproved in Johnson v Perez (1988) 166 CLR 351 but not on this point). 73 Austrust Ltd v Astley (1993) 60 SASR 354 at 372–373 per Mullighan J (affd Austrust Ltd v Astley (1996) 67 SASR 207 at 224–226 (FC); not addressed on appeal: Astley v Austrust Ltd (1999) 197 CLR 1).

164

Lawyers’ Professional Responsibility

[5.70]

which even experienced commercial clients may lack.74 For example, in County Personnel (Employment Agency) Ltd v Alan R Pulver & Co75 the solicitors’ failure to explain to a client the effect and inherent risks in an unusual rent review clause in a lease was found to have been negligent, even though the client was not naïve in the commercial world. Failure to warn of absence of standard clause

[5.70] A lawyer may be liable in negligence for failing to advise of the absence of a standard clause in a document, and its implications, as occurred in Amadio Pty Ltd v Henderson.76 There the solicitors did not advise their client of the absence of a “ratchet” clause in a lease over property the client was to purchase, which would usually appear in a lease of that kind. And in Littler v Price77 the solicitors failed to inform clients who had purchased a unit in a complex on a long-term lease of the absence of guarantees in a lease by the directors of the lessee. According to the Queensland Court of Appeal, to draw the clients’ attention to this was a necessary part of the solicitors’ duty to explain the terms of the proposed lease, and so the solicitors had behaved negligently. Where a transaction or dealing is improvident

[5.75] Lawyers retained to effect a transaction that is improvident from the client’s point of view should consider whether the client should be warned against pursuing the transaction, or at least advised of its risks. As a general principle, if the client is fully informed of the risks attendant on a transaction, and does not lack capacity, the lawyer has fulfilled her or his duty, and may act in the transaction.78 Improvidence on the face of a transaction may nonetheless lead a prudent lawyer to query whether a client is exercising a free and independent will in respect of, and truly understands, the transaction,79 especially if the person who benefits from the transaction is apparently its driver. The advice must be given in a private meeting with the client, fully documented in writing and signed by the client. A lawyer with 74 Sykes v Midland Bank Executor & Trustee Co Ltd [1971] 1 QB 113 at 124 per Harman LJ, at 130 per Karminski LJ; Fox v Everingham (1983) 50 ALR 337 at 338 (FC(FCA)); Henderson v Amadio (No 1) (1995) 62 FCR 1 at 137–138 (FC); Kyriacou v Kogarah Municipal Council (1995) 88 LGERA 110 at 122 per Dunford J. 75 County Personnel (Employment Agency) Ltd v Alan R Pulver & Co [1987] 1 WLR 916. 76 Amadio Pty Ltd v Henderson (1998) 81 FCR 149 (FC). 77 Littler v Price [2005] 1 Qd R 275. 78 See, for example, Cousins v Cousins (unreported, CA(NSW), 18 December 1990) (where a solicitor who, on being instructed to transfer valuable property to the clients’ distant relatives, failed to protect the clients’ expectation that they would be entitled to live in the property until death was held not to have been negligent because the clients were of sound mind, had given the impression that they were sufficiently well off to be able to afford the gift without difficulty, and the solicitor had told them that if they went ahead with the gift they would have no right to stay in the residence on the land they intended to give away); Frost & Sutcliffe v Tuiara [2004] 1 NZLR 782 (where a lawyer who acted for both the plaintiffs and their nephew in a transaction whereby the plaintiffs were financing the nephew’s business, which ultimately went into liquidation, was found not to have been negligent because he told the plaintiffs to obtain independent advice, advised them against the transaction, and told them they would lose their home if anything went wrong). 79 Yaktine v Perpetual Trustees Victoria Ltd (2005) 13 ANZ Ins Cas ¶61-637 at [65] per Young CJ in Eq.

[5.80]

5 Lawyers’ Duty to Clients in Tort

165

serious reservations as to client understanding or free will should decline to act, or face the prospect of liability in negligence should the transaction later be set aside, and a third party (such as a bank that has lent money in respect of the transaction) suffers loss. The dangers for a lawyer are heightened where he or she acts for each party to a transaction improvident to one of them, which presents a scenario pregnant with the danger that the lawyer will not fully advise a party of its inherent risks: see [7.150]–[7.160]. In Cockburn v GIO Finance Ltd,80 for example, a solicitor was held to have breached his duty to provide skilled, independent, accurate and detailed advice to a 19-year-old quadriplegic, who was proposing to mortgage his house and other property derived from a damages award to raise a substantial sum for his father’s business venture, in circumstances where the solicitor regarded the father also as a client. Disclosure of information relevant to the representation Scope of the duty of disclosure and prospects for liability

[5.80] A lawyer’s failure to disclose a conflict of interest proscribed by fiduciary law may trigger civil liability: see [6.05]. Failure to consult with a client on a matter outside the lawyer’s actual authority (as to which see [3.100]–[3.130]) raises the prospect of breaching the retainer. Tort-wise, the duty of care requires a lawyer to reveal to the client all material information within her or his possession relating to the client’s affairs.81 This includes keeping the client informed of the progress of the representation – a duty reflected by statute entitling clients to progress reports82 and requiring lawyers to notify substantial changes to anything within costs disclosure requirements83 (as to which see [14.15]–[14.60]). That a client is entitled to the full benefit of the lawyer’s exertions requires the lawyer to “put at his client’s disposal not only his skill but also his knowledge, so far as is relevant”.84 A lawyer cannot act for a client and at the same time withhold knowledge he or she possesses germane to the subject matter of the representation. 80 Cockburn v GIO Finance Ltd [1996] NSWCA 109. 81 McKaskell v Benseman [1989] 3 NZLR 75 at 87 per Jeffries J; Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836 at 842 per Sir Thomas Bingham MR. No Australian jurisdiction replicates this duty via professional rules, although it has been recommended: see Mize, “Should the Lawyer’s Duty to Keep Confidences Override the Duty to Disclose Material Information to a Client?” (2009) 12 Legal Ethics 171. Nor do the American rules, although again it has been recommended: see Wald, “Taking Attorney-Client Communications (and Therefore Clients) Seriously” (2008) 42 USFL Rev 747. The Singaporean rules, conversely, do make provision to this effect: see Sing, r 5(2)(b). 82 ACT, s 278; NSW, s 190 (formerly NSW 2004, s 318); NT, s 312; Qld, s 317; SA, Sch 3 cl 19; Tas, s 301; Vic, s 190 (formerly Vic 2004, s 3.4.18); WA, s 269. 83 ACT, s 276; NSW, s 174(1)(a), 174(2)(b) (formerly NSW 2004, s 316); NT, s 310; Qld, s 315; SA, Sch 3 cl 17; Tas, s 299; Vic, s 174(1)(a), 174(2)(b) (formerly Vic 2004, s 3.4.16); WA, s 267. 84 Spector v Ageda [1973] Ch 30 at 48 per Megarry J. See also Moody v Cox [1917] 2 Ch 71 at 83 per Warrington LJ; North & South Trust Co v Berkeley [1971] 1 WLR 470 at 480 per Donaldson J; Thevenaz v Thevenaz (1986) FLC ¶91-748 at 75,446 per Frederico J; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 213–215 per Mahoney JA; Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 547 per Thorp J.

166

Lawyers’ Professional Responsibility

[5.85]

The prospect of tortious liability is most likely where the failure to disclose deprives a client of knowledge that impacts on the client’s decision-making.85 In Spector v Ageda,86 for example, Megarry J opined that no reputable solicitor would effect a transaction by way of discharging an obligation he or she knew to be unenforceable or void without explaining to the client the defects in the obligation. In Roberts v Cashman87 Whealy J held that a solicitor made aware of a client’s potential cause of action via the client’s completion of a survey instrument had a duty to use that information to bring the prospect of that action to the client’s attention. A failure to make full disclosure, even if it does not generate liability in tort (whether because the client is not inclined to pursue legal proceedings, has suffered no loss or cannot establish causation) may manifest itself in client dissatisfaction, and potential complaint. In the interests of fostering client confidence, in assessing the materiality of the information to be disclosed prudent lawyers should consider client expectations. Some clients may prefer a more “hands-on” approach, and for them it may be prudent to make fuller disclosure, having disclosed any additional cost involved. There is no duty to disclose information to a client who has given informed consent to the non-disclosure of particular information (see [5.90]), or where the disclosure would be in breach of the law or a court order.88 The New Zealand professional rules add that disclosure is not required if it would likely place at risk the health or safety of the client or another person,89 and the commentary to the American rules envisages that in some circumstances “a lawyer may be justified in delaying transmission of information when the client would be likely to react imprudently to an immediate communication”.90 The duty is also obviated if it is obvious that privileged documents have been mistakenly supplied: see [11.275]. Is the duty of disclosure imputed to the firm?

[5.85] The cases generally phrase the duty of disclosure of relevant information in terms of the individual lawyer. It appears, therefore, that no equivalent 85 Bell Group Ltd (in liq) v Westpac Banking Corporation (No 9) (2008) 225 FLR 1 at [6365] per Owen J (speaking in terms of “material has a real capacity to affect the client’s interests”). It is not necessarily limited to this scenario. In McKaskell v Benseman [1989] 3 NZLR 75, for example, the plaintiffs’ solicitor, on receiving from the defendants’ solicitor a letter containing an offensive and professionally embarrassing statement, invited the latter to withdraw the offending statement and draft a new letter, which was duly done. Jeffries J held that, in not disclosing the contents of the original letter to his clients, the plaintiffs’ solicitor had breached his duty of full disclosure (at 87). Yet that his Honour awarded the plaintiffs only $1,000 in compensation for this breach (in place of the $100,000 the plaintiffs sought) says as much about the frivolous nature of the claim as it does about the lack of real culpability in the plaintiffs’ solicitor. 86 Spector v Ageda [1973] Ch 30. 87 Roberts v Cashman [2000] NSWSC 770. 88 This may include, for example, information protected under national security legislation or required to be communicated to a relevant body pursuant to money laundering legislation. 89 NZ, r 7.3. 90 US, r 1.4 (cmt [7]) (citing as an example the case of a lawyer withholding a psychiatric diagnosis of a client if the examining psychiatrist indicates that disclosure would be harmful to the client).

[5.90]

5 Lawyers’ Duty to Clients in Tort

167

obligation rests on partners and staff of a law firm who have no involvement with the matter (or part of the matter). To require otherwise would be to necessitate the familiarity, at least on a superficial level, of every partner and employee with the subject matter of every retainer assumed by the firm – an unworkable task even in a law firm of few partners let alone a mega-firm. In this context, referring to a firm of 107 partners, an English judge observed that it would be “impracticable and even absurd to say that [the partners] are under a duty to reveal to each client, and use for his benefit, any knowledge possessed by any one of their partners or staff”.91 The counterargument rests on the notion that the knowledge of one partner of a firm is imputed to fellow partners,92 a notion that has seen application in the client–client conflicts environment: see [7.40], [8.195]. But the policy justifications for imputing disqualifying conflicts of interest do not necessarily translate to the scenario of disclosure of information tort-wise.93 To conduct a “conflict check” does not require considerable information; a “knowledge check” presents a greater hurdle, the height of which is likely to increase with the size of the firm. Aside from the impracticability of casting a legal duty on lawyers, in every case, to make available for the benefit of their clients the knowledge of the firm – for instance, the work schedules of each lawyer do not necessarily permit the time to adequately make their knowledge available – even in client–client conflict situations courts have revised the strictness of the imputation rule: see [7.55], [8.200]. It must, moreover, be noted that the more extensive the channels of communication, the less likely the firm’s ability to successfully screen against client–client conflicts: see [8.210]–[8.225]. Client consent to non-disclosure?

[5.90] A client may conceivably consent to non-disclosure, although it may be queried why an informed client will proceed with legal representation without the assurance of being assured of the lawyer’s duty to disclose relevant information.94 The challenge is perhaps most acute where the lawyer acts for two or more parties to a transaction, in which case the terms of the retainer must be carefully construed to determine whether the duty of disclosure to one or any of the parties is restricted. The cases reveal that an experienced and sophisticated client will more likely be found to have accepted a restriction on the lawyer’s duty via the retainer than one who is not so positioned. The point is illustrated by National Home Loans Corp plc v Giffen Couch & Archer (a firm),95 where the respondent solicitors acted for both parties to a re-mortgage transaction. Their instructions from the appellant lender required them to investigate the title to the property, conduct a bankruptcy search, and certify that they were not aware of any material change in the borrowers’ 91 Re a Firm of Solicitors [1992] 1 All ER 353 at 365 per Staughton LJ. 92 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 374 per Ipp J. 93 See Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), pp 145–151. 94 Cf Zacharias, “Waiving Conflicts of Interest” (1998) 108 Yale LJ 407. 95 National Home Loans Corp plc v Giffen Couch & Archer (a firm) [1997] 3 All ER 808. See also Shiokawa v Pacific Coast Savings Credit Union (2005) 250 DLR (4th) 656 (CA(BC)).

168

Lawyers’ Professional Responsibility

[5.95]

circumstances subsequent to the date of the loan offer. The solicitors discovered information that cast doubt upon the borrowers’ ability to repay the loan, namely arrears in respect of the existing mortgage. The English Court of Appeal held that the solicitors would only be required to inform the lender of this information if their instructions required them to do so. The instructions were phrased with particularity and specified the matters the solicitors were required to advise on or certify, and so the solicitors were not in breach of duty in failing to pass on the information to the lender. The case has been said to show that a solicitor may assume either that the lender would make its own inquiries or is prepared to take the risk without inquiry, and that the court will not bend over backwards to assist lenders who in hindsight wish that they had insisted on fuller disclosure.96 But in circumstances where the client lacks the ability to protect its own interests, the relevant principle is that:97 … if, in the course of investigating title, a solicitor discovers facts which a reasonably competent solicitor would realise might have a material bearing on the valuation of the lender’s security or some other ingredient of the lending decision, then it is his duty to point it out.

For example, in Bristol & West Building Society v Fancy & Jackson (a firm)98 the defendant solicitors, who acted for both lender and borrower, were retained on the basis of the lender’s standard form documentation under which they were required to notify the lender of any matters that might prejudice its security or that were at variance with the loan offer. Chadwick J held that by not notifying the lender that the purchase price stated in the offer was not the true price paid by the borrower to the vendor, the solicitors committed a tortious breach of duty.

[5.95] Potential for conflicting duties can also surface where a lawyer receives confidential information from a third party that is relevant to the representation of the client. The conflict is between the lawyer’s duty to the confider and the duty to disclose information to the client. Lawyers should therefore take all reasonable steps to eschew situations of this kind, and avoid undertaking to a third party confider that the information will not be disclosed to the client.99 Otherwise, if the information is material to the client’s matter, lacking confider consent to disclosure or client consent to non-disclosure, the conflict will require the lawyer to withdraw from the matter. In this regard, it cannot be assumed that client consent to non-disclosure necessarily precludes the lawyer from subconsciously using the confidential information for the client’s benefit.

96 Halpern and Peacocke, “What is the Extent of a Solicitor’s Duty of Disclosure to a Mortgagee?” (1997) 147 New LJ 967 at 968. 97 Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836 at 842 per Sir Thomas Bingham MR. 98 Bristol & West Building Society v Fancy & Jackson (a firm) [1997] 4 All ER 582. See also Bristol & West Building Society v May May & Merrimans (a firm) [1996] 2 All ER 801; Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836; E Surv Ltd v Goldsmith Williams Solicitors [2016] 4 WLR 44. 99 Tas, para 25(b); NZ, rr 7.4, 7.5.

[5.105]

5 Lawyers’ Duty to Clients in Tort

169

Can the duty of care include giving financial advice? General principle – no duty to provide financial advice

[5.100]

Courts will not assume that a lawyer–client retainer attracts a duty to supply financial advice. The general rule is that a lawyer whose retainer does not impose a duty to give commercial advice, or advice as to the financial prudence of a transaction, will not be negligent in failing to do so.100 There are good reasons for this. Most fundamentally, there is the issue of competence and the need for licensing. Lawyers may not be qualified to assess financial risk or proffer financial advice.101 Persons who carry on a business of providing financial services102 must be licensed for that purpose.103 A breach of this requirement is an offence.104 In any case, a lawyer may be placed at a disadvantage in lacking all necessary information and documents to supply financial advice.105 There is the added danger that the relationship of confidence engendered by the lawyer–client relationship may cloud a client’s judgment regarding financial advice;106 clients may, after all, be guided by the advice of their lawyers as experienced persons of affairs.107 But as a general rule, “it is for clients, not lawyers, to make commercial decisions”.108 Financial advice and professional indemnity insurance cover

[5.105]

Financial advice falls outside the terms of lawyers’ professional indemnity insurance cover, and so negligent financial advice may generate personal liability in the lawyer for resultant loss. In Solicitors’ Liability Committee v Gray,109 for example, the solicitors promoted property schemes aimed at providing investment advice 100 Orszulak v Hoy (1989) Aust Torts Reports ¶80-293 at 69,184 per G N Williams J (FC(Qld)); Krambousanos v Jedda Investments Pty Ltd (1996) 64 FCR 348 at 365 per Branson J (affd Jedda Investments Pty Ltd v Krambousanos (1997) 72 FCR 138); Sullivan v Dan [1997] ANZ Conv R 589 at 592 per Bryson J (affd Sullivan v Dan (1998) NSW ConvR ¶55-854); Micarone v Perpetual Trustees Australia Ltd (1999) 75 SASR 1 at 142 per Olsson J; Cadoks Pty Ltd v Wallace Westley & Vigar Pty Ltd (2000) 2 VR 569 at [120] per Ashley J; Baker v Sheridan (2005) Aust Torts Reports ¶81-788 at [382]–[418] per James J; Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd (2009) 263 LSJS 87 at [257] per White J (affd Tasmanian Sandstone Quarries Pty Ltd v Legalcom Pty Ltd (2010) 270 LSJS 519); Baird v Hastings & Co (Solicitors) [2014] PNLR 17 at [23] per Weatherup J. 101 Polkinghorne v Holland (1934) 51 CLR 143 at 158 per Rich, Dixon, Evatt and McTiernan JJ; Micarone v Perpetual Trustees Australia Ltd (1999) 75 SASR 1 at 142 per Olsson J. A lawyer should not undertake work that he or she cannot competently complete: see [3.165], [3.180]. 102 As defined by the Corporations Act 2001 (Cth), s 766A. 103 Corporations Act 2001 (Cth), s 911A(1). But note the exemption from licensing in respect of advice by lawyers that is reasonably regarded as a necessary part of legal practice: s 766B(5); Corporations Regulations 2001 (Cth), regs 7.1.35A, 7.1.40. 104 Corporations Act 2001 (Cth), s 1311(1). 105 Micarone v Perpetual Trustees Australia Ltd (1999) 75 SASR 1 at 142 per Olsson J. 106 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 172 per Street CJ. 107 Polkinghorne v Holland (1934) 51 CLR 143 at 158 per Rich, Dixon, Evatt and McTiernan JJ; Hogan v Howard Finance Ltd (1987) ASC ¶55-594 at 57,539 per Hope JA; Solicitors’ Liability Committee v Gray (1997) 77 FCR 1 at 44–45 per Beaumont and Burchett JJ; Swart v Carr [2006] NSWSC 1302 at [67] per Palmer J (revd in part but without casting doubt on this observation: Carr v Swart [2007] NSWCA 337). 108 Lucantonio v Kleinert [2011] NSWSC 753 at [130] per Brereton J. 109 Solicitors’ Liability Committee v Gray (1997) 77 FCR 1.

170

Lawyers’ Professional Responsibility

[5.110]

and tax advantages to clients. They settled a claim against them for misrepresentation, negligence and breach of fiduciary duty in respect of one such scheme, and then sought an indemnity under their professional indemnity insurance. The Full Federal Court construed the policy to cover liability exhibiting a nexus with the professional functions of a solicitor, not for entrepreneurial activity lacking a real nexus to a solicitor’s practice.110 The court viewed the schemes as the actions of businesspersons rather than solicitors, and so the loss fell outside the policy. In ascertaining the boundaries of legal practice for this purpose, the court will carefully review the nature of the services supplied, and be guided by their substance rather than their form or description. Relevant also may be the form of costs disclosure, the manner of charging, the means of accounting for money received and disbursed, and the allocation of contractual risks and responsibilities. Inconsistency of these with the usual approach to providing legal services will cause a court to query whether the services merit that description, and when coupled with evidence that the services are of an entrepreneurial nature, will in all likelihood cause the court to conclude against coverage by professional indemnity insurance.111 Giving of financial advice where contemplated by the retainer

[5.110]

The type of advice a lawyer is professionally required to give depends on the nature and extent of the retainer. The lawyer may be retained only to carry out, by the necessary legal procedures, a business arrangement between the client and third parties. In other cases, the retainer may require advice in relation to the form of a transaction.112 Neither scenario requires the lawyer to furnish financial or commercial advice, as there is no express requirement to this effect; the court will ordinarily presume against any such requirement except where it is clear.113 Yet it is not always easy to divorce legal from financial advice, as the legal course selected is often premised on financial concerns.114 Good legal advice, in any case, cannot be given in a vacuum; issues of a financial nature may dictate the type and quality of advice that is appropriate.115 As such, it may be that the retainer can require the lawyer to advise on the different ways in which a client’s end may be 110 Their Honours cited from Brennan J in Leary v Federal Commissioner of Taxation (1980) 32 ALR 221 at 240 per Brennan J, who noted that “[e]ntrepreneurial activity does not attract the same privilege nor the same protection as professional activity”, and that the activities of an entrepreneur in the promotion of a scheme in which taxpayers will be encouraged to participate falls outside the scope of professional activity. 111 These were factors that led the court to so conclude in Carr v Swart [2007] NSWCA 337. 112 See, for example, Polkinghorne v Holland (1934) 51 CLR 143. 113 Janesland Holdings Pty Ltd v Simon [2000] ANZ Conv R 112 at 124 per Crispin J. 114 Wong v 407527 Ontario Ltd (2000) 179 DLR (4th) 38 at 53 per Laskin JA (“a lawyer may well have a duty to give advice on the financial or business aspects of a transaction, depending on the client’s instructions and sophistication, and on whether the client is relying on the lawyer for that kind of advice”). 115 Solicitors’ Liability Committee v Gray (1997) 77 FCR 1 at 44 per Beaumont and Burchett JJ. In fact, the provision of legal advice in the proper commercial context is a justification proffered in support of multidisciplinary practices: see [20.150].

[5.120]

5 Lawyers’ Duty to Clients in Tort

171

attained and their respective economic advantages and drawbacks. Depending on the client, it may be necessary, even without express direction, to bring to the client’s attention matters that impact on her or his financial security. In certain circumstances, it behoves lawyers, whether as a matter of law or of good practice, to counsel clients to seek financial advice.116 In fact, in Tarzia v National Australia Bank117 the Full Federal Court said that “[i]n certain situations it may be negligent of a solicitor not to ensure that his client has good financial advice, particularly when the client is at a disadvantage with respect to the other parties to the transaction, and where the results are potentially disastrous to the client”.

[5.115]

The financial advice issue has arisen in case law involving lawyers advising parties to a loan. A lawyer advising a lender who knows or has reason to suspect that the borrower may be insolvent, or that the securities he or she has been asked to prepare may be inadequate, must so advise the lender.118 And a lawyer should report to the lender client matters discovered – or that ought to have been discovered – that might prompt doubt as to the correctness or reliability of the valuation, or some other ingredient of the lending decision.119 The New South Wales Court of Appeal in Rexstraw v Johnson,120 for instance, held that a lawyer who proceeded to settlement with a valuation from a valuer unknown to him, whose valuation exceeded the amount of the loan, should have queried whether the valuation was independent and whether the client investors would consider it satisfactory for their purposes. Though in a sense financial advice, the foregoing represents the type of advice a lawyer of ordinary competence is expected to furnish to protect a lender’s interests.

[5.120]

Issues relating to financial advice also arise for lawyers retained to certify a guarantor’s or borrower’s understanding of what he or she is undertaking. Such a certificate serves to protect the lender from the risk of the transaction being set aside for a factor vitiating the contract. “It is not generally the task of solicitors to explain the financial result or prudence of the transactions involved in documents

116 See, for example, Davies v Camilleri (2000) 10 BPR 18,345 at [125], where Bell J held that a solicitor who had seen both the borrower and a mortgage broker (to whom the moneys borrowed were to be advanced for the purposes of investment) in the same meeting without inquiring of the borrower’s understanding of the transaction, had been negligent not only in failing to advise the borrower privately (in order to mitigate the potential for undue influence) but in not advising her to obtain financial advice as to the wisdom of the proposed investment. 117 Tarzia v National Australia Bank (unreported, FC(FCA), 12 October 1995) at 28. 118 See, for example, Pegrum v Fatharly (1996) 14 WAR 92, discussed at [3.65]. 119 Kayteal Pty Ltd v Dignan [2011] NSWSC 197 at [38], [48] per Brereton J (who held that a reasonably competent solicitor in the circumstances would have queried the valuation on matters that came within his expertise, which included a responsibility to confirm whether an assumption in the valuation – pertaining to flood exposure of the land the subject of the loan – was vitiated by information the solicitor obtained from searches and inquiries: at [58]). 120 Rexstraw v Johnson [2003] NSWCA 287 at [101] per Tobias JA, with whom Sheller JA and Foster AJA concurred. See also CA & MEC McInally Nominees Pty Ltd v HTW Valuers (Brisbane) Pty Ltd (2001) 188 ALR 439 at [60] per Chesterman J.

172

Lawyers’ Professional Responsibility

[5.120]

they are merely instructed to explain” unless “they undertake the task of doing so, or are specifically retained to perform it and supplied with the necessary information and documentation”.121 Remarks suggesting that lawyers should advise on the wisdom of entering into the transaction122 impose too onerous a duty (although there may be circumstances where such a duty is justified: see [5.130]–[5.140]). Were lawyers potentially liable to borrowers or guarantors for improvident transactions they may eschew giving advice on loan or guarantee transactions, or alternatively its cost will increase. So it has been said that “[i]t is not necessary to go into financial implications in order to explain the purport or effect of … a mortgage or guarantee”.123 This is subject to the proviso that the terms of the retainer may in fact require this of the lawyer, but prudent lawyers will be wary of accepting instructions of this kind. Where the retainer does not require advice as to the financial wisdom of the transaction, a lawyer should “concentrate on giving a clear account in summary of the salient features of the transaction in terms likely to be understood by a lay person unversed in legal matters”.124 This does not require a clause-by-clause explanation, which would overload the ordinary layperson’s attention span and distract attention from the major features of the transaction (bearing in mind that the degree of explanation should vary according to the nature and knowledge of the client).125 In all cases, though, the lawyer must ensure that the client understands the implications of the transaction,126 which in some circumstances may involve counselling the client to obtain advice on its financial wisdom from a qualified person.127 That the transaction is evidently improvident from the client’s perspective may lead the lawyer to query not only the client’s understanding but also her or his free will in entering into it, and thus to take steps to tease out the motivating forces behind the transaction.128 121 Tarzia v National Australia Bank (unreported, FC(FCA), 12 October 1995) at 28. 122 See, for example, McNamara v Commonwealth Trading Bank of Australia (1984) 37 SASR 232 at 241 per King CJ. 123 Micarone v Perpetual Trustees Australia Ltd (1999) 75 SASR 1 at 146 per Olsson J. 124 Citibank Savings Ltd v Nicholson (1997) 70 SASR 206 at 233 per Perry J. 125 Citibank Savings Ltd v Nicholson (1997) 70 SASR 206 at 233–234 per Perry J. 126 Padden v Bevan Ashford (a firm) [2012] 1 WLR 1759 at [42] per Lord Neuberger MR. For example, if a transaction involves giving an all moneys unlimited guarantee, the lawyer must bring home to the client that he or she will have no control over the extent of the liability he or she is being asked to undertake, not simply that the liability is “unlimited”, and inform the client of any alternatives: Royal Bank of Scotland v Etridge (No 2) [1998] 4 All ER 705 at 715 per Stuart-Smith LJ. 127 Citibank Savings Ltd v Nicholson (1997) 70 SASR 206 at 234 per Perry J. 128 See, for example, Padden v Bevan Ashford (a firm) [2012] 1 WLR 1759, where a wife provided her interest in the family home as security for her husband’s liabilities in the mistaken belief, fostered by the husband’s solicitor, that giving that security would in all likelihood prevent her husband being incarcerated. Lord Neuberger MR, with whom Hughes and Sullivan LJJ concurred, remarked (at [47]) that “[a] solicitor, properly advising her about the proposed transaction, should have told her of the importance of finding out all the relevant facts, before she executed the four documents”, and (at [48]) that “[s]he should have been told in clear terms that a hurried short meeting was simply inappropriate, bearing in mind the importance, riskiness and probable pointlessness of the transaction she was about to enter into, the inadequacy of the information available at the moment,

[5.135]

5 Lawyers’ Duty to Clients in Tort

173

[5.125]

The Legal Profession Uniform Legal Practice (Solicitors) Rules 2015, applicable in New South Wales and Victoria, address the duties of a solicitor engaged to give advice to a proposed signatory who will be a borrower in loan or security documents, or a guarantor providing security for the borrower.129 In addition to verifying the identity of the proposed signatory, the rules require that the evidence of advice be in the prescribed forms, depending on whether it is supplied to a borrower or a guarantor. The solicitor is also obliged to obtain documents in the prescribed form, including acknowledgements of the giving of the advice, for retention on file. Financial advice required due to nature of the client

[5.130]

When a client in full command of her or his faculties, and apparently aware of what he or she is doing, seeks a lawyer’s assistance in carrying out a particular transaction, the lawyer is arguably under no legal duty to go beyond those instructions by proffering unsought advice on its wisdom.130 But where the client suffers a disadvantage that prevents a full appreciation of the financial drawbacks of the transaction, the lawyer may need to advise as to the viability, even if not specifically requested to do so. In Southern Law Society v Westbrook,131 for example, the respondent client was an 84-year-old woman who had been blind for some years, and lacked relatives or others interested in her welfare. O’Connor J remarked that “the fiduciary nature of the relation between the respondent and his old lady client was of a peculiarly delicate character”, making it his duty “to take care that the old lady was properly advised and fully understood the dealings with her property”.132

[5.135]

Yet the extent to which the law should impose upon lawyers legal duties to give unsolicited financial advice (or to push for alternative avenues to mitigate improvidence in a transaction), even for clients that lack business experience or are aged, remains unsettled. At one end of the spectrum is the New South Wales Court of Appeal’s decision in Citicorp Australia Ltd v O’Brien.133 In a contract for the sale of and her inevitably upset and emotional state, coupled with the pressure being put on her”. The most important function of independent legal advice in these circumstances, his Lordship concluded, “would have been to explain to her that her main, or perhaps sole, purpose for entering into the transaction was very weak as it would very probably not be achieved”. By merely advising the wife not to enter into the transaction, the solicitor had not, according to the court, done enough.

129 Legal Profession Uniform Legal Practice (Solicitors) Rules 2015, r 11. 130 Clark Boyce v Mouat [1993] 3 NZLR 641 at 648 (PC), cited with approval in Nikolic v Nikolic [2002] NSWCA 248 at [17] per Davies AJA, with whom Giles JA and Young CJ in Eq concurred. See also Football League Ltd v Edge Ellison (a firm) [2006] EWHC 1462 (Ch) at [270] per Rimer J (who answered the following question in the negative, in a case involving an experienced client who had overlooked a commercial feature of a transaction: “Is the solicitor supposed to review the whole range of commercial considerations that underlie a particular deal, work out which ones he is concerned the client may not have given sufficient thought to and remind him about them?”); Bartle v GE Custodians [2010] 1 NZLR 802 at [147] per Randerson J (“in general, a solicitor is not required to give advice … about the wisdom of a transaction in the sense that, for example, a property to be purchased is good value for money or that a business transaction would be worthwhile”). 131 Southern Law Society v Westbrook (1910) 10 CLR 609. 132 Southern Law Society v Westbrook (1910) 10 CLR 609 at 621. 133 Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398.

174

Lawyers’ Professional Responsibility

[5.140]

land, a solicitor (unwisely) acted for the vendor, the appellant financier and the respondent purchasers. The solicitor did not explain the financial implications of the dealing to the respondents, who had limited financial resources, and little education and financial experience. The trial judge’s finding of negligence against the solicitor for not providing this advice134 was reversed by the Court of Appeal. It found the trial judge’s approach imposed a duty upon the solicitor beyond the terms of the retainer and outside any responsibility assumed by him or relied upon by the respondents, reasoning as follows:135 [T]he difficulties faced by the [respondents] which [the trial judge] considered were so great and, to professional persons, so obvious that a solicitor could not reasonably leave them unstated, did not impose the duty his Honour held [the solicitor] to be under. Stated bluntly, such a duty would require solicitors, retained to act on a purchase or mortgage for their skill in the law, to inform every client for whom they so acted of their views about the financial prospects of the purchase or mortgage where they felt or ought reasonably to have felt that there was a risk of loss. One consequence of this would be to require solicitors to give opinions, which they were not qualified to give, with the obvious consequence that if they were wrong and the client had acted on the basis of those views, they would be liable in negligence. For good reason such a proposition is contrary to authority. The solicitor’s duty is found in the terms of the retainer and the ambit of any additional assumed responsibility relied upon.

In Dominic v Riz136 a solicitor was retained to effect a transaction in which the clients mortgaged their home to raise funds to invest $150,000 in an investment that promised a $312,000 return over a year. The solicitor advised the clients to obtain financial advice in relation to the transaction but did no more. The clients lost their investment, and sued the solicitor for negligence. The trial judge ruled against the solicitor, saying that “a solicitor who is carrying out a transaction for a client is not justified in expressing no opinion when it is plain that the client is rushing into an improvident adventure”.137 This finding was overturned on appeal, where Allsop P, with whom Hodgson and McColl JJA concurred, held that the trial judge had gone “too far”.138 As the solicitor lacked knowledge of the underlying transaction, had not been retained to advise on it, and had advised the clients to secure independent financial advice, she had, according to the court, fulfilled her retainer without negligence.139

[5.140] Citicorp Australia Ltd v O’Brien and Dominic v Riz should not be read as a licence to adopt an unthinking or blinkered approach to client advice. Circumstances may arise that attract a legal duty to advise a client as to the financial wisdom of a transaction the lawyer is retained to facilitate, especially if the lawyer is to provide independent advice. The New South Wales Court of Appeal in Kowalczuk v Accom 134 O’Brien v Hooker Homes Pty Ltd (1993) ASC ¶56-217. 135 Citicorp Australia Ltd v O’Brien (1996) 40 NSWLR 398 at 418 per Sheller JA, with whom Meagher JA and Abadee AJA agreed. 136 Dominic v Riz (2009) NSW ConvR ¶56-248. 137 Riz v Perpetual Trustee Australia Ltd (2008) NSW ConvR ¶56-198 at [148] per Brereton J. 138 Dominic v Riz (2009) NSW ConvR ¶56-248 at [87]. 139 Dominic v Riz (2009) NSW ConvR ¶56-248 at [93]–[96].

[5.145]

5 Lawyers’ Duty to Clients in Tort

175

Finance Pty Ltd140 noted, to this end, that what Citicorp Australia Ltd v O’Brien rejected was that the lawyer’s obligation extended to explaining how the mortgage terms would apply in the particular financial circumstances of the client; it did not reject a proposition that a lawyer engaged to explain a document to a client is obliged to bring home to the client how the document, according to its own terms, is capable of operating. The more improvident the transaction, and the more dependent the client on the lawyer in relation to it, the more compelling the argument that the lawyer should, even if outside the strict bounds of the retainer, seek to shield the client from a real and foreseeable risk of economic loss, or at least counsel the client to secure independent financial advice. In the context of mortgage granted by a woman aged in her 60s over her home (at which she also conducted a business) to secure finance for a company in which her son had a controlling interest, Allsop P in Provident Capital Ltd v Papa made the following remarks:141 If the retainer is to give legal advice, depending on the circumstances, that may (as it did here) extend to explaining the practical consequences of the legal obligations arising from the relevant document in the known circumstances. It may be apparent, as it was here, that the legal and practical consequences to a client of entering into a transaction may be significant, but are not such as can be assessed without financial or further financial information or advice. In such circumstances, the solicitor may be obliged to counsel in appropriate terms (perhaps strong terms) about the risks in proceeding without further information or advice. Depending upon the circumstances, such as apparent ties of loyalty, whether of blood or love, the apparent risks may have to be brought home with clarity and force … [After all], many clients look to and rely on an advising lawyer, not as the expounder of legal doctrine, but as the confidential adviser about the law, and its practical intersection with life. That is why they seek advice. That is why lenders require the interposition of the trained solicitor to give independent advice and, sometimes, to certify same.

In taking no step to bring home to his client that she was risking the loss of her only substantial asset, and that avoiding that risk rested on the success of a business of which she knew nothing, beyond blandishments from her son, the solicitor had been negligent.142 Can the giving of other non-legal advice come within the retainer?

[5.145]

Aside from giving legal advice, and financial or business advice when it comes within the terms of the retainer, lawyers owe no legal duty to furnish advice to their clients.143 It follows that a lawyer cannot be found liable in contract or tort for failing to provide non-legal and non-financial advice, unless he or she has committed a negligent misstatement at general law or breached the statutory 140 Kowalczuk v Accom Finance Pty Ltd (2008) 77 NSWLR 205 at [295] per Campbell JA, with whom Hodgson and McColl JJA agreed. 141 Provident Capital Ltd v Papa (2013) 84 NSWLR 231 at [2], [6] (paragraph break omitted). 142 Provident Capital Ltd v Papa (2013) 84 NSWLR 231 at [3] per Allsop P, at [80] per Macfarlan JA, at [120]–[122] per Sackville AJA. 143 Cousins v Cousins (unreported, CA(NSW), 18 December 1990) at 12 per Kirby P (dissenting but not on this statement of principle).

176

Lawyers’ Professional Responsibility

[5.150]

proscription against misleading or deceptive conduct (see [5.15]), or has failed to advise as to the client’s moral obligations where those may translate to legal obligations.144 But as a matter of good practice lawyers should supply “rounded” legal advice, which may involve taking into account non-legal factors. Prudent lawyers will not blithely assume that a client’s best legal interests always coincide with the client’s overall best interests. A proposed course of action may have adverse non-legal consequences, including for third parties. A lawyer who foresees these consequences but fails to alert the client, though perhaps not liable in negligence, may incur client dissatisfaction. Also, the type of client may dictate the appropriate content of advice. Advice that takes into account economic and political factors may, for instance, be of particular importance where the Government is the client.

[5.150]

The foregoing recognises that legal advice does not operate in a vacuum, and that client interests may not infrequently justify proffering other than legal advice. The point is the subject of a professional rule in the United States, which provides that, in rendering advice, a lawyer may refer not only to law but also to “other considerations such as moral, economic, social and political factors, that may be relevant to the client’s situation”.145 It is expanded in the commentary to the rule, part of which reads:146 Advice couched in narrowly legal terms may be of little value to a client, especially where practical considerations, such as costs or effects on other people, are predominant. Purely technical legal advice, therefore, can sometimes be inadequate. It is proper for a lawyer to refer to relevant moral or ethical considerations in giving advice. Although a lawyer is not a moral adviser as such, moral and ethical considerations impinge upon most legal questions and may decisively influence how the law will be applied.

The Canadian and Hong Kong rules similarly envisage that lawyers may be asked for or expected to give advice on non-legal matters such as the business, policy or social implications involved in a question, or the course a client should choose. They note that while in many instances the lawyer’s experience will be such that her or his views on non-legal matters will be of real benefit to the client, a lawyer should, where and to the extent necessary, point out her or his lack of experience or other qualification in the particular field and clearly distinguish legal from non-legal advice.147 No current Australian rules explicitly address the point. The closest were the former Western Australian rules, which required lawyers to draw clients’ attention 144 A typical example involves advice to testators of their moral obligation to provide for those entitled to claim under family provision legislation. As to the moral obligation underscoring court orders for family provision, see Dal Pont and Mackie, Law of Succession (LexisNexis Butterworths, 2013), [17.60]–[17.64]. 145 US, r 2.1. See generally Gantt, “More Than Lawyers: The Legal and Ethical Implications of Counseling Clients on Nonlegal Considerations” (2005) 18 Geo J Legal Ethics 365. 146 US, r 2.1 (cmt [2]). See also Restatement, §94(3), cmt h (“A lawyer’s advice on significant nonlegal aspects of a matter may be particularly appropriate when the client reasonably appears to be unaware of such considerations or their importance or when it should be apparent that the client expects more than narrow legal counsel”). 147 Can CPC, r 3.1-1, cmt [10]; HK, principle 5.18, cmt [5].

[5.155]

5 Lawyers’ Duty to Clients in Tort

177

to the possible effect of a proposed course of action that may adversely affect their reputation.148 As morally questionable conduct, though legally justifiable, may adversely affect a client’s credit or honour, there seems little to preclude a lowyer giving moral advice. A former High Court Chief Justice, extra-judicially, has noted this even in a commercial environment:149 Because the moral purpose of much commercial law is known to or ascertainable by commercial lawyers alone, the moral lawyer becomes by default the moral as well as the legal adviser to the client … [T]he commercial lawyer’s duty cannot be restricted to legal advice, for then the moral decision – what ought to be done as distinct from what can lawfully be done – will not be addressed.

If correct, it stands to reason that lawyers need not adopt complete amorality in giving client advice. It is arguably inconsistent to expect ethical behaviour in lawyers’ own lives, but then require lawyers to adopt complete amorality in giving legal advice (being an “emotional schizophrenic”).150 It is also inconsistent with the reality that some clients, at least, view lawyers as counsellors of more than simply legal advice. Issues of morality may be of particular importance in advising a client who has or seeks a reputation for honour and integrity (say, a church or charity), but are not necessarily so circumscribed.

[5.155]

Not all moral counselling can be prudentially packaged – as advice supplied in the legal interests of the client – for “[i]f virtue were always its own reward, we would surely see more of it in the business world”.151 Yet there are those who contend that lawyers should nonetheless engage in moral counselling, a reason being that lawyers are independent of the client, and so are better positioned to supply advice of this kind.152 In this context it has been suggested that lawyers should raise awareness in, and discuss with, clients matters such as:153 • any conduct by clients that may injure third parties or that is designed to avoid legal obligations; • what an objectively “fair” disposition of the case would be; and 148 WA, r 13.2 (superseded). Cf Tas, para 7, which reads: “A client’s personal honour is his own concern unless he asks for advice on the subject. A barrister must sometimes take objections and defences and use evidence of a client which his own sense of honour would reject if the case related to him. He should, however, draw his client’s attention to the possible effect of the proposed course of action on the client’s credit or case if he thinks one or other may be affected. The client is entitled to his legal rights and he employs the barrister to get them for him by all lawful means” (emphasis supplied). 149 Brennan, “Commercial Law and Morality” (1989) 17 MULR 100 at 104, 105. 150 The phrase “emotional schizophrenic” is borrowed from Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 585. This contrasts with the traditional view of lawyer responsibility that the lawyer adopts a “role-based morality” and lacks “moral autonomy”. The traditional theory dictates that lawyers determine their moral obligations by reference to their role as lawyer, not as an individual. See Enright, “Ethics and the Family Lawyer” (1994) 7 Auck ULR 821 at 824–828. Cf Postema, “Moral Responsibility in Legal Ethics” (1980) 55 NYULR 63 at 64 (“in compartmentalising moral responses one blocks the cross-fertilisation of moral experience necessary for personal and professional growth”). 151 Rhode, “Moral Counseling” (2006) 75 Fordham L Rev 1317 at 1319. 152 Rhode, “Moral Counseling” (2006) 75 Fordham L Rev 1317 at 1331. 153 Zacharias, “Reconciling Professionalism and Client Interests” (1995) 37 William & Mary L Rev 1303 at 1359–62. Such a theory may have important implications, particularly in family law cases where the interests of the child are at stake: see [18.130].

178

Lawyers’ Professional Responsibility

[5.160]

• the lawyer’s own moral inclinations and obligations to third parties that the lawyer believes should be honoured. Ultimately, it is argued, this can translate into benefits for both lawyers – who “become more effective monitors of their own advice” – and clients generally, to the extent that “[e]veryone’s moral compass benefits from external checks”.154

[5.160]

An illustration of an instance where some have suggested that lawyers ought to delve outside the strict legal domain is in advising a client who seeks a divorce. The suggestion is that lawyers should not on all occasions blindly follow client instructions to effect the mere mechanics of the divorce, but should, unless it is clearly inappropriate,155 investigate whether divorce, as opposed to reconciliation, is indeed in the client’s best interests.156 Part and parcel of this advice could involve referring the client to non-legal avenues to resolve marital difficulties, including marriage counselling. It may also involve an awareness of client vulnerability, given that prospective divorce may likely place the client “at risk” not merely of depression but of potential self-harm. These views are underscored by a belief that lawyers are trustees of a broader moral obligation to society, within their field of influence, to promote and uphold social cohesion, which is not one shared by all within the practising profession.

STANDARD OF CARE Relevant standard Standard at general law and under statute

[5.165]

At general law, the relevant standard of care is “that of the ordinary skilled person exercising and professing to have that special skill”.157 Translated to the lawyer–client context, it is one of a qualified, competent and careful lawyer in the circumstances in the practice of her or his profession.158 As a lawyer is only liable for the use of “ordinary” care and skill, the standard of care provides no guarantee against all mistakes or omissions.159 So a lawyer is not negligent merely 154 Rhode, “Moral Counseling” (2006) 75 Fordham L Rev 1317 at 1333, 1334. 155 Such as where, for instance, where the client is a victim of continuing violence and/or abuse. 156 See, for example, Wardle, “Counselors as Gatekeepers: The Professional Responsibilities of Family Lawyers in Divorce Cases” (2010) 79 UMKC L Rev 417. 157 Rogers v Whitaker (1992) 175 CLR 479 at 483 per Mason CJ, Brennan, Dawson, Toohey and McHugh JJ. See generally Zipser, “Professionals and the Standard of Care” (1999) 7 Torts LJ 167. 158 Bannerman Brydone Folster & Co v Murray [1972] NZLR 411 at 430 per Woodhouse J; Hawkins v Clayton (1988) 164 CLR 539 at 580 per Deane J; Hanflex Pty Ltd v N S Hope & Associates [1990] 2 Qd R 218 at 226 per Demack J; Twidale v Bradley [1990] 2 Qd R 464 at 482 per Cooper J. 159 Jennings v Zilahi-Kiss, Zilahi-Kiss and MK Tremaine & Co Pty Ltd (1972) 2 SASR 493 at 512 per Bray CJ; Scottsdale Homes Pty Ltd v Gemkip Pty Ltd [2008] QSC 326 at [106] per Chesterman J (distinguishing the expected standard from conduct of a “particularly meticulous and conscientious practitioner”); Pritchard Joyce & Hinds (a firm) v Batcup [2009] PNLR 28 at [103] per Sedley LJ (“The law does not … demand either omniscience or infallibility in lawyers”, such that the standard of care means “that there will be errors which are not compensable”).

[5.170]

5 Lawyers’ Duty to Clients in Tort

179

for committing an error of judgment, unless that error is gross.160 There are manifold uncertain or difficult areas of the law, and so the expression of an opinion or the giving of advice by a lawyer does not normally constitute a promise that the opinion or advice is correct.161 It follows that cases will be lost notwithstanding that the lawyer has been diligent and careful;162 an unfavourable outcome, whether or not in litigation, is not per se evidence of negligence.163 A breach of the duty of care will be established only if the opinion or advice does not reflect the standard expected of a reasonably competent lawyer.

[5.170]

The advent of civil liability legislation has, in most jurisdictions, impacted on the relevant standard of care for professionals, including lawyers. The legislation essentially espouses the Bolam test,164 which focuses on action within the parameters of accepted professional opinion. The relevant New South Wales provision, which has counterparts expressed in similar terms in Queensland, South Australia, Victoria and Tasmania, sets the standard of care as follows:165 A person practising a profession (a professional) does not incur a liability in negligence arising from the provision of a professional service if it is established that the professional acted in a manner that (at the time the service was provided) was widely accepted in Australia by peer professional opinion as competent professional practice.

The statutory standard has been viewed, not as superseding the common law standard of care, but as a defence that insulates professionals, including lawyers, from tortious liability where they act in accord with “peer professional opinion”.166 160 Hall v Foong (1995) 65 SASR 281 at 304 per Debelle J. See, for example, Donnellan v Woodland (2012) NSW ConvR ¶56-307 at [103] per Beazley JA, with whom Basten, Barrett, Hoeben JJA and Sackville AJA concurred (who concluded that, although the appellant solicitor could have given more cautious advice, his assessment that the respondent client had a strong case “was an error of judgment of a kind that was not actionable”, but added that “[i]t would have been different if his advice had been clearly wrong as a matter of law”). 161 Trust Co of Australia v Perpetual Trustees WA Ltd (1997) 42 NSWLR 237 at 247 per McLelland CJ in Eq; Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [147], [307] per Malcolm AJA, at [363] per McPherson AJA; Carew Counsel Pty Ltd v French (2002) 4 VR 172 at [29] per Winneke P. 162 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 658 per Callinan J. 163 See, for example, Matrix Securities Ltd v Theodore Goddard (a firm) [1998] PNLR 290 (where no negligence was found against a lawyer who gave advice as to the tax authority’s ordinary practice in a case where that practice was not ultimately followed); Kekatos v Sansom [2009] NSWCA 171 (solicitor who advised clients intending to purchase a unit in a new apartment block to inspect the unit, in order to confirm it had two bedrooms, and to contact the solicitor if there was a problem, held to have had no duty to ensure that the clients actually inspected the unit). 164 Named after Bolam v Friern Hospital Management Committee [1957] 1 WLR 582 at 586 per McNair J. 165 Civil Liability Act 2002 (NSW), s 50(1). In the other jurisdictions see Civil Liability Act 2003 (Qld), s 22(1); Civil Liability Act 1936 (SA), s 41(1); Civil Liability Act 2002 (Tas), s 22(1); Wrongs Act 1958 (Vic), s 59(1). The equivalent Australian Capital Territory legislation (Civil Law (Wrongs) Act 2002 (ACT)) contains no specific provision for standard of care for professionals. The Civil Liability Act 2002 (WA) addresses standard of care only for health professionals (s 5PB). 166 Dobler v Halverson (2007) 70 NSWLR 151 at [59]–[61] per Giles JA; Sydney South West Area Health Service v MD (2009) 260 ALR 702 at [51] per Allsop P; Brakoulias v Karunaharan [2012] VSC 272 at [12]–[50] per Macaulay J; Grinham v Tabro Meats Pty Ltd [2012] VSC 491 at [133] per J Forrest J; McKenna v Hunter & New England Local Health District [2013] NSWCA 476 at [155]–[166] per Macfarlan JA, with whom Beazley P and Garling J concurred. See further Walmsley, Abadee and Zipser, Professional Liability in Australia (3rd ed, Lawbook Co., 2016), pp 68–71, 460–466.

180

Lawyers’ Professional Responsibility

[5.175]

For this purpose, differing widely accepted peer professional opinions on a matter do not prevent any one or more (or all) of those opinions being relied on.167 Peer professional opinion need not be universally accepted,168 but cannot be relied on if the court considers it “irrational” (in Victoria, “unreasonable”).169 Knowledge of the law and procedure

[5.175]

Whether at general law or under statute, the standard of care dictates that a lawyer is expected to possess the knowledge of the reasonably competent lawyer of well-settled principles of law,170 and the relevant procedure171 and rules of court,172 applicable to the client’s needs. As explained by the Supreme Court of Canada:173 A solicitor is not required to know all the law applicable to the performance of a particular legal service, in the sense that he must carry it around with him as part of his “working knowledge”, without the need of further research, but he must have a sufficient knowledge of the fundamental issues or principles of law applicable to the particular work he has undertaken to enable him to perceive the need to ascertain the law on relevant points.

Standard not informed by extraordinary foresight

[5.180]

A lawyer “is not bound … to exercise extraordinary foresight, learning or vigilance”.174 Generally speaking, therefore, a lawyer need not advise as to how the law might develop in an area, or as to the steps clients could take to address future developments. In Heydon v NRMA Ltd,175 for example, the New South Wales Court of Appeal ruled that the respondent’s counsel and its solicitors were not liable for the consequences of advice given as to the state of the law pending the hearing of a case before the High Court. When the advice was given, nothing within existing legal principle would have led a competent and skilled lawyer to foresee or warn against the possibility of the High Court substantially changing the relevant legal 167 NSW, s 5O(3); Qld, s 22(3); SA, s 41(3); Tas, s 22(3); Vic, s 59(3). 168 NSW, s 5O(4); Qld, s 22(4); SA, s 41(4); Tas, s 22(4); Vic, s 59(4). 169 NSW, s 5O(2); Qld, s 22(2) (or contrary to a written law); SA, s 41(2); Tas, s 22(2); Vic, s 59(2). 170 See, for example, Re Farmer (1997) 950 P 2d 713 (lawyer failed to understand and apply the fundamentals of bankruptcy law); Summerville v Walsh (unreported, CA(NSW), 26 February 1998) (lawyer failed to recognise and apply a provision of the wills legislation); Teachers Health Investments Pty Ltd v Julian (2001) NSW ConvR ¶55-990 (lawyer should have been aware of the principles in Yerkey v Jones (1939) 63 CLR 549, the principles of unconscionable dealing stated in Commercial Bank of Australia Ltd v Amadio (1983) 151 CLR 447 and of the Contracts Review Act 1980 (NSW)); Metsikas v Quirk (No 2) [2010] NSWSC 757 at [17] per Brereton J (“while I am acutely conscious that it may be unfair for those familiar with proceedings in this division or in the bankruptcy court to assume knowledge of an aspect of insolvency law by other practitioners, the notion of an insolvent’s assets vesting in the trustee in bankruptcy or liquidator upon sequestration or winding is fairly fundamental, and a basic one which every lawyer ought to understand”). 171 Ashby v Russell [1997] ANZ Conv R 321 at 323 per Debelle J. 172 Re Moore (1997) 494 SE 2d 804. 173 Central Trust Co v Rafuse (1986) 31 DLR (4th) 481 at 524 per Le Dain J. 174 Jennings v Zilahi-Kiss, Zilahi-Kiss and MK Tremaine & Co Pty Ltd (1972) 2 SASR 493 at 512 per Bray CJ. 175 Heydon v NRMA Ltd (2000) 51 NSWLR 1 (noted Borrowdale, “A Duty to Give the Right Advice?” [2001] NZLJ 229).

[5.185]

5 Lawyers’ Duty to Clients in Tort

181

principle.176 For this purpose, the court was unwilling to impose a duty to follow up the special leave application to the High Court by obtaining a transcript of the argument.177 The position may be otherwise where the retainer expressly requires the lawyer to speculate as to the likely course of the law. Again, though, it may be difficult to prove negligence, because speculation is by its very nature legitimately open to alternative views. Where, however, a lawyer is retained to advise on a topic that is subject to an announced legislative change, the advice should be qualified in terms that it represents the current law, and is no representation of what the law will be in future. If the retainer is to advise on the effect of a (proposed) legislative change, it must address this matter but still be expressed in qualified terms if the change has yet to materialise in final form. There nonetheless remains a role for foresight in the relevant standard of care; only “extraordinary” foresight goes beyond the legal expectation. The law recognises a duty to warn a client of potential risks of a course of action the lawyer is retained to effect, and to warn the client where there is otherwise a real and foreseeable risk of economic loss: see [5.30]. The extent of the duty is determined by the scope of the retainer, the nature of the client, and how foreseeable or substantial the risk or loss is likely to be. Standard not informed by hindsight

[5.185]

The court does not allow hindsight to insinuate itself into its reasoning in cases of alleged negligence; hindsight, it is said, should generally be “avoided when determining liability”.178 Megarry J made the point when he observed that:179 … there are few things that could not have been better done if done with hindsight. The advantages of hindsight include the benefit of having a sufficient indication of which of the many factors present are important and which are unimportant. But hindsight is no touchstone of negligence. The standard of care to be expected of a professional man must be based on events as they occur, in prospect and not in retrospect.

The point was reiterated in Capital Brake Service Pty Ltd v Meagher180 given that “[a]ny fool can be wise after the event”. The issue was whether the solicitor should have warned a client of the risks of settling with one joint tortfeasor (A) and persisting against the other joint tortfeasor (B). The New South Wales Court of Appeal found good reason for the solicitor to believe that the client would succeed against B. Although the advice to settle against A was conservative and careful, and shown in hindsight to cause the client loss, such was the inherent nature of 176 Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [380]–[450] per McPherson AJA, at [577]–[652] per Ormiston AJA. 177 Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [402], [403] per McPherson AJA, at [663] per Ormiston JA. 178 Hall v Foong (1995) 65 SASR 281 at 304 per Debelle J. 179 Duchess of Argyll v Beuselinck [1972] 2 Lloyd’s Rep 172 at 185. 180 Capital Brake Service Pty Ltd v Meagher [2003] NSWCA 225 at [30] per Ipp JA, with whom Meagher and Beazley JJA concurred.

182

Lawyers’ Professional Responsibility

[5.190]

litigation.181 The court refused to find the solicitor negligent, warning that care must be taken to judge a lawyer’s conduct, where negligent failure to warn is asserted, by reference to what he or she reasonably knew at the relevant time, not after the loss is suffered.182 Raising the standard of care?

[5.190]

As with most professions, the practice of law has become increasingly specialised, reflecting the growing complexity of society and commerce. It is unsurprising, therefore, that lawyers will specialise. Specialisation has a price, as a lawyer who is held out as an expert in a field of practice is subjected to a stricter standard of care regarding work within that field. The point is expressly recognised in the civil liability legislation in South Australia and Victoria,183 and is now established at general law. A leading statement is that of the Full Federal Court in Yates Property Corporation v Boland:184 When a firm, whether large or small, has developed a particular expertise in some area of the law it is difficult to see why as a matter of principle the standard of care in accordance with which that firm should carry out its professional work should be judged by reference to the standard of care of an ordinary practitioner. Indeed there is every reason to think that this should not be the case … When a client retains a firm that is or professes to be specially experienced in a discrete branch of the law that client is entitled to expect that the standard of care with which his retainer will be performed is consistent with the expertise that the firm has or professes to have. Such a client would no doubt be justifiably dismayed if he was told that the firm he has retained because of its experience is only required to act in accordance with the standards laid down for a solicitor who has only a general or even only a little knowledge of the law that is to be applied to the facts of the client’s case … The standard [of care] should reflect the fact that within any one calling practitioners have or profess to have varying degrees of expertise. The standard of care and skill required of such a person must bear some relationship to that expertise. In the case of a solicitor who is an expert in a particular branch of the law the requirement should be that the solicitor must carry out his retainer as would a reasonably competent solicitor who is an expert in that particular area of law.

Lawyers who possess specialist accreditation, or otherwise advertise an area of special expertise (see [20.40]), may come within the higher standard. Yet the court in Yates envisaged a higher standard not only for lawyers who profess specialist expertise, but also for those who possess that expertise. This raises the spectre of a lawyer being subject to a higher standard of care without having professed special 181 Capital Brake Service Pty Ltd v Meagher [2003] NSWCA 225 at [31], [32] per Ipp JA. 182 Capital Brake Service Pty Ltd v Meagher [2003] NSWCA 225 at [30] per Ipp JA. 183 Civil Liability Act 1936 (SA), s 40; Wrongs Act 1958 (Vic), s 58. 184 Yates Property Corporation v Boland (1998) 85 FCR 84 at 105 (emphasis supplied) (revd on appeal but without casting doubt on this point: Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575). See also Vulic v Bilinsky [1983] 2 NSWLR 472 at 483 per Miles J; Klienwort Benson Australia Ltd v Armitage (unreported, SC(NSW), Cole J, 26 April 1989); NRMA Ltd v Morgan (1999) 31 ACSR 435 at 733–734, 744 per Giles J; Creative Typographics Pty Ltd v Glade-Wright [1999] TASSC 20 at [26], [29] per Slicer J; Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 at [106] per Hasluck J; Palios Meegan & Nicholson Holdings Pty Ltd v Shore (2010) 108 SASR 31 at [39]–[41] per Gray J; Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [412]–[417] per Bell J. The same has been recognised in England: see, for example, Hicks v Russell Jones & Walker [2007] EWHC 940 (Ch) at [138] per Henderson J; Herrmann v Withers LLP [2012] PNLR 28 at [67] per Newey J.

[5.195]

5 Lawyers’ Duty to Clients in Tort

183

expertise, simply because other evidence indicates that he or she has or should have expertise sufficient to justify the application of that standard. This evidence will likely target the client’s reasonable expectation in the circumstances. For instance, the nature of the firm, and the fees it charges, may create in a client, without any explicit profession or holding out of expertise, an expectation of a standard of care exceeding what would ordinarily apply. The New South Wales Court of Appeal in Heydon v NRMA Ltd185 endorsed the concept of a variable standard of care, noting that for lawyers “professing to have a special skill in a particular area of the law, the standard of care is that of the ordinary skilled person exercising or professing to have that special skill”. This does not mean, however, that lawyers professing that special skill are judged by a higher standard in these areas than the ordinary skilled lawyer exercising or professing to have that special skill; as otherwise they would be penalised for greater proficiency at doing the same work. Lowering the standard of care?

[5.195]

Although the standard of care expected of a lawyer can be raised in certain circumstances, it is against public policy that it be lowered below the ordinary tortious professional standard. So the fact that the lawyer conducts a general practice, is inexperienced in legal practice186 or in a particular area of law or in the jurisdiction,187 does not lower the standard. Nor is the standard reduced because the lawyer acts without a fee,188 for a reduced fee189 or in a legal aid matter,190 or runs a practice in a country rather than a metropolitan area.191 The standard of care is unchanged also where a lawyer acts for multiple parties in a matter or transaction: see [7.20]. 185 Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [146] per Malcolm AJA (emphasis supplied). See also at [362] per McPherson AJA (“There is only one standard, which is the standard appropriate to a member of the profession with the relevant specialist skills”; emphasis supplied). 186 Siskamanis v Pandeli Barbayannis & Co (a firm) (unreported, FC(Vic), 25 March 1993) at 28 per Eames J. 187 Holdway v Acuri (No 2) [2007] QSC 378 at [46] per Fryberg J (“It is incumbent upon a practitioner who moves to a new jurisdiction to make himself or herself generally familiar with the law of that jurisdiction relevant to his or her areas of practice”) (revd but not on this point: Holdway v Acuri Lawyers [2009] 1 Qd R 18). 188 Chancliff Holdings Pty Ltd v Bell [1999] FCA 1783 at [16] per Lee J; Milu v Smith [2004] QSC 27 at [17] per Moynihan J; Padden v Bevan Ashford (a firm) [2012] 1 WLR 1759 at [51] per Lord Neuberger MR; Moss v Eagleston [2014] NSWSC 6 at [81] per McCallum J. 189 Edwards v Anderson [2009] NSWSC 373 at [29] per Schmidt AJ; Re N (a solicitor) [2010] QSC 267 at [35] per Fryberg J (“Having accepted a retainer, a true professional does not let the quality of the work undertaken suffer because the available remuneration is inadequate. If lawyers are not prepared to bear the cost of all necessary steps in a legal aid matter, regardless of funding, they should not take on the work”). 190 R v Japaljarri (2002) 134 A Crim R 261 at [71] per Eames JA. 191 Cousins v Cousins (unreported, CA(NSW), 18 December 1990) at 17 per Kirby P (dissenting but not on this point of principle) (“The standard of care to clients which is expected of the legal profession is high. It is as high in country towns as in the cities”). Cf Balamoan v Holden & Co (1999) 149 NLJ Rep 898.

184

Lawyers’ Professional Responsibility

[5.200]

Impact of urgency

[5.200]

The foregoing does not mean that the law applies the standard of care independent of inquiry into the circumstances in which the advice was requested. In May v Mijatovic192 Hasluck J suggested that the standard of care can depend on the urgency of the situation, taking account of time constraints in determining what a lawyer exercising reasonable care and skill could be expected to do. This does not involve a lowering of the standard in urgent matters, but that what reasonable care and skill requires may be affected by the circumstances. Where action is urgent, a lawyer may lack the time to properly assess the situation. Provided the client is warned of the risks of a course of action (see [5.50]), the applicable standard cannot require the same inquiry and consideration expected in less pressing circumstances. An example is advice requested as to whether or not to accept a formal offer of settlement made at the door of the court: see, for instance, Moy v Pettman Smith (a firm),193 discussed at [5.225]. Reliance on advice of counsel

[5.205]

In general, a solicitor is entitled to rely upon the advice of counsel properly instructed; indeed, for a solicitor, to rely on counsel’s advice is to make normal and proper use of the Bar.194 In this event, the solicitor is not ordinarily negligent should counsel’s advice prove incorrect.195 But this involves no reduction in the solicitor’s required standard of care, as the solicitor retains a duty that cannot be ousted or superseded by the engagement of counsel.196 Kirby J explained this duty in Boland v Yates Property Corp Pty Ltd as follows:197 [T]he solicitor … retains a legal duty to the client, separate, independent and personal, both by reason of the general law of negligence and the contract of retainer. The solicitor must exercise independent judgment to the extent that it is reasonable to demand this having regard to the solicitor’s reputed knowledge and experience, the complexity of the case and the skill and experience of the barrister who has been retained. If the solicitor reasonably considers that the barrister’s advice is obviously wrong, it is the solicitor’s duty to reject that advice and to advise the client independently, including as to the wisdom of retaining a fresh barrister. 192 May v Mijatovic (2002) 26 WAR 95 at [97], [157]. See also Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 at [98], [119] per Hasluck J; McFaddens (a firm) v Platford [2009] PNLR 26 at [374]–[378] per Judge Toulmin QC (where the defendant barrister had been asked to advise at very short notice). 193 Moy v Pettman Smith (a firm) [2005] 1 WLR 581. 194 Francis v Francis [1956] P 87 at 96 per Sachs J. See generally Bates, “The Litigation Solicitor’s Defence of Relying upon Counsel’s Advice” (1996) 26 Qld LSJ 393. 195 Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [248], [253] per Malcolm AJA; Regent Leisuretime Ltd v Skerrett [2007] PNLR 9 at [43]–[47] per Sir Peter Gibson; Lucantonio v Kleinert [2011] NSWSC 753 at [113] per Brereton J. See, for example, Foster v Alfred Truman (a firm) [2003] EWHC 95 (QB); Hellard v Irwin Mitchell [2013] EWHC 3008 (Ch). 196 White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 242–244 per Goldberg J; Darvall McCutcheon (a firm) v HK Frost Holdings Pty Ltd (in liq) (2002) 4 VR 570 at [39] per Chernov JA; Holdway v Acuri (No 2) [2007] QSC 378 at [47] per Fryberg J (revd but not on this point: Holdway v Acuri Lawyers [2009] 1 Qd R 18); Fraser v Bolt Burdon [2009] EWHC 2906 (QB) at [67] per Judge Richard Seymour QC. 197 Boland v Yates Property Corp Pty Ltd (1999) 167 ALR 575 at 616.

[5.210]

5 Lawyers’ Duty to Clients in Tort

185

Solicitors are not required to replicate the consideration that counsel has given to the matter – this would obviate the need to instruct counsel – but to “at least satisfy themselves that counsel’s advice and proposed course of action is not obviously wrong”.198 The client is “entitled to receive the professional advice and assistance of both the solicitor and counsel”.199 The relevant standard is, however, influenced by the solicitor’s level of knowledge in an area. A solicitor with expertise in the area of law cannot rely on counsel to the same degree as a solicitor who lacks that specialist experience.200 If the advice of counsel is clearly wrong, that the solicitor is not a specialist in the area, or that counsel is eminent in the field, is no justification for the solicitor’s failure to independently assess it. In Wakim v McNally201 the client supplied his solicitor with a copy of a case inconsistent with advice given by counsel, but the solicitor did not raise the matter with counsel because of the latter’s eminence. This was not, according to the Full Federal Court, a legitimate course of action for the solicitor, who should have raised his doubts with counsel in a courteous and professional way.202 Nor does instructing counsel protect a solicitor from negligence arising out of a failure to adequately or properly instruct counsel,203 the instruction of counsel who was obviously incompetent,204 or in respect of any action upon counsel’s advice in the absence of, or contrary to, the client’s instructions.205 Exclusion and disclaimer of liability

[5.210]

Because the law does not countenance lowering the standard of care, an attempt to do so via the retainer will be unsuccessful. For the same reason, the retainer cannot exempt lawyers for defaults in performing their professional responsibilities. There are good reasons for this. First, public confidence in lawyers, and therefore the justice system, would be reduced if the law condoned a negligent breach of a lawyer’s tortious duty by permitting the lawyer to shelter behind an

198 Harley v McDonald [1999] 3 NZLR 545 at 574. See also Matrix Securities Ltd v Theodore Goddard (a firm) [1998] PNLR 290 at 323 per Lloyd J (“it is only a solicitor’s duty to differ from [counsel’s advice] at that time and to give separate advice or to record reservations separately to the client if there was an important point on which the solicitor regarded counsel’s advice as being seriously wrong”). 199 Yates Property Corporation v Boland (1998) 85 FCR 84 at 103 (FC). 200 Yates Property Corporation v Boland (1998) 85 FCR 84 at 108 (FC); Fraser v Bolt Burdon [2009] EWHC 2906 (QB) at [67] per Judge Richard Seymour QC. Cf Langsam v Beachcroft LLP [2011] EWHC 1451 (Ch) at [137] per Roth J (remarking that although “the independent judgment which the solicitor should apply when considering whether the advice of counsel is ‘obviously or glaringly wrong’ is a judgment informed by his or her specialist expertise”, subject to that test, “where the advice is given by appropriate counsel specialised in the field who has been properly instructed, even an experienced and specialised solicitor is entitled to be guided by counsel’s advice”). 201 Wakim v McNally (2002) 121 FCR 162. 202 Wakim v McNally (2002) 121 FCR 162 at [52]. 203 Such as in failing to provide counsel with all the documents and facts relevant to the advice sought: see Locke v Camberwell Health Authority [1991] 2 Med LR 249. 204 Re A (a minor) (1988) 10 Fam L 339. 205 Such as settling the action without authority: see Thompson v Howley [1977] 1 NZLR 16.

186

Lawyers’ Professional Responsibility

[5.215]

exclusion clause in the retainer, thus depriving the client of compensation. Any loss stemming from a lawyer’s default in respect of a client should be borne by insurance, thereby spreading the loss among consumers of legal services. Second, the public service inherent in professionalism (see [1.30]) misaligns with an ability to exclude liability for professional defaults. Third, an exclusion clause in a retainer pits the lawyer’s interests against client interests, placing the lawyer in a position of conflict of interest and duty: see [6.05]. Attempts to exclude lawyers’ liability via the retainer have consequently met with judicial antipathy. In Wilkinson v Feldworth Financial Services Pty Ltd206 a clause in an agreement appointing a law firm as agent for subscription moneys to be invested with a third party read: [T]he parties agree and acknowledge that the [solicitors] have no liability for disbursement of the funds … and the parties indemnify and hold the [solicitors] harmless for any claim, demand, action or cost arising out of or in connection with the disbursement of any funds under this Agreement.

Rolfe J held that the clause was intended to protect the firm only in so far as it was correctly carrying out its obligations under the agreement in the event of loss. It was not directed to where the firm ignored its obligations under the subscription agreement.207 His Honour’s ruling was informed by his view that the parties were unlikely to have intended that the firm would not be liable for acting in an unauthorised manner, such as by losing the money due to gross negligence.208

[5.215]

The appropriate vehicle to guard against what could otherwise be liability for failure to meet the standard is to restrict the scope of the retainer, and thus the duty of care, by an express term in the retainer: see [5.25]. No breach of the duty of care in respect of a failure to give advice in a particular area of law arises due to the absence of the assumption of a duty itself. (Relying on an exclusion clause, on the other hand, presupposes a breach of the relevant duty.) The lawyer is protected, not by lowering the standard, but by restricting the scope of the engagement so as to deny responsibility at the outset. A client who is informed and understands the limitations on the scope of the lawyer’s undertaking may then make an informed choice to engage another lawyer to advise on matters outside the scope of the former’s retainer, or to retain another lawyer with the requisite expertise for the entire matter.

206 Wilkinson v Feldworth Financial Services Pty Ltd (1998) 29 ACSR 642. 207 Wilkinson v Feldworth Financial Services Pty Ltd (1998) 29 ACSR 642 at 739–740. 208 Wilkinson v Feldworth Financial Services Pty Ltd (1998) 29 ACSR 642 at 740.

[5.220]

5 Lawyers’ Duty to Clients in Tort

187

Relevance of expert evidence and professional rules

[5.220]

The court may rely on its own knowledge concerning what the ordinary, reasonably prudent and careful lawyer ought to know and do,209 although this does not preclude the calling of expert evidence.210 The latter can assist in determining the factual question of compliance with professional standards, by reference to current acceptable practice, although it remains for the court, not the expert, to reach a conclusion involving the application of the legal standard or test.211 Some judges have not placed great value on expert evidence in this context, as appears from the following statement by Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm):212 I doubt the value, or even the admissibility of this sort of evidence, which seems to be becoming customary in cases of this type. The extent of the legal duty in any given legal situation must … be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by a professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which really amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been placed, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court …

Expert evidence may assume greater importance in the wake of the statutory expression of the standard of care in civil liability legislation in several jurisdictions, focusing as it does on behaviour widely accepted by peer professional opinion: see [5.170].213 Standards prescribed by professional rules also received little weight in the past for this purpose – after all, the issue in cases of alleged professional negligence is competence whereas most disciplinary proceedings 209 Yates Property Corporation v Boland (1998) 85 FCR 84 at 111 (FC); NRMA Ltd v Morgan (1999) 31 ACSR 435 at 735 per Giles J. Cf Tasmanian Sandstone Quarries Pty Ltd v Tasmanian Sandstone Pty Ltd (2009) 263 LSJS 87 at [216] per White J (who remarked that as “[t]he legal profession has become much more specialised … [t]he assumption that courts will be familiar with the practice of solicitors in each of the various areas of professional practice may be appropriate in relation to some areas, but not all”) (affd Tasmanian Sandstone Quarries Pty Ltd v Legalcom Pty Ltd (2010) 270 LSJS 519). 210 Neagle v Power [1967] SASR 373 at 376 per Bray CJ; Jennings v Zilahi-Kiss, Zilahi-Kiss and MK Tremaine & Co Pty Ltd (1972) 2 SASR 493 at 513 per Bray CJ; Fox v Everingham (1983) 50 ALR 337 at 346 (FC(FCA)); Hanflex Pty Ltd v N S Hope & Associates [1990] 2 Qd R 218 at 227 per Demack J; Attard v James Legal Pty Ltd (2010) 80 ACSR 585 at [131] per Tobias JA; Baird v Hastings & Co (Solicitors) [2014] PNLR 17 at [15]–[18] per Weatherup J. 211 Permanent Trustee Australia Ltd v Boulton & Lynjoe Pty Ltd (1994) 33 NSWLR 735 at 738 per Young J; Heydon v NRMA Ltd (2000) 51 NSWLR 1 at [152] per Malcolm AJA; Maronis Holdings Ltd v Nippon Credit Australia Pty Ltd (2001) 38 ACSR 404 at [380], [381] per Bryson J; Lucantonio v Kleinert [2009] NSWSC 853 at [8] per Brereton J; Weller v Phipps (2010) 7 ASTLR 29 at [76], [77] per Hodgson JA. 212 Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp (a firm) [1979] Ch 384 at 402, cited with apparent approval in Yates Property Corporation v Boland (1998) 85 FCR 84 at 110 (FC), Football League Ltd v Edge Ellison (a firm) [2006] EWHC 1462 (Ch) at [278] per Rimer J and Watson v Ebsworth & Ebsworth (a firm) [2008] VSC 510 at [132] per Beach J (affd Watson v Ebsworth & Ebsworth (a firm) (2010) 31 VR 123). See also Ibrahim v Pham [2005] NSWSC 246 at [141] per Levine J (affd Ibrahim v Pham [2007] NSWCA 215). 213 Abadee, “Professional Liability: Solicitors Await Fresh Judicial Interpretation” (2003) 41 (Oct) LSJ 48 at 50.

188

Lawyers’ Professional Responsibility

[5.225]

target questions of ethics – but the shift evoked by the civil liability legislation may likewise afford rule-based standards greater relevance here.214 Standard of care in settlement advice Curial reticence to find negligence in settlement advice

[5.225]

Lawyers retained to prepare and conduct court or tribunal proceedings are ordinarily expected to advise on the settlement of the dispute (and ideally to do so in writing).215 This may encompass an obligation to “warn … of risks and pitfalls, correct wrong notions or unrealistic expectations and encourage the client in the direction the lawyer believes to be in the client’s best interest”.216 In so advising, lawyers must exercise reasonable care and skill, and may place legitimate pressure on clients to settle (see [4.140]). Courts have nonetheless shown reluctance to find lawyers negligent in reasonably giving advice as to the settlement of a dispute or in exercising that pressure.217 Advice to settle is not negligent merely because a court later considers a more favourable outcome may have prevailed had the dispute proceeded to judgment. This is because public policy favours the settlement of disputes, and a willingness to second-guess the advice may motivate lawyers to resist settlement.218 Also, as settlement advice by its very nature involves an element of the unknown, it is “difficult to underestimate the value of certainty provided by a settlement as opposed to the continuing risks of litigation through to judgment”.219 In any case, advice as to settlement, and a client’s decision on that advice, is impacted on by factors personal to a client and any inequality between the client and other parties to the dispute; different clients may have different stress and financial exposure thresholds.220 Ultimately, it is the client who must decide whether to compromise or to litigate, and so bear the consequences of this decision. Courts inquire into whether the settlement advice was within the range that, in the circumstances, could reasonably and properly be given.221 The range is construed neither too strictly, nor with the benefit of hindsight. In Moy v Pettman Smith (a 214 Cf Note, “The Evidentiary Use of Ethics Codes in Legal Malpractice: Erasing a Double Standard” (1996) 109 Harv L Rev 1102; Munneke and Davis, “The Standard of Care in Legal Malpractice: Do the Model Rules of Professional Conduct Define It?” (1998) 22 J Leg Prof 233. 215 Masters v Dobson Mitchell & Allport [2014] TASSC 31 at [84] per Pearce J (noting that, subject to limitations imposed by the terms of the retainer, “the failure of a legal practitioner to give written advice may be negligent” and, in any case, “the giving or confirmation of advice in writing is prudent to avoid disputes about what advice was given”). 216 Masters v Dobson Mitchell & Allport [2014] TASSC 31 at [81] per Pearce J. 217 See Warne, “Compromise of Litigation and Lawyers’ Liability: Forensic Immunity, Litigation Estoppels, the Rule Against Collateral Attack, Confidentiality and the Modified Duty of Care” (2002) 10 Torts LJ 167 at 189–203. 218 Karpenko v Paroian, Courey, Cohen and Houston (1981) 117 DLR (3d) 383 at 397 per Anderson J; Dew v Richardson [1999] QSC 192 at [42] per Chesterman J; Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [561] per Bell J. 219 Kelley v Corston [1998] QB 686 at 700 per Judge LJ. 220 Studer v Boettcher [2000] NSWCA 263 at [63] per Fitzgerald JA. 221 Luke v Wansbroughs (a firm) [2003] EWHC 3151 (QB) at [114] per Davis J; Walker v Chruszcz [2006] EWHC 64 (QB) at [104] per Davis J.

[5.230]

5 Lawyers’ Duty to Clients in Tort

189

firm),222 for example, counsel advised the client to proceed to trial rather than accept a payment into court by the defendant of some £150,000, believing the client’s claim to be worth between £200,000 and £300,000. Counsel did not inform the client that this higher estimate rested upon the judge admitting into evidence an expert report, but believed the chances of the report being admitted to exceed 50%. When the trial judge ruled against its admission, the defendant reduced its offer by £30,000. The client ultimately accepted £120,000 on councel’s advice, and then sued counsel for negligence for his loss. The House of Lords rejected the claim, Lord Carswell explaining as follows the judicial reticence to find a lawyer negligent on facts such as these:223 [T]he difficulties faced by an advocate who is advising on acceptance or rejection of a settlement are manifold and the pressures, especially if the advice has to be given at the door of the court, can be heavy. In such circumstances it would be surprising if every such piece of advice were reasoned with as much comprehensive precision as may be applied in hindsight by an appellate tribunal which has had the benefit of extensive argument and leisurely reflection … [I]t would be unfortunate if [lawyers] felt that they had to hedge their opinions about with qualifications. It would be equally unfortunate if another effect of the same syndrome were to be an abdication of responsibility for decisions relating to the conduct of litigation and a reluctance to give clients the advice which they require in their own best interests.

Yet Australian case law on the duty to warn a client of the risks in litigation (see [5.50]), and to disclose information relevant to the client’s decision-making (see [5.80]), may dictate that, aside from any barristerial immunity (see [5.260]–[5.345])224 an Australian court may have approached such a case less favourably to the barrister. Of course, the client would still need to surmount issues of causation, namely to prove that he or she would have acted differently had the advice been given:225 see [4.160]–[4.175]. Circumstances where advice as to strength of case can attract liability

[5.230]

The foregoing should not be understood to entirely immunise solicitors – compared to barristers in respect of settlements sufficiently connected with “in court” work (see [5.325]) – from liability for negligently given settlement advice. A solicitor is liable in negligence for committing a fundamental error226 or making a

222 Moy v Pettman Smith (a firm) [2005] 1 WLR 581. 223 Moy v Pettman Smith (a firm) [2005] 1 WLR 581 at [60]. See also at [21] per Lord Hope, at [27], [28] per Baroness Hale. Lords Nicholls and Brown concurred. 224 See, for example, Goddard Elliott (a firm) v Fritsch [2012] VSC 87 (where Bell J found that a lawyer’s breach of duty in failing to ensure the client’s mental capacity to give instructions relating to a settlement of a family law dispute was not actionable as coming within the relevant immunity). 225 See, for example, Smith v Moloney (2005) 92 SASR 498. 226 See, for example, Hodgins v Cantrill (1997) 26 MVR 481 (wrong advice as to likely quantum of settlement given by both solicitor and barrister); Hickman v Lapthorn [2006] PNLR 20 (in advising client to settle a personal injury claim, the lawyers negligently failed to take account of the real possibility that the client would be incapable of work, Jack J describing this omission as “clearly wrong” and not simply an error of judgment: at [50]); Whitehead v McLeish [2007] EWHC 1060 (QB) (advice as to settlement at around one quarter of the likely damages). Cf Finamore v Slater & Gordon (1994) 11 WAR 250; Jung v Templeton [2010] 2 NZLR 255.

190

Lawyers’ Professional Responsibility

[5.235]

misstatement of fact.227 For example, in Seamez (Australia) Pty Ltd v McLaughlin228 Sperling J found the following considerations that led the clients to settle constituted a breach of duty by the solicitors: • statements that the clients could not win, even though the solicitors believed there was a better than even chance of winning; • statements that an application for adjournment would be unsuccessful or futile, whereas an adjournment would very likely have been granted; • statements that both counsel had withdrawn from the case whereas one had not; and • the incorrect statement that a threatened injunction would prevent the clients from continuing in business. Failure to give competent advice as to the strength of the client’s case can also generate liability in negligence. In Kolavo v Pitsikas229 the appellant retained and sought legal advice on her prospects of succeeding in a claim against her travel agent and the tour operator arising out of an injury she suffered while on an organised package tour. On advice that she had a cause of action against both defendants, the appellant instructed that legal proceedings be instituted. By the time the matter came to trial, though, it became apparent that the proceedings were doomed to failure. The appellant’s action failed and she was ordered to pay the defendants’ costs. The New South Wales Court of Appeal upheld her action against the lawyers to recoup those costs. The only advice a competent lawyer could have given, according to the court, was that neither defendant could reasonably have foreseen the circumstances in which the appellant had suffered her injury.230 By failing to advise that her case was hopeless, the lawyers had breached their duty to the appellant. A lawyer who acts in a matter that lacks reasonable prospects of success may, in any case, be the subject of a personal costs order: see [17.260]–[17.275]. Failure to meet with a client

[5.235]

It is ordinarily difficult to conceive of a lawyer exercising the requisite reasonable care and skill unless he or she actually meets with the client. Although there are circumstances where face-to-face client contact is not essential – a major corporate client, which has its own in-house counsel, for instance, need not always be advised in person or orally beyond advice in written form which it has retained the lawyers to furnish – on most occasions client contact is essential. The issue surfaced, inter alia, in cases dealing with lawyers who represent joint clients in a transaction, but meet with only one of those clients. A scenario pregnant with risk is entrusting to a client the task to either explain the transaction to another client or to secure the latter’s execution of a relevant document, especially if the former has an interest potentially adverse to the latter. For example, in Eade v

227 Karpenko v Paroian, Courey, Cohen and Houston (1981) 117 DLR (3d) 383 at 397 per Anderson J; Borrowdale, “Hard Cases, Bad Law: Litigation Negligence” [2000] NZLJ 169 at 171–172. 228 Seamez (Australia) Pty Ltd v McLaughlin [1999] NSWSC 9 at [236]. 229 Kolavo v Pitsikas [2003] NSWCA 59. 230 Kolavo v Pitsikas [2003] NSWCA 59 at [57] per Cripps AJA.

[5.240]

5 Lawyers’ Duty to Clients in Tort

191

Vogiazopoulos231 the solicitor acted for husband and wife in a mortgage they gave over the family home for a loan to the husband’s business. As the husband knew that his wife would not give security over the family home, he forged his wife’s signature on the mortgage, and on its subsequent variation. At no time did the solicitor see the wife in person. The wife successfully sued the solicitor for negligence when the husband’s business became insolvent, thus threatening the family home. It follows that, where a person is entrusted to secure a spouse’s signature, a lawyer cannot proceed on the assumption that one spouse has authority to act for the other. There are also New South Wales examples of lawyers found negligent for trusting a client to secure execution of a document from another client in circumstances where the former then forged the latter’s signature.232

[5.240]

Where multiple clients are involved in a transaction or matter, and a possibility exists that one client may have influence over another, a prudent lawyer will meet with the clients separately, or refuse to act for each of them, advising one of the clients to seek independent legal advice. But even a face-to-face meeting does not exhaust all potential dangers. For instance, it may be advisable for a lawyer who meets with both husband and wife borrowers or guarantors where he or she has had no prior contact with one or both of them to take the precaution of checking the identity of each party. The husband may, after all, be accompanied by an imposter, or vice-versa.233 The need to ascertain and confirm identity assumes especial importance where part of the lawyer’s role involves attesting and certifying client signatures.234 A lawyer who has taken reasonable steps to confirm a client’s identity does not, however, warrant the client’s identity to a third party for the purposes of the doctrine of breach of warranty of authority (see [21.105]) should the client prove to be an impostor.235

231 Eade v Vogiazopoulos [1999] 3 VR 889. 232 See, for example, Graham v Hall (2006) 67 NSWLR 135 (where a solicitor, who was instructed by a husband to act for him and his wife in effecting a new mortgage over the jointly owned family home, allowed the husband to arrange for his wife to sign the mortgage papers (on the false pretext that the wife was dying of cancer), but the husband forged the wife’s signature); Ginelle Finance Pty Ltd v Diakakis (2007) NSW ConvR ¶56-174 (involving a mortgage entered into by the respondent as mortgagor for the benefit of his son and daughter-in-law, which over 18 months was increased nearly eight-fold via the respondent’s signature on the loan documentation being forged by his daughter-in-law). 233 See, for example, Chen v Gu [2011] NSWSC 1622 (where the solicitor (N), in accepting instructions from two clients – allegedly a husband and wife in the throes of a property settlement upon divorce – whom he had not previously met, failed to confirm the identity of the male client (who proved to be the wife’s cousin), and effected a transfer of property that defrauded the husband, was held to have been negligent; Rein J remarked that, in the context of property dealings, “[t]he task of seeking photographic identification is short and effective in dealing with the problem, especially if what is sought is a passport or at least a current driver’s licence”: at [129]). 234 See, for example, Khan v Khan (No 2) [2008] NSWSC 119 (where the solicitor attested to the signatures of persons who were not Mr and Mrs Hadid as if they were Mr and Mrs Hadid, where the attestation was to the effect that he was “personally acquainted” or that they were persons with “whose identity I am otherwise satisfied”). 235 See, for example, Excel Securities plc v Masood [2010] Lloyd’s Rep PN 165.

192

Lawyers’ Professional Responsibility

[5.245]

Danger of supplying unqualified advice

[5.245]

A lawyer “should be wary of bold and over-confident assurances to the client”.236 The danger here is the giving of unqualified advice on a matter to be determined by a third party, such as a court or jury, over which the lawyer lacks control. An illustration is Hall v Foong,237 where the lawyer advised that the contract the client had entered into as purchaser was void, but did not disclose that his advice was contrary to both a recent Full Court decision and counsel’s advice. On the lawyer’s advice, the client did not complete the contract and was successfully sued by the vendor for damages. Debelle J found the lawyer had been negligent, and explained the dangers of giving unqualified advice as follows:238 It is a very unwise practitioner who purports to divine the findings of fact which will be made or who advises that the client’s version of facts will prevail. It is a notorious fact that ordinary human frailty causes most, if not all, parties involved in litigation, even unconsciously, to advance a version of the facts most favourable to their cause. A reasonably skilled legal practitioner is well aware that the outcome will often depend on the facts as found by the trial judge. Even where it is unnecessary for the court to make findings of fact, it might even be imprudent to advise without qualification that a particular result in law will occur. All that notwithstanding, where a view is confidently asserted as a complete answer and advice is later obtained which refutes that view, there is an obvious duty on the legal practitioner to inform the client of the change in the advice even if it is only preliminary advice.

His Honour held that a reasonably competent lawyer would have disclosed to the client that the advice had been tendered on a preliminary basis, and that pending counsel’s opinion, it was impossible to properly assess the prospects of success.239 On the facts, however, as the client was unable to establish causation – it was impossible to infer how she would have acted had she been properly advised – she recovered only nominal damages for breach of contract (retainer).240 In Leda Pty Ltd v Weerden (No 2)241 a tax adviser who incorrectly advised, without qualification, a client that carry forward losses were available to offset against the client’s future assessable income was found by Gzell J to have failed to meet the requisite standard, although like in Hall v Foong, the adviser’s negligence was held not to be causative of the client’s loss. No solace should be taken out of the ultimate result in these two cases, as the proceedings could have been avoided by properly qualifying advice to which relevant uncertainty attached. In other instances, causation may not prove a saviour. In Herrmann v Withers LLP,242 for example, where the defendant solicitors 236 Can CPC, r 3.1-1, cmt [9]. See also Hunt v A [2008] 1 NZLR 368 at [99] (where the New Zealand Court of Appeal described as “professionally most unwise” to give advice “[t]hat would amount to a form of legal guarantee”). 237 Hall v Foong (1995) 65 SASR 281. 238 Hall v Foong (1995) 65 SASR 281 at 300–301. 239 Hall v Foong (1995) 65 SASR 281 at 303 per Debelle J. Doyle CJ and Olsson J concurred on this finding. 240 Olsson J dissented on this point. 241 Leda Pty Ltd v Weerden (No 2) (2006) 62 ATR 100 (affd Leda Pty Ltd v Weerden (2007) 63 ACSR 636). 242 Herrmann v Withers LLP [2012] PNLR 28 at [71], [73].

[5.255]

5 Lawyers’ Duty to Clients in Tort

193

gave the plaintiffs inaccurate advice as to a property’s right to access a communal garden, Newey J found that the defendants were negligent, not by giving that advice, but in not appreciating a substantial risk that their construction might not be right, and in advising “in unequivocal terms” that the plaintiffs were entitled to enter into and use the garden. Evidence that the plaintiffs attached importance to having access to the garden, and would have been unprepared to proceed with the transaction had they been advised that this may not eventuate, served to substantiate the requisite causation.243

[5.250]

Giving advice a client wishes to hear, in part because the client is a valuable one or otherwise due to an unduly close alignment to client interests, is a practice strewn with danger, as appears from the judgment of the English Court of Appeal in Levicom International Holdings BV v Linklaters (a firm).244 The court accepted the appellant’s contention that, had the respondent – a large commercial law firm – not given it over-optimistic advice as to its prospect of success in litigation, it would have settled the matter at an earlier stage rather than pursuing arbitration, which was settled on terms unfavourable to the appellant. In the leading judgment Stanley Burnton LJ, noting that the advice to the appellant quantified its prospects of success at “in the region of, but not less than, 70 per cent”, did not think it unrealistic “to consider that lawyers do not advise that the prospects of success are that high unless they are very confident indeed”.245 As this advice well overstated the appellant’s true prospects of success, it was found to be negligent, and causative of the appellant’s loss. On the latter point Jacobs LJ, in a brief concurring judgment, added that “[w]hen a solicitor gives advice that his client has a strong case to start litigation rather than settle and the client then does just that, the normal inference is that the advice is causative”.246 Standard of care in a specialised area – tax advice

[5.255]

Whether a lawyer has a duty to give advice on a particular area of law depends upon the scope of the retainer and the applicable standard of care. The point is illustrated in respect of advice on taxation aspects of a transaction or proceeding.247 The reason is that taxation is a specialised area, and so outside the competence of most lawyers. Notwithstanding this, a senior tax practitioner has made the following remark:248 Clearly, the position is that solicitors have a duty to advise their clients on the tax aspects of whatever matter they are acting in. Alternatively, they must obtain from another 243 Herrmann v Withers LLP [2012] PNLR 28 at [78]. On the facts, though, the quantum of damages payable was reduced by the failure of the plaintiffs to mitigate their loss. 244 Levicom International Holdings BV v Linklaters (a firm) [2010] PNLR 29. 245 Levicom International Holdings BV v Linklaters (a firm) [2010] PNLR 29 at [246]. 246 Levicom International Holdings BV v Linklaters (a firm) [2010] PNLR 29 at [284]. See also at [259]–[261] per Stanley Burnton LJ. 247 See generally Dal Pont, “The Duty of Solicitors to Give Tax Advice – A Reply” (1999) 28 UWALR 121. Cf O’Connor, “The Duty of Solicitors to Give Tax Advice: Recent Developments” (1998) 27 UWALR 195; “The Duty of Solicitors to Give Tax Advice – A Rebuttal of the Reply” (1999) 28 UWALR 132. See further, and more recently, Marks, “Advice can be Taxing” (2013) 87 (June) LIJ 52. 248 O’Connor, “The Duty of Solicitors to Give Tax Advice: Recent Developments” (1998) 27 UWALR 195 at 202.

194

Lawyers’ Professional Responsibility

[5.255]

tax-competent practitioner the necessary specialist tax advice for the benefit of the client. Failure to do this could result in the solicitors being held liable to the client for negligence and/or breach of contract.

Aside from not recognising that lawyers may restrict the scope of the retainer via express terms in the retainer itself, this statement assumes that all lawyers must exhibit a basic level of competence in even specialist areas of law. The latter is not necessarily an extension of principle, but the concern is that a lawyer may be retained to effect a transaction that may impact peripherally or incidentally on a specialist field of practice and, lacking any express limitation on the scope of the retainer, could be found negligent for not giving advice on that field. A leading case is Hurlingham Estates Ltd v Wilde & Partners.249 The defendant solicitors acted for a client in a restructuring transaction, part of which involved the acquisition of a lease of business premises. The way the solicitors structured the transaction exposed the client to a substantial tax liability, which the client sought to recover from the solicitors. The issues were two-fold: what was the scope of the duty of care owed to the client? And on the assumption that the scope of the solicitors’ duty encompassed taxation advice, had the required standard of care been met? On the first issue, the solicitors contended that the retainer did not extend to the provision of advice as to the taxation aspects of the relevant transaction. Lightman J rejected this contention, pointing to the absence of any express term in the retainer agreement to this effect.250 His Lordship then ruled that, in not structuring the transaction tax effectively, the solicitors had not attained the requisite standard of care.251 Although this may appear to support the quote cited earlier, namely that “solicitors have a duty to advise their clients on the tax aspects of whatever matter they are acting in”, Lightman J propounded no such general rule. The purchase and sale of property is rife with tax implications, and so it is appropriate that lawyers who purport to advise on structuring property transactions be required to address their tax consequences.252 The same is not so where the scope of the retainer is more limited, such as where the lawyer is retained simply to effect the conveyance of property. His Lordship’s expression of the standard of care in the circumstances provides valuable insights into the reach of the decision:253 It is to be expected that an intelligent layman, in the sense of a person unfamiliar with the law of taxation … would not have imagined that there was any risk of [the client] incurring any such liability … On the other hand, I would expect any reasonably competent solicitor practising in the field of conveyancing or commercial law to be aware of this concealed trap for the unwary. It is a matter he should have in mind in any transaction involving the grant of a lease and a related payment by the lessee to the lessor.

An important limitation appears from the italicised text. The standard is that of a lawyer practising in a particular field of law. In other words, because the solicitors 249 Hurlingham Estates Ltd v Wilde & Partners (1996) 37 ATR 261. 250 Hurlingham Estates Ltd v Wilde & Partners (1996) 37 ATR 261 at 263–264. 251 Hurlingham Estates Ltd v Wilde & Partners (1996) 37 ATR 261 at 267–268. 252 Tip Top Dry Cleaners Pty Ltd v Mackintosh (1998) 39 ATR 30 at 52 per Debelle J. 253 Hurlingham Estates Ltd v Wilde & Partners (1996) 37 ATR 261 at 267 (emphasis supplied).

[5.255]

5 Lawyers’ Duty to Clients in Tort

195

in Hurlingham Estates practised in the field of conveyancing and commercial law, some tax knowledge could rightly be expected.254 The same may be said, say, vis-à-vis a family lawyer with particular expertise in complex financial, corporate and trust matters, as was the firm in Goddard Elliott (a firm) v Fritsch, wherein Bell J remarked:255 … questions of taxation frequently arise and are just as frequently of importance in property settlement cases in the Family Court, especially because they can influence the composition of the matrimonial asset pool and the orders which that court might make. From the nature and subject matter of the property settlement proceeding between [the client, P] and his wife, it was implicit in the fees agreement that the “Family Law Matters” to which the agreement related required [the firm] to give due consideration and advice in relation to the taxation implications or status of particular proposals or transactions. Further, in the present case, the taxation implications or status of particular proposals or transactions were matters giving rise to foreseeable risks of the kind to which [P] might reasonably attach significance. It follows that [the firm] could reasonably be expected to identify the relevant taxation issues and to take the necessary steps to bring them to [P’s] attention and have them resolved in a timely way. Where necessary, that would involve referring the issue to a specialist lawyer or accountant.

Conversely, a solicitor practising in a field unrelated to taxation law (or some other specialist area) may not be expected to possess the same level of tax knowledge.256 In this respect, courts give weight to the notion that “unless special arrangements are made there is no such thing as a general retainer”.257 This does not, however, deny the wisdom of the quote at the outset of this paragraph, and by Bell J in the above quote, in admonishing lawyers who lack specialist expertise to counsel clients to seek specialist advice.258

254 See also Matrix Securities Ltd v Theodore Goddard (a firm) [1998] PNLR 290 at 321–322 per Lloyd J; Mason v Mills & Reeve [2011] WTLR 1589 at [158] per Arnold J (affd Swain Mason v Mills & Reeve [2012] WTLR 1827). The same can be said of an accountant who does tax work: see Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 discussed at [5.55]. 255 Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [422]. 256 Cf Bell v Vahexi Pty Ltd (1998) 40 ATR 459. 257 Carmody v Priestley & Morris Perth Pty Ltd (2005) 30 WAR 318 at [119] per Hasluck J. See also Shepherd Construction Ltd v Pinsent Masons LLP [2012] BLR 213 (where Akenhead J (at [30]) did not see “how the placing of specific commissions on a more or less informal basis, even if there are a large number of them, can give rise to a necessary implication that there was or must be some overarching general retainer by which the solicitor is required to keep under relatively constant review all advice and drafting previously done” and added (at [34]), more generally, that “[t]he fact that there were specific commissions militates against the implication of such a general retainer”). 258 See, for example, Snopkowski v Jones (Legal Practice) [2008] VCAT 1943 (lawyer retained to effect the transfer of a half-share of property to the client’s wife, which resulted in capital gains tax liability, was found to have breached the standard of care in failing to at least ask whether the client “had obtained any advice from [an] accountant concerning Capital Gains Tax and if receiving a negative response [to] have advised him to do so”: at [9]); Mehjoo v Harben Barker (a firm) [2014] 4 All ER 806 (where the court found that a generalist accounting firm’s retainer did not extend beyond giving routine tax advice, whereas the duty the plaintiff former client sought to cast upon the firm encompassed specialist tax advice, although this did not absolve the firm from referring the client to specialists).

196

Lawyers’ Professional Responsibility

[5.260]

IMMUNITY FOR “IN-COURT” ACTS OR OMISSIONS Background The High Court in Giannarelli v Wraith259 recognised and applied the principle espoused by the House of Lords in 1969 in Rondel v Worsley260 that barristers are immune from action by clients for professional negligence relating to their work in conducting litigation. But the House of Lords, in 2000, revoked this immunity in Arthur J S Hall & Co (a firm) v Simons,261 leading many to believe that the High Court would do likewise. This was against the backdrop of the High Court showing willingness to abolish another immunity262 and to ensure a consistency of law within common law jurisdictions,263 coupled with remarks by Kirby J querying the basis for the immunity.264 Early in 2005 a majority of the New Zealand Court of Appeal in Lai v Chamberlains265 rejected the immunity (though only for civil proceedings, but the Supreme Court rejected its application also to criminal proceedings on appeal).266

[5.260]

Those who anticipated the setting of the stage for a similar judicial course in Australia were disappointed by the High Court’s six–one majority267 decision in D’Orta-Ekenaike v Victoria Legal Aid,268 which upheld and arguably extended the scope of the immunity. Their Honours endorsed Giannarelli v Wraith, thus placing Australia in an almost unique position in the common law world in this respect,269 a reason that prompted the dissenter, Kirby J, to favour removing the immunity, at least in civil proceedings.270 In Attwells v Jackson Lalic Lawyers Pty Ltd271 the High Court, again pressed to oust the immunity, declined the invitation, absent arguments of principle or public policy that had not been addressed in Giannarelli and D’Orta. It remains, therefore, important to consider both the reasons for and against the immunity, addressed at [5.265]–[5.310], and where the D’Orta and Attwells decisions leave Australian law regarding its scope: see [5.315]–[5.340]. 259 Giannarelli v Wraith (1988) 165 CLR 543. 260 Rondel v Worsley [1969] 1 AC 191. 261 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 (decided 20 July 2000). 262 Namely highway immunity: see Brodie v Singleton Shire Council (2001) 206 CLR 512. 263 See, for example, in the context of the dominant purpose test for legal professional privilege Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49, discussed [11.40]. 264 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 610–615. 265 Lai v Chamberlains [2005] 3 NZLR 291 (per Hammond J, with whom McGrath, Glazebrook and O’Regan JJ concurred, Anderson P dissenting). 266 Chamberlains v Lai [2007] 2 NZLR 7 at [69]–[76] per Elias CJ, Gault and Keith JJ. See also at [225] per Thomas J. Cf at [189]–[197] per Tipping J. 267 Per Gleeson CJ, Gummow, Hayne, Heydon, McHugh and Callinan JJ, Kirby J dissenting. 268 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. 269 The immunity remains in Scotland in relating to criminal cases: Wright v Paton Farrell [2006] SC 404. 270 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [211], [347]. 271 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 per French CJ, Kiefel, Bell, Gageler and Keane JJ. Nor did the dissenters (Nettle and Gordon JJ) question the correctness of Giannarelli or D’Orta.

[5.270]

5 Lawyers’ Duty to Clients in Tort

197

The issue of barristerial immunity polarised opinion before the decision in D’Orta, and has not ceased doing so thereafter. There are those who vehemently champion its retention,272 and at the other pole those who decry it as inappropriate in modern Australian society.273 The Supreme Court of New Zealand’s decision in Chamberlains v Lai274 likewise has its supporters275 and detractors.276 Justifications for the immunity

[5.265]

The immunity ostensibly protects the public interest in the due administration of justice. It is not aimed at benefiting counsel277 but rests on public policy.278 Pertinent considerations in this context are identified below, together with reasoning proffered for rejecting them. Threat to public interest from collateral attack on original decision

[5.270]

Were barristers liable in tort in conducting litigation, it would, it is said, encourage unsuccessful litigants to sue in an attempt to show that, but for their barrister’s negligence, they would have obtained a more favourable result. Such an outcome would be inimical to the public policy of finality to litigation,279 the law frowning upon prolonged litigation pursued to produce a different result from what has already been decided.280 Moreover, it would permit court decisions to become the subject of collateral attack by another means. A successful action for negligence against a barrister, in all likelihood before a different court and on different materials from those presented in the initial litigation, would undermine the status of the original decision, and thereby be destructive of public confidence

272 Pre-D’Orta-Ekenaike see, for example, Groves and Derham, “Should Advocates’ Immunity Continue?” (2004) 28 MULR 80. Post D’Orta-Ekenaike see, for example, Craddock, “D’Orta-Ekenaike v Victoria Legal Aid: A Controversy Quelled” (2006) 80 ALJ 513. 273 Pre-D’Orta-Ekenaike see, for example, Yeo, “Dismantling Barristerial Immunity” (1998) 14 QUTLJ 12; Baker and Manderson, “Counsel’s Immunity: The High Court’s Decision in Boland v Yates” (2001) 1 Macq LJ 135; Goudkamp, “Is There a Future for Advocates’ Immunity?” (2002) 10 Tort L Rev 188. Post D’Orta-Ekenaike see, for example, Gerber, “Burning Down the House to Roast the Pig: The High Court Retains Advocates’ Immunity” (2005) 28 UNSWLJ 646. 274 Chamberlains v Lai [2007] 2 NZLR 7. 275 See, for example, Todd [2006] NZ L Rev 793. 276 See, for example, Hinchy, “Rejection of Advocates’ Immunity” [2006] NZLJ 369. 277 Nikolaidis v Satouris (2014) 317 ALR 761 at [38] per Barrett JA, with whom Beazley P and Ward JA concurred. 278 Rees v Sinclair [1974] 1 NZLR 180 at 186 per McCarthy P; Biggar v McLeod [1978] 2 NZLR 9 at 10–11 per Woodhouse J; Giannarelli v Wraith (1988) 165 CLR 543 at 557 per Mason CJ, at 572, 576 per Wilson J, at 579 per Brennan J, at 592, 595 per Dawson J. 279 Giannarelli v Wraith (1988) 165 CLR 543 at 573 per Wilson J, at 595 per Dawson J. 280 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [380] per Callinan J.

198

Lawyers’ Professional Responsibility

[5.275]

in the administration of justice.281 This problem would be especially acute, it is reasoned, in the context of successful challenges actions in negligence arising out of a criminal conviction.282 This consideration weighed most heavily in the majority’s decision in D’OrtaEkenaike v Victoria Legal Aid283 to retain the immunity. Gleeson CJ, Gummow, Hayne and Heydon JJ emphasised the notion that “[o]nce a controversy has been quelled, it is not to be relitigated”, adding that its relitigation “would be an inevitable and essential step in demonstrating that an advocate’s negligence in the conduct of litigation had caused damage to the client”.284 Their Honours viewed the matter as follows:285 [T]he central justification for the advocate’s immunity is the principle that controversies, once resolved, are not to be reopened except in a few narrowly defined circumstances. This is a fundamental and pervading tenet of the judicial system, reflecting the role played by the judicial process in the government of society. If an exception to that tenet were to be created by abolishing that immunity, a peculiar type of relitigation would arise. There would be relitigation of a controversy (already determined) as a result of what had happened during, or in preparation for, the hearing that had been designed to quell that controversy.

[5.275]

Yet all the members of the House of Lords in Arthur J S Hall & Co (a firm) v Simons286 rejected this justification for the immunity for civil proceedings. Collateral challenges to decisions in civil courts, Lord Steyn remarked, could be addressed by the principles of “res judicata, issue estoppel and abuse of process as understood in private law”.287 Together with the others in the majority, his Lordship found that courts are likewise sufficiently empowered to deal with a collateral challenge to a criminal conviction without resort to the immunity, by striking it out by reference to the public policy requiring a defendant who seeks to challenge a conviction to do so directly by way of appeal, or as an abuse of process to initiate a collateral civil challenge to a criminal conviction.288 This led Lord Hoffmann to describe maintaining the immunity as “burning down the house to roast the pig; using a broad-spectrum remedy when a more specific remedy 281 Rondel v Worsley [1969] 1 AC 191 at 249–251 per Lord Morris; Rees v Sinclair [1974] 1 NZLR 180 at 183–184 per McCarthy P; Giannarelli v Wraith (1988) 165 CLR 543 at 558 per Mason CJ, at 573–574 per Wilson J, at 594–595 per Dawson J. 282 Giannarelli v Wraith (1988) 165 CLR 543 at 558 per Mason CJ, at 574 per Wilson J, at 594–595 per Dawson J. 283 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. 284 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [43]. 285 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [45]. See also at [190] per McHugh J; Arundell v Williams Winter & Higgs (2005) 158 A Crim R 16 at [7]–[10] per Morris J; Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [30], [36] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 286 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615. 287 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 680. 288 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 679 (citing as authority Hunter v Chief Constable of the West Midlands Police [1982] AC 529; time has, however, revealed that few cases have required the court to take this step, as proof of negligence in the first instance has most commonly

[5.280]

5 Lawyers’ Duty to Clients in Tort

199

without side effects can handle the problem equally well”.289 Kirby J, dissenting in D’Orta,290 found this reasoning convincing, rejecting the suggestion that the immunity is an essential consequence of the need for the finality by reference to the experience of “virtually all legal systems of the world” that “flourish without the supposed indispensable immunity”. Similar sentiments led the New Zealand Supreme Court in Chamberlains v Lai291 to see the immunity as a “disproportionate response” and a “wrong response” to the issue of collateral attack on a previous decision. Adverse effect that fear of litigation may have on efficient conduct of court proceedings

[5.280]

The prospect of liability for negligence may, it is said, influence the exercise of independent judgment by making counsel more mindful of the need to avoid any possibility of liability. Lord Pearce expressed the relevant concern in Rondel v Worsley as follows:292 It is impossible to expect an advocate to prune his case of irrelevancies against his client’s wishes if he faces an action for negligence when he does so. Prudence will always be prompting him to ask every question and call every piece of evidence that his client wishes, in order to avoid the risk of getting involved in just such an action as the present. This is a defect which the possibility of an action for negligence would greatly encourage. It is difficult and it needs courage in an advocate to disregard irrelevancies which a forceful client wishes him to pursue. This question is of great importance for two reasons. First, if by good advocacy a case is cut down to its essentials, it is more manageable and more likely to be justly decided by judge or jury. Secondly, time (and consequently the cost) is greatly diminished.

The prospect of tort liability may, it is feared, adversely affect the efficient administration of justice, causing litigation to become lengthier, more complex and more costly. Yet even the majority in D’Orta-Ekenaike v Victoria Legal Aid293 was not convinced that the “chilling” effect of the threat of civil suit, with a consequent tendency to the prolongation of trials, should have determinative significance in deciding whether an immunity from suit should exist. In any case, the fear that counsel would take proven the impediment: see Haller, “Abuse of Process, Collateral Attack and Claims Against Lawyers” (2015) 34 CJQ 377). See also at 685 per Lord Browne-Wilkinson, at 705–706 per Lord Hoffmann, at 752–753 per Lord Millett. Contra at 722–723 per Lord Hope, at 750–751 per Lord Hobhouse. 289 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 703. Cf at 724 per Lord Hope (“while the core immunity may still be said to have a legitimate aim in civil cases, its application in this field is now vulnerable to attack on the ground that it is disproportionate”). 290 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [333]. 291 Chamberlains v Lai [2007] 2 NZLR 7 at [72], [80] per Elias CJ, Gault and Keith JJ. See also at [155] per Tipping J (“It is better to address the need to protect the judicial system in a direct way rather than indirectly through the overreaching vehicle of barristers’ immunity”). 292 Rondel v Worsley [1969] 1 AC 191 at 273. See also at 229 per Lord Reid; Rees v Sinclair [1974] 1 NZLR 180 at 182–183, 185 per McCarthy P; Giannarelli v Wraith (1988) 165 CLR 543 at 557 per Mason CJ, at 573 per Wilson J. 293 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [29] per Gleeson CJ, Gummow, Hayne and Heydon JJ.

200

Lawyers’ Professional Responsibility

[5.285]

every possible point when otherwise he or she might have been willing to shorten the proceedings is arguably a problem even with the immunity in place, in that lawyers want to do as much as they honestly can for their client and occasionally more.294 The problem may be contained in other ways, such as by the court’s disapproval and the award of costs against counsel.295 The further concern, that clients may make vexatious claims against counsel, has not been borne out by the experience in jurisdictions that lack or have removed the immunity.296 The flood of litigation against counsel feared by some in England following the ruling in Arthur J S Hall & Co (a firm) v Simons has not materialised. Nor is it evident in jurisdictions such as Canada and the United States, where no immunity exists. The general unavailability of legal aid in Australia to support negligence claims against lawyers, coupled with the availability of summary relief against vexatious claims, operate as structural impediments to counsel being sued for negligence.297 Moreover, many barristerial decisions are made under time and other pressures, which the court takes into account in defining the appropriate standard: see [5.200]. It follows that a mere mistake by counsel would in any case not of itself entitle the client to damages for negligence.298 The point is illustrated by the House of Lords’ decision in Moy v Pettman Smith (a firm),299 discussed at [5.225], where an attempt to make a barrister liable for negligence for settlement advice at the door of the court was rejected. There are also difficulties in this regard in a plaintiff establishing that the barrister’s negligence was what caused the client’s loss.300

[5.285]

A minority in Hall v Simons saw the foregoing as insufficiently weighty to oust the immunity in criminal cases. Lord Hope reasoned that the opportunities for judicial intervention in case management are significantly greater in civil cases than in criminal cases, where it is more difficult for the judge to determine when the boundary is reached between that necessary for a fair presentation of the defence and unnecessary questioning or time wasting.301 This led his Lordship to conclude that “the core immunity pursues a legitimate aim in the field of criminal justice, 294 Lai v Chamberlains [2005] 3 NZLR 291 at [154] per Hammond J (affd Chamberlains v Lai [2007] 2 NZLR 7). 295 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 693 per Lord Hoffmann. See also Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 615 per Kirby J. 296 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 614 per Kirby J; Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 680–681 per Lord Steyn, at 695 per Lord Hoffmann; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [328], [329] per Kirby J dissenting; Chamberlains v Lai [2007] 2 NZLR 7 at [77] per Elias CJ, Gault and Keith JJ. 297 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 691–692 per Lord Hoffmann, at 753 per Lord Millett; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [328] per Kirby J dissenting. 298 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 681 per Lord Steyn; Lai v Chamberlains [2005] 3 NZLR 291 at [102] per Anderson P dissenting. 299 Moy v Pettman Smith (a firm) [2005] 1 WLR 581. 300 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [194] per McHugh J; Lewis v Hillhouse [2005] QCA 316 at [21]–[27] per Keane JA; Chamberlains v Lai [2007] 2 NZLR 7 at [199] per Tipping J. 301 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 717–18.

[5.290]

5 Lawyers’ Duty to Clients in Tort

201

which is to secure the efficient administration of justice in the criminal courts”.302 There was, according to Lord Hope, the added concern that counsel in criminal cases may be subject to greater pressure than their counterparts in civil proceedings, explaining the point in this way:303 The whole atmosphere in a civil case is different, as so many of the decisions as to what is to be done in the courtroom are taken out of court when the pressures and constraints which affect proceedings in court are absent and there is time to think and to assess the implications of what is being done or not done. It is also much easier for the judge in a civil case to exercise control over the proceedings than it is for a judge in a criminal trial. The risks to the administration of justice which would flow from the removal of the immunity of the advocate against claims by his client for negligence are far less obvious, and the continuation of the immunity is for this reason that much more difficult to justify.

Both Lords Hope and Hutton expressed the further concern that clients in criminal matters would be more likely than clients in civil matters to sue their barrister because the former “may well be devious, vindictive and unscrupulous”304 or “highly unscrupulous and disreputable persons”.305 Kirby J, dissenting in D’Orta,306 conceded that a stronger argument existed for the immunity in the conduct of criminal, as compared to civil, proceedings. But the majority, in upholding the immunity generally, declined to distinguish between civil and criminal proceedings, in part because of the difficulties in drawing the line between each type of proceeding, and because their Honours did not consider it right “to see the administration of the civil law as giving rise to judgments worthy of less respect than those reached on the trial of indictable or other offences”.307 Special character of the judicial process wherein participants are immune from civil action

[5.290]

It is fundamental to the administration of justice that participants in court proceedings be encouraged to speak and act freely unimpeded by the prospect of civil process as a consequence of having done so.308 This privilege against civil liability – which applies to the parties, counsel, witnesses and judges – has traditionally been applied in the context of immunity from actions in defamation.309 Yet the public policy underlying this immunity is said to apply in an analogous way to protect counsel from liability for negligence.310

302 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 718. 303 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 724. See also at 733 per Lord Hutton. 304 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 720 per Lord Hope. 305 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 730 per Lord Hutton. 306 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [331]. His Honour had made similar remarks in Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 617–618. 307 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [78] per Gleeson CJ, Gummow, Hayne and Heydon JJ. 308 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [192] per McHugh J. 309 Cabassi v Vila (1940) 64 CLR 130 at 140–141 per Starke J. 310 Rondel v Worsley [1969] 1 AC 191 at 230 per Lord Reid, at 266–267 per Lord Pearce, at 284 per Lord Upjohn; Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 222 per Lord Diplock, at 230 per Lord Salmon; Giannarelli v Wraith (1988) 165 CLR 543 at 557–558 per Mason CJ, at 573 per Wilson J, at 595–596 per Dawson J.

202

Lawyers’ Professional Responsibility

[5.290]

But in Arthur J S Hall & Co (a firm) v Simons311 Lord Hoffmann distinguished counsel from the other participants in the curial process on the ground that counsel is the only person involved in the trial process who has undertaken a duty of care to a client. A witness owes no duty of care to anyone in respect of the evidence he or she gives to the court except to tell the truth. Similarly, the judge owes no duty of care to either of the parties, but only a public duty to administer justice in accordance with her or his oath. For these reasons, Kirby J in D’Orta-Ekenaike v Victoria Legal Aid312 opined that “the supposed analogy to the immunity afforded to judges, jurors and prosecutors breaks down under a moment’s examination”. Lord Hobhouse in Hall v Simons did not share this view so far as criminal proceedings were concerned. His Lordship reasoned that as the other participants in the trial process are immune in the public interest, the same should apply “to the defence advocate whose role derives from the same public interest and is just as important to the public interest as that of the other participants”.313 These views were grounded in the following reasoning:314 The criminal trial does not exist to protect private interests. It exists as part of the enforcement of the criminal law in the public interest. Those who take part in the trial do so as a public duty whether in exchange for remuneration or the payment of expenses. The purpose of all is, or should be, to see justice done and to play their appropriate part in achieving that end. The proceedings are conducted in public under judicial control. The position of the advocates is the same as that of the other participants. The prosecuting advocate has a duty to see that the prosecution case is, on behalf of the Crown, presented effectively and fairly. That of the defending advocate is to see that the defendant has a fair trial, that the prosecution case is properly probed and tested both in fact and in law and that his factual and legal defences are properly placed before the court supported by the available evidence and arguments … It follows from these fundamentals that the salient features of this procedure exist to serve the public interest, not to serve any private interest … It is likewise necessary that the advocate having the task of representing the defendant shall be independent and fearless. If he is not he will not be equipped to discharge the public duty entrusted to him to see that the defendant has a fair trial and that he is not convicted unless proved guilty. The advocate is performing a public function in the public interest. It is his public duty to protect the interests of his client. The criminal justice system depends upon his doing so skilfully and independently.

Lord Hutton was similarly influenced by the public nature of counsel’s duty in criminal cases, reasoning that “those discharging important public duties in the administration of justice should be protected from harassment by disgruntled persons who have been tried before a criminal court”.315 311 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 698. See also at 678–679 per Lord Steyn. Cf at 714 per Lord Hope (the analogy is at best “only an analogy”); Lai v Chamberlains [2005] 3 NZLR 291 at [142] per Hammond J (noting that the other immunities “have their own distinct and eminently supportable justifications”) (affd Chamberlains v Lai [2007] 2 NZLR 7 at [54] per Elias CJ, Gault and Keith JJ, at [157] per Tipping J). 312 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [323], dissenting. 313 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 746. 314 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 745, 746. 315 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 733.

[5.300]

5 Lawyers’ Duty to Clients in Tort

203

Unique role of counsel In D’Orta-Ekenaike v Victoria Legal Aid316 Callinan J said that “the practice of advocacy is unique in this and other respects”, adding that “[f]ew other professions … require their practitioners to attempt to see into the minds, and anticipate the thinking, reactions, and opinions of other human beings, as does the profession of advocacy”. Yet to the extent that the challenging task facing counsel can justify the immunity, it has been rejected even by those who favour its maintenance on other grounds. Otherwise a judge-made immunity could be perceived to benefit the persons from whom the judiciary has chiefly been sourced.317 As other professionals must likewise make difficult on-the-spot decisions, a general proposition that persons doing their best in a difficult job should be immune from tortious liability could apply to many besides lawyers.318

[5.295]

Where, however, McHugh J in D’Orta saw the difference between counsel and other professionals was that in no other profession does the common law require its members to act contrary to their client’s interests, seeing this factor alone as “probably sufficient to preclude reasoning by analogy from the liability of other professions and occupations for negligent conduct”.319 Though this may be true, it appears to go to the client’s motivation to sue rather than as a reason for giving counsel blanket immunity from such a claim. Fear that barristers would be deflected from observing their duty to the court

[5.300]

The concern has been raised that, if counsel could be sued for negligence, they would be tempted to prefer the interests of their clients to their duty to the court.320 The overriding duty to court may, as McHugh J observed above, require counsel to act in a variety of ways that are to the possible disadvantage of a client.321 As the administration of justice depends heavily on the faithful exercise by barristers of independent judgment in the conduct and management of the case, were the immunity abrogated, it has been said, the assistance the court obtains from the advocacy of an independent profession would be imperilled.322

316 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [366], [370]. 317 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 612 per Kirby J. See also Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [52] per French CJ, Kiefel, Bell, Gageler and Keane JJ (noting that although the operation of the immunity “may incidentally result in lawyers enjoying a degree of privilege in terms of their accountability for the performance of their professional obligations”, this incidental operation “is a consequence of, and not the reason for, the immunity”). 318 Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 219–221 per Lord Diplock; Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 681 per Lord Steyn, at 690 per Lord Hoffmann, at 738 per Lord Hobhouse; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [28], [44] per Gleeson CJ, Gummow, Hayne and Heydon JJ, at [321] per Kirby J dissenting; Chamberlains v Lai [2007] 2 NZLR 7 at [53] per Elias CJ, Gault and Keith JJ. 319 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [113]. 320 Rondel v Worsley [1969] 1 AC 191 at 227–228 per Lord Reid. 321 For example, counsel must not mislead the court (see [17.95]–[17.135]), make baseless aspersions or allegations (see [17.220]–[17.240]) or withhold relevant authorities (see [17.85]). 322 Giannarelli v Wraith (1988) 165 CLR 543 at 556 per Mason CJ, at 579 per Brennan J. Cf Re B [1981] 2 NSWLR 372 at 382 per Moffitt P.

204

Lawyers’ Professional Responsibility

[5.305]

Conversely, were counsel not to adhere to the standards of advocacy that the courts expect and rely on, there would be no justification for the immunity. For this reason the following has been suggested:323 Unless such a general failure were to occur, it is better to maintain the immunity and to rely on the publicity of court proceedings, judicial supervision, appeals, peer pressure and disciplinary procedures to prevent neglect in the performance of counsel’s duty and to avoid any injustice which might result therefrom in an individual case.

However, such concerns do not warrant weighty consideration, even for judges who favour maintaining the immunity. This is because they presuppose that counsel would be deterred by the fear of a negligence claim from discharging a clear duty to the court ahead of observing the wishes of a client,324 having been described as “a most flimsy foundation, unsupported by empirical evidence”.325 Inability to sue for fees and the cab rank principle

[5.305]

Barristerial immunity was historically linked to counsel’s inability to sue a client for fees arising out of the absence of a contractual relationship between the parties:326 see [15.10]. But today the absence of a contractual relationship is no bar to liability in tort, and so the lack of a contractual relationship between barrister and client is irrelevant. The point was made as early as 1969 by the House of Lords in Rondel v Worsley, and endorsed by the High Court.327 In Rondel v Worsley328 Lord Upjohn suggested that the immunity could be justified by reference to the “cab rank” principle (see [3.140]) but other judges have attached little weight to this as a consideration.329 In fact, in Arthur J S Hall & Co (a firm) v Simons330 the cab rank justification was decisively rejected, Lord Steyn remarking that depriving clients of a remedy for negligence causing them grievous financial loss is too high a price to pay for protecting counsel from what is in practice a very small risk of being subjected to vexatious litigation. Gleeson CJ, Gummow, Hayne and Heydon JJ in D’Orta-Ekenaike v Victoria Legal Aid331 similarly remarked that, 323 Giannarelli v Wraith (1988) 165 CLR 543 at 580 per Brennan J. Cf at 594 per Dawson J. 324 Giannarelli v Wraith (1988) 165 CLR 543 at 572 per Wilson J; Lai v Chamberlains [2005] 3 NZLR 291 at [139] per Hammond J (affd Chamberlains v Lai [2007] 2 NZLR 7 at [54] per Elias CJ, Gault and Keith JJ); D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [26] per Gleeson CJ, Gummow, Hayne and Heydon JJ. 325 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 682 per Lord Steyn. 326 Re Le Brasseur & Oakley [1896] 2 Ch 487 at 494 per Lindley LJ. 327 Giannarelli v Wraith (1988) 165 CLR 543 at 555 per Mason CJ; D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [25] per Gleeson CJ, Gummow, Hayne and Heydon JJ. The New Zealand Court of Appeal had held likewise in Rees v Sinclair [1974] 1 NZLR 180 at 186 per McCarthy P. 328 Rondel v Worsley [1969] 1 AC 191 at 281. See also Lai v Chamberlains [2005] 3 NZLR 291 at [106] per Anderson P dissenting. 329 Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 221 per Lord Diplock; Giannarelli v Wraith (1988) 165 CLR 543 at 573 per Wilson J, at 594 per Dawson J; Lai v Chamberlains [2005] 3 NZLR 291 at [149] per Hammond J (affd Chamberlains v Lai [2007] 2 NZLR 7 at [54] per Elias CJ, Gault and Keith JJ). 330 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 678. See also at 714 per Lord Hope, at 739–740 per Lord Hobhouse. 331 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [27].

[5.310]

5 Lawyers’ Duty to Clients in Tort

205

highly desirable as the cab rank rule is in ensuring that an unpopular client or cause is represented, it does not provide a sufficient basis to justify the immunity. Justifications for removing the immunity

[5.310]

Aside from the questionable status of the above justifications for retaining the immunity, there exist positive reasons for its ouster. Lords Steyn and Hutton in Arthur J S Hall & Co (a firm) v Simons332 itentified these to include enhancement of public confidence in the legal system, and that exposure of isolated acts of incompetence by counsel would strengthen that system. There is also the benefit, not to be downplayed, of avoiding the need to distinguish the acts of counsel that come within the immunity from those that fall outside it:333 see [5.320], [5.325]. In fact, the challenge of drawing this line led a majority in D’Orta-Ekenaike v Victoria Legal Aid334 to arguably extend the scope of the immunity (although one step towards its restraint has ostensibly ensued from the court’s 2016 decision in Attwells v Jackson Lalic Lawyers Pty Ltd:335 see [5.325]), much to Kirby J’s alarm: see [5.330]. Perhaps foremost among the considerations cited for removing the immunity, though, is to “bring to an end an anomalous exception to the basic premise that there should be a remedy for a wrong”.336 This clearly influenced the New Zealand Court of Appeal in Lai v Chamberlains,337 given the majority’s remark that “it is quite wrong in principle that a victim of egregious professional incompetence should have no remedy for loss caused to him or her”. Kirby J had earlier viewed an immunity as a derogation from normal accountability for wrongdoing that is a feature of the rule of law and fundamental human rights, adding that the immunity has “derived from historical, social and professional circumstances many of which have since changed markedly”.338 Gleeson CJ, Gummow, Hayne and Heydon JJ in D’Orta339 remained unconvinced that the “no wrong without a remedy” notion that there should be no wrong without remedy should justify tampering with the immunity. To give full effect to that premise, their Honours reasoned, would mean that those defamed in proceedings should have a remedy, but the absolute privilege accorded to curial participants and the privilege afforded to those who publish fair and accurate reports of court proceedings remain unchallenged. Nor is there any challenge to the immunity of witnesses from suit whether for negligence or intentional torts. In other words, there are other circumstances arising out of the curial process where a 332 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 682 per Lord Steyn, at 728 per Lord Hutton. 333 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 707 per Lord Hoffmann, at 729 per Lord Hutton, at 745 per Lord Hobhouse (limited to civil actions). 334 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. 335 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572. 336 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615 at 681 per Lord Steyn. 337 Lai v Chamberlains [2005] 3 NZLR 291 at [175] per Hammond J (affd Chamberlains v Lai [2007] 2 NZLR 7). 338 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 610–611. His Honour repeated these views in D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [314]. 339 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [71].

206

Lawyers’ Professional Responsibility

[5.315]

wrong does not attract a remedy; and so by itself this does not explain why the position of the advocate should be treated differently. In any case, as noted by the dissenting judge in Lai v Chamberlains,340 the negligence that is the subject of immunity is not necessarily irremediable. It is irremediable by the payment of money, but can be remedied by application to the court to set aside a conviction or judgment on the grounds of a miscarriage of justice: see [4.200]–[4.210]. A barrister may also be subject to disciplinary proceedings arising out of the conduct of a trial:341 see [5.315], [25.10], [25.40]. Scope of the immunity Immunity not confined to negligence

[5.315]

Counsel’s immunity applies to negligent acts and omissions (and arguably to intentional torts that come within the “in court” moniker,342 but not intentional torts such as battery and assault, which bear no relation to the conduct of the barrister’s work), and to a concurrent claim in contract emanating from the same conduct.343 There is uncertainty as to the extent to which the immunity applies outside the tortious (or parallel contractual) context. While the cases contain statements to the effect that the immunity does not cover actions for breach of fiduciary duty or breach of confidence (in particular, client-client conflicts of interest),344 there are judicial statements to the contrary,345 and it seems accepted that a breach of the statutory proscription against misleading or deceptive conduct or even unconscionable conduct comes within the immunity.346 There is also some

340 Lai v Chamberlains [2005] 3 NZLR 291 at [93] per Anderson P. 341 Interestingly, that an advocate who fails in her or his professional standards may be subject to disciplinary sanctions was one of the reasons cited by the majority in Lai v Chamberlains [2005] 3 NZLR 291 (see at [138] per Hammond J, with whom McGrath, Glazebrook and O’Regan JJ agreed) to justify why the immunity was no longer necessary. 342 Leerdam v Noori (2009) 227 FLR 210 at [145]–[148] per Macfarlan JA. 343 Attard v James Legal Pty Ltd [2009] NSWSC 811 at [67] per Simpson J (appeal allowed in part but without casting doubt on this point: Attard v James Legal Pty Ltd (2010) 80 ACSR 585). 344 See, for example, Abriel v Rothman [2004] NSWCA 40 at [27] per Cripps AJA, with whom Mason P and Santow JA concurred. See also Sims v Chong (2015) 230 FCR 346 at [86] per the court. 345 See Goddard Elliott v Fritsch [2012] VSC 87 at [544] per Bell J; Young v Hones [2013] NSWSC 1429 at [171]–[175] per Garling J (affd Young v Hones [2014] NSWCA 337); NT Pubco Pty Ltd v Strazdins [2014] NTSC 8 at [105]–[114] per Hiley J. 346 See Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at [365] per Callinan J; Goddard Elliott v Fritsch [2012] VSC 87 at [835] per Bell J; Young v Hones [2014] NSWCA 337 at [172]–[176] per Ward JA; Nikolaidis v Satouris (2014) 317 ALR 761 at [24]–[42] per Barrett JA, with whom Beazley P and Ward JA concurred. Cf Sims v Chong (2015) 230 FCR 346 at [78]–[85] (where the court noted the weight of authority in favour of the proposition in the text, but was unwilling to uncritically accept that the same applied vis-à-vis unconscionable conduct for the purposes of ss 20 and 21 of the Australian Consumer Law); Douglas and Cleary, “Has Advocates’ Immunity from Suit Survived the Australian Consumer Law?” (2013) 87 ALJ 172.

[5.320]

5 Lawyers’ Duty to Clients in Tort

207

suggestion, again not without dissent,347 that behaviour that is found to be dishonest or in bad faith falls outside the immunity.348 Uncertainty also exists as to whether the immunity can shield lawyers from personal costs orders. In New South Wales case law supports the application of the immunity to wasted costs orders of this kind,349 but elsewhere the point has been queried.350 Victorian civil procedure legislation that, inter alia, empowers a court to order a person, including a lawyer, to compensate any person for financial (or other) loss that was materially contributed to by the contravention of an “overarching obligation”351 likewise challenges the application of the immunity vis-à-vis wasted costs orders.352 What is clear is that the immunity does not safeguard lawyers from a contempt finding. Nor does it shield counsel from criticism from the Bench, or from disciplinary proceedings, for words spoken in court. As to disciplinary proceedings, the Full High Court in Clyne v New South Wales Bar Association explained the relevant law as follows:353 Cases will constantly arise in which it is not merely the right but the duty of counsel to speak out fearlessly, to denounce some person or the conduct of some person, and to use such strong terms as seem to him in his discretion to be appropriate to the occasion. From the point of view of the common law, it is right that the person attacked should have no remedy in the courts. But, from the point of view of a profession which seeks to maintain standards of decency and fairness, it is essential that the privilege, and the power of doing harm which it confers, should not be abused. Otherwise grave and irreparable damage might be unjustly occasioned.

“In court” compared to “out of court” work

[5.320]

The immunity cannot extend beyond circumstances that, on policy grounds, justify its operation. Hence, whereas it covers counsel’s conduct and management of a cause in court, there is no justification for its application to work performed out of court lacking connection with in-court work. The difficulty is in distinguishing “in-court” from “out of court” work. This explains why Mason CJ in

347 See Young v Hones [2013] NSWSC 1429 at [171]–[175] per Garling J (affd by way of obiter by Ward JA in Young v Hones [2014] NSWCA 337 at [150], [228]). 348 Swinfen v Lord Chelmsford (1860) 5 H & N 890; 157 ER 1436 at 919 (H & N), 1448 (ER) per Pollock CB: Del Borrello v Friedman and Laurie (a firm) [2001] WASCA 348 at [122], [123] per Kennedy J. 349 Attard v James Legal Pty Ltd (2010) 80 ACSR 585 at [27] per Giles JA; Nikolaidis v Satouris (2014) 317 ALR 761 at [48] per Barrett JA, with whom Beazley P and Ward JA concurred; Drake v Wight & Strickland Lawyers [2015] NSWSC 1090 at [62] per Harrison AsJ. 350 Re Dunstan (2000) 155 FLR 189 at [12]–[14] per Miles CJ (SC(ACT)); Harley v McDonald [2001] 2 AC 678 at [46], [47] per Lord Hope (PC); Medcalf v Mardell [2003] 1 AC 120 at [56] per Lord Hobhouse. 351 Civil Procedure Act 2010 (Vic), s 29(1)(c). The “overarching obligations” are listed in ss 16–27: see [17.245]. 352 Hudspeth v Scholastic Cleaning and Consultancy Services Pty Ltd (No 8) [2014] VSC 567 at [175] per Dixon J. Cf Hickie, “The Quiet Erosion of the Advocates’ Immunity under the Civil Procedure Act 2010 (Vic)” (2013) 37 Aust Bar Rev 259 (noting that the Civil Procedure Act 2010 (Vic) does not explicitly purport to oust the immunity). 353 Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 200–201 (emphasis supplied).

208

Lawyers’ Professional Responsibility

[5.320]

Giannarelli v Wraith354 branded it “artificial in the extreme to draw the line at the courtroom door”, as “[p]reparation of a case out of court cannot be divorced from presentation in court”. The immunity extends, his Honour accordingly reasoned, to “work done out of court which leads to a decision affecting the conduct of the case in court”,355 an approach endorsed in D’Orta-Ekenaike v Victoria Legal Aid356 and Attwells v Jackson Lalic Lawyers Pty Ltd.357 So whether the immunity applies to “out of court” work rests on its connection with in-court work. The closeness of this connection, though, is a matter of degree upon which judicial minds may differ, if not on principle then in its application. It is for this reason that the test, whether phrased in terms of an “intimate connection”358 or otherwise, has been branded “uncertain in application and arbitrary in effect”359 and “impermissibly vague”,360 and thus too easily expandedable “to include a large proportion, perhaps most, of the advice given by many barristers [even] in the comparative calm of the office or chambers”.361 Yet the immunity can indeed extend so far. For instance, it can shield inadequacies in pre-trial deliberations as to how the case should be conducted362 and decisions relating to the evidence to be adduced,363 even though neither occurs in the heat of the moment. The High Court in Attwells v Jackson Lalic,364 while adopting the phrase “intimate connection”, sought to stem its vagueness, and indeed restrain its purview, by

354 Giannarelli v Wraith (1988) 165 CLR 543 at 559–560. See also Biggar v McLeod [1978] 2 NZLR 9 at 10 per Woodhouse J. 355 Giannarelli v Wraith (1988) 165 CLR 543 at 560. 356 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [86] per Gleeson CJ, Gummow, Hayne and Heydon JJ. 357 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [38], [39], [46] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 358 Which is a test commonly cited in the case law: see, for example, Rees v Sinclair [1974] 1 NZLR 180 at 187 per McCarthy P; Biggar v McLeod [1978] 2 NZLR 9 at 11 per Woodhouse J, at 13 per Richardson J; Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 215 per Lord Wilberforce, at 224 per Lord Diplock, at 232 per Lord Salmon, at 236 per Lord Keith; Giannarelli v Wraith (1988) 165 CLR 543 at 571 per Wilson J; Keefe v Marks (1989) 16 NSWLR 713 at 719–720 per Gleeson CJ. 359 Chamberlains v Lai [2007] 2 NZLR 7 at [52] per Elias CJ, Gault and Keith JJ. 360 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 618 per Kirby J. 361 Boland v Yates Property Corporation Pty Ltd (1999) 167 ALR 575 at 613 per Kirby J. His Honour repeated these views in D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [326]. Cf Symonds v Vass (2009) 257 ALR 689 at [40] per Giles JA. 362 Feldman v A Practitioner (1978) 18 SASR 238 at 238–239 per Bray CJ; Keefe v Marks (1989) 16 NSWLR 713 at 719 per Gleeson CJ, at 725 per Priestley JA, at 729 per Meagher JA; Donellan v Watson (1990) 21 NSWLR 335 at 337 per Mahoney JA. 363 See, for example, Day v Rogers [2011] NSWCA 124 at [116]–[132] per Giles JA, with whom Allsop P and Sackville AJA concurred. 364 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [5] per French CJ, Kiefel, Bell, Gageler and Keane JJ.

[5.325]

5 Lawyers’ Duty to Clients in Tort

209

viewing the immunity as resting on “a functional connection between the advocate’s work and the judge’s decision”. The majority elaborated the point as follows:365 Once it is appreciated that the basis of the immunity is the protection of the finality and certainty of judicial determinations, it can be more clearly understood that the “intimate connection” between the advocate’s work and “the conduct of the case in court” must be such that the work affects the way the case is to be conducted so as to affect its outcome by judicial decision. The notion of an “intimate connection” between the work the subject of the claim by the disappointed client and the conduct of the case does not encompass any plausible historical connection between the advocate’s work and the client’s loss; rather, it is concerned only with work by the advocate that bears upon the judge’s determination of the case.

[5.325]

An area traditionally redolent with challenges in setting boundaries to the immunity, and was the focus of the dispute in Attwells v Jackson Lalic, concerns settlements or compromises effected by counsel. In 2008 the Western Australian Court of Appeal remarked that, on the (then) state of the authorities, it could not “be said with confidence where the line is to be drawn as to the application of the immunity in relation to advice given in connection with the settlement of legal proceedings”, and that “[h]ard and fast distinctions are … likely to be elusive”.366 The majority’s decision in Attwells v Jackson Lalic has brought what appears to be welcome clarification, stemming in large part from confinement of the immunity. Applying the reasoning from the quote extracted in the preceding paragraph, their Honours ruled that the immunity does not cover advice that leads to a (disadvantageous) compromise. To so extend the immunity, said the majority, is to decouple it from “the protection of the exercise of judicial power against collateral attack” and to undermine “the notion of equality before the law by enlarging the circumstances in which lawyers may be unaccountable to their clients”.367 Attwells v Jackson Lalic does not preclude the immunity applying to negligent advice not to compromise that leads to a judicial decision less beneficial to the client than a rejected offer of compromise. What may thus appear an anomaly was addressed by reference to the “functional connection” noted above:368 Just as it is true to say that advice to settle is “connected” to the case in the sense that the advice will, if accepted, lead to the end of the case, so it is true to say that advice not to settle a case is “connected” to the case in the sense that the advice will, if accepted, lead to the continuation of the case. But to say either of these things is to speak of a merely historical connection between events. That is to fail to observe the functional nature of the intimate connection required by the public policy which sustains the immunity.

The distinction is one between acts or omissions of counsel that bear upon the judge’s determination of the case and those that do not. Negligent advice to settle 365 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [46] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 366 Alpine Holdings Pty Ltd v Feinauer [2008] WASCA 85 at [84] per the court. 367 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [41] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 368 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [49] per French CJ, Kiefel, Bell, Gageler and Keane JJ.

210

Lawyers’ Professional Responsibility

[5.330]

does not have such a bearing, whereas negligent advice not to settle may well do so, even though the character of the negligent advice is substantially the same. No doubt cognisant that this dichotomy could discourage counsel advising a settlement, which goes against the grain of (inter alia) civil procedure reforms, their Honours distinguished the public policy that supports settlement from that which justifies the immunity, namely “the finality and certainty of judicial decisions”.369 What caused the divide between the majority and minority in Attwells v Jackson Lalic stemmed from the fact that the settlement in that case, though reached out of court, was on terms providing for the court to make an order by consent to reflect the compromise. There was no dissent that, had the settlement been effected entirely out of court, it would have fallen outside the immunity because the settlement would not have moved the litigation toward a determination by the court. In the opinion of the dissenters, Nettle and Gordon JJ, that the settlement envisaged a consent order served to intimately connect the negligent advice to the quelling the controversy by the exercise of judicial power.370 The majority, conversely, found no genuine exercise of judicial power in the consent order, because it simply reflected an agreement of the parties.371 Indeed, it would seem odd were the coverage of the immunity to pivot upon whether or not a settlement was effected by way of a curial consent order, at least when the settlement was entirely the product of the parties’ negotiations. As a result of the decision in Attwells v Jackson Lalic, it can no longer be assumed, as had previously been thought,372 that in Australian law the compromise of an action during its progress in court falls within the immunity. Nor does immunity necessarily envelop an alleged negligent compromise at the door of the court prior to the commencement of the trial.373 Impact of the D’Orta decision

[5.330]

Assuming an intimate connection between the negligent advice and a curial determination, now to be understood through the prism of the High Court’s ruling in Attwells v Jackson Lalic (discussed at [5.325]), its earlier decision in D’Orta-Ekenaike v Victoria Legal Aid374 still speaks against a restrictive approach in applying the immunity to out-of-court work. The applicant sought assistance from the first respondent, a statutory corporation deemed by statute to be a firm of 369 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [52] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 370 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [67], [68] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 371 Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [62] per French CJ, Kiefel, Bell, Gageler and Keane JJ. 372 See, for example, Donellan v Watson (1990) 21 NSWLR 335 at 338 per Mahoney JA, with whom Waddell AJA agreed; Chamberlain v Ormsby [2005] NSWCA 454; Donnellan v Woodland (2012) NSW ConvR ¶56-307; Stillman v Rusbourne [2015] NSWCA 410. See also Biggar v McLeod [1978] 2 NZLR 9 at 12 per Woodhouse J, at 14 per Richardson J. Cf Goddard Elliott (a firm) v Fritsch [2012] VSC 87 at [811], [827]–[833], [1145] per Bell J. 373 As had been held in Kelley v Corston [1998] QB 686 (see at 711–712 per Pill LJ, at 718–719 per Butler-Sloss LJ). 374 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1.

[5.330]

5 Lawyers’ Duty to Clients in Tort

211

solicitors,375 in defence of a criminal prosecution. The first respondent retained a barrister (the second respondent) to appear for the applicant at committal proceedings, at which the applicant pleaded guilty but later pleaded not guilty and stood trial. The applicant was convicted at trial, evidence of the guilty plea having been led, but the verdict was quashed on appeal. The applicant was acquitted on a retrial. He then sued the respondents for negligence for their advice, given two days before the committal proceeding and again on the day of the committal, to plead guilty. The issue was whether the immunity applied to the advice and, if so, whether it could extend to the first respondent as solicitor. The majority found no difficulty in concluding that the barrister’s advice was protected by the immunity, reasoning that the relationship between committal proceedings and a trial is such that they form part of the controversy that the trial ultimately determines. The barrister’s advice was work leading to a decision that affected the conduct of the case at the trial, and so came within the immunity. There was, in other words, an intimate connection between the hearing of a matter and advice as to a plea in that matter.376 The solicitor’s position could not be differentiated, in their Honours’ view, from that of the barrister.377 The solicitor’s advice was given at the same time and for the same purpose as the advice the barrister gave, and its content was identical. No difference in the duties owed by solicitor or barrister existed. Accordingly, the barrister’s advice could not be described as more closely related to the court proceedings than that of the solicitor. The considerations of finality that required maintenance of the advocate’s immunity therefore required that it extend to the advice from the solicitor. Gleeson CJ, Gummow, Hayne and Heydon JJ expressed the relevant principle as follows:378 Because the immunity now in question is rooted in the considerations described earlier, where a legal practitioner (whether acting as advocate, or as solicitor instructing an advocate) gives advice which leads to a decision (here the client’s decision to enter a guilty plea at committal) which affects the conduct of a case in court, the practitioner cannot be sued for negligence on that account.

Kirby J dissented, seeing the majority’s decision as expanding the immunity, namely to apply the rule in Giannarelli v Wraith379 beyond in court decisions during a hearing and to extend the immunity to a solicitor employed by a legal aid body, who would not have enjoyed the traditional immunity formerly confined to barristers as a class. Failing to hide his disappointment, his Honour characterised the decision as “anomalous and unjustifiable”, and “legally erroneous, unwarranted and unworthy”.380 375 Legal Aid Act 1978 (Vic), s 16(2)(a). 376 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [88] per Gleeson CJ, Gummow, Hayne and Heydon JJ, at [153] per McHugh J, at [382] per Callinan J. 377 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [90] per Gleeson CJ, Gummow, Hayne and Heydon JJ, at [168] per McHugh J, at [382]–[384] per Callinan J. 378 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [91]. 379 Giannarelli v Wraith (1988) 165 CLR 543. 380 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [322], [346].

212

Lawyers’ Professional Responsibility

[5.335]

Solicitor-advocates

[5.335]

The public policy underscoring barristers’ immunity applies with equal force to solicitors who act as advocates.381 It is the function performed at the material time and the impact that non-recognition of immunity might have upon the administration of justice, not the label attached, that attracts to the immunity.382 Such a view is endorsed by the High Court’s ruling in D’Orta-Ekenaike v Victoria Legal Aid,383 in applying the same principles to both the barrister and instructing solicitor (see [5.330]), making the title “barristerial immunity” potentially misleading. There remains scope for solicitor-advocates’ liability for work they do while acting as solicitors; solicitors cannot by assuming the dual role acquire an immunity that they lacked had they acted as solicitors alone and briefed other counsel.384 Nor does it extend to a solicitor who fails to act on counsel’s advice, or omits to put an issue to counsel for advice.385 Where, in a fused profession, there is commonly no clear line of demarcation between solicitors’ and counsels’ work, the immunity applies to work that is sufficiently connected to “in-court” work.386 As a solicitor may be liable to the client if incompetent or inexperienced counsel is briefed, a solicitor who briefs herself or himself may be liable in negligence for briefing an incompetent advocate, although not liable in negligence as advocate.387 Immunity applicable to counsel employed by the Crown

[5.340]

The immunity applies equally to counsel employed by the Crown, such as prosecutors.388 This is grounded in “the need to maintain public trust in the fearlessness and impartiality of those who must act and exercise discretion in the bringing and conducting of criminal prosecutions”.389 So the accused cannot seek redress against the prosecutor on the ground that he or she did not receive a fair trial due to of the manner in which the prosecutor conducted the case: see [18.45]. The redress is by pleading on appeal that a miscarriage of justice has occurred by virtue of the prosecutor’s in-court conduct: see [18.40].

381 Rees v Sinclair [1974] 1 NZLR 180 at 186 per McCarthy P, at 189–190 per Macarthur J; Feldman v A Practitioner (1978) 18 SASR 238 at 239 per Bray CJ; Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 215 per Lord Wilberforce, at 224 per Lord Diplock, at 227 per Lord Salmon; Giannarelli v Wraith (1988) 165 CLR 543 at 559 per Mason CJ, at 592, 593, 596 per Dawson J. 382 Giannarelli v Wraith (1988) 165 CLR 543 at 559 per Mason CJ, at 576–577 per Wilson J. 383 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. 384 Feldman v A Practitioner (1978) 18 SASR 238 at 239 at Bray CJ. 385 Acton v Graham Pearce & Co (a firm) [1997] 3 All ER 909 at 924 per Chadwick J. 386 Rees v Sinclair [1974] 1 NZLR 180 at 190 per Macarthur J; May v Mijatovic (2002) 26 WAR 95 at [121] per Hasluck J. Cf Feldman v A Practitioner (1978) 18 SASR 238 at 239 per Bray CJ. 387 Donellan v Watson (1990) 21 NSWLR 335 at 340 per Handley JA. 388 Love v Robbins (1990) 2 WAR 510 at 517 per Malcolm CJ. 389 Nettles v R (1985) 21 DLR (4th) 103 at 125 per Thorson JA.

[5.350]

5 Lawyers’ Duty to Clients in Tort

213

Ouster of immunity by statute Following the decision in D’Orta-Ekenaike v Victoria Legal Aid,390 various State Attorneys-General foreshadowed ousting the immunity by statute. An Options Paper developed for the Standing Committee of Attorneys-Generalensued, which outlined options to confine the immunity to criminal proceedings, to preserve it for identified categories of legal services providers, or to develop a new classification designed to protect strategic decisions from negligence claims while making barristers accountable for decisions falling within legal “core competencies”. Any action on those options has stalled, though.

[5.345]

The appropriateness of leaving the issue to Parliament was an argument pressed before both the House of Lords in Arthur J S Hall & Co (a firm) v Simons391 and the New Zealand Court of Appeal in Lai v Chamberlains,392 but to no avail. In the latter case, for instance, the majority viewed the courts as well positioned to remove the immunity because it was created by the courts in the first place, and so it is a rule that the courts are well placed to assess.393 Others have not been so convinced.394

LIMITING LIABILITY Professional indemnity insurance

[5.350]

Lawyers are ordinarily indemnified from loss stemming from their negligence by the terms of their professional indemnity insurance, which they must maintain as a condition of holding a practising certificate.395 Not every loss to a client arising out of a retainer necessarily comes under the umbrella of professional indemnity insurance, and lawyers must be clear on the limitations on coverage (usually limited to work with the requisite connection with the practice of law) and exclusions from it (for example, the common exclusion from liability arising out of the lawyer’s fraud or dishonesty).396

390 D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1. 391 Arthur J S Hall & Co (a firm) v Simons [2002] 1 AC 615. 392 Lai v Chamberlains [2005] 3 NZLR 291. 393 Lai v Chamberlains [2005] 3 NZLR 291 at [204], [205] per Hammond J, with whom McGrath, Glazebrook and O’Regan JJ agreed. 394 See, for example, Hampel and Clough, “Abolishing the Advocate’s Immunity from Suit: Reconsidering Giannarelli v Wraith” (2000) 24 MULR 1016; Charles, “The Immunity of the Advocate” (2003) 23 Aust Bar Rev 220. See also Attwells v Jackson Lalic Lawyers Pty Ltd (2016) 90 ALJR 572 at [28] per French CJ, Kiefel, Bell, Gageler and Keane JJ (“An alteration of the law of this kind is best left to the legislature”). 395 ACT, s 311; NSW s 211 (see also Legal Profession Uniform Law Application Act 2014 (NSW), s 106) (formerly NSW 2004, s 406); NT, s 376; Qld, s 353; SA, s 19; Tas, s 45; Vic, s 211 (formerly Vic 2004, s 3.5.2); WA, s 40. 396 On the concept of “dishonesty” in this context see McCann v Switzerland Insurance Australia Ltd (2000) 203 CLR 579; Yaktine v Perpetual Trustees Victoria Ltd (2005) 13 ANZ Ins Cas ¶61-637; Ginelle Finance Pty Ltd v Diakakis (2007) NSW ConvR ¶56-174; McCarthy v St Paul International Insurance Co Ltd (2007) 157 FCR 402; IAG New Zealand Ltd v Jackson (2013) ANZ Ins Cas ¶61-982 at [21]–[31] per Miller J. See further Dal Pont, Solicitors Manual (LexisNexis Butterworths Looseleaf), [31,030], [31,035].

214

Lawyers’ Professional Responsibility

[5.355]

Professional standards regime

[5.355]

Rising professional indemnity insurance premiums, coupled with application of competition principles to the professions (see [1.55]–[1.65]), has prompted initiatives aimed at capping professionals’ liability. The incorporation of legal practices under the Corporations Act 2001 (Cth) reduces liability exposure, as lawyers’ personal assets are immune from creditors unless pledged: see [20.170]. These initiatives must be viewed against the backdrop of the professional standards regime, which commenced in New South Wales via the Professional Standards Act 1994 (NSW), which then saw equivalent form in the Professional Standards Act 1997 (WA), before implementation in other jurisdictions after 2000.397

The regime enables the creation of schemes to limit the civil liability of professionals, except for “any negligence or other fault of a legal practitioner in acting for a client in a personal injury claim”, “a breach of trust” or “fraud or dishonesty”.398 It envisages the preparation by an occupational association of a scheme designed to limit the occupational liability of its members, to operate subject to approval by the Professional Standards Council. In applying for scheme approval, an occupational association must give the Council a detailed list of risk management strategies intended to be implemented in respect of its members. For the legal profession these strategies may include mandatory continuing legal education (see [4.30]), accreditation schemes, risk management education programs, professional conduct and practice rules, practice management courses, and trust account auditing (see [9.85]–[9.95]). The operative provision of the legislation, in its New South Wales format, reads:399 A scheme may provide that if a person to whom the scheme applies and against whom a proceeding relating to occupational liability is brought is able to satisfy the court that the person has an insurance policy: (a) insuring the person against that occupational liability; and (b) under which the amount payable in respect of the occupational liability relating to the cause of action (including any amount payable by way of excess under or in relation to the policy) is not less than the amount of the monetary ceiling specified in the scheme in relation to the class of person and the kind of work to which the cause of action relates at the time at which the act or omission giving rise to the cause of action occurred, the person is not liable in damages in relation to that cause of action above the amount so specified.

A scheme may specify different amounts of liability for different classes of persons within an occupational association or different kinds of work, or both.400 It follows that individual schemes can be tailored to different sectors within the legal profession. 397 See Civil Law (Wrongs) Act 2002 (ACT), Sch 4; Professional Standards Act 2004 (NT); Professional Standards Act 2004 (Qld); Professional Standards Act 2004 (SA); Professional Standards Act 2005 (Tas); Professional Standards Act 2003 (Vic); Treasury Legislation Amendment (Professional Standards) Act 2004 (Cth). 398 ACT, Sch 4, cl 4.3(1); NSW, s 5(1); NT, s 5(1); Qld, s 6(1); SA, s 5(2); Tas, s 5(1); Vic, s 5(1); WA, s 5(1). 399 NSW, s 21. See also ACT, Sch 4, cl 19; NT, s 22; Qld, s 22; SA, s 23; Tas, s 24; Vic, s 23; WA, s 34. 400 ACT, Sch 4, cl 20; NSW, s 24; NT, s 25; Qld, s 25; SA, s 26; Tas, s 27; Vic, s 26; WA, s 37.

[5.355]

5 Lawyers’ Duty to Clients in Tort

215

Schemes presently in force for solicitors have been brokered by the respective law societies in New South Wales, Queensland, South Australia, Victoria and Western Australia, and also for barristers in those jurisdictions by the respective bar associations.401

401 See http://www.psc.gov.au/.

Chapter 6

Lawyer–Client Conflict and Influence [6.05] PROSCRIPTION AGAINST LAWYER–CLIENT CONFLICT ...................................... 217 [6.05] Rationale for the proscription ...................................................................................... 217 [6.10] Scope of the proscription .............................................................................................. 218 [6.25] Informed client consent as elixir to conflict .............................................................. 219 [6.35] Circumstances where duty–interest conflict in issue .............................................. 221 [6.40] DEALINGS WITH CLIENTS ............................................................................................. 221 [6.40] General proscription ...................................................................................................... 221 [6.55] Borrowing from clients ................................................................................................. 224 [6.65] Lending to clients ........................................................................................................... 226 [6.70] Lawyer’s investment in client’s enterprise ................................................................ 226 [6.80] Lawyer buying from or selling to a client ................................................................ 229 [6.85] Dealings with other than current clients ................................................................... 230 [6.105] PROSCRIPTION AGAINST SECRET PROFITS ........................................................... 233 [6.105] Application of fiduciary principle generally ........................................................... 233 [6.110] Specific application to undisclosed referral fees and commissions .................... 234 [6.120] Criminal responsibility for secret commissions ...................................................... 236 [6.125] UNDUE INFLUENCE BY LAWYER OVER CLIENT ................................................. 237 [6.125] Presumption of undue influence ............................................................................... 237 [6.130] Application to gifts from client to lawyer ............................................................... 238 [6.135] Unconscionable dealing by lawyer ........................................................................... 240 [6.140] LAWYER–CLIENT SEXUAL RELATIONS ................................................................... 241

PROSCRIPTION AGAINST LAWYER–CLIENT CONFLICT Rationale for the proscription

[6.05] Fiduciary duties, which apply to the lawyer–client relationship (see [4.45]–[4.60]), dictate that lawyers must give undivided loyalty to their clients, “without being distracted by other interests including personal interests”.1 Central to fostering loyalty is the prohibition on lawyers engaging with their clients in circumstances involving a conflict of interest and duty, namely where the lawyer’s 1 R v Neil [2002] 3 SCR 631 at [24] per Binnie J.

218

Lawyers’ Professional Responsibility

[6.10]

own interests are not coincident with those of the client. Part and parcel of this proscription is the duty not to make an unauthorised profit out of the lawyer–client relationship: see [6.105]. These limitations on lawyers’ activities reflect a broader foundation than merely fiduciary law, though. There is a case to be made that lawyers should “forswear all compromise of their integrity, and … repudiate the creation of personal interest which could bring them into conflict with their duty to their clients”2 as part of the price of status as a professional, and the prevailing notion of public service inherent therein: see [1.30]. There is also the issue of appearances; a public perception that lawyers can use their privileged position to their own advantage lowers not only the public respect for the profession but public confidence in the legal system. The professional rules reflect the foregoing by stating that “[a] lawyer must not act for a client where there is a conflict between the duty to serve the best interests of a client and the lawyer’s own interests”.3 Scope of the proscription Proscription extends to avoiding the appearance of conflict

[6.10] Whether at general law or under the professional rules, the proscription against conflict between interest and duty serves a prophylactic function. The fear is that lawyers in a position of conflict between interest and duty may yield to human nature and act in their own interests.4 Yet the assumption is not that, whenever such a conflict arises, the lawyer’s self-interest will necessarily prevail. The proscription is directed at avoiding a position where a lawyer may be tempted to favour self-interest, thus avoiding even the appearance of conflict. The latter is, it is reasoned, essential to foster public confidence in the profession and its role. As explained by Megarry J in Spector v Ageda:5 The solicitor must be remarkable indeed if he can feel assured of holding the scales evenly between himself and his client. Even if in fact he can and does, to demonstrate to conviction that he has done so will usually be beyond possibility in a case where anything to the client’s detriment has occurred. Not only must his duty be discharged, but it must manifestly and undoubtedly be seen to have been discharged.

2 Bonds & Securities (Trading) Pty Ltd v Glomex Mines NL [1971] 1 NSWLR 879 at 891 per Street CJ in Eq (statement made in the context of sharebrokers, but applied with respect to lawyers by Street CJ in Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 172). 3 ACT, r 12.1; NSW, r 12.1; NT, rr 8.1(a), 8.2; Qld, r 12.1; SA, r 12.1; Vic, r 12.1; WA, r 15(2). See also WA, r 12 (“A practitioner must protect and preserve the interests of a client unaffected by the interest of: (a) the practitioner; (b) the practitioner’s law practice; (c) another client of the practitioner; (d) an affiliate of the practitioner; or (e) any other person”). 4 Bonds & Securities (Trading) Pty Ltd v Glomex Mines NL [1971] 1 NSWLR 879 at 891 per Street CJ (“[Such a] situation is fraught with the risk that human frailty will prove unequal to the resolution of the moral issues involved in the conflict”. This statement was made in the context of sharebrokers but applied with respect to lawyers by Street CJ in Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 172). 5 Spector v Ageda [1973] Ch 30 at 47 (emphasis supplied).

[6.25]

6 Lawyer–Client Conflict and Influence

219

Proscription extends beyond the individual lawyer

[6.15] Where an individual lawyer cannot act because of a conflict between interest and duty, that conflict is not avoided by another person in the lawyer’s firm, or a person not entirely independent of the lawyer, taking on the matter. Loyalty – or at least the appearance of loyalty – could be sacrificed were this allowed. The Australian Solicitors’ Conduct Rules, applied in most Australian jurisdictions, accordingly extend the proscription to “associates” of the conflicted lawyer, the term “associate” being defined in the Glossary in broad terms for this purpose as: • a partner, employee, or agent of the lawyer or of the lawyer’s firm; • a corporation or partnership in which the lawyer has a material beneficial interest; • in the case of an incorporated legal practice, a director of the practice or of a subsidiary of that practice; • a member of the lawyer’s immediate family;6 • a member of the immediate family of a partner of the lawyer’s law practice or of the immediate family of a director of the incorporated legal practice or a subsidiary thereof. Duty on barristers to advise as to instructing solicitor’s conflict

[6.20] As a further precautionary measure against conflict, the barristers’ rules require a barrister who believes on reasonable grounds that a client’s interests may conflict with those of an instructing solicitor to advise the latter of this belief, preferably in writing and, if the instructing solicitor does not agree to advise the client of the barrister’s belief, seek to so advise the client in the presence of the solicitor.7 Informed client consent as elixir to conflict

[6.25] On most occasions the presence of a conflict of interest will make it improper, or even impossible, for the lawyer to continue to act for and advise a client. But because the conflict of interest rules are directed to serving clients’ interests in securing loyal service from their lawyers, clients may relax them. The chief means to do so is by the client giving informed consent or authority to the lawyer acting, or continuing to act, in a matter involving a duty–interest conflict. Essential to informed client consent or authority is “full candour and appropriately complete disclosure to the client”8 by the lawyer.9 Disclosure is directed at placing the client in a position to determine whether or not to (continue to) retain the 6 For these purposes, the phrase “immediate family” means the spouse (which expression may include a de facto spouse or partner of the same sex), or a child, grandchild, sibling, parent or grandparent of a lawyer. 7 ACT, r 111; NSW, r 120; NT, r 111; Qld, r 114; Tas, para 28; Vic, r 120; WA, r 114. 8 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208 per Kirby P. 9 This is explicitly recognised by the professional rules in some jurisdictions: see Tas, r 11(2), 11(3); WA, r 15(4) (which states that proscription against conflict does not apply where the client: “(a) is fully informed of the conflict of interests; and (b) has received independent written legal advice about the

220

Lawyers’ Professional Responsibility

[6.30]

lawyer in the matter. Lacking knowledge of the existence, scope or the implications of the conflict, a client cannot be said to give informed consent or authority to the (continuing) representation.10 A leading statement in this regard is that of Street CJ in Law Society of New South Wales v Harvey:11 [The disclosure] must be a conscientious disclosure of all material circumstances, and everything known to him relating to the proposed transaction which might influence the conduct of the client or anybody from whom he might seek advice. To disclose less than all that is material may positively mislead. Thus for a solicitor to merely disclose that he has an interest, without identifying the interest, may serve only to mislead the client into an enhanced confidence that the solicitor will be in a position to better protect the client’s interest.

[6.30] Yet a lawyer in making the above disclosure lacks distance from the conflict, which may dictate that even with the best of intentions the disclosure may not properly avoid bias. Also, lay clients may place trust in the superior legal knowledge of their lawyer, and may be willing to accept the lawyer’s assurances simply because it is the lawyer who has given them. A prudent lawyer will, therefore, insist that the client receive independent legal advice on the matter if there is any inclination to continue the representation. Such advice serves to reduce the scope for the lawyer’s own influence in a client’s decision to continue conflicted representation, and has the benefit of being supplied by a person with no conflicting interest in the matter.12 The latter explains why a partner, associate or employee of the conflicted lawyer is presumed to be incapable of giving independent advice. The lawyer carries this onus because he or she is better positioned than the client to appreciate both the existence of a conflict and its likely scope and implications.13 Also, it is the lawyer who, if the representation is to continue, is seeking to be discharged from her or his responsibilities. So it stands to reason that any client consent, and the advice behind it, should be documented in writing. A failure to discharge this onus could justify a finding of breach of fiduciary duty, which may lead to an order for compensation (where the breach has caused the client loss), an account of profits (where the breach has generated an unauthorised gain for the lawyer) or the rescission of a transaction with the client effected in breach: see [4.180], [4.185]. effect of the conflict; and (c) agrees to the practitioner providing the legal services”). Although the rules in the remaining jurisdictions do explicitly provide for the client to consent to the lawyer proceeding with the representation where there is a conflict between the client’s and the lawyer’s interest, they do not expressly preclude it. 10 Castlereagh Motels Ltd v Davies-Roe (1967) 67 SR (NSW) 279 at 284 per Wallace P; Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 at 96 per McMullin J; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208 per Kirby P; Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 544 per Richardson J, at 547 per Thorp J; Woolworths Ltd v Kelly (1991) 22 NSWLR 189 at 212 per Samuels JA. 11 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 170. 12 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 171 per Street CJ; Day v Mead [1987] 2 NZLR 443 at 448 per Cooke P; Re Fabricius (1989) 91 ACTR 1 at 7–8 per Miles CJ, Kelly and Gallop JJ; Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 546 per Thorp J; Re Nelson (1991) 106 ACTR 1 at 17 per Higgins and Foster JJ; Witten-Hannah v Davis [1995] 2 NZLR 141 at 149 per Richardson J. 13 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 547 per Thorp J; Official Assignee of Collier v Creighton [1993] 2 NZLR 534 at 537 per Gault J.

[6.40]

6 Lawyer–Client Conflict and Influence

221

Circumstances where duty–interest conflict in issue

[6.35] The issue of conflict between duty and interest has arisen most commonly in the case law where the lawyer has transacted with a client. Typical illustrations, which are addressed below, are borrowing from clients (see [6.55], [6.60]), lending to clients (see [6.65]), and buying from or selling to clients (see [6.80]). The main concern in these types of cases involves the lawyer securing an advantage at the client’s expense that undermines the duty of undivided loyalty, although it should not be presumed that the client must suffer loss for the fiduciary breach to be actionable. Fiduciary liability is strict, and so a dealing effected in breach of fiduciary duty may be set aside even if the client suffers no loss. These concerns can also arise in respect of former clients, and even regarding persons who have never been clients, although in these cases any fiduciary duty must ordinarily be sourced aside from the retainer: see [6.85]–[6.100]. Dealings with clients can generate unauthorised profits for lawyers, for which lawyers as fiduciaries must account to the client. But the more common scenario involving secret profits is where the lawyer, in the course of representing a client, secures a profit beyond her or his professional fee to which the client has not consented: see [6.105], [6.115]. Secret profits, in addition to attracting a fiduciary liability to account, can in some circumstances attract criminal responsibility: see [6.120]. Although not strictly speaking under the fiduciary umbrella, a conflict between interest and duty is necessarily inherent in circumstances where a lawyer is presumed to exercise undue influence over a client: see [6.125], [6.130]. There is scope, to this end, for lawyer–client transactions to be susceptible to the presumption of undue influence, which therefore provides an independent ground for vitiation. Like consent to a lawyer engaging in a conflict between interest and duty in a fiduciary sense, rebuttal of the undue influence presumption is greatly assisted by evidence of independent advice. The chapter culminates with lawyer–client sexual relations, though it should be understood that the Australian approach to fiduciary law (and undue influence) makes this form of “dealing” not amenable to proscription or remedy in equity: see [6.140]–[6.150]. It is discussed in this chapter because lawyer–client sexual relations may arise out of a lawyer’s position of power or influence over the client, which as a foundation is not entirely dissimilar to that underscoring fiduciary law or the presumption of undue influence.

DEALINGS WITH CLIENTS General proscription

[6.40] A lawyer who deals or transacts with a client, other than explicitly for the purposes of the retainer, may prima facie place herself or himself in a position of conflict between interest and duty. The lawyer’s personal interest will often not

222

Lawyers’ Professional Responsibility

[6.45]

coincide with the interests of the client in that dealing or transaction.14 The presence of a conflict makes it almost impossible for lawyers to opt out of their fiduciary responsibility by pleading that, in dealing with clients, they act in a different capacity to which lesser responsibilities attach.15 So it has repeatedly been said that lawyers who deal with their client while the lawyer–client professional relationship undertake a heavy burden.16 This is because, by becoming personally interested in a dealing, lawyers place it out of their power to give the disinterested advice expected of them;17 this may raise “the possibility of overreaching by the lawyer”,18 say, by arranging the transaction in a form most beneficial to the lawyer. The position is arguably no different where, in the course of a continuing lawyer–client relationship, the lawyer proposes to deal with the client in a matter in which he or she has declined to represent the client.19 The obligations imposed on the lawyer are not diminished by virtue of another kind of relationship, such as a business relationship, that may exist between the parties.20 A leading judicial statement regarding dealings between lawyer and client are the strong words of Street CJ in Law Society of New South Wales v Harvey:21 A conflict of interest which is avoidable, and ought to be avoided, is that which arises from a deliberate proposal of the solicitor that his client deal with him … In the absence of very special circumstances, a solicitor who promotes himself as the dealer with his client misuses his position. A solicitor who constantly promotes dealings with various clients clearly misuses his position, and puts it beyond his capacity to observe his primary duty to his clients … [Therefore, a solicitor] should take all reasonable steps positively to avoid dealing directly, or indirectly, with his client.

This strict view requires a lawyer to eschew transactions that will result in the intermingling of her or his personal affairs – including the affairs of companies, ventures or others with whose financial position he or she has a personal connection – with client affairs.22

[6.45] While the strict approach represents sound practice, it is not an absolute prohibition on dealings with clients. The lawyer may deal with a client provided 14 See, for example, BRJ v Council of New South Wales Bar Association [2016] NSWSC 146 at [59]–[62] per Adamson J (where a barrister leased to a client premises at the rear of a residence she owned, his Honour characterised this as “a clear conflict between the client’s interest in having stable accommodation and the plaintiff’s interest in earning income from the lease of the premises”: at [61]). 15 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 545 per Richardson J. 16 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 171 per Street CJ; Re Fabricius (1989) 91 ACTR 1 at 7–8 (FC). 17 Ex parte Clowes (1968) 87 WN (Pt 1) (NSW) 364 at 368 per the Prothonotary; Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 at 96 per McMullin J; Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 546 per Hardie Boys J. 18 Galambos v Perez [2009] 3 SCR 247 at [29] per Cromwell J. 19 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 221 per Clarke JA. 20 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 546 per Hardie Boys J. 21 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 171. 22 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 172. Brennan J made similar comments in Leary v Federal Commissioner of Taxation (1980) 32 ALR 221 at 240 at 162.

[6.50]

6 Lawyer–Client Conflict and Influence

223

that he or she has, with full candour and disclosure, taken steps to ensure that the client has given a fully informed consent to the transaction.23 Ensuring that the client seeks independent advice may be an important step in the informed consent process. As the lawyer bears the onus of proving full disclosure and informed consent – a heavy onus – lawyers who deal with clients assume the risk of the transaction being set aside, an order for compensation or account of profits against them, and/or some professional sanction.

[6.50] Especial care should be taken where a lawyer proposes to act in a transaction for herself or himself and a family member or associate. Beyond potentially compromising a lawyer’s independent judgment (see [17.65]), such a situation is fraught with potential for conflict of interest. The point is illustrated by Woolley v Ritchie,24 where a lawyer acted on his own behalf and for his de facto spouse in real estate transactions. Upon inquiring, the de facto spouse was told by the lawyer that it was unnecessary for her to seek independent legal advice. Salmon J found that she was not fully informed as to the implications of the transactions, which included the transfer of property (with a mortgage in her name) to a trust. His Honour held that the lawyer was under a duty to ensure that his de facto spouse was fully informed and freely consented, and the lawyer’s conflict stemming from his interest in the transactions required securing independent legal advice for the spouse. Prudent lawyers will not, therefore, act in transactions in which they are personally interested and that involve their spouses, other family members or business partners, unless the other party is separately represented or advised. The need for independent representation or advice in these cases is heightened by the likelihood that the relative or associate places greater trust in the lawyer than a client lacking that association,25 and that the lawyer may be less scrupulous in matters of full disclosure. The lawyer may be less inclined to advise the relative or associate of the risks of the deal,26 who may simply assume without inquiry that her or his best interests are being fostered.27 There is, moreover, the prospect that the court could exercise its inherent jurisdiction to restrain a lawyer acting (as to which see [17.20]) for a relative where there is a doubt over the lawyer’s capacity to exercise an independent judgment.28 23 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208–210 per Kirby P, at 215–216 per Mahoney JA, at 219, 227 per Clarke JA. 24 Woolley v Ritchie [1999] ANZ Conv R 385. 25 An extreme illustration is found in Law Society of Singapore v Yap Bock Heng Christopher [2014] 4 SLR 877, where the respondent solicitor, while representing his nephew who was detained by police, requested a loan from the nephew. No independent advice was supplied, and the respondent reneged on his promise to repay the loan within two weeks, and when pressed for repayment issued threats against the nephew, as well as bills exceeding the amount owed. 26 See, for example, Council of the Law Society of New South Wales v Vaughan [2015] NSWCATOD 156 (disciplinary sanction imposed on a solicitor who borrowed money from a client, who was his cousin, without security or ensuring that the client received independent advice). 27 Woolley v Ritchie [1999] ANZ Conv R 385 at 388. 28 See, for example, Schueler v Smith [2010] FMCA 777 (where Driver FM restrained the applicant’s solicitor (and her firm) from acting where the solicitor was the de facto partner of the applicant); Temby v Chambers Investment Planners Pty Ltd [2010] FMCA 783 (where Lucev FM restrained a

224

Lawyers’ Professional Responsibility

[6.55]

Borrowing from clients General law

[6.55] The interests of lender and borrower prima facie conflict; the lender’s interest is to secure the greatest return on the most favourable terms, whereas the borrower wishes is to pay the least interest on the most favourable terms. It follows that a lawyer who wishes to borrow from a client is prima facie in a conflict of interest situation, which can only be cured by the client’s free and informed decision about the proposed transaction. Independent advice is the most effective way to achieve informed client consent; without it the lawyer bears a heavy burden to show that all has been done within her or his power to protect the client’s interests, and to ensure that the client is aware of every circumstance that is or might be relevant to the decision in question.29 Some thought as to the type of information the lawyer should disclose to a client in this context highlights this heavy onus. The client needs to know both the risk attached to the loan and the advantages that may flow to the lawyer from the use of the money.30 To this end, the client should be fully informed regarding the lawyer’s interest in the borrowing enterprise(s), the lawyer’s own personal financial position (and that of her or his associates in the enterprise(s)), the security for the loan (and securities held by third parties) and its proper value, coupled with an explanation of the drawbacks, consequences and incidents of the transaction. It is unlikely that the lawyer will be able, or at least be seen to be able, to give disinterested advice as to these matters.31 Especially where a lawyer intends to use a client’s money to finance a business the lawyer is carrying on, or proposing to establish, it is difficult to see how the client can be adequately protected and advised without independent advice.32 The New South Wales Court of Appeal’s ruling in Law Society of New South Wales v Harvey33 is the leading Australian case on lawyer–client dealings. There the respondent solicitor’s clients lent moneys to three companies of which the solicitor was a solicitor and his firm from acting for the solicitor’s parents); Pickard v Brown-Jones [2014] FCWA 12 (lawyer disqualified from acting for his wife in a family law matter on the ground of a potential conflict of interest); Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818 (husband disqualified from acting for his wife in commercial litigation). Cf Re Wombat Securities Pty Ltd [2011] NSWSC 194 at [11] per Barrett J (noting that although “[m]any lawyers would prefer, as a matter of personal choice, not to act for a parent in court proceedings and to leave such cases in the hands of someone else … it cannot be the case in any abstract sense that the integrity of the judicial process is automatically compromised if a lawyer chooses to act for the lawyer’s parent in such circumstances”); Sanchez v Lee (2013) 49 Fam LR 567 (where Turner J found it not inappropriate, as a matter of principle, for a father-in-law to represent his daughter-in-law in family law proceedings, but ultimately restrained this representation because of the prospect that the father-in-law would be called as a witness in the proceedings: see [17.45]–[17.55]). See further Dal Pont, “The Perils of Familiarity” (2011) 49 (Aug) LSJ 42. 29 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 739–740 per Hope JA. 30 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 758–759 per Hutley JA. 31 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 544 per Richardson J. 32 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 740 per Hope JA; Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 546 per Hardie Boys J. 33 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154.

[6.60]

6 Lawyer–Client Conflict and Influence

225

director and shareholder. Street CJ, who delivered the judgment of the court, found that the respondent had used his position as a solicitor to channel client money to fund his own land speculation. It was also found that he recklessly disregarded the need to protect his clients’ property in failing to provide adequate securities. Importantly, the details of these speculations were kept from the clients, who were mostly persons inexperienced in matters of investment and business, and for this reason trusted the respondent to invest on their behalf. The grossness of these abuses of trust led Street CJ to advocate that “a solicitor who does act as a loanbroker ought to regard himself as precluded, by the very relationship between him and his client, from commending to his client a loan to a company, or for a venture, in which the solicitor has an interest”.34 The respondent was accordingly struck off. Professional rules

[6.60] With this background at general law, it is unsurprising that the professional rules prohibit a lawyer from borrowing any money, or assisting an associate35 to borrow money, from a client of the lawyer (or her or his law practice) or a former client of the lawyer (or practice) who has indicated a continuing reliance upon the lawyer’s (or practice’s) advice in relation to the investment of money.36 The rules envisage exceptions to this proscription where the client is: • an Authorised Deposit-taking Institution;37 • a trustee company; • the responsible entity of a registered managed investment scheme38 or a custodian for that scheme; • an associate of the lawyer if the lawyer can prove that a full written disclosure was made to the client and that the client’s interests are protected in the circumstances; or • the employer of the lawyer.

34 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 at 172. 35 As to the meaning of “associate” see [6.15]. 36 ACT, r 12.3; NSW, r 12.3; NT, r 10.1; Qld, r 12.3; SA, r 12.3; Vic, r 12.3; WA, r 15(6), 15(7), 15(7A). The barristers’ rules in most jurisdictions similarly proscribe a barrister from receiving “any money or property by way of loan from any client, the relative of a client or a business entity of which a client is a director, partner or manager, during the course of a retainer with that client”: NSW, r 48; Qld, r 47; SA, r 47; Vic, r 48; WA, r 47. 37 “Authorised Deposit-taking Institution” has the same meaning as in the Banking Act 1959 (Cth). In the Northern Territory the exception is simply phrased to encompass those clients whose normal business is to lend money: NT, r 10.2. Equivalent provision is made by the barristers’ rules in most jurisdictions, which phrase the exception by reference to where “the ordinary business of the client, client’s relative or the business entity includes lending money”: NSW, r 48; Qld, r 47; SA, r 47; Vic, r 48; WA, r 47. 38 Under Ch 5C of the Corporations Act 2001 (Cth).

226

Lawyers’ Professional Responsibility

[6.65]

Lending to clients

[6.65] That the interests of lender and borrower are not coincident requires a lawyer, or an entity with which the lawyer is associated, who wishes to lend money to a client to behave scrupulously to allay any appearance of impropriety. At a minimum, the lawyer must:39 • disclose the interest fully and candidly to the client, preferably in writing; • advise and facilitate the provision of independent advice in more than a perfunctory way; and • advise on, and facilitate access to, alternative sources of funds, particularly where these may be to the client’s advantage. That a failure to fulfil these disclosure requirements gives rise to a fiduciary breach, and scope for the court to set aside the transaction, is illustrated by the High Court’s ruling in Maguire v Makaronis.40 There the appellant law firm lent money secured by way of mortgage to the respondent clients for the purchase of a poultry farm without disclosing the firm’s interest as mortgagee, and was also retained to act on the purchase. The clients defaulted after only one payment. The court found that the firm had breached its fiduciary duty because of the conflict between its duty to the clients and its own interest in the transaction, in particular as mortgagee under the mortgage, in circumstances where there was no informed consent due to the lack of independent legal advice for the clients.41 The court therefore ordered that the mortgage be set aside on the condition that the clients repaid the moneys borrowed. Lawyer’s investment in client’s enterprise

[6.70] If lawyers are to invest their own money in a client’s business by way of debt, the principles discussed at [6.65] apply as to full disclosure and independent advice to the client. There is scope also for lawyers to invest in a client’s business by being allotted shares (an equity interest), usually in lieu of professional fees. Client-driven justifications for this practice include securing access to legal services by clients who may otherwise lack the funds to do so, and conveying the confidence the lawyer has in the enterprise, as well as attracting other investors. The lawyer, moreover, has an economic incentive to pursue the client’s best financial interests.42 In the only Australian professional pronouncement to date,43 these advantages led the Council of the New South Wales Law Society, in its “Guidelines for Solicitors 39 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 209 per Kirby P. 40 Maguire v Makaronis (1997) 188 CLR 449. 41 Maguire v Makaronis (1997) 188 CLR 449 at 467 per Brennan CJ, Gaudron, McHugh and Gummow JJ. See also Country Law Services Pty Ltd v Duff (2007) 13 BPR 24,953 at [26]–[44] per White J. 42 See Puri, “Taking Stock of Taking Stock” (2001) 87 Cornell L Rev 99 at 103–112; Dzienkowski and Peroni, “The Decline in Lawyer Independence: Lawyer Equity Investments in Clients” (2002) 81 Texas L Rev 405 at 429–434. 43 Cf how the issue is addressed by the Hong Kong rules. These identify no objection in principle to a law firm agreeing to take equity in a client’s company in lieu of fees, provided that “the firm’s bill is rendered in a quantifiable amount, in monetary terms and is fair and reasonable” and “the client is advised that he should receive independent advice as to the merits of the proposal”, but proscribe

[6.70]

6 Lawyer–Client Conflict and Influence

227

Taking an Equity Interest in a Client in Lieu of Fees”,44 to recognise the practice of lawyers taking an equity interest in lieu of fees as consistent with the deregulation of the profession (including the deregulation of costs), and with the policy aims of greater flexibility in the delivery of legal services and increased access to legal services. Yet the Law Society did not endorse arrangements of this kind without qualification, adding that they should be implemented strictly in line with the professional rules that deal with conflicts of interest, guided by the notion that justice must always be seen to be done. Commentators have likewise expressed concerns conflicts-wise – one opining that “[a] lawyer is not a venture capitalist [and] cannot simultaneously wear two hats, that of a stockholder and that of a lawyer”45 – and for other reasons.46 A conflict may arise, for instance, where the lawyer’s interest is in short-term improvement in share price while the client’s interest is in the long-term development of the company. Some, to this end, view it as “unrealistic to believe that lawyers who have an interest in the venture do not consider their personal financial well-being while advising the client”.47 There is the further concern that taking equity in a client increases lawyers’ financial dependence upon the success of the client’s business, which may prompt lawyers to sacrifice their professional independence in giving legal advice. It may also blur the distinction between legal and business advice, causing the advice to fall outside the coverage of professional indemnity insurance. Then there is the spectre of undue influence – lawyers may, in striking a deal favourable to themselves, take advantage of clients, particularly inexperienced clients. Such an arrangement, even assuming it meets costs disclosure requirements (see [14.15]–[14.60]), could as a consequence be struck down as an unfair or unreasonable costs agreement: see [14.150]–[14.205]. Finally, the lawyer’s ongoing interest in the client’s business may place undue restraints on the client terminating the retainer: see [3.190]. These dangers dictate that lawyers should view equity investments in clients with caution. To minimise the dangers, a lawyer should consider whether the equity interest is significant having regard to the total share capital, what rights are conferred by the equity interest, and the client’s level of business expertise and experience.48 The more significant the lawyer’s interest, the greater the prospect for the firm from acting in the acquisition of equity in the client’s company and highlight a need to “be aware that the equity holding may affect future dealings with the company and may compromise the firm’s independence or integrity and their duty to act in the best interest of the client”: HK, principle 7.02, cmt [7]. 44 Though no longer appearing on the Law Society’s website, the guidelines nonetheless represent prudent practice. 45 Perrino, “Between a Rock and a Hard Place: What to do When One Must Take Equity in a Client” (2015) 28 Geo J Leg Ethics 825 at 833. 46 See generally Dzienkowski and Peroni, “The Decline in Lawyer Independence: Lawyer Equity Investments in Clients” (2002) 81 Texas L Rev 405 (an extensive article of some 150 pages, including an extensive analysis of issues of professional responsibility). Cf Langevoort, “When Lawyers and Law Firms Invest in Their Corporate Clients’ Stock” (2002) 80 Wash ULQ 569. 47 Dzienkowski and Peroni, “The Decline in Lawyer Independence: Lawyer Equity Investments in Clients” (2002) 81 Texas L Rev 405 at 548. 48 See MacDermott, “Taking Equity in a Client” (2002) 40 (Aug) LSJ 40.

228

Lawyers’ Professional Responsibility

[6.75]

conflict between interest and duty; the lawyer may, in the course of the retainer, need to recommend that the client obtain independent advice, or even withdraw from acting.

[6.75] The taking of an equity interest in a client may also generate a client–client conflict (as to which see generally Ch 7). It may incline the lawyer to favour the interests of that client at the expense of other clients who can reasonably expect advice in that field. This may generate liability not only for breach of contract or negligence, but for breach of fiduciary duty. The latter appears from the Supreme Court of Canada’s decision in Strother v 3464920 Canada Inc.49 A partner (S) in a large law firm was retained on an exclusive basis to provide tax advice to a company (the plaintiff) that marketed tax-sheltered investments. The retainer became non-exclusive at the end of 1997, the plaintiff’s business having stymied the year before due to changes to tax law. S then secured an oral tax ruling in favour of one of the plaintiff’s competitors that essentially restored the tax benefits denied to the plaintiff by the tax law changes. S did not inform the plaintiff of this, nor of his agreement to share profits with the plaintiff’s competitor. S resigned from the partnership in 1999 to become a 50% shareholder in the competitor company. The plaintiff sued S, alleging, inter alia, that S had committed a breach of fiduciary duty, and so should be liable for the profits secured from dealing with the competitor once the conflict arose. A majority of the court held that S had committed a fiduciary breach. While not wishing to unduly restrict lawyers from representing clients with competing commercial interests – the majority50 remarked that “commercial conflicts between clients that do not impair a lawyer’s ability to properly represent the legal interests of both clients will not generally present a conflict problem”51 – the facts were held to reveal a client–client conflict. What generated this conflict was S’s direct financial interest in the competitor client’s financial success, the majority explaining the point as follows:52 The difficulty is that [S] aligned his personal financial interest with the [competitor’s] success. By acquiring a substantial and direct financial interest in one client [the competitor] seeking to enter a very restricted market related to film production services in which another client [the plaintiff] previously had a major presence, [S] put his personal financial interest into conflict with his duty to [the plaintiff]. The conflict compromised [S’s] duty to “zealously” represent [the plaintiff’s] interest … a delinquency compounded by his lack of “candour” with [the plaintiff] “on matters relevant to the retainer”, ie, his own competing financial interest … In these circumstances, taking a direct and significant interest in the potential profits of [the plaintiff’s] “commercial competito[r]” … created a substantial risk that his representation of [the plaintiff] would be materially and adversely affected by consideration of his own interests … [S] could not with equal loyalty serve [the plaintiff] and pursue his own financial interest which stood in obvious conflict with [the plaintiff] making a quick re-entry into the tax-assisted film financing business. 49 Strother v 3464920 Canada Inc [2007] 2 SCR 177. 50 Binnie J delivered the majority judgment of Deschamps, Fish, Charron and Rothstein JJ. 51 Strother v 3464920 Canada Inc [2007] 2 SCR 177 at [55]. 52 Strother v 3464920 Canada Inc [2007] 2 SCR 177 at [67], [69], [70]. Contra at [149] per McLachlin CJ dissenting (Bastarache, LeBel and Abella JJ concurring).

[6.80]

6 Lawyer–Client Conflict and Influence

229

S was ordered to account to the plaintiff for all moneys he received during or attributable to his period with the law firm between 1 January 1998 and the date at which he resigned from the firm (31 March 1999), at which time “[t]he conflict was spent”.53 While it cannot necessarily be assured that Australian courts would reach the same conclusion – indeed, the majority’s tendency to allow fiduciary law to prevail over the terms of the retainer (in part influenced, it appears, by the fact that the non-exclusive retainer was oral) may place insufficient weight on the role of contract in this context54 – the case nonetheless highlights how taking an equity interest in a client can potentially sway a lawyer’s perceptions of duty to other clients. Lawyer buying from or selling to a client

[6.80] It has been judicially remarked that “[a] solicitor proposing either to buy property from, or to sell property to, a client is under a duty to cause the client to obtain independent advice”.55 Again, like the lawyer as lender or borrower, the interests of vendor and purchaser do not wholly coincide. The duty to ensure that the client seeks independent advice regarding the dealing is especially important here, for two reasons. First, the lawyer’s fiduciary responsibility prohibits her or him profiting from information or opportunity derived by reason of the fiduciary position.56 Second, the lawyer’s position of influence may lead the client to accept the terms and conditions of the transaction as suggested by the lawyer. It follows that a failure to make full disclosure, and to counsel the client to seek independent advice, may expose the lawyer to a claim for fiduciary breach or undue influence, and potentially threaten the enforceability and validity of the transaction.57 This may be so even if the lawyer’s interest is developed after contract and before completion, as appears from the ruling of the Australian Capital Territory Supreme Court in Re a Barrister and Solicitor.58 The lawyer acted for the vendor of land, and was invited by the purchaser, subsequent to exchange of contracts but prior to completion, to acquire a half-share in the property. The lawyer’s acceptance of this invitation without advising the client of this interest or counselling the client to seek independent advice amounted to a breach of fiduciary duty.59

53 Strother v 3464920 Canada Inc [2007] 2 SCR 177 at [95]. 54 See Duggan, “Solicitors’ Conflicts of Interest and the Wider Fiduciary Question” (2007) 81 ALJ 722 (who prefers the minority view, allowing contract to prevail over fiduciary law, “otherwise the court might use fiduciary law to rewrite the parties’ bargain and, at least in arms-length commercial transactions, it is hard to see the justification for this”: at 732). 55 Longstaff v Birtles [2002] 1 WLR 470 at [1] per Mummery LJ. 56 See, for example, Boardman v Phipps [1967] 2 AC 46. 57 Talbot & Olivier v Shann [2005] WASCA 34 at [3]–[5] per Templeman J. 58 Re a Barrister and Solicitor (1979) 40 FLR 26. 59 Re a Barrister and Solicitor (1979) 40 FLR 26 at 42.

230

Lawyers’ Professional Responsibility

[6.85]

No relaxation of these principles applies where the lawyer’s interest in the transaction is via a relative or associate. In Sewell v Zelden,60 for example, a solicitor acted for a client on the sale of property owned by the solicitor’s wife’s company, the sale proceeds being used to discharge a mortgage on the home of the solicitor and his wife. The solicitor did not disclose his interest to the client, in an omission the evidence revealed was designed to lure the client into purchasing a property for more than it was worth. Rein J described this as conduct “of a most inappropriate kind for a solicitor to have engaged in”.61 His Honour ordered the solicitor and the wife’s company (as an accessory to the solicitor’s breach) to pay the client the difference between the sale price ($315,000) and what the company had paid for the property the year before ($255,000). Dealings with other than current clients Dealings with former clients

[6.85] There is no general fiduciary prohibition on lawyers dealing with former clients, as fiduciary duties end with the termination of the relationship giving rise to those duties (the retainer): see [7.10], [7.15]. So if a lawyer has acted for a person in one transaction and later enters into a commercial dealing with that person, although not acting for her or him, there is no duty to make full disclosure and to counsel independent advice. For example, in Blythe v Northwood62 the defendant solicitor agreed to explain a mortgage and associated documents to a client, but took no further part in the client’s subsequent dealings with the documents or with the money the client raised with them. The New South Wales Court of Appeal rejected an argument by the client’s executrix that the defendant had breached fiduciary duty in not disclosing his interest in a company to which the client later on-lent the money, a reason being that the defendant had no further fiduciary responsibility once the retainer had ended.

[6.90] Determining whether or not a retainer has ended is therefore highly relevant to assessing the legitimacy of a lawyer’s dealings (though a claim based on a misuse of a client’s confidential information can clearly be maintained after a retainer is terminated: see [10.35]). Yet the formal termination of the lawyer–client relationship, though a highly relevant consideration, does not always conclude fiduciary duties. In assessing the scope of fiduciary duties, the court is influenced by the client’s reasonable expectations; where those expectations are that a lawyer–client relationship persists, there is scope for attendant fiduciary duties, whether independent of the retainer or under an implied retainer. Nor can it be assumed that a lawyer’s influence over a client automatically subsides once the retainer ends; fiduciary law may retain some role in this regard albeit independently of a continuing retainer. A New South Wales judge has, to this end, phrased the relevant inquiry in terms of “whether there has been an unconscientious use by the solicitor of his or her position of advantage in circumstances where the person in 60 Sewell v Zelden [2010] NSWSC 1180. 61 Sewell v Zelden [2010] NSWSC 1180 at [72]. 62 Blythe v Northwood (2005) 63 NSWLR 531.

[6.95]

6 Lawyer–Client Conflict and Influence

231

the position of the client was reasonably expecting a person in the position of a solicitor to act solely on his or her behalf”.63 Prudent lawyers will thus err on the side of caution, and make appropriate disclosure, when dealing with former clients, particularly where: • the dealings closely follow the termination of the retainer; • it is apparent that the client perceives that a lawyer–client relation persists or otherwise places trust in the lawyer’s professional judgment; or • for any other reason the lawyer suspects that her or his conduct may present the appearance of abuse of an influential position. The dangers of an incautious approach are illustrated by the English Court of Appeal’s decision in Longstaff v Birtles.64 There the claimants, who were intending purchasers, had instructed solicitors to negotiate with the vendors of a public house. The negotiations proved unfruitful, and so the retainer was terminated. The solicitors, who were partners in a hotel business venture, later invited the claimants to buy into the partnership, referring them to a local valuer but not advising them to seek independent legal advice. The claimants’ entry into the partnership proved financially disastrous. The court upheld their claim for breach of fiduciary duty, even though the retainer had ended. Mummery LJ explained the source of the relevant duty as follows:65 The source of the duty is not the retainer itself, but all the circumstances (including the retainer) creating the relationship of trust and confidence, from which flow obligations of loyalty and transparency. As long as the confidential relationship exists the solicitor must not place himself in a position where his duty to act in the interests of the confiding party and his personal interest in acting for his own benefit may conflict.

The solicitors’ proposal, within a continuing relationship of trust and confidence, gave rise to a situation in which their duty might conflict with their interest. The fiduciary breach subsisted in the solicitors continuing to deal with the claimants without insisting that they obtain independent advice. As a result, the solicitors were mulcted in equitable compensation for the claimants’ loss.

[6.95] That the transaction in question was closely related to the subject matter of the retainer, coupled with the evident trust the claimants placed in the solicitors’ business judgment, no doubt influenced the decision in Longstaff. Where the relationship between lawyer and former client is at arm’s length, however, courts have been less willing to cast upon lawyers the consequences of clients’ poor business decisions. In Marcolongo v Mattiussi,66 for instance, Young J found no fiduciary breach in solicitors’ involvement in a property development with a former client, as the former client, who was an experienced businessperson, had invited the solicitors to participate in the project. Similarly in Ipswich Interstate Transport Terminal Pty v Roles,67 out of a longstanding business and professional 63 Marcolongo v Mattiussi [2000] NSWSC 834 at [67] per Young J. 64 Longstaff v Birtles [2002] 1 WLR 470. 65 Longstaff v Birtles [2002] 1 WLR 470 at [1]. 66 Marcolongo v Mattiussi [2000] NSWSC 834 at [137]. 67 Ipswich Interstate Transport Terminal Pty v Roles (unreported, SC(Qld), Derrington J, 1 March 1995).

232

Lawyers’ Professional Responsibility

[6.100]

relationship the solicitor sold a half-share in a business asset to his businessman friend without advising his friend to seek independent advice. The price paid proved too high as a result of the solicitor’s negligent misstatement. Derrington J refused the claim for fiduciary breach – which would have generated greater scope for relief than a claim based solely in tort (see [4.180]) – because the former client was an experienced businessperson, had placed no reliance on the solicitor to advise him to seek independent help, and knew of the solicitor’s conflict of interest. Critical features of a fiduciary relationship were therefore absent. Dealings with persons who have never been clients

[6.100]

As a general principle, lawyers may freely deal with persons who have never been their clients.68 In commercial dealings between two parties at arm’s length, no fiduciary or other duty applies to a party who is a lawyer beyond that which otherwise governs the dealings.69 So a failure to disclose a conflicting interest or profit by a lawyer-party to the dealing does not vest in the other party any cause of action for fiduciary breach other than as sourced independently of status as a lawyer.70 For example, the mere fact that a person who enters into a joint venture happens to be a lawyer does not by itself impose upon the latter fiduciary duties to the other venturers,71 even if he or she has previously acted for one or more of the venturers.72 Nor does the relevant relationship of lawyer and client exist in this context merely because, as part of the joint venture agreement, the lawyer undertakes to carry out certain legal work on behalf of the venture.73 Any duties lawyers owe to non-clients rests on those otherwise attracted by the nature of the relationship in question, most commonly in tort, contract and statute. Duties of a fiduciary or confidentiality nature may also arise outside an existing lawyer–client relationship, but here they are premised upon proof of the elements that attract those duties.74 Yet in any event prudence dictates that lawyers should take care not to create in any other participants in a dealing an impression or expectation of a lawyer–client relationship, which could attract an independent fiduciary duty or substantiate an implied retainer (see [3.60]–[3.75]). 68 See, for example, Attorney Grievance Commission of Maryland v Shoup (2009) 410 Md 462 (where a loan from W to S – each a lawyer and sharing an intimate relationship – whilst S assisted in managing W’s financial affairs while W received treatment for alcohol abuse, was held not to fall within the umbrella of a retainer but was between a “boyfriend and girlfriend”: at 498). 69 Cassis v Kalfus [2003] NSWSC 649 at [83] per Cripps AJ. 70 Marcolongo v Mattiussi [2000] NSWSC 834 at [66] per Young J. 71 Schipp v Cameron (unreported, SC(NSW), Einstein J, 9 July 1998) at [665]; Cassis v Kalfus [2003] NSWSC 649 at [70] per Cripps AJ (on appeal see Cassis v Kalfus (No 2) [2004] NSWCA 315 at [6]–[11] per Giles JA); Spaulding v Adams [2012] TASSC 61 at [91], [92] per Crawford CJ (affd Spaulding v Adams [2013] TASFC 8). 72 Spaulding v Adams [2012] TASSC 61 at [93] per Crawford CJ (affd Spaulding v Adams [2013] TASFC 8). 73 Cassis v Kalfus [2003] NSWSC 649 at [70] per Cripps AJ (on appeal see Cassis v Kalfus (No 2) [2004] NSWCA 315 at [6]–[11] per Giles JA). 74 See, for example, Cassis v Kalfus (No 2) [2004] NSWCA 315 (where a joint venturer was a solicitor who had formerly represented the other joint venturer’s former employer).

[6.105]

6 Lawyer–Client Conflict and Influence

233

PROSCRIPTION AGAINST SECRET PROFITS Application of fiduciary principle generally

[6.105]

A fiduciary must not profit from the fiduciary position without the informed consent of the person to whom the fiduciary duties are owed. When translated to the lawyer–client relationship, this proscribes a lawyer profiting from the position and role as a lawyer without the client’s informed consent.

Yet because the lawyer–client relationship is a professional service relationship, inherent in it is the right to charge for the services supplied. So, unlike the archetypal fiduciary – the trustee – who historically was to act gratuitously, the law recognises no such absolute proscription as applicable to lawyers.75 This is not to say that the fiduciary proscription against secret profits can never impact on the lawyer’s ability to recover a fee; indeed, entirely one-sided costs agreements can be set aside for breach of fiduciary duty: see [14.205]. But so far as the charging of costs, and the terms of costs agreements, are concerned, the court has within its arsenal a variety of other avenues to guard against lawyers abusing their position: see [14.150]–[14.205]. What fiduciary law dictates is that if, by reason of acting for a client in a particular matter, the lawyer (or an associate) stands to gain a benefit directly or indirectly additional to reasonable professional fees, this benefit must either be disclosed or the lawyer must cease to represent the client due to conflicting interests. This requires, for example, lawyers who in the course of their practice arrange, say, insurance, loan facilities, investments or financial planning for their clients, to disclose any commissions received in respect of those arrangements or financial or other interests they have in the organisations that provide those services. The point appears in a disciplinary case, Law Society of the Australian Capital Territory v Lardner,76 where solicitors referred clients to a company controlled by their associate for the preparation of reports that were charged to the clients as disbursements, without disclosing that association. This was found to constitute a fiduciary breach, as well as misconduct, the court adding that the solicitors should have, in addition, given clients an indication of the likely costs the company would charge, and an explanation of the comparative costs of engaging the company as opposed to doing the work within the firm or engaging an unrelated consultant.77 Conflict may not always be apparent on the face of the dealing in question. For instance, the lawyer who receives low interest loans from a bank, which loans are conditional upon the lawyer (or her or his firm) maintaining a minimum trust account balance with that bank, may rationalise that, as the client is not thereby disadvantaged, this behaviour is legitimate. However, as it means deriving profit from a fiduciary position without the informed assent of the clients whose funds make up the trust account, the lawyer acts in breach of fiduciary duty. This situation is, after all, only one step removed from accepting undisclosed 75 But note that the law did recognise a proscription in this respect for lawyer-executors: see [14.70]. 76 Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24. 77 Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [22], [28].

234

Lawyers’ Professional Responsibility

[6.110]

commissions or referral fees from institutions the lawyer has recommended to clients as avenues for investment, discussed at [6.110]. Specific application to undisclosed referral fees and commissions

[6.110]

A conflict of interest is created where a lawyer accepts an undisclosed benefit for referring a client to a third party. Here the lawyer has loyalties to both the client and the third party, and by virtue of the referral fee may be tempted to use the services of a person or business of a lower standard, or of a greater cost, than that ordinarily used.78 For this reason, the Australian Solicitors’ Conduct Rules, which have seen implementation in most Australian jurisdictions, envisage that a lawyer may receive a financial benefit from a third party in relation to representing a client, or from another service provider to whom the lawyer has referred a client, only if:79 • the lawyer advises the client that a commission or benefit is or may be so payable and the nature of that commission or benefit, and that the client may refuse any referral; and • the client has given informed consent to the commission or benefit in question. Curiously, this ostensibly dilutes the requirements prescribed by its predecessor80 – which now retains force only in the Northern Territory81 – that, in addition, the lawyer be “able to advise and in fact advises the client free of any constraint or influence that might be imposed on the lawyer by the third party” and that “the lawyer’s advice is fair and free of any bias caused by the relationship with the third party”. The Law Council of Australia’s commentary to the Australian Solicitors’ Conduct Rules, however, fleshes out the concept of “informed consent” for this purpose. It envisages that the client should be made aware of, inter alia, how the receipt of the commission or benefit “may create a potential conflict of interest” and of the potential disadvantage to the client arising from its receipt, and “that the client may be able to use an alternative solicitor who does not have a potential conflict of interest”. It also “strongly” urges lawyers to advise of the need for independent advice and obtain informed consent in writing. A Guidance Statement issued by the Queensland Law Society adds that lawyers should, in securing informed consent, disclose also the amount of the commission or benefit, and what they must do to obtain it.82

[6.115]

The case law, in any event, requires scrupulous disclosure of any fee or commission to be received in addition to the professional fee as a prelude to informed client consent. For example, in the old Tasmanian case of Re Two Solicitors83 the court held that solicitors who, as a result of introducing business to an auctioneer, received part of the auctioneer’s commission on the sale of a 78 See Shirvington, “Obtaining Work by Offering a Reward” (1994) 32 (June) LSJ 16. 79 ACT, r 12.4.3; NSW, r 12.4.3; Qld, r 12.4.3; SA, r 12.4.3; Vic, r 12.4.3. 80 Law Council of Australia, Model Rules of Professional Conduct and Practice, r 33.2 (superseded). 81 NT, r 29.2. 82 Queensland Law Society, Ethics Centre, Receiving Referral Fees and Rule 12.4.3 of the Australian Solicitors Conduct Rules 2012 (Guidance Statement No 4, 30 June 2015), cl 2.2. 83 Re Two Solicitors (1911) 7 Tas LR 78 at 81 per Dodds CJ and McIntyre J.

[6.115]

6 Lawyer–Client Conflict and Influence

235

property they had been retained to place on the market, had “failed to perform the obvious and necessary duty of an attorney towards his client of fully informing him of his position before they sought approval of the sharing of the commission”. More recently, in O’Reilly v Law Society of New South Wales84 a solicitor who referred clients to a financing intermediary, which generated a premium to the intermediary and a guarantee fee to the solicitor, should have, according to Mahoney JA, given clients the following advice: You need not go to [the intermediary]. If you go through [the intermediary], there will be involved the economic cost of the premium payable to [the intermediary] … and of the guarantee fee. You should go directly to [the financier] and obtain an economically better transaction. At least, you may be able to obtain such. And I will use my best endeavours on your behalf to obtain such for you.

But it should not be assumed that, for all clients and in all circumstances, the mere disclosure of the fee or commission will suffice to substantiate client consent. Faced with such a disclosure, for many clients exercising “consent” will involve trusting the lawyer’s assurance that by recommending the services of a third party the lawyer is not being influenced by any referral fee. And yet it is often in the lawyer’s own interest for the client to give that consent. The potential for bias in the lawyer’s disclosure and advice, even if unintended, may deny “informed” client consent.85 It may be, to this end, that only independent advice can truly safeguard the lawyer’s position. In Maher v Millennium Markets Pty Ltd,86 for example, a solicitor received a fee from a third party to arrange the sale of his clients’ properties. Osborn J found that the solicitor’s interest in the transaction meant that he had not accurately explained or addressed in any substance the potential disadvantages to the clients from the arrangement. What the solicitor should have done, according to his Honour, was either ensured that the clients were independently advised as to the potential for conflict of interest implicit in the fee agreement, or at the very least personally advised them explicitly on the issue.87 Merely advising the clients of the opportunity to seek independent advice did not protect the lawyer from fiduciary breach, a ruling affirmed on appeal.88 Importantly, the court was not swayed by the fact that the clients had business and litigation experience, and that the arrangements in question were on their face financially beneficial to them (effecting the rationalisation of their liabilities). It follows that accepting referral fees from third parties is fraught with the prospect of conflict of interest, and a lawyer who purports to secure client consent without the client receiving independent legal advice faces a difficult burden. Failing to discharge that burden may not only render the lawyer accountable for the fee to the client, but may generate disciplinary sanction. The disciplinary cases of O’Reilly v Law Society of New South Wales and Re Two Solicitors mentioned above are testament to this. Prudence may therefore dictate that lawyers should eschew receiving a 84 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 215. 85 Shirvington, “Commercial Dealings and Fiduciary Duty” (2002) 40 (Feb) LSJ 44 at 45. 86 Maher v Millennium Markets Pty Ltd [2004] VSC 174. 87 Maher v Millennium Markets Pty Ltd [2004] VSC 174 at [82]. 88 Brott v Maher (No 2) [2004] VSCA 220.

236

Lawyers’ Professional Responsibility

[6.120]

reward or inducement for referring work to a third party, which is the position taken by the Western Australian professional rules.89 Criminal responsibility for secret commissions

[6.120]

Statute in New South Wales, Queensland, Tasmania, Victoria and Western Australia follows the same basic schema, making it a crime for an agent – which includes a lawyer90 – to corruptly91 receive or solicit from a person (whether for herself or himself or another person) valuable consideration:92 • as an inducement or reward for or otherwise on account of doing or forbearing to do, or having done or forborne to do, any act in relation to her or his principal’s affairs or business; or • the receipt or any expectation of which would in any way tend to influence the agent to show, or to forbear to show, favour or disfavour to any person in relation to her or his principal’s affairs or business. The equivalent Northern Territory legislation simply provides that it is a crime for a person who as agent (including a lawyer) has any powers, duties or functions to carry out, to corruptly ask for, receive or obtain (or agree to do so) from a third person any property or benefit (whether for herself or himself or another person) on account of her or his failure properly to carry out those powers, duties or functions.93 The Australian Capital Territory and South Australian provisions avoid the term “corruptly”. The former speaks of an agent, including a lawyer,94 committing an offence by dishonestly95 asking for, obtaining or agreeing to obtain a benefit for herself, himself or someone else, where either:96 • the agent has done so with the intention that he or she will provide a favour, or of inducing, fostering or sustaining a belief that he or she will provide a favour; or • obtaining, or expecting to obtain, the benefit would tend to influence the agent to provide a favour. 89 See WA, r 18(5)(b) (which prohibits a practitioner, in the course of the practitioner’s practice, from receiving or agreeing to receive an allowance in the nature of an introduction fee or spotter’s fee from any person for introducing or recommending clients to that person). 90 See Criminal Code (Qld), s 442A; Crimes Act 1958 (Vic), s 175(1); Criminal Code (WA), s 546(1). In New South Wales and Tasmania the term “agent” is defined to include a person employed by or acting on behalf of another: Crimes Act 1900 (NSW), s 249A; Criminal Code (Tas), s 266(3)(a). 91 As to the meaning of the term “corruptly” in this context see Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [14.11]–[14.14]. 92 Crimes Act 1900 (NSW), s 249B(1); Criminal Code (Qld), s 442B; Criminal Code (Tas), s 266(1); Crimes Act 1958 (Vic), s 176(1); Criminal Code (WA), s 529. See generally Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), Ch 14. 93 Criminal Code (NT), s 236. 94 Criminal Code 2002 (ACT), s 353(1). 95 “Dishonest” means: (a) dishonest according to the standards of ordinary people; and (b) known by the defendant to be dishonest according to the standards of ordinary people: Criminal Code 2002 (ACT), s 300. 96 Criminal Code 2002 (ACT), ss 356(2), 357(2).

[6.125]

6 Lawyer–Client Conflict and Influence

237

In South Australia, it is an offence for a fiduciary, which includes a lawyer,97 to exercise an unlawful bias.98 A fiduciary exercises an “unlawful bias” if:99 • the fiduciary has received or expects to receive a benefit from a third party for exercising a fiduciary function in a particular way, and exercises a fiduciary function in the relevant way without appropriate disclosure of the benefit or expected benefit; and • the fiduciary’s failure to make appropriate disclosure100 of the benefit or expected benefit is intentional or reckless. The South Australian legislation also renders a fiduciary who accepts a bribe to exercise an unlawful bias guilty of an offence.101 In some jurisdictions statute deems a benefit received by the agent’s parent, wife, child, partner, etc, to have been received by the agent unless it is proved that it was received or solicited without the consent, knowledge or privity of the agent.102 Offences of this kind are punishable by imprisonment or (in most jurisdictions) a fine. A conviction will sound in a finding of professional misconduct and, especially where there are multiple counts, will likely generate a striking off order.103

UNDUE INFLUENCE BY LAWYER OVER CLIENT Presumption of undue influence

[6.125]

Where a relation of confidence, control, domination, influence or other form of superiority exists between A and B, that renders it reasonable to presume that a transaction between them was procured by A through some unconscientious use of power over B, then the law will make that presumption.104 Proof of a relationship giving rise to fiduciary duties arguably attracts the presumption, as fiduciary relationships are characterised by trust and confidence. The lawyer and client relationship is, therefore, presumed to be one of influence,105 in that “solicitors are trusted and confided in by their … clients to give them 97 Criminal Law Consolidation Act 1935 (SA), s 146(1)(f). 98 Criminal Law Consolidation Act 1935 (SA), s 149. 99 Criminal Law Consolidation Act 1935 (SA), s 148(1). 100 What constitutes “appropriate disclosure” is stated in s 148(2) of the Criminal Law Consolidation Act 1935 (SA). 101 Criminal Law Consolidation Act 1935 (SA), s 150(3). What amounts to accepting a bribe to exercise an unlawful bias for this purpose is stated in s 150(4). 102 Criminal Code (Qld), s 442C; Crimes Act 1958 (Vic), s 177; Criminal Code (WA), s 531. Cf Crimes Act 1900 (NSW), s 249B(3). 103 See, for example, Prothonotary of the Supreme Court of New South Wales v Alcorn [2007] NSWCA 288 (where the court struck off the respondent, who had pleaded guilty to six offences, four of which involved corruptly receiving a benefit, and the remaining two pertaining to the use of false instruments). 104 See generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 7. 105 Powell v Powell [1900] 1 Ch 243 at 246 per Farwell J; Westmelton (Vic) Pty Ltd (receiver and manager appointed) v Archer [1982] VR 305 at 312–313 (FC); Verduci v Golotta (2010) 15 BPR 28,865 at [70] per Slattery J.

238

Lawyers’ Professional Responsibility

[6.130]

conscientious and disinterested advice on matters which profoundly affect … their material well-being”, making it “natural to presume that out of that trust and confidence grows influence”.106 This explains why professional rules proscribe lawyers exercising undue influence to dispose the client to benefit them beyond fair remuneration for the legal services provided.107 The strength of the presumption of undue influence varies according to the nature of the client. A client whom the evidence establishes was clearly dependent upon her or his lawyer will attract a weighty presumption. On the other end of the scale is the sophisticated and well-informed corporate client. The presumption of undue influence is rebuttable by evidence that the transaction in question was an independent and well understood act of a person (the client) in a position to exercise a free judgment based upon complete information.108 The lawyer bears the onus of adducing evidence of this kind if the transaction is to be upheld,109 an onus that ordinarily requires that the client have received independent legal advice. Only advice given by a lawyer who is truly independent – that is, not given by a partner, associate or employee of the lawyer – and who has clearly been retained to address the issue of influence and not merely client understanding,110 can come close to guaranteeing the validity of the transaction.111 An independent lawyer who is not satisfied that the transaction is a right or proper one for the client to enter must so advise the client.112 There is overlap between undue influence and fiduciary law in this context. Not only are both grounded in potential abuses of power in lawyer–client dealings, but their limits are each premised on full disclosure and independent advice. Fiduciary law has, in the case law, taken the lead, although judges are prone to refer to concepts of “influence” in a fiduciary context. Moreover, some circumstances amenable to being addressed within the umbrella of undue influence, such as lawyers securing unfair costs agreements, have instead attracted a general law and statutory jurisdiction:113 see [14.150]–[14.205]. Application to gifts from client to lawyer

[6.130]

The chief application of the presumption of undue influence in the lawyer–client context is in cases where lawyers receive from a client a benefit, such

106 Goldsworthy v Brickell [1987] Ch 378 at 404 per Nourse LJ. 107 ACT, r 12.2; NSW, r 12.2; NT, r 8.1.2; Qld, r 12.2; SA, r 12.2; Vic, r 12.2. See also the following barristers’ rules: NSW, r 47; Qld, r 46; SA, r 46; Vic, r 47; WA, r 46. 108 Johnson v Buttress (1936) 56 CLR 113 at 134 per Dixon J; Westmelton (Vic) Pty Ltd (receiver and manager appointed) v Archer [1982] VR 305 at 312–313, 317, 320–321 (FC); Weiss v Barker Gosling (1993) 16 Fam LR 728 at 757, 761 per Fogarty J. 109 Brusewitz v Brown [1923] NZLR 1106 at 1109 per Salmond J; Weiss v Barker Gosling (1993) 16 Fam LR 728 at 761 per Fogarty J. 110 Brusewitz v Brown [1923] NZLR 1106 at 1116 per Salmond J; Contractors Bonding Ltd v Snee [1992] 2 NZLR 157 at 166 per Richardson J. 111 Bester v Perpetual Trustee Co Ltd [1970] 3 NSWR 30 at 35 per Street J. 112 Powell v Powell [1900] 1 Ch 243 at 246–247 per Farwell J. 113 That is not to say that costs agreements cannot be set aside for undue influence: see Weiss v Barker Gosling (1993) 16 Fam LR 728 at 762 per Fogarty J.

[6.130]

6 Lawyer–Client Conflict and Influence

239

as a gift or legacy (other than as trustee for an unassociated third party),114 beyond their fee.115 Lawyers should, generally speaking, eschew gifts simply on the basis of appearance of being the product of lawyer influence.116 Certainly courts view transactions of this kind suspiciously, requiring the lawyer to adduce evidence – usually that the client has received independent advice117 – to rebut the presumption that the transaction was not the result of the spontaneous free will of the client.118 The point is addressed in the professional rules, which require a lawyer who receives instructions from a person to draw a will or any other instrument under which the lawyer (or the lawyer’s firm or an associate)119 will or may receive a substantial benefit120 beyond reasonable professional fees, to decline those 114 In most instances it will be patent on the face of the donative document that the lawyer takes as trustee. There may arise instances, however, where the lawyer is to take as trustee of a secret trust (see, for example, Ledgerwood v Perpetual Trustee Co Ltd (1997) 41 NSWLR 532), in which case, assuming that the lawyer will not otherwise benefit personally and financially beyond a professional fee, there is nothing to preclude her or him drafting the document. The lawyer should, in any event, ensure that the terms of the secret trust are embodied in a written document signed by the client. While only addressed by the Hong Kong rules (see principle 7.05, cmt [2]), this represents good counsel in Australia. 115 See McGovern, “Undue Influence and Professional Responsibility” (1994) 28 Real Prop Prob & Tr J 643; Hamilton and Cockburn, “Solicitors Taking Substantial Gifts under Wills: Probate Doctrines, Professional Regulation and the Application of Equitable Doctrines” (2008) 2 J Eq 117. The statement in the text does not preclude gifts from clients to lawyers being viewed through the prism of fiduciary law, reflecting a conflict between interest and duty or an unauthorised gain: see, for example, Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 at [7], [8] per V K Rajah JA, delivering the reasons of the court. 116 Re Coomber [1911] 1 Ch 723 at 726 per Cozens-Hardy MR; Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 at [18], [26] per V K Rajah JA, delivering the reasons of the court (where, in a blatant fiduciary breach, the solicitor took advantage of a client’s mental frailty and lack of sophistication to secure almost half of the proceeds from the sale of the client’s property, as well as entitlement to all her assets upon her death). 117 See, for example, Smith v O’Neill [2014] NSWSC 1119 at [177]–[202] per Hallen J (bequest to solicitor upheld because the will was drafted by an independent solicitor, who took instructions directly from the deceased and assured himself that the deceased was exercising her free will and understanding in making the gift). Cf Dore v Billinghurst [2006] QSC 140 at [62] per Byrne J (who described the solicitor’s drafting of a will under which he took a substantial benefit as “an unwise decision”, but added that the solicitor “was not obliged to refuse to draw his client’s will”). 118 Barry v Butlin (1838) 2 Moo 480; 12 ER 1089 at 482 (Moo), 1090 (ER) per Parke B; Wright v Carter [1903] 1 Ch 27 at 50 per Vaughan Williams LJ, at 57 per Stirling LJ; Wintle v Nye [1959] 1 WLR 284 at 291 per Viscount Simonds; Westmelton (Vic) Pty Ltd (receiver and manager appointed) v Archer [1982] VR 305 at 312–313, 317, 320–321 (FC); Weiss v Barker Gosling (1993) 16 Fam LR 728 at 757, 761 per Fogarty J; Ramcoomarsingh v Administrator General [2003] WTLR 291 at [18] per Lord Slynn (PC); Dore v Billinghurst [2006] QSC 140 (where the solicitor successfully rebutted the presumption by evidence, inter alia, of independent witnesses to the testator’s firm wish to benefit the solicitor). 119 As to the meaning of “associate” see [6.15]. The Western Australian rules instead adopt the term “affiliate”, which is defined in terms similar to those adopted in other jurisdictions: WA, r 3. 120 The rules define a “substantial benefit” as “a benefit which has a substantial value relative to the financial resources and assets of the person intending to bestow the benefit”: ACT, Glossary; NSW, Glossary; NT, r 9.2; Qld, Glossary; SA, Glossary; Vic, Glossary. See also Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 (where V K Rajah JA, delivering the reasons of the court, remarked that where the gift is a significant one – “having regard to the client’s means and the

240

Lawyers’ Professional Responsibility

[6.135]

instructions.121 The lawyer may offer to refer the person, for advice, to another lawyer who is not an associate of the lawyer. The rules do, however, allow the lawyer to act where the person instructing is a member of the lawyer’s immediate family,122 or is a lawyer (or a member of the immediate family of a lawyer) who is a partner, employer, or employee, of the lawyer. That the above rules target a retainer to effect a will or document containing a gift to the lawyer does not, however, mean that lawyers should, outside of such a retainer, otherwise unthinkingly accept gifts from a client without insisting that the client secure independent advice.123 The lawyer’s influence here does not necessarily abate simply because he or she has not been retained to draft the donative document Unconscionable dealing by lawyer

[6.135]

Equity can, via the doctrine of unconscionable dealing, set aside transactions effected from a stronger party’s exploitation of a weaker party’s known special disadvantage.124 Although scope exists for the doctrine to apply within the lawyer–client relationship – many lawyers do, after all, assist persons in a relative position of special disadvantage – exploitation of the lawyer’s stronger position is usually addressed via the avenue of fiduciary law or the presumption of undue influence.

Lawyers should not, however, ignore the potential application of the law of unconscionable dealing in their relations with clients, particularly in the context of negotiating costs agreements. Although decided under the Contracts Review Act 1980 (NSW) – which empowers New South Wales courts to set aside an “unjust” contract or one or more of its terms125 – Macready M’s ruling in Liu v Adamson126 must be heeded. The Master set aside a costs agreement, under which the husband reasonable expectations of other prospective beneficiaries” – it is not “readily explicable on the basis of ordinary sentiment, and this attracts the presumption that it is explicable only on the basis of influence arising from the solicitor-client relationship” (at [10]), before propounding a “rule of thumb” that “the more significant the gift, the stronger the presumption that the gift is influenced by the solicitor-client fiduciary relationship, and the more imperative the need for the client to be independently advised in respect of the gift” (at [11])). 121 ACT, r 12.4.2; NSW, r 12.4.2; NT, r 9.2; Qld, r 12.4.2; SA, r 12.4.2; Vic, r 12.4.2; WA, r 15(5)(b). A breach of this rule is likely to sound in a finding of professional misconduct, and generate at least a reprimand: see, for example, Legal Services Commissioner v Reymond [2014] NSWCATOD 14 (involving a solicitor who prepared a will for a client which appointed the solicitor as sole executor/trustee and sole beneficiary). 122 The phrase “immediate family” covers the spouse (which expression may include a de facto spouse or partner of the same sex), or a child, grandchild, sibling, parent or grandparent of a lawyer. 123 See Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 at [15]–[18] per V K Rajah JA, delivering the reasons of the court (advocating a prescriptive approach to directing the client to secure independent advice; while this proposed approach may be unduly prescriptive from an Australian perspective, it may nonetheless prove useful in focusing on the salient issues facing a lawyer in this context). 124 See generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 9. 125 Now see also the nationally applicable Australian Consumer Law, Pt 2-3 (“Unfair Contract Terms”), found in the Competition and Consumer Act 2010 (Cth), Sch 2. 126 Liu v Adamson (2003) 12 BPR 22,205 at [73].

[6.140]

6 Lawyer–Client Conflict and Influence

241

and de facto wife directors of a corporate client guaranteed the client’s costs liability to the solicitor by granting security over their home, on the ground that the agreement had not been explained to the wife, and that she lacked independent advice.

LAWYER–CLIENT SEXUAL RELATIONS [6.140]

The general law does not prohibit lawyer–client sexual relations in the sense of conferring upon a client any private cause of action, except perhaps for tortious battery. Fiduciary law in Australia is directed at preserving economic interests, and so does not generate liability for non-financial loss arising out of lawyers taking advantage of clients’ vulnerability.127 The same may be said regarding the doctrine of undue influence. Yet to the extent that lawyer–client sexual relations involve abuse of dominant position by lawyer over client, and potentially places lawyer interests in conflict with client interests,128 this behaviour exhibits quasi-fiduciary overtones, which explains why it is discussed in this chapter. The lack of an encompassing prospect of civil liability does not, however, legitimise lawyer–client sexual relations. It is undesirable for lawyers to engage in intimate relations with their clients. At a most basic level, it can be viewed as an abuse of the power-dependency relationship that often exists between lawyer and client.129 A client’s need for advice and protection, with its attached vulnerability, may raise the risk of emotional involvement with, or dependence on, her or his lawyer. This is heightened for matrimonial or family disputes, as the lawyer may be one of the few 127 Breen v Williams (1996) 186 CLR 71; Paramasivam v Flynn (1998) 90 FCR 489. The position is different in Canada, where courts have used fiduciary law to provide relief by way of damages in cases involving non-economic interests, such as sexual abuse: see, for example, Szarfer v Chodos (1986) 54 OR (2d) 664 (lawyer using information discovered in representing the plaintiff in a wrongful dismissal matter to seduce the plaintiff’s wife); Norberg v Wynrib (1992) 92 DLR (4th) 449; Taylor v McGillivray (1994) 110 DLR (4th) 64 (the latter two cases involving sexual relationships between doctor and patient). There may also be scope in New Zealand for liability of this kind: see H v R [1996] 1 NZLR 299. 128 Indeed, the American case law and commentaries often locate the issue as one of lawyer-client conflict of interest and duty: see, for example, Iowa Supreme Court Attorney Disciplinary Board v Monroe (2010) 784 NW 2d 784 at 788–789 (“The prohibition of sexual relationships between client and attorney rests on the belief that a conflict between the client’s interest and the attorney’s personal interests is inherent in such situations”); Payne, “An Overview of Sexual Harassment in the Attorney-Client Relationship as Interpreted Under the ABA Rules of Professional Conduct” (2002) 26 J Legal Prof 249 at 251–252. The Canadian professional rules do likewise: Can CPC, r 3.4-1, cmt [11] (identifying a conflict of interest where, inter alia, “a lawyer has a sexual or close personal relationship with a client”, but envisage that this conflict can be cured by another lawyer in the firm taking on the matter). 129 People v Good (1995) 893 P 2d 101 at 103 (where the Supreme Court of Colorado remarked that “[o]ften the lawyer-client relationship is characterized by the dependence of the client on the lawyer’s professional judgment, and a sexual relationship may well result from the lawyer’s exploitation of the lawyer’s dominant position”). An ostensibly blatant example of abuse of dominant position in this context is found in the Victorian disciplinary decision in Legal Profession Tribunal v Moir (Legal Profession Tribunal Proceeding No T0311 of 1998), where the lawyer had sexual intercourse with an inebriated disabled client. The lawyer was, notwithstanding genuine remorse, suspended from practice for three years.

242

Lawyers’ Professional Responsibility

[6.140]

persons offering the client support. Also, the client may fear that to decline sexual relations could prejudice continuing representation.130 Intimate relations between lawyer and client may, in any event, interfere with the lawyer’s objectivity and independence in the conduct of the case (as to which see [17.35]–[17.70]). A Canadian appellate court, to this end, made the following observation:131 A court, and counsel for opposing parties, are entitled to assume that representation by a lawyer is being made by an objective professional, not by a person who, by reason of a relationship with the client that can have a bearing on the issue in the proceeding, will be motivated by subjective considerations, especially in a family law proceeding where counsel is involved in a secret sexual relationship with the client. Integrity and avoidance of questionable conduct require that the existence of such motivation be made known to the court and the other side …

The foregoing may generate unsound professional decisions or even prompt conduct inconsistent with the lawyer’s duty of candour. Aside from the spectre of tortious liability as a result, professional disciplinary consequences may ensue. In Legal Practitioners Conduct Board v Morel,132 for example, a lawyer in her criminal law practice formed personal relationships with imprisoned clients on three separate occasions. These relationships were found to have adversely impacted upon her representation of at least one of those clients, in the way explained by Bleby and Gray JJ:133 Ms Morel’s unprofessional conduct allowed her client to make recorded admissions of serious criminal conduct during a telephone conversation. The client was unaware that the conversation was monitored. At the time Ms Morel was aware of the monitoring. At the very least this led to an inappropriate disclosure and possibly to a loss of legal professional privilege with respect to an admission. As the result of this unprofessional conduct the client was left without independent legal advice about important matters concerning his liberty. The client’s repeated complaints and frustrations about his “legal calls” being monitored were well documented.

The lawyer had also lied to the Department for Correctional Services with a view to obtaining legal visiting rights for the ulterior purpose of furthering a personal relationship. As a result, the court found the lawyer to be unfit to practise law, and removed her name from the roll. The same fate met a New Zealand lawyer who sneaked tobacco and a mobile telephone into a prison for a client, whom she claimed was her lover, and then alleged that those items had been planted by 130 Cf instances where lawyers have been disciplined for proposing or agreeing to sex in lieu of fees: see, for example, Iowa Supreme Court Attorney Disciplinary Board v McGrath (2006) 713 NW 2d 682 (where lawyer proposed that his client “do something nice” for him in exchange for working on the client’s case); Iowa Supreme Court Attorney Disciplinary Board v Bowles (2011) 794 NW 2d 1 (where the client engaged in a sex act with the lawyer to induce representation). 131 Law Society of Newfoundland and Labrador v Regular (2011) 336 DLR (4th) 1 at [85] per Wells JA. 132 Legal Practitioners Conduct Board v Morel (2004) 88 SASR 401. 133 Legal Practitioners Conduct Board v Morel (2004) 88 SASR 401 at [29]. The practitioner was, following an earlier unsuccessful application, readmitted to practice a decade or so later, pursuant to a finding that she had been rehabilitated: Re Morel [2015] SASCFC 20 (subject to a condition that she should only practise as an employed practitioner for at least five years).

[6.145]

6 Lawyer–Client Conflict and Influence

243

prison officers.134 Where, however, the intimate relationship has not evidently impacted upon the quality of the representation or generated improper conduct, it is unlikely to generate striking off or suspension.135

[6.145]

No Australian professional rules make explicit reference to the issue of lawyer–client sexual relations. Such a rule has been recommended in New South Wales,136 in line with the apparent volume of opinion, usually in terms of an absolute prohibition on lawyer–client sexual relations.137 But the lack of a dedicated rule-based proscription does not preclude a finding of misconduct, as is evident from cases in both the United States138 and New Zealand139 preceding the promulgation in those jurisdictions of such a rule. Effective from 15 August 2001, prompted by rising complaints to State Bar associations, r 1.8(j) of the American Bar Association’s Model Rules prohibits a lawyer from engaging in “sexual relations with a client unless a consensual sexual relationship existed between them when the client–lawyer relationship commenced”. The ensuing stream of disciplinary responses to lawyer–client sexual relations – including lengthy suspensions140 – has branded this an issue of professional significance. By stipulating an outright prohibition on lawyer–client sexual relationships, consensual relationships do not fall outside the rule. That the client maintains that the sexual relationship was consensual is therefore no 134 Auckland Standards Committee No 1 v Murray [2014] NZLCDT 88; Auckland Standards Committee No 1 v Murray [2015] NZLCDT 6. 135 Bar Association of Queensland v Lamb [1972] ALR 285. 136 See Chesterman, Putting Lawyers on Good Behaviour – A Review of the NSW Solicitors’ Rules and Barristers’ Rules (Report prepared for the Attorney General of New South Wales, March 2002), recommendation (16)(d) (para 8.31). 137 See, for example, Akenson, “Solicitor/Client Sexual Relations – An Abuse of Power” (1995) 69 LIJ 450; Awad, “Attorney–Client Sexual Relations” (1998) 22 J Legal Prof 131; Ross, “Sex, Lawyers and Ethics” (1998) 72 (Oct) LIJ 38; Crowley-Cyr and Caple, “Sex with Clients and the Ethical Lawyer” (2001) 8 JCULR 67. 138 See, for example, Re Bourdon (1989) 565 A 2d 1052 (two year suspension of a lawyer as a result for prompting of a sexual relationship with a divorce client that led him to fail to properly represent her interests); Matter of Bowen (1989) 542 NYS 2d 45 (two-year suspension); Matter of Discipline of Bergren (1990) 455 NW 2d 856 (one-year suspension); Disciplinary Proceedings Against Ridgeway (1990) 462 NW 2d 671 (six-month suspension); In the Matter of Lewis (1992) 415 SE 2d 173 (three-year suspension); In the Matter of Berg (1998) 955 P 2d 1240 (lawyer struck off for engaging in inappropriate sexual behaviour with numerous clients who were vulnerable, including “engaging in a forced, unconsented sex act” with a client: at 1257). 139 In September 1995 the New Zealand Law Practitioners Disciplinary Tribunal heard a charge of professional misconduct against a lawyer who had engaged in a consensual sexual relationship with a client while acting for the client in matrimonial matters. The lawyer pleaded guilty to the charge. He was censured and fined $2,000, ordered to pay compensation of $1,938 to the complainant in respect of her legal costs, and ordered to pay the costs of the district law society and New Zealand Law Society ($10,000 and $5,000 respectively). See (1995) 445 (Oct) LawTalk 7. 140 See, for example, Iowa Supreme Court Attorney Disciplinary Board v McGrath (2006) 713 NW 2d 682 (three year suspension imposed on lawyer who preyed upon dissolution client’s vulnerability by obtaining sex in exchange for legal services); Re Disciplinary Proceedings Against Voss (2011) 795 NW 2d 415 (four year and eight month suspension on lawyer who had engaged in an ongoing sexual relationship with a particularly vulnerable client and then attempted to intimidate her and her family to avoid punishment).

244

Lawyers’ Professional Responsibility

[6.150]

absolution from a disciplinary finding, though it may impact on the severity of any sanction.141 There is some suggestion in the case law that the prohibition on lawyer–client sexual relations stems from a client being unable, by definition, to consent to a relationship with her or his lawyer.142 While unduly paternalistic, it seems, r 1.8(j) does at least obviate a “gray area”, avoiding any “nuance subject to differing interpretations”.143 By admitting an exception for relationships predating the retainer, the rule may trigger inquiry as to when the retainer commenced, but should not be seen as encouraging lawyers to act for an existing sexual partner, which can itself present ethical challenges: see [6.50]; [17.65]. The current New Zealand rules, which commenced operation on 1 August 2008, prohibit entry into an intimate personal relationship with a client “where to do so would or could be inconsistent with the trust and confidence reposed by the client”, and prohibit this outright with a client “where the lawyer is representing the client in any domestic relations matter”.144 Bolstered by the new rule, in 2011 the New Zealand High Court upheld the three-year suspension meted by the disciplinary tribunal to a practitioner who had engaged in sexual intercourse with a client in circumstances amounting to an abuse of trust and confidence.145 Lawyer misconduct to this end is not confined to sexual relationships with clients, but can encompass harassment and other sexual advances to clients146 (and others: see [21.170]), especially where these are unsolicited and unwelcome.

[6.150]

It should not be assumed, though, that the power–dependency relationship between lawyer and client sexual partners always operates in favour of the lawyer. The lawyer could be dependent on the client, which in turn may, as

141 See, for example, Iowa Supreme Court Disciplinary Board v Monroe (2010) 784 NW 2d 784 (three month sexual relationship during family law representation, where the client indicated that it was her own decision to enter the relationship, and continued to view the lawyer as good friend; the need to “deter other attorneys in similar circumstances from putting their own self-interest ahead of those of the client, the very antithesis of a lawyer’s professional duty” (at 790) prompted the issue of a 30 day suspension). 142 Iowa Supreme Court Attorney Disciplinary Board v Blessum (2015) 861 NW 2d 575 at 587. 143 Iowa Supreme Court Disciplinary Board v Monroe (2010) 784 NW 2d 784 at 790. 144 NZ, rr 5.7, 5.7.1. The previous New Zealand rules (the Law Society’s Rules of Professional Conduct for Barristers and Solicitors) addressed the issue by way of commentary, to the effect that “[t]he relationship of confidence and trust may be breached where a practitioner and a client enter into a sexual relationship”: NZ, r 1.01, cmt (3). 145 Daniels v Complaints Committee 2 of the Wellington District Law Society [2011] 3 NZLR 850. 146 See, for example, Victorian Lawyers RPA v Constantinou (Legal Profession Tribunal Proceeding No T0368 and T0410 of 1998) (lawyer who sexually propositioned three clients on separate occasions, whilst detaining them in his office and on masturbating in front of them, was suspended for another 15½ months); Re Piatt (1999) 724 A 2d 1210 (lawyer who made unwanted sexual advances and lewd comments to two female clients reprimanded and placed on unsupervised probation for one year); Iowa Supreme Court Board of Professional Ethics and Conduct v Furlong (2001) 625 NW 2d 711 (18 month suspension imposed on lawyer who performed “uninvited and unwelcome” sex acts on client, and sexually harassed at least two other clients); Re Hammond (2011) 56 So 3d 199 (lawyer who engaged in repeated unwanted and coercive sexual contact with a number of clients, most of whom were incarcerated inmates, struck off).

[6.150]

6 Lawyer–Client Conflict and Influence

245

foreshadowed above, tempt or incline the lawyer to behave unprofessionally in an attempt to foster the client’s interests.147

147 See, for example, Legal Practitioners Complaints Committee v Pepe [2009] WASC 39 (where the respondent lawyer’s personal relationship with a client charged with a criminal offence led her to pressure a witness to withdraw his evidence; the respondent was convicted for attempting to pervert the course of justice, and struck off). See further Dal Pont, “It’s Not Business, It’s Personal” (2009) 83 (Aug) LIJ 72.

Chapter 7

Concurrent Conflicts [7.05] NATURE OF THE CONFLICT ......................................................................................... 247 [7.05] Importance of loyalty .................................................................................................... 247 [7.10] Cause of action grounded in fiduciary law .............................................................. 248 [7.15] Client–client conflicts falling outside the fiduciary proscriptions ........................ 248 [7.20] Importance of concurrent conflict issues ................................................................... 249 [7.25] Need for alertness to concurrent conflict issues ....................................................... 251 [7.30] SCOPE OF PROSCRIPTION ............................................................................................. 252 [7.30] Basic proscription ........................................................................................................... 252 [7.35] Application to both contentious and non-contentious matters ............................. 254 [7.40] Application beyond the individual lawyer to the firm .......................................... 254 [7.55] Application to relationship with opposing lawyer? ................................................ 257 [7.70] Limitation on scope of duty by consent .................................................................... 259 [7.95] CONCURRENT CONFLICTS IN CONTENTIOUS WORK ........................................ 264 [7.95] General principle ............................................................................................................ 264 [7.100] Multiple representation of criminal defendants ..................................................... 265 [7.105] Representation of both insured and insurer ........................................................... 267 [7.110] Representation in class actions .................................................................................. 268 [7.115] CONCURRENT CONFLICTS IN NON-CONTENTIOUS WORK ........................... 268 [7.115] No blanket proscription on concurrent representation in non-contentious work ................................................................................................................................ 268 [7.120] Absence of blanket prohibition no justification for insensitivity to conflict ..... 269 [7.125] Illustrations of scenarios capable of giving rise to conflicts ................................ 270

NATURE OF THE CONFLICT Importance of loyalty

[7.05] The basic fiduciary proscriptions, discussed at [6.05], are directed at promoting undivided loyalty by lawyer to client. This explains why lawyers must avoid engagements that place their own interests in conflict with the duty to clients, if for no other reason than the temptation to pursue the former ahead of the latter. Even if lawyers do not yield to this temptation, the fact of conflicting interests fosters the appearance of disloyalty: see [6.10]. Issues of loyalty are not limited to lawyer–client conflicts. For a lawyer to represent two or more clients with conflicting interests impinges on client loyalty. More so arguably than in the lawyer–client conflict situation, because in representing multiple clients with conflicting interests a lawyer will almost invariably not fulfil

248

Lawyers’ Professional Responsibility

[7.10]

the requisite duty of undivided loyalty to one or more of those clients. The presence of conflicting client interests itself undermines the ability to extend loyalty to each client concurrently. A lawyer cannot, in the words of a Canadian judge, “give his exclusive, undivided attention to the interests of his client if he is torn between … his client’s interests and those of another client to whom he owes the self-same duty of loyalty”.1 Cause of action grounded in fiduciary law

[7.10] In prohibiting the representation of multiple clients with conflicting interests (“concurrent conflicts”), courts and professional rules give effect to fiduciary principle.2 The concern is disloyalty, although this can be manifested in ways that would otherwise generate liability independent of the fiduciary breach. For instance, although a failure to disclose to a client information relevant to the representation may constitute negligence (see [5.80]), when the reason for the non-disclosure is a duty owed to another client, the cause of action can also be framed in breach of fiduciary duty.3 The available cause of action is relevant, particularly as the approach to identifying and quantifying loss arising from a breach of duty differs according to whether the action is pleaded in fiduciary law or in tort. Where loss eventuates, fiduciary breaches are remediable by an order for equitable compensation, which, unlike common law damages, is not subject to the constraints of foreseeability or remoteness. The tests of causation also differ, fiduciary breaches being subject to a laxer causation requirement (see [4.185]), in the end denying any role for an equivalent to the common law defence of contributory negligence.4 Client–client conflicts falling outside the fiduciary proscriptions

[7.15] Not all client–client conflicts fall under the fiduciary umbrella. The steady flow of Australian authority, though not all one-way, is towards the proposition that fiduciary duties – the duties of loyalty – owed by lawyer to client expire upon the termination of the retainer: see [8.05]. The assumption is that lawyers owe no continuing duty of loyalty, at least not in a fiduciary sense, to former clients. If correct, a former client cannot, for an alleged breach of fiduciary duty, restrain the lawyer from acting for another client on the ground that the latter’s interests are adverse to those of the former client. The former client is not powerless, though; loyalty in terms of fiduciary law may not survive the retainer but the lawyer’s duty of confidentiality does. Unlike fiduciary duties of loyalty, information under the auspices of a retainer does not lose its confidentiality merely because the retainer ends. It stands to reason that a 1 Davey v Woolley, Hames, Dale & Dingwall (1982) 133 DLR (3d) 647 at 650 per Wilson JA. 2 See Webb, “The Solicitor’s Duty” [2008] NZ L Rev 685 (who in this context focuses on the fiduciary duty of a lawyer to the client as being a product of status more than a product of contract). 3 See, for example, Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567; Eiszele v Hurburgh [2011] TASSC 65, each noted at [7.20]. 4 Pilmer v Duke Group Ltd (in liq) (2001) 207 CLR 165 at 201 per McHugh, Gummow, Hayne and Callinan JJ, at 231 per Kirby J (dissenting but not on this point).

[7.20]

7 Concurrent Conflicts

249

former client should be entitled to enforce the continuing duty of confidentiality.5 Where, therefore, that duty is threatened by the lawyer’s representation of a new client, the former client may legitimately seek to restrain that representation on the grounds of breach of confidence. Though such an action clearly has loyalty overtones – using information confidential to a former client for the benefit of a current client in proceedings against a former client smacks of disloyalty to the former client6 – the cause of action is not grounded in fiduciary breach. Importance of concurrent conflict issues

[7.20] In Australia, litigation concerning concurrent conflicts (and also former client conflicts) has been a relatively recent phenomenon. There is little in the way of Australian case law on the issue preceding the mid-1980s. Since that time the legal landscape has witnessed a greater sensitivity to client–client conflicts, with attendant academic and practitioner commentary. A single cause for this phenomenon remains difficult to pinpoint, however. The expanding (or possibly resurgent) role for fiduciary principle in Australian law is a candidate. Nor can the rise of the mega-firm be discounted; a significant proportion of the litigation has, after all, involved larger firms (although this may be due in part to the greater stakes and money amounts often involved in matters for which large firms are retained). The more cynical may see a rise in consumerism allied with the community’s apparent waning trust in the legal profession (see [1.70]) as contributing causes. Whatever the reason(s), litigation over client–client conflicts is unlikely to subside; the tendency of Australian litigation to follow the United States lead suggests the opposite. The existence of a concurrent conflict can generate for the lawyer potentially extensive legal liability, for breach of fiduciary duty and/or for negligence. This is because the standard of skill and care required of a lawyer who acts for two or more parties is as great as that required of a lawyer who acts for one party alone.7 The need to fulfil the duty to a client, where it conflicts with that owed to another client, provides no defence to lawyer liability. “[I]f a solicitor is unwise enough to undertake irreconcilable duties”, it has been judicially observed, “it is his own fault, and he cannot use his discomfiture as a reason why his duty to either client should be taken to have been modified”.8 Acting for clients with conflicting interests, to this end, will likely spawn “an intractable catch-22 conundrum for a solicitor”, and the cases reveal that in these instances solicitors “have found themselves caught 5 Alternatively, the former client can appeal to the court’s inherent supervisory jurisdiction over its own officers as a vehicle to restrain the lawyer from acting: [17.20]. 6 This has led some judges, in attempts to give substance to the appearance of disloyalty even absent proof of the potential misuse of confidential information, to couch the obligation in terms of an equitable obligation of loyalty: see, for example, Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 at 522 per Brooking JA. Such an approach is not without its problems: see [8.40]. 7 Moody v Cox [1917] 2 Ch 71 at 81 per Cozens-Hardy MR; Goody v Baring [1956] 1 WLR 448 at 450 per Danckwerts J; Re a Practitioner (1975) 12 SASR 166 at 172 per Bray CJ; Bristol & West Building Society v May May & Merrimans (a firm) [1996] 2 All ER 801 at 815 per Chadwick J. 8 Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567 at [46] per Lord Walker. See also at [8] per Lord Scott.

250

Lawyers’ Professional Responsibility

[7.20]

between the devil and the deep blue sea, unable to navigate their way out of a predicament they have themselves created”.9 For example, the lawyer’s duty of confidentiality to one client may conflict with the duty to act in the best interests of another client. This occurred in Hilton v Barker Booth & Eastwood,10 where the solicitors did not disclose information in their possession pertaining to client A – A’s antecedents as a fraudster – to client B with whom A was transacting. The English Court of Appeal explained the point this way:11 While [A and B] remained clients, each had an equal priority, and was entitled to the same standard of loyal observance of the duties owed to each, up to, but not beyond their full ambit … By loyally fulfilling the obligation of confidentiality to [A], [the solicitors] were simultaneously acting contrary to [B’s] best interests, and by retaining him as their client, they restricted his opportunity to discover the unpalatable facts about [A] from sources which were not bound by the same obligation of confidentiality. In short, the best interests of one client were prejudiced to the advantage of the other. That was impermissible, whichever client was favoured.

An Australian illustration is Eiszele v Hurburgh,12 where the plaintiffs made two loans to buy a company associated with the law firm of which the defendant solicitor was a partner, the proceeds of which they on-lent to their daughter and her de facto husband (T) for the purchase of property. The defendant, from previous professional dealings with T, knew that T was in a poor financial position. This in turn placed him in a duty–duty conflict. As Blow J observed, “[the defendant] was in a position where he had a duty to the plaintiffs to reveal what he knew about [T’s] financial position, and a duty to [T] not to do so”.13 That failure to fulfil the duty of disclosure to the plaintiffs satisfied the duty of confidentiality owed to T did not preclude a finding of a breach of fiduciary duty owed to the plaintiffs. Liability arising out of concurrent conflicts will, moreover, not necessarily enjoy plenary coverage of professional indemnity insurance. The so-called “insurance crisis”, of the late 1990s, with its impetus to reduce insurer’s financial exposurehas in some jurisdictions, for instance, translated to higher excesses for indemnity claims for loss arising out of concurrent conflicts. Also, disciplinary sanctions may lie for acting in client–client conflict situations: see [25.60]. Various equally significant practical consequences for lawyers in concurrent conflict scenarios exist. That a lawyer faced with a concurrent conflict must, in the usual case, cease to act for each client (see [7.30]), imperils the recoverability of costs for

9 Law Society of Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 at [35], [36] per V K Rajah JA. 10 Hilton v Barker Booth & Eastwood [2002] Lloyd’s Rep PN 500. 11 Hilton v Barker Booth & Eastwood [2002] Lloyd’s Rep PN 500 at [39], [40] per Judge LJ. Although the House of Lords reversed the Court of Appeal’s decision that B could not establish that he had suffered loss as a result of the solicitors’ breach, it cast no doubt on the quote extracted in the text: see Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567. 12 Eiszele v Hurburgh [2011] TASSC 65. 13 Eiszele v Hurburgh [2011] TASSC 65 at [37].

[7.25]

7 Concurrent Conflicts

251

the representation to date, and the availability of the retaining lien,14 not to mention most likely generate client dissatisfaction. The latter may manifest itself in a loss of clients not merely in the matter the subject of the conflict, but permanently if the clients receive better service elsewhere; a real concern for clients of especial value. There is the further prospect that acting for multiple parties in transactional work will function to disqualify the lawyer from acting for any one of them in respect of a dispute arising out of that transaction.15 The case law, to this end, reveals more than one example of a lawyer engaged to advise joint venturers, who was subsequently disqualified from acting for any of the venturers in a dispute between them.16 Need for alertness to concurrent conflict issues

[7.25] The potential consequences of a concurrent conflict require alertness to the possibility of conflict arising,17 especially when the retainer is first contemplated. The following is good counsel:18 Although it is often difficult to inform a client that one is prevented from accepting instructions, it is invariably better to do so at the inception to avoid the probable embarrassment, risk exposure and greater inconvenience of having to remove oneself in the middle of a transaction (or litigation) when costs have already been incurred and the matter has reached an advanced stage.

Reliance on client perceptions is no substitute for the exercise of professional judgment; it cannot be assumed that clients – who may perceive multiple representation to be in their interests (see [7.115]) – are necessarily well positioned to discern the existence or prospect of conflict at that stage. Alertness to conflict, even if not realistically foreseeable at the outset, remains a lawyer’s continuing obligation. As explained by Byrne J in Marron v J Chatham Daunt Pty Ltd:19 [W]here a party is contemplating retaining a solicitor who acts for another … the party will often not recognise a conflict which is possible, pending or even then existing. It is the solicitor who should in the normal course be the first to apprehend this. And so the parties rely upon the solicitor, not only to have the integrity to withdraw when conflict arises, but also the perception to sense its pendency before it arises in fact. The solicitor, then, must be constantly vigilant and alert to perceive the possible emergence of a conflict of interest.

That the law of concurrent conflicts is grounded in fiduciary principle means that, in assessing the prospect for conflict, the lawyer must be informed by considerations beyond merely the potential for misuse of confidential information. For example, 14 Barratt v Gough-Thomas [1951] Ch 242, discussed at [16.35]. On the retaining lien generally see [16.20]–[16.110]. 15 Andalee Pty Ltd v Delfield Investments Pty Ltd [2009] WASC 55 at [27] per Sanderson M (“If a firm of solicitors are acting for three individuals, and one of those individuals turns against the other two, it is clearly inappropriate for the firm to continue to act for any one of the three”). 16 See, for example, Holdsworth v M R Anderson and Associates Pty Ltd (unreported, SC(Vic), Phillips J, 26 August 1994); Raats v Gascoigne Wicks [2006] NZHC 598. 17 Council of the Law Institute of Victoria v A Solicitor [1993] 1 VR 361 at 367 per Tadgell J. 18 WA EPG, cl 5.4. 19 Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 at [33].

252

Lawyers’ Professional Responsibility

[7.30]

where a lawyer acts for vendor and purchaser in a conveyancing transaction that goes off for want of payment on the due date, there may be nothing confidential about the facts by which the dispute will be resolved, but it cannot be supposed that the lawyer can continue to represent both parties.

SCOPE OF PROSCRIPTION Basic proscription

[7.30] The basic proscription, reiterated in professional rules in most jurisdictions,20 is that a lawyer must avoid conflict between the interests of two or more clients. As noted earlier (see [7.05]), this proscription aims to foster undivided loyalty by lawyer to client, which cannot be fulfilled for clients who have interests that are, for the purposes of the retainer, in opposition.21 No such problem arises where there is an identity of interest or separate clients with unrelated interests, and for this reason there is no outright legal or professional prohibition on concurrent representation.22 The Australian Solicitors’ Conduct Rules, translating to other than the Northern Territory, Tasmania and Western Australia, prohibit a solicitor acting for two or more clients in the same or related matters whose interests are adverse and there is a conflict or potential conflict of the duties to act in the best interests of each client unless, “subject always to each solicitor discharging their duty to act in the best interests of their client”, each client is aware that the solicitor is also acting for another client and has given informed consent to the solicitor so acting.23 The words appearing in quotation marks highlight that the rules envisage that informed client consent, by itself, is not determinative of a lawyer acting in the event of a (potential) concurrent conflict. The rules similarly prohibit a lawyer who possesses confidential information of a client (A) – which might reasonably be concluded to be material to another client’s (B) current matter and detrimental to A’s interests if disclosed – from acting for B unless each client has given informed consent to the lawyer acting for another client.24 The lawyers in Hilton v Barker Booth & Eastwood and Eiszele v Hurburgh, each discussed at [7.20], would have avoided liability had they paid heed to the sentiment underscoring this rule. As the requirements it prescribes apply in addition to those imposed by the rule in the preceding paragraph, they are apparently “subject always to each solicitor discharging their duty to act in the best interests of their client”. If so, it may be queried how a lawyer could be convinced that the best 20 ACT, r 11.1; NSW, r 11.1; Qld, r 11.1; SA, r 11.1; Vic, r 11.1; WA, r 14(1). 21 Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 at 90 per Richardson J; Haira v Burbery Mortgage Finance & Savings Ltd (in receivership) [1995] 3 NZLR 396 at 405 per Richardson J. 22 The Tasmanian rules are unique in stating that “[a] practitioner may act for more than one party to any proceedings or transaction” (Tas, r 12(1)) before qualifying that rule with the duty of disclosure. That r 12(1) creates an impression perhaps too inclined to foster multiple representation in circumstances where it should be queried led the Law Society of Tasmania in 2005 to invite comment on r 12 with a view to its revision. The rule remains in the same form. 23 ACT, rr 11.2, 11.3; NSW, rr 11.2, 11.3; Qld, rr 11.2, 11.3; SA, rr 11.2, 11.3; Vic, rr 11.2, 11.3. 24 ACT, r 11.4; NSW, r 11.4; Qld, r 11.4; SA, r 11.4; Vic, r 11.4.

[7.30]

7 Concurrent Conflicts

253

interests of one or more clients would be fulfilled in circumstances where it might reasonably be concluded, in the terms of the rule noted in this paragraph, that disclosure of information confidential to one client would be “detrimental” to that client’s interests. And this is without addressing the legitimate inquiry surrounding the circumstances in which a fully informed client would consent to the disclosure of detrimental information or the concealment of relevant information: see [7.85]. If, during the course of concurrent representation, an actual conflict arises between the duties owed to two or more of the clients, r 11.5 of the Australian Solicitors’ Conduct Rules allow the solicitor to continue to act for one of the clients (or a group of clients between whom there is no conflict) only if the duty of confidentiality to other client(s) is not put at risk and the parties have given informed consent. While this rule envisages continuing representation in defined circumstances, alignment of those circumstances will rarely surface in practice. After all, few continuing retainers are devoid of confidential information, and few informed clients would consent to information confidential to them being potentially used against them.25 Concurrent conflict will therefore practically require withdrawal from representing each client, adding cost and inconvenience. In this event, it would have been better for each party to be separately represented from the outset. The above rules are arguably too cumbersome, and certainly more detailed than their predecessors, which retain force in the Northern Territory and Tasmania.26 The current Western Australian rules adopt a more succinct and clearer approach. They prohibit a lawyer from providing legal services for a client if:27 • the lawyer is engaged by another client in the same or a related matter; • the interests of the client and the other client are adverse; and • there is a (potential) conflict of the duties to act in the best interests of each client. The aforesaid is expressed not to apply, in line with the Australian Solicitors’ Conduct Rules, if each client is aware that the lawyer is also providing legal services to each other client, and has given informed consent to the lawyer providing the legal services to each other client.28

25 The Law Council of Australia’s commentary to r 11.5 accepts as much, stating that “[i]t is likely that in most situations contemplated by Rule 11.5, the solicitor will be unable to continue to act for any of the parties” and that “[u]nless the conflict is a minor one, or is confined to a discrete issue, it is likely that the solicitor will have acquired confidential information of the one client that it would be impossible to quarantine from the other client(s)”. 26 These require the lawyer to be satisfied that each client is aware that the lawyer is intending to act for the others, and consents to the lawyer so acting in the knowledge that the lawyer: (a) may be, thereby, prevented from disclosing to each party all information relevant to the matter within the lawyer’s knowledge, or giving advice to one party that is contrary to the interests of another; and (b) will cease to act for all parties if the lawyer would, otherwise, be obliged to act in a manner contrary to the interests of one or more of them: NT, r 7.2; Tas, r 12(2). They also envisage that a concurrent conflict of interest, unless cured by client consent (see [7.80], [7.85]), requires withdrawal from representing each client: NT, r 7.3; Tas, r 12(3). 27 WA, r 14(2). 28 WA, r 14(3).

254

Lawyers’ Professional Responsibility

[7.35]

Application to both contentious and non-contentious matters

[7.35] The rules, by their terms, apply to both contentious and non-contentious matters.29 Illustrations of each are discussed separately at [7.95]–[7.110] (contentious) and [7.115]–[7.160] (non-contentious), as the application of the fiduciary proscription to contentious work is arguably stricter than its application to non-contentious work. Two reasons have been suggested for this.30 The first is that the consequences of conflict in non-contentious business are ordinarily less disruptive than in contentious matters. In the latter scenario, there is the prospect of a trial (or pre-trial proceedings) being disrupted, and consequently delayed, by the need for alternative legal representation. The second reason is that in much non-contentious (say, transactional) work, the highly patterned and formulaic steps involved better position the lawyer to foresee prospective conflict than in litigation, the course of which may be impacted upon by matters outside reasonable foresight. It follows that lawyers contemplating multiple representation in contentious work are well advised to exercise especial care, and adopt a threshold for potential conflict at a lower level than in non-contentious representation. Application beyond the individual lawyer to the firm

[7.40] Although most of the references to concurrent conflicts in this chapter are phrased in terms of the individual lawyer, the fiduciary proscriptions extend to the firm in which the lawyer is a partner, associate or employee; a firm is “in no better position than a sole practitioner if it purports to act for separate clients whose interests are in contention”.31 This is because, where a law firm is involved, clients ordinarily retain the firm, not an individual lawyer.32 It is the firm, beyond individual lawyers, that owes a fiduciary duty to its clients.33 Attempts by a lawyer to avoid conflict by passing a client to a lawyer with whom he or she has a legal and financial association hardly removes the existence or appearance of conflict. Nor does it guard against the misuse of information confidential to one client for the benefit of another (except to the extent that, in what is likely to be an exceptional case, an effective information barrier is in place: see [7.50]). As explained by Ipp J in Mallesons Stephen Jaques v KPMG Peat Marwick:34 The partners of a firm of solicitors band together to obtain all the financial and other advantages of a partnership. A united and quasi-corporate front is presented to the world under the name by which the firm practises. The partnership name and body are used to maintain and build the reputation of the firm and to attract clients. Very often clients will consult or retain a firm rather than a particular partner in it. It is therefore … incongruous to suggest that, in determining whether a conflict of interest may exist, the knowledge 29 See definition of “matter” in ACT, Glossary; NSW, Glossary; Qld, Glossary; SA, Glossary; Vic, Glossary; the reference to “proceedings or transaction” in NT, r 7.1; and the definition of “proceedings” and “transaction” in Tas, r 3. 30 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 356. 31 Blackwell v Barroile Pty Ltd (1994) 51 FCR 347 at 360 per Davies and Lee JJ. This is reflected in the terms of the professional rules: ACT, r 11; NSW, r 11; NT, r 7.2; Qld, r 11; SA, r 11; Tas, r 12(2); Vic, r 11; WA, r 14. 32 Kelly v Jowett (2009) 76 NSWLR 405 at [70] per McColl JA, at [96] per Barrett J. 33 R v Neil [2002] 3 SCR 631 at [29] per Binnie J. 34 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 374.

[7.40]

7 Concurrent Conflicts

255

and duties of certain partners in a firm of several partners should be divorced from the knowledge and interests of other partners in the rest of the firm, and, solely for that purpose, those other partners should be regarded, in effect, as separate and independent entities.

The larger the firm, the greater the prospect that conflict rules of this kind may operate harshly, a point that has hardly passed notice by large law firms. In Village Roadshow Ltd v Blake Dawson Waldron,35 for instance, counsel for the respondent large law firm queried how, given that much commercial litigation in Victoria is conducted by a handful of large firms, a client could obtain the services of one of them if the conflict rule is applied too strictly. Byrne J found this submission not compelling, responding as follows:36 To my mind, this is the price which the clients of such firms and the firms themselves must pay. The firms have found it commercially convenient to become large. This is but one disadvantage of this trend. It is certainly no reason for the courts to weaken the traditionally high standard of a practitioner’s loyalty to the client which have characterised the practice of law in this State.

Likewise, the year before, the Canadian Supreme Court in R v Neil,37 though accepting that extending the fiduciary proscription to the firm in this context “is undoubtedly a major inconvenience to large law partnerships and especially to national firms with their proliferating offices in major centers across Canada”, refused to relax its application. It went so far as to couch the prohibition in terms of a firm not representing one client whose interests are directly adverse to the immediate interests of another current client even if the two mandates are unrelated, unless each client consents.38 The point saw reiteration by the same court a decade or so later as a “bright line rule”, justified on the following grounds:39 It is possible to argue that a blanket prohibition against concurrent representation is not warranted with respect to unrelated matters, where the concrete duties owed by the lawyer to each client may not actually enter into conflict. However, the rule provides a number of advantages. It is clear. It recognizes that it is difficult – often impossible – for a lawyer or law firm to neatly compartmentalize the interests of different clients when those interests are fundamentally adverse. Finally, it reflects the fact that the lawyer-client relationship is a relationship based on trust …

What this meant, the court surmised, was that “[i]n most cases, simultaneously acting for and against a client in legal matters will result in a breach of the bright 35 Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726. 36 Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726 at [50]. See also Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 661 per Thomas J (dissenting), who maintained that the fiduciary obligations of lawyers should not be diluted in order to ameliorate the difficulties emerging from the size and limited number of firms offering comprehensive and specialist legal services to large corporations. His Honour added that if the existing structure of the profession cannot cope with the responsibilities of a fiduciary, “it is the structure of the profession which must adjust”. 37 R v Neil [2002] 3 SCR 631 at [29] per Binnie J. 38 R v Neil [2002] 3 SCR 631 at [29] per Binnie J. 39 Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [28] per McLachlin CJC, delivering the reasons of the court.

256

Lawyers’ Professional Responsibility

[7.45]

line rule, with the result that the law firm cannot accept the new retainer unless the clients involved grant their informed consent”.40 Related vs unrelated matters

[7.45] Whether such an unyielding approach is justified for truly unrelated matters may be questioned.41 The extent to which client interests are truly adverse to each other must be examined before making any finding of a breach of the duty of loyalty. The more distant those interests are from being adverse to each other, the less the possibility for conflict. In Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd,42 for example, a law firm acted for a client in one proceeding in Queensland and against that client in unrelated proceedings in Victoria. That the proceedings were truly unrelated, and handled by different offices of the firm (in the Queensland proceedings, on the instructions of the defendant’s own lawyers), when coupled with assurances from the firm that appropriate safeguards would be put in place, led Habersberger J to reject an application to restrain the firm from continuing to act for the plaintiff.43 His Honour’s order was conditional on the Melbourne office undertaking to the court that it would seek no information from the Brisbane office about the Queensland proceeding.44 The Australian Liquor Marketers case shows that, in circumstances most likely to be exceptional,45 the same firm can act both for and against the same client concurrently. The decision would likely have gone the other way had the matters been in any way related, that is, had there been “some reasonable relationship between the two matters”.46 For example, in Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm),47 a partner in the Perth office of a national firm was engaged to act in a due diligence investigation of a company (X) in which the plaintiffs were intending to invest. The Sydney office of the firm was retained by a 40 Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [39] per McLachlin CJC, delivering the reasons of the court. 41 It may be noted that in Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 McLachlin CJC did not envisage that the “bright line rule” should necessarily operate without qualification. Her Honour noted (at [32]) that it was confined to cases where the immediate legal interests of the clients are directly adverse. She also explained (at [36]) that it cannot be successfully raised by a party who seeks to abuse it, such as in instances of preemptive retention in an attempt to disqualify an opponent from access to expert legal representation: see [8.270]. Her Honour further envisioned (at [37]) circumstances where the “bright line rule” would not apply by reason of inferred client consent to the conflicted concurrent representation: see [7.85]. 42 Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324. 43 Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324 at [26]. 44 Australian Liquor Marketers Pty Ltd v Tasman Liquor Traders Pty Ltd [2002] VSC 324 at [27]. 45 Cf Pero Mortgages Ltd v Mike Pero [2015] 3 NZLR 246 at [59] per Matthews AsJ (who, in querying the outcome in the Australian Liquor Marketers case, remarked that “the duty of loyalty to an existing client is breached by acting against that client”, and did not consider that “controlling the risk of passing of confidential information is material to that position”). 46 Marks & Spencer plc v Freshfields Bruckhaus Deringer (a firm) [2004] 1 WLR 2331 at [16] per Lawrence Collins J. 47 Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98.

[7.55]

7 Concurrent Conflicts

257

client to arrange funding for X, to relieve X’s financial difficulties caused by defective work it had carried out. X disclosed information to the Sydney office on the understanding that it be withheld from the Perth office. The related nature of the retainers meant that the Perth partner could not, according to Ipp J, have approached the investigation of the arrangements undertaken by X “with nothing in mind but the protection of the plaintiffs’ interests”,48 thus placing the firm in conflict. Scope for Chinese walls

[7.50] In the context of lawyers acting against a former client (discussed in Ch 8), courts have belatedly acknowledged the potential effectiveness of information barriers or screens within law firms (sometimes termed “Chinese walls”) as a means of avoiding the misuse of information confidential to a former client for the benefit of a current client: see [8.200]–[8.225]. That the courts have nonetheless been reticent to accept the effectiveness of Chinese walls in individual former client (“successive conflict”) cases numbs any curial inclination to unthinkingly accept them in concurrent conflict cases. In this latter arena the risks to the integrity of the representation are arguably greater, chiefly because it is concurrent, and to this end amenable to impressions of conflict, both within and outside the representation. It has been observed, in this regard, that “[t]he rule against concurrent conflicts is less forgiving”.49 At the same time, though, there is nothing in principle to preclude outright the efficacy of Chinese walls in the concurrent conflict scenario, if there is no real possibility of a leakage of confidential information. This is now acknowledged by professional rules in all bar the Northern Territory and Tasmania, which allow a law practice (and the lawyers concerned) to act where there is a conflict of duties arising from the possession of confidential information if an “effective information barrier” has been established, and this is so independent of client consent.50 What may mark an information barrier as “effective” is discussed at [8.220] and [8.225], but for the reasons noted in the preceding paragraph, for an information barrier to succeed in this event, especially in a contentious matter, the case would need to be a compelling one.51 Application to relationship with opposing lawyer?

[7.55] The chief rationale for extending the fiduciary concurrent conflict proscription beyond a lawyer to the firm in which the lawyer is employed (see [7.40]) does not translate to where the relationships in question are personal. Yet 48 Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 105. 49 Lennar Mare Island, LLC v Steadfast Insurance Co (2015) 105 F Supp 3d 1100 at 1109. 50 ACT, r 11.4.2; NSW, r 11.4.2; Qld, r 11.4.2; SA, r 11.4.2; Tas, r 11.4.2; WA, r 14(3). 51 See WA EPG, cl 5.7, which states that it is “self-evident” that satisfying the requirements of the rules will be “onerous, and for the majority of practitioners impossible in all circumstances”, and that “[e]ven small to medium sized legal practices will usually not be able to establish an effective information barrier, due to the interaction between staff and the risk of disclosure of information orally, in hard copy or electronically”. Hence, it is said that “it will only be in rare cases that practitioners will properly be able to act for clients in the same or a related matter where their interests are adverse and there is either an actual or potential conflict”: WA EPG, cl 5.8.

258

Lawyers’ Professional Responsibility

[7.60]

even though lawyers representing each client may be employed by different firms, that they share a relationship or otherwise cohabit can give the appearance of conflict. In fact, from both the perspective of appearances, and the risk of advertent or inadvertent disclosure of confidential information, the scenario of cohabitation may present as more concerning that of were the lawyers employed by the same firm but, say, in different cities (or even floors). In the latter scenario, the risk of association – and with it conflict – is less apparent.52 There are, as a result, instances of applications to disqualify a lawyer whose (de facto or de jure) spouse represents another party to the matter. The jurisdiction to disqualify here is not grounded in fiduciary law – the lawyer in question, after all, does not owe fiduciary duties to each of the clients – but the court’s inherent supervisory jurisdiction over its own officers: see [17.20]. Whether or not the court will exercise its jurisdiction depends on the facts of each case; in particular, the nature of the proceeding, the nature of the relevant relationship, and the extent of involvement of each of the lawyers. In Re L (Minors) (Care Proceedings: Solicitors),53 for example, the solicitor retained to conduct care proceedings on behalf of a local authority was cohabiting with the solicitor acting for other parties in those proceedings. In ruling that the local authority’s solicitor should be disqualified, Wilson J was influenced by the far reaching nature of the relevant inquiry in care cases, its sensitivity, and the role of the local authority as an arm of the state. These matters, according to his Lordship, placed a premium on the importance of the appearance of independence. Any curial zeal to disqualify, justifiablyabates where the lawyers are not directly involved in the litigation. Judges do not wish to impinge on personal relationships unless, because of the lawyers direct exposure to the matter, and its particular circumstances, to order disqualification is the only apt response. In Grabber Industrial Products Central Ltd v Stewart & Co,54 for instance, the plaintiff sued the defendants in debt. The senior partner in the firm acting for the plaintiffs was the spouse of the defendant’s corporate solicitor. An application to restrain the firm from acting for the plaintiff was rejected by the British Columbia Court of Appeal, the senior partner having deposed that his wife had given him no information about the defendants.

[7.60] The matter has not been addressed in any Australian professional rules. The American and New Zealand rules do, however, provide guidance. They state that a lawyer whose parent, child, sibling or spouse represents the opposing side in a contentious matter can do so only with the consent of the client after consultation.55 Their application is confined to contentious matters, and does not

52 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 407. 53 Re L (Minors) (Care Proceedings: Solicitors) [2001] 1 WLR 100. 54 Grabber Industrial Products Central Ltd v Stewart & Co (2000) 73 BCLR (3d) 256. 55 US, r 1.7 (cmt [11]); NZ, rr 5.6.4, 5.6.5 (speaking in terms of a “close personal relationship”, defined in r 1.2).

[7.75]

7 Concurrent Conflicts

259

extend beyond the individual lawyers to the firm. An American judge explained the logic for the latter limitation as follows:56 A per se rule of disqualification on the sole ground that an attorney’s spouse is a member of a firm representing an opposing party would be not only unfair to the lawyers so disqualified and to their clients but would also have a significant detrimental effect upon the legal profession. Such a rule could be expected to affect the hiring practices of law firms and the professional opportunities of lawyers. A per se rule would effectively create a category of legal “Typhoid Marys”, chilling both professional opportunities and personal choices.

The concern, moreover, is that if the courts impute professional wrongdoing to a lawyer on the basis of marital status alone, it would be difficult to avoid extending this to other relationships as well.

[7.65] There remains the prospect that the relevant relationship may not be discovered until after the trial. In these circumstances, it may provide an avenue for an appeal on the grounds of a miscarriage of justice, most likely in criminal matters in an attempt to have a conviction set aside. In R v Szabo,57 for example, the appellant’s conviction for burglary and rape was set aside due to the previously undisclosed de facto relationship between the prosecutor and defence counsel, which was held to raise in the mind of an ordinary fair-minded citizen a lingering suspicion that the appellant did not have the benefit of a fair trial. The position may be otherwise where the accused has consented to the continued representation after being fully informed of the relevant relationship. It remains, however, undesirable for related persons to appear against each other in contested criminal matters.58 Limitation on scope of duty by consent

[7.70] As fiduciary duties are superimposed on relationships to promote loyalty to a principal, fiduciary law envisages that the principal can consent to the modification or ouster of those duties.59 Here consent, as in other contexts in the law, is premised on a full understanding of the nature and implications of that to which the principal is consenting. Its role operates in two distinct ways, elaborated below: see [7.75], [7.80], [7.85]. Consent to limiting the scope of the retainer

[7.75] In the first place, a lawyer may seek to avoid altogether the conflict that would (or may) otherwise arise by limiting the scope of the retainer. The client here is not being asked to consent to the lawyer acting potentially in fiduciary breach, but to the retainer being restricted in scope so as to avoid that breach. This course may, especially if documented in writing, prove invaluable in successfully 56 Blumenfeld v Borenstein (1981) 276 SE 2d 607 at 609. 57 R v Szabo [2001] 2 Qd R 214. 58 See R v Batt [1996] Crim LR 910. There are several American ethics opinions to this effect (see, for example, NY State Ethics Op 654 (1993); NY State Ethics Op 660 (1994); Ariz Ethics Op 2001-01 (2001)), and now the Ethics Committee of the Law Institute of Victoria has endorsed a protocol devised in consultation with Victoria Police to deal with the issue of representation by close family relatives in the criminal process: see (2016) 90 (May) LIJ 65. 59 Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 at [35] per Byrne J.

260

Lawyers’ Professional Responsibility

[7.80]

defending an action for negligence or breach of fiduciary duty arising out of the multiple representation.60 Provided the client is fully aware of the implications of the limitation on the retainer’s scope, and so is positioned to secure independent legal (or financial) advice on the matter(s) outside its scope, there is no ethical impediment to the lawyer proposing and accepting a retainer on those terms. It may also be possible to do so during the course of an existing retainer, but establishing valid consent may prove more difficult because the lawyer has already assumed a duty of loyalty (and confidentiality) to each party, from which he or she wishes to be relieved by one (or more) of those parties. Consent to prospective or existing conflict

[7.80] The second way in which consent operates is via client consent to a concurrent conflict, whether at the outset of the matter61 or, where the conflict arises later,62 during its course.63 This is not to say that representing potentially conflicting interests, even with consent, is to be encouraged. Danger remains in doing so, in part because an unforeseen conflict can arise during the course of the matter. In this event, client consent may prove problematic,64 as seeking it may itself place the lawyer in a position of conflict of interest (that is, for the representation to continue) and duty.65 Whether sought at the outset, or during the course of the heavy onus of proving that each client has representation with the requisite understanding of ramifications of the conflict.66 To this end, informed the Privy Council in Clark Boyce v Mouat:67

the retainer, the lawyer bears consented to the multiple the existence and potential consent means, according to

… consent given in the knowledge that there is a conflict between the parties and that as a result the solicitor may be disabled from disclosing to each party the full knowledge which he possesses as to the transaction or may be disabled from giving advice to one party which conflicts with the interests of the other.

This ordinarily dictates not only full disclosure, but also a strong recommendation that the client(s) seek independent legal advice on the matter. In the event that a prospective client’s interests may conflict with those of an existing client, the expected candour extends to both, nonetheless consistent with maintaining the 60 See, for example, Ibrahim v Pham [2005] NSWSC 246 at [211] per Levine J (where the retainer, by expressly excluding the giving of advice on the mortgage or investment in question, and instead containing the strong recommendation to seek independent advice on the matter, served to protect the solicitor from liability for breach of fiduciary duty) (affd Ibrahim v Pham [2007] NSWCA 215). 61 As envisaged by ASCR, rr 11.3, 11.4: see [7.30]. 62 As envisaged by ASCR, r 11.5: see [7.30]. 63 See Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), pp 78–86. 64 See, for example, Taylor v Schofield Peterson [1999] 3 NZLR 434, discussed at [7.145]. 65 Clark v Baker (1987) 4 BPR 9,476 at 9,484 per Waddell CJ. 66 Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 at [35] per Byrne J. See also the commentary to r 11 of the ASCR, which refers to the disclosure of, inter alia, the potential drawbacks of the conflict (and any advantages, whether to the client or another client), the availability of alternative representation, and the manner in which the lawyer intends to manage the conflict. 67 Clark Boyce v Mouat [1993] 3 NZLR 641 at 646.

[7.85]

7 Concurrent Conflicts

261

confidentiality of information pertaining to each. If the prospective client, however, wishes to retain a veil of confidentiality over the existence, nature and scope of the new retainer, the lawyer will be unable to secure the informed consent of the existing client to any conflict, and must therefore decline to act for the prospective client68 (unless, exceptionally, an effective information barrier is in place: [7.50]). An illustration of client informed consent to a concurrent conflict is found in Clark Boyce v Mouat. There the appellant solicitor represented both mortgagor (the respondent) and guarantor (the respondent’s son) in a loan transaction. He explained to the respondent the difference between her position as mortgagor and that of her son as guarantor, and advised her to seek independent advice on several occasions. The respondent, replying that she considered this unnecessary, proceeded to sign a form of authority and declinature of independent advice. When her son later became bankrupt, the respondent was left to repay the principal sum together with arrears of interest. She alleged, inter alia, breach of fiduciary duty on the appellant’s behalf. The Privy Council rejected the appellant’s contention, reasoning as follows:69 In determining whether a solicitor has obtained informed consent to acting for parties with conflicting interest it is essential to determine precisely what services are required of him by the parties … [The respondent] required of the [appellant] no more than that he should carry out the necessary conveyancing on her behalf and explain to her the legal implications of the transaction. Since [the respondent] was already aware of the consequences if her son defaulted [the appellant] did all that was reasonably required of him before accepting her instructions when he advised her to obtain and offered to arrange independent advice. As [the respondent] was fully aware of what she was doing and had rejected independent advice, there was no duty on [the appellant] to refuse to act for her.

Although the solicitor succeeded in defending the claim, Clark Boyce should not be seen as an invitation to represent clients with potentially conflicting interests pursuant to consent. A better course would have been for the solicitor to have declined to act for the respondent, and made this clear to her in writing.

[7.85] It may on the surface seem inherently unreasonable for a client, fully informed of the conflict, to retain a lawyer who cannot give undivided loyalty, but situations where rational clients choose imperfect representation exist.70 Cost may be a strong influencing factor. A client may wish to retain a lawyer with the best qualifications for the job, or the client may know and trust that lawyer. And particularly within specialised practice areas, or in small towns wherein few lawyers practise and most residents know one another, using a conflicted lawyer may be the only feasible way to obtain representation.71 At the other pole, the concerns underscoring client consent are less pressing for sophisticated clients, which may well possess sufficient knowledge to give the requisite informed consent 68 Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [46], [47] per McLachlin CJC, delivering the reasons of the court. 69 Clark Boyce v Mouat [1993] 3 NZLR 641 at 647. 70 See Zacharias, “Waiving Conflicts of Interest” (1998) 108 Yale LJ 407 at 414–416. 71 Churchill v Connolly [2004] NSWCA 212 at [94] per Young CJ in Eq.

262

Lawyers’ Professional Responsibility

[7.85]

and to monitor lawyer behaviour in the course of the retainer.72 It is conceivable here for informed consent to be inferred, at least where the matters are unrelated, a point illustrated by the Supreme Court of Canada as follows:73 For example, governments generally accept that private practitioners who do their civil or criminal work will act against them in unrelated matters, and a contrary position in a particular case may, depending on the circumstances, be seen as tactical rather than principled. Chartered banks and entities that could be described as professional litigants may have a similarly broad-minded attitude where the matters are sufficiently unrelated that there is no danger of confidential information being abused. These exceptional cases are explained by the notion of informed consent, express or implied.

This explains the scope, usually by large law firms, to secure advance consent from sophisticated clients (often termed “advance conflict waivers”) vis-à-vis not substantially related matters.74 This course likely proves most legitimate for a specific engagement or specific client, where there is sufficient information to assess the impact of concurrent representation.75 The concept of a “blanket” or “open-ended” advance conflict waiver is more challenging, as it is difficult to conceive how a client can give informed consent to what it does not know. In 2003 the American Bar Association amended its Model Rules by adding the following comment addressing the point:76 If the consent is general and open-ended, then the consent ordinarily will be ineffective, because it is not reasonably likely that the client will have understood the material risks involved. On the other hand, if the client is an experienced user of the legal services involved and is reasonably informed regarding the risk that a conflict may arise, such consent is more likely to be effective, particularly if, eg, the client is independently represented by other counsel in giving consent and the consent is limited to future conflicts unrelated to the subject of the representation.

There is American case law that recognises the potential effectiveness of blanket advance conflict waivers for sophisticated clients with independent counsel, who are willing to forego conflict-free representation for the law practice of their choice. 72 This explains, for instance, why the English professional rules envisage that, in the event of a client–client conflict for clients who are competing for the same objective, acting pursuant to client consent is likely to be confined to where the clients are sophisticated users of legal services: see UK, O(3.7), IB(3.6). 73 R v Neil [2002] 3 SCR 631 at [28] per Binnie J. See also Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [37] per McLachlin CJC, delivering the reasons of the court (remarking that factors such as “the nature of the relationship between the law firm and the client, the terms of the retainer, as well as the types of matters involved, may be relevant to consider when determining whether there was a reasonable expectation that the law firm would not act against the client in unrelated matters”, and that ultimately “courts must conduct a case-by-case assessment, and set aside the bright line rule when it appears that a client could not reasonably expect its application”). 74 See Dodek, “Conflicted Identities: The Battle Over the Duty of Loyalty in Canada” (2011) 14 Legal Ethics 193. 75 See, for example, Visa USA, Inc v First Data Corp (2003) 241 F Supp 2d 1100 (where the waiver, which identified a specific adverse client, disclosed as fully as possible the nature of any potential conflict that could arise between the parties, and specifically contemplated the firm’s representation of Visa against First Data in litigation matters). 76 US, r 1.7, cmt [22] (supported by ABA Formal Opinion 05-436 (2005)). Equivalent provision is found in the Canadian rules: Can CPC, r 3.4-2, cmt [4].

[7.90]

7 Concurrent Conflicts

263

Arguably the leading case, Galderma Laboratories, LP v Actavis Mid Atlantic LLC,77 involved a patent infringement suit between competing dermatology manufacturers (G and A). Beginning in 2003, G retained a law firm (V) as to employment law matters, signing an advance conflict waiver provision in retainer, which read as follows: [V is] free to represent other clients, including clients whose interests may conflict with ours in litigation, business transactions, or other legal matters. You agree that our representing you in this matter will not prevent or disqualify us from representing clients adverse to you in other matters and that you consent in advance to our undertaking such adverse representations.

In June 2012 G engaged another law firm (D) to pursue an intellectual property claim against A. A then retained V to defend and counterclaim. The United States District Court, Northern Division of Texas, did not disqualify V from acting against G in view of the advance conflict waiver. Yet the tide of American case law seems opposed to such “broad”, “general”, “indefinite” and “essentially unlimited” waivers.78 It has been acknowledged that “[b]road advance waivers are a logical outgrowth of large law firms and the spiderwebs of affiliates, subsidiaries, and parents they represent”, but that “[t]he price of hiring a large and capable firm should not be powerlessness in the face of unanticipated future adverse representations, especially when … the attorney-client relationship is dynamic over time”.79 Under a fiduciary model that rests upon informed consent, it is difficult to argue with these sentiments, which are likely to be reflective of an Australian court’s approach in this field. Need for independent professional judgment by lawyer

[7.90] In any event, a lawyer should not be driven solely by client demands, but must assess whether it is truly in the client’s interests to proceed with concurrent representation notwithstanding (the prospect of) a conflict. As noted at [7.85], the client’s degree of sophistication may impact upon this assessment; the judgment of a commercially sophisticated client arguably merits more weight than that of a client who relies entirely on the lawyer’s views.80 In the latter case, careful scrutiny guards against the client making a choice without a proper appreciation of the facts.81 Even in the former case, the fact that a client is an experienced and sophisticated operator in no way absolves the lawyer from the duty to fully disclose a relevant conflict and advise the client to take independent legal advice.82 The need for the lawyer’s own judgment is arguably what underscored the rider “subject always to each solicitor discharging their duty to act in the best interests of their client” appearing in most professional rules: see [7.30]. It is the more explicit 77 Galderma Laboratories, LP v Actavis Mid Atlantic LLC (2013) 927 F Supp 2d 390. 78 See, for example, Concat LP v Unilever, PLC (2004) 350 F Supp 2d 796; Lennar Mare Island, LLC v Steadfast Insurance Co (2015) 105 F Supp 3d 1100. 79 Lennar Mare Island, LLC v Steadfast Insurance Co (2015) 105 F Supp 3d 1100 at 1118, 1119. 80 Taylor v Schofield Peterson [1999] 3 NZLR 434 at 440 per Hammond J. 81 Council of the Law Institute of Victoria v A Solicitor [1993] 1 VR 361 at 368 per Tadgell J. 82 Mantonella Pty Ltd v Thompson (2009) 255 ALR 367 at [13] per McMurdo P, at [83]–[88] per Muir JA, at [143] per Fryberg J.

264

Lawyers’ Professional Responsibility

[7.95]

in r 1.7(b) of the American rules, which prohibits accepting client consent to a concurrent conflict except, inter alia, in the reasonable belief that the lawyer “will be able to provide competent and diligent representation to each affected client”.83 The English rules require the lawyer to be satisfied that “it is reasonable … to act for all the clients and that it is in their best interests” and that “the benefits to the clients of … doing so outweigh the risks”.84 In each case, client choice does not necessarily override; the lawyer, it is assumed, remains best positioned to make an informed judgment as to whether what the client seeks represents the client’s best interests.85

CONCURRENT CONFLICTS IN CONTENTIOUS WORK General principle

[7.95] A lawyer cannot represent parties in litigation that do not share the same interests in the process and outcome of the litigation; one or more of the clients will be denied the loyalty demanded by fiduciary law.86 This outcome has potentially broader implications for the administration of justice, as appears from the following remark by the Supreme Court of Canada in R v Neil:87 Unless a litigant is assured of the undivided loyalty of the lawyer, neither the public nor the litigant will have confidence that the legal system, which may appear to them to be a hostile and hideously complicated environment, is a reliable and trustworthy means of resolving their disputes and controversies … [Also,] [t]he value of an independent bar is diminished unless the lawyer is free from conflicting interests. Loyalty, in that sense, promotes effective representation, on which the problem-solving capability of an adversarial system rests.

In a situation involving the prospective representation of multiple persons in a contentious matter, a lawyer (or firm) should therefore carefully analyse whether the interests of those persons coincide. A prospect of conflict should lead the lawyer to decline to represent one (or more) of those persons. The typical application of these principles is in the proposed representation of two or more clients in a particular matter: see the illustrations discussed at [7.100] (joint representation of two or more accused in a criminal matter), [7.105] (representation of insured and insurer) and [7.110] (representation in class actions). But they may also apply regarding a client in litigation in a matter that is adverse to the representation of 83 This, in itself, has been identified to create a problem because a conflict of interest limits the services that the lawyer can perform for one client as a consequence of competing duties to another: see Michels, “What Conflicts can be Waived? A Unified Understanding of Competence and Consent” (2012) 65 Rutgers L Rev 109 (namely the challenge of reconciling the consent and competence elements of r 1.7(b); the author accordingly proposes a new test, whereby an informed conflict waiver is to be rejected for incompetence if limitations on the means or procedures by which the lawyer pursues the matter caused by the conflict will likely defeat the client’s objectives for the representation). 84 UK, O(3.6)(c), (d). See also UK, O(3.6)(e). 85 See Zacharias, “Waiving Conflicts of Interest” (1998) 108 Yale LJ 407 at 419–421; Taylor v Schofield Peterson [1999] 3 NZLR 434 at 439 per Hammond J. 86 Re a Firm of Solicitors [1992] 1 All ER 353 at 364 per Staughton LJ. 87 R v Neil [2002] 3 SCR 631 at [12], [13] per Binnie J.

[7.100]

7 Concurrent Conflicts

265

another client in a different matter. An example is found in R v Neil,88 where the same lawyer represented both an accused in a criminal matter and a client who alleged that the accused had fabricated certain documents in another matter. The Canadian Supreme Court ruled this to be inappropriate, Binnie J reasoning as follows:89 [T]he law firm did owe a duty of loyalty to the [accused] at the material time, and the law firm ought not to have taken up the cause of one of the [accused’s] alleged victims … in proceedings before a civil court at the same time as it maintained a solicitor-client relationship with the [accused] in respect of other matters simultaneously before the criminal court … The firm, as fiduciary, could not serve two masters at the same time.

Even where there is no apparent conflict a lawyer should, in deciding whether to accept a retainer, keep in mind that an unexpected course of events may produce a conflict during the proceedings, in which case the lawyer must usually withdraw from representing each client. To continue representing one client risks misusing confidential information communicated by another (now) former client, which the court will restrain: see [8.10]. The result is invariably cost, inconvenience and delay to each of the clients and the curial process. Multiple representation of criminal defendants

[7.100]

There is no legal or professional blanket prohibition on a lawyer representing multiple criminal defendants. Opportunities for multiple representation arise because, inter alia, prosecutors and courts have incentives to try more than one defendant in a single trial. Defendants who are jointly charged may seek common representation, which may bring strategic and fee advantages.90

Such a practice nonetheless has the potential for conflict of interest, which may impact on the manner in which the defence is conducted. The defendants’ cases may, for example, not be adequately separated in the addresses or the summing up, and any possibility of different verdicts for each defendant may be left unexplored. It may restrict the lawyer from raising issues of character of one defendant, for fear of casting doubt over character in respect of the other defendant(s).91 In criminal matters, moreover, it may be more difficult to foresee how the interests of defendants may play out during the course of the representation. As explained by the United States Supreme Court:92 The likelihood and dimensions of nascent conflicts of interest are notoriously hard to predict, even for those thoroughly familiar with criminal trials. It is a rare attorney who will be fortunate enough to learn the entire truth from his own client, much less be fully apprised before trial of what each of the government’s witnesses will say on the stand. A few bits of unforeseen testimony or a single previously unknown or unnoticed document may significantly shift the relationship between multiple defendants. These imponderables are difficult enough for a lawyer to assess, and even more difficult to convey by way of explanation to a criminal defendant untutored in the niceties of legal ethics. 88 R v Neil [2002] 3 SCR 631. 89 R v Neil [2002] 3 SCR 631 at [3]. 90 See Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1380–1. 91 R v Hunter & Sara (1999) 105 A Crim R 223 at 237 per Wood CJ at CL. 92 Wheat v United States (1988) 486 US 153 at 162 per Rehnquist CJ.

266

Lawyers’ Professional Responsibility

[7.100]

It has been observed, to this end, that “[i]t takes little imagination to realize that one of the strategies that may be available to [an] accused will be to minimize his own involvement”,93 which may well involve an attempt to shift blame to other accused persons. The consequent divergence between client interests may jeopardise the trial date, or the trial itself, as the lawyer must cease to act for each defendant.94 Client consent to the conflict may carry little weight, as many criminal defendants lack the sophistication to fully appreciate the nature and implications of conflicts, and courts are, in any case, especially alert to the prospect of miscarriages of justice in criminal matters.95 Thus in a criminal trial, more so than in a civil one, conflicts can prove latent, and when they surface in a joint retainer have the potential to generate serious adverse implications for clients and the administration of justice. This explains why some judges decry multiple representation in criminal proceedings,96 and some commentators recommend its prohibition.97 No Australian professional rules explicitly address the issue of criminal concurrent representation. The Law Institute of Victoria has, however, issued “Ethical Guidelines in the Representation of the Co-accused”,98 which prohibit a lawyer or firm from acting for two or more co-accused in the same proceedings if there is an actual or foreseeable conflict of interest between the clients. They require a lawyer who agrees to act for two or more co-accused to advise the clients in writing of the risks and consequences that may flow if a conflict subsequently arises in the course of the proceedings. As to the latter requirement, the Guidelines provide that the lawyer may give co-accused clients a copy of an information notice that reads as follows:99 This notice provides important information if you have been charged with another person(s) for the same crime. If this is your situation, then you will need to make a decision about which solicitor will represent you in court. You may all be represented in court by the one solicitor or firm of solicitors only if there is no current or likely future 93 R v Cocks (2012) 291 CCC (3d) 21 at [35] per Silverman J. 94 Clark, Greatbatch, White & White v R (1996) 91 A Crim R 46 at 71 per Cox J. 95 Representation in criminal proceedings of multiple defendants whose interests diverge may, for instance, be grounds for setting aside a conviction for a miscarriage of justice: see, for example, R v Hunter & Sara (1999) 105 A Crim R 223. As to this jurisdiction see [4.200]–[4.210]. 96 Mills v R [1995] 1 WLR 511 at 523 (PC). In that case, a barrister represented four defendants at a murder trial, the first three of whom raised an alibi defence, whereas the fourth raised the defences of self-defence and provocation. Although the Privy Council spoke unfavourably of the practice, it held that the fourth defendant had not been deprived of a fair trial by reason of the joint representation because at no stage was there any potential conflict of interest for counsel, given that each of the defendants stuck to their defences. 97 See, for example, Lowenthal, “Joint Representation in Criminal Cases: A Critical Appraisal” (1978) 64 Virginia L Rev 939. See also US, r 1.7, cmt [23], which warns that “[t]he potential for conflict in representing multiple defendants in a criminal case is so grave that ordinarily a lawyer should decline to represent more than one codefendant”. In Scotland, the rules have gone further, proscribing a solicitor from accepting instructions for more than one accused in the same matter: Law Society of Scotland, Code of Conduct for Criminal Work, Art 2 (available at http:// www.lawscot.org.uk). 98 Extracted at (2002) 76 (Aug) LIJ 25 and available at http://www.liv.asn.au. See also Moisidis, “Conflicts of Interest” (2000) 74 (Dec) LIJ 61. 99 Emphasis in original; paragraph breaks omitted.

[7.105]

7 Concurrent Conflicts

267

conflict of interest between you and any other person who has been charged with you. In making this decision you need to consider that if you are found guilty, the court has to decide whether you played a major or a minor role in the crime to determine your penalty. If there is likely to be an argument between you and any other person charged with you about your role in the crime, then you should be represented in court from the start of your case by a different solicitor or firm of solicitors to any other person charged with you.

Representation of both insured and insurer

[7.105]

Insurance policies ordinarily give the insurer a right of subrogation; that is, to stand in the shoes of the insured for the purposes of legal proceedings relating to the insured’s liability. The proceedings remain in the name of the insured, even though the insurer appoints the lawyer. Though the insurer-appointed lawyer, most judges agree, becomes the lawyer for the insured,100 this does not necessarily deny a concurrent lawyer–client relationship with the insurer.101 That insurers regularly appoint lawyers to act for the insured represents an implicit acceptance that in most cases there is coincidence between the interests of insured and insurer. That coincidence does not, however, always persist. There are various scenarios in which the interests of insured and insurer may diverge,102 a typical one being where the lawyer uncovers information that (allegedly) would justify (or have justified) the insurer declining liability to indemnify. If the insurer declines to indemnify the insured, the insurer-appointed lawyer must cease to represent both the insurer and the insured because of a conflict of interest. A core aspect of the conflict is that the lawyer’s duty of undivided loyalty to the insured proscribes divulging to the insurer information confidential or privileged to the insured that is adverse to the insured’s interests, unless the insured waives privilege, or the policy conditions103 or statute104 oust this obligation.105 For example, in Nicholson v Icepak Coolstores Ltd106 the plaintiffs sued the defendant (the insured) for damage to its pears stored in the defendant’s coolstores. The 100 Groom v Crocker [1939] 1 KB 194; State Government Insurance Commission (SA) v Paneros (1988) 48 SASR 349; Kennedy v Cynstock Pty Ltd (1993) 3 NTLR 108; Verson Clearing International v Ward & Partners (1996) 9 ANZ Ins Cas ¶61-352 at 76,905–6 per Lander J (FC(SA)); Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612 at [45]–[50] per Mason P. 101 Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612 at [50] per Mason P. 102 See, for example, the lists of events in Chapman and Mallon, “Conflicts of Interest Faced by Solicitors Instructed by Insurers to Conduct Litigation on Behalf of Insureds” (1996) 26 VUWLR 679 at 705–706 and Dugdale, “‘Serving Two Masters’: The Insurer-Appointed Lawyer” (1997) 8 Ins LJ 161 at 162. 103 See, for example, Brown v Guardian Royal Exchange Assurance plc [1994] 2 Lloyd’s Rep 325 (where the terms of the policy entitled the insurers to require the solicitors’ reports to be submitted directly to them). 104 See, for example, State Government Insurance Commission (SA) v Paneros (1988) 48 SASR 349 (involving a statutory obligation on the solicitors to provide the information to the insurer). 105 Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612 at [57] per Mason P. 106 Nicholson v Icepak Coolstores Ltd [1999] 3 NZLR 475.

268

Lawyers’ Professional Responsibility

[7.110]

defendant’s insurer, pursuant to its right of subrogation, instructed a lawyer to defend the proceedings, in the course of which the defendant disclosed information to the lawyer. The plaintiffs then alleged that the defendant had breached the terms of the policy, upon which the lawyer advised the insurer to decline to indemnify the defendant. The insurer sought to adduce a brief from the lawyer supporting this decision. The defendant challenged its admissibility, maintaining that the lawyer–client relationship existing between it and the lawyer dictated that the communications in issue were privileged, and the lawyer was in a conflict of interest situation once the facts leading to the declinature arose. Penlington J accepted the defendant’s argument, ruling that the conflict meant that the lawyer should have withdrawn from continuing to represent each party.107 Representation in class actions

[7.110]

Class actions, by definition, involve a lead plaintiff bringing proceedings against a defendant on behalf of many other persons. The representative nature of the class action procedure is primarily a means to resolve, within the one case, one or more legal issues shared by members of the class. It remains to be determined how lawyer–client fiduciary duties, as they inform the law on concurrent conflicts, apply to class actions.108 If those obligations are owed only to the lead plaintiff, as the immediate client, issues over concurrent conflicts are sidestepped, as there is no concurrent representation. Whether the point can be addressed quite so simply, however, may be queried. Independent of any formal retainer, it is arguable that obligations in equity (and, for that matter, tort) apply, within the confines of the class action, to each member of the class. In this event, the spectre of concurrent conflict surfaces, and is likely magnified as the class increases in size. The prospect of informed client consent to any conflict is also magnified. Yet to narrowly construe the represented group, in an effort to abate the conflict, may undermine the object of class action legislation. At the same time, that legislation does not ordinarily require that the interests of class members be identical; in the Federal Court, for instance, it envisages that claims arising out of “the same, similar or related circumstances” that “give rise to a substantial common issue of law or fact”.109 Where, however, the boundaries of ethical obligation ultimately lie awaits judicial determination or some legislative intervention.

CONCURRENT CONFLICTS IN NON-CONTENTIOUS WORK No blanket proscription on concurrent representation in non-contentious work

[7.115]

As the prospect of conflict between the interests of multiple clients may be latent in non-contentious (often transactional) work – ordinarily more so than in contentious work – much of the case law involving concurrent conflicts has arisen

107 Nicholson v Icepak Coolstores Ltd [1999] 3 NZLR 475 at 499–500. See also Kennedy v Cynstock Pty Ltd (1993) 3 NTLR 108; Verson Cleaning International v Ward & Partners (1996) 9 ANZ Ins Cas ¶61-352; ACN 007 838 584 Pty Ltd v Zurich Australian Insurance Ltd (1997) 69 SASR 374. 108 What ensues derives from, and is elaborated in, Degeling and Legg, “Fiduciary Obligations of Lawyers in Australian Class Actions”: Conflicts Between Duties” (2014) 37 UNSWLJ 914. 109 Federal Court of Australia Act 1976 (Cth), s 33C(1) (emphasis supplied).

[7.120]

7 Concurrent Conflicts

269

in the non-contentious environment. No judge or professional rules have gone so far as to outright prohibit a lawyer representing two or more clients in non-contentious work, making this form of representation not unethical per se, even if the clients’ interests may potentially conflict. This laxer approach in non-contentious representation may, in the words of a New Zealand judge, be justified from an economic perspective, namely that “a requirement for independent representation may represent few (if any) benefits to compensate for the significant increase in the legal expense of multiple representation”.110 The involvement of only one lawyer, as opposed to two (or more) lawyers, serves not only to reduce the cost of the representation,111 but may attract the benefits of speed, convenience and familiarity, especially where its subject matter is straightforward. Nor can the availability of resources be altogether disregarded, as in rural areas clients may prove unable to secure alternative representation without considerable inconvenience and cost.112 The upshot is that the representation of multiple parties in non-contentious work – the typical example being the conveyance of property (see [7.130]) – remains hardly unusual, much of its impetus being client-driven. Absence of blanket prohibition no justification for insensitivity to conflict

[7.120]

Even absent a blanket proscription on multiple representation in non-contentious work, the case law is littered with statements condemning the practice where “there is the slightest possibility of a conflict between the parties”.113 Wootten J expressed the courts’ principal concerns in the following passage:114 [T]he practice of a solicitor acting for both parties cannot be too strongly deprecated. It is only because of the possibility that something may go wrong in a transaction, or may go wrong during its implementation, that the employment of highly trained professional people at professional scales of remuneration can be justified. To scrutinise a transaction to discover whether something is wrong in a way that may affect his interests, or to notice and deal with something that goes wrong during the transaction, is what a party employs such a person for. He is entitled to assume that that person will be in a position to approach the matter concerned with nothing [in mind] but the protection of his client’s interests against [those] of the other party. He should not have to depend on a person who has conflicting allegiances and who may be tempted either consciously or unconsciously to favour the other client. 110 Taylor v Schofield Peterson [1999] 3 NZLR 434 at 439 per Hammond J. 111 An American commentator has gone so far as to say that for a lawyer to insist on separate representation where there is no real conflict “is little different from stirring up litigation or overcharging clients”: Hazard, Ethics in the Practice of Law (Yale University Press, 1978), pp 73–74. 112 See Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 at [33] per Byrne J (“The problem is particularly acute in regional or country towns where the number of firms of solicitors may be few”). 113 Clark v Baker (1987) 4 BPR 9,476 at 9,488 per Waddell CJ. 114 Thompson v Mikkelsen (unreported, SC(NSW), Wootten J, 3 October 1974). See also Moody v Cox [1917] 2 Ch 71 at 91 per Scrutton LJ; Goody v Baring [1956] 1 WLR 448 at 450 per Danckwerts J; Gavaghan v Edwards [1961] 2 QB 220 at 225 per Danckwerts LJ; Treloar v Treloar [1968] NZLR 1085 at 1088 per Henry J; Spector v Ageda [1973] Ch 30 at 47 per Megarry J; Re a Practitioner (1975) 12 SASR 166 at 172 per Bray CJ; Commonwealth Bank of Australia v Smith (1991) 42 FCR 390 at 392–393 (FC); Callachor v Black (2000) 12 BPR 22,439 at [63] per Handley JA.

270

Lawyers’ Professional Responsibility

[7.125]

Although frequently cited – usually in cases where a lawyer has acted, or continued to act, in a case involving evident conflict between clients’ interests – the above passage may be phrased in terms too unyielding. The message, however, is clear: lawyers should be wary of concurrent representation of clients in non-contentious matters, bearing in mind its drawbacks:115 see [7.20]. It follows that a lawyer invited by multiple parties to perform non-contentious (say, transactional) work must determine whether the proposed retainer carries with it the likelihood of a conflict of interest. In so doing, the lawyer should inquire into the nature and scope of the retainer, and clearly ascertain what he or she has been retained to advise upon.116 Specific written instructions from the prospective clients regarding their expectations of the representation may prove useful.117 To this end, a transaction that is complex and/or involves large sums, and involves arm’s length parties, presents a warning sign. Complex transactions may require retainers of greater duration and lawyer input, and cloud the foreseeability of conflict. Involvement of large sums between arm’s length parties may increase the prospect for dispute, even if no conflict is evident at the outset. That no conflict is apparent on the face of the instructions does not absolve lawyers from disclosing to the prospective clients the potential for conflict, and its repercussions were it to arise.118 Client understanding and consent are essential, to this end. Where a conflict arises during the course of the representation, in most circumstances the lawyer must withdraw from representing each of the parties;119 client consent to continuing representation in this scenario is fraught with difficulty: see [7.80], [7.85]. Clearly, where the prospective clients’ interests do conflict, the lawyer must not act, even in a relatively straightforward transaction,120 unless he or she can show that each party has given an informed consent to the representation.121 In this context, as the lawyer is requesting relief from the obligation of loyalty to at least one client, the prudent lawyer will not accept the retainer unless the client(s) have has been independently advised on the conflict and its repercussions. Illustrations of scenarios capable of giving rise to conflicts

[7.125]

Conflicts between the interests of multiple (prospective) clients in non-contentious work are most commonly discerned where the clients’ respective positions are ostensibly incompatible. For example, the interests of vendor and

115 In the words of the Singapore High Court, the rule of thumb for a prudent solicitor is “when in doubt, don’t”: Law Society of Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 at [44] per V K Rajah JA. 116 Clark Boyce v Mouat [1993] 3 NZLR 641 at 647 (PC). 117 Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 643 per Kirby P. 118 See, for example, Bailey v Raymond Sullivan McGlashan [1997] ANZ Conv R 620 at 625 per Panckhurst J. 119 Murray v Macquarie Bank Ltd (1991) 33 FCR 46 at 48–49 per Spender J; Wan v McDonald (1992) 33 FCR 491 at 514–515 per Burchett J. This is notwithstanding that ASCR, r 11.5 envisages the prospect of continuing representation of one of the clients: see [7.20]. 120 As shown in Haira v Burbery Mortgage Finance & Savings Ltd (in receivership) [1995] 3 NZLR 396. 121 Taylor v Schofield Peterson [1999] 3 NZLR 434 at 440 per Hammond J.

[7.130]

7 Concurrent Conflicts

271

purchaser, lessor and lessee, and lender and borrower, on their face appear to diverge. Whereas each may have an interest in the transaction proceeding, the terms upon which it is to proceed, although the subject of agreement, cannot be assumed to reflect the same interests; the terms most favourable to the vendor, lessor or lender will not reflect those most favourable to the purchaser, lessee or borrower. For this reason, concurrent representation in these types of cases should, in order to avoid potential conflict, be limited to the bare mechanics of the transaction,122 and not in any way settling its terms. Two main illustrations are discussed below: acting for vendor and purchaser (see [7.130], [7.135]), and for lender and borrower (see [7.140). Professional rules in some jurisdictions address scenarios of this kind (and others where client interests are ostensibly incompatible): see [7.150]–[7.160]. Potential conflict between clients whose interests are, on the surface, apparently compatible may be more easily overlooked. For instance, it is often assumed that partners in a partnership, venturers in a joint venture, trustees and beneficiaries, and spouses, in retaining a lawyer to settle a transaction or dealing on their (joint) behalf, have coincident interests. However, this cannot be assumed as a matter of course, and lawyers must be sensitive to potential conflict: see, in the context of partners, [7.145]. Acting for vendor and purchaser

[7.130]

Conflicts in non-contentious work are commonly illustrated by reference to a lawyer acting for both vendor and purchaser in the transfer of land.123 Conflicts may arise here if, say, one of the parties is unable to complete the transaction, one or both of the parties expect the lawyer to negotiate on their behalf, the lawyer knows of a flaw in the title of property, or the lawyer has close family and commercial ties with one party represented but not others. It has been judicially observed, that where a “solicitor has acted for both parties [and continues] to act for one of them after a conflict has arisen, the issues of loyalty and propriety … loom more largely”.124 The experience of the defendant solicitor in Stewart v Layton125 highlights the wisdom in this remark. He accepted instructions from both vendor (plaintiff) and purchaser (a property developer) in a contract for the sale of land. As the vendor had exchanged contracts on another property and required the proceeds of the sale to complete the purchase, a simultaneous settlement was arranged. When the purchaser failed to complete due to difficulties in securing finance, the solicitor nonetheless continued to represent the purchaser pending a new solicitor taking over the file due to the conflict. During the course of that representation the solicitor discovered the purchaser’s precarious financial position, but did not reveal this to the vendor. The purchaser 122 See, for example, Marron v J Chatham Daunt Pty Ltd [1998] VSC 110 (no liability arising out of multiple representation in sale of a business because retainer limited to simply giving effect to the transaction). 123 It is not, however, confined to transfers of land. The same principles, for instance, underscore the transfer of business interests: see, for example, Roth Estate v Juschka (2016) 129 OR (3d) 261. 124 Wan v McDonald (1992) 33 FCR 491 at 515 per Burchett J. 125 Stewart v Layton (1992) 111 ALR 687.

272

Lawyers’ Professional Responsibility

[7.135]

subsequently informed the solicitor that he would be unable to settle unless he received “vendor finance” to the extent of $195,000. The vendor was faced with the choice of acceding to the purchaser’s request or obtaining bridging finance to complete her purchase. A dislike of borrowing led the vendor to opt for the former, and to sign, without adequate explanation, a loan agreement to the purchaser secured by second mortgages over two of the latter’s properties. Shortly thereafter, the purchaser went bankrupt, leaving $173,000 unpaid under the second mortgage. In a finding upheld on appeal,126 Foster J found the solicitor in breach of fiduciary duty to the vendor, reasoning that:127 … the [solicitor] was in breach of his fiduciary obligation to the [vendor] in failing to disclose to her his information as to [the purchaser’s] particular and general financial problems at a point in time sufficiently early to enable an informed discussion to take place between them as to what steps should be taken in the event that [the purchaser] should not settle. Any such rational discussion would … have resulted in the rejection out of hand of the option of providing second mortgage vendor finance … Despite the fact that the [solicitor] acted at all stages with the best of intentions towards the [vendor] he, nevertheless, committed a breach of his fiduciary duty towards her as her solicitor, which breach was rooted in the fact that he continued to act for both parties in a conveyancing transaction after a conflict of duties arose. In his strenuous endeavour to fulfil both duties, he failed properly to fulfil his duty to the [vendor]. This resulted in her entering into a most disadvantageous second mortgage.

[7.135]

Statute has impacted in this scenario in Victoria s 29W of the Sale of Land Act 1962128 prohibits a lawyer (or her or his partners or employees) from acting for both vendor and purchaser under a terms contract129 where the solicitor’s principal place of business is within a 50 kilometre radius of the intersection of Elizabeth and Bourke Streets in Melbourne unless the parties to the transaction are related130 to each other. It entitles the purchaser to rescind the contract prior to securing possession of the land or the receipt of rents and profits from it, unless the court is satisfied that: • the lawyer acted honestly and reasonably and ought fairly to be excused; and • the purchaser is substantially in as good a position as if all the relevant provisions of the section had been complied with. The section is concerned with protecting a purchaser from becoming a party to a contract prepared by the vendor’s lawyer that contains unduly harsh terms. 126 Layton v Stewart [1994] ANZ Conv R 283. 127 Stewart v Layton (1992) 111 ALR 687 at 711. 128 Equivalent provision was formerly made by s 33 of the Sale of Land Act 1962 (Vic), which translated in practically the same language to the current s 29W by reason of the Consumer Credit (Victoria) and Other Acts Amendment Act 2008 (Vic) (which for this purpose took effect on 31 October 2008). 129 A “terms contract” is an executory contract for the sale and purchase of any land under which the purchaser is: (a) obliged to make two or more payments (other than a deposit or final payment) to the vendor after the execution of the contract and before the purchaser is entitled to a conveyance or transfer of the land; or (b) entitled to possession of the land, or to the receipt of rents and profits, before the purchaser becomes entitled to a conveyance or transfer of the land: Sale of Land Act 1962 (Vic), s 29A(1). 130 The meaning of “related” in this context is found in Sale of Land Act 1962 (Vic), s 29W(7).

[7.140]

7 Concurrent Conflicts

273

Acting for lender and borrower

[7.140]

Conflict between the interests of lender and borrower may surface most commonly where the lawyer has information relevant to the interests of one client that is confidential to the other client. For example, the lawyer may discover information relevant to the risk a lender is undertaking – for instance, an adverse valuation of any security131 or the borrower’s straitened financial position132 – which cannot be disclosed to the lender without breaching the confidence (and loyalty) owed to the borrower. Or he or she may discern that one client is at a special disadvantage, or subject to the influence of another.133

Where, in such a case, the lawyer is aligned with one of the clients (say, the borrower), the prospect for conflict is heightened. In Farrington v Rowe McBride & Partners134 the respondent law firm, having successfully acted for the appellant in a personal injury claim, was requested by the appellant, a person of no investment experience, to advise on the investment of the damages awarded. One of the firm’s partners advised the appellant to invest in a contributory mortgage in a land development company. The company was a major client of the firm, and the partner in question was involved in administering the company’s finances. In fact, the firm’s trust account was virtually the company’s accounts. Moreover, some of the firm’s partners, their families and family trusts were involved with the company at the time the investment advice was given. The relations between the firm and the company were not disclosed to the appellant. The company subsequently went into receivership. The New Zealand Court of Appeal held that the respondent firm had breached its fiduciary duty to the appellant. The judgment of McMullin J perhaps best encapsulated the reasons for this:135 The respondents as solicitors to the [company] owed a duty to it as a mortgagor client to obtain and advance on the best terms reasonably possible. But the greater the existing indebtedness of the group the greater their duty as advisers to the appellant to secure an adequate security and, the less the adequacy of the security, the greater the need to ensure that the personal covenant had real value … The appellant expected the respondents to protect his interests but was left ignorant by them on matters vital to the determination of the efficacy of the security … he was not given any information to inform him adequately of the group’s ability to meet the personal obligation should the appellant be driven to fall back on that … [I]n acting for both him and the [company] … [the respondents] placed themselves in a position where, in serving the interests of one client to whom they owed a fiduciary duty, they failed to discharge a duty which they also owed to the other.

In this context, and also where guarantors are involved in the transaction, the issue dovetails into the extent to which the lawyer’s duty to protect the client’s interests 131 See, for example, Bristol & West Building Society v Fancy & Jackson (a firm) [1997] 4 All ER 582, discussed at [5.90]. 132 See, for example, Pegrum v Fatharly (1996) 14 WAR 92 (discussed at [3.65]); Hilton v Barker Booth & Eastwood (a firm) [2005] 1 WLR 567 (discussed at [7.20]); Eiszele v Hurburgh [2011] TASSC 65 (discussed at [7.20]). 133 See, for example, Verduci v Golotta (2010) 15 BPR 28,865. 134 Farrington v Rowe McBride & Partners [1985] 1 NZLR 83. 135 Farrington v Rowe McBride & Partners [1985] 1 NZLR 83 at 98–99 (paragraph break omitted). See also at 92–93 per Richardson J.

274

Lawyers’ Professional Responsibility

[7.145]

necessitates advice that may verge on the financial, and how the duty should be influenced by the experience or otherwise of the client: see [5.100]–[5.140]. Joint representation of partners in a partnership

[7.145]

A lawyer retained by (prospective) partners, even to draft a partnership agreement, should not assume that the partners’ interests necessarily coincide. Alertness to potential for conflict is essential at all times, and warning bells should sound when there is evidence of dispute or dissent between partners on a matter the subject of the retainer. The point is addressed, in the context of joint retainers generally, in the Canadian rules in the following way:136 [I]f a contentious issue arises between clients who have consented to a joint retainer, (a) the lawyer must not advise them on the contentious issue and must: (i) refer the clients to other lawyers; or (ii) advise the clients of their option to settle the contentious issue by direct negotiation in which the lawyer does not participate, provided … no legal advice is required and … the clients are sophisticated; (b) if the contentious issue is not resolved, the lawyer must withdraw from the joint representation.

A scenario that gave rise to liability is found in Taylor v Schofield Peterson.137 The appellant wished to retire from the partnership, and sell his interest therein to his partner. He instructed the respondent lawyer to draft an agreement under which he would leave his capital in the business as a loan with interest payable. The respondent had represented the appellant for some years, and dealt with the partners on business matters before. When a dispute arose between the appellant and his partner, they sought the respondent’s assistance to sort matters out and record an agreement. The partner subsequently went bankrupt, owing money to the appellant. Hammond J held that, in view of the obvious conflict, the respondent should not have continued to act for the parties without securing their informed consent to the continued representation. According to his Honour, that the agreement documented that each party had been advised to seek independent legal advice was insufficient to protect the respondent.138 The decision serves as a warning to lawyers that, once a conflict has arisen in the course of the representation, effective client consent is best secured via independent advice. Professional rules in the context of ostensibly incompatible client interests

[7.150] The superseded Law Council of Australia’s Model Rules of Professional Conduct and Practice gave specific direction to lawyers who contemplate accepting a retainer in transactional work from clients whose interests are ostensibly incompatible. Rule 8.5 prohibited a lawyer (or her or his firm) from acting for: • both vendor and purchaser in connection with the contract for the sale or transfer of land or a business for value at arm’s length; 136 Can CPC, r 3.4-8 (albeit subject to 3.4-9 which states that “if clients consent to a joint retainer and also agree that if a contentious issue arises the lawyer may continue to advise one of them, the lawyer may advise that client about the contentious matter and must refer the other or others to another lawyer”). 137 Taylor v Schofield Peterson [1999] 3 NZLR 434. 138 Taylor v Schofield Peterson [1999] 3 NZLR 434 at 445. His Honour, however, held that the appellant ought to contribute 20% to the loss he had suffered: at 447–448.

[7.155]

7 Concurrent Conflicts

275

• both lessor and lessee in connection with the lease of land for value at arm’s length; • both financier and borrower in connection with the loan of money or provision of finance or an agreement to lend money or provide finance; or • both the purchaser of land and the lender of money or provider of finance intended to be secured by a mortgage of that land; unless the lawyer (or firm) obtained a satisfactory written acknowledgment from each party of the receipt of information as to the basis on which the lawyer acted, and after first fully informing that party in writing of the potential disadvantages of the lawyer so acting. Queensland and Victoria implemented an equivalent rule,139 but no counterpart appears in their current rules. Even so, a written acknowledgment would not have absolved the lawyer from giving a verbal explanation, a point explained in the American rules as follows:140 The requirement of a writing does not supplant the need in most cases for the lawyer to talk with the client, to explain the risks and advantages, if any, of representation burdened with a conflict of interest, as well as reasonably available alternatives, and to afford the client a reasonable opportunity to consider the risks and alternatives and to raise questions and concerns. Rather, the writing is required in order to impress upon clients the seriousness of the decision the client is being asked to make and to avoid disputes or ambiguities that might later occur in the absence of writing.

The Australian Capital Territory rules of the day proscribed a lawyer from acting for both buyer and seller of land or a business, mortgagor and mortgagee of land, or lessor and lessee of land, unless full disclosure and client assent in the prescribed form is secured.141 Equivalent provision remains in the 2015 Territory rules but by way of a Guideline attached to them.142

[7.155] Rule 8.6 of the superseded Law Council’s Model Rules of Professional Conduct and Practice, at the time also replicated in the Queensland and Victorian rules,143 prohibited a lawyer from acting for a guarantor in connection with a loan of money or provision of finance where the lawyer (or the lawyer’s firm) also acted for the borrower or the financier in that transaction. The rule envisaged exceptions to this prohibition, focusing on situations where the guarantor was also a borrower, or otherwise an associate of a borrower.144 In this context, Victoria added a unique 139 Legal Profession (Solicitors) Rule 2007 (Qld), r 8.5 (superseded); Professional Conduct and Practice Rules 2005 (Vic), r 8.5 (referring to Form 1 in the Schedule for the relevant acknowledgment) (superseded). 140 US, r 1.7, cmt [20]. 141 Legal Profession (Solicitors) Rules 2007 (ACT), rr 7.4–7.7, Schs 1–3 (superseded). The rules did, however, envisage that, with the exception of leases, the lawyer could otherwise act where the parties were existing clients of the lawyer (or lawyer’s firm), were related corporations (as defined by the Corporations Act 2001 (Cth), s 50), or were related by blood, adoption or marriage (either de jure or de facto): r 7.5. 142 ACT, r 11, Guideline. 143 Legal Profession (Solicitors) Rule 2007 (Qld), r 8.6 (superseded); Professional Conduct and Practice Rules 2005 (Vic), r 8.6; (superseded). 144 Specifically, the prohibition did not apply where the guarantor was: (a) a borrower; (b) a director of a borrower; (c) a shareholder of a borrower; (d) a beneficiary in a trust of which the borrower is the trustee; (e) a party holding a beneficial interest in the borrower; (f) a body corporate “related” to a

276

Lawyers’ Professional Responsibility

[7.160]

r 8.8, which prohibited a lawyer from acting for a borrower and a financier in connection with the provision of finance if the financier was held out to the public as being in the business of providing finance and was not a prescribed institution.145 No equivalent appears in the current Victorian rules.

[7.160]

While rr 8.5 and 8.6 have no parallels in current professional rules, they nonetheless represent good practice. Rule 8.5 appears a logical upshot of rr 11.2–11.5 of the Australian Solicitors’ Conduct Rules, which apply in most jurisdictions: see [7.30]. The prohibition in r 8.6, though not a direct corollary of rr 11.2–11.5, targets a scenario pregnant with potential conflict. It would have, for instance, avoided the liability that arose in Roberts v Goldenberg146 for a solicitor who represented each party to a loan and guarantee transaction without properly ensuring that the borrower had fully understood the nature and incidents of the transaction, and the risk she was undertaking in entering the transaction as it was structured. It would also have avoided the liability of the solicitor in Permanent Custodians Ltd v King147 in representing both the borrower (son) and guarantor (father) in a transaction that was improvident from the father’s perspective.

borrower (within the meaning of the Corporations Act 2001 (Cth)); (g) a director of such a related body corporate; (h) a shareholder of such a related body corporate; or (i) a party holding a beneficial interest in such a related body corporate. Nor did r 8.6 prohibit the lawyer from acting for both the financier and the guarantor in the same transaction if they were “related” bodies corporate (within the meaning of the Corporations Act). 145 The institutions prescribed for this purpose were: (a) banks; (b) trustee companies (as defined in the Trustee Companies Act 1984 (Vic)); (c) practitioners/firms who were complying members of the Managed Mortgages Section of the RPA (or nominees); (d) societies (within the meaning of Pt 6 of the Financial Institutions (Vic) Act 1992 (Vic)); or (e) responsible entities or custodians for managed investment schemes registered under Ch 5C of the Corporations Act 2001 (Cth) or persons holding an Australian financial services licence under Pt 7.6 of that Act). 146 Roberts v Goldenberg (1997) NSW ConvR ¶55-809. 147 Permanent Custodians Ltd v King [2009] NSWSC 600 (affd Vertzayias v King [2011] NSWCA 215).

Chapter 8

Acting against Former Clients [8.05] CONTEXT ............................................................................................................................. 278 [8.05] Comparing current and former client conflicts ........................................................ 278 [8.15] Circumstances where former client conflict issues arise ........................................ 278 [8.25] INTERESTS THAT IMPACT ON DECISION TO DISQUALIFY ................................ 279 [8.30] Former client’s interest in preserving confidentiality ............................................. 279 [8.50] Interests of the general public – the question of appearances .............................. 283 [8.55] Current client’s interest in choice of legal representative ...................................... 284 [8.60] Current client’s interest in speedy and efficient dispute resolution ..................... 285 [8.65] Are the interests of the lawyer relevant? ................................................................... 286 [8.70] THRESHOLD FOR JUDICIAL INTERVENTION .......................................................... 286 [8.70] The relevant inquiry ...................................................................................................... 286 [8.80] Dissecting the relevant inquiry – the real possibility .............................................. 288 [8.95] Dissecting the relevant inquiry – reasonable observer aware of all the relevant facts ................................................................................................................................... 290 [8.100] Dissecting the relevant inquiry – to the detriment of the former client ............ 291 [8.120] Dissecting the relevant inquiry – the onus of proving misuse of confidential information .................................................................................................................... 294 [8.135] Dissecting the relevant inquiry – can impressions constitute confidential information? .................................................................................................................. 297 [8.160] DISQUALIFICATION – WHERE NO PRIOR LAWYER–CLIENT RELATIONSHIP ................................................................................................................ 302 [8.165] Duty sourced from previous social or familial relationship ................................ 302 [8.170] Duty sourced from previous involvement in litigation ........................................ 304 [8.180] Duty sourced from preliminary consultation ......................................................... 306 [8.195] SCOPE FOR DISQUALIFICATION – EXTENSION TO THE FIRM ........................ 309 [8.195] Disqualification of lawyers lacking relevant confidential information .............. 309 [8.200] Role of Chinese walls .................................................................................................. 310 [8.240] Migratory lawyers ........................................................................................................ 319 [8.255] Migratory non-lawyer staff ........................................................................................ 322 [8.260] DISQUALIFICATION APPLICATIONS AS ABUSES OF PROCESS ........................ 323 [8.260] Application to disqualify as a litigation tactic ........................................................ 323 [8.270] Pre-emptive retention of adverse representation ................................................... 326

278

Lawyers’ Professional Responsibility

[8.05]

CONTEXT Comparing current and former client conflicts

[8.05] Conflicts between the interests of multiple clients are not confined to those arising in concurrent representation, discussed in Ch 7. A lawyer may owe duties to both an existing and a former client whose interests conflict (sometimes termed a “successive conflict”). In the concurrent representation scenario, fiduciary law addresses the conflict, the notion being that the duty of loyalty to existing clients cannot properly be carried out if those clients’ interests lack coincidence: see [7.10]. Yet it does not follow that lawyers owe continuing duties of loyalty to former clients;1 what subsists is the duty of confidentiality, discussed in Ch 10. That duty, whether imposed by contract or in equity (see [10.20], [10.25]), does not dissolve once the retainer ends, as information does not lose its confidentiality merely because the relationship in which it was communicated has expired. This is especially significant in the context of the lawyer–client relationship given that it is one of the utmost confidence,2 and by protecting confidentiality (also via legal professional privilege, discussed in Ch 11) the law encourages clients to repose confidences in their lawyers.

[8.10] To preserve the duty of confidentiality, the courts have jurisdiction to disqualify a lawyer from acting against a former client via an injunction.3 Because a lawyer is an officer of the court (see [17.10]), superior courts also enjoy an inherent jurisdiction to determine which officers may represent parties to argue cases,4 a jurisdiction on occasion used to disqualify lawyers from acting against former clients even in the absence of clearly identified confidential information: see [8.40], [17.20]. Circumstances where former client conflict issues arise

[8.15] The simplest scenario where former client conflict issues surface is where a lawyer is retained to act against a former client. To the extent that the law proscribes a lawyer from so acting, he or she cannot avoid the conflict by passing on the retainer to another lawyer within the same firm. As a general principle, a conflicted (or “tainted”) lawyer taints the firm for this purpose: see [8.195]. The consequences of this proscription, if applied strictly, are potentially acute for large law firms, which has raised the issue of whether, and the extent to which, firms should be able to screen their lawyers from one another in order to manage the conflict: see [8.200]–[8.235]. Issues of “tainting” have the capacity to become more 1 Cf Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), pp 32–46. 2 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 840 per Fletcher Moulton LJ (“the degree of the confidential character of the relation … is in the eyes of the law the very highest”). 3 Yamaji v Westpac Banking Corp (No 1) (1993) 42 FCR 431 at 433–434 per Drummond J. 4 Davies v Clough (1837) 8 Sim 262; 42 ER 171 at 267 (Sim), 174 (ER) per Viscount Shadwell VC; Abse v Smith [1986] 1 QB 536; R v Visitors to Lincoln’s Inn [1992] 3 WLR 994 at 1007 per Mann LJ and Brooke J; Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 590 per Thomas J; Grimwade v Meagher [1995] 1 VR 446 at 450–453 per Mandie J.

[8.30]

8 Acting against Former Clients

279

problematic again in cases involving “migratory” lawyers, namely where a firm wishes to act against a former client of a lawyer now employed by that firm: see [8.240]–[8.250]. Although former client conflicts arise chiefly in the context of contentious matters – a former client’s motivation to disqualify is greater in the event of a perception of likely prejudice by the (mis)use of confidential information – the matter for which the former client retained the lawyer may have been either contentious or non-contentious.

[8.20] For a lawyer or firm to be disqualified from representing a client in a matter may, practically, involve the loss of a valued client as well as impact negatively upon the recoverability of costs to date. It is also capable of generating professional disciplinary consequences: see [25.60]. For these reasons, law firms must establish effective conflict checking systems, for both former and current client conflicts. The system should conduct checks at the point of first contact before consultation, before a new file is opened, and when a new party enters the case. As a cross-check on the conflict system, a list of new clients should be regularly circulated within the firm. INTERESTS THAT IMPACT ON DECISION TO DISQUALIFY [8.25] Determining whether a court should disqualify a lawyer from acting against a former client involves the balancing of various competing interests. The former client will, for this purpose, focus on her or his interests in maintaining the confidentiality of information (see [8.30]), and may support this by reference to the matter of appearances (see [8.50]). The current client, in addition to seeking to downplay the prospect of misuse of confidential information, may cite the importance of client choice of legal representative (see [8.55]) and the potentially adverse consequences of disqualification for the efficient resolution of the dispute (see [8.60]). Former client’s interest in preserving confidentiality Focus on confidentiality as foundation for judicial intervention

[8.30] As a motion to disqualify is put forth by a former client, it is no surprise that the main inquiry relates to that person’s interests. The special importance of the relationship of confidence between lawyer and client invites the court to be particularly sensitive to the need to afford protection to lawyer–client confidential information.5 It would be inconsistent for the law to encourage a client to repose confidential information in a lawyer by privileging those confidences from disclosure without the client’s consent if, on the other hand, it were to readily allow the lawyer to use that information against the client’s interests when representing a new client.6 5 Re a Firm of Solicitors [1995] 3 All ER 482 at 489 per Lightman J. 6 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 565 per Lee J; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 312 per Drummond J; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 236 per Lord Millett.

280

Lawyers’ Professional Responsibility

[8.30]

The foregoing was the focus of Lord Millett’s leading speech in Prince Jefri Bolkiah v KPMG (a firm).7 Its upshot was that, unlike the court’s jurisdiction in the context of concurrent conflicts – which is based on the fiduciary proscription that “a fiduciary cannot act at the same time both for and against the same client” – the court’s intervention when sought by a former client is founded on the protection of confidential information.8 His Lordship explained:9 The court’s jurisdiction cannot be based on any conflict of interest, real or perceived, for there is none. The fiduciary relationship which subsists between solicitor and client comes to an end with the termination of the retainer. Thereafter the solicitor has no obligation to defend and advance the interests of his former client. The only duty to the former client which survives the termination of the client relationship is a continuing duty to preserve the confidentiality of information imparted during its subsistence.

This means that, upon the termination of the retainer, the cause of action in an aggrieved client changes from breach of fiduciary duty to breach of confidence, even though in each case the complaint may involve the alleged (mis)use of confidential information. Awaiting High Court authority on the point, Lord Millett’s focus on confidentiality has proven persuasive for most Australian courts. Young J has remarked, for instance, that the “overwhelming weight of authority” in such cases is to the effect that “the sole consideration is whether there is a real risk of disclosure of confidential information”.10 Similar statements have been made by other New South Wales judges,11 as well as superior courts in the Northern Territory,12 Queensland,13 South Australia,14 Tasmania15 and Western Australia,16 and by the 7 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222. The case involved a firm of accountants providing litigation services, but the House of Lords held that the same principles apply to lawyers. 8 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 234–235. 9 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235. 10 Belan v Casey [2002] NSWSC 58 at [21]. 11 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 at [139] per Campbell J; Law Society of New South Wales v Holt [2003] NSWSC 629 at [28]–[30] per Grove J; Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 at [54] per Bergin J; Kallinicos v Hunt (2005) 64 NSWLR 561 at [76] per Brereton J; Maxwell-Smith v S & E Hall Pty Ltd (2014) 86 NSWLR 481 at [24], [25] per Barrett JA, with whom Beazley P and McColl JA concurred. 12 Barron v Ward Kellner Pty Ltd (2006) 17 NTLR 195 at [13]–[15] per Southwood J; Dundee Beach Pty Ltd v Maher [2006] NTSC 96 at [14] per Southwood J. 13 Flanagan v Pioneer Permanent Building Society Ltd [2002] QSC 346 at [11] per Dutney J. 14 Nasr v Vihervaara (2005) 91 SASR 222 at [33] per Doyle CJ, with whom Vanstone and White JJ concurred. 15 A v Law Society of Tasmania (2001) 10 Tas R 152 at [49], [54] per Underwood J; Styles v O’Brien [2007] TASSC 13 (affd Styles v O’Brien (2007) 16 Tas R 268 at [18], [19] per Crawford J). 16 Newman v Phillips Fox (1999) 21 WAR 309 at 315 per Steytler J; Westgold Resources NL v St Barbara Mines Ltd [2002] WASC 264 at [28] per E M Heenan J; Ismail-Zai v State of Western Australia [2007] WASCA 150 at [23] per Steytler P (cf at [71], [72] per E M Heenan AJA). Cf Holborow v MacDonald Rudder [2002] WASC 265 at [23] per E M Heenan J (speaking of a duty of loyalty to a former client); Frankland River Olive Co Ltd v Charters Securities Pty Ltd [2004] WASC 88 at [25]–[37] per Pullin J; Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [2005] WASC 255 at [181]–[189] per Johnson J.

[8.40]

8 Acting against Former Clients

281

Federal Court.17 Potential for focus beyond confidentiality?

[8.35] The focus on confidentiality impacts on the relevant onus; the former client must identify information confidential to her or him in the lawyer’s possession that the lawyer may use to the former client’s prejudice: see [8.120]–[8.155]. Yet the case law indicates that a lawyer can be disqualified from acting against a former client even lacking proof of a risk of misuse of confidential information. A closely reasoned statement of this kind is found in Brooking JA’s judgment in Spincode Pty Ltd v Look Software Pty Ltd,18 who saw Australian law as diverging from English law, such that “the danger of misuse of confidential information is not the sole touchstone for intervention where a solicitor acts against a former client”. His Honour discerned another possible basis for intervention, namely that “it may be said to be a breach of duty for a solicitor to take up the cudgels against a former client in the same or a closely related matter”.19 This duty he sourced from either an equitable obligation of “loyalty”, a continuing fiduciary obligation or an implied term in the contract of retainer.20 Neither Ormiston JA nor Chernov JA in Spincode expressed a concluded view on the point, although Chernov JA remarked that Brooking JA had made a compelling case. Some other judges have endorsed Brooking JA’s approach,21 but at the same time another Victorian judge has endorsed the Prince Jefri approach as representative of Victorian law.22 So it cannot be assumed that even in Victoria the position as stated by Brooking JA necessarily represents the law.

[8.40] In any event, Brooking JA did not explain how this equitable obligation of “loyalty” differed, if at all, from a fiduciary duty. In equity, fiduciary law represents the vehicle to give effect to duties of loyalty, and so it is by no means evident why equity should recognise some additional or supervening duty to the same effect. Equity has not traditionally countenanced any such obligation outside of fiduciary law; nor has the common law independent of contractual protection. Brooking JA’s favoured explanation also omits to explain why such a duty of loyalty should not apply beyond the lawyer–client relationship, such as to that between director and company. This ground has, in any case, been decisively rejected, on these grounds 17 Bureau Interprofessionnel Des Vins de Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588 at [18] per Ryan J; Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 at [47]–[53] per Goldberg J. 18 Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 at 521–522. 19 Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 at 522. 20 Spincode Pty Ltd v Look Software Pty Ltd (2001) 4 VR 501 at 522. 21 Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [103] per Nettle J; Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726 at [41] per Byrne J; Wagdy Hanna & Associates Pty Ltd v National Library of Australia (2004) 185 FLR 367 at [31]–[42] per Higgins CJ; Adam 12 Holdings Pty Ltd v Eat & Drink Holdings Pty Ltd [2006] VSC 152 at [40] per Whelan J; Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 at [14] per Whelan J; Commonwealth Bank of Australia v Kyriackou [2008] VSC 146 (affd Kyriackou v Commonwealth Bank of Australia [2009] VSCA 241). 22 World Medical Manufacturing Corporation v Phillips Ormonde & Fitzpatrick Lawyers [2000] VSC 196 at [90], [120], [263] per Gillard J. Earlier Victorian authority is also consistent with this approach: see Farrow Mortgage Services Pty Ltd (in liq) v Mendall Properties Pty Ltd [1995] 1 VR 1 at 4–5 per Hayne J.

282

Lawyers’ Professional Responsibility

[8.40]

and others, by another Victorian judge, sitting in the Federal Court, in a 2014 decision.23 It has also been rejected in New South Wales.24 So far as a continuing fiduciary duty is concerned, Brooking JA analogised the “purchase rule” in trusts law,25 and its by-product, the corporate opportunity doctrine in company law.26 Yet the extent to which these two doctrines are in any way independent of the misuse of information secured in the capacity of trustee or director is not clear.27 The implied term Brooking JA had in mind – presumably “a lawyer will not act against a former client in the same or a closely related matter” – can be construed to incorporate a presumption that the lawyer has been imparted confidential information. Were his Honour’s intention otherwise, there would have been little need to qualify the proscription by reference to the relationship between the matters. It may be, to this end, that Brooking JA was simply relaxing the onus cast on the former client – and there is other case authority couched in equivalent presumptive terms: see [8.125] – rather than denying the pervading relevance of confidential information to the relevant inquiry.28 It may, moreover, be that Brooking JA was heavily influenced by the unprofessional conduct of the law firm before him.29 The firm had acted for a company since its incorporation, and continued to act for the company even when disputes arose between its shareholders, whilst at the same time covertly advising two of the shareholders in relation to the disputes. It was then retained to act for one of the shareholders in winding up proceedings against the company. This presented the court with a case of a law firm acting for one client whilst having acted for other clients in matters arising out of precisely the same dispute. Coupled with the firm’s 23 Dealer Support Services Pty Ltd v Motor Trades Association of Australia Ltd (2014) 318 ALR 507 at [40]–[91] per Beach J. 24 Cooper v Winter [2013] NSWCA 261 at [92]–[102] per Ward JA, with whom McColl and Barrett JJA concurred; Maxwell-Smith v S & E Hall Pty Ltd (2014) 86 NSWLR 481 at [24] per Barrett JA, with whom Beazley P and McColl JA concurred; Re IPM Group Pty Ltd [2015] NSWSC 240 at [32] per Black J. 25 As to the purchase rule see Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [22.95]–[22.110]. 26 As to the corporate opportunity doctrine see Austin and Ramsay, Ford’s Principles of Corporations Law (16th ed, LexisNexis Butterworths, 2015), [9.220]–[9.270]. 27 Cf Glover, “Is Breach of Confidence a Fiduciary Wrong? Preserving the Reach of Judge-made Law” (2001) 21 Legal Studies 594 at 613–614. 28 Alternatively, the focus on loyalty in this context may represent a means to give effect to what would otherwise be an inference that relevant confidential information has been disclosed even though the applicant is unable to identify that information with sufficient precision. For example, in Connell v Pistorino [2009] VSC 289 Byrne J did not disqualify a lawyer from acting against a former client (having acted for that client on the purchase of land, and then proposed to act against the client in a proceeding involving the source of the funds for the purchase) on the grounds of misuse of confidential information because he was unable to discern “precisely” what the former client said to the lawyer (at [26]), but acceded to the application to disqualify under the loyalty head because of the “commonality of issue” between the matters, “which makes it undesirable that [the lawyer] should act against [the former client]” (at [29]). 29 As suggested by Bergin J in Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550 at [52].

[8.50]

8 Acting against Former Clients

283

refusal to acknowledge that the company had ever retained it notwithstanding clear evidence to the contrary, the foregoing served to make the case an obvious one raising the prospect of misuse of confidential information. It follows that Brooking JA’s remarks beyond this were obiter. In the final analysis, though, there may be little difference in result in applying either the Prince Jefri or the Spincode approach in the bulk of cases. Only in cases at the very margin, which will necessarily be exceptional,30 will the different approaches potentially generate different outcomes. And in these cases it may well be that the court resorts to its inherent, again exceptional, jurisdiction to disqualify a lawyer so as to preserve the appearance of justice: see [17.20]. Consent of former client to successive conflict

[8.45] Just as an existing client (A) can consent to a lawyer (or, more likely, a firm) acting for other clients with interests potentially conflicting with those of A (see [7.80], [7.85]), there is nothing to preclude a former client consenting to the lawyer, in a later retainer for another client, using confidential information in a fashion that would otherwise amount to its misuse. The confidence is, after all, that of the client, and so it is entirely the client’s choice as to how the information may be disclosed or used.31 Its validity rests on the former client being fully informed as to the extent of the use of the information and its consequences.32 For most clients this will be premised upon the prior receipt of independent advice. Former clients who, with knowledge, delay in making an application to disqualify, may be held to have waived their entitlement to confidentiality, especially where to accede to the application would cause the existing client considerable prejudice: see [8.265]. Interests of the general public – the question of appearances

[8.50] It has been judicially observed that “[t]he integrity of the legal profession and the perception of that integrity by the public is in large measure a consequence of the fidelity which a legal practitioner shows to his client and conduct which has a tendency to jeopardise that perception to faithful commitment to the interests of the client should be prevented”.33 On this logic, some judges inquire into whether the continued representation would be subversive to the appearance of propriety 30 See Waiviata Pty Ltd v New Millennium Publications Pty Ltd [2002] FCA 98 at [10] per Sundberg J; British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 at [112] per Young CJ in Eq. Cf Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), pp 120–123. 31 This is recognised in the professional rules in most jurisdictions: see ACT, r 10.2.1; NSW, r 10.2.1; Qld, r 10.2.1; SA, r 10.2.1; Vic, r 10.2.1; WA, r 13(3)(a). 32 The Law Council of Australia’s commentary to r 10 of the Australian Solicitors’ Conduct Rules identifies key matters the former client must be aware of in order to give informed consent as: “(a) the benefits and disadvantages for the former client of consenting to the use of the confidential information; (b) the benefits and disadvantages for the current client of having use of that information; (c) that the former client is entitled to refuse consent; and (d) that the former client may wish to obtain independent legal advice before providing consent”. 33 Murray v Macquarie Bank Ltd (1991) 33 FCR 46 at 49 per Spender J.

284

Lawyers’ Professional Responsibility

[8.55]

and therefore detrimental to public confidence in the legal system.34 Justice, it is said, “should not only be done but should appear to be done”,35 and the appearance that a lawyer can readily change sides is subversive to the appearance that justice is being done.36 But the appearance of changing sides cannot, however, dictate that a lawyer who has acted professionally for a particular client is forever prevented from opposing that client in subsequent litigation. The appearance of changing sides, rather, must be balanced by “the application of relevant principles which accept that a lawyer, in certain circumstances, can change sides and act against a former client where the lawyer is able to establish that there is not a real risk of misuse of confidential information”.37 Any other approach arguably invites the court to disqualify a lawyer on a nebulous foundation,38 highly dependent on judicial discretion. It may, moreover, “result in the timid reluctance to risk some imaginary appearance of conflict which has no substance”.39 Current client’s interest in choice of legal representative

[8.55] The profession’s virtual monopoly on legal services has led courts to note the public interest in these services being freely available. To this end, the client’s right to choose legal representation is not to be downplayed. It has been described as “fundamental to the adversarial process”,40 so that a court will not deprive a litigant of this choice without a compelling reason.41 The weight to be accorded to that interest must necessarily be influenced by the weight accorded to the former client’s claim to confidentiality. The stronger the latter, ultimately the less persuasive may be the current client’s freedom of choice. It may be that freedom of choice, of itself, is not as important in a city with a thriving, diverse and talented legal profession;42 in such a place freedom to secure appropriate legal representation is not curtailed, though this overlooks the fact that many clients choose their lawyer for reasons beyond competence. Conversely, an undue restriction on choice could, it has been said, “work great hardship in small towns where there were few solicitors”,43 or even in a large city with few lawyers 34 See, for example, Newman v Phillips Fox (1999) 21 WAR 309 at 314–316 per Steytler J. 35 Thevenaz v Thevenaz (1986) FLC ¶91-748 at 75,447 per Frederico J. 36 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 124 per Bryson J. 37 Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 at [60] per Goldberg J. 38 See EPAS Ltd v AMP General Insurance Ltd [2007] QCA 212 at [20] per Keane JA. 39 Re a Firm of Solicitors [1992] 1 All ER 353 at 365 per Staughton LJ. 40 Moffat v Wetstein (1996) 135 DLR (4th) 298 at 332 per Granger J. 41 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 566 per Lee J; Re a Firm of Solicitors [1992] 1 All ER 353 at 366 per Staughton LJ; Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737 at 739 per Henry J; Black v Taylor [1993] 3 NZLR 403 at 408–409 per Richardson J; Macquarie Bank Ltd v Myer [1994] 1 VR 350 at 352 per Marks J; Grimwade v Meagher [1995] 1 VR 446 at 455 per Mandie J; Moffat v Wetstein (1996) 135 DLR (4th) 298 at 335 per Granger J. 42 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J. 43 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831, in argument. Cf Seidler v Seidler [2010] FMCAfam 1394 at [59] per Willis FM (who, in response to the argument that the strictness of the successive conflict rule should be relaxed in a family law matter arising in a regional area with few lawyers,

[8.60]

8 Acting against Former Clients

285

experienced in a specialised field.44 A New Zealand judge has observed that lawyer availability “should not be unduly restricted by Court-imposed control or sanctions which are not required in the overall interests of justice to protect individual rights”.45 The weight accorded to a defendant’s counsel of choice is arguably greater too where the proceedings are criminal in nature.46 It follows that client choice attracts most weight where evidence as to the potential misuse of confidential information is slight at best,47 and disqualification would generate hardship for the current client. By itself it neither ousts a former client’s legitimate interest to protect confidentiality of information, nor raises the threshold for proof of confidential information or the risk of its misuse required of the former client. Current client’s interest in speedy and efficient dispute resolution

[8.60] Considerations of delay, inconvenience and expense arising from a change in representation may, in particular cases, influence whether the interests of justice truly demand disqualification.48 For instance, where the alleged scope for misuse of confidential information has been apparent for some time, and proceedings are reasonably advanced, to disqualify at a late stage may prejudice the current client. It would encourage wastage of resources, namely lost time and labour invested by the disqualified lawyer and the partial duplication of the latter’s work by the new lawyer.49 It could be viewed with suspicion as an abuse of process to prompt delay and inconvenience to the current client (see [8.260], [8.265]), and cast doubt on whether the information was truly confidential and relevant to the matter.50 Considerations of this kind are likely to assume greatest significance in cases where the possibility of injustice arising by virtue of continued representation is specious.51 But in cases of a real possibility of misuse of confidential information, said that although “all around Australia there will be towns, suburban areas, regional cities that have a smaller legal community than the state capital”, this did not dictate “that such a limitation provides a basis to overlook the legal principle that it is of the utmost importance that justice should not only be done, but should appear to be done”). 44 Re a Firm of Solicitors [1992] 1 All ER 353 at 366 per Staughton LJ. 45 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 655 per Henry J. 46 R v Khazaal (2006) 167 A Crim R 565 at [90] per Whealy J. 47 See Slaveski v State of Victoria [2009] VSC 540 at [5] per Pagone J (warning that “[t]he law must guard against insufficiently founded assertions of conflicts of interest in part because it could otherwise deny litigants access to the best representation for their disputes and in part because it could encourage unmeritorious assertions and contentions”). 48 Re a Firm of Solicitors [1992] 1 All ER 353 at 366 per Staughton LJ; Black v Taylor [1993] 3 NZLR 403 at 412 per Richardson J. 49 See, for example, H Stanke & Sons Pty Ltd v von Stanke (2006) 95 SASR 425 (where White J refused to disqualify because, inter alia, the lawyer had, in acting for the current client over two years, acquired an extensive knowledge regarding the client’s claims, the value of which would be lost were the client required to instruct a new lawyer, which would involve the incurring of significant expense). 50 See, for example, Marriage of McGillivray and Mitchell (1998) 23 Fam LR 238. 51 See, for example, Lafarge Construction Materials Precast Division v Lawson Lundell Lawson & McIntosh (1996) 136 DLR (4th) 280 at 285 per Shaw J; South Black Water Coal Ltd v McCullough Robertson (a firm) (unreported, SC(Qld), Muir J, 8 May 1997) at 27.

286

Lawyers’ Professional Responsibility

[8.65]

courts are slow to allow considerations of inconvenience, delay and expense to outweigh the importance of ensuring that their officers observe duties of confidentiality.52 Are the interests of the lawyer relevant?

[8.65] That to decline representation, or being disqualified, may involve the lawyer losing lucrative (and much needed) business is not a factor weighed in the balancing of competing interests. The nature of the lawyer–client relationship, coupled with the lawyer’s role in the administration of justice, dictate the subordination of the lawyer’s interests to those of both current and former clients, and to the general interests of justice. Only to the extent that the lawyer’s interests coincide with those of the current client do they assume any weight, and then only derivatively. However, there may be interests that, though ostensibly favouring lawyers, should be given weight from the perspective of client choice and access to justice. For instance, excessive curial zeal to disqualify may impinge on reasonable mobility of labour within the profession,53 which in turn may impinge upon client choice of lawyer. This explains why courts countenance attempts to screen a migratory lawyer otherwise “tainted” with confidential information more so than in other instances: see [8.240]–[8.250].

THRESHOLD FOR JUDICIAL INTERVENTION The relevant inquiry General law

[8.70] In prescribing the threshold for judicial intervention in alleged former client conflict cases, the main inquiry focuses on the need to preserve the confidentiality of information communicated in the course of a retainer. That is not to say that the appearance of impropriety is irrelevant, but that its substance is informed by the likelihood that confidential information may be misused. A leading statement of the relevant inquiry, endorsed on various occasions,54 is that of Drummond J in Carindale Country Club Estate Pty Ltd v Astill:55 [A] solicitor is liable to be restrained from acting for a new client against a former client if a reasonable observer, aware of all the relevant facts, would think that there is a real, as opposed to a theoretical possibility that confidential information given to the solicitor by the former client might be used by the solicitor to advance the interests of a new client to the detriment of the old client. 52 Magro v Magro (1989) FLC ¶92-005 at 77,192 per Rourke J; Marriage of A & B (1990) FLC ¶92-126 at 77,843–4 per Smithers J. 53 Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737 at 739 per Henry J. 54 For instance, Lord Millett in Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 237 cited the principle in Carindale with approval. See also Newman v Phillips Fox (1999) 21 WAR 309 at 323 per Steytler J; Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [66] per Nettle J; Nasr v Vihervaara (2005) 91 SASR 222 at [17], [18] per Doyle CJ, with whom Vanstone and White JJ concurred. 55 Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 312.

[8.75]

8 Acting against Former Clients

287

As such, a lawyer possessed of “relevant confidential information” cannot act against a former client. The lawyer cannot compartmentalise her or his mind so as to screen what has been gleaned from the client from what was acquired elsewhere. Attempts to do so could prompt the lawyer to avoid using information acquired legitimately for fear that it might be perceived to have come from the former client, which would in turn undermine the adequate representation of the new client.56 For this purpose, “relevant confidential information” can be defined as information:57 • originally communicated in confidence; • that remains confidential and may reasonably be considered remembered or capable, on the memory being triggered, of being recalled;58 and • relevant to the subject matter of the subsequent proposed retainer. Replication in professional rules

[8.75] The general law approach – which targets the protection of confidentiality as the core inquiry – is reiterated in the Australian Solicitors’ Conduct Rules, applicable in most jurisdictions, which proscribe a lawyer who possesses confidential information of a former client that “might reasonably be concluded to be material to the matter of another client and detrimental to the interests of the former client if disclosed” from acting for the current client in that matter.59 The equivalent rule in the preceding Law Council rules, the terms of which remain extant in the Northern Territory rules, referred to a “real possibility” of misuse of confidential information,60 in line with the Carindale formulation. It does not seem, though, that this different terminology reflects any difference in substance. The merit in phrasing the inquiry by reference to what “might reasonably be concluded” is to highlight the objective nature of the inquiry (see [8.205]). The barristers’ rules also target confidentiality. They require a barrister to refuse a brief if he or she has information confidential to any person with different interests from those of the prospective client, which may as a real possibility be detrimental to the confider, unless the latter has consented to the barrister using the information as the barrister thinks fit in giving advice.61 56 MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 268 per Sopinka J; Re a Firm of Solicitors [1995] 3 All ER 482 at 489–490 per Lightman J. 57 Re a Firm of Solicitors [1995] 3 All ER 482 at 489 per Lightman J; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235 per Lord Millett. 58 See Quann v Wilson & Atkinson (a firm) [2015] WASC 229 at [16] per Le Miere J (“Where a lawyer has had a matter disclosed to him or her, or knew of some matter, and has no present recollection of the matter there remains the possibility that his or her recollection might be refreshed during the course of the latter matter”); Foley v Foley [2016] FCWA 41 at [42] per Walters J (giving little weight to a lawyer’s deposed inability to recollect aspects of his professional dealings with a former client). 59 ACT, r 10.2; NSW, r 10.2; Qld, r 10.2; SA, r 10.2; Vic, r 10.2. 60 See NT, r 3. See also WA, r 13(2) (“A practitioner must not provide, or agree to provide, legal services to a person if there is a real possibility that the practitioner would be required, in order to act in the best interests of the person: (a) to use confidential information obtained from a former client to the detriment of the former client; or (b) to disclose to the person confidential information obtained from a former client”). 61 ACT, r 87(a); NSW, r 103; NT, r 87(a); Qld, r 97; SA, r 97; Vic, r 103; WA, r 97.

288

Lawyers’ Professional Responsibility

[8.80]

Dissecting the relevant inquiry – the “real possibility” “Possibility”

[8.80] The case law makes it clear that the “possibility”, not the “probability”, of misuse of confidential information is what attracts the jurisdiction to disqualify.62 To make the test one of probability would, it is reasoned, unduly relax the necessary precautions required in protecting confidential information.63 Moreover, according to Lord Millett in Prince Jefri Bolkiah v KPMG (a firm),64 to set the threshold at the level of probability “imposes an unfair burden on a former client, exposes him to a potential and avoidable risk to which he has not consented, and fails to give him a sufficient assurance that his confidence will be respected”. It is easier to establish that misuse of confidential information is possible, as opposed to more probable than not. “Real” possibility

[8.85] Not every possibility of misuse of confidential information merits disqualification, only those that are “real”. The nature of a “real” possibility, though incapable of precise definition, can be discerned from equivalent descriptions used by judges, such as “real prospect”,65 “real or appreciable risk”66 or “real and sensible possibility”.67 “Real” possibilities can be contrasted with “theoretical” ones, the latter being generally outweighed by the interests of the current client to retain a chosen legal representative.68 To this end, it has been said that “the Court does not act on the basis of mere possibilities”, in that “the possibilities must have a degree of reality and a degree of reasonableness and sense”.69 62 MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 257, 266–267 per Sopinka J; Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737 at 739 per Henry J. 63 Re a Firm of Solicitors [1992] 1 All ER 353 at 369 per Sir David Croom-Johnson. 64 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 236. In so doing, his Lordship rejected the long established English test of a “reasonable probability of real mischief” propounded by the English Court of Appeal in Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831. 65 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 371 per Ipp J. 66 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 651 per Henry J. In Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 Lord Millett characterised references to “an appreciable risk” or an “acceptable risk” as unhelpful, concluding that a court should intervene unless it is satisfied that there is no risk of disclosure. Taken in isolation, this statement is prone to mislead, for it imposes too absolute a standard. That this was not what his Lordship intended is evident from his subsequent remark that it goes without saying that the risk must be a real one, and not merely fanciful or theoretical, but that it need not be substantial: at 236–237. 67 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 362 per Ipp J. 68 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J; Break Fast Investments Pty Ltd v Rigby Cooke Lawyers (a firm) [2015] VSC 305 at [16] per Bell J (aligning a mere or theoretical possibility with a “negligible risk”); NZ, r 8.7.1(c) (requiring “more than negligible risk of disclosure of the confidential information”). 69 Wyndham City Council v CSR Ltd [1998] VSC 156 at [32] per Chernov J. See also R v Parsons (1992) 72 CCC (3d) 137 at 145 per Marshall JA (“while conflict of interest concerns arise from possibilities, there has to be some reasonable basis upon which the possibility is constructed”).

[8.90]

8 Acting against Former Clients

289

Informed by the sensitivity that reasonable persons feel about family law litigation,70 which in turn may cause litigants to more readily discern injustice,71 there was dicta in that context that a theoretical risk of misuse of confidential information could suffice to justify disqualification.72 Rather than foster a unique approach in family law cases (see [8.150]) – after all, disputes over deceased estates, and between family members (or even some commercial disputes) may exhibit features similar to family law litigation73 – a better approach is to take account of the breadth of potentially relevant information from the perspective of the reasonable observer, who in turn will be influenced by the nature of the litigation in question. This aligns with recent remarks by the Full Court of the Family Court branding the word “theoretical” in the phrase “theoretical risk of the misuse of the confidential information” unhelpful, instead identifying the relevant inquiry as “whether there is a real risk of misuse as opposed to one which is merely fanciful”.74 Risk of inadvertent disclosure

[8.90] In assessing the real possibility of misuse of confidential information, courts carefully assess the likelihood of its inadvertent disclosure, whether due to accident or subconscious use.75 This is particularly important where a law firm seeks to defend the application by an attempt to screen lawyers within the firm: see [8.200]–[8.225]. Whether a “real” possibility of inadvertent disclosure exists depends on the circumstances of the case, including the nature of the matter, the characteristics of the information and the relevant channels of communication. The court will consider the risk of “some chance encounter or chance remark or reaction to an observation by another”,76 bearing in mind that “wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control”.77 That a lawyer deposes to no recollection of the content of communicationsin issue is not by itself a ground to deny disqualification. It does not guard against a 70 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J. 71 Gagliano v Gagliano (1989) FLC ¶92-012 at 77,311 per Renaud J. 72 Thevenaz v Thevenaz (1986) FLC ¶91-748 at 75,447 per Frederico J; Epstein v Epstein [2008] FamCA 907 at [10] per Loughnan JR; Royce v Royce [2012] FamCA 400 at [16], [52] per Cronin J. 73 In Re Z [2010] 2 FLR 132 at [41], [42] Bodey J countenanced that there may be some commercial cases where the parties are just as emotionally involved in the outcome as is so often seen in family cases, and that family law should not therefore be seen as “some special category in this respect”. On the facts, however, his Lordship did order disqualification, not because the matter involved family law per se, but because he found a real (albeit modest) risk of misuse of confidential information to the detriment of the former client. 74 Osferatu v Osferatu (2015) 301 FLR 295 at [39] per the court. 75 Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62 at 63 per Lilley CJ; Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 835 per Cozens-Hardy MR; Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508 at 515 per Mackenzie J. 76 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 561 per Lee J. 77 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J.

290

Lawyers’ Professional Responsibility

[8.95]

subconscious drawing on that information to the disadvantage of the former client.78 As explained by an Ontario judge:79 [I]t would be an impossible task to enforce a rule which permitted a person who had received confidential information to act for an opposing party if they said they did not remember the information. How would the court verify the lack of memory? At what stage? It would be practically impossible to police and the person whose confidences were at stake would inevitably feel betrayed. Moreover, the influence of even forgotten information cannot be discounted.

A New Zealand judge has added that the former client “should not have to be comforted by counsel for the [current client’s] assurances that his memories have dulled”, and that “a former client’s entitlement to protection against potential conflict should not turn on the asserted poor memory of the former lawyer”.80 Concerns of this kind led Nettle J in Sent v John Fairfax Publication Pty Ltd81 to disqualify counsel who, 14 years earlier, advised a client on a matter from acting against that client in a related matter even though counsel deposed to no recollection of the advice. Similarly, in Rosin v MacPhail82 the British Columbia Court of Appeal disqualified a lawyer who had represented a woman in a divorce 10 years earlier from acting against her in a constructive trust action after the breakdown of her subsequent de facto relationship. The lawyer’s assertion that he had no recollection of these matters was met with the concern that, were the lawyer to act through discovery and trial, his memory would likely be jogged and he would recall things that were said, some of which may be adverse to the woman.83 Dissecting the relevant inquiry – reasonable observer aware of all the relevant facts

[8.95] The court must assess whether a reasonable observer aware of all the relevant facts would perceive a real possibility of misuse of confidential information. The “reasonable observer” requirement is a means of factoring in the public interest and safeguarding the appearance of justice. It also has the effect of objectifying the exercise, and not simply giving credence to subjective views expressed by the litigants. The reasonable observer perspective assists in, as noted by an English judge, “an over-sensitivity on the part of the objector”.84

78 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 371 per Ipp J; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 313 per Drummond J. 79 Burgess (Litigation Guardian of) v Wu (2003) 235 DLR (4th) 341 at [106], [107] per Ferguson J. See also Director of Public Prosecutions (WA) v Bennett & Co (a firm) (2005) 151 A Crim R 516 at [55] per Roberts-Smith J (“information once revealed cannot be forgotten and the obligation to maintain the confidentiality of it, may, depending on the circumstances, be one impossible of performance”). 80 Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833 at [20], [25] per Asher J. 81 Sent v John Fairfax Publication Pty Ltd [2002] VSC 429. 82 Rosin v MacPhail (1997) 142 DLR (4th) 304. 83 Rosin v MacPhail (1997) 142 DLR (4th) 304 at 311 per Esson JA. 84 Re a Firm of Solicitors [1992] 1 All ER 353 at 362 per Parker LJ.

[8.105]

8 Acting against Former Clients

291

The reasonable observer has been described as the “fair minded reasonably informed member of the public”,85 and the “well-informed reasonable bystander”.86 It follows that, though not necessarily legally trained, the reasonable observer is a person “capable of rational assessment”,87 who is “assumed to know the true facts of the matter, at least as they are known to the court”.88 He or she must, moreover, view the circumstances in issue “objectively as an outsider”.89 Of course, the reasonable observer is a purely hypothetical individual. He or she does not exist; it is the judge who must factor into her or his judgment how such a person would likely respond. It is not, however, simply an expression of the perspective of the general public; after all, the general public is not fully informed. The public may, therefore, perceive misuse of confidential information in circumstances where the court, from the perspective of the reasonable observer, refuses an application to disqualify.90 Dissecting the relevant inquiry – “to the detriment” of the former client

[8.100]

The requirement that the real possibility of misuse of confidential information be to the detriment of the former client serves several important functions. It protects lawyers from frivolous applications to disqualify. It guards the public interest that services of lawyers be freely available, which it has been observed “will be unnecessarily intruded upon unless it is shown that disclosure by the solicitor of confidential information will disadvantage the confiding client”.91 It also emphasises the appearance of justice, for it is difficult to see injustice in permitting representation that will not disadvantage the former client.

[8.105]

One of the courts’ principal inquiries in this regard focuses on whether, and the extent to which, the respective retainers are closely related.92 Closely related retainers, it is assumed, amplify the risk that the lawyer possesses 85 Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [116] per Nettle J. See also MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 251–252 per Sopinka J (“the public represented by the reasonably informed person”). 86 Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726 at [47] per Byrne J. 87 Gagliano v Gagliano (1989) FLC ¶92-012 at 77,312 per Renaud J. 88 Pott v Jones Mitchell [2004] 2 Qd R 298 at [22] per McMurdo J. See also D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J; Re a Firm of Solicitors [1992] 1 All ER 353 at 362 per Parker LJ; Gainers Inc v Pocklington (1995) 125 DLR (4th) 50 at 63 per Côté JA; Fordham v Legal Practitioners Complaints Committee (1997) 18 WAR 467 at 489–490 per Malcolm CJ. 89 Equiticorp Holdings Ltd v Hawkins [1993] 2 NZLR 737 at 740 per Henry J. In Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641, even though Henry J remarked that “[p]ossible difficulties perceived by the public” is not an appropriate standard (at 654), his Honour nonetheless considered that the risk of disclosure or other misuse of confidential information must be “viewed objectively” (at 651). 90 See Canberra Residential Developments Pty Ltd v Brendas [2009] FCA 1484 at [20] per Stone J (that some may perceive a potential misuse of confidential information is not determinative of the issue; the relevant inquiry is directed to a person who is “reasonably informed”, such that “first impressions [may] give way to a more informed view”). 91 Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 313 per Drummond J. See also MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 267 per Sopinka J. 92 See Wolfram, “Former Client Conflicts” (1997) 10 Geo J Legal Ethics 677.

292

Lawyers’ Professional Responsibility

[8.105]

confidential information relevant to the current matter that may be used to the former client’s prejudice.93 Matters are likely to be closely related, for this purpose, where significant issues in one matter arise in the other, or factors significant to one matter are significant to the other.94 The following checklist promulgated by the Nebraska Supreme Court assists in determining whether or not matters are related, involving inquiry into:95 … whether the liability issues presented are similar; whether any scientific issues presented are similar; whether the nature of the evidence is similar; whether the lawyer has interviewed a witness in both causes; the lawyer’s knowledge of the former client’s trial strategies, negotiation strategies, legal theories, business practices and trade secrets; the lapse of time between the causes; the duration and intimacy of the lawyer’s relationship with the clients; the functions being performed by the lawyer; the likelihood that actual conflict will arise; and the likely prejudice to the client if conflict does arise.

Where respective retainers are unrelated, disclosure to the detriment of the former client is less likely. In Nasr v Vihervaara,96 for example, a lawyer who had previously acted for A in a personal injury claim and a property boundary dispute was retained by B to defend A’s claim arising out of B’s alleged de facto relationship with A. The lack of common factual ground between the former matters and the current one, and A’s failure to identify what confidential information the lawyer possessed capable of being used to A’s detriment, led the South Australian Full Court to refuse A’s application to have the lawyer disqualified from representing B.97 Similarly, in House v Altimas98 Ryan J refused to disqualify a lawyer from representing A against B in defended property settlement proceedings, even though he had 14 years earlier acted for A and B in relation to a road accident, as the retainers were so unrelated as to cast serious doubt over any relevant confidential information being misused in the current retainer. 93 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 567 per Lee J; Chapters Inc v Davies, Ward & Beck LLP (2001) 52 OR (3d) 566 at [30] per Goudge JA (“There may be cases in which a simple description of the two retainers shows them to be so closely connected that the court will infer the possible misuse of confidential information and hence find the retainers to be sufficiently related”); Brookville Carriers Flatbed GP Inc v Blackjack Transport Ltd (2008) 263 NSR (2d) 272 at [50] per Cromwell JA (“The issue is not so much whether the subject-matter of the two retainers is the same, but whether confidential information learned in one would be relevant to the other”). Cf Legal Profession (Professional Conduct) Rules 1998 (Sing), s 31(1) (superseded), which stated that a lawyer “who has acted for a client in a matter shall not thereafter act against the client (or against persons who were involved in or associated with the client in that matter) in the same or any related matter”. As nothing in the rule limited “any related matter” to matters where relevant confidential information has been passed, the rule was not intended to replicate the general law position, so that “for two matters to be related, it is not necessary that the solicitor had received confidential information relevant to the subsequent suit”: Nikolay v Peters [2011] 1 SLR 663 at [23] per Lee Seiu Kin J. Presumably to address this diversion from the general rule, the current Singaporean rules make reference to confidentiality as a core foundation for declining to act in these circumstances: Sing, r 21(2). 94 Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [108] per Nettle J. 95 State ex rel Wal-Mart Stores Inc v Kortum (1997) 559 NW 2d 496 at 501. 96 Nasr v Vihervaara (2005) 91 SASR 222. 97 Nasr v Vihervaara (2005) 91 SASR 222 at [35]–[43] per Doyle CJ, with whom Vanstone and White JJ concurred. 98 House v Altimas [2012] FamCA 625.

[8.115]

8 Acting against Former Clients

293

The foregoing is not to suggest that unrelated matters can never support disqualification. The lawyer may have acquired knowledge relevant to a totally different matter, which he or she may seek to use against the former client.99 Also, in circumstances where a court considers that relevant confidential information should encompass the lawyer’s impressions of a former client’s character, personality or attitudes (see [8.135]–[8.155]), that the retainers are unrelated assumes less significance.

[8.110]

Yet even closely related retainers do not necessarily justify disqualification if the lawyer’s role in the earlier matter was merely of a compliance or advisory nature. In Christie v Wilson,100 for instance, a magazine editor retained a solicitor to advise on whether an article the magazine planned to publish was libellous. The advice was that there was no significant risk of the magazine being sued for libel. The plaintiff sued the publisher, maintaining that the article was libellous, and retained the solicitor as advocate. The English Court of Appeal refused to disqualify the solicitor from representing the plaintiff, seeing “all the difference in the world between deciding on a course of action and advising the client that the course of action is one which is proper to take”.101

The decision highlights that the relevance, and sometimes decisiveness, of the nature and scope of the former retainer. It also provides some respite for litigants whose choice of lawyer has been undermined by deliberate attempts by an opponent to corner the market by seeking advice from multiple lawyers: see [8.270]. But it should not be read as relaxing the relevant judicial approach; the decision proceeded on the assumption that the solicitor lacked relevant confidential information belonging to the former client. Cases where a lawyer has previously advised on the merits of a cause of action will not always sustain such an assumption.

[8.115]

The concept of “detriment” for this purpose may require qualification in the criminal law context. There it may be sufficient to establish that, by reason of a lawyer changing sides, there is the prospect, or even the appearance, of a breach of confidence. The point is illustrated by the ruling in Director of Public Prosecutions (Cth) v A Legal Practitioner,102 where a lawyer employed by Commonwealth Director of Public Prosecutions (CDPP), having been involved in the initial criminal investigations that led to major criminal charges being laid and a pending trial on indictment, then commenced employment with lawyers acting for two of the relevant accused. Counsel for the respondent lawyer argued that the CDPP had not produced evidence of confidential information possessed by the respondent by reason of her employment by the CDPP that, if disclosed to an accused, would put the prosecution at risk. E M Heenan J saw this as “putting the test too high”, reasoning as follows:103 99 Re a Firm of Solicitors [1992] 1 All ER 353 at 362 per Parker LJ. 100 Christie v Wilson [1998] 1 WLR 1694. 101 Christie v Wilson [1998] 1 WLR 1694 at 1696 per Stuart-Smith LJ. 102 Director of Public Prosecutions (Cth) v A Legal Practitioner [2012] WASC 459. 103 Director of Public Prosecutions (Cth) v A Legal Practitioner [2012] WASC 459 at [54].

294

Lawyers’ Professional Responsibility

[8.120]

The test is simply whether there is confidential information which has come to the practitioner by virtue of employment within the office of the CDPP which may not be disclosed without a breach of confidence. It is not necessary to show that the confidential information is of such a character that it may disadvantage the prosecution. Simply, its character being confidential means that it ought not be disclosed and that remedies are available to prevent disclosure if that is threatened.

In a case of this kind, his Honour added, which involved a multiplicity of information likely to have been available within the office of the CDPP in the course of its investigation, it would be “quite unreasonable and unjustifiable” to assume that there would be no, or no significant, confidences that would had come to the respondent’s notice or attention even though she may have lacked present recollection of them.104 Accordingly, sufficient had been shown to justify restraining the respondent from acting in any capacity that would involve her advising or representing the accused in the present or related proceedings. Dissecting the relevant inquiry – the onus of proving misuse of confidential information Orthodox approach – the person who asserts must prove

[8.120]

In civil proceedings, ordinarily the person who asserts bears the onus of proving that assertion on the balance of probabilities. When translated to the former client conflict environment, this requires the former client to establish that the lawyer has received confidential information that, as a real possibility, may be misused to her or his detriment. As explained by Lord Millett in Prince Jefri Bolkiah v KPMG (a firm):105 [I]t is incumbent on a plaintiff who seeks to restrain his former solicitor from acting in a matter for another client to establish (i) that the solicitor is in possession of information which is confidential to him and to the disclosure of which he has not consented and (ii) that the information is or may be relevant to the new matter in which the interest of the other client is or may be adverse to his own.

Discharging this onus requires the former client to identify the relevant confidential information with precision, not merely in global terms, even though it may necessitate disclosing to the court the information the confidentiality of which the action seeks to preserve.106 Not only does this precision assist the court in determining whether there is a real possibility that the information may be misused 104 Director of Public Prosecutions (Cth) v A Legal Practitioner [2012] WASC 459 at [57]. 105 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235. See also D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 122, 124 per Bryson J; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 313–314 per Drummond J; Gugiatti v City of Stirling (2002) 25 WAR 349 at [49]–[52] per Templeman J. 106 Corrs Pavey Whiting & Byrne v Collector of Customs (Vic) (1987) 74 ALR 428 at 437 per Gummow J; Manna Hill Mining Co Pty Ltd v Iles Selley Lawyers [2004] FCA 1175 at [45], [46] per Lander J; Durban Roodepoort Deep Ltd v Reilly [2004] WASC 269 at [68], [80] per Le Miere J; Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 at [20] per Whelan J; Slaveski v State of Victoria [2009] VSC 540 (where Pagone J referred to “a sufficient identification of the confidential information which is said to be capable of misuse, and a sufficient identification of how the anticipated danger of misuse is said to arise” (at [5]), and added that “it is the detail and particularity of the confidential information that matters … because it is by reference to the detail that a court is able to evaluate

[8.125]

8 Acting against Former Clients

295

to the former client’s detriment, it assists the court in framing a clear injunction should relief be granted.107 Bryson J explained other related justifications for precision in Mancini v Mancini:108 A case about confidential information cannot be nebulous. Confidential information which once existed may no longer be confidential; it may no longer be available although it was communicated in the past; it may not be material to any use which might now be proposed to be made of information. Without specificity a claim to protection cannot be defended or decided on any fair procedural basis, and a general allegation of the kind put forward here to the effect that from the nature of the past legal business confidential information must have been communicated should not in my opinion be upheld.

Vague assertions of communication of confidential information make it difficult for the court to be satisfied that the information is truly confidential, and capable of being used to the prejudice of the former client,109 especially if the retainers appear unrelated.110 So where the identification of definable relevant information or risk is “left to conjecture”, an application to disqualify is ordinarily refused.111 Orthodox approach too strict – mere evidential onus on former client?

[8.125]

A direct relationship between the retainers may raise the inference that the lawyer is possessed of confidential information capable of being used to the former client’s detriment. In cases of this kind, the court may make the inference even without the specific identification of that information.112 This may be seen to form the backdrop to judicial statements, favoured in Canada, that once a former client proves that the previous retainer is sufficiently related to the current retainer (the evidentiary burden), the substantive onus shifts to the lawyer to show that there was no confidential information communicated or no real possibility of its misuse.113 The orthodox approach, it is reasoned, gives insufficient weight to the special position of lawyers, and may require the disclosure of the information it is both the need to maintain confidentiality and the degree of apprehension for potential misuse” (at [13]). Cf GBR Investment Ltd v Keung [2010] NZHC 411 at [37] per Bell AsJ (“an over-rigorous insistence on specificity may undermine the purpose of protecting confidential information”). 107 Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at 314 per Drummond J. 108 Mancini v Mancini [1999] NSWSC 800 at [7]. 109 Independent Management Resources Pty Ltd v Brown [1987] VR 605 at 609 per Marks J. 110 See, for example, Li v Wu [2012] FCA 164 at [19]–[22] per Jagot J. 111 See, for example, Law Society of New South Wales v Holt [2003] NSWSC 629; Nasr v Vihervaara (2005) 91 SASR 222 (noted at [8.105]). 112 As was the case in Magro v Magro (1989) FLC ¶92-005 (where Rourke J found it reasonable to infer that the wife’s solicitor, by reason of his seven month retainer, possessed at least some privileged material belonging to the wife that the husband could put to good use in contested property proceedings, even though she was unable to specify what particular confidence imparted to the solicitor endangered her forensically in the proceedings) and Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [69], [70] per Nettle J (who held that the nature of the legal work that former counsel was asked to perform bespoke of the confidentiality of the information that must have been imparted). 113 MacDonald Estate v Martin (1990) 77 DLR (4th) 249 at 268 per Sopinka J. This approach has been cited without disapproval by some antipodean judges: see, for example, Wan v McDonald (1992) 33 FCR 491 at 513–514 per Burchett J; Carindale Country Club Estate Pty Ltd v Astill (1993) 42 FCR 307 at

296

Lawyers’ Professional Responsibility

[8.130]

sought to keep confidential114 (although it is unclear how the latter concern could prejudice the former client, given that the application presupposes that each lawyer is already aware of the information in question). This approach diverges from the orthodox one in adopting what is essentially a presumption, namely that confidential information capable of prejudicing a former client is necessarily the subject of related retainers.115 It may also obviate the need for a former client to identify with precision the confidential information in issue; substituted for precision is proof of related retainers. But where the retainers are not ostensibly closely related, precision in allegations remains necessary even under this approach.116 An approach even more favourable to the former client?

[8.130]

An even more favourable approach to the client emerged from some Australian authority, chiefly in family law,117 although its genesis and terms were not so circumscribed. In the seminal case, the 19th century decision in Mills v Day Dawn Block Gold Mining Co Ltd,118 Lilley CJ said that if the client swears that the lawyer received information in confidence, then “[t]he court [sh]ould not weigh conflicting testimony as to confidence when the client swears he has made confidential communications”, and “[t]he client’s interests should prevail, and the judge should refuse to determine the matter on the conflicting testimony of affidavits”. On this approach, the applicant is relieved of the need to prove the existence of confidential information; the court simply accepts the applicant’s evidence that confidential information was communicated. This reversal of the orthodox approach, though explained as an attempt to discourage satellite litigation in family law119 – the untested assumption being that family law litigation generates sensitivities absent from many other forms of litigation120 – presents as somewhat extraordinary, as it is rare for a court to accept evidence likely to be contentious without it being tested. This is especially 310–311 per Drummond J; Black v Taylor [1993] 3 NZLR 403 at 416 per McKay J; Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 107–108 per Ipp J (cited with approval); Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 at [28] per Blanchard J (cited with approval). 114 Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62 at 63 per Lilley CJ; Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 at [27] per Blanchard J (CA); Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [70] per Nettle J; Village Roadshow Ltd v Blake Dawson Waldron (2004) Aust Torts Reports ¶81-726 at [37] per Byrne J. 115 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235 per Lord Millett. 116 Re a Firm of Solicitors [1995] 3 All ER 482 at 489–490 per Lightman J. 117 See, for example, Magro v Magro (1989) FLC ¶92-005 at 77,191 per Rourke J; Marriage of Griffis (1991) 14 Fam LR 782 at 791 per Mullane J; McMillan v McMillan (2000) FLC ¶93-048 at 87,733–9 (FC); Vasik v Vasik (2007) 38 Fam LR 262 at [62] per Carter J; Selen v Selen [2009] FamCA 309 at [34]–[46] per Johnston JR; Wheller v Wheller [2012] FamCA 356 at [33]–[38] per Macmillan J; Fowler v Liddle [2012] FamCA 450 at [36]–[38] per Collier J. 118 Mills v Day Dawn Block Gold Mining Co Ltd (1882) 1 QLJ 62 at 64, 73. 119 Which concern seemed to underscore the remarks of Mullane J in Marriage of Griffis (1991) 14 Fam LR 782 at 791. 120 See Marinangeli v Marinangeli (2004) 132 ACWS (3d) 798 at [17]–[19] per Ferrier J).

[8.140]

8 Acting against Former Clients

297

concerning where its acceptance undermines a client’s freedom of choice in legal representation (as to which see [8.55]). It is unsurprising, then, the Full Court of the Family Court has now made clear that nothing in the Mills approach “obviates the need for an applicant seeking such relief from discharging his/her burden of proof by adducing cogent and persuasive evidence” that “establishes the confidential information and the risk of the misuse of that information in the circumstances”.121 This convergence in approach, which was hardly unheralded in the court,122 accordingly speaks against any discrete “family law approach”, when it comes to matters of proof of confidential information, in the context of alleged successive conflicts. Dissecting the relevant inquiry – can impressions constitute confidential information?

[8.135]

Confidential information is commonly associated with verbal or written communications, but it may not always be confined to these. A previous retainer may leave the lawyer with impressions of a client’s character, personality and attitudes, which could subsequently be used to the detriment of that client. The nature of the relevant retainers, and the lawyer’s involvement (time and substance wise) in the former retainer, can influence the relevance and weight accorded to those impressions. Importantly, they may carry weight even where the retainers are unrelated;123 after all, they pertain to a particular client, not to a particular matter.

Application in family law and criminal matters

[8.140]

Courts have recognised these impressions as of especial importance in family law,124 ostensibly due to the sensitivity to injustice experienced by many litigants in family law litigation.125 In Magro v Magro126 Rourke J restrained the husband’s solicitor from acting in contested property proceedings because the wife had previously retained a lawyer now employed by the firm representing the husband. Even though the wife was unable to specify what particular information imparted to the solicitor could prejudice her in the proceedings, the ruling was influenced by a finding that the former retainer would likely have conveyed to the

121 Osferatu v Osferatu (2015) 301 FLR 295 at [26], [41] per the court. 122 See, for example, Wake v Wake (unreported, FC(Fam Ct), 9 February 1998) (where it was held that there must be some evidence to suggest that the lawyer holds information confidential to the party seeking the order that might be used to that party’s prejudice in the proceedings); Volker v Dunwell [2013] FamCAFC 169 (where the court applied the general principles surrounding disqualification for successive conflict, which focus on confidential information, without any indication that these should be modified in the family law arena). 123 Moffat v Wetstein (1996) 135 DLR (4th) 298 at 324–325 per Granger J. 124 Black v Taylor [1993] 3 NZLR 403 at 411 per Richardson J. 125 D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 123 per Bryson J; Gagliano v Gagliano (1989) FLC ¶92-012 at 77,311 per Renaud J; Vincenzo v Vincenzo [2014] FamCA 46 at [51], [52] per Benjamin J. 126 Magro v Magro (1989) FLC ¶92-005.

298

Lawyers’ Professional Responsibility

[8.145]

solicitor “impressions of the wife’s personality gained after many hours of confidence, which could be exploited by a skilful advocate presented with those impressions”.127

[8.145]

Personality impressions may also assume greater significance as confidential information where the proceedings are criminal or quasi-criminal in nature. In cases of this kind, courts are keen to avoid any impression of prejudice; not only do issues pertaining to demeanour and attitude often figure heavily in trial tactics, the consequences of a conviction are severe. In this context a Western Australian judge made the following observations:128 confidences go beyond confidential information or instructions and include awareness of strengths or flaws of character, past convictions or discreditable behaviour, a direct appreciation of the client’s pecuniary interests and motives or an understanding of his network of friends, relatives and connections. Any or all of these matters, if gleaned from a professional relationship with a former client on previous occasions, provide the legal practitioner concerned with a knowledge and intimacy of the client’s affairs which, potentially, could be deployed to the disadvantage of the former client at the hands of an opponent. Advantages of this kind, even if obtained indirectly out of the preceding professional relationship, could not be used against the interests of the former client in subsequent proceedings without a very perception and, in many cases, the actuality, of a conflict of interest being utilised to the disadvantage of the former client or without a breach of a fiduciary obligation to keep silent about knowledge professionally acquired.

An illustration is found in R v Lindskog,129 where a lawyer who had represented the accused on charges two years earlier purported to appear for the Crown against the accused on unrelated charges. The Saskatchewan Court of Queen’s Bench disqualified the lawyer from representing the Crown due to a risk that his insights into the accused’s personality gained from the former retainer could be used to the prejudice of the accused should he elect to testify.130 Former client conflict issues can also form a ground for an appeal to set aside a conviction, but this is premised upon satisfying the court that a miscarriage of justice has occurred, a more stringent onus.131 For instance, where the previous retainer was of a limited nature,

127 Magro v Magro (1989) FLC ¶92-005 at 77,191. 128 Director of Public Prosecutions (Cth) v A Legal Practitioner [2012] WASC 459 at [68] per E M Heenan J. See also Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 368 per Ipp J; Supasave Retail Ltd v Coward Chance (a firm) [1991] 1 All ER 668 at 674 per Sir Nicholas Browne-Wilkinson VC. 129 R v Lindskog (1997) 117 CCC (3d) 551. 130 R v Lindskog (1997) 117 CCC (3d) 551 at 565 per McLellan J. 131 See, for example, R v Dann [1997] Crim LR 46, where the defendant sought to set aside a conviction on the ground that junior counsel for the prosecution had represented him in a criminal matter two years earlier. The defendant’s application was rejected because the defendant had been aware that junior counsel for the prosecution had previously represented him, and expressed no grievance regarding this until after he was convicted. The English Court of Appeal held that as the defendant did not perceive any injustice and provided no evidence in support of such a perception, there was no basis for concluding that there had been a miscarriage of justice.

[8.150]

8 Acting against Former Clients

299

and unrelated to the current proceedings, it is difficult for a criminal appellant to substantiate a miscarriage of justice arising out of being prosecuted by a lawyer whom he had previously retained.132 Application in other matters

[8.150]

Generally speaking, courts are loath to propound special rules for certain forms of litigation other than in compelling cases.133 It may be queried whether the nature of family law litigation, in particular, justifies according greater weight to personality and character impressions as confidential information than in other forms of litigation, which may also be punctuated by sensibilities to injustice and considerable emotion. In more general terms, Gillard J in Yunghanns v Elfic Ltd134 suggested that out of a retainer a lawyer may learn about the client’s strengths, weaknesses, (lack of) honesty, reactions in crises, attitudes to litigation and settling cases, and tactics (terming these “getting to know you” factors). This led his Honour to state that “[t]he overall opinion formed by a solicitor of his client as a result of his contact may in the circumstances amount to confidential information that should not be disclosed or used against the client”.135 If so, impressions of character, personality and attitudes may be relevant even in commercial litigation. Knowledge of a former client’s modus operandi and attitudes may, it could be reasoned, prove valuable to a lawyer later opposing that client in forming strategy, crossexamination and determining whether or not to call certain witnesses.136 But the foregoing must be viewed within the shadow of curial warnings against assuming that “getting to know you” factors always carry considerable weight in all commercial litigation. Each case must depend on its own facts, in particular the 132 See, for example, Ismail-Zai v State of Western Australia [2007] WASCA 150, where the appellant, who had been represented on two previous occasions – both involving pleas of guilty – by a lawyer who prosecuted the current proceeding, was unsuccessful in establishing a miscarriage of justice as a result because the court found that, due to the brevity and limited nature of the previous retainers, there was no confidential information held by the lawyer as a result of his prior representation of the appellant that was in any sense relevant, or potentially relevant, to the prosecution. 133 Some courts have resisted invitations to brand family law litigation as a “special category” for these purposes: see, for example, Rosin v MacPhail (1997) 142 DLR (4th) 304 at 312 per Esson JA; Marriage of McGillivray and Mitchell (1998) 23 Fam LR 238 at 244 (FC). 134 Yunghanns v Elfic Ltd (unreported, SC(Vic), 3 July 1998). 135 Yunghanns v Elfic Ltd (unreported, SC(Vic), 3 July 1998) at 7. 136 See, for example, Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 at 350 per Blanchard J (CA) (remarking that the disadvantage the plaintiff is seeking to prevent may be as subtle as something that may have been observed by the lawyers in the body language of one of the plaintiff’s representatives, which might give the lawyers a tactical advantage in deciding how to pursue the claim); Sent v John Fairfax Publication Pty Ltd [2002] VSC 429 at [70] per Nettle J; Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833 at [23] per Asher J; Yarrow v Pettigrew [2012] NZHC 1146 (lawyer disqualified from acting against former client arising out of a former six to seven-year professional relationship, in which advice was given in circumstances that on occasion involved client vulnerability and stress, which Heath J found would have afforded the lawyer a good knowledge of the former client’s personality that could be put to use in the preparation of, and the tactical approach to, cross-examination); Zani v Lawfirst Pty Ltd [2014] WASC 75 at [35]–[37] per Chaney J.

300

Lawyers’ Professional Responsibility

[8.150]

nature of the litigation and of the former retainer. Judges too keen to disqualify on this ground may dilute the meaning of “confidential information”, even assuming it can be substantiated with precision,137 and impose undue restriction on lawyer choice and mobility. A Canadian judge has observed, to this end, that courts that lack caution of supposed secrets that “merely boil down to familiarity with an individual and his philosophy and thinking” may be able to “link any two retainers and so prevent a law firm from ever acting against someone they had ever met on a friendly basis”.138 There is also the prospect of muddying the line between “know how” derived in the course of an engagement – which the lawyer can legitimately use – and confidential information.139 These points carry especial significance regarding the role of counsel, a point explained by Heerey J in Mintel International Group Ltd v Mintel (Australia) Pty Ltd as follows:140 Insofar as reliance is placed on the “getting to know you” principle, a moment’s consideration of the way that litigation is conducted in Australia shows that this cannot be accepted too literally, especially in relation to counsel. There are many bodies such as Commonwealth and State government entities, banks, insurers, media companies and 137 Cf Mendolin Court Pty Ltd v Delrayne (unreported, SC(Vic), Gillard J, 8 September 1997) at 4 (describing information such as getting to know the client’s attitude to negotiation, legal disputes and/or settlement as “pure speculation”); Manna Hill Mining Co Pty Ltd v Iles Selley Lawyers [2004] FCA 1175 at [46] per Lander J (refusing to disqualify given the lack of an attempt to substantiate the lawyer’s knowledge of the former client’s “thoughts, strategies, and approach regarding business matters and disputes”); Pinnacle Living Pty Ltd v Elusive Image Pty Ltd [2006] VSC 202 at [22] per Whelan J (“By its very nature information of this kind is difficult, if not impossible, to categorise or define”); Morris v Morris [2015] NZHC 2315 at [32] per Edwards J (branding information as to personality as often too generalised in nature to be confidential for this purpose). 138 Gainers Inc v Pocklington (1995) 125 DLR (4th) 50 at 63 per Côté JA. See, for example, Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [54] per McLachlin CJC, delivering the reasons of the court (rejecting the contention that the respondent law firm’s general understanding of the applicant’s litigation philosophy, secured as a result of having previously represented the applicant, amounted to relevant confidential information that might assist in its new retainer against the applicant, influenced by the fact that the relevant retainers were “entirely unrelated”). 139 Canadian Pacific Railway Co v Aikins, MacAulay & Thorvaldson (1998) 157 DLR (4th) 473 at 483 per Monnin JA; British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 at [86] per Young CJ in Eq. See, for example, UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 at [57], [58] per Barrett J (who characterised the knowledge of the lawyer in question – which included some insight into the means by which the former client sought to incorporate its terms of trade into customer contracts – as “nothing more than his general knowledge as a solicitor practising in the field of marine and transport law”, and concluded that generic information of this kind could not be confidential). As to the distinction between “know how” and confidential information generally see Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), [5.30]–[5.40]. 140 Mintel International Group Ltd v Mintel (Australia) Pty Ltd (2000) 181 ALR 78 at [44]. See also Fonterra Brands (Australia) Pty Ltd v Viropoulos (2013) 304 ALR 332 at [31] per Robertson J (who agreed with Heerey J in Mintel that Gillard J’s “getting to know you” factors in Yunghanns should not be taken literally). There have been similar remarks made even in the family law environment: see, for example, Karapataki v Karapataki [2011] FMCAfam 6 at [39] per Walters FM (“It is very important … not to elevate the significance of the ‘getting to know you’ factors”). Cf Gill v Wynne [2016] FCWA 40 at [59] per Walters J (remarking that while “getting to know you” factors comprise a form of information that “cannot comfortably be described as ‘confidential information’”, they can “nevertheless become a powerful weapon at the disposal of those with adverse interests”, and that “it is difficult to ignore that Family Court proceedings are very different to the corporate or commercial litigation to which Heerey J referred in … Mintel”).

[8.155]

8 Acting against Former Clients

301

many others which are constantly engaged in litigation. Counsel retained to act on behalf of such bodies inevitably acquire information, not confidential information in the strict sense, but experience as to the corporate culture of the clients, their internal policies, the way they deal with litigation, tactics, the personalities of important decision-makers and so forth. I do not accept that general experience of that kind would impose what … would be lifetime restraints on counsel from acting against such a body. Indeed it is a feature of an independent Bar that counsel might appear one day on behalf of such a body and the next day against it. While perhaps strange to observers from countries where the legal profession is organised differently, this freedom enhances the independence of counsel and their capacity to give objective and sometimes unwelcome advice. The cab rank rule works both ways. The driver is obliged to accept the fare, but the fare does not buy the service of the driver beyond the stipulated journey.

His Honour would no doubt accept that the position would be different where the matters in issue are related, and counsel clearly has received information confidential to the former client.141 If confidential information includes financial structure, litigation philosophy and business practice, a further concern is that a powerful client could retain most or all of the firms (or counsel) with expertise in a specific field and, by disclosing to each at least a modicum of this information, effectively disqualify those firms (or counsel) from acting against it in any future litigation.142 This course arguably amounts to an abuse of process, but has yet in Australia to generate any reported adverse consequence: see [8.270].

[8.155]

In any case, Gillard J’s reference to “getting to know you” factors should be seen against the backdrop of the facts in Yunghanns v Elfic Ltd, in which the former client had had a close relationship with a firm of solicitors spanning some 30 years. The firm consequently had “many opportunities to form opinions as to [the former client’s] modus operandi in business and legal work”.143 If the relationship in question lacks this closeness144 or the significance of the information in question is otherwise remote from the current proceeding,145 the position should be different. Yunghanns v Elfic Ltd may therefore be an unusual case, and should not be construed as supporting a proposition that “getting to know you” factors always come within the bounds of confidentiality for this purpose. Indeed, a Western Australian judge has suggested that if those factors, to the extent that they involve

141 See, for example, Sent v John Fairfax Publication Pty Ltd [2002] VSC 429; Skjerpen v Johnson [2007] BCJ No 1896 (QL). 142 Moffat v Wetstein (1996) 135 DLR (4th) 298 at 330–331 per Granger J. 143 Yunghanns v Elfic Ltd (unreported, SC(Vic), Gillard J, 3 July 1998) at 13. 144 See, for example, T J Board & Sons Pty Ltd v Castello [2008] VSC 91 at [59] per Hollingworth J (who distinguished the situation before Gillard J in Yunghanns from the facts in issue, which involved alleged impressions arising out of a 20-minute introductory meeting, and described these general impressions as “probably no different to the impression which many solicitors form of opposing parties when they meet them at a mediation or a conference”). 145 See, for example, Commonwealth Bank of Australia v Kyriackou [2008] VSC 146 at [36] per Judd J (affd Kyriackou v Commonwealth Bank of Australia [2009] VSCA 241).

302

Lawyers’ Professional Responsibility

[8.160]

knowledge of the client rather than of anything imparted in confidence by the client concerning her or his affairs, can constitute confidential information, “they will only rarely do so”.146

DISQUALIFICATION – WHERE NO PRIOR LAWYER–CLIENT RELATIONSHIP [8.160]

As the justification for disqualifying a lawyer from acting against a former client focuses chiefly on the real possibility of the misuse of confidential information, any claim to disqualify a lawyer must, if pursued by a non-client, rest upon proof of a duty of confidentiality arising independently of a lawyer–client relationship. In the alternative, appeal may be made to the court’s inherent jurisdiction to preserve the appearance of justice: see [17.20].

Duty sourced from previous social or familial relationship

[8.165]

A previous social or familial connection between the lawyer and the applicant may involve the communication of confidential information, and thus attract a duty of confidentiality sufficient to justify the lawyer being restrained from later acting against the applicant. As explained by a Canadian court:147 if the circumstances are such as to warrant a reasonable expectation of confidentiality, the absence of the [solicitor and client] relationship should not automatically exclude a disqualifying conflict of interest. But, in such a case, the person seeking to disqualify the solicitor must bring forward evidence of all the circumstances, and in particular those circumstances and facts giving rise to a “justifiable belief” in confidentiality. The circumstances would include anything tending to show that the lawyer shared the individual’s expectation of confidentiality.

For instance, a lawyer who purports to act against her or his (former) spouse may be disqualified if, in pursuing this action, he or she is likely to make use of marital confidences protected by law.148 As noted in the above quote, however, the requisite confidentiality within a (former) familial or social relationship requires proof, not assumption. In Daher v Halabi,149 for example, where the wife and her brother were partners in a law firm acting for the wife in a family law dispute over access to the children of a marriage, the husband sought to restrain the firm from acting by reason of having confided in the brother during the course of the marriage. That there was no suggestion that the wife’s brother ever acted for the husband as a lawyer proved fatal to the husband’s application. Loughnan J 146 Ismail-Zai v State of Western Australia [2007] WASCA 150 at [29] per Steytler P, whose views were endorsed by Robertson J in Fonterra Brands (Australia) Pty Ltd v Viropoulos (2013) 304 ALR 332 at [31]. 147 Escott v Collision Clinic Ltd (1996) 141 Nfld & PEIR 16 at [22]. 148 As to the protection of marital confidences see Duchess of Argyll v Duke of Argyll [1967] 1 Ch 302. Cf Liatos v Silid [2009] FamCA 674 (where Barry J denied the respondent husband’s application to disqualify the solicitor representing the wife where the respondent and that solicitor had years earlier been in a personal relationship, remarking that “I have never known the fact that practitioners do not get on to be a basis for restraining a practitioner from acting for a particular party”: at [9]; importantly, no misuse of confidences was alleged in the case). 149 Daher v Halabi [2014] FamCA 675.

[8.165]

8 Acting against Former Clients

303

characterised the husband’s argument as conflating “the idea of private confidences with the important legal privilege that attaches to information that is imparted between solicitor and client”.150 Disclosures in familial or social intercourse are, to this end, not informed by the same policy imperative as the protection of confidences shared within a retainer.151 To this end, outside a reasonable expectation of confidentiality, to disqualify lawyers is unduly restrictive, and may encourage lawyers to eschew social relationships. The Ontario case of Waxman v Waxman152 illustrates the point. A party discussed a bitterly contested dispute with a lawyer on a social occasion, giving no indication of an expectation of confidence or any intention to engage the lawyer. The lawyer was subsequently retained as counsel for the other side. Lane J reasoned that the risks associated with loose talk should be borne by the talker, not by the hearer “unless there is a solid reason in public policy for a different result in particular circumstances”.153 A similar outcome ensued in the Australian case of Marriage of Kossatz.154 The wife sought to disqualify senior counsel acting for her husband in a divorce action because senior counsel had had prior social contact with both parties. The wife alleged that, as a result, senior counsel had obtained knowledge of her character, personality and weaknesses, which could be used to her disadvantage. Mullane J rejected the application, noting the absence of any professional rule “limiting a lawyer’s freedom to act against a friend or former friend”.155 That his Honour seemed to query the closeness of the alleged social relationship156 leaves open the possibility that social contact of a substantial nature having a close association with the subject matter of the litigation could justify a different result. This concern informs the requirement, found in the barristers’ rules in some jurisdictions, to refuse a brief a barrister has already discussed, even on an informal basis, with another party with an adverse interest in the matter.157 Both Waxman and Kossatz involved litigation infused by considerable emotion, and yet the courts were disinclined to interfere with the current client’s freedom of choice. So where the association in question is not close or directly related to the matter, courts may be less inclined again to disqualify in litigation lacking this sensitivity. In the English Court of Appeal case of Geveran Trading Co Ltd v 150 Daher v Halabi [2014] FamCA 675 at [62]. 151 Waxman v Waxman (1997) 150 DLR (4th) 370 at 377 per Lane J. 152 Waxman v Waxman (1997) 150 DLR (4th) 370. 153 Waxman v Waxman (1997) 150 DLR (4th) 370 at 377. 154 Marriage of Kossatz (1993) FLC ¶92-386. 155 Marriage of Kossatz (1993) FLC ¶92-386 at 79,990. 156 Marriage of Kossatz (1993) FLC ¶92-386 at 79,989–90 per Mullane J (noting the infrequent and only casual contact). See also Sanna v Wyse and Young International Pty Ltd (No 1) [2015] NSWSC 580 (where the alleged friendship between the barrister and a director of the former client did not incline Darke J to restrain the barrister from acting against the former client, as the barrister was not shown to be in possession of any relevant confidential information). 157 Qld, r 95(m); SA, r 95(m); WA, r 95(m).

304

Lawyers’ Professional Responsibility

[8.170]

Skjevesland,158 for instance, a debtor objected to the petitioner’s counsel in bankruptcy proceedings on the ground that the debtor’s wife had known counsel socially some years earlier. The application was refused, Arden LJ finding no information of a confidential nature, and no suggestion either that counsel’s cross-examination would be influenced by the prior connection, or that the debtor would be inhibited from presenting any evidence to the court or prejudiced in his conduct of the case.159 Duty sourced from previous involvement in litigation

[8.170]

Confidential information may be received by a lawyer in the course of litigation other than from a former client. What informs the courts in this regard are matters of substance, and the importance of preserving the appearance of justice. So far as substance is concerned, an Australian judge has noted that protection may, in appropriate circumstances, extend “to one who, though not strictly speaking the client, might be said to be virtually in the same position through his association with the one who was, strictly speaking, the client”.160 For example, although a lawyer previously retained by an entity is not ordinarily barred from subsequently acting against one of its officers, the distinctions are less clear-cut where there is an identity or quasi-identity between the company and its controller(s). Though no clear dividing line can be stated, the following observations by the Alberta Court of Appeal highlight the extremes:161 On the one hand, often an unsophisticated small-business person has a one-person company whose separate existence he does not really understand, and he and the company always use the same lawyer. To let the lawyer later use the confidences from the individual against him would likely be wrong, even if the company had been the only client respecting that specific transaction. But on the other hand, sometimes a big company will use a law firm for years and thereby repeatedly expose to the firm an employee of the company and all that employee’s personal strengths, weaknesses, attitudes and way of thinking. The employee has no shares in the company, and uses a different law firm for his own affairs. What if the company then fired the employee for some unrelated reason. It would be unjust to force the company to drop its long-standing lawyers on the theory that they had become familiar with the ex-employee.

Côté JA, who delivered the judgment of the court, advocated a “more flexible tailored approach”, requiring a court to weigh all the facts of the case, including:162 • whether the law firm gave the person objecting a reasonable expectation of confidentiality at the hands of the firm; • whether disclosure to its client would be contrary to that expectation; • how strong is the likelihood of harm resulting; • how great the harm is likely to be; 158 Geveran Trading Co Ltd v Skjevesland [2003] 1 WLR 912. 159 Geveran Trading Co Ltd v Skjevesland [2003] 1 WLR 912 at [49]. 160 Macquarie Bank Ltd v Myer [1994] 1 VR 350 at 359 per J D Phillips J (emphasis supplied). Marks J made similar remarks (at 352). 161 Gainers Inc v Pocklington (1995) 125 DLR (4th) 50 at 58 per Côté JA (paragraph breaks omitted). 162 Gainers Inc v Pocklington (1995) 125 DLR (4th) 50 at 58–59.

[8.175]

8 Acting against Former Clients

305

• whether acting for that client against the person objecting would work significant injustice for some other reason; and • whether allowing the law firm thus to act would set a precedent working significant harm to future relations between lawyers and lay people.

[8.175]

Nor may the lack of a prior lawyer–client relationship prevent a lawyer’s disqualification from a proceeding in which the fortunes of the opposing client rest partly on information to which the lawyer is privy as a result of a previous retainer with a third party. Though not common, it is most likely to be the outcome where the information has been sourced out of acting against the opposing client in the past. For example, in Bracewell v Southall163 the mother applied for the father’s lawyer (C) to be restrained from continuing to act for the father in parenting proceedings because C had earlier acted against the mother at the instance of the Department of Human Services. Bennett J granted the application, reasoning that:164 … the most distinguishing feature in this case is that the lawyer’s other client was a body constituted under State legislation responsible for the protection of children in Victoria. [C] was retained to prosecute the case for the Department … against the mother. With the onerous obligations of the Department come sources of information and corporate knowledge which is not in the public domain, not accessible to the mother nor readily accessible by anyone else for that matter. Furthermore, … in the course of [C] taking instructions from the Department, it is to be expected that [the wife] would have had candid and frank discussions with protective workers about matters which could be proved or not proved, which may or may not be put in evidence including, but not limited to, the details of the notifier. It is in respect of taking instructions for the Department that the mother perceives that [C] has had access to information not accessible to the public or even to herself.

Her Honour concluded that, whilst the father’s advantage in retaining the lawyer who had represented the Department may be more apparent than real, to refuse the application would offend the public interest in preserving confidence in the administration of justice, particularly given the sensitive nature of parenting proceedings.165 Although family law proceedings present the principal illustration in this context,166 they hold no monopoly. For instance, in Garde-Wilson v Corrs Chambers Westgarth167 lawyers (Corrs) acting for the Legal Practice Board in tribunal proceedings, in which the plaintiff sought a review of the Board’s refusal to renew her practising certificate, had secured a transcript of a coercive private examination of the plaintiff in a criminal investigation. The topic of the examination 163 Bracewell v Southall [2008] FamCA 687. 164 Bracewell v Southall [2008] FamCA 687 at [36]. 165 Bracewell v Southall [2008] FamCA 687 at [39]. 166 See also Marriage of A & B (1990) FLC ¶92-126, where an estranged wife sought to have implanted in her embryos eggs stemming from an in vitro fertilisation process fertilised by her husband, and was living in a de facto relationship with a person whom the husband’s solicitor had previously represented in a matrimonial case. Smithers J found the character and personality of a potential stepfather to be a relevant factor in determining the wife’s application, and ruled that the husband’s solicitor’s exposure to confidential information relating to the de facto’s character and financial history meant that allowing the representation to continue would likely cause the wife to suffer actual prejudice. 167 Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235.

306

Lawyers’ Professional Responsibility

[8.180]

(from which a criminal charge ensued) was directly relevant to the Board’s decision. Bell J disqualified Corrs from acting for the Board in the tribunal proceedings, reasoning that, as the plaintiff’s evidence in the examination was private and subject to a publication prohibition, it was “tantamount to confidential information”.168 As Corrs had confidential information about the plaintiff that its client lacked, “[a] reasonable person informed of the facts might justifiably see a real and sensible possibility of misuse of the information, albeit unintentional or subconscious, in these circumstances”.169 Duty sourced from preliminary consultation

[8.180]

A lawyer may receive confidential information pertaining to a (prospective) matter outside a formal retainer, whether express or implied, stemming from a preliminary consultation by a person, who ultimately becomes the opposing client. In circumstances of this kind, any duty of confidentiality sufficient to disqualify the lawyer from acting against that person derives not from a retainer, but from equity. Accordingly, if the circumstances surrounding the imparting of the information support an objective conclusion that the information was supplied in the expectation it would be kept confidential, and its disclosure or use would be to the detriment of the confider, it would be unfair for the lawyer to act against the confider.170 Without detailed evidence of the information supplied in the preliminary consultation, it may prove difficult for the court to be satisfied of this unfairness.171 Multiple factors will impact on the ultimate outcome, though, which will be highly fact-specific. That the order disqualifying the lawyer will not cause great prejudice to her or his client is relevant in balancing the relevant considerations, as are the nature of the proceedings and perceptions of litigants. The Ontario case of Powers v Zuro172 illustrates circumstances wherein disqualification may ensue from a preliminary consultation. The applicant’s counsel (D) knew the respondent’s father (Z), and in the 18 months preceding being retained by the applicant, had three conversations with Z about the difficult relationship between parties. D gave Z informal advice but neither Z nor the respondent were ever D’s clients. Aitken J disqualified D’s firm from representing the applicant, reasoning as follows:173 I cannot find that [D] heard nothing that could be relevant to this litigation and to his representation of the Applicant in this litigation. [Z] spoke to him quite specifically about 168 Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235 at [51]. 169 Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235 at [51]. 170 Brennan v McGuire [2008] ACTSC 119 at [22] per Harper M; Wyn v Van den Broek (2011) 205 ACWS (3d) 898 at [42] per Mesbur J. 171 See, for example, Brennan v McGuire [2008] ACTSC 119; Tauber v Tauber (2009) 98 OR (3d) 633; Wyn v Van den Broek (2011) 205 ACWS (3d) 898. See also Law Institute of Victoria Ethics Committee, Ruling R4628 (November and December 2009) (2010) 84 (Mar) LIJ 71 (“A few short phone calls by a prospective client to a firm requesting preliminary information about their matter will not necessarily amount to a retainer, nor may it amount to a reasonable risk of disclosure of relevant confidential information sufficient to justify a firm being asked to cease to act for an opposing party”). 172 Powers v Zuro (2009) 178 ACWS (3d) 32. 173 Powers v Zuro (2009) 178 ACWS (3d) 32 at [13].

[8.190]

8 Acting against Former Clients

307

his grandchild – the subject of this litigation. He described the highly charged relationship between the parties. He described the roles being played by other family members in regard to the litigation. He described his concerns. All of this could be highly relevant information in the context of a custody and access dispute – especially one in which the extended families are implicated. It was confidential in the sense of being conveyed with confidence that it would not be used against the Respondent in these proceedings, but instead would be used by [D] to provide legal advice to [Z] as the Respondent’s agent. The only reason [Z] was conveying information to [D] about the Respondent and this litigation was because [D] was a family law lawyer and [Z] hoped [D] would be able to provide the Respondent with legal advice that would assist her in this litigation.

Z was found to have been acting as the respondent’s agent in speaking with D, and was seeking legal advice from D, for which he disclosed sufficient information to enable D to supply preliminary advice. Thus, her Honour concluded, “the Respondent should be considered in the same position as a prospective client of a solicitor who has made initial inquiries or sought initial advice from the solicitor in regard to the matter in question, but never retained the solicitor in regard to that matter”.174 It may be that this outcome was influenced by the family law context, but it does reveal that no lawyer should assume that preliminary consultations are immune from subsequent disqualification.

[8.185]

In the scenario where a solicitor discloses only a general outline of a matter to counsel, with a view to seeking either counsel’s preliminary view or for the purpose of inquiring whether counsel would accept a brief, counsel is not ordinarily precluded from acting for an opposing client in the absence of clear evidence that the general outline contained confidential information capable of use against the interests of the solicitor’s client. This may be so even in a family law proceeding, to which the courts have often shown tenderness in this arena, as appears from the following remarks of McCall CJ in Marriage of Brooke:175 the Court should be careful about disqualifying a lawyer from acting for a party as a result of a prior discussion with that lawyer which takes place for the purpose of ascertaining whether he would be prepared to act in the matter as counsel. It must be on many occasions that a solicitor telephones a barrister to enquire whether he would act in a particular case. In the course of that discussion, some broad general information is given about the case. If subsequently that person is not engaged as counsel … it becomes necessary to demonstrate that confidential information was disclosed at that general discussion which would give rise to a conflict of interest if the barrister then acted against that party. It may well be that in some cases confidential information is disclosed which thereafter disqualified the barrister from acting against that party. However, in my view the onus is then to show in such circumstances that confidential information has been disclosed which would give rise to a conflict of interest. To talk in broad, general terms during a short telephone conversation in most cases would be insufficient to disqualify the barrister. If this were not so, it would be too easy to disqualify a barrister who one may not wish to have as an opponent in a particular case.

[8.190]

A related scenario that exhibits the potential for disqualification is that of a prospective client who consults multiple lawyers or firms in an attempt to decide who to select to represent her or him in the matter (sometimes termed a “beauty

174 Powers v Zuro (2009) 178 ACWS (3d) 32 at [18]. 175 Marriage of Brooke (unreported, Family Court (WA), 1994).

308

Lawyers’ Professional Responsibility

[8.190]

contest”). This necessarily involves the prospective client disclosing the nature of the matter, as well as her or his aims. The extent of the disclosure, coupled with the prospective client’s reasonable expectations and motivations in the circumstances, are relevant to any inquiry into whether one of those lawyers or firms is precluded from acting against the client in the matter. That the issue is one of degree, informed by balancing competing policy considerations, is highlighted by the remarks of a Utah court:176 Even in such an initial interview both the attorney and the potential client may find it quite tempting to discuss the case as frankly as possible, enabling them to more clearly assess the desirability of undertaking a formal, perhaps costly, attorney-client relationship. It also seems quite likely that at the outset non-lawyers will not always appreciate the possibility that, should they choose not to enter a formal relationship, the attorney may be free to work for the other side in the same legal dispute. Justice will be hampered and the stature of the legal profession harmed if, to the surprise and dismay of persons who have assumed that their initial discussion was confidential, attorneys subsequently represent the opposing side in a dispute. Balanced against these considerations, however, is the public interest of allowing clients (and attorneys) to freely choose their employment arrangements. It may often be necessary for potential clients to interview a number of lawyers before settling on the lawyer or firm that best meets their expectations. In this vein, it is critical to avoid a situation where a person, merely by arranging employment interviews, renders a large number of attorneys unavailable for the opposing party.

The court proceeded to note that as “[c]onstructing a rule which best strikes the appropriate balance between the competing considerations is not an easy task”, the best solution is for lawyers to avoid the dilemma by “adequately controlling the initial interview”.177 This assumes especial importance in dealing with those unfamiliar with legal proceedings, where an atmosphere of confidentiality should be dissuaded. For this reason, the New South Wales Law Society’s Ethics Committee recommended, in the context of potential clients seeking initial advice via email, that firms publish warnings on their websites that potential clients should provide only their names and those of any other parties so that a conflict check can be performed, that no confidential information about the substance of the matter should be supplied, and make clear that the firm does not undertake to protect any confidential information provided by email until a retainer is commenced.178 More generally, in the “beauty contest” scenario an Illinois court has observed that:179 … the law firms who are participating in interviews with the goal of obtaining new business are far from helpless. By putting their prospective clients on notice that there is no attorney/client relationship as yet, they can avoid the possibility of having one imposed on them by law because of the potential client’s misperception about the safety of their confidential disclosures. Of course a law firm who is selling itself to a prospective client with the greatest of zeal will not find it easy to insert disclaimers into the 176 Poly Software International Inc v Su (1995) 880 F Supp 1487 at 1491 (footnote omitted). 177 Poly Software International Inc v Su (1995) 880 F Supp 1487 at 1491. 178 See “Best to Warn Email Newcomers” (2003) 41 (July) LSJ 30. 179 Bridge Products Inc v Quantum Chemical Corporation 1990 WL 70857 at 6.

[8.195]

8 Acting against Former Clients

309

all-important interview, but if it fails to do so in the interest of heightening its sales pitch, this court, at least, finds that it must live with the consequences, including potential disqualification in the future.

But Australian law may not go as far as the American Model Rules of Professional Conduct. Rule 1.18(b). It states that even when no lawyer–client relationship ensues, a lawyer who has had discussion with a prospective client must not use or reveal information learned in the consultation except as allowed by the rules governing information from a former client. In essence, the rule treats a prospective client as an actual client for this purpose, although the American case law does not appear to wholly endorse this approach.180 Rule 1.18(c) adds that a lawyer must not represent a client “with interests materially adverse to those of a prospective client in the same or a substantially related matter if the lawyer received information from the prospective client that could be significantly harmful181 to that person in the matter” except where there is consent or effective screening. Most Australian professional rules address the point by extending the meaning of a “former client” to include a person who “provided confidential information to the solicitor, notwithstanding that the solicitor was not formally retained and did not render an account”,182 but in their terms rest on the information supplied meeting the legal test of confidentiality.

SCOPE FOR DISQUALIFICATION – EXTENSION TO THE FIRM Disqualification of lawyers lacking relevant confidential information

[8.195]

A lawyer possessed with relevant confidential information (defined at [8.70]) will be disqualified from acting against a former client where that information could prejudice that client. The same applies to members of the lawyer’s firm also possessed of relevant confidential information.183 This leaves the

180 Compare, for example, BF Goodrich Company v Formosa Plastics Corporation (1986) 638 F Supp 1050 (all-day interview insufficient to form lawyer–client relationship where the potential client was in the process of conducting several interviews); Bennett Silvershein Associates v Furman (1991) 776 F Supp 800 (no disqualification arising out of a brief consultation ten years earlier on a tenuously related matter); Poly Software International Inc v Su (1995) 880 F Supp 1487 (lawyer not disqualified where he avoided learning details of the case in a half-hour consultation with the opposing party) with Bridge Products Inc v Quantum Chemical Corporation 1990 WL 70857 (disqualification ordered when, in a one-hour discussion as part of a “beauty contest”, the prospective client disclosed its settlement terms and strategic advice of its other lawyers); Bays v Theran (1994) 639 NE 2d 720 (telephone conversation about prospective retainer, which included a discussion of the merits, held to disqualify the lawyer from acting against that party). 181 For information to be “significantly harmful” in this context, “disclosure of that information cannot be simply detrimental in general to the former prospective client, but the harm suffered must be prejudicial in fact to the former prospective client within the confines of the specific matter in which disqualification is sought, a determination that is exquisitely fact-sensitive and -specific”: O Builders & Associates, Inc v Yuna Corp (2011) 19 A 3d 966 at 976. Specific evidence of the nature and substance of the information is required to establish that it is “significantly harmful”; speculative or hypothetical claims of harm are not enough: State ex rel Thompson v Dueker (2011) 346 SW 3d 390 at 396. 182 ACT, Glossary; NSW, Glossary; Qld, Glossary; SA, Glossary; Vic, Glossary; WA, r 13(1)(b). 183 Re a Firm of Solicitors [1995] 3 All ER 482 at 489–490 per Lightman J.

310

Lawyers’ Professional Responsibility

[8.200]

issue of whether the disqualification extends to the firm generally, that is, to those lawyers in the firm not possessed of the information. The issue arises where a lawyer in the firm has previously represented a client against whom the firm now has been engaged to act. The same issue can arise where, by reason of an amalgamation of firms, the new firm can be seen to act against a client of one of the pre-amalgamation firms. There is then the “migratory lawyer” situation, where the applicant is a client of a firm that employed a lawyer now at the firm acting against the applicant: see [8.240]–[8.250]. As established partnership law dictates that “the knowledge of one partner is to be imputed as the knowledge of the other”,184 a starting point is the assumption that the disqualification of the individual lawyer extends to the firm. This assumption underscores r 10 of the Australian Solicitors’ Conduct Rules, which proscribes conflicts between duties owed to current and former clients. It extends this proscription to a “law practice”, which includes “a partnership of which the solicitor is a partner” and “an incorporated legal practice”.185 Together with its similarly worded Western Australian counterpart, it further extends the proscription by defining “former client” to include a person or entity that has previously instructed:186 • the lawyer; • the lawyer’s current law practice; • the lawyer’s former law practice while the lawyer was at the former law practice; or • the former law practice of a partner, co-director or employee of the lawyer, while the partner, co-director or employee was at the former law practice. Role of Chinese walls

[8.200]

The strict approach, espoused above, sits well with the traditional small to medium size law firm, which is likely to represent a partnership in the true mutual trust and confidence sense. The “mega-firm”, though, with its many lawyers spread between departments, offices, States and even nations, has arguably undermined the basis for imputing knowledge to every partner in the firm.187 When coupled with greater lawyer specialisation, this reduces the likelihood that lawyers will obtain confidential information from other departments of the firm. Nor has the strict partnership imputation approach received unqualified endorsement by the courts, which have acknowledged scope for practices to erect 184 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 374 per Ipp J. 185 ACT, Glossary; NSW, Glossary; Qld, Glossary; SA, Glossary; Vic, Glossary; WA, r 3 (“law practice” means “a law practice of which the practitioner is an associate”). 186 ACT, Glossary; NSW, Glossary; Qld, Glossary; SA, Glossary; Vic, Glossary; WA, r 13(1). Cf NT, r 3 (which extends to “the firm, of which the practitioner was a partner”). 187 Dow Chemical Canada Inc v Nova Chemicals Corp (2011) 205 ACWS (3d) 853 at [59] per Wittmann CJQB (“In the era of the megafirm, national or international law firm, imputing the knowledge of one member to all members of the firm is a legal fiction if based solely on the premise that all the lawyers ‘work together’”).

[8.200]

8 Acting against Former Clients

311

screens or information barriers (traditionally termed “Chinese walls”)188 to preserve confidentiality and safeguard against the appearance of injustice. A Chinese wall, bolstered by undertakings to the court not to communicate relevant confidential information, may involve a combination of the following organisational elements:189 • the physical separation of the various departments in order to insulate them from each other (this often extends to such matters of detail as dining arrangements); • an educational program, normally recurring, to emphasise the importance of not improperly or inadvertently divulging confidential information; • strict and carefully defined procedures for dealing with a situation where it is considered that the wall should be crossed and the maintenance of proper records where this occurs; • monitoring by compliance officers of the effectiveness of the wall; and • disciplinary sanctions where there has been a breach of the wall. The foregoing does not mean that courts are fond of Chinese walls. In concurrent conflict cases, courts are most reticent to countenance them: see [7.50]. In former client conflicts, a cautious approach remains de rigeur. “It is not part of every day legal practice for a lawyer to have his or her knowledge from a case quarantined from another lawyer within the same section of the firm”, an Australian judge has observed, adding that “quarantining of such knowledge is a somewhat ethereal concept that is not second nature to a lawyer and when it is permitted it needs very special care”.190 188 Although it has been said that the terminology “Chinese wall” ought to be avoided on the grounds that it is discriminatory or racist as courts in common law countries, and the literature, continue to use this terminology, this text does also. No disrespect is intended in so doing. The issue of Chinese walls has generated considerable commentary: see, for example, Tomasic, “Chinese Walls, Legal Principle and Commercial Reality in Multi-Service Professional Firms” (1991) 14 UNSWLJ 46; Aitken, “‘Chinese Walls’ and Conflicts of Interest” (1992) 18 Mon ULR 91; Edmonds, “Trusting Lawyers with Confidences – Conflicting Realities (A Review of the Test and Principles Applying to Lawyers’ Conflicts of Interests)” (1997–98) 16 Aust Bar Rev 222; Mitchell, “Whose Side Are You On Anyway? Former Client Conflicts of Interest” (1998) 26 ABLR 418; Aitken, “‘Chinese Walls’, Fiduciary Duties and Intra-firm Conflicts – a Pan-Australian Conspectus” (2000) 19 Aust Bar Rev 116; Goubran, “Conflicts of Duty: The Perennial Lawyers’ Tale – A Comparative Study of the Law in England and Australia” (2006) 30 MULR 88; Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), Ch 7; Dallen, “The Rise of the Information Barrier: Managing Potential Legal Conflicts Within Commercial Law Firms” (2014) 88 ALJ 428. 189 English Law Commission, Fiduciary Duties and Regulatory Rules (Consultation Paper No 124, 1992), para 4.5.2. See also Mitchell, “Whose Side Are You On Anyway? Former Client Conflicts of Interest” (1998) 26 ABLR 418 at 432; Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), pp 166–170. 190 Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2007] NSWSC 350 at [35] per Bergin J. In earlier proceedings her Honour had allowed the law firm in question (Clayton Utz) to remain on the record for the respondent even though it had confidential information about the appellant as a consequence of acting for a company related to the appellant in a previous dispute: Asia Pacific Telecommunications Ltd v Optus Networks Pty Ltd [2005] NSWSC 550. In so ruling, she accepted that the firm had established appropriate information barriers, including an undertaking that lawyers who had advised the appellant’s related company would not have “any involvement” in the current proceedings. One such lawyer – a partner in the firm (F) – subsequently signed off on a

312

Lawyers’ Professional Responsibility

[8.205]

Traditional reluctance to recognise Chinese walls – Mallesons v KPMG

[8.205]

The modern approach – countenancing the potential availability of Chinese walls – must be viewed against the backdrop of the traditional inflexible refusal to admit their potential effectiveness. Ipp J’s 1990 decision in Mallesons Stephen Jaques v KPMG Peat Marwick191 held sway for some years, and although some of his Honour’s views have since been superseded, it should not be assumed that the case would have been decided any differently under the current more flexible approach. There Mallesons was retained by the Commissioner of Corporate Affairs to prosecute criminal charges against the defendant, even though it had previously advised the defendant as to its potential criminal liability out of which the charges stemmed. In restraining Mallesons from acting, Ipp J was influenced by the close relationship between the retainers, that the present action involved criminal proceedings, and the appearance of injustice were Mallesons permitted to continue representing the Commissioner. His Honour made this order notwithstanding undertakings Mallesons offered on behalf of its relevant partners and employees not to disclose the relevant confidential information to any person, and the fact that the lawyers representing the Commissioner worked in a different building to that ordinarily occupied by the firm. Irrespective of the integrity and standing of the persons involved, the undertakings and the physical separation, Ipp J considered that there remained a real and sensible possibility that Mallesons had placed itself in a position of conflict of interest.192 So far as the appearance of justice was concerned, his Honour was clearly influenced by the criminal nature of the proceedings, remarking as follows:193 It cannot be sufficiently emphasized … that litigation involving the prosecution of serious criminal charges calls for the most careful measures to secure not only that justice is done, but also that it is apparent that it is done. More than in any other kind of litigation, the appearance of justice being done would not survive any general impression that a firm of solicitors could readily change sides to assist in a criminal prosecution, although they previously advised the accused defendant on many of the issues which are the subject matter of the prosecution. In my view the countenancing by the courts of such a volte-face, substantially on the grounds that the partners in possession of the critical information have given undertakings that they will not disclose the information to those assisting the prosecution, will inevitably give rise to such an impression.

Ipp J characterised the nomenclature “Chinese wall” as “an attempt to clad with respectable antiquity and impenetrability something that is relatively novel and potentially porous”.194 He pointed to the absolute and inflexible quality of the rule that prohibits a fiduciary from allowing interest to conflict with duty which, in his letter agreeing to some court dates in the current proceedings without realising the matter to which it related. As this prima facie amounted to a breach of the undertaking, Bergin J ordered the firm’s disqualification from representing the respondent. 191 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357. 192 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 372. 193 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 374 (emphasis added). 194 Mallesons Stephen Jaques v KPMG Peat Marwick (1990) 4 WAR 357 at 371–372.

[8.210]

8 Acting against Former Clients

313

opinion, precluded any amelioration or watering down of the obligations of a fiduciary by means of Chinese walls and undertakings. Increasing curial willingness to recognise Chinese walls to overcome conflict

[8.210]

That Ipp J’s reasoning in Mallesons was couched in fiduciary language means that it does not accurately reflect the modern focus on preserving confidentiality. Some seven years later Ipp J himself conceded that his remarks in Mallesons as to imputation of knowledge were “too broadly stated”.195 The unyielding strict approach has consequently waned.

Whilst not downplaying the importance of confidentiality and the risk of inadvertent disclosure, judges have recognised that the erection or existence of effective barriers against communications, usually coupled with appropriately worded undertakings, may in some circumstances allow a law firm otherwise potentially “imputed” with relevant confidential information to act against a former client. The highest courts in New Zealand196 and England197 have envisaged that a Chinese wall that meets certain criteria (see [8.220], [8.225]) can in an appropriate case successfully overcome a conflict. Australian courts have, pending High Court authority, also recognised the effectiveness of appropriately erected Chinese walls, especially where the conflict has arisen out of a firm amalgamation198 or migratory lawyers.199 Even outside firm amalgamations or migratory lawyers, there may be scope for Chinese walls to cure a conflict. A relatively early Australian illustration is Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm),200 where the defendant, a law firm of 28 partners, was retained to act against a former client. The evidence showed that the previous retainer had been carried out by a discrete “section” of the firm, whereas the current retainer was the responsibility of another section of the firm. There was also evidence that each section was under the control of different partners, corresponded to a discrete area of operation, and had separate support staff. Although the previous retainer had invested those within the section charged with its responsibility with confidential information relevant to the current matter, Lee J refused to disqualify the firm in the current matter. The structure of the firm, according to his Honour, reduced the scope for potential conflict, making it strictly unnecessary to build walls around information because the walls already in effect 195 Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 108. 196 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 (see at 655 per Henry J, at 678 per Blanchard J). 197 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 237 per Lord Millett. 198 See, for example, Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 178 ALR 322; Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86, discussed at [8.225]. Cf Skye Properties Ltd v Wu (2003) 247 DLR (4th) 151 (disqualification ordered where the Chinese walls were not erected until five weeks after the amalgamation). 199 Bureau Interprofessionnel Des Vins de Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588, discussed at [8.250]; Zani v Lawfirst Pty Ltd [2014] WASC 75 at [38]–[45] per Chaney J; Gill v Wynne [2016] FCWA 40 at [57]–[65] per Walters J. 200 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558.

314

Lawyers’ Professional Responsibility

[8.215]

existed within the firm at least regarding the litigation in question. This led Lee J to accept that appropriate undertakings – requiring the current client and its solicitors not to contact persons employed in the section that represented the former client, and vice versa201 – could adequately safeguard against any possibility of conflict. Though mindful of the difficulty of enforcing such undertakings,202 Lee J rationalised that:203 the court is concerned with persons of the highest professional integrity and standing … [so] [i]t would be in the rarest of circumstances that the court would be called upon in the face of the undertakings to enforce them or take other action. This is reinforced by the facts of this case which show that the defendant firm has acted in each of these two matters as if there were separate firms … with the added factor that the litigation is not the same but involves different actions with only one common party, the plaintiff … [It follows] that the various matters of public interest are adequately served in the special circumstances of this case if the injunctions sought are refused, having regard to the undertakings … which will be a condition of the proposed order.

Onus of proof

[8.215]

For a firm to plead Chinese walls, coupled with undertakings, concedes at least the possibility that lawyers in its employ may be possessed with relevant confidential information. As such, the firm carries some onus of proof, it having been activated by evidence adduced by the applicant as to the firm’s possession of confidential information.

This is reflected in Lord Millett’s formulation of the relevant onus in Prince Jefri Bolkiah v KPMG (a firm),204 namely that once a former client establishes that the firm possesses confidential information and proposes to act for a client with an interest adverse to her or his own in a matter to which the information may be relevant, the evidential burden shifts to the firm to establish no real risk that the information will come into possession of those now acting for the other party.205 In so doing, his Lordship essentially endorsed the approach of the majority of the Canadian Supreme Court in MacDonald Estate v Martin,206 which had received judicial support in Australia207 and New Zealand.208 201 See the undertakings listed at Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 564. 202 His Honour referred to the concern expressed by Bryson J in D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 122–123 that “[e]nforcement by the court would be extremely difficult as it is not realistic to place reliance on such arrangements in relation to people with opportunities for daily contact over long periods, as wordless communication can take place inadvertently and without explicit expression, by attitudes, facial expression or even by avoiding people one is accustomed to see, even by people who sincerely intend to conform to control”. 203 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 571–572. 204 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222. 205 Cf Mitchell, “Chinese Walls in Brunei: Prince Jefri Bolkiah v KPMG” (1999) 22 UNSWLJ 243 (who argues that this test is too stringent and unduly interferes with a client’s right to choose her or his own lawyer). 206 MacDonald Estate v Martin (1990) 77 DLR (4th) 249 (see in particular at 268–269 per Sopinka J). 207 See, for example, Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 108 per Ipp J.

[8.220]

8 Acting against Former Clients

315

Lord Millett’s approach denies any need to impute or attribute the knowledge between partners, and recognises via the shifting onus that whether a person is in possession of confidential information is a question of fact to be proved or inferred from the circumstances of the case.209 This led Steytler J in Newman v Phillips Fox210 to note the considerable authority for the proposition that “the knowledge of those joining the new firm should not automatically be imputed or attributed to other lawyers at that firm”, an approach that sits especially well with the large size of some firms and the fact that many have offices in different cities (but less so with smaller one-office).211 The converse must also be true in relation to attribution to new members of the knowledge of existing members of the firm.212 Rebutting the inference of confidential communication – the efficacy of Chinese walls

[8.220]

Even though the modern case law envisages that a firm may erect a Chinese wall to guard against a former client conflict, it remains challenging to satisfy a court that the wall ensures no disclosure by the “tainted” lawyer(s). Given the policy issues at stake, it is no surprise that courts have required substantial evidence to substantiate a Chinese wall’s impenetrability. A New Zealand judge has remarked that Chinese walls are “inherently insecure and prone to leak” and should be used only exceptionally “where there is an overriding and compelling need”.213

The courts have given guidance as to the features of an effective Chinese wall. Lord Millett in Prince Jefri Bolkiah v KPMG (a firm)214 spoke of the need for it “to be an established part of the organisational structure of the firm, not created ad hoc and dependent on the acceptance of evidence sworn for the purpose by members of staff engaged on the relevant work”. Chinese walls that are part of the fabric of an institution will likely prove more effective than those artificially erected to address a one-off problem.215 Whether the latter can produce an immediate change in the communication patterns of information or a change in firm attitude or culture is 208 See, for example, Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 652 per Henry J. 209 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 235. 210 Newman v Phillips Fox (1999) 21 WAR 309 at 316, 317–318. 211 See, for example, Foley v Foley [2016] FCWA 41 (where Walters J refused to acknowledge as effective, against the risk of disclosure of relevant confidential information by a migratory lawyer, information barriers within a ten lawyer specialised family law firm: at [47], [48]). 212 Mark Foys Pty Ltd v TVSN (Pacific) Ltd (2000) 178 ALR 322 at 335 per Conti J. 213 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 670 per Thomas J (dissenting). His Honour viewed Chinese walls as no more than lawyers saying “trust me”, thus placing the court in the invidious position of deciding which lawyers are to be trusted and which ones are not: at 670. 214 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 239. See also Supasave Retail Ltd v Coward Chance (a firm) [1991] 1 All ER 668 at 674–675 per Sir Nicholas Browne-Wilkinson VC. Cf Mcvea, “‘Heard it Through the Grapevine’: Chinese Walls and Former Client Confidentiality in Law Firms” [2000] CLJ 370 at 385–387 (who argues that Lord Millett’s formulation will deny effectiveness to Chinese walls in almost every case). 215 Young v Robson Rhodes (a firm) [1999] 3 All ER 524 at 539 per Laddie J.

316

Lawyers’ Professional Responsibility

[8.225]

doubful. The cases reveal various attempts to erect Chinese walls, after the event and on an ad hoc basis, which have been held ineffective.216 Geographical isolation of parts of the firm will not itself substantiate a Chinese wall, as the mobility of labour and modern communication techniques makes distance no bar to communication.217 Also, the more extensive the previous retainer, the closer its relationship to the current retainer, and the greater the attention that each dispute has attracted both in legal circles and the public arena, the more difficult it will be to satisfy the court of the efficacy of a proposed Chinese wall. This task may prove easier where there is no corresponding closeness, especially in the migratory lawyer scenario (as to which see [8.240]).218 In the litigation, the firm should present to the court a set of draft undertakings,219 and lead evidence as to how the firm organises its affairs and who within it is aware of, and may access, relevant confidential information.220 This includes evidence of its departmental organisation, internal procedures for handling confidential information, educational steps to inculcate those procedures in each member of the firm, and procedures for monitoring, record keeping and enforcement.221 Where practicable in view of firm size, it may also be apt that the design and oversight of the screening measures be the responsibility of a member of the firm without prior involvement in the matter.222

[8.225]

Yet merely becase a Chinese wall is an ad hoc arrangement will not, by itself, doom it to failure, at least in a case involving firm amalgamation (or

216 See, for example, Re a Firm of Solicitors [1992] 1 All ER 353; Ford Motor Co of Canada Ltd v Osler, Hoskin & Harcourt (1996) 131 DLR (4th) 419; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222; Newman v Phillips Fox (1999) 21 WAR 309 at [77]–[81] per Steytler J; Zalfen v Gates [2006] WASC 296 at [92]–[103] per Newnes M. 217 Supasave Retail Ltd v Coward Chance (a firm) [1991] 1 All ER 668 at 675 per Sir Nicholas Browne-Wilkinson VC (observing that geographical isolation is not a panacea for the problem given the mobility of labour); Moffat v Wetstein (1996) 135 DLR (4th) 298 at 329–330 per Granger J; Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 671 per Thomas J (dissenting) (remarking that “it seems almost unreal to place any relevance upon the geographical separation of the offices in the present case – or indeed in any case”); Robertson v Slater Vecchio (2008) 81 BCLR (4th) 46 at [55] per Rice J (“it should not be overlooked how much contemporary inter office communication there is by telephone and email as compared to personal contact”); Georgian American Alloys Inc v White and Case LLP [2014] 1 CLC 86 at [86] per Field J. 218 See, for example, Gill v Wynne [2016] FCWA 40 at [64] per Walters J. 219 Compare the views on undertakings expressed by Mitchell, “Whose Side Are You On Anyway? Former Client Conflicts of Interest” (1998) 26 ABLR 418 at 434 (who argues that undertakings are just a species of Chinese wall, and so courts should not be cynical in viewing undertakings as a solution to successive conflicts, especially given that courts regularly accept lawyers’ undertakings in other contexts) with those of Bryson J in D & J Constructions Pty Ltd v Head (1987) 9 NSWLR 118 at 122–123. 220 Supasave Retail Ltd v Coward Chance (a firm) [1991] 1 All ER 668 at 674 per Sir Nicholas Browne-Wilkinson VC. 221 See Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1367–9. 222 Dyer v Dyer [2015] BCSC 2408 at [104] per Pearlman J (noting that the assignment of an independent lawyer to oversee the screening may not be realistic in the case of a small firm; on the facts, involving a firm of only four partners, it was held that the law cannot be prescriptive in this regard).

[8.230]

8 Acting against Former Clients

317

migratory lawyers: see [8.240]), if the court remains unconvinced of a real risk of misuse of confidential information. In Photocure ASA v Queen’s University at Kingston223 Freehills acted for a pharmaceutical company (Dusa) that was seeking leave to become a party to proceedings brought by the applicant, which involved a claim for the invalidity of a patent. Freehills’ client was the sub-licensee of that patent. The applicant sought to disqualify Freehills on the basis that a patent attorney firm (FCSB) that had integrated with Freehills had previously advised the applicant in relation to the matter the subject of the proceedings. Goldberg J held that the Chinese wall, though created ad hoc, when taken in conjunction with the undertakings proffered,224 served to avoid any real risk of disclosure of the applicant’s confidential information to the team at Freehills working on the matter.225 His Honour concluded:226 I consider that a reasonable observer, aware of the relevant facts relating to the relationship between Freehills and FCSB, and their predecessor firms, the identity of the persons who were involved in the PhotoCure file, the extent to which it is said that there has not been any disclosure of its contents, the identity of the persons who will be acting for Dusa and the undertakings which have been proffered, would not think there was a real, as opposed to a theoretical, possibility or risk that information confidential to PhotoCure given by it to FCSB’s predecessor firm might be used by Freehills to advance the interests of Dusa to the detriment of PhotoCure.

Translation to professional rules

[8.230]

Although Chinese walls’ potential effectiveness to screen lawyers against successive conflicts is recognised by Australian courts, it has taken time for them to translate to Australian professional rules or pronouncements. In March 2006, the Law Society of New South Wales, in consultation with the Law Institute of Victoria, issued “Information Barrier Guidelines”,227 which set minimum standards for information barriers (the phrase adopted as a synonym for Chinese walls). These include that the firm establish documented protocols for setting up and

223 Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86. 224 The undertakings were by the partner and his team: (1) not to discuss, or seek to discuss, with the persons at FCSB any matter relating to the Federal Court proceeding, advice previously provided by FCSB to PhotoCure in relation to the patent, or any information obtained by FCSB from PhotoCure or any person on its behalf in relation to the patent; (2) not to seek or obtain access to any files or documents, including electronic files and documents, in the possession or custody of FCSB or Freehills relating to advice previously provided to PhotoCure in relation to the patent; (3) not to work from any floor in the Melbourne office of Freehills on which FCSB was located in connection with the proceeding; (4) not to store any hard copy documents drafted or obtained by the partner in relation to the proceeding, on any floor in the Melbourne office of Freehills on which FCSB was located; and (5) to restrict access to all documents created by the partner and stored electronically so as to permit access only to those persons in Freehills undertaking work in relation to the proceeding. Goldberg J held that provided Freehills were prepared to undertake to the court to ensure that any solicitor, patent attorney or paralegal person from FCSB or Freehills acting for or in relation to the retainer of Freehills by Dusa in relation to the patent, signed an undertaking in the form to be annexed to the order, the application should be dismissed: Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 at [75]. 225 Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 at [78]–[81]. 226 Photocure ASA v Queen’s University at Kingston (2002) 56 IPR 86 at [85]. 227 Available at http://www.lawsociety.com.au.

318

Lawyers’ Professional Responsibility

[8.230]

maintaining information barriers, that the number of screened individuals be limited and clearly identified, that screened persons have no involvement with the current matter and provide certain undertakings, and that contact between screened individuals and those involved in the current matter be appropriately limited. It was not until 2010, with the promulgation of the Australian Solicitors’ Conduct Rules, that reference to information barriers surfaced in professional rules. Those rules, to date adopted in the Australian Capital Territory, New South Wales, Queensland, South Australia and Victoria and, for this purpose, paralleled in Western Australia, envisage that an “effective information barrier” can function as an exception to the duty to avoid successive conflicts.228 The Law Council’s commentary to the relevant rule, though, warns that “[f]ew firms will be able to satisfy the relevant requirements” for effective information barriers, and that “it is likely to be only larger law practices that will have the capacity to implement the requirements for establishing and maintaining an effective information barrier”. But the above guidelines and rules do not purport to encapsulate the circumstances where Chinese walls will be effective. The 2008 New Zealand rules do address the point by stating that an information barrier is effective when there is a “negligible risk” that confidential information229 in respect of the former client will be or has been disclosed to the new client or to any lawyer acting for the new client.230 They add that, unless the lawyer is unable to contact the former client, particulars of any information barrier must be disclosed to the former client before the lawyer commences to act for the new client.231 The Canadian rules also address the point, relevantly reading as follows:232 Where a lawyer has acted for a former client and obtained confidential information relevant to a new matter, another lawyer (“the other lawyer”) in the lawyer’s firm may act in the new matter against the former client if … the law firm has (i) taken reasonable measures to ensure that there will be no disclosure of the former client’s confidential information by the lawyer to any other lawyer, any other member or employee of the law firm, or any other person whose services the lawyer or the law firm has retained in the new matter; and (ii) advised the lawyer’s former client, if requested by the client, of the measures taken.

Consistent with the case law, the commentary accepts that, in the case of law firms with multiple offices, the degree of autonomy possessed by each office is relevant to this determination. It countenances that the various legal services units of a government, a company with separate legal departments, or a national law firm, may make it arguable that, due to its “institutional structure, reporting relationships, 228 ACT, r 10.2.2; NSW, r 10.2.2; Qld, r 10.2.2; SA, r 10.2.2; Vic, r 10.2.2. Cf WA, r 13(3)(b). 229 “Confidential information”, for this purpose, is presumed to be held by a law practice when any lawyer who is a member of the practice has been a member of another practice that held the confidential information when that lawyer was a member, unless the lawyer concerned can demonstrate that he or she is not aware of that information: NZ, r 8.7.5. 230 NZ, r 8.7.3. 231 NZ, r 8.7.4. 232 Can CPC, r 3.4-11. The rules make equivalent provision in the migratory lawyer context (as to which see [8.240]): Can CPC, r 3.4-20.

[8.240]

8 Acting against Former Clients

319

function, nature of work and geography, relatively fewer ‘measures’ are necessary to ensure the non-disclosure of client confidences”.233

[8.235]

The American Bar Association’s rules go further. They envisage that a law firm can act against a former client, without the latter’s informed consent, where the firm follows a set procedure. The rules, amended as from 16 February 2009, premise this on the concatenation of three elements:234 • the disqualified lawyer is screened from any participation in the matter and is apportioned no part of the fee therefor; • written notice, containing the prescribed information,235 is promptly given to any affected former client to enable her or him to ascertain compliance with the provisions of the rule; and • certifications of compliance with the rules and with the screening procedures are provided to the former client by the screened lawyer and by a partner of the firm, at reasonable intervals, upon the former client’s written request and upon termination of the screening procedures. What prompted the changes to the rule were three factors, espoused by the committee that recommended the changes. First, protecting client confidentiality did not, according to the committee, require a ban on lawyer mobility without client consent, especially at a time of law firms downsizing and shrinking new job opportunities. Second, restrictions on mobility affect the interests of other clients in being represented by their lawyer of choice. Although each of these justifications relates chiefly to the migratory lawyer scenario – which is discussed at [8.240]–[8.250] and to which courts have been more inclined to countenance Chinese walls – the rule’s terms are so confined. Third, in any event, the rule does not oust a former client’s ability to file a disqualification motion. The committee rejected a “substantial involvement test” – prohibiting screening when the lawyer had been “substantially involved” – for implying that lawyers cannot be trusted to adhere to the rules and that screening should be sanctioned only where it is not likely to be needed. Migratory lawyers

[8.240]

Chinese walls, as a vehicle to cure former client conflicts, are most likely to succeed in the migratory lawyer scenario.236 There are at least two reasons for this. First, an unduly strict approach may see firms reticent to employ lawyers with previous client exposure, a problem exacerbated for exposure to multinational clients who are frequent litigators or in a small township with few lawyers.237 233 Can CPC, r 3.4-11, cmt [2]. 234 US, r 1.10(a). 235 Namely: (1) a description of the screening procedures employed; (2) a statement of the firm’s and of the screened lawyer’s compliance with the rules; (3) a statement that review may be available before a tribunal; and (4) an agreement by the firm to respond promptly to any written inquiries or objections by the former client about the screening procedures. 236 See generally Coull, “Typhoid Marys: The Ethical Dilemma of Lawyers who Switch Firms” (1998) 28 VUWLR 41; Wald, “Lawyer Mobility and Legal Ethics: Resolving the Tension Between Confidentiality Requirements and Contemporary Lawyers’ Career Paths” (2007) 31 J Legal Prof 199. 237 See Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1366–7.

320

Lawyers’ Professional Responsibility

[8.240]

Impinging on lawyer mobility, it is said, both disadvantages lawyers and infringes client choice in representation. The curial attitude here may also be tacit acknowledgment that “as in the rest of our economy, it is becoming far less common for lawyers … to remain with the same firm for an entire career, whether by choice or due to layoffs or merger and dissolution of firms”.238 A second reason is that it is usually easier to screen a single lawyer not previously associated with a firm than a number of lawyers who represented a former client. The two extremes in this context are the following: where there is no evidence of the migratory lawyer’s involvement in the retainer in issue, making it difficult to perceive any real risk of misuse of confidential information,239 as opposed to a migratory lawyer with substantial client involvement in an ongoing contentious matter who joins another law firm that acts for the opposing party,240 which justifies a heavier onus on the firm. In cases approaching the latter extreme, it is desirable that conflicts be identified and security measures put in place by the time a lawyer changes firms, including a clear dissemination of the firm’s policy regarding the protective measures taken and the sanctions that could result in the event of breach.241 An illustration of the latter scenario is found in Koch Shipping Inc v Richards Butler (a firm).242 The case involved a lawyer (P), who had acted for a client (the claimant) in an arbitration, joining the defendant firm that acted against that client in the arbitration. The firm immediately took the following steps to erect a Chinese wall: an undertaking from P and the persons acting against the claimant (case handlers) not to disclose confidential information to each other; an undertaking from P not to communicate with the case handlers or to talk to anyone about the arbitration; and 238 Hodge v Ufra-Sexton, LP (2014) 758 SE 2d 314 at 325. 239 See, for example, Pott v Jones Mitchell [2004] 2 Qd R 298 (migratory lawyer merely a consultant to the firm representing the applicant and had performed no substantial professional work for his former firm, only assisted in introducing clients); Wagdy Hanna & Associates Pty Ltd v National Library of Australia (2004) 185 FLR 367 (migratory lawyer, who had previously acted for the plaintiff in Federal Court proceedings became a partner at the firm representing the defendant in Supreme Court proceedings, not disqualified from acting against the plaintiff because he had not been, and was not, involved in the current litigation, and had given appropriate undertakings); Salfinger v Niugini Mining (Australia) Pty Ltd [2007] FCA 470 (two solicitors who, whilst employed at a large law firm, had acted for the applicant in earlier related Supreme Court litigation, then moved to a large law firm (BDW), which acted as solicitors for the first respondent in Federal Court proceedings; Heerey J did not disqualify BDW from acting for the first respondent because, inter alia, the two solicitors had subsequently left BDW before the Federal Court litigation commenced); Gill v Wynne [2016] FCWA 40 (migratory lawyer (K) did not disqualify a law practice (A) from acting against a client (the wife) represented by the law practice that previously employed K because Walters J found that K’s interactions with the wife were “fleeting” or “otherwise comparatively superficial” (at [63]), such that undertakings by K and instructions to given to A’s employees were sufficient as information barriers (at [64])). 240 See, for example, Foley v Foley [2016] FCWA 41 (migratory lawyer (W) disqualified a law practice (A) from acting against a client (the husband) represented by the law practice that previously employed W because Walters J found that W had direct interactions with the husband, such that purported information barriers and undertakings by A did not suffice to address the real risk of misuse of confidential information: at [47]–[51]). 241 See, for example, Canada Southern Petroleum v Amoco Canada Petroleum (1997) 48 Alta LR (3d) 382. 242 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604.

[8.245]

8 Acting against Former Clients

321

locating P and the case handlers on different floors, though in the same building. These measures, according to the English Court of Appeal, provided sufficient protection for the claimant’s confidential information to allow the firm to act against it. Clarke LJ found that the undertakings and physical separation, coupled with P being “a conscientious solicitor of integrity”,243 made it fanciful to suggest that P might inadvertently let slip some confidential information she had learned when acting for the claimant.244 Ward LJ was likewise influenced by the “extensive nature of those undertakings, given … by officers of the court and by persons of high professional standing and integrity”.245 Tuckey LJ queried what more, short of the firm ceasing to act, the claimant could have been offered.

[8.245]

Koch Shipping was arguably a high-watermark case. It involved the same matter, and the walls were not formed as part of the firm’s organisational structure but consisted chiefly of undertakings. It may be that undertakings, by themselves, are insufficient to eliminate in the reasonable observer the perception of a real possibility of misuse of confidential information.246 Also, the court’s reliance on the integrity of the solicitors involved may prove problematic, unless the courts are willing to differentiate, for this purpose, lawyers who can be trusted from those cannot.247 This is a reason why the House of Lords in Prince Jefri248 shied from the English Court of Appeal’s approach in Rakusen v Ellis, Munday and Clarke,249 where an assumption of the solicitors’ integrity was accorded great weight in denying any “reasonable probability of real mischief”. If nothing else, Koch Shipping illustrates a judicial willingness to apply former client conflicts principles with less stringency in the migratory lawyer scenario. The commercial reality no doubt influenced their Lordships, as appears from the concluding comment offered by Tuckey LJ:250 I think there is a danger inherent in the intensity of the adversarial process of courts being persuaded that a risk exists when, if one stands back a little, that risk is no more than fanciful or theoretical. I advocate a robust view with this in mind, so as to ensure that the line is sensibly drawn. 243 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604 at [47]. 244 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604 at [46]. 245 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604 at [60]. 246 See Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235 at [54] per Bell J. 247 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 670 per Thomas J in dissent. 248 Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222. 249 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831. 250 Koch Shipping Inc v Richards Butler (a firm) [2002] Lloyd’s Rep PN 604 at [53]. Brewster FM expressed similar sentiments in Lakey v Lakey [2008] FMCAfam 827 at [26] (favouring “a hard nosed and realistic approach”, and saying that “judges in some of the cases in this area have shown considerable imagination in devising ways in which confidential information could conceivably pass from one lawyer to another”). See also BF Goodrich Company v Formosa Plastics Corporation (1986) 638 F Supp 1050 at 1054–5 (“the rule of disqualification is not mechanically applied, and an attorney’s conduct need not be governed by standards that can be imputed only to the most cynical members of the public”).

322

Lawyers’ Professional Responsibility

[8.250]

[8.250]

The nature of the migratory lawyer’s practice clearly impacts upon both the measures the firm must take, and the courts’ willingness to disqualify the firm. In Bureau Interprofessionel Des Vins de Bourgogne v Red Earth Nominees Pty Ltd,251 for example, Ryan J refused the applicant’s claim because: • the only person at the firm who might be in possession of the applicant’s confidential information was the migratory lawyer, who on balance was unlikely now to possess information of the requisite confidential character; • in any event, the migratory lawyer was a highly experienced practitioner, engaged as a part-time employee, working two days a week; • the migratory lawyer’s work was primarily concerned with trade mark prosecutions, a distinct sub-group of the firm’s intellectual property group; • on the migratory lawyer’s evidence, her work involved a high degree of independence from the other members of the intellectual property group; and • on leaving her former employer, the migratory lawyer did not retain any documents relating to the applicant’s affairs. Migratory non-lawyer staff

[8.255]

It should not be assumed that only lawyer staff can “taint” a firm for the purposes of successive conflicts rules. Non-lawyer staff can be apprised of information confidential to a client of the firm, which could, in the mind of a reasonable observer, be used to the detriment of that client if the staff member is then employed by a firm who acts against that client. It may, accordingly, be necessary to screen non-lawyer staff, such as paralegals and even secretarial staff, who have been exposed to the matter in their previous employ.252 The case law reveals examples, usually in family law matters, of disqualification of law firms by reason of employing a non-lawyer staff member previously employed by a firm representing an opposing party.253 Depending on the non-lawyer’s previous involvement in the matter,254 though, it may be easier to screen that person in her

251 Bureau Interprofessionel Des Vins de Bourgogne v Red Earth Nominees Pty Ltd [2002] FCA 588 at [60]. 252 Can CPC, r 3.4-23, cmt [2]. 253 See, for example, McMillan v McMillan (2000) FLC ¶93-048 (where the clerk of one party’s solicitors became employed by the other party’s solicitor, the Full Family Court disqualified the firm from continuing its current retainer) (cf Lakey v Lakey [2008] FMCAfam 827 at [28] per Brewster FM); Chern v Chern (2006) 263 DLR (4th) 318 (involving child custody proceedings in which the husband’s lawyer’s former legal assistant was subsequently employed by the wife’s lawyer, where the court acceded to the husband’s application to disqualify the wife’s lawyer). 254 Cf Grant v Thirteenth Court of Appeals (1994) 888 SW 2d 466 (disqualification where legal secretary switched sides in ongoing litigation, whose duties related to the specific litigation over weeks, and who was not screened at the new employer); Owens v First Family Financial Services Inc (2005) 379 F Supp 2d 840 (where, as a supervising paralegal at her former employer, W was exposed to documents, strategy meetings and settlement information pertaining to consumer fraud actions involving identical claims against the same defendants whom her current employer was retained to prosecute, leading the court to disqualify the current employer from acting against the defendants). Cf Koncz v Koncz (2013) 50 Fam LR 116 (where Aldridge J refused to disqualify the wife’s solicitors, even though the husband had given instructions to a law clerk later employed by the wife’s

[8.260]

8 Acting against Former Clients

323

or his new employ than an equivalent lawyer.255 Also, courts adopt a realistic approach vis-à-vis non-lawyer staff engaged on a temporary basis through an agency.256

DISQUALIFICATION APPLICATIONS AS ABUSES OF PROCESS Application to disqualify as a litigation tactic

[8.260]

In the United States, applications to disqualify on the grounds of former client conflict have become a common feature of major litigation.257 Following the American lead, the number of like applications in Australian courts has increased steadily over recent years; few, if any, reported examples of such applications existed before the mid-1980s. The same was so in Canada, regarding which the following remarks have been made, remarks equally apposite in Australia:258 Until very recently, applications to remove lawyers were so rare an event that, at least in this jurisdiction, few judges or lawyers seemed to be more than vaguely aware that such a remedy existed. Nor, so far as I am aware, was there any general feeling of discontent on the part of the public arising from the possibility of conflict. But there was and is a rising tide of discontent with the length, complexity and cost of proceedings.

In 1981 an American commentator observed that “[l]awyers have discovered that disqualifying opposing counsel is a successful trial strategy, capable of creating delay, harassment, additional expense, and perhaps even resulting in the withdrawal of a dangerously competent counsel”.259 This highlights a concern that applications of this kind could be motivated other than by genuine concern for solicitors, because the law clerk had since left the employ of the wife’s solicitors and there was no evidence of any misuse of confidential information in the interim; his Honour, however, conceded that had the clerk remained in the employ of the wife’s solicitors, it would have been appropriate to issue the restraint: at [28]). 255 See Hodge v Ufra-Sexton, LP (2014) 758 SE 2d 314 at 319–320, where the Supreme Court of Georgia cited four reasons to support screening measures for non-lawyers rather than an imputed disqualification approach: [1] non-lawyers “generally have neither a financial interest in the outcome of a particular litigation nor a choice about which clients they serve, which reduces the appearance of impropriety”; [2] non-lawyers have “different training, responsibilities, and discovery and use of confidential information compared to lawyers”; [3] disqualification of the new firm would present a hardship to the new firm’s client, such as delays, further expenses, and a loss of specialised knowledge; and [4] automatic disqualification would unduly restrict non-lawyers’ employment mobility. On the latter point see also ABA Informal Op 88-1526 (1988), p 2 (which recognised the importance of non-lawyers having “as much mobility in employment opportunity as possible consistent with the protection of clients’ interests”); Leibowitz v Eighth Judicial District Court (2003) 78 P 3d 515 at 521 (noting that “a lawyer may always practice his or her profession regardless of an affiliation to a law firm [whereas] [p]aralegals, legal secretaries, and other employees of attorneys do not have that option”); Restatement, §123, cmt ƒ (fearing that were non-lawyers’ conflict of interest imputed to the entire firm, “employers could protect themselves against unanticipated disqualification risks only by refusing to hire experienced people”). 256 See, for example, Herron v Jones (1982) 637 SW 2d 569 (non-lawyer staff engaged through a secretarial agency). 257 See generally Swisher, “The Practice and Theory of Lawyer Disqualification” (2014) 27 Geo J Leg Ethics 71 (albeit not confined to disqualification in the context of successive conflicts). 258 Manville Canada Inc v Ladner Downs (1992) 88 DLR (4th) 208 at 224 per Esson CJSC (SC(BC)). 259 Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1285.

324

Lawyers’ Professional Responsibility

[8.265]

preserving the confidentiality of information. This has hardly been unnoticed by the courts; back in 1979 an American judge recognised the “great possibility of abuse of the motion to disqualify”.260 A New Zealand judge has subsequently warned that courts should “be alert to tactical objections made for an ulterior purpose” and not assume “that the client’s expression of concern is necessarily well founded or to be taken at face value”.261 This is especially so given modern catchcries directed at improving the efficiency of the justice system and lowering its cost.

[8.265]

It is thus open to a court to decline an application it considers amounts to an abuse of process. The challenge is to distinguish abuses of process from applications that fail for other reasons. A giveaway may be the application made late in the proceedings; this may cast doubt over whether the applicant bona fide believed the information in issue to be confidential or detrimental to her or his case,262 and may also smack of an attempt to secure a collateral benefit by delaying the proceeding.263 Disqualification late in a matter may lay to waste much of the work done by the lawyers disqualified, thereby prejudicing the client in question, and so clashes directly with the desirable aim of securing efficient dispute resolution: see [8.60].264 To this end, “this is an area in which a litigant should act promptly”.265 A lack of promptness may in any case be construed as implied consent in this regard.266 260 Melamed v ITT Continental Baking Co (1979) 592 F 2d 290 at 295. 261 Russell McVeagh McKenzie Bartleet & Co v Tower Corp [1998] 3 NZLR 641 at 676 per Blanchard J. See also Black v Taylor [1993] 3 NZLR 403 at 420 per McKay J; Moffat v Wetstein (1996) 135 DLR (4th) 298 at 334 per Granger J; Canadian Pacific Railway Co v Aikins, MacAulay & Thorvaldson (1998) 157 DLR (4th) 473 at 479–480 per Monnin JA; Geveran Trading Co Ltd v Skjevesland [2003] 1 WLR 912 at [43] per Arden LJ. 262 It is also consistent with the notion that, as the application is essentially for relief analogous to an injunction, the principles that underscore the importance of prompt application for relief for injunctions necessarily apply: see generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [31.155] (in the context of interlocutory injunctions). Alternatively, it can be viewed as constituting a waiver of any confidentiality sufficient to justify disqualification: Colonial Portfolio Services Ltd v Nissen (2000) 35 ACSR 673 at [155]–[174] per Rolfe J; Buick v Boesten [2013] FamCA 208 at [49], [63] per Dawe J. The latter represents an application of the broader principle stated by Dawson J in Vakauta v Kelly (1989) 167 CLR 568 at 579 that “[w]here a party in civil litigation, being aware of the circumstances giving rise to a right to object, allows the case to continue for a sufficient time to show that he does not presently intend to exercise that right, he may be held to have waived it”. 263 Generics (UK) Ltd v Yeda Research and Development Co Ltd [2012] CP Rep 39 at [18] per Sir Robin Jacob (“If someone is treading on your toe or about to do so you shout. If you wait for months first then complain in a desultory way, you are apt not to be believed”). 264 See, for example, Durban Roodepoort Deep Ltd v Reilly [2004] WASC 269 at [101], [102] per Le Miere J; Dennis Hanger Pty Ltd v Brown [2007] VSC 495 at [23], [24] per Warren CJ; Le Soleil Hospitality Inc v Louie (2010) 200 ACWS (3d) 872 at [44], [45] per Dickson J (affd Le Soleil Hospitality Inc v Louie (2011) 201 ACWS (3d) 616); Byrne v Production Magic Pty Ltd [2012] ACTSC 6 at [22], [23] per Harper M. Cf Re Z [2010] 2 FLR 132 (where the husband’s application to disqualify the wife’s solicitors, having been delayed for only five weeks, led Bodey J to remark that “the husband’s standing back was not for so long, nor the detriment to the wife so great, that it can only be fairly remedied through an exercise of discretion denying him the remedy sought”: at [47]). 265 H Stanke & Sons Pty Ltd v von Stanke (2006) 95 SASR 425 at [81] per White J. See also Le Soleil Hospitality Inc v Louie (2010) 200 ACWS (3d) 872 at [44] per Dickson J (“at the earliest opportunity”)

[8.265]

8 Acting against Former Clients

325

In Marriage of McGillivray and Mitchell,267 for example, the husband sought to disqualify his wife’s lawyer in a divorce proceeding on the ground that the lawyer had acted for the husband in a divorce ten years earlier. The lawyer was instructed by the wife in November 1996, and appeared for the wife in interlocutory proceedings several times between February and August 1997. Only in August 1997 did the husband object to the lawyer’s continuing representation of the wife. The Full Family Court rejected the application, reasoning that had the husband been genuinely concerned about misuse of confidential information, he would have objected far earlier. Their Honours further noted:268 [I]f a family law litigant has a genuine concern about a former legal adviser acting against him or her in later family law litigation, the litigant must take the point at least in correspondence with the other side at the earliest possible opportunity. If he or she does not do so, then he or she is possessed of a weapon which can later be used as a delaying tactic at some point in the proceedings convenient to his or her position. Furthermore a failure to take the point initially must also cast doubt on the bona fides of any later complaint concerning the existence of confidential information in the practitioner in question, and on the bona fides of any alleged apprehension regarding the possible misuse of such confidential information.

It should not be assumed, though, that delay is always fatal to the success of an application to disqualify. The legitimacy or otherwise of the application, including the nature of the alleged confidential information269 and the reason(s) for the delay, are relevant here. In Hana New Zealand Ltd v Stephens,270 for example, although the defendant alleged the conflict nearly a year after the plaintiff commenced the proceedings, Asher J granted to the defendant’s application because only prior to the settlement conference were the issues arising in the proceedings properly appreciated, and the conflict came to light. Also, there was nothing in the application that was tactical or deliberately last-minute.271 In Fowler v Liddle272 (affd Le Soleil Hospitality Inc v Louie (2011) 201 ACWS (3d) 616); Lennar Mare Island, LLC v Steadfast Insurance Co (2015) 105 F Supp 3d 1100 at 1119 (“a client who wishes to disqualify opposing counsel may not wait for just the right moment”); Frigger v Kitay (No 10) [2016] WASC 63 at [31] per Le Miere J (“if a party has a genuine concern about a lawyer acting against him or her, the party must take the point at the earliest opportunity”). 266 UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 at [68] per Barrett J. 267 Marriage of McGillivray and Mitchell (1998) 23 Fam LR 238. 268 Marriage of McGillivray and Mitchell (1998) 23 Fam LR 238 at 245. See also Markham v Markham [2009] FamCA 754 at [31]–[36] per Ryan J (who refused a disqualification order due to the combined effect of a lack of relevant confidential information, the delay in the wife’s application to disqualify and the prejudice to the husband of any such order); Slaveski v State of Victoria [2009] VSC 540 at [12] per Pagone J (who, in refusing the application to disqualify, was influenced, inter alia, by the fact that the application to disqualify arose on the seventeenth day of the trial); Buick v Boesten [2013] FamCA 208 (where the husband, who from early 2010 was aware that the lawyer in question was proposing to act for the wife in family law proceedings, failed to make an application to disqualify until March 2012; Judge Dawe ruled that the husband had thereby waived any conflict in the circumstances: at [57]–[64]); Fogerty-Young v Jason [2013] VSC 570 (refusal to disqualify against a backdrop of, inter alia, the proceeding already being on foot for 18 months, and ostensibly driven by a change in the applicant’s position: at [34]–[36] per Elliott J). 269 See Durban Roodepoort Deep Ltd v Reilly [2004] WASC 269 at [102] per Le Miere J. 270 Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833. 271 Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833 at [29].

326

Lawyers’ Professional Responsibility

[8.270]

delay in the husband’s application to disqualify the wife’s lawyer, who had previously represented the husband in various litigious matters in relation to his previous marriage, was not probative because, said Collier J, the lawyer himself should have appreciated a strong prospect of conflict at an early stage. And in Selen v Selen273 Johnston JR restrained the applicant’s former lawyer from acting against her, where it was likely that the lawyer would be called as a material witness (see [17.45]), despite a two year delay, as there was a reasonable explanation for the delay. The outcome would likely have been otherwise had the delay been unexplained and persons other than the lawyer available to provide the relevant evidence.274 While delay may prove less significant where prior warning has been given of the intention to make the application to disqualify – the risk of prejudice to an opponent is, after all, thereby reduced – considerable subsisting delay after notice may not obviate that prejudice should the opponent’s lawyers be disqualified shortly before the matter would otherwise go to hearing.275 Pre-emptive retention of adverse representation

[8.270]

Courts are alert to clients engaging in “preemptive retention of adverse representation”, where a client (usually well-resourced) retains most or all of the firms with expertise in a field with the aim of disqualifying those firms from acting against it in future litigation. Such a practice is “undesirable” because it frustrates the legitimate opportunity of parties having adverse interests to retain lawyers to represent them in an action against the client.276 In an Australian case, where the plaintiff allegedly sought to “corner the market” by briefing a number of silks to limit their availability to another party, Mackenzie J, though not making a finding of fact on this issue, spoke adversely regarding such a practice if proven.277 Another Australian judge, more recently, has branded as “wholly undesirable” any practice of “manufacturing conflicts by a litigant retaining counsel on some minor, or unrelated, aspect of a matter to prevent a barrister from acting against that party in the future by the possibility or suggestion of conflicts without substance”.278 The rule barring lawyers from switching sides in the same case should only apply where the complainant sought in good faith to retain the lawyer.279 Yet whether pre-emptive retention presents a real problem has been queried. While conceding that large players in an industry may send expert barristers in a field briefs to advise containing confidential documents precisely to disqualify those lawyers from appearing against them, Young J in Eq has said that “these problems have 272 Fowler v Liddle [2012] FamCA 450 at [54]–[67]. 273 Selen v Selen [2009] FamCA 309 at [58]–[71]. 274 See, for example, Italiano v Lake [2015] VSC 189. 275 Re IPM Group Pty Ltd [2015] NSWSC 240 at [71], [72] per Black J. 276 Moffat v Wetstein (1996) 135 DLR (4th) 298 at 331 per Granger J. 277 Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508 at 522. 278 Slaveski v State of Victoria [2009] VSC 540 at [5] per Pagone J. 279 Re American Airlines Inc (1992) 972 F 2d 605 at 613.

[8.270]

8 Acting against Former Clients

327

never been seen as sufficiently serious as impeding justice for action to be taken”.280 His Honour reasoned that lawyers are “a pretty able lot”, such that it “does not take long for someone to develop the skills and experience which places him or her among the major league in particular fields of little competition”.281 Although a practical perspective, this view hardly addresses the abuse of process underscoring the practice or attempts to purposely disqualify entire (large) law firms. That the American Bar Association amended its rules in August 2012, to make clear that “a person who communicates with a lawyer for the purpose of disqualifying the lawyer is not a ‘prospective client’”,282 suggests that preemptive representation is an issue, at least in the United States. That the ensuing year the Supreme Canadian Supreme Court refused to extend its strict approach to client–client conflict scenarios (see [7.40]) to “tactical rather than principled” applications, with explicit reference to the practice of preemptive representation,283 reinforces the point. One buffer the courts can implement against the practice is to strictly construe what constitutes relevant confidential information in this context, and be wary of claims that such information includes the financial structure, litigation philosophy and business practice of the client: see [8.150], [8.155].

280 British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 at [141]. 281 British American Tobacco Australia Services Ltd v Blanch [2004] NSWSC 70 at [142]. 282 US, r 1.18, cmt [2]. 283 Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [36] per McLachlin CJC, delivering the reasons of the court (remarking, inter alia, that “institutional clients should not spread their retainers among scores of leading law firms in a purposeful attempt to create potential conflicts”).

Chapter 9

Duty to Account [9.05] THE BASIC OBLIGATION ................................................................................................ 329 [9.10] TRUST MONEY ................................................................................................................... 330 [9.10] The concept of trust money under the legal profession legislation ..................... 330 [9.20] Money involved in financial services or investments not trust money ............... 331 [9.25] Money received for costs as trust money .................................................................. 331 [9.30] ACCOUNTING FOR TRUST MONEY ............................................................................ 332 [9.30] Duties related to accounting ........................................................................................ 332 [9.65] Prohibition on use or withdrawal of trust money without authority .................. 334 [9.80] Trust money not available to satisfy lawyer or third party debt .......................... 336 [9.85] VERIFICATION OF TRUST ACCOUNTS ...................................................................... 337 [9.90] External examiners and investigators ........................................................................ 337 [9.95] Confidentiality and privilege in trust account verification .................................... 337 [9.100] EXTERNAL INTERVENTION OVER TRUST ACCOUNTS ...................................... 338 [9.100] Concept of external intervention ............................................................................... 338 [9.105] Receivers ........................................................................................................................ 339 [9.110] Supervisors of trust money ........................................................................................ 339 [9.115] Managers ........................................................................................................................ 339 [9.125] FAILURE TO ACCOUNT ................................................................................................ 340 [9.125] Claims against the Fidelity Fund .............................................................................. 340 [9.130] Other consequences of failure to account ................................................................ 341

THE BASIC OBLIGATION [9.05] Lawyers commonly receive moneys to be held for or on behalf of a client, whether from that client or a third person. For example, moneys may be received for holding in a convenient location pending disbursement, pending the happening of a contingency or event, or for stakeholding purposes. At general law, if moneys are entrusted to an agent to be held for the benefit of another person, the agent becomes a trustee.1 The holding of moneys for or on behalf of another thus serves to constitute the lawyer a trustee of those moneys for the benefit of the person for whom the money is held.2 Statute reflects, and builds upon, the general law. Generally speaking, it requires lawyers to deposit into a trust account with a financial institution money received 1 Mann v Hulme (1961) 106 CLR 136 at 141 per Dixon CJ, Taylor, Menzies and Windeyer JJ. 2 Target Holdings Ltd v Redferns (a firm) [1996] AC 421 at 437 per Lord Browne-Wilkinson; Jalmoon Pty Ltd (in liq) v Bow [1997] 2 Qd R 62 at 72 per Pincus JA and Helman J.

330

Lawyers’ Professional Responsibility

[9.10]

for or on behalf of any person to be held exclusively for that person.3 The lawyer’s own moneys relating to the practice are held in an “office account”. By statute, statutory rules or regulations, detailed prescription is made for lawyers’ accounting for trust money, which exhibits significant uniformity across Australia.

“TRUST MONEY” The concept of “trust money” under the legal profession legislation

[9.10] The obligation to deposit into a trust account money received for or on behalf of any person to be held exclusively for that person applies to money that is “trust money”. Statute defines “trust money” as money received in the course of or in connection with the provision of legal services by a law practice for or on behalf of another person.4 Coming within the statutory reach of “trust money” is: • “controlled money”, being trust money received or held by a law practice in respect of which it has a written direction to deposit in an account (other than a general trust account) over which it has, or will have, exclusive control.5 Controlled money must be deposited in the account specified in the written direction as soon as practicable after receiving it;6 • money controlled by a law practice pursuant to a power to deal with it for or on behalf of another person that is exercisable by the practice, or jointly and severally with the person or a nominee; • “transit money”, namely money a law practice receives subject to instructions to pay or deliver it to a third party, other than an associate of the practice.7 Transit money must be paid or delivered as required by those instructions rather than put in a trust account.8 For example, where a purchaser delivers to her or his lawyer a cheque drawn in favour of the selling agent for the amount of the deposit, and instructs the lawyer to pay the cheque to the agent on exchange of contracts, the money represented by the cheque is “money in transit”. 3 ACT, ss 221, 222; NSW, ss 136, 137 (formerly NSW 2004, ss 253, 254); NT, ss 245, 246; Qld, ss 247, 248; SA, Sch 2, cll 11, 12 (formerly SA, s 31(1)); Tas, ss 241, 242; Vic, ss 136, 137 (formerly Vic 2004, ss 3.3.11, 3.3.13); WA, ss 214, 215. Prior to the commencement of the Legal Profession Act 2007 (Qld), in that jurisdiction solicitors’ principal obligations regarding trust moneys were found in a statute generally applicable to all trustees, the Trust Accounts Act 1973 (Qld). This was made explicit by s 4F, and by its definition of a “trustee” to include a solicitor who in the course of practice receives money upon trust or upon terms requiring her or him to account for the money: s 4. 4 ACT, Dictionary; NSW, s 129(1) (formerly NSW 2004, s 243(1)); NT, s 235(1); Qld, s 237(1); SA, Sch 2, cl 1(1); Tas, s 231(1); Vic, s 129(1) (formerly Vic 2004, s 3.3.2(1)); WA, s 205(1). 5 ACT, s 210(1); NSW, s 129(1) (formerly NSW 2004, s 243(1)); NT, s 235(1); Qld, s 237(1); SA, Sch 2, cl 1(1); Tas, s 4(1); Vic, s 129(1) (formerly Vic 2004, s 3.3.2(1)); WA, s 205(1). “Controlled money” was a concept first introduced into the 1987 New South Wales legislation, designed to achieve a more comprehensive scheme of regulation that would require lawyers to account not only for money held in an orthodox trust account, but also for other money coming within their control, directly or indirectly: NSW 1987, s 61(9). 6 ACT, s 224(1); NSW, s 139 (formerly NSW 2004, s 256(1)); NT, s 248(1); Qld, s 251(1); SA, Sch 2, cl 15(1); Tas, s 245(1); Vic, s 139 (formerly Vic 2004, s 3.3.15(1)); WA, s 218(1). 7 ACT, s 210(1); NSW, s 128(1) (formerly NSW 2004, s 243(1)); NT, s 235(1); Qld, s 237(1); SA, Sch 2, cl 1(1); Tas, s 231(1); Vic, s 128(1) (formerly Vic 2004, s 3.3.2(1)); WA, s 205(1). 8 ACT, s 225(1); NSW, s 140(1) (formerly NSW 2004, s 257(1)); NT, s 249(1); Qld, s 253(1); SA, Sch 2, cl 17(1); Tas, s 247(1); Vic, s 140(1) (formerly Vic 2004, s 3.3.16(1)); WA, s 220(1).

[9.25]

9 Duty to Account

331

[9.15] Under the above definitions, “trust money” encompasses a broader concept than that applicable at general law. For instance, at general law a stakeholder receives a contract deposit upon terms requiring her or him to account to one or the other of the parties to the contract depending on the outcome of an event. This means that the deposit is not paid to a stakeholder as trustee but upon a contractual or quasi-contractual liability.9 Yet money received by a lawyer as stakeholder is paid on behalf of person(s) other than the lawyer and must therefore be deposited in a trust account.10 Another example is where a lawyer holds money on behalf of a client who holds the money as trustee. At general law the lawyer is an agent of the trustee, not an actual trustee;11 under statute the money must be deposited in a trust account, the lawyer being its trustee. Money involved in financial services or investments not “trust money”

[9.20] Other than in South Australia, statute excludes from the otherwise broad concept of “trust money” money entrusted to or held by a law practice for or in connection with a financial service provided by the practice in circumstances where the practice is required to hold an Australian financial services licence covering its provision.12 Also excluded is money similarly entrusted to or held for or in connection with a managed investment scheme, or mortgage financing (here also in South Australia), it has undertaken.13 The latter aligns with the statutory trend to exclude defaults or losses arising out of lawyers’ mortgage practices from fidelity fund coverage: see [9.125]. Money received for costs as “trust money”

[9.25] Money received from a client in payment of professional costs already incurred need not be treated as trust money but may be paid directly into the lawyer’s office account.14 But money received in advance of providing the legal services is not beneficially owned by the lawyer, and so must be accounted for as trust money.15 In this event, statute generally prescribes the steps to be followed before transferring that money into the lawyer’s office account: see [9.65], [9.70].

9 Potters v Loppert [1973] Ch 399 at 405–406 per Pennycuick VC. 10 See, for example, Vella v Bowden (No 3) [2014] WASC 98 at [131]–[142] per Kenneth Martin J. 11 Adams v Bank of New South Wales [1984] 1 NSWLR 285 at 290–291 per Moffitt P. 12 ACT, s 212(1); NSW, s 129(2)(c) (formerly NSW 2004, s 244(1)); NT, s 236(1); Qld, s 238(1); Tas, s 232(1); Vic, s 129(2)(c) (formerly Vic 2004, s 3.3.3(1)); WA, s 206(1). The same applies in respect of financial services provided by the practice as a representative of a person who carries on a financial services business. 13 ACT, s 212(2); NSW, s 129(2)(b) (formerly NSW 2004, s 244(2)); NT, s 236(2); Qld, s 238(2); SA, Sch 2, cl 1(1); Tas, s 232(2); Vic, s 129(2)(b) (formerly Vic 2004, s 3.3.3(2)); WA, s 206(2). 14 This point is expressly noted in NSW, s 129(2)(a) (formerly NSW 2004, s 246(4)); Vic, s 129(2)(a) (“money received by a law practice for legal services that have been provided and in respect of which a bill has been given to the client”). 15 ACT, Dictionary; NSW, s 128(1) (formerly NSW 2004, s 243(1)); NT, s 235(1); Qld, s 237(1); SA, Sch 2, cl 1(1); Tas, s 231(1); Vic, s 128(1) (formerly Vic 2004, s 3.3.2(1)); WA, s 205(1).

332

Lawyers’ Professional Responsibility

[9.30]

ACCOUNTING FOR TRUST MONEY Duties related to accounting

[9.30] The duty to account represents a necessary incident of a trustee’s personal obligation to hold and deal with trust property for the benefit of the beneficiaries.16 It obliges a lawyer to maintain an accurate, accessible and ordered account of that trust money. It also requires a system of financial controls relating to trust accounts capable of alerting lawyers and regulators to irregularities. This is particularly important where lawyers practise in partnership, though the existence of such a system does not relieve partners from personal vigilance: see [20.205]. Records to be kept

[9.35] Statute requires lawyers to keep detailed accounts of all dealings with trust money that accurately disclose the state of trust accounts, and enable the convenient and proper auditing of receipt and payment of trust money.17 Legal profession regulations exhaustively prescribe the form of the accounts and types of documentation to be maintained.18 The requirements aim to ensure that lawyers’ financial transactions through a trust account are identified and isolated, and protect clients by requiring contemporary records to explain and justify dealings with client funds. They are not, however, to be taken as the measure of the lawyer’s fiduciary obligations in equity to the client.19 Duty to give account on request

[9.40] At general law, a trustee must give an account of receipts and payments to those interested in the funds when it is properly demanded.20 To this end, the legal profession regulations entitle persons on whose behalf trust money is held to request in writing, and promptly receive, a statement of account of trust funds and their application.21 16 Re Simersall (1992) 35 FCR 584 at 589 per Gummow J. 17 ACT, s 232; NSW, s 147 (formerly NSW 2004, s 264); NT, s 257; Qld, s 261; SA, Sch 2, cl 25 (formerly SA, s 31(4)); Tas, s 255; Vic, s 147 (formerly Vic 2004, s 3.3.25); WA, s 228. 18 Legal Profession Regulation 2007 (ACT), Div 6.3; Legal Profession Uniform General Rules 2015 (NSW), Pt 4.2, Div 2 (formerly Legal Profession Regulation 2005 (NSW), Pt 8 Div 3); Legal Profession Regulations 2007 (NT), Pt 3.1 Div 3; Legal Profession Regulation 2007 (Qld), Pt 3.3 Div 1; Legal Practitioners Regulations 2014 (SA), Pt 6, 20; Legal Profession Regulations 2008 (Tas), Pt 3; Legal Profession Uniform General Rules 2015 (Vic), Pt 4.2, Div 2 (formerly Legal Profession Regulations 2005 (Vic), Pt 3.3 Div 3); Legal Profession Regulations 2009 (WA), Pt 7 Div 3. 19 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 538 per Richardson J. 20 Wroe v Seed (1863) 4 Giff 425; 66 ER 773 at 429 (Giff), 774–775 (ER) per Stuart VC; Re Bassett [1934] NZLR 690; Dagle v Dagle Estate (1990) 70 DLR (4th) 201 at 223–224 per MacDonald CJTD. 21 Legal Profession Regulation 2007 (ACT), rr 57, 58; Legal Profession Uniform General Rules 2015 (NSW), rr 52, 53 (formerly Legal Profession Regulation 2005 (NSW), cll 82, 83); Legal Profession Regulations 2007 (NT), rr 63, 64; Legal Profession Regulation 2007 (Qld), rr 53, 54; Legal Practitioners Regulations 2014 (SA), rr 40, 41; Legal Profession Regulations 2008 (Tas), rr 48, 49; Legal Profession Uniform General Rules 2015 (Vic), rr 52, 53 (formerly Legal Profession Regulations 2005 (Vic), rr 3.3.28, 3.3.29); Legal Profession Regulations 2009 (WA), rr 60, 61.

[9.60]

9 Duty to Account

333

No mixing of trust with non-trust moneys

[9.45] A trustee at general law has a duty not to mix her or his own property with trust property.22 The practical result is that money held by a lawyer in trust must be kept in accounts separate from the lawyer’s own money and other money that is not trust money.23 This general law principle is reflected by statute in each jurisdiction.24 Trust account not to be overdrawn

[9.50] As the lawyer must follow the directions of the person for or on whose behalf trust moneys are held in the use and disbursement of those moneys, and that person’s entitlement to so direct is limited to the extent of those moneys, there is no justification for a trust account to be in debit. This explains why a lawyer who, without reasonable excuse, causes a deficiency in any trust account or trust ledger account, or fails to pay or deliver any trust money, is declared guilty of an offence.25 Duty to report defalcations

[9.55] Statute requires a lawyer who believes on reasonable grounds that there is an irregularity in connection with the receipt, recording or disbursement of any trust money received by a law practice, including the practice in which he or she is employed, to notify the appropriate authority in writing.26 A breach of this requirement may expose the lawyer to a penalty. False names in trust account prohibited

[9.60] A law practice that knowingly receives money, or records receipt of money in the practice’s trust records under a false name, is liable to a penalty under statute.27 Also a law practice that receives trust money on behalf of a person commonly known by more than one name must ensure that the practice’s trust records record all names by which the person is known.28 Aside from this statutory prescription, eschewing any arrangement whereby a trust account is placed under a false name, even if the lawyer believes there is no unlawful purpose, is important to preserving the appearance of integrity. The falsity of a name in which a trust account is held is inconsistent with the lawyer’s duty to act with candour and honesty. Moreover, if the client engages in any unlawful purpose, the lawyer could 22 Re Todd (No 2) (1910) 10 SR (NSW) 490 at 500–502 per Street J. 23 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 24 per Mahoney JA. 24 ACT, s 228; NSW, s 146 (formerly NSW 2004, s 260); NT, s 253; Qld s 257; SA, Sch 2, cl 21 (formerly SA, s 31(6)(a)); Tas, s 251; Vic, s 146 (formerly Vic 2004, s 3.3.19); WA, s 224. 25 ACT, s 230(1); NSW, s 148 (formerly NSW 2004, s 262(1)); NT, s 255(1); Qld, s 259(1); SA, Sch 2, cl 23; Tas, s 253(1); Vic, s 148 (formerly Vic 2004, s 3.3.21(1))Vic s 3.3.21(1); WA, s 226(1). 26 ACT, s 231; NSW, s 154 (formerly NSW 2004, s 263); NT, s 256; Qld, s 260; SA, Sch 2, cl 24; Tas, s 254; Vic, s 154 (formerly Vic 2004, s 3.3.22); WA, s 227. 27 ACT, s 233(1); NSW, s 147(3) (formerly NSW 2004, s 265(1)); NT, s 258(1); Qld, s 261(1); SA, Sch 2, cl 26(1); Tas, s 256(1); Vic, s 147(3) (formerly Vic 2004, s 3.3.26(1)); WA, s 229(1). 28 ACT, s 233(2); NSW, s 147(4) (formerly NSW 2004, s 265(2)); NT, s 258(2); Qld, s 261(2); SA, Sch 2, cl 26(2); Tas, s 256(2); Vic, s 147(4) (formerly Vic 2004, s 3.3.26(2)); WA, s 229(2).

334

Lawyers’ Professional Responsibility

[9.65]

well be subject to accessorial liability as a constructive trustee (see [9.65]) and, in addition, professional discipline. In Cahill v Law Society of New South Wales29 the New South Wales Court of Appeal held that a lawyer who allowed transactions to be carried out in which clients adopted fictitious names, designed to effect a fraudulent purpose of which the lawyer was aware, was guilty of professional misconduct. Prohibition on use or withdrawal of trust money without authority

[9.65] Lawyers must refrain from treating trust moneys as their own property or as moneys for their own direct or indirect benefit.30 The basic requirement obligation – to hold trust money exclusively for the person from whom or on whose behalf it was received – means that the lawyer can deal with the money only pursuant to that person’s direction.31 The drawing of trust money without proper authority may attract liability at general law, and also professional discipline: see [25.50]. As such, the “trust account should be sacred, so that moneys paid into the account should only be paid out to the persons to whom the money belonged, or as they directed”.32 Statute prohibits lawyers from withdrawing trust money except to pay to, or disburse according to the direction of, the person for whom the money is so held.33 It follows that, generally speaking, a lawyer is not liable to a third party who suffers loss as a result of the lawyer following these directions. As explained by Moffitt P in Adams v Bank of New South Wales, in the context of a lawyer who holds funds on behalf of a trustee:34 If the solicitor suspects that upon the money being paid to the client, he will apply some or all of it for purposes inconsistent with the client’s duty as trustee … no ground arises for the solicitor to refuse to perform his obligation as solicitor and pay the money as directed by his client. He might refuse to act further for his client, but he could not refuse to pay the money as directed by his client … [m]ere knowledge or suspicion as to the client’s intended conduct in the future or of what he would be able to do if the money were paid out to him, could not make him a constructive trustee and could not make him a participant in improper conduct of which his client might later be guilty. There would need to be added some conduct on his part which should not have occurred or an omission to do something which he ought to have done. Mere knowledge could not make him a constructive trustee of money which he had never held other than as agent and over which he had no control.

The position is different for a lawyer who is knowingly involved in a conspiracy to defeat the interests of persons lawfully entitled to the benefit of the money, 29 Cahill v Law Society of New South Wales (1988) 13 NSWLR 1. 30 Brown v Inland Revenue Commissioners [1965] AC 244 at 265–266 per Lord Upjohn; Re a Practitioner (1982) 30 SASR 27 at 30 per King CJ. 31 Re a Solicitor (1991) 104 FLR 212 at 216 per Miles CJ; Re Nelson (1991) 106 ACTR 1 at 4 per Miles CJ, at 12 per Higgins and Foster JJ; Batrouney v Forster [2016] VSCA 80 at [115] per the court. 32 Re a Practitioner [1941] SASR 48 at 51 per Murray CJ. 33 ACT, ss 223–225; NSW, ss 138–140 (formerly NSW 2004, ss 255–257); NT, ss 247–249; Qld, ss 250–252; SA, Sch 2, cl 13–17 (formerly SA, s 31); Tas, ss 244–246; Vic, ss 138–140 (formerly Vic 2004, ss 3.3.14–3.3.16); WA, ss 217–219. 34 Adams v Bank of New South Wales [1984] 1 NSWLR 285 at 290–291, 292.

[9.70]

9 Duty to Account

335

including where the lawyer’s knowledge is sufficient to impress her or him with recipient or accessory liability.35 Care, therefore, should be taken in disbursing trust moneys at a client’s direction, as there is a prospect that the lawyer could be found liable – via constructive trusteeship36 – to a person beneficially entitled to the money but who has been deprived thereof as a result of the lawyer disbursing the money at the client’s direction. Other than in the Northern Territory, statute forbids a law practice from withdrawing trust money other than by cheque or electronic funds transfer.37 Other than in New South Wales and Victoria, this applies despite anything to the contrary in directions given to the law practice concerned, even for directions given by a person who is otherwise legally entitled to give the law practice directions in respect of dealings with the money.38 Lawyers may withdraw unclaimed trust money pursuant to statute39 or for another payment authorised by law. Also, independent of client authority, statute requires that a proportion of moneys held by lawyers on trust be lodged with a statutorily prescribed body, which may use the income from that investment for specified purposes.40 Withdrawal of trust money in payment of professional costs

[9.70] The withdrawal of trust money in satisfaction of costs rests on the lawyer following a prescribed procedure.41 The regulations generally entitle a law practice 35 See, for example, Fletcher v Eden Refuge Trust [2012] 2 NZLR 227. 36 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [38.55]–[38.115]. 37 ACT, ss 223A(1), 223A(2), 224A(1), 224A(2); NSW, s 144(1) (formerly NSW 2004, ss 255A(1), 255A(2), 256A(1), 256A(2)); Qld, ss 250(1), 250(2), 252(1), 252(2); SA, Sch 2, cl 14(1); Tas, ss 244(1), 244(2), 246(1), 246(2); Vic, s 144(1) (formerly Vic 2004, ss 3.3.14A(1), 3.3.14(1), 3.3.15A(1), 3.315A(2)); WA, ss 217(1), 217(2), 219(1), 219(2). 38 ACT, ss 223A(4), 224A(4); Qld, ss 250(4), 252(4); Tas, ss 244(4), 246(4); WA, ss 217(4), 219(4). Equivalent provision formerly existed in New South Wales and Victoria: NSW 2004, ss 255A(4), 256A(4); Vic 2004, ss 3.3.14A(4), 3.3.15A(4). 39 ACT, ss 229(1)(c), 259; NSW, s 144(2)(c) (formerly NSW 2004, ss 261(1)(c), 266); NT, ss 254(1)(c), 259; Qld ss 258(1)(c), 713; SA, Sch 2, cl 22(1)(c); Tas, ss 252(1)(c), 257–259; Vic, s 144(2)(c) (formerly Vic 2004, s 3.3.20(1)(c), referring to the Unclaimed Money Act 2008 (Vic)); WA, s 225(1)(c) (referring to the Unclaimed Money Act 1990 (WA). 40 ACT, s 253; Legal Profession Uniform Law Application Act 2014 (NSW), ss 46, 47 (formerly NSW 2004, s 283); NT, s 281; Qld, Pt 3.3 Div 6; SA, s 53; Tas, Pt 3.5 Div 2; Legal Profession Uniform Law Application Act 2014 (Vic), Pt 5, Div 1 (formerly Vic 2004, Pt 3.3 Div 6); WA, Pt 12 Div 4. Cf Mortensen, “Interest on Lawyers’ Trust Accounts” (2005) 27 Syd L Rev 289 (who raises concerns with these schemes, in particular regarding the appropriateness of profits from client moneys being used to augment other objects). 41 ACT, s 229(1)(b) (see Legal Profession Regulation 2007 (ACT), r 62); NSW, s 144(2)(b) (see Legal Profession Uniform General Rules 2015 (NSW), r 42) (formerly NSW 2004, s 261(1)(b); Legal Profession Regulation 2005 (NSW), cl 88); NT, s 254(1)(b) (see Legal Profession Regulations 2007 (NT), r 68); Qld, s 258(1)(b) (see Legal Profession Regulation 2007 (Qld), r 58); SA, Sch 3 cl 22(1)(b); Legal Practitioners Regulations 2014 (SA), reg 45 (formerly SA, ss 31(3)(b), 41(1)); Tas, s 252(1)(b) (see Legal Profession Regulations 2008 (Tas), r 53); Vic, s 144(2)(b) (see Legal Profession Uniform General Rules 2015 (Vic), r 42) (formerly Vic 2004, s 3.3.20(1)(b); Legal Profession Regulations 2005 (Vic), r 3.3.34); WA, s 225(1)(b) (see Legal Profession Regulations 2009 (WA), r 65).

336

Lawyers’ Professional Responsibility

[9.75]

to withdraw trust money for costs where it has rendered a bill42 to the client, to which the client has not objected within seven days, or has objected but has not applied for a costs review within 60 days. They alternatively allow a law practice to withdraw trust money for costs once it has given the client a request for payment, where the money is either withdrawn in accordance with a valid costs agreement or in accordance with client instructions,43 or is owed to the practice by way of reimbursement of money it has paid on behalf of the client. Where a lawyer is entitled to withdraw trust moneys to meet costs owing, the proper course is to separate what is to become the lawyer’s money from the trust moneys by withdrawing the amount from the trust account and paying it into the lawyer’s office account. A separation via a mere book entry in trust account records creates the possibility of manipulation, and uncertainty as to who is entitled to moneys in the trust account.44 Another vice of this practice is the lack of an appropriate record by reference to which the trust account can be properly and conveniently verified.45 Solicitors’ lien not prejudiced

[9.75] While statutory requirements to apply money as directed do not oust any claim or lien, whether retaining or particular, a lawyer has in respect of money in a trust account at a financial institution,46 they do not authorise a lawyer to withdraw trust moneys by means of exercising a (particular) lien. Otherwise this would undermine the statutory prerequisites for withdrawal of trust money.47 Trust money not available to satisfy lawyer or third party debt

[9.80] Trust moneys are not available for the payment of the lawyer’s personal debts, nor can they be attached or taken in execution for the purpose of satisfying a judgment against the lawyer.48 Similarly, a financial institution at which a trust account is held has no recourse or right, whether by way of set-off, counterclaim, charge or otherwise, against money standing to its credit in respect of the liability

42 To be effective for this purpose, the bill must comply with requirements imposed by the legislation and regulations: Batrouney v Forster [2016] VSCA 80 at [248] per the court. 43 A client’s “instruction” for this purpose must, to be effective, be the product of her or his informed consent to any departure from the authority in the costs agreement: Batrouney v Forster [2016] VSCA 80 at [244], [245] per the court. 44 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 18 per Moffitt P. 45 Re Nelson (1991) 106 ACTR 1 at 11 per Higgins and Foster JJ. On verification of trust accounts see [9.85]–[9.95]. 46 ACT, s 229(1)(a); NSW, s 144(2) (formerly NSW 2004, s 261(1)(a)); NT, s 254(1)(a); Qld, s 258(1)(a); SA, Sch 2, cl 22(1)(a); Tas, s 252(1)(a); Vic, s 144(2) (formerly Vic 2004, s 3.3.20(1)(a)); WA, s 225(1)(a). On the liens generally see Ch 16. 47 Batrouney v Forster [2016] VSCA 80 at [116]–[122] per the court. 48 ACT, s 227; NSW, s 145 (formerly NSW 2004, s 259); NT, s 252; Qld, s 256; SA, Sch 2, cl 20; Tas, s 250; Vic, s 146 (formerly Vic 2004, s 3.3.18); WA, s 223.

[9.95]

9 Duty to Account

337

of the lawyer to that institution.49 This is simply an application of the general law principle that property held in trust is not available for distribution to the trustee’s personal creditors.50

VERIFICATION OF TRUST ACCOUNTS [9.85] The legislation and rules in each jurisdiction provide for external independent monitoring of a lawyer’s trust accounts by means of audit and/or inspection. External examiners and investigators

[9.90] Statute requires lawyers to engage an “external examiner” (in South Australia, an auditor), generally once a year, to examine (in essence, audit) their records in respect of trust money.51 Lawyers must comply with examiners’ legitimate requests for access to relevant accounts and documents, respond to their inquiries and furnish all necessary authorities. An external examiner must report trust accounting breaches or irregularities to the requisite body, which can investigate the matter.52 The legislation also makes provision for the relevant professional body to appoint investigators to ascertain whether a law practice has complied, or is complying, with the trust accounting requirements, and to detect and prevent fraud or defalcation.53 Confidentiality and privilege in trust account verification

[9.95] Where an external examiner or investigator is conferred the right to access trust records and documentation, a lawyer must comply despite any duty of confidentiality to the client. In order to protect the client, the examiner or investigator is prohibited from making unauthorised disclosure.54 Of course, disclosure to the relevant professional body, which may use the information for the purposes of (further) investigation and possible disciplinary proceedings, is permitted: see [10.90]. Whether a lawyer may claim legal professional privilege in response to an examiner’s or investigator’s requests for documents is not explicitly addressed by 49 ACT, s 251(1)(b); NSW, s 169(2)(b) (formerly NSW 2004, s 281(1)(b)); NT, s 279(2)(b); Qld, s 281(1)(b); SA, Sch 2, cl 42(1)(b); Tas, s 274(1)(b); Vic, s 169(2)(b); WA, s 243(1)(b). 50 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [27.65]–[27.105]. 51 ACT, s 241(1); NSW, s 155(1) (formerly NSW 2004, s 274(1)); NT, s 270(1); Qld, s 268(1); SA, Sch 2, cl 34 (formerly SA, s 33); Tas, s 266(1); Vic, s 155(1) (formerly Vic 2004, s 3.3.52(1)); WA, s 237(1). 52 See ACT, ss 246, 247; NSW, s 159(1) (formerly NSW 2004, ss 277, 278, 673); NT, ss 273, 274; Qld, ss 273, 274; SA, Sch 2, cl 39; Legal Practitioners Regulations 2014 (SA), reg 52; Tas, ss 270, 271; Vic, s 159(1) (formerly Vic 2004, ss 3.3.31–3.3.44, 3.3.47); WA, ss 240, 241. 53 See ACT, Subdiv 3.1.3.1; NSW, Pt 4.2 Div 4 (formerly NSW 2004, Pt 3.1 Div 3); NT, Pt 3.1 Div 3 Subdiv 1; Qld, Pt 3.3 Div 3; SA, Sch 2, Pt 3 Div 1 (formerly SA, s 34); Tas, Pt 3.2 Div 4; Vic, Pt 4.2 Div 4 (formerly Vic 2004, Pt 3.3 Div 3); WA, Pt 9 Div 3. 54 ACT, s 248; NSW, ss 159(2), 159(3), 165(2) (formerly NSW 2004, s 278(2), 278(3)); NT, s 275; Qld, s 705; SA, Sch 2, cll 31(2), 39(3), 39(4) (formerly SA, s 37); Tas, s 271(2), 271(3); Vic, ss 159(2), 159(3), 165(2) (formerly Vic 2004, s 3.3.49); WA, s 241(2).

338

Lawyers’ Professional Responsibility

[9.100]

statute. The broad powers of investigation generally conferred on examiners and investigators are arguably wide enough to oust privilege.55 In any case, trust account records are not, as a general rule, privileged communications (see [11.95]) and, even for those that are privileged, any disclosure to an examiner or investigator is unlikely to effect a waiver of privilege for other purposes.56

EXTERNAL INTERVENTION OVER TRUST ACCOUNTS Concept of “external intervention”

[9.100]

In all jurisdictions statute provides for the appointment of a person or body to control a lawyer’s practice in the event, inter alia, of trust account irregularities. Except in South Australia, the legislation groups this provision under the general heading “external intervention”,57 which means the appointment, and the exercise of the functions, of a supervisor, manager or receiver. In South Australia the legislation makes reference to the appointment of a manager in this context.58 That most of the grounds for external intervention focus on trust accounting irregularities merits its mention here. These grounds include where the relevant body forms a belief on reasonable grounds that a law practice:59 • is not dealing adequately with trust money or trust property, or is not properly attending to the affairs of the practice; • has committed a serious irregularity in relation to trust money, trust property or the affairs of the practice; • has failed properly to account in a timely manner to any person for trust money or trust property received by the practice for or on behalf of that person; • has failed properly to make a payment of trust money or a transfer of trust property when required to do so by a person entitled to that money or property, or entitled to give a direction for payment or transfer; • is in breach of the regulations or legal profession rules with the result that the record-keeping for the practice’s trust account is inadequate; • has been or is likely to be convicted of an offence relating to trust money or trust property; • is the subject of a complaint relating to trust money or trust property; • has failed to comply with any requirement of an investigator or external examiner appointed under the legislation; or • has ceased to be engaged in legal practice without making provision for properly dealing with trust money or trust property received by the practice, or for properly winding up the affairs of the practice. 55 Rogerson v Law Society of the Northern Territory (1993) 88 NTR 1 at 9–10 per Asche CJ (who held that a statutory entitlement of a law society investigator to “at any time during business hours” inspect documents “in the custody or control” of a lawyer (under the former Legal Practitioners Act 1974 (NT), s 47(2)(a)) constitutes an abrogation of legal professional privilege). 56 Cf C-C Bottlers Ltd v Lion Nathan Ltd [1993] 2 NZLR 445 at 448–449 per Henry J. 57 ACT, Ch 5; NSW, Ch 6 (formerly NSW 2004, Ch 5); NT, Ch 5; Qld, Ch 5; Tas, Ch 5; Vic, Ch 6 (formerly Vic 2004, Ch 5); WA, Pt 14. 58 SA, Pt 3, Div 9. 59 ACT, s 479; NSW, s 326 (formerly NSW 2004, s 615); NSW s 615; NT, s 571; Qld, s 497; Tas, s 523; Vic, s 326 (formerly Vic 2004, s 5.2.1); WA, s 474. See also SA, s 45(1).

[9.115]

9 Duty to Account

339

Receivers

[9.105]

In the Australian Capital Territory, New South Wales, Tasmania and Victoria it is the court that may, on the application of the relevant body, appoint a receiver for a law practice.60 In Western Australia the application is made to the State Administrative Tribunal;61 in the Northern Territory and Queensland the Law Society may appoint a receiver without application to the court.62 In each case, the receiver may take possession of receivable property – namely all trust and controlled money, files and trust account records – and deal with it as the lawyer could have.63 The appointment is premised on a need to protect the interests of clients in relation to trust money or trust property, or it being otherwise appropriate that the provision of legal services by the practice be wound up and terminated.64 Supervisors of trust money

[9.110]

The Model Laws (as to which see [1.105]) introduced a new office under the rubric of external intervention – a supervisor of trust money – to oversee trust matters for a variable term. The legislation, other than in South Australia, envisages that the relevant body may appoint a supervisor of trust money received by the law practice if it is of the opinion that external intervention is required because of issues relating to the practice’s trust accounts, and that it is not appropriate that the practice be wound up and terminated because of those issues.65 Supervision is the least invasive form of intervention; aside from powers in respect of trust money, a supervisor otherwise has no role in practice affairs. Appointment of trust account supervisors already existed in South Australia. In that State the Law Society Council can – if it knows or has reasonable grounds to believe that a lawyer is for any reason not attending properly to the affairs of her or his practice, or has committed a serious irregularity in the course of practice – appoint a supervisor who has the power to dispose of trust money to persons entitled to the money, and to execute any cheque or other instrument for that purpose.66

Managers

[9.115]

Statute in each jurisdiction makes general provision for the appointment of a manager of a lawyer’s practice. Trust account irregularities may justify such an

60 ACT, s 494 (application by Law Society Council; see, for example, Re a Solicitor (1991) 104 FLR 212 at 218 per Miles CJ); NSW, s 341 (application by the Law Society Council) (formerly NSW 2004, s 630); Tas, s 538 (application by the Legal Profession Board); Vic, s 341 (application by the Legal Practice Board) (formerly Vic 2004, s 5.5.1). 61 WA, s 489 (application by the Legal Practice Board). 62 NT, s 586; Qld, s 512. 63 ACT, ss 499–501; NSW, ss 345–347 (formerly NSW 2004, ss 635–637); NT, ss 591–593; Qld, ss 517–519; Tas, ss 543–545; Vic, ss 345–347 (formerly Vic 2004, ss 5.5.6–5.5.8); WA, ss 494–496. 64 ACT, s 480(2)(c); NSW, s 327(2)(c) (formerly NSW 2004, s 616(2)(c)); NT, s 572(2)(c); Qld, s 498(2)(c); Tas, s 524(2)(c); Vic, s 327(2)(c) (formerly Vic 2004, s 5.2.2(2)(c)); WA, s 475(2)(c). 65 ACT, s 480(2)(a); NSW, s 327(2)(a) (formerly NSW 2004, s 616(2)(a)); NT, s 572(2)(a); Qld, s 498(2)(a); Tas, s 524(2)(a); Vic, s 327(2)(a) (formerly Vic 2004, s 5.2.2(2)(a)); WA, s 475(2)(a). See, for example, Legal Services Board v Forster (2010) 29 VR 277; Legal Services Board v Delahunty [2011] VSC 453. 66 SA, s 44.

340

Lawyers’ Professional Responsibility

[9.125]

appointment, although these are ordinarily better addressed through receivership or supervision. Management is suited to cases where the lawyer has died, or suffers illness or infirmity, or for another reason is unable to properly conduct the practice. A manager is conferred effectively the same powers to conduct the practice as those possessed by the lawyer.67 The appointment of a receiver only terminates management if the appointment authorises the receiver to exercise the powers and duties of a manager.68

FAILURE TO ACCOUNT Claims against the Fidelity Fund

[9.125]

Statute entitles a person who has suffered pecuniary loss by reason of a lawyer’s trust account defalcation to make a claim for compensation from a “guarantee” or “fidelity” fund.69 The nature of the defalcation that triggers a claim is, other than in South Australia, identified as a “default”.70 This term means a failure of a law practice to pay or deliver trust money or trust property received in the course of legal practice, or a fraudulent dealing with trust property received in the course of legal practice, if the failure or dealing arises from or is constituted by a dishonest act or omission.71 In South Australia the relevant terminology is “fiduciary or professional default”,72 defined as any defalcation, misappropriation or misapplication of trust money received, or any wrongful or negligent act or omission occurring, in the course of the practice.73 Where compensation is paid in response to a claim on the fund, the relevant body is, to the extent of that payment, subrogated to the claimant’s rights against the 67 ACT, s 490; NSW, s 336 (formerly NSW 2004, s 626); NT, s 582; Qld, s 508; SA, s 45(3), 45(4); Tas, s 534; Vic, s 336 (formerly Vic 2004, s 5.4.4); WA, s 485. 68 ACT, s 493(1)(c); NSW, s 340(1)(c) (formerly NSW 2004, s 629(1)(b)); NT, s 585(1)(c); Qld, s 511(1)(c); Tas, s 537(1)(c); Vic, s 340(1)(c) (formerly Vic 2004, s 5.4.8(1)(c)); WA, s 488(1)(c). 69 ACT, Pt 3.4; NSW, Pt 4.5 (formerly NSW 2004, Pt 3.4); NT, Pt 3.5; Qld, Pt 3.6; SA, s 57, Pt 5; Tas, Pt 3.5; Vic, Pt 4.5 (formerly Vic 2004, Pt 3.6); WA, Pt 12. The title “guarantee fund” is used in South Australia, Tasmania and Western Australia, whereas the title “fidelity fund” is used in the remaining jurisdictions. 70 ACT, ss 328, 330; NSW, ss 221, 233 (formerly NSW 2004, ss 434, 436); NT, ss 397, 399; Qld, ss 372, 374; Tas, ss 365, 371; Vic, ss 221, 233 (formerly Vic 2004, ss 3.6.5, 3.6.7); WA, ss 349, 351. Although the beneficial purpose of the Fidelity Fund suggests that the statutory language governing an entitlement to maintain a claim to the Fund be given a liberal construction in a claimant’s favour (Daly v Sydney Stock Exchange Ltd (1985) 160 CLR 371 at 380–381 per Gibbs CJ), this does not justify construing the statutory language as extending standing to claim on a person other than a client of the defaulting lawyer: Legal Services Board v Gillespie-Jones (2013) 249 CLR 493 (where counsel held disentitled to claim against the fund where the instructing solicitor misappropriated moneys advanced by a client in trust to the solicitor for the payment of counsel’s fees; the court reasoned that the solicitor was personally responsible for the barrister’s fees, as the client’s instructions did not amount to an instruction to pay the barrister fees without further reference to the client). 71 ACT, s 316; NSW, s 219 (formerly NSW 2004, s 419); NT, s 382; Qld, s 356; Tas, s 350; Vic, s 219 (formerly Vic 2004, s 3.6.2); WA, s 334. 72 SA, s 60(1). 73 SA, s 5(1).

[9.130]

9 Duty to Account

341

defaulting lawyer.74 This is in essence a statutory assignment to that body of the rights and remedies the client had at the time of payment out of the fund.75 Most jurisdictions place caps on claims against the fund.76 Also, a trend is to exclude from fidelity fund coverage claims in respect of solicitors’ investment and mortgage schemes,77 prompted by the overrepresentation of mortgage practices in fidelity fund claims. In any case, most solicitors’ mortgage schemes have been wound up in the wake of Ch 5C of the Corporations Act 2001 (Cth) (with effect on 1 July 1998), which requires these schemes to be conducted through a responsible entity, being a public company holding a dealer’s licence.78 Other consequences of failure to account

[9.130]

The possible consequences of a breach of trust accounting requirements include professional disciplinary action (see [25.50]) and action by the client for compensation directly against the lawyer for breach of trust79 or even for negligence. Lawyers who destroy or convert trust property to their own use may also be subjected to imprisonment80 and penalties under the legal profession legislation. The New South Wales Court of Criminal Appeal in R v Cole made the following remarks as to the criminality of failures to account:81 Defalcations by persons in a position of trust have to be regarded by the courts as much more serious than other types of defalcations. In this regard the solicitor stands in a particular position. He is an officer of this Court, he is held out by it as a fit and proper 74 ACT, s 343; NSW, s 246 (formerly NSW 2004, s 448; see Law Society of New South Wales v Bruce (1996) 40 NSWLR 77, dealing with the former provision: NSW 1987, s 90A); NT, s 410; Qld, s 386; SA, s 65; Tas, s 384; Vic, s 246 (formerly Vic 2004, s 3.6.19; see Legal Services Board v Werden [2011] VSC 74 (affd Werden v Legal Services Board (2012) 36 VR 637)); WA, s 363. 75 Registrar-General v Gill (unreported, CA(NSW), 16 August 1994) at 5. 76 ACT, s 348; NSW, s 230 (formerly NSW 2004, s 456); NT, s 418; Qld, s 396; Tas, s 392; Vic, s 230 (formerly Vic 2004, s 3.6.26); WA, s 371. 77 ACT, s 374; NT, s 445; Qld, s 373(1)(b); SA, s 95BA(2); Tas, s 414(2); WA, s 350(3)(b). There was formerly equivalent provision in New South Wales and Victoria: NSW 2004 s 483; Vic 2004 s 3.6.6. 78 Corporations Act 2001 (Cth), s 601FA. 79 See generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 24. 80 See, for example, Director of Public Prosecutions v Werden [2006] VSC 397 (solicitor who used client trust account funds to feed a gambling habit, leading to a trust account deficiency exceeding $1 million, sentenced to prison for five years and ten months); R v Kesik [2006] VSC 493 (solicitor who misappropriated client trust money over a prolonged period sentenced to imprisonment for three years); Director of Public Prosecutions v Avery (2009) 18 Tas R 401 (solicitor who misappropriated over $500,000 of client trust money over a prolonged period sentenced to imprisonment for six years); Brennan v State of Western Australia [2010] WASCA 19 (solicitor stealing funds belonging to a client on multiple occasions over a long period and involving a large amount of money; sentence of seven years and six months not disturbed on appeal); sentence of 7 years 6 months not disturbed on appeal); R v Munt [2015] VSC 132 (solicitor who operated a “ponzi scheme”, defrauding clients of over $4m, sentenced to imprisonment for eight years and six months). 81 R v Cole (unreported, CCA(NSW), 10 May 1974). This passage was cited with approval in R v Howse [2002] VSC 197 at [35] per Flatman J; R v Just [2003] VSC 274 at [40] per Osborn J; R v Grant [2006] VSC 235 at [26] per Habersberger J. See also Director of Public Prosecutions v Ryan (unreported, FC(Vic), 7 April 1986) at 6 per Young CJ (“a solicitor is in a special position. He is not only in a position of trust but he is held out by the Court as a person of skill and ability and as a person who can be trusted. That is the consequence of his admission to practise as a barrister and solicitor of the Court. Such a person must, in my view, inevitably suffer severe punishment for offences which

342

Lawyers’ Professional Responsibility

[9.130]

person to practise his profession, to receive his clients’ money and to be the recipient of their justified financial trust and confidence. It is not possible for the courts to regard lightly the defaulting solicitor whose actions tend to undermine the security of ordinary people and the fabric of a profession on which and on whose integrity the public are to such an extent dependent. This is particularly the type of case in which the court is entitled to express, on behalf of the community, its disapproval of the particular type of breach of trust involved.

Dunford J in R v Smith82 added that when the community’s trust in lawyers is abused by the commission of fraud in any form, “not only does the client or person of fraud suffer, but the integrity of the profession is necessarily called into question and the courts must impose sentences which are calculated to ensure that no solicitor will be left in doubt as to the serious consequences that will follow from such conduct”.

demonstrate that he is not to be trusted. Offences which demonstrate that a solicitor is not to be trusted bring the whole profession of the law into disrepute, and a solicitor guilty of such offences cannot expect to be treated leniently”), sentiments endorsed by Nettle JA in R v Bernstein [2008] VSC 254 at [40]. 82 R v Smith (2000) 114 A Crim R 8 at [15], with whom Foster AJA and Smart AJ concurred.

Chapter 10

Confidentiality [10.05] NATURE OF THE DUTY ................................................................................................. 343 [10.10] Rationale for the duty ................................................................................................. 344 [10.15] Source of the duty ........................................................................................................ 344 [10.20] SCOPE OF THE DUTY .................................................................................................... 345 [10.20] When sourced in contract ........................................................................................... 345 [10.25] When sourced in equity .............................................................................................. 345 [10.30] When sourced in professional rules ......................................................................... 346 [10.35] Duration and priority of the duty ............................................................................ 346 [10.40] Compared to legal professional privilege ............................................................... 347 [10.45] LIMITS AND EXCEPTIONS TO THE DUTY .............................................................. 347 [10.50] Client authorisation ..................................................................................................... 348 [10.70] Disclosure compelled by law ..................................................................................... 350 [10.85] Disclosure ostensibly to support lawyer’s own interests ..................................... 352 [10.95] Disclosure of information that is not confidential ................................................. 353 [10.100] Disclosure of client’s criminal conduct or intent ................................................. 354 [10.130] Disclosure in the public interest .............................................................................. 358 [10.140] FULFILLING THE DUTY .............................................................................................. 360 [10.140] Consequences of unauthorised disclosure ............................................................ 360 [10.145] Preserving confidentiality ......................................................................................... 360 [10.180] Fulfilling privacy obligations ................................................................................... 364 [10.185] SHOULD THE DUTY REMAIN? ................................................................................. 365

NATURE OF THE DUTY [10.05]

The lawyer–client relationship has from the earliest times been characterised as one of confidence. A century ago this led an English judge to observe that “the degree of the confidential character of the relation … is in the eyes of the law the very highest”, such that the court “can fix a standard for the behaviour of its own officers which is higher than it would be practicable to exact from persons in other types of confidential relations”.1 That the relationship is one of confidence translates into a duty on the lawyer to maintain inviolate clients’ confidences;2 it also forms the broader foundation for fiduciary duties lawyers owe to their clients: see [4.40]–[4.65]. 1 Rakusen v Ellis, Munday and Clarke [1912] 1 Ch 831 at 840 per Fletcher Moulton LJ. 2 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 214 per Stanton J; Baker v Campbell (1983) 153 CLR 52 at 65 per Gibbs CJ.

344

Lawyers’ Professional Responsibility

[10.10]

Rationale for the duty

[10.10]

The duty of confidentiality is commonly justified as a vehicle to encourage full and frank disclosure between client and lawyer. The protection it affords dictates that clients can seek and obtain legal advice without fear of being prejudiced by its subsequent disclosure.3 In turn, it is reasoned, public confidence is fostered in lawyers and the legal system.4 Confidentiality may also have heuristic value as a reminder to lawyers of the loyalty they owe to their clients.5 The validity of these justifications should not, however, be assumed; there are some who query them (see [10.185]), although the tide of Australian judicial opinion gives little credence to these queries. Source of the duty

[10.15]

At general law, the duty of confidentiality is sourced from an amalgam of contract law and equity stemming from the peculiar relationship of lawyer and client. In contract, it is via a term implied in law into the retainer agreement.6 Equity protects confidentiality information from unauthorised use or disclosure,7 and so can also explain lawyer–client confidentiality. The duty is replicated by the terms of professional rules in each jurisdiction.8 That some professional rules locate the duty of confidentiality as “inherent in the fiduciary relationship” between lawyer and client9 does not mean that it represents a fiduciary duty. Although both serve to foster loyalty, and have a common genesis, they cannot be equated. Not all so-called fiduciary relationships as a matter of course attract duties of confidentiality; nor do all relationships in which confidential information is communicated attract attendant fiduciary duties. Moreover, and particularly in the lawyer–client context, duties of confidentiality often outlast fiduciary duties: see [10.35].

3 Fruehauf Finance Corp Pty Ltd v Feez Ruthning (a firm) [1991] 1 Qd R 558 at 565 per Lee J; Marriage of Griffis (1991) 14 Fam LR 782 at 785 per Mullane J. 4 Marriage of Griffis (1991) 14 Fam LR 782 at 791 per Mullane J; Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 at 236 per Lord Millett; Babcock & Brown DIF III Global Co-Investment Fund LP v BBLP LLC [2015] VSC 453 at [79] per Riordan J; Federation of Law Societies of Canada v Canada (Attorney General) [2015] 1 SCR 401 at [1] per Cromwell J (identifying the duty of confidentiality as “essential to the due administration of justice”). 5 Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 300. 6 Parry-Jones v Law Society [1969] 1 Ch 1 at 7 per Lord Denning, at 9 per Diplock LJ; Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 108 per Ipp J; Westgold Resources NL v St Barbara Mines Ltd [2002] WASC 264 at [17] per E M Heenan J; Ismail-Zai v State of Western Australia [2007] WASCA 150 at [66] per E M Heenan J. 7 See generally Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 6. 8 ACT, r 9.1; NSW, r 9.1; NT, r 2.1; Qld, r 9.1; SA, r 9.1; Tas, r 11(1); Vic, r 9.1; WA, r 9(2). 9 ACT, r 9 Guideline; NT, r 2.2. There are occasional curial statements to the same effect: see, for example, Marriage of Griffis (1991) 14 Fam LR 782 at 785 per Mullane J.

[10.25]

10 Confidentiality

345

SCOPE OF THE DUTY When sourced in contract

[10.20]

The scope of the lawyer–client duty of confidentiality is determined according to its source. As it is primarily sourced in contract, it is the wording of the relevant implied term that prescribes its scope. Yet there is relatively little attempt in the case law to phrase this implied term. An English judge has simply branded “[a]ll information supplied by a client to his solicitor” as confidential,10 which is unduly broad given the various qualifications and exceptions to the duty discussed at [10.45]–[10.135]. A description closer to the mark, espoused by a Canadian judge, speaks of “any information received by a lawyer in his professional capacity concerning his client’s affairs is prima facie confidential unless it is already notorious or was received for the purpose of being used publicly or otherwise disclosed in the conduct of the client’s affairs”.11 From the above contractual perspective, the obligation of confidence should be seen as premised not upon the source of the information (say, the client, as opposed to a third party) but on its connection with the retainer.12 This also explains why conclusions reached by a lawyer from information connected with the retainer are treated as confidential as the information itself.13 When sourced in equity

[10.25]

Equity attaches protection to information capable of meeting the legal test of confidentiality, which revolves around whether the information is public knowledge and whether its communication was for a limited purpose.14 Rather than deeming all information to be confidential, equity requires an investigation into whether or not the information legitimately fulfils that description. It recognises that not every communication from client to lawyer involves the communication of confidential information.15 Yet equity ostensibly secures broader protection for confidentiality than contract, at least if the contractual duty is assumed to dissipate upon the termination of the contract giving rise to it (the retainer). In equity the duty of confidentiality remains until, inter alia, the information loses its confidentiality, which may expire long after the termination of the retainer, or not at all. Certainly the case law involving applications to disqualify 10 Mortgage Express Ltd v Bowerman & Partners (a firm) [1996] 2 All ER 836 at 845 per Millett LJ. See also Unioil International Pty Ltd v Deloitte Touche Tohmatsu (a firm) (1997) 17 WAR 98 at 108 per Ipp J. 11 Ott v Fleishman [1983] 5 WWR 721 at 723 per McEachern CJSC. See also Babcock & Brown DIF III Global Co-Investment Fund LP v BBLP LLC [2015] VSC 453 at [73] per Riordan J (“communications (other than those about matters of common or public knowledge) between a client and a solicitor for the purposes of obtaining or giving legal advice would have the necessary ingredient of confidentiality against all persons unless, by reason of implied direction or otherwise, the solicitor was authorised to provide the confidential communication to the third party”). 12 Marshall v Prescott (No 3) [2013] NSWSC 1949 at [154] per Beech-Jones J (affd Marshall v Prescott [2015] NSWCA 110). 13 Marsh v Sofaer [2004] PNLR 24 at [42], [43] per the Vice-Chancellor. 14 See Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), Chs 8, 10. 15 Australian Commercial Research and Development Ltd v Hampson [1991] 1 Qd R 508 at 518 per Mackenzie J; Church v Price [2000] NSWSC 754 at [20] per Young J.

346

Lawyers’ Professional Responsibility

[10.30]

lawyers from acting against former clients rests chiefly on proof of potential misuse of confidential information, presumably in equity: see [8.05], [8.10], [8.30]. When sourced in professional rules

[10.30]

Targeted statements of the scope of lawyer–client confidentiality are found in professional rules. The Tasmanian rules extend confidentiality to “any information obtained in the course of handling [a client’s] matter”,16 and the Canadian equivalents apply it to “all information concerning the business and affairs of the client acquired in the course of the professional relationship”.17 These rules premise the duty of confidence not upon the source of the information but on its connection with the retainer, effectively deeming that information confidential. Rules so phrased, though they emphasise the importance of the duty, should not be taken entirely at face value. Not all information connected with the retainer, merely because of that relationship, meets the legal test of confidentiality. This may explain the trend for professional rules to apply the duty of confidence to “any information which is confidential to a client and acquired by the solicitor during the client’s engagement to any person”18 or, for counsel, to “confidential information obtained by the barrister in the course of practice concerning any person to whom the barrister owes some duty or obligation to keep such information confidential”.19 It stands to reason that, for the purpose of these rules, confidentiality attracts its legal meaning. Duration and priority of the duty

[10.35]

Notwithstanding varying formulations as to its scope, the lawyer’s duty of confidentiality is not ousted by the termination of the retainer or by the death of the client.20 Nor is it reduced by a duty owed to another client.21 Lawyers can also assume duties of confidentiality to third parties, and so may be disqualified from 16 Tas, r 11(1) (see also the barristers’ rules, that extend a barrister’s duty of confidentiality to “any information which has come to him in his professional capacity and in the legitimate course of his professional employment by such client”: Tas, para 24). 17 Can CPC, r 3.3-1. 18 ACT, r 9.1; NSW, r 9.1; NT, r 2.1; Qld, r 9.1; SA, r 9.1; Vic, r 9.1. Cf WA, r 9(1) (“information confidential to a client of which a practitioner becomes aware in the course of providing legal services to the client”). 19 ACT, r 103; NSW, r 114; NT, r 103; Qld, r 108; SA, r 108; Vic, r 114; WA, r 108. 20 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 49 per Richardson J; Swidler v United States (1998) 524 US 399 (where the majority of the United States Supreme Court, per Rehnquist CJ, reasoned as follows (at 407): “we think there are weighty reasons that counsel in favor of posthumous application. Knowing that communications will remain confidential even after death encourages the client to communicate fully and frankly with counsel. While the fear of disclosure, and the consequent withholding of information from counsel, may be reduced if disclosure is limited to posthumous disclosure in a criminal context, it seems unreasonable to assume that it vanishes altogether. Clients may be concerned about reputation, civil liability, or possible harm to friends or family. Posthumous disclosure of such communications may be as feared as disclosure during the client’s lifetime”). 21 See, for example, Hilton v Barker Booth & Eastwood [2002] Lloyd’s Rep PN 500; Eiszele v Hurburgh [2011] TASSC 65, each discussed at [7.20].

[10.45]

10 Confidentiality

347

acting against a third party if this raises a real possibility of information confidential to that party being misused to her or his detriment: see [21.110], [21.115]. Compared to legal professional privilege Despite their common origin,22 shared goals (see [10.10], [11.15]) and apparent similarities, legal professional privilege differs from the duty of confidentiality in important ways. Fundamentally, privilege does not depend on a contractual, equitable or professional duty owed to clients, but rests on the wider ground of public policy: see [11.15]. Communications protected by confidentiality are more extensive than those that are privileged;23 as the privilege is premised upon confidentiality (see [11.105]–[11.115]), privileged communications represent a subset of confidential communications, requiring the fulfilment of other requirements: see [11.35]–[11.50], [11.70]–[11.100].

[10.40]

The upshot of the foregoing is that privileged information is protected from compulsory disclosure (see [11.05]) – unless the privilege is ousted by statute (see [11.225]–[11.240]) or waived (see [11.245]–[11.300]) – whereas non-privileged confidential information must yield to such compulsion. In the latter case, the public interest in discovering the truth prevails over the private duty to respect confidence.24

LIMITS AND EXCEPTIONS TO THE DUTY [10.45]

The duty of confidentiality, notwithstanding the way it is sometimes expressed, is by no means absolute. Client interests sustaining the confidentiality do not always coincide with the interests of third parties or lawyers. The resulting need to prioritise those interests exerts pressure to restrict the scope of confidentiality, and in some contexts may justify the disclosure of confidential communications; in these instances the disclosure is invariably in a limited form and to a limited audience determined by what the lawyer reasonably believes is necessary to accomplish the purpose for the disclosure.25 In others it raises some of the most difficult ethical challenges facing lawyers, highlighting the tension between acting purely as a client mouthpiece and fostering the proper administration of justice.

22 The doctrine of legal professional privilege originally rested on a lawyer’s duty, oath and honour to keep a client’s secrets. It arose out of the lawyer’s professional relationship with a client rather than with the broader consideration of public interest in the effective working of the legal system. The modern theory – that the doctrine is necessary to promote freedom of consultation of legal advisers by clients – did not clearly emerge until the 19th century. See R v Uljee [1982] 1 NZLR 561 at 574 per McMullin J; Baker v Campbell (1983) 153 CLR 52 at 84–85 per Murphy J, at 93–94 per Wilson J, at 113–114 per Deane J, at 126–127 per Dawson J; Williams, “Discovery of Civil Litigation Trial Preparation in Canada” (1980) 58 Can Bar Rev 1 at 37-39. 23 Minter v Priest [1930] AC 558 at 568 per Lord Buckmaster; D v NSPCC [1978] AC 171 at 218 per Lord Diplock; Marriage of Griffis (1991) 14 Fam LR 782 at 785 per Mullane J. The Northern Territory provide that a lawyer’s duty “to maintain the confidentiality of a client’s affairs is not limited to information which might be protected by legal professional privilege”: NT, r 2.2. 24 Baker v Campbell (1983) 153 CLR 52 at 65 per Gibbs CJ, at 111 per Deane J. 25 A point made explicit in US, r 1.6, cmt [14] but necessarily implicit in the Australian rules.

348

Lawyers’ Professional Responsibility

[10.50]

Discussed below are commonly cited exceptions to the duty of confidence,26 ordered from the least controversial to the most ethically challenging. Client authorisation

[10.50]

As lawyer–client confidentiality attaches for the benefit of the client – the confidence is the client’s – the client may authorise the lawyer to disclose what otherwise comes within its mantle; that is, the client can elect to waive or modify the relevant obligation. This is clearly envisaged by professional rules,27 supported by judicial statements,28 and consistent with the contractual and equitable foundation for the duty. For information received from joint clients, the consent of each client is required to waive confidentiality.29 The scope of any client authorisation, consent or waiver is determined by its terms. But aside from a clear statement to the contrary, consent to the disclosure for the purposes of the retainer

26 These may not be exhaustive. For instance, in August 2012 r 1.6(b)(7) was added to the American Model Rules of Professional Conduct, containing an exception to confidentiality where reasonably necessary to “detect and resolve conflicts of interest between lawyers in different firms arising from the lawyer’s change of employment or from changes in the composition or ownership of a firm, but only if the revealed information would not compromise the attorney-client privilege or otherwise prejudice the client”. An equivalent provision appears in the Canadian rules: Can CPC, r 3.3-7. This rule, its American commentary adds (via cmt [13]), recognises that lawyers in different firms may need to disclose limited information to each other to detect and resolve conflicts of interest, such as when a lawyer is considering an association with another firm, two or more firms are considering a merger, or a lawyer is considering the purchase of a law practice. Any such disclosure should ordinarily include no more than the identity of the persons and entities involved in a matter, a brief summary of the general issues involved, and information about whether the matter has terminated, in each case disclosed only to the extent reasonably necessary to detect and resolve conflicts of interest that might arise from the possible new relationship. The commentary adds that the disclosure of any information is prohibited if it would compromise the lawyer-client privilege or otherwise prejudice the client. The same logic ought to be persuastive in the Australian environment, given the need here (as elsewhere) to screen client–client conflicts (as to which see Chs 7 and 8). 27 See ACT, r 9.2.1; NSW, r 9.2.1; NT, r 2.1.1; Qld, r 9.2.1; SA, r 9.2.1; Tas r 11(1); Vic, r 9.2.1; WA, r 9(3)(a) (where “the client expressly or impliedly authorises the disclosure of the information to that person or the practitioner believes, on reasonable grounds, that the client has authorised the disclosure of the information to that person”). The barristers’ rules make similar provision: see ACT, rr 103(c), 104; NSW, rr 114(b), 115; NT, rr 103(c), 104; Qld, rr 108(b), 109; SA, rr 108(b), 109; Vic, rr 114(b), 115; WA, rr 108(b), 109 28 See, for example, Marriage of Griffis (1991) 14 Fam LR 782 at 786 per Mullane J. 29 Singla v Stockler [2012] EWHC 1176 (Ch) at [10] per Briggs J (adding that although in circumstances falling short of a joint retainer – where the lawyer represents the client (A) but not a third party to the litigation (B) – the court will be slow to deprive the A of the ordinary expectation of confidence, circumstances may arise, or A and B may be shown to have conducted themselves in such a way, that the only realistic explanation is that the ordinary obligation of confidence has been wholly removed, as between the lawyer and B, even if it remains in place as between the lawyer and the rest of the world: at [15]); Hamilton and Dixon Group Sipp v Hastings and Co (Solicitors) [2015] PNLR 17 at [12] per Deeny J.

[10.65]

10 Confidentiality

349

does not entitle the lawyer to disclose or use the information for other purposes, such as to advance her or his own interests30 or those of other clients.31 Inferred client authorisation for disclosure incidental to the conduct of the retainer

[10.55]

Authority or consent need not, at least as to the conduct of the retainer, be express. It can necessarily be inferred from the nature and terms of the retainer. Maintaining the confidentiality of all information communicated within the retainer could frustrate the purpose of the representation; much of that information has been communicated precisely so that it can be used or disclosed for its purposes. Contents of pleadings, for instance, involve the disclosure of information disclosed in the course of a retainer. Similarly in non-contentious matters, it follows (for example, from a retainer to effect probate) that a lawyer must communicate with the court (and others) information received within the confines of the retainer. For this reason, the duty of confidentiality, whether sourced in contract or in equity, must be read subject to the lawyer’s authority to use and disclose information – albeit for the limited purposes of the retainer – where this is necessary for, or incidental to, the proper or normal conduct of the retainer. In any case, though, a lawyer uncertain as to the authority to use or disclose information should secure express authority from the client.

Inferred client authorisation for disclosure to others within the firm

[10.60]

Except for information clearly confided personally and exclusively, implied authority or consent to disclose covers a lawyer’s disclosure of client confidential information to partners or employees in her or his firm,32 who are then subject to the obligation of confidence. This makes sense because the retainer is ordinarily with the firm, not with the individual lawyer. Thus it is the firm that owes the relevant duty, and it may be liable for the unauthorised use of information by its employees or partners (as well as personal liability resting in those individuals). Inferred client authorisation for disclosure to other lawyers outside the firm

[10.65]

The lawyer’s authority may encompass the disclosure of client confidential information to a lawyer outside the firm. For instance, if a client has agreed for her or his lawyer to seek counsel’s advice, this constitutes express authority to disclose relevant information to counsel. It may also be legitimate to make a disclosure to another lawyer even without express authority, where advice

30 See, for example, Re Smith (2013) 991 NE 2d 106 (lawyer who wrote an autobiographical book of his relationship with a former client (F), motivated to do so partly to recoup fees F owed him, struck from the roll; the Indiana Supreme Court did not accept that F gave informed consent to the disclosures in the book). 31 Fordham v Legal Practitioners Complaints Committee (1997) 18 WAR 467 at 486 per Malcolm CJ. 32 ACT, r 9.1; NSW, r 9.1; NT, r 2.1; Qld, r 9.1; SA, r 9.1; Vic, r 9.1. Cf WA, r 9(2) (“A practitioner must not disclose client information to a person other than the client unless the person is: (a) an associate of the practitioner’s law practice; (b) a person engaged by the practitioner’s law practice for the purposes of providing legal services to the client; or (c) a person employed or otherwise engaged by an associated entity of the practitioner’s law practice for the purposes of providing administrative services to the client”; “Associated entity” is defined in WA, r 9(1)).

350

Lawyers’ Professional Responsibility

[10.70]

is sought from the latter on the conduct of the matter.33 Indeed, it is good practice for lawyers to seek the views of others, disclosing scenarios in non-identifiable form, where they are unsure of how to proceed. In McKaskell v Benseman,34 for example, Jeffries J held that disclosing to a senior lawyer a letter sent to the client for the purposes of advice on an ethical matter did not breach confidence because it was effected “in the course of a serious and earnest search for assistance in the interests of [the lawyer’s] clients”. It is a different story where a lawyer, without express client consent, asks other lawyers for help on several client matters and transfers client files for this purpose.35 Disclosure compelled by law

[10.70]

The priority accorded by statute over the general law dictates that duties imposed by the general law, such as confidentiality, can be ousted by statute. Parliament may, to this end, require a lawyer, even lacking express or inferred client authorisation, to disclose confidential client information, and the lawyer must comply with this requirement.36

Disclosure limited in scope and purpose

[10.75]

Disclosures compelled by statute are never blanket duties or entitlements to disclose to anyone and for any purpose. They represent occasions where Parliament decrees that the public interest in access to information overrides client interests in preserving its confidentiality. Any duty to disclose is therefore restricted in objective and scope, and is usually directed to a regulatory body to secure a regulatory objective. An example is disclosure to a legal aid body information

33 ACT, r 9.2.3; NSW, r 9.2.3; Qld, r 9.2.3; SA, r 9.2.3; Vic, r 9.2.3; WA, r 9(3)(c) The barristers’ rules in most jurisdictions envisage that a barrister may make a disclosure to another barrister for the purposes of advice, in which case the latter is subject to the same duty of confidentiality that binds the disclosing barrister: ACT, rr 105, 106; NSW, rr 116, 117; NT, rr 105, 106; Qld, rr 110, 111; SA, rr 110, 111; Vic, rr 116, 117; WA, rr 110, 111. See also NZ, r 8.4(e) (which permits disclosure of confidential information where this is necessary “for the lawyer to seek guidance from another lawyer in respect of a proper course of professional conduct, and in such case that other lawyer is bound to maintain the confidence of the client”; Sing, r 6(3)(a) (allows disclosure “in confidence, for the sole purpose of obtaining advice in connection with the legal practitioner’s legal or ethical obligations”). Cf Tas, para 15, which provides that a barrister has no right (without the client’s consent) to lend papers in any brief of instructions or reveal their contents to any person otherwise than as may be necessary for the proper discharge of the duties as counsel. 34 McKaskell v Benseman [1989] 3 NZLR 75 at 88. 35 Re Mandelman (1994) 514 NW 2d 11. Cf D A Starke Pty Ltd v Yard [2012] SASC 19 at [81] per Kourakis J (“as long as a solicitor acts reasonably, he or she is not obliged to manage his or her workload and working hours so that he or she can, without fail, attend personally to the affairs of his or her clients. It is reasonable to conduct a legal practice in a way which will, on occasion require the engagement either of another solicitor, as an agent or a locum, or in a way which requires the engagement of a counsel”). 36 Parry-Jones v Law Society [1969] 1 Ch 1 at 7 per Lord Denning, at 9 per Diplock LJ. This is reflected in the professional rules in most jurisdictions: see ACT, r 9.2.2; NSW, r 9.2.2; NT, r 2.1.2; Qld, r 9.2.2; SA, r 9.2.2; Vic, r 9.2.2; WA, r 9(3)(b). The barristers’ rules are similarly qualified (“except as compelled by law”): ACT, r 103; NSW, r 114; NT, r 103; Qld, r 108; SA, r 108; Tas, para 24; Vic, r 114; WA, r 108.

[10.80]

10 Confidentiality

351

relevant to its (continuing) funding of the representation.37 Another is the duty imposed on lawyers by the Financial Transactions Reports Act 1988 (Cth) to report on cash transactions of $10,000 or more entered into by them or on their behalf.38 Pursuant to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), lawyers who provide “designated services” – which include loans39 or the provision of certain services as the holder of an Australian financial services licence40 – become “reporting entities” and must lodge reports with AUSTRAC41 in relation to “threshold transactions”42 and “suspicious matters”.43 The Act, however, is expressed not to affect the law relating to legal professional privilege,44 and contains specific exemptions for international funds transfer,45 and safe deposit box or custodial,46 services provided by lawyers. Compulsory disclosure does not override privileged communications

[10.80]

Even disclosures compelled by statute must yield to communications the subject of legal professional privilege (unless, exceptionally, statute ousts the privilege, whether expressly or by necessary implication: see [11.225]–[11.240]). This is because the privilege is sourced in public policy and, once identified, is absolute and unqualified, thereby negating any “balancing” between that privilege and some other public or private interest.47 Confidentiality in itself is not so absolute or unqualified; that lawyer–client information is confidential does not always bring to an end questions of whether a weightier public interest should override confidentiality, a point evident from the discussion at [10.100]–[10.135].

37 See, for example, Legal Aid Commission Act 1979 (NSW), s 38A; SA, r 16A.3; Tas, r 16; Legal Aid Act 1978 (Vic), s 31. 38 Financial Transactions Reports Act 1988 (Cth), s 15A(1) (see the definitions of “cash dealer” and “significant cash transaction” in s 3(1)), operational as of 15 May 1997. The report must contain the reportable details prescribed in Sch 3A. 39 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 6(2) (Table 1, items 6 and 7). 40 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 6(2) (Table 1, item 54). 41 AUSTRAC is the acronym for the Australian Transaction Reports and Analysis Centre, which is Australia’s anti-money laundering and counter-terrorism financing regulator and specialist financial intelligence unit. See Australian Transaction Reports and Analysis Centre, Information from AUSTRAC about the Anti-Money Laundering and Counter-Terrorism Financing Reporting: Obligations of Legal Practitioners, May 2011, available at http://www.lawcouncil.asn.au. 42 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 43. 43 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 41. 44 Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 242. Cf Federation of Law Societies of Canada v Canada (Attorney General) [2015] 1 SCR 401 (ruling that provisions of Canada’s anti-money laundering and anti-terrorist financing legislation that provided inadequate protection for client privilege were unconstitutional). 45 Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No 1) (Cth), Ch 23. 46 Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No 1) (Cth), para 40.2. 47 Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 183 CLR 121 at 128 per Brennan J, at 133–137 per Deane J.

352

Lawyers’ Professional Responsibility

[10.85]

Disclosure ostensibly to support lawyer’s own interests Disclosure to substantiate entitlement to remuneration

[10.85]

A lawyer may disclose confidential information pertaining to the retainer in reasonably seeking to establish or collect the fee in respect of the retainer.48 A lawyer unable to disclose to a court, or to a taxing officer or costs assessor, the nature and scope of the retainer may be effectively unable to substantiate a costs entitlement. This would have significant adverse repercussions for access to justice, as it would likely incline lawyers to undertake work for their client only upon receiving their entire fee in advance. Disclosure to defend disciplinary or legal proceedings against lawyer

[10.90]

A client who institutes proceedings against a lawyer for breach of duty (whether contractual, tortious or equitable), or to recover costs paid, is treated as having waived the right to confidentiality (and legal professional privilege) in relation to the matters he or she has put in issue by pursuing the claim.49 This is premised on grounds of procedural fairness; lawyers unable to adduce evidence pertaining to the retainer because of confidentiality would find it almost impossible to defend their actions. In turn this may disincline courts to rule in favour of clients and/or lead lawyers to either refuse certain legal work or seek to introduce exclusion clauses into their retainers (which are arguably contrary to the public interest: see [5.195]). For these reasons, and also owing to duties imposed by the terms of professional indemnity insurance policies, nor does confidentiality preclude disclosures to a lawyer’s professional indemnity insurer to the extent required under those policies.50

The same is true for a lawyer defending a disciplinary charge or complaint – recognised variously under statute51 and/or in professional rules,52 or as a necessary corollary of the broad information-gathering powers conferred on

48 This is explicitly stated in NZ, r 8.4(f). 49 Benecke v National Australia Bank Ltd (1993) 35 NSWLR 110; Lillicrap v Nalder & Son (a firm) [1993] 1 WLR 94; Nederlandse Reassurantie Groep Holding NV v Bacon & Woodrow (a firm) [1995] 1 All ER 976 at 978, 986–987 per Colman J; Swirski v Hachey (1995) 132 DLR (4th) 122 at 130 per Wilkinson J (SC(BC)); Kershaw v Whelan [1996] 2 All ER 404 at 412–415 per Ebsworth J; Esso Australia Resources Pty Ltd v BHP Billiton Petroleum (Bass Strait) Pty Ltd [2007] VSCA 224 (claim for reimbursement of legal costs); Eurasian Natural Resources Corporation Ltd v Dechert LLP [2014] EWHC 3389 (Ch) at [35], [36] per Roth J. Cf Nicolaou v Truman Facilities Pty Ltd [2014] NSWSC 1459. 50 ACT, r 9.2.6; NSW, r 9.2.6; Qld, r 9.2.6; SA, r 9.2.6; Vic, r 9.2.6; WA, r 9(3)(f). 51 The legal profession legislation in most jurisdictions explicitly requires a lawyer to comply with any requirement to answer a question or produce information despite any duty of confidentiality: ACT, s 470; NSW, s 321 (formerly NSW 2004, s 603); NT, s 563; Qld, s 491(1); Tas, s 516; Vic, s 321 (formerly Vic 2004, s 4.4.11(6)(a)); WA, s 467. 52 See SA, r 140 (barristers); WA, r 9(3)(g).

[10.95]

10 Confidentiality

353

professional bodies and tribunals by the legal profession legislation.53 Nor does a disclosure here constitute a breach of legal professional privilege.54 Disclosure of information that is not confidential

[10.95]

As the duty of confidentiality is designed to protect the client, and encourage the client to make full disclosure, neither of these purposes is threatened by a disclosure of information already in the public domain. It follows that, where the information is public knowledge – that is, no longer confidential – the purposes served by maintaining the confidence arguably expire.55

Yet caution should be exercised in disclosing what is ostensibly public information. It is conceivable that clients may nonetheless perceive a remnant of a duty of loyalty owed by their lawyer, and feel betrayed by the disclosure. Merely because this vests no legal entitlement in the client does not mean that the lawyer should feel completely free to speak as if no duty of confidentiality ever attached to the information in question. This concern is exacerbated in two ways. First, information in the public domain may not be entirely accurate. For a lawyer to comment on, and confirm, the correctness or otherwise of the information may give it the imprimatur of truth.56 In a sense, in giving weight to what may have been partly unsubstantiated information, the lawyer has disclosed something confidential. Certainly if the lawyer opts to correct information in the public domain without client consent, there is considerable danger of breaching confidence. Second, as lawyers’ knowledge of their client’s affairs is likely to be more extensive than published information, there remains the danger of inadvertent disclosure of confidential information.57 53 As to which see, ACT, Pt 4.4; NSW, Ch 7 (formerly NSW 2004, Ch 6); NT, Pt 4.6; Qld, Pt 4.6; SA, ss 76(3), 77A(3), 84; Tas, Pt 4.4; Vic, Ch 7 (formerly Vic 2004 Pt 4.4 Div 3); WA, Pt 13 Div 6. 54 The legal profession legislation in most jurisdictions states this explicitly: ACT, s 472; NSW, s 321 (formerly NSW 2004, s 604(1)); NT, ss 564, 565; Tas, ss 517, 518; Vic, s 321; WA, ss 468, 469. The Northern Territory (and former New South Wales) legislation also empowers the relevant professional or regulatory bodies to give undertakings as to non-disclosure of privileged or confidential information so obtained whether or not the client has waived privilege or confidentiality: NSW 2004, s 605; NT, s 562 . This represents an attempt to address the High Court’s ruling in Goldberg v Ng (1995) 185 CLR 83, where it held that a lawyer who discloses documents to the Law Society in dealing with inquiries arising out of a complaint cannot claim privilege over those documents in civil proceedings brought by the complainant against her or him if this is unfair to the complainant. 55 This is envisaged by both curial statements (see, for example, Ott v Fleishman [1983] 5 WWR 721 at 723 per McEachern CJSC; Re a Firm of Solicitors [1995] 3 All ER 482 at 489 per Lightman J) and necessarily inferred from the reference to information confidential to a client in professional rules. The barristers’ rules exempt from the duty of confidentiality information that has obtained from another person who is not bound by the confidentiality owed by the barrister to the first person and who does not give the information confidentially to the barrister: ACT, r 103(b); NSW, r 114(a); NT, r 103(b); Qld, r 108(a); SA, r 108(a); Vic, r 114(a); WA, r 108(a). 56 See Dal Pont, “Confidentiality and Celebrity” (2009) 83 (Oct) LIJ 76. 57 See, for example, Legal Services Commissioner v Tampoe [2009] LPT 14 (where the respondent solicitor was struck from the roll as a result of disclosing to the media, in the course of a television interview

354

Lawyers’ Professional Responsibility

[10.100]

Disclosure of client’s criminal conduct or intent Tension between confidentiality and protecting society

[10.100] The tension between the interests of the client in preserving confidentiality and encouraging full disclosure to her or his lawyer, and the public interest in protecting members of society from harm, has long raised a difficult ethical issue. The notorious American Lake Pleasant case58 highlights this tension. An attorney represented a client charged with murder. The client disclosed (under hypnosis) that he had committed other unsolved murders. Even though the parents of the victims of these murders had made public appeals for information, the lawyer did not come forward, even after having confirmed the client’s story by visiting the site at which a body was located. In preserving client confidentiality, the lawyer was held to have “conducted himself as an officer of the court with all the zeal at his command to protect the constitutional rights of his client”.59 Whether he acted ethically or morally in a broader sense, however, may have been another thing. A commentator contemporarily observed that “[m]embers of the public were shocked at the apparent callousness of [the lawyer], whose conduct was seen as typifying the unhealthy lack of concern of most lawyers with the public interest and with simple decency”.60 Others have since argued that, in these circumstances, lawyer disclosure should be a matter of duty.61 The stakes are heightened for disclosures that the client has committed crimes for which another person has been wrongly convicted. It could be argued that the client’s right to confidentiality should yield to an innocent person’s right to freedom, as maintaining confidentiality is a course diametrically opposed to the notion that it is better for the guilty to go free than for the innocent to be convicted. Sentiments of this kind, in the wake of reported instances in the United States where lawyers have retained confidential a client’s confession to crimes for which others were serving lengthy prison terms, have propelled multiple commentators to recommend that the rules be amended to allow or require disclosure in this

and subsequent documentary, information concerning a former’s client’s family and his observations regarding the former client’s criminal trial, which the tribunal found to be confidential, notwithstanding his protestations that the information was in the public domain in view of the notoriety of the client and her trial). 58 People of the State of New York v Belge (1975) 372 NYS 2d 798. For commentary on this case see “The Attorneys’ Duty to Disclose the Commission of Criminal Acts – Two Views on the Lake Pleasant Case” in Gerson (ed), Lawyers’ Ethics: Contemporary Dilemmas (Transaction Books, 1980), pp 145–181; Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 664–666. 59 People of the State of New York v Belge (1975) 372 NYS 2d 798 at 803. 60 Freedman, Criminal Law Bulletin, December 1974, cited in People of the State of New York v Belge (1975) 372 NYS 2d 798 at 801. Cf R v Butt (2012) 102 WCB (2d) 438 at [5] per M A Code J (who commended a lawyer who, upon discovering that her client, who was accused of sexual assault on a minor, was HIV positive, elected to disclose this to the Crown). 61 See, for example, Dodek, “Doing Our Duty: The Case for a Duty of Disclosure to Prevent Death or Serious Harm” (2001) 50 UNBLJ 215.

[10.105]

10 Confidentiality

355

context.62 It is evident that the more serious are the consequences for the innocent person, the greater the concern with preservation of confidentiality, especially where the client has since died.63 Where the balance lies under the professional rules

[10.105] Each of these scenarios brings into focus the extent to which lawyers should permit client interests to outweigh others’ interests, where these conflict. But if circumstances exist in which the duty of confidentiality ought to be relaxed in this context, the boundaries within which such relaxation may operate must be identified. So far as proposed criminal conduct is concerned, the professional rules in most Australian jurisdictions, adopting the Australian Solicitors’ Conduct Rules model, locate the balance by entitling a lawyer to disclose confidential information “for the sole purpose of avoiding the probable commission of a serious criminal offence”64 or “for the purpose of preventing imminent serious physical harm to the client or to another person”.65 62 See, for example, Powers, “Comparing Exceptions to Privilege and Confidentiality Relating to Crime, Fraud, and Harm – Can Hard Cases Make Good Law?” (2010) 79 UMKC L Rev 61 at 80; Natali, “Should We Amend or Interpret the Attorney – Client Privilege to Allow for an Innocence Exception?” (2013) 37 Am J Trial Adv 93; Maggio, “Quid Leges Sine Moribus Vanae Proficient: A Balancing Approach to the Postmortem Application of the Attorney–Client Privilege” (2014/2015) 78 Albany L Rev 681; Rowe, “Potential Expansion, or Modification, to the Permissive Exceptions of Model Rule 1.6: Client–Lawyer Confidentiality in Criminal Law and ‘The Gap’” (2015) 39 J Leg Prof 291; Besley, “When Innocence is Confidential: A New and Essential Exception to Attorney-Client Confidentiality” (2016) 56 Santa Clara L Rev 147. 63 This led the dissentients in Swidler v United States (1998) 524 US 399 (per O’Connor J, joined by Scalia and Thomas JJ) to rule (at 412) that “a criminal defendant’s right to exculpatory evidence or a compelling law enforcement need for information may, where the testimony is not available from other sources, override a client’s posthumous interest in confidentiality”. Her Honour reasoned that after death “the potential that disclosure will harm the client’s interests has been greatly diminished, and the risk that the client will be held criminally liable has abated altogether”, and that “[t]his diminished risk is coupled with a heightened urgency for discovery of a deceased client’s communications in the criminal context”: at 412. Accordingly, “[w]here the exoneration of an innocent criminal defendant or a compelling law enforcement interest is at stake, the harm of precluding critical evidence that is unavailable by any other means outweighs the potential disincentive to forthright communication”: at 416. The majority, however, upheld confidentiality: see at 407 (opinion delivered by Rehnquist CJ). 64 ACT, r 9.2.4; NSW, r 9.2.4; Qld, r 9.2.4; SA, r 9.2.4; Vic, r 9.2.4; WA, r 9(3)(d). For this purpose, the Glossary to these rules (excepting Western Australia) define a “serious criminal offence” as: (a) an indictable offence against a law of the Commonwealth or any jurisdiction (whether or not the offence is or may be dealt with summarily); (b) an offence against the law of another jurisdiction that would be an indictable offence against a law of this jurisdiction (whether or not the offence could be dealt with summarily if committed in this jurisdiction); or (c) an offence against the law of a foreign country that would be an indictable offence against a law of the Commonwealth or this jurisdiction if committed in this jurisdiction (whether or not the offence could be dealt with summarily if committed in this jurisdiction). 65 ACT, r 9.2.5; NSW, r 9.2.5; Qld, r 9.2.5; SA, r 9.2.5; Vic, r 9.2.5; WA, r 9(3)(e). See also the following barristers’ rules: NSW, r 82; Qld, r 81; SA, r 81; Vic, r 82; WA, r 81 (“A barrister whose client threatens the safety of any person may, notwithstanding [the rule that prescribes confidentiality], if the barrister believes on reasonable grounds that there is a risk to any person’s safety, advise the police or other appropriate authorities”).

356

Lawyers’ Professional Responsibility

[10.110]

The above rules are drafted in clearer terms that their predecessor, which remain in effect in the Northern Territory, which permitted disclosure of confidential information “in circumstances in which the law would probably compel its disclosure, despite a client’s claim of legal professional privilege, and for the sole purpose of avoiding the probable commission or concealment of a serious criminal offence”.66 Yet if another law compels the disclosure, the rule is arguably redundant.67 In each case the rules carefully circumscribe the circumstances where the duty of confidentiality can be overridden, and impose no obligation, only a discretion. This gives lawyers an “out” if their conscience dictates that information within the set parameters should be disclosed but does not require lawyers to act according to their conscience. The Canadian rules similarly allow disclosure of confidential information “when the lawyer believes on reasonable grounds that there is an imminent risk of death or serious bodily harm and disclosure is necessary to prevent the death or harm”.68 In Hong Kong the rules envisage that a solicitor may “in exceptional circumstances” breach confidentiality to the extent of revealing information “he believes necessary to prevent a client or any other person from committing or continuing a criminal act that the solicitor believes on reasonable grounds does involve or is likely to result in the abduction of or serious violence to a person (including child abuse)”.69 New Zealand bucks the trend, by requiring the disclosure of confidential information that relates to the anticipated or proposed commission of a crime punishable by imprisonment for three years or more, or if the lawyer reasonably believes that disclosure is necessary to prevent a serious risk to the health or safety of any person.70

[10.110] Unlike the American rule the subject of the Lake Pleasant case,71 Australian rules modelled on the Australian Solicitors’ Conduct Rules appear to limit

66 NT, r 2.1.3 (adopting the former Law Council of Australia, Model Rules of Professional Conduct and Practice, r 3.1.3). 67 See Evans, “Compelling Disclosures” (2004) 78 (Aug) LIJ 82. 68 Can CPC, r 3.3-3. By way of commentary, the rules add that in assessing whether disclosure of confidential information is justified to prevent death or serious bodily harm, a lawyer should consider a number of factors, including: (a) the likelihood that the potential injury will occur and its imminence; (b) the apparent absence of any other feasible way to prevent the potential injury; and (c) the circumstances under which the lawyer acquired the information of the client’s intent or prospective course of action: cmt [3]. 69 HK, principle 8.01, cmt [16] (albeit adding that “[e]ven then the solicitor must exercise his professional judgment and decide whether there are any other means of preventing the crime and, if not, whether the public interest in protecting persons at risk from serious harm outweighs his duty to his client”). 70 NZ, rr 8.2(a), 8.2(b). 71 US, r 1.6(b)(1) permits disclosure of confidential information to the extent that the lawyer reasonably believes necessary, inter alia, “to prevent reasonably certain death or substantial bodily harm”, which thus recognises “the overriding value of life and physical integrity” (cmt [6]). As to the background to this aspect of the rule see Moore, “’In the Interests of Justice’: Balancing Client Loyalty and the Public Good in the Twenty-First Century” (2002) 70 Fordham L Rev 1775. Only a minority of US States has followed the text of this rule. Some States require disclosure to prevent

[10.120]

10 Confidentiality

357

disclosure to events that may physically endanger another person, and so do not justify disclosure of serious criminal offences of a non-physical nature, including financial fraud. Corporate collapses in which lawyers maintained corporate confidences saw amendment of the American rules in August 2003 to allow a lawyer to reveal confidential information to the extent that he or she reasonably believes necessary to prevent the client from committing a crime or fraud that is reasonably certain to result in substantial injury to the financial interests or property of another and in furtherance of which the client has used or is using the lawyer’s services.72 Importantly, they extend this disclosure discretion for the purpose of preventing, mitigating or rectifying such an injury.73

[10.115] The Law Council of Australia’s former Model Rules of Professional Conduct and Practice, the substance of which remains extant only in the Northern Territory, were broader than some of their counterparts overseas in allowing disclosure of the concealment of a serious criminal offence. In New Zealand, England and the United States (with the limited qualification relating to mitigating or rectifying substantial injury to financial interests), no entitlement to breach confidentiality attaches to a client’s disclosure that he or she has previously committed a criminal act, even if that act resulted in death or injury. The wording of the former Law Council rules avoided any difficulty in distinguishing past from future conduct; a course of criminal conduct may be continuing.74 It also provided a means to avoid the outcome in a Lake Pleasant scenario (as to which see [10.100]). Some may nonetheless query whether this too greatly undermines the duty of confidentiality; not only does it appear to be inconsistent with the confidentiality many clients expect of their lawyer, it may tempt a lawyer, illegitimately, to threaten to disclose the information in an attempt to secure a collateral advantage over the client.75 This may in turn explain the Australian Solicitors’ Conduct Rules’ omission of the qualification directed to concealment of a serious criminal offence. [10.120] However narrowly or broadly the exception to confidentiality is expressed in this regard, it is no blanket entitlement to disclose to all and sundry (or to the media). The disclosure must be restricted in its audience to achieving the purpose for the exception in the first place. The New Zealand rule makes this explicit, stating that disclosure “must be only to an appropriate person and only to the extent reasonably necessary for the required purpose”.76 So when disclosing, say, an impending felony, the disclosure may only be directed to a law enforcement authority charged with the responsibility of policing felonies. If time is of the serious bodily harm or death, and permit disclosure to prevent lesser crimes: see, for example, Purcell v District Attorney (1997) NE 2d 436 (lawyer acted properly in disclosing to the authorities a client’s intention to set fire to a building from which the client had been evicted). 72 US, r 1.6(b)(2). 73 US, r 1.6(b)(3). 74 See Hazard, Ethics in the Practice of Law (Yale University Press, 1978), pp 27–30; Ipp, “Lawyers’ Duties to the Court” (1998) 114 LQR 63 at 74–76. Cf HK, principle 8.01, cmt [16] (referring to disclosure to “prevent a client or any other person from committing or continuing a criminal act”; emphasis supplied). 75 See, for example, Re Frost (1993) 863 P 2d 843; Iowa Supreme Court Board v Miller (1997) 568 NW 2d 665. 76 NZ, r 8.3.

358

Lawyers’ Professional Responsibility

[10.125]

essence the lawyer may be justified in disclosing the information in question to a person who is clearly in danger of being a victim of the felony.77 Disclosure of client’s intention to disobey a court order

[10.125] The professional rules prohibit a lawyer who is informed by a client that the client intends to disobey a court’s order from informing the court or the opponent without the client’s consent, unless the lawyer believes on reasonable grounds that the client’s conduct is a threat to any person’s safety.78 It is not entirely clear from this wording whether the disclosure must be made upon the lawyer forming that opinion, or whether it remains within the lawyer’s discretion. The latter is most likely the most reasonable interpretation for the purposes of consistency with the rules discussed at [10.105]–[10.120]. Disclosure in the public interest

[10.130] If the lawyer’s duty of confidentiality lies in equity, there may be grounds for recognising the public interest defence to disclosure in breach of confidence,79 although this would not provide a defence to a claim grounded in contract. The plea is that the public interest in maintaining the confidence is outweighed by a higher public interest, such as the interests of justice or the interests of the community or certain of its members. However, as equity’s role is permissive, not prescriptive, the lawyer who discloses confidential information in the public interest assumes the heavy burden of establishing the defence. This is the more difficult given that Australian courts have not given unqualified recognition to a broad-based public interest defence.80 They do recognise that “there is no confidence as to the disclosure of iniquity”81 but confine the concept of “iniquity” to serious crime.82 The professional rules already address this issue by permitting disclosure “for the sole purpose of avoiding the probable commission of a serious criminal offence”: see [10.105]. Even if “iniquity” is narrowly defined, though, there is no licence to make a full public disclosure of the information in question. For example, in Legal Practitioners Complaints Committee v Trowell83 the Western Australian State Administrative Tribunal held that the so-called “iniquity rule” did not justify media disclosure of allegations of a proposal to bribe the judiciary of a country in which the respondent’s client was charged with drug offences. The tribunal also found that alerting the media to delays by the client’s 77 See Restatement, §66(2) (“If the client or another person has already acted, the lawyer must, if feasible, advise the client to warn the victim or to take other action to prevent the harm and advise the client of the lawyer’s ability to use or disclose information”). 78 ACT, r 20.3.3; NSW, r 20.3.3; NT, r 17.20(c)(ii); Qld, r 20.3.3; SA, r 20.3.3; Vic, r 20.3.3; WA, r 35(4)(c). Equivalent provision is made in the barristers’ rules: ACT, r 34(c); NSW, r 81(c); NT, r 34(c); Qld, r 80(c); SA, r 80(c); Vic, r 81(c); WA, r 80(c). 79 See Brindle and Dehn, “Confidence, Public Interest, and the Lawyer” in Cranston (ed), Legal Ethics and Professional Responsibility (Clarendon Press, 1995), Ch 5. 80 See Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), [11.18]–[11.40]. 81 Gartside v Outram (1856) 26 LJ Ch 113 at 114. 82 A v Hayden (1984) 156 CLR 532 at 545 per Gibbs CJ. 83 Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1 at [375]–[388].

[10.135]

10 Confidentiality

359

foreign legal team, and publishing criticism of the team, amounted to a breach of confidentiality owed to the client, and was unlikely to be in her best interests.84 In any event, a mere assertion of the public interest of knowing about the administration of justice is unlikely to discharge that burden. In Stewart v Canadian Broadcasting Association,85 in a television broadcast on the administration of justice, a lawyer disclosed confidential information relating to his representation of an accused 11 years earlier. Though accepting that the public has an interest in knowing and understanding the workings of the courts as public institutions, the Ontario Court of Justice held the lawyer’s duty of confidentiality was weightier, and thus not to be diluted by reference to an incidental and imprecise notion of public benefit.86 Nor did the New Zealand High Court in Solicitor-General v Miss Alice87 find the public interest – alleged corruption of the judicial process leading to a miscarriage of justice – sufficiently compelling to release the lawyer-discloser from the consequences of breaching an undertaking to the court not to disclose certain documents. Any purported public interest was outweighed by the lawyer’s duty to the court.

[10.135] Real ethical issues surface where the subject of the client’s disclosure has the capacity to impact detrimentally on others. For instance, the client may have disclosed information as to her or his physical or mental condition, or intentions, that if allowed to persist could cause loss or grief to family members. Information of this kind, it has been assumed, should remain confidential although the matter remains untested; it does not in any event prevent the lawyer from encouraging the client to avoid that loss or grief by making or allowing disclosure. The stakes are increased where a lawyer (often an in-house lawyer) discovers that the client is producing or marketing a product that is dangerous to the general public, but refuses pleas to recall it. Disclosure outside the client – even if justified in the public interest – is a breach of contract, likely to justify termination of employment, as well as a seriously adverse career move. The law has not traditionally protected whistleblowers, although Pt 9.4AAA of the Corporations Act 2001 (Cth), as from 1 July 2004, establishes a regime to protect whistleblowers from civil and criminal liability in certain circumstances.88 To the extent that Federal and State whistleblowers (now commonly termed “public interest disclosure”) legislation allows disclosure of otherwise confidential information, and protects from civil, criminal and professional disciplinary liability that may otherwise ensue,89 it may avail lawyers (albeit within the private sector only in the Australian Capital Territory, Queensland and South Australia). In some jurisdictions statutes 84 Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1 at [411], [412]. 85 Stewart v Canadian Broadcasting Association (1997) 150 DLR (4th) 24. 86 Stewart v Canadian Broadcasting Association (1997) 150 DLR (4th) 24 at 159, 161. 87 Solicitor-General v Miss Alice [2007] 2 NZLR 783. 88 See Pascoe, “Corporate Sector Whistleblowing in Australia: Ethics and Corporate Culture” (2009) 27 C&SLJ 524. 89 See generally Public Interest Disclosure Act 2013 (Cth); Public Interest Disclosure Act 2012 (ACT); Public Interest Disclosures Act 1994 (NSW); Public Interest Disclosure Act 2008 (NT); Public Interest Disclosure Act 2010 (Qld); Whistleblowers Protection Act 1993 (SA); Public Interest Disclosures Act 2002 (Tas); Protected Disclosure Act 2012 (Vic); Public Interest Disclosure Act 2003 (WA).

360

Lawyers’ Professional Responsibility

[10.140]

that provide for the disclosure of concerns or suspicions relating to child abuse or neglect, and shields disclosers from professional disciplinary sanction,90 may likewise avail lawyers.91

FULFILLING THE DUTY Consequences of unauthorised disclosure

[10.140] An unauthorised disclosure of client confidential information may lead to embarrassment, loss of clients, damage to a lawyer’s reputation, conflict of interest allegations, disciplinary sanctions (see [25.65]), claims for breach of contract, and/or injunctive relief disqualifying the lawyer from continuing to act. Also, an inadvertent disclosure of confidential information may disadvantage the client by waiving any legal professional privilege in respect of it: see [11.275]. Even if not privileged, the information the subject of unauthorised disclosure may have considerable commercial value. Preserving confidentiality Reasonable efforts required

[10.145] Lawyers should make reasonable efforts to prevent the inadvertent or unauthorised disclosure of, or unauthorised access to, information relating to the representation of a client.92 The reasonableness of the lawyer’s efforts are influenced by, inter alia:93 the sensitivity of the information, the likelihood of disclosure if additional safeguards are not employed, the cost of employing additional safeguards, the difficulty of implementing the safeguards, and the extent to which the safeguards adversely affect the lawyer’s ability to represent clients (eg, by making a device or important piece of software excessively difficult to use).

90 Children and Young People Act 2008 (ACT), s 354; Children and Young Persons (Care and Protection) Act 1998 (NSW), s 29(1); Care and Protection of Children Act 2007 (NT), s 27(1). Cf the former Solicitors Regulation Authority, The Guide to the Professional Conduct of Solicitors (2007), r 4, Guidance [14] (“There may be exceptional circumstances involving children where you should consider revealing confidential information to an appropriate authority. This may be where the child is the client and the child reveals information which indicates continuing sexual or other physical abuse but refuses to allow disclosure of such information. Similarly, there may be situations where an adult discloses abuse either by himself or herself or by another adult against a child but refuses to allow any disclosure. You must consider whether the threat to the child’s life or health, both mental and physical, is sufficiently serious to justify a breach of the duty of confidentiality”); Mosteller, “Child Abuse Reporting Laws and Attorney-Client Confidences: The Reality and the Specter of Lawyer as Informant” (1992) 42 Duke LJ 203. 91 There have been calls in the United States for a similar provision relating to disclosure of elder abuse: see, for example, Sholian, “An Ethical Dilemma: Attorneys’ Duties not to Reveal Elder Abuse in Washington State” (2015) 90 Wash L Rev 1471. 92 US, r 1.6(c). 93 US, r 1.6(c), cmt [18].

[10.155]

10 Confidentiality

361

[10.150] At a basic level, this duty requires lawyers to take care regarding what is disclosed in the course of conversation, including in familial or social environments. The following counsel found in the Canadian professional rules is worthy of note:94 A lawyer should avoid indiscreet conversations and other communications, even with the lawyer’s spouse or family, about a client’s affairs and should shun any gossip about such things even though the client is not named or otherwise identified. Similarly, a lawyer should not repeat any gossip or information about the client’s business or affairs that may be overheard or recounted to the lawyer. Apart altogether from ethical considerations or questions of good taste, indiscreet shoptalk among lawyers, if overheard by third parties able to identify the matter being discussed, could result in prejudice to the client. Moreover, the respect of the listener for lawyers and the legal profession will probably be lessened.

Lawyers should also implement procedures designed to impress upon other lawyers and staff in the firm the importance of confidentiality.95 Examples include segregating public or semi-public areas of the office from private work areas, ensuring that client files (including electronic documents)96 are securely stored, and that documents that need not be maintained are securely destroyed. The latter is important not only as a means of protecting client confidences from unauthorised access, but also in fulfilling applicable privacy law obligations97 (see [10.180]). Lawyers who utilise serviced office space and shared facilities should exercise particular care, as should those who legitimately “outsource” work to others (as to which see [20.210]), including lawyers and non-lawyers located outside the jurisdiction. The greater mobility of information arising from use and transportation of laptop computers, personal digital assistant (PDA) devices, tablets (such as iPads) and smart phones increases the risk of compromising client confidential information. Hence the need for password-protected access (and regular changing of passwords), software that hides information and encryption software. Data no longer required on these electronic devices should not merely be deleted but erased with appropriate software. Cloud computing

[10.155] Use of “cloud computing” – wherein software and data is stored and processed remotely in the cloud provider’s data centre, and accessed as a service by using the internet – though convenient and potentially cost-effective, especially 94 Can CPC, r 3.3-1, cmt [8]. 95 Ott v Fleishman [1983] 5 WWR 721 at 724 per McEachern CJSC (“Lawyers also understand that it is their responsibility to train their staff and that they may well be liable for any breach of confidentiality committed by their agents or their staff”). 96 Beyond the challenges presented by cloud computing, discussed at [10.155], security surrounding the storage of electronic material is an issue not just within a law practice, but from cyber attacks outside it. The hacking of high profile databases emphasises the need for appropriate measures directed to protecting client information: see Simshaw, “Legal Ethics and Data Security: Our Individual and Collective Obligation to Protect Client Data” (2015) 38 Am J Trial Adv 549. 97 See “Privacy in Practice” (2003) 25 (Apr) LSB (SA) 14; “Client Confidentiality vs Environmental Awareness” (2004) 26 (Oct) LSB (SA) 27.

362

Lawyers’ Professional Responsibility

[10.160]

where remote access to relevant material is required (including where a task is outsourced), may also present security risks so far as the preservation of confidentiality is concerned.98 These risks – including data breaches, data loss, account or service traffic hijacking, malicious insiders, and a service provider’s denial of service99 – dictates that lawyers secure informed client consent to cloud computing vis-à-vis client information.100 Exercising due diligence on the relevant service provider, and giving due consideration to the terms of the cloud computing service arrangement, goes without saying. It is relevant, as to the latter, to consider the location of a service provider’s cloud infrastructure, whether it is possible for the service provider to access information stored in the cloud, and the extent to which the law practice can retain effective control of data can be maintained.101 Communications by fax

[10.160] Communication with clients other than face-to-face presents various risks to confidentiality. There is a risk of faxes, for instance, being sent to the wrong number or location, or being viewed by a person other than the intended recipient. These risks are mitigated by informing clients when a fax is sent, and by printing a notice of confidentiality on fax cover pages. Communications by email

[10.165] Though efficient, cost-effective and convenient, email communications risk confidentiality.102 Not only is email an insecure means of communication103 – it may be accessible by persons who are not its intended recipients – but emails may be sent to unintended recipients, whether because of an incorrect address or the mistaken use of standard mailing lists. Also, privacy expectations underscoring email communications are not always characterised by clarity.104 Lawyers should 98 See Carter, “Globally Protecting Client Confidentiality Using the Cloud” (2013) 10 Regent J Int’l L 105; Taylor, “Seeing Clearly? Interpreting Model Rule 1.6(c) for Attorney Use of Cloud Computing Technology” (2014) 45 McGeorge L Rev 835. 99 See Edwards, “Cloud Computing Services: Professional Obligations and Ethics” (2016) 43 (Apr) Brief 32; WA EPG, cl 16.4.6. 100 See Legal Services Commissioner (NSW), Cloud Computing (Practice Note) (available at http:// www.olsc.nsw.gov.au/) (which notes the need for informed client consent to information being uploaded or stored in the cloud, including by way of a clause in a standard retainer); O’Meara, “Some Silver Linings have Clouds: Common Law Confidentiality in a Fiduciary Frame, Attorneys and Cloud Computing” (2015) 48 Creighton L Rev 793 (who queries whether all clients are well positioned to give informed consent in this context). 101 WA EPG, cll 16, 17. 102 See Masur, “Safety in Numbers: Revisiting the Risks to Client Confidences and Attorney-Client Privilege Posed by Internet Electronic Mail” (1999) 14 Berkeley Tech LJ 1117; Nelson, “Legal Ethics and the Internet: Ethical Considerations in Electronic Communications Between Attorneys and Clients” (1999) 33 Fam LQ 419; Anderson, “Transmitting Legal Documents Over the Internet: How to Protect Your Client and Yourself” (2001) 27 Rutgers Comp & Tech LJ 1. 103 See California Formal Op 2010-179 (2010) (which reinforces a lawyer’s obligation to be attentive to available security and to consider the sensitivity of client information in the context of email communication via Wi-Fi). 104 See Bolin, “Risky Mail: Concerns in Confidential Attorney-Client Email” (2012) 81 Uni of Cincinnati L Rev 601.

[10.175]

10 Confidentiality

363

thus brief clients regarding issues relating to security and privacy, and discuss options for information transfer, especially for information of some sensitivity, with a view to informed client consent in this context. Where email communications are adopted, all emails should be prefaced with a warning that they are confidential and privileged, and any sensitive information should be sent in encrypted form.105 The Victorian Legal Practitioners’ Liability Committee has released “Email Guidelines”,106 which contain useful suggestions for email security. Mobile phone communications

[10.170] Mobile phones can present risks to confidentiality. Mobile phone transmissions can be intercepted, and calls are often made in public locations where their content may be overheard. Lawyers should therefore avoid communicating highly confidential information via mobile phone without client-informed consent, especially outside a secure environment.107 Social media communications

[10.175] Social media sites may challenge the preservation of confidentiality in two main ways. The first is the danger that lawyers may post upon their social media site, or “blog” or “tweet”, information that is confidential to a client. The Victorian Bar has, to this end, issued a bulletin that warns its members to eschew publishing anything on a social networking site that, inter alia, discloses confidential information or expresses an opinion on the merits of a potential or current proceeding.108 And the Law Institute of Victoria has cautioned that use of social media may expose lawyers to the risk that client confidential information may be disclosed, albeit by inadvertence.109 It cites, by way of example, a lawyer who tweets that she is in a certain location, either through text or geotagging, 105 See Lyons, “Email, Confidentiality and Legal Professional Privilege” (2001) 21 (Oct) Proctor 27; Perry, “Email Eavesdroppers” (2001) 145 Sol J 992. The American Bar Association has issued an opinion that it is not unprofessional for a lawyer to transmit information relating to the representation of a client by unencrypted email, but should consult the client and follow the client’s instructions where the information is highly sensitive: ABA Ethics Op 99-413, Protecting the Confidentiality of Unencrypted E-Mail (10 March 1999). 106 The text of the Guidelines can be found at the Legal Practitioners’ Liability Committee website (http://www.lplc.com.au). 107 See Shirvington, “Confidentially, I’m on the Bus” (2002) 40 (Apr) LSJ 40. There are various ethics opinions in the United States to the same effect: see, for example, Mass Ethics Op 94-5 (1994); NH Ethics Op 1991-92/6 (1991). 108 Victorian Bar Inc, Ethics Committee Bulletin No 2 of 2010, cl 2, available at https:// www.vicbar.com.au/home. See further Bennett, “Ethics of Lawyer Social Networking” (2009) 73 Albany L Rev 113 at 117-120; Krawitz, “May it Tweet the Court: Ethical Considerations Involving Australian Lawyers’ Social Media Use” (2013) 2 JCivLP 85 at 96–99 (who calls for national guidelines on the broader issue of social media use by lawyers: at 100–101); Browning, “Facebook, Twitter, and LinkedIn – Oh My! The ABA Ethics 20/20 Commission and Evolving Ethical Issues in the Use of Social Media” (2013) 40 Nth Ky L Rev 255 at 262–268; Browning, “Keep Your ‘Friends’ Close and Your Enemies Closer: Walking the Ethical Tightrope in the Use of Social Media” (2013) 3 St Mary’s J Legal Mal & Ethics 204 at 218–228. 109 Law Institute of Victoria, Guidelines on the Ethical Use of Social Media (29 November 2012), available at http://www.liv.asn.au/. The same appears in Office of the Legal Services Commissioner (NSW), A Guide on Practice Issues: Social Media (May 2013), available at http://www.olsc.nsw.gov.au/.

364

Lawyers’ Professional Responsibility

[10.180]

which may unintentionally disclose that she is working with an identifiable client and thereby breach the duty of confidentiality. Also, messaging by way of social media may compromise confidentiality unless a private messaging capability is used.110 Second, once clients (or their “friends”) place information (including photographs) on their social media site, there may be scope for it to traverse the public domain, and thus fall outside the protection of confidentiality. This explains why, in litigious matters in particular, some maintain that lawyers should counsel their clients to deactivate their social media sites and avoid posting on the internet anything to do with the litigation.111 But any advice of this kind is constrained by lawyers’ obligations not to be a party to the illegitimate destruction or removal of documents:112 see [17.145]. In each case the fact that when communications appear on the internet, their audience is far broader than with traditional oral or written communications, and potentially less guarded, highlights the dangers for lawyers (and clients) in this context. Of course, this is not an issue confined to clients; what lawyers place on social media about themselves may raise issues relating to advertising and broader issues relating to their fitness to practice.113 Fulfilling privacy obligations

[10.180] Privacy and confidentiality, though related, are distinct concepts. Confidentiality is directed to information conveyed in confidence that is not readily available to the public; privacy addresses the issue of personal information about individuals, whether or not that information is publicly available.114 The general law recognises entitlements to confidentiality, whereas Australian courts have yet to endorse a general right to privacy.115 Statute has intervened in the latter regard, via the Privacy Act 1988 (Cth), which propounds “privacy principles” aimed at regulating the use, storage and disclosure of private information.116 These principles apply to law practices having an annual turnover of $3m or more.117 Particular notice should be given to the principles that: 110 WA EPG, cl 15.1.2. 111 See, for example, Vinson, “The Blurred Boundaries of Social Networking in the Legal Field: Just ‘Face’ it” (2010) 41 U Mem L Rev 355 at 398. 112 See Shepherd, “Dirty Laundry Online” (2012) 32 (Mar) Proctor 36. 113 See, for example, Re Hursey (2011) 719 SE 2d 670 (lawyer disbarred for inter alia having a MySpace page containing nudity, profanity and references to the drugs he was using, together with the name and location of his law practice). See also Victorian Bar Inc, Ethics Committee Bulletin No 2 of 2010, cl 2 (warning members to eschew publishing anything on a social networking site that expresses an opinion likely to diminish public confidence in the profession or in the administration of justice or that otherwise brings the legal professional into disrepute); Dal Pont, “The Lawyer’s Friend?” (2014) 88 (Mar) LIJ 72. 114 See Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), Ch 4. 115 See the discussion in McDonald, “A Statutory Action for Breach of Privacy: Would it Make a (Beneficial) Difference?” (2013) 36 Aust Bar Rev 241. 116 What are termed the “Australian Privacy Principles” are found in the Privacy Act 1988 (Cth), Sch 1. 117 See the definition of “organisation” in s 6C(1) of the Privacy Act 1988 (Cth), and the definition of “small business operator” in s 6D(1).

[10.185]

10 Confidentiality

365

• prohibit the use or disclose personal information about an individual for a purpose other than that for which it was collected unless this is reasonably expected and is related to the original purpose of collection; and • require reasonable steps to be taken to protect personal information from misuse or loss. A breach of privacy law, whether or not it amounts to a breach of confidentiality, may be the subject of a complaint to the Information Commissioner, who can declare that the complainant is entitled to recover compensation for loss or damage suffered (including to her or his feelings or humiliation suffered).118

SHOULD THE DUTY REMAIN? [10.185] Although established in the law and professional ethos, the duty of confidentiality is not without its detractors. Beyond a lack of empirical evidence that the duty necessarily encourages clients to be more forthcoming and truthful with their lawyers, some query why full and frank client–lawyer communications should receive greater encouragement than communications between friends, partners and relatives.119 In any case, if confidentiality aims to encourage full and frank disclosure, its purposes can only be served, some say, because in the final analysis the client knows that information damaging to her or him will not be disclosed by the lawyer. Confidentiality, these opponents argue, “penalizes clients with nothing to hide” because such clients “would like their attorneys to communicate credibly that nothing is being hidden from the decision maker – but confidentiality makes this impossible”.120 So, it may be argued, not only does confidentiality prevent otherwise relevant information from reaching the court, but also it arguably operates to deny the court the ability to assess whether the client is, to the knowledge of her or his lawyer, presenting perjured evidence. As explained by one commentator:121 [T]he duty of confidentiality is obviously open to abuse and exploitation by unscrupulous clients and unethical lawyers alike secure in the knowledge that they are unlikely to be called to account for activities which by their very nature must be kept secret. Confidentiality, it seems, erodes responsibility …

Others maintain that lawyers foster confidentiality (and the related legal professional privilege) because secrecy adds value to legal services. Yet an unyielding duty of confidentiality may also be ultimately detrimental to the profession and its cause, some argue. It may, it is said, lead lawyers to “rationalize amoral representation”,122 and “distort lawyers’ perceptions of their own obligations 118 Privacy Act 1988 (Cth), s 52. 119 Fischel, “Lawyers and Confidentiality” (1998) 65 U Chi L Rev 1 at 3. 120 Fischel, “Lawyers and Confidentiality” (1998) 65 U Chi L Rev 1 at 18. 121 Tur, “Confidentiality and Accountability”, University of Adelaide Continuing Legal Education Papers (No 75, 1992), p 3. See also Stevenson, “Against Confidentiality” (2014) 48 UC Davis L Rev 337 (who argues against confidentiality on the basis that, inter alia, the social costs of confidentiality outweigh the “oversold benefits”). 122 Zacharias, “Rethinking Confidentiality” (1989) 74 Iowa L Rev 351 at 353.

366

Lawyers’ Professional Responsibility

[10.185]

as moral and autonomous individuals”.123 Exceptions to disclosure requiring professional judgment, on the other hand, may force lawyers to confront and reason through ethical dilemmas, and in so doing dispel the notion that lawyers are simply hired mouthpieces. An American commentator has opined that “[t]he image of the coconspiratorial lawyer helps explain why society considers the profession unsavory”,124 leading him to conclude that “[t]he more professional standards prescribe conduct inconsistent with society’s general ethical perceptions, the more likely society is to view the profession with cynicism”.125 Notwithstanding these criticisms, there is little if any indication within the Australian judiciary, or the profession itself, that confidentiality is waning. To the contrary, in so far as it provides the foundation for legal professional privilege, the latter doctrine has broadened rather than confined its coverage in recent times: see, for instance, the case law discussed at [11.40], [11.160]. Any infringement on the duty is therefore more likely a candidate for statute than the general law.

123 Zacharias, “Rethinking Confidentiality” (1989) 74 Iowa L Rev 351 at 372. 124 Zacharias, “Rethinking Confidentiality” (1989) 74 Iowa L Rev 351 at 375. 125 Zacharias, “Rethinking Confidentiality” (1989) 74 Iowa L Rev 351 at 376.

Chapter 11

Legal Professional Privilege [11.05] NATURE OF THE PRIVILEGE ....................................................................................... 368 [11.10] Advice and litigation privilege .................................................................................. 368 [11.15] Rationale for the privilege .......................................................................................... 369 [11.25] Privilege under the uniform evidence law .............................................................. 371 [11.30] Fulfilling the onus of proof ........................................................................................ 372 [11.35] PURPOSE OF THE COMMUNICATION ..................................................................... 373 [11.40] Dominant purpose test ................................................................................................ 373 [11.50] Litigation privilege – communication for the purpose of anticipated litigation ......................................................................................................................... 376 [11.55] Purpose of communication to further fraud ........................................................... 377 [11.70] COMMUNICATIONS COVERED BY THE PRIVILEGE ............................................ 381 [11.70] Concept of a communication ..................................................................................... 381 [11.105] Privilege limited to confidential communications ............................................... 387 [11.120] Privilege limited to communications within a lawyer–client professional relationship .................................................................................................................. 388 [11.160] Extension of privilege to communications with or from third parties ............ 395 [11.175] WHO IS ENTITLED TO CLAIM PRIVILEGE? .......................................................... 398 [11.175] The client (or the lawyer on the client’s behalf) .................................................. 398 [11.180] Where the client is an entity .................................................................................... 398 [11.185] Where the client has died or become insolvent ................................................... 399 [11.190] Parties with a common interest (common interest privilege) ............................ 400 [11.195] Parties with a joint interest (joint privilege) .......................................................... 402 [11.205] PRIVILEGE CLAIMS IN NON-JUDICIAL PROCEEDINGS ................................... 404 [11.205] General rule ................................................................................................................. 404 [11.210] Illustration – application of privilege in response to search warrants ............. 404 [11.225] ABROGATION OF PRIVILEGE BY STATUTE ........................................................... 407 [11.225] No ouster except where clear and unambiguous statutory intention .............. 407 [11.235] Scope for statutory ouster by necessary implication ........................................... 408 [11.245] WAIVER OF PRIVILEGE ............................................................................................... 410 [11.245] Express and implied waiver ..................................................................................... 410 [11.255] Waiver by intentional disclosure ............................................................................. 412 [11.275] Waiver by unintended disclosure ............................................................................ 416

368

Lawyers’ Professional Responsibility

[11.05]

NATURE OF THE PRIVILEGE [11.05] Courts have long held that certain communications arising out of the lawyer–client relationship are privileged from disclosure upon compulsory process, whether in judicial or non-judicial proceedings.1 This privilege, termed “legal professional privilege”, has been judicially described as “the oldest and best established privilege in our law”2 and “the highest privilege recognized by the courts”.3 The title “legal professional privilege” should not, however, be understood to mean that the privilege belongs to the lawyer; the privilege is that of the client,4 so only the client, not the person who supplied the information or the lawyer, can waive it: see [11.245]. Though originally perceived as a rule of evidence, legal professional privilege is now recognised as a substantive general principle of the common law.5 The uniform evidence legislation – which applies federally and in the Territories, New South Wales, Tasmania and Victoria6 – has nonetheless codified privilege as a rule of evidence. “Advice” and “litigation” privilege

[11.10] Privileged communications can take the form of “confidential communications between solicitor and client made for the purpose of advice or for use in existing or anticipated litigation”.7 The latter is termed “litigation privilege”, the former “advice privilege”. “Litigation privilege” covers confidential communications between the client and her or his lawyer (again whether directly or through agents), or between the lawyer or client and third parties, made for the purpose of use in existing or reasonably anticipated litigation. “Advice privilege” attaches to confidential communications between the client and her or his lawyer (whether directly or through agents), or between the lawyer or client and third parties, for the purpose of enabling the client to obtain, or the lawyer to give, legal advice.

1 The history of legal professional privilege is usefully catalogued in Desiatnik, Legal Professional Privilege in Australia (2nd ed, LexisNexis Butterworths, 2005), Ch 2. As to privilege in non-judicial proceedings see [11.205]. 2 General Accident Assurance Co v Chrusz (2000) 180 DLR (4th) 241 at 271 per Doherty JA. 3 R v Claus (2000) 181 DLR (4th) 759 at 767 per Kozak J. 4 Baker v Campbell (1983) 153 CLR 52 at 85 per Murphy J. 5 Baker v Campbell (1983) 153 CLR 52 at 127, 129 per Dawson J; Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 490 per Deane J. 6 Evidence Act 1995 (Cth); Evidence Act 2011 (ACT); Evidence (National Uniform Legislation) Act 2011 (NT); Evidence Act 1995 (NSW); Evidence Act 2001 (Tas); Evidence Act 2008 (Vic). 7 O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 at 22 per Mason J (emphasis supplied). See also Grant v Downs (1976) 135 CLR 674 at 688 per Stephen, Mason and Murphy JJ; R v Bell (1980) 146 CLR 141 at 144 per Gibbs J; Baker v Campbell (1983) 153 CLR 52 at 112 per Deane J, at 122 per Dawson J.

[11.15]

11 Legal Professional Privilege

369

Rationale for the privilege

[11.15] Both forms of privilege are grounded in a public policy (or public interest) directed at fostering trust and candour in the lawyer–client relationship.8 Privileging certain communications from disclosure encourages clients, it is reasoned, to fully and frankly disclose the relevant circumstances to their lawyer without the fear of being prejudiced by their subsequent revelation.9 So the privilege serves a broader public interest, as the freedom to consult a lawyer in the assurance that confidential communications will be safeguarded “will often make its own contribution to the general level of respect for and observance of the law within the community”.10 For this reason, a court draws no adverse inference from a claim of privilege;11 otherwise the purpose to which the privilege is directed would be indirectly undermined. Being grounded in public policy dictates that the privilege does not rest on a contractual duty created by the retainer.12 So a client cannot by contract extend the coverage of the privilege.13 Public policy also dictates the limits of the doctrine,14 such that privilege does not protect communications directed against the public interest.15 The court must, to this end, have regard to the foundation on which the privilege rests, “and not extend it to cases which do not fall within the mischief which it is designed to protect”.16 That the privilege does not cloak confidential communications for the purpose of legal advice sought or given in furtherance of, or to facilitate, a fraudulent purpose (see [11.55]–[11.65]) illustrates this point. And perhaps most importantly given its public policy foundation, once the privilege arises, it is absolute and unqualified; no further “balancing” between it and another policy or interest (say, transparency in the administration of justice or the principles

8 Bullivant v Attorney-General (Vic) [1901] AC 196 at 200–201 per Earl of Halsbury LC; Smorgon v Australia & New Zealand Banking Group Ltd (1976) 134 CLR 475 at 488 per Stephen J; R v Bell (1980) 146 CLR 141 at 144 per Gibbs J, at 152 per Stephen J, at 161 per Wilson J; Baker v Campbell (1983) 153 CLR 52 at 74 per Mason J, at 127 per Dawson J; Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 480 per Gibbs CJ, at 487 per Mason and Brennan JJ. 9 Smith v Jones [1999] 1 SCR 455 at [46] per Cory J (“Family secrets, company secrets, personal foibles and indiscretions all must on occasion be revealed to the lawyer by the client. Without this privilege clients could never be candid and furnish all the relevant information that must be provided to lawyers if they are to properly advise their clients”). 10 Baker v Campbell (1983) 153 CLR 52 at 95 per Wilson J. 11 Wentworth v Lloyd (1864) 10 HL Cas 589; 11 ER 1154. 12 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 206 per Fair J, at 219 per North J; Rosenberg v Jaine [1983] NZLR 1 at 8–9, 11 per Davison CJ. 13 Southern Cross Commodities Pty Ltd (in liq) v Crinis [1984] VR 697 at 702 per Young CJ; Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [31] (FC). 14 R v Bell (1980) 146 CLR 141 at 152 per Stephen J. 15 R v Bell (1980) 146 CLR 141 at 161 per Wilson J. 16 Varawa v Howard Smith & Co Ltd (1910) 10 CLR 382 at 389 per Isaacs J.

370

Lawyers’ Professional Responsibility

[11.20]

of natural justice) is required because the balancing has already been done.17 Its status as a substantive common law right, to this end, dictates that the legal professional privilege is not something a court can simply abrogate as a matter of judicial discretion.18 Can advice privilege be justified?

[11.20] While there have been no clear judicial assaults on the validity of litigation privilege,19 various dicta question the legitimacy of advice privilege. Not all remain convinced that the policy grounds noted above justify extending the privilege to mere advice. In fact, the privilege was originally confined to advice regarding litigation and later extended to non-litigious business because otherwise a person could not safely adopt precautions to render “any proceeding successful or all proceedings superfluous”.20 In 2004 an Australian Federal Court judge, Gyles J, queried the need for advice privilege to encourage a client’s candour, reasoning as follows:21 It is easy to see how the privilege is necessary to encourage candour on the part of a client who confronts or anticipates litigation to vindicate or defend legal rights as the client may need to disclose facts which are incriminating, discreditable or embarrassing in order to obtain sound advice. It is not so easy to see why a client who wishes to order its affairs to best advantage would need or require any encouragement for candour. Nor is it easy to see what corresponding public interest is served by preserving the secrecy of a client’s reasons for a transaction (unless the client chooses to lift the veil) in cases where disclosure would serve the ends of justice or would enable a statutory inquiry to be properly conducted.

Similar queries had been raised by Lord Phillips MR in the English Court of Appeal22 only weeks earlier, and have in the past been debated by law reform commissions.23 His Lordship’s views were, however, rejected on appeal, where the House of Lords endorsed advice privilege, focusing heavily on the link between 17 Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 183 CLR 121 at 128 per Brennan J, at 133–137 per Deane J; R v Derby Magistrates’ Court [1996] AC 487; B v Auckland District Law Society [2004] 1 NZLR 326 at [54] (PC); Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at [35] per Beazley and Giles JJA. 18 Michael Wilson & Partners Ltd v Nicholls [2009] NSWSC 763 at [12] per Einstein J. 19 That is not to say that it has not passed without academic criticism: see, for example, Mahoney, “Reforming Litigation Privilege” (2001) 30 Common World L Rev 66. 20 Greenough v Gaskell (1833) 1 My & K 98; 39 ER 618 at 103 (My & K), 621 (ER) per Lord Brougham LC. 21 Kennedy v Wallace (2004) 208 ALR 424 at [61]. 22 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2004] QB 916 at [39]. See also Higgins, “Legal Advice Privilege and its Relevance to Corporations” (2010) 73 Mod L Rev 371 (querying the need for advice privilege in the context of corporate clients). 23 See, for example, New Zealand Law Commission, Evidence Law: Privilege (Preliminary Paper No 23, May 1994), pp 55–56 (noting that it is more difficult to justify an absolute privilege where there is no immediate prospect of litigation because: (1) “if the prospect of litigation is unlikely, the likelihood of the information ever being relevant to court proceedings, and the lawyer ever being called upon to disclose it, is small”; and (2) “there is no direct connection between disclosure and the effectiveness of the workings of the court”).

[11.25]

11 Legal Professional Privilege

371

candour and non-disclosure.24 Although not explicitly addressed on appeal before the Full Federal Court, Gyles J’s remarks sit uncomfortably with its reasoning25 and, in any case, are inconsistent with the statements of the Full Court in another case where it extended the scope of advice privilege in third party communications:26 see [11.160]. It therefore seems that advice privilege is under little threat. This is certainly the position under the uniform evidence law, which recognises both advice privilege (s 118) and litigation privilege (s 119): see [11.25]. Privilege under the uniform evidence law

[11.25] The uniform evidence legislation (often termed “uniform evidence law”), first promulgated via the Evidence Act 1995 (Cth), was aimed to form the basis for uniform State and Territory evidence laws. The federal Act was expressed to apply in the Australian Capital Territory,27 but as from 1 March 2012 dedicated Territory legislation took effect (Evidence Act 2011). This is consequent upon the uniform scheme’s implementation in New South Wales (Evidence Act 1995), Tasmania (Evidence Act 2001), Victoria (Evidence Act 2008), and the Northern Territory (Evidence (National Uniform Legislation) Act 2011). It defines the parameters of advice privilege in s 118 as follows: 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 or a lawyer, for the dominant purpose of the lawyer, or one or more of the lawyers, providing legal advice to the client.

The concept of litigation privilege recognised by the uniform evidence law found in s 119, is phrased in the following terms: 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 between the client and another person, or between a lawyer acting for the client and another person, that was made, or (b) the contents of a confidential document (whether delivered or not) that was prepared, for the dominant purpose of the client being provided with professional legal services relating to an Australian or overseas proceeding (including the proceeding before the court), or an anticipated or pending Australian or overseas proceeding, in which the client is or may be, or was or might have been, a party.

Aside from the obvious limitation (with few exceptions) to proceedings in the courts of the jurisdictions in which it has been enacted (s 4), the main restriction on the application of the uniform evidence law is that it applies only to the “adducing 24 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2005] 1 AC 610 at [34] per Lord Scott, at [55] per Lord Rodger, at [61] per Baroness Hale. 25 See Kennedy v Wallace (2004) 142 FCR 185, noted at [11.150]. 26 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357. 27 Evidence Act 1995 (Cth), s 4.

372

Lawyers’ Professional Responsibility

[11.30]

of evidence”. It is not expressed to apply to ancillary processes, such as discovery or the inspection of subpoenaed documents. According to the High Court in Mann v Carnell,28 this means that, even in those jurisdictions that have enacted the uniform evidence law, the common law continues to apply at the ancillary process stage. In so ruling, their Honours rejected views expressed by lower courts that the uniform evidence law principles should be applied “derivatively” to ancillary processes,29 or at least should impact upon the exercise of relevant discretions under rules of court regulating those processes.30 Fulfilling the onus of proof

[11.30] Courts presume communications of a professional nature from a lawyer (or her or his agent) to a client touching the subject matter of the lawyer’s retainer, and communications from a client to the lawyer in connection with that engagement, to be prima facie privileged.31 It follows that once the person claiming the privilege can establish the facts underlying this presumption, the onus shifts to the person who disputes the claim to establish facts that prima facie rebut it.32 If he or she is able to do so, the party claiming the privilege must then establish the propriety and validity of the claim.33 Importantly, the onus is concerned with substance, not form; simply labelling a document “privileged” is insufficient to justify the privilege. As explained by Newnes M in Boase v Seven Network (Operations) Ltd:34 Where a claim for privilege is made it is necessary that any documents for which privilege is claimed be properly described. Unless such documents are sufficiently described, it will be impossible for the other party to discern whether the claim of privilege is properly made. It is not sufficient merely to assert that the documents are privileged, which is a statement of law, but the facts relied upon as giving rise to the privilege must be set out so the claim of privilege can be tested, although the facts should 28 Mann v Carnell (2000) 201 CLR 1. 29 See, for example, Telstra Corporation v Australis Media Holdings (No 1) (1997) 41 NSWLR 277; Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1998) 81 FCR 526; Akins v Abigroup Ltd (1998) 43 NSWLR 539; Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152. 30 See, for example, BT Australasia Pty Ltd v New South Wales (1996) 140 ALR 268; Sparnon v Apand Pty Ltd (1996) 68 FCR 322; Relationships Australia v Pasternak (1996) 20 Fam LR 604. 31 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 333 per Anderson J; Kennedy v Wallace (2004) 208 ALR 424 at [65] per Gyles J (affd Kennedy v Wallace (2004) 142 FCR 185); Lampson (Australia) Pty Ltd v Fortescue Metals Group Ltd (No 2) [2010] WASC 217 at [33] per Murphy JA. 32 Australian Hospital Care Pty Ltd v Duggan (No 2) [1999] VSC 131 at [68] per Gillard J. 33 Grant v Downs (1976) 135 CLR 674 at 688–689 per Stephen, Mason and Murphy JJ. 34 Boase v Seven Network (Operations) Ltd [2005] WASC 174 at [24]. See also Kennedy v Wallace (2004) 142 FCR 185 at [13] per Black CJ and Emmett J; AWB Ltd v Cole (2006) 152 FCR 382 at [133] per Young J; District Council of Mallala v Livestock Markets Ltd (2006) 94 SASR 258 at [30] per White J; Barnes v Commissioner of Taxation (2007) 64 ATR 553 at [28]–[40] per Nicholson J (on appeal: Barnes v Commissioner of Taxation (2007) 242 ALR 601 at [18] (FC)); West London Pipeline & Storage Ltd v Total UK Ltd [2008] 2 CLC 258 at [53] per Beatson J; Murray v Schreuder (2009) 1 ASTLR 340 at [38]–[43] per Newnes J (affd Schreuder v Murray (No 2) (2009) 41 WAR 169). Cf Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [37] per Vickery J (remarking that a claiming party “cannot be compelled to provide such particularity as would compromise the very privilege that is claimed”); Domain Paper (Australia) Pty Ltd v Galloway [2014] FCA 936 at [36], [49] per Murphy J.

[11.40]

11 Legal Professional Privilege

373

not be set out in such detail as would enable the contents of the documents to be ascertained directly … That is, an adequate description is required of each document for which privilege is claimed, but not one which indirectly reveals its contents.

Where there is doubt as to the status of documents over which privilege is claimed, the court may determine the claim by inspecting those documents, a jurisdiction recognised both at general law35 and by s 133 of the uniform evidence law.36 But the court need not follow this course where it can establish, by reference to affidavit evidence, or from the nature of the document itself, that the claim to privilege is formally correct, especially where ordering inspection would be excessively time-consuming.37

“PURPOSE” OF THE COMMUNICATION [11.35] Whether at general law or under the uniform evidence legislation, the privilege does not extend to all communications arising out of the lawyer–client relationship. Not only is it limited to confidential communications arising out of such a relationship (see [11.105]–[11.155]), those communications must fulfil certain purpose requirements. As elaborated below, only confidential communications made for the dominant purpose of securing legal advice or for use in existing or reasonably anticipated litigation can possibly be privileged: see [11.40], [11.45]. Also, communications for the purpose of furthering “fraud” are not privileged: see [11.55]–[11.65]. “Dominant purpose” test Shift from the “sole” purpose to the “dominant” purpose test

[11.40] Only those confidential communications made for the “purpose” of advice or for use in existing or anticipated litigation come within the privilege. In 1976 the High Court in Grant v Downs,38 contrary to the previous legal position, held that in order to be privileged, a communication must have been made for the sole purpose of legal advice or contemplated litigation. Stephen, Mason and Murphy JJ reasoned that otherwise the privilege would “travel beyond the 35 Konia v Morley [1976] 1 NZLR 455 at 459–460 per McCarthy P; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246 per Lockhart J; Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [52] per Gleeson CJ, Gaudron and Gummow JJ; Von Stieglitz v Comcare (2014) 64 AAR 356 at [51] per the court; Hancock v Rinehart [2016] NSWSC 12 at [30]–[34] per Brereton J. 36 See Bailey v Director-General, Department of Land and Water Conservation (2009) 74 NSWLR 333 at [54]–[65] per Tobias JA; Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [24] per Vickery J (remarking that “the court should not be hesitant to exercise such a power”). 37 Westminster Airways Ltd v Kuwait Oil Co Ltd [1951] 1 KB 134 at 146 per Jenkins LJ; Bailey v Director-General, Department of Land and Water Conservation (2009) 74 NSWLR 333 at [2] per Allsop P; Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [24] per Vickery J (“the nature and description of the document may be sufficient to entitle a court to be guided solely by the oath of the party making discovery, that the whole of the document or the nominated redacted parts of it are privileged”); Bare v Small [2011] VSC 639 at [11] per Mukhtar AsJ. See, for example, Brambles Holdings Ltd v Trade Practices Commission (No 3) (1981) 58 FLR 452; Yunghanns v Elfic Pty Ltd (2000) 1 VR 92. 38 Grant v Downs (1976) 135 CLR 674 at 682, 685, 688 per Stephen, Mason and Murphy JJ, at 694 per Jacobs J.

374

Lawyers’ Professional Responsibility

[11.40]

underlying rationale to which it is intended to give expression”.39 Their Honours were particularly concerned that in large corporations and public authorities routine reports and other documents prepared by subordinates for the information of their superiors would also, in the ordinary course, be provided to in-house lawyers for the purpose of obtaining legal advice or assistance. It was considered unacceptable, and contrary to the interests of justice, that such documents should be privileged merely because one of their intended destinations was a lawyer’s desk.40 In a deliberate policy decision to broaden the availability of the privilege, the uniform evidence law provides that, in the situations in which it applies, it is sufficient that the communications have been made for the dominant purpose of legal advice or contemplated litigation. This created difficulties for litigators in courts to which the uniform evidence law applied; the dominant purpose test applied in respect of adducing evidence, whereas a sole purpose test applied to ancillary processes in the same matter. Partly in response to these difficulties and partly on policy grounds, in 2000 the High Court in Esso Australia Resources Ltd v Federal Commissioner of Taxation,41 by a four-two majority,42 ousted the sole purpose test in favour of a dominant purpose test at common law. The majority saw the main drawback of the sole purpose test as its “extraordinary narrowness”,43 and that the only way to avoid the extreme consequences of this narrowness was not to take the test literally, in which case the test lost its supposed virtue of clarity.44 The sole purpose test had, in the view of Callinan J, not proved more convenient, less productive of controversy or productive of some higher order of justice.45 Yet it appears that what most influenced the majority, together with the advantage of assimilating common law and statutory purpose tests,46 was that the dominant purpose test reflects the law in other common law jurisdictions.47 The main concerns of the dissenters in Esso were that the dominant purpose test would reduce the information upon which the courts make their decisions, that it 39 Grant v Downs (1976) 135 CLR 674 at 688. 40 Grant v Downs (1976) 135 CLR 674 at 687–688. 41 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [2]–[4] per Gleeson CJ, Gaudron and Gummow JJ, at [166] per Callinan J. See Legg, “Legal Professional Privilege After Esso – Applying the Dominant Purpose Test” (2000) 20 Aust Bar Rev 40. 42 Per Gleeson CJ, Gaudron, Gummow and Callinan JJ, McHugh and Kirby JJ dissenting. 43 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [58] per Gleeson CJ, Gaudron and Gummow JJ. 44 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [59], [60] per Gleeson CJ, Gaudron and Gummow JJ. 45 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [168]. 46 Esso Australia Resources Ltd v Commissioner of Taxation (1999) 201 CLR 49 at [3], [4] per Gleeson CJ, Gaudron and Gummow JJ. 47 Namely England (see Waugh v British Railways Board [1980] AC 521), Canada (see Davies v Harrington (1980) 115 DLR (3d) 347; Voth Bros Construction (1974) Ltd v North Vancouver Board of School Trustees (1981) 23 CPC 276; Edgar v Auld (2000) 184 DLR (4th) 747; Nova, an Alberta Corp v Guelph Engineering Co (1984) 5 DLR (4th) 755; General Accident Assurance Co v Chrusz (2000) 180 DLR (4th) 241), and New Zealand (see Guardian Royal Exchange Assurance of New Zealand Ltd v Stuart [1985] 1 NZLR 596; General Accident Fire & Life Assurance Corp Ltd v Elite Apparel Ltd [1987] 1 NZLR 129).

[11.45]

11 Legal Professional Privilege

375

was inconsistent with the rationale of the privilege that communications made for non-legal purposes should be able to free-ride on the protected purpose and obtain protection, and that it would be harder to apply than the sole purpose test, resulting in an increased volume of interlocutory litigation. Determining the “dominant” purpose

[11.45] The term “dominant” refers to “the ruling, prevailing or most influential purpose”.48 Satisfying the court that advice or litigation was one of the purposes of the communication is insufficient; it must be shown that, as a matter of objective fact, that purpose “dominated” the decision to make the relevant communication.49 If the decision would have been made irrespective of any intention to obtain legal services, the purpose is not the dominant one. Nor can one of two (even significant) purposes of equal weight be said to dominate the other;50 “[d]etermining dominance calls for appreciation of competing purposes”.51 Even if a document was sent to a lawyer for legal advice, it does not necessarily dictate that that purpose was any more dominant than other non-legal advice purposes for the communication.52 But the privilege is not denied merely because the communication, or the document containing it, may have had an ancillary use, unrelated to advice or litigation, contemplated at the time it was made or created.53 Where a document prepared for the dominant purpose of legal advice or apprehended litigation contains discrete, severable material the dominant purpose of which is different, that part of the document is not privileged. For example, that a document is privileged does not mean that all its annexures or enclosures are likewise privileged merely due to being associated with privileged correspondence.54 In cases of this kind, production is ordered of the non-privileged part(s). The position is otherwise if the non-privileged material is not readily severable from the privileged material, in which case the document maintains its privileged status.55

48 Federal Commissioner of Taxation v Spotless Services Ltd (1996) 186 CLR 404 at 416 per Brennan CJ, Dawson, Toohey, Gaudron, Gummow and Kirby JJ (in the context of s 177D of the Income Tax Assessment Act 1936 (Cth)). 49 GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at [28] per Holmes J; Howell v Macquarie University [2008] NSWCA 26 at [72] per Campbell JA. 50 Kennedy v Wallace (2004) 208 ALR 424 at [73] per Gyles J (affd Kennedy v Wallace (2004) 142 FCR 185). 51 State of New South Wales v Jackson [2007] NSWCA 279 at [75] per Giles JA. 52 AWB Ltd v Cole (2006) 152 FCR 382 at [118] per Young J. 53 Sparnon v Apand Pty Ltd (1996) 68 FCR 322 at 328 per Branson J; Gaynor v Chief of Defence Force (No 2) [2015] FCA 817 at [50]–[55] per Katzmann J. 54 See, for example, Actew Corporation Ltd v Mihaljevic [2007] ACTSC 39 at [42] per Harper M (who distinguished the first part of an information paper prepared for a company board meeting, which was privileged in containing a summary of legal advice supplied by external solicitors, from its second part, which was not privileged in setting out available alternatives for action). 55 Techfarm Pty Ltd v AXA Insurance Australia Ltd [2004] WASC 166 at [53] per Newnes M.

376

Lawyers’ Professional Responsibility

[11.50]

Litigation privilege – communication for the purpose of “anticipated” litigation

[11.50] For litigation privilege to apply, the communication in question must have been made for the purpose of use in existing or reasonably anticipated litigation. There is ordinarily little difficulty in determining whether litigation is “existing”; whether or not litigation is “reasonably anticipated” may be more difficult to determine. The cases reveal a variety of expressions in this context, such as “in reasonable prospect”, “in reasonable contemplation” or “reasonable anticipation”, or litigation that was “threatened”, “proposed”, “likely” or “in fact expected”. Though varied in wording, substance-wise there is little variation in their meaning.56 In Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority57 the Victorian Court of Appeal stated that litigation had to be more than a mere possibility but it did not have to be more likely than not. If so, references to reasonable probability should not be seen as setting a lower threshold than actual probability, but more in line with a real or substantial possibility.58 The court found that reports rendered by loss assessors and engineers to a party’s solicitors had been commissioned at a time when litigation was reasonably anticipated. The factors that influenced their Honours’ ruling give an indication, more generally, of matters that go to meeting the threshold, namely that:59 • the nature of the event giving rise to the reports was inherently of a kind that, in common experience, very often leads to litigation; • lawyers were instructed, and instructed early on topics – such as liability, indemnity and quantum – that suggested an expectation of a claim; and • the party claiming the privilege had already resorted to its insurer. The court rejected the argument that, in putting in train an evidence gathering process, the threshold of reasonable anticipation had yet to be met, saying that there will be many cases where it can be said that litigation is likely before the evidence gathering process has even begun.60 When it comes to companies (such as insurers) that are loss-bearing entities and thus frequent targets for litigation, documents are not privileged merely because an intended destination is the desk of a lawyer, or they constitute reports triggered by established corporate procedures or merely because litigation is a contingent 56 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [16] per Batt JA. 57 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [3] per Callaway JA, at [19] per Batt JA. 58 The same approach, focusing on a real likelihood as opposed to a mere possibility, has also surfaced in England (see, for example, United States of America v Philip Morris Inc (No 1) [2004] 1 CLC 811 at [54] per Brooke LJ, with whom Chadwick and Scott Baker LJJ concurred) and New Zealand (see, for example, Financial Markets Authority v Hotchin [2014] NZHC 2732 at [46] per Winkelmann J). 59 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [22] per Batt JA, with whom Callaway and Charles JJA concurred. 60 Mitsubishi Electric Australia Pty Ltd v Victorian Workcover Authority (2002) 4 VR 332 at [23] per Batt JA, with whom Callaway and Charles JJA concurred.

[11.55]

11 Legal Professional Privilege

377

possibility.61 As to the latter, it has been judicially said “great care must be taken to ensure that the investigative purpose is not then ex post facto turned into an assertion that the dominant purpose was for use for confidential legal advice or in apprehended litigation”.62 At the same time, if an insurer engaged the lawyer “genuinely”, in circumstances where it was plausible and reasonable that it would require legal advice, including as to strategy consequent upon the investigator’s report, it may well be that the latter is privileged.63 That litigation privilege applies only to communications made for the dominant purpose of use in existing or “reasonably anticipated” litigation means that, although advice privilege may apply in the context of a commission of inquiry, it is difficult to extend litigation privilege to this scenario.64 Purpose of communication to further fraud Why fraudulent communications are not privileged

[11.55] Legal professional privilege does not attach to lawyer–client communications, even if they meet the other requirements of the privilege, relating to advice sought or given in furtherance of, or to facilitate, criminal, fraudulent or other unlawful purposes.65 This is irrespective of whether or not the lawyer was a party to, or ignorant of, those purposes; what is in issue is the client’s purpose.66 Though sometimes termed the “fraud exception” to privilege, this is inaccurate (at least at general law, for s 125 of the uniform evidence law creates a true exception in this regard) because these communications do not fall within a protected category at all and so are not excluded by way of an exception.67 That fraudulent communications go against the public interest serves to outweigh the public interest in their protection.68 Attendant to this is the need to preserve the integrity of court processes, as explained by Kourakis J:69 61 Brunswick Hill Apartments Pty Ltd v CGU Insurance Ltd (2010) ANZ Ins Cas ¶61-870 at [29] per Mukhtar AsJ. 62 Brunswick Hill Apartments Pty Ltd v CGU Insurance Ltd (2010) ANZ Ins Cas ¶61-870 at [30] per Mukhtar AsJ. 63 Samenic Ltd v APM Group (Aust) Pty Ltd [2011] VSC 194 at [25] per Mukhtar AsJ. 64 AWB Ltd v Cole (2006) 152 FCR 382 at [158], [161], [162] per Young J. 65 R v Cox & Railton (1884) 14 QBD 153; Bullivant v Attorney-General (Vic) [1901] AC 196 at 201 per Earl of Halsbury LC; R v Bell (1980) 146 CLR 141 at 145 per Gibbs J, at 152–153 per Stephen J, at 161–162 per Wilson J; Baker v Campbell (1983) 153 CLR 52 at 86–87 per Murphy J. 66 Williams v Quebrada Railway Co [1895] 2 Ch 751 at 756 per Kekewich J; Varawa v Howard Smith & Co Ltd (1910) 10 CLR 382 at 385 per Griffith CJ, at 386 per O’Connor J, at 390 per Isaacs J; Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 174 per Doyle CJ. 67 Clements, Dunne & Bell Pty Ltd v Commissioner of Australian Federal Police (2001) 188 ALR 515 at [30] per North J. 68 R v Bell (1980) 146 CLR 141 at 147 per Gibbs J; Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [69] per Vickery J. 69 Clone Pty Ltd v Players Pty Ltd (in liq recs appt) (2012) 279 LSJS 1 at [157] (emphasis in original) (revd but not on this specific point: Players Pty Ltd (in liq) (receivers appointed) v Clone Pty Ltd (2013) 115 SASR 547).

378

Lawyers’ Professional Responsibility

[11.60]

… general principles suggest that no litigation privilege attaches to communications, or documents evidencing steps taken, for the purposes of abusing the very processes of the Court pursuant to which the litigation is being conducted. The privilege exists to encourage frank communications between clients and their lawyers, and between their legal advisers, in order to facilitate the conduct of proceedings in accordance with the rules, procedures and practices of the Court, and the professional ethics of the legal representatives. Communications and conduct undertaken for the purpose of subverting those processes, or which breach professional conduct rules, are adverse to that public interest and should not attract the privilege.

There is the further concern not merely to discourage fraudulent conduct as a moral imperative, but to protect its victims.70 This policy does not extend to advice in respect of past misdeeds71 – only communications made in furtherance of future wrongdoing are not privileged – as a client needs protection in the case of past misdeeds that he or she does not in respect of future wrongdoing. Yet as it cannot be assumed that a clear line between past and future wrongdoing can always be drawn, ongoing commission of a fraud traverses non-privileged territory, as do active steps directed to its concealment.72 What amounts to “fraud”? For these purposes “fraud” is viewed broadly.73 It is not confined to criminal fraud but includes fraud in the ordinary sense of the word, namely conduct that has an obvious taint of dishonesty74 or that can be described as a “fraud on justice”.75 Put another way, it “embraces a range of legal wrongs that have deception, deliberate abuse of or misuse of legal powers, or deliberate breach of a legal duty at their heart”.76 The uniform evidence law, in s 125(1)(a), expresses an equivalent concept in referring to those communications “in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to civil penalty”.77 Conversely, conduct that is merely disreputable or a failure to maintain good ethical standards may be insufficient to uncover the shield of privilege.78

[11.60]

70 Dubai Aluminium Co Ltd v Al Alawi [1999] 1 WLR 1964 at 1969 per Rix J. 71 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 545 per Gaudron J. See, for example, P & V Industries Pty Ltd v Porto (No 3) [2007] VSC 113 at [27], [46]–[51] per Hollingworth J. 72 Amcor Ltd v Barnes [2011] VSC 341 at [55]–[62] per Kyrou J (in the context of s 125 of the uniform evidence law). 73 See Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [76]–[81] per Vickery J. 74 Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 at 214 per Kennedy-Grant M. 75 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 514 per Gibbs CJ. 76 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 174 per Doyle CJ. 77 Although there are tentative obiter statements of Hodgson JA to the effect that fraud in the context of s 125(1)(a) requires an element of actual dishonesty (see Idoport Pty Ltd v National Australia Bank Ltd [2001] NSWSC 222 at [63]; Van Der Lee v New South Wales [2002] NSWCA 286 at [61], with whom Mason P (at [24]) and Santow JA (at [68]) agreed on this point), it is difficult to discern from the statutory language an intention to apply a stricter test than that applicable at common law. For this reason, the view expressed by other judges, which does not premise the exception being triggered

[11.60]

11 Legal Professional Privilege

379

So legal advice given to a client on how to evade the law, aside from potentially raising civil (or even criminal) liability in the lawyer, is not privileged.79 Privilege may also not apply to communications made for the purpose of frustrating the processes of the law itself even if no crime or fraud is contemplated.80 Communications for the purpose of putting a client’s assets beyond the reach of the legitimate claims of creditors, accordingly, are not privileged.81 Nor are communications made to further a deliberate abuse of statutory power. In Attorney-General (NT) v Kearney82 the validity of regulations made by the Administrator of the Northern Territory pursuant to statutory town planning powers was challenged by the Northern Land Council, which established a prima facie case that the communications came into being as part of a scheme to defeat land claims. The Northern Territory claimed privilege for documents containing legal advice relating to the regulations prepared by its legal officers. Gibbs CJ, with whom Mason and Brennan JJ concurred, denied the privilege, reasoning as follows:83 It would be contrary to the public interest which the privilege is designed to secure … to allow it to be used to protect communications made to further a deliberate abuse of statutory power and by that abuse to prevent others from exercising their rights under the law. It would shake public confidence in the law if there was reasonable ground for believing that a regulation had been enacted for an unauthorised purpose and with the intent of frustrating legitimate claims, and yet the law protected from disclosure the communications made to seek and give advice in carrying out that purpose … The law strikes a balance between securing proper representation by encouraging full disclosure on the one hand, and requiring the production of all relevant evidence on the other, but only by dishonesty, is to be preferred: see Kang v Kwan [2001] NSWSC 698 at [9] per Santow J (who tentatively said that “fraud” for the purposes of s 125 should include the kind of sharp practice often associated with equitable fraud); Amcor Ltd v Barnes [2011] VSC 341 at [40]–[47] per Kyrou J. 78 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 174 per Doyle CJ. Cf BBGP Managing General Partner Ltd v Babcock & Brown Global Partners [2011] Ch 296 at [62] per Norris J (characterising as fraud where “the wrongdoer has gone beyond conduct which merely amounts to a civil wrong”, but “has indulged in sharp practice, something of an underhand nature where the circumstances required good faith, something which commercial men would say was a fraud or which the law treats as entirely contrary to public policy”). 79 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 513–514 per Gibbs CJ. Cf Barclays Bank plc v Eustice [1995] 4 All ER 511 at 524 per Schiemann LJ. As to the lawyer’s duty to uphold the law see generally Ch 19. 80 R v Bell (1980) 146 CLR 141. 81 Kang v Kwan [2001] NSWSC 698 at [38]–[42] per Santow J (finding an intent to defraud creditors within the meaning of the Conveyancing Act 1919 (NSW), s 37A); Gartner v Carter [2004] FCA 258 at [130] per Lander J (privilege denied for a document provided to a lawyer for the purpose of obtaining legal advice as to a proposed corporate restructure designed to put assets outside the reach of a secured creditor); R v Dunwoody (2004) 212 ALR 103 (defendant’s disposal of all his substantial assets and declaration of bankruptcy shortly after judgment for the purpose, recorded in his solicitor’s earlier file note, of potentially depriving the plaintiff of the fruits of the action); Australian Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 at [85]–[103] per Mansfield J (privilege denied to advice given to the respondent creditors regarding obtaining security over a debt owed by the operator of a managed investment scheme in order to obtain an unfair advantage over other creditors). 82 Attorney-General (NT) v Kearney (1985) 158 CLR 500. 83 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 515–516.

380

Lawyers’ Professional Responsibility

[11.65]

the balance more readily inclines in favour of disclosure where privilege from disclosure might conceal an abuse of delegated powers to enact legislation, and thus obstruct a proper challenge to the validity of part of the law itself. The basis of the privilege is not endangered if it is held that it does not protect communications made by a public authority for the purpose of obtaining advice or assistance to exceed its statutory powers.

Wilson J considered that where legal advice is sought with reference to the making of regulations for a purpose believed to be consistent with the objects of the enabling legislation, privilege attaches to those communications even though the regulations are beyond power and that a secondary motive unrelated to the statutory power is also present.84 His Honour’s concern was the implications for the privilege were an ultra vires allegation, based on a genuine but mistaken view of the scope of the power, to expose a government to discovery of confidential professional communications.85 Such a concern would not arise for advice sought in the deliberate pursuit of a purpose known to be ultra vires. On the facts Wilson J found that the communications were undertaken in the knowledge that the planning legislation was being resorted to otherwise than for a bona fide planning purpose, and so the privilege should not protect the government’s deliberate abuse of statutory powers. The reference in s 125(1)(b) of the uniform evidence law to communications “made or prepared in furtherance of a deliberate abuse of power” represents an attempt to encapsulate the foregoing.86 Onus and standard of proof

[11.65] The party alleging fraud bears the onus of establishing it to the standard of a prima facie case87 by adducing “some prima facie evidence … for the purpose of seeing whether the charge is made honestly and with sufficient probability in its truth”.88 More is required than a mere charge of crime or fraud, or that powers have been exercised for an ulterior purpose.89 Vague or generalised contentions of crimes or improper purposes will not do;90 “surmise and conjecture will not suffice”.91 Nor will mere evidence of the existence of a fraud and proof of an anterior consultation with a lawyer; there must be something to suggest that the 84 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 524. 85 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 525. 86 Bare v Small [2011] VSC 639 at [6], [7] per Mukhtar AsJ. 87 Freeman v Health Insurance Commission (1997) 78 FCR 91 at 96 per Finkelstein J; Re Moage Ltd (in liq) (1998) 82 FCR 10 at 18 at 733–734 per Mansfield J. Cf Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 at 215 per Kennedy-Grant M (“a strong prima facie case”). 88 O’Rourke v Darbishire [1920] AC 581 at 604 per Viscount Finlay. See also at 613–614 per Lord Sumner, at 622–623 per Lord Parmoor, at 632–633 per Lord Wrenbury; Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 514 per Brennan CJ; Australian Securities and Investments Commission v Mercorella (No 3) (2006) 58 ACSR 40 at [34]–[36] per Mansfield J; Howell v Macquarie University [2008] NSWCA 26 at [88] per Campbell JA (referring to “prima facie evidence that the allegation of improper purpose has a foundation”). 89 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 516 per Gibbs CJ. 90 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 591–592 per Kirby J. 91 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 174 per Doyle CJ.

[11.70]

11 Legal Professional Privilege

381

advice facilitated the fraud or the lawyer otherwise became a dupe or conspirator.92 In other words, there must be some evidence that gives substance to the allegation;93 at least enough to raise a doubt as to a claim of privilege to shift the onus to the person making the claim to show that, in truth, the privilege attaches.94 Court inspection of the relevant documents may be necessary for this purpose where some prima facie evidence appears that the lawyer was privy to fraud. An allegation of fraud must, moreover, be supportable by admissible evidence. So something more than, for instance, merely hearsay evidence is required to affect the operation of privilege.95

COMMUNICATIONS COVERED BY THE PRIVILEGE Concept of a “communication”

[11.70] Legal professional privilege applies to “communications”, not to documents as such, although the typical communication is in written form. It covers notes, drafts, charts, diagrams, photographs, spreadsheets and the like prepared by a client as a way of marshalling information to be the subject of confidential communication to her or his lawyers. Privileged communications may be oral, or mechanically, electronically or video recorded,96 provided they meet the other requirements of the privilege. The definition of “document” for the purposes of the uniform evidence law is similarly wide.97 As privilege focuses on the right to control the dissemination and use of the information recorded on the relevant document, the ownership of that document is not determinative of the point.98 Courts have construed the concept of a “communication” broadly, conferring privilege to material that is not literally a communication or manifestly a record of a communication. Draft letters that never leave the lawyer’s office, draft agreements, draft statements of claim, annotations on a document by a lawyer, for example, though not literal communications may if disclosed reveal a privileged

92 R v Shirose (1999) 133 CCC (3d) 257 at 294 (SCC). 93 Freeman v Health Insurance Commission (1997) 78 FCR 91 at 96 per Finkelstein J. 94 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 546 per Gaudron J. 95 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 514 per Brennan CJ, at 547 per Gaudron J, at 556–557 per McHugh J. Cf at 593 per Kirby J. 96 Rosenberg v Jaine [1983] NZLR 1 at 7 per Davison CJ; Baker v Campbell (1983) 153 CLR 52 at 112 per Deane J; Boyes v Collins (2000) 23 WAR 123. Video footage may not, however, always meet the confidentiality requirement for privilege: see [11.110]. 97 See Cth, dictionary; ACT, dictionary; NSW, dictionary; NT, dictionary; Tas, s 3(1); Vic, dictionary. 98 Shlosberg v Avonwick Holdings Ltd [2016] EWHC 1001 (Ch) at [109] per Arnold J.

382

Lawyers’ Professional Responsibility

[11.75]

communication.99 Documents of this kind can legitimately be characterised as incidental to a communication, and so come within the privilege.100 But communications not brought into existence or effected for the purpose of advice and/or litigation are not privileged. For this reason, no privilege attaches to documents that constitute or evidence transactions, such as contracts, conveyances, declarations of trust and the like.101 Final documents of this kind do not, in any case, usually meet the requirement of confidentiality for this purpose (as to which see [11.105]).102 Nor are instructions to a lawyer to do a particular thing, such as to prepare a legal document such as a will, ordinarily privileged because they do not necessarily amount to a request for advice.103 Documents or recordings already in existence, unless brought into existence for the purpose of advice and/or litigation, also stake no claim to privilege104 (although there is scope for a copy of such a document or recording to secure privileged status: see [11.75]). A selection of some topical areas highlighting the parameters that distinguish communications within the privilege from those falling outside it are discussed below. Application of privilege to copies, translations and modifications of non-privileged documents Copies of privileged documents are clearly privileged.105 After some uncertainty in the case law,106 the status of copies of non-privileged documents was established by the High Court in Commissioner, Australian Federal Police v Propend Finance Pty Ltd.107 Their Honours determined that the privilege attaches to copies of non-privileged documents provided to a lawyer and made for the purpose of obtaining or giving legal advice or for use in litigation that is pending, intended or reasonably apprehended. Their Honours reasoned that the contrary view gave insufficient weight to the fact that privilege protects communications between

[11.75]

99 See, for example, DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 (where Allsop J ruled that although a document, being a facsimile with some handwritten notes of a solicitor, was not in essence a communication, as it was the result of acting as a professional adviser by reference to material communicated confidentially in his professional capacity, it was privileged: at [114]); Sugden v Sugden (2007) 70 NSWLR 301 at [71]–[89] per McDougall J (where file notes of client instructions, and a draft statement commissioned by the solicitor in the course of investigating and preparing for hearing the client’s claim for damages, were held to be privileged). 100 Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63 at 66 per Pincus J; Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 333 per Anderson J; Sugden v Sugden (2007) 70 NSWLR 301 at [69] per McDougall J. 101 Baker v Campbell (1983) 153 CLR 52 at 86 per Murphy J. 102 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 334 per Anderson J. 103 Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [31] (FC). 104 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 219 per Hay J. 105 Cole v Elders Finance & Investment Co Ltd [1993] 2 VR 356. 106 Compare, for example, the views of Hunt J in McCaskill v Mirror Newspapers Ltd [1984] 1 NSWLR 66 at 67–68 (extending the privilege to a copy) with those of Clarke JA in Vardas v South British Insurance Co Ltd [1984] 2 NSWLR 652 at 661 (denying privilege). 107 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 509 per Brennan CJ, at 544–545 per Gaudron J, at 587 per Kirby J.

[11.85]

11 Legal Professional Privilege

383

lawyer and client rather than documents as such.108 They added, however, that the privileged status of the copy does not confer the same status on the original, which is susceptible to whatever compulsory processes are available to secure its production.109 By parity of reasoning, the same principles apply to translations of non-privileged documents,110 and to the marking up or tracking of changes to non-privileged documents.111 But these scenarios are distinguishable from the mere downloading and transmission of originally non-privileged information in electronic form.112 Application of privilege to attachments to privileged documents

[11.80] Attempts by lawyers to secure privileged status to otherwise nonprivileged documents by attaching them to a privileged document have not gone unnoticed by the courts. The general principle is that the mere selection of documents to be attached to a statement, in circumstances where the documents are not in their nature privileged, does not amount to a legal communication or a bringing into existence of the document for the purpose of litigation. The position may differ if the attached documents involve an annotation that meets these criteria, or where the collation itself could relevantly disclose the nature of legal advice given, communication made, or legal work done in relation to the content of the privileged statement itself. Otherwise, the origin and purpose of each document are the determining considerations in any privilege claim.113 Application of privilege to communications of a client’s identity? A client’s identity is not ordinarily privileged,114 for various reasons. In the first place, unless the client is identified, it is difficult to establish proof of a lawyer–client relationship, upon which a claim to privilege rests: see [11.120], [11.125]. Also, in almost all cases the client’s name will not have been

[11.85]

108 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 508 per Brennan CJ, at 543 per Gaudron J, at 552–523 per McHugh J. 109 Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 544 per Gaudron J, at 571 per Gummow J. 110 Sumitomo Corp v Credit Lyonnias Rouse Ltd [2002] 1 WLR 479 at [44]–[46] per Jonathan Parker LJ, delivering the judgment of the court (involving a selection of documents translated into English for the purposes of litigation). 111 Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at [31] per Lindgren J. 112 Tan v Commissioner of the New South Wales Police [2012] NSWSC 1580 at [93], [94], [104]–[109] per Hall J. 113 Brooks v Medical Defence Association of Western Australia (1999) 94 FCR 164 at [4], [5] per Madgwick J; Mundraby v Commonwealth (2001) 184 ALR 737 at [11]–[16] per Tamberlin J; Sumitomo Corp v Credit Lyonnias Rouse Ltd [2002] 1 WLR 479 at [72]–[77] per Jonathan Parker LJ, delivering the judgment of the court. 114 Bursill v Tanner (1885) 16 QBD 1; Cook v Leonard [1954] VLR 591; R v Bell (1980) 146 CLR 141 at 155 per Stephen J; Kennedy v Cynstock Pty Ltd (1993) 3 NTLR 108 at 114 per Kearney J; R v Minshull Street Crown Court [2002] EWHC 3077 (Admin) at [20], [21] per Fulford J; Z v New South Wales Crime Commission (2007) 231 CLR 75 at [4] per Gleeson CJ; Hksar v Yeung Wai Birney [2012] HKCA 109 at [111]–[123] per Stock VP.

384

Lawyers’ Professional Responsibility

[11.90]

communicated confidentially; but even if so communicated, this does not of itself justify the privilege, as a client cannot by contract extend the scope of privilege.115 In a litigation context, moreover, procedural fairness dictates that a litigant is entitled to know the identity of her or his opponent.116 However, some judges have countenanced the exceptional case where a client’s identity is so intertwined with the confidential communication that to disclose the identity would be to disclose the communication, in which case the client’s identity may be privileged.117 In Z v New South Wales Crime Commission,118 for example, Kirby and Callinan JJ were inclined to accept, as “a strongly arguable proposition”, the appellant lawyer’s argument that, in light of the peculiar circumstances of his retainer and its dominant purposes in the case (an investigation by the respondent statutory body into attempted murder), privilege attached to disclosure of his client’s name and address. Application of privilege to communications of a client’s contact details?

[11.90] The leading statement as to privilege regarding the communication of a client’s address, and one endorsed by Australian courts,119 is that of James LJ in Ex parte Campbell:120 What a solicitor is privileged from disclosing is that which is communicated to him sub sigillo confessionis – that is to say, some fact which the client communicates to the solicitor for the purpose of obtaining the solicitor’s professional advice and assistance … But a solicitor’s knowledge of his client’s residence, even though he knows it simply in consequence of the professional business in which he has been acting for him, is not on that ground alone a matter of confession, so as to be in the nature of a privileged or confidential communication … The client’s place of residence in such a case is a mere collateral fact, which the solicitor knows without anything like professional confidence; and therefore the mere statement, “The place of residence of my client came to my 115 Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [31] (FC). Cf Morrick, “Professional Privilege: the Client’s Identity” (1980) 124 Sol J 303 at 305. 116 R v Bell (1980) 146 CLR 141 at 155 per Stephen J; Rosenberg v Jaine [1983] NZLR 1 at 6 per Davison CJ. See further McNicol, Law of Privilege (Law Book Co, 1992), pp 98–100; Pugh-Thomas, “Who is Your Client?” (1997) 141 Sol J 44; Peacock, “Naming Names” (1999) 143 Sol J 152. 117 National Labour Relations Board v Harvey (1965) 349 F 2d 900 at 905; Rosenberg v Jaine [1983] NZLR 1 at 6 per Davison CJ; Ralls v United States (1995) F 2d 223 at 225–226; Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [31] (FC); Lavellee, Rackel & Heintz v Canada (Attorney-General) (2000) 184 DLR (4th) 25 at 43 per Côté JA. See also Morrick, “Professional Privilege: the Client’s Identity” (1980) 124 Sol J 303 at 305 (who suggests that the disclosure of a name given to a lawyer may attract privilege where: (a) the client must have disclosed her or his identity in confidence; (b) the lawyer must be acting as legal adviser, not as an agent; (c) the client must not be a party in litigation; and (d) the client must either be acting in the public interest or the client’s identity would be incriminating information), cited by Young CJ in Southern Cross Commodities Pty Ltd (in liq) v Crinis [1984] VR 697 at 703–704 but without examining or pronouncing on the author’s conclusions. 118 Z v New South Wales Crime Commission (2007) 231 CLR 75 at [12]. Gleeson CJ expressed a similar view: at [4]. Hayne and Crennan JJ held otherwise, being unconvinced that the client’s communication to the appellant of name and contact details had been shown to be for the dominant purpose of seeking legal advice: at [38]. 119 R v Bell (1980) 146 CLR 141 at 144–145 per Gibbs J, at 161 per Wilson J; Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [31] (FC). 120 Ex parte Campbell (1870) LR 5 Ch App 703 at 705.

[11.95]

11 Legal Professional Privilege

385

knowledge in my professional capacity, and only in consequence of my employment as his solicitor,” is not, to my mind, nearly enough to warrant the solicitor in refusing to answer the question as to where his client is residing. If, indeed, the gentleman’s residence had been concealed; if he was in hiding for some reason or other, and the solicitor had said, “I only know my client’s residence because he has communicated it to me confidentially, as his solicitor, for the purpose of being advised by me, and he has not communicated it to the rest of the world,” then the client’s residence would have been a matter of professional confidence; but the mere statement by the solicitor, that he knows the residence only in consequence of his professional employment, is not sufficient.

It follows that, in the usual case, the client’s address is a mere collateral fact the lawyer’s knowledge of which does not arise out of any professional confidence, and so is not privileged. The occasions on which the communication of that address is privileged are necessarily limited, and privilege will not attach simply because the client has asked for the address to remain confidential.121 The same principles apply regarding other contact information, such as the client’s telephone number.122 Application of privilege to trust account records?

[11.95] Trust account records document the movement of moneys in the accounts of a lawyer. They are therefore not ordinarily communications for the purpose of obtaining legal advice or assistance, and thus not privileged.123 Only in the “most unusual circumstances”, it has been said, would trust account records reveal any matter for which a claim for privilege could be made.124 Otherwise clients could gain privilege simply by ensuring that a transaction passes through a lawyer’s trust account even though it could properly have passed through the trust account of another person (such as an estate agent, or a stock and station agent).125

121 See, for example, R v Bell (1980) 146 CLR 141 (where the court denied privilege to a communication, from a wife who had abducted her child, directed at preserving the confidentiality of her and the child’s whereabouts); State Central Authority v Blyth [2010] FamCA 90 (legal professional privilege held not to apply to information relating to the whereabouts of a child who had allegedly been abducted); JSC BTA Bank v Solodchenko (No 3) [2013] Ch 1 (where Henderson J ordered the disclosure of the defendant’s contact details even though these had been supplied to his lawyer in confidence; critical to this finding was that the contact details were not privileged). 122 See, for example, Hamdan v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 211 ALR 642 at [20] per Finn J (who, in an unusual case, held that the communication by an unlawful non-citizen client who was at large of her telephone number to her lawyer in confidence was privileged: at [22]). 123 Re Ontario Securities Commission (1983) 146 DLR (3d) 73 at 82–83 per Southey J; Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 at 212–213 per Kennedy-Grant M; Stevens v Canada (Privy Council) (1998) 161 DLR (4th) 85 at 102 per Linden JA; Marsden v Amalgamated Television Services Pty Ltd [1999] NSWSC 1254 at [9] per Levine J; Ryder v Lee (2008) 41 Fam LR 77 at [32] per Burr J. 124 Allen Allen & Hemsley v Deputy Commissioner of Taxation (1989) 20 FCR 576 at 583 per Bowen CJ and Fisher J. See, for example, Cassaniti v Paragalli (2006) 229 ALR 416 at [15], [16], [26], [27] per Barrett J. 125 Packer v Deputy Commissioner of Taxation (Qld) [1985] 1 Qd R 275 at 287–288 per McPherson J, at 294–295 per Shepherdson J.

386

Lawyers’ Professional Responsibility

[11.100]

Application of privilege to bills of costs?

[11.100]

A detailed bill of costs is generally privileged because it contains a history of the nature and order of legal work carried out.126 Such a bill could disclose matters central to the lawyer–client relationship, such as a party’s state of preparation for trial, whether expert opinion had been retained, whether the quantum of the costs indicated only minimal expenditure (evidencing an expectation of compromise or capitulation), whether trial preparation was done without or with substantial time involvement and assistance of senior counsel, and whether payments are current.127 The less detailed a bill, however, the less weighty the claim to the privilege.128 On a more theoretical level, there is Canadian authority that views the negotiation of financial terms of the lawyer–client relationship as part of obtaining legal advice, the bills of costs being merely an extension of those negotiations.129 More recently, on this logic the Canadian Supreme Court upheld a claim of privilege over the gross amount of fees and disbursements billed to a client.130 That the case involved a police investigation into money laundering by the lawyer’s client may have influenced the decision, although the majority judgment was not couched in guarded terms. This arguably represents too great an extension of the privilege, as the sole dissentient held, in that it is difficult to see how knowledge of the gross fees charged could allow any litigant to deduce information concerning the legal advice supplied.131 Australian courts, though not averse to extending the privilege, would likely query the connection between gross fees and the policy underlying the privilege.

126 Chant v Brown (1852) 9 Hare 790; 68 ER 735; “Daily Express” (1908) Ltd v Mountain (1916) 32 TLR 592 at 593 per Swinfen-Eady LJ; Hodgson v Amcor Ltd (No 2) [2011] VSC 204 at [60]–[63] per Vickery J; Carey v Korda (No 2) (2011) 85 ACSR 331 at [67]–[70] per Edelman J (on appeal see Carey v Korda (2012) 45 WAR 181 at [62]–[68] per Murphy JA, with whom Martin CJ and Newnes JA concurred). 127 Legal Services Society v British Columbia (Information & Privacy Commissioner) (1996) 140 DLR (4th) 372 at 378 per Lowry J; Municipal Insurance Associations of British Columbia v British Columbia (Information & Privacy Commissioner) (1996) 143 DLR (4th) 134 at 143 per Holmes J; Stevens v Canada (Privy Council) (1998) 161 DLR (4th) 85 at 100 per Linden JA. 128 Packer v Deputy Commissioner of Taxation (Qld) [1985] 1 Qd R 275 at 282 per Andrews SPJ; Aveling v UBS Capital Markets Australia Holdings Ltd (No 3) [2005] FCA 1320 at [12] per Lindgren J; Lashansky v Legal Practitioners Complaints Committee [2005] WASCA 217 at [240] per the court; Actew Corporation Ltd v Mihaljevic [2007] ACTSC 39 at [42] per Harper M; Ryder v Lee (2008) 41 Fam LR 77 at [33], [34] per Burr J; Strategic Financial and Project Services Pty Ltd v Bank of China [2012] FCA 327 at [11]–[14] per Robertson J. Cf Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 at 212–213 per Kennedy-Grant M. 129 Stevens v Canada (Privy Council) (1998) 161 DLR (4th) 85 at 101 per Linden JA. 130 Maranda v Richer [2003] 3 SCR 193 at [32], [33] per LeBel J, with whom McLachlin CJC, Gonthier, Iacobucci, Major, Bastarache, Binnie and Arbour JJ concurred. 131 Maranda v Richer [2003] 3 SCR 193 at [47] per Deschamps J.

[11.110]

11 Legal Professional Privilege

387

Privilege limited to “confidential” communications

[11.105]

To be privileged, a communication must, so far as the person from whom disclosure is sought is concerned, be confidential in the context of a lawyer–client relationship.132 The uniform evidence law expresses an equivalent concept by defining the phrase “confidential communication” in s 117(1) as a communication made by or to a person who “was under an express or implied obligation not to disclose its contents, whether or not the obligation arises under law”.133 A corresponding definition attaches to the term “confidential document”.

It follows that, whether at general law or under statute, the context in which a document comes into existence and its proposed use are what determine its confidentiality. The latter can be inferred from the circumstances. Some disclosure is not necessarily inconsistent with maintaining confidentiality. For example, privileged communications that take place in the presence of non-clients do not lose their confidentiality if the disclosure is limited to those present and non-clients are under an implied obligation to respect their confidentiality.134 But a client who chooses to communicate with her or his lawyer in public may undermine a claim to confidentiality.135 Nor does the law ordinarily attach confidentiality to a communication between a lawyer for one party and an opponent in the litigation.136 The latter may, in any case, effect a waiver of privilege: see [11.245]–[11.300]. Video footage and confidentiality

[11.110] There is debate in the case law as to whether video footage can be denied privilege for lacking confidentiality. In J-Corp Pty Ltd v Australian Builders’ Labourers’ Federated Union of Workers (WA)137 French J held that videotapes of the plaintiff’s work site brought into existence for the sole purpose of possible litigation were not privileged because “[t]hey were not taken in circumstances to which any confidentiality attached”. A similar outcome ensued in Palace Gallery Pty Ltd v Police,138 involving surveillance footage seized by police after an incident outside 132 Ritz Hotel Ltd v Charles of the Ritz Ltd (No 22) (1988) 14 NSWLR 132 at 133 per McLelland J; J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA) (1992) 38 FCR 452 at 455–456 per French J; State of New South Wales v Jackson [2007] NSWCA 279 at [37]–[61] per Giles JA (in the context of the Evidence Act 1995 (NSW)). See generally Leslie, “The Costs of Confidentiality and the Purpose of Privilege” (2000) 31 Wisconsin L Rev 31 at 34–54. Cf Rice, “Attorney–Client Privilege: The Eroding Concept of Confidentiality Should be Abolished” (1998) 47 Duke LJ 853. 133 Under this definition, the concept of “confidentiality” can extend to “an unspoken obligation, and to an ethical, moral or social obligation”: State of New South Wales v Jackson [2007] NSWCA 279 at [41] per Giles JA. See, for example, Edwards v Vic Land Rehabilitation Pty Ltd [2012] VSC 188 at [24]–[26] per Almond J. 134 Australian Rugby Union Ltd v Hospitality Group Pty Ltd (1999) 165 ALR 253 at 263 per Sackville J. 135 Gotha City v Sotheby’s [1998] 1 WLR 114 at 119 per Staughton LJ. 136 Jamison v Government Insurance Office of New South Wales (1988) 5 ANZ Ins Cas ¶60-870 at 75,447 per Carruthers J; Raunio v Hills (2001) 116 FCR 518 at [13] (FC). 137 J-Corp Pty Ltd v Australian Builders’ Labourers’ Federated Union of Workers (WA) (1992) 38 FCR 452 at 457. 138 Palace Gallery Pty Ltd v Police (2008) 258 LSJS 420 at [36] per Anderson J.

388

Lawyers’ Professional Responsibility

[11.115]

the plaintiff’s premises. But in Boyes v Collins139 Ipp J declined to follow French J’s reasoning in a case involving a surveillance video of the appellant – who was suing the respondent for injuries said to arise out of a motor vehicle accident – on the ground that, inter alia, the video was taken covertly at the instruction of the respondent’s lawyer, with the intention of being kept confidential for use in evidence at the trial. The difference in these approaches is one of substance; French J focused his inquiry as to confidentiality on the content of the video itself. On this approach, the video in Boyes would lack confidentiality, as there was no evidence that others could not have witnessed the events it recorded at the time of recording. It appears that Ipp J conflated the purpose for which, and the circumstances in which, the video was taken, with the element of confidentiality. Documents in their final form

[11.115] Agreements in their final form intended to effect the actual transaction between the parties, records made to evidence an actual transaction, or documents lodged at public offices or pleadings filed in court, are not privileged because their content is no longer confidential.140 The same applies in respect of finalised proofs of evidence created for the purpose of serving them on an opponent, and that are in fact so served; litigation privilege does not apply in this context because the documents in question cannot be regarded as confidential.141 Drafts, however, are likely to remain privileged – as “[d]rafts and final proofs are by nature and in fact different documents” and “may well include information which is not included in a final version”142 – provided that the other elements of the privilege are met. Privilege limited to communications within a “lawyer–client professional relationship”

[11.120]

With one statutory exception (see [11.155]) and one further qualification (see [11.125]), in order to attract privilege a communication must be made in the context of a professional relationship between a competent and independent lawyer and her or his client.143 No privilege arises when a person acts as her or his own lawyer, because there is no lawyer–client relationship.144 Need for a retainer?

[11.125]

The lawyer–client relationship is ordinarily established by proof of a retainer: see [3.05]. This does not prevent communications between lawyers and

139 Boyes v Collins (2000) 23 WAR 123 at [40], with whom Pidgeon and Wallwork JJ concurred. See also Comcare v Foster (2006) 150 FCR 301 (surveillance videos found to be privileged). 140 Dalleagles Pty Ltd v Australian Securities Commission (1991) 4 WAR 325 at 334 per Anderson J. 141 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547 at [35]–[55] (FC); Buzzle Operations Pty Ltd (in liq) v Apple Computer Australia Pty Ltd (2009) 74 NSWLR 469; Asahi Holdings (Australia) Pty Ltd v Pacific Equity Partners Pty Ltd (No 2) [2014] FCA 481 at [38], [46], [47] per Bromberg J. 142 Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547 at [73] (FC). 143 Cook v Leonard [1954] VLR 591 at 592 per Sholl J; Rosenberg v Jaine [1983] NZLR 1 at 8 per Davison CJ; Perazzoli v BankSA (No 2) [2016] FCA 260 at [77] per Mansfield J. 144 Hawksford v Hawksford [2005] NSWSC 796 at [22] per Campbell J.

[11.130]

11 Legal Professional Privilege

389

prospective clients, with a view to the client retaining the lawyer to act, from being privileged where they meet the other requirements of privilege.145 In any case, the reasonable expectations of the client are the perspective from which the existence of the relevant relationship is ascertained: see [3.60]. In line with the policy behind the privilege, protection is accorded to communications where the client genuinely believed a retainer existed, whether or not it did in law,146 and whether or not the professional is a qualified or practising lawyer. A formal retainer is thus not essential to sustain a claim for privilege, whether at general law or under the uniform evidence law.147 Communication made in a legal professional capacity

[11.130]

The communication must have been made to or by the lawyer in her or his professional capacity;148 it must be “fairly referable to the relationship”.149 Communications unrelated to the provision of legal services150 and those made as a mere friend or in a purely social context are not privileged. For the same reason, nor is extraneous information a client volunteers in the course of seeking the lawyer’s advice, or the provision of unsolicited legal advice,151 ordinarily covered by the privilege.152 That communications in the course of seeking or receiving business, financial or other clearly non-legal advice are also non-privileged153 presents as an emerging issue, more so as lawyers (especially in-house lawyers) become more involved in their clients’ affairs. The basic inquiry is “whether the lawyers are being asked qua

145 Minter v Priest [1929] 1 KB 655 at 666 per Lord Hanworth MR; Kirby v Centro Properties Ltd (No 2) (2012) 87 ACSR 229 at [18] per Bromberg J. 146 Grofam Pty Ltd v Australia and New Zealand Banking Group Ltd (1993) 45 FCR 445 at 455–456 (FC); Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 at 130, 134 per Young J; Von Stieglitz v Comcare (2014) 64 AAR 356 at [46] (FC(FCA)). See, for example, Hawksford v Hawksford [2008] NSWSC 31 at [21] per White J (that the retainer of a company solicitor was invalid because the director who retained the solicitor’s services acted ultra vires did not prevent privilege arising because the client believed on reasonable grounds that the solicitor was retained to act as its solicitor). 147 Hawksford v Hawksford [2008] NSWSC 31 at [17]–[21] per White J (referring to the “explanatory and enlarging” definition of “client” in s 117(1) of the uniform evidence law; see further Apple Computer Australia Pty Ltd v Wily [2002] NSWSC 855 at [7], [11] per Barrett J; Brookfield Multiplex Ltd v International Litigation Funding Partners Pte Ltd (No 2) (2009) 180 FCR 1 at [19]–[22] per Finkelstein J). 148 Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245 per Lockhart J; Rosenberg v Jaine [1983] NZLR 1 at 8 per Davison CJ; Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 530–531 per Dawson J. 149 Minter v Priest [1930] AC 558 at 568 per Lord Buckmaster. 150 In this context, McPherson J in Packer v Deputy Commissioner of Taxation (Qld) [1985] 1 Qd R 275 at 287 gave the example of where a lawyer accepts instructions to buy groceries for a client. 151 Perazzoli v BankSA (No 2) [2016] FCA 260 at [77] per Mansfield J. 152 Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 at 131 per Young J. 153 See, for example, Kennedy v Wallace (2004) 142 FCR 185 at [38] (FC) (privilege denied to two handwritten notes prepared at a meeting between a client and his Swiss lawyer, whom the court characterised as assuming a dual role as a lawyer and a commercial adviser).

390

Lawyers’ Professional Responsibility

[11.135]

lawyers to provide legal advice”.154 This requires an inquiry into whether the advice relates to the client’s legal rights, liabilities, obligations or remedies,155 and whether the matter is one in which it is reasonable for the client to consult a lawyer’s special professional knowledge and skills.156 Yet courts have been reticent to unduly restrict what comes within the lawyer’s professional province, noting the difficulty of disentangling the lawyer’s views of the legal framework from other reasons that together go to make up the “advice as to what should prudently and sensibly be done in the relevant legal framework”.157 This led a Federal Court judge to brand it as rare for a court to confidently say that a communication within “a retainer requiring legal advice … was not connected with the provision or requesting of legal advice”.158

[11.135]

Accountants have argued for privilege to extend to their dealings with clients, particularly in the tax field where legal and accounting services overlap.159 This has the support of the Australian Law Reform Commission,160 and has been

154 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2005] 1 AC 610 at [58] per Lord Rodger. 155 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2005] 1 AC 610 at [38] per Lord Scott, at [60] per Lord Rodger, at [114] per Lord Carswell, at [120] per Lord Brown. There the House of Lords held that the preparation of the evidence to be submitted, and the submissions to be made, to an inquiry on behalf of a client – for the purpose of enhancing the client’s prospects of persuading the inquiry that its discharge of its public law obligations was not deserving of criticism and had been reasonable in the circumstances – fell squarely within the policy reasons underlying legal advice privilege. This conclusion was endorsed by Young J in AWB Ltd v Cole (2006) 152 FCR 382 at [100]. 156 Three Rivers District Council v Governor & Company of the Bank of England (No 6) [2005] 1 AC 610 at [62] per Baroness Hale. 157 Balabel v Air-India [1988] Ch 317 at 330 per Taylor LJ, endorsed in AWB Ltd v Cole (2006) 152 FCR 382 at [100] per Young J; Rio Tinto Ltd v Commissioner of Taxation (2006) 235 ALR 127 at [37] per Sundberg J; X and Y v Z (2015) 123 SASR 298 at [30]–[33] per Blue J. 158 DSE (Holdings) Pty Ltd v Intertan Inc (2003) 135 FCR 151 at [52] per Allsop J. See also Kirby v Centro Properties Ltd (No 2) (2012) 87 ACSR 229 at [80]–[88] per Bromberg J (remarking that “[l]egal advice is rarely sought in a commercial context merely for the sake of receiving advice”, but “is almost always sought by a client for the purpose of applying the advice to a commercial or other operational purpose”, so that “[t]he existence of a posterior operational purpose of that kind is of no moment where the client’s purpose in engaging its lawyer is to seek legal advice and assistance”: at [88]). 159 As to the debate in this field from an Australian perspective see Castle, “Privilege v Confidentiality; Lawyers v Accountants” (1990) 2(5) CCH J of Aust Tax 4; Boccabella, “Legal Professional Privilege: The Case for Tax Accountants’ Clients” (1993) 27 TIA 391; Maples and Woellner, “Privilege for Accountants’ Tax Advice in Australia – Brave New World, or House of Straw?” (2010) 25 Aust Tax Forum 143. 160 See Australian Law Reform Commission, Privilege in Perspective: Client Legal Privilege in Federal Investigations (ALRC 107, December 2007), which recommended that federal client legal privilege legislation should provide that a person who is required to disclose information under a coercive information-gathering power of the Commissioner of Taxation is not required to disclose a document that is a “tax advice document” (as distinguished from “tax contextual information”) prepared for that person: recommendation 6-6. The report defines both “tax advice document” and “tax contextual information”.

[11.140]

11 Legal Professional Privilege

391

statutorily effected in the United States and New Zealand,161 but is resisted by the Australian legal profession162 and the courts, which maintain that the rationale for the privilege does not apply to communications from or with non-lawyers, even those who perform a similar role to a lawyer.163 Privilege may, however, extend to documents prepared by an accountant, whether as agent for the client or a lawyer, for the dominant purpose of the client obtaining legal advice or for use in actual or contemplated litigation: see [11.160], [11.165]. Competence – need for admission to practice and practising certificate?

[11.140]

Most of the debate concerning whether or not the relevant communication occurred within a lawyer–client professional relationship focuses on the elements of competence and independence. So far as competence is concerned, Brennan J in Waterford v Commonwealth164 found “much to be said for the view that admission to practise as a barrister or solicitor is the sufficient and necessary condition for attracting the privilege”. This proposition finds support in case law, courts denying privilege arising out of communications with or from legally qualified persons not admitted to practise law.165 It also appears as the position under the uniform evidence law, which in s 117(1) defines a “lawyer” to mean an “Australian lawyer”, which means a lawyer who is admitted to practice.166 Yet were the concern only competence, the basic requirement should be the law degree, it being difficult to substantiate that what differentiates competence from 161 See Tax Administration Act 1994 (NZ), ss 20B–20G (from 2005); Internal Revenue Code (US), § 7525 (from 1998). The law in these jurisdictions, before these statutory initiatives, likewise denied accountants the privilege: Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 (CA); Couch v United States (1973) 409 US 322. See generally Kendall, “Privilege and Taxation Advice: New Zealand’s Nondisclosure Right Compared with the Tax Adviser’s Privilege in the United States” (2011) 24 NZULR 337; Meier, “Understanding the Statutory Tax Practitioner Privilege: What is Tax Shelter ‘Promotion’?” (2011) 78 U Chi L Rev 671. 162 See, for example, “Law Reform Proposals May Spell the End of Client Legal Privilege” (2008) 46 (April) LSJ 28. 163 D v NSPCC [1978] AC 171 at 238–239 per Lord Simon; Baker v Campbell (1983) 153 CLR 52 at 128 per Dawson J; Macedonia Pty Ltd v Federal Commissioner of Taxation (1987) 18 ATR 929 at 931–932 per White J (SC(SA)); Dinsdale v Commissioner of Inland Revenue (1998) 18 NZTC 13,583 (CA); Tower v Minister of National Revenue (2002) 219 DLR (4th) 151 at [21] per Kelen J; Orrong Strategies Pty Ltd v Village Roadshow Ltd (2007) 207 FLR 245 at [889] per Habersberger J; R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2013] 1 AC 185; Super Worth International Ltd v Commissioner of the Independent Commission Against Corruption [2015] HKEC 2325. Although the Federal Commissioner of Taxation does recognise an “accountants’ concession” – under which he accepts that there is a class of documents that should, in all but exceptional circumstances, remain within the confidence of taxpayers and their professional accounting advisers – this is not law, and so does not provide the same protection as legal professional privilege: White Industries Australia Ltd v Federal Commissioner of Taxation (2007) 160 FCR 298. 164 Waterford v Commonwealth of Australia (1987) 163 CLR 54 at 70. 165 See, for example, Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 (privilege denied to advice given by a legally trained chartered accountant working for an accounting firm); GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at [17] per Holmes J (privilege denied to advice given by in-house counsel not admitted to practice). 166 Cth, dictionary; ACT, dictionary; NSW, dictionary; NT, dictionary; Tas s 3(1); Vic, dictionary (in each case referring to the definition of “Australian lawyer” in the legal profession legislation).

392

Lawyers’ Professional Responsibility

[11.140]

incompetence is a practical legal training course. Perhaps for this reason, later judges focus on the professional standards and discipline that apply only to lawyers admitted to practice167 (even if the admission is outside the local jusrisdiction).168 Provided a person is admitted to practice, the lack of a practising certificate should not in theory deny scope for privilege.169 As practising certificates have not traditionally focused on competence (although continuing legal education preconditions to renewing practising certificates may shift that focus: see [4.30]), differentiating the privilege outcomes on this ground appears unjustified. Although Crispin J challenged this view in Vance v McCormack170 – his Honour denied privilege to communications with legal officers employed by Australian Defence Force lacking a practising certificate, viewing practising certificate requirements as demonstrative of continued adherence to current ethical and professional standards – the orthodox position was restored on appeal.171 Their Honours accepted that a practising certificate is relevant to whether advice ought to be privileged, but ruled that it should not be seen as determinative, reasoning as follows:172 We would agree as to the importance of [practising] certificates but would say that their existence in the particular case demonstrates, rather than concludes, the issue of it being evidence of the independent advice given professionally so as to constitute it being legal advice with the Evidence Act requirements … The person [admitted to practice] remains bound to uphold the standards of conduct and to observe the duties undertaken upon admission to the roll of practitioners. The holding of a practising certificate reinforces that regime and makes it more immediately applicable but the underlying obligations subsist, even if a current practising certificate is not held. However, by not holding a practising certificate, a person cannot necessarily be seen as independent or as necessarily acting in a legal professional capacity as a person who holds one, so as to give the quality of that person’s advice the description of “legal advice”.

The foregoing should not be read to mean that privilege can apply only to communications arising out of a relationship between an admitted lawyer and a client. As the privilege is designed to encourage clients to make candid disclosure to their legal adviser, and the reasonable expectations of the client are the principal inquiry in determining whether or not a retainer existed, it follows that privilege can attach to communications where the “client” reasonably believes he or she is

167 See, for example, Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [11]–[20] per Williams JA. 168 Aquila Coal Pty Ltd v Bowen Central Coal Pty Ltd [2013] QSC 82 at [17]–[31] per Boddice J. 169 See, for example, Australian Hospital Care Pty Ltd v Duggan (No 2) [1999] VSC 131. 170 Vance v McCormack (2004) 184 FLR 62 at [40]. 171 Commonwealth v Vance (2005) 224 FLR 243. 172 Commonwealth v Vance (2005) 224 FLR 243 at [20], [21] (paragraph break omitted). See Devereux and Gulam, “Does Practise Make Perfect?” (2005) 24 UQLJ 533; Gulam, “The Peculiar Duties of an Australian Defence Force Legal Officer” (2005) 8 Canberra L Rev 111.

[11.145]

11 Legal Professional Privilege

393

consulting a lawyer, even if that person is not admitted, has been struck off or, for that matter, has never held a legal qualification.173 Independence – application of privilege for employee lawyers?

[11.145]

The nature of the lawyer–client relationship, partisan in one sense, involves independence in another: see [17.10]. A lawyer must not only give advice independent of her or his own interests (an issue to which fiduciary law is directed: see [6.05]), but must exercise an independent judgment in so doing. An independent legal adviser, for this purpose, is “one who can bring a disinterested mind to bear on the subject matter of the legal advice”.174 Client pressure to tailor advice threatens independence, and with it the lawyer’s role and the value of her or his advice. For this reason, advice supplied by a lawyer who is not independent of the client falls outside the policy to which the privilege is aimed. The issue of independence surfaces most commonly in the context of employee (or “in-house”) lawyers, the fear being that no true independent lawyer–client relationship exists between employee lawyers and their employer. It is therefore discussed in the chapter devoted to employed lawyers: see [13.40]–[13.55]. That is not to deny that privilege can attach to communications with or from a salaried employee-lawyer; except where there is evidence that he or she is acting other than independently or other than in a legal capacity, ordinarily it does, in both the private sector175 and the public sector.176 This is clearly envisaged under the

173 Grofam Pty Ltd v Australia and New Zealand Banking Group Ltd (1993) 45 FCR 445 at 455 (FC); Global Funds Management (NSW) Ltd v Rooney (1994) 36 NSWLR 122 at 130, 134 per Young J; Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [19] per Williams JA; Strahan v Strahan [2012] FamCA 214 at [45]–[50] per Dawe J. 174 Rich v Harrington (2007) 245 ALR 106 at [40] per Branson J (who ruled that advice supplied by the Office of General Counsel (OGC) of a large accounting firm relating to allegations by a former female partner of sexual harassment by male partners of the firm was not privileged because “the relationship between OGC and the respondents was not such as to secure the advice of OGC concerning [the] allegations the objectively independent character necessary to support the respondents’ claim of client legal privilege”, so that OGC was not in a position to give professionally detached advice to the respondents concerning allegations of the character of those made by the applicant: at [60]). But see Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950 (where Katzmann J said that Branson J in Rich v Harrington “might have overstated the content of the requirement that legal professional privilege will arise only where the advice has ‘an independent character’” (at [15]), expressing the view that the law requires no more than that the legal adviser be professionally qualified and acting in a professional capacity (at [19])); Archer Capital 4A Pty Ltd v Sage Group plc (No 2) (2013) 306 ALR 384 at [71]–[73] per Wigney J (who, though not finding it necessary to decide on the point, favoured the view of Katzmann J). 175 Alfred Crompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2) [1972] 2 QB 102; Re Citibank Ltd [1989] 1 Qd R 516 at 519 per Williams J; Zentai v O’Connor (No 2) (2010) 183 FCR 180 at [109]–[122] per McKerracher J; Apple Inc v Samsung Electronics Co Ltd (No 2) [2012] FCA 1358 at [66] per Cowdroy J. 176 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 521 per Wilson J, at 530–531 per Dawson J; Waterford v Commonwealth of Australia (1987) 163 CLR 54 at 62–64 per Mason and Wilson JJ, at 73 per Brennan J, at 80–81 per Deane J; Secretary, Department of Health v Proudfoot (1993) 114 FLR 384 at 389 per Gallop J; Re Fritz [1995] 2 Qd R 580 at 584–585 per McPherson JA.

394

Lawyers’ Professional Responsibility

[11.150]

uniform evidence law,177 which in s 117(1) defines a “client” to include a person or body “who employs a lawyer (including under a contract of service)”, and an employer that is the Commonwealth or a State or Territory or a body established by it. Advice from foreign lawyer or on foreign law

[11.150]

Legal professional privilege is not confined to legal advice concerning or based on the law of the particular jurisdiction in which the giver of the advice is formally qualified; it also applies to communications between a client and her or his foreign lawyers.178 The Full Federal Court in Grofam Pty Ltd v Australia & New Zealand Banking Group Ltd explained the reason for this:179 It would be an anomalous and capricious result that legal advice, given by solicitors duly qualified and authorised to practise within a jurisdiction, especially in respect of a matter which involved a foreign element, although we do not consider that qualification to be decisive, was protected by the privilege, but legal advice given by properly retained foreign lawyers in respect of the same subject matter was not privileged.

Such a view was reiterated by the same court in Kennedy v Wallace,180 in response to the trial judge’s broadside on according privilege to foreign legal advice.181 Their Honours found that not recognising foreign lawyers’ advice privilege would undermine the rationale of the privilege, and undermine the administration of justice by enlivening a threat in Australia to the confidentiality of communications protected elsewhere.182 For the purposes of assessing claims to privilege in respect of foreign lawyers, though, it is Australian law (not foreign law) surrounding privilege that applies.183 The uniform evidence legislation also encompasses foreign lawyers, by defining “lawyer” in s 117(1) to include an “Australian-registered foreign lawyer” and “an overseas-registered foreign lawyer or a natural person who, under the law of a foreign country, is permitted to engage in legal practice in that country”. Statutory exception for unrepresented parties

[11.155]

The uniform evidence legislation, via s 120, provides that evidence is not to be adduced if, on objection by an unrepresented party, the court finds that

177 It is also envisaged by the Legal Profession Uniform Law, as it applies in New South Wales and Victoria: NSW, s 38(2); Vic, s 38(2). 178 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 535–536 per Templeman LJ; Ritz Hotel Ltd v Charles of the Ritz Ltd [No 4] (1987) 14 NSWLR 100 at 102 per McLelland J; Strahan v Strahan [2012] FamCA 214 at [51]–[54] per Dawe J. See further Butler, “In-house Counsel Advising on Foreign Law: Is it Privileged?” (2014) 42 ABLR 5. 179 Grofam Pty Ltd v Australia & New Zealand Banking Group Ltd (1993) 45 FCR 445 at 455. 180 Kennedy v Wallace (2004) 208 ALR 424. 181 See Kennedy v Wallace (2004) 142 FCR 185 at [57]–[62] per Gyles J. 182 Kennedy v Wallace (2004) 142 FCR 185 at [202] per Allsop J. Black CJ and Emmett J concurred on this point: at [62]. Compare Kee and Feiglin, “Legal Professional Privilege and the Foreign Lawyer in Australia” (2006) 80 ALJ 131 (who support the decision) with Desiatnik, “Legal Professional Privilege: A Parochial Doctrine?” (2012) 86 ALJ 536 (who queries the decision on this point). 183 Stewart v Australian Crime Commission (2012) 206 FCR 347.

[11.160]

11 Legal Professional Privilege

395

adducing it would result in the disclosure of: (a) a confidential communication between that party and another person; or (b) the contents of a confidential document that was prepared by that party (or pursuant to her or his direction or request), for the dominant purpose of preparing or conducting the proceeding. In the situations where the legislation applies, it ousts the general law rule that denies the privilege to unrepresented persons.184 Extension of privilege to communications with or from third parties “Agents” of a client

[11.160]

Communications to or from third parties acting as agents of a client, in line with basic principles of agency law, can be regarded as communications of the client itself, and on that ground attract both litigation and advice privilege. But until the decision of the Full Federal Court in Pratt Holdings Pty Ltd v Commissioner of Taxation,185 communications to or from third parties not acting as agents of the client stood in a different position in that, even if engaged on the client’s behalf, their work was not to communicate with the lawyer to obtain legal advice. In the latter context, for this reason, only when their communications were in contemplation of litigation did the privilege attach.186 This led some judges to strain the concept of an “agent” for this purpose.187 In Pratt Holdings the issue was whether privilege attached to a briefing paper prepared by an accounting firm (third party) at the direction of the client, and returned to the client who then gave it to the solicitor for the purpose of obtaining legal advice. Finn J, with whose views Stone and Merkel JJ concurred, focused not on the nature of the third party’s legal relationship with the client, but on the function the third party performed for the client. The privilege attached if that function was to enable the client to make the communication necessary to obtain legal advice it required, because the third party had been “so implicated in the communication made by the client to its legal adviser” as to bring its work product within the rationale of legal advice privilege.188 Were the law otherwise, his Honour reasoned, clients in need of non-legal professional advice would be disinclined to use the services of non-legal advisers for fear of forgoing privilege even though that advice was sought to supply to their lawyers. This would undermine the privilege itself by not facilitating access to effective communication with lawyers for the purpose of obtaining legal advice.189 Although a shift in the legal position, the decision in Pratt Holdings should not be seen to open the door more than a little. Finn J was keen to restrict the scope of his 184 As to this rule see Maddison v Goldrick [1976] 1 NSWLR 651; National Employers’ Mutual General Insurance Association v Waind (1979) 141 CLR 648 at 654 per Mason J. Contra Baker v Campbell (1983) 153 CLR 52 at 90 per Murphy J; Ventouris v Mountain [1991] 1 WLR 607. 185 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357. 186 Wheeler v Le Marchant (1881) 17 Ch D 675 at 680–682 per Jessel MR, at 683 per Brett LJ, at 684–685 per Cotton LJ; Trade Practices Commission v Sterling (1979) 36 FLR 244 at 246 per Lockhart J; Nickmar Pty Ltd v Preservatrice Skandia Insurance Ltd (1985) 3 NSWLR 44 at 53–54 per Wood J. 187 See, for example, GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at [22] per Holmes J. 188 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [41]. 189 Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [43].

396

Lawyers’ Professional Responsibility

[11.165]

decision,190 noting that the seeking of non-legal professional advice can rarely stake a claim to privilege because it will almost invariably have the character of discrete advice with a distinctive function and purpose in the client’s decision making.191 Also, a client who filters, adapts or exercises independent judgment in relation to non-legal professional advice before communicating it to the lawyer endangers a claim to privilege because its intended use appears more likely to be to advise and inform the client in making a communication to the lawyer than to record the communication to be made.192 A Federal Court judge has subsequently opined that “[a] court should approach claims for legal professional privilege over third party communications with a degree of caution” in view of its scope having been “widened significantly in recent years”.193 The uniform evidence law clearly recognises scope for third party communications to be protected under litigation privilege; so much is clear from the terms of s 119.194 The same is the case for advice privilege, made clear by amendment of s 118 in the wake of the decision in Pratt Holdings, in line with the recommendation of the Australian Law Reform Commission,195 by replacing the words “the client or a lawyer” with “the client, a lawyer or another person”.196 “Agents” of the lawyer

[11.165]

Legal professional privilege extends to any communication made through the agents of the lawyer.197 For example, it applies to communications with a lawyer’s employee made for the purpose of obtaining legal advice or that can be said to be part of communication between client and lawyer.198 It also applies to communications between the various legal advisers of the client or between a lawyer and her or his partner, legal professional agent or counsel that meet the 190 See Pratt Holdings Pty Ltd v Commissioner of Taxation (2004) 136 FCR 357 at [45]–[47]. See also at [107] per Stone J, who remarked that the difficulties in proving relevant purpose in this context “should not be underestimated”. Cf Desiatnik, “Legal Professional Privilege and the Pratt Holdings Saga” (2006) 80 ALJ 462 (who sees the upshot of the decision as that “the ability to maintain the confidentiality of third parties’ reports has been greatly enhanced” (at 471), but criticises its lack of convincing or persuasive reasoning in purporting to sweep away a principle that had stood for over a century (at 468)). Cf Melrose Cranes and Rigging Pty Ltd v Manitowoc Crane Group Australia Pty Ltd [2012] NSWSC 904 at [15]–[41] per S G Campbell J. 191 See, for example, 789Ten Pty Ltd v Westpac Banking Corp Ltd (2005) 215 ALR 131 at [50]–[73] per Bergin J (affd Westpac Banking Corporation v 789Ten Pty Ltd (2005) 55 ACSR 519 at [29] per Tobias JA). 192 See Shaw, “Tax Files – The Privilege of Communicating with an Accountant” (2004) 26 (Oct) LSB (SA) 19. 193 Visy Industries Holdings Pty Ltd v Australian Competition and Consumer Commission (2007) 161 FCR 122 at [12] per Weinberg J. 194 See the discussion in Westpac Banking Corporation v 789Ten Pty Ltd (2005) 55 ACSR 519 at [38]–[60] per Tobias JA. 195 Australian Law Reform Commission, Review of the Uniform Evidence Acts (Discussion Paper 69, July 2005), p 392. 196 Cf the position preceding this amendment, as to which see Meteyard v Love (2005) 56 ACSR 487 at [102]–[124] per Basten JA. 197 Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245 per Lockhart J. 198 R v Atkinson (1988) 4 CRNZ 1.

[11.170]

11 Legal Professional Privilege

397

requirement of privilege.199 The same is recognised by the uniform evidence legislation; “lawyer” is defined in s 117(1) to include an employee or agent of the lawyer. Also, s 118(b) applies advice privilege to confidential communications made between two or more lawyers acting for the client. Witness statements

[11.170]

Privilege applies to statements a lawyer takes from witnesses for the dominant purpose of advising a client in relation to an anticipated claim, whether by or against the client.200 The privilege here can be based on a separate and narrow principle that a party is not in general bound to reveal to the court statements taken from witnesses for the purposes of litigation.201 But the value of this privilege may be undermined by the fact that a prospective witness who has given a statement to a lawyer is not legally precluded from announcing that fact and its content to the world at large.202 Thomas J explained the scope of privilege in respect of lawyers’ dealings with expert witnesses in Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) as follows:203 [W]hen an expert is engaged by a solicitor for the purpose of giving evidence in a case, documents generated by the expert and information recorded in one form or another by the expert in the course of forming an opinion are not a proper subject for a claim of legal professional privilege. Privilege may however be claimed in relation to communications between the expert and the solicitor (both ways) when such communication is made for the purpose of confidential use in the litigation. Beyond this there is no sufficient reason why any material relevant to the formation of the expert’s opinion should be subject to a claim of legal professional privilege. It is as well to add that an expert or solicitor may not artificially manufacture privilege by, for example, the expert sending in his or her file to the solicitor. 199 Trade Practices Commission v Sterling (1979) 36 FLR 244 at 245–246 per Lockhart J; Kupe Group Ltd v Seamar Holdings Ltd [1993] 3 NZLR 209 at 213–214 per Kennedy-Grant M. 200 Sanko Steamship Co Ltd v Sumitomo Australia Ltd (1992) 37 FCR 353 at 362 per Sheppard J; Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 at 127–128 per Hill J; Australian Competition and Consumer Commission v Telstra Corp Ltd (2000) 96 FCR 317 at [28]–[31] per Lindgren J. 201 Dingle v Commonwealth Development Bank of Australia (1989) 23 FCR 63 at 66 per Pincus J. 202 J-Corp Pty Ltd v Australian Builders Labourers Federated Union of Workers (WA) (1992) 38 FCR 452 at 457 per French J; Liberty Funding Pty Ltd v Phoenix Capital Ltd (2005) 218 ALR 283 at [22], [23] (FC) (loss of confidentiality in respect of an affidavit once it was served found to constitute waiver of privilege that may otherwise have applied); Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd (2007) 34 WAR 279 at [31], [32] per McLure JA; Cadbury Schweppes Pty Ltd v Amcor Ltd (2008) 246 ALR 137 at [10]–[18] per Gordon J; Australian Competition and Consumer Commission v Cadbury Schweppes Pty Ltd (2009) 174 FCR 547 at [35] (FC). See further Pobjoy, “Keeping the Cat out of the Bag: The Interaction Between Litigation Privilege and the Service of Witness Statements” (2010) 29 CJQ 48. 203 Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 at 162. See also Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (1998) 83 FCR 397 at 398–399 per Mansfield J; Australian Securities and Investments Commission v Southcorp Ltd (2003) 46 ACSR 438 at [21] per Lindgren J; Mendelow, “Expert Evidence: Legal Professional Privilege and Experts’ Reports” (2001) 75 ALJ 258.

398

Lawyers’ Professional Responsibility

[11.175]

The above is justified on the ground that there is no property in a witness (see [17.175]), and so by parity of reasoning the same principles apply to statements by non-expert witnesses. Hence, a party may, via a subpoena, require a witness retained by another party to give to the court all relevant information in her or his possession, including in the case of an expert an expression of her or his opinion.204 The position is no different under ss 118 and 119 of the uniform evidence law.205

WHO IS ENTITLED TO CLAIM PRIVILEGE? The client (or the lawyer on the client’s behalf)

[11.175]

Fundamentally, it is the client who is entitled to claim the privilege, as it is the client’s interests (as well as the broader public interest) that the privilege is designed to protect: see [11.15]. Yet it is usually the lawyer who claims the privilege on the client’s behalf, as the lawyer is best positioned to determine those communications covered by the privilege. It stands to reason that the lawyer’s duty is to ensure that a valid claim for privilege is not lost,206 and so must ensure that only non-privileged communications are disclosed on compulsory process.207 A breach of this duty confers on a client a right of action against the lawyer, in tort or contract.208 But an illegitimate claim of privilege intended merely as a delaying tactic is an abuse of process.209 Where the client is an entity

[11.180]

Where the client is an entity, the privilege is that of the entity unless it can be said that the lawyer is acting for both the entity and its officer(s), in which case the privilege is a joint one: see [11.195]. An issue is whether communications by classes of officers or employees can be seen as communications “by the client”.210 It may be that, in this regard, any privilege should be limited to communications to and from the board of directors (the “control group” test).211 Yet the composition of the control group varies depending on the matter in question, 204 Interchase Corp Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 at 161 per Thomas J; Brookfield v Yevad Products Pty Ltd [2006] FCA 1180 at [16] per Mansfield J. 205 Tirango Nominees Pty Ltd v Dairy Vale Foods Ltd (1998) 83 FCR 397 at 399 per Mansfield J. 206 Rosenberg v Jaine [1983] NZLR 1 at 7 per Davison CJ; Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403 at 414–415 per Bowen CJ and Fisher J; Commissioner, Australian Federal Police v Propend Finance Pty Ltd (1997) 188 CLR 501 at 589 per Kirby J; Martin v Martin (No 2) (2014) 51 Fam LR 492 at [11] per Cronin J (remarking that it is inappropriate for a lawyer to breach the confidence in anticipation that the court will find an implied waiver or an exception to the privilege; the lawyer should instead request the client to waive the privilege). 207 Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1044 per Slade LJ. 208 Rosenberg v Jaine [1983] NZLR 1 at 8 per Davison CJ; Donellan v Watson (1990) 21 NSWLR 335 at 344 per Handley JA. 209 NZ, r 13.9.2 (“A lawyer must not claim privilege on behalf of a client unless there are proper grounds for doing so”). 210 See Stockdale and Mitchell, “Who is the Client? An Exploration of Legal Professional Privilege in the Corporate Context” (2006) 27 Co Lawyer 110. 211 As recommended in Higgins, “Corporate Abuse of Legal Professional Privilege” (2008) 27 CJQ 377. See also Lai, “Legal Advice Privilege and the Corporate Client” [2006] SJLS 231 (who maintains that

[11.185]

11 Legal Professional Privilege

399

and over time, and so an arguably better approach is to extend the privilege to communications to or from any employee where its elements are met (the “subject matter” test).212 The latter aligns with the rationale for the privilege, and is that adopted by the uniform evidence law, which in s 117(1) defines a “client” to include “an employee or agent of a client”. A director of an entity has a right to inspect privileged documents of the corporation, although this right is restricted to directors acting in that capacity and for the purposes of the entity as distinct from private or personal reasons.213 Hence, privilege can apply in favour of an entity where directors inspect privileged documents in their private or personal capacity.214 While the communication and dissemination of legal advice within an entity falls within the privilege, the same cannot be said for recommendations made by entity officers consequent upon that advice. The point was explained by Rath J as follows:215 [A] distinction should be drawn between the circulation in a corporation of advice received from legal advisers, and recommendations made by officers of the corporation as to the action to be taken, having regard to that advice. The recommendations are corporate action, and are not privileged, whether they follow the advice or disregard it. If the recommendations are found in a report which sets out the advice (or part of it) verbatim or in substance then I think that the privilege remains attached to that part of the report so setting out the advice. But if the officer making the recommendations is in substance tendering his own advice, then (if at all events he is not himself a professional legal adviser his advice is not privileged.

Where the client has died or become insolvent

[11.185]

Privilege attaching to lawyer–client communications is not terminated by the client’s death; it then vests in the client’s personal representatives, who can elect whether or not to waive it.216 This does not, however, prevent the adducing of evidence relevant to a question concerning the intentions, or competence in law, of “[t]here is a lot to be said for more circumspection in defining the scope of the privilege that is available to a company”, and that “[a] sensible compromise must be struck between our interests for transparency in corporate management and the practical demands for confidentiality in legal consultation on commercial affairs”: at 259). 212 See Burman, “Ethical Considerations when Representing Organisations” (2003) 3 Wyoming L Rev 581 at 605–610; Upjohn v United States (1981) 449 US 383 at 390–392 per Rehnquist CJ; Citic Pacific Ltd v Secretary for Justice [2016] 1 HKC 157 at [55], [56] (CA) (noted Teo (2015) 34 CJQ 338). 213 Edman v Ross (1922) 22 SR (NSW) 351 at 361 per Street J. 214 South Australia v Barrett (1995) 64 SASR 73 at 83–84 per Mullighan J. 215 Komacha v Orange City Council (unreported, Rath J, SC(NSW), 30 August 1979) at 9, being remarks accepted by Franki J in Brambles Holdings Ltd v Trade Practices Commission (No 3) (1981) 58 FLR 452 at 458–459, and thereafter by Logan J in Sunland Waterfront (BVI) Ltd v Prudential Investments Ply Ltd (No 4) [2010] FCA 863 at [22], [23], and Edmonds J in 12 Years Juice Foods Australia Pty Ltd v Commissioner of Taxation [2015] FCA 741 at [16], [17]. 216 Chant v Brown (1849) 7 Hare 79; 68 ER 32; Bullivant v Attorney-General (Vic) [1901] AC 196 at 206 per Lord Lindley; Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 44 per Cooke J, at 49 per Richardson J, at 55 per McMullin J.

400

Lawyers’ Professional Responsibility

[11.190]

a client who has died, where this is in issue.217 Litigation privilege enures for the benefit of successors in title to the party to an action where the relevant interest subsists.218 A bankrupt’s right (or her or his lawyer’s obligation) to assert the privilege cannot be exercised by her or his trustee-in-bankruptcy absent express statutory provision to this effect.219 The privilege is personal to and remains with the bankrupt client;220 it is not “property” of a bankrupt that under statute vests in the trustee. Yet the position under the uniform evidence law may differ, given that s 117(1) defines “client” to include “a successor to the rights and obligations of a client, being rights and obligations in respect of which a confidential communication was made”. In corporate liquidations, a liquidator may waive the company’s claim to privilege221 as a necessary incident of the statutory power to “bring or defend any legal proceeding in the name and on behalf of the company”, and “do all such other things as are necessary for winding up the affairs of the company and distributing its property”.222 Parties with a common interest (“common interest privilege”)

[11.190]

Where a person entitled to claim privilege in relation to a document discloses it to a third party who has an interest sufficient for common interest privilege, there is no loss of privilege.223 In such a case, the third party is also entitled to privilege in respect of the contents of that document.224 The common interest, which may be legal or commercial, must be either identical or so closely related as to make it inappropriate to treat the parties separately.225 Instances of a “common interest” have been found to include officers of the same company or 217 This is explicitly recognised by s 121(1) of the uniform evidence law, which, it has been said, “abrogates a claim for privilege which the deceased person as a client or party could have maintained but for his or her death if the privileged documents or communications are relevant to the deceased’s intentions or competence”: d’Apice v Gutkovich (No 1) [2010] NSWSC 1336 at [20] per White J. 218 Schneider v Leigh [1955] 2 QB 195 at 202–203 per Hodson LJ, at 205–206 per Romer LJ; Baker v Evans (1987) 77 ALR 565 at 568 per Pincus J. 219 Re Furney (1964) 20 ABC 166; Re Steele (1994) 48 FCR 236; Bond v Tuohy (1995) 56 FCR 92; Worrell v Woods (1999) 90 FCR 264. See Hassall, “Legal Professional Privilege and Bankruptcy” (1996) 4 Ins LJ 23; Moore, “The Sanctity of Legal Advice: Legal Professional Privilege in Bankruptcy” (1997) 5 Ins LJ 24. 220 R v Dunwoody (2004) 212 ALR 103 at [17]–[25] per McMurdo P. 221 Re Compass Airlines Pty Ltd (1992) 35 FCR 447 at 455 per Lockhart J; Worrell v Woods (1999) 90 FCR 264 at 267–268 per Finn J. 222 Corporations Act 2001 (Cth), s 477(2)(a), 477(2)(m). 223 Bulk Materials (Coal Handling) Services Pty Ltd v Coal & Allied Operations Pty Ltd (1988) 13 NSWLR 689 at 696 per Giles J; Goldberg v Ng (1995) 185 CLR 83 at 106 per Toohey J; Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 608 per Sheller JA; Marshall v Prescott [2013] NSWCA 152 at [60] per Barrett JA, with whom McColl and Ward JJA concurred. 224 Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 at 279 per Giles J. 225 Unilateral Investments Ltd v VNZ Acquisitions Ltd [1993] 1 NZLR 468 at 478 per Kennedy-Grant M.

[11.190]

11 Legal Professional Privilege

401

group,226 an insured and an insurer/underwriter,227 a company and its parent company,228 a plaintiff and a litigation funder funding the plaintiff’s case,229 and a liquidator and creditors (as beneficiaries of the liquidator’s statutory obligation to provide information and of the liquidation itself).230 Though there is no requirement that each person be represented by the same lawyer, this constitutes a significant influencing factor in favour of substantiating a common interest.231 To this end, it has been said that common interest privilege requires “an identity of interest so close that the parties concerned could (had they chosen to do so) have used the same solicitor or other lawyer”.232 Two persons whose individual interests conflict or are potentially adverse to each other will therefore lack a common interest for this purpose.233 At the same time, a presently existing common interest will not be destroyed by the circumstance that there is potential for future divergence of interests.234 Common interest privilege is recognised under the uniform evidence law, s 122(5)(c) of which provides that the general waiver provisions (see [11.250]) do not apply to “a disclosure to a person with whom the client or party had, at the time of the disclosure, a common interest relating to a proceeding or an anticipated or pending proceeding in an Australian court or a foreign court”. But this does not

226 See, for example, GEC Marconi Systems Pty Ltd v BHP Information Technology Pty Ltd [2000] FCA 593 at [6]–[12] per Lehane J. 227 See, for example, Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027. 228 See, for example, Rank Film Distributors Ltd v ENT Ltd (1994) 4 Tas R 281. 229 See, for example, Rickard Constructions Pty Limited v Rickard Hails Moretti Pty Ltd [2006] NSWSC 234. 230 See, for example, Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (a firm) (1998) 84 FCR 472. 231 Bulk Materials (Coal Handling) Services Pty Ltd v Coal & Allied Operations Pty Ltd (1988) 13 NSWLR 689 at 695 per Giles J; Rank Film Distributors Ltd v ENT Ltd (1994) 4 Tas R 281 at 294 per Crawford J; Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 at 279–280 per Giles J; Marshall v Prescott [2013] NSWCA 152 at [60] per Barrett JA, with whom McColl and Ward JJA concurred. 232 Bank of Nova Scotia v Hellenic Mutual War Risks Association (Bermuda) Ltd (“The Good Luck”) [1992] 2 Lloyd’s Rep 540 at 542 per Saville J (but note that in Network Ten Ltd v Capital Television Holdings Ltd (1995) 36 NSWLR 275 at 282 Giles J queried the satisfactoriness of this test, and in Elders Forestry Ltd v Bosi Security Services Ltd (No 2) (2010) 271 LSJS 100 at [29] Kourakis J suggested that the test “involves an element of circularity”). Cf the observations of Lord Denning MR in Buttes Gas and Oil Co v Hammer (No 3) [1981] QB 223 at 243 that “[i]t often happens in litigation that a plaintiff or defendant has other persons standing along side him – who have the self-same interest as he – and who have consulted lawyers on the self-same points as he – but the others have not been made parties to the action”. See also at 251 per Donaldson LJ, at 267 per Brightman LJ. 233 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 410 per Giles CJ. See, for example, Elders Forestry Ltd v Bosi Security Services Ltd (No 2) (2010) 271 LSJS 100 at [33] per Kourakis J (where the relevant relationship was that between debtor and creditor, and because their interests over the quality of the security offered were necessarily in conflict, there could be no sufficient identity of interest for the purpose of common interest privilege). 234 Marshall v Prescott [2013] NSWCA 152 at [62] per Barrett JA, with whom McColl and Ward JJA concurred.

402

Lawyers’ Professional Responsibility

[11.195]

mean that each party with a common interest must concur in waiving the privilege for a waiver, as the court may consider that in fairness waiver by one of them is waiver by all.235 Parties with a joint interest (“joint privilege”)

[11.195]

Two or more persons may join in communicating with a lawyer for the purpose of retaining her or his services or obtaining advice. The privilege that protects those communications from disclosure belongs to all the persons who joined in seeking the service or obtaining the advice; it is a joint privilege.236 A typical example is where a lawyer acts for both an insured and an insurer; up to a moment when the insurer decides to decline to indemnify the insured – which triggers a conflict of interest that prevents the lawyer from continuing to act for both parties: see [7.105] – any communications are covered by the joint privilege.237 It follows that disclosure inter se of those communications is no breach of privilege, and so the clients cannot maintain privilege against each other.238 As theirs is an inseverable right,239 all must consent to its waiver. The insurer, for instance, cannot use those communications against the insured unless the insured waives the privilege.240 The same is the case where one of a group of persons in a formal legal relationship communicates with a lawyer about a matter in which the members of the group share an interest; for instance, communications by a partner about the affairs of the partnership, a joint venturer regarding the affairs of the joint venture, or a trustee concerning the affairs of the trust.241 The mere fact of employment of the same lawyer by two persons is, however, insufficient to give rise to joint privilege. The capacity in which a communication 235 Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 619–620 per Sheller JA. 236 Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 608 per Sheller JA. 237 TSB Bank plc v Robert Irving & Burns (a firm) [2000] 2 All ER 826; Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612. 238 Mercantile Mutual Insurance (NSW Workers Compensation) Ltd v Murray (2004) 13 ANZ Ins Cas ¶61-612 at [41], [42] per Mason P. See, for example, Gemini Personnel Ltd v Morgan & Banks Ltd [2001] 1 NZLR 672 at [11]–[25] per Keith J (CA) (where the clients had a falling out). 239 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1995) 37 NSWLR 405 at 412 per Giles CJ; Farrow Mortgage Services Pty Ltd (in liq) v Webb (1996) 39 NSWLR 601 at 608 per Sheller JA; Hellenic Mutual War Risks Association (Bermuda) Ltd v Harrison (the “Sagheera”) [1997] 1 Lloyd’s Rep 160 at 165–166 per Rix J. 240 See, for example, FAI General Insurance Co Ltd v ACN 010 087 573 Pty Ltd (2000) 11 ANZ Ins Cas ¶61-464. 241 See, for example, Yunghanns v Elfic Pty Ltd (2000) 1 VR 92 (joint venture); Krok v Szaintop Homes Pty Ltd (No 1) [2011] VSC 16 (privilege joint as between trustee and beneficiaries, Judd J noting that “[i]f the advice was sought for the purpose of assisting a trustee to discharge its duty to administer the trust, in contrast to advice sought and obtained for its personal assistance, any privilege subsisting in the advice is held jointly by the trustee and all beneficiaries”: at [31]). Cf Samootin v Official Trustee in Bankruptcy (No 2) [2012] FCA 316 at [26] per Katzmann J (noting that, unlike the trustee–beneficiary relationship, there is no identity of interest between a trustee-in-bankruptcy and the bankrupt in all aspects of the administration of the bankrupt estate; a trustee-in-bankruptcy acts in furtherance of statutory duties, which may not always coincide with the interests of the bankrupt).

[11.200]

11 Legal Professional Privilege

403

was made must be considered. The communication protected by the privilege must be one made or received by a lawyer in the capacity of a lawyer,242 as communications in a non-legal capacity do not attract privilege in the first place: see [11.130]. Moreover, it is possible that a communication could be made by or to one of the parties in an exclusive capacity, notwithstanding the joint retainer;243 in such a case the lawyer must be wary of a conflict of interest between the clients: see [7.20], [7.25]. By the same token, it is possible for a person to share joint privilege with others in a communication with a lawyer in the absence of a joint retainer. To discharge the onus of establishing joint privilege in these circumstances, it has been suggested that the person will need to establish that:244 • the communication was for the purpose of seeking advice in an individual capacity; • it was made clear to the lawyer that the advice was being sought in an individual capacity, rather than as a representative of a corporate body; • those with whom the joint privilege was claimed knew or ought to have appreciated the legal position; • the lawyer knew or ought to have appreciated that he or she was communicating with the person in that individual capacity; and • the communication with the lawyer was confidential.

[11.200]

The general law position is altered by s 124 of the uniform evidence law. It provides that where, before the commencement of a civil proceeding, two or more parties jointly retained245 a lawyer in relation to the same matter,246 the Act does not prevent one of those parties from adducing, in connection with that matter, evidence of a communication made by any one of them to the lawyer, or the contents of a confidential document prepared by or at the direction or request of any one of them. The purpose of s 124, it has been said, is “to provide for the loss of client legal privilege as between joint clients”.247 But so far as waiver is concerned,

242 Re Doran Constructions Pty Ltd (in liq) (2002) 168 FLR 116 at [65]–[72] per Campbell J. 243 Perry v Smith (1842) 9 M & W 681; 152 ER 288; Rochefoucauld v Boustead (1896) 65 LJ Ch 794; Re Binqld Finances Pty Ltd (in liq) (2015) 107 ACSR 163 at [14] per Foster J. 244 Ford v Financial Services Authority [2012] 1 All ER 1238 at [40] per Burnett J. 245 For this purpose, a “joint retainer” is construed broadly. It can exist in circumstances where one party did not necessarily have any involvement with the engagement and the provision of instructions to the lawyer, but the joint retainer is nonetheless implicit in the circumstances given the relationship between the parties: Clarke v Great Southern Finance Pty Ltd (in liq) [2012] VSC 260 at [42]–[52] per Sifris J (affd Great Southern Managers Australia Ltd (recs and mgrs apptd) (in liq) v Clarke (2012) 36 VR 308). See also Tabcorp Holdings Ltd v Victoria [2013] VSC 302 at [122]–[128], [140]–[143] per Sifris J. 246 The section does not require that the proceedings only deal with the matter that is the subject of the advice, nor does it require a large or significant proportion of the proceedings to be in relation to the matter the subject of the advice. While the advice here may only be in connection with a small part of these proceedings, that is sufficient to attract the operation of s 124: Clarke v Great Southern Finance Pty Ltd (in liq) [2012] VSC 260 at [62] per Sifris J (affd Great Southern Managers Australia Ltd (recs and mgrs apptd) (in liq) v Clarke (2012) 36 VR 308). 247 Great Southern Managers Australia Ltd (recs and mgrs apptd) (in liq) v Clarke (2012) 36 VR 308 at [28] per the court. See also Jess v Jess [2015] FamCA 822 at [57], [58] per Bennett J.

404

Lawyers’ Professional Responsibility

[11.205]

s 122(5)(b) states that the provisions relating to waiver (see [11.250]) do not apply to a disclosure by a client to another person that concerns a matter in relation to which the same lawyer is providing, or is to provide, professional legal services to both the client and the other person.

PRIVILEGE CLAIMS IN NON-JUDICIAL PROCEEDINGS General rule

[11.205]

Legitimate claims for legal professional privilege are not restricted to judicial and quasi-judicial proceedings. Absent legislative restriction, privilege applies in respect of all forms of compulsory disclosure, including those in administrative proceedings and in extra-judicial processes of search and seizure. The matter was not settled until the High Court’s 1983 slim majority decision in Baker v Campbell,248 in overruling its decision made only shortly before in O’Reilly v Commissioner of the State Bank of Victoria,249 which had by an equally slender majority denied the privilege in non-judicial proceedings. The concern raised by Mason J, in the majority in O’Reilly,250 that so extending the privilege would deny access to highly relevant and important information at the cost of imposing on unqualified persons the burden of deciding difficult questions of privilege, also heavily influenced the three dissenters in Baker.251 The majority in Baker was, however, unconvinced that this concern should prevent the extension of the privilege to non-judicial proceedings. Deane J, in sentiments echoed by the other three majority judges,252 explained that the extension of privilege to non-judicial proceedings:253 … represents some protection of the citizen – particularly the weak, the unintelligent and the ill-informed citizen – against the leviathan of the modern State. Without it, there can be no assurance that those in need of independent legal advice to cope with the demands and intricacies of modern law will be able to obtain it without the risk of prejudice and damage by subsequent compulsory disclosure on the demand of an administrative officer with some general statutory authority to obtain information or seize documents.

Illustration – application of privilege in response to search warrants

[11.210]

The operation of the privilege in the context of search warrants has highlighted the practical difficulties involved in claiming privilege in non-judicial proceedings. The main difficulty arises out of the lack of a judicial tribunal for the “independent verification of claims of privilege”.254 Without a judicial determination, resolving conflict or differences of opinion between lawyers and 248 Baker v Campbell (1983) 153 CLR 52. 249 O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1. 250 O’Reilly v Commissioners of the State Bank of Victoria (1983) 153 CLR 1 at 26. 251 Namely Gibbs CJ, Mason and Brennan JJ. 252 See Baker v Campbell (1983) 153 CLR 52 at 89–90 per Murphy J, at 94–95 per Wilson J, at 129 per Dawson J. 253 Baker v Campbell (1983) 153 CLR 52 at 120. 254 Baker v Campbell (1983) 153 CLR 52 at 71 per Gibbs CJ (dissenting).

[11.210]

11 Legal Professional Privilege

405

police in a manner that will ensure that all rights are protected is by no means straightforward. This is far less of a problem where disputed claims to privilege arise in judicial proceedings, where a judge or registrar is available to determine the claim. But in non-judicial proceedings, imposing on unqualified persons, such as Justices of the Peace and police officers, the task of quickly deciding difficult questions of privilege presents particular dangers to due process.255 This problem can be complicated where the institution at which the warrant is addressed is a mere custodian of the documents in question.256 Aside from recourse to judicial proceedings, and absent legislative intervention, judges have suggested that these difficulties can be overcome if police officers and lawyers co-operate “in a reasonable and responsible way”.257 In addition to warning magistrates and Justices of the Peace to exercise caution in granting search warrants that may ostensibly cover privileged documents,258 judges have, to this end, emphasised that execution of a warrant should be carried out “reasonably”, so as to cause the least possible inconvenience and embarrassment.259 What this requires in practice is allowing the person in possession of documents within a search warrant a reasonable opportunity to claim privilege.260 Failing to accord that opportunity does not, though, automatically mean that the power has been exercised invalidly or illegally.261 As explained by the South Australian Court of Criminal Appeal:262 If the documents seized under a search warrant are not in fact protected by legal professional privilege at the time of seizure, a failure, by a police officer who seizes the documents under a warrant, to allow an adequate opportunity for a claim of privilege to be made, will not make the seizure unlawful. The seizure will be unlawful if the police officer obtains possession of documents that are the subject of privilege at the time at which possession of them is obtained. If that occurs, the court should, in considering whether to exclude the documents from evidence, take into account the adequacy of the

255 Baker v Campbell (1983) 153 CLR 52 at 76, 83 per Mason J (dissenting); Arno v Forsyth (1986) 9 FCR 576 at 588–589 per Lockhart J; Lander v Mitson (1988) 83 ALR 466 at 472 per Forster J; Allitt v Sullivan [1988] VR 621 at 630 per Murphy J. 256 See, for example, Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403 (especially at 419–420 per Bowen CJ and Fisher J). 257 Baker v Campbell (1983) 153 CLR 52 at 97 per Wilson J. 258 See, for example, Arno v Forsyth (1986) 9 FCR 576 at 587–588 per Lockhart J; Allitt v Sullivan [1988] VR 621 at 660 per Hampel J (contra at 630 per Murphy J). 259 Baker v Campbell (1983) 153 CLR 52 at 70 per Gibbs CJ (dissenting); Arno v Forsyth (1986) 9 FCR 576 at 580 per Fox J. 260 Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281 at 290 per Doyle CJ; Kennedy v Baker (No 2) (2004) 138 FCR 414 at [8] per Branson J. 261 Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281 at 297–299 per Doyle CJ; JMA Accounting Pty Ltd v Commissioner of Taxation (2004) 139 FCR 537 at [10]–[14] (FC) (the latter overruling Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403 on this point) (see Fisher, “JMA Accounting: Judicial Diminution of Professional Privilege in Tax Investigations?” (2007) 17 Revenue LJ 7). 262 Question of Law Reserved (No 1 of 1998) (1998) 70 SASR 281 at 299 per Doyle CJ, with whom Cox and Matheson JJ concurred.

406

Lawyers’ Professional Responsibility

[11.215]

procedures adopted by the police officer to allow a claim of privilege to be made. In so doing, the court should have regard to the circumstances under which the seizure was made.

The foregoing does not mean that no search can be conducted until the resolution of all privilege claims, which could otherwise excessively delay the search. In line with the purpose of the privilege being to keep secret certain communications, the mere seizure of a document without it being read will not infringe the privilege.263 For an officer to lightly peruse a document to determine whether it might be covered by the privilege may be appropriate where, for instance, no one is present to claim the privilege, there is a blanket claim for privilege and it is apparent that the claim is not sustainable.264 Where the claim proves sustainable, the court can maintain the privilege.

[11.215]

The Law Council of Australia and the Australian Federal Police have agreed on guidelines on the execution of search warrants on lawyers’ premises, law societies and like institutions in circumstances where a claim of privilege is made.265 They prohibit police officers from inspecting documents identified as potentially within the warrant until a lawyer has the opportunity to claim privilege in respect of them. Where such a claim is made, the lawyer should be prepared to indicate to the police the grounds upon which, and in whose name, the claim is made. The document(s) the subject of the claim must be placed in a sealed container in the custody of the clerk of the magistrate who issued the order or another independent party as agreed.266 Strict time limits are placed on the institution of proceedings. Where a lawyer for the person against whom a search warrant has been issued, though having been given a reasonable opportunity to claim privilege, does not do so, the police officer conducting the search can legitimately conclude that the documents in question are either not privileged or that any privilege has been waived.267

[11.220]

More recently, the Australian Law Reform Commission has recommended that the Federal Court and each State and Territory Supreme Court should have appropriate arrangements in place to cater for hearing applications on short notice concerning disputes about client legal privilege claims in federal investigations, specifically a model fast-track procedure for resolving privilege

263 Saunders v Commissioner, Australian Federal Police (1998) 160 ALR 469 at 473 per French J; JMA Accounting Pty Ltd v Commissioner of Taxation (2004) 139 FCR 537 at [13] (FC). 264 JMA Accounting Pty Ltd v Commissioner of Taxation (2004) 139 FCR 537 at [14] (FC). 265 General Guidelines between the Australian Federal Police and the Law Council of Australia as to the Execution of Search Warrants on Lawyers’ Premises, Law Societies and Like Institutions in Circumstances where a Claim of Legal Professional Privilege is Made (revised as from 3 March 1997), available at http://www.lawcouncil.asn.au/. See McNicol, “Unresolved Issues Arising from the General Guidelines Between the AFP and the Law Council of Australia” (1998) 72 ALJ 137. 266 A similar suggestion had been made by Murphy J in Allitt v Sullivan [1988] VR 621 at 631. 267 See, for example, Kennedy v Baker (2004) 135 FCR 520 at [100]–[105] per Branson J; Kennedy v Baker (No 2) (2004) 138 FCR 414 at [13] per Branson J.

[11.225]

11 Legal Professional Privilege

407

disputes.268 It envisaged, also, that lawyers should, if necessary, support the integrity of a privilege claim on oath or affirmation.269

ABROGATION OF PRIVILEGE BY STATUTE No ouster except where clear and unambiguous statutory intention

[11.225]

Two important principles of statutory interpretation impact upon the ouster of legal professional privilege by statute. The first is a presumption against Parliament intending a statute to operate so as to impair an existing substantive right; the second is that Parliament is not presumed to intend to interfere with basic common law doctrines unless, and only to the extent to which, statutory words expressly or necessarily require that outcome.270

The status of legal professional privilege as a fundamental human right and basic common law doctrine means that the court will adopt a statutory construction that preserves rather than infringes the privilege. A statute is construed to evince an intention to impair or destroy the privilege only where that intention has been expressed in “express and unambiguous terms”,271 in “plain unequivocal language capable of only one meaning”,272 or by “clear statutory provision”.273 Even if clearly ousted, the ouster will invariably be for a limited purpose; the privilege is not removed for all purposes, and its abrogation goes no further than necessary to achieve the purpose of the Act in question.274 Accordingly, statute cannot abrogate the privilege in an “indirect way”275 or in an “oblique fashion”.276 In practice, this means that legislation that would oust the privilege if given its literal effect is read down to avoid that result, unless its language clearly reveals an intention to do so.277 For example, in Federal Commissioner of Taxation v Citibank Ltd278 an issue was whether s 263 of the Income Tax Assessment Act 1936 (Cth) – which gives the Commissioner of Taxation full and free access at all times to all buildings, places, books, documents and other papers for any of the purposes of the Act, and the power to make extracts from or copies of any such books, documents or papers – ousted the privilege. As s 263 contained no 268 Australian Law Reform Commission, Privilege in Perspective: Client Legal Privilege in Federal Investigations (ALRC 107, December 2007), recommendations 8-10, 8-11. 269 Australian Law Reform Commission, Privilege in Perspective: Client Legal Privilege in Federal Investigations (ALRC 107, December 2007), recommendation 8-3. 270 Baker v Campbell (1983) 153 CLR 52 at 116–117 per Deane J, at 123 per Dawson J. 271 Baker v Campbell (1983) 153 CLR 52 at 116–117 per Deane J. 272 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 212 per Gresson J. See also at 208 per Fair J (“clear and unequivocal language”). 273 Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 491 per Deane J. See also Rosenberg v Jaine [1983] NZLR 1 at 8 per Davison CJ; Baker v Campbell (1983) 153 CLR 52 at 123 per Dawson J. 274 Southern Equities Corp Ltd (in liq) v Arthur Andersen & Co (1997) 70 SASR 166 at 188 per Bleby J. 275 Rosenberg v Jaine [1983] NZLR 1 at 12 per Davison CJ. 276 Commissioner of Inland Revenue v West-Walker [1954] NZLR 191 at 213 per Gresson J. 277 Cockerill v Collins [1999] 2 Qd R 26 at 28 per Fitzgerald P, at 30 per McPherson JA. 278 Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403.

408

Lawyers’ Professional Responsibility

[11.230]

express reference to the privilege, neither expressly excluding it nor including it, there was nothing to suggest that Parliament directed its attention to the privilege. This led Bowen CJ and Fisher J to conclude that:279 … [t]he power of the Commissioner to search and make copies of documents should be read as not referring to documents to which legal professional privilege attaches … Those general terms are not to be construed as granting an unrestricted power of search and entry but are subject to the right to claim legal professional privilege.

Certainly there is practically no scope for concluding that privilege is ousted where the relevant statute provides for a “reasonable excuse” as grounds for noncompliance with a request for documents.280

[11.230]

An example where statute does, albeit partially, oust the privilege is found in s 123 of the uniform evidence law. It provides that privilege does not apply to the adducing of evidence in criminal proceedings unless it is evidence of: (a) a confidential communication made between an associated defendant and a lawyer acting for that person in connection with the prosecution of that person; or (b) the contents of a confidential document prepared by an associated defendant or by a lawyer acting for that person in connection with the prosecution of that person.

An “associated defendant” is a person charged with an offence arising out of the same facts as those from which the defendant’s alleged offence arose, or an offence otherwise related to the defendant’s alleged offence. This deviated from the position at common law, where courts refuse to override privilege where an accused requires access to the information to establish her or his innocence.281 Section 123 envisages the adducing of evidence by a defendant of what would at law have been privileged communications where those communications were made by a third party or her or his lawyers. Scope for statutory ouster by necessary implication

[11.235]

A consistent line of High Court authority states that Parliament’s intention to oust a privilege need not be manifested expressly; it may be ousted by necessary implication.282 Courts are not, generally speaking, inclined to find a necessary implication, except where it necessarily follows from the express provisions of the statute construed in their context. To this end, “[a] necessary

279 Federal Commissioner of Taxation v Citibank Ltd (1989) 20 FCR 403 at 417. See also at 436–437 per French J. 280 AWB Ltd v Cole (2006) 152 FCR 382 at [49] per Young J. 281 In Australia see Carter v Managing Partner, Northmore Hale Davy & Leake (1995) 183 CLR 121 at 130–131 per Brennan J, at 136–138 per Deane J, at 162–167 per McHugh J. In England see R v Derby Magistrates’ Court [1996] AC 487. New Zealand and Canadian courts recognise such an exception at general law: R v Craig [1975] 1 NZLR 597; R v Dunbar & Logan (1982) 138 DLR (3d) 221; R v Ataou [1988] QB 798; R v Taffs (No 1) (1990) 6 CRNZ 262; R v McLure (2001) 195 DLR (4th) 513. 282 Baker v Campbell (1983) 153 CLR 52 at 123 per Dawson J; Sorby v Commonwealth (1983) 152 CLR 281 at 289 per Gibbs CJ, at 309–310 per Mason, Wilson and Dawson JJ; Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319 at 322 per Brennan J, at 331–332 per Dawson J, at 338 per Gaudron J, at 348–349 per McHugh J.

[11.235]

11 Legal Professional Privilege

409

implication is a matter of express language and logic not interpretation”, and not to be equated with a reasonable implication.283 An implication will, generally speaking, be necessary only where absent the implication the purposes of the statutory provision would be frustrated. That this will be uncommon appears from the robust approach of the High Court in Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission.284 The issue was whether documents to be produced pursuant to an Australian Competition and Consumer Commission (ACCC) investigation covered privileged communications. The relevant statutory provisions, s 155(1) and 155(2) of the (then) Trade Practices Act 1974 (Cth),285 read as follows: [I]f the Commission … has reason to believe that a person is capable of furnishing information, producing documents or giving evidence relating to a matter that constitutes, or may constitute, a contravention of this Act … a member of the Commission may … require that person: (a) to furnish to the Commission … within the time and in the manner specified in the notice, any such information; (b) to produce to the Commission … in accordance with the notice, any such documents; or (c) to appear before the Commission at a time and place specified in the notice to give any such evidence, either orally or in writing, and produce any such documents. [I]f the Commission … has reason to believe that a person has engaged or is engaging in conduct that constitutes, or may constitute, a contravention of this Act … a member of the Commission may, for the purpose of ascertaining by the examination of documents in the possession or control of the person whether the person has engaged or is engaging in that conduct, authorise … a member of the staff assisting the Commission … to enter any premises, and to inspect any documents in the possession or under the control of the person and make copies of, or take extracts from, those documents.

Non-compliance with the above was an offence under the section, which limited the admissibility in criminal proceedings of the evidence gained, having ousted the privilege against self-incrimination. The general terms in which ss 155(1) and 155(2) were expressed gave no basis, according to Gleeson CJ, Gaudron, Gummow and Hayne JJ, for any implication to oust privilege.286 Their Honours saw it was far from obvious that the retention of privilege would significantly impair the ACCC’s statutory functions.287 This was supported by evidence that the ACCC had in the past not once pressed for documents over which privilege was claimed, suggesting that s 155 would not be 283 R (Morgan Grenfell & Co Ltd) v Special Commissioner of Income Tax [2003] 1 AC 563 at [45] per Lord Hobhouse. 284 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543. Daniels was applied in Woolworths Ltd v Fels (2002) 213 CLR 598 (in respect of a slightly amended provision of s 155, still omitting reference to legal professional privilege). 285 The equivalent provision is now s 155 of the Competition and Consumer Act 2010 (Cth). 286 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [32]. 287 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [35].

410

Lawyers’ Professional Responsibility

[11.240]

rendered “valueless”, “inoperative” or “meaningless” by subjecting it to privilege.288 Kirby J added that the express statutory qualification to the operation of the privilege against self-incrimination was indicative of a parliamentary intention not to interfere with legal professional privilege.289 Section 155 has since been amended to make explicit that it does not require a person to produce a document that would disclose information that is the subject of legal professional privilege.290

[11.240]

If the statutory words are clear, though, the court will give effect to them and eschew strained constructions to uphold the privilege. For example, in Z v New South Wales Crime Commission291 a majority of the High Court held that a statutory provision under which a lawyer “must, if so required by the member [of the respondent Commission] presiding at the hearing furnish to the Commission the name and address of the person to whom or by whom the communication was made”292 presented an “insuperable obstacle to the maintenance of the privilege”.293 The reasons for this included the emphatic language in which the obligation of disclosure was expressed (“must”), that the disclosure obligation operated as a proviso to a sub-section otherwise designed to afford a measure of protection for legal professional privilege, that the ouster applied only pursuant to a direction to the lawyer from the member presiding at a hearing of the Commission, coupled with the high public interest in the discharge by the Commission of its important public duties.294

WAIVER OF PRIVILEGE Express and implied waiver At general law

[11.245]

Only the person entitled to claim the privilege – namely – the client, can waive it. A client can waive privilege expressly by intentionally disclosing protected material or authorising her or his lawyer to do so (sometimes termed “intentional” or “express” waiver):295 see [11.255]–[11.270]. The latter binds the client, whether within the lawyer’s actual or ostensible authority:296 see [3.100]–[3.145]. Privilege can also be lost through an implied or imputed waiver where, because of some conduct on the part of the client (or her or his lawyer), it 288 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [45] per McHugh J, at [109] per Kirby J, at [141] per Callinan J. 289 Daniels Corp International Pty Ltd v Australian Competition and Consumer Commission (2002) 213 CLR 543 at [96], [97]. 290 Trade Practices Act 1974 (Cth), s 155(7B), now Competition and Consumer Act 2010 (Cth), s 155(7B). 291 Z v New South Wales Crime Commission (2007) 231 CLR 75. 292 Namely New South Wales Crime Commission Act 1985 (NSW), s 18B(4) (proviso) (repealed). 293 Z v New South Wales Crime Commission (2007) 231 CLR 75 at [13] per Kirby and Callinan JJ. See also at [5]–[7] per Gleeson CJ. 294 Z v New South Wales Crime Commission (2007) 231 CLR 75 at [14]–[16] per Kirby and Callinan JJ. 295 See, for example, Banksia Mortgages Ltd v Croker [2010] NSWSC 535 at [38]–[42] per Schmidt J; Players Pty Ltd (in liq) v Clone Pty Ltd (2013) 115 SASR 547 at [88]–[100] per the court. 296 Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511 at 523 per Goldberg J; Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [37] (FC).

[11.250]

11 Legal Professional Privilege

411

becomes unfair to the opponent to maintain the privilege.297 In this event, the law imputes an intention to waive the privilege on the ground that a person should not be able to abuse the privilege by using it to create an inaccurate perception of the protected communication. As explained by Deane J:298 Waiver of legal professional privilege by imputation or implication of law … occurs in circumstances where a person has used privileged material in such a way that it would be unfair for him to assert that legal professional privilege rendered him immune from procedures pursuant to which he would otherwise be compellable to produce or allow access to the material which he has elected to use to his own advantage. Thus, ordinary notions of fairness require that an assertion of the effect of privileged material or disclosure of part of its contents in the course of proceedings before a court or quasi-judicial tribunal be treated as a waiver of any right to resist scrutiny of the propriety of the use which he has made of the material by reliance upon legal professional privilege.

The criterion of fairness dictates that a court can impute waiver even if it was not intended.299 What is fair depends upon the facts of each case, in particular, any inconsistency between the conduct said to amount to waiver and the maintenance of the privilege.300 Under the uniform evidence law

[11.250]

Although phrased in terms similar to the general law, the uniform evidence law eschews the concept of “fairness”, and sets its own test to determine waiver. At a most basic level, s 122(1) states that the privilege does not prevent the adducing of evidence with the consent of the client or party concerned. For this purpose, “consent” may be express or implied,301 for which and to ascertain whether there has been consent, common law concepts of consent remain applicable.302 It adds, via s 122(3), that the privilege prevents the adducing of evidence if a client has “knowingly and voluntarily disclosed to another person303 the substance of the evidence” or if “the substance of the evidence has been disclosed with the express or implied consent of the client” to a third party. The statutory test is a quantitative one; its focus is to determine whether there has been 297 Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ, at 487–488 per Mason and Brennan JJ; Goldberg v Ng (1995) 185 CLR 83 at 95–98 per Deane, Dawson and Gaudron JJ. Implied or imputed waiver is also known as “associative waiver”: Attorney-General (NT) v Maurice at 497 per Dawson J. See Mathieson and Page, “Implied Waiver of Privilege” [2000] NZLJ 355. 298 Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 492–493. 299 Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 497–498 per Dawson J; Mann v Carnell (2000) 201 CLR 1 at [29] per Gleeson CJ, Gaudron, Gummow and Callinan JJ. 300 Osland v Secretary to the Department of Justice (2008) 234 CLR 275 at [92] per Kirby J; Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738 at [39] per Duggan J. 301 Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 370–371 (FC); Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 164 per Branson and Lehane JJ. 302 Singapore Airlines Ltd v Sydney Airports Corporation Ltd [2004] NSWSC 380 at [55] per McDougall J (affd without reference to this point: Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47); Chen v City Convenience Leasing Pty Ltd [2005] NSWCA 297 at [30]–[36] per Gzell J. 303 The court is not “another person” for the purposes of s 122(2): Macedonian Orthodox Community Church St Petka Inc v His Eminence Petar, the Diocesan Bishop of the Macedonian Orthodox Church of Australia and New Zealand (2006) 66 NSWLR 112 at [45] per Beazley and Giles JJA.

412

Lawyers’ Professional Responsibility

[11.255]

sufficient disclosure to warrant loss of the privilege. If what is disclosed falls short of the test posed by s 122, there is no waiver. The meaning of “substance” in s 122 remains unclear. Rolfe J in Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd,304 for example, defined “substance” in terms of “effect”, saying that these terms are interchangeable – the “effect” of the advice may also be its “substance”. His Honour considered that the substance of the advice can be disclosed if the ultimate conclusion is revealed, even if the supporting reasoning process is not.305 Yet in Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (a firm)306 Drummond J held that “substance” is not to be equated with “effect”, finding a clear difference between the substance of an advice-containing document and its effect. A more tenable distinction than the one between “substance” and “effect” may be one between the ultimate conclusion of an opinion and the reasoning leading to it. Ultimately, the common law test of waiver is more demanding than the statutory one; once it is found that the content of legal advice has not been disclosed at common law, this is enough to satisfy the statutory test under the Act that the substance of the evidence has not been disclosed “knowingly or voluntarily” to another person.307 Also, the statutory test does not appear to envisage waiver where the disclosure of privileged communications was effected by mistake, as it speaks of disclosures made “knowingly and voluntarily”, and with the “express or implied consent” of the client.308 Waiver by intentional disclosure

[11.255]

A person does not inevitably waive privilege, whether partially or wholly, by disclosure to a third party.309 For instance, privilege attaching to documents in a lawyer’s possession is not lost if the documents are delivered to or copied by accountants retained by the client or the lawyer. The accountants in this case, in any event, could be seen as agents of the client or the lawyer: see [11.160], [11.165]. Nor do disclosures to an associate or confidant unconnected with the proceeding,310 in accordance with a duty to disclose,311 or to an expert witness for 304 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 at 18. See also BT Australasia Pty Ltd v New South Wales (No 7) (1998) 153 ALR 722 at 743 per Sackville J. 305 Ampolex Ltd v Perpetual Trustee Co (Canberra) Ltd (1996) 40 NSWLR 12 at 19. 306 Southern Cross Airlines Holdings Ltd (in liq) v Arthur Andersen & Co (a firm) (1998) 84 FCR 472 at 479–480. 307 VAW (Kurri Kurri) Pty Ltd v Scientific Committee (2001) 116 LGERA 89 at [59] per Bignold J. 308 Towney v Minister for Land and Water Conservation (NSW) (1997) 76 FCR 401 at 412–414 per Sackville J; Sovereign Motor Inns Pty Ltd v Bevillesta Pty Ltd [2000] NSWSC 521 at [18]–[23] per Austin J; QUBE Logistics (Vic) Pty Ltd v Wimmera Container Line Pty Ltd [2013] VSC 695 at [87]–[114] per Digby. 309 Harbour Inn Seafoods Ltd v Switzerland General Insurance Co Ltd [1990] 2 NZLR 381 at 384 per Henry J; Hartogen Energy Ltd (in liq) v Australian Gas Light Co (1992) 36 FCR 557 at 571 per Gummow J; Woollahra Municipal Council v Westpac Banking Corp (1994) 33 NSWLR 529 at 539–540 per Giles J. 310 Harbour Inn Seafoods Ltd v Switzerland General Insurance Co Ltd [1990] 2 NZLR 381 at 384 per Henry J. 311 British Coal Corp v Dennis Rye Ltd (No 2) [1988] 1 WLR 1113; Sevic v Roarty (1998) 44 NSWLR 287 at 301 per Powell JA.

[11.260]

11 Legal Professional Privilege

413

the purposes of proceedings,312 by themselves operate to waive privilege. Conversely, a failure to claim privilege can, if it represents an informed decision made with opportunity for consideration, constitute a waiver of privilege.313 Disclosure in pleadings or affidavit

[11.260]

Privilege is not necessarily waived by every disclosure to the opponent. It is not waived by the mere reference to a privileged document in pleadings,314 in an affidavit315 or in a list supplied to an opponent or the court316 (although the position is different if the document is reproduced in full in the pleading or affidavit).317 So far as disclosure in pleadings is concerned, the following remarks by a Federal Court judge are instructive:318 Whether a reference in a pleading to a privileged communication waives privilege in that communication, and whether indeed such a reference means that privilege in other communications is waived, must depend upon whether the pleading indicates that the party who has the benefit of the privilege has by the pleading acted inconsistently with the maintenance of the privilege … Where a party pleads the substance of an otherwise privileged communication or where the party’s case depends upon the substance of an otherwise privileged communication and the party manifests an intention to persist with that case, ordinarily that will indicate that the party is acting inconsistently with the party maintaining privilege in that communication.

The rationale in these cases is that it is not misleading or unfair to refer in a pleading or affidavit to a document that is not put into evidence.319 So far as the statutory test is concerned, disclosure of this kind is not disclosure of the substance of the communication.

312 Dingwall v Commonwealth (1992) 39 FCR 521. However, privilege in the facts and instructions upon which an expert basis his or her opinion is waived once the expert is called upon to give evidence in court or possibly earlier (namely once the expert reports are filed): Prince Removal & Storage Pty Ltd v Roads Corporation [2012] VSC 245. 313 See, for example, Norman v O’Mahony [2006] FCA 1169 (involving a claim to privilege over documents seized under a search warrant made six months after the search, where the applicant had been alerted to the existence of rights in respect of privilege by the federal agent who attended the search, and had spoken to a solicitor during the search); AA v Board of the Australian Crime Commission [2010] FCA 553 at [218], [219] per Foster J (who held that the failure to claim privilege during the execution of a search warrant and for some ten days thereafter constituted waiver). 314 Buttes Gas and Oil Co v Hammer (No 3) [1981] QB 223 at 252 per Donaldson LJ, at 268 per Brightman LJ; Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ; Shannon v Shannon [2005] 3 NZLR 757 at [58] per Glazebrook J (CA). 315 Lyell v Kennedy (No 3) (1884) 27 Ch D 1 at 24 per Cotton LJ. See, for example, Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia SRL (No 2) (2012) 287 ALR 760 at [94]–[100] per Lander J. 316 State of Victoria v Davies (2003) 6 VR 245 at [29], [30] per Batt JA. 317 Buttes Gas and Oil Co v Hammer (No 3) [1981] QB 223 at 252 per Donaldson LJ (see (1991) 107 LQR 99). Cf Corporate Group Holdings v Corporate Resources Group Ltd [1991] 1 NZLR 115. 318 SQMB v Minister for Immigration & Multicultural & Indigenous Affairs (2004) 205 ALR 392 at [41], [42] per Lander J. 319 Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 481 per Gibbs CJ.

414

Lawyers’ Professional Responsibility

[11.265]

Disclosure of legal advice

[11.265]

A mere reference to legal advice, without disclosing its substance, is not a waiver of privilege in its contents.320 Nor is the disclosure of a mere summary or effect of legal advice received necessarily fatal to maintaining privilege.321 If a party’s explanation for an action is that he or she relied upon legal advice, this by itself does not oblige that party to disclose the terms of the advice.322 For example, in Osland v Secretary to the Department of Justice,323 responding to the appellant’s petition for a pardon for murder, the Victorian Attorney-General issued a press release indicating that the joint advice of three senior counsel “recommends on every ground that the petition should be denied”. The appellant alleged that any privilege attaching to that advice had been waived by reference to it in the press release. The High Court found otherwise, because the press release revealed very little about the actual content of the joint advice, and the State’s purpose in issuing it was not to secure an advantage in proceedings affecting the appellant, but to show that a proper course in securing advice from appropriate persons had been taken.324 The position is different, both at general law and under the uniform evidence law, where the explanation or reference is to the substance of legal advice; the question is therefore one of degree.325 As explained by Tamberlin J in Bennett v Chief Executive Officer, Australian Customs Service:326 Various expressions are used in the formulation of principles relating to waiver of legal professional privilege, such as references to “the substance”, “effect”, or “content” of the advice. The weight of the authorities … supports the conclusion that the disclosure of the conclusion reached in or course of action recommended by, an advice can amount to waiver of privilege in respect of the premises relating to the opinion which has been disclosed, notwithstanding that this reasoning is not disclosed. By way of illustration, if there is a disclosure that a client has been advised that interpretation “A” is preferable to 320 See, for example, Assistant Treasurer and Minister for Competition Policy and Consumer Affairs v Cathay Pacific Airways Ltd (2009) 179 FCR 323; RinRim Pty Ltd v Deutsche Bank Australia Ltd [2013] NSWSC 1654. 321 See, for example, Seven Network Ltd v News Ltd [2005] FCA 864 at [64] per Graham J. 322 Miller v Commissioner of Inland Revenue [1999] 1 NZLR 275 at 297 (CA); Temwood Holdings Pty Ltd v Western Australian Planning Commission [2003] WASCA 112 at [23] per Wheeler J; Hoy Mobile Pty Ltd v Allphones Retail Pty Ltd [2007] FCA 933 at [23] per Tamberlin J. 323 Osland v Secretary to the Department of Justice (2008) 234 CLR 275. 324 Osland v Secretary to the Department of Justice (2008) 234 CLR 275 at [48] per Gleeson CJ, Gummow, Heydon and Kiefel JJ, at [97] per Kirby J. Cf Zentai v O’Connor (No 2) (2010) 183 FCR 180 at [137]–[142] per McKerracher J (who, on facts displaying some similarities to Osland, distinguished Osland on three grounds: (1) on the facts almost all the brief had been disclosed and only a small portion had been redacted; (2) in Osland the petition itself was a simple document that addressed topics beyond pure law, whereas on the facts the applicant’s submissions to the respondent Minister were all anchored in legal principle; (3) the court in Osland held that the purpose of releasing the limited amount of material was to demonstrate that there had been responsible advice before the decision-maker, whereas on the facts the release of the brief to the applicant was a release essentially at a private level). 325 Tau v Durie [1996] 2 NZLR 190 at 194 per McGechan J; Hoad v Nationwide News Pty Ltd (1998) 19 WAR 468 at 475 per Steytler J. 326 Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101 at [13].

[11.270]

11 Legal Professional Privilege

415

interpretation “B” of a legislative provision, then even if there is no disclosure of the reasoning leading to that conclusion, the reasoning and content of the advice may be waived, including the factual premises and circumstances leading to that conclusion.

The issue in Bennett was whether disclosure of the conclusion of legal advice waived privilege in relation to undisclosed reasons for that conclusion. That its substance and effect had been communicated in order to emphasise and promote the strength and substance of the case against the appellant led the court to conclude that it would be unfair to maintain privilege in respect of the relevant parts of that advice pertaining to the expressed conclusion.327 What influenced this ruling was that not only had the “legal stance” or “position” been disclosed but also the interpretation that had been advised as correct.328 Similarly, a party who puts in issue in the proceeding a matter that cannot fairly be assessed without examination of relevant legal advice given to that party is taken to have consented to the use of the privileged material. So, for example, a party who relies on a cause of action, an element of which is the party’s state of mind, “is taken to have waived privilege in respect of legal advice which the party had, before or at the time of the relevant events, material to the formation of that state of mind”.329 More generally, a party who makes an assertion about the content of confidential communications between that party and a lawyer is ordinarily taken to waive any privilege attaching to the communication.330 Partial disclosure as waiver of associated or entire document

[11.270]

A party may waive privilege as to certain documents but claim privilege as to others.331 The general principle is that “the mere production of the document on discovery … cannot in the ordinary course be treated as a waiver of anything beyond the document itself”.332 But a waiver of one document may entail a waiver of associated documents where to deprive the opponent of those other documents, given the substance of the document disclosed, would not be fair in the conduct of the trial.333 Also, in order to ensure that the opposing litigant is not misled by an inaccurate perception of the disclosed communication, fairness will usually dictate that “the 327 Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101 at [6] per Tamberlin J. 328 Bennett v Chief Executive Officer, Australian Customs Service (2004) 140 FCR 101 at [12] per Tamberlin J. 329 Telstra Corporation Ltd v BT Australasia Pty Ltd (1998) 85 FCR 152 at 168 per Branson and Lehane JJ. 330 Standard Chartered Bank of Australia Ltd v Antico (1993) 36 NSWLR 87 at 94–95 per Hodgson J; Hongkong Bank of Australia Ltd v Murphy [1993] 2 VR 419 at 436 per Smith J; Wardrope v Dunne [1996] 1 Qd R 224 at 226–228 per Derrington J. See also Commissioner of Taxation v Rio Tinto Ltd (2006) 151 FCR 341 at [65] (FC) (phrasing the inquiry in terms of whether the privilege holder “made an assertion as part of his or her case in the litigation that lays open the privileged documents to scrutiny, with the consequence that an inconsistency arises between the making of the assertion and the maintenance of the privilege”). 331 Lyell v Kennedy (No 3) (1884) 27 Ch D 1 at 24 per Cotton LJ. 332 General Accident Fire & Life Assurance Corp Ltd v Tanter [1984] 1 WLR 100 at 115 per Hobhouse J. 333 Prus-Grzybowski v Everingham (1986) 87 FLR 186 at 190 per Kearney J. Cf Newcrest Mining (WA) Ltd v Commonwealth (1993) 40 FCR 507 at 509 per French J.

416

Lawyers’ Professional Responsibility

[11.275]

waiver of privilege as to part of a document is in general a waiver as to the whole”.334 The rationale for this principle is based on:335 … the possibility that any use of part of a document may be unfair or misleading, that the party who possesses the document is clearly not the person who can decide whether a partial disclosure is misleading or not, nor can the judge decide without hearing argument, nor can he hear argument unless the document is disclosed as a whole to the other side. Once disclosure has taken place by introducing part of the document into evidence or using it in court it cannot be erased.

For example, in Great Atlantic Insurance Co v Home Insurance Co336 a party who disclosed a document that contained part only of a memorandum dealing with a single subject matter, and then read the document to the judge in the course of opening the case, was held to have waived the privilege as to the entire memorandum. Severance may, however, be possible if the document in issue deals with several entirely different subject matters, often determined by the judge inspecting the document.337 An equivalent approach applies under the uniform evidence law.338 Waiver by unintended disclosure Inadvertent or mistaken disclosure

[11.275]

Disclosure will not necessarily carry with it the consequence of waiver where production can be shown to be the result of inadvertence.339 Under the uniform evidence law, inadvertent or erroneous conduct may negate the conclusion that the disclosure was made knowingly and voluntarily;340 in fact, the statutory formulation appears not to envisage any waiver of privilege where the disclosure of privileged communications was effected by mistake: see [11.250]. 334 Prus-Grzybowski v Everingham (1986) 87 FLR 186 at 190 per Kearney J. See also Attorney-General (NT) v Maurice (1986) 161 CLR 475 at 488 per Mason and Brennan JJ, at 497 per Dawson J; Federal Commissioner of Taxation v Coombes (1999) 92 FCR 240 at [39], [40] (FC). 335 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 538–539 per Templeman LJ. 336 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529. 337 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 536 per Templeman LJ; Prus-Grzybowski v Everingham (1986) 87 FLR 186 at 188 per Kearney J; Propend Ltd v Commissioner of the Australian Federal Police (1995) 79 A Crim R 453 at 494–495 per Lindgren J; MAM Mortgages Ltd (in liq) v Cameron Bros (No 2) [2001] 1 Qd R 46 at 48–49 per Wilson J; Bailey v Director-General, Department of Land and Water Conservation (2009) 74 NSWLR 333 at [132] per Tobias JA. But see GE Capital Corporate Finance Group Ltd v Anchors Trust Co [1995] 1 WLR 172 at 175 per Hoffmann LJ (who saw the test for whether part can be withheld on grounds of privilege as “simply whether that part is privileged”, and favoured “no additional requirement that the part must deal with an entirely different subject matter from the rest”). Cf Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 5) (2010) 272 LSJS 1 at [25]–[29] per Bleby J. 338 Adelaide Steamship Co Ltd v Spalvins (1998) 81 FCR 360 at 369–371 (FC). 339 Great Atlantic Insurance Co v Home Insurance Co [1981] 1 WLR 529 at 537 per Templeman LJ; Spicers Paper (NZ) v Whitcoulls Group Ltd [1996] 1 NZLR 72 at 78 per Gambrill M; Kingston v State Fire Commission (1998) 8 Tas R 152 at 157 per Slicer J. 340 As required for waiver under s 122(3) of the uniform evidence law: see BT Australasia Pty Ltd v New South Wales (No 8) (1998) 154 ALR 202 at 208–209 per Sackville J; Laws v GWS Machinery Pty Ltd [2006] NSWSC 492 at [23] per Rothman J; QUBE Logistics (Vic) Pty Ltd v Wimmera Container Line Pty Ltd [2013] VSC 695 at [87]–[99] per Digby J.

[11.280]

11 Legal Professional Privilege

417

If there is no waiver of privilege, the court is hardly powerless to intervene to correct the mistake. In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd341 the High Court of Australia, informed by modern civil procedure reforms directed at the just, quick and cheap resolution of the issues in dispute,342 explained that “where a privileged document is inadvertently disclosed, the court should ordinarily permit the correction of that mistake and order the return of the document, if the party receiving the documents refuses to do so”. In so ruling, their Honours shied from the former approach that inquired into whether the disclosure was, from the perspective of the reasonable recipient of the document, the product of obvious mistake.343 Such an approach, it surmised, was prone to generating “unduly technical and costly disputes about non-essential issues”.344

[11.280]

If litigation ensues, it remains within the court’s arsenal to intervene via the equitable doctrine of breach of confidence.345 For example, in Islam v Duncan346 solicitors representing the liquidator of an incorporated association mistakenly advised its auditors’ solicitors that a copy of the liquidator’s affidavit would be supplied to them. The auditors’ solicitors expressed surprise at this, and refused to return the affidavit when informed that it had been supplied to them by mistake. A majority of the Northern Territory Court of Appeal held that the retention of the

341 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [45] per the court. See further Legg, “High Court of Australian Employs Case Management and ‘Overriding Purpose’ to Resolve Dispute Over Mistaken Provision of Privileged Documents on Discovery” (2014) 33 CJQ 115; Williams, “Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd: Implications for Case Management Obligations and the Doctrine of Waiver” (2014) 3 JCivLP 32; Legg, “Client Legal Privilege, Discovery and Expense Reduction in the Information Age” (2014) 3 JCivLP 78. 342 See, for example, Federal Court of Australia Act 1976 (Cth), s 37M; Court Procedures Rules 2006 (ACT), r 21; Civil Procedure Act 2005 (NSW), s 56; Supreme Court Rules 1987 (NT), r 1.10; Uniform Civil Procedure Rules 1999 (Qld), r 5; Supreme Court Civil Rules 2006 (SA), r 3; Civil Procedure Act 2010 (Vic), s 7; Supreme Court Rules 1971 (WA), O 1 r 4B. 343 See, for example, Guinness Peat Properties Ltd v Fitzroy Robinson Partnership [1987] 1 WLR 1027 at 1044 per Slade LJ; Complete Technology Pty Ltd v Toshiba (Australia) Pty Ltd (1994) 53 FCR 125 at 131–132 per Hill J; Meltend Pty Ltd v Restoration Clinics of Australia Pty Ltd (1997) 75 FCR 511 at 524–526 per Goldberg J; Director of Public Prosecutions (Cth) v Kane (1997) 140 FLR 468 at 485–486 per Hunt CJ at CL; Trevorrow v State of South Australia (No 2) (2005) 94 SASR 1 at [118]–[122] per Gray J; Actew Corporation Ltd v Mihaljevic [2007] ACTSC 39 at [29] per Harper M; Bendigo and Adelaide Bank Ltd v Stamatis [2013] NSWSC 248 at [49]–[52] per Harrison AsJ. 344 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [57] per the court. There is English dicta speaking favourably of the Australian approach: Rawlinson & Hunter Trustees SA v Serious Fraud Office (No 2) [2015] 1 WLR 797 at [52]–[59] per Moore-Bick LJ, with whom Gloster LJ agreed. See further Taylor, “Inadvertent Disclosure of Privileged Documents” (2015) 34 CJQ 29. 345 ISTIL Group Inc v Zahoor [2003] 2 All ER 252 at [74] per Lawrence Collins J; Trevorrow v South Australia (No 4) (2006) 94 SASR 64 at [79]–[81] per Debelle J; Commissioner of Taxation v Donoghue (2015) 329 ALR 400 at [57] per the court; Kousouros v O’Halloran [2015] WTLR 1023 at [65]–[69] per Simon J. 346 Islam v Duncan (2000) 156 FLR 167.

418

Lawyers’ Professional Responsibility

[11.285]

affidavit amounted to an unauthorised use of confidential information, which the court would prevent on equitable grounds.347

[11.285]

It is open, alternatively, for a court to restrain an opposing lawyer from acting in the matter if it foresees a real risk that information from privileged documents could be used against the party whose privilege has been infringed. In Celanese Canada Inc v Murray Demolition Corp348 the plaintiffs seized documents pursuant to an Anton Piller order without effectively screening them for legal professional privilege. The documents were then “burned” onto CD-ROMs, and viewed by a lawyer at the plaintiffs’ law firm. The Supreme Court of Canada ordered that the plaintiffs’ solicitors be removed as solicitors on the record, remarking that parties “should be free to litigate their disputes without fear that their opponent has obtained an unfair insight into secrets disclosed in confidence to their legal advisors”.349 In so ruling, the court identified relevant factors in determining whether lawyers should be removed to include: how the documents came into the possession of the plaintiff or its lawyers; what the plaintiff and its lawyers did upon recognising that the documents were potentially privileged; the extent of review made of the privileged material; the contents of the lawyer–client communications and the degree to which they are prejudicial; the stage of the litigation; and the potential effectiveness of a firewall or other precautionary steps to avoid mischief.350 There is now Australian and English case law supportive of this jurisdiction in an appropriate case.351 Lawyer’s duty upon receipt of inadvertently disclosed material

[11.290]

The professional rules in most jurisdictions now state that, unless otherwise permitted or compelled by law, a lawyer to whom material known or reasonably suspected to be confidential is disclosed by another lawyer, or by some other person and who is aware that the disclosure was inadvertent, must not use the material but must:352

347 Islam v Duncan (2000) 156 FLR 167 at [12], [13] per Martin CJ, at [27] per Mildren J. Contra at [22] per Angel J dissenting. 348 Celanese Canada Inc v Murray Demolition Corp [2006] 2 SCR 189. 349 Celanese Canada Inc v Murray Demolition Corp [2006] 2 SCR 189 at [34] per Binnie J, who delivered the reasons of the court. 350 Celanese Canada Inc v Murray Demolition Corp [2006] 2 SCR 189 at [59]. 351 See, for example, GT Corporation Pty Ltd v Amare Safety Pty Ltd [2007] VSC 123 (where the plaintiff’s counsel was disqualified upon the defendant inadvertently disclosing privileged communications in the course of discovery, because of counsel’s “extensive regard to the contents” of the relevant documents (at [91]); but no equivalent order was made against the instructing solicitors, who had “far more limited knowledge of the contents of the documents than counsel” (at [94])); Shlosberg v Avonwick Holdings Ltd [2016] EWHC 1001 (Ch) at [146]–[161] per Arnold J. Cf H Stanke & Sons Pty Ltd v von Stanke (2006) 95 SASR 425 at [74] per White J (who recognised the potential availability of the court’s supervisory jurisdiction to disqualify a lawyer from acting in circumstances of this kind, but on the facts found that the documents in question were not privileged, or that if they were, privilege had been waived); Hutchins v Cap Coast Telecoms Pty Ltd (in liq) (No 2) [2015] FCA 946 at [32]–[36] per Gleeson J (another instance where the jurisdiction was recognised but not exercised). 352 ACT, r 31.1; NSW, r 31.1; Qld, r 31.1; SA, r 31.1; Vic, r 31.1; WA, r 24. See also US, r 4.4(b) (“A lawyer who receives a document or electronically stored information relating to the representation

[11.295]

11 Legal Professional Privilege

419

• return, destroy or delete the material (as appropriate) immediately upon becoming aware that disclosure was inadvertent; and • notify the other lawyer or the other person of the disclosure and the steps taken to prevent inappropriate misuse of the material. A lawyer who reads some or all of the confidential material before becoming aware of its confidential status must notify the opposing lawyer or the other person immediately, and refrain from reading any more of the material.353 The High Court has opined that “[s]uch a rule should not be necessary”, as “[i]n the not too distant past it was understood that acting in this way obviates unnecessary and costly interlocutory applications”.354 It nonetheless noted that compliance with the rule “permits a prompt return to the status quo and thereby avoids complications which may arise in the making of orders for the rectification of the mistake and the return of documents” and, to this end, promotes conduct that will foster the just, quick and cheap resolution of the issues in dispute.355

[11.295]

With the prevalence of electronic communications, including for the exchange of documents between opposing lawyers, the issue arises as to the ethics of “mining” the metadata of a document in a concerted attempt to ascertain its earlier iterations.356 The American Bar Association, in a 2006 opinion, saw no ethical impediment to lawyers mining and using the metadata embedded in electronic files received from other lawyers.357 Instead it placed the responsibility on the lawyer transmitting the document(s) in question to adopt strategies that protect against the document(s) being mined in this fashion. Alabama, on the other hand, proscribes the practice, its bar committee declaring that “mining of metadata constitutes a knowing and deliberate attempt by the recipient attorney to acquire confidential and privileged information in order to obtain an unfair advantage against an opposing party”.358 Some other states have ruled likewise,359 and this arguably reflects the correct ethical position in Australia. After all, as an American commentator has noted, senders of electronic documents “expect the recipients to open the files and see exactly what the senders see on their computer monitors or

of the lawyer’s client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender”); Schaefer, “The Future of Inadvertent Disclosure: The Lingering Need to Revise Professional Conduct Rules” (2010) 69 Maryland L Rev 195. 353 ACT, r 31.2; NSW, r 31.2; Qld, r 31.2; SA, r 31.2; Vic, r 31.2. 354 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [66] per the court. 355 Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Ltd (2013) 250 CLR 303 at [67] per the court. 356 See Dal Pont, “Reading Outside the Lines” (2012) 86 (Dec) LIJ 71. 357 American Bar Association, Formal Op 06-442 Review and Use of Metadata (5 August 2006). 358 Alabama State Bar Disciplinary Committee, Op 2007-02 (2007). 359 See, for example, NY State Bar, Ethics Op 749 (2001); State Bar of Ariz Comm on the Rules of Professional Conduct, Op 07-03 (2007); Maine Board of Bar Overseers Professional Ethics Committee, Op 196 (2008).

420

Lawyers’ Professional Responsibility

[11.300]

on the printed versions of those files”, and “do not expect the file recipients to ascertain the changes they have made in those files”.360 The American Bar Association subsequently amended its Model Rules of Professional Conduct to state that “[m]etadata in electronic documents creates an obligation under this Rule only if the receiving lawyer knows or reasonably should know that the metadata was inadvertently sent to the receiving lawyer”.361 It may be queried, though, how a receiving lawyer should know that the metadata was sent “inadvertently” where the sending lawyer supplies the digital document pursuant to discovery and does not claim that the document itself (as opposed to the metadata within it) was sent by accident.362 Overhearing by third parties

[11.300]

Whether third parties overhearing a privileged communication constitutes a waiver depends on the circumstances. The general rule, according to Wigmore,363 is that as the means of preserving the secrecy of the communication are largely in the client’s hands, and since the privilege derogates from the general testimonial duty, it is improper to extend it to third parties who obtain knowledge of the conversations. However, in R v Uljee364 the New Zealand Court of Appeal held that this rule does not apply where a communication has been overheard by a third party whose presence the client had no reason to suspect. In Uljee a privileged conversation between the accused and his solicitor was overheard by a police officer stationed immediately outside the venue of the conversation. In ruling that privilege had not been waived, McMullin J explained that:365 In principle there seems no reason why a communication which solicitor and client have sought to keep confidential should not still be protected even though a third party has chanced to overhear it or gained knowledge of its contents through a “bugging device”. If deliberate and careful steps have been taken to keep the communication secure from others it seems wrong that it should lose its protection because some eavesdropper has either chanced upon it or taken deliberate steps to listen to it.

360 Craver, “Negotiation Ethics for Real World Interactions” (2010) 25 Ohio St J on Disp Resol 299 at 329–330. See also King, “The Ethics of Mining for Metadata Outside of Formal Discovery” (2009) 113 Penn St L Rev 801 (who concludes that “[i]ntentionally trying to find privileged or protected information is dishonest and is prejudicial to the administration of justice”: at 839). 361 US, r 4.4, cmt [2] (amended in August 2012). 362 Rotunda, “Applying the Revised ABA Model Rules in the Age of the Internet: The Problem of Metadata” (2013) 42 Hofstra L Rev 175 at 230. 363 Wigmore on Evidence (McNaughton rev, 1961), Vol 8 at 2326. 364 R v Uljee [1982] 1 NZLR 561. 365 R v Uljee [1982] 1 NZLR 561 at 576.

[11.300]

11 Legal Professional Privilege

421

Richardson J phrased the issue as one of balancing competing public interests,366 stating that the “[s]olicitor and client should be able to act in the belief that what they legitimately discuss in their interview is confidential”.367 If this right is not protected, it goes against the policy underlying the privilege, namely, encouraging full and frank communications.

366 R v Uljee [1982] 1 NZLR 561 at 570–571. 367 R v Uljee [1982] 1 NZLR 561 at 572.

Chapter 12

Privilege in Aid of Settlement [12.05] CONTEXT AND RATIONALE ....................................................................................... 423 [12.10] PARAMETERS OF THE PRIVILEGE ............................................................................. 425 [12.10] Two main requirements .............................................................................................. 425 [12.20] Concept of an admission ............................................................................................ 427 [12.25] Need for connection between the admission and the settlement of the dispute ..................................................................................................................... 428 [12.30] Scope of privilege against other persons ................................................................. 430 [12.35] EXCEPTIONS TO THE PRIVILEGE .............................................................................. 431 [12.40] Communications resulting in a concluded compromise agreement .................. 432 [12.45] Communications that cloak reprehensible behaviour ........................................... 432 [12.65] Estoppel ......................................................................................................................... 434 [12.70] Striking out proceedings for want of prosecution ................................................. 434 [12.75] Issue as to mitigation of loss ..................................................................................... 435 [12.80] Waiver of privilege ...................................................................................................... 435 [12.85] Welfare of the child in family law cases .................................................................. 436 [12.90] Offers made without prejudice as to costs .............................................................. 437 [12.100] Criminal cases ............................................................................................................. 437

CONTEXT AND RATIONALE [12.05]

It is the policy of the law to encourage the settlement of disputes rather than their litigation. This is because settlement (or compromise) fosters substantial public and private benefits: the disputants avoid the uncertainties, trouble and expense of trials; they, their witnesses and the wider community are spared the opportunity costs of diverting resources from more useful activities into litigation; stress on public funding for courts is reduced; and, less tangibly, social harmony is arguably promoted.1

This policy is reflected in a variety of ways. Costs-wise the costs indemnity rule (where the losing party is ordinarily ordered to pay the winning party’s costs)2 and the financial consequences of rejecting what ultimately prove to be favourable offers of settlement (namely bearing an opponent’s costs after the date of the offer),3 motivate litigants to settle their dispute. Alternative dispute resolution methods are 1 Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [27] per Byrne J. 2 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), Ch 7. 3 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), Ch 13.

424

Lawyers’ Professional Responsibility

[12.05]

often prescribed as part of the curial process, whether court-sanctioned or, in some instances, court-ordered.4 Again the aim is to settle rather than litigate to the end. What is known as the “privilege in aid of settlement” (or “without prejudice privilege”) is further means by which the general law fosters this public policy.5 It does so by excluding from admissibility into evidence proof of admissions contained in correspondence between litigants made bona fide for the purpose of settling their dispute.6 This is termed “without prejudice” correspondence, that is, without prejudice to the position of its writer if the terms proposed are not accepted.7 The disputants are thereby encouraged to negotiate freely and without fear that, failing agreement, what they said or did may later be used in evidence.8 Were negotiations able to be converted into admissions prejudicial to the person making them, litigants would, it is feared, be reticent to make attempts to compromise a dispute.9 Some view the privilege as giving effect to the implied agreement of the parties that the correspondence should be “without prejudice”,10 though not all find this compelling.11 A main reason for this divergence of opinion is that the privilege is informed by public policy while at the same time being triggered by the substance of what a litigant is seeking in making the communications in question.

4 As to litigation management schemes generally see Cairns, Australian Civil Procedure (11th ed, Lawbook Co., 2016), Ch 2. 5 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 per Dixon CJ, Webb, Kitto and Taylor JJ; Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299 per Lord Griffiths. As to the historical backdrop to “without prejudice privilege” see Desiatnik, Without Prejudice Privilege in Australia (LexisNexis Butterworths, 2010), Ch 2. 6 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 per Dixon CJ, Webb, Kitto and Taylor JJ. See generally Waver, “Without Prejudice Communications – Their Admissibility and Effect” (1974) 9 UBCLR 85; Perell, “The Problems of Without Prejudice” (1992) 71 Can Bar Rev 223. 7 Walker v Wilsher (1889) 23 QBD 335 at 337 per Lindley LJ. 8 Rodgers v Rodgers (1964) 114 CLR 608 at 614 per McTiernan, Taylor and Owen JJ; Cutts v Head [1984] Ch 290 at 306 per Oliver LJ. 9 Jones v Foxall (1852) 15 Beav 388; 51 ER 588 at 396 (Beav), 591 (ER) per Romilly MR; Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [29] per Byrne J; Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [23]–[26] per Auld LJ. 10 See, for example, Rabin v Mendoza & Co [1954] 1 WLR 271 at 273 per Denning LJ; Cutts v Head [1984] Ch 290 at 314 per Fox LJ; Prudential Assurance Co Ltd v Prudential Insurance Co of America [2003] EWCA Civ 1154 at [11]–[23] per Chadwick LJ; Jadwan Pty Ltd v Porter (No 2) (2004) 13 Tas R 219 at [15] per Blow J. 11 See Waver, “Without Prejudice Communications – Their Admissibility and Effect” (1974) 9 UBCLR 85 at 97–101, and cited for this purpose by Auld LJ in Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [24]. Cf Stax Claimants v Bank of Nova Scotia Channel Islands Ltd [2007] EWHC 1153 (Ch) at [13] per Warren J (who spoke of a “notional implied agreement” in this context, adopting the term “notional” because “the implied agreement is not a complete answer even as between the parties concerned”); Falland v Symbion Health Ltd (2010) 269 LSJS 189 at [16]–[22] per Bleby J; Avonwick Holdings Ltd v Webinvest Ltd [2014] EWCA Civ 1436 at [17] per Lewison LJ, with whom Sharp and Burnett LJJ concurred.

[12.10]

12 Privilege in Aid of Settlement

425

The privilege in aid of settlement is reflected by s 131 of the uniform evidence law – which applies in proceedings in federal courts, and in the courts of the Territories, New South Wales, Tasmania and Victoria:12 see [11.25] – and in abbreviated form in South Australian legislation.13

PARAMETERS OF THE PRIVILEGE Two main requirements At general law

[12.10]

There are two main requirements for the without prejudice privilege to attach to correspondence. First, there must exist a dispute between prospective litigants that is the subject of negotiation. It is not essential that litigation have commenced; the privilege extends to where litigation is contemplated should the negotiations not result in a satisfactory resolution of the matters in dispute.14 To premise the privilege on the commencement of proceedings would encourage persons to litigate. The rationale for the privilege does not, though, apply to negotiations where litigation is not contemplated.15 Hence “[c]ommunications made at a time when there is no dispute cannot, with retrospective effect, be made subject to the without prejudice privilege by subsequently raising a dispute”.16 While the he relevant inquiry is influenced by the temporal proximity between the communication and the commencement of the litigation;17 proximity here is a broader concept relating to the subject matter of the dispute.18 Arguably the crucial consideration is “whether in the course of negotiations the parties contemplated or 12 Evidence Act 1995 (Cth), s 131; Evidence Act 2011 (ACT), s 131; Evidence (National Uniform Legislation) Act 2011 (NT), s 131; Evidence Act 1995 (NSW), s 131; Evidence Act 2001 (Tas), s 131; Evidence Act 2008 (Vic), s 131. 13 Evidence Act 1929 (SA), s 67C. 14 Rodgers v Rodgers (1964) 114 CLR 608 at 614 per McTiernan, Taylor and Owen JJ; Harrington v Lowe (1996) 190 CLR 311 at 323 per Brennan CJ, Dawson, Toohey, Gaudron, McHugh and Gummow JJ. 15 Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [29] per Williams JA. See, for example, GPI Leisure Corp Ltd (in liq) v Yuill (1997) 42 NSWLR 225 (in the context of s 131 of the Evidence Act 1995 (NSW)). 16 Avonwick Holdings Ltd v Webinvest Ltd [2014] EWHC 3322 (Ch) at [35] per David Richards J. 17 Compare Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 (where communications that antedated the start of proceedings by about two years were held to fall outside the privilege, although this outcome was influenced more by the nature of the communications – which the court characterised as open communications directed at discussing the repayment of an admitted liability rather than communications directed at negotiating and compromising that liability – than the temporal element) with Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 (where communications over a period of two months preceding the institution of proceedings were held to come within the privilege, the court remarking that confining the operation of the privilege to negotiations of a dispute in the course of litigation, or after threat of litigation on it, or by reference to some time limit set close before litigation, did not “fully serve the public policy interest underlying it of discouraging recourse to litigation and encouraging genuine attempts to settle whenever made”: at [34] per Auld LJ). 18 See, for example, CJ Redman Constructions Pty Ltd v Tarnap Pty Ltd [2006] NSWSC 173 at [5]–[7] per Campbell J (who found a letter that alluded to settlement discussions being on foot insufficiently

426

Lawyers’ Professional Responsibility

[12.15]

might reasonably have contemplated litigation if they could not agree”.19 The second requirement is that the correspondence contains express or implied admissions made bona fide for the purpose of achieving settlement of the dispute.20 Scope for the privilege depends, therefore, in part on how courts have construed an “admission”, and in part on the their willingness to connect the statement in question with the settlement of the dispute. Though discussed separately below, these points are not unrelated. In any event, the court is entitled to view the correspondence in question to determine whether the prerequisites to the privilege are present.21 Under the uniform evidence law

[12.15]

The general law requirements are, by and large, replicated under the uniform evidence law,22 s 131(1) of which provides that evidence is not to be adduced of: • a communication between persons in dispute, or between one or more persons in dispute and a third party, in connection with an attempt to negotiate a settlement of the dispute; or • a document (whether delivered or not) that has been prepared in connection with an attempt to negotiate a settlement of a dispute. Like the general law, the reference to an attempt to “negotiate” a settlement does not presuppose an attempt to negotiate a compromise in which some middle ground is found; rather, in its context the word “negotiate” simply means to arrange for or bring about a settlement.23 Unlike the application of uniform evidence law to legal professional privilege (see [11.25]), the fact that s 131 is confined to the adducing of evidence does not restrict its application because without prejudice privilege is concerned with the admissibility of evidence, not the production of documents. connected with an attempt to negotiate a settlement of the dispute because it gave no detail of those discussions and, importantly, did not involve its writer either making an admission on behalf of his client concerning the matter of the settlement discussion, or attributing any admission to the recipient of the letter). 19 Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [34] per Auld LJ. 20 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 291 per Dixon CJ, Webb, Kitto and Taylor JJ; Glengallan Investments Pty Ltd v Arthur Andersen [2002] 1 Qd R 233 at [28] per Williams JA. 21 Re Daintrey [1893] 2 QB 116 at 119–120 per Vaughan Williams J. 22 The tide of judicial opinion favours the view that s 131 replicates the general law: see, for example, Airtourer Co-operative Ltd v Millicer Aircraft Industries Pty Ltd [2004] FCA 948 at [36] per Beaumont J; CJ Redman Constructions Pty Ltd v Tarnap Pty Ltd [2006] NSWSC 173 at [7] per Campbell J; Korean Air Lines Co Ltd v Australian Competition and Consumer Commission (No 3) (2008) 247 ALR 781 at [72]–[74] per Jacobson J; Biovision v CGU Insurance Ltd [2010] VSC 589 at [38] per Judd J (“there is no reason why the scope of the provision should not have the same reach as the common law, and every reason to expect that it was so intended by the Parliament”). Cf Brown v Federal Commissioner of Taxation (2002) 119 FCR 269 at [99] per Sackville and Finn JJ. 23 Barrett Property Group Pty Ltd v Dennis Family Homes Pty Ltd (No 2) (2011) 193 FCR 479 at [34] per Bromberg J.

[12.20]

12 Privilege in Aid of Settlement

427

Concept of an “admission”

[12.20]

The judicial trend has endorsed a broad construction of an “admission”, in an effort to foster the purpose of the privilege. One judge has, for instance, affixed the privilege to “all conversations and mutual communings which go on with the purpose of trying to settle a dispute between parties”.24 This accords with the approach adopted in s 131 of the uniform evidence law, which applies the privilege to “communications”.25 The broad construction may allow a communication that does not involve an offer of settlement, or some form of admission (in the true sense), to be privileged if that communication is an “opening shot” in a negotiation for compromise.26 Otherwise “a party to a dispute could never safely make, by way of negotiation, an initial [settlement] offer in response to a claim”.27

A challenge is to distinguish a true admission from a plain assertion of rights. One approach is to blur this distinction, and so broaden the scope for the privilege, which underscores the following remarks by an English judge:28 In any negotiation to avoid future proceedings, an early step will be for each party to lay its cards on the table. The rights holder will say what rights he has and why he thinks they are being breached by the defendant. He will almost always say that he is prepared to protect and enforce his rights. In many cases those statements could be construed as a claim of right. Absent protection by the without prejudice rule, the addressee of these statements would be able to commence declaratory proceedings. So the very negotiations designed to avoid litigation will become the triggering event for their commencement. I can hardly think of something more calculated to deter a rights holder from entering into discussions for a compromise … For these reasons, I have come to the conclusion that the without prejudice rule covers not only admissions but assertions also … [So] the spread of the without prejudice umbrella should be wide enough to cover all statements made bona fide without prejudice by each party touching upon the strength or weakness of its own and its opponent’s case and any valuation, for whatever reason, it places on its or its opponent’s rights.

These remarks seem to countenance too extensive a scope for an “admission”. Other judges have found that, where the correspondence amounts not to an offer to negotiate but to an assertion of rights, especially if coupled with an intimation that proceedings would ensue lacking the recognition of those asserted rights, the

24 Davies & Davies v Nyland & O’Neil (1974) 10 SASR 76 at 105 per Zelling J. See also Somatra Ltd v Sinclair Roche & Temperley (a firm) [2000] 1 WLR 2453 at [22] per Clarke LJ. 25 Indeed, it has been suggested that the use of the word “communication” extends protection beyond that afforded by the common law: Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547 at [78], [79] per Beech-Jones J. 26 South Shropshire District Council v Amos [1986] 1 WLR 1271 at 1277 per Parker LJ; Cooper v van Heeren [2007] 3 NZLR 783 at [27]–[42] per Hammond and Ellen France JJ (endorsing the trial judge’s view that “it would be artificial, if not impossible to isolate out an admission from a statement which was preparatory, incidental or otherwise related to it”); Ofulue v Bossert [2009] 1 AC 990 at [12] per Lord Hope (“Far from being mechanistic, the rule is generous in its application”). 27 Barnetson v Framlington Group Ltd [2007] 1 WLR 2443 at [29] per Auld LJ. 28 Unilever plc v Procter & Gamble Co [1999] 1 WLR 1630 at 1638, 1639 per Laddie J.

428

Lawyers’ Professional Responsibility

[12.25]

privilege has no operation.29 At the same time, there is nothing to preclude, as a matter of principle in an appropriate case, a repetition or renewal of an offer – the latter being made on a without prejudice basis whereas an earlier one was not – from coming within the privilege.30 Nor is the statement of a party’s position in firm, categorical terms for negotiating purposes fatal to the privilege;31 after all, this represents a common negotiating strategy. Need for connection between the admission and the settlement of the dispute

[12.25]

As appears from the foregoing, not all statements made before the institution of proceedings or in pre-trial machinations necessarily qualify for the privilege; the statements must be connected with the settlement of the dispute. So, merely because a communication is headed “without prejudice” is not conclusive of the availability of the privilege,32 but only raises a presumption that it was intended to be a without prejudice communication, particularly if its author is a person experienced in litigation and its intended recipient is a lawyer.33 Nor is the absence of this heading conclusive against the privilege.34 The issue is one of substance, not simply of form, although prudent lawyers will head any negotiating correspondence “without prejudice”,35 avoiding other forms of terminology (such as “off the record” or “open”),36 which may convey other meanings.37 To ascertain whether or not a communication is bona fide intended to be part of or to promote 29 See, for example, Buckingham County Council v Moran [1989] 3 WLR 152; Collins Thomson v Clayton [2002] NSWSC 366; Bradford & Bingley plc v Rashid [2006] 1 WLR 2066 (where the House of Lords held that apparently open communications directed at discussing only the repayment of an admitted liability rather than negotiating a compromise of a disputed liability fell outside the privilege); Smith v Gould (Ruling No 1) [2012] VSC 210 at [21]–[24] per Dixon J. 30 Apotex Pty Ltd v Les Laboratoires Servier (No 5) (2011) 199 FCR 62 at [27], [37] per Flick J. 31 Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd [2016] EWHC 486 (Comm) at [65] per Flaux J. 32 South Shropshire District Council v Amos [1986] 1 WLR 1271 at 1277 per Parker LJ; Falland v Symbion Health Ltd (2010) 269 LSJS 189 at [10] per Bleby J (“the words ‘without prejudice’ in a communication cannot be used indiscriminately as a cloak over communications and documents where the privilege is not appropriate”); Smith v Gould (Ruling No 1) [2012] VSC 210 at [21]–[24] per Dixon J. See, for example, Smith v Gould [2012] VSC 210 (where letters to a bank written by a customer’s lawyers, marked “without prejudice”, offered no concession but sought to persuade the bank to accept a lesser sum to discharge the customer’s debt because the customer lacked the financial means to repay; coupled with the absence of evidence that the customer disputed the quantum of the debt or the bank’s entitlement to recover it, Dixon J held that the letters had been mislabelled, and fell outside the privilege: at [21]–[24]). 33 See, for example, Williams v Hull [2009] EWHC 2844 (Ch) (where the reply was also marked “without prejudice”, which according to Arnold J reinforced the presumption arising from the marking of the letter as “without prejudice”, “because it shows that the recipient of the Letter understood that communications had moved into the without prejudice realm and was content to proceed on that basis”: at [30]). 34 Rodgers v Rodgers (1964) 114 CLR 608 at 614 per McTiernan, Taylor and Owen JJ; Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299–1300 per Lord Griffiths. 35 Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299 per Lord Griffiths. 36 See, for example, Cheddar Valley Engineering Ltd v Chaddlewood Homes Ltd [1992] 1 WLR 820 at 825–826 per Jules Sher QC; Dixons Stores Group Ltd v Thames Television plc [1993] 1 All ER 349 at 351–352 per Drake J.

[12.25]

12 Privilege in Aid of Settlement

429

negotiations, the relevant inquiry in each case targets what, on an objective basis, the intention of the author was and how a reasonable recipient would, in all the relevant circumstances understand it.38 The leading Australian case is Field v Commissioner for Railways for New South Wales,39 involving a claim arising out of injury the appellant suffered upon alighting from the respondent’s train. The latter’s solicitors opened negotiations with a view to settlement in a letter marked “without prejudice” and sought that a medical specialist examine the appellant. Following further correspondence marked “without prejudice”, the appellant agreed to the respondent’s request. During the consultation with the specialist the appellant made an admission that the respondent subsequently sought to lead in evidence, to which the appellant objected. The issue was whether it was fairly incidental to the purposes of the negotiations, to which the medical examination was subsidiary or ancillary, that the appellant should communicate to the specialist the manner in which the accident was caused. Their Honours held that “[t]o answer this question in the affirmative stretches the notion of incidental protection very far”, reasoning that the admission in question “was not reasonably incidental to the negotiations” and “was made without any proper connection with any purpose connected with the settlement of the action”.40 Hence, the specialist’s evidence as to the appellant’s admission was admissible. The uniform evidence law likewise requires the communication to have been made “in connection with an attempt to negotiate a settlement of the dispute”. The approach at general law propounded in Field led Young J in GPI Leisure Corp Ltd (in liq) v Yuill41 to conclude that “connection” should mean “directly connected” rather than “in any way connected”. The requisite connection is not established simply because the statements are made at a “settlement conference” ordered or sanctioned by a court or tribunal.42 Whether or not the privilege applies depends on the facts of each case, specifically whether it can be inferred that one or both of the parties attended the conference

37 Venus, ““Without Prejudice”: Can Communications Lose their Privilege” (2003) 41 (Mar) LSJ 50 at 50–51. In Jadwan Pty Ltd v Porter (No 2) (2004) 13 Tas R 219 at [17]–[19] Blow J held that where, in a situation unconnected with settlement negotiations or discussions, a person makes a disclosure expressed to be “off the record”, this indicates no more than a desire for confidentiality and does not give rise to a legal obligation of confidentiality. As such, there were no grounds in public policy to make such a disclosure inadmissible. 38 Schering Corporation v Cipla Ltd [2005] FSR 25 at [14] per Laddie J; Best Buy Co Worldwide Sales Corporation [2011] Bus LR 1166 at [18] per Lord Neuberger MR; Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd [2016] EWHC 486 (Comm) at [23] per Flaux J. 39 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285. 40 Field v Commissioner for Railways for New South Wales (1957) 99 CLR 285 at 293 per Dixon CJ, Webb, Kitto and Taylor JJ. 41 GPI Leisure Corp Ltd (in liq) v Yuill (1997) 42 NSWLR 225 at 226. Cf Brown v Federal Commissioner of Taxation (2002) 119 FCR 269 at [99] per Sackville and Finn J. 42 Nodnara Pty Ltd v Deputy Commissioner of Taxation (1997) 140 FLR 336 at 340 per Young J.

430

Lawyers’ Professional Responsibility

[12.30]

with a view to settlement.43 “Settlement conferences” that are held as a matter of course in almost every apparently contested case do not carry the assumption that the parties attend with the intention of settling their disputes, or even in the hope of doing so; the parties may be approaching the conference as merely something required before the court or tribunal will grant a hearing. Scope of privilege against other persons

[12.30]

Where its requirements are met, the privilege protects “without prejudice” communications between parties to litigation from being admissible at the instance of other parties in the same litigation. In the leading case, Rush & Tompkins Ltd v Greater London Council,44 the House of Lords held that an admission by A in without prejudice discussions with B was inadmissible at the instance of another party to the litigation. Lord Griffiths, in an approach endorsed by several Australian judges,45 explained the rationale for this as follows:46 In multi-party litigation it is not an infrequent experience that one party takes up an unreasonably intransigent attitude that makes it extremely difficult to settle with him. In such circumstances it would … place a serious fetter on negotiations between other parties if they knew that everything that passed between them would ultimately have to be revealed to the one obdurate litigant. What would in fact happen would be that nothing would be put on paper but this in itself is a recipe for disaster in difficult negotiations which are far better spelt out with precision in writing.

The rationale for without prejudice privilege underscoring the above remarks translates to cases where the negotiations and the litigation arise out of the same subject or similar matter, and the negotiations and any settlement are of potential relevance to subsequent litigation between a party to the negotiation and a party involved in the litigation.47 The position under the uniform evidence law follows the general law, but goes further in extending the privilege to communications “between one or more persons in dispute and a third party”: s 131(1)(a). Third parties here can include persons such as doctors and accountants, who may be consulted in relation to settlement proposals or possibilities.48 So whenever persons are in dispute, evidence of their settlement negotiations cannot be adduced, even in litigation to 43 Compare Nodnara Pty Ltd v Deputy Commissioner of Taxation (1997) 140 FLR 336 (privilege denied) with Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69 (privilege upheld). 44 Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280. 45 See, for example, Heron Wood Pty Ltd v Ampol Petroleum (Vic) Pty Ltd [1999] VSC 83 at [19], [20] per Beach J; Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 3) (2009) 262 LSJS 265 at [46]–[56] per Anderson J (affd Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738). 46 Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1305. See also Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [34], [35] per Byrne J. Dicta suggesting that the privilege derives from implied agreement that the correspondence should be “without prejudice” (see, for example, Rabin v Mendoza & Co [1954] 1 WLR 271 at 273 per Denning LJ; Cutts v Head [1984] Ch 290 at 314 per Fox LJ) do not, therefore, fully explain the privilege, as there is no such agreement with other parties to the litigation. 47 Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738 at [84] per Duggan J; Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386 at [28], [37]–[39] per Hammerschlag J. 48 Seven Network Ltd v News Ltd (2006) 151 FCR 450 at [42] per Graham J.

[12.35]

12 Privilege in Aid of Settlement

431

which someone else is a party, or indeed to which neither of them is a party.49 Also, for the purpose of clarity, s 131(5)(c) provides that a reference to a communication made by a person in dispute includes a reference to a communication made by an employee or agent of such a person. The same would, as a matter of logic, be so at general law. The aforesaid does not dictate that without prejudice offers can never be disclosed to non-parties; in practice, parties may need to disclose them to lenders and other advisers. At the same time, nor does this mean that the offers are disclosable to the world at large; they are communicated for a limited purpose and so a without prejudice offer exhibits the indicia of confidential information at general law.50 The uniform evidence law, to this end, envisages the admissibility of without prejudice communications expressed not to be treated as confidential via s 131(2)(d), as does s 67C(2)(d) of the Evidence Act 1929 (SA).

EXCEPTIONS TO THE PRIVILEGE [12.35]

Courts have recognised exceptions to the without prejudice privilege, whether by reference to public policy or the parties’ agreement, thereby allowing the admissibility of the communications in question.51 From a public policy perspective, occasions exist where the public interest in promoting settlements is outweighed by the public interest in full discovery between litigants. As far as agreement is concerned, the law does not impede the expression of private will. It appears, in any case, that courts are slow to lift the privilege umbrella unless the case for doing so is plain.52 The general law exceptions to the privilege are, other than as noted below, largely replicated in s 131(2) of the uniform evidence law. These also inform the content of s 67C(2) of the Evidence Act 1929 (SA).

49 First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266 at [28] per Campbell J. 50 Volpes v Permanent Custodians Ltd [2005] NSWSC 111 at [8] per Windeyer J. 51 These exceptions were conveniently listed by Robert Walker LJ in Unilever plc v Procter & Gamble Co [2000] 1 WLR 2436 at 2444–5. See further Desiatnik, Without Prejudice Privilege in Australia (LexisNexis Butterworths, 2010), Ch 6. 52 Tomlin v Standard Telephones & Cables Ltd [1969] 1 WLR 1378 at 1385 per Ormrod J; Ofulue v Bossert [2009] 1 AC 990 at [2] per Lord Hope, at [57] per Lord Walker (“As a matter of principle I would not restrict the without prejudice rule unless justice clearly demands it”), at [98] per Lord Neuberger (who was disinclined to create further exceptions to the rule for fear of “hampering the freedom parties should feel when entering into settlement negotiations”); Alstom Power Ltd v Yokogawa Australia Pty Ltd (No 3) (2009) 262 LSJS 265 at [91]–[93] per Anderson J (noting, and endorsing, the majority view in Ofulue that “the public policy of protecting without prejudice negotiations should be preferred to developing exceptions to the rule”: at [92]) (affd Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738); Kalenik v Apostolidis (No 3) [2009] VSC 475 at [48] per Hargrave J (“Without prejudice privilege should not be cast aside by a sidewind”); Alan Ramsay Sales & Marketing Ltd v Typhoo Tea Ltd [2016] EWHC 486 (Comm) at [32] per Flaux J. Cf Mercantile Mutual Custodians Pty Ltd v Village/Nine Network Restaurants & Bars Pty Ltd [2001] 1 Qd R 276 at [13] per Pincus JA (who described the privilege as “a sensitive bird which when abused takes flight”). See further Aitken, “‘Without Prejudice’ Revisited” (2011) 34 Aust Bar Rev 296.

432

Lawyers’ Professional Responsibility

[12.40]

Communications resulting in a concluded compromise agreement

[12.40]

The acceptance of a “without prejudice” offer creates a binding legal obligation in the nature of a contract. It follows that, unless the without prejudice communications that resulted in that contract can be admitted, the ability to challenge its validity – say, on grounds such as misrepresentation, fraud or undue influence, or because of misleading or deceptive conduct – is undermined.53 The same can be said of attempts to determine whether or not the contract actually represents a settlement and, if so, the meaning of its terms.54 It follows that without prejudice correspondence may be admissible in proceedings for the rectification of the settlement agreement,55 and to this end the House of Lords has recently perceived no reason why “the ordinary principles governing the interpretation of a settlement agreement should be any different regardless of whether the negotiations which led to it were without prejudice”.56 While the court may admit without prejudice communications to resolve these types of issues, the privilege otherwise remains.57 The correspondence is not adduced in order to evidence an admission made by a party in a without prejudice communication, but to ascertain whether a legally enforceable agreement, or what agreement, has been made between the parties. Equivalent provision is made in s 131(2)(e) and (f) of the uniform evidence law, and in s 67C(2)(e) of the Evidence Act 1929 (SA). Communications that cloak reprehensible behaviour

[12.45]

Where the without prejudice nature of discussions is used as a cover for reprehensible behaviour of one or both of the parties, public policy denies the privilege to those discussions. This mirrors the public policy underscoring the so-called “fraud exception” to legal professional privilege (as to which see [11.55]–[11.65]). Cases involving allegations of perjury and illegitimate threats in without prejudice correspondence are those most commonly argued in this context.

Allegations of perjury in without prejudice correspondence

[12.50]

A typical scenario in the case law is where the privilege would enable the exclusion of evidence that would cloak perjury. The courts have, however, been reticent to apply the exception except in the clearest cases of abuse for fear of eroding the privilege. The judicial approach is illustrated in Savings & Investment

53 Pihiga Pty Ltd v Roche (2011) 278 ALR 209 at [96]–[106] per Lander J. See, for example, Underwood v Cox (1912) 26 OLR 303; Broadview Investments Co Pty Ltd v Corporate Interiors (New Zealand) Ltd (unreported, HC(NZ), Neazor J, 12 August 1998). 54 Admiral Management Services Ltd v Para-Protect Europe Ltd [2002] 1 WLR 2722 at [71] per Stanley Burnton J. 55 Pearlman v National Life Assurance Co of Canada (1917) 39 OLR 141; Butler v Countrywide Finance Ltd (1992) 5 PRNZ 447; Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2011] 1 AC 662 at [33]–[35] per Lord Clarke. 56 Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2011] 1 AC 662 at [40] per Lord Clarke. 57 First Capital Partners Pty Ltd v Sylvatech Ltd (2004) 186 FLR 266 at [35], [36] per Campbell J.

[12.55]

12 Privilege in Aid of Settlement

433

Bank Ltd (in liq) v Fincken.58 Rix LJ refused to admit evidence from a without prejudice conference of an admission by the defendant as to assets he had not disclosed in an earlier settlement deed, even though it pointed to a lie in the defendant’s affidavit evidence. His Lordship’s reasoning appears from the following extract:59 A litigant understands in general that he may make admissions for the purpose of settling litigation under the protection of privilege if the negotiations fail. He may go into such a meeting without legal advisors, indeed very often such meetings have better prospects of success if the principals to the dispute meet alone. If the case against him is one of fraud or dishonesty, or if he has made an incautious affidavit in the past whatever be the nature of the case against him, he moves into a situation of peril at the point at which he is most candid. There may be no one present to warn him that the privilege with which the meeting began is in the process of being lost, or of the danger of self-incrimination. In such circumstances cases of fraud or dishonesty become almost impossible to settle … Alternatively, the less scrupulous who make no admissions are better served by the very rules which are designed to encourage frank exchanges than are the more candid. Moreover, the well-advised litigant will be told that if he makes his admission in a hypothetical form, contingent upon settlement, then … the privilege cannot be lost. This is a recipe for legalism and has the danger of turning the without prejudice meeting into a potential trap and one which may moreover be exploited by litigants who do not enter into such discussions altogether in good faith …

Rix LJ was also concerned that inquiring into perjury would mean that the serious and criminal charge of perjury would fall to be debated on an interlocutory outing, or even at trial, with the potential of derailing the trial by the exposure of without prejudice material to the trial judge.60 Other English judges have likewise discouraged satellite litigation for the purpose of determining whether a litigant made without prejudice statements potentially indicative of earlier perjury; to admit evidence because it allegedly betrays perjury would discourage the making of frank admissions in the first place for the purposes of settling the matter.61 Allegations of illegitimate threats in without prejudice correspondence

[12.55]

Not every threat in negotiations justifies the abrogation of the privilege, for it is inherent in any negotiations that a party may threaten to enforce her or his rights should a compromise not be achieved, and with this in mind may bring to the other party’s attention the consequences of not compromising.62 The concern here relates to threats in the nature of blackmail or of other illegal behaviour, or threats made in an otherwise deliberately damaging way. For instance, in Van Der Sluis v Health Waikato Ltd,63 a case that arguably represents the high-water mark, the cloak of privilege was lost because the respondent threatened to commence a

58 Savings & Investment Bank Ltd (in liq) v Fincken [2004] 1 WLR 667. 59 Savings & Investment Bank Ltd (in liq) v Fincken [2004] 1 WLR 667 at [59]. 60 Savings & Investment Bank Ltd (in liq) v Fincken [2004] 1 WLR 667 at [58]. 61 See, for example, Berry Trade Ltd v Moussavi [2003] EWCA Civ 715 at [53] per Peter Gibson LJ. 62 Unilever plc v Procter & Gamble Co [1999] 1 WLR 1630 at 1642 per Laddie J. 63 Van Der Sluis v Health Waikato Ltd [1995] 1 ERNZ 478 (see Mahoney [1997] NZ Law Rev 57 at 94). See also Re Connor (Debtors) [1996] 1 NZLR 244 at 247 per Kennedy-Grant M (one party to a dispute

434

Lawyers’ Professional Responsibility

[12.60]

separate disciplinary proceeding beyond the proceeding involved in the applicant’s personal grievance, should that grievance proceed to an unsuccessful trial result. Position under the uniform evidence law

[12.60]

The issue has been addressed in more expansive terms by the uniform evidence law via s 131(2)(g), (j) and (k), which provide that the privilege does not apply if: • evidence that has been adduced in the proceeding, or an inference from evidence that has been adduced therein, is likely to mislead the court unless evidence of the communication or document is adduced to contradict or to qualify that evidence; • the communication was made, or the document was prepared, in furtherance of the commission of a fraud or an offence or the commission of an act that renders a person liable to a civil penalty; or • one of the persons in dispute, or an employee or agentthereof, knew or ought reasonably to have known that the communication was made, or the document was prepared, in furtherance of a deliberate abuse of a power. Similar, although not identical, provision is found in s 67C(2)(h) of the Evidence Act 1929 (SA).

Estoppel

[12.65]

Even though without prejudice discussions produce no concluded agreement, a clear statement by one party on which the other party is intended to act, and does in fact act, can be admissible as giving rise to an estoppel.64 The uniform evidence law, being not intended as a code, does not deny scope for an estoppel. As with the operation of estoppel in other contexts, however, merely alleging estoppel is not sufficient to override the privilege,65 and courts are not overly keen to find an estoppel. After all, what is said in negotiations may often be no more than a negotiating stance, and not reasonably to be relied upon for the purposes of an estoppel.66 Striking out proceedings for want of prosecution

[12.70]

Without prejudice communications can be admitted in relation to applications to strike out proceedings for want of prosecution. Where delay is in issue, the court may admit without prejudice communications for the purpose of cannot force the other party to it to accept an offer that might otherwise be unjustifiable by coupling the offer with notice of suspension of payment of debts or of intention to suspend such payment); Bradbury v Westpac Banking Corporation [2009] 3 NZLR 400 at [83]–[85] per Baragwanath J.

64 Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1997] FSR 178 at 191 per Neuberger J (adding that although “contract and estoppel are quite separate concepts, it appears to me logical and consistent that, if ‘without prejudice’ correspondence can be looked at to see if it gives rise to a contract, then such correspondence can also be looked at to see if it gives rise to an estoppel”) (not disapproved on appeal: Hodgkinson & Corby Ltd v Wards Mobility Services Ltd [1998] FSR 530). 65 Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2010] 1 WLR 1803 at [28]–[31] per Longmore LJ (revd but not on this specific point: Oceanbulk Shipping & Trading SA v TMT Asia Ltd [2011] 1 AC 662). 66 See, for example, AAG Investments Ltd v BAA Airports Ltd [2010] EWHC 2844 (Comm) at [79] per Walker J.

[12.80]

12 Privilege in Aid of Settlement

435

showing that they have been made, so as to explain that delay.67 Admission of without prejudice communications here does not undermine the purpose of the privilege, as the admission does not go to the merits of the action. The absence of equivalent provision in the uniform evidence legislation makes little difference, as the legislation is not intended to be a code. Issue as to mitigation of loss

[12.75]

Where an issue arises as to whether a claimant has acted reasonably to mitigate her or his loss, that issue can be treated as one unconnected with the truth or falsity of anything stated in without prejudice negotiations, and so falls outside the public policy protecting such communications.

Waiver of privilege

[12.80]

Litigants may (agree to) waive otherwise available without prejudice privilege.68 Importantly, as the privilege creates a situation of mutuality that enables all parties to the dispute to take advantage of its protection,69 its waiver requires the consent of each party.70 Consent can be inferred or imputed where there has been a disclosure inconsistent with the privilege. In principle, where a party deploys material to support its case on the merits – that would otherwise be inadmissible as part of without prejudice communications – the other party should be entitled to refer to those communications to advance its own case on the merits.71 The test for waiver is arguably the fairness test applicable to implied waiver cases of legal professional privilege (see [11.245]), as explained by Clarke LJ in Somatra Ltd v Sinclair Roche & Temperley (a firm):72 I recognise that in those cases the court was considering waiver of [legal professional] privilege and not the use of without prejudice communications, but I do not think that the principle can be any different in such a case. Fairness requires that where a party deploys privileged or without prejudice material as part of its case at a trial the other party should be entitled, in the one case, to see the whole of the privileged document and, in the other case, to rely upon the other without prejudice material which came into existence as part 67 Walker v Wilsher (1889) 23 QBD 335 at 338 per Lindley LJ; Hoefler v Tomlinson (1995) 60 FCR 452 (FC). 68 Avonwick Holdings Ltd v Webinvest Ltd [2014] EWCA Civ 1436 at [18] per Lewison LJ, with whom Sharp and Burnett LJJ concurred (“[i]f A and B agree for valuable consideration that their communications will not be used in civil proceedings in court … it [is] difficult to see why, as a matter of principle, the court should not uphold their agreement”). See further Desiatnik, Without Prejudice Privilege in Australia (LexisNexis Butterworths, 2010), Ch 7. 69 Cutts v Head [1984] Ch 290 at 314 per Fox LJ. 70 Walker v Wilsher (1889) 23 QBD 335 at 337 per Lindley LJ; Re Turf Enterprises Pty Ltd [1975] Qd R 266 at 267 per Dunn J; Quad Consulting v Bleakey (1991) 27 FCR 86 at 93 per Hill J. 71 Somatra Ltd v Sinclair Roche & Temperley (a firm) [2000] 1 WLR 2453 at [36] per Clarke LJ. 72 Somatra Ltd v Sinclair Roche & Temperley (a firm) [2000] 1 WLR 2453 at [30]. See also Yokogawa Australia Pty Ltd v Alstom Power Ltd (2009) 262 ALR 738 at [107] per Duggan J, with whom Sulan J concurred (“I can see no reason why most of the general considerations relating to waiver of legal professional privilege should not apply also to without prejudice privilege”). Cf at [140] per Kourakis J (who preferred to reserve his position on the question of the capacity of a party to unilaterally waive the settlement privilege); CMA Assets Pty Ltd v John Holland Pty Ltd (No 4) [2013] WASC 77 at [8]–[12] per Allanson J; Dowling v Ultraceuticals Pty Ltd [2016] NSWSC 386 at [52] per Hammerschlag J.

436

Lawyers’ Professional Responsibility

[12.85]

of the same without prejudice process. The question here is whether the same is true where the without prejudice material is deployed, not at the trial, but at an interlocutory application.

The issue has arisen regarding claims for discovery.73 In Trade Practices Commission v Arnotts Ltd74 production of “without prejudice” correspondence in response to such a claim was held to amount to a waiver regarding the subsequent admissibility of that correspondence. Fairness, according to Beaumont J, dictated that the waiver at the anterior stage of the proceedings should be treated as extending to all subsequent stages of the litigation. His Honour considered that to limit the waiver to the discovery process would lead to an artificial situation in which the plaintiff lawfully obtained the document on discovery but could not use it in evidence, which would generate an unfair result.75 Notions of consent (waiver) are expressed in s 131(2)(a) and (b) of the uniform evidence law, which envisage the admissibility of without prejudice communications where: • the disputants consent76 to the evidence being adduced in the proceeding concerned; or • the substance of the evidence has been disclosed with the express or implied consent of all the disputants. Similar provision is made in s 67C(2)(a) and (b) of the Evidence Act 1929 (SA), although para (c) adds an equivalent of the common law fairness test where the substance of the evidence has been partly disclosed with the express or implied consent of the parties.77 Welfare of the child in family law cases

[12.85]

In family law cases involving children, there is authority that the court may admit evidence that would otherwise be without prejudice if it considers that the welfare of the child is served in so doing.78 This exception is informed by the statutory direction that the Family Court take into account the interests of the child as the paramount consideration in, inter alia, litigation involving parenting, location and recovery orders.79 The uniform evidence law, in providing that without prejudice privilege does not apply if making the communication, or 73 See Rabin v Mendoza & Co [1954] 1 WLR 271 at 273–274 per Denning LJ, at 274 per Romer LJ. 74 Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69. 75 Trade Practices Commission v Arnotts Ltd (1989) 88 ALR 69 at 75. 76 See Chapman v Allan (1999) 74 SASR 274 at [90] per Doyle CJ and Lander J (who interpreted the South Australian equivalent provision, s 67C(2)(a), as requiring “mutual consent” at the time of the tender of the relevant document). 77 As to the interpretation of Evidence Act 1929 (SA), s 67C(2)(c) see Mair v Mazzitti (No 1) (2003) 231 LSJS 186 at 190 per Judge Lunn. 78 Hutchings v Clarke (1993) 112 FLR 450 at 453–455 (FC(Fam Ct)). Cf Marriage of Day (1994) 115 FLR 172 at 173–174 per Lindemayer J. 79 Family Law Act 1975 (Cth), ss 65AA, 67L, 67V.

[12.100]

12 Privilege in Aid of Settlement

437

preparing the document, affects a right of a person (s 131(2)(i); in South Australia, the rights of a party to the dispute),80 could encompass such an approach. Offers made “without prejudice as to costs” At general law

[12.90]

In accordance with general principle, without prejudice communications cannot, as a general rule, be considered in determining costs.81 However, if a letter is written without prejudice containing an offer of settlement, but clearly asserts that the offeror seeks to rely on the letter on the question of costs, that letter (known as a “Calderbank letter”)82 may be admitted on the question of costs.83 The court may take into account the offer in exercising its costs discretion if the offer is rejected and the matter goes to trial. If the ultimate result for the offeree is less favourable than the without prejudice offer, the court may order the offeree to pay the costs of the matter from the date of the offer even though he or she has proven successful at trial. A letter so phrased therefore serves to promote settlement of disputes because an offeree who has something to lose in the event of a court awarding less than the offer may be more willing to accept a without prejudice offer.84 Under the uniform evidence legislation

[12.95]

The uniform evidence law, via s 131(2)(h), states that the without prejudice privilege does not apply if “the communication or document is relevant to determining liability for costs”. So, under statute, any without prejudice communication is admissible on costs whether or not it is expressed as “without prejudice except as to costs”.85

Criminal cases

[12.100] That the policy considerations that inform without prejudice privilege (see [12.05]) are absent in criminal cases means that the privilege has no application in criminal proceedings. The uniform evidence law, via s 131(5)(b), and s 67C(1) of the Evidence Act 1929 (SA), reflect the general law in this respect. The exception, however, is confined to discussions about the resolution of criminal proceedings, 80 Evidence Act 1929 (SA), s 67C(2)(g). 81 Walker v Wilsher (1889) 23 QBD 335 at 339 per Bowen LJ; Gorman v Matthews (1897) 13 WN (NSW) 224; Reed Executive plc v Reed Business Information Ltd [2004] 1 WLR 3026 at [21] per Jacob LJ; Rayner v Pethick (2006) 243 LSJS 471 at [32]–[36] per Bleby J. 82 After the English Court of Appeal case in which it was first propounded: Calderbank v Calderbank [1976] Fam 93. 83 Cutts v Head [1984] Ch 290 at 305 per Oliver LJ; AMEV Finance Ltd v Artes Studios Thoroughbreds Pty Ltd (1988) 13 NSWLR 486 at 487 per Hodsgon J; Watt v Watt (1988) 12 Fam LR 589 at 604 per Powell J. See generally Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [13.55]–[13.86]. 84 Cutts v Head [1984] Ch 290 at 315 per Fox LJ. 85 Bruinsma v Menczer (1995) 40 NSWLR 716 at 719–720 per Santow J; Marks v GIO Australia Holdings Ltd (No 2) (1996) 66 FCR 128 at 135 per Einfeld J; Silver Fox Co Pty Ltd v Lenard’s Pty Ltd (No 3) (2004) 214 ALR 621 at [36], [37] per Mansfield J. Cf Tony Azzi (Automobiles) Pty Ltd v Volvo Car Australia Pty Ltd (2007) 71 NSWLR 140 at [12] per Brereton J.

438

Lawyers’ Professional Responsibility

[12.100]

and does not encompass wider disputes regarding which criminal proceedings were a contemplated or even likely outcome.86

86 Liu v Fairfax Media Publications Pty Ltd (2012) 84 NSWLR 547 at [107] per Beech-Jones J.

Chapter 13

Employed (“In-house”) Lawyers [13.05] BACKGROUND ................................................................................................................. 439 [13.10] ETHICAL ISSUES SPECIFIC TO EMPLOYED LAWYERS ........................................ 440 [13.15] Impact on liability of client ........................................................................................ 441 [13.20] Impact on termination of retainer ............................................................................. 441 [13.25] Impact on pressure to behave unethically .............................................................. 441 [13.30] Impact on non-legal role(s) ........................................................................................ 443 [13.35] Impact on professional independence ...................................................................... 444 [13.40] Impact on claims to legal professional privilege ................................................... 444 [13.60] Importance of identifying the client ......................................................................... 449 [13.65] Impact on acting for clients other than the employer .......................................... 451 [13.70] GOVERNMENT LAWYERS ............................................................................................ 452 [13.70] Application of principles of professional responsibility ....................................... 452 [13.75] Specific responsibilities as government lawyers .................................................... 453 [13.125] Responsibilities as public servants ......................................................................... 463

BACKGROUND [13.05]

The increasing prevalence of employed (sometimes termed “in-house”) lawyers in the Australian legal environment justifies addressing ethical issues pertaining to these lawyers in a separate chapter. This trend appears to be driven by entities, wishing to have ready access to legal advice – to which strict duties of confidentiality apply and the mantle of legal professional privilege may attach – from a person committed to the employer’s cause and whose fees (via a salary) are determined. The role and expectations of in-house counsel have evolved, and indeed expanded, over time, beyond simply providing legal advice.1 An in-house lawyer may be a member of the senior executive team of the client-employer, and a legal intermediary between the employer and its employees, as well as an agent of the employer in dealings with third parties (including with outside lawyers). He or she may also assume the role of certifier for regulatory purposes.2

Status as an employed lawyer, whether in private enterprise or in government, in no way diminishes or alters professional responsibility to the client, the court or the 1 See Liggio, “The Changing Role of Corporate Counsel” (1997) 46 Emory LJ 1201 at 1201–7; Liggio, “A Look at the Role of Corporate Counsel: Back to the Future – or is it the Past?” (2002) 44 Ariz L Rev 621; Simmons and Dinnage, “Innkeepers: A Unifying Theory of the In-House Counsel Role” (2011) 41 Seton Hall L Rev 77; Lipson, Engel and Crespo, “Who’s in the House? The Changing Nature and Role of In-House and General Counsel” [2012] Wis L Rev 237. 2 See DeMott, “The Discrete Roles of General Counsel” (2005) 74 Fordham L Rev 955; Webb, “Ethics and the Role of Corporate Counsel: Gatekeeper, Whistleblower or Friend?” (2005) 23 C&SLJ 483.

440

Lawyers’ Professional Responsibility

[13.10]

public.3 A leading judicial statement is that of Lord Denning MR in Alfred Crompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2):4 Many barristers and solicitors are employed as legal advisers, whole time, by a single employer. Sometimes the employer is a great commercial concern. At other times it is a government department or a local authority. It may even be the government itself, like the Treasury Solicitor and his staff. In every case these legal advisers do legal work for their employer and for no one else. They are paid, not by fees for each piece of work, but by a fixed annual salary. They are, no doubt, servants or agents of the employer … They are regarded by the law as in every respect in the same position as those who practise on their own account. The only difference is that they act for one client only, and not for several clients. They must uphold the same standards of honour and etiquette. They are subject to the same duties to their client and to the court. They must respect the same confidence. They and their clients have the same privileges.

Importantly, unless statute otherwise provides, in the event of conflict between a duty to an employer and a duty as a lawyer, the latter must prevail. The point was made in the Law Council of Australia’s now superseded Model Rules of Professional Conduct and Practice as follows:5 A practitioner, who is employed by a corporation (not being a solicitor corporation) or by any other person who is not a practitioner, must not, despite any contrary direction from the practitioner’s employer, act as a practitioner in the performance of any legal work or service in breach of any of the provisions of the (relevant legislation applicable to practitioners) or these rules.

Employed lawyers are subject to the same general law duties of performance in contract and tort (and statute, where applicable) as apply to other lawyers: see Ch 5. Also, legal professional privilege applies to advice supplied by employed lawyers, provided that in giving the advice they act in their capacity as legal advisers: see [11.145], [13.40]–[13.55].

ETHICAL ISSUES SPECIFIC TO EMPLOYED LAWYERS [13.10]

Notwithstanding the common ethical regime applicable to all lawyers, noted at [13.05], some aspects of an employed lawyer’s role raise ethical issues that are either peculiar to the employed lawyer, or at least are likely to arise with greater frequency in that context.6 The main issues, discussed below, stem largely from the lawyer’s status as an employee. That client complaints are rarely lodged against employed lawyers7 – much of their work is thus hidden from the scrutiny of

3 Re Bannister (1975) 5 ACTR 100 at 111 per Blackburn J. 4 Alfred Crompton Amusement Machines Ltd v Customs & Excise Commissioners (No 2) [1972] 2 QB 102 at 129 (emphasis supplied). See also Australian Securities and Investments Commission v Rich [2004] NSWSC 1089 at [43] per Austin J; Zentai v O’Connor (No 2) (2010) 183 FCR 180 at [109]–[122] per McKerracher J. 5 Law Council of Australia, Model Rules of Professional Conduct and Practice, r 5, which translate at present only in the Northern Territory: NT, r 4. See also WA, r 21(1) (“A practitioner who is employed by a person other than by a law practice must comply with these rules as modified by this rule”). 6 See Evers and Harris, “The Duties of In-house Counsel: The Bold, the Bright and the Blurred?” (2009) 37 ABLR 267. 7 Complaints against lawyers for alleged unprofessional conduct frequently originate from disgruntled clients. But in the employed lawyer scenario, the client is unlikely to lodge such a complaint because

[13.25]

13 Employed (“In-house”) Lawyers

441

regulators – does not deny the seriousness of these ethical issues. In recognition of this, the Australian Association of Corporate Counsel publishes an Ethics for In-House Counsel Handbook8 and the New South Wales Law Society issued a publication A Guide to Ethical Issues for Government Lawyers.9 Impact on liability of client

[13.15]

Because of an employed lawyer’s status as an employee, the employer is vicariously liable for the lawyer’s defaults in the course of the employment. Outside the employment context, clients are liable for their lawyers’ defaults only via the law of agency: see [3.80]. Liability in agency, unlike vicarious liability, is direct (the acts or omissions of the agent are treated as those of the principal) rather than vicarious.10

Impact on termination of retainer

[13.20]

An employed lawyer, due to status as an employee, enjoys the protections the law gives to employees, particularly so far as termination of employment is concerned. An employer, unlike the ordinary client who retains a lawyer (see [3.200]), cannot dismiss an employee at will.

Impact on pressure to behave unethically

[13.25]

Acting for only one client, upon whom an employed lawyer’s livelihood depends, may present serious ethical challenges.11 Where, for example, the employer expects the lawyer to behave unethically, or for the benefit of management at the expense of the workers or of the entity as a whole, any refusal by the lawyer to act can be precarious to continuing employment with the employer, or future employment elsewhere. As observed by a commentator:12 The organisation is their only client, and if they cannot act they are unemployed – they have to resign.13 Thus there is more pressure on corporate lawyers than on private lawyers to ignore ethical standards. Many in-house lawyers are part of the management the lawyer is its employee, and so there are other avenues available to discipline the lawyer. Also, an employer is hardly likely to lodge a complaint recording an employee’s costs, as these have been negotiated between employer and employee in the form of salary (and bonuses). In other contexts, moreover, it may be the client who is pressuring the employed lawyer to behave unethically. It follows that complaints against employed lawyers are more likely to stem from third parties with whom those lawyers interact in the course of their duties as employees. See Cohen, “The Regulator’s Perspective of the Role and Duties of In-house Counsel” (Paper presented at A Practical Guide for In-house Counsel Conference, 26–27 May 2003, LexisNexis Butterworths, Sydney), pp 7–8. 8 Available to members at http://www.acla.acc.com. 9 Now in its third edition, 2015, available at http://www.lawsociety.com.au. 10 See Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [22.3]–[22.6]. 11 This statement draws support from empirical evidence in the United Kingdom: see Moorehead and Vaughan, Legal Risk: Definition, Management and Ethics (University College London, Centre for Ethics and Law, 2015) (stemming from interviews with senior in-house lawyers and senior compliance staff at large corporate entities). 12 Ross, “Corporate Lawyer Whistleblowing” (1998) 72 (Sept) LIJ 27 at 28 (footnote supplied). 13 Ordinarily a lawyer whose client requires the lawyer to behave illegally or unethically must terminate the retainer: see [19.10].

442

Lawyers’ Professional Responsibility

[13.25]

team, with intimate knowledge of corporate policies and decisions. As members of a team there is tremendous peer pressure on them to toe the line and to maintain the secrecy of the corporate activities. By contrast, if the zealous management is pursuing illegal policies, and the lawyer approves of these activities, he or she can not only be held criminally liable but will also face professional disciplinary sanctions.

That an employed lawyer, if for no other reason than physical proximity to the client, will have access to informal sources of information concerning the client – information ordinarily unavailable to outside lawyers – exacerbates the likelihood of ethical dilemmas. The point has been explained as follows:14 [A] lawyer in independent practice is sheltered from the informal, back-channel information that flows around the company water cooler.15 Instead, engagement of an independent law firm is necessarily predicated on a distillation of the facts about the matter in question. This is so even when the outside lawyer is given all of the documents and access to all of the company’s employees. Back-channel information simply cannot be recreated. And there are times, I have been told, when outside counsel may be retained on the basis of selected facts precisely to accommodate a response that provides a desired outside opinion … The lawyers inside the company law department are not so sheltered. In this respect, paradoxically, lawyers in a corporate law department confront situations that resemble the ethical challenges faced by the criminal defense lawyer.

Similar challenges may face government lawyers who, like other employed lawyers, lack the luxury to refuse to act for a client. Faced with an irreconcilable conflict between her or his instructions and what is proper professional conduct, the lawyer’s only alternative is to resign from office. The consequences of conflict are accordingly more serious for employed lawyers than lawyers in private practice: potentially sacrificing a career as opposed to losing a client.16 This had prompted calls for some protection for employed lawyer whistleblowers, at least in the contract of employment (say, a provision that it is not grounds for dismissal for a lawyer to refuse to adhere to a corporate policy that leads to a violation of the professional rules) or ideally by statute.17 Some statutory protection exists for government lawyer whistleblowers under “public interest disclosure” legislation that allows disclosure of otherwise confidential information, and protects from civil, criminal and professional disciplinary liability that may otherwise ensue.18

14 Hazard, “Ethical Dilemmas of Corporate Counsel” (1997) 46 Emory LJ 1011 at 1019 (footnote supplied). 15 The term “water cooler” is used to refer to the places and occasions for informal information exchange that occurs in all employment settings. 16 Curtis and Kolts, “The Role of the Government Lawyer in the Protection of Citizens’ Rights” (1975) 49 ALJ 335 at 338. 17 Ross, “Corporate Lawyer Whistleblowing” (1998) 72 (Sept) LIJ 27 at 28. 18 See generally Public Interest Disclosure Act 2012 (Cth); Public Interest Disclosure Act 2012 (ACT); Public Interest Disclosures Act 1994 (NSW); Public Interest Disclosure Act 2008 (NT); Public Interest Disclosure Act 2010 (Qld); Whistleblowers Protection Act 1993 (SA); Public Interest Disclosures Act 2002 (Tas); Protected Disclosure Act 2012 (Vic); Public Interest Disclosure Act 2003 (WA).

[13.30]

13 Employed (“In-house”) Lawyers

443

Impact on non-legal role(s)

[13.30]

A lawyer external to the entity is ordinarily retained to provide only legal advice to the entity. An entity that seeks advice of a different kind – say, accounting or strategic advice – will most likely retain other professionals for this purpose. An employed lawyer, conversely, may be expected to act and advise other than in a legal role, which in turn is capable of raising various ethical difficulties (as well as liability under statute as an “officer” of the company).19 As noted at [11.130], it may serve to deny the employer’s claim to legal professional privilege over advice supplied in a non-lawyer capacity. The difficulty of compartmentalising an employed lawyer’s role into legal and non-legal components also explains why it is inadvisable for employed lawyers to become directors of their employer. As urged by an American commentator:20 Agreeing to serve on a corporate client’s board of directors is an invitation to disaster. A lawyer who becomes a board member will never be just another board member, especially when the lawyer is the corporation’s attorney. He or she will always be a lawyer, and will always be regarded that way by other board members and other constituents … Whatever the lawyer says as a board member will be taken as something more – as legal advice from the corporation’s attorney.

Australian professional bodies have not addressed the point. Guidance derives from an American Bar Association ethics opinion,21 which, though not prohibiting the practice, warns of its dangers, due chiefly from a loss of independence. The opinion, to this end, requires in-house counsel, before assuming a non-legal role, to have “full, free and frank discussions” with the entity board and executives to ensure that they clearly “understand the ethical and practical pitfalls that lie along the way”, including that communications in a directorial capacity may not attract legal professional privilege (see [13.45]). Certainly, attempts to compartmentalise the employed lawyer’s dual (or multiple) roles as a means of avoiding an ethical responsibility are unlikely to succeed. An employed lawyer who maintains that her or his contact with an opposing client otherwise in breach of the “no-contact” rule (see [21.235]) was made in a non-legal capacity, for instance, bears an almost insurmountable onus. This is because any information an employed lawyer secures in the course of allegedly acting in a non-legal capacity – say, by contacting the opposing client directly – he or she is obliged to use for the benefit of the client in the lawyer’s legal capacity. 19 See Shafron v Australian Securities and Investments Commission (2012) 247 CLR 465 (where the appellant, who was general counsel and company secretary, was held to have contravened s 180(1) of the Corporations Act 2001 (Cth) by failing to discharge his duties as an “officer” of the company; the court rejected the appellant’s contention that the conduct in issue was undertaken in his capacity as general counsel, instead finding that his role was a composite one incapable of division into distinct capacities). 20 See Burman, “Ethical Considerations when Representing Organisations” (2003) 3 Wyoming L Rev 581 at 644. See also “It’s Risky on Board” (2011) 85 (Nov) LIJ 75. Cf Straub, “ABA Task Force Misses the Mark: Attorneys Should not be Discouraged from Serving on their Corporate Clients’ Board of Directors” (2000) 25 Del J Corp L 261. 21 ABA, Lawyer Serving as Director of Client Corporation, Op 98-410 (1998). See further Smith, “Sitting vs Not Sitting on Your Client’s Board of Directors” (2002) 15 Geo J Legal Ethics 597.

444

Lawyers’ Professional Responsibility

[13.35]

Impact on professional independence

[13.35]

There is no professional prohibition against an employed lawyer appearing on the record for her or his employer. The concern remains, however, that employed counsel may be incapable, by virtue of their relationship with the employer, of bringing to the litigation the requisite independence (see [17.35]) or bringing to advice the requisite objectivity.22 In this context heed should be paid to the following observations of Cooke J in Henderson Borough Council v Auckland Regional Authority:23 Although an employed barrister may properly represent his employer, it is as well to stress the importance of the independent consideration of a case that will more often be given by a barrister or barrister-and-solicitor whose experience and responsibilities are not confined to representing one client. This kind of professional detachment can be of value to the client in that it is likely to result in the more effective presentation of the client’s case. In turn it is of value to the court. And of course the more important the litigation the more important it tends to become. It is hoped that these factors will always be borne in mind by those concerned in deciding whether an “in-house” counsel should take the responsibility of conducting any particular litigation for his employer.

A lack of independence may not only negatively impact on the quality of the advice an employed lawyer may provide, but serve to undermine a claim to legal professional privilege over that advice: see [13.50]. At the same time, external lawyers should not always be assumed to be more independent than in-house counsel, especially those who rely heavily on one or few valuable clients for their fees. Impact on claims to legal professional privilege Application of privilege in the context of employed lawyers

[13.40]

Legal professional privilege extends to legal advice given by salaried employees provided that, in giving the advice, they are acting in their capacity as legal advisers:24 see [11.130]. It therefore applies to communications between an employed lawyer and her or his employer where its requirements are satisfied. It also attaches to confidential professional communications between government agencies and their salaried legal officers undertaken for the purpose of seeking or giving legal advice or in connection with anticipated or pending litigation.25 The same is replicated in the uniform evidence legislation for employed lawyers in both the private and public sector via its definition of “client”.26 Even though some have argued that privilege in the context of government lawyers should be more 22 See Langevoort, “Getting (Too) Comfortable: In-house Lawyers, Enterprise Risk, and the Financial Crisis” [2012] Wis L Rev 495. 23 Henderson Borough Council v Auckland Regional Authority [1984] 1 NZLR 16 at 23. 24 This is explicitly recognised by the Legal Profession Uniform Law, as implemented in New South Wales and Victoria: NSW, s 38(2); Vic, s 38(2). 25 Re Citibank Ltd [1989] 1 Qd R 516 at 519 per Williams J; Secretary, Department of Health v Proudfoot (1993) 114 FLR 384 at 389 per Gallop J; Re Fritz [1995] 2 Qd R 580 at 584–585 per McPherson JA. 26 The uniform evidence law, via s 117(1), defines “client” to include a person or body “who employs a lawyer to provide legal services or who employs a lawyer (including under a contract of service)”. As to the application of the uniform evidence legislation see [11.25]. In the government lawyer

[13.40]

13 Employed (“In-house”) Lawyers

445

circumscribed,27 or even ousted altogether,28 to foster open and honest government, this has largely fallen on deaf judicial ears. As explained by Mason and Wilson JJ in Waterford v Commonwealth:29 The growing complexity of the legal framework within which government must be carried on renders the rationale of the privilege … increasingly compelling when applied to decision-makers in the public sector. The wisdom of the centuries is that the existence of the privilege encourages resort to those skilled in the law and that this makes for a better legal system. Government officers need that encouragement, albeit, perhaps, for reasons different to those which might be expected to motivate the citizen.

For example, privilege attaches to communications passing between a public authority invested with power to make subordinate legislation and the legal advisers of that authority, for the purpose of seeking and giving legal advice relating to the making of proposed regulations.30 Also, the Australian Securities and Investments Commission (and other government regulatory bodies) has the benefit of legal professional privilege in respect of communications between its legal adviser(s) and itself made for the purpose of enabling the legal adviser(s) to give, or the client to receive, legal advice.31 The main limitations on the availability of privilege in the employed lawyer context focus on the dual issues of capacity and independence, which form at least part of

context see also Judiciary Act 1903 (Cth), ss 55E(2)(c), 55Q(1) (which provide that an AttorneyGeneral’s lawyer, and an Australian Government Solicitor lawyer, acting in that capacity is entitled to “all the rights and privileges of so practising”). 27 The argument is that there should be no privilege when the government acts in an executive or administrative manner, in which case legal advice should be treated no differently from economic or political advice, neither of which gives rise to privilege: see, for example, Gowdy, “Should the Government Have an Attorney–Client Privilege?” (1999) 51 Florida L Rev 695. Contra Ellinwood, “‘In the Light of Reason and Experience’: The Case for a Strong Government Attorney–Client Privilege” (2001) 32 Wisc L Rev 1291. The New South Wales Law Reform Commission has seen some force in the argument that legal advice which “is of a more general or policy character” ought not to be privileged: Circulation of Legal Advice to Government (Issues Paper 13, June 1997), para 5.28. It observed that legal advice on such matters “is qualitatively different from legal advice to private clients which the Australian courts find subject to legal professional privilege”: para 5.20. In any case, a government may, in order to foster a policy of transparency with respect to its activities, have a greater incentive to waive the privilege: Stevens v Canada (Privy Council) (1998) 161 DLR (4th) 85 at 97, 109 per Linden JA. 28 See, for example, Brown, “The Justification of Legal Professional Privilege when the Client is the State” (2010) 84 ALJ 624 (who argues that “[i]n light of modern democratic theories and greater rights and government commitment to public access to government-held information, legal advice to government should not remain elevated above other forms of information”, referring to a movement towards more open and participatory democracy, wherein “governments have made a public commitment, and legislated, to facilitate increased access to government-held information”, such that rather than a “blanket” exception for legal advice, “it would be more transparent if governments substantiated the need for secrecy on a case-by-case basis according to the doctrine of public interest immunity”: at 642, 643). 29 Waterford v Commonwealth (1987) 163 CLR 54 at 64. 30 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 511 per Gibbs CJ, at 522 per Wilson J. 31 Somerville v Australian Securities Commission (1995) 60 FCR 517 at 319 per Jenkinson J.

446

Lawyers’ Professional Responsibility

[13.45]

the rationale for the privilege32 and are discussed below. There may, moreover, be issues pertaining to whether the communication was truly confidential.33 Capacity

[13.45]

An employed lawyer may act in more than merely a legal capacity in exercising her or his functions, and is more likely to act for purposes unrelated to legal proceedings than an external lawyer. The status of the lawyer is therefore relevant in determining whether or not a document was brought into existence for a privileged purpose.34 In particular, employed lawyers may be in a closer relationship to management than outside external lawyers, and so “more exposed to participation in commercial aspects of the enterprise”.35 It is therefore necessary to analyse precisely in what capacity the employed lawyer sent or received the relevant communications.36 The following observations by the Supreme Court of Canada are instructive in this context:37 It is, of course, not everything done by a government (or other) lawyer that attracts solicitor-client privilege. While some of what government lawyers do is indistinguishable from the work of private practitioners, they may and frequently do have multiple responsibilities including, for example, participation in various operating committees of their respective departments. Government lawyers who have spent years with a particular client department may be called upon to offer policy advice that has nothing to do with their legal training or expertise, but draws on departmental know-how. Advice given by lawyers on matters outside the solicitor-client relationship is not protected. A comparable range of functions is exhibited by salaried corporate counsel employed by business organizations. Solicitor-client communications by corporate employees with in-house counsel enjoy the privilege, although (as in government) the corporate context creates special problems … In private practice some lawyers are valued as much (or more) for raw business sense as for legal acumen. No solicitor-client privilege attaches to advice on purely business matters even where it is provided by a lawyer … Whether or not solicitor-client privilege attaches in any of these situations depends on the nature of the relationship, the subject matter of the advice and the circumstances in which it is sought and rendered. 32 There is considerable literature, particularly in the United States, on the interplay of privilege with the employed lawyer: see, for example, Alexander, “The Corporate Attorney–Client Privilege: A Study of the Participants” (1989) 63 St John’s L Rev 191 at 368–413 (arguing for a qualified corporate attorney–client privilege); Thornburg, “Sanctifying Secrecy: The Mythology of the Corporate Attorney–Client Privilege” (1993) 69 Notre Dame L Rev 157 (arguing that corporate lawyer–client privilege should be abolished); Hill, “A Problem of Privilege: In-house Counsel and the Attorney–Client Privilege in the United States and the European Community” (1995) 27 Case West Res J of Int Law 145; Stevens, “An Analysis of the Troubling Issues Surrounding In-house Counsel and the Attorney–Client Privilege” (1999) 23 Hamline L Rev 289. 33 Commonwealth v Vance (2005) 224 FLR 243 at [24]–[27] per Gray, Connolly and Tamberlin JJ. 34 Sydney Airports Corporation Ltd v Singapore Airlines Ltd [2005] NSWCA 47 at [24] per Spigelman CJ. 35 Seven Network Ltd v News Ltd [2005] FCA 142 at [4] per Tamberlin J. See also Rio Tinto Ltd v Commissioner of Taxation (2006) 235 ALR 127 at [31] per Sundberg J (“In contemporary companies, senior lawyers increasingly often play management roles which will sometimes involve them creating documents that are not for the dominant purpose of providing legal advice”). 36 Dye v Commonwealth Securities Ltd (No 5) [2010] FCA 950 at [24] per Katzmann J. 37 R v Shirose (1999) 133 CCC (3d) 257 at 288–289 per Binnie J, delivering the reasons of the court.

[13.50]

13 Employed (“In-house”) Lawyers

447

Yet that the legal advice supplied has policy or other aspects that are not strictly legal does not automatically deny privilege. The High Court has observed, to this end, that “[i]n various contexts, legal professionals advise on matters of policy, their legal expertise being relevant to the weight to be attached to their opinions”, and that “legal professional privilege may attach to advice given by lawyers, even though it includes advice on matters of policy as well as law”.38 The matter is clearly one of degree and impression, the concern being to ensure that employers cannot shield activities from scrutiny that are not lawyers’ activities only because they have had the input of a lawyer-employee.39 Advice is not privileged if the legal adviser gives it in another capacity (say, as an officer of a non-legal department) and is privileged only if given by a lawyer who has been admitted to practice and remains subject to the duty to observe professional standards and the liability to professional discipline.40 The latter may be substantiated in part by the employee in question holding a current unrestricted practising certificate, although this is not essential.41 Independence

[13.50]

Even advice prepared in an employed lawyer’s capacity as a lawyer may not be privileged if the lawyer is not “independent” of the employer. In this regard, a Victorian judge has observed:42 [T]here is sufficient dicta to support the proposition that the employee legal adviser when performing his role in a communication concerning a legal matter must act independently of any pressure from his employer and if it is established that he was not acting independently at the particular time then the privilege would not apply or if there was any doubt the court should in those circumstances look at the documents.

Expressed another way, if communications with employed lawyers are to be privileged, “the lawyers must retain the independence required by their professional 38 Osland v Secretary to the Department of Justice (2008) 234 CLR 275 at [12] per Gleeson CJ, Gummow, Heydon and Kiefel JJ. 39 Miller v Commissioner of Inland Revenue (1997) 18 NZTC 13,001 at 13,018 per Baragwanath J. 40 Attorney-General (NT) v Kearney (1985) 158 CLR 500 at 510 per Gibbs CJ. See, for example, GSA Industries (Aust) Pty Ltd v Constable [2002] 2 Qd R 146 at [18] per Holmes J (who denied privilege where it was doubtful that in-house counsel, who was not admitted to practice, was in fact acting in a legal capacity in the circumstances); General Manager, Workcover Authority of New South Wales v Law Society of New South Wales (2006) 65 NSWLR 502; Priest v State of New South Wales [2006] NSWSC 1281. 41 Commonwealth v Vance (2005) 224 FLR 243 at [30] (ruling that advice proffered by Australian Defence Force (ADF) lawyers could be privileged, rejecting the view expressed by the trial judge, Crispin J, that for privilege to attach to the communications, the employed lawyer must hold a current practising certificate: Vance v McCormack (2004) 184 FLR 62 at [37]–[42]). More generally, on the duties of ADF legal officers, see Gulam, “The Peculiar Duties of an Australian Defence Force Legal Officer” (2005) 8 Canberra L Rev 111. 42 Australian Hospital Care Pty Ltd v Duggan (No 2) [1999] VSC 131 at [54] per Gillard J. The Court of Justice of the European Union has gone further, ruling that internal company communications with in-house lawyers do not attract legal professional privilege under European competition law: Akzo Nobel Chemicals Ltd v Commission [2011] 2 AC 338 (informed by the view that “both from the in-house lawyer’s economic dependence and the close ties with his employer”, the lawyer “does not enjoy a level of professional independence comparable to that of an external lawyer”: at [49]).

448

Lawyers’ Professional Responsibility

[13.55]

standing and obligations notwithstanding the employment relationship”.43 In some respects, independence is an aspect of capacity; a lawyer who gives advice in a legal capacity fulfils one aspect of independence. The failure to hold a practising certificate could, in some circumstances, evidence a lack of independence, although the lawyer’s qualifications and experience are arguably more important factors to this end.44 But independence goes further, arguably, because advice given in a legal capacity even by the holder of a practising certificate may be so coloured by the nature of the lawyer’s relationship with her or his employer as to fall outside the rationale for the privilege. That the employed lawyer is part of senior management and owns a significant number of shares in the employing entity, and her or his remuneration depends in part on the performance of the entity (or a business unit of the entity), further challenges independence.45 Even outside these circumstances, independence can be compromised, so it is advisable for the employer to adopt a reporting structure as “independent” as possible – such as requiring the lawyer to report directly either to the board of directors or the managing director – as the fewer “pressure points” that are placed on the lawyer, the better he or she is placed to demonstrate independence.46 Securing privilege in the employed lawyer context

[13.55]

In addition to the employer taking steps to ensure an employed lawyer’s capacity and independence, there are various steps an employed lawyer can take to maximise scope for the operation of legal professional privilege to communications in which he or she is involved.47 Employed lawyers with dual (or multiple) roles should sign off on internal communications that are intended to be privileged by using a title that emphasises their legal role. These communications should be marked “privileged and confidential”, and not be widely disseminated throughout

43 Vance v McCormack (2004) 184 FLR 62 at [25] per Crispin J (not disapproved on appeal: Commonwealth v Vance (2005) 224 FLR 243). Cf Tamberlin and Bastin, “In-house Counsel and Privilege: ‘The Client’s Man of Business’” (2008) 31 Aust Bar Rev 188 (who argue that it cannot be assumed that in-house counsel necessarily operate with any lesser degree of independence than external legal advisers simply because they are in the employ of clients); Tamberlin and Bastin, “In-house Counsel, Legal Professional Privilege and ‘Independence’” (2009) 83 ALJ 193 (who repeat their earlier observations, remarking that “[w]hether a lawyer acts with the independence expected by the profession depends on that lawyer’s actions and willingness to avoid or disregard influences which might undermine his or her disinterestedness”: at 197); Bastin, “Should ‘Independence’ of In-House Counsel be a Condition Precedent to a Claim of Legal Professional Privilege in Respect of Communications Between Them and Their Employer Clients?” (2011) 30 CJQ 33 (who argues that independence should not be such a prerequisite). 44 Australian Hospital Care Pty Ltd v Duggan (No 2) [1999] VSC 131 at [99] per Gillard J. 45 Kyrou, “Legal Professional Counsel Wearing Two Hats” (2000) 38 (June) LSJ 42 at 44–45. 46 Willcock, “Legal Professional Privilege and the In-House Lawyer – Principles and Practice” (1999) 27 ABLR 364 at 372. 47 See generally Kyrou, “Legal Professional Counsel Wearing Two Hats” (2000) 38 (June) LSJ 42; Willcock, “Legal Professional Privilege and the In-House Lawyer – Principles and Practice” (1999) 27 ABLR 364 at 371; Kyrou, “Attracting and Preserving Legal Professional Privilege by In-house Counsel” (Paper presented at A Practical Guide for In-house Counsel Conference, 26–27 May 2003, LexisNexis Butterworths, Sydney), pp 16–17; Whitaker and Paton, “What Flows from Three Rivers?” [2005] NZLJ 237 at 240.

[13.60]

13 Employed (“In-house”) Lawyers

449

the organisation. Any business advice (or other non-legal advice) should be recorded in a document separate from that containing legal advice, and stored separately from privileged documents. Further precautions include restricting the number of copies of privileged documents, recording to whom a copy is supplied, and ensuring that any third parties with a common interest in the relevant matter (see [11.190]) who are given a copy are clear on the terms upon which the copy has been supplied. Importance of identifying the client

[13.60]

The legal fiction of an entity as client raises the issue of who in fact is the lawyer’s client. The ethical issues for employed lawyers are, though, arguably heightened because they are more likely than external lawyers to have close associations with the management of the entity. It is therefore important that the lawyer, and the entity’s staff, be clear as to who is authorised to instruct the lawyer and to whom the lawyer owes duties. Although often seen as an issue endemic to companies as employers, similar issues arise where the employer is a group of persons, say in the form of a partnership, an unincorporated association or promoters of an entity the lawyer is instructed to form.48 The terms of the lawyer’s retainer (that is, her or his contract of employment) are valuable for this purpose.

The simple answer to an inquiry into client identity is that the client is the entity, and not any particular entity officers or its shareholders,49 and it is the entity to which the lawyer owes professional duties (termed “entity theory”). Yet the matter is more complex than this simple statement may suggest. As an entity operates through its officers, the principal issue is to identify which individuals (or body) represent the entity for the purposes of the retainer.50 The common response to this query is that the board of directors, as the managing agent of the client, is the source of instructions that the lawyer must follow (although this does not preclude the board from authorising one of its executives to give instructions).51 But the 48 See Burman, “Ethical Considerations when Representing Organisations” (2003) 3 Wyoming L Rev 581 at 584–598. 49 Carey v Freehills (2013) 303 ALR 445 at [323] per Kenny J (“As a general proposition, the law of negligence resists any extension of a solicitor’s duty of care beyond a client company to its shareholders or other related entities purely because they have derivative interests in the company’s performance”); Restatement, §96, cmt b (“A lawyer who has been employed or retained to represent an organization as a client owes professional duties of loyalty and competence to the organization. By representing the organization, a lawyer does not thereby also form a client-lawyer relationship with all or any individuals employed by it or who direct its operations or who have an ownership or other beneficial interest in it, such as its shareholders”). The position may differ, however, in a case of a sole trader who operates a small business through a company, where there is an identity between the company and the shareholder: see, for example, in RP Howard Ltd v Woodman Matthews & Co (a firm) [1983] BCLC 117 (where a husband and wife owned all the shares in a company,and the husband sought legal advice, both as a representative of the company and in his personal capacity); Gray v Staffa [2004] WASC 131 (where Commissioner Odes QC found a serious question to be tried on an interlocutory application that an implied retainer existed between the solicitor for the company and the company’s sole beneficial shareholder and director: at [53]–[63]). 50 Corresponding difficulties arise in the context of government lawyers: see [13.100]. 51 Newcastle International Airport Ltd v Eversheds LLP [2014] 1 WLR 3073 at [80] per Rimer LJ, with whom Underhill and Moore-Bick LJJ concurred.

450

Lawyers’ Professional Responsibility

[13.60]

board, or certain of its members, may have interests adverse to those of the entity.52 The entity lawyer must, therefore, first and foremost, identify the entity’s interests and distinguish those from any adverse interests of associated individuals. This explains why some locate the touchstone for measuring corporate interests as the collective interests of shareholders.53 Australian professional rules do not address the issue. Reality, in any case, dictates that the entity lawyer cannot routinely second-guess management’s articulation of where those interests lie. It is for this reason that the American rules state that, as a general rule, decisions concerning policy and operations of the entity are not the lawyer’s province; decisions made by the constituents of the entity must ordinarily be accepted even if the lawyer doubts their utility or prudence.54 However, where there is a clear breach of duty owed to the entity by directors or officers, the rules require the entity lawyer to take active steps to oppose that violation,55 which may, where the lawyer believes it to be in the best interest of the entity, involve bringing the matter to the board. Before being amended in August 2003, the rules envisaged that if the board persisted in a clear violation of its legal obligation to the entity, the lawyer had no other option but to resign. Following corporate collapses in which lawyers maintained the confidentiality of an entity’s fraudulent practices – arguably influenced, at least in part, by the lawyers’ reliance on the one client and involvement in the client management group – the rules were amended to allow the lawyer to reveal information relating to the representation if he or she reasonably believes that the violation is reasonably certain to result in substantial injury to the entity.56 Some have suggested that the disclosure obligation be cast wider.57 52 See, for example, Newcastle International Airport Ltd v Eversheds LLP [2014] 1 WLR 3073 (where the lawyer (E) was instructed, to produce draft new service contracts between its client (N) and its executives, exclusively by the proposed counterparties, principally the N’s CEO; the English Court of Appeal held that, in these circumstances, part of E’s duty to N was to ensure the provision of the finished drafts to N’s remuneration committee explaining in user-friendly language a summary of the scheme and workings of each material change to the executives’ original contracts and identifying where the changes could be found: at [81]–[84] per Rimer LJ, with whom Underhill and Moore-Bick LJJ concurred). 53 See Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1352. 54 US, r 1.13, cmt [3]. 55 US, r 1.13(b). 56 US, r 1.13(c). This was not the first rule-based attempt to broaden scope for lawyer disclosure. A proposal to allow disclosure of otherwise confidential information of the client organisation to persons other than constituents in order to prevent harm to the organisation by a constituent was explicitly addressed in a rejected version of r 1.13(c) (which in its revised final draft form, as at 30 June 1982, entitled the lawyer to disclose otherwise confidential information “if the lawyer reasonably believes that: (1) the highest authority in the organization has acted to further the personal or financial interests of members of that authority which are in conflict with the interest of the organization; and (2) revealing the information is necessary in the best interest of the organization”). 57 See, for example, Harris, “Taking Entity Theory Seriously: Lawyer Liability for Failure to Prevent Harm to Organizational Clients Through Disclosure of Constituent Wrongdoing” (1998) 11 Geo J Legal Ethics 597 (urging recognition of lawyer discretion to make “loyal disclosure” in interest of entity client); Higgins, “Corporate Abuse of Legal Professional Privilege” (2008) 27 CJQ 377 (who argues that as corporate abuse of privilege imposes a significant cost on the administration of justice,

[13.65]

13 Employed (“In-house”) Lawyers

451

These corporate collapses spawned the Sarbanes-Oxley Act 2002, which, inter alia, obliged the Securities and Exchange Commission (SEC) to issue rules covering the activities of lawyers appearing before it.58 In response, the SEC issued a rule directed to “reporting up” and “reporting out”.59 The former requires lawyers to report material evidence of wrongdoing up the chain of command within the client.60 It envisages permissive “reporting out” to the extent the lawyer reasonably believes necessary to prevent the client “from committing a material violation that is likely to cause substantial injury to the financial interest or property of the [client] or investors” (or to rectify the consequences of such a violation) or from committing perjury in an SEC investigation or administrative proceeding.61 The latter functions, it has been said, “essentially as a whistleblower license for attorneys to use in a last-ditch effort to protect third parties when the highest authorities within the organization fail to take appropriate remedial measures”.62 The Canadian professional rules address the point similarly, but without licensing whistleblowing. Where a lawyer is employed by an entity to act in a matter in which he or she knows that the entity has acted, is acting or intends to act dishonestly, fraudulently, criminally or illegally, the rules require the lawyer to so advise the person from whom instructions are received and the chief legal officer (or otherwise the CEO), and should this not cause the entity to cease this conduct, “advise progressively the next highest persons or groups”.63 If the entity persists in the (proposed) wrongful conduct, the lawyer must resign. Impact on acting for clients other than the employer

[13.65]

A lawyer in private practice will ordinarily have multiple clients, and aside from the event of a conflict between the interests of two or more clients (see Ch 7), may choose the clients he or she is willing to represent. Employed lawyers may be more circumscribed, and ordinarily can represent clients other than their employer only where they act bona fide pursuant to an express reservation of a right of private practice in their contract of employment and comply with applicable statutory and professional requirements. Beyond the duty of fidelity owed to an employer and possible conflicts of interest, the main concerns are and existing mechanisms for controlling abuses have not proved effective, lawyers should, inter alia, be required to disclose suspected unlawful conduct to the authorities directly). See also Webb, “Ethics and the Role of Corporate Counsel: Gatekeeper, Whistleblower or Friend?” (2005) 23 C&SLJ 483 (who notes the increasing call for corporate counsel to act as a check (gatekeeper) or reporter (whistleblower) in respect of corporate conduct).

58 15 USC § 7245. 59 17 CFR § 205 (2005). 60 17 CFR § 205.3(b)(1) (2005) (which obliges an attorney who becomes aware of evidence of a material violation by a corporate client, or by any officer, director, employee, or agent of the client, to “report such evidence to the [client’s] chief legal officer (or the equivalent thereof) or to both the [client’s] chief legal officer and its chief executive officer (or the equivalents thereof) forthwith”). 61 17 CFR § 205.3(d)(2) (2005). 62 Matthews, Hoffman and Scott, “Conflicting Loyalties Facing In-house Counsel: Ethical Care and Feeding of the Ravenous Multi-Headed Client” (2006) 37 St Mary’s LJ 901 at 921 (emphasis in original) (concluding that “the SEC and Congress now view in-house counsel as the gatekeepers of corporate integrity”: at 930). 63 Can CPC, r 3.2-8.

452

Lawyers’ Professional Responsibility

[13.70]

requirements relating to practising certificates, unfairly attracting work (see [20.05]–[20.70]), sharing of receipts with unqualified persons (see [20.125]) and professional indemnity insurance. Similar principles and concerns apply where an employed lawyer acts for officers of the entity, which the lawyer may do, subject to the terms of her or his employment, if the interests of the entity and the officer are consistent, or the latter’s interest is unrelated to that of the entity. This dictates that the lawyer must decline an engagement that may give rise to a conflict between the interests of the officer and that of the entity,64 or in any other way impinges on the duty to the entity. In this event, an employed lawyer must ensure that entity officers are under no misapprehension that he or she represents them or their personal interests. If an officer consults the lawyer for advice on a matter potentially adverse to the entity, the lawyer should make it clear that her or his responsibility is to safeguard the entity’s interests, not those of the officer. The latter should then be treated as an unrepresented person (see [21.275]) and counselled to seek independent legal advice.65 The foregoing also dictates that, because the entity is the client, the employed lawyer, in dealing with its officers, must exercise care not to breach the duty of confidentiality he or she owes to the entity. Again it cannot be assumed that the interests of the officers necessarily coincide with those of the entity.

GOVERNMENT LAWYERS Application of principles of professional responsibility

[13.70]

In a general sense, lawyers employed by government (or a government instrumentality) are subject to the same professional responsibilities as other lawyers.66 Two main exceptions apply to this proposition. Exceptionally, an express statutory provision, or authority conferred thereunder, may modify the lawyer’s professional responsibility. An example is archives legislation that prohibits the unauthorised handing over of certain client documents to the client or a private lawyer.67 The second exception is that, by reason of the status of government lawyers, certain professional rules have no direct application to them. It makes sense, for instance, that barristers employed by a government or statutory body are 64 See, for example, Trade Practices Commission v CC (New South Wales) Pty Ltd (1994) 125 ALR 94 (where there was a conflict between the interests of the company and one of its directors, who had agreed with the (then) Trade Practices Commission to give a frank account of the events substantiating the company’s alleged breaches of the the (then) Trade Practices Act 1974 (Cth) in return for immunity from prosecution; in these circumstances, Hill J ruled that a solicitor should not act for both the company and its director: at 105); Sharp v Rata International Pty Ltd [2013] VSC 328 (where Almond J restrained a law practice from acting for both a company and a director alleged to have committed a breach of fiduciary duty owed to the company: at [35]). 65 See Park, “Ethical Challenges: The Dual Role of Attorney-Employee as Inside Corporate Counsel” (1999) 22 Hamline L Rev 783 at 790–791; Knowler, “Conflicts of Interest: In-House Counsel” [2011] NZLJ 176. 66 Downey v O’Connell [1951] VLR 117 at 123 per Gavan Duffy and O’Bryan JJ; Judiciary Act 1903 (Cth), ss 55E(3), 55Q(2). 67 Archives Act 1983 (Cth), s 24.

[13.80]

13 Employed (“In-house”) Lawyers

453

not, within that employment, bound by the rules dealing with barristers’ work, sole practitioner rules, direct client access, cab rank and briefs that may or must be refused. There may also be a need to restrict the application of the “no-contact” rule (see [21.235]). The American Restatement, for instance, takes the view that the application of the no-contact rule in this context should be limited to “instances in which the government stands in a position closely analogous to that of a private litigant and with respect to contact where potential for abuse is clear”, and suggests that concerns of client vulnerability “will often be misplaced with respect to officers who are selected and trained for service to the public and who will often have an established relationship with and ready access to government counsel”.68 Yet others suggest that the “no-contact” rule be relaxed in respect of government lawyers’ dealings with others in view of their need to make contact in carrying out investigations pursuant to statutory or other powers.69 Specific responsibilities as government lawyers

[13.75]

The status of a lawyer employed by government may attract certain restrictions or considerations that do not necessarily translate into the private lawyer context, some of which are discussed below. The unique role of criminal prosecuting lawyers (who are in effect government lawyers too, even if retained from the private profession) is addressed separately at [18.10]–[18.90].

Duty to foster the public interest?

[13.80]

Government lawyers arguably have a greater responsibility than their private sector counterparts to foster integrity, for they are custodians of the public trust not only in the legal profession and the administration of justice, but also in the administration of government.70 A senior Canadian public service lawyer has opined that “the foundation of all public service is that public servants have a public trust and a mission of helping ministers to uphold the public interest”, and as such “public service values have a special context or emphasis deriving from the public trust and unique mission of government”.71

In line with the foregoing, government lawyers’ conduct must both be, and be seen to be, above reproach. It is critical that the government should, in all its legal 68 Restatement, §101, cmt b. 69 See Cramton and Udell, “State Ethics Rules and Federal Prosecutors: The Controversy over the Anti-Contact and Subpoena Rules” (1992) 53 U Pitt L Rev 291. 70 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 757–758; Note, “Rethinking the Professional Responsibilities of Federal Agency Lawyers” (2002) 115 Harv L Rev 1170 (arguing that the touchstone of ethics for a government lawyer should be the responsibility to help the relevant government agency to develop its position in a way consistent with democratic values); Hutchinson, “‘In the Public Interest’: The Responsibilities of Government Lawyers” (2008) 46 Osgoode Hall LJ 105 at 113–119; Silverman v Erlich Beer Corp (1987) 687 F Supp 67 at 69–70 (“an attorney in the employ of the government … has the august majesty of the sovereign behind his or her every utterance; the economic power in the hands of some individual government lawyers can wreak total devastation on the average citizen. As a result, the attorney representing the government must be held to a higher standard than that of the ordinary lawyer”). 71 Tait, “The Public Service Lawyer, Service to the Client and the Rule of Law” (1997) 23 Cth Law Bull 542 at 546.

454

Lawyers’ Professional Responsibility

[13.85]

endeavours, be seen to uphold the law. This means that government lawyers should not devise and advise on the implementation of schemes for the avoidance of lawful imposts and duties. They must, even more so than other lawyers, be alert to the appearance or existence of conflicts of interest, as these are detrimental to public confidence in government.72 A real or apparent exploitation of public office for private gain is especially destructive to that confidence and so justifies especially strict regulation of conflicts of interest pertaining to financial interests of officers in government.73 Government as “model litigant”

[13.85]

In conducting litigation, government lawyers should act in an exemplary fashion and in a manner indicative of standards that lawyers representing private litigants should seek to emulate. This is known as the “model litigant” duty,74 which has long been recognised by the courts.75 A litigant who is an officer of government is expected to adhere to those standards of fair dealing in the conduct of litigation that the courts have come to expect from the government and from its officers. Griffith CJ captured the spirit of this responsibility back in 1912 in referring to the “standard of fair play to be observed by the Crown in dealing with its subjects”.76 Insistence on this standard is a recurrent theme in judicial decisions in relation to the conduct of litigation by all tiers of government. Reference has been made to the duty of “conscientious compliance with the procedures designed to minimise cost and delay”,77 to assist “the court to arrive at the proper and just result”,78 and not to take purely technical points of practice and procedure79 or unfairly impair the other party’s capacity to defend itself.80 72 Cf Judiciary Act 1903 (Cth), ss 55F, 55R (Attorney-General’s lawyer or the Australian Government Solicitor may act in a matter for two or more parties who have conflicting interests where this has been approved by the Attorney-General); Legal Profession Uniform Law Application Act 2014 (NSW), s 44(2)(a) (the Crown Solicitor may act for a party in a matter that is not the subject of litigation, even if also acting for another party). 73 See Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1423–6. 74 It has been suggested that model litigant principles should extend to large corporations, as they increasingly resemble governments in view, inter alia, of the power they yield, their increasingly public roles, and the impact they have on citizens and communities: Cameron and Taylor-Sands, “‘Corporate Governments’ as Model Litigants” (2007) 10 Legal Ethics 154. 75 See generally Appleby, “The Government as Litigant” (2014) 37 UNSWLJ 94. 76 Melbourne Steamship Co v Moorehead (1912) 15 CLR 333 at 342. 77 Kenny v South Australia (1987) 46 SASR 268 at 273 per King CJ. 78 P & C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 383 per Mahoney J. 79 Yong Jun Qin v Minister for Immigration and Multicultural Affairs (1997) 75 FCR 155 at 166 (FC). 80 Director of Public Prosecutions (Cth) v Saxon (1992) 28 NSWLR 263 at 268 per Kirby P. See, for example, Scott v Handley (1999) 58 ALD 373, where the second respondent (who was an officer of the Commonwealth): (a) was in a position of obvious advantage in relation to unrepresented litigants; (b) was significantly in default in complying with procedures designed to secure the fair and orderly preparation of the matter for hearing; (c) served the affidavits on the appellants at an extremely late date with the consequential likely impairment of their capacity to prepare properly for a final hearing; (d) did not inform the judge of the default and its possible consequences; and (e) took advantage of the appellants’ inability to properly articulate the basis for, and to secure, an

[13.85]

13 Employed (“In-house”) Lawyers

455

The model litigant duty, which at Federal level is enshrined in a Legal Services Direction issued by the Federal Attorney-General,81 applies to the Commonwealth, Australian Government Solicitor (AGS) and private lawyers acting for the Commonwealth.82 It requires the Commonwealth and its agencies to act honestly and fairly in handling claims and litigation brought against the Commonwealth or an agency by, inter alia:83 • dealing with claims promptly and not causing unnecessary delay in handling of claims and litigation; • paying legitimate claims without litigation; • acting consistently in the handling of claims and litigation; • endeavouring to avoid litigation wherever possible and, if not possible, keeping the costs of litigation to a minimum (including by not requiring the other party to prove a matter which the Commonwealth or the agency knows to be true, and not contesting liability if the Commonwealth or the agency knows that the dispute is really about quantum); • not taking advantage of a claimant who lacks the resources to litigate a legitimate claim; • not relying on technical defences unless the Commonwealth’s or the agency’s interests would be prejudiced by the failure to comply with a particular requirement; • not undertaking and pursuing appeals unless the Commonwealth or the agency believes that it has reasonable prospects for success or the appeal is otherwise justified in the public interest; and • apologising where the Commonwealth or the agency is aware that it or its lawyers have acted wrongfully or improperly. The case law recognises other illustrations of the model litigant duty, including approaching the issue of discovery in document-intensive cases in a way that defines the issues for the court’s consideration when managing the discovery process, appropriately collecting and identifying relevant documents, and assisting

adjournment. The Full Court of the Federal Court of Australia (at [46]) held that the second respondent had “fallen considerably short of the standard properly to be expected of the Commonwealth”, and that a miscarriage of justice had occurred as a result. 81 Pursuant to the power to issue directions under s 55ZF of the Judiciary Act 1903 (Cth). The text of the Legal Services Directions issued to date can be found at http://www.ag.gov.au. See further Australian Law Reform Commission, Managing Justice (Report No 89, 2000), recommendation 23 (see discussion at paras 3.129–3.147), recommendation 24 (see discussion at paras 3.148–3.168). 82 Judiciary Act 1903 (Cth), s 55ZG. Model litigant rules also exist in the Territories, New South Wales, Queensland and Victoria, but take the form of policy guidelines: see generally Buchanan and Lynch, “Model Litigant Rules, OK?” (2011) 85 (Mar) LIJ 41. 83 Legal Services Directions 2005 (Cth), Appendix B, cl 2.

456

Lawyers’ Professional Responsibility

[13.90]

in the just, quick and cheap resolution of the real issues in the proceedings.84 The failure to act as a model litigant can be a relevant factor in considering the appropriate order as to costs.85 The obligation to act as a model litigant may therefore require more than merely acting honestly and in accordance with the law and court rules, and goes beyond lawyers’ duties to act in accordance with their ethical obligations.86 But it has limits; a governmental litigant may act firmly and properly to protect its interests, and take all legitimate steps to pursue its claims and test or defend the claims against it. Restrictions on criticism of the judiciary and government

[13.90]

Government lawyers, including the Attorney-General, should be more circumscribed regarding any criticism of the court than private lawyers, it has been said, because criticism may diminish public confidence in the court and with it judicial independence.87 Others argue that public confidence and judicial independence have little to do with one another, for instance:88 Although a government lawyer … does have a duty to protect and safeguard the independence of the judiciary, it is not obvious that the government lawyer has a duty to defend the judiciary generally when it is criticised. In particular, it would not seem to me that a government lawyer does owe a duty to defend a particular decision. Of course, it is an aspect of the independent and professional service to a client that the government lawyer will provide an objective assessment of the case, including that of any judgment delivered in it. There is always a danger of blaming the judge for the tactical and strategic failures of lawyers and of policy-makers. The lawyer acting for government has a duty to the client to provide an objective assessment of the performance of the courts. However, failure to provide such an objective assessment is a failure of the lawyer’s duty to his or her client, not a failure of his or her duty to the profession.

Government lawyers will, in any case, be likely to suffer greater constraints than private lawyers in criticising government policy or action, or in participation in bodies which, because of their nature, may be involved in criticising government

84 Priest v State of New South Wales [2007] NSWSC 41 at [35]–[40] per Johnson J. 85 Cultivaust Pty Ltd v Grain Pool Pty Ltd [2004] FCA 1568 at [18] per Mansfield J. Cf Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd (2007) ATPR ¶42-200 at [25] per Gray J; Peadon, “What Cost to the Crown a Failure to Act as a Model Litigant?” (2010) 33 Aust Bar Rev 239. 86 See, for example, Re Moline & Comcare (2003) 77 ALD 224 at [11] (AAT) (speaking of a standard of ethical fairness such that “an emanation of the Commonwealth who is a respondent in a tribunal proceeding has an obligation to assist the tribunal to make the correct or preferable decision. That party’s role is not to win at all costs”, meaning that “[t]here will be occasions where a respondent is aware of material favourable to the applicant’s case, sometimes when the applicant’s advisers are unaware of such material”). 87 See, for example, Brennan, “Why be a Judge” (1997) 14 Aust Bar Rev 89 at 94–96. 88 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 125.

[13.95]

13 Employed (“In-house”) Lawyers

457

policy or action. Such criticism or involvement could be seen as an act of disloyalty to their employer that may practically, if not legally, place their employment in jeopardy.89 Impact of executive and moral considerations on the giving of advice

[13.95]

Government lawyers must take care to distinguish work of an executive nature from work of a legal professional character. It is not unethical for a government lawyer to give advice that is, in part at least, a matter of policy or management discretion, but it is desirable, to prevent misunderstanding on the agency’s part, to separate legal advice any policy or management advice.90 Failure to do so not only imperils claims to legal professional privilege (see [11.130]), but also may inadvertently allow executive considerations to influence the legal advice supplied.

The independence of a government lawyer’s legal advice is especially important when the rights of citizens in dealings with government are in issue. If, for example, the lawyer believes advice to be correct, he or she must not allow executive considerations such as political disadvantage or administrative inconvenience to alter that advice.91 Inherent in this is the government lawyer’s duty to make a proper inquiry into what the law really is, for the rule of law is not protected by unduly stretching the interpretation to fit the client’s wishes, or giving differing interpretations to different departments.92 Government lawyers must not allow executive considerations to cloud their legal advice, nor permit their own ethical biases to influence that advice. To this end, it has been said that care should be taken to ensure that any role of lawyers in relation to the ethical behaviour of governments does not become an excuse for the involvement of lawyers in moral and policy issues for which they may have no particular expertise and no authority.93 So even though it is common for lawyers in government to advise in areas with significant policy consequences, they have no authority to impose their own moral perspectives upon the government. As explained by a (then) senior government lawyer:94 89 Curtis and Kolts, “The Role of the Government Lawyer in the Protection of Citizens’ Rights” (1975) 49 ALJ 335 at 339, 342; Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), cll 2.5, 2.5.1 (“A legal officer is not entitled to publicly oppose government policy concerning any matter in which they are or have been is acting”; “A public statement of opposition to government policy will undermine public confidence and the client’s trust in the impartiality of the advice they receive”). 90 Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), Key Principle 6.2, cl 6.3.4. 91 Curtis and Kolts, “The Role of the Government Lawyer in the Protection of Citizens’ Rights” (1975) 49 ALJ 335 at 338; Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), Key Principle 2.2 (which requires the legal officer to provide services without regard for whether the advice may incur the client’s displeasure). 92 Tait, “The Public Service Lawyer, Service to the Client and the Rule of Law” (1997) 23 Cth Law Bull 542 at 543. 93 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 121; Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), cl 2.5.2. 94 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 121–122.

458

Lawyers’ Professional Responsibility

[13.100]

A government lawyer must always be meticulous to ensure that advice only involves objective standards of behaviour or, at least, that it is clear what parts of the advice relate to matters where the client is bound to comply and what parts relate to matters where the client’s policy opinion is the ultimate determinant … [T]he task for the lawyer acting for government is not to identify his or her own moral beliefs, but rather to identify and apply the accepted moral beliefs and practices of the relevant government system. A government lawyer is only justified in raising and advising on ethical concerns and issues if recognised and accepted ethical rules of conduct applicable to that government can be identified. The identification of such ethical rules is an objective exercise in descriptive ethics.

Importance of identifying the client

[13.100] On one view, the client whom government lawyers represent is “the government”, the legal advice being given to the government as a corporate entity. The government is, under this view, treated as analogous to a corporation or a partnership, in that advice given to one subsidiary corporation or to one partner is treated as given to the entire corporation or partnership. This view dictates that when one Minister or official receives legal advice, the government as a whole is deemed to be the “client”. This is the view of the New South Wales Law Reform Commission in concluding that:95 Ministers and departments should be regarded generally as a single entity, and that legal advice given to any Minister, department, or public agency other than a business enterprise with an independent legal personality should prima facie be regarded as advice given to the whole of government, and as such, should be available to all organs of government.

Others have reached the same conclusion, on slightly different reasoning; the client is the sovereign as defined pursuant to the relevant constitutional structure, the “indivisibility” of the Crown dictating that, subject to statute, there can be only one government client.96 On this logic, it is not unethical for a lawyer to disclose the contents of legal advice to another agency in accordance with law or government policy (subject to privacy law restrictions on communications of personal information between agencies), and where both agencies represent the Crown no implicit waiver of privilege is involved.97 Also on this logic, it has been suggested that government lawyers can have no concurrent conflict of interest merely because different government agencies have instructed them.98 But this overlooks that

95 New South Wales Law Reform Commission, Circulation of Legal Advice to Government (Issues Paper 13, June 1997), para 5.27. 96 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 115. 97 Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), Key Principles 3.3, 3.4. 98 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 116.

[13.105]

13 Employed (“In-house”) Lawyers

459

different agencies have varying objectives, compete for funds and may expect confidentiality from the lawyer giving advice to the exclusion of other departments.99

[13.105] The foregoing “whole-of-government” approach to identifying the client may be supportable in theory; the practice, though, may differ. The reasons, in practice, to adopt an “agency-focused” approach appear in the following extract from the American Restatement:100 No universal definition of the client of a governmental lawyer is possible. For example, it has been asserted that government lawyers represent the public, or the public interest. However, determining what individual or individuals personify the government requires reference to the need to sustain political and organizational responsibility of governmental officials, as well as the organizational arrangements structured by law within which governmental lawyers work. Those who speak for the governmental client may differ from one representation to another. The identity of the client may also vary depending on the purpose for which the question of identity is posed. For example, when government lawyers negotiate a disputed question of departmental jurisdiction between two federal agencies, it is not helpful to refer to the client of each of the lawyers as “the federal government” or “the public” when considering who is empowered to direct the lawyers’ activities. For many purposes, the preferable approach on the question presented is to regard the respective agencies as the clients and to regard the lawyers working for the agencies as subject to the direction of those officers authorized to act in the matter involved in the representation …

For most day-to-day legal questions, in practice government lawyers take instructions from the individual Minister, agency or department as the client,101 as a delegate and under the authority of the Attorney-General, who has the constitutional role of representing the Crown in the courts and of providing legal advice and other legal services to government.102 The Attorney-General, being ultimately responsible for giving instructions, has constitutional duties, including a duty of independence, in performing the constitutional functions of the office. So for instructions emanating directly from or confirmed by the Attorney-General, “the government lawyer can usually assume that the public interest and other relevant issues have been adequately considered”.103

99 This informs the advice that “[a] government lawyer should treat agencies of the Crown separately when he or she is considering whether acting for more than one in the same matter would involve a conflict of duties to each”: Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), cl 1.5. 100 Restatement, §97, cmt c. 101 Tait, “The Public Service Lawyer, Service to the Client and the Rule of Law” (1997) 23 Cth Law Bull 542 at 545. 102 McGrath, “Role of the New Zealand Solicitor-General” (1998) 18 NZULR 197 at 201–204; Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 118. 103 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 119.

460

Lawyers’ Professional Responsibility

[13.110]

Example – legal aid lawyers

[13.110] Lawyers employed in a legal aid office must abide by the ethics and standards of conduct that all lawyers owe to their clients.104 The primary duty of a lawyer in a legal aid case – whether employed as a legal aid lawyer, or as a private lawyer taking a legal aid case – is to the client.105 Part of this duty is to counsel clients to properly manage scarce legal aid resources, the point being explained, by reference to counsel representing an accused, by Smart J in Kay v R as follows:106 [S]olicitors should advise defendants for whom they appear that, if appreciable funds and their borrowing capacities are substantially exhausted on committal proceedings, they may be refused legal aid for their trial and they may not obtain a stay of proceedings. This could result in them being unrepresented at their trial. Defendants should be advised that they should give priority to conserving their funds and being represented at the trial. The advice should not be perfunctory. Care should be taken to confine the committal proceedings to the important issues and avoid them becoming protracted. In some cases where the funds available to a defendant are limited it will be reasonable for a defendant to be represented at committal proceedings which are confined.

The duty of confidentiality in this context is, in addition to professional rules and codes (see [10.30]), expressed by statute in most jurisdictions.107 However, no confidentiality or privilege shields disclosures by lawyers to the legal aid office (or equivalent) of information to which the latter is statutorily entitled. Like other government lawyers, legal aid lawyers must be vigilant as to potential conflicts between their own interests and those of their client and must not, as a general rule, accept gifts from clients.108 In order to avoid concurrent and former client conflicts, one (or both) of the parties, while still legally aided, should be represented by a lawyer not employed by the legal aid office. Client–client conflicts in government lawyer scenario

[13.115] As noted at [13.100], although viewing a government lawyer’s client as the government as a whole may in theory avoid concurrent conflict issues (discussed in Ch 7), the reality may be otherwise because different agencies may indeed have different interests. For this reason, the better approach is for a government lawyer to treat agencies representing the Crown discrete for the purpose of considering whether acting for more than one in the same matter would 104 Legal Aid Act 1977 (ACT), s 13; Legal Aid Commission Act 1979 (NSW), s 25; Legal Aid Act 1990 (NT), s 13; Legal Aid Queensland Act 1997 (Qld), s 74; Legal Services Commission Act 1977 (SA), ss 22(2), 30, 31; Legal Aid Commission Act 1990 (Tas), s 11; Legal Aid Act 1978 (Vic), s 16; Legal Aid Commission Act 1976 (WA), ss 50A, 51. National Legal Aid has issued Best Practice Standards, which address legal aid lawyers’ ethical obligations, including obligations relating to their relations with clients, other lawyers, counsel and the courts. These are available at http://www.nationallegalaid.org. 105 Re Chapman [1977] 2 NZLR 196 at 199 per Mahon J. 106 Kay v R (1998) 100 A Crim R 367 at 375. 107 Legal Aid Act 1977 (ACT), s 92; Legal Aid Commission Act 1979 (NSW), s 26; Legal Aid Act 1990 (NT), s 55; Legal Aid Queensland Act 1997 (Qld), s 75 (legal professional privilege); Legal Services Commission Act 1977 (SA), s 31A; Legal Aid Act 1978 (Vic), s 43; Legal Aid Commission Act 1976 (WA), s 64. 108 On acceptance of gifts generally see [6.130].

[13.115]

13 Employed (“In-house”) Lawyers

461

involve a conflict.109 So a government lawyer should not act for more than one agency in the same matter if it is evident from the outset, or becomes evident during the course of the retainer, that the agencies have conflicting interests.110 The prospect for conflict is heightened where an agency is semi-privatised, having a separate legal existence and capacity.111 This approach may also impact on lawyers who transfer between agencies in so far as former client conflict issues are concerned (discussed generally in Ch 8); it may be appropriate to treat the second agency as another client for this purpose.112 The former client conflict issue assumes greater prominence where a government lawyer then commences private practice and acts against the government or its agency (the “revolving door”). A private law firm may find ex-government lawyers attractive precisely because of their connections and knowledge of the workings of government.113 Legal principles and professional rules relating to former client conflicts dictate that a lawyer cannot act against a former client in a related matter (see Ch 8), and screening the lawyer from involvement can be difficult. These principles, applied strictly, would see a firm disqualified from acting against government merely because it has within its ranks a lawyer previously employed by government. Given the mobility of labour between private and government practice, it is possible that in a short time every major legal firm in a city (especially one that is the centre of government) could be disqualified from acting against the government. Applying too rigorous an approach in these circumstances could deter private firms from employing ex-government lawyers and thereby severely impinge upon the latter’s career options.114 Here, in particular, viewing the former client as the government as a whole is seriously problematic.

109 Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), Key Principle 1.5. 110 Law Society of NSW, A Guide to Ethical Issues for Government Lawyers (3rd ed, 2015), Key Principle 5.3. 111 Selway, “The Duties of Lawyers Acting for Government” (1999) 10 Pub L Rev 114 at 117–118. 112 US, r 1.11, cmt [5]. 113 See Kampelman, “The Washington Lawyer: Some Musings” in Gerson (ed), Lawyers’ Ethics: Contemporary Dilemmas (Transaction Books, 1980), p 242. 114 See Canadian Pacific Railway Co v Aikins, MacAulay & Thorvaldson (1998) 157 DLR (4th) 473 at 483–484 per Monnin JA. The successive conflict scenario is not confined to government employed lawyers, but can arise also in the context of other employed (migratory) lawyers: see, for example, Generics (UK) Ltd v Yeda Research and Development Co Ltd [2012] CP Rep 39 (where the English Court of Appeal showed a disinclination to disqualify an in-house lawyer who changed employers, reasoning that automatic disqualification would, given increasing lawyer mobility, unduly prejudice in-house lawyers; the majority (see at [79]–[83] per Etherton LJ, at [105]–[107] per Ward LJ), rather than applying the principles from Prince Jefri Bolkiah v KPMG (a firm) [1999] 2 AC 222 (discussed at [8.30]) in this context, applied the law governing employees’ (mis)use of trade secrets: see Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), [15.32]–[15.34]).

462

Lawyers’ Professional Responsibility

[13.120]

[13.120] There is no reported Australian case, or professional rule, dealing specifically with the revolving door problem.115 The issue is addressed by the American rules, which prohibit a lawyer who has formerly served as a public officer or employee of the government from representing a client in connection with a matter in which the lawyer participated personally and substantially as a public officer or employee unless the appropriate government agency gives its informed written consent.116 It also prohibits a lawyer, who has confidential government information117 about a person acquired as a public officer, from representing a private client in a matter in which the information could be used to the material disadvantage of that person.118 In each case, the concern raised in the preceding paragraph is addressed by allowing the firm employing the disqualified lawyer to act provided that the latter is screened from any participation in the matter and receives no part of the fee. The rationale behind how the American rule is drafted is explained in the commentary to the rule as follows:119 This rule represents a balancing of interests. On the one hand, where the successive clients are a government agency and another client, public or private, the risk exists that power or discretion vested in that agency might be used for the special benefit of the other client. A lawyer should not be in a position where benefit to the other client might affect performance of the lawyer’s professional functions on behalf of the government. Also, unfair advantage could accrue to the other client by reason of access to confidential government information about the client’s adversary obtainable only through the lawyer’s government service. On the other hand, the rules governing lawyers presently or formerly employed by a government agency should not be so restrictive as to inhibit transfer of employment to and from the government. The government has a legitimate need to attract qualified lawyers as well as to maintain high ethical standards. Thus a former government lawyer is disqualified only from particular matters in which the lawyer participated personally and substantially. The provisions for screening … are necessary to prevent the disqualification rule from imposing too severe a deterrent against entering public service.

In any case, it may be that the justifications for confidentiality (see [10.10]), which lies at the core of successive conflicts matters (see [8.30]), are less compelling for government lawyers than for private lawyers.120 An important qualification to this statement applies to former prosecutors, who can be restrained from representing

115 Cf the argument that the legal profession should not attempt to develop special rules applicable only to government lawyers: see Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1443–6. 116 US, r 1.11(a). 117 The rule defines “confidential government information” as “information that has been obtained under governmental authority and which, at the time this Rule is applied, the government is prohibited by law from disclosing to the public or has legal privilege not to disclose and which is not otherwise available to the public”: US, r 1.11(c). 118 US, r 1.11(c). 119 US, r 1.11, cmt [4]. See Hazard, Ethics in the Practice of Law (Yale University Press, 1978), pp 110–119; Comment, “Conflicts of Interest in the Legal Profession” (1981) 94 Harv L Rev 1244 at 1430–9. 120 Hutchinson, “‘In the Public Interest’: The Responsibilities of Government Lawyers” (2008) 46 Osgoode Hall LJ 105 at 124–129.

[13.125]

13 Employed (“In-house”) Lawyers

463

accused persons with whom they have previously had an involvement in the course of the same or related prosecutorial function.121 Responsibilities as public servants

[13.125] In addition to general professional responsibilities as lawyers, and contractual duties as employees, government lawyers must comply with the standards of conduct prescribed by statute and codes applicable to public officers.122 These contain obligations that reflect some of the lawyer’s main professional responsibilities although, in the unlikely event of conflict, precedence must be given to the latter. The Commonwealth’s Guidelines on Official Conduct of Commonwealth Public Servants,123 for example, identify “key public service values” to include “acting in accordance with the letter and spirit of the law; dealing equitably, honestly and responsively with the public; and avoiding real or apparent conflicts of interest”. The Public Service Act 1999 (Cth), s 13 prescribes a Code of Conduct for employees, and agency heads are empowered to impose the prescribed sanctions124 for breaches. The Code requires Australian public service (APS) employees in the course of APS employment to, inter alia: • • • •

behave honestly and with integrity; act with care and diligence; treat everyone with respect and courtesy; comply with all applicable Australian laws;

• maintain appropriate confidentiality about dealings with any Minister or Minister’s member of staff; • disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment; • not make improper use of inside information, or of their duties, status, power or authority, in order to gain, or seek to gain, a benefit or advantage for themselves or for any other person;125 and 121 See, for example, Registe v State (2010) 697 SE 2d 804 (where the Supreme Court of Georgia acceded to the State’s motion to disqualify retained defense counsel (J) from representing the defendant in a murder case where J, as a former assistant district attorney (ADA), had signed search warrant applications to secure evidence against the defendant relating to the murder charge, as well as in two other criminal cases against the defendant the facts of which the State intended to introduce as similar fact evidence in the murder trial). 122 Examples of relevant legislation at a Federal level include: Freedom of Information Act 1982 (Cth); Privacy Act 1988 (Cth); Public Service Act 1999 (Cth); Public Governance, Performance and Accountability Act 2013 (Cth). An example of a code of is found in the Public Service Commission, Guidelines on Official Conduct of Commonwealth Public Servants (1995). 123 Public Service Commission, Guidelines on Official Conduct of Commonwealth Public Servants (1995), p 2. 124 Namely termination of employment, reduction in classification, re-assignment of duties, reduction in salary, deductions from salary by way of fine, and a reprimand: Public Service Act 1999 (Cth), s 15(1). 125 The Public Governance, Performance and Accountability Act 2013 (Cth), ss 27, 28 applies parallel obligations to officials (defined in s 13) in all Commonwealth entities.

464

Lawyers’ Professional Responsibility

[13.125]

• at all times behave in a way that upholds the APS values126 and the integrity and good reputation of the APS.

126 The APS values, listed in Public Service Act 1999 (Cth), s 10, include a commitment to conduct that is ethical, respectful, accountable and impartial.

PART III Costs Chapter 14: Costs Disclosure and Costs Agreements ........................................ 467 Chapter 15: Recovery of Costs from Clients ...................................................... 501 Chapter 16: Solicitors’ Liens ................................................................................. 519

Chapter 14

Costs Disclosure and Costs Agreements [14.15] COSTS DISCLOSURE REQUIREMENTS ...................................................................... 468 [14.20] Disclosure requirements .............................................................................................. 470 [14.65] Other disclosure obligations ...................................................................................... 477 [14.75] COSTS AGREEMENTS ..................................................................................................... 478 [14.80] Construing a costs agreement .................................................................................... 479 [14.85] Effect of costs agreement ............................................................................................ 481 [14.90] Formalities for costs agreements ............................................................................... 482 [14.100] Costs recovery where costs agreement is unenforceable or void ..................... 483 [14.110] CONTINGENT FEE COSTS AGREEMENTS ............................................................. 484 [14.110] Definition ..................................................................................................................... 484 [14.115] Advantages and drawbacks ..................................................................................... 484 [14.120] Contingency fees at general law ............................................................................. 486 [14.135] Statutory regulation of contingency fees ............................................................... 488 [14.150] SETTING ASIDE AND VARIATION OF COSTS AGREEMENTS ......................... 491 [14.155] Jurisdiction to set aside unfair or unreasonable costs agreements ................... 491 [14.170] Concept of fairness at common law ....................................................................... 494 [14.195] Concept of reasonableness at common law .......................................................... 497

[14.05]

A principal reason for public concern with, and complaints against, the legal profession is the matter of legal costs,1 specifically the perception that lawyers charge too much and that access to the legal system generally is too costly.2 The issue of lawyers’ costs remains a live community issue, and continues to attract the attention of government and law reform bodies.3 There have also been judicial 1 In this chapter, references to “costs” include: the cost of legal advice and assistance (fees); expenses incurred by the lawyer for her or his client (disbursements); and other expenses, such as court costs and transcript fees (charges): Elders Trustee & Executor Co Ltd v Estate of Herbert (1996) 111 NTR 25 at 30 per Gallop J. However, although the disadvantage or inconvenience suffered by a litigant can be seen as the “costs” of litigation, these are not “legal costs”: Cachia v Hanes (1994) 179 CLR 403 at 414 per Mason CJ, Brennan, Deane, Dawson and McHugh JJ. 2 Multiple external factors, beyond legal costs, have been identified as contributors to the rise in litigation costs, including: (1) the rising costs of discovery procedures due to broader practices of electronic record-keeping; (2) the implementation of case management procedures and their focus upon reducing delay in the court system; (3) taxation incentives for businesses to litigate; (4) rising costs of expert witnesses; and (5) rising court fees: New South Wales Law Reform Commission, Security for Costs and Associated Costs Orders (Consultation Paper 13, May 2011), p 9. 3 See, for example, Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), Ch 4 (devoted to legal costs).

468

Lawyers’ Professional Responsibility

[14.10]

statements querying the costs of justice. In a case involving a $500,000 legal bill for a divorce, Kirby P made the following pertinent observation:4 Little wonder that the legal profession, and its methods of charging, are coming under close parliamentary, media and public scrutiny. Something appears to be seriously wrong in the organisation of the provision of legal services in this community when charges of this order can be contemplated, still less made … If such costs, in what was substantially a single matrimonial property case between a married couple, are truly regarded as reasonable, there may be something seriously wrong in the assessment of reasonableness within the legal profession which this Court should resolutely correct.

The concern over lawyers’ costs, coupled with lawyers’ virtual monopoly on legal services and their position of greater knowledge, has prompted the law to impose safeguards on the charging of costs by lawyers to clients, which include the following: • extensive costs disclosure requirements: see [14.15]–[14.70]; • disciplinary sanction for lawyers who charge grossly excessive fees: see [25.70]–[25.80]; • the review of a bill of costs by an independent adjudicator: see [15.40]–[15.90]; • the prospect of a costs agreement being set aside in certain circumstances: see [14.160]–[14.205]. The Legal Profession Uniform Law, as implemented in New South Wales and Victoria, adds that “[a] law practice must not act in a way that unnecessarily results in increased legal costs payable by a client, and in particular must act reasonably to avoid unnecessary delay resulting in increased legal costs”.5 It thereby aims to give statutory force to what has traditionally been seen in terms of professional obligation.

[14.10]

It is the retainer from which the lawyer’s claim to costs is derived. In the absence of a valid provision governing the lawyer’s remuneration, whether in the retainer itself or in a separate contract (namely a costs agreement: see [14.75]–[14.105]),6 the lawyer may recover scale costs or, if no scale applies, the fair and reasonable value of the legal services provided (a quantum meruit basis).7

COSTS DISCLOSURE REQUIREMENTS [14.15]

Statute requires disclose to (prospective) clients, in writing in a way that they can understand, how the lawyer will charge and an indication of clients’ likely costs exposure. Costs disclosure obligations were driven in part as an avenue to increase price competition between lawyers, by positioning consumers to make price comparisons for legal services. They are also a means to foster consumer

4 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 422. 5 NSW, s 173; Vic, s 173. 6 A costs agreement, although a contract, is not the retainer agreement, but may be included within the retainer: Keesing v Adams [2010] NSWSC 336 at [30] per Brereton J; Legal Services Commissioner v Mould [2015] QCAT 440 at [60]–[66] per Carmody J. 7 This is made explicit in ACT, s 279; NT, s 314; Qld, s 319; SA, Sch 3, cl 21; Tas, s 303; WA, s 271. It also appeared in the former New South Wales and Victorian legislation: NSW 2004, s 319; Vic 2004, s 3.4.19.

[14.15]

14 Costs Disclosure and Costs Agreements

469

protection, informed by the frequent imbalance in power and knowledge between parties to a retainer or costs agreement. As explained by a Victorian judge:8 The protective policy of requiring disclosure by lawyers and enhancing freedom of informed choice by clients underpins this legislation, reflecting the modern conception that clients are not just clients but also consumers who are typically in a position of negotiating disadvantage, that lawyers are not just professionals but also suppliers of legal services and that the provision of legal services is not just an indispensible ingredient of the system of justice but also a (national) market in which information and bargaining power are imperfectly distributed.

That costs disclosure is now a legislated requirement does not mean that lawyers were not otherwise subject to some such obligations at general law. As discussed at [14.175], the fairness requirement for costs agreements, in targeting client understanding of costs agreement and their implications, has long proceeded on a need for some costs disclosure. Moreover, a lawyer, as a fiduciary, cannot legitimately profit from the lawyer–client fiduciary relationship without informed client consent: see [6.105]. This dictates a need for client consent to lawyers’ costs, in turn premised in part on costs disclosure. There is, to this end, case authority branding incomplete disclosure as a fiduciary breach.9 A costs disclosure statement should ideally be separate from the retainer or costs agreement, to avoid the impression that every aspect of the statement has legal force (cost estimates, for instance: see [14.40]), and because costs disclosure may be required before the retainer or costs agreement (see [14.45]) and includes reference to the client’s right to negotiate a costs agreement. The most extensive disclosure requirements derive from the Model Laws schema, the terms of which remain in force, chiefly through core uniform provisions,10 except in New South Wales and Victoria. In the latter jurisdictions, pursuant to the Legal Profession Uniform Law, costs disclosure obligations appear in less extensive terms: see [14.25].

8 Russells v McCardel [2014] VSC 287 at [10] per Bell J. 9 See, for example, Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228, discussed at [14.205]. 10 This followed a recommendation from the Australian Law Reform Commission that the Commonwealth Attorney-General, via the Standing Committee of State and Federal AttorneysGeneral, encourage all jurisdictions to enact similar legislation to harmonise the requirements for solicitors and barristers to disclose actual, expected or charged fees: Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), paras 4.26–4.37 (recommendation 26).

470

Lawyers’ Professional Responsibility

[14.20]

Disclosure requirements What must be disclosed?

[14.20]

The Model Laws’ schema, in its application in the Territories, Queensland, South Australia,11 Tasmania and Western Australia, requires a law practice to disclose to a (prospective) client matters including the following:12

• the basis on which legal costs will be calculated, including whether a scale (or equivalent) applies to any of the costs; • the client’s right to negotiate a costs agreement with the law practice (see [14.75]), to receive a bill from the law practice (including to request an itemised bill) (see [15.30]), and to be notified of any substantial change to the matters that are required to be disclosed;13 • if reasonably practicable, an estimate of the total legal costs, or otherwise a range of estimates and an explanation of the major variables that will affect their calculation; • details of the intervals (if any) at which the client will be billed; • the rate of interest (if any) that the law practice charges on overdue legal costs; • if the matter is a litigious matter, an estimate of the range of costs that may be recovered if the client is successful in the litigation, and that the client may be ordered to pay if unsuccessful (see [14.40]); • the client’s right to progress reports;14 • details of the person whom the client may contact to discuss the legal costs; • the avenues open to a client if there is a dispute in relation to legal costs, such as costs assessment (see [15.40]–[15.90]) and the setting aside of a costs agreement that is not fair or reasonable (see [14.150]–[14.205]); • a statement that a court order for the payment of costs in favour of the client will not necessarily cover all the client’s legal costs; and 11 South Australia did not adopt the Model Laws’ costs (disclosure) schema until 1 July 2014, pursuant to the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA). In South Australia formal costs disclosure obligations first saw the light with the former Rules of Professional Conduct and Practice, promulgated to take effect on 1 March 2003. These obligations were superseded once South Australia implemented the Australian Solicitors’ Conduct Rules on 25 July 2011, albeit via rules specific to South Australia (r 16B). 12 ACT, s 269; NT, s 303; Qld, s 308; SA, Sch 3, cl 10 (which adds that if the law practice will not be calculating legal costs in accordance with an applicable scale of costs, it must disclose that another law practice may calculate legal costs in accordance with the scale: Sch 3, cl 10(1)(b)); Tas, s 291; WA, s 260. The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 309; Vic 2004, s 3.4.9. 13 Under ACT, s 276; NT, s 310; Qld, s 315; SA, Sch 3, cl 17; Tas, s 299; WA, s 267 (and formerly NSW 2004, s 316; Vic 2004, s 3.4.16). 14 A law practice must, upon a reasonable client request, give to the client a written report of the progress of the matter, and a written report of the legal costs incurred by the client to date, or since the last bill (if any), in the matter: ACT, s 278; NSW, s 190 (formerly NSW 2004, s 318); NT, s 312; Qld, s 317; SA, Sch 3, cl 19; Tas, s 301; Vic, s 190 (formerly Vic 2004, s 3.4.18); WA, s 269. It has been noted that “[a] solicitor’s retainer in relation to possible litigation is rarely immutably fixed at the date on which it commences”, and that “[i]t is desirable that the prospective client be given a rough timetable as to the steps which may be required and when they are expected to occur”: Hancock v Arnold (2008) Aust Torts Reports ¶81-973 at [52] per Basten JA.

[14.25]

14 Costs Disclosure and Costs Agreements

471

• if applicable, a statement that disbursements may be payable by the client even if the client enters a conditional costs agreement (as to which see [14.135]).

[14.25]

Under the Legal Profession Uniform Law, as it applies from 1 July 2015 in New South Wales and Victoria, a law practice must:15

• when or as soon as practicable after instructions are initially given in a matter, “provide the client with information disclosing the basis on which legal costs will be calculated in the matter and an estimate of the total legal costs”; • when or as soon as practicable after any significant change to anything previously disclosed above, “provide the client with information disclosing the change, including information about any significant change to the legal costs that will be payable by the client”;16 and • provide information about the client’s rights to: (1) negotiate a costs agreement with the law practice (see [14.75]); (2) negotiate the billing method (say, by reference to timing or task); (3) receive a bill from the law practice, and request an itemised bill after receipt of a (partially) non-itemised bill; and (4) seek the assistance of the designated local regulatory authority17 in the event of a dispute about legal costs. This catalogue reveals disclosure obligations less extensive than those prescribed by the Model Laws, which had been extant under the former New South Wales and Victorian Acts. There is no explicit requirement that a client be informed of any applicable scale, details of the intervals (if any) at which the client would be billed, the rate of interest (if any) that the practice would charge on overdue legal costs, the client’s right to progress reports, details of the person whom the client could contact to discuss the legal costs, specific avenues in the event of a dispute in relation to legal costs,18 that an order by a court for the payment of costs in favour of the client may not cover all of the client’s legal costs, or that disbursements could be payable even under a conditional costs agreement. Disclosure of these matters nonetheless remains good practice. Perhaps the most significant alleviation, though, is the omission of any obligation, in a litigious matter, to give the client an estimate of the range of costs recoverable if the client proves successful in the litigation or payable by the client if unsuccessful. The Legal Profession Uniform Law is, conversely, more stringent when it comes to costs disclosure in an important way. It requires “an estimate of the total legal costs” of the law practice, not merely “a range of estimates and an explanation of the major variables that would affect their calculation”. And there is no means of circumventing this requirement where it is not “reasonably practicable”. 15 NSW, s 174(1), 174(2); Vic, s 174(1), 174(2). 16 Disclosure here must include a sufficient and reasonable amount of information about the impact of the relevant change to allow the client to make informed decisions about the future conduct of the matter: NSW, s 174(2)(b); Vic, s 174(2)(b). 17 In New South Wales, the Legal Services Commissioner; in Victoria, the Victorian Legal Services Board. 18 Although this must be disclosed in the bill for the relevant legal services: NSW, s 192; Vic, s 192.

472

Lawyers’ Professional Responsibility

[14.30]

[14.30]

Disclosure requirements are also imposed on a law practice that intends to retain another law practice on a client’s behalf.19 But a law practice (to be) retained on behalf of a client by another law practice is not obliged to make disclosure to the client.20 For example, a barrister must disclose to the instructing solicitor details of the barrister’s fees and billing arrangements – for the solicitor to then disclose to the client – but need not make this disclosure directly to the client. The above disclosure requirements must be fulfilled in writing,21 and, in jurisdictions under the Model Laws’ schema, in clear plain language.22 The reference to “clear plain language” aims to prevent disclosure couched in terms familiar to lawyers that a layperson may have difficulty understanding.23

[14.35]

The Model Laws’ schema envisages scope for disclosure in a language other than English if the client is more familiar with that language,24 but does not require the written disclosure expressed in a language the client does understand.25 Rather, clients with inadequate understanding of English, the relevant information should, once written disclosure in English is supplied, be conveyed orally in a language the client understands.26 This interpretation is consistent with the statutory wording that obliges a law practice aware of a client’s illiteracy to arrange for the required information to be conveyed orally in addition to providing written disclosure.27 The Legal Profession Uniform Law, as applied in New South Wales and Victoria, makes provision directed to the same object by requiring a law practice to take “all reasonable steps to satisfy itself that the client has understood and given consent to the proposed course of action for the conduct of the matter and the proposed

19 ACT, s 270; NSW, s 175 (formerly NSW 2004, s 310); NT, s 304; Qld, s 309; SA, Sch 3, cl 11; Tas, s 293; Vic, s 175 (formerly Vic 2004, s 3.4.10); WA, s 261. 20 Autore v Folino-Gallo [2014] NSWSC 777 at [50], [51] per Harrison AsJ. 21 ACT, s 271(1); NSW, s 174(6) (formerly NSW 2004, s 311(1)); NT, s 305(1); Qld, s 310(1); SA, Sch 3, cl 12(1); Tas, s 294(1); Vic, s 174(6) (formerly Vic 2004, s 3.4.11(1)); WA, s 262(1) 22 ACT, s 275(1)(a); NT, s 309(1)(a); Qld, s 314(1)(a); SA, Sch 3, cl 16(1)(a); Tas, s 298(1)(a); WA, s 266(1)(a). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 315(1)(a); Vic 2004, s 3.4.15(1)(a). The current New South Wales and Victorian Acts do require conditional costs agreements (as to which see [14.140]) to be “in plain language”: NSW, s 181(2)(a); Vic, s 181(2)(a). 23 Smirnios v Byrne (No 2) [2009] VSC 86 at [45] per Lasry J; Russells v McCardel [2014] VSC 287 at [75]–[77] per Bell J (adding that while in assessing whether an agreement is expressed in clear and plain language, care is needed to avoid the wisdom of hindsight (at [94]), if a provision “in relation to a matter of significant importance is expressed in language that is not clear and plain”, the agreement is non-compliant (at [82])). 24 ACT, s 275(1)(b); NT, s 309(1)(b); Qld, s 314(1)(b); SA, Sch 3, cl 16(1)(b); Tas, s 298(1)(b); WA, s 266(1)(b). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 315(1)(b); Vic 2004, s 3.4.15(1)(b). 25 Smirnios v Byrne (No 2) [2009] VSC 86 at [45] per Lasry J. 26 Smirnios v Byrne (No 2) [2009] VSC 86 at [47] per Lasry J. 27 ACT, s 275(2); NT, s 309(2); Qld, s 314(2); SA, Sch 3, cl 16(2); Tas, s 298(2); WA, s 266(2). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 315(2); Vic 2004, s 3.4.15(2).

[14.40]

14 Costs Disclosure and Costs Agreements

473

costs”.28 What are “reasonable steps” here will likely depend on the nature of the client and circumstances, albeit assessed from an objective perspective.29 The challenge in disclosing costs estimates

[14.40]

Supplying (prospective) clients with an estimate of the total costs , which is compelled in New South Wales and Victoria under the Legal Profession Uniform Law, may not always be easy. Even under the Model Laws’ disclosure schema – which qualifies any duty to provide a costs estimate by reference to practicability – the expectation that lawyers nonetheless supply a range of estimates and an explanation of the major variables that will affect their calculation may again not always prove to be straightforward. Certainly, the Model Laws’ requirement, in litigious matters, to supply an estimate of the range of costs that may be recovered if the client succeeds, and that the client may be ordered to pay if unsuccessful, may well presuppose little short of divination.

Although there is clearly a public interest in client awareness of likely costs, the parameters of all but the simplest retainer may be stretched or contracted by multiple events outside the lawyer’s control, a point of especial significance for a retainer to pursue litigation. The challenge is exacerbated for costs not determined by a scale or remuneration order. Under the auspices of the Model Laws, it is perhaps unsurprising to find lawyers reticent to provide specific estimates, and instead locate an estimate within a broad range. But there are limits to acceptable ranges for this purpose. In Casey v Quabba30 a statement that “[i]t is estimated the possible range of fees and costs recoverable will be between nil and $250,000 (approximately)” was held not to be a “genuine attempt to inform the client as required by the [legislation]”, and so did not meet the disclosure requirements. It behooves lawyers here to stress to (prospective) clients that the figures are mere estimates, and can be influenced by many factors. Clients should be dissuaded from construing an estimate as a quote,31 to which the lawyer can be legally bound.32 It is thus critical for lawyers to review the currency of an estimate during the course of the retainer, so as to keep the client informed of any substantial changes to its quantum. This is more crucial again in New South Wales and Victoria, where costs estimates are now mandatory, which explains explicit

28 NSW, s 174(3), 174(6); Vic, s 174(3), 174(6). 29 See Rosier, “Costs Disclosure and the Uniform Law: Has Your Client Really Understood You?” (2016) LSJ (Feb) 84 at 85. 30 Casey v Quabba [2005] QSC 356 at [39] per Jones J. 31 The point is addressed in the Hong Kong rules by counsel that “[w]hen giving estimates, a solicitor should take care to ensure that he is not binding himself to an agreed fee unless such is his intention”, and that “[c]lear and appropriate words should be used to indicate the nature of the estimate”: HK, principle 4.01, cmt [3]. 32 See, for example, D A Starke Pty Ltd v Yard [2012] SASC 19 (litigation involved a client’s ultimately unsuccessful contention that the lawyer’s cost estimate was in the nature of a quote; the litigation could arguably have been avoided had the lawyer in question been more explicit in communicating the nature of the estimate).

474

Lawyers’ Professional Responsibility

[14.45]

statutory provision to this effect in those jurisdictions.33 The case law reveals occasions where lawyers have suffered for been dilatory in doing so.34 At the same time, deliberate “under-quoting” to secure a client, and later revising the estimate upward, beyond being unprofessional and amounting to misleading and deceptive conduct, may be a fiduciary breach in placing the lawyer’s own interests in conflict with the duty to the client.35 However, that the total costs charged exceed (even substantially) the estimate does not automatically render the costs agreement unfair or unreasonable36 (under the Model Laws: see [14.160]) or dictate that the costs are not fair and reasonable (under the Legal Profession Uniform Law: [14.165]). When and to whom must the disclosure be made?

[14.45]

The disclosure requirements must be met before the lawyer is retained or, if not reasonably practicable, as soon as practicable after being retained.37 Ideally, again excepting difficult cases where it is impracticable to do so, costs estimates should precede entry into a costs agreement; otherwise a client risks incurring and (over) committing to paying future costs “without a fair idea of what those costs may be”, and may find it difficult to “seek independent legal advice on the nature and effect of the costs agreement or to seek a more economical legal service”.38 The foregoing combine to give an unfair advantage to the lawyer in her or his relationship with the client. At least under the Model Laws, disclosing to another law practice must be made before the other law practice is retained except in urgent circumstances, in which

33 The legislation requires a law practice, when or as soon as practicable after there is any significant change to anything previously disclosed, to “provide the client with information disclosing the change, including information about any significant change to the legal costs that will be payable by the client”, which information must contain “a sufficient and reasonable amount of information about the impact of the change on the legal costs that will be payable to allow the client to make informed decisions about the future conduct of the matter”: NSW, s 174(1)(b), 174(2)(b); Vic, s 174(1)(b), 174(2)(b). 34 See, for example, Bariamis v Coadys [2007] VCAT 645 (costs agreement cancelled due to a failure to provide an updated costs estimate in circumstances where this was practicable; the original costs estimate was $5,000 but the costs ultimately charged exceeded $18,000); Legal Practitioners Complaints Committee v Reyburn (2009) 62 SR (WA) 340 (respondent solicitor criticised for failing to formally revise a costs estimate in writing once the retainer became contentious); Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303 at [180] per White J (characterising a continued failure to provide a fresh reasonable estimate as a breach of contract, as well as misleading and deceptive conduct by omission under statute). 35 Burrell Solicitors Pty Ltd v Reavill Farm Pty Ltd [2016] NSWSC 303 at [180] per White J; HK, principle 4.01, cmt [3] (“To give an estimate which has been pitched at an unrealistically low level solely to attract the work and subsequently to charge a higher fee is improper because it misleads the client as to the true or likely cost”). 36 Moleirinho v Talbot and Olivier Lawyers Pty Ltd [2014] WASCA 65 at [36] per the court. 37 ACT, s 271(1); NSW, s 174(1) (formerly NSW 2004, s 311(1)); NT, s 305(1); Qld, s 310(1); SA, Sch 3, cl 12(1); Tas, s 294(1); Vic, s 174(1) (formerly Vic 2004, s 3.4.11(1)); WA, s 262(1). 38 Smith v Lewis Blyth & Hooper [2013] WASC 408 at [106], [107] per Jenkins J (paragraph breaks omitted) (revd but not on this specific point: Lewis Blyth & Hooper (a firm) v Smith (2015) 48 WAR 467).

[14.55]

14 Costs Disclosure and Costs Agreements

475

case it may be made orally before the law practice is retained and confirmed in writing as soon as practicable thereafter.39

[14.50]

Costs disclosure, in the usual case, is directed to the (prospective) client, which is defined to include a person to or for whom legal services are provided.40 The legislation, however, also requires disclosure to any associated third party payer, to the extent that the details or matters disclosed are relevant to that person and relate to costs payable by that person in respect of legal services supplied to the client.41 A person is a “third party payer” if he or she is under a legal obligation to pay any of the costs in question and has already paid all or part of those costs.42 He or she is an “associated third party payer” if the said legal obligation is owed to the law practice.43 When need disclosure not be made?

[14.55]

The legal profession legislation prescribes exceptions to costs disclosure requirements. In New South Wales and Victoria, under the Legal Profession Uniform Law, the basis upon which costs are calculated and a costs estimate need not be disclosed if the total legal costs are unlikely to exceed a lower threshold prescribed.44 If those costs are unlikely to exceed a specified higher threshold,45 the disclosure requirements are met by giving the client a standard disclosure form.46 Once a law practice becomes aware (or ought reasonably become aware) that the costs are likely to exceed the relevant threshold(s), it must inform the client in writing and make the requisite disclosure(s).47 The disclosure requirements also have no application to a commercial or government client.48 39 ACT, s 271(2); NT, s 305(2); Qld, s 310(2); SA, Sch 3, cl 12(2); Tas, s 294(2); WA, s 262(2). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 311(2); Vic 2004, s 3.4.11(2). 40 ACT, dictionary; NSW, s 6(1) (formerly NSW 2004, s 4(1)); NT, s 4; Qld, Sch 2; SA, Sch 3, cl 1; Tas, s 4(1); Vic, s 6(1) (formerly Vic 2004, s 1.2.1(1)); WA, s 3. 41 ACT, s 281A; NSW, s 176 (formerly NSW 2004, s 318A; NT, s 313; Qld, s 318; SA, Sch 3, cl 20; Tas, s 302; Vic, s 176 (formerly Vic 2004, s 3.4.18A); WA, s 270. The sections add that the disclosure must be made in writing at the time the disclosure to the client is required or, if the law practice only afterwards becomes aware of the legal obligation of the associated third party payer to pay the client’s legal costs, as soon as practicable after becoming aware of the obligation. 42 On the concept of a “third party payer”, and the requirement that he or she be legally obliged to pay the costs in question, see the discussion in Legal Services Commissioner v Wright [2012] 2 Qd R 360 at [27]–[32] per McMurdo J; Huntingdale Village Pty Ltd v Mallesons Stephen Jaques [2013] WASC 48 at [14]–[27] per Le Miere J; Shillington v Harries [2013] NSWSC 1202 at [32]–[56] per Latham J; Whyte v LM Investment Management Ltd (in liq) (recs and mgrs apptd) [2015] QSC 303 at [21]–[28] per Jackson J. 43 ACT, s 261A(1); NSW, s 171(1) (formerly NSW 2004, s 302A(1)); NT, s 296(1); Qld, s 301(1); SA, Sch 3, cl 2(1); Tas, s 284(1); Vic, s 171(1) (formerly Vic 2004, s 3.4.2A); WA, s 253(1). 44 NSW, s 174(4); Vic, s 174(4). The lower threshold is $750: NSW, Sch 4, cl 18(3); Vic, Sch 4, cl 18(3). 45 Namely $3,000: NSW, Sch 4, cl 18(3); Vic, Sch 4, cl 18(3). 46 NSW, s 174(5); Vic, s 174(5). The standard disclosure form is prescribed by the Legal Profession Uniform General Rules 2015, r 72. 47 NSW, s 174(7), 174(8); Vic, s 174(7), 174(8). 48 NSW, s 170(1); Vic, s 170(1). “Commercial or government client” is defined in NSW, s 170(2); Vic, s 170(2).

476

Lawyers’ Professional Responsibility

[14.60]

The Model Laws’ schema operative elsewhere exempts from the disclosure requirements instances where:49 • the total legal costs, excluding disbursements, are unlikely to exceed a prescribed amount;50 • the client has received one or more disclosures from the law practice in the previous 12 months, the client has agreed in writing to waive the right to disclosure, and a principal of the law practice decides on reasonable grounds that the further disclosure is not warranted; • the (prospective) client is a law practice, public or foreign company (or a subsidiary), registered Australian body, financial services licensee, Minister of the Crown acting in her or his capacity as such, government department or public authority; • the costs or the basis on which they will be calculated are agreed as a result of a tender process; or • the (prospective) client will not be required to pay the costs, or the costs will not otherwise be recovered by the law practice (say, where the law practice acts in the matter on a pro bono basis). Consequences of failing to fulfil disclosure requirements

[14.60]

A failure to fulfil the costs disclosure requirements dictates, inter alia, that the client need not pay the costs, and precludes the lawyer maintaining proceedings for their recovery, unless those costs have been taxed or assessed (see [15.40]–[15.90]) or, under the Legal Profession Uniform Law, the designated local regulatory authority has determined any costs dispute: see [24.80].51 It is capable, moreover, of constituting unsatisfactory professional conduct or professional misconduct.52

There are three main differences between the Model Laws’ and Uniform Law schema in this context. First, the Uniform Law declares that breaching the disclosure obligations renders any costs agreement involved void. The Model Laws simply entitle the client to apply for the costs agreement (or a provision in it) to be set aside (see [14.150]–[14.205]); mere failure to fulfil the disclosure obligations does not render any costs agreement void53 (or, for that matter, compel that it should be set aside for unfairness).54 Second, in a provision without parallel in the Uniform 49 ACT, s 272; NT, s 306; Qld, s 311; SA, Sch 3, cl 13; Tas, s 295; WA, s 263. The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 312; Vic 2004, s 3.4.12. 50 The prescribed amount, which is exclusive of GST, is $750 (Qld; formerly also NSW and Vic) or $1500 (ACT, NT, SA, Tas, WA). 51 ACT, s 277; NSW, s 178(1) (formerly NSW 2004, s 317); NT, s 311; Qld s 316; SA, Sch 3, cl 18; Tas, s 300; Vic, s 178(1) (formerly Vic 2004, s 3.4.17); WA, s 268. 52 Such conduct of itself does not automatically constitute unsatisfactory professional conduct or professional misconduct, because the legislation speaks in terms of it being “capable of” constituting unsatisfactory professional conduct or professional misconduct. Whether or not it does rests upon the circumstances of each case: Reynolds v Whittens (2002) 57 NSWLR 271 at [41] per O’Keefe J. 53 Walter v Buckeridge (No 5) [2012] WASC 495 at [46] per Le Miere J. 54 See, for example, Barclay v Clarke (a firm) [2014] QSC 20. As to the concept of “fairness” in this context see [14.170].

[14.70]

14 Costs Disclosure and Costs Agreements

477

Law, the Model Laws state that, on taxation or costs assessment, the costs recoverable by the lawyer may be reduced by an amount proportionate to the seriousness of the failure to disclose. Third, in a provision unique to the Uniform Law schema, the above statutorily prescribed consequences are expressed not to apply if the law practice took reasonable steps to comply with its disclosure obligations before becoming aware of the contravention, and rectified it within 14 days thereof, where “the contravention was not substantial and it would not be reasonable to expect that the client would have made a different decision in any relevant respect”.55 Failing to fulfil the costs disclosure requirements does not oust any lien to which the lawyer may be otherwise entitled.56 Nor does it mean that the costs claimed are ultimately irrecoverable, though their quantum may be reduced.57 Other disclosure obligations Disclosure prior to settlement

[14.65]

The legal profession legislation requires a law practice that negotiates the settlement of a litigious matter on a client’s behalf to disclose, before the settlement is executed, a reasonable estimate of the amount of legal costs payable by the client if the matter is settled (including any legal costs of another party that the client is to pay), and a reasonable estimate of any contributions towards those costs likely to be received from another party.58

Disclosure of commission by lawyer-executors

[14.70]

A lawyer who receives instructions from a person to draft a will appointing the lawyer an executor must, under the professional rules in most jurisdictions, inform that person in writing, where the lawyer may claim commission, that the person could appoint as executor someone who might make no claim for commission.59 This reflects statements at general law,60 and aligns with fiduciary law, which proscribes a lawyer-executor charging, as a lawyer, for professional services rendered to the estate absent a charging provision in the will. In Szmulewicz v Recht,61 for instance, Habersberger J found that a solicitor-executor,

55 Legal Profession Uniform General Rules 2015 (NSW), r 72A(2); Legal Profession Uniform General Rules 2015 (Vic), r 72A(2). 56 Patterson v Cohen [2005] NSWSC 635 at [12]–[17] per Hamilton J (particular lien) (contra Kelly v Hogan [2004] NSWSC 238 at [35] per Austin J, but the view stated in the text is preferable given that non-disclosure does not oust the client’s liability to pay costs, instead imposing only a precondition to recovery); Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48 at [55]–[61] per James J (retaining lien). 57 Chakera v Kuzamanovic [2003] VSC 92 at [13], [21] per Nettle J. 58 ACT, s 273; NSW, s 177 (formerly NSW 2004, s 313); NT, s 307; Qld, s 312; SA, Sch 3, cl 14 (cf the former SA, r 16B.2.4); Tas, s 296; Vic, s 177 (formerly Vic 2004, s 3.4.13); WA, s 264. 59 ACT, r 12.4.1; NSW, r 12.4.1; NT, r 9.1; Qld, r 12.4.1; SA, r 12.4.1; Vic, r 12.4.1; WA, r 15(5)(a)(iii). 60 See, for example, Re Chapple (1884) 27 Ch 584 at 587 per Kay J; Re Smith (deceased) (1916) 16 SR (NSW) 422 at 425 per Street J; Will of Shannon [1977] 1 NSWLR 210 at 217 per Holland J; Re McClung (deceased) [2006] VSC 209 at [35] per Evans M. 61 Szmulewicz v Recht [2011] VSC 368.

478

Lawyers’ Professional Responsibility

[14.75]

by including a clause in the testator’s will that entitled the solicitor to charge, in addition to professional fees, commission equating to percentages of the capital value of the estate and its income, committed a breach of fiduciary duty. IHis Honour stated the following:62 [A] solicitor putting forward a will for a client to sign, which contains a clause such as the one in this case, must explain to the client all of the pros and cons of the inclusion of the clause, even if it was the client who suggested the clause, so that it is clear that the client has given his or her informed consent to a clause which otherwise would give rise to an objection on the ground of conflict between fiduciary duty and personal interests. The solicitor cannot assume that the client understands all of the ramifications of including the suggested clause, no matter how sophisticated or astute the client may be with respect to financial matters.

That the above disclosure obligations extend beyond those contemplated by the professional rules has prompted a recommendation that the rules be revised to reflect these broader obligations.63 A practice of “double dipping” in this context – claiming both professional fees and commission – is moreover now very likely to be visited by a finding of professional misconduct.64 The foregoing does not preclude a lawyer making application to the court for commission, which may be fixed in line with the professional work done.65

COSTS AGREEMENTS [14.75]

A lawyer is not prohibited, whether at general law or professionally, from contracting with a client regarding the amount and manner of payment of the lawyer’s costs. The gradual shift from fee scales as between lawyer and client, coupled with costs disclosure obligations, have combined to popularise the use of agreements of this kind (“costs agreements”). The legal profession legislation in each jurisdiction, to this end, both recognises and regulates the practice of lawyers effecting costs agreements with their clients.66

62 Szmulewicz v Recht [2011] VSC 368 at [44]. See also Walker v D’Alessandro [2010] VSC 15 at [30] per T Forrest J; Tas r 80(1) (which prohibits a lawyer charging both profit costs and commission in relation to the same work carried out for or on behalf of a client if that lawyer is also an executor and/or trustee), 80(3) (which prohibits a lawyer executing a will or settlement for a person unless that person, before executing the will or settlement, has signed a statement showing the rate or identifying the scale of commission to be charged in addition to legal professional charges if: (a) the lawyer or another lawyer in the practice is appointed under the will or settlement as an executor and/or trustee; and (b) any one of the lawyers is entitled to a trustee’s commission); Cook, “Don’t Ask for More” (2011) 85 (Oct) LIJ 46. 63 See Victorian Law Reform Commission, Succession Laws (Report, August 2013), pp 147–149 (see the catalogue of proposed disclosure obligations listed at p 147, and the ultimate recommendation directed to expressly requiring the practitioner “to obtain the client’s informed consent to the payment of the benefit”: p 148). 64 See, for example, Victorian Legal Services Commissioner v McBain [2015] VCAT 1545; Victorian Legal Services Commissioner v Rhoden [2016] VSC 67. 65 Re Craig (1952) 52 SR (NSW) 265. 66 ACT, s 282(1); NSW, s 180(1) (formerly NSW 2004, s 322(1)); NT, s 317(1); Qld, s 322(1); SA, Sch 3, cl 24(1) (formerly SA, s 42(6)); Tas, s 306(1); Vic, s 180(1) (formerly Vic 2004, s 3.4.26(1)); WA, s 282(1).

[14.80]

14 Costs Disclosure and Costs Agreements

479

Construing a costs agreement

[14.80]

A costs agreement can form part of the retainer, or be separate from it; either way, it is not the retainer, but like the retainer it is a contract, and so must meet both the general law requirements of a contract and any formality requirements imposed by statute: see [14.90], [14.95]. There must, as a result, be an agreement that the law will enforce as a contract, usually evidenced by a meeting of the minds. In fact, statute makes explicit that a costs agreement is enforced in the same way as any other contract,67 and may consist of a written offer accepted in writing or (except for a conditional costs agreement) by other conduct.68 In Swaab v Sayed,69 Kunc J found that a reasonable bystander would regard the defendant’s conduct, in continuing to instruct the plaintiff law practice and paying some of its invoices, as an acceptance of the offer set out in the terms of the costs agreement, notwithstanding that the defendant never returned an executed copy to the practice. In PM Sulcs & Associates Pty Ltd v Oliveri,70 Debelle AJ found otherwise in a case involving a backdated costs agreement not signed by the client or accepted by other conduct. The evidence revealed that the parties had not agreed on the hourly rate chargeable under the alleged agreement, which was “obviously a fundamental term of a costs agreement”.71 A costs agreement can, in any case, be expressed in terms so obscure, and so incapable of definite or precise meaning, to be unenforceable on the grounds of uncertainty.72 Generally, though, faced with alleged uncertainty, courts endeavour to avoid a construction that leads to invalidity, especially if the contract has been acted upon.73 If the terms of a costs agreement prove ambiguous, it may be that a 67 ACT, s 286; NSW, s 184 (formerly NSW 2004, s 326); NT, s 321; Qld, s 326; SA, Sch 3, cl 28; Tas, s 310; Vic, s 184 (formerly Vic 2004, s 3.4.30); WA, s 286. 68 ACT, ss 282(3), 283(3)(c)(i); NSW, s 180(3) (formerly NSW 2004, s 322(3)); NT, ss 317(3), 318(3)(c)(i); Qld, ss 322(3), 322(3)(c)(i); SA, Sch 3, cll 24(3), 25(3)(c)(i); Tas, ss 306(3), 307(3)(c)(i); Vic, s 180(3) (formerly Vic 2004, s 3.4.26(3)); WA, ss 282(3), 283(3)(c)(i). 69 Swaab v Sayed [2013] NSWSC 887 at [28]. 70 PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456. 71 PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456 at [191]. An English judge, in a case involving a backdated conditional fee agreement, has remarked that “[i]t is wrong to seek to give an agreement retrospective effect by back-dating it”, and that “[i]f it is agreed that a written agreement should apply to work done before it is entered into, it should be correctly dated with the date on which it is signed and expressed to have retrospective effect”: Holmes v Alfred McAlpine Homes (Yorkshire) Ltd [2006] EWHC 110 (QB) at [23] per Stanley Burnton J. At the same time, it should not be assumed that a costs agreement can never have retrospective effect: see Paroz v Clifford Gouldson Lawyers [2012] QDC 151 at [32]–[44] per McGill DCJ. 72 See, for example, McInnes v Twigg (1992) 16 Fam LR 185 at 201 per Moss J. Cf QCoal Pty Ltd v Cliffs Australia Coal Pty Ltd [2010] QSC 479 at [40]–[49] per Ann Lyons J (rejecting an argument that a costs agreement was uncertain because it stipulated that fees were chargeable on the basis of “our current hourly rates from time to time”; her Honour reasoned that “the rate to be charged for any work done was always able to be objectively ascertained by reference to the objective criteria”, as “[t]he rates were not set in an arbitrary way but rather the applicable rates to be charged were set pursuant to policy of annual review and were usually fixed for a year”: at [47]); Costa v Murcia Pestell Hillard Pty Ltd [2013] WASC 44 (rejection of an argument that an otherwise “straightforward and easily comprehensible” costs agreement was uncertain for not stipulating a partner charge-out rate). 73 Twigg & Twigg v Kung (1994) 121 FLR 227 at 231–233 (FC(Fam Ct)).

480

Lawyers’ Professional Responsibility

[14.80]

contra proferentem approach – construed against the lawyer – is justified.74 This is so especially for a typical lay client, the logic being that a lawyer should, as the author of the agreement and holding a knowledgeable position, ensure its terms are clearly expressed, and thus should not receive the benefit of ambiguous expression75 (although the position may be otherwise for an experienced client).76 Lack of clarity sounding in denial of a fee ensued in Baker Johnson Lawyers v Jorgensen,77 involving a claim settled for an amount “inclusive of costs”, that was less than the costs and disbursements incurred by the plaintiff’s solicitors. The solicitors had been retained on a “no win no fee” basis, without defining in the costs agreement what was meant by “win”. The Queensland District Court denied the solicitors’ claim to recover the shortfall from the plaintiff, reasoning that an outcome is not a “win” from a plaintiff’s perspective unless he or she recovers something.78 Statute now requires a conditional costs agreement (as to which see [14.140]) to set out those circumstances that constitute the successful outcome of the matter.79 In drafting a costs agreement, it is sensible to address, inter alia, the possibility a counter-claim, that the client may succeed at trial but lose on appeal,80 or that the

74 See, for example, Owners – Strata Plan No 45205 v Andreones Pty Ltd [2009] NSWSC 1189 (retainer construed strictly so as to deny solicitors professional and photocopying costs incurred after its termination). 75 Maurice Blackburn Pty Ltd v Burmingham [2009] VSC 20 at [117] per Byrne J (noting, in this context, that “the modern legal environment is more sensitive to the consequences of inequality of bargaining power”). 76 See Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 3) [2004] VSC 164, where Byrne J declined to construe a costs agreement contra proferentem where the client was “an intelligent and experienced litigant who demonstrated himself to be well able to look after his own interests”, “a very experienced professional litigant” and a “hands on client”: at [10], [11]. His Honour’s finding, though, appeared to be influenced by his view that in many respects the costs agreement operated “surprisingly harshly” vis-à-vis the law firm: at [29]. 77 Baker Johnson Lawyers v Jorgensen [2002] QDC 205. 78 Baker Johnson Lawyers v Jorgensen [2002] QDC 205 at [18] per McGill DCJ. Neilson DCJ adopted the same reasoning in the factually similar case of Brady v Bale Boshev Solicitors (2009) 10 DCLR(NSW) 284 at [34]–[39]. 79 ACT, s 283(3)(a); NSW, s 181(2)(b) (formerly NSW 2004, s 323(3)(a)); NT, s 318(3)(a); Qld, s 323(3)(a); SA, Sch 3, cl 25(3)(a); Tas, s 307(3)(a); Vic, s 181(2)(b) (formerly Vic 2004, s 3.4.27(3)(a)); WA, s 283(3)(a). 80 See, for example, Woodgate v Keddie (2006) Aust Contract R ¶90-247, where Bennett J held that a conditional costs agreement, cl 2 of which provided that “the successful outcome of the Work undertaken is when we obtain … a verdict in [the client’s] favour”, entitled the solicitors to retain their fee (including a 25% uplift fee) even though the verdict in question was reversed on appeal. In so ruling, his Honour noted that cl 2 made no reference to “appeal” or “final”, and that cl 1 of the agreement described “the Work” by reference to which the “successful outcome” related in a manner that encompassed only trial work and not work for an appeal: at [21]. This finding was affirmed on appeal: Woodgate v Keddie (2007) 242 ALR 234.

[14.85]

14 Costs Disclosure and Costs Agreements

481

client may refuse a generous settlement offer.81 The following admonitions of Bergin CJ in Eq in Spence v Gerard Malouf & Partners Pty Ltd are apposite in this context:82 In a “No Win – No Charge” retainer when solicitors’ livelihoods and incomes are bound up with and dependent upon the client taking a particular step in litigation, it seems to me that the capacity to provide the client with objective advice about taking that step is compromised. The greater the amount of fees to be lost the greater the prospect of compromise. These types of retainers are fraught with difficulties if they are not drafted with exquisite clarity. Experience shows that there are always prospects of a client wanting to take a second opinion or change solicitors. Great care must be taken to explain the circumstances in which a client will be responsible for the solicitors’ fees. In the competitive world of securing clients, it is also very important that prospective clients are informed of the specific circumstances in which a solicitor may terminate the retainer, particularly on the basis that there will be an entitlement to do so if the client refuses to accept reasonable advice.

In Spence a “no win – no charge” retainer prescribed occasions in which the “no win – no charge” policy would not operate, but made no mention of the prospect of the defendant law firm ceasing to act for the plaintiff client if it (or counsel) formed the view that the plaintiff could not achieve a better outcome than an offer of compromise. A month before the trial the law firm advised the plaintiff that it would cease to act if Senior Counsel’s opinion was that the plaintiff would not exceed the offer of compromise, unless the plaintiff made arrangements to attend to payment of its fees within seven days. Bergin CJ in Eq branded this “a most unreasonable threat”,83 and ordered the firm to cede its retaining lien over the file to the plaintiff’s new lawyers. Effect of costs agreement

[14.85]

As a contract, a costs agreement stipulates the lawyer’s entitlement to recover costs, limiting the lawyer to the costs specified in, and calculated according to, the agreement. If a costs agreement sets the regime for payment, there is consequently no ground upon which the lawyer can recover additional costs on a quantum meruit basis.84 A costs agreement does not oust scope for disciplinary proceedings for overcharging (see [25.80]). Nor does it excise the jurisdiction

81 Cf the barristers’ rules that entitle a barrister to return a brief accepted under a conditional costs agreement if the barrister considers on reasonable grounds that the client has unreasonably rejected a reasonable offer to compromise contrary to the barrister’s advice: ACT, rr 99(a), 100 (not confined to conditional costs agreements); NSW, r 106; NT, r 100(a) (not confined to conditional costs agreements); Qld, r 100; SA, r 100; Vic, r 106; WA, r 100. 82 Spence v Gerard Malouf & Partners Pty Ltd [2010] NSWSC 764 at [110]. See also Frost v Miller [2015] QSC 206 at [19], [20] per Carmody CJ (in remarks that also target uplift fee agreements in this regard). 83 Spence v Gerard Malouf & Partners Pty Ltd [2010] NSWSC 764 at [99]. See also Ireland v Trilby Misso Lawyers [2011] 2 Qd R 320 (where lawyers who illegitimately terminated the retainer upon forming the view that the claim was too risky to proceed with on a “no win – no fee” basis were denied their costs); Viselle v Grieve (2014) 18 DCLR (NSW) 75 (lawyer’s failure to make express provision for the costs consequences of an early termination of a “no win – no fee” engagement justified a stay of the enforcement of assessed costs: at [29]–[33] per Gibson DCJ). 84 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (2007) 18 VR 250 at [136]–[140] (CA); Ventouris Enterprises Pty Ltd v Dib Group Pty Ltd (No 4) [2011] NSWSC 720 at [24]–[29] per Slattery J.

482

Lawyers’ Professional Responsibility

[14.90]

(where the Model Laws apply) to set it aside for being unfair or unreasonable (see [14.150]–[14.205]) or (under the Uniform Law) a finding that the costs are not fair and reasonable (see [14.165]). Formalities for costs agreements Writing

[14.90]

Statute envisages that costs agreements be written, or evidenced in writing,85 and declares void costs agreements that do not meet the writing formalities.86 The lack of writing a written costs agreement does not, however, deny a lawyer a claim for costs; he or she can seek to recover costs on a quantum meruit basis, to be quantified by taxation or assessment if necessary: see [14.100]. Such a claim rests not on contract, but in avoiding the client being unjustly enriched by the lawyer’s services.87 Signature

[14.95]

The legal profession legislation states that an offer in respect of a purported costs agreement can be accepted by conduct other than writing.88 There is no requirement, therefore, that a client sign a costs agreement (unless the terms of the offer require signature,89 or in the case of conditional and uplift fee agreements, which statute requires to be signed: see [14.140]). It remains good practice, in any 85 That a costs agreement may be “evidenced in writing” means that there is no requirement that the agreement be documented in a single document. An agreement in writing can be contained in letters or correspondence, or in some other written form, provided it is clear that the client has acceded to the terms of these letters or correspondence. See, for example, Amirbeaggi v Business in Focus (Aust) Pty Ltd [2008] NSWSC 421 (deed dealing with a debt for legal costs held to constitute a costs agreement); Jaha v Defteros [2012] VSC 512 (letter from the lawyers that referred to a costs agreement held to evidence what the parties had earlier orally agreed). 86 ACT, ss 282(2), 287(1); NSW, ss 180(2), 185(1) (formerly NSW 2004, ss 322(2), 327(1)); NT, ss 317(2), 322(1); Qld, ss 322(2), 327(1); SA, Sch 3, cll 24(2), 25(1); Tas, ss 306(2), 311(1); Vic, ss 180(2), 185(1) (formerly Vic 2004, ss 3.4.26(2), 3.4.31(1)); WA, ss 282(2), 287(1). Prior to its amendment by the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), which took effect on 1 July 2014, the South Australian legislation simply stated that a written costs agreement may be entered into (SA, s 42(6)) without indicating the consequences of a lack of writing. The case law nonetheless suggested that an oral costs agreement was unenforceable: McNamara Business & Property Law v Kasmeridis (2005) 92 SASR 382 (where the Full Court proceeded on this assumption, and suggested that the sending of an email or even an oral accession could amount to an acceptance for this purpose, provided that the agreement itself was in writing: at [61]–[63]); Piper Alderman (a firm) v Australian Medic-Care Company Ltd (2011) 278 LSJS 137 at [46] per Stanley J (where an exchange of emails evidenced the agreement between the parties that the firm would act on its normal terms of engagement – apparent from other documents – pending the parties agreeing on the terms the firm was insisting upon as a retainer agreement). 87 Wentworth v Rogers [2002] NSWSC 709 at [19] per Barrett J; Wentworth v Rogers [2005] NSWSC 143 at [38]–[45] per Patten AJ. 88 ACT, s 282(3); NSW, s 180(3) (formerly NSW 2004, s 322(3)); NT, s 317(3); Qld, s 322(3); SA, Sch 3, cl 24(3); Tas, s 306(3); Vic, s 180(3) (formerly Vic 2004, s 3.4.26(3)); WA, s 282(3). The South Australian position, under the former SA, s 42(6), was likely to have been the same because, under the general law of contract, an acceptance can be effected other than by signature: Motor Trades Association of Australia Superannuation Fund Pty Ltd v Rickus (No 6) (2010) 223 FCR 261 at [30] per Flick J. 89 See, for example, O’Neill v Wilson [2011] QSC 220; Paroz v Clifford Gouldson Lawyers [2012] QDC 151.

[14.105]

14 Costs Disclosure and Costs Agreements

483

case, to secure a client signature to a costs agreement, as this reduces the prospect of an allegation that the client has not agreed to its terms.90 It also may prompt a client to closely consider the terms to which he or she is attesting. Costs recovery where costs agreement is unenforceable or void

[14.100] Statute declares void a costs agreement that contravenes any of the statutory requirements.91 Any costs payable thereunder remain recoverable by the lawyer, but quantified under an applicable scale or practitioner remuneration order, or otherwise according to the fair and reasonable value of the services provided (quantum meruit basis).92 However, the legislation precludes recovery or retention of an amount exceeding what the lawyer would have been entitled to recover had the costs agreement been valid.93 It also precludes recovery or retention of any fees charged under an illegitimate uplift fee agreement (see [14.145]) or a percentage fee agreement (see [14.135]).94 [14.105] The 1996 Victorian Act disentitled a lawyer who entered into a costs agreement proscribed by the legislation “to recover any amount in respect of the provision of legal services in the matter to which the costs agreement related”.95 In Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 4)96 a costs agreement prescribed a discount hourly rate of $66, compared to the $400 “normal” hourly rate, stating that the “normal” rate would be charged should the client succeed in the litigation. Byrne J saw this as an uplift fee agreement and, as the uplift of $400 over $66 exceeded the statutory 25% limit (see [14.145]), deprived the solicitors of costs. His Honour’s decision was reversed by the Victorian Court of Appeal, which viewed the agreement as an ordinary conditional costs agreement, whereupon the normal rate was the fee payable in the event of a successful outcome.97 What also informed this conclusion were policy considerations, explained as follows:98 We consider that the access to justice issue … is also of some importance. If [the client’s] position prevailed, speculative fee agreements which provided for the payment of some costs in the event of failure would, in many instances we should think, have been rendered unlawful. The only agreements of that kind which could have survived [the relevant provision dealing with uplift fee agreements] would have been agreements in 90 See, for example, PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456, discussed at [14.80]. 91 ACT, s 287(1); NSW, s 185(1) (formerly NSW 2004, s 327(1)); NT, s 322(1); Qld, s 327(1); SA, Sch 3, cl 29(1); Tas, s 311(1); Vic, s 185(1) (formerly Vic 2004, s 3.4.31(1)); WA, s 287(1). 92 ACT, s 287(2); NT, s 322(2); Qld, s 327(2); SA, Sch 3, cl 29(2); Tas, s 311(2); WA, s 287(2). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 327(2); Vic 2004, s 3.4.31(2). 93 ACT, s 287(3); NSW, s 185(2) (formerly NSW 2004, s 327(3)); NT, s 322(3); Qld, s 327(3); SA, Sch 3, cl 29(3); Tas, s 311(3); Vic, s 185(2) (formerly Vic 2004, s 3.4.31(3)); WA, s 287(3). 94 ACT, s 287(4), 287(5); NSW, s 185(3), 185(4) (formerly NSW 2004, s 327(3A), 327(4); NT, s 322(4), 322(5); Qld, s 327(4), 327(5); SA, Sch 3, cl 29(4), 29(5); Tas, s 311(4), 311(5); Vic, s 185(3), 185(4) (formerly Vic 2004, s 3.4.31(4), 3.4.31(5)); WA, s 287(4), 287(5). 95 Vic 1996, s 102(3). 96 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (No 4) [2006] VSC 28 at [7]–[21]. 97 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (2007) 18 VR 250 at [130] (CA). See also Coadys (a firm) v Getzler (2007) 18 VR 288 at [36] (CA). 98 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) (2007) 18 VR 250 at [124] (CA).

484

Lawyers’ Professional Responsibility

[14.110]

which there was a small differential in what was payable in the event of success and what was payable in the event of failure. That must have been a disincentive to solicitors to enter into speculative fee arrangements other than those under which no costs were payable in the event of failure. Access to justice would scarcely, if at all, have been increased in such circumstances.

The Queensland legislation explicitly addresses the point, by stating that if a law practice discounts its fees, the statutory reference to a 25% maximum uplift of a practice’s costs is to be read as a reference to the fees it would have charged had it not discounted them.99

CONTINGENT FEE COSTS AGREEMENTS Definition

[14.110] Under a contingency fee agreement, the payment of the lawyer’s fee is made contingent on a specified event, usually the success in the litigation. These agreements take one of three forms: speculative, uplift and percentage. Pursuant to a speculative (or conditional) fee agreement, a lawyer takes her or his usual fee only in the event that the action is successful. An uplift (or success) fee arrangement entitles a lawyer to receive, in addition to her or his usual fee, an agreed flat amount or percentage “uplift” of usual fee should the client succeed. Under a percentage fee agreement a lawyer receives as fees an amount calculated as a percentage of the amount secured. Advantages and drawbacks

[14.115] Contingency fee arrangements are lauded for fostering access to justice, chiefly for plaintiffs in civil actions pursuing meritorious monetary claims who otherwise could not afford representation. Such an arrangement incentivises the lawyer to make an early assessment of the client’s prospects of success, which the client is ordinarily poorly positioned to assess, and to vigorously and innovatively pursue a case that has reasonable or strong prospects of success. The flip side is that contingency fee agreements function as a disincentive to pursuing unmeritorious or vexatious proceedings. As expounded by a Queensland judge:100 As legal practitioners are better equipped to evaluate the efficacy of the proposed claim, they constitute more efficient risk-bearers. Through connecting remuneration with probability of success, conditional costs agreements promote alignment between the economic interests of legal practitioners and their clients. This also enhances efficiency in the administration of justice, as legal practitioners are unlikely to pursue futile, speculative or spurious claims if an adverse outcome will result in significant economic expenditure without a commensurate return. Accordingly, conditional costs agreements assist in removing dubious claims from the judicial system, avoiding unnecessary waste of public time and resources.

Opponents of contingency fee agreements fear that an epidemic of unreasonable litigation may stem from removing a financial impediment to litigation. They cite as proof the litigious nature of United States society, although other factors contribute 99 Qld, s 324(5). 100 Frost v Miller [2015] QSC 206 at [18] per Carmody CJ.

[14.115]

14 Costs Disclosure and Costs Agreements

485

to this. The United States lacks a comprehensive medical insurance scheme and has only a limited welfare system, so its citizens rely more heavily on obtaining compensation via the courts. Damages awards may prove more generous due to often being assessed by juries and by virtue of statutes that provide for double and triple damages in some cases. Moreover, much of the litigation conducted in the United States is not subject to the costs indemnity rule; instead each party bears its own costs. As a result, a litigant loses little if he or she proves unsuccessful in the claim. Perhaps more concerning is the conflict of interest inherent in a contingency fee: the lawyer’s interest to settle at a time that maximises her or his fee may not align with the client’s interests.101 Scope for conflict is heightened in the case of percentage fees (and uplift fees to a lesser extent), which encourage lawyers to settle as early as possible in the proceeding in order to generate the greatest fee for the least work. Thus lawyers may pressure clients to accept potentially disadvantageous settlements, and guard their interest by inserting in the costs agreement an entitlement to specified fees if clients reject a fair and reasonable settlement offer. Attached to this is the fear that the purchase of a share in litigation is a temptation to engage in misconduct in the pursuit of a successful outcome.102 Another concern is that uplift and percentage fee agreements may result in a lawyer fee unrelated to the value of the legal services performed.103 “The mention of contingency fees”, an Australian tribunal has observed, “can tend to evoke notions of highly entrepreneurial lawyers treating litigation as a means of siphoning disproportionate amounts from damages payouts received by vulnerable clients”.104 101 Wallersteiner v Moir (No 2) [1975] QB 373 at 402 per Buckley LJ; Trendtex Trading Corp v Crédit Suisse [1980] QB 629 at 663 per Oliver LJ; Re Robb (1996) 134 FLR 294 at 315 (FC(ACT)). See, for example, Re Melvey (1966) 85 WN (Pt 1) (NSW) 289 at 297 (CA). 102 Re Trepca Mines Ltd (No 2) [1963] Ch 199 at 219–220 per Lord Denning MR; Wallersteiner v Moir (No 2) [1975] QB 373 at 402 per Buckley LJ; Giles v Thompson [1994] 1 AC 142 at 153 per Lord Mustill. 103 Studies in the United States show that lawyers who take on a case on a percentage fee basis can expect to secure a greater fee than they would adopting time charging: see, for example, Kritzer, “The Wages of Risk: The Returns of Contingency Fee Legal Practice” (1998) 47 DePaul L Rev 267. As to uplift fees, unlike the normal fee that consists partly of overheads, the uplift is all profit. Hence, a doubling of the profit does not require anywhere near a 100% uplift. The research shows that the average client who enters a conditional fee agreement pays out of her or his damages as “uplift” more than is justified by the actual risk of losing: see Zander, “Will the Revolution in the Funding of Civil Litigation in England Eventually Lead to Contingency Fees?” (2002) 52 DePaul L Rev 259 at 279–280. However, it should be noted that there remains, in the United States, curial oversight over the percentage fee agreements. A court may find a contingent fee unreasonable where, inter alia, there is “a high likelihood of substantial recovery by trial or settlement, so that the lawyer bore little risk of nonpayment”, where “the client’s recovery was likely to be so large that the lawyer’s fee would clearly exceed the sum appropriate to pay for services performed and risks assumed”, or “because either the percentage rate is excessive or the base against which the percentage is applied is excessive or otherwise unreasonable”: Restatement, §35, cmts c, d. Also, a lawyer’s “failure to disclose to the client the general likelihood of recovery, the approximate probable size of any recovery, or the availability of alternative fee systems can also bear upon whether the fee is reasonable”: Restatement §35, cmt c. See also US, r 1.5, cmt [5] (“When there is doubt whether a contingent fee is consistent with the client’s best interests, the lawyer should offer the client alternative bases for the fee and explain their implications”). 104 Legal Services Commissioner v Barrett [2012] VCAT 1800 at [33].

486

Lawyers’ Professional Responsibility

[14.120]

More generally, contingency fee agreements do not relieve unsuccessful litigants from the risk of an adverse costs order unless the lawyer agrees to shoulder this liability (“no win no fee”), or the client secures insurance for this purpose.105 They, moreover, usually work only one way, that is, for a plaintiff; they cannot assist a defendant who is not counterclaiming. Contingency fees at general law

[14.120] At general law the torts of maintenance and champerty upset the legality of certain contingency fee agreements. Maintenance involves “the procurement, by direct or indirect financial assistance, of another person to institute or carry on or defend civil proceedings, without lawful justification”.106 Champerty is a form of maintenance in which a share of the proceeds of the litigation is stipulated as the consideration for the assistance given. The tort of champerty reflects the public interest in seeing that “vulnerable litigants are protected from opportunistic exploitation”.107 Accordingly, percentage fee agreements are champertous,108 as are uplift fee agreements to the extent that they can be viewed as being in substance a share of the proceeds of judgment.109 Although the torts of maintenance and champerty have been statutorily abolished in New South Wales, South Australia and Victoria, in New South Wales and Victoria this does not prevent a contract from being contrary to public policy or otherwise illegal on the grounds of champerty.110 Yet against the backdrop of the High Court’s decision in Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd111 – which upheld the legitimacy public policy-wise of litigation funding agreements under which the funder receives a share of the proceeds of the litigation – the scope for champerty to impugn costs agreements is now correspondingly reduced. 105 Insurance of this kind (known as “After The Event” insurance), taken out to cover the opponent’s fees and disbursements, has become popular in England following the legislative recognition of speculative and uplift fee agreements: see Zander, “Will the Revolution in the Funding of Civil Litigation in England Eventually Lead to Contingency Fees?” (2002) 52 DePaul L Rev 259 at 261–269. 106 English Law Commission (Report No 7, 1966) Vol 1, pp 167, 168, cited in J C Scott Constructions v Mermaid Waters Tavern Pty Ltd [1984] 2 Qd R 413 at 428 per McPherson J. 107 Stocznia Gdanska SA v Latvian Shipping Co (No 2) [1999] 3 All ER 822 at 831 per Toulson J. 108 See, for example, Smits v Roach (2004) 60 NSWLR 711 (affd but on a different ground: Smits v Roach (2006) 227 CLR 423). 109 Cf Clairs Keeley (a firm) v Treacy (2003) 28 WAR 139 at [169], [170] per Templeman J. 110 Maintenance, Champerty and Barratry Abolition Act 1993 (NSW), ss 4, 6; Criminal Law Consolidation Act 1935 (SA), Sch 11; Abolition of Obsolete Offences Act 1969 (Vic), s 4; Wrongs Act 1958 (Vic), s 32(2). 111 Campbells Cash and Carry Pty Ltd v Fostif Pty Ltd (2006) 229 CLR 386. The New Zealand Court of Appeal, applying Fostif, has similarly ruled that litigation funding is not of itself an abuse of process: Contractors Bonding Ltd v Waterhouse [2012] 3 NZLR 826. The United States has, in recent times, also witnessed some drive towards litigation funding, notwithstanding the traditional avenue of percentage fee agreements to access justice: see Fischer, “Litigating Financing: A Real or Phantom Menace to Lawyer Professional Responsibility?” (2014) 27 Geo J Legal Ethics 191; Langford, “Betting on the Client: Alternative Litigation Funding is an Ethically Risky Proposition for Attorneys and Clients” (2015) 49 USF L Rev 237.

[14.125]

14 Costs Disclosure and Costs Agreements

487

It is more difficult to characterise a speculative fee agreement as champertous.112 For speculative fee agreements, the advantage of access to justice has proven to outweigh other concerns. The High Court has recognised that a lawyer who considers that a client has a reasonable cause of action (or defence), and does not bargain for an interest in the subject matter of the litigation, may charge on a speculative fee basis.113 Far from being discouraged, this practice has been described as “consistent with the highest professional honour”,114 it being judicially queried why there is “a widespread reluctance in the legal community to recognise, if not to commend the speculative action”.115

[14.125] That is not to say that all forms of proceedings are amenable policy-wise to being pursued on a speculative fee basis. A contingent fee may encourage defence lawyers in criminal proceedings to mislead the court in order to secure their client’s acquittal and thereby receive their fee, or to reject a favourable plea bargain.116 Matrimonial matters also should not be charged via a contingent fee, it is reasoned, because it is against public policy to incentivise lawyers to encourage divorce or discourage reconciliation.117 The exceptions to the use of speculative fee agreements are reflected in the statutory regulation of these agreements.118 In any event, the availability of legal aid for criminal and family law matters has not made this a live issue in Australian legal circles to date. 112 Contra the position at common law in England (see the strict approach in Hughes v Kingston Upon Hull City Council [1999] QB 1193 and Awwad v Geraghty & Co (a firm) [2001] QB 570), which led to a statutory sanction of conditional fee agreements: Courts and Legal Services Act 1990 (UK), ss 58, 58A. See Walters, “Contingency Fee Arrangements At Common Law” (2000) 116 LQR 371. Yet even in England there seems to be a turning of the tide in recent times at common law: see Kellar v Williams [2004] UKPC 30 at [21] per Lord Carswell; Morris v Southwark London Borough Council [2011] 2 All ER 240 at [49] per Lord Neuberger MR; James, “The End of Champerty?” (2011) 161 New LJ 547. 113 Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 203 (FC). 114 Sievwright v Ward [1935] NZLR 43 at 47 per Ostler J. See also Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [89] per Miles CJ, Higgins and Madgwick JJ; Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 at [42] (FC(ACT)); Kain v Wynn Williams & Co [2013] 1 NZLR 498. Cf Re Sheehan (1990) 13 Fam LR 736 at 749 per Fogarty J. 115 Re Robb (1996) 134 FLR 294 at 315 (FC(ACT)). 116 British Waterways Board v Norman (1993) 26 HLR 232; Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 535–538. Cf Lushing, “The Fall and Rise of the Criminal Contingency Fee” (1991) 82 J of Crim Law & Criminology 498 (who argues that contingency fees ought to be permitted in criminal cases); Karlan, “Contingent Fees and Criminal Cases” (1993) 93 Colum L Rev 595 (suggesting limited relaxation of ban, particularly for white-collar criminal defendants); Restatement §35(1), cmt f(i) (“A fee arrangement giving lawyers a direct financial incentive to seek their clients’ acquittal or favorable plea would increase client choice and promote effective assistance of counsel and might be no more likely to induce misconduct due to overzealousness than a contingent fee in civil cases”). 117 See Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 538–541. Cf Restatement §35(1), cmt g (which observes that since the passage of no-fault divorce legislation, “public policy does not clearly favor the continuation of a marriage that one spouse wishes to end”; also, “in practice, once one spouse retains a lawyer to seek a divorce, a divorce will follow in most cases regardless of the basis of the fee”, in which case the principal dispute is likely to be a financial one, as regards which the prohibition on contingent fee agreements might “make it more difficult for the poorer spouse to secure vigorous representation”). 118 ACT, s 283(2); NSW, s 181(7) (formerly NSW 2004, s 323(2)); NT, s 318(2); Qld, s 323(2); SA, Sch 3, cl 25(2); Tas, s 307(2); Vic, s 181(7) (formerly Vic 2004, s 3.4.27(2)); WA, s 283(2).

488

Lawyers’ Professional Responsibility

[14.130]

[14.130] Lawyers who act on a speculative basis enjoy no relaxation of professional standards.119 The extent to which the lawyer’s own interest in a speculative claim may interfere with her or his duties cannot be ignored. The events in Re Robb120 highlight some of the dangers of speculative costs agreements. The solicitors acted for plaintiffs on a “no win no fee” basis in personal injury litigation. Being out of pocket for fees and disbursements until the successful resolution of a client’s claim meant that, in the words of the Full Court of the Australian Capital Territory Supreme Court, the solicitors “had a substantial personal interest in the successful outcome of their clients’ cases and in the moneys that thereby became payable to the clients”.121 Hence, “there was conflict between their interests and the interests of the clients in being properly advised in relation to settlements and the profit costs and disbursements”.122 This conflict obscured the solicitors’ perceptions of their fiduciary duties, leading them to treat settlement moneys as their own rather than on trust for their clients. Statutory regulation of contingency fees

[14.135] In line with the concerns expressed over percentage fee agreements (see [14.115]), statute generally prohibits agreements of this kind.123 This has not, however, precluded recommendations in Australia for the (limited) recognition of percentage fees as a means of accessing justice.124 Flowing on from judicial statements endorsing the validity of speculative fee agreements, no legal prohibition applies to speculative fee agreements, although statute regulates their operation. The uncertain status at general law of uplift fee agreements has prompted their statutory validation, subject to controls and limitations. The relevant regulation of speculative and uplift fee agreements is discussed below. Conditional costs agreements

[14.140] The legal profession legislation entitles a lawyer to make a costs agreement under which the payment of some or all of the lawyer’s costs is conditional on the successful outcome of the relevant matter (termed a “conditional costs agreement”).125 The agreement must set out the circumstances constituting 119 Re Robb (1996) 134 FLR 294 at 315–316 (FC(ACT)). 120 Re Robb (1996) 134 FLR 294. 121 Re Robb (1996) 134 FLR 294 at 300. 122 Re Robb (1996) 134 FLR 294 at 300. 123 ACT, s 285; NSW, s 183 (using the term “contingency fees”) (formerly NSW 2004, s 325); NT, s 320; Qld, s 325; SA, Sch 3, cl 27 (formerly SA, r 16C.1); Tas, s 309; Vic, s 183 (using the term “contingency fees”) (formerly Vic 2004, s 3.4.29); WA, s 285. 124 Both the Productivity Commission and the Law Institute of Victoria have recommended the removal of restrictions on percentage fee billing (other than in criminal and family matters), albeit bolstered by comprehensive disclosure requirements, a capping of the percentage for certain matters, and prescription that charging of percentage fees precludes charging on hourly rates: Productivity Commission, Access to Justice (Inquiry Report, No 72, Overview, 5 September 2014), recommendation 18.1; (2016) 90 (Apr) LIJ 17 (17 February 2016). 125 ACT, s 283(1); NSW, s 181(1) (formerly NSW 2004, s 323(1)); NT, s 318(1); Qld, s 323(1); SA, Sch 3, cl 25(1); Tas, s 307(1); Vic, s 181(1) (formerly Vic 2004, s 3.4.27(1)); WA, s 283(1). Prior to 1 July 2014,

[14.140]

14 Costs Disclosure and Costs Agreements

489

the successful outcome of the matter,126 be in writing in clear plain language, signed by the client,127 and must (subject to exceptions in relation to some clients)128 contain:129 • a statement that the client has been informed of the right to seek independent legal advice before entering into the agreement;130 and • a cooling-off period of not less than five clear business days during which the client, by written notice, may terminate the agreement.131 If a client terminates an agreement within the cooling-off period, the Model Laws state that the lawyer may recover only costs in respect of legal services performed for the client before the termination that were reasonably necessary to preserve the client’s rights.132 Under the Uniform Law, the equivalent restriction applies to legal

what were termed “complying contingency costs agreements” were, in South Australia, regulated by an additional rule in the South Australian implementation of the Australian Solicitors’ Conduct Rules, namely r 16C (as to which see para [14.155] of the fifth edition of this work). 126 ACT, s 283(3)(a); NSW, s 181(2)(b) (formerly NSW 2004, s 323(3)(a)); NT, s 318(3)(a); Qld, s 323(3)(a); SA, Sch 3, cl 25(3)(a); Tas, s 307(3)(a); Vic, s 181(2)(b) (formerly Vic 2004, s 3.4.27(3)(a)); WA, s 283(3)(a). The former Victorian rules (the Professional Conduct and Practice Rules 2005) stated that in a conditional costs agreement: (a) “successful outcome”, “win”, “success” or any similar expression means that the client will receive an amount of money after payment of all liabilities (including tax) the client incurs in the matter to the practitioner and to any other person; and (b) “no fee”, “no charge” or any similar expression means that the client will not be liable for costs to the lawyer unless the client achieves a successful outcome in the matter: r 2A.1. The rule envisaged that the lawyer could define those expressions differently in the agreement, but required a lawyer who planned to do so to give the client a full statement of what the expression meant and how that meaning differed from the meaning set out above: r 2A.2(d). As to the importance of doing so see Baker Johnson Lawyers v Jorgensen [2002] QDC 205, discussed at [14.80]. 127 Non-conditional costs agreements need not be signed by the client but can be accepted by other conduct: see [14.95]. 128 In the Model Laws’ jurisdictions, vis-à-vis costs agreements between law practices, and with “sophisticated clients”: ACT, s 283(4), 283(5); NSW 2004, s 323(4A), 323(4B) (repealed); NT, s 318(4), 318(5); Qld, s 323(4); SA, Sch 3, cl 25(4), 25(5); Tas, s 307(4), 307(5); Vic 2004, s 3.4.27(4), 3.4.27(4A) (repealed); WA, s 283(4). “Sophisticated client” is defined in ACT, s 261; NSW 2004, s 302(1) (repealed); NT, s 295(1); Qld, s 300; SA, Sch 3, cl 1; Tas, s 283; Vic 2004, s 3.4.2 (repealed); WA, s 251. In the Uniform Law jurisdictions, vis-à-vis costs agreements with commercial or government clients, or third party payers who would be commercial or government clients if they were a client of the law practice: NSW, s 170; Vic, s 170. 129 ACT, s 283(3)(c)–(e); NSW, s 181(2)–181(4) (formerly NSW 2004, s 323(3)(c)–(e)); NT, s 318(3)(c)–(e); Qld, s 323(3)(c)–(e); SA, Sch 3, cl 25(3); Tas, s 307(3)(c)–(e); Vic, s 181(2)–181(4) (formerly Vic 2004, s 3.4.27(3)(c)–(e)); WA, s 283(3)(c)–(e). 130 While this provision does not require that the client be advised of a right to seek independent legal advice before entering into the conditional costs agreement, “to optimally protect the consumer’s interests”, it is good practice to give this advice: Frost v Miller [2015] QSC 206 at [65] per Carmody CJ. 131 The cooling-off period is, it has been said, “intended to give the client adequate time for mature reflection, for seeking professional advice and for discussing the matter with family and friends, as the client’s free election”: Russells v McCardel [2014] VSC 287 at [85] per Bell J. 132 ACT, s 283(6); NT, s 318(6); Qld, s 323(5); SA, Sch 3, cl 25(6); Tas, s 307(6); WA, s 283(5). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 323(5); Vic 2004, s 3.4.27(5).

490

Lawyers’ Professional Responsibility

[14.145]

services performed on the client’s instructions, with knowledge that they would be performed during that period; it also precludes recovery of any uplift fee.133 The former Victorian rules counselled lawyers who entered into a conditional costs agreement to explain it to the client, ensure that the client understood the explanation, and cautioned that statements in writing by the client of that understanding are not conclusive evidence of that fact.134 This represents good practice, as does the requirement, also found in those rules, that a conditional costs agreement state, to the extent that each is applicable, that:135 • the client may be liable to meet disbursements or third party payments (and give examples of these), and that the lawyer will advise the client if there is any significant change in that liability; • the client may incur a liability for legal costs and disbursements payable to another party to the proceedings; and • the client may incur liability in the proceedings to another party for damages in certain circumstances (such as where a counter claim is lodged). Uplift fee agreements

[14.145] The legal profession legislation validates uplift fee agreements that provide for the payment of a premium not exceeding 25% of the costs otherwise payable on the successful outcome of the matter.136 In the Model Laws jurisdictions it requires that any premium be separately identified in the agreement,137 and that the lawyer disclose to the client in writing, before entering the agreement, the law practice’s usual fees, the uplift fee and reasons why that uplift fee is warranted.138 In those jurisdictions, and in New South Wales and Victoria under the Uniform Law, the legislation adds that an uplift fee agreement must identify the basis on which the uplift fee is to be calculated and include an estimate of the fee (or the latter is not reasonably practical, a range of estimates and an explanation of the 133 NSW, s 181(5); Vic, s 181(5). 134 Professional Conduct and Practice Rules 2005 (Vic), r 2A3 (superseded). 135 Professional Conduct and Practice Rules 2005 (Vic), r 2A.2(a)–(c) (superseded). 136 ACT, s 284(1), 284(4); NSW, s 182(1), 182(2) (formerly NSW 2004, s 324(2), 324(5)); NT, s 319(1), 319(4); Qld, s 324(1), 324(4); SA, Sch 3, cl 26(1), 26(4) (cf former SA, r 16C.2.9, which envisaged the charging of “up to double the fees to which [the lawyer] would otherwise be entitled if those fees were charged according to the scale contained in the current applicable schedule to the Rules of the Supreme Court”); Tas s 308(1), 308(4); Vic, s 182(1), 182(2) (formerly Vic 2004, s 3.4.28(1), 3.4.28(4)); WA s 284(1), 284(4). 137 ACT, s 284(2); NT, s 319(2); Qld, s 324(2); SA, Sch 3, cl 26(2); Tas, s 308(2); WA, s 284(2). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 324(3); Vic 2004, s 3.4.28(2). 138 ACT, s 274; NT, s 308; Qld, s 313; SA, Sch 3, cl 15; Tas, s 297; WA, s 265. The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 314; Vic 2004, s 3.4.14. There is some suggestion that this would be required even at general law: McDonald Crawford v Morrow (2004) 28 Alta LR (4th) 62 at [17] per Berger JA (“A ‘premium’ fee based on a favourable result in the absence of full disclosure is wholly inconsistent with the obligation of the solicitor to clearly and fairly advise a client of the terms of his or her contract”).

[14.155]

14 Costs Disclosure and Costs Agreements

491

major variables that may affect its calculation).139 That estimate must be an amount, not a percentage of some uncertain base amount, “so that clients can compare apples with apples” as between lawyers competing for the work.140 In several jurisdictions the legislation prohibits a costs agreement making provision for an uplift fee where the law practice lacks a reasonable belief that a successful outcome of the matter is reasonably likely,141 but this is no impediment to the use of uplift fee agreements, as lawyers are unlikely to risk being denied any fee by pursuing a weak case. The former proscription in New South Wales on uplift fee agreements in relation to a claim for damages142 has not reappeared in the Uniform Law.143

SETTING ASIDE AND VARIATION OF COSTS AGREEMENTS [14.150] Courts have traditionally viewed costs agreements jealousy, due principally to the lawyer’s opportunity to exercise influence over the client. Almost a century ago the English Court of Appeal suggested that judges should be reticent to enforce costs agreements favourable to a lawyer “unless they were satisfied that they were made under circumstances that precluded any suspicion of an improper attempt on the solicitor’s part to benefit himself at his client’s expense”.144 Much more recently a New South Wales judge has highlighted that “[w]henever a solicitor negotiates the payment of fees with a client or potential client there is always scope for a conflict of interest to arise”.145 Jurisdiction to set aside unfair or unreasonable costs agreements

[14.155] Courts of equity had within their arsenal scope to set aside agreements between lawyer and client on the grounds of undue influence146 or fiduciary breach. But common law courts played a more significant role in this context, exercising a jurisdiction to set aside or modify costs agreements that lacked fairness or reasonableness.147 This jurisdiction translated to legal profession statutes, and 139 ACT, s 284(3); NSW, s 182(3) (formerly NSW 2004, s 324(4)); NT, s 319(3); Qld, s 324(4); SA, Sch 3, cl 26(3); Tas, s 308(3); Vic, s 182(3) (formerly Vic 2004, s 3.4.28(3)); WA, s 284(3). 140 Russells v McCardel [2014] VSC 287 at [47] per Bell J. 141 ACT, s 284(4)(a); NSW, s 182(2)(a); Tas, s 308(4)(a); Vic, s 182(2)(a) (formerly Vic 2004, s 3.4.28(4)(a)); WA, s 284(4)(a). Cf SA, Sch 3, cl 26(4)(a) (which proscribes provision for an uplift fee in a costs agreement unless the risk of the claim failing, and of the client having to meet his or her own costs, is significant). 142 NSW 2004, s 324(1). 143 The broad the definition of the term “damages” in New South Wales (as appears in the Civil Liability Act 2002 (NSW), s 3, which applies the term to any form of monetary compensation) had unduly confined the scope for uplift fee agreements in New South Wales. 144 Clare v Joseph [1907] 2 KB 369 at 376 per Fletcher Moulton LJ. See also Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 435–437 per Mahoney JA. 145 Symonds v Vass [2007] NSWSC 1274 at [179] per Patten AJ (revd on appeal without casting doubt on this point: Symonds v Vass (2009) 257 ALR 689). 146 See, for example, Barrett v Whitten (1992) 15 Fam LR 693; Portuguese Cultural and Welfare Centre v Talbot Olivier Pty Ltd (No 2) [2015] WASC 54 at [46] per Corboy J. 147 See generally Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [3.13], [3.14].

492

Lawyers’ Professional Responsibility

[14.160]

remains in the jurisdictions that retain the Model Laws’ schema,148 following a nineteenth century English initiative.149 “Fairness”, which relates to circumstances leading to the agreement, displays a procedural focus: see [14.170]–[14.190]. “Reasonableness”, on the other hand, is concerned with the substantive terms of the agreement: see [14.195]–[14.205] Under the Uniform Law, however, there is no parallel provision, and questions of fairness and reasonableness target the costs themselves rather than costs agreements: see [14.165]. Statutory jurisdiction under the Model Laws

[14.160] The legislation deviates from the common law in two ways. First, the statutory jurisdiction vests in the court only in the Australian Capital Territory, Queensland, South Australia and Western Australia; in the Northern Territory and Tasmania it vests in a costs assessor. Second, the legislation uses the concepts of fairness and reasonableness, but adds that, in determining whether or not a costs agreement is fair or reasonable, regard can be had to any or all of the following matters:150 • whether the client was induced to enter into the agreement by the fraud or misrepresentation of the law practice or its representatives; • whether a lawyer acting on behalf of the law practice has been found guilty of unsatisfactory professional conduct or professional misconduct in relation to the provision of legal services to which the agreement relates; • whether the law practice failed to make any of the required costs disclosures: see [14.20]–[14.35]; • the circumstances and the conduct of the parties before, when and after the agreement was made; • whether and how the agreement addresses the effect on costs of matters and changed circumstances that might foreseeably arise and affect the extent and nature of legal services provided under the agreement; • whether and how billing under the agreement addresses changed circumstances affecting the extent and nature of legal services provided under the agreement. The above factors focus more on the procedural than the substantive. Some may be superfluous, as clients are likely to pursue other avenues to address shortcomings reflected by their content; others are too vague to supply concrete guidance in their application.151 That these do not exhaustively state the matters that may influence a finding of unfairness or unreasonableness – a point made explicit by the wording of 148 ACT, s 288(1); NT, s 323(1); Qld, s 328(1); SA, Sch 3, cl 30(1); Tas, s 312(1); WA, s 288(2). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 328(1), s 328(1A); Vic 2004, s 3.4.32(1). 149 Namely the Attorneys and Solicitors Act 1870 (UK), s 4. 150 ACT, s 288(3); NT, s 323(2); Qld, s 328(2); SA, Sch 3, cl 30(2) (cf the former SA, r 16C); Tas, s 312(2); WA, s 288(3). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 328(2); Vic 2004, s 3.4.32(2). 151 See Dal Pont, “Costs Agreements and VCAT – The Challenge of St Yves” (2008) 34 Mon ULR 262 at 268–275.

[14.165]

14 Costs Disclosure and Costs Agreements

493

the legislation other than in the former Victorian provision152 – leaves open the door to informing the statutory concepts of “fairness” and “reasonableness” by their understood meaning developed by the general law (as to which see [14.170]–[14.205]). Where a determination is made that a costs agreement is not fair or reasonable, the legislation directs the court (or costs assessor) to determine the fair and reasonable legal costs153 in relation to the work to which the agreement related.154 In making this determination, the court (or assessor) must take into account the seriousness of the lawyer’s conduct, whether or not it was reasonable to carry out the work, and whether or not the work was carried out in a reasonable manner.155 The legislation contains a list of matters, culminating in “any other relevant matter”, to which the court (or assessor) may have regard in this context.156 So if a costs agreement is set aside, it is the determination of the court (or assessor) that defines the parties’ rights and obligations, not the terms of the costs agreement.157 Approach under the Legal Profession Uniform Law

[14.165] The Legal Profession Uniform Law, as it applies in New South Wales and Victoria, adopts a different take on fairness and reasonableness of costs agreements. It requires a law practice, in charging legal costs to other than commercial or governmental clients,158 to charge no more than fair and reasonable costs in all the circumstances, which are proportionately and reasonably incurred, 152 In the Northern Territory, Queensland, South Australia, Tasmania and Western Australia (and formerly also in New South Wales), the relevant provision is expressed to operate “without limiting the matters to which the costs assessor [court] can have regard”: NSW 2004, s 328(2) (repealed); NT, s 323(2), Qld, s 328(2); SA, Sch 3, cl 30(2); Tas, s 312(1); WA, s 288(3) (and see WA, r 18(3): “A practitioner must not charge costs which are more than is reasonable for the practitioner’s services having regard to the following: (a) the complexity of the matter; (b) the time and skill involved in dealing with the matter; (c) any scale of costs that might be applicable to the matter; (d) any agreement as to costs between the practitioner and the client”). The same is the outcome in the Australian Capital Territory, albeit by listing “any other relevant matter” as the final matter to which the court: ACT, s 288(3)(h). The former Victorian parallel provision (Vic 2004, s 3.4.32(2)) appeared to exhaustively state the matters to be taken into account for this purpose, making it unclear whether reference to the concepts of “fairness” or “reasonableness” as understood at general law could assume any relevance: see Dal Pont, “Costs Agreements and VCAT – The Challenge of St Yves” (2008) 34 Mon ULR 262 at 275–276. 153 In Tasmania, and Western Australia, by reference to an applicable scale or remuneration order; in Queensland, the court may apply an applicable scale of costs for this purpose: Qld, s 328(5)(a). 154 ACT, s 288(5), 288(6); NT, s 323(4), 323(5); Qld, s 328(4), 328(5)(b); SA, Sch 3, cl 30(4), 30(5); Tas, s 312(4), 312(5); WA, s 288(5), 288(6). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 328(4), 328(5); Vic 2004, s 3.4.32(4), 3.4.32(5). 155 ACT, s 288(6); NT, s 323(5); Qld, s 328(5); SA, Sch 3, cl 30(5); Tas, s 312(5); WA, s 288(6). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 328(5); Vic 2004, s 3.4.32(5). 156 ACT, s 288(8); NT, s 323(7); Qld, s 328(7); SA, Sch 3, cl 30(7); Tas, s 312(7); WA, s 288(8). The former New South Wales and Victorian legislation, as it applied before 1 July 2015, made equivalent provision: NSW 2004, s 328(7); Vic 2004, s 3.4.32(7). 157 Wentworth v Rogers [2002] NSWSC 709 at [26], [27] per Barrett J. 158 “Commercial or government client” is defined in NSW, s 170(2); Vic, s 170(2).

494

Lawyers’ Professional Responsibility

[14.170]

and proportionate and reasonable in amount.159 Whether or not the costs satisfy these requirements rests on whether they reasonably reflect:160 • the level of skill, experience, specialisation and seniority of the lawyers concerned; • the level of complexity, novelty or difficulty of the issues involved, and the extent to which the matter involved a matter of public interest; • the labour and responsibility involved; • the circumstances in acting on the matter, including, for example, its urgency, the time spent on the matter, the time when business was transacted, the place where business was transacted and the number and importance of any documents involved; • the quality of the work done; and • the retainer and the instructions (express or implied) given in the matter. A costs agreement is prima facie evidence that costs disclosed therein are fair and reasonable if the requirements surrounding costs disclosure and costs agreements have been met.161 There accordingly appears to remain little scope for the common law to set aside costs agreements, as elaborated below, in these jurisdictions. Concept of “fairness” at common law

[14.170] Fairness refers to the mode of obtaining the agreement. It reflects the requirement that a lawyer not “take advantage of the relationship between his client and himself or receive any benefit from an agreement into which the client has been induced to enter by reason of his reliance upon the [lawyer]”.162 A lawyer who makes an agreement with a client who fully understands and appreciates that agreement satisfies the fairness requirement.163 Depending on the nature of the client (see [14.190]), a lawyer may need to take steps to explain a costs agreement and its impact, and ensure that the client understands it164 – that the client exercises a “real and genuine choice”.165 Independent advice may be desirable, although it is not essential or necessarily decisive.166 Need for costs disclosure and explanation

[14.175] Fulfilling the statutory costs disclosure requirements (see [14.20]–[14.35]) clearly assists in fulfilling the fairness criterion. It is not, however, a complete substitute for fairness because it does not ensure that a client understands the nature 159 NSW, s 170(1); Vic, s 170(1). 160 NSW, s 172(2); Vic, s 172(2). 161 NSW, s 172(4); Vic, s 172(4). 162 Emeritus Pty Ltd v Mobbs (1991) NSW ConvR ¶55-588 at 59,319 per Studdert J. See also Bear v Waxman [1912] VLR 252 at 301–302 per Cussen J; New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 123 per Gleeson CJ. 163 Re Stuart [1893] 2 QB 201 at 204–205 per Lord Esher MR; Bear v Waxman [1912] VLR 252 at 301–302 per Cussen J; Richardson v Lander (1948) 65 WN (NSW) 74 at 76 per Walker, Deputy Prothonotary. 164 Weiss v Barker Gosling (1993) 16 Fam LR 728 at 763 per Fogarty J; Twigg & Co v Rutherford (1996) 20 Fam LR 862 at 881–884 (FC). 165 Re P’s Bill of Costs (1982) 8 Fam LR 489 at 497 per Evatt CJ and Fogarty J. 166 Re P’s Bill of Costs (1982) 8 Fam LR 489 at 496 per Evatt CJ and Fogarty J.

[14.185]

14 Costs Disclosure and Costs Agreements

495

and effect of a costs agreement. Accordingly, a costs agreement could be unfair even where full costs disclosure has been made. The case law highlights particular dangers where costs agreements introduce a charging regime exceeding an applicable scale. Failure to explain differences between scale and agreement costs, and their effect on that recoverable under a costs order, is pertinent to the issue of fairness. In this context Ipp J in Brown v Talbot & Olivier observed:167 [It is important] for solicitors, when entering into agreements with their clients whereby they seek to impose a costs regime different to that which they in the ordinary course would be entitled, to ensure that there is no suggestion of any overreaching on their part. In my opinion, any agreement that seeks to remove the limit imposed by the scale will be regarded as unreasonable if full disclosure is not made of the limits and benefits provided by the scale and the effect and consequences of the proposed agreement. The obligation to make a full and frank disclosure of this kind is an integral part of the duty owed by lawyers to their clients.

Clear disclosure and explanation should also be made of any unusual basis of charging. For example, a client invited to enter a costs agreement that prescribes a set hourly fee across the board, for all forms of work and for all lawyer(s) involved, needs a careful explanation of the implications of, and justification(s) for, such an agreement, even on the unlikely assumption that an agreement of this kind can be seen as reasonable:168 see [14.200].

[14.180] The requisite disclosure should be made prior to entry into a costs agreement. An agreement entered into at a late stage in respect of litigious business will be scrutinised with particular care, as the client usually has no vantage ground left from which to bargain. For example, in Stoddart & Co v Jovetic169 the lawyers had acted for three years in a litigious matter that was supposed to be ready for trial and had received substantial moneys on trust for fees without ever furnishing the client a statement of account. It was held insufficient merely to advise the client that costs calculated under the agreement “may exceed the statutory scale”, that “another legal firm may well” do the work for less, and that the client “may obtain independent legal advice”.170 The Western Australian Full Court surmised that such a communication might be expected at the commencement of an engagement, not when nearing its completion, stating that:171 The idea that a wholly impecunious client might at that stage go off to “obtain independent legal advice” or might be in any way warned, assisted or protected by the cursory statements that costs calculated in accordance with the agreement “may” exceed the statutory scales and that another legal firm “may well” do the work for less, is simply unreal.

[14.185] Under the so-called rule in Re Blyth and Fanshawe,172 an expense that is not necessary for the proper enforcing of a client’s rights (an “unusual expense”) 167 Brown v Talbot & Olivier (1993) 9 WAR 70 at 77. 168 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 at [32] per de Jersey CJ. 169 Stoddart & Co v Jovetic (1993) 8 WAR 420. 170 Stoddart & Co v Jovetic (1993) 8 WAR 420 at 431. 171 Stoddart & Co v Jovetic (1993) 8 WAR 420 at 431. 172 Re Blyth and Fanshawe (1882) 10 QBD 207. See further Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [5.26]–[5.34].

496

Lawyers’ Professional Responsibility

[14.190]

cannot be recovered from the client unless prior authority was secured to incur it. Where a costs agreement is used to secure this authority, the lawyer must ensure that the client is made aware and properly advised as to the costs implications of giving the authority. In Kasmeridis v McNamara Business & Property Law,173 for example, the costs agreement authorised the solicitors “to incur any unusual disbursements the solicitors considered necessary for the proper conduct of the matter”. The solicitor said nothing to the clients on this topic, and Judge Lunn, in a finding affirmed on appeal,174 found this to be unfair, adding that the clients:175 were entitled to proper advice about the extent to which they were committing themselves financially before the lawyer accepted instructions which would authorise the incurring of unusual disbursements subjectively considered by the [solicitors] to be necessary for the proper conduct of the matter.

In BHP Billiton Ltd v Parker (No 2),176 Judge Dart identified three issues that should have triggered a warning by the respondent’s solicitors: the fees chargeable by proposed (interstate) counsel (S) would exceed those charged by local senior counsel; the additional fees (namely a reading fee) likely to be charged by S by reason of not having appeared at the trial; and S claimed an entitlement to charge a cancellation fee in his costs agreement for days set aside. A warning that S’s “charges are slightly higher than those for Queen’s Counsel in South Australia” and that “we may not be able to recover from the defendant the entirety of [S’s] fees if we are successful in defending the appeal” was not, his Honour held, sufficient to position the respondent to make an informed choice about whether or not to incur the costs.177 Impact of nature of the client

[14.190] The nature and scope of the explanation required rests on the client’s knowledge, experience and position. A client of limited experience or sophistication requires a greater explanation than one who is experienced in business and is likely to understand the effect of a costs agreement from a very brief explanation. As elaborated by the Supreme Court of Western Australian judge:178 … the client’s personal knowledge and experience of litigation and what it entails, and of the bases upon which solicitors commonly charge fees, and of the existence, nature and purpose of court scales in relation to fees, and of the nature and purpose of taxation of costs, and the recency and currency of the client’s knowledge and experience of such matters, may, depending on all the circumstances, be relevant to a consideration of the scope and content of disclosure required in a particular case in order for the client to exercise an independent and informed judgment about whether to enter a costs agreement. 173 Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 at [22]. 174 McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129. 175 Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 at [22]. 176 BHP Billiton Ltd v Parker (No 2) [2014] SASC 6 at [22]. 177 BHP Billiton Ltd v Parker (No 2) [2014] SASC 6 at [32]. 178 Computer Accounting & Tax Pty Ltd v Bowen Buchbinder Vilensky [2009] WASC 171 at [96] per Murphy J.

[14.200]

14 Costs Disclosure and Costs Agreements

497

Another Australian court has gone so far as to remark that, for clients who are particularly vulnerable and reliant on the lawyer, a failure to fully and frankly advise as to the relative level of the fees proposed to be charged is, if those fees are exorbitant, “no better than theft”.179 The other extreme is illustrated by Cerini v McLeods (a firm),180 involving a client of considerable business experience. The evidence revealed that he gave due consideration to the terms of the costs agreement, and understood that he was to be charged at different hourly rates depending on who did the work, and was entitled to take independent advice before signing it. The agreement also entitled the solicitor to charge a flat fee for a telephone attendance or a letter in place of the hourly rate. According to Pullin J, there was no requirement here for the solicitor to have explained the terms of the agreement to the client. The courts ultimately adopt a realistic approach, and will not cast on lawyers the consequences of clients’ wilful ignorance.181 An educated client experienced in business transactions, and in dealings with lawyers, who elects not to read the costs agreement will struggle to establish unfairness.182 Concept of “reasonableness” at common law

[14.195] An agreement is unreasonable if its terms or effect are unreasonable to the client.183 The issue of reasonableness is determined at the time of entering into the agreement, on an objective basis and with regard to all the circumstances of the case.184 Rate of and approach to charging

[14.200] The main focus of reasonableness is on the lawyer’s rate of and approach to charging. The failure to stipulate a rate of charging is prima facie unreasonable, as the client is unable to assess the reasonableness of the agreement prior to entering into it.185 Statutory costs disclosure requirements, though, now serve to mitigate this risk: see [14.20]–[14.35]. 179 Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 at [64] (FC(ACT)). 180 Cerini v McLeods (a firm) [2004] WASC 45. 181 Ullinger v Giles [2013] WASC 117 at [25] per Sanderson M (noting that “[w]hen confronted with documents which detail the nature of the [lawyer–client] relationship it is incumbent upon a client to read those documents and weigh up whether or not he or she wishes to sign up”). 182 See, for example, Chan v Batemans [2009] WASC 177; Frigger v Shepherd [2014] WASC 477. Cf BGM v Australasian Lawyers Group Pty Ltd [2014] WASC 290 (where, even in the face of a client sophisticated and experienced in business, the lack of full disclosure and explanation of matters pertinent to a family law retainer was held to justify the setting aside of the relevant costs agreement). 183 Jovetic v Stoddart & Co (1992) 7 WAR 208 at 220 per Seaman J (not disapproved on appeal: Stoddart & Co v Jovetic (1993) 8 WAR 420); Brown v Talbot & Olivier (1993) 9 WAR 70 at 75 per Ipp J. 184 Schiliro & Gadens Ridgeway (1995) 19 Fam LR 196 at 204–205 (FC). 185 Brown v Talbot & Olivier (1993) 9 WAR 70 at 81 per Ipp J (“the client’s position is fraught with uncertainty; he is susceptible, to a large degree, to the subjective decision of the solicitors, and he is dependant [sic] on the exigencies of the practice of the solicitors – something about which he knows nothing”).

498

Lawyers’ Professional Responsibility

[14.205]

Costs agreements that vest in the lawyer considerable unilateral discretion as to the charges that can be made are likely to be unreasonable. An example is an agreement that entitles lawyers to charge “at rates notified to the client from time to time”.186 Another is the charging of a simple flat hourly rate irrespective of experience or seniority, or the nature of the work.187 But an agreement that reflects a relevant scale, and confers no unusual benefit on the lawyer, is prima facie reasonable. Factored into this determination is the lawyer’s seniority and expertise and the nature and extent of work involved, including its novelty, difficulty and complexity.188 Efficiency and success in the matter may also be relevant, as will the market for legal services in which the client, as a consumer, is obliged to seek those services.189 In Athanasiou v Ward Keller (6) Pty Ltd,190 for example, Mildren J held a costs agreement to be unreasonable because: the difference between scale costs and the costs payable under the agreement was potentially significant; there was nothing to suggest that the case was one of particular difficulty or complexity; the charges were not fixed by reference to these factors, but applied arbitrarily to all work done by the firm; the agreement provided for the same hourly rate regardless of the experience of the lawyer; and much of the work could have been delegated to a junior lawyer. Time charging

[14.205] Costs agreements are commonly based, at least in part, on time costing;191 that is, an hourly rate that covers practice overheads as well as appropriate remuneration for partners. This has become popular, inter alia, on the ground of fairness to the lawyer, as payment is presumably more closely related to the actual work done than other methods of charging.192 It has been propelled, moreover, by the shift from scales of costs, which have been branded as anti-competitive: see [1.55]. 186 Catto v Hampton Australia Ltd (in liq) (2007) 251 LSJS 164 at [16] per Judge Lunn (who added that “[s]olicitors cannot reserve to themselves the right to increase their time charges as they see fit. If there is to be an increase, it must be by either a new agreement or a variation agreement in which all the considerations of fairness and reasonableness have to be re-visited”). 187 Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103 at 109 per Rogers CJ; New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 126 per Gleeson CJ. 188 Burgundy Royale Investments Pty Ltd (receivers and managers appointed) (in liq) v Westpac Banking Corp (No 3) (1992) 37 FCR 492 at 500 per Einfeld J. 189 New South Wales Crime Commission v Fleming (1991) 24 NSWLR 116 at 124 per Gleeson CJ. 190 Athanasiou v Ward Keller (6) Pty Ltd (1998) 122 NTR 22 at 33. 191 Indeed, an Australian judge has observed regarding time charging these days that “so prevalent is the practice that those who have commenced a legal professional career as a solicitor and later come to practise at the Bar may have encountered no other method of charging for professional services than time charging”: Wide Bay Conservation Council Inc v Burnett Water Pty Ltd (No 9) (2011) 194 FCR 250 at [101] per Logan J. 192 As to the origins and rise of time charging, from an American perspective which nonetheless has parallels in Australia, see Pardau, “Bill, Baby, Bill: How the Billable Hour Emerged as the Primary Method of Attorney Fee Generation and why Early Reports of its Demise May be Greatly Exaggerated” (2013) 50 Idaho L Rev 1 at 2–9.

[14.205]

14 Costs Disclosure and Costs Agreements

499

Yet time costing may contain an element of unreasonableness, chiefly because it denies the incentive to avoid unnecessary work or inefficient practices, and rewards the inexperienced, inefficient and the incompetent. Scale costs, conversely, reward the efficient and penalise the tardy. As such, it has been said that “[t]ime charges have a distinct potential to result in overcharging”193 – which may magnify where lawyers “round up” the fee charged in six minute intervals194 – an issue of particular concern where lawyers are set ambitious billing targets. Empirical research reveals that commercial pressures to maximise billable hours may prompt deceptive billing practices.195 Time charging may also fail to discriminate as to the type of work done, say, whether or not the lawyer is engaged in a highly skilled task or a more mundane task.196 While this will be compensated to some extent by varying charge out rates for persons of greater or lesser skill, the lower charge out rate may insufficiently compensate for the greater amount of time occupied.197 Time charging, moreover, may raise the prospect of a conflict between the lawyer’s own interest and that of the client. Mahoney JA in Law Society of New South Wales v Foreman explained the point as follows:198 Such an agreement ordinarily involves that the solicitor may determine how much time is spent on the client’s litigation and by whom. It will therefore put the solicitor in a position in which her duty to the client (to do the work in such time that the costs will be no more than they need to be) may be in conflict with her interest (that she receive more costs rather than less). The temptation may exist to spend upon the client’s litigation time for which costs would not otherwise be billed or to engage on it staff whose time could or would not be used elsewhere in the firm.

Here the court’s jurisdiction to enforce fiduciary proscriptions (see [6.05]) can justify the court in setting aside a time costing agreement. Fryberg J in Re Morris 193 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 422 per Kirby P, in dissent but not on this point. See, for example, the disciplinary cases of Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 and Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574, discussed at [25.75]. 194 See, for example, Legal Profession Complaints Committee v O’Halloran [2011] WASAT 95 (where the tribunal spoke disapprovingly of this practice: at [133]–[135]) (leave to appeal refused: O’Halloran v Legal Profession Complaints Committee [2013] WASCA 59). But this does not mean that a costs agreement that provides for six minute unit billing at a flat hourly rate of charging is of itself unreasonable: Smith v Lewis Blyth & Hooper [2013] WASC 408 at [169] per Jenkins J (revd but not on this specific point: Lewis Blyth & Hooper (a firm) v Smith (2015) 48 WAR 467). 195 See, for example, Fortney, “The Billable Hour Derby: Empirical Data on the Problems and Pressure Points” (2005) 33 Fordham Urb LJ 171; Parker and Ruschena, “Pressures of Billable Hours: Lessons from a Survey of Billing Practices inside Law Firms” (2011) 9 U St Thomas LJ 619. 196 See, for example, Kasmeridis v McNamara Business & Property Law (2006) 245 LSJS 31 at [29]–[31] per Judge Lunn (where a charge of $200 per hour prescribed by a costs agreement for time spent by a junior solicitor familiarising himself with the law was found unreasonable, as “the time which he needed to accomplish the necessary tasks … was likely to have been significantly greater than that of a lawyer of several years more experience in such matters”: at [31]) (affd McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129 at [63]–[72] per Doyle CJ). 197 Singleton v Macquarie Broadcasting Holdings Ltd (1991) 24 NSWLR 103 at 109 per Rogers CJ. 198 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 437. See also McNamara Business & Property Law v Kasmeridis (2007) 97 SASR 129 at [51] per Doyle CJ.

500

Lawyers’ Professional Responsibility

[14.205]

Fletcher & Cross’ Bill of Costs,199 for instance, saw the issue within the fiduciary prism. It involved a Japanese national inexperienced with Australian litigation who retained a law firm under a time charging costs agreement. His Honour ruled that the firm should, in discharging its fiduciary duty, have disclosed to the client that:200 • time charging was normal among large commercial firms but not necessarily for other firms; • there was a risk that time charging might result in a higher bill than a tasks performed basis; • task-based charging was a conventional and traditional method of charging by lawyers; and • the Federal Court scale, which applied in the litigation, was limited to the amount chargeable by reference to the tasks performed regardless of the time spent on the task. So lawyers must be conscious of the extent to which a time costing agreement contains provisions that place the lawyer in a position of advantage or conflict of interest. Lawyers should ensure that, by explanation, independent advice or otherwise, clients exercise an independent and informed judgment in entering into such an agreement,201 or otherwise face the possibility of the agreement being struck down for unreasonableness or fiduciary breach. The debate persists as to whether time charging remains a defensible manner of determining the value of legal services.202 Ultimately client demand may drive alternative charging methods, such as task-based or fixed-fee charging.203

199 Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228. 200 Re Morris Fletcher & Cross’ Bill of Costs [1997] 2 Qd R 228 at 243. 201 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 437 per Mahoney JA. 202 There are those who maintain that time charging is defensible: see, for example, Webb, “Killing Time: A Limited Defence of Time-Cost Billing” (2010) 13 Legal Ethics 39; Balachandran, “Realistic Time Billing: In Defence of the Billable Hour” (2011) 49 (June) LSJ 60; Pardau, “Bill, Baby, Bill: How the Billable Hour Emerged as the Primary Method of Attorney Fee Generation and why Early Reports of its Demise May be Greatly Exaggerated” (2013) 50 Idaho L Rev 1. 203 See Rotunda, “Moving from Billable Hours to Fixed Fees: Task-Based Fees and Legal Ethics” (1999) 47 Kansas L Rev 819; Benson, “Tracking and Billing – Keeping up with the Times” (2000) 74 (Oct) LIJ 57; Vilensky, “The Benefits of Fixed Fee Pricing” (2012) 39 (Feb) Brief 12 (but cf Friedman, “Fixed Fee Pricing” (2012) 39 (June) Brief 12).

Chapter 15

Recovery of Costs from Clients [15.05] FOUNDATION AND PARAMETERS ........................................................................... 501 [15.05] Recovery of costs based on contract ......................................................................... 501 [15.15] Restrictions on the recovery of costs ........................................................................ 502 [15.25] Securing the recovery of costs ................................................................................... 503 [15.30] THE NEED TO DELIVER A BILL AND WAIT THE REQUIRED TIME ................ 503 [15.40] COSTS ASSESSMENT ...................................................................................................... 505 [15.40] Concepts ........................................................................................................................ 505 [15.50] Rationale ........................................................................................................................ 506 [15.55] Application for assessment ........................................................................................ 507 [15.60] Approach to assessment ............................................................................................. 508 [15.75] Costs of assessment ..................................................................................................... 510 [15.80] Reasons for assessor’s determination ....................................................................... 510 [15.85] Review of assessment .................................................................................................. 511 [15.95] Alternatives to assessment ......................................................................................... 512 [15.100] SECURING COSTS RECOVERY .................................................................................. 513 [15.105] Irrevocable authorities ............................................................................................... 513 [15.110] Taking security for costs ........................................................................................... 516

FOUNDATION AND PARAMETERS Recovery of costs based on contract

[15.05]

The basis upon which a lawyer can recover her or his professional fees and disbursements is the law of contract. It is the existence of a retainer between lawyer and client that substantiates the lawyer’s claim for remuneration. That a client has engaged a lawyer to perform legal services via a retainer gives rise to an implied undertaking by the client to pay costs, whether on the basis specified in the contract, according to an applicable scale, or otherwise on a quantum meruit basis most likely ascertained by way of taxation or assessment.1

[15.10]

Counsel traditionally fell outside the realm of contract. The assumption was that counsel could contract with neither the client nor the instructing solicitor; the relationship was one of honour, not debt: see [21.100]. Now that the legal profession legislation envisages that an instructing solicitor and a barrister may contract by way of a costs agreement, and the barristers’ rules in most jurisdictions

1 Statute makes this explicit in most jurisdictions: ACT, s 279; NT, s 314; Qld, s 319; SA, Sch 3, cl 21; Tas, s 303; WA, s 271. It also appeared in the former New South Wales and Victorian legislation: NSW 2004, s 319; Vic 2004, s 3.4.19.

502

Lawyers’ Professional Responsibility

[15.15]

allow counsel (in some circumstances) to accept a direct access retainer from a lay client (see [3.45]), there is scope for counsel to recover costs from an instructing solicitor and/or a client, depending on the terms of the relevant contract. No assumption is made that a solicitor who instructs counsel does so solely as the client’s agent, and so avoids personal liability for counsel’s fee; the matter is determined again on the construction of the contract. In this context the quantum of the fee is that agreed with the instructing solicitor2 or, absent agreement, one that is proper and reasonable in the circumstances, commensurate with counsel’s seniority, experience, skill, time, difficulty and responsibility. Restrictions on the recovery of costs Restrictions stemming from the nature of the claim

[15.15]

That the retainer has traditionally been construed as an entire contract (see [3.195]) means that, generally speaking, a lawyer who terminates a retainer without just cause forfeits the ability to recover costs “earned” to date: see [3.210]. However, various exceptions qualify this principle, which may operate to mitigate its apparent harshness: see [3.200]–[3.215]. The jurisdiction, originally at common law and since reflected by statute in most jurisdictions (but now arguably superseded by the terms of the Legal Profession Uniform Law in New South Wales and Victoria),3 to set aside an unfair or unreasonable costs agreement (see [14.150]–[14.205]) dictates, moreover, that the terms of a costs agreement cannot be in every case determinative as to the quantum of the lawyer’s costs entitlement. Restrictions imposed by statute

[15.20]

Statute restricts lawyers’ ability to enforce a contractual claim to costs in several ways. First, it prohibits a lawyer from commencing proceedings to recover costs without first delivering to the client a “bill of costs” and waiting the statutorily prescribed period: see [15.30], [15.35]. Other restrictions apply where the lawyer has received from the client moneys for costs in advance of the service being provided (trust moneys): see [9.70]. Second, statute prescribes a procedure directed at independently assessing the fairness and reasonableness of lawyers’ bills, known variously as “taxation”, “assessment” or “revision”: see [15.40]–[15.90]. Thereby the lawyer’s bill can be reduced. Third, restrictions on the quantum of costs recoverable from a client are set by statute in certain circumstances.4 Fourth, as a claim in

2 Costs disclosure requirements on counsel to their instructing solicitor (see [14.30]) assist in securing a documented agreement on counsel’s fees. 3 The relevant provision states that a costs agreement is prima facie evidence that costs disclosed therein are fair and reasonable if the requirements surrounding costs disclosure (see [14.25]) and costs agreements (see [14.90], [14.95], [14.140], [14.145]) have been met: NSW, s 172(4); Vic, s 172(4). 4 See, for example, Civil Law (Wrongs) Act 2002 (ACT), Pt 14.1 and Legal Profession Uniform Law Application Act 2014 (NSW), Sch 1, which provide that if the amount recovered on a claim for personal injury damages does not exceed a set amount, the maximum costs for legal services provided to a party in connection with the claim are fixed at 20% of the amount recovered or $10,000, whichever is greater.

[15.30]

15 Recovery of Costs from Clients

503

contract, it may be barred by the expiry of the relevant limitation period,5 for which time begins to run from the completion of the lawyer’s work, not from when the bill of costs was served.6 Securing the recovery of costs

[15.25]

The main way in which lawyers can secure the recovery of costs is to request the client to supply funds for costs and disbursements in advance, to be held on trust until the preconditions to transfer that money beneficially to the lawyer are met: see [9.25]. Instead of receiving trust moneys in advance, lawyers may seek to secure their claim to costs by: • applying to the court to enforce their particular lien over a fund generated from their services in circumstances where there is a likelihood that the claim to costs will be frustrated (see [16.115]–[16.160]); • pursuant to their retaining lien, refusing to deliver to the client items the property of their client, which are lawfully in their possession (see [16.20]–[16.110]); • extracting from the client an irrevocable authority (see [15.105]); and/or • taking security for costs (see [15.110]).

THE NEED TO DELIVER A BILL AND WAIT THE REQUIRED TIME [15.30]

Statute prohibits a lawyer from commencing proceedings to recover costs until a bill has been delivered to the client for those costs, and 30 days (in the Australian Capital Territory, 90 days in the case of a lump sum bill)7 has elapsed after its delivery.8 If the lawyer delivers a lump sum bill, and the client requests an itemised bill9 within 30 days (Australian Capital Territory, 90 days) of receiving the lump sum bill, the above time restriction starts from the date the lawyer complies with that request.10 5 The relevant limitation period is six years in all jurisdictions except for the Northern Territory, where it is three years: Limitation Act 1985 (ACT), s 11(1); Limitation Act 1969 (NSW), s 14(1)(a); Limitation Act 1981 (NT), s 12(1)(a); Limitation of Actions Act 1974 (Qld), s 10(1)(a); Limitation of Actions Act 1936 (SA), s 35(a); Limitation Act 1974 (Tas), s 4(1)(a); Limitation of Actions Act 1958 (Vic), s 5(1)(a); Limitation Act 2005 (WA), s 13. 6 Coburn v Colledge [1897] 1 QB 702. 7 A “lump sum bill” is a bill that describes the legal services to which it relates and specifies the total amount of the legal costs: ACT, s 261; Legal Profession Uniform General Rules 2015 (NSW), r 5(1) (formerly NSW 2004, s 302(1)); NT, s 295(1); Qld, s 300; SA, Sch 3, cl 1; Tas, s 283; Legal Profession Uniform General Rules 2015 (Vic), r 5(1) (formerly Vic 2004, s 3.4.2); WA, s 251. 8 ACT, s 289(1); NSW, s 194(1) (formerly NSW 2004, s 331(1)); NT, s 324(1); Qld, s 329(1); SA, Sch 3, cl 31(1); Tas, s 313(1); Vic, s 194(1) (formerly Vic 2004, s 3.4.33(1)); WA, s 289(1). 9 An “itemised bill” is a bill that specifies in detail how the legal costs are made up in a way that would allow them to be assessed or taxed: ACT, s 261; Legal Profession Uniform General Rules 2015 (NSW), r 5(1) (formerly NSW 2004, s 302(1)); NT, s 295(1); Qld, s 300; SA, Sch 3, cl 1; Tas, s 283; Legal Profession Uniform General Rules 2015 (Vic), r 5(1) (formerly Vic 2004, s 3.4.2); WA, s 251. 10 ACT, s 292(1)–(3), 292(7), 292(10); NSW, s 194(2)(b) (formerly NSW 2004, s 332A(4), 332A(5)); NT, s 327(4), 327(5); Qld, s 332(4), 332(5); SA, Sch 3, cl 34(4), 34(5); Tas, s 316(4), 316(5); Vic, s 194(2)(b) (formerly Vic 2004, s 3.4.36(4)); WA, s 292(4), 292(5).

504

Lawyers’ Professional Responsibility

[15.35]

The time restrictions apply whether or not the costs are the subject of a costs agreement.11 They give a client an opportunity to “form an opinion, with or without advice, whether the bill is excessive before he is faced with legal proceedings”,12 and to decide whether to apply for it to be taxed or assessed:13 see [15.40]–[15.90]. They do not oust the right to payment for the work done – after all, that rests on the retainer or costs agreement – but restricts only the enforcement of that right.14 The fact that no bill has been given does not therefore prevent a lawyer from setting off a claim for costs.

[15.35]

The time restrictions apply, under the terms of the legislation, only to attempts by lawyers to institute proceedings to recover costs. If the proceedings lack this character, the restrictions do not apply. Hodgson JA in Koutsourais v Metledge & Associates supplied some guidance as to the dividing line in this context via the following observations:15 … factors which would tend to make proceedings ultimately based, at least in part, on a lawyer’s entitlement to costs, other than proceedings for recovery of costs, would include: a compromise of previous legal proceedings; a compromise involving other matters as well as costs; a compromise accepting in respect of costs a substantially lesser sum; and legal advice to the client at the time of the compromise. Each and all of these factors would in my opinion tend towards changing the character of proceedings based on the compromise from being proceedings for the recovery of costs.

None of these factors was present in Koutsourais, where a solicitor made informal claims without complying bills against two clients, being a company and a principal of the company. The parties subsequently agreed that if the company paid the costs by instalments, the solicitor would not proceed with winding-up. The solicitor later sued the company for the money payable under that agreement. Hodgson JA, with whom Beazley JA concurred, held that the claim retained the character of a claim for costs and was therefore barred by statute. His Honour was influenced, in particular, by the fact that the amount to be paid remained the precise amount claimed for costs, and the company identified as liable for the whole was one of two entities that together were previously liable for the entire costs, albeit in undetermined shares.16 11 ACT, s 289(4); NT, s 324(4); Qld, s 329(4); SA, Sch 3, cl 31(4); Tas, s 313(4); WA, s 289(4). Equivalent provision in the former New South Wales and Victorian legislation (NSW 2004, s 331(4); Vic 2004, s 3.4.33(4)) has not translated to the Legal Profession Uniform Law, but nor does the latter contain anything to suggest that a costs agreement would oust the time restriction in question. 12 Zizza v Seymour [1976] 2 NSWLR 135 at 139 per Moffitt P. 13 Liati v Fitzsimons (1996) 68 FCR 402 at 405 (FC); Re Robb (1996) 134 FLR 294 at 327 (FC(ACT)). 14 Coburn v Colledge [1897] 1 QB 702 at 706 per Lord Esher MR; Re Beckwith (1993) 43 FCR 256 at 266 per Cooper J; FAI Traders Insurance Co Ltd v Ferrara (1996) 41 NSWLR 91 at 97–98 per Handley JA; Re Devy (1996) 67 FCR 355 at 357–358 per Hill J; Liati v Fitzsimons (1996) 68 FCR 402 at 405 (FC) (the mere fact that a calculation may be incorrect does not prevent the bill bringing into existence an enforceable debt). 15 Koutsourais v Metledge & Associates [2004] NSWCA 313 at [11]. Although Beazley JA concurred generally with Hodgson JA’s ruling, her Honour expressed no opinion on this specific point. 16 Koutsourais v Metledge & Associates [2004] NSWCA 313 at [9]. The presence of these two factors led Brereton J on the facts in Amirbeaggi v Business in Focus (Australia) Pty Ltd [2008] NSWSC 421 at [41]–[43] to rule that the proceedings in question were proceedings for the recovery of costs for the

[15.40]

15 Recovery of Costs from Clients

505

Lawyers who wish to avoid the statutory restriction must distance the claim from one relating to a previously determined distinct claim for costs arising out of the retainer. For example, in Cameron v Dennis17 a barrister who had issued fee invoices to his instructing solicitor acceded to the latter’s request, made after the completion of the matter, to defer payment until the clients had subdivided and sold land belonging to them. Once the sale was effected the solicitor disputed the liability to pay the barrister, arguing that the barrister’s invoices did not fulfil the statutory requirements. The New South Wales District Court held that the barrister’s claim was properly characterised as one for breach of contract, not one for the recovery of costs for the purposes of the statutory restriction. Two reasons for this were given: first, the barrister made no claim for interest on the fees even though part of the basis for agreeing to defer payment was the solicitor’s promise to pay interest; and second, the solicitor’s representation that he had a mortgage that could be registered to protect him in respect of the fees the clients owed essentially acknowledged the barrister’s entitlement to the fees.18 The New South Wales Court of Appeal affirmed this decision.19

COSTS ASSESSMENT Concepts In the lawyer and client context

[15.40]

Statute makes provision for an independent adjudication of the fairness and reasonableness of bills of costs,20 via a process termed “taxation”, “assessment” or “review” of costs. “Taxation” is “to deal seriatim [in a series] with each item by way of allowance or disallowance”.21 “Assessment” is ordinarily conducted informally on a global rather than an item-by-item approach, is paper-driven and does not require the physical attendance of the parties. But the terminology is used inconsistently in the legislation. For instance, while jurisdictions except South Australia describe the relevant process as “assessment”, Tasmania and Western Australia envisage that it is conducted by taxing officers. And in Victoria, costs assessment is conducted under the auspices of the dedicated Costs Court.22 In New South Wales, the Northern Territory and Queensland, costs assessors are appointed from the practising profession for a set period, and conduct assessments purposes of the legislation. See also Burbidge v Wolf [2008] NSWSC 60 at [40] per Nicholas J (where an attempt to circumvent the statutory requirements by alleging that the client’s liability to pay fees arose under a trust, or that it was unconscionable for the client to refuse to pay, proved unsuccessful). 17 Cameron v Dennis (2006) 3 DCLR(NSW) 392. 18 Cameron v Dennis (2006) 3 DCLR(NSW) 392 at [19]–[24] per Johnstone DCJ. 19 Dennis v Cameron [2007] NSWCA 228. 20 ACT, Div 3.2.7; NSW, Pt 4.3, Div 7; Legal Profession Uniform Law Application Act 2014 (NSW), Pt 7 (formerly NSW 2004, Pt 3.2 Div 11); NT, Pt 3.3 Div 8; Qld, Pt 3.4 Div 7; SA Sch, 3 Pt 7 (formerly SA, s 42); Tas, Pt 3.3 Div 7; Vic, Pt 4.3, Div 7 (formerly Vic 2004, Pt 3.4 Div 7, referring to “costs review”); WA, Pt 10, Div 8. 21 Re Grant, Bulcraig & Co [1906] 1 Ch 124 at 128 per Farwell J. 22 Supreme Court Act 1986 (Vic), s 17D(1)(ea).

506

Lawyers’ Professional Responsibility

[15.45]

on a part-time basis.23 Taxing officers, on the other hand, even if they conduct a process known as “assessment”, are public servants attached to the court.24 “Assessor” and “assessment” are used as encompassing terms in the remainder of this chapter to refer to the relevant person and process. In the party and party context

[15.45]

Costs assessment also plays an important role outside the lawyer and client context. As an unsuccessful litigant is usually ordered to pay the successful litigant’s costs (known as the “costs indemnity rule”),25 assessment is a vehicle used to quantify the costs of the successful party that the unsuccessful litigant should be required to pay (known as “party–party costs”). The latter rarely, if ever, equate to all the costs the successful litigant owes her or his own lawyer. The process of assessing party–party costs is outside the scope of this work,26 although it should be noted that most assessments are conducted as between party and party. Rationale

[15.50]

The rationale for the process of assessment is that it is inappropriate for the ultimate task of determining the propriety of a bill of costs to rest in the hands of the lawyer who rendered the bill. Only a qualified and experienced person who is independent of both the lawyer and the matter can properly assess its propriety. A client’s ability to seek an independent review of a bill of costs counterbalances lawyers’ monopoly on legal work and gives some assurance against abuse and exploitation. Tadgell J explained the point, referring to taxation, in Redfern v Mineral Engineers Pty Ltd as follows:27 The courts’ surveillance over costs as between solicitor and client is assumed with a view to preventing any unfair advantage by solicitors in their charges to their clients. It stems, it seems, from the notion that ordinarily a solicitor is presumed to be in a position of dominance in relation to his client as a result of his presumed knowledge of the law and of what may and may not be properly charged by way of fees. Were a strict view not taken it might be open to a solicitor to overreach his client or otherwise act oppressively towards him on the matter of costs. Considerations of public policy and undue influence

23 Legal Profession Uniform Law Application Act 2014 (NSW), s 93C, Sch 6, cl 1 (formerly NSW 2004, s 390(1), Sch 5) (appointed by the Chief Justice); NT, s 366 (appointed by the Chief Justice, Chief Magistrate or the Law Society); Qld, s 300 (“costs assessor” means a person appointed under the Uniform Civil Procedure Rules as a cost assessor: see Qld UCPR, Ch 17, Pt 5 (appointed by the Brisbane registrar of the Supreme Court)). 24 Supreme Court Act 1933 (ACT), s 10 (power to assess or tax a lawyer–client bill vested in the Supreme Court in the Australian Capital Territory, but a registrar can exercise the court’s powers for this purpose; see also ACT CPR, rr 1760, 1761); SA, Sch 3, cl 41 (formerly SA, s 42(1), 42(1a)) (similar to ACT); Tas, s 283 (costs assessor is a person who is a taxing officer of the Supreme Court, namely a registrar of the court: Supreme Court Act 1959 (Tas), s 10); WA, s 3 (“taxing officer” means a taxing officer of the Supreme Court). 25 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), Ch 7. 26 For a detailed treatment of party–party taxation (assessment) see Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), Chs 15–18. 27 Redfern v Mineral Engineers Pty Ltd [1987] VR 518 at 523.

[15.55]

15 Recovery of Costs from Clients

507

combined to shape the attitude of the Courts of Equity, by which the general rules in relation to taxation of costs were formulated …

Application for assessment

[15.55]

In the lawyer and own client context, assessment of a bill of costs is usually sought by the party chargeable (most often the client),28 who must make the application within a specified time of the bill being delivered or, in some cases, being paid.29 A time limit is imposed because payment of the bill is prima facie evidence of the client’s implied acceptance of its reasonableness.30 The lawyer who has presented the bill,31 and a third party payer,32 may also apply for the bill to be assessed. In each case, an application for assessment operates to stay any proceedings the lawyer has commenced for recovery of costs.33

28 ACT, s 294A(1) (to the Supreme Court); NSW, s 198(1); Legal Profession Uniform Law Application Act 2014 (NSW), s 68(2) (formerly NSW 2004, s 350(1)) (to the Manager, Costs Assessment); NT, s 332(1); Qld, s 335(1) (application to the relevant court: Qld UCPR, r 743A; the rules make provision for the parties to agree on a costs assessor to conduct the assessment (r 743E) and, lacking agreement, for application to the registrar to appoint a costs assessor (r 743F)); SA, Sch 3, cl 37 (to the Supreme Court); Tas, s 319(1) (to a costs assessor); Vic, s 198(1) (formerly Vic 2004, s 3.4.38(1)) (to the Costs Court); WA, s 295(2). 29 Other than in South Australia, an application for assessment by a client or third party payer must be made within 12 months (in Tasmania, 60 days): ACT, s 294A(5); NSW, s 198(3) (formerly NSW 2004, s 350(4)); NT, s 332(5); Qld, s 335(5); Tas, s 319(5); Vic, s 198(3) (formerly Vic 2004, s 3.4.38(5)); WA, s 295(6). Scope, however, exists for an extension of time: see ACT, s 294A(6), 294A(7); NSW, s 198(4) (formerly NSW 2004, s 350(5)); NT, s 332(6); Qld, s 335(6); Tas, s 319(6); Vic, s 198(4) (formerly Vic 2004, s 3.4.38(6)); WA, ss 295(7), 295(8). As to extensions of time see, for example, Dye v Fisher Cartwright Berriman Pty Ltd [2010] NSWSC 895; Tomasevic v Carbone [2015] VSC 302; Rohowskyj v S Tomyn & Co [2015] VSC 511; cf Harvey v Goodman Law Pty Ltd [2011] NSWSC 340. In South Australia the application must be made within six months after either the bill was given or the request for payment was made to the client or third party payer, or the costs were paid if neither a bill was given nor a request was made, although again there is scope to extend time: SA, Sch 3, cl 37(4), 37(5). Prior to 1 July 2014, when SA, Sch 3 took effect, the South Australian Act prescribed no time limit within which to apply for taxation. However, by virtue of the former SA, s 42(5), under which the court “may order” or “may adjourn” taxation, it had been held that an unduly late application, without proper explanation, could be refused: see, for example, Kowalski v Stanley [2014] SASC 198 at [18]–[20] per Judge Dart (involving an application made 23 years since the last of the costs were incurred). 30 Matter of Bills of Costs of Boulton Cleary & Kern [1995] ANZ Conv R 321 at 322 per Kiefel J. 31 ACT, s 296(1)–(3); NSW, s 198(1) (formerly NSW 2004, s 352(1)–(3)); NT, s 334(1)–(3); Qld, s 337(1)–(3); SA, Sch 3, cl 39; Tas, s 321(1)–(3); Vic, s 198(1) (formerly Vic 2004, s 3.4.40(1), (2), (2A)); WA, s 297(1)–(3). 32 ACT, s 294A(2); NSW, s 198(1) (formerly NSW 2004, s 350(2)) (see Boyce v McIntyre (2009) 78 NSWLR 152 at [19]–[22] per Ipp JA); NT, s 332(2); Qld, s 335(2); SA, Sch 3, cl 37(1); Tas s 319(2); Vic, s 198(1) (formerly Vic 2004, s 3.4.38(2)); WA, s 295(3). A person is a “third party payer” if he or she is under a legal obligation to pay, or has paid, all or any part of the legal costs for legal services provided to the client: ACT, s 261A(1)(a); NSW, s 171(1) (formerly NSW 2004, s 302A(1)(a)); NT, s 296(1)(a); Qld, s 301(1); SA, Sch 3, cl 2(1)(a); Tas, s 284(1)(a); Vic, s 171(1) (formerly Vic 2004, s 3.4.2A(1)(a)); WA, s 253(1)(a). 33 ACT, s 298(b); NSW, s 198(7)(b) (formerly NSW 2004, s 355(b)); NT, s 336(b); Qld, s 338(b); SA, Sch 3, cl 44(c) (process is termed “adjudication”); Tas, s 323(b); Vic, s 198(7)(b) (formerly Vic 2004, s 3.4.41(1)(b)); WA, s 298(b).

508

Lawyers’ Professional Responsibility

[15.60]

The recovery by a successful litigant of party–party costs from an opponent in no way affects a client’s right seek assessment of her or his own lawyer’s bill.34 As party–party costs afford only a partial indemnity to a successful litigant, there may be good reason for a client to have her or his own lawyer’s bill assessed in an attempt to reduce the extent to which he or she is out of pocket by virtue of the proceedings. Approach to assessment Outside a valid costs agreement or applicable scale

[15.60]

In the jurisdictions that retain the Model Laws’ schema for the regulation of lawyer–client costs – namely all bar New South Wales and Victoria – absent a valid costs agreement or applicable scale, the legislation requires an assessor to consider whether it was reasonable to carry out the work to which the costs relate, whether the work was carried out in a reasonable manner, and the fairness and reasonableness of the amount of the costs in relation to that work.35 In assessing fairness and reasonableness for this purpose, a costs assessor may have regard to:36

• • • • • • • • • •

whether the lawyer complied with any relevant regulation or professional rules; whether the lawyer has made the requisite disclosure: see [14.20]; any relevant advertisement as to the lawyer’s costs or skills; the skill, labour and responsibility displayed by the lawyer responsible for the matter; the retainer, and whether the work done was within its scope; the complexity, novelty or difficulty of the matter; the quality of the work done; the place where and circumstances in which the legal services were provided; the time within which the work was required to be done; any other relevant matter.

The Legal Profession Uniform Law, as it applies in New SOuth Wales and Victoria adopts a slightly different schema. It requires a costs assessor (in Victoria, the Costs Court) to determine whether costs are fair and reasonable37 and, to the extent they are not fair and reasonable, determine the amount of legal costs (if any) that are to be payable.38 In making this assessment, the assessor (court) must apply stated principles,39 and may have regard to stated matters.40 Collectively these are 34 Re Robb (1996) 134 FLR 294 at 328 (FC(ACT)). 35 ACT, s 300(1); NT, s 341(1); Qld, s 341(1); SA, Sch 3, cl 46(1); Tas, s 327(1); WA, s 301(1). Equivalent provision appeared in the former New South Wales and Victorian legislation: NSW 2004, s 363(1); Vic 2004, s 3.4.44(1). 36 ACT, s 300(2); NT, s 341(2); Qld, s 341(2); SA, Sch 3, cl 46(2); Tas, s 327(2); WA, s 301(2). Equivalent provision appeared in the former New South Wales and Victorian legislation: NSW 2004, s 363(2); Vic 2004, s 3.4.44(2). 37 NSW, s 200(1); Vic, s 200(1). 38 NSW, s 199(2)(b); Vic, s 199(2)(b). 39 NSW, s 172(2); Vic, s 172(2). 40 NSW, s 200(2); Vic, s 200(2).

[15.65]

15 Recovery of Costs from Clients

509

directed to the dot points listed above. But the assessor’s (court’s) jurisdiction in this regard is not confined by the terms of the legislation to where no costs agreement exists. Where a valid costs agreement exists

[15.65]

A valid costs agreement (see [14.75]–[14.145]) restricts the scope of assessment under the Model Laws’ schema (but not, as noted above, under the Legal Profession Uniform Law). It requires an assessor to assess the disputed costs by reference to the provisions of the costs agreement if that agreement specifies the amount, or a rate or other means for calculating the amount, of the costs.41 At the same time, it does not preclude an assessor from inquiring into whether it was reasonable to do work at all, or to do it at the fixed rate provided in the costs agreement.42 The foregoing presupposes that an assessor has the power to determine whether a costs agreement exists, and its terms, something mentioned explicitly in the Uniform Law.43 Both the Model Laws and Uniform Laws envisage that a lawyer cannot, via a costs agreement, oust the costs assessor’s power to assess costs thereunder44 except, under the Model Laws, in the case of a a sophisticated client.45 Even outside of a sophisticated client, there is nothing to preclude a lawyer and client reaching an agreement, outside of a costs agreement, to contract out of assessment. Such an agreement, assuming it is otherwise enforceable, operates as an accord and satisfaction in place of the obligations under the costs agreement.46

41 ACT, s 300A(1); NT, s 339(1); Qld, s 340(1); SA, Sch 3, cl 47(1); Tas, s 328(1); WA, s 302(1). Equivalent provision appeared in the former New South Wales and Victorian legislation: NSW 2004, s 361(1); Vic 2004, s 3.4.44A(1) (Costs Court). The South Australian Act, prior to the inclusion of Sch 3 from 1 July 2014, empowered the Supreme Court to tax a bill, and in those proceedings rescind or vary a costs agreement if its terms are not fair and reasonable: SA, s 42(7). The terms of an agreement could not, therefore, oust the court’s jurisdiction here; consistent with the position elsewhere, though, the case law required the taxing officer to tax costs by reference to the schedule of fees provided in the agreement: Renton Resources Pty Ltd v Johnson Winter & Slattery (2005) 240 LSJS 434 at [49], [56] per Anderson J, at [61] per Layton J. 42 LM v K Lawyers (No 2) [2015] WASC 245 at [9]–[16] per C Boyle R (citing, by way of illustration, where a costs agreement provides for a charge at a particular hourly rate for work requiring the skill of a lawyer, but (for want of appropriate support staff or otherwise) the lawyer performs work that does not require the skill of a lawyer; in this event, the lawyer is not entitled to charge for it under the costs agreement). 43 NSW, s 199(2)(a) (formerly NSW 2004, s 359(3)(b)); Vic, s 199(2)(a). 44 ACT, s 282(5); NSW, s 180(4) (formerly NSW 2004, s 322(5)); NT, s 317(5); Qld, s 322(5); SA, Sch 3, cl 24(5); Tas, s 306(5); Vic, s 180(4) (formerly Vic 2004, s 3.4.26(5)); WA, s 282(5). 45 ACT, s 304A; NT, s 343; Qld, s 344; SA, Sch 3, cl 51; Tas, s 338; WA, s 309. Equivalent provision appeared in the former New South Wales and Victorian legislation: NSW 2004, s 395A; Vic 2004, s 3.4.48A. “Sophisticated client” is defined in ACT, s 261; NSW 2004, s 302(1); NT, s 295(1); Qld, s 300; Tas, s 283; Vic 2004, s 3.4.2; WA, s 251. 46 Beba Enterprises Pty Ltd v Gadens Lawyers (2013) 41 VR 590; GLS v Goodman Group Pty Ltd [2015] VSC 627; K & L Gates Australia, LLC v Swindells [2016] VCC 173; Able Demolitions and Excavations v Barry Kenna & Co [2016] VSC 96.

510

Lawyers’ Professional Responsibility

[15.70]

Where a scale (or equivalent) applies Where a scale, or its equivalent,47 applies to the legal work conducted as part of the retainer, and no costs agreement ousts the scale, other than in the Australian Capital Territory and Queensland, the legislation requires a costs assessor (in Victoria, the Costs Court) to assess the amount of disputed costs that are subject to a scale by reference to the scale48 (although in Western Australia the court may allow a higher amount if the “unusual difficulty, complexity or importance of the matter” renders the scale amount inadequate).49 In the Australian Capital Territory, assessment may be made by reference to anything the court considers appropriate, including a scale of costs.50

[15.70]

Costs of assessment

[15.75]

The costs of taxation were traditionally determined under the so-called “one-sixth rule”, whereby the client would be liable for those costs if the amount taxed off the bill was less than one-sixth of the bill; otherwise the lawyer would bear the costs burden. The rule aimed to prevent lawyers from overcharging clients, as a lawyer who inflated a bill by improperly including items risked having to pay the costs of taxation if these items were disallowed.51

The substance of the one-sixth rule remains in the legal profession legislation. It imposes the costs of the assessment on the lawyer if the costs are reduced by at least 15 per cent on the assessment.52 But in each case the assessor retains the power to “otherwise order”, and so the onus rests on the lawyer to establish grounds on which he or she should be relieved, in whole or in part, of the costs of the assessment. Outside this scenario, the costs of the assessment are payable by the other party to the assessment. Reasons for assessor’s determination

[15.80]

The Legal Profession Uniform Law, as it applies in New South Wales and Victoria, requires a costs assessor to give reasons for a determination.53 An equivalent provision first appeared in the 2004 New South Wales legislation,54 following the New South Wales Court of Appeal’s ruling in Attorney-General v 47 In New South Wales and Victoria, a “fixed costs legislative provision” (as defined in NSW, s 6(1); Vic, s 6(1); in the Northern Territory (and formerly New South Wales), a “fixed costs provision” (as defined in NSW 2004, s 302(1); NT, s 295(1))); in Western Australia, an applicable costs determination. 48 NSW, ss 172(2), 200(1) (formerly NSW 2004, s 362); NT, s 340; SA, Sch 3, cl 48; Tas, s 329; Vic, ss 172(2), 200(1) (formerly Vic 2004, s 3.4.44B); WA, s 303. 49 WA, s 280(2), as to which see Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [15.71]–[15.77]. 50 ACT, s 300B. 51 Re Dibbs and Farrell (1941) 41 SR (NSW) 249 at 255 per Jordan CJ; Richardson v Lander (No 2) (1948) 65 WN (NSW) 81 at 86 per Herron J. 52 ACT, s 302(2); NSW, s 204 (formerly NSW 2004, s 369(3)(a), 369(3)(c)); NT, s 350(3); Qld, s 342(2); SA, Sch 3, cl 49; Tas, s 331(2); Vic, s 204 (formerly Vic 2004, s 3.4.45(2)); WA, s 304(2). 53 NSW, s 201; Vic, s 201. 54 NSW 2004, s 370.

[15.85]

15 Recovery of Costs from Clients

511

Kennedy Miller Television Pty Ltd55 that the right to appeal an assessor’s determination to the court (see [15.85]) would be rendered illusory without the assessor’s reasons. The regulations in New South Wales prescribe the content of a statement of reasons for this purpose,56 which must, in any case, adopt, at the least, “a minimum standard which places the parties in a position to understand why the decision was made sufficiently to allow them to exercise any right of appeal”.57 The court rules in Queensland now also contain a requirement for an assessor to disclose reasons.58 Review of assessment

[15.85]

Provision is made for the review of a costs assessor’s determination in each jurisdiction. In New South Wales, Queensland, Victoria and Western Australia the process applicable to a review as between party and party applies to reviewing assessments as between lawyer and own client.59 In Victoria and Western Australia, it involves in the first instance a process of review by application to the assessor who made the determination. In New South Wales, it involves a review by a panel of costs assessors (in Victoria, judicial registrar or Costs Judge). In Queensland, as in New South Wales, Victoria and Western Australia, scope exists for the court to review an existing determination.

In the Australian Capital Territory, the Supreme Court conducts the assessment, and so, without a provision in the legal profession legislation for the review of assessment, the court’s determination can be appealed to the Court of Appeal.60 As the Registrar of the court ordinarily conducts adjudication in South Australia, an appeal from that decision lies to the Master of the court.61 55 Attorney-General v Kennedy Miller Television Pty Ltd (1998) 43 NSWLR 729 at 735 per Priestley JA, at 739 per Handley JA. 56 Legal Profession Uniform Law Application Regulation 2015 (NSW), reg 41 (formerly Legal Profession Regulation 2005 (NSW), cl 128). 57 Frumar v Owners of Strata Plan 36957 (2006) 67 NSWLR 321 at [45] per Giles JA. See also Cassegrain v CTK Engineering Pty Ltd [2008] NSWSC 457 at [90]–[92] per White J. In Frumar the court found that neither the costs assessor nor the panel of costs assessors had provided sufficient reasons for their decisions. According to Giles JA, the claimant or the opponent could not properly appeal to the Supreme Court without knowing: (1) whether the panel’s assessment had been by taking the itemised bill of costs and allowing, disallowing or adjusting items, or by coming to its own view of work reasonable to be carried out; (2) if the former, what items had been allowed, disallowed or adjusted and whether as to hourly rate or reasonable times or for some other reason; or (3) if the latter, what work the panel thought reasonable and how it costed the carrying out of the work: at [62]. 58 Qld UCPR, r 738 (which applies to lawyer and client costs assessment: r 743I). 59 Legal Profession Uniform Law Application Act 2014 (NSW), Pt 7, Divs 5 (reviews), 6 (appeals) (formerly NSW 2004, Pt 3.2, Div 11, Subdiv 5 (review by panel), 6 (appeals)); Qld UCPR, r 743I (referring to r 742); Legal Profession Uniform Law Application Act 2014 (Vic), s 97 (formerly Vic 2004, s 3.4.47); Vic RSC, rr 63.37(2), 63.57; WA, s 308; WA RSC, O 66 rr 55, 56 (review by the court conducted in accordance with the rules of court). See generally Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [18.51]–[18.76]. 60 Supreme Court Act 1933 (ACT), s 37E. 61 SA, Sch 3, cl 41(2) (formerly SA, s 42(1b)).

512

Lawyers’ Professional Responsibility

[15.90]

The legal profession legislation in the Northern Territory prescribes a procedure specific to the review of lawyer–client costs assessment. A party to the assessment may seek a review of the costs assessor’s determination by a reviewer,62 from which a dissatisfied client can appeal to the court on a matter of law63 or otherwise with leave of the court.64 The equivalent Tasmanian legislation also makes specific provision for review of assessment. In the first instance, a party may make a written objection to the assessor, who must review the item(s) the subject of the objection.65 The next step for a dissatisfied party is to apply to the court to review the assessment as to the item(s) in question.66

[15.90]

Because a costs assessor enjoys a wide discretion in carrying out the assessment, the court is reticent to interfere with the exercise of that discretion. As a result, the court’s approach parallels any review or appellate body’s approach when faced with a challenge to a discretionary decision. Allen J captured this approach, by reference to taxation, in McWilliam v McWilliam:67 [W]here the decision merely determines the quantum of a charge the reviewing court will rarely intervene. Where the matter in question is fairly within the taxing officer’s discretion, the court, on appeal, will review the decision only when it is seen to be plainly erroneous; that is, having proceeded on an obviously wrong principle. As it is usually expressed, the taxing officer’s decision on matters of discretion is always to be considered final, unless he has acted on some mistaken or erroneous principle, or where he has exercised his discretion in a manner which is manifestly wrong.

Alternatives to assessment

[15.95]

There is no need for costs assessment if lawyer and client agree on the quantum of costs to be paid. In some jurisdictions the legal profession legislation prescribes for alternative dispute resolution avenues of costs disputes. In the Northern Territory, a client who disputes a bill of costs, including an amount claimed to be payable under a costs agreement, may refer the dispute to the Statutory Supervisor68 for mediation if the amount in dispute is less than $10,000.69 Also, a registrar may may by written notice require the parties to enter a process of mediation if the disputed amount is less than $5,000.70 Equivalent provision existed under the former Legal Profession Act 2004 (NSW).71 62 NT, s 352(1). “Reviewer” includes: (a) if the costs assessor is the Master or is appointed by the Law Society – the Supreme Court; or (b) if the costs assessor (other than the Master) is appointed by the Chief Justice – the Master or a Registrar: NT, s 351. 63 NT, s 362. 64 NT, s 363. 65 Tas, s 333. 66 Tas, s 334(1). 67 McWilliam v McWilliam [1969] 1 NSWR 159 at 161. 68 The office of Statutory Supervisor is established pursuant to NT Pt 7.5. 69 NT, s 330(1). 70 NT, s 330(3). 71 See NSW 2004, s 336 (dispute referred to the Legal Services Commissioner (appointed under NSW 2004, Pt 7.3), the Law Society Council or the Bar Council, and mediation ordered by the Manager, Costs Assessment).

[15.105]

15 Recovery of Costs from Clients

513

In Queensland statute provides for mediation of “consumer disputes”;72 as these include a dispute about a lawyer’s conduct to the extent it does not involve an issue of unsatisfactory professional conduct or professional misconduct,73 they can encompass disputes over costs. The former Victorian Act was more explicit on the point. It prescribed a procedure for mediation of “civil disputes”,74 defined to include disputes in relation to costs not exceeding $25,000 in respect of any one matter.75 The Legal Profession Uniform Law in New South Wales and Victoria provides for any complaints made in relation to “costs disputes” to be pursued by the relevant Legal Services Commissioner in an attempt at informal resolution,76 including via mediation,77 where the amounts in dispute are less than $10,000 or the bill of costs is less than $100,000:78 see [24.80].

SECURING COSTS RECOVERY [15.100] The general law has recognised the importance of ensuring that lawyers have some security for their costs, the concern being that otherwise lawyers would decline retainers for clients who lacked the financial capacity to supply the fees in advance (on trust). It was through the vehicle of a lien, implied as a matter of law arising out of the lawyer–client relationship, that the law effected this security. Under the “general” lien, the lawyer can withstand the client’s request for the delivery of the client’s file or other documents lawfully in the lawyer’s possession until the outstanding costs are paid or satisfactorily secured. The general law also recognises a “particular” lien, whereby lawyers can apply to the court for an equitable interest over a fund not in their hands that has been generated from their services. The importance of these liens merits their discussion in a separate chapter, namely Chapter 16. Two other means of securing costs, effected by way of contracting with the client, are discussed below. Irrevocable authorities

[15.105] As an irrevocable authority to pay from an identifiable fund given for value represents a valid equitable assignment of that property, a client’s assignment of the right to the proceeds of anticipated litigation to a third party may threaten the lawyer’s ability to recoup her or his fee from those proceeds. As a lawyer may apply to the court to secure a lien over the proceeds of judgment for costs incurred in obtaining the judgment, which has been variously described as an equitable right or interest (see [16.125]), the issue becomes one of competing equitable interests; the assignee’s interest as against the interest of the lawyer. The general 72 Qld, Pt 4.5. 73 Qld, s 440. 74 Vic 2004, Pt 4.3, Div 3. 75 Vic 2004, s 4.2.2(a) (cf the former Vic 1996, s 122). 76 NSW, s 287; Vic, s 287. 77 NSW, s 288; Vic, s 288. 78 NSW, s 291; Vic, s 291.

514

Lawyers’ Professional Responsibility

[15.105]

principle (at least where the equities are equal) being that the first in time prevails,79 if the assignment predates the lawyer’s interest,80 the assignee’s interest will in the usual case prevail. For this reason it has been suggested that lawyers should, if they are unable to procure their fee in advance on trust, obtain at the commencement of the retainer an irrevocable authority from the client covering taxable (assessable) lawyer–client costs.81 In doing so, a lawyer should urge the client to seek independent professional advice prior to executing the authority, and in any case ensure that the client fully understands its nature and consequences. The lawyer should furnish consideration for the irrevocable authority, say by ensuring the retainer clearly provides that the lawyer will act, or continue to act, for the client only if the client gives the requisite authority.82 But lawyers should not assume that a valid “irrevocable authority” in their favour is always truly “irrevocable”, and so always capable of protecting their claim to costs. Circumstances may arise where a lawyer’s claim under an irrevocable authority can lose its otherwise temporal priority to a third party’s claim. In Grogan v Orr,83 for instance, the respondent solicitor acted for a client (N) in family law proceedings. As N could pay the respondent’s fees only on receiving his share of the matrimonial property, the respondent secured from N an irrevocable authority to this effect. The implementation of the Family Court’s orders involved the sale of real estate, in respect of which a different solicitor (the appellant) acted. N revoked the aforesaid authority and instructed the appellant to pay the proceeds of sale to him, and shortly thereafter filed for bankruptcy. Some five years later the respondent commenced proceedings to recover his fees. The trial judge reasoned that where an agent (the appellant) is directed or authorised by the principal (N) to pay to a third party (the respondent) money from a fund in the agent’s hands, and the agent expressly or impliedly promises to pay the third party or hold the money on the third party’s behalf, the agent is personally liable to pay the third party.84 This led him to find the appellant personally liable for the respondent’s costs. The New South Wales Court of Appeal reversed this decision, stating that although such a promise could be implied from acts or words, it could not be implied, as on the facts, from silence alone.85 It also rejected the respondent’s argument that he had provided consideration for the irrevocable authority, there being no evidence that the respondent would have 79 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [2.10]–[2.120]. 80 There remains some uncertainty regarding the time at which the lawyer’s equitable interest arises under a particular lien: see [16.135]–[16.145]. 81 See Doyle and Herriman, “Irrevocable Authorities and Undertakings” (1991) 13 (Sept) LSB (SA) 13 at 14–15. 82 Grogan v Orr [2001] NSWCA 114 at [55] per Sheller JA. 83 Grogan v Orr [2001] NSWCA 114. 84 Orr v Grogan (2000) NSW ConvR ¶55-931 at 57,388 per Sperling J (SC(NSW)). As to this principle see Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [23.54]. 85 Grogan v Orr [2001] NSWCA 114 at [51] per Sheller JA, Meagher JA concurring.

[15.105]

15 Recovery of Costs from Clients

515

ceased to act had N refused to sign the authority.86 In any event, according to their Honours, the respondent’s delay served to bar the claim due to laches.87 It appears, therefore, that had the respondent notified the appellant of his claim upon the sale of the property, the outcome would have been different; the court in such a case could have imposed on the appellant the equitable personal obligation to pay the respondent’s costs.88 In Twigg v Kung,89 for example, it was not until the proceeds of a settlement had been disbursed by the current solicitors that the former solicitors, in whose favour the client had executed an irrevocable authority entitling them to costs out of the proceeds of the litigation, explicitly notified the current solicitors of their claim to a particular lien for unpaid costs. Hodgson JA, with whom Stein JA and Foster AJA concurred, made the following important observations regarding notice in this context:90 [N]otice of a lien can be effectively given at a time when the interest is still inchoate, in that there has not yet been a judgment or settlement to which the lien could attach. The important matter is the actual or presumed state of mind of the person dealing with the property at the time when that dealing takes place: if the person in question has notice of the lien at the time the property is dealt with, that will be sufficient, and it will not matter that the communication occurred at a time before the lien attached to particular property … [I]t follows from this approach that the adequacy of the notice must be considered as at the time when the challenged dealing takes place; and the question whether a notice is sufficient to bring about the required actual or presumed state of mind must have regard, not only to the terms of the notice itself and the circumstances in which it was given, but also to the circumstances that have ensued in the meantime … [T]he notice must, viewed in all the circumstances occurring up to the time of the dealing with the affected property, be such as to convey to the recipient as at that time that a lien is being asserted in respect of costs incurred in the relevant matter and unpaid. It is not sufficient that it merely raise a possibility that such is the case.

Although the current solicitors had been notified of the terms of the irrevocable authority, Hodgson JA considered that those terms lacked sufficient clarity to fix them with notice of the lien, as they made no reference to a lien and did not suggest there were costs owing to the former solicitors to be met out of the property recovered. Also, at no time in the intervening period was notice given to the current solicitors that there were unpaid costs that could support a lien or that a lien was still asserted.91 As a result, the former solicitors’ claim of lien was rejected. The decision in Twigg shows not that notice to the debtor is a prerequisite for the lien to exist, but that the absence of notice may cause a lien supported by an irrevocable

86 Grogan v Orr [2001] NSWCA 114 at [55] per Sheller JA, Meagher JA concurring. 87 Grogan v Orr [2001] NSWCA 114 at [69], [70] per Sheller JA, Meagher JA concurring. Cf Firth v Centrelink (2002) 55 NSWLR 451 at [105]–[111] per Campbell J (no detrimental reliance or alteration of position sufficient to justify defence of laches); Twigg v Kung (2002) 55 NSWLR 485 at [38] per Hodgson JA. 88 Firth v Centrelink (2002) 55 NSWLR 451 at [54] per Campbell J. 89 Twigg v Kung (2002) 55 NSWLR 485. 90 Twigg v Kung (2002) 55 NSWLR 485 at [32], [33], [35] (paragraph breaks omitted). 91 Twigg v Kung (2002) 55 NSWLR 485 at [36].

516

Lawyers’ Professional Responsibility

[15.110]

authority to be lost. The court may, to this end, disallow such a lien to prevail against the claim of a bona fide purchaser for value without notice over the money subject of the claim.92 Taking security for costs

[15.110] Statute entitles lawyers to take reasonable security from a client for costs and entitles a lawyer to refuse to act or to cease acting for a client who does not provide reasonable security.93 The usual way of securing liability for fees is by placing funds to be held on trust by the lawyer: see [9.25]. Alternatively, a lawyer may obtain a guarantee of payment from a third party, or take a mortgage or charge over one or more of the client’s assets.94 The terms of the security must not be of an unusual or onerous character,95 and must be in a form appropriate to serve the purpose intended. In Re Nelson,96 for example, the solicitor’s fees were secured by a mortgage over the client’s property, although on the face of the memorandum of mortgage, it appeared that the solicitor had advanced the money in question to the client. When the solicitor became bankrupt, the solicitor’s trustee-in-bankruptcy had a prima facie case supporting the demand for repayment of the sum secured. According to Higgins and Foster JJ, the proper approach in the circumstances should have been an “all moneys” mortgage up to a maximum amount expressed as being for legal costs to be incurred in the litigation and remaining unpaid as at the date an account for such work was rendered. By adopting the approach he did, the solicitor “failed effectively to safeguard his client’s interests to the detriment of that client”.97 To guard against any accusation that he or she has taken advantage of the client, the lawyer should ensure that the transaction is properly explained to the client,98 it being prudent to advise the client to seek independent advice.99 Like other lawyer–client transactions, it may be set aside for breach of fiduciary duty, fraud,100 undue influence101 or unconscionable dealing. It may also potentially be set aside 92 Cf Firth v Centrelink (2002) 55 NSWLR 451; Firth v Centrelink (No 2) (2002) 55 NSWLR 494. 93 ACT, s 280; NSW, s 206 (formerly NSW 2004, s 320); NT, s 315; Qld, s 320; SA, Sch 3, cl 22; Tas, s 304; Vic, s 206 (formerly Vic 2004, s 3.4.20); WA, s 272. 94 Re Nelson (1991) 106 ACTR 1 at 17 per Higgins and Foster JJ. See, for example, Moloney v Coppola [2012] NSWSC 728; Murfett Legal Pty Ltd v Frigger [2015] WASC 406; Lakic v Prior [2016] VSC 293. 95 Prees v Coke (1871) 6 Ch App 645; Eyre v Hughes (1876) 2 Ch D 148; Cockburn v Edwards (1881) 18 Ch D 449; Jones v Linton (1881) 44 LT 601; Biggs v Hoddinott [1898] 2 Ch 307. See, for example, M J Leonard Pty Ltd v Bristrol Custodians Ltd (in liq) [2013] NSWSC 1734 (where Windeyer AJ remarked that, absent exceptional circumstances, security over all of a client’s assets is unlikely to be reasonable: at [61]). 96 Re Nelson (1991) 106 ACTR 1. 97 Re Nelson (1991) 106 ACTR 1 at 18. 98 Weston v Connor (unreported, CA(Vic), 9 February 1998) at 15–17 per Batt JA; Jones v Baker (2002) 10 BPR 19,115 at 19,123–4 per Young CJ in Eq. 99 Aaronisle Pty Ltd v Thorpe [2005] WASC 87 at [49] per Commissioner McKerracher QC. 100 See, for example, Ward v Sharp (1884) 53 LJ Ch 313. 101 See, for example, Watson v Rodwell (1879) 11 Ch D 150; M J Leonard Pty Ltd v Bristrol Custodians Ltd (in liq) [2013] NSWSC 1734 (grant by clients of a charge over all their property to their solicitor

[15.110]

15 Recovery of Costs from Clients

517

under statutory provisions directed at unjust contracts, now including the “unfair contract terms” provisions of the Australian Consumer Law.102 Macready M’s decision in Liu v Adamson103 highlights some of the dangers in taking security over property (jointly) owned by a client’s spouse or other family member. Pursuant to the Contracts Review Act 1980 (NSW), the Master set aside as “unjust” a costs agreement that granted security for costs over the home of the husband and de facto wife directors of a corporate client as a guarantee of the client’s costs liability. What led the Master to so rule was that the agreement had not been explained to the wife, and that she lacked independent advice; instead the solicitor met the wife for the first time on the occasion of signing the contract. This shows that lawyers who wish to take security for costs from their clients may not be in a dissimilar position to lending institutions, and so must take equivalent if not greater precautions to this end.104

without proper explanation held to amount to a breach of fiduciary duty: at [52]–[54] per Windeyer AJ); Portuguese Cultural and Welfare Centre v Talbot Olivier Pty Ltd (No 2) [2015] WASC 54 at [46] per Corboy J. See generally Weston v Connor (unreported, CA(Vic), 9 February 1998) at 15–17 per Batt JA; Horan, “Security for Legal Costs: Yet Another Warning” (1998) 72 (Aug) LIJ 65. 102 Australian Consumer Law, Pt 2-3, operative from 1 January 2011, found in Competition and Consumer Act 2010 (Cth), Sch 2. 103 Liu v Adamson (2003) 12 BPR 22,205. 104 See Marshall, “Unconscionable Costs Agreements” (2003) 41 (Nov) LSJ 64.

Chapter 16

Solicitors’ Liens [16.05] GENERAL PRINCIPLES .................................................................................................. 519 [16.10] Two forms of solicitors’ lien ....................................................................................... 519 [16.15] Policy underlying liens ............................................................................................... 520 [16.20] RETAINING LIEN ............................................................................................................. 521 [16.20] Lien is possessory and general .................................................................................. 521 [16.25] What items come within the lien? ............................................................................ 522 [16.50] What costs can the lien secure? ................................................................................. 525 [16.55] Operation of lien where a client changes solicitor ................................................ 526 [16.75] Ouster and loss of lien ................................................................................................ 530 [16.115] PARTICULAR LIEN ........................................................................................................ 537 [16.115] Nature and operation of particular lien ................................................................. 537 [16.135] Competing claims to particular lien – timing of the lien ................................... 540 [16.150] Lien claimed by a former solicitor .......................................................................... 542 [16.160] Ouster of lien by statute ........................................................................................... 543

GENERAL PRINCIPLES [16.05]

A lawyer can secure costs due from a client before taking active steps in performing the retainer. He or she may do so, most commonly, by requesting funds in advance from the client, which are held in trust until the services are performed, and the requirements for withdrawal of costs from trust money are met: see [9.25], [9.70]. Alternatives include actually taking security on property owed by the client (see [15.110]), or via a litigation loan, whether or not secured.

Two forms of solicitors’ lien

[16.10]

Absent an effective security for costs, the law provides a vehicle – a lien – to secure costs due after the lawyer’s services have been supplied. The concept of a lien recognises “a right to resist a demand for the payment of money or the performance of an obligation until some counter obligation is paid or performed”.1 Two forms of lien may arise within the lawyer–client relationship. The “retaining” lien entitles solicitors to retain their clients’ papers or other chattels until their costs are paid: see [16.20]–[16.110]. The other lien, known as the “particular” lien, is also designed to safeguard solicitors’ costs but arises over any personal property recovered or preserved, or any judgment obtained, for the client by the solicitors’ exertions in litigation: see [16.115]–[16.160]. As liens are ordinarily associated with 1 John D Hope & Co v Glendinning [1911] AC 419 at 430–431 per Lord Kinnear.

520

Lawyers’ Professional Responsibility

[16.15]

possession, and the particular lien is not predicated upon possession, the term “lien” here is used “in a very special sense”.2 Each lien is premised upon a legally enforceable claim to costs. As a barrister at general law cannot sue for her or his fees (see [15.10]), the foundation for a barrister claiming a lien for unpaid costs, whether against the instructing solicitor or the client, is lacking.3 But to the extent that barristers can now, under statute and professional rules, contract with clients and instructing solicitors (see [3.45]), there is scope for barristers to assert a lien, as there is where the practitioner acts as both solicitor and barrister. For the purposes of clarity, however, the term “solicitor” is used in this chapter in the context of liens. Policy underlying liens

[16.15]

The basic policy underscoring both the retaining and the particular lien is that “it is not just that the client should get the benefit of the solicitor’s labour without paying for it”.4 Were a solicitor’s claim for fees not secured by way of lien, absent other effective security a lawyer would be forced to lodge proceedings in debt, which may be frustrated if the client is unable to satisfy the debt. The retaining lien addresses the problem by restricting the client’s ability to proceed with litigation or a transaction; the particular lien does so by being directed at money or property (usually) before it comes into the client’s hands. Yet it is the public interest served by the liens, beyond the legal profession’s own interest, that justifies their existence.5 For instance, the original justification for the particular lien was that, without protection of this kind solicitors would eschew work for “needy people” facing insolvency.6 The modern broader justification for the particular lien, though, reflects two fundamental rights enjoyed by all citizens in a democracy: the right of access to the courts, and the right to legal representation. Regarding the former, it has been judicially observed that:7 When [the right of access to the courts] is denied, justice is denied, and the ability of society to order its affairs and resolve its differences in a regular manner is impugned. Yet it is incontrovertible that the costs of litigation are high and evidently getting higher. For many citizens, civil litigation is likely to be an avenue which is beyond their means. This is so even when they have a meritorious claim. Others suffer financial instability which may be solely or largely caused by the very actions of the party whom they wish to sue. To these and others in the community the right to have their “day in court” is becoming an increasingly distant and unattainable right. In my view, abandoning the solicitors’ particular lien could exacerbate these difficulties. Being without any protection, solicitors could well be unwilling to undertake the legal work required to pursue a claim.

2 Kelso v McCulloch (unreported, SC(NSW), Young J, 24 October 1994) at 9. 3 Atkinson v Pengelly [1995] 3 NZLR 104 at 111–112 per Tipping J. 4 Guy v Churchill (1887) 35 Ch D 489 at 491 per Cotton LJ. See also at 492 per Lindley LJ; Groom v Cheesewright [1895] 1 Ch 730 at 732 per Kekewich J; Meguerditchian v Lightbound [1917] 2 KB 298 at 307 per Swinfen Eady LJ; Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 483 per Windeyer J. 5 Hughes v Hughes [1958] P 224 at 229 per Hodson LJ. 6 Ex parte Bryant (1815) 1 Madd 49; 56 ER 19 at 52 (Madd), at 20 (ER) per Sir Thomas Plumer VC; Atkinson v Pengelly [1995] 3 NZLR 104 at 106 per Tipping J. 7 Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 240 per Thomas J.

[16.20]

16 Solicitors’ Liens

521

As to the latter, the particular lien provides a mechanism, it is reasoned, to facilitate legal representation for parties who do not necessarily have a financial standing or status that matches their prospects of success.8 The lien, therefore, can be seen as serving the public good. Not all are convinced that the retaining lien presents as strong a policy justification, although to date there has been no active judicial voice to this effect. In 1993 the New South Wales Law Reform Commission recommended its abolition because, in its opinion, the lien is a barrier to consumers’ ability to seek advice, complain or take action against their former lawyer.9 It noted that although other service providers (such as mechanics, repairers and bailees of goods) also enjoy a lien over property subject to the payment of outstanding fees, the position of solicitors should stand alone for three reasons. First, lawyers are members of a profession, and so should be motivated by public service (see [1.30]), not simply commercialism. Secondly, a legal file kept by a solicitor is distinguishable in nature from other types of personal property or chattels, as it usually contains documents that regulate legal rights and obligations between parties, as well as material confidential to the client. Thirdly, the solicitor’s retention of a file under a lien may prevent a person from vindicating her or his legal rights. Commentators have, on related grounds, likewise queried the continuing recognition of the retaining lien.10 Both the Commission and commentators envisage alternative methods to protect solicitors’ fees, such as mediation, lodgment of a guarantee with a court or tribunal, or the giving of an appropriate undertaking by the new solicitor who has taken over the file.

RETAINING LIEN Lien is “possessory” and “general”

[16.20]

The retaining lien is also termed the “general” or “possessory” lien. Each of these terms is of some significance. The lien is “general” because it extends to all costs owed by the client to the solicitor; it is not restricted, like a particular lien, to the costs owing in respect of the items that the client wishes the solicitor to deliver up. The lien is “possessory” in being premised upon the solicitor having actual physical possession of the items retained pursuant to it. The items withheld under the lien must, by definition, be the property of the client (as to which see [3.230]); it makes little sense to speak of a lien over the solicitor’s own property. The retaining lien is a protective, passive right – a right to refuse to transfer an item of property to which the claimant would otherwise be entitled.11 It gives the solicitor no right to

8 Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 241 per Thomas J. 9 New South Wales Law Reform Commission, Scrutiny of the Legal Profession: Complaints Against Lawyers (Report 70, February 1993), paras 5.69–5.78 (recommendation 71). A similar recommendation has been made by the New South Wales Legal Services Commissioner: see Mark, “Complaints About Legal Costs: Ethical Implications” (1998) 72 Reform 23 at 26. 10 See, for example, Leubsdorf, “Against Lawyer Retaining Liens” (2004) 72 Fordham L Rev 849 (who argues that the lien is inconsistent with the duties of a lawyer to avoid conflict of interest, to conceal no relevant information from a client, and to refrain from taking advantage of a client’s confidence or lack of knowledge). 11 Re a Barrister and Solicitor (1979) 40 FLR 26 at 39 (FC(ACT)).

522

Lawyers’ Professional Responsibility

[16.25]

actively enforce her or his demand,12 nor to payment out of the property the subject of the lien.13 The solicitor secures no legal or equitable ownership to that property via the lien,14 and so it does not function as an encumbrance or equitable charge over the property,15 although it does operate as a de facto security. A solicitor’s act in seeking improperly to maintain a lien over a client’s property can generate a disciplinary sanction.16 What items come within the lien?

[16.25]

The retaining lien can be claimed over items the property of a client that come into the solicitor’s possession in the course of the retainer and in her or his capacity as solicitor with the sanction of the client.17 Three important limitations on the scope of the lien flow from this proposition, each addressed below: see [16.30]–[16.40]. Also discussed below is scope for the lien to be exercised over money held in the solicitor’s trust account: see [16.45]. Lien does not extend to property owned by a third party

[16.30]

Items that are the property of a third party, not of the solicitor or client, cannot be the subject of the retaining lien, but must be delivered up to that party, unless the solicitor has some valid security as against the third party. For example, that an Australian passport is declared by statute to be the property of the Commonwealth18 does not necessarily preclude a solicitor legitimately retaining a client’s passport as security for costs due from the client. This is because the client is a bailee of the passport, with good title against all except the Commonwealth; by relinquishing possession the bailee creates a sub-bailment that is, if created for reward, enforceable other than against the Commonwealth.19 Lien does not extend to items received or held outside a solicitor–client capacity

[16.35]

A solicitor cannot maintain a retaining lien over items against a person demanding their delivery unless, at the date of the demand, possession of those

12 Barratt v Gough-Thomas [1951] Ch 242 at 250 at 1053 per Evershed MR. 13 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 18–19 per Hope JA. 14 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 20 per Hope JA. 15 Barratt v Gough-Thomas [1951] Ch 242 at 250 per Evershed MR, at 263–264 per Jenkins LJ. Cf Young v Davidovic Pty Ltd (2011) 255 FLR 422. 16 See, for example, Stirkis v Legal Services Commissioner [2012] NSWADT 68; Council of the Law Society of New South Wales v Prosilis [2013] NSWADT 151; Council of the Law Society of New South Wales v Prosilis (No 2) [2014] NSWCATOD 2. 17 Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liq) (1935) 53 CLR 250 at 256 per Rich, Dixon, Evatt and McTiernan JJ, at 261 per Starke J; Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA. 18 Australian Passports Act 2005 (Cth), s 54. 19 Xu v Council of the Law Society of New South Wales [2009] NSWCA 430 at [45]–[57] per Handley AJA, with whom Tobias JA concurred (adding, though, that the court may decline to enforce the lien if its exercise would deprive an impecunious client of his or her liberty: at [57]). Cf at [10]–[20] per Basten JA; Vallant Hooker & Partners v Proceedings Commissioner [2001] 2 NZLR 357 at 363 per Laurenson J (dealing with an equivalent provision in the New Zealand legislation: Passports Act 1992 (NZ), s 33).

[16.40]

16 Solicitors’ Liens

523

items is referable to a solicitor–client relationship with the claimant.20 If at that date the possession is not so referable, the solicitor loses whatever entitlement to a lien he or she may have enjoyed. For example, in Barratt v Gough-Thomas21 a solicitor, who acted for both parties to a mortgage transaction, held the title documents both before and after the transaction. In response to a notice from the mortgagor to redeem the mortgage, the solicitor claimed a lien on the documents of title for costs incurred before and after the original deposit of those documents. The English Court of Appeal held that any lien had expired with the mortgage transaction. Jenkins LJ explained:22 When a client for whom a solicitor holds deeds mortgages the property comprised in them to another client of the same solicitor, who acts for both parties in the matter, then, even though the deeds before and after the mortgage remain continuously in the solicitor’s possession, it is plain that after the completion of the mortgage the solicitor holds them exclusively in the right and on behalf of the mortgagee, and that the character and legal basis of his possession is precisely the same as if the deeds had been handed over to the mortgagee on completion of the mortgage and thereafter returned by him to the solicitor to hold on his behalf.

The change in the character of the solicitor’s possession of the deeds, from possession as solicitor to and on behalf of the original client (the mortgagor) to possession as solicitor to and on behalf of a different client (the mortgagee), destroyed the solicitor’s lien against the mortgagor.23 Consistent with the foregoing, no lien arises over items not received in the capacity of solicitor in the matter. “No lien can attach”, it has been judicially stated, “on that which never was held by the solicitors by contract or in any other way as solicitors of the persons against whom the lien is claimed”.24 In Ex parte Fuller,25 for example, mortgagees deposited both a mortgage deed and title deeds to the mortgaged property with their solicitors for safe custody. The mortgagor later instructed the same solicitors to sell the property. When the property was passed in at auction, the mortgagor filed for bankruptcy and his trustee in bankruptcy contracted to sell the property. Bacon CJ held that the solicitors had no lien on the deeds against the trustee in bankruptcy in respect of their costs of the abortive sale. This was because the solicitors had the deeds in their possession not in any right of their own; their possession was that of the mortgagees. Lien does not extend to chattels or moneys advanced for a particular purpose

[16.40]

Where chattels or moneys are advanced to a solicitor for a particular purpose, so as to make the solicitor a trustee of them (see [9.25]), a lien cannot

20 Re Wright (1984) 1 FCR 51 at 53 per Beaumont J. 21 Barratt v Gough-Thomas [1951] Ch 242. 22 Barratt v Gough-Thomas [1951] Ch 242 at 261. See also at 254–256 per Evershed MR; Re Snell (1877) 6 Ch D 105 at 107 per Jessel MR; Sheffield v Eden (1878) 10 Ch D 291 at 293 per Baggallay LJ; Re Mason & Taylor (1878) 10 Ch D 729; Re Nicholson (1883) 53 LJ Ch 302 at 303 per Bacon VC; Franicevich v Strong [1997] 1 NZLR 460 at 464–465 per Gambrill M. 23 Barratt v Gough-Thomas [1951] Ch 242 at 263. 24 Ex parte Fuller (1881) 16 Ch D 617 at 619 per Bacon CJ. 25 Ex parte Fuller (1881) 16 Ch D 617.

524

Lawyers’ Professional Responsibility

[16.45]

attach unless they are allowed to remain in the lawyer’s possession for general purposes with the client’s express or implied consent after the particular purpose has been fulfilled or has failed.26 Stumore v Campbell & Co27 presents a useful illustration. The plaintiff (as execution creditor) applied to attach money held by the defendant solicitors (as garnishees) earlier deposited by the judgment debtor with the solicitors for a special purpose that had failed. The solicitors claimed that the judgment debtor owed them costs exceeding the sum deposited, and asserted a lien in support of it. The English Court of Appeal rejected the solicitors’ claim, Lord Esher reasoning as follows:28 It appears that some money was placed in the hands of the defendants, who are solicitors, for a particular purpose. So long as that purpose existed there was a trust imposed upon them, and they were bound, if they accepted the money at all, to employ it or lay it out in the particular way indicated by the trust … It is admitted that, being trustees, no lien would attach in their favour, because the money was intrusted to them for a specific purpose.

There was no lien, but merely a right of counterclaim in an action, because the money was entrusted to the solicitors for a specific purpose and, on the failure of this purpose, there was a resulting trust to the person who entrusted it.29 Retaining lien over money in a trust account

[16.45]

At general law, the issue of whether or not a solicitor can exercise a retaining lien over moneys in clients’ trust accounts is the subject of conflicting authority.30 Some judges have maintained that, as a lien focuses on a right to retain physical possession of a specific thing, a lien cannot be exercised over money that a solicitor has banked because, in so doing, he or she loses possession of the money, retaining only a chose in action.31 Harman J expressed the contrary view in Loescher v Dean, reasoning as follows:32 26 Alessio v Daniels (unreported, SC(Vic), Kaye J, 19 October 1983) at 5–8; Re Wright (1984) 1 FCR 51 at 53 per Beaumont J; WFM Motors Pty Ltd v Maydwell [1994] ANZ Conv R 454 at 458–459 per Young J; Official Trustee in Bankruptcy v Kioussis (2000) NSW Conv R ¶55-936 at 57,416 per Young J; Moloney v Marler & Darvall [2004] QCA 310 at [10]–[14] per Williams JA, at [59]–[64] per Mullins J; Withers LLP v Rybak [2012] 1 WLR 1748 at [21], [22] per Sir Robin Jacob. 27 Stumore v Campbell & Co [1892] 1 QB 314. 28 Stumore v Campbell & Co [1892] 1 QB 314 at 315. 29 Cf Loescher v Dean [1950] Ch 491 at 495 per Harman J. 30 See Dal Pont, Law of Costs (1st ed, LexisNexis Butterworths, 2003), [26.19]–[26.24]. 31 Mackenzie v Mackintosh (1891) 64 LT 706 at 708 per Lindley LJ, at 710 per Bowen LJ; Mills v Rogers (1899) 18 NZLR 291 at 310 per Williams J, at 314–315 per Denniston J; Shand v M J Atkinson Ltd (in liq) [1966] NZLR 551 (CA); WFM Motors Pty Ltd v Maydwell [1994] ANZ Conv R 454 at 457–458 per Young J. Cf Stewart v Strevens [1976] 2 NSWLR 321 at 328 per Helsham J. 32 Loescher v Dean [1950] Ch 491 at 496. See also Re a Barrister and Solicitor (1979) 40 FLR 26 at 39 (FC(ACT)); Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 18 per Hope JA; Gilshenan and Luton v Commissioner of Taxation [1984] 1 Qd R 199 at 204–207 per Andrews SPJ (who, however, queried Loescher v Dean on another ground); Re Jalmoon Pty Ltd [1986] 2 Qd R 264 at 266–267 per Thomas J; Kirk v Commissioner of Australian Federal Police (1988) 19 FCR 530 at 555 per Davies J; Prekookeanska Plovidba v LNT Lines Srl [1988] 3 All ER 897 at 900–901 per Hirst J; Atkinson v Pengelly

[16.50]

16 Solicitors’ Liens

525

I do not see why a solicitor, if he has money in his possession, has not got an ordinary lien on it. The fact that he puts it in a client account does not mean that it is any the less his account, although it is earmarked in that way; and it seems to me that the client could not demand that the money be handed over. It would be an answer to say: “You have not paid my bill and I shall not pay you out your money until you have”. Consequently, it seems to me that, as the debtor could not obtain the money from the solicitor without paying his bill, a creditor cannot attach it, and therefore I must discharge the garnishee order nisi against this money to the extent of the sum due under the solicitor’s lien.

The issue is now addressed by the legal profession legislation, which entitles a law practice to exercise a retaining lien over trust money held in a general trust account (or controlled money account) of the practice for a person, for the amount of costs reasonably due and owing by the person to the practice.33 What costs can the lien secure?

[16.50]

The retaining lien encompasses the solicitor’s taxable (or assessable) costs, charges and expenses “incurred by him as solicitor for his client”34 and for which the client is personally liable.35 It does not extend to costs incurred at a stage where the solicitor acts as an adverse party to a client, such as, for instance, costs the solicitor incurred on a taxation or assessment of a solicitor–client bill of costs (as to which see [15.40]–[15.90])36 or in seeking advice as to her or his right to retain the file.37 The basic proposition here is that the lien does not extend to costs a solicitor has incurred for her or his own benefit and not on the client’s instructions.38 Provided that those costs have been incurred, the existence of the lien arguably does not rest upon a bill having been rendered to the client.39

[1995] 3 NZLR 104 at 106 per Tipping J; Philippa Power & Associates v Primrose Couper Cronin Rudkin [1997] 2 Qd R 266 at 272–273 per Macrossan CJ and White J, at 276 per Derrington J; Heslop v Cousins [2007] 3 NZLR 679 at [190]–[192] per Chisholm J; Withers LLP v Rybak [2012] 1 WLR 1748 at [21], [22] per Sir Robin Jacob. 33 ACT, s 229(1)(a); NSW, s 144(2)(a) (formerly NSW 2004, s 261(1)(a)); NT, s 254(1)(a); Qld, s 258(1)(a); SA, Sch 2, cl 22(1)(a) (former SA, s 31(1)); Tas, s 252(1)(a); Vic, s 144(2)(a) (formerly Vic 2004, s 3.3.20(1)(a)); WA, s 225(1)(a). 34 Re Long [1929] VLR 318 at 320–321 per Lowe J. 35 Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA; Bentley v Gaisford [1997] QB 627 at 640–641 per Roch LJ. 36 See, for example, Re Long [1929] VLR 318 at 321 per Lowe J. 37 See, for example, White v Bini [2003] FCA 669. 38 White v Bini [2003] FCA 669 at [9] per Finkelstein J. 39 Re Cao [1996] ANZ Conv R 321 at 324 per Beazley J. Cf Re Taylor [1891] 1 Ch 590 at 596 per Lindley LJ; Re Birmingham (decd) [1959] 1 Ch 523.

526

Lawyers’ Professional Responsibility

[16.55]

Operation of lien where a client changes solicitor

[16.55]

It is where the client changes solicitors in the course of a matter that issues over a retaining lien most commonly arise. Here the former solicitor’s retaining lien does not expire but her or his rights may be modified depending, in large part, on whether the client discharged the solicitor, or the solicitor discharged the client.40

Lawyer discharged by client

[16.60]

As a general principle, where the client discharges the solicitor other than for misconduct,41 it is appropriate for the solicitor to retain the items in question until her or his costs to date are paid or satisfactory arrangements are made to secure the solicitor’s costs entitlement.42 Although the court retains a discretion to order a solicitor to deliver up client items, it will not usually be exercised where the client has discharged the solicitor. The reason for this is that:43 [t]he interest in the client having his papers for the purpose of conducting an existing proceeding is outweighed by the unfairness to the solicitor (or possibly a number of solicitors) in having to give up his lien in circumstances where, without any just or reasonable cause, the client has terminated his instructions and retained a new firm of solicitors.

The foregoing is reflected in the professional rules, which acknowledge the solicitor’s claim of lien in these circumstances.44 The importance of not denying a client the benefit of legal services means that a client’s intention to discharge the solicitor must be clear for the purpose of substantiating the solicitor’s claim of lien.45 If there is uncertainty as to whether the client wishes to terminate the retainer, the solicitor should take steps to clarify the client’s position, and seek instruction. Making an assumption from the surrounding circumstances that the 40 Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 at 624–625 per Templeman LJ; Bolger v Bolger (1985) 82 FLR 46 at 49–50 per Buckley LJ; Blanda v Kemp Strang Lawyers Pty Ltd [2006] NSWSC 48 at [67] per James J. See further Collins, “Development of Solicitors’ Possessory Liens” (2013) 87 ALJ 710. 41 In Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 at [37] Besanko J envisaged circumstances where a client could be virtually compelled to terminate the retainer by the solicitor’s misconduct, in which case his Honour considered that the court would have regard to the solicitor’s misconduct and not confine itself to the fact, as a matter of form, that the client terminated the retainer. But it remains that the client bears the onus of proving misconduct; general allegations of overcharging or trivial allegations against solicitors are unlikely to satisfy this onus: see Graham, “Solicitors’ Liens” (1997) 17 (June) Proctor 16, referring to Jean v Roger David Stores Pty Ltd (unreported, FCA, Olney J, 18 April 1997) and Re Weedman [1996] FCA 1112, where the clients were unable to prove misconduct. 42 Robins v Goldingham (1872) LR 13 Eq 440 at 442 per Malins VC; Hughes v Hughes [1958] P 224 at 227–228 per Hodson LJ; Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 at 624–625 per Templeman LJ; Marriage of Rhode (1983) 9 Fam LR 159 at 160 per Gee J; A v B [1984] 1 All ER 265 at 269 per Leggatt LJ; Bolger v Bolger (1985) 82 FLR 46 at 50 per Buckley J. 43 Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 at [38] per Besanko J. 44 ACT, r 14.1; NSW, r 14.1; NT, rr 6.3, 21.3; Qld, r 14.1; SA, r 14.1; Vic, r 14.1; WA, r 28(2). 45 Re Wingfield & Blew (Solicitors) [1904] 2 Ch 665 at 684 per Cozens-Hardy LJ; Stark v Dennett [2008] 2 Qd R 72 at [45] per Keane JA.

[16.65]

16 Solicitors’ Liens

527

client wishes to discharge the solicitor may, if the assumption proves inaccurate, be construed as the solicitor discharging the client, thus imperilling the lien. This occurred in Stark v Dennett, where Keane JA explained the relevant circumstances, and what the solicitor should have done to address the matter, as follows:46 One can readily understand that the respondent [solicitor] may have regarded the appellant [client] as a demanding and, even an ungrateful, client. It may well be that the appellant’s expressions of a want of confidence in the respondent’s advice were such that the respondent would have been justified in calling upon the appellant at some earlier stage to state clearly, once and for all, whether the appellant wished to continue to retain the respondent in his action, making it clear in this regard that a continuation of the appellant’s expressions of discontent would be treated as manifesting a breakdown of the trust and confidence essential to the continuation of the retainer. But the respondent did not bring matters to a head in such a clear and unequivocal way before denying the appellant access to his own papers.

His Honour found that communications from the client were consistent with the continuation of the retainer generally, despite his willingness to deal personally with one aspect of the matter (the mediation) and his complaints about the quality of legal advice he was receiving. In these circumstances, the solicitor’s conduct in denying the client access to his papers for the critical period prior to the mediation was “quite unjustified … and not consistent with the continuation of the retainer”.47 Stark v Dennett suggests, as does other case law,48 that a refusal by a solicitor to continue representation until a demand for fees is met is construed as a discharge of the client by the solicitor. However, if the terms of the retainer or costs agreement clearly require the client to pay the solicitor’s costs at prescribed intervals, and the client delays or refuses to pay those costs, the solicitor arguably has “just cause” to terminate the retainer upon reasonable notice, having given the client a reasonable opportunity to rectify the breach(es) in question: see [3.205]. In this event, it would be inappropriate for the solicitor to be deprived of an otherwise available retaining lien over the client’s file or other property lawfully in the solicitor’s possession.49 Lawyer discharges the client

[16.65]

The often vulnerable position of a client vis-à-vis her or his solicitor dictates an ostensibly different approach where it is the solicitor who discharges the client. Here the general principle requires the solicitor to hand up the file to the

46 Stark v Dennett [2008] 2 Qd R 72 at [46]. See also Rigoli Lawyers v Arman (2009) 40 Fam LR 676 at [38] per Cronin J. 47 Stark v Dennett [2008] 2 Qd R 72 at [47] per Keane JA. 48 Emeritus Pty Ltd v Mobbs (1991) NSW ConvR ¶55-588 at 59,317 per Studdert J; Major Projects Pty Ltd v Sibmark Pty Ltd [1992] ANZ Conv R 349 at 352 per McLelland J; Ismail v Richards Butler (a firm) [1996] QB 711 at 728–729 per Moore-Bick J; Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2011] NSWSC 156 at [9] per Brereton J. 49 Kyriackou v Martin [2014] VSC 122 at [36]–[47] per Emerton J (who ordered the client to pay a substantial proportion of an outstanding invoice as a condition of being given access to the file).

528

Lawyers’ Professional Responsibility

[16.70]

new solicitor, who holds it subject to the former solicitor’s lien.50 This duty is enforceable by an order of the court, exercised over its officers, “in order to avoid the grave consequences of a client being unable to obtain his papers”.51 This does not mean that the lien expires. The point is recognised by the Law Council of Australia’s former Model Rules of Professional Conduct and Practice (which only the Northern Territory continues to replicate), which require the former solicitor to surrender possession of client documents essential to the defence or prosecution of continuing court proceedings to the new solicitor upon receiving satisfactory security for the unpaid costs, provided that the new solicitor:52 • holds the documents subject to the former solicitor’s lien, if that is practicable, and provides reasonable security for the payment of the latter’s costs; or • enters into an agreement53 with the client and the former solicitor to procure payment of the latter’s costs upon completion of the relevant proceedings. The rules require the new solicitor to do what is reasonably practicable to comply with this agreement.54 It follows that the rules are directed at the former solicitor receiving, in lieu of payment, “something of monetary value which would ensure the satisfaction of the possessory lien”.55 An undertaking by new solicitors to pay the former solicitor’s reasonable costs and disbursements as agreed or assessed at the successful completion of the retainer is not necessarily a satisfactory security for this purpose.56 Nor is an undertaking by the former client to pay into court the proceeds of any judgment or settlement obtained.57 What is satisfactory is an agreement, to which both the client and the new solicitor are parties, that the verdict or settlement moneys will be retained by the new solicitors to the extent necessary to meet the former solicitor’s costs.58 Differentiating discharge by client from discharge by solicitor

[16.70]

At least from the former Law Council rules noted above, it appears that a solicitor who has discharged a client must release the file, subject to her or his costs being secured, whereas a solicitor discharged by a client has no such duty. Yet the

50 Griffiths v Griffiths (1843) 2 Hare 587; 67 ER 242; Conquest v Maffey (1897) 22 VLR 616 at 620 per Madden CJ; Connolly v Standard Telephones and Cables Pty Ltd (1991) 28 FCR 581 at 582 per Pincus J; Ismail v Richards Butler (a firm) [1996] QB 711 at 719–722, 726–729 per Moore-Bick J; Stark v Dennett [2008] 2 Qd R 72 at [49] per Keane JA; Gigi Entertainment Pty Ltd v Macree (No 2) [2011] NSWSC 869 at [39] per Slattery J. 51 Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 at [35] per Besanko J. 52 Law Council of Australia, Model Rules of Professional Conduct and Practice, r 23.4; NT, r 21.4. 53 See, for example, the tripartite deed approved by the Council of the New South Wales Law Society – between the client, the former solicitor and the current solicitor – governing the costs consequences on the transfer of files upon termination of the retainer (updated to 1 January 2014) (available at http://www.lawsociety.com.au). 54 Law Council of Australia, Model Rules of Professional Conduct and Practice, r 23.5; NT, r 21.5. 55 Bechara v Atie [2005] NSWCA 268 at [64] per McColl JA. 56 Bechara v Atie [2005] NSWCA 268 at [66], [67] per McColl JA. See also Chaina v Presbyterian Church (NSW) Property Trust (No 4) [2011] NSWSC 524. 57 Stark v Dennett [2007] QSC 171 at [29], [30] per Douglas J (reversed on appeal but without casting doubt on this point: Stark v Dennett [2008] 2 Qd R 72). 58 Bechara v Atie [2005] NSWCA 268 at [65] per McColl JA.

[16.70]

16 Solicitors’ Liens

529

position is not so simplistic. A hint of greater complexity is provided by another provision in those rules, in this instance replicated in the Australian Solicitors’ Conduct Rules, which suggests that, even where a client discharges the solicitor, the solicitor remains duty bound to deal with the documents in the manner noted at [16.65] where those are essential to the client’s defence or prosecution of current proceedings.59 If correct, there seems to be little distinction between the two scenarios,60 which may in turn explain why the Australian Solicitors’ Conduct Rules omit the rule referred to at [16.65]. While in many instances it may be patent who has discharged whom – from explicit words or actions, or as a result of the substratum for the relationship coming to an end61 – this is not always clear-cut. The issue is a question of fact to be determined from the circumstances and actions of the parties.62 Courts have eschewed an overly technical approach to the question, instead looking at it “as a matter of real substance”,63 “to be resolved in a practical way”.64 This is sensible, especially given case authority that a solicitor’s refusal to continue acting until a demand for fees is satisfied represents a discharge of the client by the solicitor, even though others have viewed this as just cause to terminate the retainer (see [3.205]), and so within the rules that apply where the client has terminated the retainer (see [16.60]). In any event, there remains a discretion within the court at general law (see [16.75]) to determine whether or not to order the delivery up of the items in question and, if so, on what terms.65 In Ismail v Richards Butler (a firm),66 for instance, the defendant solicitors discharged their retainer by requiring payment of outstanding costs as a condition of continuing to act. Even so, Moore-Bick J held that in the circumstances – referring to the nature of the case, the stage of the litigation and the parties’ conduct – the value of the defendants’ lien would be much diminished were the items in question relinquished to the plaintiffs’ new solicitors. This prompted his Lordship to order the plaintiffs to provide security for the 59 ACT, r 15.1; NSW, r 15.1; NT, r 6.4; Qld, r 15.1; SA, r 15.1; Vic, 15.1; WA, r 29. 60 See Bechara v Atie [2005] NSWCA 268 at [62] per McColl JA. 61 Where, for instance, the solicitor’s practising certificate has been suspended or cancelled, the solicitor is treated as having discharged the client, even though the solicitor’s practice has been transferred to a practice that is willing to act for the client, because the solicitor’s ““wrongful acts have rendered him legally incompetent to continue with the retainer”: Cosgriff v Issac Brott & Co [2008] VSC 515 at [9] per Byrne J. The same is the consequence when the law practice is placed into liquidation: Kyriackou v Martin [2014] VSC 122 at [12]–[35] per Emerton J. 62 PM Sulcs & Associates Pty Ltd v Oliveri [2009] NSWSC 456 at [198] per Debelle AJ (noting that, in a case of parties who had had a long professional and personal relationship extending over a period of at least nine years coming to have differences that led to bitterness and acrimony, “it is inappropriate to attempt to decide who in fact discharged the other”, as “[t]he simple fact is that a long-standing professional relationship had come to an end”). 63 Jankowski v Mastoris [1996] ANZ Conv R 324 at 327 per Hodgson J. 64 Cosgriff v Issac Brott & Co [2008] VSC 515 at [8] per Byrne J, an approach adopted by Vickery J in Nicholson v Knaggs [No 2] [2009] VSC 187 at [20]. 65 Gamlen Chemical Co (UK) Ltd v Rochem Ltd [1980] 1 WLR 614 at 624–625 per Templeman LJ. 66 Ismail v Richards Butler (a firm) [1996] QB 711 (see Goodliffe, “How to Sack a Client” (1996) 146 New LJ 421).

530

Lawyers’ Professional Responsibility

[16.75]

defendants’ costs via payment into court or other acceptable means. Similar circumstances led Slattery J in Gigi Entertainment Pty Ltd v Macree (No 2)67 to make an equivalent security order. Ouster and loss of lien Lien ousted by the court

[16.75]

The New South Wales, South Australian and Victorian legal profession legislation empowers a court to order the delivery up of any documents in a solicitor’s possession.68 In South Australia the court is directed to take into account the solicitor’s right to costs for the services provided;69 New South Wales courts have, in any case, adopted a similar approach, such that the power will ordinarily be exercised only in favour of a former client if required in the interests of justice and on conditions designed to protect the solicitor’s interests so far as possible.70 Court rules in the Territories and Western Australia make provision for payment into court of amounts equivalent to the property secured by a lien.71 In any event, case authority recognises an inherent jurisdiction in the court to order that documents, over which a lien is claimed, be produced where necessary to do justice in the particular case.72 The documents here are produced to the court, not to the parties. Who can inspect them is within the court’s discretion, which will incline in favour of preserving the lien “except insofar as is necessary for the conduct of the litigation”.73 A leading statement of the court’s role is that of Asprey JA in Bolster v McCallum:74 Upon production of the documents to the court and upon a request by the opponent to be allowed to inspect them, the presiding judge should have examined each of the 67 Gigi Entertainment Pty Ltd v Macree (No 2) [2011] NSWSC 869 at [40]–[45]. 68 NSW, s 472(1)(b) (formerly NSW 2004, s 728(1)(b)); SA, s 39 (which has been held not to oust a legitimate claim for legal professional privilege: Verson Clearing International v Ward & Partners (1996) 9 ANZ Ins Cas ¶61-352 at 76,903 per Perry J); Vic, s 472(1)(b). 69 SA, s 39(3). 70 Major Projects Pty Ltd v Sibmark Pty Ltd [1992] ANZ Conv R 349 at 351–352 per McLelland J; Doyles Construction Lawyers v Harsands Pty Ltd (unreported, SC(NSW), McLelland CJ in Eq, 24 December 1996) at 5; Flexible Manufacturers Systems Pty Ltd v Lewis [2002] NSWSC 932 at [19] per Berecry AM; Bechara v Atie [2005] NSWCA 268 at [69] per McColl JA, with whom Ipp and Tobias JJ concurred. See, for example, Gulbis v Strikis [2012] NSWSC 807 (where Slattery J ordered the delivery of a certificate of title over which the solicitor (S) claimed a lien because, inter alia, S failed (incorrectly) to acknowledge his relationship of solicitor and client with the applicant (G), and had never given any cost disclosure as a solicitor to G or any retainer documents: see at [40]–[45]). Cf Tyneside Property Management Pty Ltd v Hammersmith Management Pty Ltd [2011] NSWSC 22 at [13] per Pembroke J (noting that “[NSW 2004] s 728 permits an order to be made that would have an effect which is different to that which would result from the application of the Solicitors’ Rules”, and adding that it is unnecessary that “extraordinary circumstances” be demonstrated). 71 ACT CPR, r 1012; NT RSC, r 37.05; WA RSC, O 84, r 7. 72 McKenzie v Director-General of Conservation and Natural Resources [2001] VSC 220 at [32] per Gillard J; Castel Electronics Pty Ltd v Wilmoth Field Warne (a firm) [2012] VSC 481 at [56]–[58] per Lansdowne AsJ. 73 Ferraro v PD Properties Pty Ltd (unreported, SC(NSW), McClelland CJ in Eq, 19 August 1993) at 3. 74 Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 287. See also Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267 at 268–271 per Shepherdson J; Bentley v Gaisford [1997] QB 627 at 641 per Roch LJ.

[16.80]

16 Solicitors’ Liens

531

documents so produced to determine whether ex facie any of the documents were relevant to the issues which he was called upon to decide. If upon such examination any of the documents produced appeared to be so relevant, then and then only, would the presiding judge consider the question of their inspection by counsel for the defendants. The judge has a discretion as to whether he will permit any, and if so what, material documents to be inspected by the parties and upon what conditions, for the documents have been produced to the court and are in the custody of the court. Where a claim of lien is raised, it may seem to be proper for the presiding judge to exercise his discretion by permitting inspection of the documents on behalf of counsel for the defendants upon terms, for example, that no copies thereof be taken or that the contents thereof be not disclosed by counsel to the defendants. What course is to be pursued in this regard is one peculiarly for the exercise of the discretion of the presiding judge having regard to the facts of each particular case.

The court may, for example, order production of documents where these are the best evidence in an action in professional negligence against the solicitors claiming the lien.75 It may also be that the lien will “give way where the interests of justice require that the documents in [the solicitor’s] possession may help the defence of an accused person”.76 Yet outside scenarios of this kind, the courts have been reticent to interfere. In Re Weedman,77 for instance, Drummond J doubted whether, in circumstances where the client had discharged the solicitor other than for misconduct, the court possessed any residual discretion to give the former client access to her or his documents in the face of a lien, even if denying access could leave the client facing what can be regarded as catastrophic disruption to her or his litigation. His Honour remarked:78 Such a discretion could, in my opinion, only be justified on the basis that the interests of justice may require such an order to be made in some cases. But it is difficult to see why the Court should disregard the interests of its own officers and leave them without payment for what is justly due to them because insistence on the lien would deprive the former client of material essential to the conduct of his case, where that situation has been brought about by the client discharging the solicitor without any good reason.

Drummond J added that even if there was such a residual discretion, merely because the client needs the documents to progress the action is no ground to justify its exercise.79 The position may not, however, be so unyielding; it is incongruent with the exercise of a judicial discretion for it to be curtailed by potentially inflexible judge-made rules. To this end, there is case authority phrased in more yielding terms.80 Lien ousted by statute or rules

[16.80]

As the retaining lien derives from the general law, it may be ousted by statute. Consistent with the policy behind the lien (see [16.15]), though, courts will

75 Hammerstone Pty Ltd v Lewis [1994] 2 Qd R 267 at 270–271 per Shepherdson J. 76 R v Storer (1993) 65 A Crim R 130 at 134 per Gallop J. 77 Re Weedman [1996] FCA 1112. 78 Re Weedman [1996] FCA 1112 at [10]. 79 Re Weedman [1996] FCA 1112 at [60]. 80 See, for example, Rafferty v Time 2000 West Pty Ltd (No 3) (2009) 257 ALR 503 at [35], [36] per Besanko J.

532

Lawyers’ Professional Responsibility

[16.80]

construe a statutory provision narrowly for this purpose. In Coshott v Stegnajic,81 for example, the statute in question provided that the solicitor representing a person claiming workers’ compensation under the Act “shall not be entitled to … claim a lien in respect of … costs on, or deduct such costs from, the sum awarded, ordered or agreed as compensation”.82 This provision was construed as ousting only the solicitor’s particular lien (given the phrase “on … the sum awarded”), not the general lien. The Full Court of the Western Australian Supreme Court adopted a similarly narrow approach in Bennett & Co v CLC Corporation83 to construing s 530B(1) of the Corporations Law.84 That subsection disentitled a person, as against the liquidator, to retain possession of the company’s books or to claim or enforce a lien on those books, but superadded the words “such a lien is not otherwise prejudiced”. To interpret the superadded words, the court construed the subsection not to oust the effectiveness of the retaining lien as a security, but to preserve the lien notwithstanding the loss of possession of the books in question.85 Good reasons, in policy and statutory construction, supported this approach, according to Wallwork J, namely:86 • if a liquidator could then dispose of the books by sale to a third party, the solicitor’s lien would be completely prejudiced and lost altogether; • the Corporations Law was not a confiscatory statute that ousts rights without compensation in the absence of clear words, which the words of s 530B(1) were not; and • it was unclear why s 530B(1) should destroy a lien over the books of a company whereas a lien over other articles such as a motor vehicle would not be destroyed. The position would arguably have been different had the superadded words not appeared in s 530B(1), as appears from the decision of the New Zealand Court of Appeal in Buddle Findlay v Isaac.87 In regard to an equivalent section in the New Zealand legislation,88 which lacked the phrase “but such a lien is not otherwise prejudiced”, the court held that there were no grounds to uphold the continuing existence of the lien. So once the solicitors gave up possession, the lien expired.89 As the decision in Buddle Findlay shows, where the relevant provision clearly ousts the lien a court will have little choice but to give effect to it. This may be as a matter of necessary implication. Solicitors cannot, for instance, exercise a lien over 81 Coshott v Stegnajic [1984] 2 NSWLR 632 at 633 per Yeldham J. 82 Workers’ Compensation Act 1926 (NSW), s 56(2) (repealed). 83 Bennett & Co v CLC Corporation (2001) 23 WAR 344. 84 Now the Corporations Act 2001 (Cth), s 530B(1). 85 Bennett & Co v CLC Corporation (2001) 23 WAR 344 at 353 per Murray J. 86 Bennett & Co v CLC Corporation (2001) 23 WAR 344 at 348-349. 87 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705 (see Watts, “Solicitors’ Liens and Third Parties” [1996] NZ Law Rev 402). 88 Namely the Companies Act 1955 (NZ), s 237(1) (now the Companies Act 1993 (NZ), s 263(1)). 89 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705 at 261,135 per Temm J, delivering the reasons of the court.

[16.90]

16 Solicitors’ Liens

533

documents of a client company that statute requires be kept in a particular place, or to be available for a specific purpose such as inspection.90 Ouster of lien in disciplinary proceedings

[16.85]

In most jurisdictions, the relevant disciplinary body or tribunal may, as part of a disciplinary order where the charge has been substantiated, order the solicitor to waive her or his retaining lien.91

Exclusion of lien by agreement or conduct (including by waiver)

[16.90]

A retaining lien may be excluded by agreement, or by inference from the parties’ conduct and course of dealing. For example, in Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liq)92 the client handed to his solicitor a certificate of title for the sole purpose of registering a transfer to the bank, subject to the solicitor’s undertaking to redeliver it to the bank upon registration. The solicitor thereafter retained the certificate claiming a lien for his unpaid costs. The High Court held that:93 … the undertaking to redeliver the instrument to the bank after completion of the registration of the transfer, and the limitation imposed by the word “sole” upon the purposes of the bailment are together inconsistent with the retention of the certificate under a general lien.

A solicitor may also lose the lien by abandoning or waiving it. For instance, a letter to the client that “all outstanding accounts have been paid” has been held to waive the lien.94 Yet perhaps the most commonly alleged form of waiver is by a solicitor taking other security, revealing an intention that it be in substitution of the lien. Whether or not the taking of a security functions to waive the lien depends upon the intention expressed or to be inferred from the relative position of the parties and the circumstances of the case.95 Importantly, what destroys the lien is not merely taking another security, but “something in the facts … or in the nature of the security taken, which is inconsistent with the existence of the lien, and which is

90 Re Capital Fire Insurance Association (1883) 24 Ch D 408 at 418–419 per Cotton LJ; DTC (CNC) Ltd v Gary Sargeant & Co (a firm) [1996] 1 WLR 797 at 800–801 per Michael Crystal QC. 91 ACT, s 442(2)(b); NSW, s 308(4) (formerly NSW 2004, s 571(2)(b)); NT, s 534(2)(b); Qld, s 464(b); Tas, s 491(2)(b); NSW, s 308(4) (formerly Vic 2004, s 4.3.17(1)(e); WA, s 448(2)(b). 92 Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liq) (1935) 53 CLR 250. 93 Leeper v Primary Producers’ Bank of Australia Ltd (in voluntary liq) (1935) 53 CLR 250 at 257 per Rich, Dixon, Evatt and McTiernan JJ. See also at 262 per Starke J (who added that even had the undertaking been executed some time after the delivery of the certificate of title, it would still have been “cogent and really conclusive evidence of the terms upon which the certificate of title was received and accepted, and is equally inconsistent with the existence of any lien”). 94 Soia v Bennett [2003] WASC 158 at [15], [16] per McKechnie J. 95 Re Taylor, Stileman & Underwood [1891] 1 Ch 590 at 597 per Lindley LJ, at 598 per Lopes LJ, at 600–601 per Kay LJ; Clifford Harris & Co v Solland International Ltd [2005] 2 All ER 334 at [24]–[41] per Christopher Nugee QC.

534

Lawyers’ Professional Responsibility

[16.95]

destructive of it”.96 Nonetheless, taking from a client a security in the nature of a promissory note payable on demand gives rise to the prima facie inference that the solicitor waives the lien.97 This inference shifts the onus to the solicitor to establish the continuing operation of the lien.

[16.95]

The foregoing does not prevent a solicitor who takes a security inconsistent with retaining the lien from taking steps to preserve the lien, provided this is done expressly. Because taking a security in addition to the retention of the right of lien is an advantage to the solicitor at the expense of the client, the solicitor’s fiduciary duty mandates a duty of clear disclosure to the client to this effect. In Re Morris Kennedy LJ explained this point as follows:98 In view of the peculiar position which a solicitor occupies in relation to his client, and of the public importance, which the law recognises, of maintaining the obligations of that relation in their integrity, I should be inclined to hold that, if, when taking from his client any security for costs generally, a solicitor intends to retain the security of his lien, he ought not to be silent, but either by express words or by necessary implication to make that intention known to his client; and that if he fails to prove such a reservation he ought, whatever be the nature of the security he takes, to be treated as having waived or abandoned his right of lien.

Once the lien is waived, the solicitor cannot unilaterally revive it. Only a fresh agreement between solicitor and client can reinstate the lien, which agreement will be carefully scrutinised to ensure that the solicitor has not secured it by fiduciary breach or undue influence.99 Lien lost when clashes with third party interests

[16.100] A solicitor’s right to a lien is wholly derivative from the client. It is therefore co-extensive with the client’s right to the items in question,100 and is enforceable only against persons who have no higher right than the client.101 If those items are subject to interests of third parties with priority over those of the client, the lien is subject to the interests of those third parties.102 So, it has been said, solicitors who retain possession of a client’s documents claiming a lien for unpaid 96 Angus v McLachlan (1883) 23 Ch D 330 at 335–336 per Kay J. Hence, the case law that suggests that prima facie the taking of a security serves to oust the lien (see, in particular Lord Eldon’s remarks in Cowell v Simpson (1809) 16 Ves 275; 33 ER 989 at 279–282 (Ves), at 990–992 (ER) and Balch v Symes (1823) Turn & R 87; 37 ER 1028 at 92 (Turn & R), at 1030 (ER)) does not establish an unyielding rule. 97 Re Taylor, Stileman & Underwood [1891] 1 Ch 590 at 597 per Lindley LJ, at 598 per Lopes LJ, at 601 per Kay LJ. 98 Re Morris [1908] 1 KB 473 at 481. See also at 475 per Lord Alverstone CJ, at 477 per Buckley LJ. 99 Clifford Harris & Co v Solland International Ltd [2005] 2 All ER 334 at [53] per Christopher Nugee QC. 100 Pelly v Wathen (1851) 1 De GM & G 16; 42 ER 457 at 23 (De GM & G), 459–460 (ER 457) per Cranworth LJ (noting that “[n]o man … can give a lien to his solicitor of a higher nature than the interest he himself has in the deeds”). 101 Re Rapid Road Transit Company [1909] 1 Ch 96; Kirk v Commissioner of Australian Federal Police (1988) 19 FCR 530 at 567 per Beaumont J. 102 Attorney-General v Trueman (1843) 11 M & W 694; 152 ER 983; Attorney-General v Walmsley (1843) 12 M & W 179; 152 ER 1160; Peat v Clayton [1906] 1 Ch 659.

[16.100]

16 Solicitors’ Liens

535

fees “have to take the documents ‘warts and all’”; if the documents are subject to an encumbrance, “the solicitors cannot hold the documents free of that encumbrance”.103 What also flows from the foregoing is that a solicitor cannot set up a lien acquired in the cause against the rights to production of the other parties in the cause.104 The logic is that “whereas a solicitor may assert a lien to embarrass his client he should not be entitled to embarrass other parties interested in the proceedings”.105 This explains why a retaining lien is not ordinarily a ground to resist production of documents on subpoena duces tecum106 when the court can ensure that at the conclusion of the proceedings the lien will continue unaffected by the production.107 As the lien derives wholly from the client, if the client cannot resist the subpoena nor can the solicitor.108 The position differs where it is the client against whom the lien is claimed who is instrumental in the issuing of the subpoena, the reason being that:109 [w]hen account is taken of the nature of many of the documents over which a solicitor can claim a lien for his unpaid costs, it is obvious that if a client could obtain production of the documents in the litigation without having paid the solicitor who was previously acting for him and who claimed the lien then the solicitor’s lien could be practically valueless to him.

Outside the subpoena scenario, likewise, if a client is bound to produce a document in proceedings, so too is the solicitor. In Buddle Findlay v Isaac,110 for example, the solicitors came into possession of the client’s certificates of title when they were subject to a floating charge under a debenture, which became a fixed charge by the time receivers were appointed. As the client could not lawfully resist the receivers’ demand for possession of the certificates, nor could the solicitors who claimed a

103 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705 at 261,136 per Temm J, delivering the reasons of the court. 104 Lewis v Powell [1897] 1 Ch 678 at 681-683 per Stirling J. 105 Re Gladstone (1971) 25 DLR (3d) 43 at 44 per McGillivray JA. See also Dessau v Peters, Rushton & Co Ltd [1922] 1 Ch 1 at 5 per Sargant J; Andersen v Lockhart [1991] 1 Qd R 501 at 504 per Ryan J; Elders Rural Finance Ltd v Tapp (1993) 113 FLR 351 at 354 per Martin CJ. 106 Namely, an order of the court requiring a person to attend before the court to produce specified documents. 107 Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 283–284 per Jacobs JA; Marriage of Conroy (1990) 103 FLR 233 at 234–235 per Elliott J. 108 Re Hawkes [1898] 2 Ch 1 at 6–7 per Lindley MR; Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA. 109 Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 284 per Jacobs JA. See also Abruzzese v David Jones Ltd (No 1) [2003] FMCA 280 at [12], [13] per Driver FM (noting that the issuing of a subpoena to obtain a file from a former solicitor is ordinarily an abuse of process in circumstances where the solicitor receiving the subpoena is entitled to rely upon a solicitor’s lien in order to withhold the file from the former client). 110 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705.

536

Lawyers’ Professional Responsibility

[16.105]

lien over them.111 But if a third party has no higher right to claim the documents than the client, then the third party’s claim is subject to the lien.112 Buddle Findlay highlights that timing of the relevant interests may prove critical to whether or not a solicitor’s lien can prevail over a third party’s claim. The point is of especial importance in the context of a client’s insolvency. That a client becomes insolvent does not prejudice a lien that existed prior to the relevant date for insolvency purposes.113 This is because securities that pre-date the insolvency are as a general rule enforceable outside insolvency proceedings. So a solicitor may exercise a lien over items the property of a client that came into the solicitor’s possession before the client’s liquidation or bankruptcy, but not over those acquired in the course of the winding up or bankruptcy. In Re Cao,114 for instance, solicitors received the certificate of title and discharge of mortgage in the course of an intended mortgage transaction. The latter stalled due to bankruptcies that resulted in title to the property being vested in the trustee for the bankrupts. As the solicitors’ work occurred after the trustee acquired title, they were denied a lien over those documents.115 Loss of lien through loss of possession

[16.105] Because possession is the essence of the retaining lien, the lien cannot exist over property not yet in the solicitor’s possession.116 For the same reason, once possession of documents or other chattels is relinquished, the general rule is that any lien claimed over them is lost.117 However, a retaining lien may be preserved, as noted earlier at [16.65], where physical possession is relinquished to another solicitor subject to an undertaking or agreement by the latter to this effect. As explained by Stamp LJ in Caldwell v Sumpters:118 It is plain that … a solicitor’s possessory lien is lost if the solicitor parts with the possession of the deeds without making any reservation. It is also plain that if the solicitor obtains the agreement of the recipient to do so [the recipient] will hold the deeds on the solicitor’s behalf and the lien will not be lost. In my judgment it is also the law that where a solicitor having a possessory lien on his former client’s papers puts them in the hands of a third party to hold them to the order of the solicitor or for the account of the solicitor, the lien is not destroyed because the possession of the transferee becomes the possession of the solicitor. 111 Buddle Findlay v Isaac (1996) 7 NZCLC ¶96-705 at 261,136 per Temm J, delivering the reasons of the court. 112 Bentley v Gaisford [1997] QB 627 at 640 per Roch LJ. 113 Robson v Kemp (1802) 4 Esp 233; 170 ER 703; Re Capital Fire Insurance Association (1883) 24 Ch D 408. 114 Re Cao [1996] ANZ Conv R 321. 115 Re Cao [1996] ANZ Conv R 321 at 323 per Beazley J. 116 Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ. 117 Shand v MJ Atkinson Ltd (in liq) [1966] NZLR 551 at 560 per Turner J; Re Ly (1995) 62 FCR 432 at 435 per Beazley J. 118 Caldwell v Sumpters [1972] Ch 478 at 497 (paragraph break omitted). See also at 495–495 per Salmon LJ; Watson v Lyon (1855) 7 De GM & G 288; 44 ER 113 at 297–298 (De GM & G), at 116–117 (ER) per Turner LJ; Re Ly (1995) 62 FCR 432 at 435–436 per Beazley J; Bentley v Gaisford [1997] QB 627 at 641 per Roch LJ.

[16.120]

16 Solicitors’ Liens

537

Nor is a solicitor’s lien lost if the possession of the items in issue is lost by way of fraud, trick or other unlawful means,119 or where a solicitor is required by statute,120 by the court, or even as a demonstration of good faith, to deliver the item(s) to the court.121 Expiry of lien by payment of bill

[16.110] A solicitor entitled to a retaining lien can withhold the relevant items from a client until the client satisfies the solicitor’s legitimate demands for which the lien is claimed.122 Once the client does this, the lien expires, and the client is entitled to an order for the delivery up of those items.123 It is not essential, for this purpose, that the client actually pay the solicitor the sum claimed. As the lien is concerned with securing the solicitor’s claim, payment into court124 or giving of an adequate security, such as a deposit in an interest-bearing account,125 will likely be sufficient. PARTICULAR LIEN Nature and operation of particular lien

[16.115] A solicitor is entitled to a lien “on a fund or on the fruits of a judgment recovered by his exertions for the costs of recovery, or those immediately incidental thereto”.126 The lien extends to property or a fund recovered or preserved out of a compromise of the action. It is described as “particular” because, unlike the retaining (“general”) lien, it does not extend to protect costs the solicitor has incurred in relation to work unrelated to the litigation pursuant to which the property is recovered or judgment obtained.127 It is variously also known as the “non-possessory” or “fruits of the action” lien. Circumstances where a particular lien is valuable

[16.120] The particular lien is valuable because a solicitor acquires no common law interest in a client’s right to receive the money or property from a judgment, 119 Dicas v Stockley (1836) 7 C & P 587; 173 ER 258 at 590–591 (C & P), at 259–260 (ER) per Littledale J. 120 See, for example, Bennett & Co v CLC Corp (2001) 23 WAR 344, discussed at [16.80]. 121 Tibmor Pty Ltd v Nashlyn Pty Ltd [1989] 1 Qd R 610 at 612 per Moynihan J; Re Ly (1995) 62 FCR 432 at 436 per Beazley J. Cf Magnamain Investments Pty Ltd v Baker Johnson Lawyers [2008] QSC 245 at [23]–[25] per Daubney J (ruling that the payment of money into court pursuant to a consent order, in the absence of any express reservation prior to the making of the order, operated to relinquish any retaining lien that might otherwise have existed in respect of the money). 122 Tobin v Melrose [1951] SASR 139 at 143 per Ligertwood J; Bolster v McCallum (1966) 85 WN (Pt 1) (NSW) 281 at 286 per Asprey JA; Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 18-19 per Hope JA. 123 Bolger v Bolger (1985) 82 FLR 46 at 49 per Buckley J. 124 Re Gedye (1851) 14 Beav 56; 51 ER 208 at 61 (Beav), at 210 (ER) per Romilly MR; Re Galland (1885) 31 Ch D 296 at 303 per Chitty J. 125 Equuscorp Pty Ltd v Wilmoth Field Warne (a firm) [2003] VSC 268 at [10]-[12] per Bongiorno J. 126 Re Meter Cabs Ltd [1911] 2 Ch 557 at 559 per Swinfen Eady J. 127 Re a Barrister and Solicitor (1979) 40 FLR 26 at 39 (FC(ACT)).

538

Lawyers’ Professional Responsibility

[16.125]

award or compromise;128 also, solicitors often do not have possession of that money or property.129 So if the solicitor has yet to be paid, little may prevent a client from claiming the property or fund recovered via the solicitor’s exertions without paying the solicitor. The client may assign the proceeds of judgment or compromise to a third party, or the same result may ensue involuntarily by the client becoming insolvent: see [16.130]–[16.145]. Another situation where unpaid fees may be endangered is where the solicitor is no longer on the record at the time when the property or fund is recovered; at that time another solicitor’s fees may be owed: see [16.150], [16.155]. Lien functions via an equitable interest enforced by a court

[16.125] The way the particular lien operates to ameliorate the above situations is by conferring upon the solicitor an equitable interest – taking the form of a security or charge – in the property or fund recovered through her or his efforts proportionate to the fees owed.130 The lien is premised upon an order of the court to this effect, and so must be actively enforced,131 unlike the passive enforcement characteristic of the retaining lien. It is a claim or right of a solicitor to ask for the court’s intervention “for his protection, when, having obtained judgment for his client, he finds there is a probability of the client depriving him of his costs”.132 The reference to “probability” does not mean that “this has to be shown more probable than not”, but as “not requiring any more than a significant risk be shown”.133 In Johns v Cassel,134 for example, that the client would not admit that anything was due, would not give an undertaking and had no other significant assets from which to satisfy the solicitor’s demand, was found sufficient to substantiate “at least an appreciable risk”. The position is clearly different where the client pays the money in question into court.135 No order will be made for payment of unpaid costs direct to the solicitor in the absence of agreement as to their quantum. But an order for moneys representing the value of the lien to be paid into court will be made pending the ascertainment 128 Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ. 129 Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238 per Thomas J. 130 Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ (categorising the interest as an equitable right “analogous to the right which would be created by an equitable assignment of a corresponding part of the money by the client to the solicitor”); Re a Barrister and Solicitor (1979) 40 FLR 26 at 39–40 (FC(ACT)); Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 474–475 per Windeyer J; Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238–239 per Thomas J; Twigg v Keady (1996) 135 FLR 257 at 259–260 per Fogarty J. 131 Re a Barrister and Solicitor (1979) 40 FLR 26 at 39–40 (FC(ACT)). 132 Mercer v Graves (1872) LR 7 QB 499 at 503 per Cockburn CJ. See also Ex parte Patience (1940) 40 SR (NSW) 96 at 100 per Jordan CJ; Re a Barrister and Solicitor (1979) 40 FLR 26 at 39–40 (FC(ACT)); Johns v Cassel (1993) FLC ¶92-364 at 79,819 per Hodgson J. 133 Ex parte Patience (1940) 40 SR (NSW) 96 at 108 per Jordan CJ. 134 Johns v Cassel (1993) FLC ¶92-364 at 79,819 per Hodgson J. 135 See, for example, Doyles Construction Lawyers v D’Jamirze [2004] NSWSC 507 at [16]–[20] per Michael Grove J.

[16.130]

16 Solicitors’ Liens

539

of quantum by way of taxation or assessment.136 The absence of a formal costs agreement will not, therefore, oust the availability of the particular lien.137 Court’s intervention and its terms are discretionary

[16.130] Being premised upon intervention in the court’s equitable jurisdiction, the court retains a discretion whether or not to accede to the application. Curial intervention is justified, in line with equity’s proportional approach to granting relief, only if necessary for a solicitor’s protection and then only to the extent necessary to safeguard the lien.138 It has been said, to this end, that the order will be framed “on the basis of the minimum necessary to protect the firm”.139 Like other forms of equitable jurisdiction, it is also informed by questions surrounding the conduct of the applicant solicitor and any delay underscoring it.140 In many of the cases where the lien is asserted, the proceeds of the litigation or compromise are in the hands of a third party.141 The court’s order here is directed at the judgment debtor to pay the solicitor her or his costs as ascertained by taxation (or assessment). In the meantime, it restrains that debtor (via an injunction) from paying, and the client from receiving, the money or property without first accounting to the solicitor for the costs.142 The position is different where the money in respect of which a solicitor claims a particular lien for costs is already in her or his hands. Here the solicitor may, subject to the statutory requirements on the recovery of costs, including taxation or assessment (see [15.05]–[15.90]), retain out of it the amount of the costs and pay over the balance to the client or, where the costs exceed the amount in hand, apply it towards those costs.143 136 Johns v Cassel (1993) FLC ¶92-364 at 79,819 per Hodgson J; Scammell & Co v WorkCover Corporation (2006) 95 SASR 278 at [58] per Layton J; Brackenreg v KJB Law Pty Ltd (2015) 293 FLR 325 at [51] per Mossop M; Goldberg v Beckett [2015] NSWSC 1966 at [36] per Harrison J (but adding that this does not mean that “a solicitor is correspondingly entitled to pay himself or herself from funds over which a lien exists before the amount that is payable has been ascertained by assessment or otherwise”, as “[t]he very nature of the lien suggests that its fundamental characteristic is that of a security, not a device for effecting satisfaction of an outstanding account whose precise quantification remains in doubt”). 137 Lashansky v Legal Practice Board [2006] WASC 247 at [72], [73] per Templeman J. 138 Estate of Fuld (deceased) (No 4) [1968] P 727 at 737 per Scarman J; Abdul-Karim v Attorney-General’s Department [1999] NSWSC 79 at [23]–[29] per Young J. 139 Canatan Holdings Pty Ltd v Audori Pty Ltd (unreported, FCA, Einfeld J, 1 August 1994) at [16]. 140 See, for example, Karam v Palmone Shoes Pty Ltd (No 4) [2016] VSC 261 (where the delay in making the application was one of the reasons that disinclined J Forrest J from intervening: at [42]–[46]). 141 North West Construction Co Pty Ltd (in liq) v Marian [1965] WAR 205 at 212 per Nevile J; Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238 per Thomas J. 142 Ex parte Patience (1940) 40 SR (NSW) 96 at 102 per Jordan CJ. 143 Welsh v Hole (1779) 1 Dougl 238; 99 ER 155 at 238 (Dougl), 155–156 (ER) per Lord Mansfield; Stewart v Strevens [1976] 2 NSWLR 321 at 327 per Helsham J; Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 19 per Hope JA; Worrell v Power & Power (1993) 46 FCR 214 at 217 (FC); Kison v Papasian (1994) 61 SASR 567 at 568 per King CJ; Chester v Cassidy Gibson Howlin (1995) 18 Fam LR 463 at 468 per Moss J.

540

Lawyers’ Professional Responsibility

[16.135]

Competing claims to particular lien – timing of the lien

[16.135] Like the retaining lien (see [16.100]), the particular lien is wholly derivative from the client. So it stands no higher than the client’s rights. For instance, as long as the client’s rights to the fund remain unascertained and contingent, the solicitor’s rights have the same character. It also means that the lien is limited by whatever rights may be exercised against the client; it is subject to all the equities between the client and other parties interested in the fund or property.144 As a result, issues can arise involving the extent to which the lien can secure priority for a solicitor to the proceeds of judgment or compromise ahead of other claimants to it. As an equitable interest, the law of priorities between legal and equitable interests, and between equitable interests, applies.145 So, a solicitor’s equitable interest in the fund prevails over that of a later assignee of the fund who is not a bona fide purchaser for value and without notice.146 Conversely, as a solicitor is entitled to a lien on the net benefit achieved for a client, the lien is subject to the prior rights of the parties to set-off.147 In each case, however, the court will consider the equity of the situation, because temporal priority will not mandate actual priority where this outcome is inequitable.148 [16.140] It nonetheless remains important to determine the moment at which the solicitor’s equitable rights under a particular lien arise. The point assumes especial significance where a client purports to assign the proceeds of judgment or compromise to a third party,149 or in the event of a client’s insolvency. The claims of third parties loom large in these scenarios. Taking the insolvency scenario by way of illustration, unless the solicitor can establish an entitlement pre-dating the insolvency, her or his lien will lose priority to the claims of the relevant insolvency administrator. The court is therefore called to decide “whether or not the proceeds should … be deemed to have been in the possession of the solicitors prior to the [insolvency]”.150 It is clear that a solicitor’s equitable rights under a particular lien arise before there is a fund in court and, indeed, before the judgment for costs has been quantified by taxation or assessment.151 This is because solicitors have been treated as possessing equitable rights in the judgment independent of a curial declaration; the lien arises

144 Halvanon Insurance Co Ltd v Central Reinsurance Corp [1988] 1 WLR 1122 at 1130–1 per Hobhouse J. 145 As to which see Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), Ch 2. 146 Twigg v Keady (1996) 135 FLR 257 at 269–270 per Finn J. 147 Puddephatt v Leith [1916] 2 Ch 168. See further Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [27.26]–[27.29]. 148 Akki Pty Ltd v Martin Hall Pty Ltd (1994) 35 NSWLR 470 at 483 per Windeyer J. 149 See, for example, Color Point Pty Ltd v Markby’s Communication Group Pty Ltd (unreported, FCA, Weinberg J, 27 November 1998). 150 Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238 per Thomas J. 151 Worrell v Power & Power (1993) 46 FCR 214 at 222 (FC). Cf Re Meter Cabs Ltd [1911] 2 Ch 557 at 559 per Swinfen Eady J; Re Statewide Computer Services Pty Ltd (in liq) [1992] 2 Qd R 647 at 649–650 per Ryan J.

[16.145]

16 Solicitors’ Liens

541

by operation of law152 and so court’s assistance is invoked “not to create the rights but to enforce them”.153 So the solicitor’s interest in the fund dates back to the time when the fund first comes into existence, namely when the judgment for costs is obtained or when the settlement agreement was entered into.154 For example, in Worrell v Power & Power,155 as the judgment for costs had been obtained prior to the commencement of the relation-back period, the trustee-in-bankruptcy could not claim moneys held by the respondent solicitors in part satisfaction of costs. Yet it may be that the relevant date is earlier than the date judgment for costs is obtained. In Re H & W Wallace Ltd (in liq) Thomas J considered that:156 … the particular lien arises when the solicitors undertake the work for the client in the course of litigation. The equitable interest, whether pursued or not, exists from that time. What the client may or may not subsequently do in seeking to deprive the solicitors of their costs makes no difference to the effect of that interest. Nor can it inhibit the right of the solicitors to seek the court’s intervention to protect that pre-existing interest.

This approach is advantageous to solicitors because it means that the proceeds of a particular lien will only lose priority to the claims of an insolvency administrator where the retainer is entered into after the date of insolvency. Whether or not it is right depends on whether the particular lien is seen as premised on the solicitor undertaking work for a client (based on contract), or on the solicitor recovering a fund or property in the representation (an outcome-based approach). As the lien arises out of a contractual relationship (the retainer), an analogy could be drawn with another lien arising from contract, the vendor’s lien for unpaid purchase moneys, which has been held to arise at the time of contract even though it cannot be actively enforced until a later date.157 If this analogy is accurate, the same could be said for the solicitor’s particular lien.

[16.145] The timing of the particular lien is also important where the solicitor has, since having provided the relevant legal services, stopped practising, whether for disciplinary sanction or to retire. Were it temporally aligned with the time the claim is made rather than when the services were performed, on a client’s later insolvency the client’s insolvency administrator could maintain that the solicitor

152 Australian Receivables Ltd v Tekitu Pty Ltd (deed administrators appointed) (2012) 260 FLR 243 at [85]–[92] per Ward J. 153 Worrell v Power & Power (1993) 46 FCR 214 at 224 (FC). 154 Worrell v Power & Power (1993) 46 FCR 214 at 224 (FC) (judgment for costs); Re De Groot [2001] 2 Qd R 359 at 368 per Muir J (settlement moneys). See also Twigg v Keady (1996) 135 FLR 257 at 265 per Finn J (equitable right is acquired at the time when the relevant moneys become payable to the client); Carew Counsel Pty Ltd v French (2002) 4 VR 172 at 187 per Winneke P (it “arises immediately upon the recovery of monies through the exertions of the solicitor”); XX Firm v ZZ Firm [2013] FamCA 1007 at [50], [53] per Forrest J. 155 Worrell v Power & Power (1993) 46 FCR 214 at 224 (FC). See also Kison v Papasian (1994) 61 SASR 567 at 569 per King CJ. Cf Twigg v Keady (1996) 135 FLR 257 at 290 per Kay J. 156 Re H & W Wallace Ltd (in liq) [1994] 1 NZLR 235 at 238 (emphasis supplied). 157 Reliance Finance Corp Pty Ltd v Heid [1982] 1 NSWLR 466 at 478 per Hope JA; Barclays Bank plc v Estates & Commercial Ltd [1997] 1 WLR 415 at 419–420 per Millett LJ.

542

Lawyers’ Professional Responsibility

[16.150]

has no entitlement to the lien due to a lack of practising rights at the time insolvency priority disputes are to be determined.158 Lien claimed by a former solicitor

[16.150] Circumstances may arise where a client changes solicitors in the course of a matter whilst owing fees to the first solicitor. If in these circumstances the second solicitor secures property or money for the client, whether from a judgment or compromise, the issue is whether the first solicitor retains a lien for her or his unpaid costs even though he or she is not the solicitor on the record. As a general principle, a solicitor is not denied a lien simply because he or she has ceased to act for the client prior to the recovery of the judgment or compromise. But as the particular lien is premised on a solicitor being paid “out of the produce of his industry and skill”,159 for the court to give effect to the lien the former solicitor must substantiate a link between the money or property so recovered and work he or she has performed. In Doyles Construction Lawyers v Harsands Pty Ltd,160 for example, the solicitors acted in proceedings that were settled by an agreement negotiated directly between the parties, which provided for payment to their client of $40,000. Shortly after the agreement was made, but before payment was made under it, the solicitors ceased to act. McLelland CJ found a sufficient causal link; although others had acted for the plaintiffs at earlier stages in the matter, the solicitors acted for ten months up to, and overlapping with, the time when the compromise was negotiated. While not involved in the negotiation, they had carried the litigation to a point where a successful negotiation could take place. The requisite link has been variously expressed as one where the fruits of the litigation are gained “at least in part, as a result of”,161 “come about by reason of”162 or are “produced by”163 the solicitor’s exertions on behalf of the former client. Reference has also been made to a solicitor who “played at least a significant part”164 or was “instrumental”165 in the conduct of the litigation that led to the recovery. That the link so expressed is “not an exacting standard”,166 this should 158 This argument, when raised by a client’s liquidator in Lashansky v Legal Practice Board [2006] WASC 247, was rejected by Templeman J (see at [75]–[84]). 159 Groom v Cheesewright [1895] 1 Ch 730 at 732 per Kekewich J. 160 Doyles Construction Lawyers v Harsands Pty Ltd (unreported, SC(NSW), McLelland CJ in Eq, 24 December 1996). 161 Color Point Pty Ltd v Markby’s Communication Group Pty Ltd (unreported, FCA, Weinberg J, 27 November 1998) at 23. 162 Worrell v Power & Power (1993) 46 FCR 214 at 224 (FC). 163 Grogan v Orr [2001] NSWCA 114 at [62] per Sheller JA. 164 Kelso v McCulloch (unreported, SC(NSW), Young J, 24 October 1994) at 11. 165 Ex parte Patience (1940) 40 SR (NSW) 96 at 103 per Jordan CJ. 166 Jackson v Richards (2005) 12 BPR 23,091 at [47] per White J. His Honour repeated this observation in Helm v Helm [2011] NSWSC 1595 at [7] (adding that “[i]t is not necessary to demonstrate that a judgment came about as a result of specific efforts by the solicitor”). See also AMC Commercial Cleaning (NSW) Pty Ltd v Coade [2013] NSWSC 192 (where Rein J (at [20] did not think that to recover under their lien the former solicitors “need[ed] to establish that it was their efforts alone that produced the settlement nor, where other factors have helped produce the settlement, to

[16.160]

16 Solicitors’ Liens

543

not be mistaken as indicating that solicitors will always secure an equitable interest in the judgment or settlement proceeds no matter how slight or fleeting their participation.167

[16.155] The situation discussed above may involve both the former and the current solicitor claiming a lien for unpaid costs. Where the proceeds of judgment or the client’s funds are insufficient to meet both solicitors’ costs, the issue becomes one of priority and allocation. There is English authority that, as a general rule, the solicitor who conducts the case to conclusion should have first claim for her or his fees.168 But this approach may produce injustice, in that:169 … one can easily imagine cases where, with a late change of solicitor and a small recovery, considerable injustice could be done to the first solicitor. In any event, where successive solicitors have each contributed to the ultimate recovery there seems little justice in a rule which has the capacity to exclude absolutely the earlier of the two.

Perhaps a fairer approach is a general rule that, subject to any contrary agreement, competing claims should be settled pari passu according to the amount of costs owing, an approach that could be disturbed if in the circumstances equity demands otherwise. Each solicitor’s conduct would, for this purpose, be the subject of inquiry. If, for instance, the first solicitor unjustifiably left the client in the lurch, and the second solicitor became involved as a matter of necessity, that may justify the first solicitor’s claim being postponed to that of the second. The converse may be the case where the second solicitor has poached the client from the first, or where the second solicitor, with knowledge of the first solicitor’s equitable entitlement, conspired with the client to ensure payment of its fees in priority.170 Ouster of lien by statute

[16.160] Statute may oust the particular lien where, as in the case of the general lien (see [16.80]), clear words dictate this to be the drafters’ intention. For example, legislation that denied a solicitor an entitlement “to recover … any costs in respect of any proceedings … or to claim a lien in respect of such costs on, or deduct such costs from, the sum awarded, ordered or agreed as compensation”171 has been held establish a proportionate responsibility for the settlement”, reasoning (at [23]) that not only would the proportionate responsibility may be very difficult to assess but because “solicitors involved in litigation (and counsel) should be encouraged to examine ways in which settlement can be achieved and to encourage parties to a dispute, where such a possibility exists, to consider accepting solutions that involve, to some degree, matters that do not arise directly, or even indirectly, out of litigation”). 167 See, for example, Abdul-Karim v Attorney-General’s Department [1999] NSWSC 79 at [32]–[37] per Young J. 168 See, for example, Re Wadsworth (1886) 34 Ch D 155. 169 Atkinson v Pengelly [1995] 3 NZLR 104 at 109 per Tipping J. 170 See, for example, XX Firm v ZZ Firm [2013] FamCA 1007 (Forrest J describing behaviour of this kind as falling short “of the standards of professionalism and propriety expected of an officer of this Court” (at [60]), and ordering the respondent firm and/or the client to reinstate sufficient funds at least to the firm’s trust account to protect the applicant firm’s interests at the relevant point in time). 171 Namely the Workers’ Compensation Act 1926 (NSW), s 56(2) (repealed).

544

Lawyers’ Professional Responsibility

[16.160]

to abolish the particular lien the solicitor would otherwise have over moneys recovered in the proceedings and held for the client.172 The particular lien can be ousted by statutory implication, but this is unusual. An example is found in Scammell & Co v WorkCover Corporation,173 where a statutory provision174 made a solicitor’s entitlement to costs from a client subject to: an award or order by a specified tribunal; the costs being reasonable and not exceeding 85 per cent of the relevant Supreme Court Scale; and specified regulations as to costs. Layton J, with whom Nyland and Sulan JJ concurred, construed the relevant provision as requiring the defendant to pay costs directly to the solicitor from a specified fund if an award is made, but that it be limited to the amount ordered by the tribunal.175 This indicated that the legislation was intended to exclude the solicitor’s entitlement to claim a lien for payment by the defendant from the fund other than a payment following an award for costs.176 In so construing the relevant legislation, Layton J was influenced by the “clear public interest”, historically evident in workers compensation legislation, of ensuring “that a worker is paid entitlements to worker’s compensation payments”, which recognised “a worker’s vulnerable position by reason of being injured” and “the need to allow for circumstances of support during a process of hopeful rehabilitation and recovery from injury”.177

172 Coshott v Stegnajic [1984] 2 NSWLR 632 at 633 per Yeldham J (who held, however, that it did not oust the general lien: see [16.80]). 173 Scammell & Co v WorkCover Corporation (2006) 95 SASR 278. 174 Namely the Workers Rehabilitation and Compensation Act 1986 (SA), s 95 (repealed). 175 Scammell & Co v WorkCover Corporation (2006) 95 SASR 278 at [90]. 176 Scammell & Co v WorkCover Corporation (2006) 95 SASR 278 at [91]. 177 Scammell & Co v WorkCover Corporation (2006) 95 SASR 278 at [98].

PART IV Lawyers’ Duty to the Administration of Justice Chapter 17: Duty to the Court ............................................................................. 547 Chapter 18: Particular Applications of the Duty to the Administration of Justice ............................................................................................................... 601 Chapter 19: Duty to Obey and Uphold the Law ................................................ 627

Chapter 17

Duty to the Court [17.05] CONTEXT ........................................................................................................................... 548 [17.10] Lawyer as an officer of the court .............................................................................. 548 [17.15] Enforcing the duty to the court ................................................................................. 549 [17.35] INDEPENDENCE .............................................................................................................. 552 [17.40] Independence in presentation of the case ............................................................... 553 [17.45] Independence undermined where lawyer is a witness in the matter ................ 555 [17.60] Independence undermined by a lawyer’s conflict of interest ............................. 558 [17.65] Independence threatened by a lawyer’s relationships .......................................... 559 [17.75] CANDOUR IN THE PRESENTATION OF THE LAW ............................................... 561 [17.80] Duty to assist the court in the applicable law and procedure ............................ 561 [17.85] Duty not to withhold relevant law ........................................................................... 562 [17.95] CANDOUR IN THE PRESENTATION OF THE FACTS ........................................... 564 [17.95] The duty and its scope ................................................................................................ 564 [17.110] False documents ......................................................................................................... 567 [17.115] Half-truths ................................................................................................................... 568 [17.120] Especial candour in ex parte applications ............................................................. 569 [17.125] Verification of client’s narrative ............................................................................... 570 [17.130] Client perjury .............................................................................................................. 570 [17.140] Client’s intention to disobey court order ............................................................... 573 [17.145] Duty not to illegitimately destroy or remove documents .................................. 573 [17.150] DEALING WITH WITNESSES ..................................................................................... 575 [17.150] Importance of maintaining integrity ...................................................................... 575 [17.155] No conferring with witnesses together .................................................................. 575 [17.160] No suborning of witnesses ....................................................................................... 576 [17.165] No coaching of witnesses ......................................................................................... 577 [17.170] No communication in cross-examination .............................................................. 579 [17.175] No property in a witness .......................................................................................... 579 [17.185] Evidence subject to a pre-existing confidentiality obligation ............................ 581 [17.190] COMMUNICATIONS AND RELATIONSHIP WITH JUDGE ................................ 581 [17.200] PUBLIC DISCLOSURES AND MEDIA COMMUNICATIONS ............................... 583 [17.215] ABUSES OF PROCESS ................................................................................................... 585 [17.220] Baseless aspersions or allegations ........................................................................... 586 [17.245] Wasting of time and money in court proceedings ............................................... 591 [17.260] Hopeless cases ............................................................................................................ 594

548

Lawyers’ Professional Responsibility

[17.05]

CONTEXT [17.05]

The duties that inform the lawyer’s role as a participant in the curial process have, in broad terms, been expressed as follows:1 Practitioners, in all their dealings with the courts, whether those dealings involve the obtaining and presentation of evidence, the preparation and filing of documents, instructing an advocate or appearing as an advocate, should act with competence, honesty and candour. Practitioners should be frank in their responses and disclosures to the court, and diligent in their observance of undertakings which they give to the court or their opponents.

These duties are not limited to the making of oral submissions to a court or tribunal, but extend to the performance by lawyers of any act in the course of practising their profession.2 Lawyer as an officer of the court

[17.10]

From the earliest times lawyers have been characterised as officers of the court, a point that finds expression in the legal profession legislation.3 Accordingly, a lawyer’s duty to the court4 is “paramount” or “overriding”,5 a point reiterated in various profession rules.6 To the extent that the duty to the court conflicts with a duty to the client, the former duty must prevail. For example, fabricating evidence may be in a client’s interest, as it may increase the client’s chances of succeeding in the claim, but a lawyer, as part of the duty to the court, cannot be a party to the

1 What is cited in the text appears as a preface to the Advocacy Rules in the superseded Law Council of Australia’s Model Rules of Professional Conduct and Practice. See also Civil Procedure Act 2010 (Vic), s 17 (“A person to whom the overarching obligations apply [which includes lawyers: s 10(1)] must act honestly at all times in relation to a civil proceeding”). See generally Ipp, “Lawyers’ Duties to the Court” (1998) 114 LQR 63. 2 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 60 per Ipp J. 3 See ACT, s 28; NSW, s 25 (formerly NSW 2004, s 33); NT, s 28; Qld, s 38; SA, s 23A (which in making explicit provision to the effect that an interstate legal practitioner who practises law in the State is an officer of the court implicitly acknowledges that local legal practitioners are likewise officers of the court); Tas, s 37; Vic, s 25 (formerly Vic 2004, s 2.3.9); WA, s 29. 4 In this context, “court” is not limited to superior courts, but extends to inferior courts, tribunals, inquiries established or conducted under statute or by a Parliament, Royal Commissions, and an arbitration or mediation or any other form of dispute resolution: ACT, Glossary; NSW, Glossary; Qld, Glossary; SA, Glossary; Vic, Glossary; WA, r 3. Equivalent provision is made in the barristers’ rules: ACT, r 15; NSW, r 124; NT, r 15; Qld, r 116; SA, r 116; Vic, r 124; WA, r 116. 5 Giannarelli v Wraith (1988) 165 CLR 543 at 555–556 per Mason CJ, at 572 per Wilson J (“paramount duty”). 6 See ACT, r 3.1; NSW, r 3.1; Qld, r 3.1; SA, r 3.1; Vic, r 3.1; WA, r 5. The same point is made in the barristers’ rules: ACT, r 1; NSW, rr 4(a), 23; NT, r 1; Qld, rr 5(a), 25; SA, rr 5(a), 25; Vic, rr 4(a), 23; WA, rr 5(a), 25.

[17.20]

17 Duty to the Court

549

presentation of false evidence, for to do so would be inconsistent with the honesty and candour required its officers:7 see [17.95]–[17.145]. In the famous words of Lord Reid in Rondel v Worsley:8 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, which may and often does lead to a conflict with his client’s wishes or with what the client thinks are his personal interests. Counsel must not mislead the court.

The paramount duty to the court carries with it a level of independence. The lawyer is not solely a “hired gun” for a client,9 but must bring an independent judgment.10 This is reflected in the cases in which the lawyer can accept – for instance, the lawyer must not act in a matter where her or his personal interests conflict with the duty as an officer of the court – and how the matter is conducted. As to the latter, for a lawyer to use the curial process to achieve an outcome inconsistent with the role of that process amounts to an abuse of process: see [17.215]. The trust the court places in lawyers also attracts a corresponding duty to diligently observe any undertakings given to the court (see [22.05]), to act with courtesy to the court, and to avoid unnecessary expense and waste of the court’s time (see [17.245]–[17.255]). Enforcing the duty to the court The court retains an inherent (or implied)11 supervisory jurisdiction over its officers, directed at preserving the proper administration of justice. At a most basic level, it encompasses both the admission of lawyers to that status (see [2.20]–[2.45]), and their removal from it (see [23.05]–[23.15]). It has ramifications beyond this, too, as noted below.

[17.15]

Court’s jurisdiction to restrain lawyer from acting

[17.20]

The jurisdiction empowers a court to determine which of its officers may represent parties to litigation. It may, for instance, restrain a lawyer from appearing

7 Public Trustee v By Products Traders Pte Ltd [2005] 3 SLR(R) 449 at [54] per V K Rajah J (“It is axiomatic that the plea of acting in the best interests of a client can never condone any breach of the obligation of candour that every solicitor owes to the court qua officer of the court”; emphasis in original); Law Society of Singapore v Nor’ain bte Abu Bakar [2009] 1 SLR(R) 753 at [91] per Chan Sek Keong CJ (a lawyer “may not hide behind the shield that is his client’s instructions if such instructions are contrary to his overriding duty to the court”). 8 Rondel v Worsley [1969] 1 AC 191 at 227. 9 R v O’Connell (1844) 7 Ir LR 261 at 312–13 per Crampton J; Public Trustee v By Products Traders Pte Ltd [2005] 3 SLR(R) 449 at [56] per V K Rajah J (“The attainment of justice cannot be viewed solely through a client’s lenses, divorced and detached from the solicitor’s professional functions and obligations to ensure the attainment of justice”); Regina v Ulcay [2008] 1 WLR 1209 at [27] per Sir Igor Judge P (“The advocate is not a tinkling echo, or mouthpiece, spouting whatever his client ‘instructs’ him to say”). 10 See Green, “Lawyers’ Professional Independence: Overrates or Undervalued?” (2013) 46 Akron L Rev 599 at 608–613 (in the remainder of the paper addressing various other ways in which lawyer independence is conceptualised). 11 Implied jurisdiction covers courts that lack inherent jurisdiction.

550

Lawyers’ Professional Responsibility

[17.20]

where it would breach a confidence owed to a former client (see [8.10]) or a fiduciary duty owed to an existing client (see [6.05]), or otherwise an appearance of the lawyer changing sides.12 The court may do likewise where it doubts a lawyer’s capacity to exercise an independent judgment (other than, evidently, in the case of a lawyer-litigant),13 say where he or she may be called as a material witness (see [17.45]–[17.55]) or has a direct personal interest in the outcome14 beyond a fee15 (see [17.60]), if the subject matter of the litigation may involve an evaluation of the lawyer’s conduct16 or the evidence reveals that he or she is placing the duty to the client ahead of the duty to the court.17 The relevant inquiry is whether a fair-minded reasonably informed person18 would find it subversive to the administration of justice to allow the representation to continue.19 But curial reserve in exercising this jurisdiction evinces from its 12 See, for example, Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 (where a solicitor who had previously acted for a company and received instructions from its sole director subsequently sought to represent that director, who had since been removed from the company, against company in respect of same claim as that to which solicitor had previously acted for company); Dale v Clayton Utz (a firm) (No 2) [2013] VSC 54 (barrister disqualified from acting against a person who had earlier sought advice on an issue related to the current proceedings, even though the evidence did not identify any relevant confidential information had been communicated in the circumstances). 13 See Lee v Korean Society of Victoria [2014] VSC 316 at [24] per Dixon J. Cf Melbourne City Investments Pty Ltd v Treasury Wine Estates Ltd (No 3) [2014] VSC 340 (where the solicitor on the record for the plaintiff, who was also the plaintiff’s sole director and shareholder, was disqualified from acting because the plaintiff was the representative plaintiff in the matter, and his interest went beyond those of others’ solicitors acting in the matter). 14 For instance, where the lawyer acts for a relative (see [6.50]), spouse (see, for example, Pickard v Brown-Jones [2014] FCWA 12; Otta International Pty Ltd v Asia Pacific Carbon Pte Ltd [2015] NSWSC 1818) de facto partner (see, for example, Schueler v Smith [2010] FMCA 777; Bosgard v Bosgard (2013) 49 Fam LR 612) or longstanding friend or business associate (see, for example, Grieves v Tully [2011] FamCA 617). 15 A lawyer’s interest in securing a fee, including on a speculative basis (see [14.110]) or via a lien (as to which see Ch 16), is not a sufficient ground in itself to justify disqualification: Naczek v Dowler [2011] FamCAFC 179 at [84] per Bryant CJ and Bennett J; Bolitho v Banksia Securities Ltd (No 4) [2014] VSC 582 at [53] per Ferguson JA; Frigger v Kitay (No 10) [2016] WASC 63 at [29] per Le Miere J. The position may differ where the lawyer has more than a minimal financial interest in a litigation funder that proposes to fund the client’s case: see, for example, Bolitho v Banksia Securities Ltd (No 4) at [52]–[61]; cf Moore v Scenic Tours Pty Ltd [2015] NSWSC 237 at [80]–[86] per Garling J. 16 See, for example, Bahonko v Nurses Board of Victoria (No 3) [2007] FCA 491 (involving serious criminal allegations against a solicitor representing the opponent); R & P Gangemi Pty Ltd v D & G Luppino Pty Ltd (2012) V ConvR ¶54-815 (lawyer propounding a cause prompted by own error; cf Westpac Banking Corporation v Newey [2013] NSWSC 533, where the error was of “a very low order” and unlikely to come under scrutiny). 17 Millhouse v Mullens [2015] FamCA 754 at [38] per Forrest J. This is premised on more than mere speculation: Worth v Worth [2016] FamCA 4 at [30] per Forrest J. 18 As to what the concept of a “reasonably informed” member of the public may dictate in a given case see, for example, Viscariello v Legal Profession Conduct Commissioner [2015] SASC 4 at [22]–[28] per Parker J. See also Moore v Scenic Tours Pty Ltd [2015] NSWSC 237 at [88] per Garling J (noting that the reasonable observer, in this context, “does not act on suspicion”, and “does not make connections or draw inferences in the absence of evidence”). 19 Davies v Clough (1837) 8 Sim 262; 42 ER 171 at 267 (Sim), 174 (ER) per Viscount Shadwell VC; Grimwade v Meagher [1995] 1 VR 446 at 450–453 per Mandie J; Western Australia v Ward (1997) 76 FCR 492 at 498–499 per Hill and Sundberg JJ; Rapid Metal Developments (Australia) Pty Ltd v Anderson

[17.25]

17 Duty to the Court

551

description as “extraordinary”,20 of an “exceptional nature”,21 to be applied “sparingly”22 and only in a “clear case”.23 This reserve reflects that the jurisdiction exhibits a more public dimension than protecting confidentiality as between a lawyer and a client.24 Court’s jurisdiction to sanction a lawyer for breach of duty

[17.25]

The jurisdiction to disqualify an officer of the court from acting encompasses a power to sanction a lawyer who has breached the duty owed to the court. A lawyer who commits an abuse of process may be ordered to pay the costs of the proceeding or a step therein.25 Breaches of the duty not to mislead the court will almost invariably generate a serious disciplinary consequence: see [25.10]. A lawyer’s words or actions that interfere with the administration of justice or otherwise disregard the court’s authority can sound in punishment for contempt.26 The contempt power is exercised to vindicate the integrity of the court and its proceedings,27 such as where a lawyer has gone out of her or his way to be insulting and disrespectful to the court.28 But the power to punish for contempt in these circumstances is ordinarily used sparingly and only in serious cases; it is not activated by, for example, suggestions of bias in an address to the court or jury.29 Courts display less circumspection in professional disciplinary action against lawyers who treat the bench with disrespect: see [25.25]. A court may, in any event, Formrite Pty Ltd [2005] WASC 255 at [181]–[189] per Johnson J; H Stanke & Sons Pty Ltd v von Stanke (2006) 95 SASR 425 at [71], [81] per White J; Geelong School Supplies Pty Ltd v Dean (2006) 237 ALR 612 at [33]–[52] per Young J; R v Khazaal (2006) 167 A Crim R 565 at [28]–[34] per Whealy J; Hana New Zealand Ltd v Stephens [2007] 1 NZLR 833 at [11]–[13] per Asher J; Cleveland Investments Global Ltd v Evans [2010] NSWSC 567 at [5]–[8], [51], [52] per Ward J; Dale v Clayton Utz (a firm) (No 2) [2013] VSC 54 at [159]–[168] per Hollingworth J; Murdoch v Brown [2013] FamCA 586 at [36]–[40] per Cronin J. Cf Commonwealth Bank of Australia v Jackson McDonald (a firm) [2014] WASC 301 at [24] per Martin CJ (querying the enunciation of the test in terms of the perception of a fair-minded lay observer) 20 UTi (Aust) Pty Ltd v Partners of Piper Alderman [2008] NSWSC 219 at [52] per Barrett J; Accent Management Ltd v Commissioner of Inland Revenue [2013] 3 NZLR 364 at [32] per O’Regan P. 21 T J Board & Sons Pty Ltd v Castello [2008] VSC 91 at [30] per Hollingworth J; In the Matter of the Consortium Centre Pty Ltd [2012] NSWSC 898 at [12] per Black J. 22 Moore v Scenic Tours Pty Ltd [2015] NSWSC 237 at [95] per Garling J. 23 Bransdon v Gilbert (2007) 212 FLR 28 at [70] (FC(Fam)). 24 Brookville Carriers Flatbed GP Inc v Blackjack Transport Ltd (2008) 263 NSR (2d) 272 at [51], [55] per Cromwell JA; Canadian National Railway Co v McKercher LLP [2013] 2 SCR 649 at [65] per McLachlin CJC. 25 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [23.21]–[23.35]. 26 Ex parte Bellanto [1963] NSWR 1556 at 1564–6 (FC). 27 Lewis v Ogden (1984) 153 CLR 682 at 693 (FC). 28 See, for example, Attorney-General for Queensland v Lovitt [2003] QSC 279 (where counsel described a magistrate before whom he was appearing as a “cretin”, having stood up to make the remark whilst the prosecutor was addressing the magistrate and loud enough to be heard by attending journalists). 29 See, for example, Lewis v Ogden (1984) 153 CLR 682 (“The freedom and the responsibility which counsel has to present his client’s case are so important to the administration of justice, that a court should be slow to hold that remarks made during the course of counsel’s address to the jury amount to a wilful insult to the judge, when the remarks may be seen to be relevant to the case which counsel is presenting to the jury on behalf of his client”: at 689 (FC)).

552

Lawyers’ Professional Responsibility

[17.30]

order the removal of counsel who has behaved inappropriately, including by showing disrespect to the bench, for instance, by arguing with the bench and by turning his back on the bench.30

[17.30]

Misleading the court can generate consequences for the trial process itself. In criminal matters, it can produce a miscarriage of justice, and provide grounds for the conviction to be quashed and a retrial ordered. Where a misleading statement or omission has caused a judgment to be fraudulently obtained, the court may, exceptionally, set aside the judgment in a civil case. As explained by Holroyd Pearce LJ in Meek v Fleming:31 Where a party deliberately misleads the court in a material matter, and that deception has probably tipped the scale in his favour (or even, as I think, where it may reasonably have done so), it would be wrong to allow him to retain the judgment thus unfairly procured. Finis litium32 is a desirable object, but it must not be sought by so great a sacrifice of justice which is and must remain the supreme object. Moreover, to allow the victor to keep the spoils so unworthily obtained would be an encouragement to such behaviour, and do even greater harm than the multiplication of trials.

There is also scope, chiefly in a civil jury trial, for a court to find a miscarriage of justice arising out of some other form of abuse of process perpetuated by a lawyer at trial. For example, in Rees v Bailey Aluminium Products Pty Ltd33 the Victorian Court of Appeal held that, in the course of a civil jury trial for damages for personal injuries, repeated misconduct by the defendant’s counsel – involving unjustified allegations of fraud and the introduction of extraneous matters in the closing address – likely had a prejudicial effect on the jury and so precipitated a miscarriage of justice. Accordingly, the plaintiff’s appeal was upheld.

INDEPENDENCE [17.35]

The proper administration of justice depends, and the court relies, on the faithful exercise by lawyers of an independent judgment in conducting and managing cases.34 The integrity of the judicial process is undermined if lawyers lack “the objectivity and independence which their professional responsibilities and obligations to the court require of them”.35 Also, it is critical to public confidence in the profession that clients are assured of receiving independent and unbiased legal 30 Owens v Owens [2009] FMCAfam 1397 at [10]–[30] per Walters FM. 31 Meek v Fleming [1961] 2 QB 366 at 379 (footnote supplied). On the courts’ equitable jurisdiction to set aside judgments fraudulently obtained see Dal Pont, “Judgments Fraudulently Obtained – The Forgotten Equity” (1995) 14 U Tas L Rev 129. 32 Interest reipublicae ut sit finis litium (it concerns the State that lawsuits be not protracted). 33 Rees v Bailey Aluminium Products Pty Ltd (2008) 21 VR 478. See also Baulch v Lyndoch Warrnambool Inc (2010) 27 VR 1. 34 See generally Green, “Lawyers’ Professional Independence: Overrated or Undervalued?” (2013) 46 Akron L Rev 599. 35 Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 590 per Thomas J (whose observations were adopted by Mandie J in Grimwade v Meagher [1995] 1 VR 446 at 452). See also Bowen v Stott [2004] WASC 94 at [52] per Hasluck J.

[17.40]

17 Duty to the Court

553

advice from lawyers.36 The rules on referral fees (see [20.70]) and the sharing of receipts (see [20.125], [20.130]), and the scope of legal professional privilege (see [11.145], [13.50]), are in part directed to independence. The issue of independence is, though, perhaps most commonly associated with the lawyer’s responsibilities as an officer of the court, as discussed below. Independence in presentation of the case Lawyers’ duty “is to do right by their clients and right by the court”,37 which requires taking all legal points deserving of consideration. A lawyer is obliged, as part of the duty to both the client and the court, to “press such rational considerations as the evidence fairly gave rise”.38 That same duty, however, does not require slavishly following a client’s instructions as to the conduct of the case,39 because part of the lawyer’s duty to the court is to avoid a misuse of court time, and the associated cost, by refraining from advancing arguments that are not reasonably open: see [17.245]–[17.255].

[17.40]

Lawyers pressed by clients to “make every point conceivable and inconceivable without judgment or discrimination”40 must exercise professional judgment so as “not to use public time in the pursuit of submissions which are really unarguable”.41 This does not mean refraining from pursuing points unlikely to succeed, but to determine those points that are reasonably arguable and jettison the rest.42 Mason CJ made the point as follows in Giannarelli v Wraith:43 [I]t is that a barrister’s duty to the court epitomizes the fact that the course of litigation depends on the exercise by counsel of an independent discretion or judgment in the conduct and management of a case in which he has an eye, not only to his client’s success, but also to the speedy and efficient administration of justice. In selecting and limiting the number of witnesses to be called, in deciding what questions will be asked in cross-examination, what topics will be covered in address and what points of law will be raised, counsel exercises an independent judgment so that the time of the court is not taken up unnecessarily, notwithstanding that the client may wish to chase every rabbit down its burrow.

36 Brennan, “Pillars of Professional Practice: Functions and Standards” (1987) 61 ALJ 112 at 117 (“clients seek a lawyer’s guidance precisely because it is independent of the client’s interests and objective in its legal content”). 37 Lougheed Enterprises Ltd v Armbruster (1992) 63 BCLR (2d) 316 at 324–325 (CA). 38 Tuckiar v R (1934) 52 CLR 335 at 346 per Gavan Duffy CJ, Dixon, Evatt and McTiernan JJ. 39 R v Farooqi [2014] 1 Cr App R 8 at [108], [109] per Judge LCJ. 40 Ashmore v Corporation of Lloyd’s [1992] 1 WLR 446 at 453 per Lord Templeman. 41 Richardson v R (1974) 131 CLR 116 at 123 per Barwick CJ, McTiernan and Mason JJ. 42 Ipp, “Lawyers’ Duties to the Court” (1998) 114 LQR 63 at 100. In fact, one of the justifications for counsel’s immunity is that at times counsel must “prune his case of irrelevancies against his client’s wishes”: Rondel v Worsley [1969] 1 AC 191 at 272–273 per Lord Pearce. On barristerial immunity see [5.260]–[5.345]. 43 Giannarelli v Wraith (1988) 165 CLR 543 at 556.

554

Lawyers’ Professional Responsibility

[17.40]

Lawyers should, therefore, not allow clients to assume control over litigation at the expense of their own independent judgment, or otherwise get caught within any client abuse of process and its consequences.44 The relevant principles are reiterated in the professional rules,45 which read at follows: A [lawyer] representing a client in a matter that is before the court must not act as the mere mouthpiece of the client or of the instructing [lawyer] (if any) and must exercise the forensic judgments called for during the case independently, after the appropriate46 consideration of the client’s and the instructing [lawyer’s] instructions where applicable. A [lawyer] will not have breached the [lawyer’s] duty to the client, and will not have failed to give appropriate consideration to the client’s or the instructing [lawyer’s] instructions, simply by choosing, contrary to those instructions, to exercise the forensic judgments called for during the case so as to: [1] confine any hearing to those issues which the [lawyer] believes to be the real issues; [2] present the client’s case as quickly and simply as may be consistent with its robust advancement; or [3] inform the court of any persuasive authority against the client’s case. A [lawyer] must not make submissions or express views to a court on any material47 evidence or issue in the case in terms which convey or appear to convey the [lawyer’s] personal opinion on the merits of that evidence or issue.

Although there are cases in which criminal defendants have argued that their conviction should be set aside on the ground that counsel’s exercise of their independent judgment was contrary to instructions,48 arguments of this kind infrequently succeed: see [4.205].

44 See, for example, Wentworth v Rogers [1999] NSWCA 403 (where the court warned that a lawyer who allowed himself to be controlled by his client, doing the client’s bidding and allowing her to conduct the various applications before the court however she chose, is responsible for the client’s actions, here sounding in personal liability for costs: at [46]). See further Dal Pont, “My Client the Bully” (2009) 83 (Jan/Feb) LIJ 76. 45 ACT, rr 17.1–17.3; NSW, rr 17.1–17.3; NT, rr 17.3–17.5; Qld, rr 17.1–17.3; SA, rr 17.1–17.3; Vic, rr 17.1–17.3; WA, r 32(1)–32(3). Equivalent provision appears in the barristers’ rules see ACT, rr 18–20; NSW, rr 42–44; NT, rr 18–20; Qld, rr 41–43; SA, rr 41–43; Vic, rr 42–44; WA, rr 41–43. 46 The Australian Bar Association’s Committee on Standard Advocacy Rules recommended that the word “appropriate” be used in place of the word “reasonable” in order “to reflect a concern that in some cases the only proper consideration of, for example, a client’s desires will be to ignore them without spending any appreciable time considering them”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 2. The concern was that the expression “reasonable consideration” could carry some unintended requirement that there always be some consideration, even where the exigencies of a hearing would render that wasteful. 47 The word “material” is intended “to clarify that certain trivial or merely procedural matters may sometimes be the subject of a barrister’s expression of personal opinion in court”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 2. 48 See, for example, R v S [1998] 3 NZLR 392.

[17.45]

17 Duty to the Court

555

Independence undermined where lawyer is a witness in the matter Proscription and its rationale

[17.45]

A lawyer must not accept a retainer if there is reason to believe that he or she will be required to give evidence material to the determination of contested issues before the court. If this becomes apparent during the course of proceedings, the lawyer should withdraw, and arrange for an independent lawyer to take over the matter. The foregoing is recognised both by the courts49 and professional rules.50 It can be justified on various grounds,51 broadly aimed at “underwrit[ing] the [lawyer’s] primary duty to the court as one of its officers concerned in the administration of justice”.52 To appear as a witness may tend to confuse the lawyer’s role. That role is to present the case and test the evidence and arguments, whereas a witness provides sworn testimony of facts within her or his personal knowledge or expertise. There is also the prospect of conflict between interest and duty; by appearing as a witness the lawyer may be placed in a position where the duty to the court, or her or his own interests, conflict with the duty to the client. It has been remarked, to this end, that “[t]he vice of a lawyer acting as both witness and instructing solicitor (or counsel) in a case is that he may be tempted to tailor his evidence to support his client”.53 For a lawyer’s objectivity and independence to be queried by giving evidence may have deleterious effects on public opinion of trials and the profession.54 A further danger is that effectiveness as an advocate may be impaired if a lawyer’s credibility as a witness is impeached,55 with an attendant client loss of faith in the lawyer. There is the added concern that the finder of fact may place undue weight on the testimony of an officer of the court.56 In a criminal context it could produce a 49 Hutchinson v Davis [1940] NZLR 490 at 506 per Myers CJ, at 522 per Northcroft J; R v Secretary of State for India in Council, ex parte Ezekiel [1941] 2 KB 169 at 175 per Humphreys J; Jeffrey v Associated National Insurance Co Ltd [1984] 1 Qd R 238 at 245 per Thomas J; Chapman v Rogers [1984] 1 Qd R 542 at 545 per Campbell CJ; R v Forde (1986) 19 A Crim R 1 at 12 per Kaye J; Yamaji v Westpac Banking Corp (No 1) (1993) 42 FCR 431 at 432 per Drummond J; Clay v Karlson (1997) 17 WAR 493 at 494–495 per Templeman J; Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 at [147]–[149] per Wilson J (views endorsed at [51] per Tipping J, at [99] per McGrath J); Sheraz Pty Ltd v Vegas Enterprises Pty Ltd (2015) 48 WAR 93 at [194] per Chaney J. 50 ACT, r 27; NSW, r 27; NT, r 13; Qld, r 27; SA, r 27; Tas, r 95(1); Vic r 27; WA, r 42. The barristers’ rules, in this vein, require barristers to refuse a brief where they have reasonable grounds to believe that they may, as a real possibility, be a witness in the case: see ACT, r 87(c), 87(d) (cf r 88); NSW, r 101(d), 101(e); NT, r 87(c), 87(d) (cf r 88); Qld, r 95(d), 95(e); SA, r 95(d), (e) (cf r 96); Tas, r 94(2)(g), 94(2)(h); Vic, r 101(d), 101(e); WA, r 95(d), 95(e). 51 For a critical analysis of the policy considerations behind the lawyer-witness rule see Moss, “Ethical Proscriptions Against a Lawyer Serving as Both Advocate and Witness” (1993) 23 Mem St UL Rev 555; Richmond, “Lawyers as Witnesses” (2006) 36 New Mexico L Rev 47. 52 Barrak Corporation Pty Ltd v Kara Group of Companies Pty Ltd [2014] NSWCA 395 at [2] per Barrett JA. 53 Pittorino v Meynert [2001] WASC 245 at [10] per Bredmeyer M. 54 Jeffrey v Associated National Insurance Co Ltd [1984] 1 Qd R 238 at 245 per Thomas J; Vector Gas Ltd v Bay of Plenty Energy Ltd [2010] 2 NZLR 444 at [149] per Wilson J; H v S [2016] NZHC 409 at [31] per Asher J. 55 R v Forde (1986) 19 A Crim R 1 at 12 per Kaye J. 56 MacArthur v Bank of New York (1981) 524 F Supp 1205 at 1209–11.

556

Lawyers’ Professional Responsibility

[17.50]

miscarriage of justice sufficient to substantiate an appeal against a conviction.57 Because the rule protects not only the client, the client cannot waive the lawyer’s disqualification in this respect.58 The bases of the proscription justify extending its application to solicitors who instruct counsel.59 In fact, the concern of conflicting interests has led one judge to brand it:60 … unwise for a solicitor, who is not himself appearing as an advocate or an instructing solicitor in court but who is aware that it is likely that he will be called as a material witness … to continue, either personally or through his firm, to represent the client if this can be reasonably avoided.

The foregoing does not mean that the lawyer-witness proscription is always imputed to the law practice, a point acknowledged in the American rules.61 As the lawyer-witness here is not acting as trial counsel, the concerns underscoring the proscription are reduced.62 They are not, however, necessarily removed. There may remain questions surrounding potential tension between loyalty to a client as opposed to loyalty the firm.63 Issues over loyalty also serve to explain why a lawyer should usually avoid representing a litigant if a partner, employee or close family member is likely to be called as a substantive witness. Court’s jurisdiction to disqualify lawyer-witness from acting

[17.50]

It is within the court’s power to disqualify a lawyer from representing a party in circumstances where the lawyer is or may be called as a witness.64 In

57 Cf Grey v City of Marion (2006) 159 A Crim R 357 (where although the prosecutor was a potential witness in the criminal trial, Debelle J found no miscarriage of justice, being “an instance of a departure from the proper course which fortunately has had no adverse consequence”: at [31]). 58 Freeman v Vicchiarelli (1993) 827 F Supp 300. 59 Jeffrey v Associated National Insurance Co Ltd [1984] 1 Qd R 238 at 245 per Thomas J. 60 Chapman v Rogers [1984] 1 Qd R 542 at 545 per Campbell CJ (emphasis supplied). In Yamaji v Westpac Banking Corp (No 1) (1993) 42 FCR 431 at 432 Drummond J adopted Campbell CJ’s comments “as words that need to be heeded by legal practitioners”. 61 See US, r 3.7(b) (which does not automatically extend the lawyer-witness prohibition to the partners and associates of a testifying lawyer, and instead permits this other than where otherwise precluded by r 1.7 (general conflict of interest rule) or r 1.9 (former client conflicts)); see, for example, Ramsay v Boeing Welfare Benefit Plan Committee (1987) 662 F Supp 968; Kubin v Miller (1992) 801 F Supp 1101. 62 Indeed, in Murray v Metropolitan Life Insurance Co (2009) 583 F 3d 173 at 178 it was suggested that “disqualification by imputation should be ordered sparingly … and only when the concerns motivating the rule are at their most acute”. See, for example, Coppola v Nobile (2012) 279 LSJS 543 (where Stanley J restrained a lawyer-witness from acting, but not his firm, chiefly because of the delay in making the application to disqualify: at [34]–[45]). 63 Harvard Investments Ltd v City of Winnipeg (1994) 6 WWR 127 at 137 per Schulman J. See, for example, Fraresso v Wanczyk (1995) 40 CPC (3d) 123 (disqualification of lawyer-witness (K), where it was probable that K’s evidence would be necessary to answer an allegation of breach of trust against K’s firm, imputed to other partners in K’s firm). 64 See the discussion in Beggs v Attorney-General [2006] 2 NZLR 129 at [21]–[41] per Miller J. The statement of Drummond J in Yamaji v Westpac Banking Corp (No 1) (1993) 42 FCR 431 at 432 that the general proscription does not mean that “there is jurisdiction to restrain a solicitor for a party continuing to act for that party on the basis that it is apparent that he is going to be required as a witness for one side or the other on contentious issues, even though, by so acting, the solicitor may

[17.55]

17 Duty to the Court

557

determining whether or not to exercise this power, the court’s principal inquiry concerns the proper administration of justice, in appearance and in actuality. It targets the likelihood of the lawyer being called as a witness on a material contentious matter, and its impact on the integrity of the trial process.65 The latter is balanced against the public interest that persons should not be denied their lawyer of choice without good cause, and the cost or impracticability of the lawyer being restrained.66 The lawyer’s disqualification may be justified where a fair-minded reasonably informed observer would perceive a potential for misuse of confidential information,67 a prospect that the lawyer is seen as having a personal interest in the outcome of the case,68 the lawyer’s independence and objectivity being otherwise compromised,69 or for another reason that the administration of justice would be imperilled.70 The timing of the relevant application is hardly irrelevant to this inquiry. Delay in seeking disqualification may speak of tactical concerns, and if the cause of prejudice to the respondent, can justify a refusal of the application.71 The same may ensue for an application made at a stage too early to determine whether the lawyer may be called as a witness.72 Exceptions to the proscription

[17.55]

The most obvious exception to the lawyer-witness proscription applies in the case of lawyer-litigants, who could not otherwise properly conduct their case. Nor are lawyers prohibited from giving evidence solely on uncontested matters, on fall short of meeting a proper standard of professional conduct” should be viewed not as denying the jurisdiction, but as indicating that its exercise will not be automatic or even common (a point elaborated in the review of case authority found in Beggs, above, where no disqualification order was made).

65 Mitchell v Burell [2008] NSWSC 772 at [20] per Brereton J. 66 Scallan v Scallan [2001] NSWSC 1078 at [7] per Windeyer J; Bowen v Stott [2004] WASC 94 at [57] per Hasluck J. 67 Executive Homes Pty Ltd v First Haven Pty Ltd [1999] VSC 261 at [10] per Byrne J; Bowen v Stott [2004] WASC 94 at [47] per Hasluck J; Lester v Lester [2007] SASC 298 at [17], [18] per Judge Lunn; Premier Capital (China) Ltd v Sandhurst Trustees Ltd [2012] VSC 611 at [14] per Pagone J. See, for example, Gugiatti v City of Stirling (2002) 25 WAR 349; Dundee Beach Pty Ltd v Maher [2006] NTSC 96 at [61], [62] per Southwood J. 68 See, for example, Paino v MDN Mortgages Pty Ltd [2009] NSWSC 898 (solicitor’s financial interest in the client gave rise to the prospect that the solicitor would be a material witness); Coppola v Nobile (2012) 279 LSJS 543. 69 See, for example, Mitchell v Burell [2008] NSWSC 772 (where the solicitor was likely to be a material witness, and his evidence was likely to be controversial and his credit and professional conduct impugned); Perpetual Trustee Co Ltd v Miller [2011] NSWSC 1406 (where Harrison AsJ ordered the disqualification of a lawyer who would likely be called as a witness, whereupon his conduct, integrity and reputation would come under attack: at [41]). 70 See, for example, Geelong School Supplies Pty Ltd v Dean (2006) 237 ALR 612 at [44]–[52] per Young J; Selen v Selen [2009] FamCA 309 at [47]–[71] per Johnston JR. 71 See, for example, Lester v Lester [2007] SASC 298 at [17], [18] per Judge Lunn; Coppola v Nobile (2012) 279 LSJS 543 at [34]–[39] per Stanley J. Cf Selen v Selen [2009] FamCA 309 at [58]–[71] per Johnston JR (acceding to an application punctuated by delay because, inter alia, the applicant provided a reasonable explanation therefor: at [71]). 72 See, for example, Trkulja v Barrow [2013] VSC 227 at [25], [26] per Beach J.

558

Lawyers’ Professional Responsibility

[17.60]

matters of formality regarding which there is no reason to believe that substantial evidence will be offered in opposition,73 or on the nature and value of legal services rendered. Finally, subject to the court’s power to disqualify, a lawyer-witness may continue representing a client if it is not possible to withdraw without jeopardising the client’s interest. This may be so if a court hearing is imminent and no reasonable opportunity exists to obtain alternative legal representation.74 The relevant United States rule, to this end, permits a lawyer to act as witness where disqualification would work “substantial hardship” on the client.75 Its proof requires more than mere increased cost and delay but, for instance, “the loss of extensive knowledge of a case based upon a long-term relationship between the client and counsel and substantial discovery conducted in the actual litigation”.76 Independence undermined by a lawyer’s conflict of interest

[17.60]

Where it becomes apparent that a lawyer may have criminal or civil exposure on a matter in which he or she represents a client, the need for independence – expressed judicially in this context as “the importance of counsel being personally remote from the subject-matter of the dispute”77 – requires the lawyer to withdraw.78 The lawyer, it is feared, may be disinclined “to offer evidence completely exculpating the client and inculpating the legal practitioner”.79 The issue has arisen in the case law chiefly in probate disputes where a lawyer representing a litigant was involved in drafting the relevant testamentary document. The two cases noted below highlight the fact-dependent nature of the jurisdiction, influenced heavily by the court’s perception of the evidence likely to be adduced. In Clay v Karlson80 the plaintiff sued the defendants, who were executors of a will, arguing that the testator was of unsound mind and had received no independent 73 Re Vandervell’s Trusts (No 2) [1974] Ch 269 at 283–284 per Megarry J. As to uncontested matters or matters of formality, there is no reason to believe that the lawyer’s evidence will not be accepted or will be challenged: see, for example, Emanuel Management Pty Ltd (in liq) v Foster’s Brewing Group Ltd (2003) 178 FLR 1 at [1272] per Chesterman J (application refused because no evidence was to be called contradicting the solicitors’ evidence). 74 The rules in the Northern Territory and Western Australia proscribe continued representation “unless exceptional circumstances” warrant otherwise: NT, r 13; WA, r 42(2). The phrase “exceptional circumstances” appears to be directed to circumstances where the interests of the client dictate continued representation, such as where the evidence has become necessary at the 11th hour or later: see Shirvington, “Ethical Dilemmas Facing Solicitors in Court” (1998) 36 (June) LSJ 22 at 23. 75 US, r 3.7(a)(3), as to which see Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 386–388. 76 Brown v Daniel (1998) 180 FRD 298 at 302. See, for example, DJ Investment Group LLC v DAE/Westbrook LLC (2006) 147 P 3d 414 (where substantial hardship arose out of a motion to disqualify filed two and a half years into the litigation, the Supreme Court of Utah endorsed the lower court’s doubt over whether “another attorney could be brought up to speed in this matter” and recognised that “such an effort would require [the client] to expend an exorbitant amount of time and money”: at 417). 77 Barrott v Barrott [1964] NZLR 988 at 990 per Haslam J. 78 Kooky Garments Ltd v Charlton [1994] 1 NZLR 587 at 589–590 per Thomas J. 79 Morrison v Judd [1996] ANZ Conv R 193 at 193 per Kirby P. 80 Clay v Karlson (1997) 17 WAR 493.

[17.65]

17 Duty to the Court

559

advice in executing a codicil to his will. The solicitors who prepared the codicil acted on the instruction of the second defendant and had no contact with the testator until its execution. The plaintiff succeeded in securing an order restraining the solicitors from continuing to act for the second defendant in this action. The solicitors had a personal interest in its outcome arising out of their professional conduct in preparing and executing the codicil. Templeman J made the following observations:81 I am unable to accept that the court is powerless to interfere in the exercise of its supervisory jurisdiction so as to avoid what is acknowledged to be an undesirable situation. It seems to me quite wrong to suggest that the court should stand back and allow the matter to proceed, then perhaps to be followed by some form of disciplinary proceedings after the event. Although the cases have been concerned with proceedings of that kind after the event, they stress the undesirability of solicitors acting in matters in which they have a personal interest.

Conversely, in Scallan v Scallan82 Windeyer J refused the defendant’s application, in a contested probate suit, for an order restraining the plaintiff’s solicitors from acting on the grounds that a consultant to the latter’s firm was an attesting witness to the will and a probable material witness in the proceedings. It was not unusual, Windeyer J remarked, “for instructing solicitors in contested probate proceedings to give evidence as to facts relevant to instructions for and execution of a will”.83 Independence threatened by a lawyer’s relationships Relationship with client

[17.65]

A lawyer must not appear in a matter where her or his relationship with a client may or would make it difficult to maintain professional independence. As too close a relationship with a client may threaten independence, lawyers should strive to maintain client relationships on a true professional level. To pursue personal,84 or even business,85 relationships with clients risks objectivity and independence.

Courts have cautioned of the dangers that arise, particularly in criminal cases, where lawyers to become involved to a degree that unbalances their professional judgment and identifies them with the client’s cause.86 This explains why a lawyer should not become a party to an arrangement whereby bail provided by a surety is obtained using the money of the accused person,87 or become a surety for a client’s 81 Clay v Karlson (1997) 17 WAR 493 at 497. See also Afkos Industries Pty Ltd v Pullinger Stewart (a firm) [2001] WASC 69 at [16] per Miller J. 82 Scallan v Scallan [2001] NSWSC 1078. 83 Scallan v Scallan [2001] NSWSC 1078 at [11]. 84 On the inadvisability of lawyer–client sexual relations see [6.140]. 85 See, for example, R v White (1997) 114 CCC (3d) 225 at 263–264 per Laskin and Charron JJA. 86 Prothonotary v Jackson [1976] 2 NSWLR 457 at 462 (CA); New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 233 per Moffitt P, at 262 per Reynolds JA. See also Brennan, “Pillars of Professional Practice: Functions and Standards” (1987) 61 ALJ 112 at 117. 87 Cf Re B [1981] 2 NSWLR 372 (where this was a reason preventing admission: see [2.130]); R v Freeman (1985) 3 NSWLR 303 (where the lawyer had been convicted of conspiracy to pervert the course of justice, although the conviction was quashed on appeal: see [19.40]).

560

Lawyers’ Professional Responsibility

[17.70]

bail.88 Lack of independence may, in addition, lead a lawyer to participate in a client’s wrongful conduct,89 and possibly encourage other forms of unprofessional conduct, such as misleading the court or questionable sharp practices.90 Even too close a professional connection may sacrifice at least the appearance of independence. For instance, though an “in-house” lawyer may appear on behalf of her or his employer, there is a concern as to whether such a person can exercise the requisite kind of professional detachment:91 see [13.35]. Lawyers should also be wary of the dangers of representing friends or relatives. In addition to issues of independence and objectivity, lawyers who do so may be tempted to cut corners, accept work beyond their competence, or be less exact with issues of professional responsibility.92 There is the further danger, by reason of the lawyer’s connection with the client, that he or she may be called as a witness in the client’s case: see [17.45]. There is, moreover, potential for a court to disqualify a lawyer from acting for a person with whom he or she has a family, business or personal association as part of the court’s inherent, albeit exceptional, jurisdiction to determine which of its officers may represent parties to litigation: see [6.50], [17.20]. Relationship with opposing lawyer

[17.70]

The independence of a lawyer who has a family or other personal association with a lawyer for an opponent may be called into question, even if simply on the basis of appearance. The concern is that one lawyer may disclose confidential information, even if only inadvertently, to the other lawyer, or may otherwise conduct the case in a fashion inconsistent with the duty to the court and/or to the client. The focus on the client’s interests here justifies a more detailed treatment of the topic in the part of the book devoted to client duties: see [7.55]–[7.65].

88 ACT, r 17.4; NSW, r 17.4; NT, r 16; Qld, r 17.4; SA, r 17.4; Vic, r 17.4. 89 New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 233 per Moffitt P. 90 See, for example, Guss v Law Institute of Victoria Ltd [2006] VSCA 88 (where the appellant knowingly failed to discover a relevant document in acting for his wife in litigation); Legal Practitioners Complaints Committee v Pepe [2009] WASC 39 (where the respondent’s personal relationship with a client charged with a criminal offence led her to pressure a witness to withdraw his evidence). 91 Henderson Borough Council v Auckland Regional Authority [1984] 1 NZLR 16 at 23 per Cooke J. 92 See, for example, Legal Practitioners Complaints Committee v Chang [2007] WASAT 86 (where the lawyer, who was acting for a friend of her family, failed to make adequate record of the client’s cheques, cashing the cheques and retaining the cash in her personal safe; the tribunal remarked that “acting for a friend accentuates the need to comply more rigorously with professional standards because, if one does not and the relationship is muddied, the fallout and the consequences of the breach of the ethical relationship can be worse than in other cases”: at [30]).

[17.80]

17 Duty to the Court

561

CANDOUR IN THE PRESENTATION OF THE LAW [17.75]

Lawyers must not mislead the court as to the law, but “must do what they can to ensure that the law is applied correctly to the case”.93 Most fundamentally, lawyers must not misrepresent the law to a court or tribunal.94 The need for candour in this context also has at least two other important ramifications, discussed below. Duty to assist the court in the applicable law and procedure

[17.80]

Lawyers should be aware of the relevant legal principles and the requirements of applicable rules of court,95 and be adequately prepared in their submissions.96 This involves researching the relevant law thoroughly – not relying on general statements in textbooks without extracting the authorities from which those statements come97 – and properly instructing the judge so as to reduce scope for judicial error.98 As explained by Forrest AJA in Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd:99 [W]here a party wishes to propound a certain legal point at trial, it is appropriate (indeed some may say necessary) for that party to provide as much assistance as it can to the trial judge in determining that issue. That obligation extends not only to submissions but also to the provision of relevant authorities supporting the particular assertion. Simply articulating a position amongst a raft of other arguments without any considered submissions or analysis of the authorities places an impossible burden upon the trial judge.

The foregoing reflects lawyers’ important role, in the adversary process, in assisting judicial officers in reaching decisions. Brooke LJ expressed the point this way in Copeland v Smith:100 The English system of justice has always been dependent on the quality of the assistance that advocates give to the bench. This is one of the reasons why, in contrast to systems of justice in other countries, English judges are almost invariably in a position to give judgment at the end of a straightforward hearing without having to do their own research and without the state having to incur the cost of legal assistance for judges because they cannot rely on the advocates to show them the law they need to apply. 93 Re Gruzman (1968) 70 SR (NSW) 316 at 323 (CA). 94 Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 200 (FC). See, for example, R v S(F) (2000) 144 CCC (3d) 466 at [30] per Labrosse JA (where a new trial was ordered because, inter alia, counsel had misrepresented a passage from a decision he was purporting to quote); Sutanto Henny v Suriani Tani [2004] SGHC 7 (where a solicitor was remiss in failing to inform the judge that English dictum referred to had been disapproved in a later case; as to the importance of contextualising any dicta relied upon in making submissions to the court see Bachoo Mohan Singh v Public Prosecutor [2010] 1 SLR 966 at [81] per V K Rajah JA). 95 Kennedy v McGeechan [1978] 1 NSWLR 314; Macteldir Pty Ltd v Dimovski (2005) 226 ALR 773 at [90] per Allsop J; Sedrak v Starr [2010] NSWCA 228 at [18] per McColl JA. 96 ERS Engines Pty Ltd v Wilson (unreported, SC(NSW), Young J, 21 September 1994) at 11–12. 97 Jones v Baker (2002) 10 BPR 19,115 at [47] per Young CJ in Eq. 98 R v Dick [1982] Tas R 252 at 255 per Cosgrove J. 99 Accurate Financial Consultants Pty Ltd v Koko Black Pty Ltd (2008) 66 ACSR 325 at [194]. 100 Copeland v Smith [2000] 1 WLR 1371 at 1376.

562

Lawyers’ Professional Responsibility

[17.85]

In Copeland counsel failed to refer the trial judge to a recently reported case decisive of the issue before the court, even after being asked whether there was authority on point. Buxton LJ expressed “very great concern” that the trial judge was permitted by professional advocates to approach the matter as if it were free from authority.101 Not only was this “extremely discourteous” to the judge, his Lordship added, it was wasteful of time and money because the issue was argued on appeal.102 Hence, it is essential for lawyers who hold themselves out as competent to practise in a particular field to maintain currency with authority in that field. This dictates the value, and indeed necessity, of current awareness systems for new case law, including unreported cases, and statutory changes. Copeland highlights, moreover, that a lawyer who knows that the presiding judge is unfamiliar with the law or procedure in a particular case should draw the judge’s attention to all relevant matters. This is of especial importance for lawyers who appear before courts or tribunals with lay decision-makers. For example, Commissioners of the New South Wales Land and Environment Court are appointed chiefly for their environmental and planning expertise, and so cannot be expected to display the same level of understanding of legal principle as judges or lawyers.103 Duty not to withhold relevant law

[17.85]

Lawyers must not withhold authorities that may tell against their client but which the law or the standards of the profession require them to produce.104 The Australian Solicitors’ Conduct Rules,105 parallel barristers’ rules,106 professional rules, to this end, require a lawyer, at the appropriate time in the hearing of the case if the court has not yet been informed of that matter, to inform the court of: 101 Copeland v Smith [2000] 1 WLR 1371 at 1372–3. His Lordship added that it is not appropriate to refer to a reported case by means of a transcript: at 1373. 102 Copeland v Smith [2000] 1 WLR 1371 at 1373. This is an example of the type of case where it may be appropriate to award costs directly against counsel (see [17.245]), although the issue was not addressed in Copeland. 103 See, for example, Campbelltown City Council v Toth (2004) 135 LGERA 336, where senior counsel for the respondent failed to provide the Commissioner with assistance by way of copies of relevant decisions and gave the Commissioner no assistance in understanding those decisions or the principles said to emerge from them. This led McClellan CJ to deny the respondent an order for costs, even though he had been successful in having the matter remitted to the Commissioner: at [42]. In reaching this decision, his Honour remarked that “when a matter of legal difficulty arises and a party wishes to submit that a particular principle should guide the Commissioner’s decision, it is fundamental that the advocate do whatever he or she can to assist the Commissioner to correctly decide the question”: at [40]. 104 Rondel v Worsley [1969] 1 AC 191 at 227–228 per Lord Reid. For criticism of this duty see Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 681–682. 105 ACT, r 19.6; NSW, r 19.6; Qld, r 19.6; SA, r 19.6; Vic, r 19.6; WA, r 34(6). Cf NT, r 17.11 (which adopts the approach found in r 14.6 of the Law Council of Australia’s former Model Rules of Professional Conduct and Practice, which extended the disclosure obligation to “any authority on the same or materially similar legislation as that in question in the case … which has not been disapproved”). 106 NSW, r 29; Qld, r 31; SA, r 31; Vic, r 29; WA, r 31. Cf ACT, r 25; NT, r 25 (adopting the approach mentioned in relation to NT, r 17.11 in the immediately preceding footnote).

[17.90]

17 Duty to the Court

563

• any binding authority;107 • where there is no binding authority, any authority decided by an Australian appellate court;108 and • any applicable legislation; that the lawyer has reasonable grounds to believe to be directly in point against the client’s case. This obligation persists until final judgment is given.109 But it does not apply if the opponent tells the court that the opponent’s entire case will be withdrawn or that the opponent will consent to final judgment, unless the appropriate time for the lawyer to inform the court of such matters has arrived or passed.110 Nor does it require a lawyer to inform the court of any matter that would have rendered admissible any evidence tendered by the prosecution that the court has ruled inadmissible without calling on the defence.111

[17.90]

Legal databases permit lawyers, whether from the office or remotely, to access both reported and unreported decisions worldwide. As a consequence, judges are not infrequently swamped with a large volume of decisions, good and bad, reserved and unreserved, even though the relevant courts may never have intended to decide matters of principle. This increases judicial workload and challenges, as well as the cost of researching and arguing a given case,112 prompting judicial calls to restrict the cases that may be cited to a court, particularly unreported cases.113 107 The 1993 Australian Bar Association’s rules required disclosure of “binding or persuasive authority” directly on point (r 5.3(a)), but this requirement, in extending to persuasive authority, was removed because “the proliferation of law reports, the changes in the rules of stare decisis and the increasing importance of foreign case law beyond English decisions make the prospect of rendering a barrister in breach of proper professional standards by misjudging what is merely ‘persuasive’ an unattractive one”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 4. 108 This is said to recognise “the peculiar importance in Australia, as a federal nation, of assisting the courts with decisions of co-ordinate authority in areas where the substantive law is identical or nearly so”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 4. 109 The rules require a lawyer who becomes aware of any such decision or legislative provision while judgment remains pending to inform the court (and the opponent) and request the court to re-list the case for further argument: ACT, r 19.8; NSW, r 19.8; NT, r 17.13; Qld, r 19.8; SA, r 19.8; Vic, r 19.8; WA, r 34(8), 34(9). Equivalent provision is made in the barristers’ rules: ACT, r 27; NSW, r 31; NT, r 27; Qld, r 33; SA, r 33; Vic, r 31; WA, r 33. 110 ACT, r 19.7; NSW, r 19.7; NT, r 17.12; Qld, r 19.7; SA, r 19.7; Vic, r 19.7; WA, r 34(7). Equivalent provision is made in the barristers’ rules: ACT, r 26; NSW, r 30; NT, r 26; Qld, r 32; SA, r 32; Vic, r 30; WA, r 32. 111 ACT, r 19.9; NSW, r 19.9; NT, r 17.14; Qld, r 19.9; SA, r 19.9; Vic, r 19.9; WA, r 34(10). Equivalent provision is made in the barristers’ rules: ACT, r 28; NSW, r 32; NT, r 28; Qld, r 34; SA, r 34; Vic, r 32; WA, r 34. 112 Michaels v Taylor Woodrow Developments Ltd [2001] Ch 493 at [79] per Laddie J; Bouttell v Rapisarda [2014] NSWSC 1192 at [66] per McDougall J; Feehan v Toomey [2014] VSC 488 at [26], [27] per McMillan J. 113 See, for example, Michaels v Taylor Woodrow Developments Ltd [2001] Ch 493 at [87] per Laddie J, who suggested that the courts could adopt a procedure where all extempore judgments of any court, and any judgment of courts of first instance, are not to be cited unless the court upon, or shortly after, giving judgment indicates to the contrary.

564

Lawyers’ Professional Responsibility

[17.95]

The matter has been addressed by a practice direction in the United Kingdom, which limits the judgments that may be cited, and requires advocates to state, in respect of each authority that they wish to cite, the proposition of law that it demonstrates, and the parts of the judgment that support that proposition.114 In Australia, several courts have subsequently issued practice notes that aim to restrict the number of cases that the court is invited to consider.115 A submission to the Consultative Council of Australian Law Reporting in 1999 recommending that courts define a category of case – say “Not for Publication” or “Not for Citation” – to be circulated only to the parties and the court file was rejected on the ground that courts have no right to restrict publication of their decisions, and that in some areas (mainly sentencing and personal injuries awards) it is useful for lawyers to access data about trends, even though cases might not be cited in court.

CANDOUR IN THE PRESENTATION OF THE FACTS The duty and its scope Importance of duty

[17.95]

As an “assistant in the administration of justice”, a lawyer must be able to command the confidence and respect of the court.116 Central to this is a commitment not to knowingly mislead the court on any matter. This duty is reflected in the professional rules,117 by statute in Victoria,118 and in manifold curial statements, including the following from a Western Australian judge:119 The duty of counsel not to mislead the court in any respect must be observed without regard to the interests of counsel or of those whom the counsel represents. No instructions of a client, no degree of concern for the client’s interests, can override the duty which counsel owes to the court in this respect. At heart, the justification for this duty, and the reason for its fundamental importance in the due administration of justice, is that an

114 The Practice Direction is found at [2001] 2 All ER 510. 115 Federal Court, Practice Note CM2 (1 August 2011), cll 11–16; New South Wales Court of Appeal, Practice Note No SC CA 1 (27 March 2009), cl 46; Supreme Court of Queensland, Practice Direction No 16 of 2013, cll 3–5. 116 Re Davis (1947) 75 CLR 409 at 420 per Dixon J; Re Evatt (1967) 67 SR (NSW) 236 at 245 (CA); Re Gruzman (1968) 70 SR (NSW) 316 at 323 (CA); Re B [1981] 2 NSWLR 372 at 381–382 per Moffitt P; New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 204 per Kirby P. 117 ACT, r 19.1; NSW, r 19.1; NT, r 17.6; Qld, r 19.1; SA, r 19.1; Vic, r 19.1; WA, r 34(1). Equivalent provision is made in the barristers’ rules: ACT, r 21; NSW, r 24; NT, r 21; Qld, r 26; SA, r 26; Tas, para 34; Vic, r 24; WA, r 26. 118 Civil Procedure Act 2010 (Vic), s 21 (which proscribes a person to whom the overarching obligations apply, which includes a lawyer (s 10(1)), in respect of a civil proceeding from engaging in conduct that is misleading or deceptive, or is likely to mislead or deceive). 119 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 73 per Parker J. See also at 60 per Ipp J; Tombling v Universal Bulb Co Ltd [1951] 2 TLR 289 at 297 per Denning LJ; Abse v Smith [1986] 1 QB 536 at 546 per Donaldson MR; Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 at 193 per Ipp J; Public Trustee v By Products Traders Pte Ltd [2005] 3 SLR(R) 449 at [35] per V K Rajah J.

[17.100]

17 Duty to the Court

565

unswerving and unwaverable observance of it by counsel is essential to maintain and justify the confidence which every court rightly and necessarily puts in all counsel who appear before it.

Misleading a court, unless warranted by the law,120 undermines the confidence that courts and fellow lawyers can thereafter place in a lawyer’s integrity.121 For this reason, wilfully misleading the court has been judicially described as “outrageously dishonourable” and, as such, deserving of severe disciplinary action:122 see [25.10]. So great was the obligation resting on barristers to be truthful that their allegations of fact to courts were once treated as evidence.123 Although no longer so, lawyers’ duty not to mislead a court remains a touchstone of the adversary system. It extends to all representations to the court, including in the drawing of pleadings and conducting subsequent stages in a case.124 It applies with equal vigour to the advocate who gives evidence to the court.125 In this latter context, the obligation of utmost candour cannot be shaken off or forgotten simply because the holder of the office has not been practising the daily work of a lawyer or is not appearing as an advocate. In this respect, it has been said that “[t]here is no status of a partial barrister, or a barrister for some purposes or at some hours only”.126 Duty is both proscriptive and prescriptive

[17.100] The duty of candour prohibits a lawyer from being a party to the presentation to the court of any evidence, or the making of any statement, which is to the lawyer’s knowledge false or misleading.127 It requires her or him to inform the court of any misapprehension of the court as to the effect of an order it is making.128 It also requires lawyers to take all necessary steps to correct any misleading statement they have unknowingly made to the court upon becoming 120 For example, the failure to call an available and relevant witness (Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR) or objecting to highly pertinent but inadmissible evidence. These may have the practical effect of obstructing truth or causing a court to mislead itself, but are lawful. They are “the result of the law”: New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 205 per Kirby P. There are also other occasions where the public interest in truth is outweighed by some other public interest. Legal professional privilege is an example: see Ch 11. 121 Swinburne v David Syme & Co [1909] VLR 550 at 570 per Madden CJ; Re Foster (1950) 50 SR (NSW) 149 at 152 per Street CJ; Abse v Smith [1986] 1 QB 536 at 545 per Donaldson MR. 122 Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 230 per Clarke JA; Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 58 per Ipp J. 123 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 204 per Kirby P. 124 Rondel v Worsley [1969] 1 AC 191 at 231 per Lord Reid. 125 New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 233 per Moffitt P; New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 209 per Kirby P. 126 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 204 per Kirby P (adding that being a barrister “is a role with obligations to courts which cannot be ignored by a schizophrenic-like delineation between activities in court as a policeman [or other occupation] and activities as a barrister”: at 204–205). 127 Re Gruzman (1968) 70 SR (NSW) 316 at 323 (CA). 128 ACT, r 19.11; NSW, r 19.11; NT, r 17.17; Qld, r 19.11; SA, r 19.11; Vic, r 19.11; WA, r 36. Equivalent provision is made in the barristers’ rules: ACT, r 31; NSW, r 34; NT, r 31; Qld, r 36; SA, r 36; Vic, r 34; WA, r 36.

566

Lawyers’ Professional Responsibility

[17.100]

aware of it.129 So a lawyer misleads the court if, having led the court to believe a fact to be true, in failing to correct it upon discovering it to be false at any time prior to judgment. Stuart-Smith LJ stated the relevant law on this point in Vernon v Bosley (No 2) as follows:130 [W]here the case has been conducted on the basis of certain material facts which are an essential part of the party’s case … which were discovered before judgment to be significantly different, the court is not being misled by the failure of the defendant to put before it material of which she could or should have been aware, but by the failure of the plaintiff and his advisers to correct an incorrect appreciation which the court will otherwise have as a result of their conduct of [the] case.

Vernon involved an action by the plaintiff for nervous shock, and a failure to disclose to the court information coming to light before its final order indicating the plaintiff’s medical condition to be less severe than the court had been led to believe. The plaintiff was running contradictory cases in simultaneous proceedings in the hope of gaining advantage in each – in a separate proceeding in which he was seeking custody of his children, the plaintiff adduced from the same psychiatrist who had given evidence in the nervous shock claim a prognosis different to that adduced in the latter proceedings. The English Court of Appeal held that the failure of the plaintiff’s lawyers to make this disclosure before the court’s final order had been drawn meant that the court had been misled. Stuart-Smith LJ held that counsel should have advised the plaintiff to disclose, and withdrawn if the client refused that advice.131 Thorpe LJ preferred a different approach, requiring counsel to have disclosed the relevant material to the opponent and, aside from a contrary agreement between the parties, also to the judge. His Lordship reasoned that were the duty of counsel to require no more than withdrawal from the case, there remained a risk of injustice.132 This approach, though it has the merit of avoiding a potential injustice, is inconsistent with the tenor of Australian professional rules, which generally proscribe lawyers making any court disclosure without client consent:133 see [17.130].

129 ACT, r 19.2; NSW, r 19.2; NT, r 17.7; Qld, r 19.2; SA, r 19.2; Vic, r 19.2; WA, r 34(2). Equivalent provision is made in the barristers’ rules: ACT, r 22; NSW, r 25; NT, r 22; Qld, r 27; SA, r 27; Vic, r 25; WA, r 27. 130 Vernon v Bosley (No 2) [1999] QB 18 at 38. See also at 63 per Thorpe LJ; Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 at 193 per Ipp J (who, in referring to Vernon v Bosley, remarked that “[a] trend towards a stringent duty of disclosure has become discernible”); CSR Ltd v D’Arcy [1999] NSWCA 216 at [53] per Mason P (noting that Vernon v Bosley “provides a timely reminder of the paramount duties resting upon legal practitioners stemming from their role as officers of the court”); Perpetual Trustee Co Ltd v Cowley [2010] QSC 65 at [17], [130] per Atkinson J. 131 Vernon v Bosley (No 2) [1999] QB 18 at 39. 132 Vernon v Bosley (No 2) [1999] QB 18 at 64. 133 See, for example, O’Neill v Hayley (No 1) (2015) 301 FLR 374 (where solicitors were granted leave to withdraw in the face of discordance between information the client disclosed to them and the responses the client had given in cross-examination, but without disclosing the discordance in question to the court).

[17.110]

17 Duty to the Court

567

Limits to the duty

[17.105] A lawyer would, it is said, “fail in his duty to his own client were he to supplement the deficiencies in his opponent’s evidence”.134 It follows that, in line with provisions in professional rules, a lawyer does not make a misleading statement to a court merely by not correcting an error stated to the court by the opponent or any other person.135 But the rules do direct a lawyer to alert the opponent and, if necessary, inform the court if any express concession by the opponent in a civil trial about evidence, case law or legislation is contrary to the true position and believed to have been made by mistake.136 So for the purposes of the duty of candour, disclosure-wise there is a need to distinguish unfavourable primary legal materials from unfavourable evidence. False documents

[17.110] A lawyer must not knowingly submit a false document to the court.137 He or she must not therefore be party to an affidavit that contains any untruth or misleading statement, a point elaborated by Ipp J in Kyle v Legal Practitioners Complaints Committee as follows:138 Lawyers may not, consistently with their ethical duties and duties to the court, prepare and file affidavits known by them to be perjured, whether the affidavits are made by their clients or other witnesses … In England, the ethical rule is that lawyers should not produce witness statements that they know to be false or where they know that the witness does not believe the statement to be true in all respects. Further, if, after filing a witness statement, a lawyer is put on enquiry as to the truth of the facts stated in the statement, the lawyer should, where practicable, check whether those facts are true. If the lawyer then discovers that the witness statement which has been served is incorrect, the lawyer must inform the other parties immediately … In my view this rule reflects the duties that lawyers in this country owe to the court.

An affidavit is not a pleading, but a statement of facts for the information of the judicial tribunal. In Re Thom139 this led the court to brand a practice of stating in an affidavit that the deponent does not admit a charge the deponent knows to be a true charge as “a very reprehensible one”; the concern is that it gives the court the misleading impression that the allegation is unfounded. 134 Khudados v Hayden [2007] EWCA Civ 1316 at [38] per Ward LJ. 135 ACT, r 19.3; NSW, r 19.3; NT, r 17.8; Qld, r 19.3; SA, r 19.3; Vic, r 19.3; WA, r 34(3). The former Law Council rules, which in this sense remain reflected in the Northern Territory and Western Australia, added that it is not misleading to fail to disclose facts concerning a client’s character or past when the lawyer makes other statements on those matters that are not themselves misleading: Law Council of Australia, Model Rules of Professional Conduct and Practice, r 14.10; NT, r 17.15; WA, r 34(11). Equivalent provision is made in the Northern Territory barristers’ rules, again following an earlier version of the ABA rules: NT, r 29. 136 Equivalent provision is made in the barristers’ rules: ACT, r 19.12; NSW, r 19.12; Qld, r 19.12; SA, r 19.12; Vic, r 19.12. Equivalent provision is made in the barristers’ rules: ACT, r 23; NSW, r 26; NT, r 23; Qld, r 28; SA, r 28; Vic, r 26; WA, r 28. 137 Rajasooria v Disciplinary Committee [1955] 1 WLR 405 at 413 per Lord Cohen (PC). 138 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 60. See also Myers v Elman [1940] AC 282 at 322 per Lord Wright; Coe v New South Wales Bar Association [2000] NSWCA 13. 139 Re Thom (1918) 18 SR (NSW) 70 at 73 per Cullen CJ, with whom Gordon and Feruson JJ concurred.

568

Lawyers’ Professional Responsibility

[17.115]

The foregoing does not mean that the contents of pleadings can never be misleading. As pleadings are intended to be a mechanism for the purpose of arriving at the issues in dispute, as well as defining and crystallising the issues, lawyers should not knowingly make false allegations of fact in pleadings. If, after making a factual allegation in a pleading that is before the court, a lawyer discovers the allegation to be false, there is case authority that the lawyer will mislead the court if he or she fails to disclose the true position.140 Yet as the professional rules generally proscribe lawyers from disclosing to the court that a document tendered to the court is false or misleading without the client’s consent – which if not forthcoming leaves the lawyer with no option but to withdraw – it is unclear whether the same should apply in respect of pleadings. Half-truths

[17.115] Lawyers must eschew statements or conduct that are half-truths, or otherwise leave the court with an incorrect impression. The observations of the Cullen CJ in Re Thom are instructive in this context:141 It is perhaps easy by casuistical reasoning to reconcile one’s mind to a statement that is in fact misleading by considering that the deponent is not under any obligation to make a complete disclosure. By this means a practitioner may be led into presenting a statement of fact which, although it may not be capable of being pronounced directly untrue in one particular or another, still presents a body of information that is misleading, and conceals from the mind of the tribunal the true state of facts which the deponent is professing to place before it. For that reason it is proper on such an occasion as this to express condemnation of any such casuistical paltering with the exact truth of the case.

The classic case of half-truths is Meek v Fleming.142 The plaintiff claimed damages for alleged assault and wrongful imprisonment against the defendant, then a chief inspector in the police force. Between the date when the writ was lodged and the date of trial, the defendant was demoted to station sergeant on being found guilty by the police disciplinary board of being a party to the deception of a court in another matter. His counsel chose not to disclose the demotion to the court. Instead, the defendant appeared in plain clothes, was referred to as “Mr” and was not asked his name and rank. However, the plaintiff’s counsel and the judge frequently addressed the defendant as “inspector” or “chief inspector” and nothing was done to disabuse them. Holroyd-Pearce LJ observed that “[t]he fact that the defendant’s advisers were prepared to act as they did showed the great importance which they attached to the facts concealed”.143 His Lordship considered that, by virtue of the concealment, the judge and jury were misled in an important matter, the defendant’s credibility.144 This led him to conclude that it would be “an intolerable infraction on the 140 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 60 per Ipp J. 141 Re Thom (1918) 18 SR (NSW) 70 at 74–75. See also Forster v Legal Services Board (2013) 40 VR 587 at [161], [162] per Kyrou AJA, with whom Weinberg and Harper JJA concurred; Harle v McGarvie [2015] VSC 697 at [91]–[93] per Zammit J. 142 Meek v Fleming [1961] 2 QB 366. 143 Meek v Fleming [1961] 2 QB 366 at 377. 144 Meek v Fleming [1961] 2 QB 366 at 379.

[17.120]

17 Duty to the Court

569

principles of justice” to allow a “not guilty” verdict to stand where the actions of the defendant and his counsel had enabled the former to “masquerade as a chief inspector of unblemished reputation enjoying such advantage as that status and character would give him at the trial”.145 In short, “the duty to the court here was unwarrantably subordinated to the duty of the client”.146 Especial candour in ex parte applications

[17.120] The unique nature of ex parte applications in an adversarial system demands especial candour on behalf of applicants to avoid an abuse of the court’s processes. An ex parte applicant, to fulfil this duty, must supply “the place of the absent party to the extent of bringing forward all material facts which that party would presumably have brought forward in his defence to that application”.147 Lawyers on ex parte applications must therefore display the utmost fairness and good faith, and see that all relevant matters, for and against the application, are brought to the court’s attention.148 The professional rules reflect this duty, requiring a lawyer seeking ex parte interlocutory relief to disclose to the court all matters in her or his knowledge that provide reasonable grounds to believe would support an argument against granting the relief or limiting its terms adversely to the client.149 For this purpose, a lawyer should seek instructions for the waiver of legal professional privilege so as to permit disclosure of relevant matters to the court. If the client refuses to waive the privilege, the lawyer must inform the client of the possible consequences of this refusal150 and inform the court that no assurance can be given that all matters that should be disclosed have been disclosed.151 145 Meek v Fleming [1961] 2 QB 366 at 380. See also at 380–383 per Willmer J, at 383–384 per Pearson LJ. 146 Meek v Fleming [1961] 2 QB 366 at 379. 147 Thomas A Edison Ltd v Bullock (1912) 15 CLR 679 at 682 per Isaacs J. See also Rybak v Langbar International Ltd [2011] PNLR 16 at [18]–[20] per Morgan J; Williams v Kim Management Pty Ltd [2013] 1 Qd R 387 at [47]–[53] per Dalton J. 148 Re Cooke (1889) 5 TLR 407 at 409 per Lord Esher MR. 149 ACT, r 19.4; NSW, r 19.4; NT, r 17.9; Qld, r 19.4; SA, r 19.4; Vic, r 19.4; WA, r 34(4). Equivalent provision is made in the barristers’ rules: ACT, r 24; NSW, r 27; NT, r 24; Qld, r 29; SA, r 29; Vic, r 27; WA, r 29. 150 A court that is not apprised of all relevant and material information on an ex parte application is unlikely to accede to it, especially where the consequences for the defendant of the order sought are potentially severe. Moreover, even if the court nonetheless grants the order sought, it is liable to be dissolved upon subsequent application. See, for example, Barneys Blu-Crete Pty Ltd v Australian Workers’ Union (1979) 43 FLR 463. 151 ACT, r 19.5; NSW, r 19.5; NT, r 17.10; Qld, r 19.5; SA, r 19.5; Vic, r 19.5; WA, r 34(5). Equivalent provision is made in the barristers’ rules: ACT, r 24A; NSW, r 28; NT, r 24A; Qld, r 30; SA, r 30; Vic, r 28; WA, r 30. In recommending the text of the earlier iteration of this rule, the concern was that “legal professional privilege could be maintained by a client in such a way as to embarrass the administration of justice in relation to ex parte orders”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 3. In order to avoid that consequence, the Committee resolved to “make clear counsel’s duty and also to protect the interests of clients who wish to do the right thing if they knew what that was” and that the rule as worded would “achieve a balance of the various interests … with the appropriate weighting in favour of the administration of justice”.

570

Lawyers’ Professional Responsibility

[17.125]

Verification of client’s narrative

[17.125] Lawyers should remain alert to the importance of fulfilling the duty of candour owed to the court. A lawyer must not “accept a client’s instructions uncritically” but instead “critically assess those instructions to see whether they can properly translate into pleadings”.152 This may well involve bringing caution, even mild scepticism, to a client’s narrative.153 Lawyers must take reasonable steps to verify a client’s contentions, especially for serious allegations. In Y v M,154 for example, Temm J found that a cause of a misleading affidavit in a custody and access dispute (which included allegations of child sexual abuse) was the “unquestioning acceptance” by the lawyer of the mother’s account. If doubtful as to the veracity of instructions or their potential to mislead, a lawyer should press the client until properly satisfied that this potential is removed, and in the meantime not put submissions to the court that are potentially misleading.155 The point may be reached where the lawyer’s misgivings regarding a client’s narrative of events means that he or she should withdraw from the representation. Yet the fact that the lawyer’s personal belief – and one the lawyer has been unable to confirm, whether from direct knowledge or from necessary inference in the circumstances – is that the client is not telling the truth does not prevent the lawyer conducting the case in accordance with the client’s instructions.156 Client perjury Where perjury has been committed

[17.130] The professional rules generally require a lawyer who, at any time before judgment is delivered, is informed by a client that the client (or another person procured by the client) has lied in a material particular to the court, falsified a document that has been tendered, or suppressed material evidence on a topic where there was a positive duty to make disclosure to the court, to advise the client that the court should be informed of the lie, falsification or suppression, and request authority to do so.157 If the client refuses that request, the lawyer must withdraw from the case but otherwise may not inform the court of the lie, falsification or suppression.158 This outcome serves to place the lawyer’s duty of confidentiality – aimed at encouraging the client to be forthright with the lawyer (see [10.10]) – ahead of ensuring the truth is presented to the court. For this reason, there are those, including some within the judiciary, who maintain that disclosure to the court is the appropriate course, for otherwise the court is misled.159 The 152 WA EPG, cl 7.9. 153 See Shirvington, “Going Behind Clients’ Instructions” (1998) 36 (May) LSJ 32. 154 Y v M [1994] 3 NZLR 581 at 590. 155 Kavia Holdings Pty Ltd v Werncog Pty Ltd [1999] NSWSC 839 at [2] per Santow J. 156 New South Wales Bar Association v Punch [2008] NSWADT 78 at [23]–[25]. 157 ACT, r 20.1; NSW, r 20.1; NT, rr 11.1.1, 15, 17.18; Qld, r 20.1; SA, r 20.1; Vic, r 20.1; WA, r 35(1). Equivalent provision is made in the barristers’ rules: ACT, r 32; NSW, r 79; NT, r 32; Qld, r 78; SA, r 78; Tas, para 40; Vic, r 79; WA, r 78. 158 Perpetual Trustee Co Ltd v Cowley [2010] QSC 65 at [130]–[132] per Atkinson J. 159 See, for example, Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at [13] per Ipp J.

[17.130]

17 Duty to the Court

571

ethical challenges inherent in this scenario have inclined American rule-makers towards this view. The relevant rule reads as follows:160 If a lawyer, the lawyer’s client, or a witness called by the lawyer, has offered material evidence and the lawyer comes to know of its falsity, the lawyer shall take reasonable remedial measures, including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer evidence, other than the testimony of a defendant in a criminal matter, that the lawyer reasonably believes is false.

The commentary to this rule states that if the lawyer’s withdrawal is not permitted or will not undo the effect of the false evidence, the lawyer must make disclosure to the tribunal as is reasonably necessary to remedy the situation, even if doing so would compromise confidentiality. It is then left to the tribunal to determine what should be done, whether by making a statement about the matter to the trier of fact, ordering a mistrial or perhaps doing nothing. The rule-makers’ concern was that unless it is understood that the lawyer will act upon the duty to disclose the existence of false evidence, a client could simply reject the lawyer’s advice to reveal the false evidence, insist that the lawyer keep silent, and thereby “in effect coerce the lawyer into being a party to fraud on the court”.161 The position is different where the client maintains her or his innocence against compelling prosecution evidence, and refuses to concede that he or she has adduced perjured evidence. In these circumstances, it is the lawyer’s duty to bring to the client’s attention the relevant inconsistencies, and to invite the client, if appropriate, to consider a guilty plea. To the extent that this involves the client altering her or his version of the events, it is not to be construed as an admission of perjury, and does not by itself justify the lawyer withdrawing from the retainer. As explained by the Supreme Court of the United States:162 A lawyer’s certainty that a change in his client’s recollection is harbinger of intended perjury – as well as judicial review of such apparent certainty – should be tempered by the realization that, after reflection, the most honest witness may recall (or sincerely believe he recalls) details that he previously overlooked.

The lawyer cannot, as a result, pressure the client to enter a guilty plea on the pain of otherwise refusing to act further unless the client has admitted perjury or clearly offered perjured evidence.163 Outside of these latter scenarios, the retainer must continue, albeit in the face of a practical challenge to explain the client’s altered version of events to the jury.

160 US, r 3.3(a)(3). Cf Thrower, “Neither Reasonable nor Remedial: The Hopeless Contradictions of the Legal Ethics Measures to Prevent Perjury” (2010) 58 Cleveland State L Rev 781 (who believes that the rule is not sufficiently explicit and does not protect the lawyer from the potential adverse legal and professional consequences of breaching confidentiality). 161 US, r 3.3(a)(3), cmt [11]. 162 Nix v Whiteside (1986) 475 US 157 at 190–191 per Stevens J. 163 See, for example, R v Nerbas [2012] 1 Qd R 362 (leave granted to the appellant to withdraw his plea of guilty, which the court found had been pressured by his lawyers threatening to terminate the representation unless the client pled guilty).

572

Lawyers’ Professional Responsibility

[17.135]

Where perjury is proposed

[17.135] Upon being informed by a client that he or she proposes to lead perjured testimony, the lawyer’s first duty is to attempt to dissuade the client from this unlawful course of conduct. A lawyer who knows that a client, or witness on a client’s behalf, will present perjured evidence cannot be a party to this. The United States Supreme Court has, to this end, noted that “[t]he suggestion sometimes made that ‘a lawyer must believe his client, not judge him’ in no sense means a lawyer can honorably be a party to or in any way give aid to presenting known perjury”.164 At the same time, in an earlier decision the District of Columbia Court of Appeals saw the protection of client confidentiality as so basic a tenet of professional conduct “that it yields only in the rarest of real ethical dilemmas”, wherein “advice, disassociation, and even passive representation may be resorted to in lieu of exposure”.165 As to the latter, the court referred to the (then) applicable American Bar Association Standards for Criminal Justice, which envisaged continuing, albeit limited, representation of an accused who insists on testifying falsely if withdrawal is not feasible or permitted by the court. The relevant standard read as follows:166 If withdrawal from the case is not feasible or is not permitted by the court, or if the situation arises during the trial and the defendant insists upon testifying falsely in his own behalf, the lawyer may not lend his aid to the perjury. Before the defendant takes the stand in these circumstances, the lawyer should make a record of the fact that the defendant is taking the stand against the advice of counsel in some appropriate manner without revealing the fact to the court. The lawyer must confine his examination to identifying the witness as the defendant and permitting him to make his statement to the trier or the triers of the facts; the lawyer may not engage in direct examination of the defendant as a witness in the conventional manner and may not later argue the defendant’s known false version of facts to the jury as worthy of belief and he may not recite or rely upon the false testimony in his closing argument.

A majority of the court endorsed this approach as “meet[ing] both ethical requirements of protecting clients’ confidences and refraining from wrongdoing”.167 An alternative way of approaching the issue was proposed by the dissentient, Reilly CJ, who reasoned that as perjury is a crime, a client who insists on the presentation of perjured evidence reveals an intention to commit a crime, which rules not infrequently mark as an exception to confidentiality.168 To the extent that perjury is a “serious criminal offence” in the context of the relevant Australian rules (see [10.15]), a similar argument could be made in this jurisdiction, thereby 164 Nix v Whiteside (1986) 475 US 157 at 171 per Burger CJ, in an opinion in which White, Powell, Rehnquist and O’Connor JJ joined. Cf at 177 per Brennan J. 165 Butler v United States (1980) 414 A 2d 844 at 849. 166 ABA, Standards for Criminal Justice: Defense Function (Approved Draft, 1971), standard 7.7. The corresponding rule in the current standards (ABA, Standards for Criminal Justice: Prosecution and Defense Function (4th ed, 2014), standard 4–7.6(b)) simply states that “[d]efense counsel should not knowingly offer false evidence, whether by documents, tangible evidence, or the testimony of witnesses, or fail to take reasonable remedial measures upon discovery of its falsity”. 167 Butler v United States (1980) 414 A 2d 844 at 850. 168 Butler v United States (1980) 414 A 2d 844 at 857.

[17.145]

17 Duty to the Court

573

justifying the timely disclosure to the judge of the intended perjury as a means of preventing the client’s commission of that offence. Client’s intention to disobey court order

[17.140] A lawyer must not advise a client, or indeed a third party, to disobey a court order,169 or give this (tacit) encouragement or approval. A lawyer whose client discloses an intention to disobey a court order must advise against that course and warn of its dangers, and not advise how to carry out or conceal that course.170 But the lawyer must not inform the court or the opponent of the client’s intention unless previously authorised by the client or the lawyer believes on reasonable grounds that the client’s conduct constitutes a threat to any person’s safety. This recognises that lawyers should not advise clients how to circumvent orders of the court and that the public interest in confidentiality of lawyer–client communications may, in some circumstances, be outweighed by the public interest in securing the safety of an individual, group or the community in general: see [10.100]–[10.135]. Duty not to illegitimately destroy or remove documents

[17.145] Lawyers must not be a party to the illegitimate destruction or removal of documents. Although a client may be tempted to destroy documents that are unsupportive of its case, lawyers must not advise removal or destruction of documents if there is a prospect that these are relevant to the prospective or existing litigation. In New South Wales the issue was addressed by the now superseded Legal Profession Regulation 2005 (NSW), which made provision as follows:171 An Australian legal practitioner must not give advice to a client to the effect that a document should be destroyed, or should be moved from the place at which it is kept or from the person who has possession or control of it, if the practitioner is aware that: (a) it is likely that legal proceedings will be commenced in relation to which the document may be required, and (b) following the advice will result in the document being unavailable or unusable for the purposes of those proceedings. An Australian legal practitioner must not destroy a document or move it from the place at which it is kept or from the person who has possession or control of it, or aid or abet a person in the destruction of a document or in moving it from the place at which it is kept or from the person who has possession or control of it, if the legal practitioner is aware that: (a) it is likely that legal proceedings will be commenced in relation to which the 169 See, for example, K(R) v K(S) (2006) 269 DLR (4th) 224 (where, in family law proceedings for custody of a child, the mother’s lawyer advised her client to disobey a court order to return her son to the father after an access visit, which advice was motivated by an allegation that the father had sexually abused the son, the Alberta Court of Queen’s Bench remarked that “counsel ought not to have recommended to the client that she disobey the court order” (at [23] per Slatter J), but should have addressed a genuine concern about the child’s welfare via an urgent application to the court). 170 ACT, r 20.3; NSW, r 20.3; NT, r 17.20; Qld, r 20.3; SA, r 20.3; Vic, r 20.3; WA, r 35(4). Equivalent provision is made in the barristers’ rules: ACT, r 34; NSW, r 81; NT, r 34; Qld, r 80; SA, r 80; Vic, r 81; WA, r 80. 171 Legal Profession Regulation 2005 (NSW), cll 177(1), 177(2) (repealed) (originally Legal Profession Regulation 2002 (NSW), cl 142A (with effect from 22 November 2002)).

574

Lawyers’ Professional Responsibility

[17.145]

document may be required, and (b) the destruction or moving of the document will result in the document being unavailable or unusable for the purposes of those proceedings.

The foregoing was expressed to apply even in the absence of an indication that a specific person intended to commence proceedings in relation to which the document concerned may have been required.172 The regulations declared a contravention of the foregoing to be professional misconduct, unless the lawyer merely moved a document to a person who was lawfully entitled to its possession or control upon request to do so.173 No equivalent appears in the current uniform law scheme, or via professional or statutory rule in other Australian jurisdictions.174 However, in Victoria, following judicial criticism of a law firm’s advice to a client to destroy or remove documentation relevant to the litigation in issue,175 the Victorian Parliament made it a crime punishable by a fine and/or imprisonment for a person (including a lawyer) to wrongfully destroy documents.176 In any case, criminal law statutes elsewhere make general provision criminalising the wilful destruction of what a person knows may be required as evidence in a proceeding.177 A conviction therefor, which is not confined to physical evidence but can include electronic evidence – and to this end impacts upon advice, say, to delete content on client social media sites178 – may be amenable to a severe disciplinary sanction for the lawyer in question.179

172 Legal Profession Regulation 2005 (NSW), cl 177(3) (repealed). 173 Legal Profession Regulation 2005 (NSW), cll 177(4), 177(5) (repealed). 174 Cf Can CPC, r 5.1-2A (“A lawyer must not counsel or participate in the concealment, destruction or alteration of incriminating physical evidence or otherwise act so as to obstruct or attempt to obstruct the course of justice”). 175 In McCabe v British Tobacco Australia Services Ltd [2002] VSC 73 Eames J made findings that the defendant had destroyed or removed documents that might otherwise have been the subject of discovery, and that the defendant and its solicitors had subverted the process of discovery in the case with the intention of denying a fair trial to the plaintiff. The Victorian Court of Appeal held that Eames J had fallen into significant error in his determination of the issues, including his findings of improper conduct by the solicitors: British American Tobacco Australia Services Ltd v Cowell (2002) 7 VR 524. 176 Crimes Act 1958 (Vic), Pt I, Div 5 (inserted by the Crimes (Document Destruction) Act 2006 (Vic)), with effect from 1 September 2006). 177 Criminal Code 2002 (ACT), s 706(1); Criminal Code (NT), s 102; Criminal Code (Qld), s 129; Criminal Law Consolidation Act 1935 (SA), s 243; Criminal Code (Tas), s 99; Criminal Code (WA), s 132 (see also Corruption, Crime and Misconduct Act 2003 (WA), s 171). See also Crimes Act 1900 (NSW), s 192F(1) (limited to the destruction or concealment of accounting records). 178 See Browning, “A Clean Slate or a Trip to the Disciplinary Board? Ethical Considerations in Advising Clients to ‘Clean Up’ Their Social Media Profiles” (2015) 48 Creighton L Rev 763 at 769–779. 179 See, for example, Legal Profession Complaints Committee v Brickhill [2013] WASC 369 (practitioner who counselled a person to destroy relevant evidence contrary to s 171 of the Corruption, Crime and Misconduct Act 2003 (WA) “clearly and consciously failed to meet the standards of conduct and integrity required of legal practitioners” (at [25]) and, in tandem with having knowingly gave false evidence before the Corruption and Crime Commission, was struck off the roll).

[17.155]

17 Duty to the Court

575

DEALING WITH WITNESSES Importance of maintaining integrity

[17.150] Consistent with what was noted in the preceding paragraph, the lawyer’s lawyer’s role as a participant in the administration of justice attracts the responsibility to protect the integrity of evidence. Any lawyer behaviour that upsets that integrity, or appears to do so, can negatively impact on public confidence in the legal process and consequently reduce the reputation of, and trust placed in, the profession. Evidence of questionable integrity may, in any case, be inadmissible or accorded less weight. The lawyer’s role as protector of the integrity of evidence is reflected in several ways in connection with lawyer dealings with witnesses, which are discussed below. Informing these is the need for the relationship between a lawyer and witness to be, and be seen to be, on a proper professional plane. No conferring with witnesses together

[17.155] A lawyer should not, as a general rule, confer with or condone another lawyer conferring with more than one lay witness at the one time, about any issue the lawyer believes may be contentious at a hearing and could be affected by, or may affect, evidence any of those witnesses may give.180 This rule is directed at reducing the risk of contamination of evidence through collusion, an interest that outweighs any considerations of efficiency that stem from multiple interviewing.181 Ultimately, a breach of this rule is counterproductive, as explained by a Victorian judge in the context of expert witnesses:182 Meetings between experts to be called by a party for the purpose of ensuring a “common line” in the case has a number of vices. The exercise is ultimately self-defeating. In the first place the essential independence of the witness is compromised – the witness is no longer giving exclusively his or her own opinion – the evidence is in danger of becoming a “team presentation”. As a consequence, the overriding duty to assist the court on the expert subject matter is compromised and the witness approaches the role of the advocate for the person retaining him or her. Secondly, adequate testing of the evidence and the information relied upon becomes problematic. The content of discussions at such meetings is rarely likely to be recorded, and the influences which are brought to bear are not likely to be assessed with any degree of confidence. The credibility of the participating witnesses will suffer accordingly.

For example, in Day v Perisher Blue Pty Ltd183 a teleconference with witnesses discussing their evidence occurred, leaving Sheller JA with the distinct impression that this was done to ensure that they would all speak with one voice as to the relevant events. Such an approach, his Honour noted, “seriously undermines the 180 ACT, r 25.1; NSW, r 25.1; NT, r 17.30; Qld, r 25.1; SA, r 25.1; Vic, r 25.1; WA, r 40(1). Equivalent provision is made in the barristers’ rules: ACT, r 46; NSW, r 71; NT, r 46; Qld, r 70; SA, r 70; Vic, r 71; WA, r 70. 181 ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 10. 182 Roads Corporation v Love [2010] VSC 253 at [36] per Vickery J. See also Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 at [30] per Sheller JA. 183 Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731.

576

Lawyers’ Professional Responsibility

[17.160]

process by which evidence is taken”, describing the practice as “improper”.184 The court referred the matter to the Legal Services Commissioner, albeit giving the solicitors seven days to show cause why no such reference should be made.185 The proscription extends beyond witnesses to conferring with multiple clients in a matter. But in the latter context, it must admit scope for the lawyer conferring with more than one client regarding matters that require agreement between clients, such as undertakings to the court, admissions or concessions of fact, amendments of pleadings and compromise.186 Also, in Roads Corporation v Love187 Vickery J envisaged that pre-trial meetings of witnesses is not necessarily improper where convened for the purpose of lawyers being supplied information that in turn is provided to a party with legal advice, or pursuant to a practice of exchanging expert witness draft reports where the opinion of one expert depends upon information to be provided by others. No suborning of witnesses

[17.160] Under no circumstances may a lawyer advise or suggest to a witness that false evidence should be given, or suborn a witness.188 So in Kennedy v Council of the Incorporated Law Institute of New South Wales189 the solicitor, who acted for the plaintiff consequent upon the death of her husband as a result of a fall from a train, sought to persuade a witness for the defendant to give an account of the accident in terms contrary to an earlier statement the witness had made, and favourable to the plaintiff. This conduct, which interfered with the due administration of justice, was held to justify the solicitor being struck off. The case law reveals other instances of striking off in similar circumstances.190 A finding of professional misconduct, moreover, recently ensued against a lawyer who, in the course of representing a defendant charged with (and then later convicted of) sexual offences against 184 Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 at [30]. 185 Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 at [36], [37]. See also Legal Profession Complaints Committee v Caine [2010] WASAT 178 at [141]–[148] (involving a finding of unsatisfactory professional conduct against a lawyer who had encouraged witnesses to confer). 186 ACT, r 25.2; NSW, r 25.2; NT, r 17.31; Qld, r 25.2; SA, r 25.2; Vic, r 25.2; WA, r 40(2). Equivalent provision is made in the barristers’ rules: ACT, r 47; NSW, r 72; NT, r 47; Qld, r 71; SA, r 71; Vic, r 72; WA, r 71. 187 Roads Corporation v Love [2010] VSC 253 at [40]. 188 ACT, r 24.1.1; NSW, r 24.1.1; Qld, r 24.1.1; SA, r 24.1.1; Vic, r 24.1.1; WA, r 39(1). Equivalent provision is made in some barristers’ rules: NSW, r 69(a); Qld, r 68(a); SA, r 68(a); Vic, r 69(a); WA, r 68(a) (cf ACT, r 43; NT, r 43). See Attorney-General v Gregory (unreported, CA(Qld), 4 December 1998) at [4] per de Jersey CJ (“A solicitor who attempts to suborn a witness in criminal court proceedings strikes audaciously into the heart of the judicial process”). 189 Kennedy v Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJR 563 190 See, for example, Legal Practitioners Complaints Committee v Pepe [2008] WASAT 246 (stemming from the respondent’s conviction for attempting to pervert the course of justice, arising out of an attempt to dissuade a potential witness in criminal proceedings from giving evidence); Singh v Legal Services Commissioner [2013] QCA 384 (involving the appellant’s attempt, while practising in Fiji ten years earlier, to bribe a witness to change his evidence, coupled with a failure to notify the Queensland Law Society of his consequent conviction).

[17.165]

17 Duty to the Court

577

children, subjected the complainant to expressions of disapproval (and the prospect of ostracism), stemming from a shared religious heritage, for having assisted the police in the matter.191 No coaching of witnesses

[17.165] A lawyer’s role in protecting the integrity of evidence precludes suggesting to any prospective witness (including a party or the client) the content of evidence the witness should give.192 Encompassed is a duty not suggest answers to questions that might be asked, or suggest words or expressions to a witness.193 As observed by an American court, the lawyer’s “duty is to extract the facts from the witness, not pour them into him; to learn what the witness does know, not to teach him what he ought to know”.194 Also proscribed is counselling a witness to be forgetful and evasive,195 and advising a client or witness of the consequences of giving certain evidence with a view to encouraging that person to illegitimately avoid those consequences.196 The same applies when a witness’ true recollection of events is supplanted by another version suggested by the interviewer, whether by repetitive reading of a statement to the point where the testimony is mere regurgitation or otherwise influencing the witness.197 Especial care must be taken when the interviewee is a child, or otherwise someone suggestible.198 The above does not prohibit a lawyer from expressing a general admonition to tell the truth or testing the evidence a prospective witness plans to give, including drawing the witness’s attention to inconsistencies or other difficulties with it.199 It is not unethical, it has been remarked, “in an arm’s-length interview with a witness, for an attorney to attempt to persuade her, even aggressively, that her initial version 191 Victorian Legal Services Commissioner v Lewenberg [2016] VCAT 439; Victorian Legal Services Commissioner v Lewenberg (No 2) [2016] VCAT 556 (lawyer reprimanded and suspended for 15 months). 192 ACT, r 24.1.2; NSW, r 24.1.2; NT, r 17.28; Qld, r 24.1.2; SA, r 24.1.2; Vic, r 24.1.2; WA, r 39(2). Equivalent provision is made in the barristers’ rules: ACT, r 43; NSW, r 69(b); NT, r 43; Qld, r 68(b); SA, r 68(b); Vic, r 69(b); WA, r 68(b). 193 R v Noble (2000) 117 A Crim R 541 at [4] per McMurdo P, at [19] per Pincus JA; Majinski v State of Western Australia (2013) 226 A Crim R 552 at [30]–[35] per Martin CJ, with whom Buss and Mazza JJA concurred. Cf Restatement, §116, cmt b (“a lawyer may suggest choice of words that might be employed to make the witness’s meaning clear”). 194 Re Eldridge (1880) 82 NY 161 at 171. 195 See, for example, R v Sweeney (1987) 39 CCC (3d) 182 (lawyer who counselled a witness in a judicial proceeding to be forgetful and evasive convicted for attempting to obstruct the course of justice). 196 See Hazard, Ethics in the Practice of Law (Yale University Press, 1978), p 128; Wolfram, Modern Legal Ethics (West Publishing Co, 1986), p 648. 197 Majinski v State of Western Australia (2013) 226 A Crim R 552 at [32] per Martin CJ, with whom Buss and Mazza JJA concurred. 198 Majinski v State of Western Australia (2013) 226 A Crim R 552 at [35] per Martin CJ, with whom Buss and Mazza JJA concurred. 199 ACT, r 24.2; NSW, r 24.2; NT, r 17.29; Qld, r 24.2; SA, r 24.2; Vic, r 24.2; WA, r 39(3). Equivalent provision is made in the barristers’ rules: ACT, r 44; NSW, r 70; NT, r 44; Qld, r 69; SA, r 69; Vic, r 70; WA, r 69.

578

Lawyers’ Professional Responsibility

[17.165]

of a certain fact situation is not complete or accurate”.200 The lawyer’s professional responsibility to a client dictates that he or she should prepare witnesses (including the client) for the type and manner of questioning,201 and not put a witness on the stand without knowing in advance how he or she will respond to vital questions.202 The level of preparation is influenced by the experience of the witness.203 Witness preparation of this kind can actually serve the efficient administration of justice and save time.204 But the line between legitimate advice to a witness and illegitimate witness coaching is not always clear.205 For instance, the practice in some parts of the United States to rehearse witnesses before a team of lawyers, psychologists and public relations people to maximise the impact of their evidence is not one endorsed by Australian courts.206 More generally, an English judge has explained the dangers of witness training as follows:207 Even if the training takes place one-to-one with someone completely remote from the facts of the case itself, the witness may come, even unconsciously, to appreciate which aspects of his evidence are perhaps not quite consistent with what others are saying, or indeed not quite what is required of him. An honest witness may alter the emphasis of his evidence to accommodate what he thinks may be a different, more accurate, or simply better remembered perception of events. A dishonest witness will very rapidly calculate how his testimony may be “improved”. These dangers are present in one-to-one witness training. Where however the witness is jointly trained with other witnesses to the same events, the dangers dramatically increase. Recollections change. Memories are contaminated. Witnesses may bring their respective accounts into what they believe to be better alignment with others. They may be encouraged to do so, consciously or unconsciously. They may collude deliberately. They may be inadvertently contaminated. Whether deliberately or inadvertently, the evidence may no longer be their own. Although none of this is inevitable, the risk that training or coaching may adversely affect the accuracy of the evidence of the individual witness is constant. So we repeat, witness training for criminal trials is prohibited.

200 Resolution Trust Corporation v Bright (1993) 6 F 3d 336 at 341. See also Bonsell v Development Consent Authority [2004] NTSC 64 at [45] per Mildren J; Restatement, §116, cmt b (referring to the legitimacy of a lawyer “revealing to the witness other testimony or evidence that will be presented and asking the witness to reconsider the witness’s recollection or recounting of events in that light”). 201 See Re Equiticorp Finance Ltd (1992) 27 NSWLR 391 at 395 per Young J; Sheppard, “Communications with Witnesses Before and During their Evidence” (1987) 3 Aust Bar Rev 28 at 28–36; Brennan and Pearson, “Why Prepare Witnesses?” (1998) 72 (Oct) LIJ 73; Fowler, “Familiarisation or Coaching?” [2006] NZLJ 111. 202 R v Chapman (1958) 26 WWR 385 at 393 per O’Halloran JA. 203 R v Noble (2000) 117 A Crim R 541 at [19] per Pincus JA. 204 See Applegate, “Witness Preparation” (1989) 68 Tex L Rev 277. It has been noted, to this end, that witness preparation is in line with the rules noted at [17.250], which require limiting evidence to issues genuinely in dispute and taking up as little as possible of the court’s time: Legg, “Preparing Witnesses Effectively” (2003) 41 (Dec) LSJ 60. 205 See Kerrigan, “Witness Preparation” (1999) 30 Texas Tech L Rev 1367; Flowers, “Witness Preparation: Regulating the Profession’s “Dirty Little Secret”” (2011) 38 Hastings Const LQ 1007. 206 Re Equiticorp Finance Ltd (1992) 27 NSWLR 391 at 395 per Young J. 207 R v Momodou [2005] 1 WLR 3442 at [61] per Judge LJ.

[17.175]

17 Duty to the Court

579

No communication in cross-examination

[17.170] The professional rules in most jurisdictions prohibit a lawyer conferring with any witness (including a party or client) he or she has called on any matter related to the proceedings while that witness remains under cross-examination.208 This aims to prevent the coaching or coaxing of a witness or its appearance, and its breach has the capacity to cause a miscarriage of justice209 or professional disciplinary sanction. The rules envisage a limited qualification to the proscription in exceptional circumstances where the lawyer has informed the cross-examiner of an intention to do so, and: (i) believes on reasonable grounds that special circumstances (including the need for instructions on a proposed compromise) require such a conference; (ii) has, if possible, informed the cross-examiner beforehand of the [lawyer’s] intention to do so; and (iii) otherwise does inform the cross-examiner as soon as possible of the [lawyer] having done so.

The above prohibition continues during adjournments of the hearing. But it does not apply if the cross-examiner has given prior consent, for in so doing, he or she can exercise control over protecting the integrity of evidence. No property in a witness

[17.175] No lawyer engaged in a proceeding, criminal or civil, has the sole right to call or discuss the case with a witness.210 There is no “property” in a witness because “the court has a right to every man’s evidence”.211 So, as a general rule, whether or not the opposing party is represented, a lawyer may confer with any witness willing to see her or him, whether or not subpoenaed or to be called by an opposing party. The same applies to expert witnesses,212 who have an overriding

208 ACT, r 26.1; NSW, r 26.1; NT, r 17.32; Qld, r 26.1; SA, r 26.1; Vic, r 26.1; WA, r 41. Equivalent provision is made in the barristers’ rules: ACT, r 48; NSW, r 73; NT, r 48; Qld, r 72; SA, r 72; Vic, r 73; WA, r 72. Cf Sheppard, “Communications with Witnesses Before and During their Evidence” (1987) 3 Aust Bar Rev 28 at 36–39. 209 R v Shepherd [2001] 1 NZLR 161 at [8] per Ellis J (CA) (but on the facts, even though the prosecutor had met with a witness under cross-examination for an hour, the court did not consider that a miscarriage of justice had occurred). 210 R v Shaw (1991) 57 A Crim R 425 at 450 per Nathan J (“eye witnesses do not belong to a camp, but are within the class of persons whom juries expect and are entitled to hear”); Commonwealth Bank of Australia v Cooke [2000] 1 Qd R 7 at 12 per Williams J. 211 Harmony Shipping Co SA v Saudi Europe Line Ltd [1979] 1 WLR 1380 at 1384 per Lord Denning MR. 212 Ward v R (1981) 3 A Crim R 171 at 183 per Moffitt P, at 191 per Lee J; Trade Practices Commission v Arnotts Ltd (No 5) (1990) 21 FCR 324 at 330 per Beaumont J; R v R [1994] 4 All ER 260 at 262–263 per Evans LJ; Connolly v Dale [1996] QB 120 at 126 per Balcombe LJ; Re L (A Minor) [1997] AC 16 at 25 per Lord Jauncey; Interchase Corporation Ltd (in liq) v Grosvenor Hill (Qld) Pty Ltd (No 1) [1999] 1 Qd R 141 at 145 per Pincus JA; Public Transport Authority of Western Australia v Leighton Contractors Pty Ltd (2007) 34 WAR 279 at [28] per McLure JA.

580

Lawyers’ Professional Responsibility

[17.180]

duty to assist the court on matters within their area of expertise;213 otherwise a wealthy client could, say, consult all the acknowledged experts in a field and thereby disable them from giving evidence against her or him.214 The flip side is that a lawyer (other than a prosecutor: see [18.50]–[18.70]) need not disclose to an opponent the existence of a witness who would assist an adversary and injure her or his own client.215 But a lawyer must not prevent or discourage prospective witnesses from conferring with an opponent or being interviewed by another person involved in the proceedings.216 This does not prohibit simply telling a prospective witness that he or she need not agree to confer or be interviewed.217 It follows that, in communicating with a prospective witness, a lawyer must recognise and respect a person’s right to refuse an interview, and pursue it only if the witness is willing.

[17.180] Notwithstanding the basic proposition that there is no property in a witness, as a salutary rule, “[a] solicitor for the adverse interest should be circumspect in approaching a person whose evidence has been opened by the other party”.218 Lawyers should bear in mind the possibility of subsequent accusations of tampering with evidence to be given by that witness, which may reduce the weight of the testimony and the credibility of the lawyer. With this in mind, the former English professional rules advise that, to avoid allegations of evidence tampering, it is wise, “when seeking to interview a witness for the other side, to offer to interview them in the presence of the other side’s representative”.219 Particular care is necessary in criminal proceedings.220 When interviewing a prosecution witness, defence counsel must be careful to ensure that nothing is said or done to intimidate the witness. It is especially unwise to interview complainants in sexual offences without notifying the prosecutor in advance. Both courtesy and self-interest are generally served by making arrangements for the interview 213 See, for example, Federal Court, Practice Note CM7, Expert Witnesses in Proceedings in the Federal Court of Australia (1 August 2011), cl 1.1; ACT CPR, Sch 1 (“Expert witness code of conduct”), cl 1.2(1); NSW UCPR, Sch 7 (“Expert witness code of conduct”), cl 2(1). Supreme Court of Tasmania, Practice Direction No 1 of 2016 (“Expert witness code of conduct”), cl 2; Vic RSC, Form 44A (“Expert witness code of conduct”), cl 1. 214 Harmony Shipping Co SA v Saudi Europe Line Ltd [1979] 1 WLR 1380 at 1386 per Lord Denning MR, at 1387 per Waller LJ; Wimmera Industrial Metals Pty Ltd v Iluka Midwest Ltd [2002] FCA 653 at [46] per Sundberg J. 215 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 205 per Kirby P. 216 ACT, r 23.1; NSW, r 23.1; NT, r 17.33; Qld, r 23.1; SA, r 23.1; Vic, r 23.1; WA, r 38(1). Equivalent provision is made in the barristers’ rules: ACT, r 49; NSW, r 74; NT, r 49; Qld, r 73; SA, r 73; Vic, r 74; WA, r 73. 217 Deacon v Australian Capital Territory (2001) 147 ACTR 1 at [111] per Higgins J. See ACT, r 23.2; NSW, r 23.2; NT, r 17.34; Qld, r 23.2; SA, r 23.2; Vic, r 23.2; WA, r 38(2). Equivalent provision is made in the barristers’ rules: ACT, r 50; NSW, r 75; NT, r 50; Qld, r 74; SA, r 74; Vic, r 75; WA, r 74. 218 Bar Association of Queensland v Lamb [1972] ALR 285 at 286 per Menzies J. See also Shirvington, “Improper Communication” (1994) 32 (Aug) LSJ 19. 219 Solicitors Regulation Authority, The Guide to Professional Conduct of Solicitors, r 11, guidance 13(f) (superseded). 220 The material in this paragraph stems largely from the now superseded New Zealand Law Society, Rules of Professional Conduct for Barristers and Solicitors, r 10.08.

[17.190]

17 Duty to the Court

581

through the prosecutor. In other cases it may be worthwhile, as suggested in the English rule noted above, to conduct the interview in the presence of an independent and reputable person. For example, interviews with child witnesses should be so conducted to ensure that the child is not pressured or unreasonably distressed by the event.221 This is especially so in cases involving allegations of sexual offending. Evidence subject to a pre-existing confidentiality obligation

[17.185] Lawyers may be prevented, by way of injunction, from using information to benefit their client that comes to them via a person who is subject to a contractual or equitable obligation of confidentiality in respect of that information. For example, in AG Australia Holdings Ltd v Burton222 Campbell J issued orders restraining a former employee from disclosing information protected by a confidentiality clause in the employment contract to the solicitors acting against the former employer, and restraining the solicitors in question from inducing or procuring any such breach. Lawyers should accordingly take care in obtaining information from (potential) witnesses that is or may be covered by a contractual (or equitable) confidentiality obligation. The point was made more recently, in the context of expert witnesses, by a Western Australian judge that lawyers should exercise caution “in obtaining advice from an expert who has previously been consulted by another party to the proceedings so as not to encourage a breach of confidentiality”, and that “a prudent solicitor would make it clear that what is sought is an opinion which does not rely on any confidential information”.223 If confidential information is obtained, the lawyers’ ability to continue to act could be jeopardised.224

COMMUNICATIONS AND RELATIONSHIP WITH JUDGE [17.190] To preserve the appearance of integrity in the administration of justice, a lawyer must not deal with a court on terms of familiarity that may reasonably give the appearance that he or she carries special favour with the court.225 This 221 See generally Keough, Child Representation in Family Law (LBC Information Services, 2000), Chs 4–8. 222 AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 at [167]. 223 Rapid Metal Developments (Australia) Pty Ltd v Anderson Formrite Pty Ltd [2005] WASC 255 at [139] per Johnson J. 224 Horton, “Using Information: Witnesses Under Obligations of Confidence” (2002) 22 (Dec) Proctor 16. 225 The point is recognised in the case law (see, for example, Porter v Australian Prudential Regulation Authority [2009] FCA 1148 at [20] per Perram J; Wilson v Department of Human Services – Re Anna [2010] NSWSC 1489 at [108] per Palmer J (discouraging counsels’ salutation to the court (“Good morning, your Honour”) for fear of conveying apparent familiarity with the bench); Hughes v Janrule Pty Ltd [2011] ACTCA 23 at [27] per Penfold J; Hill v Halo Architectural Design Services Pty Ltd [2013] NSWSC 878; Tugrul v Tarrants Financial Consultants Pty Ltd (in liq) [2013] NSWSC 1971 at [19]–[21] per Kunc J; FAL Management Group Pty Ltd v Denham Constructions Pty Ltd [2015] NSWSC 1035 at [4]–[7] per McDougall J) as well as in professional rules: ACT, r 18.1; NSW, r 18.1; NT, r 17.45; Qld, r 18.1; SA, r 18.1; Vic, r 18.1; WA, r 33(1). Equivalent provision is made in the barristers’ rules: ACT, r 61; NSW, r 45; NT, r 61; Qld, r 44; SA, r 44; Vic, r 45; WA, r 44. See further Lilley and Carter, “Communications with the Court” (2013) 87 ALJ 121.

582

Lawyers’ Professional Responsibility

[17.190]

includes using every endeavour to avoid being alone with the judge from the moment the hearing commences until the conclusion of addresses except with the opponent’s prior consent.226 Reflecting the “fundamental principle that a judge must not hear evidence or receive representations from one side behind the back of the other”,227 the professional rules in most jurisdictions contain the following proscription:228 A [lawyer] must not, outside an ex parte application or a hearing of which the opponent has had proper notice, communicate in the opponent’s absence with the court concerning any matter of substance in connection with the current proceedings unless: [1] the court has first communicated with the [lawyer] in such a way as to require the [lawyer] to respond to the court; or [2] the opponent has consented beforehand to the [lawyer] dealing with the court in a specific manner notified to the opponent by the [lawyer].

Outside of the foregoing, communications between a lawyer and the judge (or judge’s associate) should normally be confined to matters concerning practice or procedure.229 Where the opponent consents to the communication, the lawyer must not raise any matters with the court other than those the subject of the consent, and should promptly inform the opponent of what passed between the lawyer and the court.230 For this purpose, communication is viewed broadly, and can encompass not only direct oral or hard copy written communications,231 but electronic communications, including “friending” on social media.232

226 R v Turner [1970] 2 QB 321 at 326 per Lord Parker CJ; R v Lilydale Magistrates Court [1973] VR 122 at 127 per McInerney J; Toronto Harbour Commissioners v THC Parking Inc (1999) 175 DLR (4th) 536 at 555 per Nordheimer J; Anderson Group Pty Ltd v Tynan Motors Pty Ltd [2006] NSWCA 22 at [17] per Basten JA (cf at [142], [143] per Young CJ in Eq). 227 Re JRL (1986) 161 CLR 342 at 346 per Gibbs CJ. 228 ACT, r 22.5; NSW, r 22.5; NT, r 17.40; Qld, r 22.5; SA, r 22.5; Vic, r 22.5; WA, r 37(6). Equivalent provision is made in the barristers’ rules: ACT, r 56; NSW, r 54; NT, r 56; Qld, r 53; SA, r 53; Vic, r 54; WA, r 53. See also US, r 3.5(b) (“A lawyer shall not … communicate ex parte with [a judge] during the proceeding unless authorized to do so by law or court order”). 229 R v Fisher (2009) 22 VR 343 at [38] per Redlich and Dodds-Streeton JJA. 230 ACT, rr 22.6, 22.7; NSW, rr 22.6, 22.7; NT, rr 17.41, 17.42; Qld, rr 22.6, 22.7; SA, rr 22.6, 22.7; Vic, rr 22.6, 22.7; WA, r 37(7). Equivalent provision is made in the barristers’ rules: ACT, rr 57, 58; NSW, rr 55, 56; NT, rr 57, 58; Qld, rr 54, 55; SA, rr 54, 55; Vic, rr 55, 56; WA, rr 54, 55. 231 See Tugrul v Tarrants Financial Consultants Pty Ltd (in liq) [2013] NSWSC 1971 at [19] per Kunc J (noting that as email has “done away with what might be thought to have been the last practical barriers to quick and easy communication with a judge’s chambers”, care must be taken to ensure compliance with the relevant rules; at the same time, his Honour accepted that many types of communication, including by email, with a judge’s chambers can assist the parties and the court in achieving a just, cheap and quick resolution of proceedings). 232 See Fla Sup Ct Jud Ethics Adv Comm, Op 2009-20 (2009) (advising judges that they should not add lawyers as “friends” on their social networking site if those lawyers appear before the judge); NY Adv Comm on Judicial Ethics, Op 08-176 (2009), at 2 (“The judge … should be mindful of the appearance created when he/she establishes a connection with an attorney or anyone else appearing in the judge’s court through a social network. In some ways, this is no different than adding the person’s contact information into the judge’s Rolodex or address book or speaking to them in a public setting. But, the public nature of such a link … and the increased access that the person would have to any personal information the judge chooses to post on his/her own profile page establish, at least, the appearance of a stronger bond”).

[17.200]

17 Duty to the Court

583

[17.195] As a lawyer must eschew conduct that might convey the impression that he or she is able to communicate information about the proceedings to the judge ex parte, nor should a lawyer appear before a court in a matter where, by reason of her or his relationship with the court or a member of it, the impartial administration of justice may appear to be prejudiced. This is reflected in barristers’ rules that require counsel to decline a brief in a contested hearing before her or his parent, sibling, spouse, child or a member of her or his household.233 Any relationship a lawyer has with the judge must be disclosed at the outset, and will ordinarily preclude the lawyer appearing.234 PUBLIC DISCLOSURES AND MEDIA COMMUNICATIONS [17.200] The extent to which lawyers’ freedom of speech should be curtailed in making out-of-court media communications, or in conference addresses, remains the subject of debate.235 Restrictions on those communications and addresses seek to balance three interests: the interest of the public and the media in accessing facts and opinions about litigation; the interest of litigants in placing a legal dispute before the public or in countering adverse publicity about the matter; and the interest of the public and opposing parties in ensuring that the process of adjudication is not distorted by statements carried in the media.236 It is in the context of lawyers commenting on cases in which they are, or have been, involved that the balancing of these interests has proven most challenging. It has traditionally been assumed that the administration of justice is better served if lawyers are “seen but not heard” than by allowing lawyers to use the media as a vehicle to sway public opinion. The latter, in particular, is viewed by some as impinging on the independence of the Bar, thus risking the integrity of the trial process. Reference to the US-style media circus surrounding high-profile trials is not infrequently made to bolster this view. In line with this concern, there have been multiple recent occasions where lawyers have been criticised for making media comments and disclosures regarding their clients’ cases.237 Each of these events refocused the debate over lawyers’ public comments, and whether these should be curtailed to preserve integrity in the administration of justice or, at least to preserve its appearance.

233 ACT, r 87(i); NSW, r 101(j); NT, r 87(i); Qld, r 95(j); SA, r 95(j); Vic, r 101(j); WA, r 95(j). 234 Cf Marriage of Kennedy & Cahill (1995) 118 FLR 60 (where a judgment was set aside, and ordered to be reheard by another judge, once the relationship between the wife’s solicitor and the trial judge was disclosed after the judgment was delivered). 235 See Dal Pont, “The Lawyer and the Media” (2008) 82 (Mar) LIJ 80. 236 Restatement, §109(1), cmt b. 237 These include the media comments by two Western Australian silks regarding the Schapelle Corby case (see Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1), by a Victorian silk (and now judge) on the Thomas terrorism trial(s), those of a New South Wales prosecutor in a speech to university students reflecting on her perception of justice in a criminal trial she had prosecuted (see R v MG (2007) 69 NSWLR 20: see [18.15]), and the release to the media of his client’s record of interview by senior counsel representing a terrorism suspect (see Evans, “Justice Before Rules” (2008) 82 (Apr) LIJ 76).

584

Lawyers’ Professional Responsibility

[17.205]

[17.205] The Australian Solicitors’ Conduct Rules address the issue of public disclosures via a simple proscription against a lawyer publishing or take stepstowards the publication of “any material concerning current proceedings which may prejudice a fair trial or the administration of justice”.238 The barristers’ rules address the issue in greater detail. They proscribe a barrister publishing any material concerning any proceeding that the barrister knows to be inaccurate, discloses any confidential information, or expresses the barrister’s opinion on the merits of a current or potential proceeding other than in the course of genuine educational or academic discussion on matters of law.239 The rules also prohibit the publication of material concerning a current proceeding in which the barrister is appearing, or any potential proceeding in which he or she is likely to appear, except that:240 • a barrister may supply answers to unsolicited questions concerning a current proceeding limited to information as to the identity of the parties or of any witness already called, the nature of the issues in the case, the nature of the orders made or judgment given (including any reasons given by the court) and the client’s intentions as to any further steps in the case; • a barrister may, if not contrary to statute or court practice, and upon the request of the client or instructing solicitor or in response to unsolicited questions, supply for publication: 238 ACT, r 28.1; NSW, r 28.1; Qld, r 28.1; SA, r 28.1; Vic, r 28.1. The Western Australian rules contain a provision phrased in similar terms: WA, r 43(2) (but see also WA, r 43(3), which prohibits a lawyer participating in or contributing to a forum that is, in whole or in part, about a matter in which the lawyer is or has been professionally engaged unless: (a) participation is not contrary to the interests of the client; (b) the lawyer gives a fair and objective account of the matter in a manner consistent with the maintenance of the good reputation and standing of the profession; and (c) if the forum involves any radio, television or other transmission, the client has given informed consent). Cf NT, r 17.43(b)(ii) (“the answers are accurate and uncoloured by comment or unnecessary description”), 17.43(b)(iii) (“the answers do not appear to express the practitioner’s own opinions on any matters relevant to the case”). 239 ACT, r 59(a); NSW, r 76; NT, r 59(a); Qld, r 75; SA, r 75; Vic, r 76; WA, r 75. 240 ACT, r 59(b); NSW, r 77; NT, r 59(b); Qld, r 76; SA, r 76; Vic, r 77; WA, r 76. The former Western Australian barristers’ rules were amended (r 58), as from 15 February 2006, in the wake criticism of some lawyers making media comment to proscribe any media comment by barristers “in relation to or touching in any way upon any matter in respect of which the barrister has provided, is providing or expects in future to provide professional services” unless: (a) the statement or communication was expressly stated by the barrister to be “off the record” or “background” and was “restricted to a fair and balanced explanation or recapitulation of proceedings that took place in a public hearing or the correction of errors in a published report of such a hearing and does not include the expression of the barrister’s personal views or opinions”; or (b) the barrister has received the prior consent of the President of the Association, which will only be granted if the President is satisfied that the grant of consent is in the interest of the barrister’s client and in the interests of justice, or is necessary to enable the barrister to respond appropriately to public criticism of the barrister’s conduct. In promulgating this restrictive rule, the (then) President expressed the concern that “[m]edia appearances and attributed media comment by a lawyer on behalf of a client in current litigation have a distinct tendency to cause that lawyer to be publicly linked with a client, or the client’s cause”, coupled with concerns related to breach of client confidentiality, potential waiver of privilege, exposure to civil liability for defamation, contempt of court (in particular, infringing the sub judice rule), and the “potential conflict between the true interests of the client and the lawyer’s own interest in seeking to promote his or her own reputation or in generally pursuing favourable publicity for themselves or their practice, in the process”.

[17.215]

17 Duty to the Court

585

– copies of pleadings in their current form that have been filed and served in accordance with the court’s requirements; – copies of affidavits or witness statements, that have been read, tendered or verified in open court, clearly marked so as to show any parts which have not been read, tendered or verified or that have been disallowed on objection; – copies of transcript of evidence given in open court, if permitted by copyright and clearly marked so as to show any corrections agreed by the other parties or directed by the court; or – copies of exhibits admitted in open court and without restriction on access. A barrister may if requested advise a client about dealings with the media other than in a manner calculated to interfere with the proper administration of justice, and does not breach the above rules by advising the client about whom there has been published a report relating to the case, and who has sought the barrister’s advice in relation to that report, that the client may take appropriate steps to present the client’s own position for publication.241

[17.210] Ultimately, lawyers must appreciate the dangers of making public and media comment on cases. Blanket prohibitions leave little scope for professional judgment on occasions where comment is legitimate. The consequences of public comment may not all be negative. Aside from the fact that trials are conducted in the courtroom and subject to defined rules of evidence as opposed to by media, too severe a curtailing of lawyers’ media comment may reinforce the perception that the law operates behind closed doors. And the “gagging” of lawyers has the capacity to (further) distance the profession from the community it seeks to serve, and to present lawyers as lacking personal values or convictions. ABUSES OF PROCESS [17.215] The public interest in the due administration of justice necessarily extends to ensuring that the court’s processes do not lend themselves to oppression and injustice.242 To this end, the court has the inherent power to prevent misuse of its procedure in a way that, though not inconsistent with a literal application of its procedural rules, nonetheless would be manifestly unfair to a litigant or otherwise bring the administration of justice into disrepute.243 The lawyer’s pivotal role in the administration of justice, in this respect, dictates that he or she should eschew conduct that is an abuse of process, irrespective of the motivation for so doing.244 241 NSW, r 78; Qld, r 77; SA, r 77; Vic, r 78; WA, r 77. 242 Reid v New Zealand Trotting Conference [1984] 1 NZLR 8 at 9 per Richardson J; NZ Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 at 95 per Somers J. 243 Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at 536 per Lord Diplock. 244 Civil Procedure Act 2010 (Vic), s 18(c) (which proscribes, inter alia, lawyers from making any claim or make a response to any claim in a civil proceeding that is an abuse of process; and a breach of this proscription is amenable to sanction, including by way of costs: see s 29(1)); NZ, r 2.3 (“A lawyer must use legal processes only for proper purposes”).

586

Lawyers’ Professional Responsibility

[17.220]

Lawyers who foster or are involved in an abuse of process may be subject to disciplinary proceedings, and may have costs awarded against them personally.245 The circumstances in which an abuse of process can arise are many and varied. The following examples of abuses of process are not intended to be exhaustive. Baseless aspersions or allegations

[17.220] As an officer of the court concerned in the administration of justice, a lawyer must not be a party to the presentation to a court of any evidence, or the making of any statement or allegation, for which there is, in her or his opinion, insufficient evidentiary foundation.246 Nor should a lawyer lend herself or himself to casting aspersions on another party, witnesses or third parties for which there is no sufficient basis in the information in her or his possession.247 This may require a lawyer to decline instructions to institute proceedings ostensibly designed to antagonise an opponent unnecessarily or to gratify the client’s own anger or malice,248 although a lawyer may ethically represent a client with a good cause of action or defence notwithstanding the client is inspired by ill-will.249 The privilege enjoyed by barristers in drawing or settling pleadings or presenting a case in court – and their immunity from actions in negligence and defamation for in court work: see [5.260]–[5.345] – make it their professional responsibility, remedied by disciplinary sanction, not to make allegations without a sufficient basis or without reasonable grounds.250 In Clyne v New South Wales Bar Association,251 for example, the appellant barrister, in an opening statement in committal proceedings 245 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [23.21]–[23.35]. 246 ACT, r 21.3; NSW, r 21.3; NT, r 17.22; Qld, r 21.3; SA, r 21.3; Vic, r 21.3; WA, r 36(4). Equivalent provision is made in the barristers’ rules: ACT, r 36; NSW, r 64; NT, r 36; Qld, r 63; SA, r 63; Vic, r 64; WA, r 63. Also, the Civil Procedure Act 2010 (Vic), s 18(d), with effect on 1 January 2011, prohibits (inter alia) lawyers making any claim or a response to any claim in a civil proceeding that “does not, on the factual and legal material available to the person at the time of making the claim or responding to the claim, as the case requires, have a proper basis”, and a breach of this proscription is amenable to sanction, including by way of costs (see s 29(1)). The Act, via s 42(1), imposes on lawyers to make proper basis certification on the filing of the client’s first substantive document in a civil proceeding and any document that significantly amends it. 247 Rondel v Worsley [1969] 1 AC 191 at 227 per Lord Reid; NZ Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 at 96 per Somers J; Strange v Hybinett [1988] VR 418 at 422–423 per Murphy J, at 423–424 per Gray J; Y v M [1994] 3 NZLR 581 at 586 per Temm J; Rees v Bailey Aluminium Products Pty Ltd (2008) 21 VR 478 at [32]–[38] (CA); Cressy v Johnson (No 2) [2009] VSC 42 at [25] per Kaye J. See, for example, Thatcher v Douglas, The Times, 8 January 1996 (where the English Court of Appeal held that, when faced with a client who insisted that counsel air unfounded allegations of bias and corruption against the trial judge, counsel should have either refused to act on those instructions or withdrawn from the case); Orlov v New Zealand Law Society [2013] 3 NZLR 562 at [77], [122] per French J (involving disrespectful and scandalous allegations against a judge). 248 Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR. 249 Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 196 (FC). 250 Gazley v Wellington District Law Society [1976] 1 NZLR 452 at 454 per White J; NZ Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 at 87 per Cooke J; Minister Administering the Crown Lands Consolidation Act & Western Lands Act v Tweed Byron Aboriginal Land Council (1990) 71 LGRA 201 at 203–204 (CA(NSW)); Y v M [1994] 3 NZLR 581 at 586 per Temm J. 251 Clyne v New South Wales Bar Association (1960) 104 CLR 186.

[17.225]

17 Duty to the Court

587

before a magistrate, made what the High Court described as “an unrestrained and vicious public attack” on the person the subject of the proceedings. His appeal from being struck off was rejected by the High Court, which found that his allegations, being “of the most serious and damaging nature”, could not possibly be substantiated on the basis of the available evidence and invited inferences that could not possibly be drawn from any material he had. Their Honours then made the following remarks regarding abuses of privilege:252 [I]t is not merely the right but the duty of counsel to speak out fearlessly, to denounce some person or the conduct of some person, and to use such strong terms as seem to him in his discretion to be appropriate to the occasion. From the point of view of the common law, it is right that the person attacked should have no remedy in the courts. But from the point of view of a profession which seeks to maintain standards of decency and fairness, it is essential that the privilege and the power of doing harm which it confers, should not be abused. Otherwise grave and irreparable damage might be unjustly occasioned. The privilege may be abused if damaging irrelevant matter is introduced into a proceeding. It is grossly abused if counsel, in opening a case, makes statements which have ruinous consequences to the person attacked, and which he cannot substantiate or justify by evidence. It is obviously unfair and improper in the highest degree for counsel, hoping that, where proof is impossible, prejudice may suffice, to make such statements unless he definitely knows that he has, and definitely intends to adduce, evidence to support them. It cannot, of course, be enough that he thinks that he may be able to establish his statements out of the mouth of a witness for the other side.

[17.225] The professional rules in most jurisdictions reflect this duty.253 They require a lawyer, in exercising the forensic judgments called for throughout a case, to take care to ensure decisions to invoke the coercive powers of a court or to make allegations or suggestions under privilege are reasonably justified by the material then available, and are appropriate for the robust advancement of the client’s case on its merits.254 The rules proscribe decisions or allegations made principally to harass or embarrass, or to gain a collateral advantage for the client, the barrister or the instructing solicitor out of court. 252 Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 200–201 (FC). See also R v Lavery (No 2) (1979) 20 SASR 430 at 431 per Walters J; Camp v Legal Practitioners Complaints Committee [2007] WASC 309 (a finding of unsatisfactory professional conduct arising out of serious allegations made by the appellant to journalists that could not be substantiated by evidence yet to be presented in court); New South Wales Bar Association v Cairns [2008] NSWADT 34 (where the respondent, who engaged in unsatisfactory professional conduct in failing to advise his instructing solicitor or the client concerning the inadequacy of evidence to support an allegation of fraud, was reprimanded). 253 ACT, rr 21.1, 21.2; NSW, rr 21.1, 21.2; NT, rr 11.2, 12, 17.21; Qld, rr 21.1, 21.2; SA, rr 21.1, 21.2; Vic, rr 21.1, 21.2; WA, r 36(2), 36(3). Equivalent provision is made in the barristers’ rules: ACT, rr 35, 36; NSW, rr 60, 61, 64; NT, r 35; Qld, rr 59, 60, 63; SA, rr 59, 60, 63; Tas, para 29; Vic, rr 60, 61, 64; WA, rr 59, 60, 63. See also NZ, r 2.3 (“A lawyer must not use, or knowingly assist in using, the law or legal processes for the purpose of causing unnecessary embarrassment, distress, or inconvenience to another person’s reputation, interests, or occupation”). 254 See, for example, Legal Services Commissioner v Bosscher [2016] QCAT 75 (where the respondent was found guilty of unsatisfactory professional conduct by reason of tendering a lengthy document before a Commission of Inquiry that, inter alia, contained allegations that cast doubt over the integrity of a (now) sitting judge in circumstances where its tender was not germane to the application (for recusal) before the Commission).

588

Lawyers’ Professional Responsibility

[17.230]

Prompted, it seems, by amendments to the (then) New South Wales barristers’ rules effected on 30 May 2008,255 most current solicitors’ and barristers’ rules state that, in proceedings in which an allegation of sexual assault, indecent assault or the commission of an act of indecency is made and in which the alleged victim gives evidence:256 • a lawyer must not ask that witness a question or pursue a line of questioning intended to: – mislead or confuse the witness; or – be unduly annoying, harassing, intimidating, offensive, oppressive, humiliating or repetitive; and • a lawyer must take into account any particular vulnerability of the witness in the manner and tone of the questions that the lawyer asks. But there is no infringement of this rule, the barristers’ rules add, merely because the question(ing) challenges the witness’s truthfulness or the consistency or accuracy of her or his statements, or requires the witness to give evidence that he or she could consider offensive, distasteful or private.257 Allegations of criminality, fraud or other serious misconduct

[17.230] The duty discussed above is particularly strict for serious allegations, typically of fraudulent or criminal behaviour. Courts have often cautioned that allegations of fraud should not be made lightly.258 These may be widely recounted and, in the process, cause great harm to a person’s reputation before any evidence has been offered and submitted to the scrutiny of cross-examination or rebuttal. Loose allegations of fraud are, in the words of one judge, “a blot on the adversarial system”.259 The former Victorian barristers’ rules, to this end, prohibited barristers from permitting themselves “to be made the instrument by which publicity is obtained for allegations which are scandalous or calculated to vilify, insult or injure the commercial or personal reputation of another person or corporation”.260

255 Barristers’ Rules (NSW), r 35A (superseded). 256 ACT, r 21.8; NSW, r 21.8; Qld, r 21.8; SA, r 21.8; Vic, r 21.8; WA, r 36(10). As to the relevant barristers’ rules see: NSW, r 62; Qld, r 61; SA, r 61; Vic, r 62; WA, r 61. See further Craig, “The Ethical Obligations of Defence Counsel in Sexual Assault Cases” (2014) 51 Osgoode Hall LJ 427. 257 NSW, r 63; Qld, r 62; SA, r 62; Vic, r 63; WA, r 62 (in line with the former Barristers’ Rules (NSW), r 35B). 258 Saltoon v Lake [1978] 1 NSWLR 52 at 58 (CA); Y v M [1994] 3 NZLR 581 at 586 per Temm J; Murphy v Legal Services Commissioner [2013] QSC 70 at [86], [87] per Daubney J. See Chapman, “Pleading Allegations of Dishonesty” [2006] NZLJ 13. 259 NIML Ltd v MAN Financial Australia Ltd (No 2) [2004] VSC 510 at [6] per Harper J. 260 Victorian Bar Inc, Practice Rules, r 37 (superseded). See also NZ, r 8.04 (“A practitioner must not attack a person’s reputation without good cause”).

[17.230]

17 Duty to the Court

589

Lawyers may be expected, in this regard, to “exert a moderating influence on their clients”.261 They must have both specific instructions and an appropriate evidentiary foundation before alleging and pleading fraud. This foundation need not necessarily be direct. It may be inferred; fraud is often perpetrated covertly, making it impossible to prove by direct evidence. If so, the lawyer may invite the tribunal of fact to draw an irresistible inference of fraud from the facts proved. But lawyers should bear in mind that professional discipline262 (and/or a personal costs order:263 see [17.215]) may flow from unreasonable or reckless allegations of dishonesty or fraud. The professional rules regulating both solicitors and barristers reflect the foregoing via a provision that reads as follows:264 A [lawyer] must not allege any matter of fact amounting to criminality, fraud or other serious misconduct against any person unless the [lawyer] believes on reasonable grounds that: [1] available material by which the allegation could be supported provides a proper basis for it; and [2] the client wishes the allegation to be made, after having been advised of the seriousness of the allegation and of the possible consequences for the client and the case if it is not made out.

The lawyer may regard the instructing practitioner’s opinion as a reasonable ground for holding the said belief.265 The rules also prohibit a lawyer making a suggestion in cross-examination on credit unless he or she believes on reasonable grounds that acceptance of the suggestion would diminish the credibility of the evidence of the witness.266 These rules aim to enlist counsel, by professional and ethical judgments, in reducing contested litigation begun or fought without justification. 261 Bandwill Pty Ltd v Spencer-Laitt (2000) 23 WAR 390 at [213] per Templeman J. See also Thomas v SMP (International) Pty Ltd [2010] NSWSC 822 at [22] per Pembroke J (“Counsel’s duty to the court requires them, where necessary, to restrain the enthusiasms of the client and to confine their evidence to what is legally necessary, whatever misapprehensions the client may have about the utility or the relevance of that evidence”). 262 Holborow v MacDonald Rudder [2002] WASC 265 at [19] per E M Heenan J; Brown v Bennett (No 2) [2002] 1 WLR 713 at [113]–[115] per Neuberger J (opining that it would require strong facts before a barrister could be said to be acting contrary to professional standards in maintaining a case of dishonesty that could be justified on the basis of the facts put forward by a client simply because there was credible strong contrary evidence available, but conceded that the position may differ where the client’s instruction and evidence consist less of hard facts than expressions of opinion or inference). 263 See, for example, Furlong v Wise & Young Pty Ltd [2016] NSWSC 647. 264 ACT, r 21.4; NSW, r 21.4; NT, rr 11.2, 12, 17.26; Qld, r 21.4; SA, r 21.4; Vic, r 21.4; WA, r 36(3), 36(8). The relevant barristers’ rules are: ACT, r 37; NSW, r 65; NT, r 37; Qld, r 64; SA, r 64; Vic, r 65; WA, r 64 265 ACT, r 21.6; NSW, r 21.6; NT, r 17.24; Qld, r 21.6; SA, r 21.6; Vic, r 21.6; WA, r 36(7). Equivalent provision is made in the barristers’ rules: ACT, r 39; NSW, r 66; NT, r 39; Qld, r 65; SA, r 65; Tas, para 41; Vic, r 66; WA, r 65 266 ACT, r 21.5; NSW, r 21.5; NT, r 17.23; Qld, r 21.5; SA, r 21.5; Vic, r 21.5; WA, r 36(5). Equivalent provision is made in the barristers’ rules: ACT, r 38; NSW, r 67; NT, r 38; Qld, r 66; SA, r 66; Vic, r 67; WA, r 66. Under s 41 of the uniform evidence law, explicit provision is made for the court to disallow a question put to a witness in cross-examination, or to inform the witness that it need not be answered, if the question is unduly annoying, harassing, intimidating, offensive, oppressive or repetitive.

590

Lawyers’ Professional Responsibility

[17.235]

Allegations in family law proceedings

[17.235] Family lawyers are likewise bound to eschew false or unsupported allegations, especially where serious allegations of abuse are involved. In Y v M267 counsel for the respondent contended that a solicitor is justified in filing an affidavit in the Family Court attacking the reputation of the other party without good cause solely upon the client’s instruction. This argument was presented on the basis that the Family Court is a unique tribunal, conducted in private268 where the judge’s paramount concern is the interests of the child. Temm J flatly rejected these contentions, observing that “[i]t is just as important for the Family Court to be correctly informed as it is for any other court or tribunal, perhaps particularly so when the welfare of a child is at stake”.269 His Honour added that lawyers who persist in such a practice risk not only professional sanction, but also orders against them personally for the payment of costs. In the latter context, Temm J warned that “[i]f one succumbs to the temptation to ‘beef up’ an affidavit by recording as fact that which is not fact but only a suspicion, the solicitor may become exposed to personal liability”. Naming third parties

[17.240] The superseded New Zealand professional rules required lawyers to exercise care in court when naming persons not involved in the proceeding.270 Where it was necessary to name a person in a way that, if published, might damage that person’s reputation or character, they recommended that lawyers request the court to receive the name and information confidentially, and reminded lawyers of the court’s inherent power to prohibit publication of part of evidence even in the absence of such a request.271 Australian professional rules also evidence a concern with naming third parties, although expressed in the context of pleas of mitigation for criminal defendants. In most jurisdictions the rules require a lawyer who, in mitigation of the client’s criminality, has instructions that justify submissions involving serious allegations of misconduct against a person who is unable to answer the allegations in the case, to avoid disclosing that person’s identity unless necessary for the proper conduct of the client’s case.272 267 Y v M [1994] 3 NZLR 581. 268 Cf WA EPG, cl 7.13 (“The fact that some proceedings may be conducted in private does not confer on a practitioner in such a matter any greater freedom to make serious allegations of misconduct without a proper foundation”). 269 Y v M [1994] 3 NZLR 581 at 589. 270 New Zealand Law Society, Rules of Professional Conduct for Barristers and Solicitors, r 8.02 (superseded). 271 New Zealand Law Society, Rules of Professional Conduct for Barristers and Solicitors, r 8.02 (cmt (1), (2)) (superseded). As to the court’s power in this context see Dal Pont, Law of Confidentiality (LexisNexis Butterworths, 2015), [20.12]–[20.19]. 272 ACT, r 21.7; NSW, r 21.7; NT, r 17.27; Qld, r 21.7; SA, r 21.7; Vic, r 21.7; WA, r 36(9). Equivalent provision is made in the barristers’ rules in most jurisdictions: NSW, r 68; NT, r 40; Qld, r 67; SA, r 67; Vic, r 68; WA, r 67.

[17.245]

17 Duty to the Court

591

Wasting of time and money in court proceedings

[17.245] The cost of accessing justice, coupled with unacceptable delays in securing it,273 has prompted the legislative recognition in several jurisdictions of a lawyer’s duty to assist in facilitating the just, quick and cheap resolution of the real issues in the proceedings,274 upon the pain of personal costs liability. The aim is “to bring about a cultural change in the conduct of litigation” and to focus the parties “on resolving disputes as quickly and cheaply as possible”.275 They build on various dicta over the years condemning as an abuse of process attempts by lawyers to unnecessarily lengthen the duration of proceedings,276 which may be aimed at pressuring an opponent into settling the dispute by exhausting the latter’s patience and/or money, or even to maintain the status quo for the client pending the final resolution of the dispute.277 In 1998 a Federal Court judge issued the following warning to lawyers who abuse the curial process through delaying tactics:278 The time has passed when obstructionist and delaying tactics on the part of parties to proceedings in the court can be countenanced by the court. It is perfectly proper for a party and its legal advisers to fight a case and to put an opposing party to the proof of its cause, although I question whether it is appropriate to put an opposing party to the proof of an issue, which is not disputed, which will not be a critical issue at trial and which will have the effect of running up costs unnecessarily. Nevertheless, it is not proper … to adopt a positive or assertive obstructionist or delaying strategy which is not in the interests of justice and inhibits the court from achieving an expeditious and timely resolution of a dispute. Court resources are finite and so are the resources of most litigants and the court should not countenance a deliberate strategy of obstruction and delay. If a party instructs its legal advisers to adopt such a strategy the legal adviser should inform the party that it is not proper for it to do so and if the party insists, then the legal adviser should withdraw from acting for that party.

More recent judicial remarks note lawyers’ duty to give “sufficient consideration in preparing or presenting their case as to how they might best assist the court in the 273 Roadway Express Inc v Piper (1980) 447 US 752 at 757 per Powell J (“The glacial pace of much litigation breeds frustration with the … courts and, ultimately, disrespect for the law”). 274 Federal Court of Australia Act 1976 (Cth), s 37M; Court Procedures Rules 2006 (ACT), r 21, 1.08; Civil Procedure Act 2005 (NSW), s 56; Supreme Court Rules 1987 (NT), r 1.10; Uniform Civil Procedure Rules 1999 (Qld), r 5; Supreme Court Civil Rules 2006 (SA), r 3; Civil Procedure Act 2010 (Vic), s 7; Supreme Court Rules 1971 (WA), O 1, r 4B. 275 Explanatory Memorandum, Access to Justice (Civil Litigation Reforms) Amendment Bill 2009 (Cth), [30]. 276 See, for example, Unioil International Pty Ltd v Deloitte Touche Tohmatsu (No 2) (1997) 18 WAR 190 at 193 per Ipp J; Edwards & Nosworthy v R (1997) 90 A Crim R 571 at 573 per Heenan J. See also US, r 3.2 (“A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client”). 277 See, for example, Saragas v Martinis [1976] 1 NSWLR 172 (where, in a dispute between tenants (the appellants) and landlord (the respondent) over possession of the leased property, the appellants’ solicitors lodged a frivolous appeal with the object of securing, in the words of Moffitt P, “some kind of moratorium in respect of these premises for some year and a half” (at 175), the court condemned the solicitors’ behaviour). 278 White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 252 per Goldberg J (affd Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 (FC)).

592

Lawyers’ Professional Responsibility

[17.245]

use of its limited resources”279 and, more generally, “to do everything possible to ensure the matter is soon concluded in a timely and cost efficient way”.280 More than one judge has, to this end, decried the “ambush approach” to litigation,281 in which lawyers “play cards close to their chest” in the hope of some tactical advantage, where this does no more than increase the time and cost of litigation. The lawyers’ obligation, rather, is to “exercise a degree of co-operation to express the issues for trial before and during the trial”.282 Consistent with these judicial overtones, Victoria has given statutory force283 to the duty of lawyers, amongst others,284 to “cooperate with the parties to a civil proceeding and the court in connection with the conduct of that proceeding”,285 use reasonable endeavours in connection with the proceeding to act promptly and minimise delay,286 and to refrain from taking any step in connection with any claim (or response to it) in a civil proceeding unless they reasonably believe that the step is necessary to facilitate its resolution or determination.287 A breach of these duties proscription is amenable to sanction, including by way of costs.288 The latter has been branded a “unique provision, conferring powers broader than those in any

279 A Team Diamond Headquarters Pty Ltd v Main Road Property Group Pty Ltd (2009) 25 VR 189 at [15] per Redlich JA and Beach AJA. 280 Virgtel Ltd v Zabusky (No 2) [2009] QCA 349 at [30] per McMurdo P. See also Audsley v R (2014) 44 VR 506 at [80] per the court (“It is the responsibility of trial counsel … to ensure that every trial is conducted with reasonable expedition, consistent with fairness. Counsel must ensure that they focus on the real issues in the trial, and adopt a realistic and responsible attitude to their forensic scrutiny”). 281 White v Overland [2001] FCA 1333 at [4] per Allsop J (“where it is evident, or indeed suspected, that the other side is proceeding on the basis of a misconception or has not appreciated something, as a general rule, efficiency, common sense and an appreciation of the costs and resources (both public and private) likely to be wasted by confusion in litigation will mandate that a party through his or her representative ensure that the other is not proceeding on a misconception or that the other does appreciate something that has been said”); Ewen Stewart & Associates Pty Ltd v Blue Mountains Virtual Air Helitours Pty Ltd (No 2) [2011] NSWSC 113 at [21] per White J; Franco v Frattelli’s Fresh Pasta Pty Ltd [2011] NSWSC 576 at [19] per White J. 282 Baulderstone Hornibrook Engineering Pty Ltd v Gordian Runoff Ltd [2008] NSWCA 243 at [160] per Allsop P. See also McLaughlin v Dungowan Manly Pty Ltd (No 3) [2011] NSWSC 717 at [30] per Pembroke J (“the efficient conduct of commercial litigation, indeed all litigation, can only be assisted by restraint, moderation, sensible co-operation and sound judgment by counsel”). 283 Stemming from Victorian Law Reform Commission, Civil Justice Review (Report No 14, 2008). 284 The relevant duties apply to persons to whom the “overarching obligations” apply, which include lawyers: Civil Procedure Act 2010 (Vic), s 10(1). Although the Act commenced on 1 January 2011, it has been observed that “[o]bligations of this kind have always existed”: Director of Consumer Affairs Victoria v Scully (No 2) [2011] VSC 239 at [22] per Hargrave J. Cf Modra v State of Victoria (2012) 205 FCR 445 at [31] per Gray J (who said that similar provisions found in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth) dictated that “the duty of a legal practitioner in a proceeding in this court has been changed significantly”). 285 Civil Procedure Act 2010 (Vic), s 20. 286 Civil Procedure Act 2010 (Vic), s 25. 287 Civil Procedure Act 2010 (Vic), s 19. 288 See Civil Procedure Act 2010 (Vic), s 29.

[17.255]

17 Duty to the Court

593

other jurisdiction in Australia, to sanction [lawyers] and parties who fail to meet their overarching obligations”289 by distributing the costs burden between those who fail to meet those obligations.290

[17.250] Various professional rules reflect the transition in approach. They require lawyers to ensure that they complete the work they are briefed to do “in sufficient time to enable compliance with orders, directions, rules or practice notes of the court”, and for counsel who have reasonable grounds to believe that the work will not be completed on time to warn their instructing solicitor (or the client) and the opponent.291 In similar vein, the rules cast a duty on lawyers to inform their opponent of any reasonable grounds they have to believe that an application will be made to adjourn a hearing, including the grounds for it, and to seek with the opponent’s consent to inform the court of this.292 This coincides with an earlier judicial warning that lawyers who are unprepared at trial without good reason cannot expect a vacation of trial dates, because lawyers are jointly responsible for the orderly and prompt disposition of cases.293 The changes to the professional rules further include an obligation on lawyers in a case to:294 • confine the case to identified issues which are genuinely in dispute; • have the case ready to be heard as soon as practicable; • present the identified issues in dispute clearly and succinctly; • limit evidence, including cross-examination, to that reasonably necessary to advance and protect the client’s interests at stake in the case; and • occupy as short a time in court as is reasonably necessary to advance and protect the client’s interests at stake in the case.

[17.255] Lawyers who, whether at their clients’ behest, or on their own initiative, unduly delay the progress of litigation may be subject to personal costs orders.295 Similarly, a lawyer’s failure to obey court directions or orders may generate 289 Yara Australia Pty Ltd v Oswal (2013) 41 VR 302 at [17] (CA) (noting that parallel New South Wales provisions (Civil Procedure Act 2005 (NSW), ss 56–60) “remain more aspirational than obligatory”, wherein the court’s powers as to costs remain governed by court rules, and “[t]here are no broad powers to issue sanctions for contravention of the obligations”, and that parallel Federal Court provisions only empower the court to take into account a failure to comply with the duty to act consistently with the overarching purpose when exercising the costs discretion: Federal Court of Australia Act 1976 (Cth), s 37N(4)). 290 Yara Australia Pty Ltd v Oswal (2013) 41 VR 302 at [20] (CA). 291 See the following barristers’ rules: ACT, r 41; NSW, r 57; NT, r 41; Qld, r 56; SA, r 56; Vic, r 57; WA, r 56. See also Re Suitors’ Fund Act 1964 (WA) (2002) 135 A Crim R 48 at [26] per Roberts-Smith J (who viewed lawyers’ duties as to ensure that “cases are properly considered and prepared well in advance of a hearing date and to advise the court and the other parties immediately if it becomes apparent the case cannot or should not proceed”). 292 ACT, r 22.8; NSW, r 22.8; Qld, r 22.8; SA, r 22.8; Vic, r 22.8. See also the following barristers’ rules: ACT, r 42A; NSW, r 59; NT, r 42B; Qld, r 58; SA, r 58; Vic, r 59; WA, r 58. 293 Kennedy v Cynstock Pty Ltd (1993) 3 NTLR 108 at 111 per Kearney J. 294 See the following barristers’ rules: ACT, r 42; NSW, r 58; NT, r 42; Qld, r 57; SA, r 57; Vic, r 58; WA, r 57 (and see also Legal Profession Conduct Rules 2010, r 36(1)). 295 See, for example, White Industries (Qld) Pty Ltd v Flower & Hart (a firm) (1998) 156 ALR 169 at 249 per Goldberg J (affd Flower & Hart (a firm) v White Industries (Qld) Pty Ltd (1999) 87 FCR 134 (FC)).

594

Lawyers’ Professional Responsibility

[17.260]

personal costs liability,296 as may an unyielding and unreasonable mandating that an opponent comply with procedural rules.297 But much of judicial activity has focused, in this regard, on lawyers pursuing hopeless cases, which may evidence an attempt to secure some collateral advantage, which is discussed below. Hopeless cases Approach in civil cases at general law

[17.260] For a lawyer to institute civil proceedings lacking any legal foundation is an abuse of court processes because it squanders valuable court time and resources,298 and causes unnecessary discomfort, cost and inconvenience to the opposing party. It could also be seen as a dereliction of the lawyer’s duty to the client, as exposing a client to a liability for costs is unlikely to be in the client’s best interests. Before commencing proceedings a lawyer must properly investigate the claim, or otherwise ascertain the relevant facts, to enable her or him (or counsel) to form an opinion whether a cause of action exists or is likely to succeed. Simply acting on client instructions to initiate proceedings or to pursue a claim is inappropriate; reasonable inquiries must be made. A lawyer who, as a result of inquiries, decides that no good cause of action exists must advise the client not to proceed. The challenge is to distinguish cases that are weak but arguable from those destined to failure. A lawyer may legitimately represent a client in the former event – provided, of course, that the client is informed as to the weakness of the case and the likely consequences of pursuing the matter – but not in the latter.299 So a lawyer may ethically put forward a claim or an argument based upon a good faith argument for an extension, modification or reversal of existing law,300 as explained by Davies JA in Steindl Nominees Pty Ltd v Laghaifar:301 [I]t is one thing to present a case which is barely arguable (but arguable nevertheless) but most likely to fail; it is quite another to present a case which is plainly unarguable and ought to be so to the lawyer who presents it. In my opinion, with respect, it is improper for counsel to present, even on instructions, a case which he or she regards as bound to fail because, if he or she so regards it, he or she must also regard it as unarguable. 296 See, for example, Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66 (where the respondent’s solicitors took the view that an early mediation ordered by the court would not be in their client’s best interests and acted in a way calculated to defer the mediation, Branson J took the solicitors’ failure into account in determining whether the application in question, being one for security for costs, should be granted). 297 See, for example, St George Bank Ltd v O’Reilly (1999) 150 FLR 27 (where Higgins J ordered the plaintiff’s solicitors, who had denied a reasonable request for particulars and ignored a request for an extension of time, to pay the costs of an unnecessary application to set aside a default judgment entered as a result). 298 CT Bowring & Co (Insurance) Ltd v Corsi Partners Ltd [1994] 2 Lloyd’s Rep 567 at 580 per Millett LJ. 299 Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR; European Hire Cars Pty Ltd v Beilby Poulden Costello [2009] NSWSC 526 at [60] per Bryson AJ. 300 A159 of 2002 v Minister for Immigration & Multicultural & Indigenous Affairs [2003] FCA 1087 at [23] per Selway J; RDCW Diamond (Pty) Ltd v Da Gloria [2007] NSWSC 1325 at [21] per Rothman J. 301 Steindl Nominees Pty Ltd v Laghaifar [2003] 2 Qd R 683 at [24]. See also Mitry Lawyers v Barnden [2014] FCA 918 at [87], [88] per Wigney J; Xabregas v Owners – Strata Plan No 79205 [2014] NSWSC 1027 at [63]–[65] per White J.

[17.265]

17 Duty to the Court

595

In any event, the costs indemnity rule (whereby a losing party is ordered to pay the successful party’s costs), including the threat of an order for those costs to be quantified on an indemnity basis, and the summary procedure of applying to have an action struck out as disclosing no reasonable cause of action, serve as structural impediments to the pursuit of hopeless cases. In more recent times, moreover, the focus has shifted to ordering costs against lawyers personally who pursue hopeless cases,302 including those that become hopeless in due course,303 which has been expanded via statute in some jurisdictions and contexts (see [17.265], [17.270]), or to making a finding of unsatisfactory professional conduct.304 Statutory initiatives

[17.265] New South Wales amended its legal profession legislation, with effect from 20 March 2002, to explicitly set disciplinary and costs consequences for lawyers who pursue civil claims lacking reasonable prospect of success.305 This has translated to the current Legal Profession Uniform Law Application Act 2014 (NSW),306 having earlier witnessed a parallel initiative in the Australian Capital Territory.307 In New South Wales, the legislation imposes duties on lawyers phrased in the following terms:308 A law practice must not provide legal services on a claim or defence of a claim for damages unless a legal practitioner associate responsible for the provision of the services concerned reasonably believes on the basis of provable309 facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success. A law practice cannot file court documentation310 on a claim or defence of a claim for damages unless a principal of the practice, or a legal practitioner associate responsible for the provision of the legal service concerned, certifies that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success. 302 See Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), [23.29]–[23.34]. 303 Re Felicity (No 4) [2015] NSWCA 19 at [22] per Basten JA, with whom Ward and Emmett JJA concurred. 304 The legal profession legislation defines “unsatisfactory professional conduct” to include conduct “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 lawyer” (see [23.90]), thus raising the prospect that pursuing an untenable or unarguable case can generate a disciplinary consequence: see, for example, Legal Profession Complaints Committee v Carlose [2012] WASAT 104. 305 NSW 2004, Pt 3.2, Div 10 (as from 1 October 2005) (previously NSW 1987, Pt 11, Div 5C). 306 Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2 (as from 1 July 2015). 307 Civil Law (Wrongs) Act 2002 (ACT), Pt 14.2. 308 Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cll 2(1), 4(2) (formerly NSW 2004, ss 345(1), 347(2)). See also Civil Law (Wrongs) Act 2002 (ACT), s 188(1), 188(2). 309 A fact is “provable” only if the lawyer reasonably believes that the material then available provides a proper basis for alleging that fact: Civil Law (Wrongs) Act 2002 (ACT), s 186; Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 2(2) (formerly NSW 2004, s 345(2)). 310 “Court documentation” means a statement of claim, summons, cross-claim, defence or further pleading (including an amendment of any such document), and any other document of a kind prescribed by the regulations: Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 4(4) (formerly NSW 2004, s 347(4)). The Australian Capital Territory provision simply refers to a “pleading”: Civil Law (Wrongs) Act 2002 (ACT), s 188(2).

596

Lawyers’ Professional Responsibility

[17.265]

The “mere incantation” of a reasonable belief is insufficient for this purpose; a reasonable belief “must be based upon a reasonably arguable view of the law and upon provable facts”.311 A claim has “reasonable prospects of success” if there are reasonable prospects of damages being recovered thereon; a defence has “reasonable prospects of success” if there are reasonable prospects of the defence defeating the claim or leading to a reduction in the damages recovered on the claim.312 The statutory regime, therefore, calls for lawyers to make this potentially difficult assessment, at the outset of a case, leading one judge to brand the breadth of these requirements as “excessive”, and prone to confusing the respective roles and obligations of lawyers and the judiciary.313 The provision of legal services without reasonable prospects of success is capable of being unsatisfactory professional conduct or professional misconduct, 314 and may, where the claim is for damages, lead the court to make a personal costs order against the law practice or lawyer who supplied those services.315 In New South Wales, the foregoing is expressed not to apply to legal services provided as a preliminary matter for the purpose of a proper and reasonable consideration of whether a claim or defence has reasonable prospects of success.316 The statutory regime aims to produce a “deterrent” or “chilling” effect in lawyers whose clients urge them to pursue cases lacking reasonable prospects of success.317 At the same time the courts have recognised that too ready imposition of the sanctions could undermine the statutory purpose, as it may force litigants to proceed in person without professional assistance and deny litigants with arguable claims an ability to pursue them.318 There is also the concern that whether a case 311 Keddie v Stacks/Goudkamp Pty Ltd (2012) 293 ALR 764 at [154] per Beazley JA, with whom Barrett JA and Sackville AJA concurred (adding that “[a] belief based upon a failure properly to examine the material upon which the belief is based is not … a reasonable belief”: at [158]). 312 Civil Law (Wrongs) Act 2002 (ACT), s 186; Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 2(4) (formerly NSW 2004, s 345(4)). 313 Batistatos v Roads and Traffic Authority of New South Wales (2006) 226 CLR 256 at [214] per Callinan J. See generally Stewart and Evers, “The Requirement that Lawyers Certify Reasonable Prospects of Success: Must 21st Century Lawyers Boldly Go Where No Lawyer has Gone Before?” (2010) 13 Legal Ethics 1. 314 Civil Law (Wrongs) Act 2002 (ACT), s 188(3); Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 4(1) (formerly NSW 2004, s 347(1)). 315 Civil Law (Wrongs) Act 2002 (ACT), s 189(1); Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 5(1) (formerly NSW 2004, s 348(1)). 316 Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 3 (formerly NSW 2004, s 346). The rationale for this exclusion is that a lawyer must be able to take initial instructions and advise the client on whether or not the claim or defence has reasonable prospects of success without breaching the statutory duty: Second Reading Speech, Legislative Assembly, 28 May 2002, Hon Mr Carr. 317 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [126] per McColl JA. 318 Fowler, Corbett and Jessop v Toro Constructions Pty Ltd [2008] NSWCA 178 at [17] per Basten JA. Two commentators have observed, to this end, that the certification requirement could become “a significant access to justice issue if the legislative provisions are interpreted and applied in such a way as to discourage lawyers from taking on hard cases or cases requiring some new interpretation or extension of existing law to do justice to a party’s claim”: Stewart and Evers, “The Requirements that Lawyers Certify Reasonable Prospects of Success: Must 21st Century Lawyers Boldly Go where No Lawyer has Gone Before?” (2010) 13 Legal Ethics 1 at 2.

[17.265]

17 Duty to the Court

597

has reasonable prospects of success is a matter on which reasonable minds might differ.319 As explained by Barrett J in Degiorgio v Dunn (No 2):320 [T]he [Act] should not … be presumed to intend that lawyers practising in New South Wales must boycott every claimant with a weak case. A statutory provision denying to the community legal services in a particular class of litigation cannot be intended to stifle genuine but problematic cases. Nor do I see the statutory provisions as intended to expose the lawyer to the prospect of personal liability in costs in every case in which a court, having heard all the evidence and argument, comes to a conclusion showing that his or her client’s case was not as strong as may have appeared at the outset to be. The legislation is not meant to be an instrument of intimidation, so far as lawyers are concerned.

This led his Honour to equate the phrase “without reasonable prospects of success” with “so lacking in merit or substance as to be not fairly arguable”, a concept short of “likely to succeed”.321 There is accordingly a range of views that could reasonably be entertained, and the scope for disciplinary or costs sanctions are reserved for cases that clearly fall outside that range.322 This explains judicial remarks that the statutory scheme sets “a high threshold”.323 The duty, though, is an ongoing one, such that lawyers should cease to act if at any time in a matter they conclude it has no reasonable prospects of success.324 This requires lawyers to become familiarised with a client’s case as early as possible, and maintain that familiarity at all times, so that they can, if material surfaces that makes the case unsustainable, promptly examine and act on it.325 But a brief delay

319 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [132] per McColl JA. 320 Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 at [27]. See also Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [190] per McColl JA. 321 Degiorgio v Dunn (No 2) (2005) 62 NSWLR 284 at [28] per Barrett J. See Beaumont, “What are “Reasonable Prospects of Success”?” (2004) 78 ALJ 812. 322 Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [132] per McColl JA (who held that merely because the client’s claim failed before both the arbitrator and the primary judge did not mean that the lawyer had provided legal services without reasonable prospects of success: at [186]); Fowler, Corbett and Jessop v Toro Constructions Pty Ltd [2008] NSWCA 178 at [18], [19] per Basten JA; Treadwell v Hickey [2010] NSWSC 1119 at [121] per Barrett J (who remarked that the fact that, as the hearing evolved, elements of the original pleaded case were abandoned did not mean that there was never reasonable prospects of success in regard to these claims). 323 See, for example, Treadwell v Hickey [2010] NSWSC 1119 at [25] per Barrett J. 324 Momibo Pty Ltd v Adam (2004) 1 DCLR (NSW) 316 at [104] per Judge Neilson; Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [127] per McColl JA; Re Felicity (No 4) [2015] NSWCA 19 at [22] per Basten JA, with whom Ward and Emmett JJA concurred. See also Riley v Bankstown City Council [2005] NSWSC 748 at [15] per Hidden J; Firth v Latham [2007] NSWCA 40 at [68] per Hoeben J (noting that being mindful of the judicial restraint to be exercised when applying these sections, “the Act should not be interpreted as requiring that the evidence necessary to establish an arguable case at trial be available to a party before proceedings are commenced. Implicit in the concept of a continuing obligation on the part of a legal practitioner to comply with the sections is the proposition that the conduct of litigation is a dynamic process. Whether reasonable prospects of success exist could vary depending upon the results of inquiries and the collection of evidence”). 325 See Balachandran, “Reasonable Prospects of Success: What are the Responsibilities Cast on the Legal Profession?” (2004) 42 (Nov) LSJ 61 at 63.

598

Lawyers’ Professional Responsibility

[17.270]

in so doing does not ordinarily trigger costs or disciplinary consequences, because the “duty must be applied to the practical realities of a lawyer’s professional life”.326

[17.270] Several of the cases in which lawyers have been ordered to pay costs personally have involved the pursuit of hopeless immigration cases.327 The swell of hopeless migration claims prompted amendments to the Migration Act 1958 (Cth), as from 1 December 2005,328 which prohibit a person encouraging another to pursue migration litigation that has no reasonable prospect of success if the person does not give “proper consideration to the prospects of success”329 of the litigation, or a purpose in commencing or continuing it is “unrelated to the objectives which the court process is designed to achieve”.330 The legislation adds that migration litigation need not be hopeless or bound to fail for it to have no reasonable prospect of success,331 although this inquiry is approached from the perspective of the litigation as a whole rather than individual grounds pleaded.332 Like its New South Wales counterpart, the legislation premises the filing of a document commencing migration litigation upon the lawyer certifies in writing that there are reasonable grounds for believing that the migration litigation has a reasonable prospect of success.333 A lawyer who contravenes the foregoing will likely be mulcted in costs.334

326 Momibo Pty Ltd v Adam (2004) 1 DCLR (NSW) 316 at [104] per Judge Neilson (who held that a delay of one month in assessing the lack of reasonable prospects of success did not amount to a breach of the statutory duty). 327 See, for example, Buksh v Minister for Immigration and Multicultural and Indigenous Affairs [2004] FCA 32. 328 By inserting Pt 8B into the Migration Act 1958 (Cth) (“Costs orders where proceedings have no reasonable prospect of success”), via the Migration Litigation Reform Act 2005 (Cth). 329 The word “proper” here invites consideration of whether, in the circumstances, “there was a balanced and thoughtful assessment of the prospects of success, such assessment being directed to whether, objectively, the litigant had prospects of success”: SZFDZ v Minister for Immigration and Multicultural Affairs (2006) 155 FCR 482 at [25] per Moore J. 330 Migration Act 1958 (Cth), s 486E(1). 331 Migration Act 1958 (Cth), s 486E(2). 332 SZTMH v Minister for Immigration and Border Protection (2015) 145 ALD 630 at [64] per Rangiah J. 333 Migration Act 1958 (Cth), s 486I(1). 334 Migration Act 1958 (Cth), s 486F(1). Cf Uppu v Minister for Immigration and Citizenship (No 2) [2012] FMCA 157 (where Burchardt FM, involving a borderline case, declined to order costs against the lawyer because “one has to make allowances for the pressure that clients in such circumstances put on their legal representatives and the fact that at the end of the day the capacity to see matters clearly will obviously vary from legal practitioner to legal practitioner”: at [52]).

[17.275]

17 Duty to the Court

599

No application in criminal proceedings

[17.275] The “hopeless case rule” does not apply, or at least applies with far less rigour, to defendants in criminal law cases.335 There are three reasons for this. First, the Crown, not the defendant, institutes the proceedings. Second, it is the role of the prosecution to establish the guilt of the defendant beyond a reasonable doubt; the defendant is entitled to put the prosecution to proof. Third, the client has the sole right to make the decision whether to plead guilty or not guilty: see [18.110].

335 See Dyhrberg, “Legal Ethics in Court Practice – Commentary” in Legal Ethics (Legal Research Foundation, October 1994), pp 28–29.

Chapter 18

Particular Applications of the Duty to the Administration of Justice [18.10] PROSECUTING COUNSEL ............................................................................................. 602 [18.10] The basic duty of fairness and impartiality ............................................................ 602 [18.20] Impact on attitude of prosecutor .............................................................................. 605 [18.50] Prosecutor’s duty of disclosure .................................................................................. 611 [18.75] Calling of witnesses by prosecutors ......................................................................... 613 [18.90] Submissions on sentence ............................................................................................ 617 [18.95] CRIMINAL DEFENCE LAWYERS ................................................................................. 618 [18.100] Guilt of the accused ................................................................................................... 618 [18.120] Disclosure of prior convictions ................................................................................ 620 [18.125] Advice on plea and giving evidence ...................................................................... 621 [18.130] DUTY OF FAMILY LAWYERS IN CASES INVOLVING CHILDREN .................. 622 [18.130] Circumstances where interests of child are paramount ...................................... 622 [18.140] Lawyers as mediators in family law proceedings ............................................... 624 [18.145] Appointment of an independent children’s lawyer ............................................ 625

[18.05]

This chapter addresses the duty to the administration of justice in the context of three specific forms of legal practice: criminal prosecution, criminal defence, and in family law disputes involving children. These areas generate many of the typical “ethical” dilemmas that form illustrations in both texts and professional responsibility classes and, for prosecution and defence work in particular, also in much of the journal literature. It is necessary at the outset to emphasise that lawyers’ professional responsibility in these fields, in the broad sense, is no different from what governs lawyers generally. Prosecutors, defence lawyers and family lawyers are subject to duties to the client and to the administration of justice as are all lawyers. But specific aspects of each of their roles serve to complicate issues of professional responsibility. It is the prospect of criminal sanctions, and their impact on the fundamental right to freedom, that impacts on the roles and responsibilities of prosecutors and defence lawyers.1 In family law cases, there is often the complication of the interests of the child, which may differ from those perceived by one or both parents. These complications have led some to suggest that different professional responsibility rules should be drafted for lawyers involved in different forms of 1 See, for example, the discussion in Jackson, “Truth and Compromise in Criminal Justice: A Critique of Trial Practice and Lawyers’ Ethics” (1997) 48 NILQ 321.

602

Lawyers’ Professional Responsibility

[18.10]

practice.2 Unitary approaches may, it is said, tend to over-generalise. Alternatives include rewriting universal rules to include enough specific provisions to guide lawyer behaviour in sub-specialties; continuing to rely on universal rules but providing regulatory supplements or protocols for practices in which deviation from the general norms is appropriate; and adopting separate rules for different areas of practice.3 There has been a move to this end in Australia for family lawyers, for instance, upon the issue by the Family Law Council and Family Law Section of the Law Council of Australia of Best Practice Guidelines for Lawyers Doing Family Law Work.4

PROSECUTING COUNSEL The basic duty of fairness and impartiality The role and duties of a prosecutor5 are in some ways distinct from those of other lawyers. The most critical distinction is the prosecutor’s duty of fairness and impartiality, which may generate tension with unbridled notions of zealous advocacy.6 As explained by Deane J in Whitehorn v R:7

[18.10]

Prosecuting counsel in a criminal trial represents the State. The accused, the court and the community are entitled to expect that, in performing his function of presenting the case against an accused, he will act with fairness and detachment and always with the objectives of establishing the whole truth in accordance with the procedures and standards which the law requires to be observed and of helping to ensure that the accused’s trial is a fair one.

Professional rules reflect the notions of fairness and impartiality, in broad terms, by requiring prosecutors to “fairly assist the court to arrive at the truth” and “seek impartially to have the whole of the relevant evidence placed intelligibly before the court”.8 These positive duties are echoed by a general proscription on doing 2 See, for example, Zacharias, “Reconceptualizing Ethical Roles” (1997) 65 Geo Wash L Rev 169. 3 Zacharias, “Reconceptualizing Ethical Roles” (1997) 65 Geo Wash L Rev 169 at 205. 4 2nd ed, October 2010, available at http://www.lawcouncil.asn.au (the first edition being issued on 29 March 2004). 5 Although reference to a “prosecutor” ordinarily brings to mind a person who prosecutes breaches of the general criminal law, the same obligations apply to lawyers who prosecute an action on behalf of an instrumentality or agency of the Crown generally, for instance, an organisation such as Workcover: Thompson v Duffin (2009) 105 SASR 181 (FC) (in the context of a prosecution under the Workers Rehabilitation and Compensation Act 1986 (SA)). 6 See Plater and Line, “Has the ‘Silver Thread’ of the Criminal Law Lost its Lustre? The Modern Prosecutor as a Minister of Justice” (2012) 31 U Tas L Rev 55 (who call for a more robust and “adversarial” approach to at least some aspects of the prosecutorial role, notably in the conduct of the prosecution at trial). 7 Whitehorn v R (1983) 152 CLR 657 at 663–664. See also Mallard v R (2005) 224 CLR 125 at [82] per Kirby J. The prosecutor has been described as a lawyer with no client but with several important constituencies: the police, victims of crime, the government and the community in general: Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 759–760. 8 ACT, r 29.1; NSW, r 29.1; NT, r 17.46; Qld, r 29.1; SA, r 29.1; Vic, r 29.1; WA, r 44(2). Equivalent provision is made in the barristers’ rules: ACT, r 62; NSW, r 83; NT, r 62; Qld, r 82; SA, r 82; Tas, para 57; Vic, r 83; WA, r 82.

[18.15]

18 Particular Applications of the Duty to the Administration of Justice

603

anything that would prejudice the fairness of the trial.9 The rules, to this end, preclude prosecutors from arguing any proposition of fact or law that they do not believe on reasonable grounds is capable of contributing to a finding of guilt and of carrying weight.10 On one level, the duty to secure a fair trial is one shared with defence counsel,11 who must likewise place their duty to the court above the duty to the client: see [17.10]. In this regard the following has been said:12 Rather than simply saying that a prosecutor has a “dual role” as both advocate and minister of justice, it is more accurate to say that all lawyers, even criminal defense lawyers, have such dual roles, but that the prosecutor’s dual role sometimes strikes a different balance between cooperative and adversarial stances. Rather than saying that the prosecutor is always required to be more cooperative than other lawyers, it is more accurate to say that when the prosecutor’s standard differs from the standard of other lawyers it differs only in degree.

The prosecutorial duty of fairness and impartiality, though, goes deeper. It affects the attitude expected of a prosecutor (see [18.20]–[18.45]), and manifests itself in duties of disclosure (see [18.50]–[18.70]) and the calling of witnesses (see [18.75]–[18.85]), as well as, to some extent, the prosecutor’s submissions on sentence (see [18.90]). There are two main reasons for the prosecutor’s duty of fairness and impartiality. The first is that, unlike other lawyers, there is theoretically no conflict between the prosecutor’s duty to the court and the duty to the client, the state. The proper administration of justice serves the interests of both. The second reason is that, in the eyes of the jury, the prosecutor’s status as the state may give her or his words a stamp of integrity and fairness.13 As observed by an American appellate court:14 The power and force of the government tend to impart an implicit stamp of believability to what the prosecutor says. The same power and force allow him, with a minimum of words, to impress on the jury that the government’s vast investigatory network, apart from the orderly machinery of trial, knows that the accused is guilty or has non-judicially reached conclusions on relevant facts which tend to show he is guilty.

[18.15]

The foregoing explains why a prosecutor should eschew public comment to the media about a trial he or she is prosecuting or has prosecuted, or risk otherwise endangering the appearance of objectivity and impartiality in the

9 Alister v R (1984) 154 CLR 404 at 429–430 per Murphy J (dissenting, but on another point); R v Anderson (1991) 53 A Crim R 421 at 449 per Gleeson CJ, at 453 per Slattery J. 10 ACT, r 29.4; NSW, r 29.4; NT, r 17.49; Qld, r 29.4; SA, r 29.4; Vic, r 29.4; WA, r 44(6). Equivalent provision is made in the barristers’ rules: ACT, r 65; NSW, r 86; NT, r 65; Qld, r 85; SA, r 85; Vic, r 86; WA, r 85. 11 Vella v R (1990) 47 A Crim R 119 at 122 per Malcolm CJ; Hugo v R (2000) 113 A Crim R 484 at [103] per Sheller AJ. 12 McMunigal, “Are Prosecutorial Standards Different?” (2000) 68 Fordham L Rev 1453 at 1472. 13 Alister v R (1984) 154 CLR 404 at 429–430 per Murphy J dissenting (but on another point). 14 Hall v United States (1969) 419 F (2d) 582 at 583–584. See also R v B (RB) (2001) 152 CCC (3d) 437 at [15] per Donald JA (CABC) (“Crown counsel is the surrogate of the Attorney General, the chief law officer of the Crown, and thus represents the guardian of law and order and as such he or she has a greater potential to influence the jury than counsel for the defence”).

604

Lawyers’ Professional Responsibility

[18.15]

machinery of criminal justice.15 For example, in Prosecution Guidelines issued in June 2007 by the New South Wales Office of the Director of Public Prosecutions (ODPP) the issue of media contact is addressed as follows:16 In trials, rulings on evidence and all matters in the absence of the jury (where one is to be or has been empanelled) should not be commented upon, other than to remind the media that they should not be reported during the trial. It is permissible and appropriate if requested by the media for an officer to give his or her name and indicate that the prosecution is being conducted by the ODPP, but many prosecutors prefer to remain anonymous and security considerations may militate against disclosure of names. It is not appropriate to discuss with the media the likely result of proceedings or the prospect of appellate proceedings being instituted, a matter being discontinued or an ex officio indictment being filed. It is not appropriate to comment to the media on the correctness or otherwise of any determination of a court.

The New South Wales Court of Criminal Appeal in R v MG17 accepted that a prosecutor is entitled on an appropriate occasion to draw attention to the ordeal of victims of crime, suggest systemic reform that may ameliorate problems, and to discuss the relative merits of the adversarial and inquisitorial system of justice. However, in that case, comments in the prosecutor’s address to university students following the applicant’s trial, appeal and retrial for rape were held to have breached the above guideline, the reasons for this appearing from the following extract from the judgment:18 [I]n our view [the prosecutor] was telling the listener that in her opinion the applicant was guilty and that, although his appeal was successful, it succeeded on minor matters the jury having correctly determined the applicant’s guilt. Although her address was made to an audience comprised of many law students, it was a public occasion on which she chose to speak about trials which attracted considerable publicity. It was inconceivable that, even if she herself took no steps to bring the address to the attention of the press, others would not do so … [I]n her address she made plain that she was of the opinion that in the case of the applicant the adversarial system had failed, favouring the interests of the applicant over those of the complainant.

The prosecutor’s statements, said their Honours, demonstrated a lack of detachment from the case she was required to prosecute. Though accepting that a prosecutor may privately believe the accused is guilty, here the prosecutor’s “public expression of that view displayed partiality and potentially compromised her capacity to fairly prosecute on behalf of the Crown”, with the consequence that “a fair minded person might reasonably conclude that her conduct of the prosecution would be 15 R v Sheikh (2004) 144 A Crim R 124 at [114] per Sully J (where the Crown prosecutor had spoken to the press following the trial, stating: “I commend the quality of the police investigation and the fortitude of the victim”). 16 Guideline 32 (selections from), issued pursuant to s 13 of the Director of Public Prosecutions Act 1986 (NSW). 17 R v MG (2007) 69 NSWLR 20. 18 R v MG (2007) 69 NSWLR 20 at [50], [51] (paragraph break omitted).

[18.25]

18 Particular Applications of the Duty to the Administration of Justice

605

directed to vindicating her publicly expressed view”.19 Accordingly, the court ordered that the applicant’s retrial be stayed pending the appointment of another prosecutor. Impact on attitude of prosecutor

[18.20]

The duty of fairness and impartiality impacts on the attitude the law expects a prosecutor to display in performing the prosecutorial function. That attitude should be one consistent with a duty to assist the court in attaining the purpose of criminal prosecutions, namely to make certain that justice is done between the subject and the state. It is in this respect that prosecutors have been described as “ministers of justice”.20 This translates into a duty not to “struggle for a conviction” or “be betrayed by feelings of professional rivalry”.21 Nor should prosecutors view criminal prosecutions as a contest between individuals or as one between the Crown seeking to convict and the accused endeavouring to be acquitted;22 “the role of the prosecutor”, it has been judicially remarked, “must be performed without any concern as to whether the case is won or lost”.23 To this end, the professional rules direct that the prosecution’s case for a conviction not be pressed beyond a full and fair presentation of that case.24 The case law adds that prosecutors should refrain from using legally available tactical manoeuvres just to secure a conviction,25 and from seeking to take advantage of a minor procedural error made by defence counsel.26 Need for detachment and self-control

[18.25]

Essential to fulfilling the duty of fairness and impartiality is professional detachment and self-control.27 A prosecutor’s obligations do not simply parallel the attitude adopted by the defence,28 and are inconsistent with maligning defence 19 R v MG (2007) 69 NSWLR 20 at [86]. 20 R v Lucas [1973] VR 693 at 705 per Newton J and Norris AJ. 21 R v Lucas [1973] VR 693 at 705 per Newton J and Norris AJ. See also Love v Robbins (1990) 2 WAR 510 at 515–516 per Malcolm CJ; R v Kennedy (1997) 94 A Crim R 341 at 353 per Hunt CJ at CL (“Crown prosecutors should not let their understandable distaste for the factual situations of the individual case become zealotry in a misguided belief that convictions must be obtained at any cost. They have a duty to ensure that trials will be fair to the accused”); Subramaniam v The Queen (2004) 79 ALJR 116 at [54] (FC); Thompson v Duffin (2009) 105 SASR 181 at [104] (FC) (in the context of a prosecution under the Workers Rehabilitation and Compensation Act 1986 (SA)). 22 R v Chamandy (1934) 61 CCC 224 at 227 per Riddell J. 23 R v Livermore (2006) 67 NSWLR 659 at [48] (CCA). See also G P v The Queen (2010) 27 VR 632 at [64] per Bongiorno JA (“it is not the function of a Crown prosecutor merely to act as might some counsel in an ordinary inter partes proceeding, taking every point regardless of its merit. It is the function of a Crown prosecutor, by appropriate argument to assist a Court not to fall into appealable error”). 24 ACT, r 29.2; NSW, r 29.2; NT, r 17.47; Qld, r 29.2; SA, r 29.2; Vic, r 29.2; WA, r 44(4). Equivalent provision is made in the barristers’ rules: ACT, r 63; NSW, r 84; NT, r 63; Qld, r 83; SA, r 83; Vic, r 84; WA, r 83. 25 King v R (1986) 161 CLR 423 at 426 per Murphy J. 26 R v Moore (1995) 77 A Crim R 577 at 583–584 per Hunt CJ at CL. 27 R v B (RB) (2001) 152 CCC (3d) 437 at [18] per Donald JA. 28 R v Bathgate (1946) 46 SR (NSW) 281 at 284 per Maxwell J.

606

Lawyers’ Professional Responsibility

[18.30]

counsel.29 Prosecutors must,not proffer their own reaction to the evidence led on an accused’s behalf; a prosecutor’s personal convictions or opinions on issues of fact, on the credibility of witnesses, and on the guilt and character of an accused are, strictly speaking, irrelevant.30 Reflecting the case law,31 the point is reiterated, in more general terms, by professional rules that prohibit a lawyer making submissions or expressing views to a court on any material32 evidence or issue in terms that (appear to) convey the lawyer’s personal opinion on its merits.33 Also, by expressing personal view(s) to the jury, a prosecutor might lead the jury to believe that they are required to decide whether the prosecutor is correct in those personal views rather than assess for themselves whether the evidence proves the Crown case.34 It goes without saying that a prosecutor should not personally prosecute a case in respect of which he or she is likely to be called as a witness, as this may undermine scope for professional detachment and the appearance of impartiality.35 Importance of not inflaming bias against the accused

[18.30]

Fairness dictates that a prosecutor must not seek to inflame or bias the court against the accused36 (or, for that matter, any witnesses called by the accused).37 In certain types of criminal prosecution – a typical example being a prosecution for sex offences against children – the jury may harbour existing prejudice against the accused. In these circumstances, more so than others, prosecutors must be vigilant not to do or say anything that appeals to that 29 R v Siu (1998) 124 CCC (3d) 301 at [70] per Finch JA. 30 R v Kaufman (2000) 151 CCC (3d) 566 at [18], [19] per Fish JA; R v Liristis [2004] NSWCCA 287 at [95] per Kirby P. 31 See, for example, Wilson v Collingwood Store Pty Ltd (2014) 41 VR 531 at [70]–[73] per the court; Lyndon v R [2014] NSWCCA 112 at [43] per Basten JA, with whom Button J and RS Hulme AJ concurred. 32 The word “material” is intended “to clarify that certain trivial or merely procedural matters may sometimes be the subject of a barrister’s expression of personal opinion in court”: ABA, Report of the Committee on Standard Advocacy Rules (February 1995), p 2. 33 ACT, r 17.3; NSW, r 17.3; NT, r 17.5; Qld, r 17.3; SA, r 17.3; Vic, r 17.3; WA, r 32(3) (except where otherwise required by law or a court). Equivalent provision is made in the barristers’ rules: ACT, r 20; NSW, r 44; NT, r 20; Qld, r 43; SA, r 43; Vic, r 44; WA, r 43. 34 R v KNP (2006) 67 NSWLR 227 at [53] per McClellan CJ at CL. 35 Grey v City of Marion (2006) 159 A Crim R 357 at [28]–[31] per Debelle J. The general proscription against a lawyer appearing in a case where he or she is likely to be called as a witness is discussed at [17.45]. 36 R v DDR [1998] 3 VR 580 at 593 per Ormiston JA (“there is a particular responsibility, so far as a prosecutor is concerned, to avoid an unnecessary creation of prejudice against the accused”); R v Livermore (2006) 67 NSWLR 659 at [36]–[38] (CCA); ACT, r 29.3; NSW, r 29.3; NT, r 17.48; Qld, r 29.3; SA, r 29.3; Vic, r 29.3; WA, r 44(5) (see also WA, r 44(12), which adds that if an accused person is unrepresented, a prosecutor must inform the court of any mitigating circumstances of which the prosecutor is aware). Equivalent provision is made in the barristers’ rules: ACT, r 64; NSW, r 85; NT, r 64; Qld, r 84; SA, r 84; Vic, r 85; WA, r 84. 37 See, for example, R v Stewart (Eric) [2009] 3 NZLR 425 (where the prosecutor’s intemperate attack on the integrity of a senior medical expert defence witness led the court to find that a miscarriage of justice had occurred).

[18.35]

18 Particular Applications of the Duty to the Administration of Justice

607

prejudice.38 For example, in R v Hodges,39 the New Zealand Court of Appeal held that remarks in the prosecutor’s closing statement – describing the accused, who was charged with child sexual abuse, as a “kerb crawler” and a “predator” who “ooze[d] male arrogance” and thought “females [were] only good for one thing” – were prejudicial and inflammatory, causing the trial, at which the accused was convicted, to have miscarried as a result Other scenarios are also pregnant with the possibility of existing prejudice, including where the crime charged has apparent racial or religious motivations. In R v Thomas,40 for example, in a trial in which the accused was convicted of attempted arson, the prosecutor had adduced evidence of World War II Nazi atrocities, photographs of Nazi tattoos on the accused’s body, and a book on the Holocaust and newspaper cuttings relating to hate crimes seized from the accused’s house, in an effort to overcome what was not an especially strong circumstantial case against the accused. The New Zealand Court of Appeal ruled that these tactics, designed as they were to inflame the jury against the accused, should have been halted by the trial judge or at least been the subject of a direction to the jury. The accused had, therefore, been the victim of a real risk of miscarriage of justice, and so the court directed that a verdict of acquittal be entered. Importance of avoiding unduly emotive language

[18.35]

Consistent with the duty to avoid inflaming bias or prejudice against an accused, a prosecutor must not conduct proceedings with unduly emotive language;41 that is, “with language that is calculated not to enlighten but to ignite”.42 In McCullough v R,43 Crown counsel in a murder case emphasised the sanctity of life and the horrible nature of murder, branding the accused as a “despicable” and “disgusting” man who felt no remorse and who was prepared to kill as another person might “swat a fly” or “flick out a match”. He compared the accused to the Yorkshire Ripper, suggesting that he was the sort of person who, if not restrained, might be responsible for having “half the community wiped out”. The Tasmanian Court of Criminal Appeal viewed these remarks as calculated to prejudice the jury by arousing feelings of disgust and revulsion, and fear and

38 de Jesus v R (1986) 61 ALJR 1 at 3 per Gibbs CJ; R v M [1991] 2 Qd R 68 at 83 per Cooper J; R v O’Sullivan (unreported, CCANSW, 17 December 1992) at 32 per McInerney J; R v Day [2000] QCA 313 at [28] per Thomas JA; R v B (RB) (2001) 152 CCC (3d) 437 at [15] per Donald JA; R v Wheatley [2012] QCA 55 at [65], [66] per Muir JA; Lyndon v R [2014] NSWCCA 112 at [25] per Basten JA, with whom Button J and RS Hulme AJ concurred (“Where the offending is inherently likely to inspire feelings of distaste or even revulsion which may cloud an impartial assessment of the evidence, particular care should be taken not to play on possible prejudice or emotion”). 39 R v Hodges (unreported, CA(NZ), 19 August 2003). 40 R v Thomas (unreported, CANZ, Henry, Tipping and Salmon JJ, 15 December 1998). 41 R v Roulston [1976] 2 NZLR 644 at 654 per Woodhouse J; R v Deriz (1999) 109 A Crim R 329 at 338 per Parker J; R v Day [2000] QCA 313 at [28] per Thomas JA; R v Wheatley [2012] QCA 55 at [52]–[54] per Muir JA. 42 R v Munroe (1995) 96 CCC (3d) 431 at 447 per Austin JA (affd R v Munroe [1995] 4 SCR 53). 43 McCullough v R [1982] Tas R 43.

608

Lawyers’ Professional Responsibility

[18.35]

apprehension, against the accused.44 The real risk of the jury being improperly influenced by those remarks led it to quash the conviction. Merely because the language chosen by a prosecutor is strong or emotive will not always impinge on the duty of fairness, especially if it is proportionate to and supported by the evidence adduced. A fair and balanced presentation of relevant evidence may evoke prejudice or emotion. It is, to this end, unrealistic for the law to treat a prosecutor as a robot, by requiring her or him to try and remove from the presentation of the prosecution case, or to neutralise, aspects that evoke prejudice or emotion. As explained by the Queensland Court of Appeal in R v Day:45 [C]riminal trials deal with human situations and it is the duty of counsel to elicit answers which will give the jury appropriate insights into the conduct which will facilitate the drawing of inferences on issues such as motive, intention, knowledge and state of mind of various actors. It is counsel’s duty to do so, and to try to do so persuasively. The statements made in the above cases condemning inflammatory and emotive conduct by counsel are not in my view intended to deny counsel their proper role in these respects.

The fairness criterion is aimed not at prejudice or emotion per se, but at undue prejudice or emotion. In an alleged rape case, R v Deriz,46 where the prosecutor described the defendant’s conduct as “barbarous”, involving “sexual atrocities” and “hostages”, the Western Australian Court of Criminal Appeal found no justification to allow an appeal against conviction on this ground. The prosecution case, according to the court, was entirely supported by the evidence it led, and so these descriptions were, given the evidence, not inappropriate. The matter is one of judgment and degree. Too strict an approach could undermine prosecutors’ duty to present the Crown case in a firm and positive manner, and impinge upon the discharge of their obligations fearlessly in the interests of the Crown.47 In this regard the tightrope prosecutors must tread has been described as follows:48 Counsel for the Crown is obliged to put the Crown case to the jury and, when appropriate, he is entitled to firmly and vigorously urge the Crown view about a particular issue and to test and, if necessary, to attack that advanced on behalf of the accused. But he must always do so temperately and with restraint, bearing constantly in mind that his primary function is to aid in the attainment of justice, not the securing of convictions. 44 McCullough v R [1982] Tas R 43 at 58–59. 45 R v Day [2000] QCA 313 at [28] per Thomas JA, Pincus and Davies JJA concurring. 46 R v Deriz (1999) 109 A Crim R 329. 47 R v Deriz (1999) 109 A Crim R 329 at 339 per Parker J; R v Rugari (2001) 122 A Crim R 1 at [45], [52] per Carruthers AJ. 48 McCullough v R [1982] Tas R 43 at 57 (CCA). See also Berger v United States (1935) 295 US 78 at 88 per Sutherland J (“[A prosecutor] may prosecute with earnestness and vigor – indeed he should do so. But, while he may strike hard blows, he is not at liberty to strike foul ones. It is as much his duty to refrain from improper methods calculated to produce a wrongful conviction as it is to use every legitimate means to bring about a just one”); Libke v R (2007) 230 CLR 559 at [35] per Kirby and Callinan JJ (dissenting but not on this point) (“The role of prosecuting counsel is not to be passive. He or she may be robust, and be expected and required to conduct the prosecution conscientiously and firmly”).

[18.40]

18 Particular Applications of the Duty to the Administration of Justice

609

Consequences of failure to observe the standard of fairness

[18.40]

A prosecutor’s failure to act with fairness and impartiality may provide grounds for an accused who has been convicted to appeal the conviction for a miscarriage of justice. An appellate court will be slow to intervene unless it can clearly be demonstrated that the accused has suffered unfairness as a result of prosecutorial intemperance.49 To this end, merely because some of the prosecutor’s statements or questions could be legitimately criticised does not compel a finding of unfairness to the accused.50 As explained by the Queensland Court of Appeal:51 In the cool atmosphere of an appeal court that reconstruction may be described as unduly theatrical. But unless we are to interrupt criminal trials so that counsel may first write out their speeches, closing addresses must remain at least partly driven by adrenalin. Spontaneity is a valuable asset in criminal trials even if it leads to the occasional flourish that would be deleted on more mature reflection.

An appellate court will, in any case, bear in mind that “[i]t is difficult to recapture the atmosphere of a lengthy trial by reading the transcript of it”.52 It will give due weight to the fact that the trial judge is best positioned to gauge the effect on the jury of an inflammatory statement (and whether it was accompanied, say, by aggressive gestures or suggestive body language). Appellate courts are especially disinclined to interfere where defence counsel at trial was experienced and did not at the time object to the prosecutor’s statements or questions,53 in cases where the prosecution case was very strong,54 and/or where the trial judge redressed any perceived imbalance by addressing the jury regarding it.55 49 Whitehorn v R (1983) 152 CLR 657 at 664–665 per Deane J; R v Russo (2004) 11 VR 1 at [10] per Winneke P. 50 See, for example, Libke v R (2007) 230 CLR 559 at [81]–[85] per Hayne J (with whom Gleeson CJ concurred on this point), at [134], [135] per Heydon J (contra at [37]–[54] per Kirby and Callinan JJ dissenting) (where the prosecutor engaged in illegitimate forms of cross-examination, including questioning directed at humiliating and belittling the accused, sarcastic and insulting questioning, cutting off the accused’s answers before they were completed, argumentative questioning and questions resting on controversial assumptions, but the majority nonetheless held that this did not generate a miscarriage of justice); R v Pelly (2015) 122 SASR 84 (where a majority of the court, per Bampton and Parker JJ, Gray J dissenting, concluded that the impugned cross-examination and immoderate prosecutorial remarks would not have created a real risk that the jury would not have given proper consideration to the evidence, and any potential unfairness in this context was moderated by the summing up and did not bring about a miscarriage of justice: at [206] per Bampton J); Kohai v R [2015] 1 NZLR 833 (where, in a case involving alleged child sexual abuse, prosecuting counsel’s reference to the accused having a “taste for young girls” was unjustified and inflammatory but the court nonetheless ruled that the trial had not miscarried as a result). 51 R v Day [2000] QCA 313 at [31] per Thomas JA, Pincus and Davies JJA concurring. 52 R v Ciseau (unreported, CAQld, 8 November 1994). 53 See, for example, Vella v R (1990) 47 A Crim R 119 at 138 per Brinsden J; R v Day [2000] QCA 313 at [32] per Thomas JA; R v Webb [2004] QCA 448. 54 See, for example, Vella v R (1990) 47 A Crim R 119 at 129 per Malcolm CJ. 55 See, for example, R v KNP (2006) 67 NSWLR 227 at [53], [56] per McClellan CJ at CL (although the introduction of prosecutor’s personal thoughts was a “gross breach” of the duty to present the Crown case fairly and impartially, it did not cause a miscarriage of justice chiefly because of the trial judge’s directions to the jury given after defence counsel had an opportunity to address the jury and respond to the prosecutor’s address); Causevic v The Queen (2008) 190 A Crim R 416 at [28] per McClellan CJ at CL (where the trial judge reminded the jury that counsel’s arguments were not

610

Lawyers’ Professional Responsibility

[18.45]

There comes a point, though, when the prosecutor’s departure from good practice is so gross, persistent, prejudicial or irremediable that an appellate court has little choice but to condemn a trial as unfair and quash a conviction as unsafe. This may be so if, say, defence counsel objected to the prosecutor’s conduct and the trial judge did not properly address the point in addressing the jury.56 An appellate court may likewise intervene if defence counsel has proven ineffective to protect the accused from the prosecutor’s excesses, and this has not been diffused or corrected by the trial judge.57 Even if the trial judge has sought to rectify the perceived prejudice,58 or the prosecutor has sought to do so in summing up,59 being left until the end of the trial an appellate court may find that the damage has been done, as the effect of the prosecutor’s intemperance has languished for sufficient time to prejudice the jury.

[18.45]

As the duty of fairness is owed to the court, a prosecutor owes no independent duty of fairness directly to the accused.60 The duty is therefore not directly enforceable at the suit of the accused or anyone else by prerogative writ, judicial order or an action for damages.61 To citizens civil remedies against prosecutors would, it is said, cause prosecutors to be distracted from their duty to act fearlessly and in accordance with their professional knowledge and opinions.62 Prosecutorial intemperance, however, secures no immunity from disciplinary action.63

evidence and that they were entitled to take a different approach to that which counsel had submitted); R v Kemp [2009] 1 Qd R 532 at [27] per Jones J (“the [trial judge’s] correction given in such emphatic terms and at the time it was delivered was sufficient to overcome any adverse impact arising from the prosecutor’s remarks”). 56 See, for example, R v Russo (2004) 11 VR 1. 57 See, for example, R v S(F) (2000) 144 CCC (3d) 466; Bernard v State of Trinidad and Tobago [2007] 2 Cr App R 22 (conviction set aside because of defence counsel’s inexperience coupled with the failure of the court to afford him the necessary materials and opportunity to prepare himself properly); R v Wheatley [2012] QCA 55 at [62]–[64] per Muir JA. 58 See, for example, R v DDR [1998] 3 VR 580 at 595 per Ormiston JA. 59 R v Livermore (2006) 67 NSWLR 659 at [39]–[44] (CCA) (where the prosecutor effectively invited the jury to conclude that they were “slow” if they did not agree with him). See also GDD v R [2010] NSWCCA 62 at [48]–[55] per Grove J, at [102]–[117] per Simpson J. 60 Love v Robbins (1990) 2 WAR 510 at 525 per Wallwork J. 61 Elguzouli-Daf v Commissioner of Police [1995] QB 335; Emanuele v Hedley (1997) 137 FLR 339; Courtney v State of Tasmania [2000] TASSC 83; Cannon v Tahche (2002) 5 VR 317 at [59], [60] (CA) (claim for tort of misfeasance in a public office rejected); Brooks v Commissioner of Police of the Metropolis [2005] 1 WLR 1495 at [38] per Lord Rodger. 62 Krieger v Law Society of Alberta (1997) 149 DLR (4th) 92 at 103 per MacKenzie J (QBAlta); Mensinga v Director of Public Prosecutions [2003] ACTCA 1 at [36] per Higgins CJ and Gray J. 63 R v Chaplin (1995) 96 CCC (3d) 225 at 233 per Sopinka J (SCC); Krieger v Law Society of Alberta (1997) 149 DLR (4th) 92 at 113–115 per MacKenzie J. See, for example, Legal Profession Complaints Committee v Bates [2012] WASAT 150 (prosecutor disciplined for breaching duty of disclosure).

[18.55]

18 Particular Applications of the Duty to the Administration of Justice

611

Prosecutor’s duty of disclosure

[18.50]

The prosecutor’s duty of disclosure owes its origin to the elementary right of every defendant to a fair trial.64 What informs the duty is that an accused, in order to receive a fair trial, must have adequate notice of the case against her or him: the absence of any right in an accused, as opposed to a defendant in civil proceedings, to obtain discovery also informs the duty.65 There is then the inherent power imbalance between the Crown and the individual, a point explained by Sulan J in R v Ulman-Naruniec as follows:66 Criminal proceedings are adversarial. The adversarial system, by its nature, requires information to be placed before the jury by the parties. The prosecution has the discretion to determine what evidence will be placed before the jury. That leaves the prosecution and the police with what some may describe as too much power. The creation of an independent office of the [Director of Public Prosecutions (DPP)] has as one of its purposes to ensure that all relevant information is disclosed to the defence. The DPP is not an arm of the investigating authority. Any disadvantage which may be perceived to the defence resulting from the defence’s inability to investigate matters as thoroughly as the prosecution is overcome or lessened by the obligation of the prosecution to make all relevant material available, including that which may be helpful to the defence.

The duty to disclose is especially important where the evidence in question may cast a significant light on the credibility or reliability of material prosecution witnesses or the acceptability and truthfulness of exculpatory evidence from or for the accused.67 What should be disclosed?

[18.55]

Prosecutors should not shut out, but disclose, any evidence that the jury could reasonably regard as credible and that could be of importance to the accused’s case. Professional rules, in line with judicial statements to similar effect,68 require prosecutors to disclose to their opponent as soon as practicable all material – including the names of and means of finding prospective witnesses in connection with such material – available to them, or of which they become aware, that could 64 R v Brown [1998] AC 367 at 374 per Lord Hope; R v Keogh (No 2) [2015] SASC 180 at [57], [58] per Blue J. See generally Plater, “The Development of the Prosecutor’s Role in England and Australia with Respect to its Duty of Disclosure: Partisan Advocate or Minister of Justice?” (2006) 25 U Tas L Rev 111; Plater and de Vreeze, “Is the ‘Golden Rule’ of Full Prosecution Disclosure a Modern ‘Mission Impossible’?” (2012) 14 Flinders LJ 133. 65 SOBH v Police Force of Victoria [1994] 1 VR 41 at 47–48 per Brooking J, at 67–73 per Ashley J. 66 R v Ulman-Naruniec (2003) 143 A Crim R 531 at [136] (dissenting but not on this statement of principle). 67 Mallard v R (2005) 224 CLR 125 at [81] per Kirby J. See, for example, R v HAU [2009] QCA 165 (where the appellant was convicted of indecent treatment and unlawful carnal knowledge of a child, the prosecution failed to disclose the victim impact statement (and attached doctor’s letter), which presented a different account of events by the complainant; it was held that the defence should have been afforded the opportunity to cross-examine the complainant with respect to those different accounts, and a retrial was ordered). 68 See, for example, Dallison v Caffrey [1963] 1 QB 348 at 369 per Lord Denning MR; R v Lucas [1973] VR 693 at 705 per Newton J and Norris AJ; R v Ulman-Naruniec (2003) 143 A Crim R 531 at [137] per Sulan J (dissenting but not on this statement of principle); R v Spiteri (2004) 61 NSWLR 369 at [17] per Simpson J; R v Keogh (No 2) [2015] SASC 180 at [54]–[64] per Blue J.

612

Lawyers’ Professional Responsibility

[18.60]

constitute evidence relevant to the guilt or innocence of the accused.69 Equivalent provision is made by statute in some jurisdictions.70 Although a prosecutor is not obliged to lead evidence that may undermine the Crown case, fairness dictates that material in the prosecutor’s possession that may have that effect be disclosed to the defence. The investigation process also requires inquiry into material that may affect the credibility of potential Crown witnesses. Again, the prosecutor is not obliged to lead the evidence of witnesses who in her or his opinion are likely to be regarded by the judge or jury as not credible or unreliable. But fairness requires the disclosure of material in the prosecution’s possession that may cast doubt on the credibility or reliability of the witnesses it chooses to lead.71 Circumstances where disclosure not required

[18.60]

The professional rules generally recognise that a prosecutor may decline to make disclosure where it would seriously threaten the integrity of the administration of justice in those proceedings or the safety of any person.72 In any event, the rules direct the prosecutor to consider whether the charge against the accused to which the non-disclosed material pertains should be withdrawn, and the accused should be faced only with a lesser charge to which such material would not be so relevant.73 The case law adds that the prosecution’s duty of disclosure does not extend to disclosing material:74 • relevant only to the credibility of defence (as distinct from prosecution) witnesses; • relevant only to the credibility of the accused; • only because it might deter an accused from giving false evidence or raising an issue of fact that might be shown to be false; • for the purpose of preventing an accused from creating a trap for herself or himself, if at the time the prosecution became aware of the material it was not a relevant issue at trial. 69 ACT, r 29.5; NSW, r 29.5; NT, r 17.50; Qld, r 29.5; SA, r 29.5; Vic, r 29.5; WA, r 44(3). Equivalent provision is made in the barristers’ rules: ACT, r 66; NSW, r 87; NT, r 66; Qld, r 86; SA, r 86; Vic, r 87; WA, r 86. 70 Criminal Code (Qld), s 590AB(2); Criminal Procedure Act 2009 (Vic), ss 42, 185; Criminal Procedure Act 2004 (WA), s 95(6)–(9). 71 R v H [2004] 2 AC 134 at 147 per Lord Bingham; Ragg v Magistrates’ Court of Victoria (2008) 18 VR 300 at [73]–[79] per Bell J. 72 ACT, r 29.5; NSW, r 29.5; NT, r 17.50; Qld, r 29.5; SA, r 29.5; Vic, r 29.5; WA, r 44(3). Equivalent provision is made in the barristers’ rules: ACT, r 66; NSW, r 87; NT, r 66; Qld, r 86; SA, r 86; Vic, r 87; WA, r 86. 73 ACT, r 29.6; NSW, r 29.6; NT, r 17.51; Qld, r 29.6; SA, r 29.6; Vic, r 29.6. Equivalent provision is made in the barristers’ rules: ACT, r 66A; NSW, r 88; NT, r 66A; Qld, r 87; SA, r 87; Vic, r 88; WA, r 87. 74 R v Spiteri (2004) 61 NSWLR 369 at [17] per Simpson J; R v Farquharson [2009] VSCA 307 at [214] per the court.

[18.75]

18 Particular Applications of the Duty to the Administration of Justice

613

However, a prosecutor who intends to use material he or she believes on reasonable grounds may have been unlawfully or improperly obtained must inform the opponent of the material, and make available to the opponent a copy if it is in documentary form.75 Disclosure of availability of evidence

[18.65]

The duty not to mislead the court, coupled with the duty of fairness, means that prosecutors should not inform the court or their opponent that they have evidence supporting an aspect of their case unless they believe on reasonable grounds that the evidence is obtainable from material already available.76 A prosecutor who, having informed the court of such evidence, later learns that it will not be available, must immediately inform the opponent of that fact and also the court when the case is next before the court.77 Consequences of failure to disclose

[18.70]

A prosecutor’s failure to disclose may form a ground of appeal against a conviction on the basis that the accused has suffered a miscarriage of justice.78 Not every such failure results in a miscarriage of justice, but only in the infrequent case where the prosecutor’s conduct prejudiced the accused so that the trial was not fair.79 As the duty of disclosure is owed to the court, it is not remediable by civil action by an accused against the prosecutor.80 It may nonetheless generate professional disciplinary sanction.81 Calling of witnesses by prosecutors General rule

[18.75]

The duty of fairness impacts upon the prosecutor’s calling of witnesses. Though the prosecutor alone decides who to call as a Crown witness, this

75 ACT, r 29.8; NSW, r 29.8; NT, r 17.53(a), 17.53(b) (see also 17.53(c) which requires the prosecutor to inform the opponent of the grounds for believing the material was unlawfully or improperly obtained); Qld, r 29.8; SA, r 29.8; Vic, r 29.8; WA, r 44(7) (which adds that must “inform the defence of the grounds for believing that the material was unlawfully or improperly obtained”). Equivalent provision is made in the barristers’ rules: ACT, r 67; NSW, r 91; NT, r 67; Qld, r 89; SA, r 89; Vic, r 91; WA, r 89. 76 ACT, r 29.10; NSW, r 29.10; NT, r 17.55; Qld, r 29.10; SA, r 29.10; Vic, r 29.10; WA, r 44(9). Equivalent provision is made in the barristers’ rules: ACT, r 69; NSW, r 93; NT, r 69; Qld, r 91; SA, r 91; Vic, r 93; WA, r 91. 77 ACT, r 29.11; NSW, r 29.11; NT, r 17.56; Qld, r 29.11; SA, r 29.11; Vic, r 29.11; WA, r 44(10). Equivalent provision is made in the barristers’ rules: ACT, r 70; NSW, r 94; NT, r 70; Qld, r 92; SA, r 92; Vic, r 94; WA, r 92. 78 R v Ward [1993] 1 WLR 619 at 642 (CA). 79 R v Ulman-Naruniec (2003) 143 A Crim R 531 at [146] per Sulan J (dissenting but not on this statement of principle). 80 Cannon v Tahche (2002) 5 VR 317 at [57]–[60] (CA). 81 R v Chaplin (1995) 96 CCC (3d) 225 at 233 per Sopinka J; Krieger v Law Society of Alberta (1997) 149 DLR (4th) 92 at 115 per MacKenzie J; Cannon v Tahche (2002) 5 VR 317 at [58] (CA).

614

Lawyers’ Professional Responsibility

[18.75]

discretion must not be exercised so as to obtain unfair advantage for the prosecution. As explained by Barwick CJ, McTiernan and Mason JJ in Richardson v R:82 Any discussion of the role of the Crown prosecutor in presenting the Crown case must begin with the fundamental proposition that it is for him to determine what witnesses will be called for the prosecution. He has the responsibility of ensuring that the Crown case is properly presented and in the course of discharging that responsibility it is for him to decide what evidence, in particular what oral testimony, will be adduced. He also has the responsibility of ensuring that the Crown case is presented with fairness to the accused. In making his decision as to the witnesses who will be called he may be required in a particular case to take into account many factors, for example, whether the evidence of a particular witness is essential to the unfolding of the Crown case, whether the evidence is credible and truthful, whether in the interests of justice it should be subject to cross-examination by the Crown, to mention but a few.

Fairness to the accused dictates that a prosecutor must not pick and choose the witnesses or evidence to be presented so as only to favour a conviction, but should present impartially the available, relevant credible evidence, whether it tends for or against conviction, and should recognise and not seek to hide any weaknesses of the prosecution case.83 The prosecutor does not fulfil this duty, it has been said, “by seeking to avoid having placed before the court evidence which he is not entitled to regard as unreliable and yet which ill accords with a theory of the accused’s guilt”.84 To avoid the risk of a miscarriage of justice, a prosecutor must call all witnesses whose evidence is necessary to unfold the narrative and give a complete account of the events upon which the prosecution is based. So the prosecution must, for instance, call eyewitnesses of any events that go to prove the elements of the crime, even if those witnesses give accounts inconsistent with the Crown case.85 Professional rules, to this end, require the prosecution to call, as part of its case, all witnesses whose testimony is admissible and necessary for the presentation of all of the relevant circumstances, and gives reasonable grounds for the prosecutor to believe that it could provide admissible evidence relevant to any matter in issue.86

82 Richardson v R (1974) 131 CLR 116 at 119. See also R v Apostilides (1984) 154 CLR 563 at 575–578 (FC). 83 R v Deriz (1999) 109 A Crim R 329 at 338–339 per Parker J. 84 R v Kneebone (1999) 47 NSWLR 450 at 462 per James J. 85 Whitehorn v R (1983) 152 CLR 657 at 674 per Dawson J; R v Kneebone (1999) 47 NSWLR 450 at 470 per Smart AJ; Dyers v R (2002) 210 CLR 285 at [11] per Gaudron and Hayne JJ, at [118] per Callinan J. See, for example, R v Jensen (2009) 23 VR 591. 86 ACT, r 29.7; NSW, r 29.7; NT, r 17.52(a)–(d); Qld, r 29.7; SA, r 29.7; Vic, r 29.7. Equivalent provision is made in the barristers’ rules: ACT, r 66B(a)–(d); NSW, r 89(a), 89(b); NT, r 66B(a)–(d); Qld, r 88(a), 88(b); SA, r 88(a), 88(b); Vic, r 89(a), 89(b); WA, r 88(a), 88(b).

[18.80]

18 Particular Applications of the Duty to the Administration of Justice

615

Distinguishing witnesses that must be called from those that need not be called

[18.80]

“A refusal to call the witness”, the High Court has remarked, “will be justified only by reference to the overriding interests of justice”.87 The case law, reflected in professional rules,88 indicates that the prosecutor owes no duty to call those witnesses that the opponent consents to not being called or whose entire evidence has been dealt with by an admission on behalf of the accused. Nor need a prosecutor call a witness whose testimony he or she believes on reasonable grounds would establish a point already adequately established by other witnesses.89 A witness whose testimony the prosecutor believes on reasonable grounds is plainly unreliable or plainly untruthful also need not be called.90 For example, in Walsh v State of Western Australia91 the witness, who was the complainant’s mother, had peremptorily dismissed the possibility of sexual misconduct by the appellant and unequivocally aligned herself with the appellant and his interests before she knew the detail of the allegations or when, where and how the offences allegedly occurred. McLure P, with whom Buss JA and Hall J concurred, held that “[t]his conduct provided a proper basis for the prosecutor to form an adverse view as to the credibility of the statements and the evidence to be based on them”,92 and thus sufficient ground not to call that witness. But suspicion, scepticism and errors on subsidiary matters do not suffice to make a witness unreliable in this context. The prosecutor should focus on matters of substance and even on these there may be significant differences between the witnesses, but it is for the jury to resolve them.93 In particular, a prosecutor has no proper basis for concluding that a witness is unreliable merely because her or his 87 R v Apostilides (1984) 154 CLR 563 at 576 (FC). 88 ACT, r 29.7(i), (ii); NSW, r 29.7(i), (ii); NT, r 17.52(e), (f); Qld, r 29.7(i), (ii); SA, r 29.7(i), (ii); Vic, r 29.7(i), (ii). Equivalent provision is made in the barristers’ rules: ACT, r 66B(d), (e); NSW, r 89(i), (ii); NT, r 66B(d), (e); Qld, r 88(c)(i), (ii); SA, r 88(c)(i), (ii); Vic, r 89(i), (ii); WA, r 88(c)(i), (ii). 89 Whitehorn v R (1983) 152 CLR 657 at 674–675 per Dawson J; R v Kneebone (1999) 47 NSWLR 450 at 470 per Smart AJ; ACT, r 29.7(iii); NSW, r 29.7(iii); NT, r 17.52(g); Qld, r 29.7(iii); SA, r 29.7(iii); Vic, r 29.7(iii). Equivalent provision is made in the barristers’ rules: ACT, r 66B(f); NSW, r 89(iii); NT, r 66B(f); Qld, r 88(c)(iii); SA, r 88(c)(iii); Vic, r 89(iii); WA, r 88(c)(iii). 90 ACT, r 29.7(iv); NSW, r 29.7(iv); NT, r 17.52(h); Qld, r 29.7(iv); SA, r 29.7(iv); Vic, r 29.7(iv). Equivalent provision is made in the barristers’ rules: ACT, r 66B(g); NSW, r 89(iv); NT, r 66B(g); Qld, r 88(c)(iv); SA, r 88(c)(iv); Vic, r 89(iv); WA, r 88(c)(iv). See, for example, R v Busson (2007) 248 LSJS 444 (where Bleby J considered that the prosecutor’s view that the witness in question could not be held out as a witness of truth appeared to be justified, and one supported by the conclusion of at least two judges at the defendant’s trial: at [21]–[25]). The incarnation of this rule in the superseded Law Council of Australia’s Model Rules of Professional Conduct and Practice (r 20.7(iii)) also required the prosecution, if defence counsel requested, to call a witness that the prosecution deemed to be unreliable so that defence counsel could cross-examine that witness. Such an approach was problematic, as it obliged a prosecutor to proffer a witness merely in order to give the defence material with which to attack the credit of other witnesses on whom the Crown relied. In other words, it produced the undesirable outcome of requiring the prosecution to call a witness for no purpose other than to assist the defence in its endeavour to destroy the Crown’s case: R v Russell-Jones [1995] 3 All ER 239 at 245 (CA). 91 Walsh v State of Western Australia [2011] WASCA 119. 92 Walsh v State of Western Australia [2011] WASCA 119 at [75]. 93 R v Apostilides (1984) 154 CLR 563 at 576 (FC).

616

Lawyers’ Professional Responsibility

[18.85]

account misaligns with a theory of the case attractive to the prosecutor. In other words, the prosecutor must not espouse a theory and tailor a case accordingly.94 An approach whereby the witness is not called at all, or is left to the defence to call because the witness’s evidence is not seen as fitting the prosecution’s view of the case, is likely to lead to a miscarriage of justice. In R v Kneebone,95 for example, a case of alleged rape, the prosecutor had failed to call as a witness the mother of the complainant who had allegedly witnessed the crime. A miscarriage of justice was found, as the way in which the complainant’s evidence was given made the evidence of her mother essential to the unfolding of the narrative and crucial on credibility.96 A prosecutor must inform the opponent as soon as practicable of the identity of any witness whom he or she intends not to call, together with the reason(s) for this.97 Calling of witnesses by the court

[18.85]

In exceptional circumstances the trial judge may call a person to give evidence. This jurisdiction is confined, for the reasons proffered by the High Court in Richardson v R:98 [T]he occasions for its exercise should be rare and infrequent, because all too often the trial judge lacks that knowledge and information about the witness, his relationship to the parties and to the evidence to be presented which is essential to the making of a decision whether the witness should be called in the Crown case. The trial judge should be astute to acknowledge the nature of the discretion which is reposed in the prosecutor and the limitations attaching to his judicial knowledge of the material circumstances.

The prosecution’s refusal to call a witness, even for reasons a judge thinks insufficient, is not by itself a ground to exercise this jurisdiction.99 In R v Busson,100 for example, Bleby J refused to call a witness that the prosecutor considered could not be held out as a witness of truth fearing, inter alia, that the court would otherwise be drawn into the adversarial arena. His Honour queried, were the court to call the witness, whether it would have to lead the witness, what assistance the 94 R v Anderson (1991) 53 A Crim R 421. 95 R v Kneebone (1999) 47 NSWLR 450. 96 R v Kneebone (1999) 47 NSWLR 450 at 462 per James J. 97 ACT, r 29.7; NSW, r 29.7; NT, r 17.52(i); Qld, r 29.7; SA, r 29.7; Vic, r 29.7. Equivalent provision is made in the barristers’ rules: ACT, r 66B(h); NSW, r 90; NT, r 66B(h); Qld, r 88; SA, r 88A; Vic, r 90; WA, r 88A. 98 Richardson v R (1974) 131 CLR 116 at 122 per Barwick CJ, McTiernan and Mason JJ. See also R v Apostilides (1984) 154 CLR 563 at 575 (FC) (noting that the trial judge may but is not obliged to question the prosecutor in order to discover the reasons that led the prosecutor to decline to call a particular person, but is not called upon to adjudicate the sufficiency of those reasons); Diehm v Director of Public Prosecutions (Nauru) (2013) 88 ALJR 34 at [74]–[79] per French CJ, Kiefel and Bell JJ (against the backdrop of a statutory provision empowering the court to call a witness, their Honours nonetheless found no reason to suppose that this discretionary element “should not be informed by a principle of restraint, having regard to the risks which necessarily attach to a trial judge calling a witness”: at [79]). 99 R v Apostilides (1984) 154 CLR 563 at 576 (FC). 100 R v Busson (2007) 248 LSJS 444 at [29].

[18.90]

18 Particular Applications of the Duty to the Administration of Justice

617

jury should receive in endeavouring to determine where the truth lies, and what directions could be given to a jury where both parties would almost certainly allege that the witness is not a witness of truth. Submissions on sentence

[18.90]

The duty of fairness and impartiality dictates that a prosecutor should not seek to persuade the court to impose a vindictive sentence. The rules nonetheless require a prosecutor to correct an error made by the opponent in address on sentence, inform the court of relevant authority or legislation bearing on the appropriate sentence and assist the court to avoid appealable error on the issue of sentence.101 The same rule adds (other than in Western Australia) that a prosecutor may submit that a custodial or non-custodial sentence is appropriate.102 Former provision, entitling a prosecutor to inform the court of an appropriate range of severity of penalty, including a period of imprisonment, by referring to relevant decisions (which aligned with authority at the time)103 was omitted in the Australian Solicitors’ Conduct Rules (but remains in most barristers’ rules)104 in view of the High Court’s decision in Barbaro v R.105 In that case, the court made clear that a prosecutor is not required, or even allowed, to make a statement to the court as to the bounds of the available range of sentences. To do so, it was reasoned, “may lead to erroneous views about its importance in the process of sentencing with consequential blurring of what should be a sharp distinction between the role of the judge and the role of the prosecution in that process”.106 In any case, their Honours added, any such statement is one of opinion, and “advances no proposition of law or fact which a sentencing judge may properly take into account in finding the relevant facts, deciding the applicable principles of law or applying those principles to the facts to yield the sentence to be imposed”.107

101 ACT, r 29.12; NSW, r 29.12; NT, r 17.57; Qld, r 29.12; SA, r 29.12; Vic, r 29.12; WA, r 44(11). Equivalent provision is made in the barristers’ rules: ACT, r 71; NSW, r 95; NT, r 71; Qld, r 93; SA, r 93; Vic, r 95; WA, r 93. See R v Ireland (1987) 49 NTR 10 at 21 per Nader J; R v Gulliford (2004) 148 A Crim R 558 at [182] per Wood CJ at CL. Cf R v Lavery (No 2) (1979) 20 SASR 430 at 431 per Walters J; Phillips, “Practical Advocacy” (1988) 62 ALJ 64 at 66–67. 102 See R v Wilton (1981) 26 SASR 362 at 368 per King CJ; Matthews v R (2014) 44 VR 280 at [144] per Priest JA and Lasry AJA. 103 R v Tait & Bradley (1979) 24 ALR 473 at 477 (FC(FCA)); R v Casey (1986) 20 A Crim R 191 at 196 (CCA(Vic)); R v Glass (1994) 73 A Crim R 299 at 305 per Finlay J; R v MacNeil-Brown (2008) 20 VR 677 at [13]–[61] per Maxwell P, Vincent and Redlich JJA (contra at [127]–[130] per Buchanan JA, at [139]–[147] per Kellam JA); Director of Public Prosecutions v Terrick (2009) 24 VR 457 at [65]–[71] (CA). 104 See ACT, r 71(e); NT, r 71(e); Qld, r 93(e); SA, r 93(e); WA, r 93(e). 105 Barbaro v R (2014) 253 CLR 58. 106 Barbaro v R (2014) 253 CLR 58 at [33] per French CJ, Hayne, Kiefel and Bell JJ. Cf Matthews v R (2014) 44 VR 280 at [7] per Warren CJ, Nettle and Redlich JJA (interpreting Barbaro as suggesting that “a quantified range submission will not vitiate the sentencing discretion unless it can be demonstrated that the sentencing judge was influenced by the submission in arriving at his or her sentence”; contra at [142] per Priest JA and Lasry AJA). 107 Barbaro v R (2014) 253 CLR 58 at [7] per French CJ, Hayne, Keifel and Bell JJ.

618

Lawyers’ Professional Responsibility

[18.95]

CRIMINAL DEFENCE LAWYERS [18.95]

It is a criminal defence lawyer’s duty to protect her or his client so far as is possible from being convicted, except by a competent tribunal and upon admissible evidence sufficient to support a conviction for the offence with which the client is charged.

Guilt of the accused

[18.100] Having accepted a brief, a defence lawyer is duty bound to defend the accused irrespective of any belief or opinion he or she may have formed as to the accused’s guilt or innocence. Assessment of guilt or innocence is for the court, not counsel. In the well-known words of Bramwell B: “A client is entitled to say to his counsel, ‘I want your advocacy and not your judgment; I prefer that of the court’”.108 Where the accused clearly confesses guilt

[18.105] A lawyer to whom a client has made a clear confession of guilt may represent the client even if the client wishes to plead “not guilty”. Where a confession is made during the proceedings, professional rules in fact require the lawyer to continue to act.109 The same is the case for confessions made prior to the commencement of proceedings if there is insufficient time for another lawyer to take over the case properly before the hearing and the client insists on the lawyer continuing to act. This course is justified because the prosecution bears the burden of establishing an accused’s guilt beyond a reasonable doubt. As explained by the High Court in Tuckiar v R:110 Whether he be in fact guilty or not, a prisoner is, in point of law, entitled to acquittal from any charge which the evidence fails to establish that he committed, and it is not incumbent on his counsel by abandoning his defence to deprive him of the benefit of such rational arguments as fairly arise on the proofs submitted.

A confession of guilt, coupled with a not guilty plea, nonetheless severely curtails how the lawyer can conduct the accused’s representation in line with the duty not to mislead the court (as to which see [17.95]–[17.135]).111 It is inconsistent with that duty to set up an affirmative case inconsistent with the confession. The lawyer cannot, for instance, falsely suggest that another person committed the offence charged, call evidence in support of an alibi for the accused112 or allow the accused to deny the truth of the prosecution case in any respect inconsistent with the confession. While there are some who, seeking to justify permitting a client to give evidence inconsistent with that confession, argue that no client is guilty until found 108 Emerson v Sparrow (1871) LR 6 Ex 329 at 371. 109 ACT, r 20.2; NSW, r 20.2; NT, r 17.19; Qld, r 20.2; SA, r 20.2; Vic, r 20.2; WA, r 35(2). Equivalent provision is made in the barristers’ rules: ACT, r 33; NSW, r 80; NT, r 33; Qld, r 79; SA, r 79; Tas, para 56; Vic, r 80; WA, r 79. 110 Tuckiar v R (1934) 52 CLR 335 at 346 per Gavan Duffy CJ, Dixon, Evatt and McTiernan JJ. 111 See ACT, r 20.2.2; NSW, r 20.2.2; NT, rr 14, 17.19(b); Qld, r 20.2.2; SA, r 20.2.2; Vic, r 20.2.2; WA, r 35(3). Equivalent provision is made in the barristers’ rules: ACT, r 33(b); NSW, r 80; NT, r 33(b); Qld, r 20.2; SA, r 20.2; Tas: “Confessions of Guilt by Accused Persons”, preface; Vic, r 80; WA, r 79. 112 See, for example, New South Wales Bar Association v Punch [2008] NSWADT 78.

[18.110]

18 Particular Applications of the Duty to the Administration of Justice

619

so by the court, this is fallacious because “[a] thing is not made true or not by a court’s pronouncing on it, and a lawyer can reach conclusions about an issue without having a judge tell him what to think”.113 What the lawyer can do, where appropriate, is argue that the evidence as a whole does not prove that the client is guilty of the offence charged, or that for some reason of law, such as insanity, the client should not be found criminally responsible.114 The aforesaid must be read subject to the proviso that counsel must ensure that the accused’s confession is indeed true and voluntary. It must be kept in mind that an accused who admits guilt may be deluded or confused, trying to shield a third party or worn down by the prosecution.115 Denial of guilt but plea of guilty

[18.110] The converse situation – where an accused denies committing the offence but insists on pleading guilty – also raises ethical issues. As a general principle, it has been said, “counsel of course will emphasise that the accused must not plead guilty unless he has committed the offence charged”.116 But circumstances may arise where a client may reject this advice, and insist on entering a plea of guilty. A client may elect to do so, for instance, to avoid worry, inconvenience or expense, to avoid publicity, to protect family or friends, for fear that defending the charge could bring to light other criminal conduct or conduct of which he or she is ashamed, or in the hope of obtaining a more lenient sentence than he or she would if convicted after a plea of not guilty. Lawyers are not ethically prohibited from representing a client in these circumstances – notwithstanding suggestions that to do so essentially amounts to misleading the court117 – for the reason identified by Brennan, Toohey and McHugh JJ in Meissner v R:118 113 Hazard, Ethics in the Practice of Law (Yale University Press, 1978), p 130. 114 ASCR, r 20.2.2(iii)–(v); NSW, r 20.2.2(iii)–(v); NT, r 17.19(b)(v); Qld, r 20.2.2(iii)–(v); SA, r 20.2.2(iii)–(v); Vic, r 20.2.2(iii)–(v); WA, r 35(3)(c). Equivalent provision is made in the barristers’ rules: ACT, r 33(b)(iii)–(v); NSW, r 80(e)–(g); NT, r 33(b)(iii)–(v); Qld, r 79(e)–(g); SA, r 79(e)–(g); Vic, r 80(e)–(g); WA, r 79(e)–(g). In recommending the former equivalent to the above barrister’s rule, the authors of the ABA’s Report of the Committee on Standard Advocacy Rules (February 1995) recognised “that the power of a jury to acquit is ample, and that in some cases acquittal may reflect disapproval of the law in question or of the decision to prosecute rather than a punctiliously rational regard for the law as directed by the trial judge and the evidence presented at trial”. For this reason the Committee considered that “a barrister’s proper scope of conduct when the client has privately confessed guilt should clearly permit advocacy which is directed to achieving such a result”, the rule having been designed to permit that kind of advocacy. 115 See Blake and Ashworth, “Some Ethical Issues in Prosecuting and Defending Criminal Cases” [1998] Crim L Rev 16 at 19–21. 116 R v Turner [1970] 2 QB 321 at 326 per Lord Parker CJ. 117 See, for example, Bridges, “The Ethics of Representation on Guilty Pleas” (2006) 9 Legal Ethics 80 (who argues that as a guilty plea is the determinant of the legal outcome of the case, to plead guilty when a client maintains innocence is to mislead the court; hence, the author maintains that the ethical obligations to withdraw from representation should be stronger in this scenario than where a client confesses guilt but wishes to plead “not guilty”, in which case this reaffirms the burden of proof on the prosecution and the proper role of the court in determining guilt or innocence); Law Society of Upper Canada v Besant [2014] ONLSTA 50 (opining (at [130]) that “there are compelling

620

Lawyers’ Professional Responsibility

[18.115]

A person charged with an offence is at liberty to plead guilty or not guilty to the charge, whether or not that person is in truth guilty or not guilty … A court will act on a plea of guilty when it is entered in open court by a person who is of full age and apparently of sound mind and understanding, provided the plea is entered in exercise of a free choice in the interests of the person entering the plea. There is no miscarriage of justice if a court does act on such a plea, even if the person entering it is not in truth guilty of the offence.

However, before entering a guilty plea for a client who maintains her or his innocence, the lawyer should delve into the client’s decision, to ensure that it is not for irrational reasons or a misconception as to the possible outcome of the proceedings. The client should be advised on the strength of the prosecution case, the prospects of acquittal, and be fully apprised of the consequences of a guilty plea. The latter include that the plea is an admission of the elements of the offence, so that submissions in mitigation can be advanced only on the basis that the client is guilty.119 A client should be informed of the likely penalty, any criminal compensation orders that may be consequent on sentence, and of any possibility that the plea could affect civil liability. This advice should be supplied in writing, and client instructions received in writing; otherwise the lawyer may be at the mercy of a client who later repents from her or his decision.120 Attribution of criminal responsibility to another

[18.115] Where the client does not admit guilt, a defence lawyer should not attribute to another person the offence with which the client is charged unless the facts or circumstances disclosed by the evidence in the case, or that form the lawyer’s instructions, or rational inferences to be drawn from them, raise at least a reasonable suspicion that the offence may have been committed by that person.121 Disclosure of prior convictions

[18.120] As a general principle, defence counsel owes no duty to disclose to the court material adverse to a client’s interests of which the prosecution is unaware, and indeed should not do so unless instructed by a client who fully understands reasons why a defence counsel should be extremely reluctant to assist with what is functionally a guilty plea when the client asserts his or her innocence”, as “[t]he potential for a wrongful conviction of a factually innocent client is obvious”, and (at [131]) that for the purposes of possible disciplinary proceedings, “it is potentially misleading for counsel to participate in advising a court that the facts are substantially correct, knowing that his or her client says that the facts are incorrect”). 118 Meissner v R (1995) 184 CLR 132 at 141. See also Hidden, “Some Problems for the Criminal Advocate” (2003) 27 Crim LJ 191 at 196–197. 119 Meissner v R (1995) 184 CLR 132 at 157 per Dawson J; R v Allison (2003) 138 A Crim R 378 at [24] per Jerrard JA. 120 R v Allison (2003) 138 A Crim R 378 at [2] per McMurdo P, at [26] per Jerrard JA (a case where a client alleged that he had been deprived of the opportunity to plead guilty by not being told by his lawyer of an offer by the Crown before the trial not to press for a custodial sentence for a guilty plea; although their Honours preferred the evidence of the lawyer, who deposed that the offer had been brought to the client’s attention, they added that signed instructions would have avoided the dispute in question). 121 Though only the former Victorian barristers’ rules made explicit provision to this effect (Victorian Bar Inc, Practice Rules, r 156), it is consistent with defence lawyers’ duty to the administration of justice.

[18.125]

18 Particular Applications of the Duty to the Administration of Justice

621

the consequences of the proposed disclosure. Although the rationale for this is especially strong at the adversarial (trial) stage, it also applies at the sentencing stage. Counsel must not, without the client’s instruction and informed consent, disclose to the court other convictions, of which the prosecution is ostensibly unaware, that impact upon sentence. Nor should counsel correct any information given by the prosecution if its disclosure or correction would be to the client’s detriment.122 There is no miscarriage of justice, it is reasoned, because:123 … [a] court is bound to decide a case on the evidence, and only on the evidence before it. The penalty that was imposed was entirely in conformity with both the facts and the law. All that happened was that the prosecutor failed to provide evidence to the court of a relevant fact. The consequence of this should be no different from that in any other case where a party fails to call relevant evidence. It makes no difference whether the proceedings follow a plea of guilty or not guilty. The court is to decide the case on the evidence before it.

Deliberately misleading the court is a different matter. Defence counsel must not lend herself or himself to an assertion that the client has no convictions, nor ask a prosecution witness whether there are previous convictions against her or his client in the hope of receiving a negative answer.124 Advice on plea and giving evidence

[18.125] The client has the sole right to decide whether to plead guilty or not guilty, and whether or not to give evidence.125 While defence counsel may advise a client about pleading guilty or giving evidence, the client must be allowed complete freedom of choice in that respect. But this freedom is premised upon the client making an informed decision, which in turn requires the lawyer to traverse all relevant aspects of the case.126 For instance, a lawyer who believes the client is unlikely to escape conviction may advise that the court may regard a plea of guilty, and a display of remorse, as a mitigating factor.127 Barristers’ rules in most jurisdictions state, more generally, that lawyers should, unless in their considered opinion the circumstances warrant otherwise:128 122 R v Rumpf [1988] VR 466 at 472 per McGarvie J; Vernon v Bosley (No 2) [1999] QB 18 at 38 per Stuart-Smith LJ; R v Bourchas [2002] NSWCCA 373 at [92] per Giles JA; Tas, para 51 123 Boyd v Sandercock [1990] 2 Qd R 26 at 28 per Thomas J (a case where the prosecutor did not know of the accused’s conviction for the same offence some five years earlier, which would have affected the penalty for the current offence). 124 Hidden, “Some Ethical Problems for the Criminal Advocate” (2003) 27 Crim LJ 191 at 194; ACT, r 19.10; NSW, r 19.10; NT, r 17.16; Qld, r 19.10; SA, r 19.10; Vic, r 19.10; WA, r 34(12). Equivalent provision is made in the barristers’ rules: ACT, r 30; NSW, r 33; NT, r 30; Qld, r 35; SA, r 35; Tas, para 51; Vic, r 33; WA, r 35. 125 R v Turner [1970] 2 QB 321 at 326 per Lord Parker CJ 126 R v Goodyear [2005] 1 WLR 2532 at [48] (CA); Mazza, “Ethical Issues for Defence Counsel on a Plea of Guilty” (2016) 43 (Mar) Brief 14 at 15 (referring to advice as to the consequences of pleading guilty, including the range of penalties and sentencing options). 127 R v Turner [1970] 2 QB 321 at 326 per Lord Parker CJ; R v Goodyear [2005] 1 WLR 2532 at [34] (CA); Re N (a solicitor) [2010] QSC 267 at [24] per Fryberg J; Tas, para 46. 128 ACT, r 17B; NSW, r 38; NT, r 17B (see also Rules of Professional Conduct and Practice (NT), r 10A.6); Qld, r 40; SA, r 40; Vic, r 38; WA, r 40.

622

Lawyers’ Professional Responsibility

[18.130]

advise a client who is charged with a criminal offence about any law, procedure or practice which in substance holds out the prospect of some advantage (including diminution of penalty), if the client pleads guilty or authorises other steps towards reducing the issues, time, cost or distress involved in the proceedings.

It is prudent, especially where the client may have difficulty in deciding on a plea or on whether to give evidence, for the lawyer to take written instructions. Erroneous advice by defence counsel as to the effect of a guilty plea may provide grounds for an appeal for a miscarriage of justice,129 although this is unlikely to succeed if the evidence shows that the decision to plead guilty was freely and voluntarily made, and that the erroneous advice was no more than one contributing factor amongst others in making that decision, especially where the case against the client is overwhelming.130

DUTY OF FAMILY LAWYERS IN CASES INVOLVING CHILDREN Circumstances where interests of child are paramount

[18.130] In family law litigation involving parenting, location and recovery orders, statute requires the court to have regard to the welfare (or interests) of the child as the paramount consideration.131 As the Family Court will not make a divorce order unless it is satisfied that arrangements have been made for the welfare of the children,132 the interests of the child also assume importance in divorce proceedings. Disputes as to the division of matrimonial property may raise children’s interests too.133 The focus on the interests of the child impacts on a lawyer’s approach to representing a party to the marriage. Unlike the ordinary case where the interests of the client are paramount independently of those of third parties, the lawyer must correlate the interests of a third party, the child, with those of the client. Selby J explained this in Clarkson v Clarkson as follows:134 [T]he interests of the parties take second place. Regard for the interests of the child is the determining factor. This is what is meant by regarding the interests of the child as the 129 See, for example, R v Turner [1970] 2 QB 321 (retrial ordered where the defendant was incorrectly informed by counsel that a guilty plea would avoid a custodial sentence); R v Wilkes (2001) 122 A Crim R 310 (new trial ordered where defence counsel’s advice that entering a guilty plea would save the defendant at least two years in gaol was found to have been imprudent and inappropriate); R v KCH (2001) 124 A Crim R 233 (where the accused’s decision to enter a plea of guilty had “been procured by improper pressure”: at [103] per Ipp AJA). 130 See, for example, R v Pugh (2005) 158 A Crim R 302 (where the erroneous advice of counsel that the accused would secure a lighter sentence by pleading guilty was held not to have involved improper pressure or inducement because: (a) there were independent and appropriate grounds for concluding that a guilty plea would benefit the accused; (b) the evidence of the accused’s guilt was persuasive; and (c) the evidence and submissions made on the accused’s behalf were consistent with a conclusion that his plea evinced consciousness of guilt: at [67]–[69] per Doyle CJ, at [120], [121] per Bleby J, at [227]–[229] per Gray J). 131 Family Law Act 1975 (Cth), ss 60CA, 67L, 67V. 132 Family Law Act 1975 (Cth), s 55A(1)(b)(i). 133 Under Family Law Act 1975 (Cth), s 79(4). 134 Clarkson v Clarkson (1972) 19 FLR 112 at 114. See also Rush & Tompkins Ltd v Greater London Council [1989] 1 AC 1280 at 1299–1300 per Lord Griffiths.

[18.130]

18 Particular Applications of the Duty to the Administration of Justice

623

paramount consideration … Recognised tactics of advocacy which may be in every way right and proper are not necessarily of assistance in cases of this nature. The task of counsel is a difficult one for, whilst owing a duty to his client – a duty which may be discharged by bringing out points which indicate that to grant custody or access to his client would be in the interests of the child whilst granting them to his opponent’s client would be inimical to those interests – he must always remain aware that the child’s interests come before those of his client. It is therefore necessary to adduce all available evidence which might have a bearing on the matter.

The issue, therefore, concerns the extent to which the interests of the child upset traditional doctrines of partisanship and confidentiality. Selby J suggests that, unlike other lawyers, family lawyers must take account of the interests of a non-client in advising their clients. This raises difficult issues, poignantly illustrated by the example of a client who, seeking a parenting order, has admitted to the lawyer abusing the child in the past.135 True partisanship dictates that the lawyer suppresses this admission, a course that lawyer–client confidentiality can justify. The duty to suppress is qualified in three main ways, none of which necessarily apprises the court of that admission. First, the lawyer cannot make submissions to the court, or lead evidence, inconsistent with the client’s admission. Second, the professional rules generally allow a lawyer to disclose confidential information for the sole purpose of avoiding the probable commission of a serious criminal offence: see [10.105]. In addition to the rules being only permissive, it is clear that not all factors that impact on a child’s welfare are serious criminal offences. Third, in some jurisdictions statutes that provide for the disclosure of concerns or suspicions relating to child abuse or neglect, and shields disclosers from professional disciplinary sanction,136 may avail lawyers. Conversely, it can be argued that the court, not the lawyer, is the arbiter of the best interests of the child. In this context, it is said that a lawyer who permits her or his own subjective assessment of the interests of the child to influence the matters disclosed to the court risks imposing on the client her or his views on parenting (and indeed morality generally). It is further argued that the appointment of an independent children’s lawyer sufficiently safeguards the child’s interests:137 see [18.145]. Against this is the notion that the lawyer should disclose; it is then the responsibility of the court to assess the implications of the matters disclosed for the interests of the child. In this context it is interesting to note that, where the interests of the child are served thereby, the court may admit evidence otherwise excluded on the grounds of the privilege in aid of settlement.138 135 See Enright, “Ethics and the Family Lawyer” (1994) 7 Auck ULR 821. 136 Children and Young People Act 2008 (ACT), s 354; Children and Young Persons (Care and Protection) Act 1998 (NSW), s 29(1); Care and Protection of Children Act 2007 (NT), s 27(1). 137 This is not the case where a child is represented by counsel retained by one parent, because it raises at least the appearance of bias and injustice: Fiorellino v Fiorellino (1996) 132 DLR (4th) 338 at 341–344 per Wright J. 138 Hutchings v Clarke (1993) 112 FLR 450 at 453–455 (FC(Fam Ct)). Cf Marriage of Day (1994) 115 FLR 172 at 173–174 per Lindemayer J. Such an outcome could also be potentially justified pursuant to s 131(2)(i) of the uniform evidence law: see [12.85]. On the privilege in aid of settlement generally see Ch 12.

624

Lawyers’ Professional Responsibility

[18.135]

[18.135] The paramount interests of the child should impact on how a case is argued, and how a lawyer advises her or his client. This is acknowledged by s 60D of the Family Law Act 1975 (Cth),139 which casts obligations on advisers, including legal practitioners,140 who advise or assist persons concerning a child in family law proceedings. Those involve informing those persons to regard the best interests of the child as the paramount consideration, and encouraging them to act on the basis that the child’s best interests are best met by the child having a meaningful relationship with both parents while at the same time being protected from harm from being subjected to, or exposed to, abuse, neglect or family violence. The Best Practice Guidelines for Lawyers Doing Family Law Work,141 issued by the Family Law Council and Family Law Section of the Law Council of Australia, equally encourages lawyers who act for a parent to explicitly bring to their client’s attention that the court approaches the matter from the viewpoint of what is best for the child, which can override the wishes of either parent or the child.142 The Guidelines counsel lawyers to impress upon their client the need to distance children from the dispute between their parents, and contain various admonitions with this in mind. For instance, they advise lawyers to:143 • warn clients about the potentially damaging effects of involving their children in disputes concerning their parents and the particular risks of harm to children where they are encouraged to take sides; • make clients aware that negotiations in relation to children are separate from negotiations in relation to disputes they may have with the opponent on other issues; and • use their best efforts to dissuade clients from making (or opposing) applications in respect of children motivated by intentions other than the children’s welfare (such as applications made from spite, from a wish to “teach the other party a lesson” or in a belief that it would improve financial claims). Lawyers as mediators in family law proceedings

[18.140] Lawyers who act as mediators in family law proceedings must take into account the interests of the child in conducting the mediation. Therein lies the danger that an impartial mediator may influence the outcome with her or his view as to the interests of the child. In this context it is instructive to consider the

139 Section 60D was inserted by the Family Law Legislation Amendment (Family Violence and Other Measures) Act 2011 (Cth). 140 “Adviser” is defined as a person who is: (a) a legal practitioner; (b) a family counsellor; (c) a family dispute resolution practitioner; or (d) a family consultant: Family Law Act 1975 (Cth), s 60D(2). 141

2nd ed, October 2010 (available at http://www.lawcouncil.asn.au).

142 Family Law Council and Family Law Section of the Law Council of Australia, Best Practice Guidelines for Lawyers Doing Family Law Work (2nd ed, October 2010), Pt 6 para 1.5. 143 Family Law Council and Family Law Section of the Law Council of Australia, Best Practice Guidelines for Lawyers Doing Family Law Work (2nd ed, October 2010), Pt 6 paras 1.7–1.9.

[18.145]

18 Particular Applications of the Duty to the Administration of Justice

625

American Bar Association’s (albeit now superseded) Standards of Practice for Lawyer Mediators in Family Law Disputes, which provided, inter alia:144 The mediator has a duty to ensure that the participants consider fully the best interests of the children, that they understand the consequences of any decision they reach concerning the children. The mediator also has a duty to assist parents to examine the separate and individual needs of their children and to consider those needs apart from their own desires for any particular parenting formula. If the mediator believes that any proposed agreement of the parents does not protect the best interests of the children, the mediator has a duty to inform them of this belief and its basis.

Where necessary to protect the interests of the child, the court may, as explained below, order that the child be represented by an independent children’s lawyer: see [18.145]. Appointment of an independent children’s lawyer

[18.145] Where in proceedings under the Family Law Act 1975 (Cth) a child’s best interests are, or a child’s welfare is, the paramount or a relevant consideration, and it appears to the Family Court that the child’s interests in the proceedings ought to be independently represented by a lawyer, s 68L empowers the court to order that the child be represented by an “independent children’s lawyer”.145 This order can be made on the court’s own initiative, or upon the application of the child, an organisation concerned with the welfare of children, or any other person.146 Section 68LA states the role and responsibilities of independent children’s lawyers. It requires an independent children’s lawyer to form an independent view, based on the available evidence, as to the child’s best interests, and to act in what the lawyer believes to be those interests. If satisfied that the adoption of a course of action is in the child’s best interests, the lawyer must make a submission to the court to that effect. The Act makes clear that an independent children’s lawyer is not the child’s legal representative and is not obliged to act on the child’s instructions in relation to the proceedings.147 It also lists the following specific duties of the independent children’s lawyer:148 • to act impartially149 in dealings with the parties to the proceedings;150 144 Pt III, para D (emphasis supplied). The current equivalent standards are the ABA’s Model Standards of Practice for Family and Divorce Mediation (February 2001), which do not contain a precise equivalent. 145 Prior to 1 July 2006 (being the date on which the new ss 68L and 68LA of the Family Law Act 1975 (Cth) took effect), termed a “separate representative”. 146 Family Law Act 1975 (Cth), s 68L(4). 147 Family Law Act 1975 (Cth), s 68LA(4). 148 Family Law Act 1975 (Cth), s 68LA(5). These represent a legislative incorporation, with some modifications, of the principles propounded in P and P and Legal Aid Commission of New South Wales (1995) 19 Fam LR 1 at 32–33 (FC) (which were endorsed by Chisholm J in T v L (2000) 160 FLR 63 at [53]–[55]). See further Kaspiew et al, “Getting the Word Out: The Role of Independent Children’s Lawyers in the Family Law System” (2014) 28 AJFL 29. 149 For this purpose, “the appearance of bias may be tested by whether a fair-minded lay observer might reasonably apprehend that the independent children’s lawyer might not bring an impartial or unprejudiced mind to the task of independently representing a child”: Kingley v Arndale (No 2) (2010) 255 FLR 326 at [33] per O’Reilly J (affd Arndale v Kingley (No 3) [2011] FamCAFC 128).

626

Lawyers’ Professional Responsibility

[18.145]

• to ensure that any views expressed by the child in relation to the matters to which the proceedings relate are fully put before the court; • if a report or other document that relates to the child is to be used in the proceedings – to analyse the report or other document to identify those matters in it that the lawyer considers the most significant for determining the child’s best interests, and to ensure that those matters are properly drawn to the court’s attention; • to endeavour to minimise the trauma to the child associated with the proceedings; and • to facilitate an agreed resolution of matters at issue in the proceedings to the extent to which doing so is in the best interests of the child. Case law preceding s 68LA highlighted that, consistent with s 68LA, an independent children’s lawyer does not necessarily advance what the “client” wants but what is in the best interests of that “client”.151 To this end, an independent children’s lawyer may disclose to the court any information that the child communicates to the lawyer if the lawyer considers the disclosure to be in the child’s best interests, even if the disclosure is made against the child’s wishes.152

150 As the primary responsibilities and duties of an independent children’s lawyer remain essentially the same as all lawyers appearing before the court, merely because he or she expresses a view on a particular issue before the court is no ground by itself to question her or his impartiality. It is frequently the duty of an independent children’s lawyer to come to a view contrary to that contended on behalf of a party, thus giving her or his submissions the appearance of partiality because the views so expressed are likely to accord with the position of one of the parents and not the other. In this event the appearance of partiality does not impinge on the independent children’s lawyer’s role, and is no ground by itself to disqualify the lawyer from acting in the proceedings. See Knibbs v Knibbs [2009] FamCA 840. 151 Marriage of Harris (1977) FLC ¶90-276 at 76,476 per Fogarty J, cited with approval by Strauss J in Separate Representative v JHE and GAW (1993) 16 Fam LR 485 at 514. 152 Family Law Act 1975 (Cth), s 68LA(7), 68LA(8).

Chapter 19

Duty to Obey and Uphold the Law [19.10] CLIENT WHO BEHAVES UNLAWFULLY .................................................................. 628 [19.10] Lawyer’s duty ............................................................................................................... 628 [19.30] Potential consequences for the lawyer of the client’s unlawful acts .................. 629 [19.50] APPROACH TO THE GIVING OF ADVICE ............................................................... 633 [19.50] Line between advising on legal and illegal conduct ............................................. 633 [19.55] Illustration – taxation advice ..................................................................................... 634

[19.05] As actors in the legal system, lawyers must foster respect for the law and its administration.1 This duty manifests itself in various ways. Lawyers must not engage in conduct that is dishonest, illegal, unprofessional, that may otherwise bring the profession into disrepute or that is prejudicial to the administration of justice.2 They must obey court orders,3 and not seek to further their clients’ causes by unfair or dishonest means.4 Nor should lawyers knowingly assist or seek to induce a breach of the law by clients,5 other lawyers and third parties.6 This extends to lawyers not instructing agents to commit an illegal act or to do anything that would be improper for lawyers to do. Finally, although lawyers are not precluded from criticising the law – they are, after all, well qualified to criticise the

1 Re B [1981] 2 NSWLR 372 at 382 per Moffitt P. 2 ACT, r 5.1; NSW, r 5.1; Qld, r 5.1; SA, r 5.1; Vic, r 5.1; WA, r 6(2). 3 Legal Services Board v Foster (No 3) [2012] VSC 640 at [15] per Emerton J (“legal practitioners should be held to a higher standard when it comes to compliance with Court orders and the preservation of the due administration of justice than ordinary members of the public” because “[l]egal practitioners are bound to uphold the rule of law”). 4 WA, r 16(1). 5 Can CPC, r 3.2-7 (“When acting for a client, a lawyer must never knowingly assist in or encourage any dishonesty, fraud, crime or illegal conduct, or instruct the client on how to violate the law and avoid punishment”). In addition to legal consequences, conduct of this kind can generate a disciplinary response: see, for example, Legal Practitioners Complaints Committee v Segler (2009) 67 SR (WA) 280 (where the respondent, in advising a client that he could carry out building projects despite being unregistered as a builder, was found to have committed professional misconduct). See further Dal Pont, “Drawing the Line on Advice” (2010) 84 (Jul) LIJ 74. 6 US, r 1.2(d) (“A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent”). Regarding the responsibility to other lawyers see WA, r 16.2.

628

Lawyers’ Professional Responsibility

[19.10]

law and restricting its critical assessment would hamper law reform – they must not do so in a manner that undermines the law or public confidence in it.7

CLIENT WHO BEHAVES UNLAWFULLY Lawyer’s duty

[19.10]

A lawyer becomes aware that a client is engaging in unlawful conduct should counsel the client against it and to eschew any involvement in that conduct, whether by assisting or being seen to be condoning that activity. This may require the lawyer to refuse to perform an act that the client directs, and may even require the lawyer to terminate the retainer. If a lawyer has reason to believe that a client will disregard the lawyer’s advice and thereby contravene the law or some legal obligation to a third party, again he or she should counsel the client of the lawyer’s responsibilities and, if the client persists, terminate instructions.8 Yet outside these circumstances no implication of involvement by a lawyer in a client’s misconduct ordinarily arises merely from an allegation that the lawyer performed legal work related to the client’s activities.9

Example – illegal transfer of money A lawyer cannot turn a blind eye to disclosed or apparent illegality.10 If he or she has reasonable grounds to doubt a client’s bona fides, inquiries should be made. For example, where money is handed to a lawyer in circumstances that raise the suspicion that it stems from criminal activity, the lawyer should question the client regarding its source.11 This may be the case where, say, the lawyer receives a large sum of cash from a new client or a client who would not usually deal in that way. If not satisfied with the result of that questioning, the lawyer should decline to handle the money.

[19.15]

This duty is compounded by the duty imposed by the Financial Transactions Reports Act 1988 (Cth) to report cash transactions12 of $10,000 or more entered into by lawyers or on their behalf.13 A breach of this duty is an offence.14 Also, under the 7 Ambarde v Attorney-General for Trinidad & Tobago [1936] AC 322 at 325 per Lord Atkin. Cf the argument that government lawyers should be more circumscribed than private lawyers in criticising the judiciary: see [13.90]. 8 See Greenwood, “Ethics and Avoidance Advice” (1991) 65 LIJ 724. 9 Re Moage Ltd (in liq) (1998) 153 ALR 711 at 718 per Burchett J. 10 See Shirvington, “Warning Sounds for Solicitors Assisting in or Condoning Client’s Fraudulent Activity” (1995) 33 (Sept) LSJ 26. 11 See Can CPC, r 3.2-7, cmt [1] (“A lawyer should be alert to and avoid unwittingly becoming involved with a client engaged in criminal activities such as mortgage fraud or money laundering … because the means for these, and other criminal activities, may be transactions for which lawyers commonly provide services”). 12 The term “transaction” includes negotiations or a proposal to conduct a transaction: Financial Transactions Reports Act 1988 (Cth), s 3(7). 13 Financial Transactions Reports Act 1988 (Cth), s 15A(1) (see the definition of “significant cash transaction” in s 3(1)). The report must contain the reportable details prescribed in Sch 3A: s 15A(2). 14 Financial Transactions Reports Act 1988 (Cth), s 28(3).

[19.30]

19 Duty to Obey and Uphold the Law

629

Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) lawyers who advance loans or provide certain services as the holder of an Australian financial services licence15 are subject to reporting obligations.16 English solicitors have been subject to legislation of this kind, but with a broader focus, since 1 June 2003.17 Example – clients using false names

[19.20]

A lawyer should inquire where he or she suspects that a client has given a false name for a trust account, for this may be done to conceal moneys for an unlawful purpose: see [9.60]. Similarly, allowing a client to plead to a criminal charge in a false name may lead to the lawyer being convicted for attempting to pervert the course of justice: see [19.40].

Example – suspicion that client using premises for illegal purposes A ruling of the Law Society of the Australian Capital Territory18 suggests that if a lawyer is requested to act in a matter involving premises, which he or she has heard unsubstantiated rumours are being, or are about to be, used for illegal or unlawful purposes, the lawyer is entitled to disregard those rumours. The ruling adds that the lawyer remains entitled to accept instructions to act in the matter even if, by virtue of the rumours, he or she forms the belief that the premises were being used for such a purpose. However, a lawyer who knows or receives instructions that the premises are being used for an illegal or unlawful purpose cannot act so as to further that purpose. For example, the lawyer must not prepare a lease of those premises for use for an illegal or unlawful purpose.

[19.25]

Potential consequences for the lawyer of the client’s unlawful acts

[19.30]

A lawyer’s involvement in a client’s unlawful acts may generate civil liability, criminal responsibility and/or disciplinary sanction. So prudent lawyers will take care to maintain a distance from clients and their activities, at the risk of being driven by client demands to assist in unlawful (or unethical) actions. The following counsel, though stated in the context of accountants, is equally pertinent to lawyers:19

15 See Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), s 6(2) (see Table 1, Items 6, 7, 54). 16 See Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth), ss 41 (reporting of “suspicious matters”), 43 (reporting of “threshold transactions”). See generally Information from AUSTRAC about the Anti-Money Laundering and Counter-Terrorism Financing Reporting: Obligations of Legal Practitioners (May 2011), available at http://www.lawcouncil.asn.au. 17 The Proceeds of Crime Act 2002 (UK) and the Money Laundering Regulations 2007 (UK) impose specific duties to take action to prevent money laundering and to report on suspected money laundering. This legislation imposes a reporting duty from the moment when the solicitor has “reasonable grounds for knowledge or suspicion of money laundering” (see ss 327(2), 328, 329), and makes failure to report an offence (under s 330). See Hollander and Salzedo, Conflicts of Interest (4th ed, Sweet & Maxwell, 2011), Ch 10; Terrill and Breslow, “The Role of Lawyers in Combating Money Laundering and Terrorist Financing: Lessons from the English Approach” (2014/15) 59 NYL Sch L Rev 433. 18 ACT Law Society Ruling, Illegal or Unlawful Use of Premises (17 June 1985). 19 Athanasiou, “Who’d be an Accountant?” (2004) 38 TIA 362 at 366.

630

Lawyers’ Professional Responsibility

[19.35]

[A]s soon as you step over the line for your client, you not only put at stake your integrity and professionalism, you give your whole career and life to your client on a platter to do with as your client pleases, because your client is then able to put pressure on you to do further “favours” that involve you even more in the client’s own fraud or misconduct. In a worst case scenario, if your client does the wrong thing, he or she will take you down too.

Civil liability

[19.35]

Lawyers who carry out client instructions that involve a fiduciary or trust breach may be found liable, if they exhibit the requisite knowledge, as a recipient of trust property transferred in breach or for dishonestly assisting that breach.20 Liability in these cases is personal and unlimited, and so lawyers should make proper inquiry in receiving and transferring money or property on behalf of a client who is a trustee or fiduciary. But aside from the aforesaid scenarios, a lawyer is not ordinarily liable for following the directions of a person on whose behalf he or she holds money regarding its disbursement unless the lawyer was a party to a conspiracy to defeat the interests of persons lawfully entitled thereto (beneficiaries)21 or acts contrary to an undertaking he or she has given: see [22.10]. This is because statute requires lawyers to pay over trust money as requested by the person on whose behalf it was advanced: see [9.65]. A lawyer is not prevented from representing a trustee simply because the trustee is acting in a manner, though not dishonest or otherwise in breach of trust, the lawyer considers contrary to the beneficiaries’ interests.22 This is subject to the rider that the lawyer is not at the same time representing any of the beneficiaries or any other person affected by the trustee’s action. In giving advice, a lawyer may be liable in tort as an agent of the client for misrepresentation – or even as a principal – or under statute for misleading and deceptive conduct, where he or she passes on what the client has inaccurately disclosed and in some way adopts it as her or his own or adds to it. No such liability will accrue where the lawyer acts merely as a conduit and purports to do no more than pass on instructions from her or his principal: see [21.135]. Criminal responsibility

[19.40]

A lawyer who aids or abets a client’s criminal actions will be likewise criminally responsible for those acts as a party to the offence, or for criminal conspiracy. The courts are not keen to find lawyers criminally responsible in this context, and have noted that the mere giving of advice in the ordinary course of a

20 See, for example, Eden Refuge Trust v Hohepa [2011] 1 NZLR 197 at [206]–[220] per Duffy J (the solicitor was also found liable as a recipient of trust property) (affd Fletcher v Eden Refuge Trust [2012] 2 NZLR 227). Cf Twinsectra Ltd v Yardley [2002] 2 AC 164). On liability of this kind generally see Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [38.65]–[38.125]. 21 Adams v Bank of New South Wales [1984] 1 NSWLR 285 at 290–292 per Moffitt P. Cf Fletcher v Eden Refuge Trust [2012] 2 NZLR 227 at [81]–[88] per White J. 22 Re Wheeler [1991] 2 Qd R 690 at 698 per Dowsett J.

[19.40]

19 Duty to Obey and Uphold the Law

631

retainer is usually insufficient to attract criminal sanction.23 Street CJ in R v Tighe & Maher identified the dividing line in this regard as follows:24 [I]n the course of [a solicitor’s] practice he may be called upon to advise and to act for all manner of clients, good, bad or indifferent, honest or dishonest, and he is not called upon to sit in judgment beforehand upon his client’s conduct, nor, because he does his best for him as a solicitor within proper limits, is he to be charged with being associated with him in any improper way. In acting for a client, a solicitor is necessarily associated with him, and is compelled to some extent to appear as if acting in combination with him. So he may be, but combination is one thing and improper combination, amounting to conspiracy to commit a crime or a civil wrong, is another thing … [I]t may [therefore] be useful to point out the importance, in cases where a solicitor is charged with entering into an agreement with his client which amounts to a criminal conspiracy, of seeing that the jury are properly instructed as to a solicitor’s duty to his client, and that it is made plain to them that, before a solicitor can be convicted of conspiring with his client to commit a wrong, it must be proved that he did things in combination with him, over and above what his duty as a solicitor required of him, which leads irresistibly and conclusively to an inference of guilt.

It has been in giving tax advice that lawyers’ potential criminal liability has been most debated by Australian commentators. There is a fear that tax lawyers who involve their clients in schemes that are found to defraud the revenue may be charged with conspiracy to defraud the revenue25 or as a party to tax offences.26 An example is R v Pearce,27 where two lawyers were found guilty of conspiracy to defraud where, in order to assist one client, they marketed a scheme to other clients that was a fraud, having accepted an intermediary’s assurances regarding it. McKechnie J, in ordering that a custodial sentence was necessary, stated: Your conspiracy, done with intention to defraud, put the national revenue at risk. The fact that it was unsuccessful is due in part to an early warning about the scheme from a disgruntled person … [C]onspiracies such as the one on which you have been convicted are pernicious in many respects. First, they represent a substantial fraud on the Australian government. Indirectly they are a fraud on all law-abiding taxpayers as well. Your scheme played on the greed of those who participated as franchisees so that they could claim a substantial refund to which they were not entitled.

Outside the tax scenario, there are instances of lawyers being convicted of a conspiracy or an attempt to pervert the course of justice. In R v Freeman28 a lawyer who had conspired to obtain security for bail for a prisoner using the prisoner’s own money was convicted, though an appeal against the conviction was allowed. 23 See, for example, Commisso v United Telecasters Sydney Pty Ltd [1999] NSWSC 51 at [75] per Levine J (where a lawyer who simply gave advice as to the likely consequences in defamation of the publication of a program was found incapable of being characterised as an accessory of the subsequent commission of a wrong). 24 R v Tighe & Maher (1926) 26 SR (NSW) 94 at 108–109. 25 Under the Criminal Code Act 1995 (Cth), s 135.4 (previously Crimes Act 1914 (Cth), s 29D). 26 See McHugh, “Jeopardy of Lawyers and Accountants in Acting on Commercial Transactions” (1988) 22 TIA 542. Cf Gyles, “Criminal Liability of Professional Advisers” (1989) 23 TIA 480 at 481–484. 27 R v Pearce (unreported, SC(WA), McKechnie J, 13 July 2004). See also R v Forsyth (1990) 20 ATR 1818; Gyles, “Conspiracy to Defraud the Revenue” (1984) 58 ALJ 567; Simcock, “Responsibilities and Exposures” (Pt 2) (1994) 28 TIA 612 at 612–614. 28 R v Freeman (1985) 3 NSWLR 303.

632

Lawyers’ Professional Responsibility

[19.45]

The conviction in Hatty v Pilkinton (No 2),29 where a lawyer had entered a plea of guilty on a client’s behalf knowing that she had been charged under an assumed false name, was restored on appeal. Black CJ, who delivered the main judgment, noted the following regarding the lawyer’s conduct:30 The inference is irresistible that Mr Pilkinton, an experienced practitioner, knew that the court would be misled by the conduct in which he and his client were engaged and would proceed on a false basis … That the court would proceed on a false basis was obviously an inevitable consequence of the course of conduct, involving Mr Pilkinton and his client, in which Mr Pilkinton took an active part as counsel; and it was known to be an inevitable consequence. In these circumstances the inference is also irresistible that Mr Pilkinton, whatever his reason, intended the result that the court should be misled as to the real name of his client and should proceed upon a false basis.

The lawyer could have avoided the ethical dilemma, according to his Honour, by advising the client that he could not continue to appear if she insisted on using the false name.31 Disciplinary consequences

[19.45]

Lawyers who become involved in their clients’ unlawful conduct, or who otherwise knowingly assist clients to effect an unlawful act or outcome, are prime candidates for professional sanction. Examples include where lawyers, often to assist their clients in securing a favourable financial outcome, make a false statement as to value, date or some other element in a transaction. In Saunders v Edwards,32 for instance, Kerr LJ remarked that a lawyer who is knowingly involved in a false apportionment to avoid stamp duty for a client commits professional misconduct. There are disciplinary cases where lawyers who altered the dates of documents or misstated transaction amounts for their clients’ benefit have been fined for professional misconduct.33 That the lawyer did not originate the fraud does not prevent a disciplinary sanction if, while knowing of it, he or she did not object to it for fear of upsetting the client.34 In some circumstances, the lawyer’s involvement in the client’s fraud is such that the disciplinary tribunal or court has little option but to order striking off. This ensued in Law Society of New South Wales v Dennis,35 where a solicitor was a party to a scheme whereby a building society – which advanced loans to his clients from a vendor company, for which the solicitor also acted – was misled as to the purchase price paid by the purchasers. The New South Wales Court of Appeal declared that 29 Hatty v Pilkinton (No 2) (1992) 35 FCR 433. An application for special leave to appeal to the High Court was refused: Pilkinton v Hatty (1992) 66 ALJR 868. 30 Hatty v Pilkinton (No 2) (1992) 35 FCR 433 at 440. 31 Hatty v Pilkinton (No 2) (1992) 35 FCR 433 at 445. 32 Saunders v Edwards [1987] 1 WLR 1116 at 1125. See also at 1133 per Nicholls LJ. 33 See, for example, Re Freeman [1993] 2 LPDR 3 (alteration of date on a contract in order to avoid payment of a fine on the stamp duty payable on the contract); Re Gibbins [1995] 2 LPDR 6 (typing of a new front page to a contract for sale of land that postdated the contract). 34 See, for example, Re Scarfone [1998] 2 LPDR 26 (no objection to a contract that understated the purchase price by $20,000). 35 Law Society of New South Wales v Dennis (1981) 7 Fam LR 417.

[19.50]

19 Duty to Obey and Uphold the Law

633

“[p]articipation in a scheme of this character is inconsistent with the integrity demanded of a practising solicitor”.36 In Attorney-General v Bax37 the same fate befell a lawyer who, in acting for a client in financial difficulty, falsified documents and transactions, antedated a deed of loan and intentionally deceived a creditors’ meeting. That he was seeking to avoid the client being declared bankrupt, and derived no personal pecuniary benefit from it, did not mitigate the seriousness of his misconduct.

APPROACH TO THE GIVING OF ADVICE Line between advising on legal and illegal conduct

[19.50]

“The professional judgment of a lawyer must at all times be exercised within the bounds of the law”.38 A lawyer must not tender advice to a client that he or she knows or has reasonable grounds to believe is being requested to advance an illegal purpose.39 Where the client’s instructions are, for this reason, such as to prevent the proper performance of the lawyer’s duties, he or she should cease to act. Critically, a lawyer must not advise a client as to the ways in which an unlawful purpose may be achieved or concealed, propose methods of breaking the law, irrespective of the prospects or otherwise of the client being caught or prosecuted,40 or advise or assist clients to behave contrary to an order of the court.41 Nor should a lawyer who is informed by a client that the client intends to disobey a court’s order advise the client how to carry out or conceal that course: see [17.140]. A distinction must be drawn between a lawyer, on the one hand, presenting an analysis of legal aspects of questionable conduct and, on the other, recommending the means by which a crime or fraud might be committed with impunity. The former represents a legitimate part of a lawyer’s role. In line with this, a lawyer may advise a client to engage in conduct the lawyer considers may be illegal where this advice is given in good faith to test the validity or scope of the law, the client is informed of the consequences and likelihood of the conduct being found to be 36 Law Society of New South Wales v Dennis (1981) 7 Fam LR 417 at 424. 37 Attorney-General v Bax [1999] 2 Qd R 9. 38 NZ, r 5.2. 39 A point made explicit in Sing, r 10(5). 40 Legal Practitioners Complaints Committee v Segler (2009) 67 SR (WA) 280 at [87] (“a legal practitioner is not entitled to advise a client to act in an illegal manner simply because he or she believes that the client will not be prosecuted”). 41 See, for example, the following cases where lawyers have been the subject of professional discipline: Re Nulle (1980) 620 P 2d 214 (where a lawyer advised a client to conceal the identity of the true owners in an application for a liquor licence); Re Agnew (1981) 311 NW 2d 869 (where a lawyer advised a client to flee the state to avoid prosecution); Re Young (1989) 776 P 2d 1021 (where a lawyer assisted a fugitive client by arranging bail under a false name that the client habitually used); Matter of R [1998] 3 LPDR 26 (where a family lawyer advised a client to take physical possession of children in direct violation of Family Court orders – which granted him school vacation access – and to lay low and not get arrested). See also Restatement §94, cmt e (“A lawyer may not … ignore or counsel or assist a client to ignore a mandatory court order surreptitiously and seek to excuse noncompliance on the asserted justification of providing a basis for appellate review if detected”).

634

Lawyers’ Professional Responsibility

[19.55]

illegal, and is given complete freedom of choice whether or not so to act.42 In other words, in any proposed course of conduct the legal status of which is unclear, the client should be fully apprised of the risk and consequences of illegality, and permitted to choose whether or not to pursue that course. A failure to so apprise the client may amount to negligence.43 Hence, the lawyer should caveat any such advice by disclosing the risk and advising that her or his opinion may not necessarily be correct. Illustration – taxation advice

[19.55]

A common, and ethically problematic and divisive, illustration of the lawyer’s duty to uphold the law in the giving of advice relates to taxation advice.44 The principles discussed above prohibit lawyers from advising clients to engage in “tax evasion”, being criminal falsification or non-disclosure as a means of reducing tax. Nor should lawyers advise clients to engage in “tax avoidance”, which is rendered unlawful by virtue of its artificial and contrived character, having no rationale apart from the obtaining of a tax benefit. Conversely, a lawyer may, and must where the scope of the retainer encompasses this, advise a client as to the legal means of minimising taxation liability, termed “tax planning”. In this context earlier professional rules in the Northern Territory and South Australia read as follows:45 A practitioner may advise and otherwise act for a client so as to assist such client to minimise an obligation to pay income and other taxes, provided at all times that the practitioner in so acting: (a) does not commit or is not associated with any misleading, deceptive, fraudulent or improper conduct; (b) does not offer advice or assistance when it is known or ought to be known that the client proposes to act in a manner contrary to law.

The difficulty is to distinguish tax avoidance from tax planning. Moreover, the breadth of the language of anti-avoidance legislation, coupled with frequently ambiguous statements by the courts, may render it difficult for a lawyer to assure the legality of a scheme. Therefore, a prudent lawyer will always fully apprise the client of any risks in the carrying out of the proposed scheme. 42 See US, r 1.2(d) (“a lawyer may discuss the legal consequences of any proposed course of conduct with a client and may counsel or assist a client to make a good faith effort to determine the validity, scope, meaning or application of the law”; the Restatement §94(2) makes similar provision); Can CPC, r 3.2-7, cmt [4] “the lawyer may properly advise and represent a client who, in good faith and on reasonable grounds, desires to challenge or test a law and the test can most effectively be done by means of a technical breach giving rise to a test case. In all such situations the lawyer should ensure that the client appreciates the consequences of bringing a test case”). The latter appears to contemplate scope for lawyer involvement in civil disobedience, but whether, and the extent to which, such behaviour is ethical awaits determination: see DiSalvo, “The Fracture of Good Order: An Argument for Allowing Lawyers to Counsel the Civilly Disobedient” (1982) 17 Ga L Rev 109. 43 See, for example, EVBJ Pty Ltd v Greenwood (1988) 20 ATR 134. On liability for negligence generally see Ch 5. 44 This is by no means the only such illustration – similar issues arise, for instance, in the case of lawyers who advise clients of vehicles or structures that serve to reduce clients’ child support obligations. 45 Professional Conduct Rules (NT), r 14.1 (superseded by the Rules of Professional Conduct and Practice, as from 10 April 2002); Rules of Professional Conduct and Practice (SA), r 15.1 (superseded by the Rules of Professional Conduct and Practice, as from 1 March 2003, and most recently by the Australian Solicitors’ Conduct Rules on 25 July 2011).

[19.65]

19 Duty to Obey and Uphold the Law

635

[19.60]

There have, from time to time, been statements from both judges and commentators questioning the ethics or morality of lawyers advising clients of the methods of reducing taxation liability.46 The words of Viscount Simon LC in Latilla v Inland Revenue Commissioners, commenting on what today would be viewed as tax planning, present a good example in this respect:47 There is, of course, no doubt that they are within their legal rights, but that is no reason why their efforts, or those of the professional gentlemen who assist them in the matter, should be regarded as a commendable exercise of ingenuity or as a discharge of the duties of good citizenship. On the contrary, one result of such methods, if they succeed, is, of course, to increase pro tanto the load of tax on the shoulders of the great body of good citizens who do not desire, or do not know how, to adopt these manoeuvres.

Conversely, there is the classic statement of Lord Macnaghten that “no one is bound to leave his property at the mercy of the revenue authorities if he can legally escape their grasp”.48 Tax practitioners generally adhere to the latter view. The issues of morality raised by Viscount Simon are rationalised by placing the responsibility not on the lawyer but, rather, on the legislature, the lawyer’s duty to clients and the client. In so doing, lawyers seek to avoid responsibility for the morality of the advice. But a shirking of ethical responsibility is hardly consistent with the true spirit of a profession, and tax lawyers in particular should take care to avoid ethical desensitisation from a long exposure to tax-driven schemes. In what was admittedly a clear case of fraud, the remarks of McKechnie J in R v Pearce,49 in ordering two tax lawyers to be imprisoned, nonetheless deserve to be pondered: “I can only think that in the hothouse of the taxation industry you lost your moral compass and direction causing you to play this part in this conspiracy”, and “I suspect that you have been playing the taxation game for so long that your vision as to what is right in the complexities of taxation law and accounts practice has become blurred”. Responsibility of the legislature

[19.65]

Regarding the responsibility of the legislature, a typical statement is that of the pro-taxpayer judge, Barwick CJ:50 It is for the Parliament to specify, and to do so … as far as language will permit, with unambiguous clarity, the circumstances which will attract an obligation on the part of the citizen to pay tax … Parliament having prescribed the circumstances which will attract tax, or provide occasion for its reduction or elimination, the citizen has every right to mould the transaction into which he is about to enter into a form which satisfies the requirements of the statute.

Deane J had similarly observed that the fault for unfairness or inequity that stems from the legislated taxation scheme “lies with the form of the legislation at the relevant time and not with the courts whose duty it is to apply the words which the 46 See the discussion in Regan, “Tax Advisors and Conflicted Citizens” (2013) 16 Legal Ethics 322. 47 Latilla v Inland Revenue Commissioners [1943] AC 377 at 381. See also Countess Fitzwilliam v Inland Revenue Commissioners [1993] BTC 8003 at 8035 per Lord Templeman (dissenting). 48 Commissioner of Stamp Duties v Byrnes [1911] AC 386 at 392. 49 R v Pearce (unreported, SC(WA), 13 July 2004). 50 Federal Commissioner of Taxation v Westraders Pty Ltd (1980) 144 CLR 55 at 59, 60.

636

Lawyers’ Professional Responsibility

[19.70]

Parliament has enacted”.51 His Honour noted that a court could not arrogate to itself, without legislative warrant, the function of overriding the plain words of an Act simply because it considers that overall considerations of fairness or some general policy of the Act would be best served by a decision against the taxpayer. This would, in his opinion, “be to substitute arbitrary taxation for taxation under the rule of law and, indeed, to subvert the rule of law itself”.52 Duty to the client

[19.70]

If a client wishes to avail itself of a tax minimisation route that is legal, it is the duty of the legal adviser to assist in achieving the desired result if retained to do so. A failure to advise clients as to how to legally minimise their tax liability may, where that advice comes within the scope of the retainer, constitute negligence: see [5.255]. To this end, a New South Wales Supreme Court judge has remarked that “there is a duty on persons such as accountants and solicitors to advise their client how they can avoid, as far as possible, making what the government regards as a proper contribution”.53 Minimising taxation liability is, after all, usually in the client’s best (financial) interests. Moreover, though it is ordinarily in the client’s best interests to maintain a good working relationship with taxation authorities, a lawyer should not hesitate to dispute a taxation authority’s view if he or she considers it to be incorrect, or to take advantage of a legitimate tax planning opportunity where this aligns with the client’s interests and the client instructs the lawyer to do so. It is said that any issue of the equity of entering a particular transaction or scheme in the overall taxation scheme is a matter for Parliament to address, and should not influence the lawyer’s advice. In the words of one commentator:54 Provided the transaction is totally legal, the client’s right is to receive the best advice that the practitioner can provide which, if necessary, may involve taking advantage of loopholes provided by the legislation or the courts … advisers should not feel guilty or ashamed about achieving the best result for their clients, even if that involves a loss of revenue to the State in circumstances where some claim it is “unfair” for one person to be able to pay less tax than another, comparable person.

Client choice

[19.75]

Some contend that issues of morality in tax minimisation are within the exclusive province of the client, in that the client chooses, upon being fully

51 Federal Commissioner of Taxation v Westraders Pty Ltd (1979) 38 FLR 306 at 319. 52 Federal Commissioner of Taxation v Westraders Pty Ltd (1979) 38 FLR 306 at 319–320, approved by Barwick CJ on appeal: Federal Commissioner of Taxation v Westraders Pty Ltd (1980) 144 CLR 55 at 60. See Myers, “Tax Advice: The Lawyer’s Ethical Responsibility” (1990) 19 Aust Tax Rev 80. 53 Bayer v Balkin (1995) 31 ATR 295 at 305 per Cohen J (affd without reference to this specific point: Balkin v Peck (1998) 43 NSWLR 706). See also Sacca v Adam and R Stuart Nominees Pty Ltd (1983) 33 SASR 429; EVBJ Pty Ltd v Greenwood (1988) 20 ATR 134. Cf Jindi (Nominees) Pty Ltd v Dutney (1993) 26 ATR 206. 54 Simcock, “Responsibilities and Exposures” (Pt 1) (1994) 28 TIA 549 at 550–551 (paragraph breaks omitted; emphasis supplied). See also Forsyth, “Tax Avoidance and the Responsibility of the Professional Legal Adviser” (1981) 55 ALJ 582 at 587–588.

[19.80]

19 Duty to Obey and Uphold the Law

637

apprised of the risks and consequences of a scheme, whether or not to pursue it. In this context a former Chief Justice of the High Court, Sir Anthony Mason, writing extrajudicially, has stated:55 [T]he morality of tax avoidance (as distinct from tax evasion) is very much a matter for the individual taxpayer, although it runs the risk of adverse comment from judges who feel impelled to express their sense of outrage. The taxpayer who wishes to reduce his liability to tax … is, however, as much entitled to legal advice as another member of the community, and a lawyer who practises in that field is as much entitled to, and bound, to assist a client as the lawyer who practises in other fields of law. So long as tax avoidance is not an offence – and it is difficult to conceive how it could be made an offence – the taxation lawyer should be as free from criticism as lawyers in other fields.

The tax lawyer and moral advice

[19.80]

A barrister, being subject to the “cab rank” rule (see [3.150]), cannot decline a brief simply by reason of strong personal views inconsistent with the subject matter of the proposed representation. Instead the barrister should frankly disclose her or his views on the matter to the prospective client, who must then determine whether it is desirable to retain the barrister.56 Outside the circumstances where the cab rank principle applies, the lawyer may decline to represent a client who proposes a course of conduct that offends the lawyer’s sense of morality.57 If the lawyer nonetheless opts to accept the retainer, there is the issue of whether he or she may or should raise issues of the morality of the scheme with the client. In this context the accepted view appears to be that stated by a prominent practitioner, who observed:58 It seems to me to transcend the proper function of the lawyer to seek to impose his views of morality, or tax equity, upon a client who quite clearly has different views. Of course, if the client asks, expressly or impliedly, for the legal adviser’s views, they may properly be given. And often it is appropriate for the legal adviser to point out that issues of morality are involved – particularly where the moral aspect may also involve important practical considerations … But the role of a lawyer is to further his client’s interests, not to act as a source of rulings on moral conduct.

The critical matter appears to be that the lawyer should not impose her or his moral views on the client. This is a concern given the position of influence a lawyer may hold over clients. Certainly a lawyer must not tailor advice to her or his criteria of morality.59 Within these constraints, though, there is no reason why a lawyer should not raise moral issues regarding the conduct in issue. In fact, it has been 55 Cited without reference by Hampel J in R v Forsyth (1990) 20 ATR 1818 at 1822–3 (entitled “Where Now?”). 56 See Wilson, Lectures on Advocacy and Ethics in the Supreme Court (Legal Research Foundation Inc, New Zealand, Publication No 15, 1979), p 36. 57 See Chernov, “The Lawyer and Morality” (1991) (Feb) Brief 9. Cf Rush v Cavenaugh (1845) 2 Pa 187 at 189 (“The high and honourable office of a counsel would be degraded to that of a mercenary, were he compelled to do the biddings of his client against the dictates of his conscience”). 58 Forsyth, “Tax Avoidance and the Responsibility of the Professional Legal Adviser” (1981) 55 ALJ 582 at 587 (emphasis supplied). 59 See generally Freedman, Lawyers’ Ethics in an Adversary System (Bobbs-Merrill, 1975), Ch 2.

638

Lawyers’ Professional Responsibility

[19.85]

suggested that, where a course of conduct is legal but morally questionable, lawyers should inform clients of those moral implications. The following comment is typical:60 [O]bjectivity and independence are consistent with the capacity to take the extra step of proffering some larger criteria by which the proposed action may be measured … It is values such as justice and honesty which distinguish lawyers from mere functionaries soon to be replaced by appropriate consumer software … To leave decisions about principle solely to the client without also drawing his or her attention to the great issues represents an inadequate approach to professional responsibility, because lawyers are responsible not only to their clients but also to the community which grants recognition to their profession … [The lawyer] should not hesitate to make some comments about the weightier demands of the law, that is justice and good faith, just as he or she should feel free to comment on other commercial aspects of the option.

Justice McHugh has also made overtures of this kind, albeit extrajudicially, counselling lawyers to assess “whether the objective or the means of achieving it, although not prohibited by law, may nevertheless be regarded as dishonest by the standards of the community”.61 Promoting tax schemes and “marketing opinions”

[19.85]

The Western Australian professional rules prohibit a lawyer from promoting or marketing tax schemes or arrangements that have the predominant purpose of tax avoidance.62 These rules are not intended to prevent lawyers from advising any individual client as to the participation or proposed participation of the client in the scheme or arrangement, but are directed at preventing lawyers from being visibly associated with activities of questionable legality and, just as importantly, questionable morality. They are also aimed at the practice of a lawyer giving “marketing opinions” (also known as “selling opinions”) to the promoter of a tax scheme that set out the scheme’s prospects of success.63 The opinion is sought for the purpose of conferring legitimacy on the scheme and thereby enticing persons to invest in it. It is not unethical per se for a lawyer to give a “marketing opinion” provided it reflects her or his honest and wholly independent opinion; the lawyer must not permit that opinion to be coloured by the desires of the client or any fee for the opinion or in

60 Greenwood, “Ethics and Avoidance Advice” (1991) 65 LIJ 724 at 725–726. 61 McHugh, “Jeopardy of Lawyers and Accountants in Acting on Commercial Transactions” (1988) 22 TIA 542 at 553. Contra Myers, “Tax Advice: The Lawyer’s Ethical Responsibility” (1990) 19 Aust Tax Rev 80. It has been suggested that there ought to be an ethical rule prohibiting a non-advocate lawyer (that is, in a non-adversarial setting) from accepting clients who, while not pressing illegal conduct, nonetheless press that which the lawyer knows is an unconscionable end: Schwartz, “The Professionalism and Accountability of Lawyers” (1978) 66 Calif L Rev 669. 62 WA, r 48(1) (which further prohibits lawyers from having a financial interest in a business organisation that promotes or markets such schemes or arrangements: r 48(2)). 63 Tax is not the only area in which lawyers’ opinions are sought as a vehicle to convince third parties to proceed with a transaction or dealing. Lawyers’ opinions may be sought, for instance, in structured finance, and are directed not to clients as such, but to third parties such as investors or financiers. See Schwarcz, “The Limits of Lawyering: Legal Opinions in Structured Finance” (2005) 84 Tex L Rev 1; Coffee, “Can Lawyers Wear Blinders? Gatekeepers and Third-Party Opinions” (2005) 84 Tex L Rev 59.

[19.85]

19 Duty to Obey and Uphold the Law

639

connection with the scheme’s operation.64 It is unethical for a lawyer to give one (optimistic) opinion for prospective investors and supplementary (pessimistic) advice to the promoters.65 Such a practice may also expose the lawyer to potential liability for misleading a third party (whether in tort or under statute) or possibly even criminal responsibility.66 The former barristers’ Practice Rules in Victoria addressed marketing opinions explicitly. Rule 109(b) required that a barrister, who apprehended that her or his written advice was being sought for a wider purpose than the affairs of a client, was to seek and obtain a satisfactory assurance that it would not be: (a) published or supplied to others for the purpose of promoting or soliciting business for the solicitor or client without the barrister’s consent, which consent should be withheld if there is any doubt as to the propriety of the proposed use of the advice; or (b) used for circulation to other persons to invite or encourage them to enter into artificial or contrived arrangements or schemes for the purpose of avoiding the operation of the law. Rule 109(c) counselled barristers who apprehended that their name may be used to promote or solicit business for the solicitor, client or other persons to secure an assurance that their name would not be used without the supply of the full written advice or the relevant part thereof. The foregoing raises a more general issue as to the extent to which lawyers should permit their name to be used to promote commercial ventures. For example, in the United States venture capitalists have established internet sites geared to the legal profession, specifically to bring lawyers and clients together, which declare an association with one or more prominent legal ethicists, designed to “provide a sort of vaccination”, an “authority, legitimacy and comfort for both lawyers and their prospective clients”.67 As these ethicists are paid for this association, the chief ethical issue concerns the impression created in third parties that the “scheme” has been the subject of independent certification. In Australia, as in the United States, lawyers who permit themselves to be associated with a specific product or service must be scrupulous to ensure that they avoid creating in potential purchasers or users of that product or service any misleading or deceptive impressions: see [21.130], [21.135].

64 See Forsyth, “Tax Avoidance and the Responsibility of the Professional Legal Adviser” (1981) 55 ALJ 582 at 587. 65 See Gyles, “Criminal Liability of Professional Advisers” (1989) 23 TIA 480 at 481. 66 McHugh, “Jeopardy of Lawyers and Accountants in Acting on Commercial Transactions” (1988) 22 TIA 542 at 551–552. Contra Gyles, “Criminal Liability of Professional Advisers” (1989) 23 TIA 480 at 484; Myers, “Tax Advice: The Lawyer’s Ethical Responsibility” (1990) 19 Aust Tax Rev 80 at 84–86. 67 Carter, “Checkbook Credibility?” (2000) 86 (June) ABAJ 50.

PART V Other Lawyer Responsibilities Chapter 20: Conduct of Practice .......................................................................... 643 Chapter 21: Relations with the Profession and Third Parties .......................... 681 Chapter 22: Undertakings ..................................................................................... 733

Chapter 20

Conduct of Practice [20.05] SOLICITATION OF BUSINESS ....................................................................................... 644 [20.05] Lawyer advertising ...................................................................................................... 644 [20.15] Restrictions on lawyer advertising ........................................................................... 646 [20.55] Other restrictions on methods of soliciting work .................................................. 652 [20.75] PRACTICE NAMES, STATIONERY AND PREMISES ............................................... 656 [20.75] Practice names .............................................................................................................. 656 [20.80] Practice stationery ........................................................................................................ 658 [20.90] Sharing premises .......................................................................................................... 659 [20.95] CONDUCTING ANOTHER BUSINESS ........................................................................ 660 [20.95] Constraints .................................................................................................................... 660 [20.100] Separation and control .............................................................................................. 661 [20.105] Need for disclosure .................................................................................................... 661 [20.110] Deemed conduct of another business ..................................................................... 661 [20.115] Illustration – conducting the business of an estate agent ................................... 662 [20.125] SHARING RECEIPTS WITH NON-LAWYERS ......................................................... 663 [20.125] Traditional prohibition on receipt sharing ............................................................ 663 [20.130] Relaxation of prohibition .......................................................................................... 664 [20.135] LAWYER BUSINESS STRUCTURES ............................................................................ 665 [20.135] Traditional business structures ................................................................................ 665 [20.150] Multi-disciplinary partnerships ............................................................................... 666 [20.170] Incorporated legal practices ..................................................................................... 669 [20.175] MEDIATION BY LAWYERS .......................................................................................... 671 [20.180] Characteristics of mediation and mediators ......................................................... 672 [20.185] Mediator accreditation .............................................................................................. 673 [20.190] Lawyer skills useful in mediation ........................................................................... 674 [20.195] Agreement to mediate ............................................................................................... 675 [20.200] Termination of mediation ......................................................................................... 676 [20.205] SUPERVISION AND ATTENDANCES ....................................................................... 676 [20.205] Supervision .................................................................................................................. 676 [20.215] Attendance at practice ............................................................................................... 678 [20.220] BANKRUPTCY OF LAWYER ....................................................................................... 679

644

Lawyers’ Professional Responsibility

[20.05]

SOLICITATION OF BUSINESS Lawyer advertising

[20.05]

The view that solicitation of business does not sit well with status as a professional spawned the traditional professional prohibition on lawyer advertising.1 To advertise, it was said, denigrates the profession to a mere business and cheapens its image. It was also argued that advertising conveys to the community the (incorrect) notion that the profession prompts litigation for its own purposes. The experience in the United States,2 where advertising is said to contribute to the profession’s poor image3 – a proposition challenged by empirical research4 – supposedly substantiates these contentions. However, this attitude, whilst not obsolete,5 has been subjected to considerable scrutiny in Australia.6 Public concern over access to justice and the need for consumers of legal services to be informed of their options, with an attached prospect of increasing price competition and thus reducing the cost of legal services,7 coupled with inroads into traditional legal domains by non-lawyers (see [1.25]) and the call for a level playing field, prompted professional bodies to revise restrictions on soliciting business. In 1994 the (then) Trade Practices Commission branded a prohibition on lawyer advertising as anti-competitive, seeing restrictions on advertising as limiting “the flow of valuable market information to consumers

1 For an analysis of the reasons why lawyer advertising was traditionally prohibited see Angyal and Payne, “The Law: Professional Autonomy and the Public Interest” in Boreham, Pemberton and Wilson (eds), The Professions in Australia (University of Queensland Press, 1976), pp 114–117. 2 The prevalence of lawyer advertising in the United States stemmed from the decision in Bates v State Bar of Arizona (1977) 433 US 350, in which the Supreme Court, applying the constitutional right to freedom of speech, held that a State may not prohibit the advertisement of prices at which certain routine legal services will be performed. See generally Wolfram, Modern Legal Ethics (West Publishing Co, 1986), pp 775–785; Van Patten, “Essay: Lawyer Advertising, Professional Ethics, and the Constitution” (1995) 40 South Dakota L Rev 212. 3 See, for example, Hyland, “Attorney Advertising and the Decline of the Legal Profession” (2011) 35 J Legal Prof 339. 4 This research is alleged to show that lawyer advertising instead raises the public’s esteem for the profession: Cebula, “Does Lawyer Advertising Adversely Influence the Image of Lawyers in the United States? An Alternative Perspective and New Empirical Evidence” (1998) 27 J Leg Stud 503; Cebula, “Historical and Economic Perspectives on Lawyer Advertising and Lawyer Image” (1998) 15 Georgia State Uni L Rev 315. 5 See, for example, D’Orta-Ekenaike v Victoria Legal Aid (2005) 223 CLR 1 at [362] per Callinan J (“A profession which undertakes its work in public, adversarially and competitively, in the presence of judges who supervise the whole proceedings, and may discipline its members, and whose engagement is generally by other professionals, has no need to, and should not, in my opinion, be obliged or encouraged to advertise”). 6 See, for example, Trade Practices Commission, Study of the Professions: Legal (Final Report, 1994), Ch 9. 7 See Engstrom, “Attorney Advertising and the Contingency Fee Paradox” (2013) 65 Stanford L Rev 633 (who notes that the loosening of lawyer advertising restrictions in the wake of Bates v State Bar of Arizona (1977) 433 US 350, mentioned in note 2 above, empirical research in the United States revealed a reduction in the cost of legal services, albeit that the same has not ensued vis-à-vis to percentage fees in personal injury work).

[20.10]

20 Conduct of Practice

645

with adverse consequences for competition”.8 The upshot has been a relaxation of the advertising prohibition in each jurisdiction, and in some jurisdictions also the loosening of professional prohibitions on directly approaching clients (see [20.55]) and the payment of referral fees to secure business (see [20.70]). It has been judicially observed in this regard that “[s]imply to advertise for business, that is, to endeavour to attract customers by advertisement, is an accepted part of ordinary professional life”.9 Statute or professional rules now envisage that lawyers may advertise their services.10 But maintenance of the public confidence in the profession has dictated restrictions on the right to advertise, discussed at [20.15]–[20.50]. With the application of competition principles to the profession (see [1.55]–[1.65]), 1996 saw the Australian Government, after consultation with relevant stakeholders,11 produce Guidelines for the Advertising of Legal Services,12 that aimed to assist lawyers in framing advertisements that meet the needs of consumers and avoid being misleading or deceptive, and to assist consumers to better understand advertisements for legal services, and advertisers to identify “areas of risk” that demand careful attention in producing an advertisement. The guidelines addressed, inter alia, the advertisement of qualifications of legal service providers, expertise of legal service providers, rates of prior success, expectations of results, comparisons with other lawyers, fees, testimonials and endorsements. Similar guidelines were later issued by the New South Wales Law Society13 and the Victorian Law Institute.14

[20.10]

The objects underscoring the regulation of lawyer advertising, and the principles discussed below that are designed to give effect to these objects, apply to all forms of advertising. With the burgeoning use of the internet, it behooves lawyers to take especial care that internet advertising meets the relevant standards. As law firm web sites ordinarily contain much more information than found on, or can be communicated through, traditional advertising avenues, there is a greater risk of including information that contravenes the relevant requirements, as well as dated information. And to the extent that web pages explain detail about the law and encourage prospective clients to make email contact with the firm, there is the attendant prospect that the firm could be assuming some legal responsibility, whether via an implied retainer, tort or under statute (see [3.75], [5.60]), to persons

8 Trade Practices Commission, Study of the Professions: Legal (Final Report, 1994), p 171. See Baxt, “Professions and the Challenge of Competition: Why the Hilmer Report and its Endorsement Create New Opportunities for the Professions” (1995) 8 Corp & Bus LJ 1 at 4–8. 9 Judge v Chiropractors Board of South Australia (2004) 89 SASR 94 at [46] per Perry J. 10 ACT, r 36.1 (see also ACT, r 116.1 (barristers)); NSW, r 36.1; Qld, r 36.1; SA, r 36.1; Tas, r 7; Vic, r 36.1; WA, r 45(1). 11 Namely representatives of the Law Council of Australia, State and Territory Justice and Attorney-General’s Departments, the Consumers’ Federation of Australia and the Australian Consumers’ Association. 12 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996). 13 Guidelines for Solicitors’ Advertising (effective 28 November 1996), extracted in (1997) 35 (Feb) LSJ 80, although these no longer appear on the Society’s website. 14 Advertising Guidelines (effective 24 March 2011, and now 17 April 2014), available at http://www.liv.asn.au.

646

Lawyers’ Professional Responsibility

[20.15]

it may not regard as clients. Hence the need for certain aspects of web page publicity to be qualified by clearly expressed and conspicuous limitations, conditions or disclaimers.15 That many lawyers maintain social media pages and communications also requires care when posting information (whether written or photographic) not to breach advertising guidelines.16 To the extent that social media avenues are utilised to promote, as part of a broader marketing strategy,17 the advertising requirements clearly apply. The same is not the case for a lawyer’s personal page, although its content may, should it reflect poorly on the lawyer’s character or respect for the law, have professional disciplinary consequences. It stands to reason that, especially (but not solely) where social media or blogs are publicity vehicles for a law practice, lawyers should review the content of any third party postings, to ensure that these do not contravene advertising rules or otherwise reflect badly on the lawyer’s character. Restrictions on lawyer advertising False, misleading or deceptive advertising

[20.15]

Advertisements, or indeed other communications with a person relating to legal services, must be consistent with the maintenance of proper professional standards. Advertisements that are inaccurate or otherwise create unreasonable expectations are likely to foster community and client distrust in the profession. For this reason, statute or professional rules in each jurisdiction proscribe lawyers from engaging in advertising of a false, misleading or deceptive character.18 The use of the phrase “misleading or deceptive”, in adoping language from consumer protection legislation,19 renders the case law on this legislation useful in assessing the quality of an advertisement. An advertisement is misleading or deceptive, to this end, if it contains a material misrepresentation of fact, omits a fact necessary to make a statement not misleading when considered as a whole, or is likely to create an unjustified expectation.20 15 See generally American Bar Association, Formal Opinion 10-457 “Lawyer Websites” (5 August 2010). 16 See Bennett, “Ethics of Lawyer Social Networking” (2009) 73 Albany L Rev 113 at 129–131; Browning, “Facebook, Twitter, and LinkedIn – Oh My! The ABA Ethics 20/20 Commission and Evolving Ethical Issues in the Use of Social Media” (2013) 40 Nth Ky L Rev 255 at 269–277; Colvin, “The Dangers of Using Social Media in the Legal Profession: An Ethical Examination in Professional Responsibility” (2015) 92 U Detroit Mercy L Rev 1 at 6–15. 17 As to the marketing of legal services more generally see Hodges, “I Didn’t go to Law School to Become a Salesperson – The Development of Marketing in Law Firms” (2013) 26 Geo J Leg Ethics 225. 18 ACT, r 36.1 (see also ACT, r 116.2(a) (barristers)); NSW, r 36.1; Qld, r 36.1; SA, r 36.1; Tas, r 7(1); Vic, r 36.1; WA, r 45(1). 19 Australian Consumer Law, s 18(1) (found in Competition and Consumer Act 2010 (Cth), Sch 2), being the current equivalent of the former s 52(1) of the Trade Practices Act 1974 (Cth) and its State and Territory fair trading equivalents. 20 See, for example, Legal Profession Complaints Committee v Love [2014] WASAT 84 (where the respondent devised a website called “applyforlegalaid”, which made no reference to the respondent, but instead mimicked the Legal Aid WA’s website and application form, and once the form was

[20.20]

20 Conduct of Practice

647

[20.20]

The advertisement of fees, in particular, merits scrutiny. Consistent with the rationale of statutory initiatives for disclosure of cost estimates (see [14.20], [14.25], [14.40]), lawyers must take care to avoid misleading impressions in advertising their fees. Some lawyers advertise, for example, fixed or maximum fees or hourly rates for specified services, ranges of fees and methods of determining fees. Advertisements of this kind rarely allow clients to accurately estimate the total cost of the lawyer’s services; certainly advertisements promising monetary or percentage savings on usual rates do little to assist, and are likely in any case to be misleading.21 Lawyers who attempt, by way of advertisement, to give clients an indication of total costs should note the frequent difficulty of accurately predicting legal costs, which may depend on factors beyond the lawyer’s control. It follows that where fees are advertised, lawyers should disclose at least the possibility of other additional charges that may comprise the total cost of the service.22 And offering to provide legal services for a set sum while not disclosing “hidden extras”, or being misleading as to the work included in the services advertised, is clearly unethical.23 Confusion may also stem from advertisements using the phrase “first appointment free”, and so the terms and conditions of the offer should be made clear. Also prone to creating confusion are expressions such as “no win – no fee”, or “no win – no pay”, as these suggest that a legal service is entirely free of charge. As this is rarely so – often disbursements and other costs are payable even if a client succeeds, let alone the potential exposure to paying the other party’s costs if the client fails – care must be taken to ensure that fees that are or could be payable are clearly disclosed.24 At least there should be disclosure that the offer is subject to conditions, whether costs-related or as to the lawyer’s willingness to accept the client on the terms advertised.25

submitted, the information inserted would be forwarded to the respondent; the respondent’s advertising was found to be misleading and deceptive and, coupled with findings of unsatisfactory professional conduct against him on prior occasions, led to a recommendation that the respondent be struck off). 21 Law Institute of Victoria Ethics Committee, R2436 (November 1990) (advertisement “15% off costs and 10% off scale fees” ruled to be misleading). Cf the ethical issues surrounding the increasing practice of lawyers in the United States, often small law practices, to advertise on “deal-of-the-day” websites (for example Groupon.com), which provide to subscribers, by way of email or internet daily deals, redeemable vouchers for a good or service being offered at a discount by the supplier: see Boldon, “The Ethics of Lawyers Marketing their Services on Daily Deal Websites” (2012) 68 Bus Law 263; Russ, “Is Groupon for Lawyers Fraught With Ethical Danger? Why the Legal Community Should Embrace Innovative Internet-Marketing for Lawyers” [2013] U Ill JL Tech & Pol’y 393. 22 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 10; WA EPG, cl 12.8. 23 Clause 11 of the NSW Guidelines for Solicitors’ Advertising gives as an example of misleading conduct a conveyancing advertisement that sets a lump sum cost for acting on a sale, and then purports to charge professional fees in addition to that sum for the preparation of a contract. It adds that an advertisement purporting to distinguish between “sale” and “preparation of contract” may be misleading, as preparation of the contract is an integral part of the sale, but notes that this may be satisfactorily addressed by the use of the terms “preparation of contract” and “balance of sale”. 24 See, for example, Legal Practitioners Complaints Committee v Browne (2006) 42 SR (WA) 342 (where the tribunal held that the words “no compensation = no legal fees” in the respondent’s advertisement

648

Lawyers’ Professional Responsibility

[20.25]

[20.25]

Misleading or deceptive conduct claims are not confined to advertising of fees, but can encompass any of the lawyer’s promotional activities. In Nixon v Slater & Gordon,26 for example, the defendant law firm published a promotional booklet for its medical negligence practice, on the cover of which appeared a photograph of two surgeons conducting a procedure with a robed barrister scrutinising the surgery. Those surgeons proved to be identifiable as the applicants. They successfully argued that, in addition to being a libel,27 mailing the booklet to medical practitioners in Victoria was “misleading or deceptive” in contravention of s 52(1) of the Trade Practices Act 1974 (Cth) (now s 18(1) of the Australian Consumer Law). Merkel J reasoned that, as there was no medical malpractice claim against the applicants, the representation contained in the booklet was misleading and deceptive.28 His Honour awarded damages in the amount that he otherwise would have awarded for defamation.29 The Australian Consumer Law, as well as empowering the court to make orders for compensation, makes provision for the imposition of fines or other penalties, including requirements to publish corrective advertising. Vulgar or sensational advertising

[20.30]

The professional rules in some jurisdictions prohibit advertising that is vulgar, sensational or otherwise of such a nature that, in the opinion of the relevant professional body, it is likely to bring a lawyer, the profession or the legal system into disrepute.30 In this context the Council of the Law Institute of Victoria has identified as “undesirable advertising” that which:31 • identifies a client or past client without the client’s written consent; • is disparaging of other lawyers or of the profession in general; • compares the practice, standards or skills of the lawyer with those of any other named or identifiable lawyer; or • diminishes public confidence in the legal profession or in the administration of justice or otherwise bring the profession into disrepute. Comparisons and testimonials

[20.35]

The Guidelines for the Advertising of Legal Services caution that “[c]omparative advertising is an area of particular risk for advertisers of legal services because of the difficulty in comparing like with like and the risk of it being were misleading “because a member of the public may be misled into thinking that, by using the practitioner’s services, they would have no liability for any fees or costs rather than no liability for only the practitioner’s own charges for legal fees”: at [4]). 25 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 11; NSW, cl 2; WA EPG, cll 12.8, 12.9. 26 Nixon v Slater & Gordon (2000) 175 ALR 15. See Webb and Wylie, “A Federal Court Warning on Lawyers’ Advertising” (2001) 39 (May) LSJ 67. 27 On the libel point see Nixon v Slater & Gordon (2000) 175 ALR 15 at [30]–[69]. 28 Nixon v Slater & Gordon (2000) 175 ALR 15 at [80]. 29 Namely $200,000 and $100,000 respectively for each of the applicants: Nixon v Slater & Gordon (2000) 175 ALR 15 at [84]. 30 ACT, r 37, Guideline (see also ACT, r 116.2(c) (barristers)); Tas, r 7(1); WA, r 45(1)(e). 31 Advertising Guidelines (adopted 17 April 2014), available at http://www.liv.asn.au.

[20.40]

20 Conduct of Practice

649

potentially misleading, deceptive or defamatory”.32 It has been judicially observed that “an advertisement which reflected in any way on the competence or quality of service provided by a competitor, might amount to unprofessional conduct”.33 In response to these concerns the relevant rules or guidelines in Tasmania and Victoria prohibit advertisements that contain or imply a comparison with another named or identifiable lawyer’s practice, services, standards or skills.34 In the remaining jurisdictions, lawyers inclined to engage in comparative advertising should ensure at least that the advertisement is accurate,35 disclose any basis for the comparison, only compare like with like, and make claims that will remain current for the life of the advertisement. Testimonials and endorsements, according to the Guidelines for the Advertising of Legal Services, must be used with “great care”.36 They warn that testimonials that have been paid for or scripted are of particular concern because consumers may believe that they are true and thus place faith in them. It follows that a lawyer who uses testimonials or endorsements in advertising must, on inquiry, be able to show their genuineness and veracity and that they were not provided for monetary or other reward.37 Advertisement of specialty or expertise

[20.40]

There is no absolute prohibition on lawyers advertising themselves as specialists or experts in one or more fields of practice. Advertisement of a special expertise may be useful in enabling persons to locate lawyers who are particularly well equipped to deal with certain forms of disputes or transactions. But lawyers should be wary of making claims to expertise unless these can be substantiated.38 A claim that proves unsubstantiated can generate client dissatisfaction and potential disciplinary sanction. Also, lawyers who hold themselves out as specialists in a 32 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 9. See also NSW, cl 6; WA EPG, cll 12.7, 12.9. 33 Judge v Chiropractors Board of South Australia (2004) 89 SASR 94 at [47] per Perry J. 34 Tas, r 7(1); Vic: Advertising Guidelines (adopted 17 April 2014). 35 Cf US, r 7.1, cmt [3], which states that “an unsubstantiated comparison of the lawyer’s services or fees with the services or fees of other lawyers may be misleading if presented with such specificity as would lead a reasonable person to conclude that the comparison can be substantiated”. This may be violated by a lawyer’s use of superlatives that imply her or his services to be superior to those of other lawyers: see, for example, Mezrano v Alabama State Bar Association (1983) 434 So 2d 732; Medina County Bar Association v Grieselhuber (1997) 678 NE 2d 535 (“We Do It Well” found to be an unverifiable and misleading claim). 36 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 12. 37 This appears only in the previous New Zealand rules (New Zealand Law Society, Rules of Professional Conduct for Barristers and Solicitors, r 4.01, cmt (3)) but nonetheless represents sound practice. Cf Law Institute of Victoria Ethics Committee R4212 (ruling that a proposed television advertisement containing brief testimonials from clients was ethical provided it was not misleading: see (2005) 79 (June) LIJ 89). 38 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 4 (which notes that the use of the term “expert” is an area of potential risk for advertisers of legal services, but adds that provided such a claim is well founded “there is usually no problem with a lawyer or other person advertising himself or herself as an expert”).

650

Lawyers’ Professional Responsibility

[20.45]

field of practice are subjected to a stricter standard of care in tort for work conducted within that specialty: see [5.190]. The Australian Solicitors’ Conduct Rules, to this end, declare that a lawyer must not “convey a false, misleading or deceptive impression of specialist expertise””, or advertise in a manner that uses the words “accredited specialist” or a derivative of those words, unless the lawyer is a specialist accredited by the relevant professional body.39 Where is no specialist accreditation scheme, lawyers should avoid language of accreditation, and take care in using the word “specialist” or the like. There is nothing to preclude the advertising of areas of practice in which the lawyer practises or takes instructions, but if “expertise” is professed, it must be capable of being substantiated by reference to, inter alia, the lawyer’s qualifications, experience and extent of practice focus in the relevant field(s).40 The Australian Capital Territory barristers’ rules set a minimum of two years “extensive experience” in a relevant field, other than as a pupil, as a prerequisite to a barrister holding herself or himself out as a specialist or as offering specialist services.41 Representations of prior success or results in a matter

[20.45]

As advertisements quoting past rates of success can imply to consumers that the same chance of success will attach to future cases, advertisements of this kind are likely to be misleading and deceptive.42 Aside from concerns as to the manner of calculating and expressing prior rates of success, every case is different. Even minor differences in facts between similar cases can bring about very different outcomes. It may not be easy, therefore, in an advertisement to counterbalance the impression of chance of success with disclaimers and qualifications. It is also potentially misleading to advertise in terms of “win” or “loss”; advertisements of this kind may give the impression that the result of a given case 39 ACT, r 36.2; NSW, r 36.2; Qld, r 36.2; SA, r 36.2; Vic, r 36.2. Similar provision is made in WA, r 45(2). Cf US, r 7.4(d), which prohibits a lawyer from stating or implying that he or she is certified as a specialist in a particular field of law unless the lawyer has been certified as a specialist by an organisation, clearly identified in the communication, that has been approved by an appropriate State authority or that has been accredited by the American Bar Association. The American rules, to this end, distinguish between advertisement of specialisation (which is ethical provided that the statement is not misleading) and certification (which is ethical only where a certification regime has been followed). 40 Legal Profession (Solicitors) Rules 2007, r 38.2(d) (superseded); Tas, r 7(2); Legal Profession Complaints Committee, Western Australia, Use of the Terms “Specialist” and “Expert” in Advertisements (March 2014), available https://www.lpbwa.org.au/ (advertising of specialist expertise to align with criteria adopted for specialist accreditation in other states (cl 5), and warning that use of the term “expert” may “be understood by members of the public as implying that a practitioner has particular knowledge, skill, training or experience in an area of law above that of other practitioners, even accredited specialists”, and so “should only be used in limited circumstances where a clear claim to expertise can properly and reasonably be made, having regard to the particular qualifications, experience and continuous involvement and professional development of a practitioner in a particular field of practice” (cl 6)). 41 ACT, r 117 (which adds that a barrister seeking to advertise a specialisation must give at least two months’ notice of her or his intention to the Bar Council, which may decline to approve the advertisement). 42 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 7; NSW, cl 4; WA EPG, cl 12.5.

[20.50]

20 Conduct of Practice

651

is a foregone conclusion. What is considered a win by one person need not necessarily be so to another. As most cases are settled out of court, it is difficult to classify a settlement as a win or a loss. In any event, the outcome of a case is in many instances complex, not easily expressed in win or loss terms, especially in an advertisement.43 Likewise, advertising that a litigation matter can be completed within a certain period of time may raise false expectations if it omits to make clear that this cannot be achieved except by means of settlement or compromise of the client’s claim if this is in fact the case.44 Restrictions on advertising in relation to personal and work injury matters

[20.50]

Civil liability reforms witnessed New South Wales lawyers become prohibited from publishing an advertisement that includes any reference to or depiction of:45

• “personal injury”; • any circumstance in which personal injury might occur, or any activity, event or circumstance that does or could suggest the possibility of personal injury, or any connection to or association with personal injury or a cause of personal injury; or • a personal injury legal service (that is, any legal service that relates to recovery of money, or any entitlement to recover money, in respect of personal injury). An equivalent prohibition applied to advertising in respect of work injury services. Various exceptions to these prohibitions existed,46 the main one being an advertisement as to the lawyer being an accredited specialist or offering specialist services: see [20.40]. The High Court upheld the constitutional validity of these initiatives, ruling that they do not infringe implied rights of freedom of political communication or freedom of interstate trade under the Constitution.47 Now in New South Wales the Legal Profession Uniform Law, and regulations and rules thereunder, make no equivalent provision. The Northern Territory (within its legal profession legislation), Queensland and Western Australia have enacted provisions directed to the same end, albeit in terms 43 Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 8; WA EPG, cl 12.6. 44 See, for example, Re Wamsley (2000) 725 NE 2d 75 (advertisement that lawyer could secure the best possible settlement in the shortest period of time held likely to create an unjustified expectation that the lawyer could secure such a result in every case). 45 Legal Profession Regulation 2005 (NSW), cll 24(1), 34(1) (repealed) (formerly Legal Profession Regulation 2002 (NSW), cll 139(1), 140G). 46 Workers Compensation Regulation 2010 (NSW), cl 79 (amended to oust its applications vis-à-vis lawyers) (previously Workers Compensation Regulation 2003 (NSW), cl 75; effective 23 May 2003). 47 APLA Ltd v Legal Services Commissioner (NSW) (2005) 224 CLR 322 (per Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ, McHugh and Kirby JJ dissenting). See Gray, “High Court Validates Restrictions on Lawyer Advertising” (2005) 26 Qld Lawyer 131; Gray, “Advertising by Professions and the Competition and Consumer Act 2010 (Cth)” (2012) 40 ABLR 336 (who queries whether advertising restrictions are consistent with the Competition and Consumer Act 2010 (Cth)).

652

Lawyers’ Professional Responsibility

[20.55]

that differ in detail, which remain extant.48 A contravention of the relevant prohibition is an offence that attracts a monetary penalty, and is declared to be professional misconduct.49 Other restrictions on methods of soliciting work Approaching prospective clients

[20.55]

As members of a profession, lawyers should not solicit prospective clients in a manner capable of bringing the profession into disrepute. Cited as dangers of solicitation are stirring up litigation, assertion of fraudulent claims, misrepresentation, debasing of the profession and potential harm to the person solicited in the form of overreaching.50

A distinction could be made between direct solicitation of clients who will probably be represented by a lawyer and the solicitation of persons who would otherwise forgo valuable legal rights. The lawyer’s motivation in the former is essentially competitive – to secure business at the expense of another lawyer – whereas in the latter, solicitation may be an important means of assuring awareness of legal rights.51 Yet to proscribe the former and permit the latter unrealistically presupposes that the distinction between the two situations can be made in a lawyer’s own mind. To this end, the rules in most Australian jurisdictions do not unduly restrict means of solicitation, and avoid the troublesome inquiry into the lawyer’s state of mind. The former Australian Capital Territory professional rules, relevantly extracted below, contained the most comprehensive treatment of the issue:52 A practitioner may communicate with a person who is not then his or her client with a view to obtaining instructions for professional business provided that: (a) the content and nature of any material used by the practitioner in the course of the communication is subject to the same restrictions as are [applicable to advertising]; (b) the form of the communication does not derogate from the dignity of the legal profession; (c) the physical, emotional and mental state of the person is such that the person is capable of exercising reasonable judgment in employing a practitioner; 48 The main prohibition is found in NT, s 290(1); Personal Injuries Proceedings Act 2002 (Qld), s 66(1); Civil Liability Act 2002 (WA), s 17(1). 49 Legal Profession Regulation 2005 (NSW), cl 24(2) (repealed) (see Hagipantelis v Legal Services Commissioner of New South Wales (2010) 78 NSWLR 82; Legal Services Commissioner v Bryden (No 2) [2012] NSWADT 112; Legal Services Commissioner v Bryden (No 3) [2012] NSWADT 225); NT, ss 290(1), 466(1)(a) (branding conduct consisting of a contravention of the Act as capable of constituting unsatisfactory professional conduct or professional misconduct); Personal Injuries Proceedings Act 2002 (Qld), s 66(1), 66(3); Civil Liability Act 2002 (WA), s 17(3). 50 Ohralik v Ohio State Bar Association (1978) 436 US 447 at 461 per Powell J. Cf the criticisms of restrictions on lawyer solicitation in the United States, which generally focus on the importance of the free flow of information: see, for example, Hill, “Solicitation by Lawyers: Piercing the First Amendment Veil” (1990) 42 Mercer L Rev 369. 51 This distinction is recognised by US, r 7.3(a), which prohibits a lawyer from soliciting in person, by telephone or by email professional employment from a prospective client (other than another lawyer, a close friend or family member, or a former client) when a significant motive for doing so is the lawyer’s pecuniary gain. 52 Legal Profession (Solicitors) Rules 2007 (ACT), r 38.4 (see also r 38.5) (superseded). See further Tas, r 8.

[20.60]

20 Conduct of Practice

653

(d) the practitioner must not communicate with a person who has made it known to the practitioner, directly or indirectly, that he or she does not desire to receive such communications from the practitioner or from practitioners generally; and (e) the communication does not involve undue influence, coercion, duress, harassment or nuisance.

Regarding (c) above, the Australian Solicitors’ Conduct Rules make specific provision proscribing what is known as “ambulance chasing”. Following the earlier Law Council’s Model Rules schema53 – which remains in the Northern Territory54 – it prohibits lawyers from seeking instructions in a manner likely to oppress or harass a person who, due to a recent trauma, injury or other circumstances, might reasonably be expected to be at a significant disadvantage in dealing with the lawyer at the time when the instructions are sought.55 Also, statute in the Northern Territory, Queensland and Western Australia prohibits a person who is at the scene of an incident, or at a hospital after an incident, at which another person allegedly suffers or suffered a personal injury, from soliciting or inducing a potential claimant involved in the incident to make a claim.56 The foregoing may not, however, preclude a law practice from making available pamphlets advertising its services in, say, doctors’ or hospital waiting rooms.57

[20.60]

The Council of the Victorian Law Institute has addressed the issue of “direct marketing” (which includes “cold calling” but extends other forms of communication) via guidelines.58 These restrict rather than outlaw the practice, requiring that it comply with privacy law, the Council of Ministers Model Codes on Direct Marketing, and any other relevant legislation. They limit the persons who may engage in cold calling (namely principals and directly employed staff of the lawyer or firm) and the times when cold calling can be carried out (only between 9am and 6pm on weekdays, and not on public holidays). A client “cooling off” period where a retainer is concluded as a result of cold calling is imposed, as is the need for an internal complaints handling procedure that meets prescribed 53 Law Council of Australia, Model Rules of Professional Conduct and Practice, r 33.1.2 (superseded). 54 NT, r 29.1.2. 55 ACT, r 34.2; NSW, r 34.2; Qld, r 34.2; SA, r 34.2; Vic, r 34.2. See also NZ, r 11.2(b) (“A lawyer must not directly contact a prospective client … if the lawyer knows or should know that the physical, emotional, or mental state of the person is such that the person could not exercise reasonable judgement in engaging a lawyer, or the lawyer is aware that the prospective client does not wish to be contacted by the lawyer”); Florida Bar v Went for It Inc (1995) 515 US 618 (where the United States Supreme Court upheld the constitutionality of a Florida professional rule – which prohibited lawyers soliciting a prospective client in “an action for personal injury or wrongful death or otherwise relates to an accident or disaster involving the person to whom the communication is addressed or a relative of that person, unless the accident or disaster occurred more than 30 days prior to the mailing of the communication” – reasoning that “[t]he Bar has substantial interest both in protecting injured Floridians from invasive conduct by lawyers and in preventing the erosion of confidence in the profession that such repeated invasions have engendered”: at 635 per O’Connor J). 56 Legal Profession Act 2006 (NT), s 292(1); Personal Injuries Proceedings Act 2002 (Qld), s 67(1); Civil Liability Act 2002 (WA), s 19(1). 57 Law Institute of Victoria, Ethics Committee, R4891 (December 2015), extracted at (2016) 90 (May) LIJ 65. 58 “Direct-Marketing Guidelines”, adopted by the Council of the Law Institute of Victoria on 16 September 2010, available at http://www.liv.asn.au.

654

Lawyers’ Professional Responsibility

[20.65]

standards. Without equivalents in other Australian jurisdictions, these guidelines nonetheless represent good practice.59 In any case, cold callers must take care to avoid harassing or coercing prospective clients, be sensitive to those persons’ right to privacy, and respect a request to desist from further contact. With the mushrooming use of email and social media, the speed and personal nature of methods of these communications may pose a danger of overreaching. The United States Model Rules partly address the issue by restricting solicitation, inter alia, via “real-time electronic contact”.60 The Victorian guidelines make explicit reference to email communications but the issue is not targeted directly in other Australian guidelines or rules. Contacting clients upon leaving firm and poaching clients

[20.65]

It is not improper per se for lawyers who plan to leave a firm to contact its clients to inform them of future practice details. This contact is subject to the following limitations.61 First, the contact should not deprecate the firm or its members. Clients must be shielded from any acrimony existing between the firm and the departing lawyer. The departing lawyer should first inform the firm of her or his proposed departure, so that it may meet with and/or write to clients informing them of the departure and the new arrangements for conduct of their matters. Second, departing lawyers should in no way suggest or indicate that clients are obliged to instruct them, nor should they undermine existing lawyer–client relationships between the firm and its clients.62 Third, if a client expresses a wish to transfer instructions from the firm to the departing lawyer, the latter should inform the client of her or his responsibility to negotiate the terms of the transfer, including the requirement either to pay all outstanding costs and disbursements or secure the firm’s entitlements to costs and disbursements. The firm should facilitate the transfer of files, subject to the payment of any such firm’s fees and disbursements. Fourth, any valid contractual restriction on solicitation of a client contained in the departing lawyer’s contract of employment or partnership agreement with her or his former firm must be adhered to. 59 Cf UK, O(8.3) (which prohibits “unsolicited approaches in person or by telephone to members of the public in order to publicise [the] firm or in-house practice or another business”; instances of failing to observe this prohibition include “approaching people in the street, at ports of entry, in hospital or at the scene of an accident; including approaching people to conduct a survey which involves collecting contact details of potential clients, or otherwise promotes [the] firm or in-house practice”: IB(8.5)). 60 US, rr 7.3(a), 7.3(b). See Hurld, “Untangling the Wicked Web: The Marketing of Legal Services on the Internet and the Model Rules” (2004) 17 Geo J Legal Ethics 827. 61 The limitations stated in the text represent an amalgam of the following: Shirvington, “Leaving Firms and Contacting Clients” (1995) 33 (Feb) LSJ 27; Mazurek, “Solicitors Leaving Firms Need to Heed the Rules” (1998) 36 (Sept) LSJ 35; “Best Practice Protocol for the Conduct of Firms (Employees and Partners) Leaving Firms” (1998) 36 (Nov) LSJ 30 (revised 20 June 2002); SA: Professional Standards Division Determination (1997) 19 (Oct) LSB (SA) 7. 62 The New South Wales Protocol provides that it is not improper per se for a lawyer to contact clients of a firm, for whom he or she acted whilst employed by the firm, after leaving the firm, but that this should only be done with great care: (1998) 36 (Nov) LSJ 30.

[20.70]

20 Conduct of Practice

655

Consistent with the foregoing, the traditional view that it is unprofessional to seek to poach a client from another lawyer does not survive the modern competitive business environment. The following remarks by a South Australian judge highlight the modern approach:63 In the context … of the legal profession, it is unlikely that a charge of unprofessional conduct would these days be sustained simply on the basis that a practitioner had endeavoured to induce customers to engage him or her, rather than remain a client of another practitioner. There is much movement of practitioners in and out of legal firms, and it is a common occurrence for practitioners who leave a firm to take up practice elsewhere, to draw with them clients of the firm which they have left. This is an unexceptional and everyday experience.

Indeed, professional journals regularly advertise lawyer movements from one practice to another, which may induce clients of a former practice to follow a lawyer to a new practice. It ensues that, as a general principle, approaching a client of another lawyer with a view to encouraging the client to change firms is not per se unprofessional.64 The controls on “direct marketing” noted at [20.60] must, however, be kept firmly in mind regarding unsolicited approaches. Obtaining work by offering reward

[20.70]

Where a lawyer obtains work by offering a fee to a third party – whether ad hoc or through an organised law broker65 – a concern is that the third party may be encouraged to refer work to the lawyer whether or not the lawyer is the most suitable or appropriate person to perform that work.66 As the lawyer will owe loyalties to both the client and the third party, there is the prospect of a conflict of interest from the lawyer’s perspective, and also a potential infringement of fee sharing prohibitions (see [20.125], [20.130]) if the third party is remunerated on a percentage of the lawyer’s ultimate fee to the client. As prospective clients, particularly those lacking experience with the profession, may rely heavily on a third party’s recommendation, the professional rules generally require the lawyer to disclose to prospective clients any referral fee agreement in place.67 These concerns support the Western Australian prohibition on these arrangements

63 Judge v Chiropractors Board of South Australia (2004) 89 SASR 94 at [51], [52] per Perry J (paragraph break omitted). 64 Cf Tas, r 8(1), which prohibits a lawyer from applying, or seeking instructions, for professional business from a person whom the lawyer knows is a client of another lawyer in a current matter. 65 US, r 7.2, cmt [5] (amended August 2012) (which allows a lawyer to pay others for generating client leads, such as Internet-based client leads, provided the lead generator does not recommend the lawyer). 66 See Shirvington, “Obtaining Work by Offering a Reward” (1994) 32 (June) LSJ 16. 67 ACT, r 12.4.4; NSW, r 12.4.4; NT r 29.1.1; Qld, r 12.4.4 (and see Queensland Law Society, Ethics Centre, Paying Referral Fees and Rule 12.4.4 of the Australian Solicitors Conduct Rules 2012 (Guidance Statement No 3, 30 June 2015), cll 2.3, 2.4 (as to the scope of the disclosure requirement)); SA, r 12.4.4; Vic, r 12.4.4. See also Federal Bureau of Consumer Affairs, Guidelines for the Advertising of Legal Services (July 1996), cl 14 (which requires the advertisement of legal services through a referral agent to disclose this fact and any referral fee that is ultimately payable to that agent); Pakula, “Law Brokers and Solicitors” (2003) 41 (Dec) LSJ 39.

656

Lawyers’ Professional Responsibility

[20.75]

outright.68 Barristers’ rules in most jurisdictions likewise prohibit the giving of any benefit to a person for introducing professional work to a barrister.69 The prudent lawyer will, in any case, eschew even informal referral fee arrangements. A statutory prohibition on some referral fee arrangements exists in the Northern Territory, Queensland and Western Australia as part of the civil liability reforms. It makes it an offence to reward a person for soliciting or inducing a person who suffers or may suffer a personal injury arising out of an incident to make a claim.70 In South Australia, statute makes it an offence for a lawyer to give any consideration to a person for referring business involving the preparation of conveyancing instruments.71 Where there is reason to believe that a client is referred to a lawyer by a third party, independent of any existing formal or informal arrangement between them, the Singaporean professional rules, in what is equally appropriate in Australia, require the lawyer:72 • not to permit the referror to undermine the lawyer’s professional independence; • not to reward the referror by the payment of commission or any other form of consideration; • not allow the referral to affect the advice given to the client; • to advise the client impartially and independently, ensuring that any wish to avoid offending the referror in no way affects the advice given; • to ensure that the referror in no way influences any decision taken in relation to the nature, style or extent of the lawyer’s practice; and • to communicate directly with the client to obtain or confirm instructions in the process of providing advice and at all appropriate stages of the transaction.

PRACTICE NAMES, STATIONERY AND PREMISES Practice names

[20.75]

Practice names must be consistent with requirements of professional standing. They must not tend to mislead as to the nature or structure of the firm, bring the profession into disrepute, or be unfair to other lawyers or to the public. In Tasmania, professional restrictions apply to the names that may be included in a practice name, being limited to the names of the lawyer, a partner or past member of the firm or a firm that conducted the same practice, although these can be lifted with the approval of the Law Society.73

68 WA, r 18(5)(a). 69 NSW, r 46; Qld, r 45; SA, r 45; Vic, r 46; WA, r 45. 70 Legal Profession Act 2006 (NT), s 293(1); Personal Injuries Proceedings Act 2002 (Qld), s 68(1); Civil Liability Act 2002 (WA), s 20(1). 71 Land and Business (Sale and Conveyancing) Act 1994 (SA), s 29(1). “Conveyancing instrument” means instrument as defined in the Real Property Act 1886 (SA): Land and Business (Sale and Conveyancing) Act 1994 (SA), s 3. 72 Sing, r 39(2). 73 Tas, r 6.

[20.75]

20 Conduct of Practice

657

In the remaining jurisdictions practice names need not be so constrained. But in any case, lawyers must avoid business names that might reasonably be expected to mislead or deceive a person seeking the provision of legal services as to the nature and identity of the provider, or as to the nature and quality of the services offered.74 Here the principles that dictate the appropriateness of advertising (see [20.15]–[20.50]) also impact on the legitimacy of practice names. At a most basic level the business name must indicate that the business being carried on is a legal practice. It should not give an incorrect impression as to the firm’s size or structure; for example, that it is multi-partnered and broadly based if it is in fact small. A sole practitioner should not, therefore, attach the suffix “and partners” to a business name or use the suffix “and associates” unless he or she employs at least one lawyer who holds a current practising certificate.75 The title “law centre” or “law clinic” may convey the impression that the practice is a governmental legal aid agency and so should be avoided (unless it is a community legal centre). Neumegen v Neumegen & Co76 provides an example of a practice name found to be misleading and deceptive. The appellant, who had practised under his own name since 1984 (namely Peter Neumegen), on being joined in partnership by his cousin (Mark Neumegen), planned to adopt the name “Neumegen & Neumegen”. The respondent firm “Neumegen and Co”, which had been named “Neumegen & Neumegen” between 1931 and 1983, objected to this. The New Zealand Court of Appeal, by a majority, held that the name of the new firm was likely to mislead or deceive,77 and granted an injunction restraining the appellant from using that name. Richardson P and Blanchard J identified at least three situations where by adopting the name Neumegen & Neumegen the appellant could mislead some reasonable members of the affected class of consumers:78 • when an older client who continues to know the respondent as Neumegen & Neumegen contacts the new firm because it bears that name; • when a potential new client recommended to deal with the respondent approaches the appellant’s firm because of confusion caused by the lack of distinctiveness in the two names; and • when someone who has dealt with the respondent since 1983, knowing only that name, requires further legal work and goes to the appellant’s firm believing it to be a branch of the respondent. Their Honours held that the use of the name by the appellant would operate as a false representation to the consumer, even though the appellant did not intend that it should do so. They added, however, that the injunction did not give the respondent a monopoly right in the use of the name Neumegen; the appellant and 74 This is made explicit in Tas, r 6(5). 75 See, for example, Medina County Bar Association v Grieselhuber (1997) 678 NE 2d 535 (lawyer must not practise under the lawyer’s name “and Affiliates” if there are no affiliates); Disciplinary Counsel v Furth (2001) 754 NE 2d 219 (sole practitioner not to practise under his name followed by “Associates, Attorneys and Counselors at Law”). 76 Neumegen v Neumegen & Co [1998] 3 NZLR 310. 77 Thus breaching s 9 of the Fair Trading Act 1986 (NZ), which is equivalent to the Australian Consumer Law, 18(1): see [20.15], [21.130]. 78 Neumegen v Neumegen & Co [1998] 3 NZLR 310 at 320.

658

Lawyers’ Professional Responsibility

[20.80]

his cousin remained free to use their surname provided it was coupled with another name or description sufficient to distinguish it from the respondent’s practice.79 Thomas J dissented, reasoning that a realistic and commonsense approach denied the possibility that any confusion would be sufficiently significant to attract the statutory protection.80 Practice stationery

[20.80]

The firm’s stationery or other publications must not be misleading or deceptive as to the firm’s structure or the status of any person named in it. In Western Australia the stationery must state only the names and status of the partner(s) and lawyer-employee(s).81

As a matter of common sense, firm letterhead should identify the practice name, and its contact details (including postal and street address, contact numbers, and now also a website and an email address). Correspondence from the firm should identify the name and status of the person responsible for it; after all, the public and other lawyers should know the name and status of the person with whom they are dealing. For instance, persons who are employees of the firm (or are otherwise associated with it) but who lack a practising certificate should not be represented as practising lawyers, whether on letterhead or in correspondence.82 For locally registered foreign lawyers (see [2.160]), the legal profession legislation in most jurisdictions specifies designations that these lawyers may use in law firm letterhead and other identifying documents.83

[20.85]

Lawyers must avoid their letterheads being used by persons to create a misleading impression to third parties. For example, lawyers should not allow debt collectors or mercantile agents to send letters of demand, or commence proceedings, on their letterhead because this creates the misleading impression that it has emanated from a lawyer’s office.84 To this end, professional rules in the Territories and New South Wales prohibit a lawyer from allowing the lawyer’s business name

79 Neumegen v Neumegen & Co [1998] 3 NZLR 310 at 321. 80 Neumegen v Neumegen & Co [1998] 3 NZLR 310 at 326. 81 WA, r 19(2). 82 The legal profession legislation stipulates a penalty for an unqualified person who makes a false representation to be a lawyer: ACT, r 17; NSW, s 11 (formerly NSW 2004, s 15); Qld, s 25; SA, s 23; Tas, s 14; Vic, s 11 (formerly Vic 2004, s 2.2.3); WA, s 13. See Shirvington, “Candour can Prevent a Molehill Becoming a Mountain” (2003) 41 (Apr) LSJ 34 at 35. 83 ACT, s 160; NT, s 177; Qld, s 170; Tas, s 170; WA, s 157. Equivalent provision formerly existed in New South Wales and Victoria: NSW 2004, s 191; Vic 2004, s 2.8.9. 84 See, for example, Legal Services Commissioner v Nomikos [2013] VCAT 1682 (where the respondent lawyer, who allowed her practice letterhead and name to be used by a debt collection or mercantile agent in a misleading or deceptive manner, was found to have committed professional misconduct; the tribunal noted that “there is a significant difference in impact between a letter of demand from a debt collection agency, and a letter of demand from a solicitor” (at [521]), in that “[t]he fact that a solicitor is acting in the matter and has sent a letter of demand on behalf of a client would generally signify that the matter has become more serious for the person alleged to owe the debt; that it has been escalated” and thus “signify that the matter is one step closer to legal proceedings” (at [522]); the respondent was reprimanded and ordered to pay a $75,000 fine: Legal Services Commissioner v Nomikos [2014] VCAT 251).

[20.90]

20 Conduct of Practice

659

or stationery to be used by a debt collection, or mercantile, agent in a manner that is likely to mislead the public.85 They also require a lawyer who receives, from a debt collection or mercantile agent, instructions to act for a client creditor to ensure that:86 • the lawyer’s relationship to the agent is fully disclosed to the client;87 • the information required to be disclosed to the client by any relevant legislation and the rules is communicated to the client; • the lawyer maintains direct control and supervision of any proceedings on behalf of the client; and • any money recovered on behalf of the client is accounted for by the lawyer. Though not addressed by professional rules, it may be unprofessional for a lawyer to use her or his practice’s letterhead to communicate with a person with whom he or she is in dispute, except where it is clear that the lawyer is representing herself or himself in a professional capacity. What marks behaviour of this kind as unprofessional is the likelihood that it is intended as a means of intimidating the (prospective) opponent.88 Sharing premises

[20.90]

The main concerns with lawyers sharing premises with non-lawyers are threefold. First, it may endanger the privilege or confidentiality of lawyer–client communications, especially where office staff, computers or communications facilities are shared.89 Second, sharing premises may generate confusion in the minds of clients and the community as to whom they are dealing with. This explains the following duty imposed by the Australian Solicitors’ Conduct Rules:90 Where a solicitor or law practice shares an office with any other entity or business engaged in another calling, and a client is receiving services concurrently from both the

85 ACT Guideline D1; Legal Profession Uniform Law Practice (Solicitors) Rules 2015 (NSW), r 7.1; NT, r 27. 86 ACT Guideline D1; Legal Profession Uniform Law Practice (Solicitors) Rules 2015 (NSW), r 7.2; NT, r 27. 87 In Victorian Legal Services Commissioner v Anderson [2015] VCAT 1157 at [39] the tribunal noted that being the sole principal of a firm that was wholly owned by a debt collecting agency, and one that carried out work on referral from the Metropolitan Taxi Club (an organisation providing insurance and assistance with responding to claims against taxi drivers for damage caused to other vehicles) placed the respondent solicitor “in a particularly challenging position in terms of ensuring he upholds his ethical duties to his clients (as well as to the Courts)”. 88 Quinlivan v Legal Profession Complaints Committee [2012] WASCA 263 at [53], [54] per Murphy JA. See also UK, IB(11.9) (“using your professional status or qualification to take unfair advantage of another person in order to advance your personal interests” being identified as an action that may tend to show that the lawyer has not achieved the required outcomes). 89 The law does not, however, assume that sharing of premises or office staff by itself involves a breach of confidentiality (Canberra Residential Developments Pty Ltd v Brendas [2009] FCA 1484 at [18], [20] per Stone J); a breach needs to be established on the facts on the balance of probability. 90 ACT, r 39.1; NSW, r 39.1; Qld, r 39.1; SA, r 39.1; Vic, r 39.1. See also Tas, r 5(1) (which permit lawyers to share premises with another business only “the conduct of that business is kept separate from the practice as far as practicable” and “the carrying on of that business is not likely to lead to a contravention of the Act or these rules”); WA, r 46 (“A practitioner who shares an office with a person who is not engaged in providing legal services must ensure that a client of the practitioner who also receives services from the other person is informed about the nature and the terms of the services provided by the practitioner and the services provided by the other person”).

660

Lawyers’ Professional Responsibility

[20.95]

law practice and the other entity, the solicitor, or law practice (as the case requires) must take all reasonable steps to ensure that the client is clearly informed about the nature and the terms of the services being provided to the client by the law practice, including (if applicable) that the services provided by the other entity are not provided by the law practice.

Third, the person(s) or entity with whom the lawyer is sharing premises may be conducting a business of a nature incompatible, or in a manner inconsistent, with the standing of the legal profession. The first two concerns apply equally where premises are shared between two or more lawyers or firms whose practices are not associated.

CONDUCTING ANOTHER BUSINESS Constraints

[20.95]

The shrinking legal market in some fields and the inroads by accountants and others into traditionally legal work has prompted lawyers to search for methods of maintaining their market share. One approach has been the emergence of lawyers who conduct another business beyond their legal practice. The professional rules contain no blanket prohibition on such conduct, but reflect what are the prevailing concerns by imposing certain restrictions on the conduct of another business. To this end, there is found in various rules a proscription on the conduct of another business by a lawyer that may: • adversely affect the reputation of the profession or the lawyer;91 • create a conflict between the lawyer’s own interests, or the interests of clients of that business, and the interests of clients of the law practice;92 • endanger the privilege or confidentiality attaching to lawyer–client communications; or • constitute an unfair means of attracting business.93 A lawyer should cease to act if the independent service of the client’s interest is reasonably likely to be affected by the lawyer’s interest in the other business.94 The barristers’ rules in most jurisdictions add that a barrister “may not use or permit 91 See the following barristers’ rules: NSW, r 9(a); Qld, r 13(a); SA, r 13(a); Vic, r 9(a); WA, r 13(a) (see also Legal Profession Conduct Rules 2010 (WA), r 20(1)(a)). See, for example, Re Weare [1893] 2 QB 439 (where a solicitor was struck off for knowingly renting his premises for use as a brothel). 92 ACT, r 39 Guideline; Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), r 8.1.1; NT, r 28.1; Tas, r 5(1). See also the following barristers’ rules: NSW, r 9(b); Qld, r 13(b); SA, r 13(b); Vic, r 9(b); WA, r 13(b). In this context, the (then) Chairman of the New Zealand Law Practitioners Disciplinary Tribunal has observed: “Involvement with commercial activities [combined with professional practice] can often impinge on the practitioner’s judgment and efficiency as a lawyer. Where a practitioner engages to a significant extent in commercial endeavours, particularly if those commercial endeavours are of an entrepreneurial nature, there is a risk of the practitioner losing objectivity and judgment. There is also a very real risk of the public perceiving a conflict of interest, even though no such conflict of interest exists. Public perception can carry a real risk of criticism of the profession” (New Zealand Law Practitioners Disciplinary Tribunal, Chairman’s Report, 1993–94). 93 WA, r 20(1)(c). 94 ACT, r 39 Guideline; Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), r 8.1.4; NT, r 28.1.3.

[20.110]

20 Conduct of Practice

661

the use of the professional qualification as a barrister for the advancement of any other occupation or activity in which he or she is directly or indirectly engaged, or for private advantage, unless that use is usual or reasonable in the circumstances”.95 Separation and control

[20.100] In several jurisdictions the professional rules require the conduct of the other business to be kept separate from the lawyer’s legal practice in so far as correspondence, accounts and presentation to the public are concerned.96 Yet in view of the concerns noted above at [20.95], it makes sense to ensure that the other business should remain under the control of the lawyer. Need for disclosure

[20.105] Professional rules in the Territories and New South Wales require that a lawyer disclose to any client who, in the course of dealing with the lawyer, deals with the other business, the lawyer’s financial or other interests in that business.97 The Legal Profession Uniform Law, as it applies in New South Wales and Victoria, gives this statutory effect, by requiring a law practice, in circumstances where it is engaged to provide services that the client might reasonably assume to be legal services but the practice provides both legal services and other services, to disclosure to the client whether the services are legal services. If no proper disclosure is made, “the standard of care owed by the law practice in respect of the service is the standard that would be applicable if the service were a legal service that had been provided by an Australian legal practitioner”.98 Deemed conduct of another business

[20.110] A lawyer is deemed, by the professional rules in New South Wales and the Northern Territory, to be engaged in the conduct of another business where he or she, or an associate,99 is:100 • entitled, at law or in equity, to an interest in the assets of the business that is significant or of relatively substantial value; • exercises any material control over the conduct and operation of the business; or • has an entitlement to a share of the income of the business that is substantial, having regard to the total income derived from it. 95 NSW, r 10; Qld, r 14; SA, r 14; Vic, r 10; WA, r 14. 96 ACT, r 39 Guideline; Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), r 8.1.2; NT, r 28.1.1; Tas, r 5(1)(a); WA r 20(1)(b). 97 ACT, r 39 Guideline; Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), r 8.1.3; NT, r 28.1.2. 98 NSW, s 107(3); Vic, s 107(3). 99 The term “associate” is defined broadly in Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), Glossary; NT, Definitions. 100 Legal Profession Uniform Legal Practice (Solicitors) Rules 2015 (NSW), r 8.2; NT, r 28.2.

662

Lawyers’ Professional Responsibility

[20.115]

In Tasmania and Western Australia the professional rules contain provisions directed at the same issue but expressed in simpler terms; that is, provisions directed at businesses substantially under the lawyer’s direction or control.101 Illustration – conducting the business of an estate agent

[20.115] The selling of property, in addition to the related conveyancing, long an accepted part of a solicitor’s business in England and Scotland,102 has proven far less common in Australia.103 Yet there is no professional prohibition on a lawyer so acting, provided that he or she abides by the requirements of the professional rules on the conduct of other businesses, and is licensed and operates within the statutory framework applicable to real estate agents.104 Unless licensed, the lawyer must ensure that the tasks he or she performs in the course of legal practice are not those of a real estate agent (or auctioneer).105 Only the Law Institute of Victoria explicitly addressed the issue, via a guideline that no longer appears on its website. It permitted qualified solicitors to practise as estate agents from the same premises on their undertaking to:106 • maintain two trust accounts; • place all deposits for the sale of land in the solicitor’s trust account; • appoint the same persons as auditor of both trust accounts; • allow Law Institute personnel full access to the estate agent trust account and other records associated with the agency (subject to the terms of the Estate Agents Act 1980 (Vic)); • maintain in their dealings as estate agents the same ethical standards expected in their capacity as solicitors; and 101 Tas, r 5(2); WA, r 20(2). 102 See Solicitors Regulation Authority (UK), Property Selling Rules 2011 (which prescribes “the standards which must be met by solicitors and others when they carry on property selling, either themselves or through their employees”: r 1.1). 103 See Liverani, “South Australian Solicitors Ready to do Big on Real Estate; Slower Take Up in New South Wales” (2001) 39 (Sept) LSJ 21. 104 See Agents Act 2003 (ACT), Pt 3; Property, Stock and Business Agents Act 2002 (NSW), Pt 2; Agents Licensing Act 1979 (NT), Pt 3; Property Occupations Act 2014 (Qld), Pt 4; Land Agents Act 1994 (SA), Pt 2; Property Agents and Land Transactions Act 2005 (Tas), Pt 4; Estate Agents Act 1980 (Vic), Pt 3; Real Estate and Business Agents Act 1978 (WA), Pt 3. See further Dal Pont, “The Lawyer–Estate Agent” (2008) 82 (Nov) LIJ 86. 105 See, for example, Lewis v Real Estate Institute of New Zealand Inc [1995] 3 NZLR 385 (where the New Zealand Court of Appeal held that the operation of so-called “solicitors’ property centres”, which effectively carried on the functions of a real estate agency, breached the statutory prohibition on persons carrying on the business of an estate agent unless they hold a real estate agent’s licence; although the relevant legislation contained an exemption for a solicitor acting “in the course of his or her business as a solicitor”, the court held that this referred to “services conducted as a subsidiary activity, an adjunct to, a solicitor’s business as so understood” (at 393); it followed that as the solicitors in question offered the full range of services normally provided by estate agents, they fell outside the exemption); Noone v Mericka [2012] VSC 101 (a factually similar Victorian case, in which the same outcome ensued). 106 Law Institute of Victoria, Guideline, “Solicitors Acting as Estate Agents” (17 May 1990). The Ethics Committee of the Law Institute of Victoria has ruled that solicitors can hold a public auctioneer’s licence: R3122 (April 1993).

[20.125]

20 Conduct of Practice

663

• obtain separate insurance cover for real estate agent functions to a level not less than the compulsory professional indemnity insurance required to be carried by solicitors in Victoria.

[20.120] Aside from the challenge to secure a clear understanding of when the lawyer is acting as a lawyer, as opposed to as an estate agent (which may be challenging for both client and lawyer, and it should not be assumed that client signature of an acknowledgment by itself rectifies any misunderstandings here), the nature of the agency as between lawyers and their clients, and as between estate agents and their clients, is incongruent in at least one important respect. The estate agent in practice acts as an intermediary (even if representing the vendor, as is usually the case), with the role of bringing together two parties in a transaction, and is remunerated if that transaction is completed (the quantum usually being a percentage of the value of the transaction). Lawyers’ remuneration is calculated differently, and lawyers owe clearer duties to their client than an agent who in effect acts as an intermediary. The not unreasonable assumption that the lawyer may “bundle” the services (for example, offer lower legal costs for clients who engage her or him as an estate agent, or lower estate agent fees for clients who engage her or him as a lawyer) may in turn also conflate the services. Then there is the potential for conflicting interests, as an estate agent usually represents the vendor, but as a lawyer may be engaged by the purchaser to effect the conveyance.107 Marketing services are of a different nature to transactional services, and the case law evinces examples of lawyers who have some role in marketing products to which there is downstream legal transactional work attached failing to fulfil legal duties to the transactional client.108 That is not to say that a lawyer-estate agent acts unethically; if safeguards are in place to reduce scope for potential conflict of interest – by addressing the manner of remuneration and clearly defining parameters of involvement in the marketing, negotiation and sale process – the practice may be ethical, and consumers may indeed benefit from the dual role.

SHARING RECEIPTS WITH NON-LAWYERS Traditional prohibition on receipt sharing

[20.125] Traditionally lawyers have been prohibited from sharing the receipts of their legal practice with persons who are not qualified lawyers. The fear was that non-lawyers entitled to fees from legal work could influence the way the lawyer conducts legal work; the lawyer’s independence could be threatened because the

107 Cf NZ, rr 16.7 (which addresses an aspect of conflict by prohibiting a lawyer who provides real estate services for a prospective vendor of a property from acting for any purchaser or prospective purchaser in relation to the acquisition of the property concerned), 16.8 (which applies an equivalent prohibition in the lessor–lessee scenario). In each case the prohibition extends to others within the lawyer’s firm: NZ, r 16.9. 108 See, for example, Carr v Swart [2007] NSWCA 337.

664

Lawyers’ Professional Responsibility

[20.130]

non-lawyer may be more interested in a financial return than client interests.109 Also, sharing of receipts with a person struck off or suspended from practice would deny much of the practical effect of such a sanction and so is prohibited by professional rules in most jurisdictions.110 Beneficial Finance Corp Ltd v Conway (No 2)111 provides an illustration of alleged receipt sharing. There the plaintiff retained the defendant to act as its solicitor in money-lending transactions between the plaintiff and its customers. The retainer provided that the defendant would pay the plaintiff 50% of the gross amount of each bill rendered by the defendant to the plaintiff in consideration of the latter providing office accommodation and services for him. The issue arose as to whether this represented a prohibited sharing of receipts.112 As to this arrangement, McInerney J remarked:113 It is to be expected that a person who provides office accommodation and facilities for use by a solicitor in the course of or for the purpose of his practice will require to be recompensed by the solicitor … The mere fact that the payment is made from moneys received by the solicitor as remuneration of costs earned in his practice is not enough to make the payment a sharing. A solicitor who has paid wages to his staff out of the actual moneys received in costs from his clients would not be sharing those costs with the members of his staff. Nor is a “sharing” to be inferred from the mere circumstances that a proportion of the solicitor’s earnings are paid out to an unqualified person.

The real character of the transaction, according to his Honour, rested on an inquiry into whether the share taken was out of all proportion to the value of the consideration.114 On the facts, McInerney J found that payment represented a reasonably accurate expression of the likely relationship between overheads and gross takings, and so was not illegitimate receipt sharing. Relaxation of prohibition

[20.130] The taxation advantages flowing from the assignment of partnership income to members of the lawyer’s family115 led many Australian professional bodies in the late 1970s to relax the prohibition on receipt sharing.116 Even though 109 Gassman v State Bar (1976) 553 P 2d 1147 at 1151; Attorney Grievance Commission v Lebowitz (1981) 431 A 2d 88 at 92. It has been suggested that such mischiefs could be targeted directly rather than banning fee sharing: see Fischer, “Why Can’t Lawyers Split Fees? Why Ask Why, Ask When?” (1992) 6 Geo J of Legal Ethics 1. 110 ACT, r 40.1; NSW, r 40.1; Qld, r 40.1; SA, r 40.1; Vic, r 40.1; WA, r 47. 111 Beneficial Finance Corporation Co Ltd v Conway (No 2) [1971] VR 594. A more recent example is found in Mohamed v Alaga & Co (a firm) [2000] 1 WLR 1815. 112 Contrary to Legal Profession Practice Act 1958 (Vic), s 94, enacted in equivalent form in Vic 1996, s 317. No equivalent appears in the current Victorian legislation. 113 Beneficial Finance Corporation Co Ltd v Conway (No 2) [1971] VR 594 at 604. 114 Beneficial Finance Corporation Co Ltd v Conway (No 2) [1971] VR 594 at 605. 115 Known as an “Everett assignment”, after Federal Commissioner of Taxation v Everett (1980) 143 CLR 440 (the High Court ruling that where the partner assigns her or his partnership interest, the income of the partnership attributable to this interest is derived by the assignee and, as such, taxable in the assignee’s hands). 116 See, for example, Law Society of NSW, Solicitor’s Superannuation and Sharing of Receipts of Solicitor’s Practice (Bulletin No 31 of 1978).

[20.145]

20 Conduct of Practice

665

these taxation advantages have since been reduced by capital gains tax,117 the statutory trend to allow multi-disciplinary partnerships and incorporated legal practices has led to the removal of the prohibition on sharing receipts where these business structures are adopted: see [20.150]–[20.170].

LAWYER BUSINESS STRUCTURES Traditional business structures

[20.135] The traditional form of business structure for solicitors is a partnership, except in the case of a sole practitioner. The quest for independence has meant that barristers, on the other hand, are generally prohibited by the barristers’ rules from practising in partnership, or as an employee, but must practise as sole practitioners.118 Various concerns underscored why the corporate vehicle was seen as inappropriate for lawyers’ practices; limited liability was understood as inconsistent with lawyers’ legal and professional responsibilities, and allowing law firms to offer shares to the public, and reward non-lawyer staff with shares, was contrary to the traditional prohibition against lawyers sharing fees with nonlawyers:119 see [20.125]. On a more basic level, a century ago the New York Court of Appeals stated:120 The practice of law is not a business open to all, but a personal right, limited to a few persons of good moral character, with specific qualifications ascertained and certified after a long course of study … No one can practise law unless he has taken an oath of office and has become an officer of the court, subject to its discipline, liable to punishment for contempt in violating his duties as such, and to suspension or removal … As these conditions cannot be performed by a corporation, it follows that the practice of law is not a lawful business for a corporation to engage in.

First step towards incorporation of legal practices

[20.140] The legal profession legislation in five Australian jurisdictions had for some time permitted lawyers to incorporate their practices,121 but its form differed from the usual incorporation. It required that the company’s sole object be the practice of law, that its directors be natural persons who hold practising certificates and all voting shares, and that the company and its directors carry unlimited liability. It therefore offered few of the commercial advantages usually associated with incorporation, denying limited liability, any scope for raising capital from investors or the ability to involve non-lawyers in management. Move towards full incorporation and multi-disciplinary partnerships

[20.145] The desire of lawyers to limit vicarious liability for the wrongs of their partners (risk management to protect “innocent partners”), coupled with 117 See Income Tax Assessment Act 1997 (Cth), s 108-5 (wide definition of a “CGT asset”). 118 ACT, r 81; NSW, r 12; NT, r 81; Qld, r 16; SA, r 16; Vic, r 12; WA, r 16. 119 Parker, “Law Firms Incorporated: How Incorporation Could and Should Make Firms More Ethically Responsible” (2004) 23 UQLJ 347 at 349. 120 Re Cooperative Law Co (1910) 198 NY 479 at 483. 121 NSW 1987, Pt 10A (repealed); Legal Practitioners (Incorporation) Act 1989 (NT) (repealed); SA, ss 24–30 (repealed); Tas 1993, ss 148–162 (repealed); Vic 1996, Pt 10 (repealed).

666

Lawyers’ Professional Responsibility

[20.150]

competition policy reform122 (see [1.55]–[1.65]), led the (then) Trade Practices Commission in 1994 to recommend that law firms be permitted to incorporate so as to limit the liability of equity holders for negligence to the extent to which each equity holder would not be jointly liable for the negligence of the other equity holders.123 New South Wales, with Law Society support,124 was first to yield to the pressure, allowing law firms to incorporate under the corporations legislation,125 and now the legal profession legislation elsewhere makes equivalent provision: see [20.170]. In a step towards a similar goal, New South Wales had earlier also been the first jurisdiction to allow lawyers to associate with non-lawyers via multi-disciplinary partnerships, another trend pursued elsewhere. Building on this trend, the Legal Profession Uniform Law, as it applies in New South Wales and Victoria, contains the broad statement that legal services may be provided under “any business structure”, subject to the Uniform Law and attendant rules.126 Multi-disciplinary partnerships Justifications for and benefits of MDPs

[20.150] The prevailing catchcry of promoting competition in the legal profession drew support from governments127 and law reform bodies128 for giving lawyers the option of entering into multi-disciplinary partnerships (or, more broadly, multidisciplinary practices) (MDPs). No doubt perceiving a potential to increase market share, or at least protect existing market share, law societies have generally speaking also supported such initiatives.129 An MDP can be defined as follows:130 [A] partnership, professional corporation, or other association or entity that includes lawyers and nonlawyers and has as one, but not all, of its purposes the delivery of legal services to a client(s) other than the MDP itself or that holds itself out to the public as 122 Parker, “Law Firms Incorporated: How Incorporation Could and Should Make Firms More Ethically Responsible” (2004) 23 UQLJ 347 at 350–351. 123 Trade Practices Commission, Study of the Professions: Legal (Final Report, 1994), p 130. See Ramsay, “Should Law Firms be Permitted to Incorporate?” (1994) 10 Aust J of Law & Soc 245. 124 See (1999) 37 (July) LSJ 71. The New South Wales Law Society was not alone in supporting this initiative: see, for example, Law Society of Western Australia, Flexible Practice Structures for Lawyers (Position Paper, April 1999). 125 Through the enactment of the Legal Profession Amendment (Incorporated Legal Practices) Act 2000 (NSW), which added a new Div 2A to Pt 3 of the Legal Profession Act 1987 (NSW), and commenced on 1 July 2001. 126 NSW, s 32; Vic, s 32. 127 See, for example, Trade Practices Commission, Study of the Professions: Legal (Final Report, 1994); Report of the Victorian Attorney-General’s Working Party on the Legal Profession, Reforming the Legal Profession (August 1995); Legal Profession Working Group, Reform of the Legal Profession in Australia: Report to the Council of Australian Governments (July 1996), p 5 (Principle 8). 128 See, for example, Law Reform Commission of Victoria, Access to Justice: Restrictions on Legal Practice (Report No 47, May 1992). 129 See, for example, Law Society of New South Wales, Report of the Professional Regulation Taskforce (May 1997). 130 American Bar Association, Commission on Multidisciplinary Practice available at http://www.americanbar.org/aba.html.

[20.155]

20 Conduct of Practice

667

providing nonlegal, as well as legal, services. It includes an arrangement by which a law firm joins with one or more other professional firms to provide services, including legal services, and there is a direct or indirect sharing of profits as part of the arrangement.

Allowing lawyers to engage in MDPs, as well as fostering competition, was advocated on the ground of a one-stop integrated professional service to clients. Not only can a client secure advice from more than one discipline within the one practice, the quality of that advice, given its “holistic” nature, is argued to be better than one-discipline based advice. In a commonly suggested scenario, namely an MDP involving lawyers and accountants,131 for instance, there is synthesis between the legal and business advice proffered. Other suggested benefits of MDPs include cost savings, giving all professionals the same opportunities, greater crossfertilisation of ideas, and reduction in risk by diversification of a firm’s market.132 Also, it is said, entry into MDPs with international accounting firms may give national law firms valuable international exposure,133 together with the traditional strengths of those accounting firms, such as an institutional client base, crossmarketing, size, and international recognition of brand name. Concerns underscoring MDPs

[20.155] The main concerns expressed in respect of MDPs, which led some (including the American Bar Association) to argue that MDPs should be prohibited,134 can be grouped into four main areas:135 • Governance. These concerns focus on how, and the extent to which, existing regulation of lawyers – including unauthorised practice prohibitions, the 131 Although accountants are often touted as the logical and most likely participants in MDPs, there need not be any such limitation. Other occupations and professions, such as town planners, stockbrokers, conveyancers, tax agents, financial planners, engineers and architects, may also be suitable participants in MDPs with lawyers. 132 New Zealand Law Society, Multi-Disciplinary Practices Committee, Discussion Paper on MultiDisciplinary Practices (1999), paras 4.2–4.13. 133 See, for example, Shale, “Shake the Tree” [2000] NZLJ 139. 134 See the discussion in Schulenburger, “Would You Like Fries with That? The Future of Multidisciplinary Practices” (2001) 87 Iowa L Rev 327 (arguing against the ABA’s vote against MDPs). Economic recession coupled with reduction in lawyers’ monopoly has renewed calls in the United States to recognise the appropriateness of MDPs and other forms of non-lawyer ownership of law firms: see, for example, Groth, “Protecting the Profession Through the Pen: A Proposal for Liberalizing ABA Model Rule of Professional Conduct 5.4 to Allow Multidisciplinary Firms” (2014) 37 Hamline L Rev 565; Hill, “The Preclusion of Nonlawyer Ownership of Law Firms: Protecting the Interest of Clients or Protecting the Interest of Lawyers?” (2014) 42 Cap UL Rev 907; Schiff, “The Changing Nature of the Law Firm: Amending Rule 5.4 to Allow for Alternative Business Structures Resulting in Nonlawyer Ownership of Law Firms” (2014) 42 Cap UL Rev 1009. Cf Robinson, “When Lawyers Don’t Get All the Profits: Non-Lawyer Ownership, Access, and Professionalism” (2016) 29 Geo J Leg Ethics 1. See also the debate in Canada as to what are termed “alternative business structures” in that jurisdiction: Wiseman, “Access to Justice and Legal Profession Regulation in Canada: To ABS, or Not ABS or to ABS+” (2015) 18 Legal Ethics 78; Wiseman, “Update on Regulatory Consideration of ABS in Canada: Towards a ‘Made in Canada’ Approach?” (2015) 18 Legal Ethics 185. 135 The text follows the grouping adopted by Roach and Iacobucci, “Multidisciplinary Practices and Partnerships: Prospects, Problems and Policy Options” (2000) 79 Can Bar Rev 1 at 15–37. Similar concerns have been voiced by others: see, for example, Law Council of Australia, National Profession Taskforce Multidisciplinary Practices Working Group, Multidisciplinary Practices: Legal

668

Lawyers’ Professional Responsibility

[20.160]

disciplinary jurisdiction, the quantification of fees, trust accounts, insurance and fidelity funds – will apply to non-lawyer members of MDPs. • Independence. Having non-legal members of MDPs has raised concerns as to how to maintain the independence of legal advice, the extent to which outside interests and ancillary businesses impact on lawyers’ integrity, independence or competence, and the fear that lawyers will have a financial incentive to “steer” clients towards their non-lawyer partners. • Confidentiality. The uniqueness of the doctrine of legal professional privilege (see Ch 11), coupled with the fact that other professions may take different approaches to confidentiality (see Ch 10), has led to the fear that both privilege and confidentiality could be eroded or lost in an MDP. • Conflicts of interest. As MDPs are likely to be practices larger than existing law firms, there is concern over conflict of interest rules, specifically the consistency or otherwise of conflict rules that apply to lawyers as opposed to other professions, and the greater likelihood of MDPs being “conflicted out” on the grounds of client-client conflicts (as to which, see Chs 7, 8). Regulation of MDPs

[20.160] The legal profession legislation in each jurisdiction except South Australia, following the Model Laws’ lead, allows and regulates MDPs.136 It defines a “multi-disciplinary partnership” as “a partnership between one or more Australian legal practitioners and one or more other persons who are not Australian legal practitioners, where the business of the partnership includes the provision of legal services in this jurisdiction as well as other services”.137 It allows a lawyer to be in partnership with a person who is not a lawyer, provided that the business of the partnership includes the provision of legal services,138 and it lifts the prohibition on the sharing of receipts with non-lawyers.139 The concerns discussed at [20.160] are addressed, at least in part, by mimicking the regulation of incorporated legal practices: see [20.175]. The legislation imposes on each legal practitioner partner responsibility for the management of the legal Professional Privilege and Conflict of Interest (Issues Paper, September 2000); Law Council of Australia, Policy Statement on Lawyers’ Business Structures; New Zealand Law Society, Multi-Disciplinary Practices Committee, Discussion Paper on Multi-Disciplinary Practices (1999), paras 2.15, 5.3–5.83, 8.1. 136 ACT, Div 2.6.3; NT, Pt 2.6, Div 3; Qld, Pt 2.7, Div 8; Tas, Pt 2.5, Div 3; WA, Pt 7, Div 3. Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, Pt 2.6, Div 3; Vic 2004, Pt 2.7, Div 3 137 ACT, s 134(1); NT, s 151(1); Qld, s 144(1); Tas, s 144(1); WA, s 131(1). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 165(1); Vic 2004, s 2.7.36(1). 138 ACT, s 135(1); NT, s 152(1); Qld, s 145(1); Tas, s 145(1); WA, s 132(1). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 166(1); Vic 2004, s 2.7.37(1). 139 ACT, ss 139(b), (d), 146(1); NT, ss 156(b), (d), 163(1); Qld, ss 149(1)(b), (d), 156(1); Tas, ss 149(b), (d), 156(1); WA, ss 136(b), (d), 143(1). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, ss 170(b), (d), 177(1); Vic 2004, ss 2.7.41(b), (d), 2.7.48(1).

[20.170]

20 Conduct of Practice

669

services provided by the partnership,140 and to this end requires each partner to implement and maintain appropriate management systems.141 It adds that a lawyer who provides legal services via an MDP is not excused from compliance with professional obligations, and retains the professional privileges of a lawyer (such as legal professional privilege).142 In line with this, the professional rules also apply to lawyers in an MDP,143 as do requirements as to advertising,144 and conflict of interest proscriptions.145 MDPs pursuant to incorporation

[20.165] Because an incorporated legal practice may provide any other service and conduct any other business (see [20.170]), it may engage in activities outside legal work through a single business structure. It follows that a practice of a multi-disciplinary nature – with both lawyer and non-lawyer directors and profit-shares – can be established through the vehicle of an incorporated legal practice. The conduct of any such practice, rather than being subject to the above regulation, is governed and regulated by the provisions that apply to incorporated legal practices, which are discussed below. This explains why the Legal Profession Uniform Law, operative in New South Wales and Victoria, does not replicate the MDP provisions, which are effectively subsumed by those regulating incorporated legal practices. Incorporated legal practices

[20.170] The legal profession legislation, which implements core-uniform provisions of the Model Laws schema in this regard, permits incorporation by law practices under the Corporations Act 2001 (Cth).146 Other than in South Australia,147 the legislation allows an incorporated legal practice (ILP) to provide any other service and conduct any other business except a managed investment scheme 140 ACT, s 137(1); NT, s 154(1); Qld, s 147(1); Tas, s 147(1); WA, s 134(1). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 168(1); Vic 2004, s 2.7.39(1). 141 ACT, s 137(2); NT, s 154(2); Qld, s 147(2); Tas, s 147(2); WA, s 134(2). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 168(2); Vic 2004, s 2.7.39(2). 142 ACT, s 140; NT, s 157; Qld, s 150; Tas, s 150; WA, s 137. Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 171; Vic 2004, s 2.7.42. 143 ACT, s 144; NT, s 161; Qld, s 154; Tas, s 154; WA, s 141. Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 175; Vic 2004, s 2.7.46. 144 ACT, s 145; NT, s 162; Qld, s 155; Tas, s 155; WA, s 142. Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 176; Vic 2004, s 2.7.47. 145 ACT, s 141; NT, s 158; Qld, s 151; Tas, s 151; WA, s 138. Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 172; Vic 2004, s 2.7.43. 146 ACT, Div 2.6.2; NSW, Pt 3.7, Div 2; NT, Pt 2.6, Div 2; Qld, Pt 2.7, Divs 2–7; SA, Sch 1 (operative from 1 July 2014, pursuant to the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA)); Tas, Pt 2.5, Div 2; Vic, Pt 3.7, Div 2; WA, Pt 7, Div 2. 147 SA, Sch 1, cl 2 (which prohibits an ILP from providing any service, or conducting any business, that does not involve engaging in legal practice).

670

Lawyers’ Professional Responsibility

[20.170]

within Ch 5C of the Corporations Act 2001 (Cth).148 The practice is thus able to engage in activities other than legal work through a single business structure. To facilitate this, the traditional prohibition on sharing receipts with non-lawyers is explicitly lifted in most jurisdictions.149 The nature of lawyers’ legal and professional responsibilities has, however, dictated the need for controls and restrictions on the structure and operation of ILPs. At a most basic level, an ILP must have at least one lawyer-director who holds an unrestricted practising certificate,150 who is (or are) responsible for the management of the legal services it provides.151 As such, lawyer-directors must ensure that those legal services comply with lawyers’ legal and professional duties.152 Also, those who provide legal services on an ILP’s behalf must comply with lawyers’ professional obligations, and do not lose lawyers’ professional privileges.153 So far as liability is concerned, joint and several liability of partners is replaced by vicarious liability of a practice for the dishonesty of its lawyers. This is done by making an ILP vicariously liable in civil proceedings relating to certain claims if the practice would be so liable were it carrying on business in partnership. The claims in question are those arising out of:154 • civil proceedings relating to a failure to account for, pay or deliver money or other valuable property received by, or entrusted to, the practice (or to any lawyer or other employee of the practice) in the course of the provision of legal services by the practice, where the money or property is under its direct or indirect control; and 148 ACT, s 102; NSW, ss 103, 258(1)(a); NT, s 120; Qld, s 112; Tas, s 113; Vic, ss 103, 258(1)(a); WA, s 100. 149 ACT, s 118(1); NT, s 135(1); Qld, s 128(1); SA, Sch 1, cl 17(1); Tas, s 128(1); WA, s 116(1). Equivalent statutory provision, applicable before 1 July 2015, existed in New South Wales and Victoria: NSW 2004, s 151(1); Vic 2004, s 2.7.20(1). 150 ACT, s 107(1); NSW, s 105 (and see definition of “principal” and “authorised principal” in s 6(1)); NT, s 125(1); Qld, s 117(1); SA, Sch 1, cl 8(1); Tas, s 118(1); Vic, s 105 (and see definition of “principal” and “authorised principal” in s 6(1)); WA, s 105(1). The United Kingdom has recently followed suit, pursuant to the Legal Services Act 2007 (UK) (with effect on 6 October 2011), under which the Solicitors Regulation Authority (see http://www.sra.org.uk) can take (as from 3 January 2012) applications from organisations wishing to become alternative business structures (ABS) (see Pt 5), under which lawyers and non-lawyers can share ownership, management and control of a business that provides reserved legal services to the public (namely those services reserved for lawyers: see s 12), provided there is a single lawyer-partner. See Rose, “Talking About a Revolution” (2012) 86 (Mar) LIJ 14. Cf the equivalent incorporation initiatives in New Zealand, pursuant to the Lawyers and Conveyancers Act 2006 (NZ), which permits law firms to practise in the form of an incorporated company, but unlike its Australian counterparts restrains persons other than actively involved lawyers from holding shares in an incorporated law firm: see ss 6, 17. This constraint has been argued as being unnecessary and unfortunate: Wright, “Incorporated Law Firms: The Practical and Ethical Considerations” (2007) 13 Auck ULR 1. 151 ACT, s 107(2); NSW, s 34(1); NT, s 125(2); Qld, s 117(2); SA, Sch 1, cl 8(2); Tas, s 118(2); Vic, s 34(1); WA, s 105(2). 152 See, for example, Victorian Legal Services Commissioner v Logan [2016] VCAT 544 (where non-lawyers established a practice with one lawyer-director (L), whose failure to properly supervise the unethical activities of its “owner(s)” was held to constitute professional misconduct). 153 ACT, s 110(1); NSW, ss 33, 38; NT, s 128(1); Qld, s 120(1); SA, Sch 1, cl 11; Tas, s 121(1); Vic, ss 33, 38; WA, s 108(1). 154 ACT, s 117; NSW, s 111; NT, s 134; Qld, s 127; SA, Sch 1, cl 16; Tas, s 127; Vic, s 111; WA, s 115.

[20.175]

20 Conduct of Practice

671

• civil proceedings for any other debt owed, or damages payable, to a client as a result of a dishonest act or omission by a lawyer who is an employee of the practice in connection with the provision of legal services to the client. The main advantages of incorporating a legal practice include greater flexibility for distribution of profits and the transferring of interests in the company, and the ability to raise equity capital. As non-lawyers can own shares in the company, persons with expertise other than in law can be admitted to the board. There are also benefits so far as liability exposure is concerned, as lawyers’ personal assets are immune from creditors unless pledged.155 Incorporation, though, attracts onerous lawyer-director responsibilities, and the publicity and regulation required by the Corporations Act 2001 (Cth). There may be scope also for various potentially adverse imposts (such as payroll tax and workers’ compensation insurance), as well as exposure to the possibility of a takeover.156 Nor can transactional costs of converting business structures (such as capital gains tax and stamp duty) be overlooked; those costs provision some explanation as to why the primary uptake for incorporation to date has been in smaller law firms. Aside from the legal drawbacks of incorporation, consistent with the concerns underscoring MDPs (see [20.155]), ILPs raise the spectre of directors’ duties to the company conflicting with their duty to clients, and pressure from non-lawyer directors/investors to reduce professional standards. Moreover, where the ILP is publicly listed, practice may be driven by the share price, it is feared, rather than a commitment to ethical conduct. To date statistics, though, show that ILPs have fewer complaints lodged against them, but this may be explainable more by the current demographic of ILPs than anything else.157

MEDIATION BY LAWYERS [20.175] The popularity of alternative dispute resolution (“ADR”) has prompted some lawyers to promote themselves as mediators (or some other “third party neutral”).158 In response, the Law Council of Australia approved ethical standards for mediators,159 and the Law Society of New South Wales issued guidelines for lawyers who act as mediators.160 The latter defines “mediation” as:161 155 See King, “Should your Firm Incorporate?” (2001) 39 (Mar) LSJ 44; Vincent, “What are the Commercial and Corporate Law Effects of Incorporating Legal Practices?” (2002) 40 (July) LSJ 49; Harvey and Tang, “Making it Your Business: Possible New Structures for Law Firms” (2005) 79 (July) LIJ 62. 156 See Northeast, “Legal Practice Structuring: Making the Right Selection” (2007) 81 (Nov) LIJ 34. 157 See generally Stagg-Taylor, “Lawyers’ Business: Conflicts of Duties Arising from Lawyers’ Business Models” (2011) 14 Legal Ethics 173. 158 Being the terminology adopted in the American professional rules: see US, r 2.4. 159 Law Council of Australia, Ethical Standards for Mediators (August 2011), available at http://www.lawcouncil.asn.au/, hereinafter in the notes to this chapter, LCA (Mediators). 160 Law Society of NSW, Guidelines for Solicitors who Act as Mediators (December 2012) (hereinafter, NSW (Mediators)). These Guidelines have been largely adopted by the Commercial Dispute Resolution Committee, Litigation Lawyers Section of the Law Institute of Victoria. Equivalent guidelines exist in Western Australia: WA EPG, cl 9. Similar concepts had appeared pronouncements and rules in other jurisdictions, which no longer appear to be in force: ACT Law Society, Mediation

672

Lawyers’ Professional Responsibility

[20.180]

a process in which the parties to a dispute, with the assistance of a dispute resolution practitioner (the mediator), identify the disputed issues, develop options, consider alternatives and endeavour to reach agreement. The mediator has no advisory or determinative role in regard to the content of the dispute or the outcome of its resolution, but may advise on or determine the process of mediation whereby resolution is attempted.

Characteristics of mediation and mediators

[20.180] Although professional pronouncements generally view the process of mediation as voluntary – disputants cannot be forced to attend or continue mediation – courts are nowadays empowered to order mediation of a dispute.162 At mediation, the mediator does not impose a solution upon the disputants, or make substantive decisions for the parties; mediation instead emphasises the parties’ own responsibilities for making their own decisions. A mediator’s function is, in the usual approach to mediation, not to give legal advice or to direct the parties’ decision based upon her or his interpretation of the applicable law.163 As the parties control the mediation, it is open to them, if they desire advice as to the legal aspects of their dispute, to retain a lawyer-mediator for this purpose, who thereby contractually assumes an obligation to give advice as to the legal implications of proposed avenues for settlement.164 The peculiar role of the mediator requires the characteristics of impartiality and neutrality.165 Impartiality targest freedom from bias,166 explained by a Victorian judge in the following terms:167 In a sense, a mediator is retained “to act for the parties” at the mediation, for it is at their behest that he is acting as mediator. But in no sense, absent some specific agreement, can Guidelines for Legal Practitioners (2000); Queensland Law Society, Standards of Conduct for Mediators (1995); Professional Conduct Rules (SA), Attachment 2 (Guidelines for Legal Practitioners Acting as Mediators or Acting as Advisers to Parties in Mediation); Vic: Guidelines for Lawyer Mediators in Family Disputes (extracted in (1985) 59 LIJ 1163). The text represents a summary of common elements of the aforesaid pronouncements. For a broader discussion of ethical issues confronting mediators see Noone and Ojelabi, “Ethical Challenges for Mediators Around the Globe: An Australian Perspective” (2014) 45 J Law & Pol’y 145 (against a backdrop of an Australian empirical study of mediators). 161 NSW (Mediators), para 2.1. See also WA EPG, cl 9.28. 162 See Federal Court of Australia Act 1976 (Cth), s 53A(1); Civil Law (Wrongs) Act 2002 (ACT), s 195(1); Civil Procedure Act 2005 (NSW), s 26(1); NT RSC, r 48.13(1); Civil Proceedings Act 2011 (Qld), ss 43, 44; Supreme Court Act 1935 (SA), s 65(1); Alternative Dispute Resolution Act 2001 (Tas), s 5(1); Tas RSC, r 518(1); Civil Procedure Act 2010 (Vic), s 66; Vic RSC, r 50.07; WA RSC, O 4A Div 2. 163 Cf Moore, “Lawyer Mediators: Meeting the Ethical Challenges” (1996) 30 Fam LQ 679 at 687–689. 164 Tapoohi v Lewenberg (No 2) [2003] VSC 410 at [76] per Habersberger J. 165 Although commonly stated in absolute terms, the requirements of impartiality and neutrality are subjective and, at least to an extent, inconsistent with human nature and experience, for no person can be impartial or neutral in an absolute sense. In this context the fulfilment of the requirements of impartiality and neutrality is a matter of degree. See generally Astor and Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002), pp 149–157; Astor, “Mediator Neutrality: Making Sense of Theory and Practice” (2007) 16 Soc & Leg Stud 221; Field, “Mediation Ethics in Australia – A Case for Rethinking the Foundational Paradigm” (2012) 19 JCULR 41. 166 LCA (Mediators), para 2; NSW (Mediators), para 5.1; WA EPG, cll 9.30, 9.31. 167 Tapoohi v Lewenberg (No 2) [2003] VSC 410 at [75] per Habersberger J.

[20.185]

20 Conduct of Practice

673

it be said that a mediator acts for a party in the sense that a lawyer acts for a client. A moment’s reflection will demonstrate why this is so. The parties are in dispute, so their interests are in conflict. The mediator is required to stand back from this conflict, to assist the parties to resolve it; it is not to promote the interests of one party perhaps to the disadvantage of the other. This is, essentially, the role of the lawyer acting for that party.

A prudent lawyer-mediator will, to this end, emphasise to mediation participants that he or she represents none of them. A lawyer-mediator who perceives that a disputant misunderstands the lawyer’s role must explain the difference between the lawyer’s role as a third-party neutral and a lawyer’s role as a client representative.168 The allied notion of “neutrality” requires a mediator not to proceed with mediation where the mediator or a disputant believes that her or his background, personal experiences or relationships may prejudice the mediator’s performance or detract from her or his impartiality.169 For example, a mediator who has previously provided legal counselling or any other services, or had any social or professional relationship with a participant, lacks the appearance of neutrality.170 Mediator accreditation

[20.185] The role and attributes of mediators are in some ways antithetical to those commonly exhibited by or expected of lawyers.171 Impartiality and neutrality fly in the face of the adversarial role inherent in zealously representing a client. That the mediator’s chief function is not the giving of legal advice is likewise foreign to the lawyer’s experience. As explained by a Federal Court judge:172 The skills required of a mediator are different skills from those required of a litigator. A well-conducted mediation is not simply an occasion for each side to give consideration, with the assistance of the mediator, to the strength of its legal case and concomitantly to the extent to which it may be willing to compromise on its formal legal position.

This explains why professional bodies in some jurisdictions require lawyers to meet set prerequisites prior to holding themselves out as mediators.173 Also, as from 1 July 2009 all family dispute resolution practitioners are required to be accredited by statute.174 168 US, r 2.4(b). 169 NSW (Mediators), cl 5.2. 170 Clark v Baker (1987) 4 BPR 9,476 at 9,486 per Waddell CJ. 171 See Corbin, Baron and Gutman, “ADR Zealots, Adjudicative Romantics and Everything in Between: Lawyers in Mediations” (2015) 38 UNSWLJ 492. Cf Altobelli, “Family Lawyers as Mediators” (1995) 9 AJFL 222 at 224–225, 229–231. 172 Hopeshore Pty Ltd v Melroad Equipment Pty Ltd (2004) 212 ALR 66 at [32] per Branson J. 173 NSW (Mediators), paras 3.1, 3.3, Sch 1 (which provide that a lawyer can only act as a sole mediator upon satisfactorily completing an approved course, and obtained national mediator accreditation or having appropriate mediation experience, and require lawyer-mediators to engage in relevant annual continuing education as part of their continuing legal education program); Tas, r 9 (prohibits lawyers from holding themselves out as being prepared to perform work as a mediator without approval of the Law Society, and as a condition of approval the Society may require the lawyer to comply with any rules of practice or guidelines approved by it in respect of the practice of mediation; see also Alternative Dispute Resolution Act 2001 (Tas), s 9, regarding the maintenance of a list of mediators by the Chief Justice and the Chief Magistrate). There have likewise been calls for

674

Lawyers’ Professional Responsibility

[20.190]

The trend towards accreditation of mediators saw the commencement, on 1 January 2008, of the National Mediation Accreditation System (NMAS), an industry-based scheme that relies on voluntary compliance by Recognised Mediator Accreditation Bodies (RMABs) that agree to accredit mediators in accordance with the requisite standards.175 NMAS aims to provide a base level of accreditation for all mediators, whether or not they are lawyers. Two types of standards are incorporated in the NMAS, “Approval Standards” and “Practice Standards”. The former set requirements for mediators seeking to obtain approval under the voluntary accreditation system requirements; the latter set practice and competency requirements for mediators, and inform participants and others about what they can expect of the mediation process and mediators. These align closely with the characteristics of mediation and mediators noted at [20.180]. Although this accreditation is voluntary, it is likely to be adopted as a benchmark for government departments’ selection of mediators, and other large organisations may follow suit.176 Lawyer skills useful in mediation

[20.190] Certain lawyer attributes are suited to successful mediation, principally lawyers’ analytical and problem-solving skills.177 Also, many lawyers are, by virtue of their experience in negotiation, sensitive to issues of both power and rights.178 Lawyers should equally be attuned to perceiving conflicts of interest, and maintaining the confidentiality of information, skills crucial to the proper conduct of mediation. Accordingly, a lawyer acting as a mediator must disclose to all parties to the mediation any interest or association – personal, professional or commercial – he or she has or may have in or with the outcome of the dispute the subject of the mediation or the parties to it. And a lawyer-mediator has the same obligations of confidentiality, with respect to communications made in the course of a mediation, as he or she would have if such communications had been made by a client.179 To formal “credentialing” of mediators in the United States: see Scoliere, “Is the Lack of Credentialing for Mediators Jeopardizing the Future of the Profession?” (2014) 27 Geo J Leg Ethics 875. On mediator training and credentialling see Astor and Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002), pp 206–219; Hardy and Rundle, Mediation for Lawyers (CCH, 2010), pp 84–90. 174 Under the Family Law (Family Dispute Resolution Practitioner) Regulations 2008 (Cth). 175 The Mediator Standards Board is responsible for the development of mediator standards and the implementation of the NMAS: see http://www.msb.org.au. 176 Charlton, “New National Standards Set for Mediators” (2008) 46 (June) LSJ 42 at 43. 177 These skills also contribute to making lawyers good arbitrators: see Klug and Dutson, “Role of the Legal Profession in Arbitration” (2000) 74 ALJ 42. 178 See Altobelli, “Family Lawyers as Mediators” (1995) 9 AJFL 222 at 229–231. 179 See LCA (Mediators), paras 5, 6.1; NSW (Mediators), paras 4.7, 6.2, 6.4; WA EPG, cl 9.35. See also Moore, “Lawyer Mediators: Meeting the Ethical Challenges” (1996) 30 Fam LQ 679 at 700–709; Hardy and Rundle, Mediation for Lawyers (CCH, 2010), Ch 6. Cf Field and Wood, “Marketing Mediation Ethically: The Case of Confidentiality” (2005) 5 QUTLJJ 142 (who argue that confidentiality is insufficiently assured in the mediation environment to warrant its use in marketing mediation as a dispute resolution measure).

[20.195]

20 Conduct of Practice

675

this end, statute in the Australian Capital Territory prohibits an accredited mediator from disclosing any information obtained in a mediation session except where:180 • the disclosure is required by law; • the disclosure is made with the consent of the parties; • the disclosure is made with the consent of the person who gave the information; or • the mediator believes on reasonable grounds that: – a person’s life, health or property is under serious and imminent threat and the disclosure is necessary in order to avert, or mitigate the consequences of, its realisation; or – the disclosure is necessary in order to report to the appropriate authority the commission of an offence181 or prevent the likely commission of an offence. These exceptions to confidentiality parallel those applicable to lawyers under the professional rules in most jurisdictions: see [10.50]–[10.115]. The equivalent provision in the Alternative Dispute Resolution Act 2001 (Tas), namely s 11, is more yielding; for instance, it allows disclosure where the mediator believes it necessary to prevent or minimise the danger of injury to a person or damage to property. Agreement to mediate

[20.195] Prior to reaching an agreement to mediate, a lawyer-mediator should define and describe to the disputants the process of mediation so that they can thereby understand the differences between mediation and other available ADR methods. In so doing, he or she should stress that the process is “without prejudice”, meaning that, without both parties’ consent, communications during the course of mediation cannot be used as evidence in court proceedings.182 Such an assurance is essential to encourage frankness between the parties. As a further safeguard to this end, the mediator may require agreement of all parties not to give evidence or produce documents in any subsequent legal proceedings concerning issues mediated upon.183 Statute may protect against subsequent adducing into evidence of matters disclosed in some mediations.184 Aside from statute, though, it may be that contractual provisions of this kind may yield to the public policy that

180 Court Procedures Act 2004 (ACT), s 52C (formerly Mediation Act 1997 (ACT), s 10 (repealed)). 181 In this context, “offence” means an offence involving: (a) violence, or the threat of violence, to a person; or (b) intentional damage to property or the threat of such damage: Court Procedures Act 2004 (ACT), s 52C(3). 182 NSW (Mediators), para 4.1; Volpes v Permanent Custodians Ltd [2005] NSWSC 111 at [8] per Windeyer J. 183 NSW (mediators), paras 6.5, 6.6. 184 See, for example, Federal Court of Australia Act 1976 (Cth), s 53B; Alternative Dispute Resolution Act 2001 (Tas), s 10(4), 10(5). See generally Astor and Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002), pp 181–186.

676

Lawyers’ Professional Responsibility

[20.200]

relevant evidence should not be denied to a court,185 at least where the communications in issue do not meet the requirements of without prejudice privilege (as to which see Ch 12). The disputants should be informed of their right to receive independent legal or other professional advice at any time during the mediation process.186 The costs of the mediator should be addressed prior to any agreement to mediate. That agreement should be in writing and contain the terms upon which the disputants agree for the mediation to be conducted. It may exclude liability on behalf of the mediator, the chief concerns here being liability in contract (breach of retainer) and in tort (negligence).187 Such a clause does not oust the power of a professional body to discipline the mediator. Some mediators are, in any event, conferred immunity by statute.188 Termination of mediation

[20.200] If the process of mediation results in the disputants reaching an agreement, the mediator should discuss with the parties a process for its formalisation and implementation.189 If partial agreement is attained, the mediator should discuss procedures available to resolve remaining issues. Facing a final impasse, the mediator should not prolong unproductive discussions that would merely waste time and money but suggest to the parties other means of resolving the dispute, including to seek independent legal advice. SUPERVISION AND ATTENDANCES Supervision

[20.205] A lawyer should properly supervise all legal professional work carried out on her or his behalf.190 Supervision and vigilance serve to reduce the likelihood of breaches of duty to clients by other lawyers or employees, and with it the likelihood of legal and professional liability. Lawyers may be vicariously liable for the acts or omissions of their employees effected in the course of employment.191 After all, delivering a client into the care of an employee does not reduce a lawyer’s 185 See Downes and Rohl, “Confidentiality in Mediation” (2005) 25 (Apr) Proctor 41. The confidentiality inherent in mediation may, however, provide a ground for disqualifying a law firm subsequently acting against a party it had assisted in mediation: see [21.110], [21.115]. 186 NSW (Mediators), para 4.9. 187 See Schmidt-McCleave, “Mediators’ Duty of Care” [2013] NZLJ 397. 188 See, for example, Federal Court of Australia Act 1976 (Cth), s 53C; Court Procedures Act 2004 (ACT), s 52D. See generally Astor and Chinkin, Dispute Resolution in Australia (2nd ed, LexisNexis Butterworths, 2002), pp 189–192. 189 See LCA (mediators), para 7; NSW (Mediators), para 8; Alternative Dispute Resolution Act 2001 (Tas), s 6; Moore, “Lawyer Mediators: Meeting the Ethical Challenges” (1996) 30 Fam LQ 679 at 692–694. 190 ACT, r 37.1; NSW, r 37.1; Qld, r 37.1; SA, r 37.1; Vic, r 37.1; WA, r 16(4). 191 See, for example, Lloyd v Grace Smith & Co [1912] AC 716. Cf Zakka v Elias [2013] NSWCA 119 (no vicarious liability where the acts of the employee, in negligently assisting a family friend in a transaction, represented a frolic of her own: see at [126]–[142] per Ward JA, at [158] per Emmett JA).

[20.210]

20 Conduct of Practice

677

legal or professional duties, whether or not that employee is legally qualified.192 It is therefore critical that a principal should assign work to an employee within the latter’s capability and supervise work so assigned.193 Legal liability under partnership legislation may lie in a partner in a law firm for the wrongful acts or omissions of co-partners acting in the ordinary course of business of the firm or with her or his authority.194 Lawyers who fail to adequately supervise staff may also be subject to professional disciplinary sanction: see [25.90]. The appropriate level of supervision will vary according to the employee’s qualifications and experience, the type of work conducted by the employee, and the extent of authority the employee enjoys. Another facet of a supervising lawyer’s responsibility is to seek to inculcate in supervisees an awareness and appreciation of their professional responsibility.195 This is especially important as lawyers derive many of their attitudes towards issues of professional responsibility from their supervisors in the workplace. To this end, supervisors should lead by example by practising the highest standards of professional responsibility. “Outsourcing” of legal work

[20.210] The trend towards “outsourcing” by law firms – wherein legal (and non-legal)196 services are delegated to a person or entity outside the firm, including outside the jurisdiction197 – has been described as a “salutary one for our globalized economy”,198 especially to the extent that it reduces the cost of legal services (although it may equally be driven by profit-maximisation objectives). It has been described as “quickly becoming a part of mainstream legal practice”,199 especially against the backdrop in economic downturns, increasing competitive pressures and tightening of legal services market, and client savviness. At the same 192 Sims v Craig Bell & Bond [1991] 3 NZLR 535 at 547 per Hardie Boys J. 193 See MacDermott, “The Art of Delegating” (2005) 43 (Aug) LSJ 52. 194 See Partnership Act 1963 (ACT), ss 14, 16; Partnership Act 1892 (NSW), ss 10, 12; Partnership Act 1997 (NT), ss 14, 16; Partnership Act 1891 (Qld), ss 13, 15; Partnership Act 1891 (SA), ss 10, 12; Partnership Act 1891 (Tas), ss 15, 17; Partnership Act 1958 (Vic), ss 14, 16; Partnership Act 1895 (WA), ss 17, 19. 195 Shirvington, “Work Experience Students and Confidentiality” (1994) 32 (July) LSJ 16; Shirvington, “Updates on Confidentiality, Faxing, Irrevocable Authorities and Retrieving Files” (1995) 33 (Mar) LSJ 15 (in the context of confidentiality). 196 See US, r 5.3, cmt [3] (inserted in August 2012) (which envisages that a lawyer may use non-lawyers outside the firm to assist the lawyer in rendering legal services to a client, but require the lawyer to “make reasonable efforts to ensure that the services are provided in a manner that is compatible with the lawyer’s professional obligations”, the extent thereof depending on the circumstances, “including the education, experience and reputation of the non-lawyer; the nature of the services involved; the terms of any arrangements concerning the protection of client information; and the legal and ethical environments of the jurisdictions in which the services will be performed, particularly with regard to confidentiality”). 197 See Robertson, “A Collaborative Model of Offshore Legal Outsourcing” (2011) 43 Ariz St LJ 125. 198 American Bar Association, Formal Opinion 08-451 Lawyer’s Obligations when Outsourcing Legal and Nonlegal Support Services (5 August 2008), p 2. 199 Murphy, Wilson and Wong, “Legal Professionalism in the Twenty-First Century: Government Lawyers as Accidental Innovators” (2012) 63 UNBLJ 420 at 423.

678

Lawyers’ Professional Responsibility

[20.215]

time, though, it presents various challenges, including the need to monitor the quality of the services and the ethical context in which they are supplied. These are heightened where the outsourcing is directed outside Australia, as are the risks of breach of ethical rules, preservation of confidentiality and avoidance of client–client conflicts being among the most pressing.200 Beyond the implementation and maintenance of adequate risk-management initiatives, the legitimacy of outsourcing rests upon informed client consent.201 Attendance at practice

[20.215] The professional rules Tasmania and Western Australia prohibit a lawyer from carrying on a practice in a place unless he or she or another lawyer is in charge at that place and gives attendance.202 The standard of attendance is variously described as “regular”203 or “substantial”.204 A lawyer’s duties were elaborated in an earlier version of the relevant New South Wales rules, which read as follows:205 A practitioner must exercise effective control of each office maintained by the practitioner for the purpose of conducting the practitioner’s practice and, in particular, the practitioner must ensure that at each office: (a) the practitioner or a partner of the practitioner undertakes personally, or supervises adequately, the work done and the legal services provided; (b) all work undertaken and all communications received are given prompt attention; and (c) the qualifications and status of the persons engaged in the practitioner’s practice are represented accurately to any persons who have dealings with the practitioner’s practice.

Attendance and effective control of a practice by a qualified lawyer increases public confidence that legal work will be conducted competently. Appropriate attendance also ensures that clients and prospective clients have prompt access to legal services. The policy of access is evident, for example, in the Australian Capital Territory and Tasmanian professional rules, which require a lawyer who conducts a 200 See generally Harmon, “The Ethics of Legal Process Outsourcing – Is the Practice of Law a “Noble Profession”, or is it just Another Business?” (2008) 13 J Tech L & Pol’y 41; Tuft, “Supervising Offshore Outsourcing of Legal Services in a Global Environment: Re-Examining Current Ethical Standards” (2010) 43 Akron L Rev 825; Kenny and Gordon, “Outsourcing Issues for Legal Practice” (2012) 50 (May) LSJ 72. 201 US, r 5.3, cmt [6] (inserted in August 2012) (“Before a lawyer retains or contracts with other lawyers outside the lawyer’s own firm to provide or assist in the provision of legal services to a client, the lawyer should ordinarily obtain informed consent from the client and must reasonably believe that the other lawyers’ services will contribute to the competent and ethical representation of the client”). 202 Tas, r 4(1) (but lawyers can apply to the Law Society Council for approval not to comply with this requirement: Tas, r 4(2)); WA, r 17(3). 203 WA, r 17(4) (“adequate and regular”). 204 Tas, r 4(1). 205 Professional Conduct and Practice Rules 1995 (NSW), r 44 (superseded).

[20.220]

20 Conduct of Practice

679

practice at an office not open continuously during normal business hours to take appropriate steps to inform members of the public as to how he or she may be contacted.206

BANKRUPTCY OF LAWYER [20.220] Driven in large part by the public shaming of certain lawyers who had not paid tax for years, and then petitioned for bankruptcy to avoid tax obligations, the legal profession legislation was amended with the object of bringing to the attention of the relevant regulatory body lawyers who have taken advantage of a law relating to bankruptcy. The legislation requires both an applicant for, and holder of, a practising certificate who has become an insolvent under administration to give a written statement to the relevant regulatory body showing why he or she nonetheless remains a fit and proper person to hold a practising certificate.207 The legal profession legislation states that the conduct of a lawyer as, or in becoming, an insolvent under administration is capable of being professional misconduct or unsatisfactory professional conduct.208 This does not mean that bankruptcy always or even commonly justifies a disciplinary sanction. This response is arguably only justified where the events surrounding the bankruptcy place a cloud over a lawyer’s honesty or integrity,209 or possibly competence. A disciplinary response would otherwise be inconsistent with the general objectives of, and rationale for, bankruptcy.

206 ACT, Guidelines A3, A4; Tas, r 4(1A). 207 ACT, Div 2.4.7; NSW, Pt 3.5, Div 4, Subdiv 2 (refers to a “bankruptcy-related event”, defined in s 6(1)) (formerly NSW 2004, Pt 2.4, Div 7); NT, Pt 2.3, Div 6; Qld, Pt 2.4, Div 7; SA, Pt 3, Div 2B (as from 1 July 2014); Tas, Pt 2.3, Div 7; Vic, Pt 3.5, Div 4, Subdiv 2 (refers to a “bankruptcy-related event”, defined in s 6(1)) (formerly Vic 2004, Pt 2.4, Div 7); WA, Pt 5, Div 7. Prior to 1 July 2014, SA, s 49(1) made it an offence for a lawyer who becomes bankrupt, or subject to a composition or deed of arrangement or assignment with or for the benefit of creditors, to practise the profession of the law without the authority of the Supreme Court. Under this provision, circumstances that could justify a bankrupt lawyer remaining in practice, albeit subject to conditions, were illustrated in Re Read (2006) 243 LSJS 368; Re Jenner (2007) 250 LSJS 74; Re Lindquist (2009) 262 LSJS 182. The current SA, s 49 makes equivalent provision to its predecessor but confines it to lawyers who are or have been director of an incorporated legal practice during its winding up for the benefit of creditors, who must not, without the authority of the Supreme Court, practise the profession of the law. 208 ACT, s 389(d); NSW, s 298(1)(f) (formerly NSW 2004, s 498(1)(d)); NT, s 466(1)(d); Qld, s 420(d); SA, s 70(d); Tas, s 422(1)(d); Vic, s 298(1)(f) (formerly Vic 2004, s 4.4.4(d)); WA, s 404(d). 209 See, for example, Legal Services Commissioner v Testart [2007] VCAT 2234 (where the tribunal held that a barrister who had, during his period of bankruptcy, siphoned at least $50,000 to his de facto partner, had engaged in misconduct).

Chapter 21

Relations with the Profession and Third Parties [21.10] LEGAL DUTIES TO THIRD PARTIES IN TORT ......................................................... 682 [21.10] General rule and its rationale .................................................................................... 682 [21.15] What informs the extension of tortious liability beyond the client? .................. 683 [21.20] Lawyer who has assumed a responsibility to a third party ................................ 683 [21.30] Lawyer who makes a misstatement to a third party ............................................ 685 [21.45] Lawyer who gives an opposing client an assurance or undertaking ................ 688 [21.50] Lawyer who fails to notify an executor of a will or its contents ........................ 688 [21.55] Lawyer’s duty to disappointed beneficiaries .......................................................... 689 [21.90] LEGAL DUTIES TO THIRD PARTIES IN CONTRACT ............................................ 698 [21.90] Legal duties arising out of agency ............................................................................ 698 [21.105] Legal duties arising out of breach of warranty of authority ............................. 700 [21.110] LEGAL DUTIES TO THIRD PARTIES IN EQUITY .................................................. 701 [21.110] Duties of confidentiality owed to non-clients ....................................................... 701 [21.120] Fiduciary duties owed to non-clients ..................................................................... 703 [21.125] Duties owed as an accessory to a fiduciary or trust breach .............................. 703 [21.130] LEGAL DUTIES TO THIRD PARTIES UNDER STATUTE ...................................... 703 [21.140] PROFESSIONAL DUTIES OWED TO OTHER LAWYERS ..................................... 706 [21.140] Professionalism, honesty and courtesy .................................................................. 706 [21.205] Taking advantage of an opponent’s mistake ........................................................ 718 [21.220] PROFESSIONAL DUTIES IN COMMUNICATING WITH THIRD PARTIES ...... 722 [21.220] The need for professionalism in communications ............................................... 722 [21.225] Threatening criminal proceedings or media disclosure ...................................... 723 [21.230] Author’s name on letters .......................................................................................... 724 [21.235] Communications with a client of another lawyer (no-contact rule) ................ 724 [21.275] PROFESSIONAL DUTIES TO UNREPRESENTED PARTIES .................................. 730 [21.275] Especial care required when dealing with unrepresented parties .................... 730 [21.280] No-contact rule modified in its application to unrepresented parties ............. 732

[21.05]

The high standard of professional conduct expected of lawyers is not confined in application to their relationships with clients and the court. In their professional dealings with other lawyers, and with persons other than clients, lawyers’ conduct must be characterised with the same principles of good faith, honesty and fairness required in their relations with clients and the court. To this end, a lawyer may assume legal duties to third parties – whether in tort, contract,

682

Lawyers’ Professional Responsibility

[21.10]

equity or under statute – as well as professional duties to other lawyers and non-clients. These duties form the subject of this chapter. The distinction between legal and professional duties, in this context as in others, is usually between duties that are capable of generating personal civil liability in the lawyer to a third party (legal duties) and those sanctioned chiefly via the disciplinary process (professional duties).

LEGAL DUTIES TO THIRD PARTIES IN TORT General rule and its rationale

[21.10]

The late nineteenth century saw a Victorian judge remark that “[a] solicitor does not owe a duty to every passer-by whom he meets in the street, but only to the client who employs him”.1 Broadly speaking, the same general rule remains, whereby a lawyer acting on a client’s behalf owes no duty of care in tort to non-clients.2 A Canadian judge explained a reason for this in the following terms:3 When a lawyer practises law, his or her duties and obligations to a client are the same, even though the abilities and experience of each lawyer may differ. That equality of obligation means that each lawyer is responsible to advise and protect his or her own client, and not to off-load that duty to another lawyer. As a general rule, it is only the lawyer retained who is privy to his client’s instructions, desires and motivations. That lawyer is in the best position to assess the strengths and weaknesses of the client’s case, and the evidence that may be brought to bear in the client’s cause. There must be no dilution of the lawyer’s responsibility to his own client by attributing professional liability more widely.

A concern underscoring extension of tortious liability to non-clients is risk of liability to an indeterminate class of persons. This is not a risk where tortious liability to a client is concerned, because the lawyer has via the retainer assumed a duty of care to an identified person. It explains why persons lacking an express retainer with a lawyer, but who allege the lawyer owed them a duty of care, may seek to substantiate an implied retainer: see [3.60]. Another concern with imposing tortious responsibility to non-clients is the prospect of conflicting duties – the lawyer’s duty of care to a client may conflict with that owed to a third party.4 1 Ward v Lewis (1896) 22 VLR 410 at 418 per Hood J. 2 Ross v Caunters [1980] Ch 297 at 322 per Megarry VC; Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393 at 397 per Thomas J; Al-Kandari v J R Brown & Co (a firm) [1988] QB 665 at 672 per Lord Donaldson MR, at 675–676 per Bingham LJ; Gran Gelato Ltd v Richcliff (Group) Ltd [1992] Ch 560 at 569–571 per Nicholls VC; Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) (2001) 188 ALR 566 at [170] per Finkelstein J. 3 D’Amore Construction (Windsor) Ltd v Lawyer’s Professional Indemnity Co (2005) 249 DLR (4th) 467 at [37] per Pierce J. 4 Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642 at 659 per Mahoney JA; Dean v Allin & Watts [2001] 2 Lloyd’s Rep 249 at [33] per Lightman J; Fitzwood Pty Ltd v Unique Goal Pty Ltd (in liq) (2001) 188 ALR 566 at [171] per Finkelstein J; David v David [2009] NSWCA 8 at [92] per Allsop P (“it would be an extraordinary development of the law to impose upon the solicitor a duty to take some step or give some advice to a third party that was inconsistent with the interests of his primary client”); Burmeister v O’Brien [2010] 2 NZLR 395 at [234] per Asher J (“Caution must be exercised in imposing a duty on solicitors to those who are not only not the solicitor’s clients, but who indeed have interests essentially in conflict with those of the solicitor’s direct client”).

[21.20]

21 Relations with the Profession and Third Parties

683

The risk of indeterminate liability is perhaps the weightiest concern; the existence of this risk forms an essentially impermeable argument against extending the duty. On the other hand, even though the courts do not readily countenance conflicting duties of care,5 such a conflict may not prevent extension of a duty of care to third parties.6 Having said that, coincidence between the lawyer’s alleged duty of care in tort to a third party and existing duties owed to a client presents a stronger case for recognising the former duty. What informs the extension of tortious liability beyond the client?

[21.15]

The concept that tort law has frequently used to restrict the boundaries of liability is that of proximity, making it unsurprising that some of the case law relating to lawyers’ tortious duties to third parties is couched in these terms. While the centrality or otherwise of the concept of proximity remains the subject of debate in the High Court,7 most agree that successful claims for pure economic loss require more than reasonable foreseeability. In the present context, that additional element has variously been established by the assumption of responsibility by the lawyer to a third party,8 the third party’s reliance on the lawyer9 and/or the control a lawyer has over the third party’s interests.10 Below are discussed some circumstances in which courts have held lawyers liable in tort to third parties. Importantly, courts have invariably stressed that the ambit of the duty of care is to be determined on a case-by-case basis.11 Lawyer who has assumed a responsibility to a third party

[21.20]

It lies within a lawyer’s power to avoid tortious responsibility to a non-client. The most direct avenue is to make clear to the non-client, in writing, that the lawyer does not represent the non-client’s interests, and does not undertake to give the non-client legal advice, instead advising the non-client to

5 See, for example, Carey v Freehills (2013) 303 ALR 445 (where Kenny J rejected the applicant’s claim that the respondent law firm, which had been retained by a company, owed him a duty of care in his capacity as the effective stakeholder or shareholder in the company, reasoning that “a solicitor’s advice to a company … may well conflict with some or all of the shareholders’ long-term interests or plans with respect to the company”, which in turn “militates against the imposition of a separate duty of care to the shareholders with respect to advice given to a company concerning its own conduct of affairs”: at [341]). 6 See, for example, Watkins v De Varda [2003] NSWCA 242 (discussed at [21.20]) and Dean v Allin & Watts [2001] 2 Lloyd’s Rep 249 (discussed at [21.30]). 7 See Barker, Cane, Lunney and Trindade, The Law of Torts in Australia (5th ed, OUP, 2012), pp 456–462. 8 See for example, White v Jones [1995] 2 AC 207 at 268 per Lord Goff; Brownie Wills v Shrimpton [1998] 2 NZLR 320 at 324–325 per Blanchard and Gault JJ, at 329–330 per Tipping J. 9 See, for example, Hardware Services Pty Ltd v Primac Association Ltd [1988] 1 Qd R 393 at 397 per Thomas J; Brownie Wills v Shrimpton [1998] 2 NZLR 320 at 324–325 per Blanchard and Gault JJ. 10 See, for example, Hill v Van Erp (1997) 188 CLR 159 at 198–199 per Gaudron J. 11 Seale v Perry [1982] VR 193 at 237 per McGarvie J; Allied Finance & Investments Ltd v Haddow & Co [1983] NZLR 22 at 25 per Cooke J, at 29 per Richardson J; New Zealand Social Credit Political League Inc v O’Brien [1984] 1 NZLR 84 at 88 per Cooke J, at 97 per Casey J; White v Jones [1995] 2 AC 207 at 269 per Lord Goff.

684

Lawyers’ Professional Responsibility

[21.20]

secure independent legal advice.12 The lawyer should then, in all dealings with the non-client, act in accord with that statement. The dangers of eschewing this counsel are illustrated by the facts and ruling in Watkins v De Varda.13 A solicitor (C) was asked by a client (F) to prepare contracts intended to transfer F’s interests in property in Cambodia to the respondent (third party). The contracts proved legally ineffective, and the respondent was unable to recover the money he had paid to F. The mere absence of a retainer with the respondent did not, according to the New South Wales Court of Appeal, dictate that C owed the respondent no duty of care.14 The evidence revealed that C had given the respondent the impression that he was also serving the respondent’s interests, making it reasonable for the respondent to rely on C rather than retain his own solicitor. As a result, C owed the respondent a duty of care even though C was in a position of conflict. The facts in the New Zealand High Court case of Bartle v GE Custodians15 highlight dangers for lawyers who advise prospective clients, which may generate liability even preceding any retainer. The plaintiffs sought preliminary advice from a solicitor (M) regarding a joint venture investment (“Blue Chip”) that allowed them to utilise the equity in their home to purchase an investment property. The plaintiffs were concerned as to the risks in entering a joint venture, and desired assurances as to the substantiality of the other venturer and that their home, which was unencumbered, would not be placed at risk. Randerson J found that, in giving these assurances, M gave the plaintiffs a misleading impression, given obvious risks to them in the way the investments were structured, and the plaintiffs’ limited financial resources. The absence of a retainer did not preclude a tortious duty of care in view of M’s assumption of responsibility, his Honour reasoning as follows:16 The parties were in close proximity in legal terms … [M] was approached by the [plaintiffs] in his capacity as a solicitor who … had special knowledge and expertise in the Blue Chip investment schemes including the joint venture investment contemplated by the [plaintiffs]. [M] was aware that [a third party] had referred the [plaintiffs] to him by reason of his experience and special knowledge of such transactions. An appointment was arranged … It was a serious occasion and the [plaintiffs] were entitled to expect that [M] would exercise due care in providing accurate information to them in answer to their questions and in responding to the assurances they sought about the safety of the contemplated transaction. Although no specific contract of retainer had been entered into, [M] hoped and expected he would receive instructions in due course to act on their behalf … Here, [M] expressed no reservations about answering the [plaintiffs’] questions and was willing to accept their instructions to act if they decided to proceed with the investment. There can be no question that [M] knew the [plaintiffs] were relying on him for advice and that, if his advice proved to be inaccurate or misleading, the [plaintiffs] could suffer loss through entering into the contemplated transaction. The possibility of such loss was 12 Watkins v De Varda [2003] NSWCA 242 at [171] per Ipp JA. 13 Watkins v De Varda [2003] NSWCA 242. 14 Watkins v De Varda [2003] NSWCA 242 at [140] per Ipp JA, with whom Sheller JA and Foster AJA agreed. 15 Bartle v GE Custodians [2010] 1 NZLR 802. 16 Bartle v GE Custodians [2010] 1 NZLR 802 at [142], [144].

[21.30]

21 Relations with the Profession and Third Parties

685

clearly foreseeable. In these circumstances, it is appropriate to conclude there was an assumption of responsibility by [M] and that it is fair, just and reasonable to find that he owed the [plaintiffs] a duty of care.

The decisions in Watkins and Bartle highlight that the dangers for lawyers are particularly acute where a third party is not legally represented in the transaction or matter. It increases the risk that the third party will look to the lawyer for advice, and brings a stronger mandate for a prudent lawyer to be explicit in avoiding any impression that he or she is in any way protecting the third party’s interests. If the third party makes it clear that he or she is legally represented in the matter, the lawyer can enjoy some level of assurance that the third party is not relying on her or him for advice, although this does not oust potential liability for negligent misstatement: see [21.30]–[21.40].

[21.25]

Yet even where the third party presents as legally represented and knowledgeable, a careful lawyer will confirm the identity of the other lawyer, and avoid creating any expectation in the third party of an assumption of responsibility. The latter saved the solicitors in Stringer v Flehr & Walker17 from liability, even though they had not confirmed the identity of the lawyer allegedly advising the third party. There the plaintiff wished to transfer property to her son and took no security on the property in respect of the transfer. The defendant solicitors acted for the son in effecting the conveyance. The son secured a loan by mortgaging the property, under which he defaulted, leaving no moneys from the proceeds of sale once the mortgage was paid off. The plaintiff’s claim in tort against the solicitors – for failing to advise her to take security – was rejected by Philippides J, who found that the solicitors had expressly or impliedly assumed no responsibility to advise the plaintiff as to the terms and desirability of the contract. What influenced her Honour was that the plaintiff had given the solicitors to understand that she had obtained advice about the contract from other solicitors. Having advised the plaintiff to seek independent legal advice, the solicitors had no further duty to advise her in respect of the contract.18 Lawyer who makes a misstatement to a third party

[21.30]

The general law of negligent misstatement dictates that a lawyer who gives advice to a person whom he or she knows, or should know, will rely thereon assumes a duty to use proper care.19 If the advice is given negligently and loss results, the lawyer will be liable for damages in tort (or under statute for engaging in misleading and deceptive conduct: see [21.130], [21.135]). The rationale for the duty of care in this context has been judicially explained as follows:20 [I]t is clearly desirable that the word of solicitors in respect of matters on which they are professionally instructed should be able to be relied on by those persons with whom they are dealing. I am quite satisfied that whatever may be defined as the parameters of the 17 Stringer v Flehr & Walker (2003) Aust Torts Reports ¶81-718. 18 Stringer v Flehr & Walker (2003) Aust Torts Reports ¶81-718 at [91]–[93]. 19 See generally Mendelson, The New Law of Torts (3rd ed, OUP, 2014), pp 632–652. 20 Belsham v Arthur [1992] ANZ Conv R 85 at 89 per Holland J (HC(NZ)) (where a disappointed purchaser, who failed to enter into a binding contract, successfully claimed damages against the vendor’s solicitor in tort for deceit).

686

Lawyers’ Professional Responsibility

[21.35]

duty of care of a professional person, they will always include a duty on a solicitor not negligently or wilfully to mislead another on a matter in which the solicitor is acting professionally and where the solicitor making the statement or carrying out the course of conduct knows, or should know, that the statement or course of conduct would be relied upon by the other party.

How far this can be taken is illustrated by the English Court of Appeal’s decision in Dean v Allin & Watts.21 The claimant made a series of loans to borrowers, secured by a charge on a leasehold flat. The solicitors, acting only for the borrowers, incorrectly advised the partiesthat a mere deposit of deeds was a sufficient and effective security for this purpose. The solicitors knew that the claimant was not legally represented in the dealings. When the borrowers defaulted, the claimant sued the solicitors in respect of the misstatement. The court held that the solicitors owed the claimant a duty of care not to misstate the efficacy of the security, and to ensure he obtained effective security, reasoning that it was “fair, just and reasonable” that such a duty should be imposed in view of the foreseeability of damage and the necessary relationship of proximity.22

[21.35]

There may be scope for liability for negligent misstatement to persons who rely on a signature, meeting or explanation to which a lawyer has falsely attested or certified. The lawyer attests to or certifies the process underscoring the relevant transaction, not usually the content of any document, although there may be some overlap between the two. As explained by a Canadian judge:23 The representations which the lawyer makes in commissioning the document are limited to the identity of the deponent, the place and time when the document is sworn and that the deponent has sworn that the contents of the document are true. If any of those representations should subsequently turn out to be untrue, inaccurate or misleading then the issue will become one of whether the lawyer was negligent in the manner in which he confirmed those representations. For example, if a lawyer commissioned a deponent’s affidavit without making reasonable inquiries to determine the identity of the deponent, then the lawyer might be liable in negligent misrepresentation to a party who relied on the document if it subsequently transpires that the person who swore the document was not, in fact, the named deponent. It would expose lawyers and others who commission documents to a vast sphere of liability if it could be successfully asserted that, in commissioning those documents, they were in some manner warranting the truth of the contents of the document itself.

The foregoing does not make a lawyer liable to an opponent for not securing an enforceable agreement in the latter’s favour. This is the responsibility of the opponent’s own lawyer, as illustrated by Mantella v Mantella.24 There, responding to the wife’s challenge to the validity of a separation agreement on various grounds,25 the husband initiated third party proceedings against the lawyer who had advised the wife, arguing that the lawyer owed a duty of care in tort to him to properly 21 Dean v Allin & Watts [2001] 2 Lloyd’s Rep 249. 22 Dean v Allin & Watts [2001] 2 Lloyd’s Rep 249 at [40] per Lightman J, Robert Walker and Sedley LJJ concurring. 23 Gerling Global General Insurance Co v Siskind Cromarty Ivey & Dowler (2002) 59 OR (3d) 555 at [16] per Nordheimer J. 24 Mantella v Mantella (2006) 80 OR (3d) 270. 25 Namely undue influence, unconscionable dealing and non-disclosure (by the husband).

[21.40]

21 Relations with the Profession and Third Parties

687

advise the wife. The Ontario Superior Court of Justice rejected the husband’s claim, remarking that “[i]f there is a problem with the independent legal advice, that is an issue between the solicitor and her client”.26 Though accepting that it is foreseeable that a lack of competent legal advice could lead to damage for the opposite party, the court held that a party to an agreement has no relationship of proximity with the other side’s lawyer.27 In any case, “[a] solicitor’s certificate of independent legal advice is not a warranty that the agreement is enforceable”; if the husband required such comfort, he should have sought it from his own solicitor.28

[21.40]

Liability for negligent misstatement may be avoided through a clear disclaimer of responsibility, which will ordinarily undermine the reasonableness of a third party’s reliance on the statement and deny an assumption of responsibility. But in order to be protected by a disclaimer, the lawyer must take into account the experience and understanding of the third party (especially where he or she is not legally represented), and must act in a way that denies any assumption of responsibility or gives any ground for reliance by a non-party. In Watkins v De Varda,29 discussed at [21.20], that the solicitor (C) had warned the respondent (third party) of his ignorance of Cambodian law did not oust C’s tortious liability to the respondent. This was because there was no need to be a Cambodian lawyer, according to the court, to know that the documents C prepared did not and could not transfer rights to the Cambodian property.30 The decision highlights that, at least where a disclaimer relates to the standard of care expected, it will not necessarily be effective to deny a duty of care. But its general application may be limited given that the solicitor’s advice was egregiously wrong. Liability may also be avoided if the information sought and the disclosed purposes for which it is sought operate to deny the requisite proximity. Ouwens v Ace Builders Pty Ltd31 is a case in point. Pursuant to an arrangement to divide a residuary estate, W was expected to receive $15,000. W’s solicitor confirmed to the respondent financier that W would benefit from the estate and, upon that confirmation, the respondent advanced moneys to W secured on a second mortgage over property purchased with those funds. It later became clear that the estate would not realise $15,000 and, in any event, W arranged for her share to be paid to her children. Following W’s bankruptcy, the respondent unsuccessfully sued the solicitor in tort for the moneys owing under the loan. The South Australian Supreme Court reasoned that the parties’ relationship, and the information sought, did not require the solicitor to foresee that W would renege on the arrangement or that the deceased had incurred undisclosed debts, or to alert the respondent to these

26 Mantella v Mantella (2006) 80 OR (3d) 270 at [37] per Corbett J. 27 Mantella v Mantella (2006) 80 OR (3d) 270 at [44] per Corbett J. 28 Mantella v Mantella (2006) 80 OR (3d) 270 at [45] per Corbett J. 29 Watkins v De Varda [2003] NSWCA 242. 30 Watkins v De Varda [2003] NSWCA 242 at [152], [153] per Ipp JA, with whom Sheller JA and Foster AJA agreed. 31 Ouwens v Ace Builders Pty Ltd (1989) 52 SASR 344.

688

Lawyers’ Professional Responsibility

[21.45]

possibilities. The respondent was, in any case, aware that the $15,000 amount was only an “expectation” and that the funds were as yet unavailable.32 Lawyer who gives an opposing client an assurance or undertaking

[21.45]

A lawyer’s assurances or undertakings to third parties, including opposing clients, may give rise to personal responsibility in contract where the elements of a contract are present: see [22.15]. There is also scope for the court to enforce lawyers’ personal undertakings, or otherwise order a non-complying lawyer to pay compensation, under its inherent jurisdiction: see [22.25]–[22.45]. So far as tortious liability is concerned, the basic notion is that a lawyer does not, as a general rule, owe a duty of care to the client of another lawyer: see [21.10]. So, for example, a lawyer acting for a vendor of land does not owe a duty of care to the buyer; nor does a lawyer acting for a party in adversarial litigation owe a duty of care to that party’s opponent. The opposing lawyer has the responsibility, and thus the duty of care, to foster and protect her or his own client’s interests.

The foregoing does not mean that a lawyer’s tortious duty of care can never arise out of an undertaking or assurance to an opposing client. In Al-Kandari v J R Brown & Co (a firm),33 for example, the respondent solicitors were held liable in tort to their opponent’s client (the wife) for failing to honour an undertaking not to release to their client (the husband) his passport. The breach permitted the husband to leave the United Kingdom and abduct his children. The English Court of Appeal held that the respondents owed the wife a duty to take reasonable care to keep the passport in their possession, which they had breached by permitting the husband to access his passport. An Australian case illustration is found in L T King Pty Ltd v Besser,34 where solicitors representing a debtor stated in an email to a creditor’s solicitors that they held sufficient funds to cover the full amount owing to the creditor, which induced the creditor to pay out his clients. The debtor’s solicitors did not in fact hold the funds, having received a cheque from their client subject to instructions as to when it might be cleared. When the debtor later proved unable to meet the debt, the creditor successfully sued the debtor’s solicitors for the shortfall on the grounds of negligent misstatement.35 Lawyer who fails to notify an executor of a will or its contents In Hawkins v Clayton36 the High Court found solicitors who had retained custody of a will liable in tort to the executor for loss suffered by reason of their failure to locate and inform him of the will or its contents until six years after the testatrix’s death. In the intervening period, the main asset of the estate, a house, was permitted to fall into disrepair and lie vacant. What attracted liability, according to Deane J, was the solicitors’ assumption of responsibility and the

[21.50]

32 Ouwens v Ace Builders Pty Ltd (1989) 52 SASR 344 at 346 per Jacobs J, at 355 per Prior J. 33 Al-Kandari v J R Brown & Co (a firm) [1988] QB 665. 34 L T King Pty Ltd v Besser (2002) 172 FLR 140. 35 L T King Pty Ltd v Besser (2002) 172 FLR 140 at [102]–[109] per Osborn J. In any case, the solicitors were found liable for engaging in misleading and deceptive conduct contrary to statute: see [21.130], [21.135]. 36 Hawkins v Clayton (1988) 164 CLR 539.

[21.55]

21 Relations with the Profession and Third Parties

689

executor’s reliance, which created a real risk of economic loss.37 In similar vein, Brennan J saw the “natural and foreseeable consequences” of the failure to inform the executor promptly as that a loss of “the benefit of possession of the estate which he would have had as executor if the solicitors had informed him of the will”.38 His Honour observed that, as a testator entrusts custody of a will to a solicitor in the expectation that it will be made effectual on her or his death, “[u]nless some duty of disclosure be imposed on the custodian … the purpose for which the custodian accepted custody would go unfulfilled”.39 This led Brennan J to express the relevant duty in the following terms:40 [W]here the custodian has reason to believe that disclosure by him to the executor of the existence, contents and custody of the will is needed in order that the will may be made effectual, the custodian is under a duty promptly to take reasonable steps to find, and to disclose the material facts to, the executor.

The duty was not owed to the solicitor’s client (the testatrix) but was a duty to protect the executor and, derivatively, the beneficiaries (indeed, the executor was the principal beneficiary). The executor was held entitled to recover from the solicitors compensation for the loss “generated by events occurring when the executor [was] ignorant of his title to the estate before he [had] elected whether or not to renounce the office of executor”.41 This loss included the deterioration of the house, the removal and destruction of furniture that was untended in the house, the loss of rent that should have been paid during its unauthorised occupancy, and the penalty for late lodgment of a death duty return. Lawyer’s duty to disappointed beneficiaries Following the trend in the highest courts of New Zealand42 and the United Kingdom,43 and some Canadian courts,44 the High Court in Hill v Van Erp45 held that a lawyer retained to draft a client’s will owes a duty of care to the beneficiaries the client intends to benefit, and will be liable for the loss suffered by a beneficiary stemming from a failure to take reasonable care in performing the client’s instructions. There the appellant solicitor drafted a client’s will, and had it witnessed by a person known to be the husband of the beneficiary, rendering the

[21.55]

37 Hawkins v Clayton (1988) 164 CLR 539 at 578–579. 38 Hawkins v Clayton (1988) 164 CLR 539 at 559. 39 Hawkins v Clayton (1988) 164 CLR 539 at 552. See also at 579 per Deane J. 40 Hawkins v Clayton (1988) 164 CLR 539 at 555. 41 Hawkins v Clayton (1988) 164 CLR 539 at 557 per Brennan J. 42 Gartside v Sheffield, Young & Ellis [1983] NZLR 37. 43 White v Jones [1995] 2 AC 207. See also the earlier decision in Ross v Caunters [1980] Ch 297. 44 See, for example, Whittingham v Crease & Co (1978) 88 DLR (3d) 353; Peake v Vernon & Thompson (1990) 49 BCLR (2d) 245; Heath v Ivens (1991) 57 BCLR (2d) 391. 45 Hill v Van Erp (1997) 188 CLR 159. Australian State courts had previously endorsed such a proposition: see, for example, Watts v Public Trustee (WA) [1980] WAR 97; Finlay v Rowlands Anderson & Hine [1987] Tas R 60.

690

Lawyers’ Professional Responsibility

[21.60]

gift to that beneficiary invalid under statute.46 The court held that the solicitor, in negligently preparing the will, had breached the duty of care owed to the beneficiary. Successful actions of this kind require proof by the disappointed beneficiary that the testator intended her or him to take under the will to the extent he or she alleges. Where, as in Hill v Van Erp or Summerville v Walsh,47 a will exists but its effect is denied because of the lawyer’s negligence, the disappointed beneficiary ordinarily has little difficulty in meeting that onus. The position may be otherwise where the disappointed beneficiary alleges that a valid will does not reflect the testator’s intention,48 that the lawyer has failed to implement the testator’s instructions that had yet to be finalised,49 or that a current will from which he or she has been excluded is invalid for lack of capacity: see [21.85].

[21.60]

Where there has been delay in implementing a testator’s instructions, which an (untimely) death causes to frustrate the testator’s intentions, whether this triggers liability to beneficiary/ies intended to take pursuant to those instructions depends on the facts. In the leading English case of lawyer liability to disappointed beneficiaries, White v Jones,50 the testator resolved to make a new will, to include legacies of £9,000 to each daughter, and instructed the defendant law firm, via a letter received on 17 July 1986, to this effect. The firm sat on those instructions until 16 August, when an internal office memorandum was prepared on the matter. Yet little progress ensued in preparing the will, punctuated by broken appointments with the testator, when on 14 September the testator died unexpectedly without the new will having been executed. Accordingly, his earlier will, which disinherited his daughters, remained unrevoked. The House of Lords found the firm held liable to daughters as disappointed beneficiaries. The outcome in White v Jones can be contrasted with that in X (an infant) v Wollcombe Young,51 even though the testatrix was, to the solicitor’s knowledge, terminally ill. The testamentary instructions were given while the testatrix was in hospital, five days preceding her death. Neuberger J found that in view of the testatrix’s appearance and the solicitor’s conversation with her, the solicitor “had no reason to believe that this alert, intelligent, albeit terminally ill, person, had a 46 By reason of the (then) Succession Act 1981 (Qld), s 15(1). The so-called “interested witness rule” has since been abolished or mollified across Australia: see Dal Pont and Mackie, Law of Succession (LexisNexis Butterworths, 2013), [4.52]–[4.55]. 47 Summerville v Walsh (unreported, CA(NSW), 26 February 1998) (where a lawyer who, in drafting a dying client’s will that left the client’s estate to the respondent, failed to secure the client’s signature to the will prior to the client’s death was held liable for the respondent’s loss for failing to recognise that the wills legislation allowed a will to be signed by a person other than the testator in the testator’s presence and by his direction: see Clarke, “Where There’s a Will There’s a Lot to Weigh – Solicitor Beware” (1998) 18 (Sept) Proctor 12; Aitken, “Execution of Wills – The Solicitor’s Duty” (1999) 73 (June) LIJ 80). 48 See, for example, Walker v Geo H Medlicott & Son (a firm) [1999] 1 WLR 727. 49 See, for example, Queensland Art Gallery Trustees v Henderson Trout [2000] QCA 93 (discussed in Mortensen, “Solicitors’ Will-Making Duties” (2002) 26 MULR 60). 50 White v Jones [1995] 2 AC 207. 51 X (an infant) v Wollcombe Young [2001] Lloyd’s Rep PN 274.

[21.60]

21 Relations with the Profession and Third Parties

691

real risk of not surviving for the next week, or indeed for the next month”.52 The evidence revealed that the solicitor aimed to complete the will within a week of receiving instructions, which accorded with the testatrix’s instructions and expectations. There was, his Lordship found, nothing obviously dilatory about the solicitor’s behaviour, unlike that of the law firm in White v Jones. Similarly, in Howe v Fischer53 the New South Wales Court of Appeal reversed the trial judge’s finding of negligence54 against a lawyer who failed to prepare an informal will,55 upon instructions from a 94-year-old woman, in advance of a formal will, in circumstances where no formal will was ultimately executed in view of the woman’s death 12 days later. The appellate court found that lawyer’s duty of care, whether to the deceased or to the plaintiff as an intended beneficiary of the deceased’s bounty, had been fulfilled in view of lingering doubt over whether the deceased had committed herself irrevocably to the scheme of benefaction in question coupled with lack of evidence that her medical condition spoke of impending loss of mental capacity or death.56 This does not deny, though, that circumstances may trigger a duty to effect an informal will, which duty could extend to an intended beneficiary. A Canadian judge has suggested the following factors as relevant to consider in determining whether a lawyer acted reasonably in approaching the task of effecting testamentary instructions:57 [1] the terms of the lawyer’s retainer – for example, whether a precise time table is agreed upon; [2] whether there was any delay caused by the client; [3] the importance of the Will to the testator; [4] the complexity of the job – for example the more complex the job the more time required; [5] the circumstances indicating the risk of death or onset of incapacity in the testator; and [6] whether there has been a reasonable ordering of the lawyer’s priorities. By this, [what is] meant [is] that … the job will be done within a reasonable ordering of the priorities in the lawyer’s life and practice.

Another has noted “a continuum between a client who presents without any particular concerns regarding health or age and a client who is clearly on his or her death bed”.58 So if there is a plain and substantial risk of the client’s imminent death, anything other than immediate steps to effecting a valid testamentary document may be negligent.59 And for a client who is old or ill, delay that is 52 X (an infant) v Wollcombe Young [2001] Lloyd’s Rep PN 274 at 282. See also Rosenberg Estate v Black (2001) 110 ACWS (3d) 560 (where, although the solicitor knew that of a serious health problem five days before the testatrix’s death, the evidence revealed that the solicitor had no reason to believe there was a substantial risk that the testatrix would die within days; no finding of negligence was therefore made). 53 Howe v Fischer (2014) 12 ASTLR 66. 54 See Fischer v Howe (2013) 85 NSWLR 67. 55 Pursuant to the Succession Act 2006 (NSW), s 8. 56 Howe v Fischer (2014) 12 ASTLR 66 at [51], [59] per Barrett JA, with whom Beazley P and Macfarlan JA concurred. 57 Rosenberg Estate v Black (2001) 110 ACWS (3d) 560 at [42] per Swinton J. 58 McCullough v Riffert (2010) 59 ETR (3d) 235 at [62] per Mulligan J. 59 See, for example, Maestrale v Aspite (2012) 9 ASTLR 575 (where the defendant solicitor, having obtained instructions from the plaintiff’s terminally ill father to prepare a new will, failed to respond

692

Lawyers’ Professional Responsibility

[21.65]

acceptable will be less than in the absence of age or illness.60 It is a question of a reasonable lawyer’s judgment in the circumstances, based on an assessment of the client’s age and state of health. Factored into this assessment, as foreshadowed in the fifth point in the above quote, is an inquiry into the testator’s capacity to instruct. If the lawyer reasonably believes the testator to lack capacity, no retainer can ensue, and so there can be no finding of negligence to disappointed beneficiaries for failing to implement those instructions.61 Rationale for the duty

[21.65]

Justifications for imposing on lawyers a tortious duty to disappointed beneficiaries are manifold. First, unless a duty is recognised, those with a valid claim suffer no loss (the testator and the estate) but those who suffer loss have no claim (the disappointed beneficiary/ies). The latter lack a remedy because a will cannot be rectified at general law, and the estate has been distributed under the terms of a valid will. That the estate may, on some occasions, claim against the lawyer for negligence is of benefit to a disappointed beneficiary only if he or she otherwise shares in the residuary estate. There is consequently a gap in the law that practical justice dictates must be filled. Where statute permits a will to be rectified,62 and proceedings for rectification are open on the facts, the court expects the disappointed beneficiary to mitigate her or his damage by bringing those proceedings before suing the lawyer.63 If the rectification claim succeeds, such as to entitle the disappointed beneficiary to her or his intended legacy, any damages for negligence against the lawyer are limited to the costs of the rectification action.64 Second, as the public relies on lawyers to prepare effective wills, it would be a failure of the legal system not to impose on lawyers some responsibility.65 Third, the duty promotes professional competence in dealing with wills,66 and thus to the plaintiff’s calls for urgent advice; the father died before executing the will, and Fullerton J ruled that the defendant had been negligent, which in turn had caused the plaintiff a loss of the greater share he would have received under the putative will; her Honour identified the relevant breach of duty as the defendant’s “failure to respond to the plaintiff’s urgent calls for advice and attention in the interim”: at [107]). 60 X (an infant) v Wollcombe Young [2001] Lloyd’s Rep PN 274 at 282 per Neuberger J; McCullough v Riffert (2010) 59 ETR (3d) 235 at [61] per Mulligan J (noting that “[v]isits to a hospital, nursing home or a palliative care centre will give rise to greater urgency [and] [t]he more so when the lawyer has the benefit of medical advice that the client has a terminal illness”). 61 See, for example, Hall v Bennett Estate (2003) 64 OR (3d) 191. 62 See Wills Act 1968 (ACT), s 12A; Succession Act 2006 (NSW), s 27; Wills Act 2000 (NT), s 27; Succession Act 1981 (Qld), s 33; Wills Act 1936 (SA), s 25AA; Wills Act 2008 (Tas), s 42; Wills Act 1997 (Vic), ss 31, 32; Wills Act 1970 (WA), s 50. The rectification of wills is discussed in Dal Pont and Mackie, Law of Succession (LexisNexis Butterworths, 2013), [2.62]–[2.77]. 63 Walker v Geo H Medlicott & Son (a firm) [1999] 1 WLR 727 at 738–739 per Sir Christopher Slade, at 742–744 per Simon Brown LJ (see Coley, “Disappointed Beneficiaries” (1999) 143 Sol J 260). 64 Walker v Geo H Medlicott & Son (a firm) [1999] 1 WLR 727 at 742 per Mummery LJ. 65 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 43 per Cooke J; Van Erp v Hill (1995) Aust Torts Reports ¶81-317 at 62,065 per Fitzgerald P. 66 Hill v Van Erp (1997) 188 CLR 159 at 195 per Gaudron J, at 234 per Gummow J.

[21.70]

21 Relations with the Profession and Third Parties

693

enhances the lawyer–client relationship.67 Fourth, the existence of a duty of care highlights the importance of legacies in a society that recognises citizens’ right to freely dispose of their assets.68 Finally, and perhaps most fundamentally, in the words of McMullin J in Gartside v Sheffield, Young and Ellis:69 It is that in all justice one who is responsible for causing damage to another by his negligence ought generally to pay for it … It is altogether reasonable that those who because of their occupation and the skill, experience and expertise associated with it are engaged to perform a service which if properly performed, will benefit an identifiable person should make good the loss which the latter may suffer from the former’s negligence.

The claim in negligence does not violate the confidentiality of client communications.70 A client’s personal representatives may waive any confidentiality or privilege, it being the lawyer’s duty to disclose to the person having the power of waiver all relevant information, including notes of instructions. As the personal representatives are obliged to deal fairly in the interests of all those having claims against the estate, and for that purpose make available all relevant information, courts have generally refused to allow legal professional privilege to be set up in relation to any claim brought against the personal representatives in respect of the testator’s testamentary dispositions. On that reasoning, it is difficult for the personal representatives to justify refusing to waive privilege when requested by either the plaintiff or the defendant in negligence proceedings brought by a disappointed beneficiary under a proposed will. Basis of relief

[21.70]

In New Zealand the foundation of the duty of care to intended beneficiaries lies in proximity based chiefly on reasonable foreseeability and assumption of responsibility. The lack of any knowledge or reliance by the disappointed beneficiary is not fatal to the claim in negligence.71 As explained by Richardson J in the leading case, Gartside v Sheffield, Young and Ellis:72 [A] solicitor who accepts instructions from a client to draw a will which is intended to benefit a designated third party must appreciate or be taken to appreciate that a careless failure on his part to have the will drawn and presented for execution may deprive the third party of that intended benefit … In those circumstances the designated beneficiary under the proposed will is so obviously and foreseeably likely to be closely and directly and adversely affected by any carelessness on the part of the solicitor in that regard that the latter should have his interests in mind.

67 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 51 per Richardson J; Connell v Odlum [1993] 2 NZLR 257 at 271 per Thomas J. 68 White v Jones [1995] 2 AC 207 at 260 per Lord Goff. 69 Gartside v Sheffield, Young and Ellis [1983] NZLR 37 at 54. See also Van Erp v Hill (1995) Aust Torts Reports ¶81-317 at 62,065 per Fitzgerald P. 70 See Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 44 per Cooke P, at 49–50 per Richardson J, at 55 per McMullin J. 71 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 55 per McMullin J. 72 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 46–47 (emphasis supplied).

694

Lawyers’ Professional Responsibility

[21.70]

In the same case, Cooke J identified as a decisive factor the “degree of proximity”, namely, “the patent closeness and directness of the effect on the plaintiff”.73 In the High Court of Australia in Hill v Van Erp,74 although the majority agreed that a plaintiff must establish more than just foreseeability of loss, and that it was foreseeable that a beneficiary would suffer loss if a lawyer negligently performed her or his duty to the testator in drafting the will,75 the consensus went no further.76 Dawson, Toohey, McHugh and Gummow JJ considered it a vain hope that the notion of proximity of itself could clearly specify a common element underlying each category of case attracting a duty of care, preferring instead to rely upon policy considerations to mark the outer boundaries of the tort.77 Yet Dawson and Toohey JJ, like the House of Lords two years earlier,78 found in such cases an assumption of responsibility suggesting a relationship of proximity. Dawson J explained the point as follows:79 [W]hilst there will usually be no specific reliance by an intended beneficiary upon a solicitor retained to attend to the will, the intended beneficiary’s interests are totally and unavoidably dependent upon the proper performance of a function within the sole province of the solicitor. And, it might be added, in that situation the solicitor knows of the beneficiary’s dependence and in that respect may be regarded as having assumed responsibility towards the intended beneficiary.

Brennan CJ, Gaudron, McHugh and Gummow JJ rejected a plaintiff’s right to recover based on an assumption of responsibility by the lawyer or upon reliance by the plaintiff. Brennan CJ reasoned that the lack of anterior relationship between lawyer and beneficiary precludes any finding of an assumption of responsibility.80 The Chief Justice found the relevant duty in the fact that the duty of care owed by a lawyer to an intended but disappointed beneficiary is in the performance of the work in which the lawyer owes a corresponding duty, albeit contractually, to the testator.81 Gaudron and Gummow JJ held that, in the absence of an assumption of responsibility, what attracted the duty of care was the lawyer’s position of control over the interests of the beneficiary.82 73 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 44. 74 Hill v Van Erp (1997) 188 CLR 159 per Brennan CJ, Dawson, Toohey, Gaudron and Gummow JJ, McHugh dissenting. 75 Hill v Van Erp (1997) 188 CLR 159 at 170–171 per Brennan CJ, at 177–178, 186 per Dawson J, at 196–197 per Gaudron J, at 237 per Gummow J. 76 See Ferrers, “Solicitors’ Duty of Care” [1997] NZLJ 230; Vranken, “Negligent Solicitors and Compensation for Economic Loss: Hill v Van Erp” (1997) 5 Torts LJ 1. 77 See in particular Hill v Van Erp (1997) 188 CLR 159 at 177–178 per Dawson J, at 237–238 per Gummow J. 78 See White v Jones [1995] 2 AC 207 at 268 per Lord Goff, at 276 per Lord Browne-Wilkinson. 79 Hill v Van Erp (1997) 188 CLR 159 at 186. 80 Hill v Van Erp (1997) 188 CLR 159 at 170–171. Cf White v Jones [1995] 2 AC 207 where the House of Lords, in order to circumvent the difficulty that the lawyer is unlikely to have consciously assumed a legal responsibility to the intended beneficiaries for the careful performance of the task, characterised the assumption of responsibility as being for the task itself. 81 Hill v Van Erp (1997) 188 CLR 159 at 170–171. This coincidence of interests also influenced the judgment of Dawson J (at 187). 82 Hill v Van Erp (1997) 188 CLR 159 at 198–199 per Gaudron J, at 231–232 per Gummow J.

[21.75]

21 Relations with the Profession and Third Parties

695

Yet the consistency in the ultimate outcome reflected a belief that the considerations that ordinarily cause concern over making lawyers liable for loss to third parties are absent in this type of disappointed beneficiary case. First, it did not raise the prospect of indeterminate liability, as an intended beneficiary under a will is a specific, identifiable individual rather than a member of an unascertained class, and nor is the liability to such a person at large. Second, the recognition of a duty of care in these circumstances would not supplant remedies available in other areas nor disturb any general body of rules constituting a coherent body of law.83 Third, that the interests of the client and the beneficiary are coincident means that the court does not create conflicting duties of care.84

[21.75]

The majority in Hill v Van Erp was at pains to emphasise that its decision should not be seen as opening a wide door to the availability of claims by third parties against professionals. In the words of Gummow J:85 It is by no means to espouse any general proposition to the effect that if A promises B to perform a service for B which B intends, and A knows, will confer a benefit on C if performed, A owes to C a duty in tort to perform that service with reasonable skill and care. The question whether this or any variant of a proposition in such broad terms should be accepted must be left for another day. The present case lies in a narrower compass.

There can, accordingly, be no assumption that the duty of care owed by A to B will chart the parameters of any duty A owes to C. Amongst other things, the scope of A’s engagement with B, and questions over B’s likely courses of action pursuant to A’s advice, may constrain or deny the duty to C. The ruling of the High Court in Badenach v Calvert86 is illustrative. There the deceased (D) instructed a lawyer (B) to draft a will leaving his entire estate to C. B both failed to advise that a family provision claim by D’s estranged daughter could potentially frustrate the deceased’s intention to benefit C in this fashion, and that there was scope to foreclose this outcome by altering ownership of land D and C held as tenants-in-common to a joint tenancy.87 The High Court, in unanimously reversing the lower court’s ruling that B had breached a duty of care to C, found that B’s initial retainer did not encompass an obligation to advise D on how to avoid a family provision claim. As explained by French CJ, Kiefel and Keane JJ:88 Whilst advice about the possibility of a claim against [D’s] estate is clearly relevant in the context of the retainer, advice about how to avoid such a claim by inter vivos transactions with property interests is not. From the solicitor’s perspective it could not be assumed that the client would need this latter advice … [C’s] case is that [B] should have volunteered this advice. However, it is difficult to see how [B] had a duty to do so merely 83 Hill v Van Erp (1997) 188 CLR 159 at 180 per Dawson J. 84 Hill v Van Erp (1997) 188 CLR 159 at 170–171 per Brennan CJ, at 186 per Dawson J. See also Carr-Glynn v Frearsons (a firm) [1999] Ch 326 at 337 per Chadwick LJ. 85 Hill v Van Erp (1997) 188 CLR 159 at 235. The concern that the case could espouse such a general proposition was what led McHugh J to dissent. 86 Badenach v Calvert (2016) 90 ALJR 610. 87 Scope for this course of action to have this effect is reduced in New South Wales by virtue of notional estate orders under statute: see Dal Pont and Mackie, Law of Succession (LexisNexis Butterworths, 2013), [20.57]–[20.77]. 88 Badenach v Calvert (2016) 90 ALJR 610 at [31]–[33] (paragraph break omitted).

696

Lawyers’ Professional Responsibility

[21.75]

because [B] has informed the client of the possibility that a claim could be made by the daughter but that, absent further information, he could not be any more certain about it occurring. It cannot be reasoned from the fact that the daughter later brought a claim that [B] should have appreciated that this was likely to occur. Even if he had done so, it is still difficult to see that the appreciation of this possibility would have warranted advice of this kind. Neither [B] nor [D] could have known with any certainty whether the claim would be successful and, if so, the extent of the provision that might be made for the daughter from [D’s] estate. [D’s] initial instructions regarding the preparation of his will, to benefit [C] alone, would not have been sufficient to convey to [B] that [D] would wish to take any lawful step to defeat any claim which was made by the daughter. At this point [B] was not to know what view the client might take of whether the daughter had a claim, moral or legal, upon him or his estate.

Gageler J, in a concurring judgment, conceded that reasonable care in effecting a testator’s instructions might require a lawyer to do more than merely draft and ensure the proper execution of a will; say, where steps to sever a joint tenancy are integral to effecting the testator’s intention that specified property be given by the will, where taking those steps can properly be seen as part of the will-making process.89 On the facts, however, the scope of B’s retainer did not go so far. Unlike the Hill v Van Erp scenario, when facing a proposed inter vivos transaction, it cannot be assumed that, when client instructions are received, the interests of the client and the disappointed beneficiary align. Such a transaction, having the effect of immediately denying the client an interest in property, may not be in her or his interests. Conversely, at any point before completing an inter vivos transaction, a client can change her or his mind despite any promise to an intended beneficiary thereof. These scenarios, which are capable of creating conflicting interests, do not arise if a lawyer is merely carrying into effect a testator’s intentions as stated in her or his final will.90 Even had a duty of care extended to the intended beneficiary (C), the High Court remained unconvinced that C had proven the requisite causation between its breach and C’s alleged loss. In particular, C had not established what course of action D would have taken if advised of the joint tenancy option. Any such decision would have rested on D’s consideration of, inter alia, the risks concerning the irreversible nature of the inter vivos transactions, and the associated cost and delay. Coupled with the uncertainty that D’s daughter would make a family provision claim, the plurality saw “no reason to think that even if [D] had been given the advice contended for, he would have been more likely to undertake transactions of this kind than, say, simply pursuing his original course of action, by which [C] was to be the sole beneficiary under [D’s] will”.91

89 Badenach v Calvert (2016) 90 ALJR 610 at [61]. 90 Badenach v Calvert (2016) 90 ALJR 610 at [47] per French CJ, Kiefel and Keane JJ, at [90], [91] per Gordon J. 91 Badenach v Calvert (2016) 90 ALJR 610 at [35] per French CJ, Kiefel and Keane JJ. See also at [96] per Gordon J.

[21.85]

21 Relations with the Profession and Third Parties

697

Quantum of damages

[21.80]

The intended beneficiary can recover the benefits he or she would have received but for the lawyer’s negligence. The recovery ceiling is the amount of the intended testamentary provision,92 which may be discounted if there is a risk that, had the lawyer exercised reasonable care, the beneficiary might not have obtained the testamentary benefit provided under the will.93 For instance, there may be a risk that the testator might have declined, or lacked the capacity, to execute the will. Even if the testator did execute the will, there is a risk that he or she could have subsequently revoked or varied it, or that the testamentary provision could have been eroded by family provision claims. In any case, the benefits (if any) to which the beneficiary was entitled in any event, for instance, under the will or an intestacy, must be set off against the amount arrived at in the first inquiry. If it transpires that the evidence does not reveal that the alleged disappointed beneficiaries were intended to take, proven negligence in advising the testator cannot overcome the fact that they have suffered no loss as a result of that negligence.94 Liability does not extend to beneficiaries of former wills excluded from current will

[21.85]

As a general principle, lawyers retained to draft a new will owe no duty of care to beneficiaries of a previous will. Attempts to make lawyers liable on the ground that the new will is vitiated by reason of the testator’s lack of capacity or some other vitiating factor have invariably failed, for good reason. In the first instance, beneficiaries of a previous will have another remedy open to them, namely seeking to have the present will set aside.95 Also, to allow such an action could give rise to conflicts between the duties to beneficiaries of different wills. As explained by the Alberta Court of Appeal in Graham v Bonnycastle:96 The imposition of a duty to beneficiaries under a previous will would create inevitable conflicts of interest. A solicitor cannot have a duty to follow the instructions of his client to prepare a new will and, at the same time, have a duty to beneficiaries under previous wills whose interests are likely to be affected by the new will. The interests of a beneficiary under a previous will are inevitably in conflict with the interests of the testator who wishes to change the will by revoking or reducing a bequest to that beneficiary.

92 Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 50 per Richardson J; Hill v Van Erp (1997) 188 CLR 159 at 170–171 per Brennan CJ, at 178 per Dawson J, at 198–199 per Gaudron J. 93 See Gartside v Sheffield, Young & Ellis [1983] NZLR 37 at 50–52 per Richardson J, at 55–56 per McMullin J. Cf Seale v Perry [1982] VR 193 at 241 per McGarvie J (beneficiaries lost the certainty of receiving an accretion to their estates). 94 See, for example, Vagg v McPhee [2011] NSWSC 1584 (where although the solicitor was found to have been negligent in not raising the prospect of the testatrix severing the joint tenancy in property held with her estranged husband, Schmidt J dismissed the claim by her children because “there was no instruction given that there should be any testamentary disposition of the … property in favour of the children”: at [105]) (affd Vagg v McPhee (2013) 85 NSWLR 154). 95 Worby v Rosser [2000] PNLR 140 at [25] per Chadwick LJ, at [29] per Peter Gibson LJ; Graham v Bonnycastle (2004) 36 Alta LR (4th) 203 at [27] per McFadyen JA, at [60], [61] per Berger JA. 96 Graham v Bonnycastle (2004) 36 Alta LR (4th) 203 at [29] per McFadyen JA, with whom Ritter JA concurred. Contra at [59] per Berger JA.

698

Lawyers’ Professional Responsibility

[21.90]

In Worby v Rosser,97 for example, the residual beneficiaries under the testator’s original will (the testator’s common law wife and two children) claimed that the defendant solicitor had been negligent in allowing the testator to execute a new will when he lacked testamentary capacity to do so and had been unduly influenced by the beneficiary of the new will. They sought to recover their own costs incurred in resisting probate of the new will and propounding the earlier will. Their action proved unsuccessful, Chadwick LJ reasoning as follows:98 If the solicitor’s breach of duty under his retainer has given rise to the need for expensive probate proceedings, resulting in unrecovered costs, then, prima facie, those costs fall to be borne by the estate … If the estate bears the costs thereby and suffers loss then, if there is to be a remedy against the solicitor, it should be the estate’s remedy for the loss to the estate. There is no need to fashion an independent remedy for a beneficiary who has been engaged in the probate proceedings. His or her costs, if properly incurred in obtaining probate of the true will, can be provided for out of the estate … (including the costs to which the beneficiary is entitled out of the estate).

In Graham v Bonnycastle99 the testator’s children likewise failed in their action against the lawyer who drafted the testator’s new will, from which they were excluded. The Alberta Court of Appeal, in so ruling, was concerned that the fear of being sued by beneficiaries under prior wills could make lawyers reluctant to act for elderly testators who wish to alter their will.100 A similar decision had been made some years earlier by the New Zealand Court of Appeal in Knox v Till.101 It rejected a claim by the appellants, who as residuary beneficiaries under an earlier will had successfully challenged a later will on the grounds of lack of testamentary capacity, against the lawyers who drafted the later will (the respondents) for the costs incurred in challenging the will. Their Honours reasoned that “[t]he degree of proximity in relationship is too distant”, as there was no assumption of responsibility by the respondents, the appellants placed no reliance on the respondents, and “no policy considerations sufficient to justify the imposition of the duty have been proffered”.102

LEGAL DUTIES TO THIRD PARTIES IN CONTRACT Legal duties arising out of agency

[21.90]

Lawyers act as agents for their clients in various respects and, depending on the scope of the authority conferred by the retainer, may contract on a client’s behalf: see [3.80]–[3.145]. A prudent lawyer will ensure that any transaction of this kind is entered into as agent, with a clear stipulation that the lawyer is not undertaking personal liability. But where, whether due to a lack of clarity in the terms of the transaction or otherwise, the lawyer can be construed as assuming

97 Worby v Rosser [2000] PNLR 140. 98 Worby v Rosser [2000] PNLR 140 at [25]. See also at [29] per Peter Gibson LJ. 99 Graham v Bonnycastle (2004) 36 Alta LR (4th) 203. 100 Graham v Bonnycastle (2004) 36 Alta LR (4th) 203 at [30] per McFadyen JA, with whom Ritter JA concurred. 101 Knox v Till [1999] 2 NZLR 753. 102 Knox v Till [1999] 2 NZLR 753 at 755 per Henry J, delivering the judgment of the court.

[21.100]

21 Relations with the Profession and Third Parties

699

personal liability, including jointly with the client, duties in contract are attracted. These are discussed in more detail in the chapter dealing with lawyers’ undertakings: see [22.15], [22.20]. Also, assurances or undertakings by lawyers can give rise to personal liability in tort: see [21.45]. Application in the context of fees of third parties

[21.95]

The professional rules require a lawyer who instructs a third party on a client’s behalf, but is not intending to accept personal liability for payment of the third party’s fees, to advise the third party in advance.103 In other words, aside from agreement to the contrary, the lawyer contracts with the third party as principal, not as an agent for the client. As the lawyer is liable as principal for the fees of third parties, that no fee has been received from the client is no defence to a claim. The fees in question may be, say, for the costs of medical reports, expert witnesses, accountants, valuers, actuaries or surveyors engaged by a lawyer for the purposes of a client retainer. A failure to honour these debts to third parties is ordinarily treated as professional misconduct.104 Application to counsels’ fees

[21.100] The same general principle applies in respect of counsel’s fees,105 although this must be seen against the backdrop of the historical general law prohibition against counsel suing for their fees.106 This anachronism107 – an instructing solicitor’s obligation is one of honour, not debt – meant that counsel looked to the instructing solicitor for payment but could not at general law enforce a claim in contract. As a result, a solicitor’s refusal to pay counsel’s fee had professional, as opposed to legal, consequences. It was common for barristers’ rules to entitle a barrister to decline a brief from a solicitor “listed” by the bar association for not paying another barrister’s fee without reasonable excuse.108 The legal profession legislation, by now envisaging that an instructing solicitor and a barrister may enter into a costs agreement, which is enforceable like any other contract, has lifted the prohibition on counsel enforcing a fee claim in contract: see 103 ACT, r 35.1; NSW, r 35.1; NT, r 24; Qld, r 35.1; SA, r 35.1; Vic, r 35.1; WA, r 25 (which requires that the notification be in writing). 104 See, for example, Council of the Law Society of New South Wales v Narayanasamy [2014] NSWCATOD 18 (solicitor’s ongoing failure to pay for a debt incurred to a company that conducted property searches and inspections); Mancini v Legal Practitioners Conduct Board [2014] SASCFC 31; Fittock v Legal Profession Conduct Commissioner (No 2) [2015] SASCFC 167 (the last two cases involving lawyers who failed to pay fees owing to psychologists instructed on a client’s behalf). 105 This is explicitly recognised by the professional rules in the Northern Territory and Western Australia: NT, r 30.1; WA, r 26. 106 Re Le Brasseur & Oakley [1896] 2 Ch 487 at 493 per Lindley LJ; Atkinson v Pengelly [1995] 3 NZLR 104 at 110–111 per Tipping J. 107 It represents “perhaps the last inheritor of the classical Roman law’s exclusion of jurists from the law of contract”: International Encyclopedia of Comparative Law, Vol VIII (“Specific Contracts”), Ch 9 (by Fisch) p 14. Both the courts (see, for example, Shand v Doyle [1997] ANZ Conv R 134 at 134–135 per Kennedy ACJ, at 138 per Rowland J) and commentators (see, for example, Dal Pont, “The Recovery of Counsel’s Fees” (2004) 23 UQLJ 380) have queried its modern justification. 108 This remains in the barristers’ rules in the Territories: ACT, r 92; NT, r 92.

700

Lawyers’ Professional Responsibility

[21.105]

[3.45]. There is, in any case, nothing to preclude counsel lodging a complaint against a non-paying solicitor through the general complaints process established by the legal profession legislation: see Ch 24. An instructing solicitor who does not pay the fee of counsel he or she has instructed on a client’s behalf, or who delays its payment, may be guilty of unsatisfactory professional conduct or professional misconduct.109 Legal duties arising out of breach of warranty of authority

[21.105] An agent who asserts authority to represent a principal, but in fact lacks authority to do so, is liable to the third party with whom he or she is dealing for breach of warranty of authority where that party has suffered loss.110 The action is for breach of promise, being a warranty that the defendant has the authority he or she professes to have. So, as with any other collateral warranty, to establish a warranty of authority requires proof of a contract under which a promise is made expressly or by implication to the promisee, for which the promisee gives consideration. The doctrine of breach of warranty of authority raises the spectre of a lawyer being liable in contract to a non-client. The issue has arisen mainly in the context of lawyers who lacked authority to act for a client at all. It has been judicially noted that “a solicitor who enters an appearance warrants that he has authority from the client to enter that appearance”.111 The reasoning behind this goes to the heart of the legal process, as explained by Swinfen Eady J in Yonge v Toynbee:112 [I]n the conduct of litigation the Court places much reliance upon solicitors, who are its officers; it issues writs at their instance, and accepts appearances for defendants which they enter, as a matter of course, and without questioning their authority; the other parties to the litigation also act upon the same footing, without questioning or investigating the authority of the solicitor on the opposite side … The manner in which business is ordinarily conducted requires that each party should be able to rely upon the solicitor of the other party having obtained a proper authority before assuming to act. It is always open to a solicitor to communicate as best he can with his own client, and obtain from time to time such authority and instructions as may be necessary. But the solicitor on the other side does not communicate with his opponent’s client, and, speaking generally, it is not proper for him to do so … It is in my opinion essential to the proper conduct of legal business that a solicitor should be held to warrant the authority which he claims of representing the client; if it were not so, no one would be safe in assuming that his opponent’s solicitor was duly authorised in what he said or did, and it would be impossible to conduct legal business upon the footing now existing; and, whatever the liability may be, the Court, in exercising the authority which it possesses over its own 109 Rhodes v Fielder, Jones & Harrison [1918–19] All ER Rep 846; Carver v Legal Profession Disciplinary Tribunal (1991) 7 LPDR 8; Re Robb (1996) 134 FLR 294 at 310 (FC(ACT)); Law Society of New South Wales v McCarthy [2003] NSWADT 188 at [41]; Law Society of New South Wales v Graham [2007] NSWADT 67 at [29]. Cf Council of the Law Society of New South Wales v Beazley [2012] NSWADT 153. 110 Gosling v Gaskell [1897] AC 575 at 592 per Lord Herschell; Cox v Mosman & Isles, Love & Co [1909] St R Qd 45 at 55–56 per Real J. As to the doctrine of breach of warranty of authority generally see Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [23.80]–[23.94]. 111 Simmons v Liberal Opinion Ltd [1911] 1 KB 966 at 972 per Fletcher Moulton LJ. 112 Yonge v Toynbee [1910] 1 KB 215 at 233, 234.

[21.110]

21 Relations with the Profession and Third Parties

701

officers, ought to proceed upon the footing that a solicitor assuming to act, in an action, for one of the parties to the action warrants his authority.

In that case, a client instructed solicitors to conduct his defence in respect of threatened proceedings, but before commencing suit the client became certified as of unsound mind. Unaware of this, the solicitors entered an appearance for the client, delivered a defence (to which the plaintiff replied) and acted in other interlocutory proceedings. Upon discovering that the defendant lacked capacity, the plaintiff sought an order that the appearance of the defendant’s solicitors and all subsequent proceedings be struck out, and that the solicitors be ordered personally to pay the plaintiff’s costs of the action to date on the ground that they had acted without authority. The English Court of Appeal made the order requested, ruling that the solicitors were liable on an implied warranty or contract that they had authority when they had not.113 A more recent example is Penn v Bristol & West Building Society.114 It involved a solicitor (B) who, in dealings with the purchaser’s solicitor, held himself out as having been duly instructed by husband and wife vendors of property. The purchaser’s solicitor also acted for the building society that was to finance the purchase. In reliance on this fact, and on the fact that the vendors were to pass legal title to the house to the purchaser, the building society advanced money to the purchaser. B did not, in fact, have authority to act for the wife. Waller LJ, with whom Waite and Staughton LJJ concurred, held that the B’s warranty of his authority was given to both the purchaser and the building society. As B had warranted to the building society that he was authorised to act for the wife, and since the lack of that authority caused the building society loss, B was liable to the building society for breach of warranty in respect of that loss.

LEGAL DUTIES TO THIRD PARTIES IN EQUITY Duties of confidentiality owed to non-clients

[21.110] Lawyers owe a duty of confidentiality to their clients, sourced from contract (usually by way of a term implied into the retainer), equity (under its jurisdiction to protect the confidentiality of information communicated for a limited purpose) and professional rules: see [10.15]. But in contract and equity a lawyer can owe enforceable confidentiality obligations to non-clients. The terms of a contract may impose upon a lawyer such a duty, and as the equitable duty is independent of contract, the duty can be imposed on a lawyer who receives information equity considers should be protected from disclosure. The latter explains, in the most part, why lawyers remain subject to duties of confidentiality to former clients, and may be restrained from acting against former clients: see [8.10]. Lawyers should, in any 113 It has been recommended that the rule in Yonge v Toynbee be abrogated by statute, and in its stead it be enacted that a solicitor’s authority to conduct litigation on behalf of a person who becomes mentally infirm “shall continue to extend to the doing of all acts beneficial to the [client] in relation to the action until either the Public Trustee by Statute or a next friend by order of the Court has been appointed to represent the person”: Twelfth Report of the Law Reform Committee of South Australia, Law Relating to Limitation of Time for Bringing Actions (1970), p 8. In no Australian jurisdiction has this recommendation been translated to statute. 114 Penn v Bristol & West Building Society [1997] 1 WLR 1356.

702

Lawyers’ Professional Responsibility

[21.115]

case, avoid assuming confidentiality obligations that clash with the duty to their clients to use information received in the course of the retainer for clients’ benefit: see [5.85]. Where the information in question is confidential to a third party, the court may, via an injunction at the behest of the third party, restrain its use for the benefit of the client.115

[21.115] Yet a court will not necessarily disqualify a lawyer from acting for a client simply because the lawyer has previously acted against the same opponent in a related matter. Without clear evidence of the potential for misuse of confidential information, disqualification would undermine a client’s freedom to choose its own lawyer, and allow opponents, often for tactical reasons, to unduly impinge on that choice. Lawyers may, moreover, be unjustifiably restricted in separately representing multiple clients with similar claims against the same defendant. In Mitchell v Pattern Holdings Pty Ltd116 Bergin J refused to restrain a law firm from continuing to act for the plaintiff in proceedings against the applicant (defendant) when the firm had acted for another plaintiff opposed to the applicant in similar proceedings that had been settled on confidential terms. In Williamson v Schmidt117 Lee J refused the plaintiffs’ application to disqualify the defendants’ solicitors from acting against them in circumstances where one of the defendants had acted against the plaintiffs for a different client in similar proceedings ultimately settled by mediation. His Honour opined that cases where a court would, in circumstances of this kind, intervene would be “very rare indeed and subject to strict proof”.118 Yet the existence of two recent cases on point highlights that the scenario may not be as rare as Lee J suggests. In Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd119 lawyers who acted for a party against a defendant, which dispute was settled at mediation via a detailed confidentiality agreement, sought to act for a different party against the same defendant in a claim very similar to the earlier retainer. The New Zealand Court of Appeal restrained the lawyers from so acting because “there is an inherent incompatibility between lawyers’ participation in a confidential mediation and their desire to act for other clients in parallel litigation”.120 Einstein J restrained a lawyer on similar facts in Worth Recycling Pty Ltd v Waste Recycling and

115 See, for example, AG Australia Holdings Ltd v Burton (2002) 58 NSWLR 464 at [167] per Campbell J (where a disgruntled former employee sought to disclose information in breach of a confidentiality undertaking in the employment contract to a lawyer who acted against the former employer); H Lundbeck A/S v Sandoz Pty Ltd [2011] NSWSC 1297 (where the defendant sought to disclose to its lawyers the terms of a confidential settlement agreement it had reached with the plaintiff in relation to a prior litigious dispute, in which the lawyers were not involved). See also L v K (Freezing Orders: Principles and Safeguards) [2014] Fam 35 at [56] per Mostyn J (in the context of documents obtained by a client in breach of a duty of confidentiality owed to an opponent). 116 Mitchell v Pattern Holdings Pty Ltd [2000] NSWSC 1015. See also Fortin v Brunet (2009) 182 ACWS (3d) 840; Ian West Indoor and Outdoor Services Pty Ltd v Australian Posters Pty Ltd [2011] VSC 287. 117 Williamson v Schmidt [1998] 2 Qd R 317. 118 Williamson v Schmidt [1998] 2 Qd R 317 at 330. 119 Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 (noted Webb [2001] NZLJ 337). 120 Carter Holt Harvey Forests Ltd v Sunnex Logging Ltd [2001] 3 NZLR 343 at [30] per Blanchard J.

[21.130]

21 Relations with the Profession and Third Parties

703

Processing Pty Ltd,121 referring to the prospect of misuse of negotiation moves and strategies adopted during the mediation and what was said during the course of the negotiations (including strengths and weaknesses, offers and counter offers, etc). Fiduciary duties owed to non-clients

[21.120] The lawyer–client relationship is presumed to give rise to fiduciary duties: see [4.40]. Yet as fiduciary duties are superimposed upon a relationship in circumstances where a court considers that a party should be protected from another party’s potential abuse of position, it stands to reason that lawyers can owe fiduciary duties to non-clients. The danger is that fiduciary duties owed to a client may conflict with those owed to a non-client, placing the lawyer in a no-win situation of being unable to fulfil both. Prudent lawyers will take care not to put themselves in the position of inviting a non-client to place trust in them, an especial danger where the non-client is another party to the matter or transaction, and is not legally represented: see [6.100], [8.160]–[8.190]. Such a scenario also attracts the risk of a court finding that the non-client has in fact become a client under an implied retainer: see [3.60]–[3.75]. Duties owed as an accessory to a fiduciary or trust breach

[21.125] Equity may make persons liable or accountable as accessories to another’s breach of equitable duty.122 The issue is relevant to lawyers, who may be exposed to liability as an accessory to a client’s breach of trust or fiduciary duty, if there is a lack of probity evidenced by knowledge of the breach. For this purpose, proof of constructive knowledge suffices, namely knowledge of circumstances that would indicate the facts to an honest and reasonable person.123 This form of liability is personal, and unlimited. To the extent that it arises out of conduct that can be described as “dishonest”, it falls outside professional indemnity insurance coverage. Lawyers’ potential exposure is illustrated by Eden Refuge Trust v Hohepa,124 where a solicitor was found to have been an accessory to a breach of fiduciary duty by the trustee of a charitable trust, where the solicitor had been retained to act for the trust. LEGAL DUTIES TO THIRD PARTIES UNDER STATUTE [21.130] Under s 18(1) of the Australian Consumer Law125 (and its previous equivalents, s 52(1) of the Trade Practices Act 1974 (Cth) and State and Territory fair 121 Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWSC 356 at [37] (affd Worth Recycling Pty Ltd v Waste Recycling and Processing Pty Ltd [2009] NSWCA 354). 122 See Dal Pont, Equity and Trusts in Australia (6th ed, Lawbook Co., 2015), [38.65]–[38.125]. 123 Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89. 124 Eden Refuge Trust v Hohepa [2011] 1 NZLR 197 at [206]–[211] per Duffy J (the solicitor was also found liable as a recipient of trust property: at [212]–[220]) (see Mize, “Mandatory Reporting of Trustee Misconduct?” [2011] NZLJ 57) (affd Fletcher v Eden Refuge Trust [2012] 2 NZLR 227). Cf Twinsectra Ltd v Yardley [2002] 2 AC 164. 125 The Australian Consumer Law is found in the Competition and Consumer Act 2010 (Cth), Sch 2, which commenced on 1 January 2011. See generally Lockhart, The Law of Misleading or Deceptive Conduct (4th ed, LexisNexis Butterworths, 2014).

704

Lawyers’ Professional Responsibility

[21.135]

trading counterparts), a lawyer or firm may be liable to a non-client for breach of the proscription against misleading and deceptive conduct,126 which is supported by a wide variety of remedial avenues found in Pt 5-2 of the Australian Consumer Law. For instance, misleading or deceptive law firm promotional or marketing material may generate this form of liability, as it did in Nixon v Slater & Gordon,127 discussed at [20.25]. The failure to fulfil an unqualified undertaking given to a third party on a client’s behalf can equally attract statutory liability.128

[21.135] As the Australian Consumer Law extends liability for loss to “any person involved in the contravention”,129 lawyers need not be directly engaged in the impugned conduct to be liable. A person “involved in a contravention” includes a person who “has aided, abetted, counselled or procured the contravention”, or “has been in any way, directly or indirectly, knowingly concerned in, or party to, the contravention”.130 It follows that lawyers can be “involved” in a client’s misleading and deceptive conduct.131 For example, a lawyer may be involved preparing a disclosure document issued by a franchisor to induce potential franchisees, or a prospectus issued by a company to induce potential investors. A lawyer who makes or endorses a client’s statement in the document or prospectus knowing it to be false is liable as an accessory to misleading or deceptive conduct.132 The same may be so if a lawyer fails to correct a false statement133 or half-truth134 made by a client to a third party. Certainly, a

126 See Corones, “Solicitors’ Liability for Misleading Conduct” (1998) 72 ALJ 775. See also Civil Procedure Act 2010 (Vic), s 21 (a person to whom the overarching obligations apply (which includes a lawyer: s 10(1)) must not, in respect of a civil proceeding, engage in conduct that is misleading or deceptive, or likely to mislead or deceive; a breach of this proscription is amenable to sanction, including by way of costs: see s 29(1)). 127 Nixon v Slater & Gordon (2000) 175 ALR 15. 128 See, for example, L T King Pty Ltd v Besser (2002) 172 FLR 140 (discussed at [21.45]). 129 Australian Consumer Law, s 236(1) (formerly Trade Practices Act 1974 (Cth), s 82(1)). 130 Australian Consumer Law, s 2(1). 131 See generally Huett, “Could You be an Accessory?” (2001) 75 (Mar) LIJ 49; Pearce, “Accessorial Liability for Misleading or Deceptive Conduct” (2006) 80 ALJ 104. 132 See, for example, Menmel Pty Ltd v Great Australian Bite Pty Ltd (1997) ATPR ¶41-553; Polon v Dorian [2014] NSWSC 571 at [650] per Hall J (noting that statements made by a solicitor to members of the public at a public meeting as part of an investment promotion without an appropriate disclaimer may supplement, reinforce, endorse or adopt statements made by the promoters of the financial product, and in making those statements the lawyer cannot ordinarily be said to have been simply acting as a mere conduit; see also at [755]–[759]). 133 Sutton v A J Thompson Pty Ltd (1987) 73 ALR 233 (involving an accountant/financial adviser). 134 Corones, “Solicitors’ Liability for Misleading Conduct” (1998) 72 ALJ 775 at 781; Wilkinson v Feldworth Financial Services Pty Ltd (1998) 29 ACSR 642 at 751 per Rolfe J (lawyers committed misrepresentation by silence by conveying the false impression that certain transactions had been legitimately completed).

[21.135]

21 Relations with the Profession and Third Parties

705

lawyer who gives a client advice to carry out a misleading or deceptive activity, and then performs the work involved in carrying it out, is liable as an accessory.135 Conversely, a lawyer who acts as a mere conduit, doing no more than passing on a client’s instructions, does not thereby become responsible for anything misleading in the information passed on.136 Nor does a lawyer who has expressly disclaimed personal responsibility for what proves to be a misleading or deceptive statement, or has otherwise made it apparent to a third party that the lawyer is relying on the client for the information.137 A lawyer who is unaware of falsity of the client’s statements in question or “honestly ignorant of the circumstances that give that conduct a contravening character” also avoids liability.138 On the other hand, a lawyer who does not merely purport to pass on what he or she has been told, or who passes it on inaccurately or in some way adopts it as her or his own or adds to it, may engage in misleading conduct personally as opposed to as an accessory. For example, in Argy v Blunts & Lane Cove Real Estate Pty Ltd139 solicitors acting for a vendor of land received an incomplete zoning certificate, and annexed it to the contract of sale in accordance with standard conveyancing practice. This was found to amount to a representation that the certificate was issued by the council and was complete. The solicitors were held to have made a misleading and deceptive statement to the purchaser in that the zoning certificate was incomplete, and were accordingly liable for the purchaser’s loss. A more recent illustration is found in Australian Competition and Consumer Commission v Sampson140 where the lawyer, who in representing companies that rented digital video discs to the public, periodically sent misleading or deceptive notices to the companies’ customers who owed rental charges. What impugned these notices were statements that, inter alia, the notices were court documents, the companies could enter 135 See, for example, Australian Securities and Investments Commission v Somerville (2009) 77 NSWLR 110 (where a lawyer who advised on and recommended the transaction that breached the statutory proscription, and prepared or obtained all documents necessary to carry out the transaction, was found liable as an accessory, albeit under a parallel provision in the Corporations Act 2001 (Cth) (see s 79)). 136 Yorke v Lucas (1985) 158 CLR 661 at 666 per Mason ACJ, Wilson, Deane and Dawson JJ; Goldsbro v Walker [1993] 1 NZLR 394 at 398 per Cooke P, at 405 per Hardie Boys J. 137 Saints Gallery Pty Ltd v Plummer (1988) 80 ALR 525 at 530 (FC(FCA)). 138 Yorke v Lucas (1985) 158 CLR 661 at 677 per Brennan J. See also at 668 per Mason ACJ, Wilson, Deane and Dawson JJ. Cf Mackman v Stengold Pty Ltd (1991) ATPR ¶41-105 (where the partners in an accounting firm were held to be “involved in a contravention” by the vendor regarding misleading statements made as to the vendor’s profitability because the accountants had lent their name to the vendor’s sale advertisement without checking its profit figures: at 52,632–3 per Spender J). 139 Argy v Blunts & Lane Cove Real Estate Pty Ltd (1990) 26 FCR 112. 140 Australian Competition and Consumer Commission v Sampson [2011] FCA 1165. The lawyer in question was subsequently found guilty of professional misconduct (see Legal Services Commissioner v Sampson [2013] VCAT 1177) and reprimanded as a result (see Legal Services Commissioner v Sampson [2013] VCAT 1439). See also Legal Services Commissioner v Nomikos [2013] VCAT 1682 (respondent practitioner who allowed her practice letterhead and name to be used by a debt collector in a misleading or deceptive manner found to have committed professional misconduct; she was reprimanded and ordered to pay a $75,000 fine: Legal Services Commissioner v Nomikos [2014] VCAT 251).

706

Lawyers’ Professional Responsibility

[21.140]

judgment against a customer sans a court order, and the lawyer could enforce a judgment via a warrant or garnishee order. Tracey J issued an injunction to restrain the contravening conduct, an order that corrective advertisements be published, and an order that the lawyer (and her firm) engage in trade practices compliance training.

PROFESSIONAL DUTIES OWED TO OTHER LAWYERS Professionalism, honesty and courtesy

[21.140] In dealings between one another, lawyers should act with honesty, fairness and courtesy, and adhere to undertakings (see [22.05]), so as to transact lawfully and competently the work they perform for clients in a manner consistent with the public interest.141 The resulting confidence, mutual respect and cooperation between lawyers promotes the efficient administration of justice,142 which serves the client and the legal process, as well as instrumental in fostering the reputation of the profession. Most American States have adopted (chiefly aspirational) “civility codes” (also known as “professionalism creeds”),143 reflecting a belief that “civility” between lawyers is part and parcel of professionalism144 (and perhaps as an implicit recognition of reduced levels of civility within the profession).145 An American commentator has, in this context, made the following poignant observation:146 141 See ACT, r 4.1.2; NSW, r 4.1.2; NT, r 18; Qld, r 4.1.2; SA, r 4.1.2; Vic, r 4.1.2; WA, r 6(1)(b). 142 See Beevis v Dawson [1957] 1 QB 195 at 201 per Singleton LJ (who noted that, in litigation, lawyers who act discourteously or bicker with one another are unlikely to give the requisite assistance to the court); O’Connor, “Professionalism” (1998) 76 Wash ULQ 5 at 8 (“More civility and greater professionalism can only enhance the pleasure lawyers find in practice, increase the effectiveness of our system of justice, and improve the public’s perception of lawyers”); Code, “Counsel’s Duty of Civility: An Essential Component of Fair Trials and an Effective Justice System” (2007) 11 Can Crim L Rev 97. 143 See Campbell, “Raise Your Right Hand and Swear to be Civil: Defining Civility as an Obligation of Professional Responsibility” (2011/12) 47 Gonz L Rev 99 at 101–107; Preston and Lawrence, “Incentivizing Lawyers to Play Nice: A National Survey of Civility Standards and Options for Enforcement” (2015) 48 U Mich J Law Reform 701 (noting that 39 of 50 states have professionalism creeds, whether espoused by courts, bar associations or other organisations, though noting that many are outdated, poorly worded and too limited or so vague as to fail to effectively identify errant conduct). 144 See, for example, Aspen, “The Search for Renewed Civility in Litigation” (1994) 28 Val UL Rev 513; Nagorney, “A Noble Profession? A Discussion of Civility Among Lawyers” (1999) 12 Geo J of Legal Ethics 815; Baron and Corbin, “Robust Communications or Incivility? Where do we Draw the Line?” (2015) 18 Legal Ethics 1; Curtis, “The Codification of Professionalism: Can You Sanction Lawyers into Being Nice?” (2015) 40 J Leg Prof 49. 145 Cf Groia v Law Society of Upper Canada (2015) 382 DLR (4th) 337 (where Nordheimer J (at [23]) noted the “increasing concern over the last number of years that the conduct of lawyers is becoming less and less civil – both inside and outside the courtroom”, and (at [24]) pondered its cause, surmising that it may “the result of demands by clients and/or the result of the frequent image of lawyers in television shows, and in other media, where actors portray lawyers in a particular fashion unrestrained by any need to represent reality and without any concern for the reputation of the legal system”). 146 Rubin, “A Causerie on Lawyer’s Ethics in Negotiations” (1975) 35 La L Rev 577 at 589.

[21.145]

21 Relations with the Profession and Third Parties

707

Another lawyer … who deals with a lawyer should not need to exercise the same degree of caution that he would if trading for reputedly antique copper jugs in an oriental bazaar. It is inherent in the concept of an ethic, as a principle of good conduct, that it is morally binding on the conscience of the professional, and not merely a rule of the game adopted because other players observe (or fail to adopt) the same rule. Good conduct exacts more than mere convenience …

It has been judicially observed that members of the profession “who seek to win a momentary advantage for their clients without observing the proper courtesies invite correction by the court and disapproval of their colleagues” and that “[t]o the extent that solicitors act in this way, they run the risk of destroying the confidence and mutual respect which generally distinguishes dealings between members of the legal profession from other dealings in the community”.147 The lawyer’s professional responsibility in this regard is reflected in a multitude of ways, some of which are discussed below. Offensive or disparaging comments to and about other lawyers

[21.145] “It is the task of the lawyer”, it has been said, to argue a client’s case “in a reasoned and dispassionate manner, without descending into personal invective against the lawyers appearing for the other party”.148 This not to deny that, particularly in the context of litigation, emotions may run high, and words may be spoken that, in a calmer environment, would have been avoided. The presentation of a case dispassionately, moreover, should not be construed as undermining zealous advocacy, which may justify “uncomfortable and unpleasant exchanges” and “language that may be very tough in its expression”.149 It is appropriate, therefore, that the language used be viewed in context, and without undue reliance placed on hindsight. At the same time, though, disparaging or offensive language – whether to other lawyers or not,150 and whether in or outside the court151 – is unprofessional. It can 147 Garrard v Email Furniture Pty Ltd (1993) 32 NSWLR 662 at 667 per Kirby ACJ. See also Ren Nominees Pty Ltd v MS Cognosis Pty Ltd (No 1) [2013] FCA 916 at [55] per Perram J; Ken Tugrul v Tarrants Financial Consultants Pty Ltd [2014] NSWSC 437 at [70] per Kunc J; Mineralogy Pty Ltd v Sino Iron Pty Ltd (No 4) [2014] WASC 282 at [59] per Edelman J. 148 Towers v Atkins (No 2) [2015] FCCA 3537 at [59] per Judge Scarlett. See also Legal Profession Complaints Committee v in de Braekt (2012) 80 SR (WA) 134 at [28] per the court (“While a practitioner should advocate fearlessly on behalf of the interests of their client, that is not an excuse for discourtesy”). 149 Groia v Law Society of Upper Canada (2015) 382 DLR (4th) 337 at [71], [73] per Nordheimer J. 150 See, for example, Legal Profession Complaints Committee v in de Braekt [2012] WASAT 58 (solicitor who, inter alia, sent multiple offensive and discourteous emails to a police officer, and who made discourteous and abusive remarks to a court security officer, found to have committed professional misconduct; the solicitor was ultimately struck from the roll: Legal Profession Complaints Committee v in de Braekt [2013] WASC 124). 151 R v Felderhof (2004) 68 OR (3d) 481 at [84] per Rosenberg JA (noting that unfair and demeaning comments by a lawyer in the course of submissions to a court “diminishes the public’s respect for the court and for the administration of … justice and thereby undermines the legitimacy of the results of the adjudication”).

708

Lawyers’ Professional Responsibility

[21.150]

accordingly attract disciplinary sanction,152 as may the making of unsupported accusations against,153 or derogatory remarks about,154 other lawyers in their professional calling. Resort to personal abuse may, in any case, frustrate the objectivity necessary for proper legal representation (as to which see [17.35]).155 Animosity between clients not to be reflected in professional relations

[21.150] Consistent with the preceding paragraph, lawyers must not permit any acrimony or discourtesy that may exist between the parties to seep through into their professional relations with one another. The relevant duty here is expressed in the Canadian professional rules, which state:156 Any ill feeling that may exist or be engendered between clients, particularly during litigation, should never be allowed to influence lawyers in their conduct and demeanour toward each other or the parties. The presence of personal animosity between lawyers involved in a matter may cause their judgment to be clouded by emotional factors and hinder the proper resolution of the matter. Personal remarks or personally abusive tactics interfere with the orderly administration of justice and have no place in our legal system.

Nor should any personal dispute or antipathy between the lawyers be allowed to affect their relations in their professional work.157 While lawyers are not expected to behave like “verbal eunuchs”, in the words of the Canadian Supreme Court, professionalism constrains a response to provocation with “dignified restraint”.158 Suppressing what may be natural negative human emotions in professional 152 See, for example, Legal Services Commissioner v Winning [2008] LPT 13 (where the respondent was found to have engaged in unprofessional conduct arising out of expressing himself in a “crude, vulgar, undisciplined way” to others in the legal profession, and publicly reprimanded as a consequence); Legal Services Commissioner v Cooper [2011] QCAT 209 (solicitor who used discourteous and offensive language in letters to another solicitor found to have engaged in unsatisfactory professional conduct). 153 See, for example, Victorian Legal Services Commissioner v McDonald [2016] VCAT 21 (solicitor who accused an opposing solicitor of being “fundamentally dishonest” and “telling lies” was declared to have committed unsatisfactory professional conduct, as these communications served no other purpose than to disparage the opposing solicitor). 154 Can CPC, r 7.2-1, cmt [3] (“A lawyer should avoid ill-considered or uninformed criticism of the competence, conduct, advice or charges of other lawyers, but should be prepared, when requested, to advise and represent a client in a complaint involving another lawyer”), Victorian Bar Inc, Ethics Committee Bulletin No 2 of 2010, cl 2 (extending to social networking sites; by way of example, warning against posting a flippant or sarcastic comment about a fellow member of the Bar, the judiciary, a client or a matter in which counsel is briefed: cl 3). 155 Legal Profession Complaints Committee v in de Braekt (2011) 75 SR (WA) 336 at [139]. 156 Can CPC, r 7.2-1, cmt [2]. See also Dal Pont, “Respect in Trying Circumstances” (2011) 85 (Apr) LIJ 76. 157 Granitgard Pty Ltd ACN 007 427 590 v Termicide Pest Control Pty Ltd ACN 093 837 337 (No 6) [2010] FCA 381 at [46] per Logan J; Knight v Carter [2015] NSWSC 609 at [27] per Bergin CJ in Eq. 158 Doré v Barreau du Québec [2012] 1 SCR 395 at [68] per Abella J. See also Donaghy v Council of Law Society of New South Wales (No 3) [2014] NSWCATOD 32 at [82] (“Most lawyers experience criticisms and pressures and sometimes bad behaviour by other lawyers, but the obligation is to respond in a manner that complies with the Rules, which involves courtesy and dignity and extends respect to the other lawyer”); Orlov v New Zealand Lawyers and Conveyancers Disciplinary Tribunal [2015] 2 NZLR 606 at [83] per Simon France J (“lawyers of good standing would recognise the importance of freedom of expression, and not be unduly concerned or condemnatory of extravagant language, and misguided opinions, at least as long as there was no bad faith”).

[21.160]

21 Relations with the Profession and Third Parties

709

dealings with other lawyers is not necessarily easy, especially as clients may expect their representatives to share the clients’ personal acrimony to the opponent that, for them, includes opponents’ lawyers.159 Clients may be dissatisfied and displeased with anything they perceive as an attitude not unfavourable to the opponent. Yet given the importance of courtesy, honesty and respect in lawyers’ professional relations inter se to the proper and efficient administration of justice, client acrimony presents no justification for animosity towards an opposing lawyer. There may, however, be sense in not giving a client the impression of undue friendship with the opposing lawyer. Honesty and accuracy in representations (including in negotiations)

[21.155] Beyond generating potential civil liability in contract (see [21.90]–[21.105]), tort (see [21.30]–[21.40]) or under statute (see [21.130], [21.135]), a lawyer’s inaccurate statements or representations to other lawyers negatively impact on the efficient administration of justice, which necessitates that lawyers be able to rely on their colleagues’ representations and assurances. For this reason, the professional rules in most jurisdictions contain the following prohibition and prescription:160 A [lawyer] must not knowingly make a false statement to the opponent in relation to the case (including its compromise) [and must] take all necessary steps to correct any false statement made by the [lawyer] to an opponent as soon as possible after the [lawyer] becomes aware that the statement was false.

[21.160] In extending the prohibition to false statements relating to the compromise of a case, the rules envisage that lawyers should avoid false statements in negotiations on a client’s behalf. But the failure of the rules to explicitly address the conduct expected of lawyers in negotiation has led some to see the duty not to mislead an opponent as inapplicable, or at least not applicable in full force, to negotiation. The very nature of negotiation, they maintain, dictates that for lawyers to eschew all misleading impressions would undermine the “traditional secretiveness and obliquity of the bargaining process”.161 Indeed, some argue that lawyers are obliged to misrepresent in negotiation if this will best serve clients’ interests.162 159 A point noted by Cronin J in Pencious v Pencious [2012] FamCA 74 at [171]. 160 See ACT, rr 22.1, 22; NSW, rr 22.1, 22; NT, rr 17.35, 17.36; Qld, rr 22.1, 22; SA, rr 22.1, 22; Vic, rr 22.1, 22; WA, r 37(1), 37(2). Equivalent provision is made in the barristers’ rules: ACT, rr 51, 52; NSW, rr 49, 50; NT, rr 51, 52; Qld, rr 48, 49; SA, rr 48, 49; Vic, rr 49, 50; WA, rr 48, 49. The authors of the ABA’s Report of the Committee on Standard Advocacy Rules (February 1995) recommended that the word “false” should be used instead of the word “misleading” in order to “avoid invidious debate or dispute” over the meaning of the latter: p 12. 161 Poseidon Ltd v Adelaide Petroleum NL (1991) 105 ALR 25 at 26 per Burchett J. 162 See, for example, White, “Macchiavelli and the Bar: Ethical Limitations on Lying in Negotiation” [1980] Am B Found Res J 926 at 928 (“Everyone expects a lawyer to distort the value of his own case, of his own facts and arguments, and to deprecate those of his opponent”); Steele, “Deceptive Negotiating and High-Toned Morality” (1986) 39 Vand L Rev 1387 at 1399 (“some form of deceit, at least in the broadest sense of the word, is inherent in all negotiations and that a lawyer with an obligation to obtain the best result for a client cannot be expected, realistically, to negotiate outside the context of everyday convention”); Condin, “Bargaining in the Dark: The Normative Incoherence of Lawyer Dispute Bargaining Role” (1992) 51 Maryland L Rev 1 at 71 (“all forms of

710

Lawyers’ Professional Responsibility

[21.160]

The Australian Law Reform Commission has bemoaned the lack of guidance in professional rules in this field.163 The American rules do address the point, but via a concession that “[u]nder generally accepted conventions in negotiation, certain types of statements ordinarily are not taken as statements of material fact”.164 Those rules identify estimates of price or value placed on the subject of a transaction, and a party’s intentions as to an acceptable settlement of a claim, as ordinarily within this category.165 This means that, according to one commentator, the rules “create a situation in which lawyers can engage in deceptive, or at least manipulative, hard bargaining without professional consequence”.166 On the other hand, the Alberta rules, for example, give no “out”, stating that “[i]n no situation, including negotiation, is a lawyer entitled to deliberately mislead a colleague”.167 The prospect remains that negotiation may give cover to unethical practices, where these do not place the other party on notice. These practices are not subject to the scrutiny of court procedures and safeguards, so that lawyers who engage in them can be reasonably secure that they are unlikely to be discovered. “[D]isingenuous behavior”, it has been observed, “is indigenous to most legal negotiations and could not realistically be prevented due to the nonpublic nature of bargaining interactions”.168 Even if discovered, there are few, if any, truly effective sanctions. This explains why a strong ethical stance is necessary.169 That a lawyer, under the leverage must be exploited, inflated demands made, and private information obtained and used whenever any of these actions would advance the client’s stated objectives”); Craver, “Negotiation Ethics for Real World Interactions” (2010) 25 Ohio St J on Disp Resol 299 at 342–343 (“To the extent [lawyers] naïvely believe that no other practitioners are exaggerating or embellishing client interests, they place their own clients at a distinct disadvantage. It is as if they are playing poker on behalf of their clients with their cards face up when they are not certain they are really able to see all of the cards being held by their opponents”). 163 Australian Law Reform Commission, Managing Justice: A Review of the Civil Justice System (Report No 89, 2000), [3.110]. In New South Wales it has been recommended that consideration be given to stipulating that lawyers conducting settlement negotiations be subject to mutual obligations of good faith (see Chesterman, Putting Lawyers on Good Behaviour – A Review of the NSW Solicitors’ Rules and Barristers’ Rules, Report prepared for the Attorney General of New South Wales, March 2002, recommendation (18)(c)), although it remains unclear how this will impact upon the conduct of negotiations. 164 US, r 4.1(a), cmt [2]. 165 Steele, “Deceptive Negotiating and High-Toned Morality” (1986) 39 V and L Rev 1387 at 1395 (“Deceitful or not, lies about price, value, and some other matters are practically sacrosanct to conventional negotiation. If lawyers were forbidden from engaging in these lies, they would be at a tremendous disadvantage when negotiating with any nonlawyer”). Cf WA EPG, cll 8.10, 8.11 (which advises lawyers to disabuse clients of any thought that negotiations will be conducted dishonestly, say, by attempting to ‘bluff’ the other side; it cites an example of a “bluff” that would amount to misleading conduct, namly where a lawyer is instructed to say that a particular amount is the “final offer”, when to the lawyer’s knowledge that is in fact not so). 166 Peppet, “Lawyers’ Bargaining Ethics, Contract and Collaboration: The End of the Legal Profession and the Beginning of Professional Pluralism” (2005) 90 Iowa L Rev 475 at 499. 167 Law Society of Alberta, Code of Conduct, r 6.02(2), commentary (as of April 2016). 168 Craver, “Negotiation Ethics: How to be Deceptive Without Being Dishonest/How to be Assertive Without Being Offensive” (1997) 38 S Tex L Rev 713 at 719. 169 See generally Parke, “Lawyers as Negotiators: Time for a Code of Ethics?” (1993) 4 ADRJ 216 at 223. See further Longan, “Ethics in Settlement Negotiations: Foreword” (2001) 52 Mercer L Rev 807; Taylor, “Negotiations and Settlements – Obligations, Risks and Practicalities” (2002) 22 Aust Bar Rev

[21.165]

21 Relations with the Profession and Third Parties

711

pretext of pursuing a client’s interests, may not be “found out” does not make this behaviour ethical. It may undermine public confidence in the justice system, which rests heavily upon lawyers’ trustworthiness. It has been said, in this regard, that “[m]ore is required of a lawyer than the custom of the marketplace, than bargaining in a bazaar, or in playing poker”.170

[21.165] Yet it cannot now be assumed that misleading conduct by lawyers in the course of negotiation has no ramifications. If it comes to light, there is not only the prospect of any agreement secured via the negotiation being vitiated, there may also be scope, within accepted legal principle, for tortious liability to the opponent for losses caused as a result. And there is certainly no shield from disciplinary sanction, as appears from the decision of Byrne J, sitting in the Queensland Legal Practice Tribunal, in Legal Services Commissioner v Mullins,171 who disciplined a senior Queensland barrister for misleading conduct in the course of a mediation. The barrister represented a quadriplegic client seeking damages from an insurer. In settlement negotiationshe did not disclose to the insurer that the client had been diagnosed with cancer, which in turn reduced the life expectancy estimate that factored heavily in calculating the value of the claim. The respondent instead conducted the mediation on the basis of the original life expectancy estimate, and the matter was settled on that basis. Byrne J found the respondent to have “intentionally deceived” the insurer’s barrister and the insurer’s representatives,172 and to be guilty of professional misconduct. He was reprimanded, and ordered to pay a fine equating to his fee for the mediation ($20,000), thus ensuring that he did not profit from his own wrong. Before the tribunal the barrister maintained he had done no wrong. His case characterised the compromise negotiations as “commercial”, conducted on a tacit, common assuming that, in deciding whether to settle, the parties would rely exclusively on their own resources and information. There would not, it was said, “have been a reasonable expectation that influential information communicated during the negotiations would not knowingly be false”. These contentions the tribunal described as “at first blush startling”.173 The Queensland Court of Appeal subsequently noted, referring to Mullins, that “[p]robity is essential to the utility of mediation as a form of alternative dispute resolution”.174 The respondent’s instructing solicitor was subsequently also disciplined (including by way of a

1; Richmond, “Lawyers’ Professional Responsibilities and Liabilities in Negotiations” (2009) 22 Geo J Legal Ethics 249; McElwaine, “Ethical Conduct at Mediation” (Spring/Summer 2015) 127 Law Letter 14; Standing, “Ethical and Legal Obligations in Mediations and Other Negotiations” (August 2015) 42 Brief 20. 170 Thurman, “Chipping Away at Lawyer Veracity: The ABA’s Turn Toward Situation Ethics in Negotiations” (1990) 1 J of Dispute Res 103 at 115. 171 Legal Services Commissioner v Mullins [2006] LPT 12. 172 Legal Services Commissioner v Mullins [2006] LPT 12 at [30]. 173 Legal Services Commissioner v Mullins [2006] LPT 12 at [26]. 174 Legal Services Commissioner v Voll [2008] QCA 293 at [67] per Wilson J, with whom Keane JA and Dutney J concurred.

712

Lawyers’ Professional Responsibility

[21.165]

$15,000 fine), the tribunal remarking that by remaining silent at the mediation he had “practised a fraudulent deception”.175 That Mullins was no aberrant decision, and that a newfound ethical imperative may indeed apply in these circumstances, was confirmed Legal Practitioners Complaints Committee v Fleming,176 delivered within two weeks of the Mullins decision. The Western Australian State Administrative Tribunal held that a solicitor who, in representing a client in a dispute over a deceased estate, secured from others interested in the estate a covenant not to challenge the will, had behaved unprofessionally in conveying the impression that the will in question was legally enforceable. In fact, the deceased had not executed the will in accordance with the applicable statutory formalities. The tribunal noted that, on being instructed to keep the informal nature of the will secret, the solicitor should have advised the client against this course. If the client insisted, the solicitor ought to have advised that he could not conduct the negotiations so as to suggest that a formal will existed or procure the other side’s consent to probate upon a false basis.177 By implying the existence of a valid will, and procuring a covenant from a third party by concealing the status of the will and the significance and effect of the covenant, was “to act dishonestly and unfairly”.178 In remarks that confirm the ethical shift, the tribunal noted the importance of candour in settlement negotiations, reasoning as follows:179 In seeking to settle a matter pursuant to his client’s instructions or the procedures of the Court, the practitioner, in some senses, gives up his “adversary” role in favour of a “negotiating” role. In that co-operative role it is important that practitioners may be relied upon by the other party and his advisers to act honestly and fairly in seeking a reasonable resolution of the dispute. If everything a practitioner says in negotiations must be checked and verified, many of the benefits and efficiencies of a settlement will be lost or compromised. Honesty, fairness and integrity are also of importance in such negotiations because they are conducted outside the Court and are beyond the control which a judge hearing the matter might otherwise exercise over the practitioners involved. Outside the trial process, there is no impartial adjudicator to “find the truth” between the opposing assertions. Dishonest or sharp practice by the practitioner to secure an advantage for his client might go undetected for some considerable time or for all time. A level of trust between the advisers involved is therefore essential. The fact that, in the normal course, the lawyer’s improper conduct might be exposed, and the harm avoided by a “due diligence” undertaken by the opposing lawyer, does not alter the impropriety in any respect.

The latter highlights that unethical conduct cannot be justified on the basis that structural features within the justice system itself will eventually cause the matter to be addressed or ameliorated. Lawyers’ ethical imperative remains, and should not be divorced from external controls. In the wake of Fleming, provision was made in the Law Society of Western Australia’s Ethical and Practice Guidelines, to the effect 175 Legal Services Commissioner v Garrett [2009] LPT 12 at [25] per Mullins J. 176 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29. 177 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29 at [68]. 178 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29 at [87]. 179 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29 at [75]–[77] (paragraph breaks omitted).

[21.170]

21 Relations with the Profession and Third Parties

713

that “practitioners must appreciate that the negotiation context is no different to any other area of practice, as far as ethical standards are concerned”.180 The point has seen subsequent Australian curial reiteration181 as well as academic endorsement.182 Though mentioned in neither Mullins nor Fleming, there was American case authority, decided over 20 years earlier, supporting the outcome in each of these cases. In Virzi v Grand Trunk Warehouse and Cold Storage Co183 the defendant applied to have the settlement in personal injury action set aside because, in negotiating the settlement, the plaintiff’s lawyer omitted to disclose that the plaintiff had died some weeks earlier. In acceding to the defendant’s application, the court made the following observations:184 This Court feels that candor and honesty necessarily require disclosure of such a significant fact as the death of one’s client. Opposing counsel does not have to deal with his adversary as he would deal in the marketplace. Standards of ethics require greater honesty, greater candor, and greater disclosure, even though it might not be in the interest of the client or his estate. The handling of a lawsuit and its progress is not a game. There is an absolute duty of candor and fairness on the part of counsel to both the Court and opposing counsel. At the same time, counsel has a duty to zealously represent his client’s interests. That zealous representation of interest, however, does not justify a withholding of essential information, such as the death of the client, when the settlement of the case is based largely upon the defense attorney’s assessment of the impact the plaintiff would make upon a jury, because of his appearance at depositions. Plaintiff’s attorney clearly had a duty to disclose the death of his client both to the Court and to opposing counsel prior to negotiating the final agreement.

Ultimately, that the plaintiff’s death was not caused by injuries related to the lawsuit, and had no effect on the fairness of the settlement, did not excuse the plaintiff’s lawyer from disclosing the plaintiff’s death as, inter alia, “the fact of plaintiff’s death nevertheless would have had a significant bearing on defendants’ willingness to settle”.185 Avoiding discrimination, harassment and bullying

[21.170] A lawyer is ethically obliged to recognise the essential dignity of each individual in society and the principles of equal rights and justice, an obligation that applies to lawyers’ relationships. Their status as professionals, coupled with their responsibility to protect individual rights, means that lawyers should lead by example in non-discriminatory conduct. This is reflected in professional rules, which proscribe a lawyer engaging in conduct that constitutes discrimination and 180 WA EPG, cl 8.6. 181 See, for example, Kaye v Woods (No 2) [2016] ACTSC 87 (where Mossop AsJ remarked that “[t]he obligation on a solicitor to correct misleading statements to a court must be at least as strict as that to correct statements made to another party during the course of a mediation”: at [139]). 182 See, for example, Wolski, “The Truth About Honesty and Candour in Mediation: What the Tribunal Left Unsaid in Mullins’ Case” (2012) 36 MULR 706. 183 Virzi v Grand Trunk Warehouse and Cold Storage Co (1983) 571 F Supp 507. 184 Virzi v Grand Trunk Warehouse and Cold Storage Co (1983) 571 F Supp 507 at 512 (paragraph break omitted). 185 Virzi v Grand Trunk Warehouse and Cold Storage Co (1983) 571 F Supp 507 at 511.

714

Lawyers’ Professional Responsibility

[21.175]

sexual harassment, defined by reference to applicable anti-discrimination or human rights statutes.186 The rules also proscribe workplace bullying which, absent a statutory definition in relevant State or Territory legislation, includes behaviour that could be expected to intimidate, offend, degrade or humiliate.187 More generally, over 20 years ago the New Jersey Supreme Court, in the context of a lawyer who behaved offensively to all participants in the curial process, said the following:188 Any kind of conduct or verbal oppression or intimidation that projects offensive and invidious discriminatory distinctions, be it based on race or color, as in this case, or, in other contexts, on gender, or ethnic or national background or handicap, is especially offensive. In the context of either the practice of law or the administration of justice, prejudice both to the standing of this profession and the administration of justice will be virtually conclusive if intimidation, abuse, harassment, or threats focus or dwell on invidious discriminatory distinctions.

To this end, case law in the United States,189 now reflected also in Australian cases,190 reveals multiple occasions when lawyers have been disciplined for engaging in unlawful harassment or discrimination of others. Confidential communications

[21.175] Lawyers should not disclose or seek to adduce communications that are expressed “without prejudice” (see Ch 12) or that come within the veil of confidentiality (see Ch 10) or legal professional privilege (see Ch 11). This dictates 186 ACT, r 42.1; NSW, r 42.1; Qld, r 42.1; SA, r 42.1; Vic, r 42.1; WA, r 17(5). Equivalent provision appears in the barristers’ rules in some jurisdictions: ACT, r 122 (which prescribe a conciliation procedure in respect of complaints, although this does not oust a complainant’s right to utilise the ordinary disciplinary process or to pursue other relief available at law: ACT, r 122.3); SA, r 117; WA, r 117. See also UK, O(2.1)–O(2.6) (which include an obligation to “provide services to clients in a way that respects diversity” and to make “reasonable adjustments to ensure that disabled clients, employees or managers are not placed at a substantial disadvantage compared to those who are not disabled”; see further IB(2.1)–IB(2.3)). For an analysis of the trend to make provision to this effect in professional rules see Brockman, “The Use of Self-Regulation to Curb Discrimination and Sexual Harassment in the Legal Profession” (1997) 35 Osgoode Hall LJ 209. 187 See ACT, Glossary; NSW, r 42.1 Glossary; Qld, r 42.1 Glossary; SA, r 42.1 Glossary; Vic, r 42.1 Glossary; WA, r 17(1). Equivalent provision appears in the barristers’ rules in some jurisdictions: SA, r 119; WA, r 119. 188 Re Vincenti (1989) 554 A 2d 470 at 474. 189 See, for example, Principe v Assay Partners (1992) 154 Misc 2d 702 (lawyer who made multiple sexist and degrading remarks about the opposing lawyer during depositions); Re Piatt (1999) 724 A 2d 1210 (lawyer who made unwanted sexual advances and lewd comments to two female clients); Re Tenenbaum (2005) 880 A 2d 1025 (lawyer who sexually harassed clients and employees over a period of five to ten years); Iowa Supreme Court Attorney Disciplinary Board v Moothart (2015) 860 NW 2d 598 (lawyer who, inter alia, made sexual comments and suggestions to a client, paid another client to perform a sex act, and grabbed the breast of law office employee). 190 See, for example, Legal Profession Complaints Committee v in de Braekt [2013] WASC 124 (lawyer who made racially tinged offensive remarks directed at a court security supervisor found to have committed professional misconduct); Legal Practitioners Conduct Board v Kudra [2014] SASCFC 37 (lawyer found to have engaged in misconduct as a result of touching a female client’s breasts, ostensibly to determine whether there was a reasonable chance of her succeeding in a medical negligence claim relating to breast enlargement surgery); PLP v McGarvie [2014] VSCA 253 (lawyer who repeatedly sexually harassed a female employee found guilty of professional misconduct).

[21.180]

21 Relations with the Profession and Third Parties

715

that lawyers who receive a document – whether by post, by fax or electronically – sent by opposing lawyers by mistake should avoid reading the document and immediately return it to the sender: see [11.290], [11.295]. Attempts to argue in these circumstances that privilege has been waived infrequently meet with success (see [11.275]), and it is also open to the court, upon an application for this purpose, to disqualify a recipient who has read the document sent by mistake: see [11.280]. It is likewise unprofessional, as well as potentially a breach of contract or breach of confidence, to disclose other communications that the parties have agreed are to remain confidential. Recording conversations

[21.180] It is arguably unprofessional and discourteous, and also an invasion of privacy, for a lawyer to audio or video record a conversation, with another lawyer (or her or his employee) without the latter’s consent,191 even without a legal impediment to doing so. A lawyer who wishes to record a conversation should request and secure prior consent from the other lawyer (or her or his employee). Informed by the same concerns, a lawyer should avoid broadcasting to any other person a telephone conversation with another lawyer, whether by speaker phone or otherwise, without first identifying each person to whom the conversation is broadcast and securing prior consent.192 Yet no Australian professional rule explicitly addresses the above scenario. In a 1974 opinion the American Bar Association advised that “no lawyer should record any conversation whether by tapes or other electronic device without the consent or prior knowledge of all parties to the conversation”.193 In 2001, though, it reversed its position, viewing undisclosed taping as not unethical per se unless prohibited by the law of the relevant jurisdiction.194 This divergence of opinion is reflected in the case law, some of which supports the rationale underscoring the earlier opinion195 – that secret recording is dishonest, an underhand practice designed to ensnare an opponent, and thus a departure from the standards of fairness and candour that characterise the traditions of professionalism – whereas

191 Can CPC, r 7.2-3 (“A lawyer must not use any device to record a conversation between the lawyer and a client or another lawyer, even if lawful, without first informing the other person of the intention to do so”); NZ, r 10.8; Dal Pont, “On the Record” (2012) 86 (Aug) LIJ 72. 192 Shirvington, “Best Practice: No Rule No Problem?” (July 2002) 40 LSJ 38. 193 ABA, Formal Op 337 (10 August 1974) (although the opinion expressly exempts prosecuting attorneys). 194 ABA, Ethics Op 01-422, Electronic Recordings by Lawyers Without the Knowledge of All Participants (24 June 2001). 195 See, for example, Mississippi Bar v Attorney ST (1993) 621 So 2d 229 at 234 per Sullivan J, dissenting (“an absolute ban on surreptitious taping adequately speaks to all public concerns of all parties and should be put in place and rigorously enforced”).

716

Lawyers’ Professional Responsibility

[21.185]

other courts remain decidely uncomfortable with a blanket prohibition.196 It has generated varying responses by State Bar Associations too, as well as debate among commentators.197 Those who see secret recording as not unethical maintain that, as lawyers are not ordinarily bound to keep the confidences of third parties, absent some express or implicit assurance to the contrary, “a person who speaks to an attorney with whom he has no attorney–client relationship must realize that his statements are subject to publication”.198 There is also the contradiction inherent in prohibiting covert audio-recording of conversations but allowing other (written) records to be made of the same event. “[O]ne would think we would welcome a means of perfecting the lawyer’s memory of what his communicant has said”,199 an American judge has remarked. At the same time, even opponents of blanket prohibition acknowledge that secret recording can, in some instances, be unethical, such as where it is used to blackmail or to otherwise secure an unfair advantage.200 And there is no dissent from the view that a false response to an inquiry as to whether a conversation is being recorded is unethical.201 Ultimately, as suggested at the outset of this paragraph, the “safe” ethical position is to avoid secret recordings. Second opinions and referrals

[21.185] A lawyer may confer with or give a second opinion to the client of another lawyer. However, unless the client instructs otherwise, in such a case it is ordinarily professional courtesy to notify the first lawyer beforehand.202 This practice aims, moreover, to prevent an existing lawyer–client professional relationship being undermined, including by an attempt to poach clients. Consisent with the latter, a lawyer who has been referred work from another lawyer should not, as a matter of professional courtesy, seek to take advantage of the referral to enlarge the scope of the retainer. Threats to seek personal costs order

[21.190] A lawyer may, by order of the court, be made personally liable for the costs of a matter where, in the circumstances, the costs have been incurred because 196 See, for example, Netterville v Mississippi State Bar (1981) 397 So 2d 878; Attorney M v Mississippi Bar (1992) 621 So 2d 220. 197 See, for example, the discussion in Vana, “Attorney Private Eyes: Ethical Implications of a Private Attorney’s Decision to Surreptitiously Record Conversations” [2003] U Ill L Rev 1605 (who ultimately favours the ABA’s 1974 opinion). 198 Attorney M v Mississippi Bar (1992) 621 So 2d 220 at 224 per McRae J. Contra at 226 per Hawkins J dissenting. 199 Attorney M v Mississippi Bar (1992) 621 So 2d 220 at 228 per Robertson J. 200 See, for example, Attorney M v Mississippi Bar (1992) 621 So 2d 220 at 224 per McRae J. 201 See, for example, Mississippi Bar v Attorney ST (1993) 621 So 2d 229. 202 See Shirvington, “Critical Colleagues, Second Opinions and Solicitor Swapping” (2001) 39 (July) LSJ 45. Cf Sing, r 7(4): “A legal practitioner (A) may give a second opinion to a client of another legal practitioner (B), with or without the knowledge of B, but must not improperly seek to influence the client to terminate the relationship between the client and B”.

[21.190]

21 Relations with the Profession and Third Parties

717

of the lawyer’s breach of duty to the court.203 This raises the prospect of lawyer A threatening to seek a personal costs order against lawyer B as a trial tactic designed to discourage lawyer B from proceeding with the matter. Courts are alert to abuses of process of this kind, as explained by a New South Wales judge:204 Courts should guard themselves against stratagems which include collateral attacks on the legal representatives of the opposing party, whether based on claims for costs, on professional discipline, on supposed conflicts of interest or otherwise. Overbearing the opponent’s legal representatives by threats against their personal positions is outside the range of legitimate strategies for conducting litigation. Attacks on bases like that should be made with whole-hearted sincerity and on solid grounds or the subjects should not be raised at all. If anything is to be done, it should be done by making an application to the Court, not by uttering threats.

An indemnity costs order is likely to be made against a person who, in this context, makes an allegation that proves to be unfounded.205 But not every threat to pursue a personal costs order is illegitimate; in the circumstances, the pressure may not be improper, and it may be justifiable to remind the opposing lawyer of the responsibility to ensure that costs are not being improperly incurred.206 With the foregoing in mind, the New South Wales Law Society issued a statement relating to threats to seek costs orders against lawyers on the ground that the cause has no reasonable prospects of success under that jurisdiction’s legal profession legislation207 (since implemented by statute also in the Australian Capital Territory).208 The statement says that these threats should not be made unless each of the following is satisfied:209 1. The lawyer making the threat has material available that would clearly suggest that the proceedings have little merit and are likely to fail. 2. The lawyer has specific client instructions to make the threat after the client has been made aware of its seriousness and the possible consequences for the client if the allegation is not made out (for instance, an indemnity costs order against the client).210 3. The lawyer, as a matter of professional courtesy, makes known to the opposing lawyer the evidentiary basis for having formed the view referred to in (1) above. 203 See generally Dal Pont, Law of Costs (3rd ed, LexisNexis Butterworths, 2013), Ch 23; Pincus and Haller, “Wasted Costs Orders Against Lawyers in Australia” (2005) 79 ALJ 497. 204 De Groot v Nominal Defendant [2005] NSWCA 61 at [253] per Bryson JA. See also Redowood Pty Ltd v Goldstein Technology Pty Ltd [2004] NSWSC 515 at [35] per Austin J; Lemoto v Able Technical Pty Ltd (2005) 63 NSWLR 300 at [194] per McColl JA, with whom Hodgson and Ipp JJA concurred. 205 See, for example, Redowood Pty Ltd v Goldstein Technology Pty Ltd [2004] NSWSC 515 at [32]–[35] per Austin J. 206 See, for example, Nuclear Utility Technology and Environmental Corporation Inc v Australian Broadcasting Corporation [2009] NSWSC 78 at [62]–[77] per McCallum J. 207 Legal Profession Uniform Law Application Act 2014 (NSW), Sch 2, cl 5 (formerly NSW 2004, s 348), as to which see [17.265]. 208 Civil Law (Wrongs) Act 2002 (ACT), s 189. 209 The statement is extracted at (2004) 42 (Sept) LSJ 44. 210 See, for example, Redowood Pty Ltd v Goldstein Technology Pty Ltd [2004] NSWSC 515.

718

Lawyers’ Professional Responsibility

[21.195]

Complaining in a professional manner

[21.195] A lawyer concerned about the behaviour of another lawyer, and on reasonable grounds believes it to be professionally inappropriate, should bring the matter to the attention of the relevant professional or regulatory body, which may be able to resolve it.211 Where this course proves fruitless or is otherwise inappropriate, a formal complaint may be made within the processes established by statute for this purpose (discussed in Ch 24). In any event, it is often courteous, prior to contacting a professional or regulatory body or lodging a complaint, to correspond with the lawyer in question, detailing the concerns and inviting a response.212 But giving notice may be inapt in circumstances where lawyers are required to notify suspected irregularities (see [9.55], [24.15]), because notifying the erring lawyer may enable a “cover-up”. The Australian Solicitors’ Conduct Rules add that a lawyer must not make an allegation of misconduct against another lawyer unless it is made bona fide in the belief, on reasonable grounds, that available material by which the allegation could be supported provides a proper basis for it.213 The rule in question is consequent upon more than one occasion where a lawyer has been disciplined for making allegations of impropriety against one or more opposing lawyers without reasonable grounds.214 The foregoing aligns with lawyers’ duty not to make allegations of criminality, fraud or other serious misconduct in the course of representing clients without reasonable foundation: see [17.230]. Suing another lawyer

[21.200] That the professional rules require lawyers to treat one another with utmost courtesy and fairness can be seen as supporting the proposition that a lawyer instructed to sue another lawyer should, as a general rule, give to the latter notice of an intention to commence those proceedings rather than simply serving the initiating process.215 In addition to being within the spirit of the rules, such a practice can foster attempts by professional indemnity insurers to reduce the number and costs of claims against lawyers by securing their mediated resolution before costs escalate.216 Taking advantage of an opponent’s mistake

[21.205] Beyond co-operating with an opponent for the purposes of the efficient conduct of a matter, a lawyer is not bound to assist an adversary. In fact, to assist 211 See Shirvington, “Appropriate Pursuit of a Grievance” (2001) 39 (Nov) LSJ 46. 212 See “Complaining in a Professional Manner” (1993) 31 (Nov) LSJ 73. 213 ACT, r 32.1; NSW, r 32.1; Qld, r 32.1; SA, r 32.1; Vic, r 32.1. 214 See, for example, McLaren v Legal Practitioners Disciplinary Tribunal (2010) 26 NTLR 45; Legal Profession Complaints Committee v in de Braekt (2011) 75 SR (WA) 336. See further Dal Pont, “Pointing the Finger” (2011) 85 (Aug) LIJ 82. 215 Cf HK, principle 5.01, cmt [3] (“A solicitor who is instructed to bring an action against his prospective client’s former solicitor should, provided he is competent and able, accept those instructions. However, he should not accept instructions to sue a colleague with whom or with any of whose partners or solicitors he is on friendly terms; he should instead explain the situation and advise the prospective client to seek advice elsewhere”). 216 See Morgenthaler, “Suing Other Solicitors Without Notice” (1997) 19 (Aug) LSB (SA) 7.

[21.210]

21 Relations with the Profession and Third Parties

719

may constitute a dereliction of the lawyer’s duty to her or his own client. For instance, if a lawyer knows of a witness who would assist the adversary and injure her or his own client, to inform the adversary would be to betray the client.217 The adversary system entrusts to individual lawyers the responsibility to protect and further the interests of their own clients. It may, moreover, demonstrate a lack of respect to lecture another lawyer on the latter’s conduct of the matter.218 The foregoing leads many lawyers to maximise the advantage that may stem from an opponent’s mistake. But it should not be assumed that (small) victories of this kind never exact a price. On occasions where an advantage to the client is no more than temporary, and has caused delay and increased cost in the matter without altering its outcome, the court may visit the lawyer with a personal costs order for pursuing an abuse of process.219 Also, a lawyer who seeks to take advantage of an opponent’s mistake in disclosing a privileged document may, where it should have been obvious that the document was sent by mistake, find herself or himself disqualified from acting in the matter: see [11.280]. It may even prove disadvantageous to the lawyer’s client, who may be drawn into further proceedings to rectify the error.220

[21.210] Taking advantage of an opponent’s mistake, especially one fostered by the lawyer, may, moreover, attract professional disciplinary consequences, as appears from the ruling in Chamberlain v Law Society of the Australian Capital Territory.221 The court in Chamberlain warned that, although the line between tough but legitimate tactics in an adversary system and professional misconduct may be difficult to draw, lawyers should not assume that taking advantage of an opponent’s mistake invariably falls into the former category. It involved a $255,579.20 income tax assessment issued by the Commissioner of Taxation to the appellant, a lawyer. Following the taxpayer’s objection, the Deputy Commissioner issued a writ that claimed, in error, only $25,557.92. The appellant instructed an employee to have a consent judgment entered against him for this lesser amount, which the Commissioner’s officers duly signed and filed, unaware of the error. In so doing the appellant secured an estoppel raised by the consent judgment.222 The Australian Capital Territory Supreme Court found the appellant guilty of 217 Re Cooke (1889) 5 TLR 407 at 408 per Lord Esher MR; New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 205 per Kirby P. But see [18.50]–[18.70] with respect to prosecutors’ duties in this respect. 218 See, for example, Towers v Atkins (No 2) [2015] FCCA 3537 (the statement in correspondence between lawyers that “[w]e presume that you have read section 65DAE of the Family Law Act” found to be discourteous and impolite). 219 Green v Schneller [2003] NSWSC 202 at [31]–[34] per Simpson J (who said that lawyers who “keep to themselves an obvious and deadly point … run the risk that costs will not be awarded in their favour”); Hertsmere Primary Care Trust v Rabinda-Anandh [2005] 3 All ER 274 at [10], [11] per Lightman J. 220 See, for example, Tamlura NV v CMS Cameron McKenna [2009] EWHC 538 (Ch) at [168] per Mann J. 221 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148. 222 The Commissioner unsuccessfully sought, in two separate sets of proceedings, orders requiring the appellant to pay the balance of the income tax owed: Chamberlain v Deputy Commissioner of Taxation (1988) 164 CLR 502 (res judicata); Chamberlain v Deputy Commissioner of Taxation (1991) 28 FCR 21 (issue estoppel).

720

Lawyers’ Professional Responsibility

[21.215]

professional misconduct and ordered his suspension from practice for six months. The Full Federal Court (by majority) dismissed the appeal but (by a different majority) substituted a reprimand as the appropriate sanction. Black CJ noted that, while it would be improper to induce an opponent to make a mistake by means of a deliberate misrepresentation, it may, in different circumstances, be acceptable to take advantage of an opponent’s mistake.223 But his Honour considered that to foster or induce a mistake that may involve the opposing client in unnecessary expense or delay may be misalign with a lawyer’s duties to the profession, the community and the court, reasoning that:224 [Such conduct] would be detrimental to a relationship characterised by courtesy and fairness that ought to exist between members of the legal profession. A relationship of that nature … has as its justification not merely social and ethical mores; it has an additional justification referable to the public interest, in that courtesy and fairness contribute materially to the effective and expeditious performance of legal work … Another vice of conduct that induces or fosters a mistake is that it may easily involve, or in practical terms be close to, misrepresentation. In this way such conduct is, of its nature, liable to be in tension with the overriding duty of honesty that practitioners owe to the courts, their clients and to their fellow practitioners.

Lockhart J added that, once served with the writ, the appellant could have informed the Commissioner of the mistake, paid the Commissioner the amount claimed in accordance with the endorsement to the writ, or simply suffered default judgment.225 Although his Honour identified the first option as the proper course, he considered that pursuing either of the remaining options would not have been unethical.226 What marked the appellant’s behaviour as misconduct was his active and elaborate role in procuring the entry of the consent judgment. In this regard, Lockhart J noted that the appellant:227 … obtained an advantage by more than mere silence. He deliberately set in train the events and documents which … led to the entry of the consent judgment. He knew the Deputy Commissioner had made a large mistake and took unfair advantage of it for his own benefit.

[21.215] Chamberlain could be viewed as a decision at the time peculiar to the jurisdiction from which it originated, in that Black CJ referred to, and couched some statements of principle in terms of, the now twice superseded Australian Capital Territory Guide to Professional Conduct and Etiquette, para 20.2, which read: If a practitioner observes that another practitioner is making or is likely to make a mistake or oversight which may involve the other practitioner’s client in unnecessary expense or delay, the practitioner should not do or say anything to induce or foster that mistake or oversight and should, except where so doing might prejudice his or her own client, draw the attention of the other practitioner to that mistake or oversight. 223 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 154. 224 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 155. 225 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 163–164. 226 See also Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 170–171 per Jenkinson J, at 172–173 per Whitlam J. 227 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 166. See also at 170–171 per Jenkinson J, at 172–173 per Whitlam J.

[21.215]

21 Relations with the Profession and Third Parties

721

The Australian Solicitors’ Conduct Rules, which have translated to the Australian Capital Territory, now prohibit a lawyer from taking “unfair advantage of the obvious error of another [lawyer] or other person, if to do so would obtain for a client a benefit which has no supportable foundation in law or fact”.228 In any event, the decision in Chamberlain has broader implications, as it was based on the lawyer’s duties to the profession, the community and the court, which duties are reflected by these rules rather than derived from them.229 A majority of the judges, in any case, did not refer to the rule in question.230 And if, as Black CJ observed, inducing or fostering a mistake involves in substance a misrepresentation, the rules prohibit this conduct:231 see [21.155]. They add that “[a] [lawyer] does not make a false statement to the opponent simply by failing to correct an error on any matter stated to the [lawyer] by the opponent”232 is not inconsistent with the judgment in Chamberlain. Rather, it appears an implicit recognition that the active inducement or fostering of such an error may amount to a false statement. The following general points can be gleaned from the judgments in Chamberlain. First, taking advantage of an opponent’s mistake may, in some circumstances, be unprofessional.233 It is the active fostering or inducement of that mistake that appears to be the main hallmark of unprofessional conduct.234 Second, that the opponent is well resourced, knowledgeable and a frequent litigant does not justify a lawyer fostering or inducing the perpetuation of the mistake.235 Third, where a 228 ACT, r 30.1; NSW, r 30.1; Qld, r 30.1; SA, r 30.1; Vic, r 30.1. See also Tas, para 8; WA, r 23; Can CPC, r 7.2-2 (“A lawyer must avoid sharp practice and must not take advantage of or act without fair warning upon slips, irregularities or mistakes on the part of other lawyers not going to the merits or involving the sacrifice of a client’s rights”). 229 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 155 per Black CJ. 230 Per Jenkinson, Whitlam and Beazley JJ. 231 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 155 per Black CJ. 232 See ACT, r 22.3; NSW, r 22.3; Qld, r 22.3; SA, r 22.3; Vic, r 22.3; WA, r 37(3) (unless “by the practitioner’s silence the opponent might reasonably infer that the practitioner is affirming the statement”). Equivalent provision is made in the barristers’ rules: ACT, r 53; NSW, r 51; NT, r 53; Qld, r 50; SA, r 50; Vic, r 51; WA, r 50. 233 See Emirates Park Pty Ltd v Magic Millions Sales Pty Ltd [2002] FCA 1039 at [3] per Kiefel J (who remarked, in a case where the original statement of claim pleaded the wrong legislation, that “professional courtesy and the interest of both parties” required the error to have been brought to the applicant’s attention by the respondent’s lawyers). 234 Cf Ernst & Young v Butte Mining Co [1996] 1 WLR 1605 at 1622 per Robert Walker J (who said that “even in the most hostile litigation (indeed, especially in the most hostile litigation) solicitors must be scrupulously fair and not take unfair advantage of obvious mistakes” of their opponent’s legal representatives, especially “where the solicitor in question has been a major contributing cause of the mistake”). 235 See Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 164 per Lockhart J, at 169 per Jenkinson J. Lawyers sometimes adopt the attitude that well-resourced, legally knowledgeable and frequent litigants should bear the consequences of their own mistakes. The prevailing attitude appears to be that any advantage, particularly over a governmental agency or large corporation, must be exploited to the client’s benefit. The appellant in Chamberlain well illustrates this attitude. At first instance, Miles CJ noted that the appellant regarded himself as guilty of no wrongdoing at all, not even any error of judgment, and that he saw the error as being entirely on the part of the Deputy Commissioner: Law Society of the Australian Capital Territory v Chamberlain (1993) 116 ACTR 1 at 11.

722

Lawyers’ Professional Responsibility

[21.220]

mistake involves the opposing client in unnecessary expense or delay, the proper course is to inform the opposing lawyer of the mistake if doing so will not prejudice one’s own client. Although this may affront some lawyers’ sense of duty to a client (or the satisfaction of outwitting an opponent), it highlights that, as professionals and participants in the administration of justice, lawyers have responsibilities that extend beyond their client.

PROFESSIONAL DUTIES IN COMMUNICATING WITH THIRD PARTIES The need for professionalism in communications

[21.220] Lawyers should maintain professionalism in all communications. They should, for instance, not use insulting, provocative or annoying language, or acrimonious or offensive correspondence;236 this is unbecoming, discourteous and may merit professional sanction. And as noted at [21.170], they should avoid discriminatory, harassing or vilifying communications. Yet it cannot be said, without qualification, that lawyers must always refrain from communications, which may otherwise be justified in the tone and language, merely because the recipient may find those discourteous, provocative or even offensive.237 Communications from lawyers should be frank, clear and not designed to confuse. The intended audience of the communication will determine its form, nature and complexity. For instance, for communications to laypersons, lawyers should make a conscious effort to avoid forms and expressions those persons will likely be unable to understand or appreciate.238 But the fact that the recipient is legally trained does not justify communications that are designed to bewilder or dim understanding. Consistent with the duty to act honestly and in good faith, a lawyer must not, in any communication with another person, represent anything as truth that he or she knows, or reasonably believes, is untrue.239 For example, he or she must not, in any 236 Legal Services Commissioner v Lynch [2015] VCAT 772 at [14]. 237 See, for example, Lander v Council of the Law Society of the Australian Capital Territory (2009) 231 FLR 399 (where Higgins CJ, Gray and Refshauge JJ upset a tribunal finding that the appellant had been engaged in unsatisfactory professional conduct in forcefully criticising the conduct of public officials in correspondence, remarking that “[i]f the conduct of public officials adversely impacting on a client is considered on reasonable grounds to be ‘rude, unhelpful’ or any similar characterisation, it is no breach of the obligation of courtesy to point that out to those in authority, even though those criticised, may consider the criticism unwarranted and offensive”: at [36]); McDonald v Legal Services Commissioner [2015] VSC 237. 238 See, for example, Council of the Law Institute of Victoria, Letters of Demand Guidelines (15 November 2007) (available at http://www.liv.asn.au) (which state, inter alia, that: (1) if the recipient of the letter of demand is unlikely to have any legal background or facility in English, the language should be kept simple; and (2) where the lawyer believes the recipient of the letter of demand may not speak English fluently, the lawyer may wish to refer in the letter to availability of interpreting services). 239 For this purpose, though, a lawyer “does not have to have a subjective belief in the complete accuracy of every assertion they make on a matter of law either in submissions or in correspondence engaged in on behalf of their client”, as in the ordinary course “it may suffice if the practitioner considers that a relevant assertion on a matter of law is something which is reasonably open on the current state of the law”: Provident Capital Ltd v Anderson (No 3) [2013] NSWSC 705 at [36] per Beech-Jones J.

[21.225]

21 Relations with the Profession and Third Parties

723

communication on a client’s behalf, demand the payment, and any costs, to the lawyer in the absence of any existing liability owed by the person to the lawyer’s client.240 Also, the professional rules generally require lawyers to avoid making statements calculated to mislead or intimidate a third party or that grossly exceed the legitimate assertion of a client’s entitlements.241 Where the rules are breached, aside from any disciplinary sanction, there is the prospect that any costs wasted as a result will be ordered against the lawyer personally.242 Threatening criminal proceedings or media disclosure

[21.225] It is unethical to threaten the institution of criminal proceedings against a person in default of satisfying a civil liability to the lawyer’s client.243 It would be adopting an unduly restrictive approach to limit the proscription to cases where the liability has been admitted by the debtor or has been the subject of a judgment by a court – the proscription extends to a claimed liability.244 As it may, in any particular case, be difficult to delineate the precise point at which any application of pressure

240 See, for example, Victorian Bar Inc v Himmelhoch [1999] VSC 222 (barrister suspended from practice for harassing a person for the repayment of a fictitious debt); Legal Profession Complaints Committee v Amsden [2014] WASAT 57 (lawyer’s demand, in his own capacity, of an amount where there was no liability to pay held to amount to professional misconduct; the tribunal noted that “the case of misconduct is arguably all the stronger when it is the practitioner’s own position which he or she seeks to advance by such an unfair and improper demand”: at [46]). 241 ACT, r 34.1.1; NSW, r 34.1.1; NT, r 26.2; Qld, r 34.1.1; SA, r 34.1.1; Vic, r 34.1.1. See, for example, Law Institute of Victoria, Letters of Demand Guidelines (15 October 2015) (available at http://www.liv.asn.au) (which state, inter alia, that: (1) language implying that it is inevitable that judgment will be entered in the client’s favour if proceedings are issued must be avoided; (2) the practice of forwarding with a letter of demand an unissued complaint application, statement of claim or other initiating process can mislead and should be avoided; and (3) a letter of demand should therefore not threaten the institution of legal proceedings if legal costs are not paid within a particular time); Australian Competition and Consumer Commission v Sampson [2011] FCA 1165 (regarding misleading and deceptive statements in letters of demand, discussed at [21.135]); Dal Pont, “Being Demanding?” (2014) 88 (Oct) LIJ 70. 242 See, for example, Provident Capital Ltd v Anderson (No 3) [2013] NSWSC 705 at [37]–[46] per Beech-Jones J. 243 ACT, r 34.1.2; NSW, r 34.1.2; NT, r 26.3; Qld, r 34.1.2; SA, r 34.1.2; Vic, r 34.1.2; WA EPG, cl 3.3. Various judicial statements decree it to be professional misconduct for a lawyer to seek to secure an advantage over an opponent in this fashion: see Matter of Swanwick (1883) 1 QLJR 117; Matter of Chubb (1887) 3 QLJR 35 (where the solicitor described the default as “a serious matter” that rendered the defaulter “liable to be punished under the Insolvency Act”); New South Wales Bar Association v Maddocks (unreported, CA(NSW), Kirby P, Samuels and McHugh JJA, 23 August 1988); Legal Services Commissioner v Sing [2007] 2 Qd R 158 (“Reasonable people would not think members of the legal profession would, as such, enjoy any particular influence or clout with the police service favourable to the launching or advancement of criminal prosecutions”: at [20] per de Jersey CJ); Legal Practitioners Complaints Committee v Segler (2009) 63 SR (WA) 43 (involving a threat, completely without foundation, to refer a matter to the Director of Public Prosecutions with a recommendation for an indictment for perjury). 244 See Shirvington, “Obeying the Spirit and Not Just the (Black) Letter of the Law” (2000) 38 (June) LSJ 36.

724

Lawyers’ Professional Responsibility

[21.230]

becomes improper, lawyers have been exhorted to be “extremely careful before resorting to any even arguably threatening conduct” and “to err on the side of caution”.245 But there is arguably no ethical objection to a lawyer, instead of threatening criminal proceedings as an alternative to civil redress, indicating that the possible commission of a crime (such as if goods are not returned) will be referred to the appropriate authorities. Nor is it necessarily inappropriate to threaten to refer the non-payment of a debt to the media, although this technique should not be used to draw publicity to conduct unrelated to the redress sought.246 Author’s name on letters

[21.230] It is important for the public and other lawyers dealing with a principal or employee of a firm to know the name and status of the person with whom they are dealing.247 Hence, written communications with clients or third parties should identify its author by name and status. It is also important to ensure that the firm or business name under which the lawyer practises is legible in all correspondence from the practice: see [20.75]–[20.85]. Communications with a client of another lawyer (“no-contact rule”) No-contact rule and its rationale

[21.235] Lawyers must not communicate with someone they know is represented by another lawyer in the matter without the latter’s consent (the “no-contact rule”).248 This proscription applies to both oral and written communications, as well as attempts to contact an opponent via social media sites249 (though the latter does not preclude a lawyer passively reviewing publicly available content of those sites).250 The no-contact rule aims to prevent a lawyer from circumventing the protection that legal representation provides to another person, most commonly the 245 Legal Services Commissioner v Sing [2007] 2 Qd R 158 at [30] per de Jersey CJ. 246 Shirvington, “Letters of Demand – Just How Demanding Can You Be?” (1996) 34 (Nov) LSJ 28. 247 See Shirvington, “Communications: a Perennial Problem (Part 1)” (1995) 33 (May) LSJ 20. 248 Jones v Jones (1847) 5 Notes of Cases in the Ecclesiastical and Maritime Courts 134 at 140 (“Any communications which the solicitor of one party has with a party opposed to him in the cause is extremely unprofessional”). 249 See Law Institute of Victoria, Guidelines on the Ethical Use of Social Media (29 November 2012) (branding it as unethical for a lawyer to: (1) make a Facebook “friend” request to another lawyer’s client or to make such a request to another lawyer’s client in order to gain access to their Facebook page; or (2) accept a “friend” request from a person whom a lawyer knows to be another lawyer’s client). 250 See Clemency, “‘Friending’, ‘Following’, and ‘Digging’ up Evidentiary Dirt: The Ethical Implications of Investigating Information on Social Media Websites” (2011) 43 Ariz St LJ 1021; Law Institute of Victoria, Ethics Guidelines, “Communicating with Another Solicitor’s Client” (17 December 2015) (adding that “the solicitor must not make any comments via the other solicitor’s client’s ‘Profile,’ ‘Tweet’ or site as this may be regarded as communicating with another solicitor’s client” and that if the other solicitor’s client’s social networking site is blocked from public viewing and permission is needed in order to view it, “a solicitor should not associate with the other solicitor’s client by requesting permission to view the other solicitor’s client’s ‘Profile,’ ‘Tweet’ or site”). Cf Keeling, Weerasingha-Cote and Schnapper-Casteras, “Neither Friend nor Follower:

[21.240]

21 Relations with the Profession and Third Parties

725

opponent but extending to a represented co-party or non-party fact witness as well as a non-client so represented prior to any suit being filed.251 Otherwise, the lawyer may, via her or his legal knowledge and position, secure damaging admissions from that other person, access privileged communications (see Ch 11) or undermine that person’s trust in her or his lawyer.252 Moreover, a dispute as to the contents of such a communication may require the lawyer to become a witness: see [17.45]. These concerns, albeit weightiest in contentious matters, apply in non-contentious matters too. Some say that the rule can operate contrary to the interests of an opposing client, whose lawyer may thereby keep the client “in the dark” concerning the progress of the matter and the client’s chances of success.253 The latter issue is now partly addressed by costs sanctions imposed on lawyers who pursue cases that lack reasonable prospects of success: see [17.260]–[17.275]. In any case, the more general argument has not proven so persuasive as to overcome the concerns to which the rule is directed. It has been noted, in this regard, that the fact that a lawyer “thinks that other side is not conducting the case to their client’s best advantage offers no excuse for the [lawyer] contacting the other client direct and telling him so. Litigation could not proceed if that was the situation”.254 Application of the no-contact rule to agents of a lawyer

[21.240] The no-contact rule extends to employees or agents of the lawyer.255 The former South Australian professional rules, for instance, prohibited a lawyer from instructing an agent to communicate directly with another represented party with a view to obtaining admissions contrary to that party’s case or to do anything that would be improper for the lawyer to do.256 Otherwise the prohibition would be one of form over substance. This does not, however, prevent lawyers from Ethical Boundaries on the Lawyer’s Use of Social Media” (2014) 24 Cornell J Law & Public Pol’y 145 (arguing that informal discovery of social media accounts should not be confined to publicly available information but should be constrained only by outright fraud and deception). 251 Re Margetson & Jones [1897] 2 Ch 314 at 318–319 per Kekewich J; Restatement, §99(1); US, r 4.2, cmt [3] (“This rule applies to communications with any person, whether or not a party to a formal adjudicative proceeding, contract or negotiation, who is represented by counsel concerning the matter to which the communication relates”). 252 Re Pursley [1995] 4 LPDR 5 at 27 (a client represented by a solicitor “should not be exposed to the confusion which must necessarily arise where there is interference by an opposing solicitor between the client and his own solicitor”); Cohen, “Beyond the No-Contact Rule: Ex Parte Contact by Lawyers with Nonclients” (2013) 87 Tulane L Rev 1197 at 1204 (the rule is directed to “deter[ring] collusion against the absent lawyer representing the contacted person”). 253 See Leubsdorf, “Communicating with Another Lawyer’s Client: The Lawyer’s Veto and the Client’s Interests” (1979) 127 U Pa L Rev 683 at 689–693 (and who suggests that the rule should be changed so that a lawyer may contact represented non-client by letter, with a contemporaneous copy to opposing lawyer, or in person, after reasonable notice to the opposing lawyer of the intent to contact). 254 Re Pursley [1995] 4 LPDR 5 at 24. 255 See, for example, Council of the Law Society of New South Wales v Byrnes [2016] NSWCATOD 64 (communication with opposing client via the respondent solicitor’s office manager held to be unprofessional, although no penalty imposed because it was driven by, inter alia, the opposing solicitor’s failure to respond to telephone communications). 256 Rules of Professional Conduct and Practice (SA), r 35.1 (superseded).

726

Lawyers’ Professional Responsibility

[21.245]

instructing agents to make observations of an opposing party aimed at ascertaining evidence that might be tendered at trial.257 No application of the no-contact rule to clients

[21.245] The rationale for the no-contact rule does not justify prohibiting a client from directly approaching another party to the matter. Litigants, after all, have the right to communicate directly with each other, which may in some instances assist in resolving the dispute or at least confining the issues in dispute.258 It follows that a lawyer need not counsel a client against contacting an opponent directly, or inform the other lawyer that a direct approach is proposed (though it may be courteous to do so). In fact, the New Zealand rules envisage that a lawyer may actually recommend that the client make direct contact with any other party.259 A suggestion can be found in a New South Wales case, moreover, that there is nothing unethical per se in assisting a client in drafting correspondence to be sent by the client directly to an opponent should the lawyer believe that direct contact will facilitate the resolution of the dispute.260 However, in this situation the mischief the prohibition is intended to address is not entirely dispelled; the lawyer may “word up” the client for the purpose of, say, casting doubt on the competence of the other lawyer.261 Here the practical distinction between a lawyer instructing an agent to make the communication, which is unprofessional, and the like instruction of the client, seems fine.262 It follows that a lawyer should, as a general principle, avoid “masterminding” client communication with an opponent.263 The balance that is to be struck is stated in the Restatement as follows:264 The lawyer for a client intending to make such a communication may advise the client regarding legal aspects of the communication, such as whether an intended communication is libelous or would otherwise create risk for the client. Prohibiting such advice would unduly restrict the client’s autonomy, the client’s interest in obtaining important legal advice, and the client’s ability to communicate fully with the lawyer. The lawyer may suggest that the client make such a communication but must not assist the client inappropriately to seek confidential information, to invite the nonclient to take action without the advice of counsel, or otherwise to overreach the nonclient.

In similar vein, in 2011 the American Bar Association issued an opinion that “[a] lawyer may advise a client of that right and may assist the client regarding the 257 See, for example, Hill v Shell Oil Co (2002) 209 F Supp 2d 876. 258 Perfection Fresh Australia Pty Ltd v Melbourne Market Authority (No 2) [2013] VSC 342 at [184] per Elliott J. 259 NZ, r 10.2.4. 260 Re IPM Group Pty Ltd [2015] NSWSC 240 at [61] per Black J. 261 Cf Nauru Phosphate Royalties Trust v Business Australia Capital Mortgage Pty Ltd (in liq) [2008] NSWSC 833, discussed at [21.260]. 262 See Kleiman and Hofstein, “Ethical Concerns Relating to Communications with Represented Parties” (1999) 33 Fam LQ 349. 263 See, for example, Trumbull County Bar Association v Makridis (1996) NE 2d 31 (lawyer who suggested that a client make direct telephone contact with an opponent, and during the telephone call also spoke to the opponent, was reprimanded). 264 Restatement, §99(2), cmt k.

[21.255]

21 Relations with the Profession and Third Parties

727

substance of any proposed communication”, but warned that “[s]uch assistance may not, however, result in overreaching by the lawyer”.265 By way of commentary, the opinion cites, as prime examples of overreaching, “assisting the client in securing from the represented person an enforceable obligation, disclosure of confidential information, or admissions against interest without the opportunity to seek the advice of counsel”. To prevent overreaching, a lawyer must, it adds, “advise her client to encourage the other party to consult with counsel before entering into obligations, making admissions or disclosing confidential information”. Also, “[i]f counsel has drafted a proposed agreement for the client to deliver to her represented adversary for execution, counsel should include in such agreement conspicuous language on the signature page that warns the other party to consult with his lawyer before signing the agreement”. Application of the no-contact rule to lawyer-litigants

[21.250] As the no-contact rule does not extend to clients (see [21.245]), the issue arises as to whether a lawyer who is a party in a matter can directly contact the client represented by the opposing lawyer.266 If the prevailing concern is a lawyer’s ability to influence the other party, there is arguably a basis to apply the no-contact rule to lawyer-litigants, especially those who are self-represented. As lawyers cannot, it is reasoned, divorce their professional from their private selves, they should be deprived of laypersons’ right to directly contact an opposing client.267 The alternative view is that this contact should not be proscribed “as long as the contacting solicitor does so in a personal capacity and does not seek, as a solicitor, to influence the other party”.268 The danger here, and why lawyer-litigants should be wary of pursuing such a course, is that, depending on the nature and experience of the opponent, the lawyer may exhibit that influence simply by reason of being a lawyer, without any conscious action on her or his behalf. Application of the no-contact rule where corporate body is the opposing party

[21.255] The no-contact rule applies where the opponent is a body corporate. The issue concerns which officers of the company the lawyer is prohibited from contacting. An earlier iteration of the New South Wales rules addressed the issue by extending the no-contact rule, in adversarial proceedings, to “any person authorised to make admissions on behalf of the corporation, or to direct the conduct of the proceedings”.269 This approach was similar to that adopted in with 265 American Bar Association, Formal Op 11-461, Advising Clients Regarding Direct Contacts with Represented Persons (4 August 2011). 266 See Langs, “Legal Ethics: The Question of Ex Parte Communications and Pro Se Lawyers under Model Rule 4.2 – Hey, Can We Talk?” (1997) 19 W New Eng L Rev 421. 267 This view enjoys the support of some American case law: see, for example, Sandstrom v Sandstrom (1994) 880 P 2d 103; Runsvold v Idaho State Bar (1996) 925 P 2d 1118. Cf Pinsky v Statewide Grievance Commission (1990) 578 A 2d 1075. 268 Shirvington, “Communications: a Perennial Problem (Part 1)” (1995) 33 (May) LSJ 20 (referring to a 1995 ruling of the Ethics Committee of the Law Society of New South Wales to this effect). 269 Professional Conduct and Practice Rules 1995 (NSW), r 18.2. Cf Shirvington, “Civility and Thoughtfulness Needed in Communications” (2005) 43 (Aug) LSJ 44 (suggesting that the lawyer should not communicate with any of the corporate body’s officers or employees directly).

728

Lawyers’ Professional Responsibility

[21.260]

equivalent rules in the United States270 and Canada,271 as well as guidelines issued by the Law Institute of Victoria.272 It avoids the two extremes, between the blanket rule prohibiting contact with all corporate employees on the one hand, and the “control group test” on the other. The former is too broad, as “[t]he broader the definition of ‘party’ in the interests of fairness to the corporation, the greater the cost in terms of foreclosing vital informal access to facts”.273 The latter is too narrow; defining “party” to include only the most senior management exercising substantial control over the corporation “overlooks the fact that corporate employees other than senior management also can bind the corporation”.274 Application of the no-contact rule to certain indirect communications

[21.260] The absence of direct contact by a lawyer with a represented person does not circumvent the application of the no-contact rule if its spirit has been undermined. Attempts to undermine the opposing client’s trust in her or his own lawyer by indirect means may also infringe the rule. For example, in Nauru Phosphate Royalties Trust v Business Australia Capital Mortgage Pty Ltd (in liq),275 though the defendant’s lawyer made no direct communication with any representative or officer of the plaintiff, he prepared and disseminated a discussion paper with the intention that its content should come to the plaintiff’s attention, in a calculated attempt to induce in the plaintiff suspicion of its legal advisers and of the advice they might give. McDougall J saw it as conduct intended to persuade the plaintiff, without proper advice, to abandon its proceedings, which was “underhanded and wrong”.276

270 US, r 4.2, cmt [2] (which applies the no-contact rule to persons “having a managerial responsibility on behalf of the organisation, and with any other person whose act or omission in connection with that matter may be imputed to the organisation for the purposes of civil or criminal liability or whose statement may constitute an admission on the part of the organisation”). See further Berch and Berch, “May I Have a Word With You? Oops, Have I Already Violated the No-Contact Rule?” (2013) 6 Phoenix L Rev 433. 271 Can CPC, r 7.2-8. 272 Law Institute of Victoria, Ethics Guildelines, “Communicating with Another Solicitor’s Client” (17 December 2015) (“it is not appropriate to speak directly to company personnel who normally have authority to make admissions on the company’s behalf, or to instruct in the conduct of the proceedings, where the company has in-house counsel involved in the matter or external legal representation”; footnote omitted) (available at http://www.liv.asn.au) (replacing the former Victorian Law Institute Ethics Committee, “Guidelines on Interviewing Witnesses” (October 1990), to similar effect). 273 Niesig v Team I (1990) 76 NY 2d 363 at 371. 274 Niesig v Team I (1990) 76 NY 2d 363 at 373. 275 Nauru Phosphate Royalties Trust v Business Australia Capital Mortgage Pty Ltd (in liq) [2008] NSWSC 833. 276 Nauru Phosphate Royalties Trust v Business Australia Capital Mortgage Pty Ltd (in liq) [2008] NSWSC 833 at [35].

[21.265]

21 Relations with the Profession and Third Parties

729

Exceptions to the no-contact rule

[21.265] The no-contact rule does not prohibit a mere inquiry of the opposing party as to whether he or she is represented and, if so, by whom.277 Nor does it restrict contact where the opposing lawyer (not the opposing client) consents to the contact, and the contact occurs within the parameters of that consent.278 In this context, as in others, consent presupposes knowledge by the person whose consent is requested, and reflects a reasoned and considered affirmative act in the face of a situation calling for decision.279 Apart from these circumstances, the professional rules generally only envisage circumventing the no-contact rule where the circumstances are so urgent as to require the lawyer to do so, provided that the communication would not be unfair to the other party.280 There is nonetheless no objection to a lawyer, on being notified by another lawyer that her or his client has retained the latter, to communicate with that client to confirm the client’s instructions and arrange for the orderly transfer of the client’s affairs to the latter.281 The mischief to which the no-contact rule is aimed does not apply to proscribe a lawyer speaking to a represented person who contacts the lawyer with a view to seeking a second opinion.282 Nor does it apply to communications with a represented non-client in the course of social, business or other relationships, or to communications unrelated to the matter involved in the representation.283 Care 277 ACT, r 33.1.3; NSW, r 33.1.3; NT, r 17.38(c); Qld, r 33.1.3; SA, r 33.1.3; Tas, Practice Guideline No 3; Vic, r 33.1.3; WA, r 37(4)(c). Equivalent provision is found in the barristers’ rules: ACT, r 54(c); NSW, r 52(a); NT, r 54(c); Qld, r 51(a); SA, r 51(a); Vic, r 52(a); WA, r 51(a). This assumes greater importance in the context of the “unbundling” of legal services (see [4.95]), under which an opponent may be represented only as to part of the matter: Re Seare (2013) 493 BR 158 at 184. 278 ACT, r 33.1.1; NSW, r 33.1.1; NT, r 17.38(a); Qld, r 33.1.1; SA, r 33.1.1; Tas, Practice Guideline No 3; Vic, r 33.1.1; WA, r 37(4)(a). Equivalent provision is found in the barristers’ rules: ACT, r 54(a); NSW, r 52(b); NT, r 54(a); Qld, r 51(b); SA, r 51(b); Vic, r 52(b); WA, r 51(b). Professional rules generally allow a lawyer to communicate directly with any other party for whom, to the lawyer’s knowledge, another lawyer is currently acting where notice of the lawyer’s intention to communicate with the other party, in default of a reply from the other lawyer, has been given to that lawyer, who has failed, after a reasonable time, to reply: ACT, r 33.1.4; NSW, r 33.1.4; NT, r 23.1; Qld, r 33.1.4; SA, r 33.1.4; Tas, Practice Guideline No 3; Vic r 33.1.4; WA, r 37(4)(d). It has been suggested that it may even be appropriate for the lawyer to contact the relevant professional or regulatory body before taking this action: see Thompson, “Contacting the Client of Another Solicitor” (1997) 17 (May) Proctor 7. 279 Legal Services Commissioner v Murphy [2015] QCAT 381 at [47]–[49] (adding that there is, moreover, no defence in this instance to show apparent consent to contact by the opposing client: at [52]). 280 ACT, r 33.1.2; NSW, r 33.1.2; NT, r 17.38(b); Qld, r 33.1.2; SA, r 33.1.2; Tas, Practice Guideline No 3; Vic, r 33.1.2; WA, r 37(4)(b). See also barristers’ rules: ACT, r 54(b); NSW, r 52(c); NT, r 54(b); Qld, r 51(c); SA, r 51(c); Vic, r 52(c); WA, r 51(c). 281 Although only the Northern Territory and Tasmania explicitly address the point (NT, r 23.2; Tas, Practice Guideline No 3), this qualification to the no-contact rules makes common sense in any case. 282 This is made explicit in US, r 4.2, cmt [4], and now also appears in Law Institute of Victoria, Ethics Guidelines, “Communicating with Another Solicitor’s Client” (17 December 2015) (reflecting “the general principle that a person should have the freedom to instruct a solicitor of choice and allows clients to receive a second opinion about legal issues”). 283 Restatement, §99(1), cmt d.

730

Lawyers’ Professional Responsibility

[21.270]

should nonetheless be taken to ensure that any such communications do not stray to the legal matter and otherwise to avoid subtle remarks, even if in jest, that could be construed as undermining the non-client’s position or trust in her or his lawyer. Consequences of violating the no-contact rule

[21.270] A breach of the no-contact rule, though chiefly viewed as a professional issue, can generate legal consequences, including the court ruling inadmissible any evidence gathered as a result,284 or ordering the return of documents and notes,285 or even ordering the lawyer to be disqualified in the proceedings.286 Also it cannot be assumed, contrary to suggestions in the past,287 that a compromise effected directly with the opposing client in breach of the no-contact rule will in every case be enforceable. Breaches of the no-contact rule may, in any event, merit a professional disciplinary sanction, as in Re Pursley,288 where a lawyer breached the no-contact rule – making contact with and giving advice to an opposing client with whom she was friends without first notifying that client’s lawyer – managing as a result to secure an outcome unfavourable to the opposing client. The New South Wales Legal Services Tribunal held the lawyer’s behaviour to be professional misconduct, and ordered her to pay a $6,000 fine. The lawyer’s partner, who had instigated the contact through her as an intermediary, was also found guilty of professional misconduct, and fined $10,000. When coupled with other misconduct, repeated breaches of the no-contact rule are capable of generating a striking off order. In Legal Practitioners Conduct Board v Wharff,289 for example, the breach of the no-contact rule persisted for 10 months, involving 30 separate communications, notwithstanding requests by the opposing lawyer to desist. According to the Full Court of the South Australian Supreme Court, this rendered the breach “particularly serious”,290 and coupled with the respondent’s failure to pay counsels’ fees and deliver up client documents, non-compliance with the requirements of a trust account inspector and noncooperation with the disciplinary investigation, justified removal from the roll.

PROFESSIONAL DUTIES TO UNREPRESENTED PARTIES Especial care required when dealing with unrepresented parties

[21.275] A lawyer representing a party in a matter should avoid giving legal advice to any unrepresented party and take reasonable steps to ensure that the 284 See, for example, Faison v Thornton (1993) 863 F Supp 1204. 285 See, for example, State ex rel Pitts v Roberts (1993) 857 SW 2d 200. 286 See, for example, Clos v Pugia (1992) 420 SE 2d 774; Nauru Phosphate Royalties Trust (recs and mgrs apptd) v Business Australia Capital Mortgage Pty Ltd (in liq) [2008] NSWSC 833 at [36]–[38] per McDougall J. 287 See, for example, Re Margetson & Jones [1897] 2 Ch 314 at 319 per Kekewich J. 288 Re Pursley [1995] 4 LPDR 5. See also Legal Services Commissioner v Bradshaw [2008] LPT 9; Legal Services Commissioner v Mercader [2011] VCAT 2062. 289 Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116. 290 Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116 at [13].

[21.275]

21 Relations with the Profession and Third Parties

731

latter is under no impression that the lawyer acts for her or him.291 Beyond this, the lawyer should exhibit the same standards of conduct in their dealings with unrepresented parties as they do in dealings with other lawyers in a matter.292 But unlike parties legally represented in a matter, unrepresented parties have no person engaged to foster and protect their interests. For this reason, a lawyer’s professional responsibility to an unrepresented party may be potentially more onerous than were that person legally represented, which may be accentuated where he or she represents a party experienced in litigation293 or subject to model litigant obligations.294 A chief concern is that the lawyer could use her or his knowledge and position to take advantage of the unrepresented party for the purposes of advancing the client’s interests. Yet the duty to her or his own client requires a lawyer to take every legitimate course available to pursue the client’s interests; to take account of the opponent or other party’s interests could be detrimental to the client’s interests, and thus a breach of duty. The balance is arguably struck by the general proposition that, in treating unrepresented parties with courtesy and fairness, lawyers should not take unfair advantage of them.295 For example, language or conduct designed specifically to confuse, intimidate or unduly pressure an unrepresented opponent should be avoided.296 When negotiating with an unrepresented party, care should be taken to avoid any allegation of undue pressure,297 although this does not prevent lawyers from forcefully advancing reasons why that party should settle.298 It may be prudent to require an independent person to be available when negotiating with a self-represented party, and to confirm that party’s understanding before concluding settlement, having this noted on the record by transcript or notation on orders or terms of settlement.299 Within the course of litigation, though not obliged to assist 291 Though only made explicit in the Canadian and Singaporean rules (Can CPC, r 7.2-9; Sing, r 8(2)), this represents good counsel elsewhere. 292 NZ, r 12. 293 Serobian v Commonwealth Bank of Australia [2010] NSWCA 181 at [42] per MacFarlan JA. 294 Noone, Director of Consumer Affairs Victoria v Operation Smile (Australia) Inc (No 2) [2011] VSC 153 at [12]–[14] per Pagone J; Director of Consumer Affairs Victoria v Scully (No 2) [2011] VSC 239 at [17]–[20] per Hargrave J. 295 Scot, r B1.13.4 (“Where you appear against a person who represents him or herself, you must avoid taking unfair advantage of that person and must, consistently with your duty to your client, co-operate with the court in enabling that person’s case to be fairly stated and justice to be done. However you must not sacrifice the interests of your client to those of the person representing him or herself”); UK, IB(11.7) (“taking unfair advantage of an opposing party’s lack of legal knowledge where they have not instructed a lawyer” may tend to show that the solicitor has not achieved the required outcomes). 296 New South Wales Bar Association, Guidelines for Barristers on Dealing with Self-Represented Litigants (2nd ed), para 66 (available at http://www.nswbar.asn.au). Undue pressure could generate potential legal implications, such as proceedings for contempt of court: see, for example, Novotny v Cropley [2005] NSWCA 26 (although contempt not found on the facts). 297 Novotny v Cropley [2005] NSWCA 26 at [10] per Hodgson JA. 298 Marriage of Prior (2002) 168 FLR 221 at [58] (FC(Fam Ct)). 299 Council of the Law Society of New South Wales, Guidelines for Solicitors Dealing with Self-represented Parties (20 April 2006), cl 1.2(c).

732

Lawyers’ Professional Responsibility

[21.280]

unrepresented litigants run their case, lawyers should be courteous in demeanour at all times, and refuse to become embroiled in any personal attacks levelled by the unrepresented litigant.300 No-contact rule modified in its application to unrepresented parties

[21.280] The professional rules inhibit a lawyer making contact with an unrepresented party only where that party is being indemnified by an insurance company.301 Were the no-contact rule to apply vis-à-vis unrepresented parties, the lawyer could not fulfil the terms of her or his retainer. The barristers’ rules, though, prohibit a barrister conferring or dealing directly with “any party who is unrepresented unless the party has signified willingness to that course”,302 no doubt on the assumption that any contact is effected by the instructing solicitor. It remains nonetheless appropriate for a lawyer who contacts an unrepresented party to ensure that that party is fully informed as to the lawyer’s identity and purpose,303 and is given an opportunity to obtain independent legal advice.

300 Family Law Council and Family Law Section of the Law Council of Australia, Best Practice Guidelines for Lawyers Doing Family Law Work (2nd ed, October 2010), Pt 4 para 2.7 (available at http://www.lawcouncil.asn.au). 301 ACT, r 22.4; NSW, r 22.4; NT, r 17.39(a); Qld, r 22.4; SA, r 22.4; Vic, r 22.4; WA, r 37(5). 302 ACT, r 55(a); NSW, r 53; NT, r 55(a); Qld, r 52; SA, r 52; Vic, r 53; WA, r 52. 303 This explains why a lawyer for a party who “friends” an unrepresented adversary on social media in order to obtain information helpful to the retainer from the adversary’s non-public website must discloses her or his identity as the party’s lawyer: Massachusetts Bar Association, Op 2014–5 (8 May 2014).

Chapter 22

Undertakings [22.05] CONTEXT ........................................................................................................................... 733 [22.05] Importance of abiding by undertakings .................................................................. 733 [22.10] Potential liability for failure to fulfil undertaking ................................................. 734 [22.15] LIABILITY IN CONTRACT ............................................................................................. 735 [22.15] Assuming personal liability in undertakings .......................................................... 735 [22.20] Construing the terms of an undertaking ................................................................. 736 [22.25] LIABILITY UNDER THE COURT’S JURISDICTION ................................................. 738 [22.25] Judicial remedies .......................................................................................................... 738 [22.30] Nature of jurisdiction .................................................................................................. 739 [22.45] Construing the undertaking ....................................................................................... 741 [22.50] PROFESSIONAL DISCIPLINARY LIABILITY ............................................................. 742 [22.55] STEPS TO AVOID LIABILITY ON UNDERTAKINGS ............................................... 742 [22.55] Undertakings only to be given on the client’s behalf with the client’s authority ........................................................................................................................ 742 [22.60] Written undertaking in clear and unambiguous terms ........................................ 743 [22.65] Complete control .......................................................................................................... 744 [22.70] Need for care in accepting undertakings ................................................................ 744 [22.75] Need for care regarding undertakings given by partners and staff ................... 744

CONTEXT Importance of abiding by undertakings

[22.05]

An undertaking is a promise to do or refrain from doing something. Fidelity to undertakings in the course of professional practice is an important component of a lawyer’s professional responsibility, and directly relevant to the court’s continuing accreditation of her or his fitness to practise. Because of this, and the fact that lawyers may give undertakings to a court, another lawyer or a third party (including a regulatory body), the topic merits separate treatment. It has been noted, to this end, that:1 Undertakings are given by legal practitioners for the specific purpose of enabling legal activities to be carried out. Other persons rely on those undertakings. The undertakings are personal to the legal practitioner and bind that practitioner … as a matter of professional conduct and comity, and will be enforced by the Courts because legal practitioners are officers of the Court and because without enforcement undertakings

1 Copini [1994] NSWLST 25 at 6. See also Legal Profession Complaints Committee v Detata [2012] WASCA 214 at [48]–[54] per Martin CJ (noting that “the obligation of a legal practitioner to perform his or her undertaking is a solemn obligation of the utmost importance”: at [54]).

734

Lawyers’ Professional Responsibility

[22.10]

would be worthless, persons and Courts would be unable to rely on the word of the legal practitioner and this aspect of legal practice, that demands compliance for legal efficiency, would collapse.

Because the courts, other lawyers and third parties must rely on the representations and assurances of lawyers in the course of their practice, the law expects strict compliance with lawyers’ undertakings.2 It is ordinarily no defence that the undertaking required a third party to do an act, that its performance would place the lawyer in breach of duty to a client,3 or that it is inconvenient for the lawyer to fulfil its terms.4 This is reinforced by the Australian Solicitors’ Conduct Rules, which require solicitors who have given an undertaking in the course of legal practice to “honour that undertaking and ensure the timely and effective performance of the undertaking, unless released by the recipient or by a court of competent jurisdiction”.5 Courts are disinclined to excuse lawyers from compliance with their undertakings because, as explained by a New Zealand judge:6 … to excuse the [lawyer] from performance would … seriously undermine the justifiable claims of the legal profession to standards of integrity and honourable conduct upon which both the profession and the public have constantly to rely. In order to demonstrate the insistence by the courts that those standards are to be maintained the disciplining of those who breach them by ordering performance is a very necessary, if regrettable, action to be taken.

Potential liability for failure to fulfil undertaking

[22.10]

The scope for a lawyer’s liability for a breach of an undertaking arises in three main ways.7 First, for an undertaking given to a court, the court can order its enforcement. A breach of, or failure to fulfil, the undertaking constitutes contempt of court8 (although the court has discretion to refrain from making a finding of contempt).9 The court also retains, within its discretion, an inherent summary

2 Willson v Angela Gibson Law Corp (2008) 87 BCLR (4th) 319 at [76] per Goepel J (“solicitors must observe scrupulously the terms of any undertaking they give”). 3 Re Kerly, Son & Verden [1901] Ch 467. 4 See, for example, Webster v Shueard [2012] SASC 93 (where White J ruled that the retirement of the solicitor who had given the undertaking did not oust the solicitor’s duty to satisfy the undertaking: at [62]–[66]). 5 ACT, r 6.1; NSW, r 6.1; Qld, r 6.1; SA, r 6.1; Vic, r 6.1. See also NT, rr 19, 25; WA, r 22(2), 22(3). 6 Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 640 per Wylie J. See also National Westminster Finance New Zealand Ltd v Bryant [1989] 1 NZLR 513 at 518–519 per Smellie J; Re Nelson (1991) 106 ACTR 1 at 22 per Higgins and Foster JJ; A Ltd v B Ltd [1996] 1 WLR 665 at 674 per Sir John Vinelott. 7 Wade v Licardy (1993) 33 NSWLR 1 at 6 per Bryson J. 8 Al-Kandari v J R Brown & Co (a firm) [1988] QB 665 at 675 per Bingham LJ; Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 915 per Balcombe LJ; National Australia Bank Ltd v Bond Brewing Holdings Ltd [1991] 1 VR 386 at 583 per Murphy J; Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118; Law Institute of Victoria Ltd v Nagle [2005] VSC 35 at [13] per Gillard J. 9 See, for example, CT Sheet Metal Works Pty Ltd v Hutchinson [2012] FCA 17.

[22.15]

22 Undertakings

735

“special supervisory”10 jurisdiction to order a lawyer to pay compensation to a person who suffers loss as a result of that breach or failure: see [22.25]. Second, an undertaking given to a third party, or to another lawyer, may be enforced by way of a civil claim for breach of contract if the requirements of a contract are met: see [22.15]. This may prove problematic if the undertaking is not supported by consideration, or if an element of a contract is missing. Contract does not exhaust the scope for civil liability; an assurance given to the opposing lawyer or her or his client that proves to be false or misleading can generate liability in tort11 or misleading or deceptive conduct under statute: see [21.130]. Yet even outside contract or tort, the court’s inherent jurisdiction remains,12 under which it can order that an undertaking be enforced, or compensation be paid for its non-fulfilment: see [22.25]. As the jurisdiction is not based on contract or tort, that the lawyer may have a defence to an action at law, such as absence of writing or limitation, does not oust the court’s power; the question, though, remains one of judicial discretion: see [22.30], [22.35] Third, the recipient of a lawyer’s undertaking may lodge a complaint with the relevant regulatory body if the undertaking is not properly fulfilled. A failure to honour a personal undertaking given in a lawyer’s professional capacity will usually amount to misconduct: see [22.50].

LIABILITY IN CONTRACT Assuming personal liability in undertakings

[22.15]

A lawyer assumes no contractual liability to non-clients unless he or she enters a contractual relationship with those persons. Where a lawyer, within the scope of her or his authority, contracts on behalf of a client, making it clear that he or she does not contract in a personal capacity, it is the client, according to ordinary principles of agency law, who is contractually responsible. Furthermore, no contractual responsibility to a third party attaches where the contract is effected within the ostensible authority with which the lawyer has been vested by the client, even if beyond her or his actual authority. But in such a case the lawyer may be liable to the client for acting beyond authority: see [3.95].

The danger arises in circumstances where the lawyer gives an undertaking that its recipient can reasonably construe as having been given personally, whether or not the client is also liable. This is no more than the basic agency law principle that an agent may be liable under a principal’s contract if he or she assumes personal liability under it, or otherwise contracts for an undisclosed principal.13 This principle clearly applies in the context of undertakings given to third parties by 10 Bank of Ireland Mortgage Bank v Coleman [2009] 3 IR 699 at 725 per Geoghegan J, with whom Fennelly and Finnegan JJ concurred. 11 See, for example, Allied Finance & Investments Ltd v Haddow & Co [1983] NZLR 22; Al-Kandari v J R Brown & Co (a firm) [1988] QB 665 (undertaking to opposing client), discussed at [21.45]. 12 See United Mining & Finance Corp Ltd v Becher [1910] 2 KB 296 at 303 per Hamilton J; Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 638–639 per Wylie J. 13 See Dal Pont, Law of Agency (3rd ed, LexisNexis Butterworths, 2014), [19.28]–[19.47], [23.3]–[23.41].

736

Lawyers’ Professional Responsibility

[22.20]

lawyers in the course of their practice. There is, it has been noted, “no special branch of the law to deal with solicitors’ undertakings and the question whether solicitors are liable on them is part of the general law of contract but subject to the special difficulties of interpreting the undertakings”.14 Lawyers who have no intention of undertaking personal liability are well advised, therefore, to make it clear that any undertaking is that of the client only: see [22.55]–[22.65]. Construing the terms of an undertaking

[22.20]

Courts closely scrutinise the terms of an undertaking to ascertain whether the lawyer has given it on the client’s behalf. The words adopted are construed in their context, but from the objective inquiry into how those words would reasonably have been understood by its recipient in the circumstances.15 A statement that the undertaking is given as solicitor and agent for the client and not in a personal capacity, or to the effect that it is the client who gives the undertaking, is ordinarily indicative of a disclaimer of lawyer personal liability: see [22.60]. But any ambiguity is usually construed strictly against the lawyer.16 In Gorman v Norton,17 for instance, the plaintiff successfully sued the solicitors for an absconding debtor on an undertaking the solicitors had given “to pay any sum that may be awarded against [the debtor]”. The expression “on behalf of the defendant”, used in the body of the letter containing the undertaking, did not, in the court’s view, oust the solicitors’ personal liability. Care should also be taken when giving (or accepting) undertakings that include words such as “best endeavours” or “best efforts”, which may likewise be potentially ambiguous.18 The curial interpretation will not, however, be strained to undermine the nature of the relationship or transaction involved. As it is generally assumed that an undertaking is intended to facilitate the successful completion of an essentially commercial dealing, a technical or legalistic construction must yield to evident substance and intention.19 So some courts have refused to be too exacting regarding undertakings that, if construed in their broadest sense, would impose unrealistic expectations on lawyers. In Russo v Dupree20 a solicitor had undertaken to protect the costs and disbursements of another lawyer, from whom the solicitor had taken over the conduct of a personal injuries claim. Bryson J construed the undertaking as given by the solicitor, but was unwilling to impose on the solicitor a personal 14 Russo v Dupree (1989) 217 ALR 54 at 56 per Bryson J. 15 Bank of Ireland Mortgage Bank v Coleman [2009] 3 IR 699 at 720 per Geoghegan J, with whom Fennelly and Finnegan JJ concurred (noting the importance of having regard to the undertaking “as a whole”); Coll v Floreat Merchant Banking Ltd [2014] EWHC 1741 (QB) at [53] per Hickinbottom J. 16 Coll v Floreat Merchant Banking Ltd [2014] EWHC 1741 (QB) at [53] per Hickinbottom J; HK, principle 14.05 (“An ambiguous undertaking is generally construed in favour of the recipient”), cmt [1] (“Care should be taken to word undertakings in precise terms and this is particularly applicable to an undertaking given to a layman”). 17 Gorman v Norton (1887) 8 LR (NSW) L 479. 18 HK, principle 14.05, cmt [2]. 19 Fellingham v Rooke (unreported, HC(NZ), Thorp J, 26 February 1987); Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 171 per Fisher J; Webster v Shueard (2012) 113 SASR 99 at [99] per White J. 20 Russo v Dupree (1989) 217 ALR 54.

[22.20]

22 Undertakings

737

obligation that, come what may, the costs would be paid out of the solicitor’s own pocket if necessary. What led his Honour to so conclude appears from the following extract from the judgment:21 What is required is that the solicitor is to take for the protection of the first solicitor the same steps as he would take for the protection of himself, by doing all that he reasonably can to collect any verdict and costs recovered into his trust account and then not to deal with them in compliance with the client’s directions except on the basis that his own and his first solicitor’s costs are paid before the client disposes of the money. To some degree there must be room for the implication of an allowance of a reasonable range of conduct. For example, it must have been intended that action to protect the first solicitor’s costs would be taken at reasonable times and also that it would only be taken insofar as the action was reasonable. That is to say the solicitor who uses such language does not thereby undertake to destroy the relationship with his client by unduly vigorous or intransigent behaviour.

So the undertaking, though it bound the solicitor personally, required him only to take reasonable steps to protect the plaintiff’s costs and disbursements. It was no personal guarantee or promise of their payment. It follows that the rule of construction must yield to a contrary express or implied intention of the parties. The position is clearer again where construing a personal undertaking against the lawyer would be inconsistent with the nature of the legal relationship the parties intended to create. In Barclays Bank plc v Weeks Legg & Dean (a firm)22 solicitors acting for purchasers of land gave the appellant bank, which had advanced the purchase moneys on the security of the properties, an undertaking that the sums so received would be applied solely for acquiring a “good marketable title” to the property. The bank sued the solicitors for breach of the undertaking, claiming that the solicitors had failed to obtain a title that gave the bank sufficient security. The issue was whether the solicitors had given an absolute undertaking (assuming personal liability if they parted with the money without obtaining a good marketable title even without their own default) or only a qualified undertaking (namely, an undertaking of liability only if the failure was due to their own default). The English Court of Appeal saw either interpretation as open on the wording of the undertaking, but the following reasons led it to conclude that the parties had intended it to be qualified.23 First, the parties were unlikely to have intended the solicitors to assume a duty to the bank – which was not their client and was not being charged for their services – more onerous than the duty they had assumed towards their own client. Second, the undertaking related to the investigation of the vendor’s title as well as to the vendor’s due execution of the conveyance, but it was impossible for a purchaser’s solicitor to give an unqualified guarantee of the vendor’s title. Third, it was difficult to see what steps a purchaser’s solicitor could take to ensure that the conveyance to her or his client is properly executed by the vendor. Finally, as the purpose of the undertaking was to set the terms on which 21 Russo v Dupree (1989) 217 ALR 54 at 56 (paragraph break omitted). 22 Barclays Bank plc v Weeks Legg & Dean (a firm) [1998] 3 WLR 656 (noted Butt (1999) 73 ALJ 96). 23 Barclays Bank plc v Weeks Legg & Dean (a firm) [1998] 3 WLR 656 at 670–671 per Millett LJ, at 673–674 per Pill LJ.

738

Lawyers’ Professional Responsibility

[22.25]

the solicitors were authorised to part with money belonging in equity to the bank, it was difficult to see why they should assume a more onerous obligation in contract than they assumed in equity. So construed, the undertaking aligned the solicitors’ obligations under it with their obligations to their own client, and with the client’s obligations in equity to the bank. It also avoided exposing the solicitors to a liability that no solicitor could be properly advised to accept.

LIABILITY UNDER THE COURT’S JURISDICTION Judicial remedies

[22.25]

The court’s jurisdiction over lawyers’ undertakings – and this is not confined to undertakings given to the court – is based on its inherent right to insist and require that its officers observe a high standard of conduct,24 and is in any case expressly preserved by legal profession legislation.25 The jurisdiction is ordinarily given effect in one of two ways: by way of an order that the undertaking be fulfilled, or via an order compensating a person who suffers loss as a result of its non-fulfilment. The former is more likely the course if it is possible for the undertaking to be performed.26 A refusal to comply with the court’s order will place the lawyer in contempt of court,27 and may justify the court suspending the lawyer from practice.28 But the court will not enforce an undertaking that is incapable of being performed at the time the lawyer is called upon to honour it. The logic for this is self-evident: “to order a solicitor to do the impossible and then as the next logical step to punish him for not doing it, is in reality to discipline him for having given the undertaking in the first place”.29 In such a case, the court may 24 Re Hilliard (1845) 2 Dow & L 919; 59 RR 880 at 920–921 (Dow & L), at 882 (RR) per Coleridge J (“the Court does not interfere merely with a view of enforcing contracts, on which actions might be brought, in a more speedy and less expensive mode; but with a view to securing honesty in the conduct of its officers, in all such matters as they undertake to perform or see performed, when employed as such, or because they are such officers”); Re Grey [1892] 2 QB 440 at 443 per Lord Esher MR; Re McDougall’s Application [1982] 1 NZLR 141 at 142 per Hardie Boys J; Gill & McAsey v Wainui Timber Co Ltd [1992] 1 NZLR 1 at 4 per Richardson J; Wade v Licardy (1993) 33 NSWLR 1 at 9 per Bryson J; Nickelby Pty Ltd v Holden (unreported, SC(NSW), Young J, 31 March 1994) at 7–11; Willson v Angela Gibson Law Corp (2008) 87 BCLR (4th) 319 at [80] per Goepel J; Coll v Floreat Merchant Banking Ltd [2014] EWHC 1741 (QB) at [37]–[45] per Hickinbottom J. 25 ACT, s 462; NSW, s 264 (formerly NSW 2004, s 590); NT, s 554; Qld, s 13; SA, s 89(3); Tas, s 510; Vic, s 264 (formerly Vic 2004, s 4.4.39); WA, s 465. 26 Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 917–918 per Balcombe LJ. See, for example, Clark v Lucas Solicitors LLP [2010] 2 All ER 955. 27 Re A Solicitor [1966] 1 WLR 1604 at 1608 per Pennycuick J. See, for example, Solicitor-General v Miss Alice [2007] 2 NZLR 783. 28 See Simes, Jacobsen & Steel v Gough & Irving (unreported, HC(NZ), Cook J, 3 August 1984). 29 Re McDougall’s Application [1982] 1 NZLR 141 at 145 per Hardie Boys J (where the performance of the undertaking depended entirely on a third party’s willingness to surrender its legal rights, which neither the lawyer nor the court could compel). See also Peart v Bushell (1827) 2 Sim 38; 57 ER 705 at 39 (Sim), 705 (ER) per Hart VC (“am I then to throw the solicitor into prison until he has performed them, when it may turn out that they cannot be performed?”); Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 915 per Balcombe LJ.

[22.30]

22 Undertakings

739

order the lawyer to compensate a person who has suffered loss in consequence of the failure to implement the undertaking.30 Nature of jurisdiction Discretionary and disciplinary nature The jurisdiction is discretionary,31 and so the court will not exercise it as a matter of course. It is unfettered by absolute rules but must be exercised according to the facts of each case.32 Informing the exercise of the jurisdiction is its disciplinary slant,33 which has various implications. The court’s order is not premised on the claimant holding an enforceable contractual or other civil right.34 Rather, it is premised on a failure that merits reproof35 – that the failure to honour it is “inexcusable”.36

[22.30]

It is open to the court, therefore, to refuse relief where a lawyer has acted bona fide.37 In Bentley v Gaisford38 the first solicitors (plaintiffs) released the client’s file to new solicitors (defendants), who undertook “to hold the documents/our file to our order in respect of the outstanding fees/disbursements”, but without express restriction on the use the defendants could make of the file. The defendants, acting bona fide and pursuant to what they regarded as their duty to their client, copied the file and gave it to the client, rendering the plaintiffs’ retaining lien (as to which see [16.20]–[16.110]) practically worthless. The plaintiffs sued the defendants for, inter alia, compensation for breach of the undertaking. A majority of the English Court of Appeal held that the use the defendants could properly make of the file was impliedly limited so as to preserve to the first solicitor the maximum security 30 Marsh v Joseph [1897] 1 Ch 213 at 244–245 per Lord Russell CJ; United Mining & Finance Corp Ltd v Becher [1910] 2 KB 296 at 305 per Hamilton J; Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 918 per Balcombe LJ; Taylor v Ribby Hall Leisure Ltd [1998] 1 WLR 400 at 408 (CA); Clark v Lucas Solicitors LLP [2010] 2 All ER 955 at [56] per Sarah Asplin QC. Regarding the award of interest see Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 173 per Fisher J. 31 Re McDougall’s Application [1982] 1 NZLR 141 at 142 per Hardie Boys J; Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 917 per Balcombe LJ; Bank of Ireland Mortgage Bank v Coleman [2009] 3 IR 699 at 720 per Geoghegan J, with whom Fennelly and Finnegan JJ concurred. 32 Taylor v Ribby Hall Leisure Ltd [1998] 1 WLR 400 at 409 (CA). 33 Re Hilliard (1845) 2 Dow & L 919; 59 RR 880 at 921 (Dow & L), at 882 (RR) per Coleridge J; Re Grey [1892] 2 QB 440 at 443 per Lord Esher MR; Re McDougall’s Application [1982] 1 NZLR 141 at 142 per Hardie Boys J; Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 639 per Wylie J; Coll v Floreat Merchant Banking Ltd [2014] EWHC 1741 (QB) at [45] per Hickinbottom J. 34 Re Grey [1892] 2 QB 440 at 443 per Lord Esher MR; Taylor v Ribby Hall Leisure Ltd [1998] 1 WLR 400 at 408 (CA). 35 R & T Thew Ltd v Reeves (No 2) [1982] QB 1283 at 1286 per Lord Denning MR; Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 924 per Kerr LJ; John Fox v Bannister, King and Rigbeys [1988] QB 925 at 930 per Nicholls LJ; Bentley v Gaisford [1997] QB 627 at 644 per Roch LJ, at 648–649 per Henry LJ. Cf Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 639 per Wylie J (no requirement for proof of dishonourable conduct). 36 Commissioner of Inland Revenue v Bhanabhai [2006] 1 NZLR 797 at [165] per Laurenson J. 37 Nickelby Pty Ltd v Holden (unreported, SC(NSW), Young J, 31 March 1994). 38 Bentley v Gaisford [1997] QB 627.

740

Lawyers’ Professional Responsibility

[22.35]

consistent with the progress of the client’s litigation.39 But their Lordships refused to award compensation on the ground that the defendants had acted bona fide. The result would likely have differed had the undertaking specifically prohibited the copying of the file. Bentley v Gaisford is the exceptional, rather than the usual, case. A more standard illustration of the curial attitude is found in Commissioner of Inland Revenue v Bhanabhai.40 There the defendants acted as solicitors for two companies involved in a construction project that, though it failed before completion, nonetheless triggered obligations to pay Goods and Services Tax (GST) arising out of contracts of sale for certain apartments in the project. The defendants wrote to the Commissioner of Inland Revenue that “we undertake on settlement of [the identified apartments] we will forthwith pay to you the GST component of the sale consideration”. The undertaking was not met, and the Commissioner sought either its enforcement or an order that the defendants pay compensation for the loss caused by its breach. Laurenson J held that the undertaking was one given personally by the defendants, being satisfied that each party intended that it was to ensure that GST was to be paid from moneys received by the defendants on settlement. As moneys received on settlement were paid mainly to the project’s financier, it was now impossible for the defendants to pay the GST claimed from the sale proceeds received on settlement. As a result, his Honour did not order the defendants to perform the actual undertaking but that the Commissioner receive compensation for the loss arising from its non-performance. This finding was affirmed on appeal,41 the New Zealand Court of Appeal also being influenced by the defendants’ equity interest in the construction project. The latter, according to the court, supported the view that “the undertaking should be construed as meaning what it says” rather than narrowly.42 Had the defendants not been prepared to fulfil the promise in the undertaking, noted the court, they “should not have given the undertaking”.43

[22.35]

The nature of the jurisdiction may disincline the court to exercise it if delay in bringing the proceedings has caused a genuine risk of prejudice to the lawyer.44 In accord with its discretionary nature, the court has power to release a lawyer from an undertaking, which may be apt if the lawyer was deceived into giving the undertaking45 or otherwise due to unforeseen events or a mistake, its performance proves impossible. For a court to release an undertaking, though, 39 Bentley v Gaisford [1997] QB 627 at 641–643 per Roch LJ, at 647 per Henry LJ. Contra at 635–636 per Sir Richard Scott VC dissenting, who argued that because there was no express limitation in the undertaking prohibiting the defendants from copying the documents, the defendants had not breached their undertaking to the plaintiffs. 40 Commissioner of Inland Revenue v Bhanabhai [2006] 1 NZLR 797. 41 Commissioner of Inland Revenue v Bhanabhai [2007] 2 NZLR 478 at [45] per William Young P. See Webb, “Solicitors’ Undertakings: A Primer” [2007] NZLJ 143. 42 Commissioner of Inland Revenue v Bhanabhai [2007] 2 NZLR 478 at [44] per William Young P. 43 Commissioner of Inland Revenue v Bhanabhai [2007] 2 NZLR 478 at [46] per William Young P. 44 See, for example, Taylor v Ribby Hall Leisure Ltd [1998] 1 WLR 400. 45 Law Society of New South Wales v Waterhouse [2002] NSWADT 204 at [17] (affd Waterhouse v Law Society of New South Wales [2003] NSWADTAP 20).

[22.45]

22 Undertakings

741

usually rests on special circumstances, or cogent and persuasive reasons.46 Other factors relevant to the exercise of the jurisdiction include the conduct of the client on whose behalf the undertaking was given, whether its recipient contributed to the breach, and the extent of the actual loss suffered by the recipient.47 Summary nature

[22.40]

The court’s jurisdiction is most commonly invoked by summary proceeding, although this is not the only appropriate procedural vehicle.48 As a summary proceeding, it is normally invoked by originating summons, and does not usually involve pleadings, discovery or oral evidence. Because the lawyer is, as a result, deprived of many of the advantages that ordinarily avail a defendant on trial, it has been said that the jurisdiction should be exercised only in a clear case.49 Construing the “undertaking” Use of the word “undertaking” is not essential in this context;50 the jurisdiction may be attracted “whenever a solicitor has accepted an obligation in his capacity as solicitor”.51 But it is important that the court carefully scrutinise the scope of the undertaking, and whether or not it is personal, by construing the relevant language, as it does where liability in contract is in issue: see [22.20]. So far as the requirement that the undertaking be given in the lawyer’s professional capacity is concerned,52 the phrase “in his [or her] capacity as a solicitor” has been held to:53

[22.45]

… go so far as this, that when a solicitor, in the course of business which he is conducting for clients with third parties in the way of his profession, gives an undertaking to those third parties incidental to those negotiations, that undertaking is one which is given in his capacity as a solicitor and not as a mere layman undertaking the office of stakeholder or guaranteeing the payment of money.

Therefore, an undertaking given by a lawyer who is a party to a legal matter is, generally speaking, an undertaking given in her or his professional capacity.54 46 Esso Australia Resources Ltd v Plowman (1995) 183 CLR 10 at 37 per Brennan J. See, for example, Re Kelly and Department of Treasury and Finance (No 2) (2002) 19 VAR 330 at [54]–[63] (VCAT); Blanch v Deputy Commissioner of Taxation (2004) 58 ATR 113. 47 Commissioner of Inland Revenue v Bhanabhai [2006] 1 NZLR 797 at [165] per Laurenson J. 48 Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 171 per Fisher J. 49 Geoffrey Silver & Drake v Baines [1971] 1 QB 396 at 402 per Lord Denning MR; Simes, Jacobsen & Steel v Gough & Irving (unreported, HC(NZ), Cook J, 3 August 1984); John Fox v Bannister, King and Rigbeys [1988] QB 925 at 930 per Nicholls LJ, at 931 per Sir John Donaldson MR. 50 See, for example, Re a Solicitor [1907] 2 KB 539; John Fox v Bannister, King and Rigbeys [1988] QB 925. 51 Hastingwood Property Ltd v Saunders Bearman Anselm (a firm) [1991] Ch 114 at 126 per Edward Nugee QC. 52 Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 171 per Fisher J. 53 United Mining & Finance Corp Ltd v Becher [1910] 2 KB 296 at 307 per Hamilton J, approved in Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 636 per Wylie J. 54 Shirvington, “Undertakings: Personal or Professional?” (1995) 33 (July) LSJ 16.

742

Lawyers’ Professional Responsibility

[22.50]

PROFESSIONAL DISCIPLINARY LIABILITY [22.50]

Failure to fulfil a personal undertaking given in a professional capacity is unprofessional, and so can generate a professional disciplinary consequence, whether or not it amounts to a breach of contract.55 This is recognised by the legal profession legislation, which includes within misconduct a contravention of the professional rules.56 A finding of professional misconduct is more likely where the failure was deliberate and without reasonable explanation,57 in which case it can legitimately be concluded that the lawyer suffers “a lack of appreciation of the significance of an undertaking and the importance of compliance with undertakings given between practitioners in order to ensure the proper service of clients”.58

STEPS TO AVOID LIABILITY ON UNDERTAKINGS Undertakings only to be given on the client’s behalf with the client’s authority Prudent lawyers will avoid giving personal undertakings59 – it is, after all, difficult to foresee all future possibilities that might impact upon their performance – bearing in mind that a lawyer cannot be compelled to do so.60 A lawyer requested to provide an undertaking on a client’s behalf should instead pledge that the undertaking is that of the client and clearly disclaim any personal liability for its performance, or otherwise specify a relevant limitation.

[22.55]

55 Keppie v Law Society of the Australian Capital Territory (1983) 62 ACTR 9 (discussed at [22.75]); Udall v Capri Lighting Ltd (in liq) [1988] QB 907 at 917 per Balcombe LJ; Rooks Rider (a firm) v Steel [1994] 1 WLR 818 at 827 per Knox J; R v Khazaal (2006) 167 A Crim R 565 at [92] per Whealy J; Auckland Standards Committee 3 of New Zealand Law Society v W [2011] 3 NZLR 117 (affd W v Auckland Standards Committee 3 of New Zealand Law Society [2012] NZAR 1071). 56 ACT, s 389(a); NSW, s 298(b) (formerly NSW 2004, s 498(1)(a)); NT, s 466(1)(a); Qld, s 420(a); SA, s 70(a); Tas, s 422(1)(a); Vic, s 298(b) (formerly Vic 2004, ss 4.4.4(a), 4.4.6(b)); WA, s 404(a). 57 See, for example, Law Society of New South Wales v Treanor [2005] NSWADT 285 at [28]–[42] (breach of multiple undertakings given to another lawyer held to amount to professional misconduct at common law, justifying a public reprimand and a $7,000 fine); Legal Services Commissioner v Farnham [2009] LPT 4 (solicitor’s breach of an undertaking to be personally responsible for the payment of an amount of money, which facilitated a transaction that involved a company of which he was a director, held to amount to professional misconduct); Legal Profession Complaints Committee v Detata [2012] WASCA 214 (lawyer who recklessly disregarded the terms of an undertaking he had proffered to an opposing lawyer found to have committed professional misconduct and fined $10,000); Legal Profession Complaints Committee v Khosa [2015] WASAT 107; [2015] WASAT 107 (S) (six month suspension for deliberate breach of undertaking to placate an unhappy client). Cf Auckland Standards Committee 3 of New Zealand Law Society v W [2011] 3 NZLR 117 (solicitor who drafted an undertaking more widely than he intended due to time pressures found guilty of negligence or incompetence in his professional capacity under the relevant New Zealand legislation, a finding equivalent to unsatisfactory professional conduct in Australia) (affd W v Auckland Standards Committee 3 of New Zealand Law Society [2012] NZAR 1071). 58 Legal Services Commissioner v Zaghini [2005] LPT 4 per de Jersey CJ. 59 Countrywide Banking Corp Ltd v Kingston [1990] 1 NZLR 629 at 637 per Wylie J. 60 Re Hilliard (1845) 2 Dow & L 919; 59 RR 880 at 921 (Dow & L), at 882 (RR) per Coleridge J (“he is never compelled to enter into them; if he does, he should secure himself by his arrangement with his client, and he must be taken to know the legal consequences of his own act”).

[22.60]

22 Undertakings

743

It is imperative, in this regard, for the lawyer to secure the client’s express irrevocable authority before giving an undertaking on the client’s behalf.61 This requires a full understanding by the client of the legal consequences of her or his act, namely the nature and extent of her or his liability on the undertaking.62 Lacking such authority, the lawyer faces the prospect of either being personally bound on the undertaking or, if the undertaking is given within her or his ostensible authority, liability to the client for acting in excess of actual authority. It is therefore sound practice for the authority in question to be in writing, and to include an acknowledgment by the client of the enforceability and other ramifications of giving the undertaking. A lawyer who relies on a client’s subsequent authority runs the risk that the client may withhold the authority. Written undertaking in clear and unambiguous terms

[22.60]

Lawyers must ensure that undertakings are expressed in clear, precise and unambiguous terms. The only safe course is to adopt an undertaking capable of only one interpretation that it incorporates every term intended to restrict its effect.63 Therefore, to reduce scope for dissension as to the nature and scope of, or liability under, an undertaking, it is essential that the undertaking be written, or at least be confirmed in writing.

As lawyers can only be assured of avoiding personal liability if this is expressly disclaimed in the undertaking itself, simply phrasing the undertaking as “on behalf of my client X” may not necessarily suffice.64 Clearer and less ambiguous expressions should be used; for instance, “as solicitor and agent for and not personally I undertake”, or “I have been instructed that my client undertakes” or, even more comprehensively and clearly:65 An undertaking is hereby given upon instructions from and on behalf of our client to … We emphasise that we accept no liability [for] the performance of the undertaking hereby given. However, we have no reason to believe that our client will not comply with the undertaking.

61 See Tas, para 5. The former barristers’ rules in Victoria stated that counsel should not give an undertaking to the court on behalf of a solicitor or a lay client without the express authority of the person concerned (Practice Rules, r 13), which remains a sound practice. 62 See Shirvington, “Take Care When Giving or Receiving Undertakings” (1994) 32 (Sept) LSJ 15; Evans, “Solicitors’ Undertakings” (2001) 75 (Mar) LIJ 39. 63 Although it does not appear on the Law Institute’s website, its Practice Note on Undertakings (June 1988) adds the useful counsel that, prior to giving the undertaking, a solicitor should consider: (a) the time for performance; (b) whether there should be a “sunset clause” in the undertaking; (c) whether there are any circumstances in which the undertaking might become impossible to fulfil; and (d) whether there is any uncertainty in its terms. 64 Cf Law Institute of Victoria, Ethics Guidelines, Undertakings (17 December 2015) (suggesting the wording “My client, [client name] undertakes that he/she will …”). 65 As found in the former Queensland Solicitors Handbook, 12.00.3.

744

Lawyers’ Professional Responsibility

[22.65]

Complete control

[22.65]

Lawyers should only give personal undertakings, if at all, where the means of fulfilment are within their complete control,66 as opposed to being partly dependent upon the acts or omissions of a third party outside the lawyer’s control. For example, a lawyer should not give an undertaking regarding the filing of documents in a court or the swearing of an affidavit by the client unless the documents are in the lawyer’s possession or the affidavit was being sworn at the time of the undertaking.67 Any such undertaking should be made subject to conditions; say, a condition that brings the undertaking to an end,68 or that a third person does something. As to the latter, the Australian Solicitors’ Conduct Rules proscribe a solicitor from seeking from another solicitor (or that solicitor’s employee, associate, or agent) undertakings in respect of a matter “that would require the co-operation of a third party who is not party to the undertaking”.69

Need for care in accepting undertakings

[22.70]

Lawyers should be careful in accepting undertakings that lack clarity in their expression. If an undertaking is not enforceable, or only enforceable against a person who is incapable of fulfilling it, the lawyer accepting the undertaking may have breached the duty to protect her or his client’s interest.70 Conversely, lawyers who receive an undertaking in clear and unequivocal terms need not go behind the undertaking and independently verify it.71 It remains sound practice, though, for lawyers who receive an undertaking to confirm it immediately upon receipt. Need for care regarding undertakings given by partners and staff

[22.75]

As a general principle, an undertaking given by an employee of a lawyer on the latter’s behalf will professionally bind the lawyer.72 An undertaking given by an employee solicitor, law clerk or other employee of a firm of lawyers is an undertaking by the firm, whether or not its giver secured proper authority from a

66 Re McDougall’s Application [1982] 1 NZLR 141 at 146 per Hardie Boys J; Bhanabhai v Commissioner of Inland Revenue [2007] 2 NZLR 478 at [43] per William Young P. 67 Thompson, “Undertakings can be a Source of Complaints” (1997) 17 (Mar) Proctor 18. 68 See Law Institute of Victoria, Ethics Guidelines, Undertakings (17 December 2015) (counselling that if a personal undertaking is given by a solicitor, “it should be given in clear and unambiguous terms and it is important that it has a realistic condition which will trigger the undertaking to come to an end and not continue indefinitely”: for example, “I undertake to provide a cheque to ‘X’ in the sum of ‘Y’ by 13 June 2014”). 69 ACT, r 6.2; NSW, r 6.2; Qld, r 6.2; SA, r 6.2; Vic, r 6.2. See also NT, rr 19A, 20. See, for example, Legal Services Commissioner v Simon [2014] VCAT 1179 (respondent solicitor who gave an assurance on behalf of a client that depended on action by a third party which the solicitor could not guarantee found to have engaged in unsatisfactory professional conduct, and reprimanded). 70 See Re McDougall’s Application [1982] 1 NZLR 141. 71 Australian Guarantee Corporation (NZ) Ltd v East Brewster Urquhart & Partners [1990] 2 NZLR 167 at 172 per Fisher J. 72 Evenco Pty Ltd v Australian Building Construction Employees and Builders Labourers Federation (Qld Branch) [2001] 2 Qd R 118; NZ, r 6.07.

[22.75]

22 Undertakings

745

partner of the firm.73 For this reason, lawyers should proscribe their employees to give undertakings or otherwise ensure that employees have a clear understanding and authorisation as to what type of undertakings can and cannot be given or accepted. Regular monitoring and supervision remain necessary in any event, as well as proactive action in the face of an unauthorised undertaking. Liability for breach of a personal undertaking by one partner in a firm may accrue to other partners under partnership legislation. It provides that where by the wrongful act or omission of a partner acting in the ordinary course of business of the firm, or with the authority of her or his co-partners, loss or injury is caused to a third party, or any penalty is incurred, the firm is liable to the same extent as the partner so acting or omitting to act.74 The legislation adds that every partner is liable jointly and severally with co-partners for everything for which the firm, while he or she is a partner, becomes liable under the preceding provision.75 For example, in Burbery Mortgage Finance & Savings Ltd (in receivership) v O’Neil76 a partner in a firm (S) obtained a loan of $787,500 to assist him in the purchase of a commercial property. S gave an undertaking that the loan complied with the requirements of the lender, specifically that the mortgage did not exceed 75% of the lowest cash consideration for which the property was to be transferred. The purported price was $1.1 million, but the price actually paid was only $765,000. This meant that the amount borrowed exceeded the purchase price of the property. The lender claimed that the firm had breached its undertaking by reason of this, and sought a determination as to liability on the basis that it would have lent only $300,000 had it known the true value of the property. Williamson J noted that the documents and correspondence relating to the loan were framed in terms that the lender had engaged the firm, and found that, although S lacked express authority from the firm to effect the transaction, S had ostensible authority. The firm was therefore liable. His Honour stated:77 In this case the documents and letters from [the firm] to [the lender] indicated that [S] had authority to act on behalf of the firm. The transaction in which the firm was engaged was … work normally carried out by solicitors … There was nothing in the loan application or accompanying documents or [S’s] conduct which would have alerted [the lender] to the possibility that [S] would be acting otherwise than in accordance with authority from [the firm]. 73 See, for example, Hawkins v Gaden (1925) 37 CLR 183 (where the High Court held that where a clerk settling a conveyancing transaction on behalf of the vendor’s solicitors stated in writing that the solicitors, “in consideration of settlement” of the matter, undertook to satisfy the requisitions of the Registrar-General in regard to the withdrawal of a caveat, the solicitors were personally bound by the undertaking). 74 Partnership Act 1963 (ACT), s 14; Partnership Act 1892 (NSW), s 10; Partnership Act 1997 (NT), s 14; Partnership Act 1891 (Qld), s 13; Partnership Act 1891 (SA), s 10; Partnership Act 1891 (Tas), s 15; Partnership Act 1958 (Vic), s 14; Partnership Act 1895 (WA), s 17. 75 Partnership Act 1963 (ACT), s 16; Partnership Act 1892 (NSW), s 12; Partnership Act 1997 (NT), s 16; Partnership Act 1891 (Qld), s 15; Partnership Act 1891 (SA), s 12; Partnership Act 1891 (Tas), s 17; Partnership Act 1958 (Vic), s 16; Partnership Act 1895 (WA), s 19. 76 Burbery Mortgage Finance & Savings Ltd (in receivership) v O’Neil [1995] ANZ Conv R 387. See Webb, “Solicitor Undertakers Beware” [1995] NZLJ 36. 77 Burbery Mortgage Finance & Savings Ltd (in receivership) v O’Neil [1995] ANZ Conv R 387 at 391.

746

Lawyers’ Professional Responsibility

[22.75]

Unfulfilled undertakings given by staff or co-partners can, in addition to liability in contract or under the partnership legislation, give rise to professional sanction. This occurred in Keppie v Law Society of Australian Capital Territory,78 where an employed solicitor breached an undertaking to the opposing solicitors that he would not disburse certain funds by accounting to his own client. The Full Court of the Australian Capital Territory Supreme Court ordered that the solicitor be reprimanded, having found that the undertaking had been given personally, and remarked that for an employed solicitor “knowingly to breach an undertaking given by his employer would be conduct no less serious than knowingly to break an undertaking given by himself”.79 It also criticised the employer’s failure to “take control” of the matter once the opposing solicitors had challenged the employed solicitor on his breach of undertaking. Rather than leaving the matter for an inexperienced employee, the court stated, the employer should have, in relation to the opposing solicitors, “ensure[d] that his employee adopted an attitude of total candour about what had happened”.80

78 Keppie v Law Society of Australian Capital Territory (1983) 62 ACTR 9. 79 Keppie v Law Society of Australian Capital Territory (1983) 62 ACTR 9 at 15. 80 Keppie v Law Society of Australian Capital Territory (1983) 62 ACTR 9 at 19.

PART VI Discipline of Lawyers Chapter 23: The Disciplinary Jurisdiction .......................................................... 749 Chapter 24: Disciplinary Procedures ................................................................... 781 Chapter 25: Types of Misconduct ......................................................................... 803

Chapter 23

The Disciplinary Jurisdiction [23.05] ROLE OF THE COURT .................................................................................................... 749 [23.20] NATURE OF DISCIPLINARY PROCEEDINGS ........................................................... 751 [23.20] Objectives of disciplinary proceedings .................................................................... 751 [23.50] Proof in disciplinary proceedings ............................................................................. 756 [23.55] Procedural fairness in disciplinary proceedings .................................................... 757 [23.75] Costs of disciplinary proceedings ............................................................................. 761 [23.80] Publicising disciplinary action ................................................................................... 761 [23.85] CONCEPT OF PROFESSIONAL MISCONDUCT ....................................................... 762 [23.85] Misconduct as defined at common law ................................................................... 762 [23.90] Misconduct as defined under statute ....................................................................... 763 [23.95] DISCIPLINARY ORDERS ................................................................................................ 765 [23.100] Striking off ................................................................................................................... 766 [23.105] Suspension ................................................................................................................... 767 [23.110] Reprimand ................................................................................................................... 768 [23.115] FACTORS THAT IMPACT ON DISCIPLINARY ORDERS ...................................... 769 [23.120] Frequency of misconduct and prior misconduct findings ................................. 769 [23.130] Lawyer’s attitude ....................................................................................................... 771 [23.135] Lawyer’s level of appreciation of wrongdoing .................................................... 772 [23.140] Lawyer’s level of experience .................................................................................... 772 [23.145] Illness and external stressors ................................................................................... 773 [23.155] Testimonials and opinions by third parties ........................................................... 777 [23.165] Loss suffered by others as a result of misconduct ............................................... 779 [23.170] Loss already suffered by lawyer as a result of misconduct ............................... 779

ROLE OF THE COURT [23.05]

The integrity of the legal profession and its reputation with the public depend in large part upon the maintenance and enforcement of high standards of professional conduct by its members. It has been said that lawyers “should discharge their professional duties with integrity, probity and complete trustworthiness”1 and be on their guard “to uphold and maintain the dignity of the profession”.2 The maintenance of a high standard of conduct, in both professional and personal spheres, is critical for lawyers to be able to command the confidence 1 Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR. 2 Re Foster (1950) 50 SR (NSW) 149 at 151–152 per Street CJ.

750

Lawyers’ Professional Responsibility

[23.10]

and respect of the court, fellow lawyers and clients,3 because the proper functioning of the legal system depends upon the manifest integrity of its members.4 The standard of utmost integrity also stems from the fact that, as members of a profession and as officers of the court (see [17.10]), lawyers are entrusted with exclusive privileges in connection with the business of clients. That lawyers individually and collectively maintain utmost integrity is the more critical given that, because of the duty of confidentiality (see Ch 10) and the doctrine of legal professional privilege (see Ch 11), much of a lawyer’s work is secret.

[23.10]

The court has a right, as well as a duty, to supervise the conduct of its officers and to ensure that the requisite standards are maintained.5 Its jurisdiction is conferred by statute, usually on appeal from a determination of a disciplinary tribunal (see Ch 24), but it retains an inherent jurisdiction to discipline lawyers admitted to practise in the court.6 The inherent jurisdiction is preserved by the legal profession legislation,7 and is a corollary of its authority to admit persons to practise as officers of the court (as to which see [2.30]).8 It follows that even if a procedural irregularity serves to deny jurisdiction to a disciplinary tribunal,9 or the concept of misconduct relied upon falls outside misconduct as defined by statute, the court can entertain a disciplinary application, and make disciplinary orders,10 in its inherent jurisdiction. The court may adopt procedures it considers appropriate, subject to contrary statutory provision.11 For instance, the court is not restricted to considering the precise allegations as formulated. If the evidence presented is capable of establishing misconduct other than that alleged, the court is to consider the questions arising in this regard, in each case ensuring that natural justice is accorded to the lawyer:12 see [23.60]–[23.70]. 3 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 285–286 per Dixon CJ; Re a Practitioner (1982) 30 SASR 27 at 32 per King CJ. 4 Prothonotary of the Supreme Court of New South Wales v Pangallo (1993) 67 A Crim R 77 at 79 per Kirby P. 5 Re Moseley (1925) 25 SR (NSW) 174 at 179–180 per Street CJ; Myers v Elman [1940] AC 282 at 319 per Lord Wright; Harvey v Law Society of New South Wales (1975) 49 ALJR 362 at 364 per Barwick CJ. 6 Myers v Elman [1940] AC 282 at 335 per Lord Porter; Re a Solicitor [1960] VR 617 at 618 per Dean J; Re a Barrister and Solicitor (1979) 40 FLR 1 at 17 (FC(ACT)); Bektas v McGarvie [2015] VSC 78 at [15]–[19] per Kaye JA. 7 ACT, s 462; NSW, s 264 (formerly NSW 2004, s 590); NT, s 554; Qld, s 13; SA, s 89(3); Tas, s 510; Vic, s 264 (formerly Vic 2004, s 4.4.39); WA, s 465. 8 Re Davis (1947) 75 CLR 409 at 414 per Latham CJ, at 419 per Starke J, at 423 per Dixon J, at 427 per McTiernan J; Re a Barrister and Solicitor (1979) 40 FLR 1 at 17 (FC(ACT)); Re B [1981] 2 NSWLR 372 at 380 per Moffitt P. 9 See, for example, A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 (where the inherent jurisdiction was activated because the relevant disciplinary tribunal decided it lacked jurisdiction owing to the respondent’s failure to comply with a statutory requirement that the appellant be notified of the relevant decision). 10 Such as striking off, suspension, reprimands (see Bhandari v Advocates Committee [1956] 1 WLR 1442; Law Society of the Australian Capital Territory v Burns (2012) 6 ACTLR 282), fines (see Re Law Society of the Australian Capital Territory and Chamberlain (1993) 116 ACTR 1 at 18 per Miles CJ) costs orders (see Re a Barrister and Solicitor (1972) 20 FLR 234 at 244 (FC(ACT)) and orders to repay money. 11 Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 250–251 per Deane, Dawson, Toohey and Gaudron JJ. 12 Re Robb (1996) 134 FLR 294 at 297 (FC(ACT).

[23.20]

23 The Disciplinary Jurisdiction

751

[23.15]

When requested to review a matter of discipline, the court attaches weight to a decision of the relevant disciplinary body or tribunal responsible for upholding standards of the profession made after a careful and objective consideration of the evidence.13 It reasons that members of that body or tribunal, being statutorily charged to determine disciplinary issues, are good judges of the standards of conduct required of lawyers14 and have had the opportunity of seeing and hearing the witnesses.15 That the body or tribunal is partly composed of lay members does not detract from the court’s regard of its decision, a point made by the Western Australian Court of Appeal as follows:16 it cannot be accepted that this Court should look behind the constitution of the Tribunal to decide for itself whether members of the Tribunal in a particular case were sufficiently expert in a particular aspect of a field of legal practice relevant in some way to that particular Reference. It can, in the Court’s view, be accepted that members of the Tribunal … constitute a specialist Tribunal appointed or elected inter alia for the specific purpose of dealing with the discipline of the legal profession, including the determination of References of the type in question.

It follows that courts will interfere with an order imposed by a disciplinary body or tribunal only “on clear grounds”,17 where it is “clearly appropriate”18 and in “a very strong case”.19 Yet as an appeal to the court is generally in the nature of a rehearing, the court must go beyond merely satisfying itself that there is evidence that could justify the findings appealed against, but determine for itself what facts are proved by the evidence and what inferences should be drawn from those facts.20

NATURE OF DISCIPLINARY PROCEEDINGS Objectives of disciplinary proceedings Main aim is protective

[23.20]

The main purpose served by disciplinary proceedings – which informs both the way in which the gravity of the misconduct is determined, and what factors influence the disciplinary sanction imposed – is to protect members of the

13 Re a Practitioner (1975) 12 SASR 166 at 170 per Bray CJ; Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 at 252 per Mahoney JA; Re Maidment (1992) 23 ATR 629 at 646 per Olsson J; Quigley v Legal Practitioners Complaints Committee [2003] WASCA 228 at [21] per Parker J; Walsh v Legal Practitioners Conduct Board (2016) 125 SASR 111 at [79] per Stanley J. 14 Re a Solicitor [1912] 1 KB 302 at 312 per Darling J; Re Hodgekiss (1959) 62 SR (NSW) 340 at 343 per Owen J; Re a Practitioner [1960] SASR 178 at 192 per Chamberlain J. 15 Re Hodgekiss (1959) 62 SR (NSW) 340 at 343 per Owen J. 16 De Pardo v Legal Practitioners Complaints Committee [2003] WASCA 274 at [14]. See also Jager v Medical Complaints Tribunal (2004) 12 Tas R 446 at [18] per Blow J; Salsbury v Law Society [2009] 1 WLR 1286 at [30] per Jackson LJ; Moseley v Solicitors Regulation Authority [2013] BPIR 855 at [17] per Lewis J. 17 Re a Practitioner [1960] SASR 178 at 192 per Chamberlain J. 18 Salsbury v Law Society [2009] 1 WLR 1286 at [30] per Jackson LJ. 19 Rajasooria v Disciplinary Committee [1955] 1 WLR 405 at 415–416 per Lord Cohen (PC). 20 Re Hodgekiss (1959) 62 SR (NSW) 340 at 343 per Owen J; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 440 per Mahoney JA, at 471 per Giles AJA.

752

Lawyers’ Professional Responsibility

[23.25]

public from misconduct by lawyers.21 This recognises the public interest in the integrity of members of the profession, a New South Wales judge branding the protective function as 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”.22 Closely allied to the protective object, professional discipline also aims to safeguard the reputation of the profession,23 which is more important than the fortunes of any individual member.24 Subsidiary and related to the foregoing are the objectives of maintaining proper standards in the legal profession25 and setting an example to other lawyers.26 A disciplinary order aims to deter other lawyers from engaging in the impugned conduct,27 thus also protecting the public against like defaults by other lawyers.28 So in making a disciplinary order, account is taken of the message it conveys to other lawyers, particularly inexperienced lawyers.29 The order should deliver the message that no matter how efficient, eminent or popular the lawyer, the conduct in question is unacceptable and will be treated seriously.30 Relationship between protection and punishment

[23.25]

As disciplinary proceedings are not criminal in nature, and instead target protection of the public, it is reasoned that their object cannot be to mete out punishment.31 Yet disciplinary sanctions may be felt as punishment by, and involve a great deprivation to, the person disciplined. A person who is struck off or 21 Southern Law Society v Westbrook (1910) 10 CLR 609 at 622 per O’Connor J; Weaver v Law Society of New South Wales (1979) 53 ALJR 585 at 587 per Mason J; Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 252 per Deane, Dawson, Toohey and Gaudron JJ; Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J. 22 New South Wales Bar Association v Meakes [2006] NSWCA 340 at [114] per Basten JA. 23 Southern Law Society v Westbrook (1910) 10 CLR 609 at 622 per O’Connor J; Re a Legal Practitioner (1981) 55 FLR 405 at 423 (FC(ACT)); Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR. 24 Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR; Sidney v Auckland District Law Society [1996] 1 NZLR 431 at 434–436 per Barker, Tompkins, Cartwright JJ. 25 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 286 per Dixon CJ; Re a Barrister and Solicitor (1979) 40 FLR 1 at 24–25 (FC(ACT)). 26 De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 at [42] per French J. 27 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 471 per Giles AJA; Attorney-General v Bax [1999] 2 Qd R 9 at 22 per Pincus JA. 28 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441 per Mahoney JA. 29 Re Drew (1920) 20 SR (NSW) 463 at 466 per Cullen CJ; Re a Practitioner (1982) 30 SASR 27 at 32 per King CJ. 30 Re Robb (1996) 134 FLR 294 at 330 (FC(ACT)). 31 Southern Law Society v Westbrook (1910) 10 CLR 609 at 625 per Isaacs J; Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 286 per Dixon CJ; Clyne v New South Wales Bar Association (1960) 104 CLR 186 at 201–202 (FC); Weaver v Law Society of New South Wales (1979) 53 ALJR 585 at 587 per Mason J; Re a Legal Practitioner (1981) 55 FLR 405 at 423 (FC(ACT)); Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J.

[23.25]

23 The Disciplinary Jurisdiction

753

suspended, for instance, loses the ability to earn an income from the profession he or she is otherwise qualified to pursue. A fine is, moreover, ostensibly punitive in nature.32 It is thus not always easy to divorce the effect of a disciplinary order from its objective.33 This explains judicial statements that the protection of the public requires meting out proper punishment and that grave forms of misconduct justify a “punitive response”.34 It is arguably by construing this response with the deterrent aspect of punishment – “as a warning signal to the legal profession”35 – that it is reconcilable with the chief protective aim.36 The prospect of punishment may, it is reasoned, discourage lawyers from engaging in conduct that threatens the public interest.37 Also, a “punitive response” shows the grave view a court or tribunal takes of the misconduct; a failure to mark its disapproval via such a response in the case of serious misconduct may be viewed by the public as almost tacit approval.38 The foregoing targets “general deterrence”, although the weight it should receive in determining the disciplinary sanction may need to be “sensibly moderated” where mental disorder has contributed to the lawyer’s misconduct.39 At the same time, the protection of the public may nonetheless dictate, as appears in the following paragraph, that a lawyer whose misconduct is impacted upon by mental disorder not remain on the roll.

32 It is open to a court or disciplinary tribunal, though, not to impose a fine because of the lawyer’s demonstrated inability to pay (see, for example, Legal Practitioners Complaints Committee v Richardson [2008] WASAT 116 at [7], [34]) or because of the size of the likely costs order that the lawyer will have to bear (see, for example, New South Wales Bar Association v Caffrey (No 4) [2008] NSWADT 190 at [30]), or to otherwise reduce the quantum of the fine to take account of the lawyer’s limited financial means, exposure to a costs order or another pecuniary penalty (see, for example, Legal Services Commissioner v Jayakody [2008] VCAT 2075 at [39]–[46]; Legal Services Commissioner v Laurie [2011] QCAT 335 at [13]; Council of the Law Society of New South Wales v Gallego (No 2) [2015] NSWCATOD 10 at [42]–[44]). A court or disciplinary tribunal may also allow a period of time for its payment: see, for example, Legal Services Commissioner v Clapin [2011] QCAT 339 at [16]. 33 R & T Thew Ltd v Reeves (No 2) [1982] QB 1283 at 1285–6 per Lord Denning MR. 34 Re Nelson (1991) 106 ACTR 1 at 24–25 per Higgins and Foster JJ. Cf Re Evatt (1967) 67 SR (NSW) 236 at 249–250 (CA); Bolton v Law Society [1994] 1 WLR 512 at 518 per Sir Thomas Bingham MR. 35 Council of the Law Society of New South Wales v Treanor [2009] NSWADT 115 at [17]. 36 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 at [57] per McMurdo P; Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 at [30], [31] per Maxwell P (noting that although “[t]he available sanctions are, by their nature, punitive, and the objectives of specific and general deterrence – which serve the protection of the public – depend upon the sanctions having punitive effect”, where there is a choice of sanctions “the Tribunal will choose that sanction which maximises the protection of the public”); Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2013] ACTSC 134 at [58], [59] per Nield AJ. See further Dal Pont, “Disciplinary Disjunction” (2010) 84 (Oct) LIJ 74. 37 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441 per Mahoney JA. 38 Legal Practitioners Conduct Board v Boylen (2003) 229 LSJS 32 at [72] per Debelle J. 39 See, for example, Legal Services Commissioner v Piva [2009] VCAT 1981 at [60], [61]; Legal Services Commissioner v Long [2012] VCAT 193 at [18].

754

Lawyers’ Professional Responsibility

[23.30]

Impact of protective aim on nature of sanction

[23.30]

As a disciplinary order protects the reputation of the profession, it may justify a sanction more severe than were its object directed to punishment.40 For example, in Legal Practitioners Conduct Board v Trueman,41 involving a lawyer struck off for misconduct explainable by a psychiatric condition, Doyle CJ remarked that were the court concerned only with punishment, “it might be possible to take a more merciful course”. Also, that the lawyer has already suffered punishment by the law arising out of the misconduct – say, by being subject to a criminal penalty, and suffering public ignominy as a result – does not downplay its seriousness in a disciplinary sense, or the need for “general deterrence”, and so of itself does not usually justify any less severe a disciplinary order:42 see [23.170]. The notion of general deterrence may also justify a disciplinary sanction that would not have been merited had specific deterrence – directed at the lawyer in question – been the sole consideration.43

[23.35]

Just as disciplinary proceedings are not criminal in nature or purpose, nor are they like ordinary civil litigation. They have not historically been the vehicle through which individuals injured by a lawyer’s misconduct could secure a monetary (or other) remedy. A person who suffers financially as a result of a lawyer’s misconduct may recover by instituting civil proceedings directly against the lawyer, or in some circumstances by an application to the fidelity fund: see [9.125]. The flip side is that a lawyer cannot successfully defend a charge of misconduct by pointing to the fact that no client has suffered (or will suffer) financially as a result of the misconduct (though it could impact on the disciplinary response): see [23.165].

The court’s inherent disciplinary jurisdiction (see [23.05], [23.10]) nonetheless empowers the court to order a lawyer to make compensation.44 Also, statute now generally gives disciplinary bodies or tribunals power, in the course of disciplinary proceedings, to order a lawyer to pay compensation (within a set limit) to a complainant who has suffered loss as a result of the lawyer’s misconduct.45 In this sense, the disciplinary process has traversed into the role of the civil process, although it does not displace civil processes between lawyers and their clients. 40 Re Maraj (a legal practitioner) (1995) 15 WAR 12 at 24 per Malcolm CJ; Moseley v Solicitors Regulation Authority [2013] BPIR 855 at [17], [29] per Lewis J. 41 Legal Practitioners Conduct Board v Trueman (2003) 225 LSJS 503 at [22]. See also Legal Practitioners Conduct Board v Dudek (2006) 245 LSJS 346 at [17], [18] per Sulan J. 42 See, for example, Barristers’ Board v Darveniza (2000) 112 A Crim R 438. 43 See, for example, Legal Services Commissioner v McCristal [2011] VCAT 231 (involving trust accounting irregularities that involved no dishonesty and had been properly addressed by the respondent, the tribunal remarked that specific deterrence was not an overriding factor (at [36]), but focused on general deterrence as the “paramount objective” in cases of this kind (at [54]), thus ordering that the respondent be reprimanded and pay a $25,000 fine, noting that “[t]here can never be any extenuating circumstances which will excuse a blatant and calculated breach of the legislation and Rules governing the management of trust moneys”: at [55]). 44 Myers v Elman [1940] AC 282. 45 ACT, Pt 4.8; NSW, Pt 5.5 (formerly NSW 2004, Pt 4.9); NT, Pt 4.12; Qld, Pt 4.10; Tas, Pt 4.9; Vic, Pt 5.5 (formerly Vic 2004, ss 4.3.17(1)(a), 4.4.19(a)); WA, Pt 13, Div 11.

[23.45]

23 The Disciplinary Jurisdiction

755

Impact of protective aim on procedure

[23.40]

That disciplinary proceedings are directed not chiefly at punishment, but rather at protecting the public, is a reason why the civil rather than the criminal standard of proof applies: see [23.50]. It also explains why, unlike the accused in a criminal matter, a lawyer-defendant must cooperate reasonably in the process and avoid an unduly combative approach: see [24.30]. Behaviour inconsistent with this duty may impact on the appropriate disciplinary response: see [25.85]. So while a criminal defendant’s behaviour at trial does not ordinarily affect the criminal penalty,46 it can affect the disciplinary response.47

Impact of protective aim on need to comprehensively consider misconduct

[23.45]

The protective aim requires a court or tribunal to deal comprehensively with the misconduct issues before it. That any of one of multiple matters alleged against a lawyer would, if established, justify a striking off order, does not obviate the need to address each of them. There are at least two reasons for this: first, as the lawyer’s conduct is a matter of public concern, allegations of professional misconduct should be openly and fully dealt with; and second, all of the matters constituting misconduct should be addressed on the basis that they could be relevant to any future application for readmission (as to which see [2.175]).48 A lawyer may otherwise petition for her or his own removal to shield other misconduct, which could then not be recorded for other purposes, whether for readmission or in pursuing a different endeavour.49 Also, even though the lawyer consents to the orders sought, the court must satisfy itself that those orders are appropriate,50 and make findings of fact in appropriate detail as to the basis of its orders.51 This may not necessarily require findings on every matter alleged, but generally it is appropriate to make findings on significant matters concerning the conduct the subject of the complaint.52 46 R v Gray [1977] VR 225 at 231. 47 Hannebery v Legal Ombudsman [1998] VSCA 142 at [22] per Tadgell JA. 48 Re Demer [1967] 1 NSWR 167 at 168–169 (CA); Law Society of New South Wales v Seymour (unreported, CA(NSW), 14 April 1982) at 4; Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768 at [13]–[17] (CA(NSW)); Law Society of the Australian Capital Territory v Burns (2012) 6 ACTLR 282 (FC). Cf SA, s 89(1b) (which allows a lawyer to bring an application in anticipation of disciplinary proceedings that have not yet been instituted and empowers the court to strike the lawyer’s name from the Roll before the proceedings are instituted; the court nonetheless may decline to make the order on the lawyer’s application if the public interest demands that it exercise its disciplinary jurisdiction, which may result in the making of additional, or other, orders: Legal Practitioners Conduct Board v Pertl [2014] SASCFC 88 at [11] per Kourakis CJ, with whom Gray and Vanstone JJ concurred). 49 See, for example, Smyrnis v Legal Practitioners Admission Board [2003] NSWCA 64 (where the Law Society was granted leave to intervene in a solicitor’s application for an order that his name be removed from the roll, on the ground that the solicitor filed an affidavit in support in which he made only limited disclosure of his corrupt conduct). 50 Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [12] per McColl JA. 51 Prothonotary of the Supreme Court of New South Wales v Ritchard (unreported, CA(NSW), 31 July 1987); New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at [24] per Spigelman CJ. 52 Council of the New South Wales Bar Association v Power (2008) 71 NSWLR 451 at [11] per Hodgson JA.

756

Lawyers’ Professional Responsibility

[23.50]

Proof in disciplinary proceedings

[23.50]

The onus of proving misconduct lies on the party alleging it, namely, the relevant regulatory or professional body or other complainant who has standing.53 So far as the standard of proof is concerned, the sui generis nature54 of disciplinary proceedings – they are neither criminal nor civil – has generated some equivocality. Only the Queensland legislation addresses the issue explicitly, applying a balance of probabilities standard for allegations before a disciplinary body.55 The cases make reference to a standard variously described as a “high degree of satisfaction”,56 “comfortably and confidently satisfied”,57 “very sure”58 and, most commonly, “reasonable satisfaction”.59 Although clearly not the criminal standard, it may be more exacting than the ordinary civil standard. The degree of satisfaction required may, it is said, vary between cases; where it lies within the continuum rests on the gravity of the alleged misconduct.60 Whether this indeed represents some kind of intermediate standard may be queried. It may be that, as the New Zealand Supreme Court held in Z v Dental Complaints Assessment Committee,61 the civil standard applies but judges require stronger evidence of more serious allegations before the issue is proved to their reasonable satisfaction. The uniform evidence law, in s 140, supports this, as it directs the court to take into account “the gravity of the matters alleged” in determining whether a party has proved its case on the balance of probabilities, although it should not be assumed to apply in disciplinary proceedings. Not all share the same view. In Singapore, for instance, the criminal standard is favoured because, inter alia, “it sends the moral message that, if a person’s conduct or character is to be judged for professional fitness, it may only be judged if the highest standard of proof has been reached”.62 Elias CJ in Z v Dental Complaints Assessment Committee, in dissent, also favoured the criminal standard, finding the 53 Southern Law Society v Westbrook (1910) 10 CLR 609 at 626 per Isaacs J, at 627 per Higgins J. 54 Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149 at 158 per Duggan J; Ooi v Medical Board of Queensland [1997] 2 Qd R 176 at 178 (FC). Cf Legal Services Commissioner v Bone [2014] QCA 179 at [47] per Morrison JA, with whom Fraser and Gotterson JJA concurred (who described disciplinary proceedings as “akin to criminal proceedings, although not requiring the same standard of proof”). 55 Qld, s 649(1). 56 O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208 per Kirby P. 57 Re Hodgekiss (1959) 62 SR (NSW) 340 at 356 per Hardie J. 58 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 296 per Fullagar J. 59 This is known as the Briginshaw standard (after Briginshaw v Briginshaw (1938) 60 CLR 336), and has been widely endorsed: see, for example, Adamson v Queensland Law Society Inc [1990] 1 Qd R 498 at 504–506 per Thomas J; Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149 at 153 per Millhouse J, at 166 per Debelle J. 60 Re a Barrister and Solicitor (1979) 40 FLR 1 at 21 (FC(ACT)); New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 238 per Hope JA; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 220 per Clarke JA; Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149 at 153 per Millhouse J. 61 Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1 at [102] per McGrath J, who also delivered the reasons of Blanchard and Tipping JJ. 62 Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221 at [51] per V K Rajah JA.

[23.55]

23 The Disciplinary Jurisdiction

757

analogy with civil proceedings less convincing, especially for serious disciplinary charges.63 Her Honour reasoned as follows:64 In the case of disciplinary bodies with power to impose heavy penalties (including removal from the profession) and comprised of professional peers and lay members it is in my view unacceptably loose to leave the matter on the basis that sufficient protection is provided by “flexible” application of a balance of probabilities standard of proof. The higher criminal standard of proof should be frankly adopted in such disciplinary proceedings. The effect should not be exaggerated. It simply requires the Tribunal to be sure of the facts which justify imposition of substantial penalties and the reputational and professional damage which results from a finding of serious professional misconduct.

A decade and a half earlier an English judge similarly complained that it was “not altogether helpful” to leave the standard of proof “somewhere undefined between the criminal and the civil standard”.65 That this obiter remark was influenced by the fact that the applicable Bar Code of Conduct required the application of the criminal standard did not prevent the Privy Council in Campbell v Hamlet66 from applying the criminal standard of proof in legal disciplinary proceedings, contrary to what had been assumed to have been the law.67 Ultimately, it may be queried whether a civil standard flexibly applied as opposed to the criminal standard will make a substantial difference to the outcome in practice,68 and whether the exercise is more aligned, at least in this context, with semantics than anything else. Procedural fairness in disciplinary proceedings

[23.55]

Disciplinary investigations and proceedings must be conducted according to the standards of procedural fairness.69 These are superimposed on the statutory framework by the general law, and so may extend beyond the specific requirements of the statute.70 As disciplinary bodies and tribunals exercise adjudicative functions, a high standard of procedural fairness is expected, akin to that applicable in the courts.71 The flip side is that members of disciplinary bodies and tribunals 63 Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1 at [50], [55]. 64 Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1 at [4]. 65 Re a Solicitor [1993] QB 69 at 81 per Lord Lane CJ. 66 Campbell v Hamlet [2005] 3 All ER 1116. See also Law Society v Waddingham [2012] 6 Costs LO 832 (requirement to prove allegation of dishonesty against solicitor to the criminal standard). 67 See Bhandari v Advocates Committee [1956] 1 WLR 1442 (PC). 68 Cf Law Society of Singapore v Wan Hui Hong James [2013] 3 SLR 221, where V K Rajah JA, though favouring the criminal standard, remarked (at [49]), that where the allegations against a lawyer are of a very serious nature, there is likely to be little practical difference between the civil and criminal standards of proof, and (at [50]) that the criminal standard in any event allows a degree of flexibility in its operation, as “the strength of evidence required to remove all reasonable doubt may also vary according to the gravity or seriousness of the allegations to be proved”. 69 Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 251 per Deane, Dawson, Toohey and Gaudron JJ; Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J; Carver v Law Society of New South Wales (1998) 43 NSWLR 71 at 98 per Powell JA, at 101 per Stein JA. 70 Romeo v Asher (1991) 29 FCR 343 at 349 per Morling and Neaves JJ. This is explicitly recognised by ACT, s 417; NSW, s 319 (formerly NSW 2004, s 591); NT, s 504; Tas, s 460; Vic, s 319; WA, s 430(1). 71 Newfoundland Telephone Co v Board of Commissioners of Public Utilities [1992] 1 SCR 623 at 638 per Cory J; Solicitor “X” v Nova Scotia Barristers’ Society (1999) 171 DLR (4th) 310 at 318 per Roscoe JA.

758

Lawyers’ Professional Responsibility

[23.60]

share an immunity akin to that enjoyed by participants in the curial process.72 The requirements of procedural fairness are manifested in the various ways discussed below. Conduct of investigation

[23.60]

As regulatory bodies and tribunals have broad powers to investigate and summon evidence,73 these must be exercised bona fide and in a manner so as not to oppress.74 While disciplinary proceedings are not criminal in nature, moreover, the position of the relevant regulatory body or officer is sufficiently akin to that of a prosecutor in criminal proceedings to justify a duty of fairness and behaviour as a model litigant75 (as to which see [13.85]). Procedural fairness in investigations also translates to apprising the lawyer in sufficiently precise terms, prior to the hearing, of the nature and particulars of the case he or she is called upon to meet.76 Beyond giving fair notice of the conduct alleged to be unprofessional and why it is so, thus assisting the lawyer in formulating a response, this facilitates clear findings as to the nature and quality of the lawyer’s conduct. The lawyer must then be afforded an appropriate opportunity to be heard and to lead evidence in relation to charges,77 which will ordinarily encompass (sworn) evidence. these powers must be exercised bona fide and in a manner so as not to oppress.78

72 ACT, s 587A; ACT Civil and Administrative Tribunal Act 2008 (ACT), s 116; NSW, s 467; Civil and Administrative Tribunal Act 2013 (NSW), s 89 (formerly NSW 2004, s 601; Administrative Decisions Tribunal Act 1997 (NSW), s 137); NT, ss 560, 677; Qld, s 707; SA, s 81(2); Tas, s 515; Vic, s 467; Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 143; WA, s 591; State Administrative Tribunal Act 2004 (WA), ss 163, 164. 73 See, for example, ACT, Pt 4.4; NSW, Ch 7 (formerly NSW 2004, Ch 6); NT, Pt 4.6; Qld, Pt 4.6; SA, Sch 4 (formerly SA, ss 76(3), 77A(3), 84); Tas, Pt 4.4; Vic, Ch 7 (formerly Vic 2004, Pt 4.4, Div 3); WA, Pt 13, Div 6. 74 Rogerson v Law Society of the Northern Territory (1993) 88 NTR 1 at 10 per Asche CJ. 75 Legal Services Commissioner v Adamakis [2013] VCAT 1970 at [31]. 76 Re Evatt (1967) 67 SR (NSW) 236 at 238 (CA); Re a Barrister and Solicitor (1979) 40 FLR 1 at 18 (FC(ACT)); Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 6 per Moffitt P; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 211 per Kirby P, at 224 per Clarke JA; R v Solicitors’ Disciplinary Tribunal [1988] VR 757 at 770 (FC); Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J; Kerin v Legal Practitioners Complaints Committee (1996) 67 SASR 149 at 166 per Debelle J. 77 Smith v New South Wales Bar Association (1992) 176 CLR 256 at 270 per Deane J; Yung v Adams (1997) 150 ALR 436 at 441 per Davies J. 78 Coe v New South Wales Bar Association [2000] NSWCA 13 at [21] per Meagher JA, with whom Priestley JA agreed; New South Wales Bar Association v Meakes [2006] NSWCA 340 at [70] per Tobias JA; Legal Services Commissioner v Stirling [2013] VSCA 374 at [155]–[159] per the court.

[23.65]

23 The Disciplinary Jurisdiction

759

Conduct of disciplinary hearings

[23.65]

In most jurisdictions, statute requires hearings before a relevant body or tribunal to be conducted in public unless the interests of justice dictate otherwise.79 “Transparency and public exposure in cases involving a profession”, it is said, “are required by public policy as a means of maintaining public confidence”.80 Participants in disciplinary proceedings are generally entitled to legal representation.81 In some jurisdictions the rules of evidence apply to non-court disciplinary proceedings,82 whereas in others they do not.83 In any case, rules of evidence may guide the relevant tribunal on how to treat particular evidence or the weight to attribute it.84 The disciplinary body or tribunal must make findings concerning the nature of the lawyer’s conduct, and the integrity or otherwise of her or his evidence, as these may be relevant in determining fitness on a future readmission application: see [2.175]. The giving of reasons for these findings serves not only to properly inform a court to which an appeal may subsequently be brought,85 but is necessary in order to satisfy the parties that the issues have been addressed, and to satisfy the public that the body or tribunal has properly discharged its role. As explained by de Jersey CJ in Attorney-General v Kehoe, referring to the (then) Queensland Solicitors Complaints Tribunal:86 With a tribunal like this, the purpose of expressing, preferably publishing, sufficient reasons for such a decision … is … to satisfy the public that the Tribunal is properly discharging its role. This Tribunal generally conducts its proceedings in public. Because of the public significance of its determinations, which relate to those to be held out as fit to practise as solicitors, it is important that interested members of the public have the opportunity to come to know of the Tribunal’s justification for any decision it may make, and thereby satisfy themselves that the disciplinary process is being carried through properly.

79 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 38; NSW, s 301(1); Civil and Administrative Tribunal Act 2013 (NSW), Sch 5, Pt 4, Div 4, cl 22(1) (formerly NSW 2004, s 560); NT, s 523; Qld, s 644; SA, s 84A(1), (2); Tas, s 467(3); Vic, s 301(1); Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 101; State Administrative Tribunal Act 2004 (WA), s 61 (cf WA, s 434). 80 Law Society of Tasmania v LH [2003] TASSC 90 at [6] per Slicer J. See also Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 75–76 per Parker J. 81 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 30; Civil and Administrative Tribunal Act 2013 (NSW), Sch 5, Pt 4, Div 4, cl 21(4) (formerly Administrative Decisions Tribunal Act 1997 (NSW), s 71(1)); NT, s 508(3); Barristers’ Conduct Rules (SA), r 136(c); Qld, s 643(5); Tas, s 467(5)(a); Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 62(1); State Administrative Tribunal Act 2004 (WA), s 39(1). 82 ACT, s 420; NSW, s 301(3) (limited to allegations of professional misconduct) (formerly NSW 2004, s 558); NT, ss 507(2), 521; Vic, s 301(3) (limited to allegations of professional misconduct). See Zaidi v Health Care Complaints Commission (1998) 44 NSWLR 82 at 90–91 per Mason P. 83 Qld, s 645(1)(c); Barristers’ Conduct Rules (SA), r 136(c); Legal Profession (Disciplinary Tribunal) Rules 1995 (Tas), r 12; State Administrative Tribunal Act 2004 (WA), s 32(2). 84 Albert, “Statutory Professional Disciplinary Proceedings” (1994) 68 LIJ 154 at 159. 85 Malfanti v Legal Profession Disciplinary Tribunal (unreported, CA(NSW), 23 August 1993) at 15, 16 per Clarke JA. 86 Attorney-General v Kehoe [2001] 2 Qd R 350 at [3], [4] (paragraph break omitted).

760

Lawyers’ Professional Responsibility

[23.70]

Bias of decision-maker

[23.70]

Though bias can take many forms, in the case of disciplinary proceedings it most commonly surfaces where the decision-maker has a connection with the dispute that creates an impression that it may incline towards a particular result. The test for bias is whether there is a reasonable apprehension on the part of a fair-minded and informed member of the public of a lack of impartiality in the decision-maker or adjudicator.87 A leading judicial statement in this context is that of Lord Clyde in Roylance v General Medical Council (No 2):88 One essential element of a fair hearing is the requirement that the decision-maker should be impartial … Impartiality calls for a state of mind which is free from any influences extraneous to the merits of the particular case, which is capable of a dispassionate inquiry and an objective judgment, and which is not turned aside by any motivation to favour one side as against the other. But the actual state of a person’s mind is not always readily discoverable and absolute perfection may not be readily ascertainable. More subtly the decision-maker may be influenced quite unconsciously in the one direction or the other by extraneous considerations in ways which may be evident to or suspected by others but of which he is unaware. The insidious nature of bias makes its identification elusive. The law does what it can by recognising that bias may be apparent as well as actual. Thus proof of an appearance of bias may be as fatal as proof of a state of mind which is actually partial.

This explains why, for instance, a person who was a member of a body or its relevant committee when it instituted disciplinary proceedings to be addressed by a tribunal is, as a general rule, disqualified from sitting on that tribunal on the grounds of apprehended bias.89 Bias may also surface when the adjudicator, by its actions in conducting the hearing, conveys the impression of lacking impartiality. For example, in Solicitor X v Nova Scotia Barristers’ Society90 the Nova Scotia Court of Appeal held that the manner and substance of the disciplinary panel’s questioning of the lawyer exceeded the bounds of simple clarification of the evidence – it focused on matters irrelevant to the charges, and was combined with suggestions of bad faith and unfair conduct by the lawyer – but served to bring the adjudicators into the arena “cast with the demeanour of prosecutors”. As a result, the court concluded that a reasonable person would not be left with the impression that the panel acted fairly, impartially and judicially. This does not mean, however, that extensive questioning by an adjudicator per se causes it to traverse the line between adjudicator and prosecutor, as complex issues may indeed require questioning of that kind.91

87 Newfoundland Telephone Co v Board of Commissioners of Public Utilities [1992] 1 SCR 623 at 636 per Cory J; Carver v Law Society of New South Wales (1998) 43 NSWLR 71 at 87, 99 per Powell JA; Roylance v General Medical Council (No 2) [2000] 1 AC 311 at 318–319 (PC). 88 Roylance v General Medical Council (No 2) [2000] 1 AC 311 at 318 (PC). 89 Carver v Law Society of New South Wales (1998) 43 NSWLR 71 at 87, 98–99 per Powell JA, at 101 per Stein JA, at 102 per Sheppard AJA. 90 Solicitor “X” v Nova Scotia Barristers’ Society (1999) 171 DLR (4th) 310 at 322 per Roscoe JA. 91 See, for example, Rusonik v Law Society of Upper Canada (1988) 28 OAC 57.

[23.80]

23 The Disciplinary Jurisdiction

761

Costs of disciplinary proceedings

[23.75]

Statute vests in the relevant professional disciplinary body or tribunal, like a court, a discretion in the award of costs, including the costs of investigating the conduct that led to the finding. As a general principle, though, that discretion is exercised against a lawyer found to have behaved unprofessionally.92 The profession or the public generally, it is reasoned, should not have to bear costs of proceedings correctly brought for the protection of the public.93

A lawyer who succeeds on the merits cannot necessarily be assured of receiving costs; statute in most jurisdictions premises a costs order in favour of the lawyer on “special circumstances”,94 and envisages that costs may be ordered against a lawyer if the sole or principal reason the proceedings were instituted was a failure to co-operate with the relevant body, or for any other reason such an order is warranted.95 In line with this, case authority supports the proposition that even if a lawyer’s appeal on penalty is upheld, he or she may still be liable for the costs of the initial hearing if the court considers that bringing the proceedings was justified.96 Publicising disciplinary action

[23.80]

The legislative trend towards transparency of disciplinary proceedings – evident in the general requirement that hearings be public (see [23.65]) – has translated into statutory provision as to the publicising of disciplinary action. It requires relevant bodies to publicise disciplinary action taken against a lawyer, and to keep a register of that action available for public inspection.97 Although statute in the Territories, Queensland and Western Australia retains the availability of a private reprimand or sanction,98 it confines this to “special circumstances”.99 92 ACT, s 433(1); NSW, s 303(1) (formerly NSW 2004, s 566(1)); NT, s 529(1); Qld, s 462(1); SA, s 85(1); Tas, s 481(1); Vic, s 303(1). Cf State Administrative Tribunal Act 2004 (WA), s 87 (basic proposition is that each party bears its own costs but reserves a discretion to the tribunal to make costs orders). 93 New South Wales Bar Association v Thomas (No 2) (1989) 18 NSWLR 193 at 210 per Kirby P. 94 ACT, s 433(3); NSW, s 303(3) (formerly NSW 2004, s 566(3)); NT, s 529(3); Qld, s 462(4); Tas, s 481(3); Vic, s 303(3). As to the meaning of “special circumstances” in this context see New South Wales Bar Association v Tedeschi (No 3) [2003] NSWADT 174 at [46]; Haralovic & Carr v Law Society of New South Wales (No 2) [2007] NSWADT 97 at [28]–[46] (in the context of “special circumstances” under the power to award costs conferred by s 88(1) of the Administrative Decisions Tribunal Act 1997 (NSW)). 95 ACT, s 433(2); NSW, s 303(2) (formerly NSW 2004, s 566(2)); NT, s 529(2); Qld, s 462(2); Tas, s 481(2); Vic, s 303(2). 96 See, for example, Re Hodgekiss (1959) 62 SR (NSW) 340 at 349 per Owen J, at 358 per Hardie J. 97 ACT, s 448; Legal Profession Uniform Law Application Act 2014 (NSW), s 152 (formerly NSW 2004, s 577); NT, s 541; Qld, s 472; SA, s 89C; Tas, s 497; Legal Profession Uniform Law Application Act 2014 (Vic), s 150 (formerly Vic 2004, s 4.4.26); WA, s 452. 98 ACT, ss 413(2)(b), 425(3)(e); NT, ss 499(2)(a), 525(3)(e); Qld, ss 456(2)(e), 458(2)(a); WA, ss 426(2)(a), 439(d). 99 Cf the common practice in the United States of issuing private sanctions or reprimands as opposed to public ones, which has been bemoaned by more than one commentator: see, for example, Levin, “The Case for Less Secrecy in Lawyer Discipline” (2007) 20 Geo J Legal Ethics 1; Reid, “The Legal Profession’s “Dirty Little Secret”: Attorney-Client Sexual Relations and Public vs Private Disciplinary Sanctions” (2011) 24 Geo J Legal Ethics 801.

762

Lawyers’ Professional Responsibility

[23.85]

CONCEPT OF “PROFESSIONAL MISCONDUCT” Misconduct as defined at common law

[23.85]

The common law defines “professional misconduct” as behaviour that would reasonably be regarded as disgraceful or dishonourable by the lawyer’s professional brethren of good repute and competency. Known as the Allinson test, after the English Court of Appeal’s 1894 decision100 where it was propounded, it has been repeatedly endorsed as the relevant standard by Australian courts.101 That it rests on the application of peer judgment – a standard of conduct that commends itself to the general body of lawyers – has at least the implications noted below. First, compliance with the rulings and pronouncements of the relevant professional body, even if erroneous, are likely to provide a defence to a charge of professional misconduct.102 Second, that the impugned practice is widespread among the profession may indicate that it is not regarded as disgraceful and dishonourable by reputable and competent members of the profession, although this cannot be taken too far. That other lawyers engage in an unprofessional practice does not make it right.103 In Law Society of Tasmania v Turner,104 for example, involving disciplinary action arising out of a solicitors’ mortgage scheme collapse, Crawford J conceded that other reputable firms had engaged in the same practices as the respondents and that there was no evidence put before the court that there were reputable lawyers who regarded such practices as disgraceful or dishonourable, or even improper. However, applying the Allinson test, this did not prevent a finding of misconduct because the evidence did not show that those other reputable firms were competent or reasonably of the view that the practices were not disgraceful or dishonourable.105 Third, the requirement that the conduct be disgraceful or dishonourable excludes “mere negligence” from professional misconduct.106 Conversely, conduct amounting to gross negligence or recklessness may come within the common law definition of

100 Allinson v General Council of Medical Education and Registration [1894] 1 QB 750. 101 See, for example, Re a Solicitor [1960] VR 617 at 620 per Dean J; Re Thom (1962) 80 WN (NSW) 968 at 969 (FC); Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 143 (CA); Prothonotary of the Supreme Court of New South Wales v Costello [1984] 3 NSWLR 201 at 203 per Glass and Samuels JJA; Adamson v Queensland Law Society Inc [1990] 1 Qd R 498 at 507 per Thomas J; Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 153 per Black CJ, at 168 per Jenkinson J. 102 Brown v Inland Revenue Commissioners [1965] AC 244 at 258 per Lord Reid; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 756 per Hutley JA. 103 Law Society of Tasmania v Walker (unreported, SC(Tas), Cox J, 30 November 1988) at 28; Re Robb (1996) 134 FLR 294 at 329 (FC(ACT)). 104 Law Society of Tasmania v Turner (2001) 11 Tas R 1. 105 Law Society of Tasmania v Turner (2001) 11 Tas R 1 at [46]. 106 Myers v Elman [1940] AC 282 at 288 per Viscount Maugham; Re Hodgekiss (1959) 62 SR (NSW) 340 at 351 per Hardie J; Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 143 (CA); Re Miles (1966) 84 WN (Pt 1) (NSW) 163 at 173 (CA).

[23.90]

23 The Disciplinary Jurisdiction

763

misconduct.107 There is scope, though, for other than gross negligence to generate disciplinary consequences pursuant to the statutory concepts of misconduct: see [23.90]. Fourth, the Allinson definition of misconduct is not confined to behaviour in the course of a lawyer’s practice; it can encompass disgraceful or dishonourable conduct in a lawyer’s personal life. The word “professional”, so interpreted by the courts, has recognised that behaviour in a lawyer’s personal life can impact on the confidence the public can have in the lawyer in her or his professional life. Fifth, it has been said that, to come within professional misconduct at general law, the misconduct must “be brought home to the solicitor himself”,108 or there must be “some personal default”.109 So misconduct by a member of a firm does not render other members liable in the disciplinary sense in the absence of default on their behalf.110 But the notion that a lawyer must be personally implicated in the alleged misconduct to be liable for it – though found often in the case law111 – should not be interpreted as denying professional disciplinary consequences for omissions to properly supervise employees or partners. Serious omissions of this nature may nonetheless be regarded as disgraceful or dishonourable for the purposes of the Allinson definition: see [25.90]. Misconduct as defined under statute

[23.90]

The common law concept of “professional misconduct” is supplemented by various definitions of misconduct in the legal profession legislation. The statutory concepts are neither exhaustive nor intended to restrict the meaning and application of misconduct at common law, but serve as a legislative direction as to the behaviour that merits the description “misconduct”.112 Two definitions are supplied, differentiated according to the gravity of the misconduct, and ultimately influencing both the forum in which the matter is pursued and the severity of the disciplinary sanction. This differentiation was designed, inter alia, “to meet dissatisfaction with the response to those charged with deciding the complaints of

107 Re Miles (1966) 84 WN (Pt 1) (NSW) 163 at 175 (CA); Re Mayes [1974] 1 NSWLR 19 at 25–26 per Reynolds and Hutley JJA; Re a Barrister and Solicitor (1979) 40 FLR 1 at 22 (FC(ACT)). Cf Pillai v Messiter (No 2) (1989) 16 NSWLR 197 at 200 per Kirby P, at 200 per Samuels JA. 108 Myers v Rothfield [1939] 1 KB 109 at 127 per Slesser LJ. 109 Re a Barrister and Solicitor (1979) 40 FLR 1 at 22 (FC(ACT)). 110 Re a Barrister and Solicitor (1979) 40 FLR 26 at 27 (FC(ACT)). 111 See, for example, Myers v Elman [1940] AC 282 at 289 per Viscount Maugham, at 302–303 per Lord Atkin; Re a Solicitor [1960] VR 617 at 620 per Dean J; Nikolaidis v Legal Services Commissioner [2007] NSWCA 130 at [130]–[136], [182], [183] per McColl JA. Cf Re Mayes [1974] 1 NSWLR 19 at 25 per Reynolds and Hutley JJA. 112 At the same time, it has been argued that the common law definition is outdated in the wake of modern definitions and the modern disciplinary processes: see Edmonds, “Misconduct of Australian Lawyers Under Legislation Based on the National Model – Aligning the Common Law Tests with the New Statutory Regime” (2013) 39 Mon ULR 776.

764

Lawyers’ Professional Responsibility

[23.90]

users of legal services and the suggestion that they sometimes tended to neglect conduct falling short of proper standards of competence and diligence”.113 The relevant phraseology, deriving from the core uniform provisions of the Model Laws (see [1.105]),114 distinguishes “professional misconduct” from “unsatisfactory professional conduct”. The latter is defined to include a lawyer’s conduct 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 lawyer”.115 The requirement that the conduct occur “in connection with the practice of law” has been said to require “more than a person acting in his own personal interest while using legal skills”, but to have “elements of the conduct forming part of a legal practice, as generally understood”.116 This is not, however, confined to acting for clients. Conduct may occur “in connection with the practice of law” even if not connected with the provision of legal services; for instance, it may encompass failure to fulfil contractual and monetary responsibilities to employees or taxation authorities.117 “Professional misconduct” under statute includes unsatisfactory professional conduct where it involves a substantial118 or consistent failure119 to reach or 113 Walsh v Law Society of New South Wales (1999) 164 ALR 405 at 421 per McHugh, Kirby and Callinan JJ. Cf Haller, “Professional Discipline for Incompetent Lawyers? Developments in the UK and Australia” (2010) 17 Int’l J Leg Prof 83 (who argues that the aims underscoring extending professional discipline to incompetence have not been fully realised). 114 In South Australia this awaited the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA), which amended the Legal Practitioners Act 1981 (SA) with effect on 1 July 2014. Prior to this date the South Australian Act distinguished “unsatisfactory conduct” from “unprofessional conduct”: SA, s 5(1). The latter was clearly more serious, as it was defined as an offence of a dishonest or infamous nature committed by the lawyer in respect of which punishment by imprisonment is prescribed or authorised, or any conduct in the course of, or in connection with, practice involving substantial or recurrent failure to meet the standard of conduct observed by competent legal practitioners of good repute. The former referred to conduct in the course of, or in connection with, practice that was less serious than unprofessional conduct but involved a failure to meet the standard of conduct observed by competent lawyers of good repute. 115 ACT, s 386; NSW, s 296 (formerly NSW 2004, s 496); NT, s 464; Qld, s 418; SA, s 68; Tas, s 420; Vic, s 296 (formerly Vic 2004, s 4.4.2); WA, s 402. 116 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D2” [2014] ACAT 6 at [73] (leading the tribunal to rule that the misguided pursuit of an action by a lawyer-litigant was not conduct “in connection with the practise of law”; the tribunal added that the proposition that a lawyer can be guilty of unsatisfactory professional conduct or professional misconduct by pursuing his or her own interests in a court case “in a wrongheaded, obstinate and misguided way” should be treated “with caution”: at [81]). 117 See, for example, Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D1” [2014] ACAT 17; Council of the Law Society of the Australian Capital Territory v Legal Practitioner “HA” [2016] ACAT 55. Cf Council of the Law Society of the Australian Capital Territory v Legal Practitioner “N1” [2016] ACAT 36. 118 Use of the term “substantial” suggests more than a mere departure from the standard of conduct required of a lawyer, but connotes “a large or considerable departure from the standard required”, which “could be the result of the extent and seriousness of the departure from the requisite standard of conduct, the deliberateness of the conduct, the consequences for the client or other aspects of the conduct”: Fittock v Legal Profession Conduct Commissioner (No 2) [2015] SASCFC 167 at [110] per the court (adding that “something more than a minor or moderate departure from the standard is required”: at [111]).

[23.95]

23 The Disciplinary Jurisdiction

765

maintain a reasonable standard of competence and diligence, and conduct whether or not happening in connection with the practice of law that would justify a finding that the lawyer is not a fit and proper person to engage in legal practice.120 It is thus declaratory of the proposition, accepted at general law, that while “mere negligence” will not constitute professional misconduct, gross negligence may: see [23.85]. This is consistent with the protective aim of disciplinary proceedings, as the public must be protected from serious, repeated or prolonged neglect or incompetence in representing client interests. This may be so, for instance, where the lawyer displays “a dangerous lack of knowledge or elementary law and procedure”,121 or has engaged in a gross failure to properly supervise an employee or partner, who then engages in misconduct: see [25.90]. The legislation adds that, without limiting the above definitions, the following can be unsatisfactory professional conduct or professional misconduct:122 • conduct consisting of a contravention of the legal profession legislation, regulations or rules; • charging of excessive legal costs in connection with the practice of law (under the Legal Profession Uniform Law in New South Wales and Victoria, charging of more than a fair and reasonable amount for legal costs): see [25.70]–[25.80]; • conduct in relation to which there is a conviction for a serious offence, a tax offence or an offence involving dishonesty; • conduct as or in becoming an insolvent under administration; • conduct in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 (Cth); • conduct in failing to comply with an order of a professional or disciplinary body; • conduct in failing to comply with a compensation order.

DISCIPLINARY ORDERS [23.95]

The appropriate disciplinary order depends on the seriousness or gravity of the misconduct, which in turn is determined by the potential impact of the conduct on the protection of the public and the reputation of the profession. What may also influence the appropriate order are various matters aside from the nature

119 “Consistent failure” refers to ongoing or persisting acts of failing on different occasions to reach or maintain the required standard. Accordingly, the same or similar failures occurring on a series of related occasions explainable by an overarching error of judgment by the lawyer do not involve a “Consistent failure” in this sense: Council of the Law Society of New South Wales v Webb [2013] NSWCA 423 at [22] per Meagher JA, with whom Leeming JA and Simpson J concurred. On the facts, this meant that the respondent’s negligent failure to seek confirmatory instructions from clients in ten transactions in which the same agent defrauded the clients did not involve a “consistent” course of unsatisfactory professional conduct, and was accordingly did not amount to professional misconduct: at [27]. 120 ACT, s 387; NSW, s 297 (formerly NSW 2004, s 497); NT, s 465; Qld, s 419; Tas s 421; Vic, s 497 (formerly Vic 2004, s 4.4.3); WA, s 403. 121 As was the case that led to a striking off order in Legal Profession Complaints Committee v Chin [2012] WASC 467 at [57] per the court. 122 ACT, s 389; NSW, s 298 (formerly NSW 2004, s 498(1)); NT, s 466(1); Qld, s 420; SA, s 70; Tas, s 422(1); Vic, s 298 (formerly Vic 2004, s 4.4.4); WA, s 404.

766

Lawyers’ Professional Responsibility

[23.100]

of the misconduct, discussed at [23.120]–[23.170]. The types of orders available to disciplinary tribunals and courts are extensive, including the main ones noted below (namely striking off, suspension or reprimand) but also fines,123 the imposition of conditions on practice and compensation orders, amongst others. Striking off

[23.100] Striking off (also termed “removal” or “disbarment”) is the most serious professional sanction, exercised where the lawyer is found not to be a fit and proper person to remain a member of the profession.124 The gravity of a lawyer’s misconduct may mean that nothing short of removal from practice can properly protect the public and/or preserve the reputation of the profession. Common to many of the occasions where lawyers have been struck off is dishonesty, as honesty is fundamental to both public and curial confidence in the profession.125 A lack of honesty may manifest itself in misstatements to the court (see [25.10]), for instance, or in fraudulent activity in practice or outside it (see [25.15], [25.50], [25.100]). It should not be assumed, however, that a finding of professional misconduct of itself justifies striking off;126 a lesser sanction may fulfil the tribunal’s protective responsibility, such as suspension (see [23.105]) or a reprimand (see [23.110]). But nor should it be assumed that striking off is limited to cases of misconduct. A lawyer may be struck off by reason of other forms of unfitness to practise, such as mental illness or loss of faculties by reason of age.127 In Re a Practitioner128 the lawyer suffered from a “paranoid episode” that rendered him unfit to practise until he could satisfy the court of his recovery. On other occasions, this outcome can be achieved by an undertaking, for instance, by an aged or infirmed lawyer who has

123 See Dal Pont, “Fine and Punishment” (2007) 81 (June) LIJ 84. 124 Re Davis (1947) 75 CLR 409 at 416 per Latham CJ; Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 298 per Kitto J; Re Maraj (a legal practitioner) (1995) 15 WAR 12 at 25 per Malcolm CJ. 125 Cf SRA Disciplinary Procedure Rules 2011 (UK), Appendix 3 (which is unique in making explicit provision for those circumstances where misconduct may support a decision to strike off: “(a) the conduct of the regulated person has caused significant loss or harm; (b) the regulated person has abused a position of trust; (c) the conduct of the regulated person has caused harm to or to the interests of a vulnerable person; (d) the conduct of the regulated person was motivated by any form of discrimination; (e) the conduct was deliberate, pre-meditated, repeated or reckless; (f) the conduct has put the public confidence in the regulation of the profession at risk; or (g) the conduct of the regulated person indicates that the person is unsuitable for the role being undertaken”: cl 4; conversely, cl 5 lists factors that may, following misconduct, support a decision not to strike off: “(a) the conduct was committed as a result of a genuine mistake or misunderstanding; (b) the regulated person has cooperated fully with the [Solicitors Regulation Authority]; (c) the conduct was trivial; or (d) there is a low likelihood of repetition of the conduct”). 126 Prothonotary of the Supreme Court of New South Wales v Costello [1984] 3 NSWLR 201 at 207 per Priestley JA; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 236 per Clarke JA. 127 Re Davis (1947) 75 CLR 409 at 418 per Starke J, at 424 per Dixon J; Re B (a Solicitor) [1986] VR 695 at 699–702 per Brooking J. 128 Re a Practitioner [1960] SASR 178.

[23.105]

23 The Disciplinary Jurisdiction

767

failed to meet the requisite standard, not to subsequently apply for a practising certificate.129 But where the lawyer’s conduct justifies removal from the roll, an undertaking is inappropriate.130 Suspension

[23.105] Suspension from practice is an appropriate disciplinary order “in limited circumstances”.131 It may be apt where a lawyer has fallen below the high standards expected “but not in such a way as to indicate that he lacks the qualities of character and trustworthiness which are the necessary attributes of a person entrusted with the responsibilities of a legal practitioner”.132 For instance, it may follow where a lawyer’s failure did not involve dishonesty,133 but not ordinarily upon repeated dishonest behaviour.134 While the effect of a suspension on the lawyer’s clients (in the case of the sole practitioner, in particular) is relevant in determining whether such disciplinary order ought to issue, by itself it cannot preclude such an order where, for reasons of protection and deterrence, it is otherwise justified.135 Suspension serves to warn other lawyers to eschew the impugned acts or omissions,136 and as an attempt to reform the lawyer,137 it being hoped that the experience of suspension will make her or him meticulous in future compliance with the required standards.138 An order for suspension should be based on a view that, upon the termination of a period of suspension, the lawyer will no longer be unfit to practise.139 It may accordingly have a role where the lawyer is suffering a temporary physical ailment or mental irrationality if a reasonable prognosis exists that, with treatment or supervision, he or she will likely be fit to practise within a

129 Re a Solicitor [1960] VR 617 at 623 per Dean J. 130 Re Maraj (a legal practitioner) (1995) 15 WAR 12. 131 Jauncey v Law Society of New South Wales (unreported, CA(NSW), 1 February 1989) at 13 per Clarke JA. 132 Re a Practitioner (1984) 36 SASR 590 at 593 per King CJ, cited with approval by Mason P in New South Wales Bar Association v Hamman (1999) 217 ALR 553 at [100]. 133 See, for example, Law Society of the Australian Capital Territory v Gates [2006] ACTSC 126 (where the solicitor’s persistent failure to comply with trust account regulations and to properly deal with trust account funds generated a 12-month suspension rather than striking off in view of the absence of any dishonesty in the impugned conduct, the solicitor’s ill health and the general competence with which the solicitor otherwise conducted his practice). 134 Attorney-General v Bax [1999] 2 Qd R 9 at 22 per Pincus JA. 135 Mancini v Legal Practitioners Conduct Board [2014] SASCFC 31 at [19] per the court. 136 Re Drew (1920) 20 SR (NSW) 463 at 466 per Cullen CJ. 137 Re Evatt (1967) 67 SR (NSW) 236 at 250 (CA). 138 Bolton v Law Society [1994] 1 WLR 512 at 518 per Sir Thomas Bingham MR. 139 Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 at 76 per Reynolds JA; Queensland Law Society Inc v Carberry [2000] QCA 450 at [40] per Moynihan SJA and Atkinson J.

768

Lawyers’ Professional Responsibility

[23.110]

finite time.140 Where, though, the duration of the ailment or irrationality is uncertain, it may be difficult to stipulate a set period of suspension; the lawyer may instead be suspended until he or she can satisfy the court or professional body that the adverse effects of the ailment have passed. The main practical difference between suspension and striking off is the element of certainty. A lawyer who has been suspended, for however long a period, is usually entitled to resume practice when the period of suspension expires, whereas a lawyer who has been struck off must, should he or she desire to resume practice, apply to be re-admitted, with no certainty as to the fate of that application (see [2.165]–[2.190]).141 The suspension order can, however, be drafted so as to require the tribunal or a third party to make a finding prior to allowing the person’s practice rights to resume.142 Reprimand

[23.110] A reprimand is usually confined to breaches of professional standards that are not so substantial as to merit suspension or striking off.143 Yet this should not serve to deny that “a reprimand … is nevertheless a serious matter”144 and “not a slap on the wrist”.145 A reprimand, it has been said, “has the effect of identifying standards the establishment and maintenance of which protects the public”.146 Evidence of the isolated nature of the conduct and of the lawyer’s good character are common to cases in which a reprimand has been ordered.147 For example, lawyers who on single occasions have used insulting or offensive language to an 140 Re Mack (1968) 88 WN (Pt 1) (NSW) 68 at 71 per Wallace P; Legal Practitioners Conduct Board v Morel (2004) 88 SASR 401 at [62] per Bleby and Gray JJ; Legal Practitioners Conduct Board v Nicholson (2006) 243 LSJS 293 at [37], [38] per Doyle CJ (envisaging a period of suspension until an appropriate monitoring regime could be put into place to address the lawyer’s alcohol addiction and depression). 141 Re a Practitioner (1984) 36 SASR 590 at 593 per Jacobs J; Re Nelson (1991) 106 ACTR 1 at 25 per Higgins and Foster JJ; Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR. 142 See, for example, Victorian Legal Services Commissioner v Mingos [2016] VCAT 918 (cancellation of practising certificate issued so as to ensure, inter alia, that the respondent would need to reapply for a practising certificate after the period of cancellation expires and satisfy the relevant board of his fitness to practise at that time: at [77]). 143 Southern Law Society v Westbrook (1910) 10 CLR 609 at 620 per O’Connor J; Re Nelson (1991) 106 ACTR 1 at 25 per Higgins and Foster JJ. 144 Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 157 per Black CJ. See also Legal Profession Complaints Committee v Detata [2012] WASCA 214 at [42] per Martin CJ (“A reprimand cannot and should not be viewed as the equivalent of no penalty at all. Other legal practitioners and members of the community generally would properly regard the imposition of a reprimand as a significant admonition of [the respondent’s] misconduct”); New Zealand Law Society v B [2013] NZCA 156 at [39] per White J (“a rebuke of a professional person will inevitably be taken seriously”). 145 Legal Services Commissioner v Sapountzis [2010] VCAT 1124 at [21]. 146 Prothonotary of the Supreme Court of New South Wales v Chapman (unreported, CA(NSW), 14 December 1992) at 22 per Cripps JA. 147 See, for example Re a Barrister and Solicitor (1979) 40 FLR 26 at 43 (FC(ACT)); Chamberlain v Law Society of the Australian Capital Territory (1993) 43 FCR 148 at 157 per Black CJ, at 167 per Lockhart J, at 173 per Whitlam J.

[23.120]

23 The Disciplinary Jurisdiction

769

opponent,148 approached jury members subsequent to trial,149 acted for both parties to a transaction involving a potential conflict150 and altered the jurat of an affidavit in the absence of the deponent to formally re-swear it,151 have received reprimands. A hint of dishonesty, if only isolated, may generate a reprimand coupled with a fine,152 but blatantly dishonest conduct, especially if sustained, calls for a more severe sanction.

FACTORS THAT IMPACT ON DISCIPLINARY ORDERS [23.115] The most critical factor that influences the appropriate disciplinary order is the nature of that (mis)conduct. The main types of (mis)conduct that generate disciplinary responses are discussed in Ch 25. Beyond the nature of the misconduct, though, other factors that impact upon the nature and severity of the disciplinary sanction are discussed below. These should not, however, necessarily be seen as mutually exclusive; a combination of more than one such factor can influence, whether to mitigate or to aggravate, what would otherwise be the appropriate order. While consistency in disciplinary outcomes is desirable, the heavily factual nature of the relevant inquiry dictate limited precedential value of earlier cases.153 Frequency of misconduct and prior misconduct findings Isolated as opposed to persistent misconduct

[23.120] Where the misconduct can be reasonably construed as an isolated blight on an otherwise unblemished professional career, it may justify a less severe disciplinary sanction than may otherwise have been the case.154 The seriousness of the misconduct and how it reflects upon the lawyer’s honesty and integrity are, in any case, important matters that impact upon the issue. Absence of dishonesty or other impugning of the lawyer’s integrity may, in a singular mishap, be in the lawyer’s favour. In Council of the Queensland Law Society Inc v Cummings,155 for example, the lawyer admitted trust account breaches. These amounted to professional misconduct, but related solely to his inability to adequately keep his trust account. The isolated nature of this misconduct – this was the first blemish in 148 See, for example, Re a Solicitor (1952) 69 WN (NSW) 356 at 358 per Street CJ. 149 See, for example, Prothonotary v Jackson [1976] 2 NSWLR 457 at 462 (CA). 150 See, for example, Re a Practitioner (1975) 12 SASR 166 at 172–173 per Bray CJ. 151 See, for example, Re a Barrister and Solicitor (1984) 73 FLR 79. 152 See, for example, Ellis v Auckland District Law Society [1998] 1 NZLR 750 (lawyer who had overdrawn his trust account on a single occasion five years earlier reprimanded rather than suspended because of the singular circumstances surrounding the event, the delay that had since occurred in the matter being pursued in a disciplinary forum, and the fact that he had conducted his practice professionally and responsibly since that time). 153 Law Society (Solicitors Regulation Authority) v Emeana [2013] EWHC 2130 (Admin) at [26] per Moses LJ, with whom Burnett J concurred. 154 Attorney-General v Bax [1999] 2 Qd R 9 at 20 per Pincus JA (“A momentary or at least temporary lapse from proper standards of honest behaviour is one thing; persistence in such conduct over a substantial period is another”). 155 Council of the Queensland Law Society Inc v Cummings [2004] QCA 138.

770

Lawyers’ Professional Responsibility

[23.125]

the lawyer’s 33-year practice career – coupled with the absence of any tinge of dishonesty, led the Queensland Court of Appeal to impose a 12-month suspension and a fine as an appropriate sanction,156 even though trust account irregularities often justify a severe disciplinary response: see [25.50]. Conversely, persistent misconduct, where it evidences dishonesty or even recklessness or neglect, will be visited with an order denying fitness to practise.157 Previous disciplinary findings

[23.125] Where proven misconduct is antedated by adverse findings and disciplinary sanctions, a court or disciplinary tribunal may conclude that the lawyer has not learned from previous experience. Whereas one instance of misconduct may, where it is not serious, justify some leniency sanction-wise, recurrences speak of the lawyer’s indifference to professional standards and thus the need for an order protecting the public from the lawyer’s behaviour.158 It follows that prior findings may have a cumulative effect even if the present misconduct is not at the most serious end. This does not mean that a lawyer is disciplined repeatedly for the same misconduct, but that findings of misconduct must be viewed in the context of the earlier findings, especially those that evidence a course of similar failings.159 These serve to indicate whether the lawyer has any true regard for her or his obligations as a lawyer, and indeed any true repentance for previous misconduct. The fact that the subsequent misconduct differs in nature from that for which the lawyer was earlier disciplined may not be in the lawyer’s favour, especially where the subsequent misconduct is serious and persistent, because this reveals that the earlier disciplinary order had little deterrent effect. In Legal Practitioners Conduct Board v Kerin,160 for example, shortly after having his practising certificate reinstated after a suspension, the respondent engaged in repeated unprofessional conduct. In ordering that he be struck off, the court remarked that “the persistence of the practitioner’s conduct and its seriousness, coming so soon after his 156 That the lawyer had fully cooperated with the Law Society investigation, undertaken to repay the deficiency, and given an undertaking not to seek a principal practising certificate in the future, also influenced this decision. 157 See, for example, Law Society of South Australia v Murphy (1999) 201 LSJS 456 at [27] per Doyle CJ (a case where the lawyer was found to have repeatedly neglected his duties). See also Legal Practitioners Complaints Committee v Eley [2007] WASC 148 at [63]–[66] per Steytler P; Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9 at [53]–[60] per the court; Legal Practitioners Complaints Committee v Mijatovic [2008] WASC 214 at [14], [15] per Martin CJ. 158 See, for example, Legal Practitioners Conduct Board v Le Poidevin (2001) 83 SASR 443 (lawyer who practised law without holding a practising certificate, and ignored statutory notices issued by the relevant professional body, struck off in view of his two-year suspension three years earlier for other misconduct); Legal Practitioners Conduct Board v Hay (2001) 83 SASR 454 (persistent neglect of client affairs and disregard of proper inquiries and demands from the Legal Practitioners Conduct Board, coupled with reprimands on two previous occasions for not dissimilar misconduct, justified a striking off order); Council of the Queensland Law Society v Tunn [2004] QCA 412 (experienced lawyer who had been disciplined on three previous occasions for unsatisfactory professional conduct struck off for continuing to operate his practice in an unprofessional manner). 159 Legal Practitioners Conduct Board v Le Poidevin (2001) 83 SASR 443 at [18] per Doyle CJ. 160 Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371.

[23.130]

23 The Disciplinary Jurisdiction

771

resumption of practice following his suspension for his previous unprofessional conduct indicates that the practitioner does lack the qualities of character and trustworthiness required of practitioners”.161 Lawyer’s attitude

[23.130] That a lawyer does not attempt to conceal or downplay the seriousness of her or his misconduct, and responds in an honest and frank manner to the inquiries of the relevant regulatory body, tribunal or court “may well demonstrate that he is a person truly to be relied on”.162 A timely plea of guilty coupled with acknowledged and genuine remorse may, depending on the circumstances, achieve a less severe penalty than a plea of not guilty accompanied by sworn denials.163 Of course, it cannot be assumed that all guilty pleas necessarily show genuine remorse.164 The latter may, in appropriate cases, require attempts to make restitution to those who have suffered loss from the misconduct,165 or directed at rehabilitation to ensure that the misconduct will not reoccur.166 Even if this does not serve to reduce the severity of a disciplinary sanction, it may be probative on a future application for readmission: see [2.170]. There is a difference here between a voluntary confession to themisconduct before it was detected167 and so-called “11th hour remorse and insight”.168 Attempts to justify the misconduct, or to shift blame or diminish culpability for it, also misalign with genuine remorse.

161 Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371 at [52] per White J. See also at [29] per Gray J. 162 New South Wales Bar Association v Livesey [1982] 2 NSWLR 231 at 233 per Moffitt P. 163 New South Wales Bar Association v Maddocks (unreported, CA(NSW), Kirby P, Samuels and McHugh JJA, 23 August 1988); Attorney-General v Bax [1999] 2 Qd R 9 at 23 per Shepherdson J. 164 See, for example, Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [17] per Young CJ in Eq (involving a conviction for importation of a small quantity of cocaine into Australia, to which the lawyer had pleaded guilty, and assisted the police in their investigations); Prothonotary of the Supreme Court of New South Wales v Holt [2008] NSWCA 136 at [20] per Gzell J (who did not accept that the lawyer’s guilty plea to offences involving the misappropriation of client property evidenced genuine remorse, as it was made at a late stage, and the lawyer’s continued inappropriate dealings with trust property revealed “a systematic flaunting [sic] of his duties over an extended period of time”). 165 Compare Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 at [88], [89] (where the compensation offered by the solicitors to clients they had overcharged was viewed as a “significant mitigatory factor”) with Legal Practitioners Conduct Board v Warburton [2014] SASCFC 65 (where the respondent’s expressed contrition was “substantially weakened when it is recognised that he has taken no further step to fully repair the consequences of his breach of trust”: at [20] per Gray J, with whom Peek and Nicholson JJ concurred). 166 See, for example, Council of the Law Society of New South Wales v Green (No 2) [2009] NSWADT 297 at [52]–[64]. 167 See, for example, Legal Practitioners Complaints Committee v Lashansky [2007] WASC 211 at [31] per the court. 168 Singh v Legal Services Commissioner [2013] QCA 384 at [22] per Margaret McMurdo P, with whom Muir and Gotterson JJA concurred.

772

Lawyers’ Professional Responsibility

[23.135]

Lawyer’s level of appreciation of wrongdoing

[23.135] A failure by the lawyer to appreciate the incorrectness and gravity of the (mis)conduct may be indicative of unfitness to practise.169 A reason for this is that it increases the risk of its recurrence, and with this the need to protect the community from misconduct of that kind.170 Such a failure is often allied with a lack of understanding or care of basic aspects of professional responsibility,171 and may also raise doubts over the lawyer’s character.172 Even a misconception of professional duty may potentially amount to misconduct.173 That most of the cases highlighting a lack of appreciation of wrongdoing have arisen in the context of lawyer–client financial dealings174 emphasises the importance of propriety in dealings of this kind: see [6.40]–[6.80], [25.55]. The remarks of Hope JA, in respect of “a solicitor who pleads ignorance of his duty when he makes use of his client’s money”, are worthy of note in this regard:175 A failure to understand and appreciate the care that must be taken by a solicitor who wants to make use of his trusting client’s money for his own purposes would generally show an unfitness to remain on the roll. In so far as [the solicitor’s] ignorance should be treated as a lack of knowledge rather than a lack of standards, it was not ignorance of some esoteric or difficult corner of the law; it was an ignorance of general principles applicable to common activities of a solicitor in which, for the most part, [the solicitor] was regularly engaged, and it was an ignorance which he took no steps to remedy.

A failure to understand or appreciate the seriousness of other professional breaches may also count against a lawyer for disciplinary purposes. For instance, the respondent’s failure to acknowledge the significance of knowingly giving false evidence on oath was one of the factors that led the Queensland Court of Appeal in Barristers’ Board v Young176 to order his name be struck from the roll. Lawyer’s level of experience

[23.140] A lawyer’s level of experience may be relevant to the disciplinary response, albeit as a two-edged sword. A singular breach in an extensive practice 169 Southern Law Society v Westbrook (1910) 10 CLR 609 at 626 per Isaacs J; New South Wales Bar Association v Evatt (1968) 117 CLR 177 at 184 (FC); Re Maidment (1992) 23 ATR 629 at 642 per Legoe J; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 472 per Giles AJA. 170 Legal Profession Complaints Committee v in de Braekt [2013] WASC 124 at [35] per the court. 171 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 743 per Hope JA; Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 at 253 per Mahoney JA. 172 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 444 per Mahoney JA. 173 Re Hodgekiss (1959) 62 SR (NSW) 340 at 349 per Owen J; Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 757 per Hutley JA; Re a Barrister and Solicitor (1984) 73 FLR 79 at 86 (FC(ACT)). 174 See, for example, Legal Practitioners Complaints Committee v Lashansky [2007] WASC 211 at [32]–[35] (where what heavily influenced the court in ordering that the respondent be struck off was his lack of understanding of “the necessity to keep proper accounts, to separate his own money from money held on trust for others, to have proper agreements for costs if acting on special arrangements, to give a proper accounting to his clients and to comply generally with his obligations under the [relevant Act]” (at [32]) even though there had been no allegation of dishonesty). 175 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 740–741. 176 Barristers’ Board v Young [2001] QCA 556.

[23.145]

23 The Disciplinary Jurisdiction

773

career may suggest it to be of character and, if not serious, does not require onerous sanction.177 Yet by virtue of that experience it could be said that the lawyer should have known better and so is deserving of severe sanction.178 That a breach of professional standards is attributable to a lawyer’s youth and inexperience may justify a more lenient sanction than would otherwise be the case,179 although not so in matters involving actual dishonesty, the reason being that “basic honesty is not a quality that is ordinarily acquired through experience, or by lengthy practice of trying one’s best to be honest”.180 Illness and external stressors Medical condition or addiction

[23.145] Evidence of mental illness or addiction is on occasion pleaded in an attempt, if not to justify the misconduct, at least to mitigate its seriousness. But evidence of this kind does not ordinarily carry great weight181 – it does not, after all, address the protective role of disciplinary proceedings182 – especially for misconduct that involves dishonesty.183 There is, to this end, natural reticence to allow mental illness to excuse (as opposed to explain) dishonest conduct, as it is unlikely to deprive a person of the ability to appreciate the wrongfulness of her or his behaviour.184 177 See, for example, Council of the Queensland Law Society Inc v Cummings [2004] QCA 138 (discussed at [23.120]); Legal Practitioners Conduct Board v Nicholson (2006) 243 LSJS 293 at [30] per Doyle CJ (where the fact that the misconduct in question, although dishonest, occurred over a very short period of time, during which the lawyer was in a disturbed state of mind, against a backdrop of a lengthy unblemished practice career, led the court to impose a less severe disciplinary sanction than would otherwise have been imposed). 178 See, for example, Re Maidment (1992) 23 ATR 629 at 642 per Legoe J; Guss v Law Institute of Victoria Ltd [2006] VSCA 88 at [42] per Maxwell P. 179 See, for example, Re Fabricius (1989) 91 ACTR 1 at 9–10 (FC); Re Milte (1991) 22 ATR 740 at 755 per Zelling AJ; Legal Services Commissioner v Wen [2016] NSWCATOD 36 at [58]–[63]. 180 Attorney-General v Bax [1999] 2 Qd R 9 at 13 per McPherson JA. See, for example, Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2014] ACTSC 13 (that the practitioner in question had only two years’ professional experience at the time of his dishonesty in misleading the court found not to mitigate the disciplinary consequence, Refshauge J remarking that “a defect in character such as dishonesty is not something related to inexperience”: at [337]). 181 Cf Dal Pont, “Discipline and Depression” (2010) 84 (Nov) LIJ 76. 182 See, for example, BRJ v Council of New South Wales Bar Association [2016] NSWSC 146 (involving a barrister who was repeatedly late in appearances in court; Adamson J remarked that although the plaintiff was late because of physical consequences of her mental condition, the cause of her lateness (repeated as it was) did not deprive her conduct of its character as unsatisfactory professional conduct: at [57]). 183 Legal Profession Complaints Committee v Love [2014] WASC 389 at [63] per Beech, Kenneth Martin and Edelman JJ. 184 See, for example, Legal Practitioners Conduct Board v Phillips (2002) 83 SASR 467 at [29] per Prior J, at [39] per Gray J (that the lawyer suffered from borderline personality disorder did not explain his dishonesty and lack of candour and frankness with the tribunal and the court); Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42 at [25] per de Jersey CJ, at [47] per Williams JA (lawyer suffering depression arising out of severe emotional trauma struck off as a result of misappropriating client funds over a period of two years and misleading the court); Condon v Legal Practitioners Conduct Board (2004) 234 LSJS 314 at [54] per Mullighan J (another case involving

774

Lawyers’ Professional Responsibility

[23.145]

In any case, an illness that truly has this effect in itself makes the lawyer unfit to practise law;185 the case law reveals occasions where mental illness is pleaded in an attempt to explain misconduct, and it is evidence of that illness, when coupled with the misconduct itself, that leads the court or tribunal to find the lawyer unfit to practise.186 There is nonetheless some indication in the case law that, outside dishonest conduct, mental illness may have a mitigating effect on the relevant sanction,187 at least where it does not sacrifice the primary protective function of disciplinary proceedings. At the same time, if a lawyer suffers an illness but takes no steps to seek assistance – whether by instructing another lawyer to perform the work, seeking support from the relevant professional body or seeking treatment from medical treatment – it may prove difficult to attribute to the illness significant mitigating effect.188 As noted at [23.105], if the court or tribunal is convinced that the misconduct is indeed attributable to a significant degree to mental illness, it may countenance suspending the lawyer from practice for a period sufficient to recover from, or put in place measures to control, the illness. It may be so inclined (or even to allow the lawyer to remain in practice subject to conditions) where the medical condition or addiction is of a temporary nature, now controlled by medication or rehabilitation.189 But uncertainty in predicting a person’s future mental state will often present difficulties in setting a time frame, especially if the person has shown misappropriation of trust moneys, the court rejecting any suggestion that “the appellant misappropriated the monies from the trust account due to his mental state or alcoholism, or that for some reason he did not appreciate what he was doing on each occasion”). 185 See, for example, Legal Practitioners Conduct Board v Trueman (2003) 225 LSJS 503 at [23] per Doyle CJ; Legal Services Commissioner v XBY [2016] QCAT 102. 186 See, for example, Legal Practitioners Conduct Board v Dudek (2006) 245 LSJS 346 (lawyer who had failed to comply with a notice from the Board, failed to comply with an undertaking to a court, failed to account to clients, and acted to the potential detriment of a client, was struck off even though, according to Sulan J, “[t]he evidence establishe[d] that the practitioner was suffering from a psychiatric condition which contributed to his failure to discharge his professional responsibilities”: at [15]); Legal Profession Conduct Commissioner v Kassapis [2015] SASCFC 37 (where Gray J, with whom Sulan and Nicholson JJ concurred, remarked that while the totality of the respondent’s misconduct – including defective trust accounting, inappropriate client communications and misleading the court – revealed that he was “incapable of coping in practice” by reason of considerable pressure and a litany of health concerns, “this neither wholly explains nor excuses his conduct”, as “[t]his court requires that practitioners maintain high standards in difficult circumstances”: at [37]). 187 See, for example, Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 at [35], [36] per Maxwell P (who said that because a disciplinary tribunal’s disciplinary jurisdiction is “inescapably … punitive, in the service of protecting the public”, it is appropriate that the principles applicable to sentencing appeals apply by analogy to appeals from disciplinary decisions of the tribunal, so that “the analogy with sentencing means that the existence of any mental condition … may be relevant” in a disciplinary context; see also at [43] per Chernov JA, at [47] per Nettle JA); Stirling v Legal Services Commissioner [2013] VSCA 374 at [63]–[75] per the court. 188 See, for example, Legal Practitioners Conduct Board v Potter (2012) 8 ASTLR 401 at [38]–[47] per the court. 189 See, for example, Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 (discussed at [25.135]); Burgess v McGarvie [2013] VSCA 142 (against a backdrop of a finding of professional misconduct by the solicitor – involving failing to use his best endeavours to complete work in a timely fashion, failing to properly communicate with clients and breaching an undertaking to complete CPD requirements – the court ruled that suspension from practise as a

[23.150]

23 The Disciplinary Jurisdiction

775

little or no motivation to seek treatment.190 This may incline the court to strike off the lawyer,191 with a view to a potential application for readmission upon evidence of rehabilitation.192 Pressure and external stressors

[23.150] It has been judicially observed that “[c]haracter is tested not by what one does in good times but in bad”.193 As a result, evidence of pressure or other external stressor will not usually mitigate the appropriate disciplinary response to proven misconduct, especially if it involves dishonesty.194 Where stressors do not generate dishonest behaviour, but neglect or oversights, there is more substantial ground for allowing them to mitigate the disciplinary sanction. But they can never completely absolve a lawyer from the disciplinary consequences of unprofessional conduct. It has been observed to this end that:195 [t]he practice of law frequently gives rise to stressful situations. It is essential that a practitioner recognise that fact, and if such stressors have impacted on the practitioner resulting in professional failures or transgressions, it is incumbent upon a practitioner who wishes to remain upon the Roll, to take steps to ensure that such stressors can be dealt with appropriately in the future. principal solicitor for 21 months was an appropriate sanction in view of its belief that the solicitor’s psychological condition substantially ameliorated his moral culpability: at [74], [75]). Cf Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 (where the court took into account the appellant’s depressive illness in releasing him from a 12-month suspension ordered as a result of instances of overcharging and trust accounting irregularities even lacking evidence of recovery: at [35]–[38] per Maxwell P, at [43] per Chernov JA, at [47] per Nettle JA). 190 See, for example, Legal Practitioners Complaints Committee v Tomlinson [2006] WASC 211 (where the respondent pleaded guilty to stalking his former girlfriend, the court made a striking off order, in part because he had expressed no interest in obtaining psychological therapy for his behaviour); New South Wales Bar Association v Howen (No 2) [2008] NSWADT 252 at [79]–[87] (although the respondent’s personality trait dysfunction contributed to a state of denial about his mental health problems, his history of poor compliance with mental health assessment and treatment dictated that a period of suspension was not an appropriate response to his dishonesty). 191 See, for example, Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42 at [27] per de Jersey CJ. 192 See, for example, Re Bell (unreported, CA(Qld), Thomas, Williams and Derrington JJ, 6 December 1991). 193 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 449 per Mahoney JA. 194 See, for example, Legal Practitioners Conduct Board v Hannaford (2002) 83 SASR 277 at [24] per Gray J (where the respondent’s misappropriation of client funds and failure to make truthful disclosure to a legal aid body, though it could be explained by the stress of the illness suffered by his partner, could not be excused by it); Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371 (court unwilling to attach much weight to the respondent’s matrimonial breakdown when ordering that the respondent be struck from the roll); Law Society of New South Wales v Stormer (No 2) [2011] NSWADT 9 at [12] (which held that the death of a best friend, the ill-health of the solicitor’s father, the challenges of establishing a sole practice and the stresses and strains of being a sole practitioner “are not factors which have any application to this matter where the issue is not a small number of technical and/or similar transgressions which might justify a less serious assessment of the solicitor’s situation”, which involved acts of clear dishonesty). 195 Law Society of New South Wales v Farr [2009] NSWADT 108 at [38]. See also Legal Profession Complaints Committee v A Legal Practitioner [2013] WASAT 37 (S) at [59] (“It is in the nature of the work of a legal practitioner that a practitioner will be busy and very often under stress. That could hardly be regarded as a basis to excuse the practitioner’s professional obligations”).

776

Lawyers’ Professional Responsibility

[23.150]

In Legal Practitioners Conduct Board v Jones,196 for instance, the defendant solicitor, who had engaged in a litany of unprofessional conduct over a two-year period of high stress and anger, was struck off from practice because, inter alia, there was no evidence that the cause of the stress and anger had been addressed. Courts and disciplinary tribunals are especially disinclined to give weight to stressors that the lawyer has taken on by choice. A typical illustration is tundertaking too much work, which manifests itself in unprofessional conduct.197 Responding to an attempt to mitigate the seriousness of not carrying out client instructions within a reasonable time, failing to properly communicate with clients, and misleading clients, the New South Wales Administrative Decisions Tribunal in Law Society of New South Wales v Pearson made the following remarks that deserve close attention:198 The workload to which [the lawyer] refers is not an answer. The practitioner was a partner and he raises apparently in mitigation his workload and the number of files he had. He may well have been the architect of his own disaster in part because he took on too many files. Consistently having too many files may suggest greed or stupidity and it certainly courts professional disaster … A practitioner must be able to be calm in the storm for his clients’ sake and be able to have a balanced work life. There are different appropriate work limits for everyone. A practitioner who consistently has too many files in the practitioner’s own estimate and consistently works to what to the practitioner are excessive hours is not a practitioner who by so acting is being responsible, either personally, to the clients or to the profession. It should be obvious that there are limits to the volume of work a practitioner can accept and properly perform. Exceeding those limits is hardly an answer when the work is not properly performed or simply not performed at all. Obviously a practitioner who has more work than he or she can handle will not handle all his or her work and is likely to do some of the work performed poorly.

The tribunal ordered that the lawyer be suspended for one year, reprimanded and fined. In so ruling it made the pointed observation that the profession must be aware of the professional dangers posed by “any one of the modern day business practices of hourly rates, time sheets and budgets that govern much of current practice by solicitors”.199

196 Legal Practitioners Conduct Board v Jones (2010) 272 LSJS 529. 197 See Dal Pont, “Too Much Work – Too Little Time” (2006) 80 (Mar) LIJ 78. 198 Law Society of New South Wales v Pearson [2005] NSWADT 206 at [83]. See also Law Society of Tasmania v Scott [2007] TASSC 30 (where Tennent J noted that the only explanation for the respondent’s unprofessional conduct (namely repeated neglect and delay in relation to conveyancing matters over a period of six months) was that she had been overwhelmed with business as a result of her advertising; her Honour remarked that “[t]he respondent had an obligation as a practitioner to ensure that if she advertised and obtained significant business as a result, she was competent to deal with it, and retained and supervised competent staff to assist her. In the absence of her taking those steps, she should not have accepted the work”: at [20]); Council of the Law Society of the Australian Capital Territory v Legal Practitioner Y [2013] ACAT 8 (a busy sole practice held not to mitigate the seriousness of the respondent’s misconduct: at [31], [32]) (affd Legal Practitioner v Council of the Law Society of the Australian Capital Territory (No 2) [2015] ACTSC 317). 199 Law Society of New South Wales v Pearson [2005] NSWADT 206 at [83].

[23.155]

23 The Disciplinary Jurisdiction

777

Testimonials and opinions by third parties

[23.155] As the aim of discipline is protective more than punitive (see [23.20]), considerations that may mitigate punishment have less impact in this context than on sentences imposed in criminal cases.200 Though often presented, evidence from others as to the lawyer’s (good) character and reputation does not directly address the essential issue, namely a need to maintain public confidence that lawyers will be trustworthy.201 This has led one court to view testimonials as “of only limited assistance unless the writers address the question of the solicitors’ misconduct”.202 For testimonials to assume any weight, they must be based on a detailed understanding of the conduct that occurred, and informed by a full appreciation of the lawyer’s methods, not by opinions based upon a view from days past.203 Testimonials that disregard known facts, or downplay the seriousness of the misconduct, indicate a diminished capacity to give convincing evidence of good character,204 and so attract little weight. Nor is evidence from a non-legally qualified deponent of great value, for “it is one thing to speak well of a man whom the deponent has met in social or business circles; it is another to speak of him as to his professional dealings”.205 Third parties’ opinions cannot, in any event, be substituted for the opinion of the tribunal or court.206 Evidence of the lawyer’s good reputation and integrity carries greatest weight where the breach is a minor and isolated one, here presenting a compelling case that the lawyer’s character as revealed by the breach is entirely out of character.207 In cases of this kind, testimonials may justify a reprimand in lieu of a suspension. This occurred in English v Complaints Committee,208 where the lawyer’s default was in signing a jurat clause that proof of service was sworn to him when no such oath was administered but from past experience he had no reason to question the honesty of the deponent. This conduct was characterised as an act of simple inadvertence arising out of sheer repetition.209 In Walsh v Law Society of New South

200 Cf Quinn v Law Institute of Victoria Ltd [2007] VSCA 122 at [35], [36] per Maxwell P, at [43] per Chernov JA, at [47] per Nettle JA. 201 Bolton v Law Society [1994] 1 WLR 512 at 519 per Sir Thomas Bingham MR; Sidney v Auckland District Law Society [1996] 1 NZLR 431 at 434–436. 202 Re Robb (1996) 134 FLR 294 at 329 (FC(ACT)). 203 Re Melvey (1966) 85 WN (Pt 1) (NSW) 289 at 298 (CA). Cf Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [14] per Young CJ in Eq (who remarked that “[i]t was pleasing to see that in contrast with many cases of this type each of the character referees appears to have been made fully aware of all the relevant facts and circumstances of the opponent’s offence”). 204 Re Bridgman [1934] St R Qd 1 at 7 per Blair CJ; Re Nelson (1991) 106 ACTR 1 at 24 per Higgins and Foster JJ. 205 Re Melvey (1966) 85 WN (Pt 1) (NSW) 289 at 298 (CA). 206 Re Bridgman [1934] St R Qd 1 at 7 per Blair CJ. 207 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 444 per Mahoney JA. 208 English v Complaints Committee (1986) 41 SASR 217. 209 English v Complaints Committee (1986) 41 SASR 217 at 225 per Johnston J.

778

Lawyers’ Professional Responsibility

[23.160]

Wales210 that the lawyer’s misconduct occurred entirely within his own family and had neither caused nor been intended to cause any financial detriment to anyone, coupled with his substantial practice experience for which others attested his good character and reputation, led the High Court to rule that he should not be removed from the roll of solicitors. The position is otherwise where the breach is more serious, and especially where it involves repeated dishonesty;211 here, character evidence carries far less weight because a serious breach, and breaches that are repeated, are difficult to explain as other than indicative of a lack of integrity.

[23.160] An ostensibly high-water mark case so far as the weight accorded to testimonials is concerned is New South Wales Bar Association v Sahade (No 3).212 The respondent barrister had lodged hundreds of applications to pre-register for shares in the “Telstra 2 share offer” in false names, with false or artificially variegated addresses and telephone numbers. He aimed to conceal that the these were multiple applications by a single person, believing that the Commonwealth would most likely reject multiple applications for pre-registration from the same person. The tribunal branded this conduct as dishonest and ruled that, at the time it was committed, the respondent was unfit to remain on the roll.213 But on a subsequent hearing, at which affidavits from 20 or so legal practitioners attesting to the respondent’s good character were presented, the tribunal decided that the respondent was presently a fit and proper person, albeit publicly reprimanding him and ordering him to pay a fine. It was particularly influenced by the affidavits from other barristers in the respondent’s chambers, remarking as follows:214 The fact that some twenty members of the Bar, members of Sydney Chambers, having had disclosed to them fully by the [respondent] himself the wrongdoing which brought him to … this Tribunal, have accepted him as a colleague on their own floor is very much in his favour. There can be little doubt that barristers have an important role to play in judging the fitness of their fellows to serve the community. As a group, with few exceptions, they maintain high standards and would not readily accept as a colleague a person whom they do not expect to maintain similar standards.

“The sheer number of referees and the force with which they express their opinions cannot be ignored”, the tribunal added.215 These seemed to outweigh its earlier findings that the respondent was unwilling to admit the wrongfulness (as opposed to the unfairness) of his conduct until the eleventh hour and that “his evidence [was] unconvincing in any event”.216 On appeal Basten JA, with whom Mason P 210 Walsh v Law Society of New South Wales (1999) 164 ALR 405 at 427 per McHugh, Kirby and Callinan JJ. 211 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 448–449 per Mahoney JA. The cases most commonly concerned fraudulent trust account misappropriations: see, for example, Re a Practitioner (1984) 36 SASR 590 at 592 per King CJ, at 593 per Jacobs J; Re Nelson (1991) 106 ACTR 1 at 24 per Higgins and Foster JJ. 212 New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39. 213 New South Wales Bar Association v Sahade [2005] NSWADT 159. 214 New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 at [115]. 215 New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 at [116]. 216 New South Wales Bar Association v Sahade [2005] NSWADT 159 at [104], [116], [119].

[23.170]

23 The Disciplinary Jurisdiction

779

and Santow JA concurred, considered that the tribunal was “undoubtedly right” to identify the evidence in the character affidavits as having “significant weight”, given that several members of the Bar of significant seniority, and with knowledge of the specific conduct complained of, had given the respondent unqualified support for the purposes of the second hearing as well as, to a lesser degree, at the first hearing.217 Loss suffered by others as a result of misconduct

[23.165] Merely because no client or third party ultimately suffered loss as a result of the misconduct does not alter its character, and so should not in theory influence the disciplinary order. Occasions where lawyers have sought to mitigate the seriousness of improper dealings with client funds highlight the point. For example, in Law Society of New South Wales v Starky218 the solicitor, faced with a cash flow crisis in servicing borrowings on property investments, used client funds to “trade out” of financial difficulties without informed consent. The solicitor was struck off, the court rejecting the argument that his personal guarantee of repayment could justify unauthorised dealings with client money. It remarked that the propriety of the solicitor’s behaviour “does not depend upon the fortunes of the market except in so far as the prospect of those fortunes can properly be taken into account in judging the propriety of the action at the time it is taken”. That clients have benefited from the lawyer’s (fiduciary) breach presents no weightier a ground to mitigate its seriousnessand if so pleaded, may reveal a lack of understanding of professional responsibility, itself inconsistent with fitness to practise.219 Where a client or a third party has suffered loss as a result of a lawyer’s misconduct, whether or not the lawyer has fully compensated that person is a factor that may go to the appropriate disciplinary sanction220 or to the lawyer’s prospects of readmission if he or she is struck off: see [2.170]. Loss already suffered by lawyer as a result of misconduct

[23.170] The loss suffered by a lawyer as a result of her or his misconduct – not only financial loss, but also the loss of trust and reputation – is strictly speaking irrelevant to the aim of protecting the public.221 Yet judges are not entirely willing to discount it in a disciplinary response.222 There is some justification for this, at least when the court or tribunal considers imposing a fine (as opposed to an order 217 Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 at [85]. 218 Law Society of New South Wales v Starky (unreported, CA(NSW), 13 August 1979). 219 See, for example, Bolster v Law Society of New South Wales (unreported, CA(NSW), 20 September 1982); Law Institute of Victoria v Gough (unreported, SC(Vic), Hansen J, 10 February 1995). 220 Law Society of Tasmania v Turner (2001) 11 Tas R 1 at [38] per Crawford J. 221 Re Maraj (a legal practitioner) (1995) 15 WAR 12 at 24 per Malcolm CJ; Legal Profession Complaints Committee v Bachmann [2011] WASC 309 at [51] per Martin CJ, E M Heenan and Jenkins JJ. 222 See, for example, Re Maidment (1992) 23 ATR 629 at 652–653 per Olsson J; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 418 per Kirby P dissenting.

780

Lawyers’ Professional Responsibility

[23.170]

suspending or striking off the lawyer).223 It may legitimately incline a court or tribunal against imposing a fine,224 or to set its quantum below what would otherwise have been imposed, especially as the lawyer will likely be ordered to pay the costs of both the hearing225 and the disciplinary investigation.226 In circumstances of this kind, it may be that there is little cause for “specific deterrence” to inform the relevant sanction.

223 Cf Victorian Legal Services Commissioner v Lewenberg (No 2) [2016] VCAT 556 at [12] per per Judge Jenkins (“it is not an objective of an order, to seek to maximise or maintain the practitioner’s capacity to earn a living and pay his/her debts. Otherwise all legal practitioners who find themselves in impecunious circumstances, could, on that basis alone, seek to resist an order to suspend or cancel their practising certificate”). 224 Pickering v Auckland District Law Society [1985] 1 NZLR 1 at 5 per Barker, Vautier and Tompkins JJ; Bolton v Law Society [1994] 1 WLR 512 at 518 per Sir Thomas Bingham MR. 225 See, for example, Attorney-General v Clough [2002] 1 Qd R 116 at [94] per Muir J. 226 See, for example, Legal Practitioners Conduct Board v Boylen (2003) 229 LSJS 32 at [10], [16] per Mullighan J, at [74] per Debelle J.

Chapter 24

Disciplinary Procedures [24.10] BRINGING MISCONDUCT TO THE ATTENTION OF THE RELEVANT BODY ............................................................................................................ 782 [24.10] Reporting by courts and costs assessors .................................................................. 782 [24.15] Reporting by lawyers .................................................................................................. 783 [24.30] Professional responsibility regarding inquiries from regulatory body .............. 786 [24.35] AUSTRALIAN CAPITAL TERRITORY ......................................................................... 787 [24.35] Complaints and investigations .................................................................................. 787 [24.40] Council determinations ............................................................................................... 788 [24.45] Hearing before ACAT .................................................................................................. 789 [24.50] Appeals from ACAT .................................................................................................... 789 [24.55] NEW SOUTH WALES AND VICTORIA ...................................................................... 789 [24.60] Complaints .................................................................................................................... 790 [24.65] Investigation by Commissioner ................................................................................. 790 [24.85] Proceedings in designated tribunal .......................................................................... 792 [24.90] NORTHERN TERRITORY ............................................................................................... 793 [24.90] Complaints and investigations .................................................................................. 793 [24.95] Determination by Law Society .................................................................................. 793 [24.100] Appeal to and from the Legal Practitioners Disciplinary Tribunal .................. 793 [24.105] QUEENSLAND ................................................................................................................ 794 [24.105] Complaints and investigations ................................................................................ 794 [24.110] Proceedings before a disciplinary body ................................................................. 795 [24.115] Appeals to the Queensland Civil and Administrative Tribunal and the court ............................................................................................................... 795 [24.120] SOUTH AUSTRALIA ..................................................................................................... 796 [24.120] Complaints and investigations ................................................................................ 796 [24.125] Legal Practitioners Disciplinary Tribunal .............................................................. 797 [24.130] Supreme Court ........................................................................................................... 797 [24.135] TASMANIA ...................................................................................................................... 798 [24.135] Complaints and investigations ................................................................................ 798 [24.140] Determination by Legal Profession Board ............................................................. 798 [24.145] Role of the Disciplinary Tribunal and the Supreme Court ................................ 799 [24.150] WESTERN AUSTRALIA ................................................................................................ 800 [24.150] Complaints and investigations ................................................................................ 800 [24.155] Determination of Legal Profession Complaints Committee .............................. 801 [24.160] Role of the State Administrative Tribunal and the Court .................................. 801

782

Lawyers’ Professional Responsibility

[24.05]

[24.05]

Similarities exist between the jurisdictions in terms of disciplinary procedures. At a basic level, the first stage involves the lodging of a complaint with a regulatory body, followed by an investigation, and a process for making disciplinary orders. The main disciplinary body is generally a tribunal, the trend now being to vest jurisdiction over lawyer discipline in a tribunal that has general jurisdiction to review administrative decisions. Variations in detail in disciplinary procedures between jurisdictions nonetheless justify separate treatment, even at the expense of repetition.

Where there is commonality now is in applying the same disciplinary processes to each arm of the profession – to both solicitors and barristers – which materialised only with the enactment of the 1987 Act in New South Wales,1 the 1996 Act in Victoria,2 the 2004 Act in Queensland,3 and the 2006 Act in the Australian Capital Territory.4 The South Australian barristers’ rules prescribe a disciplinary process5 but at the same time envisage that barristers may be disciplined under the statutory regime.6 The fused profession elsewhere has meant that the historical dichotomy has not translated to statute.

BRINGING MISCONDUCT TO THE ATTENTION OF THE RELEVANT BODY Reporting by courts and costs assessors

[24.10]

Most disciplinary investigations and proceedings arise out of client complaints – the substantial majority of which reveal an expectation gap rather than any unethical conduct.7 Courts also play a role, as they cannot overlook issues of misconduct that arise in the course of matters before them, but must draw these to the attention of the relevant body.8 This is indeed apt; by their daily interaction with lawyers, judges are positioned to observe lawyer (mis)conduct, and because of 1 Legal Profession Act 1987 (NSW), Pt 10 (repealed). 2 Legal Practice Act 1996 (Vic), Pt 5 (repealed). 3 Legal Profession Act 2004 (Qld), Ch 3 (repealed). 4 Legal Profession Act 2006 (ACT), Ch 4. 5 SA, rr 137–144. 6 SA, r 174(c) states that the Professional Responsibility Committee of the South Australian Bar Association may at any stage refer the matter to the Legal Practitioners Conduct Board (which has since been replaced by the Legal Profession Conduct Commissioner: see [24.120]) “for investigation and determination, in which event it shall take no further action in connection with the matter until the determination of the matter by the Conduct Board [Commissioner], the Legal Practitioners [Disciplinary] Tribunal [see [24.125]] or the Court [see [24.130]]”. See, for example, the Tribunal’s decision in Re Quick (17 March 2003), involving discipline of a barrister with a drug addiction. 7 Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D3” [2015] ACAT 7 at [116] (noting that the legal profession is one “where people often will make unreasonable complaints”). 8 See, for example, Spector v Ageda [1973] Ch 30 at 50 per Megarry J; Zelino v Budai (2001) 47 ATR 488 at [238] per Palmer J; Re Read (2006) 243 LSJS 368 at [20] per Besanko J; Perpetual Trustee Co Ltd v Cowley [2010] QSC 65 at [134] per Atkinson J; Re Manlio (No 2) [2016] VSC 130 at [78]–[85] per McDonald J.

[24.15]

24 Disciplinary Procedures

783

their legal training, are able to evaluate lawyer conduct.9 If the court is minded to report a lawyer, it may be appropriate to first give the lawyer an opportunity to be heard.10 In most jurisdictions the legal profession legislation makes provision for a costs assessor to refer a matter for disciplinary inquiry, not confined to overcharging, that arises in the course of costs assessment.11 Reporting by lawyers

[24.15]

There is scope for lawyers to report other lawyers’ misconduct. It has been said, to this end, that “it is essential to the maintenance of professional standards and the confidence of the public in the (largely) self regulated legal profession, that where professional standards are not met, and the matter cannot be resolved, the issue be referred to the appropriate authority”, and that “[p]ractitioners have a professional obligation to do so”.12 There is limited recognition of this obligation by the legal profession legislation (except in South Australia), which requires lawyers to report other lawyers’ dishonesty or irregularity in accounting for trust money,13 and to self-report, inter alia, their conviction for serious offences or tax offences and their insolvency.14 In the Australian context, only the former Victorian professional rules sought to address the issue in terms more comprehensive. They required a lawyer to disclose to the relevant regulatory body the occurrence of any conduct, whether or not in the course of practice, that is dishonest or that is calculated, or likely to a material degree, to prejudice or diminish public confidence in the administration of justice, or adversely prejudice a lawyer’s ability to practise according to the rules.15 Even so, it is arguable that this obligation was, in its terms, restricted to self-reporting, 9 Greenbaum, “Judicial Reporting of Lawyer Misconduct” (2009) 77 UMKC L Rev 537 at 544 (who, however, notes that in the United States, even though judges are required to report lawyer misconduct (see American Bar Association, Model Code of Judicial Conduct (2011), r 2.15(B)), studies show that judicial reporting is most infrequent). 10 See, for example, Day v Perisher Blue Pty Ltd (2005) 62 NSWLR 731 at [36], [37] per Sheller JA; Zandas v Zandas [2014] FCCA 1184 at [105]–[112] per Judge Scarlett. 11 ACT, s 303; NSW, s 202 (formerly NSW 2004, s 393); NT, s 370; Qld, s 343; SA, Sch 3, cl 50; Tas, s 332; Vic, s 264 (formerly Vic 2004, s 3.4.46); WA, s 307. 12 Legal Practitioners Complaints Committee v Fleming (2006) 48 SR (WA) 29 at [78]. 13 ACT, s 231(2); NSW, s 154(2) (formerly NSW 2004, s 263(2)); NT, s 256(2); Qld, s 260(2); SA, Sch 2, cl 24(2); Tas, s 254(2); Vic, s 154(2) (formerly Vic 2004, s 3.3.22(2)); WA, s 227(2). 14 Termed “show cause events” or, in New South Wales and Victoria, “automatic show cause events”: ACT, s 61; NSW, s 88 (formerly NSW 2004, s 67); NT, s 62; Qld, s 68; SA, s 20AH; Tas, s 73; Vic, s 88 (formerly Vic 2004, s 2.4.27); WA, s 62. In New South Wales and Victoria the legislation now also makes provision for “designated show cause events”, directed to Australian legal practitioners who have engaged in legal practice outside the conditions imposed by their practising certificates or otherwise practised without holding the requisite professional indemnity insurance: NSW, s 91; Vic, s 91. 15 Professional Conduct and Practice Rules 2005 (Vic), rr 30.1, 31.1 (repealed), implementing Law Council of Australia, Model Rules of Professional Conduct and Practice, rr 30.1, 31.1 (repealed). Cf SA, r 136 (barristers) (which requires a member or committee who receives or becomes aware of a formal complaint by any person against a barrister of a breach to refer the complaint forthwith to the Bar Association’s Professional Responsibility Committee).

784

Lawyers’ Professional Responsibility

[24.20]

rather than reporting other lawyers’ misconduct, especially as its remaining provisions were clearly expressed to apply to disclosure of a lawyer’s own misbehaviour. No equivalent has translated to the current Victorian rules.

[24.20]

Elsewhere, professional rules have traverse into lawyer whistleblowing. The English rules mandate reporting where a lawyer becomes aware of serious misconduct by another lawyer, albeit taking into account, where necessary, the duty of confidentiality to a client.16 The New Zealand rules do likewise in the event of reasonable grounds to suspect that another lawyer has been guilty of misconduct, subject to any legal professional privilege.17 Hong Kong solicitors must report “any professional misconduct or dishonesty on the part of another solicitor or a member of his staff, or of any other person purporting to represent or to be in the employment of another solicitor or firm”, after having obtained client consent if this is necessary.18 In the United States the rules require a lawyer who knows of another’s violation of the rules that “raises a substantial question as to that lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects” to report this to the appropriate professional authority.19 The Canadian rules address the issue more comprehensively by imposing a reporting obligation, unless it would be unlawful or breach lawyer-client privilege, as regards:20 • • • •

the misappropriation or misapplication of trust monies; the abandonment of a law practice; participation in criminal activity related to a lawyer’s practice; the mental instability of a lawyer of such a nature that the lawyer’s clients are likely to be materially prejudiced;21 • conduct that raises a substantial question as to another lawyer’s honesty, trustworthiness, or competency as a lawyer; and • any other situation in which a lawyer’s clients are likely to be materially prejudiced. The above rules are designed to protect the public and the integrity of the profession. A concern is that “[u]nless a lawyer who departs from proper professional conduct is checked at an early stage, loss or damage to clients or others may ensue”, as “[e]vidence of minor breaches may, on investigation, disclose a 16 UK, O(10.4). 17 NZ, r 2.8. A discretion to report applies where there are reasonable grounds to suspect that another lawyer has been guilty of (the lesser) unsatisfactory conduct: NZ, r 2.9. 18 HK, principle 11.03. 19 US, r 8.3(a). See also Restatement, §5(3). 20 Can CPC, r 7.1-3. 21 In view of evidence of a correlation between professional discipline and alcohol or drug abuse/addiction, it has been suggested that the American rules be amended to require lawyers who know or reasonably believe that another lawyer’s performance, appearance, health or overall wellness is substantially declining as a result of alcoholism or other chemical dependency to refer the lawyer to an appropriate intervention program: see Rovzar, “Putting the Plug in the Jug: The Malady of Alcoholism and Substance Addiction in the Legal Profession and a Proposal for Reform” (2015) 10 U Mass L Rev 426.

[24.25]

24 Disciplinary Procedures

785

more serious situation or may indicate the commencement of a course of conduct that may lead to serious breaches in the future”.22 Moreover, ““no one is better suited to recognize a breach of the Rules or better situated to observe one”,23 and making reporting mandatory compelling reporting. “reduce(s) the internal debate between one’s desire to weed out the corrupt element from the bar and the concern that one must not snitch, squeal, or tattle on a colleague”.24 The existence of the mandatory rule, and compliance with it, at least in the United States where the rule has antecedents going back to 1908,25 have proven two different things, however. In a 1970 report, a special committee of the American Bar Association concluded that the reluctance to report lawyer misconduct was a major problem with lawyer discipline.26 Not until 1988 was an American lawyer disciplined for not making a report.27

[24.25]

To propound an enforceable professional duty to report other lawyers’ misconduct dictates that a failure to report can itself amount to misconduct. This presents difficult issues – particularly in relation to protecting whistleblowers – that remain to be fully debated at a professional level in Australia.28 If there is to be an enforceable duty of this kind, the following, at least, must be clear: the level of proof that attracts the reporting obligation;29 what comes within and falls outside the duty to report; and the moment at which the duty is triggered.30 Then there is the issue of protecting a reporting (whistleblowing) lawyer, who may fear reprisal 22 Can CPC, r 7.1-3, cmt [1]. 23 Attorney U v Mississippi Bar (1996) 678 So 2d 963 at 976 per McRae J (dissenting, but not on this point) (adding that “if its precepts are not enforced, the Bar’s hallowed concept of self-regulation will become a pathetic mockery”). 24 Rotunda, “The Lawyer’s Duty to Report Another Lawyer’s Unethical Violations in the Wake of Himmel” [1988] U Ill L Rev 977 at 992. 25 In its first code (the Canons of Professional Ethics, 1908), the American Bar Association obliged lawyers to “expose without fear or favor before the proper tribunals corrupt or dishonest conduct in the profession”: canon 29. 26 ABA Special Commission on Evaluation of Disciplinary Enforcement, Problems and Recommendations in Disciplinary Enforcement (1970), p 167. 27 Re Himmel (1988) 533 NE 2d 790 (involving a lawyer’s failure to report another lawyer who had converted a former client’s funds, in an attempt not to disincline the errant lawyer from fulfilling his promises to reimburse the client). 28 See Richmond, “The Duty to Report Professional Misconduct: A Practical Analysis of Lawyer Self-Regulation” (1999) 12 Geo J Legal Ethics 175; Greenbaum, “The Attorney’s Duty to Report Professional Misconduct: A Roadmap for Reform” (2003) 16 Geo J Legal Ethics 259; Dal Pont, “Mandatory Lawyer Reporting of their Peers’ Misconduct: Should Australia Follow Suit?” (2014) 17 Legal Ethics 23. 29 In the American context, it has been held that the supporting evidence must be such that a reasonable lawyer under the circumstances would have formed a “firm opinion” that the conduct in question had more likely than not occurred: Attorney U v Mississippi Bar (1996) 678 So 2d 963 at 972. 30 See, for example, Restatement, §5(3), cmt i, (“the requirement is commonly interpreted not to require a lawyer involved in litigation or negotiations to make a report until the conclusion of the matter in order to minimize harm to the reporting lawyer’s client”). Cf Fedder, “Obstacles to Maintaining the Integrity of the Profession: Rule 8.3’s Ambiguity and Disciplinary Board Complacency” (2010) 23 Geo J Legal Ethics 571 (who argues that “[t]he absence of an invariable deadline obstructs the Rule’s goal of maintaining the integrity of the profession, permits calamitous consequences for affected third parties, and leads to only partially defensible convictions for its violation”: at 583).

786

Lawyers’ Professional Responsibility

[24.30]

from the lawyer against whom a report has been made. This concern is heightened in the intra-firm scenario, where a lawyer (particularly a junior lawyer) is likely to be reticent to report misconduct for fear of sacrificing her or his employment, or even career.31 Yet it is here that a reporting duty arguably has the greatest value, as lawyers are best positioned to observe and act on their colleagues’ misconduct within the firm. Accordingly, unless a duty to report, as well as being phrased in precise terms, is supported by a process that protects the lawyer fulfilling the duty, it is unlikely to be exercised. Without protection, a mandatory rule has been described as “worthless when it comes to intra-firm reports of misconduct”,32 there being little chance that even serious misconduct will be reported to disciplinary authorities. The same commentator has reasoned as follows:33 Given the choice between potential personal and professional ruin and potential discipline should his failure to report ever come to light, almost every lawyer will gamble (1) that his failure to report will never be discovered … and (2) that he can avoid or mitigate any sanction for not reporting the misconduct. These are good gambles, and disciplinary authorities and courts are wrong to believe that most lawyers will behave differently.

Suggested avenues for protecting the reporting lawyer include ensuring that her or his identity remains confidential early in the process, providing an immunity from civil liability for reporting within the boundaries of the relevant rule, and modifying professional rules to make it misconduct to impede, or to retaliate for, reporting.34 Professional responsibility regarding inquiries from regulatory body

[24.30]

Lawyers are professionally obliged, as a price for self-regulation some maintain,35 to fully and promptly respond to inquiries from the relevant regulatory body.36 Failing to respond, or giving false or misleading responses, can attract a disciplinary response more severe to that attaching to the misconduct being

31 Long, “Whistleblowing Attorneys and Ethical Infrastructures” (2009) 68 Maryland L Rev 786 at 798 (who bemoans the fact that “bringing misconduct to light carries with it the potential for retaliation” whereas “the choice to remain silent in the face of unethical behaviour carries relatively few risks for an attorney”). 32 Richmond, “The Duty to Report Professional Misconduct: A Practical Analysis of Lawyer Self-Regulation” (1999) 12 Geo J Legal Ethics 175 at 202. 33 Richmond, “The Duty to Report Professional Misconduct: A Practical Analysis of Lawyer Self-Regulation” (1999) 12 Geo J Legal Ethics 175 at 203. 34 See Greenbaum, “The Attorney’s Duty to Report Professional Misconduct: A Roadmap for Reform” (2003) 16 Geo J Legal Ethics 259 at 322–324. See also Long, “Whistleblowing Attorneys and Ethical Infrastructures” (2009) 68 Maryland L Rev 786. 35 Law Society (Solicitors Regulation Authority) v Emeana [2013] EWHC 2130 (Admin) at [33] per Moses LJ, with whom Burnett J concurred (“Self-regulation of a profession requires those who hold themselves out as professionals to co-operate with regulators and give completely frank and honest answers when questioned”). 36 See ACT, r 43; NSW, r 43; Qld, r 43; SA, r 43 (and see SA, r 141 (barristers)); Vic, r 43; WA, r 50; Dal Pont, “Reporting for Duty” (2005) 79 (Oct) LIJ 78.

[24.35]

24 Disciplinary Procedures

787

investigated,37 as the failure to fully cooperate may be indicate a lack of candour or dishonesty: see [25.85]. Willing cooperation with the investigative process, coupled with an acknowledgement of error or wrongdoing where it has been established, may in some instances mitigate the disciplinary sanction.38 In addition to responding to requests from investigators within their statutory functions and powers, the general law contains statements obliging lawyers to assist an inquiry into their professional conduct,39 namely a duty “to cooperate reasonably in the process”.40 Such an inquiry should not be viewed as if the investigator “was a prosecutor in a criminal cause or as if we were engaged upon a trial of civil issues”.41 The disciplinary jurisdiction has been described as “a special one”, not one in which the lawyer may “lie by and engage in a battle of tactics”.42 The duty to assist does not mean that the lawyer must disregard her or his own interests43 – in any case, the lawyer must be accorded natural justice (see [23.60]–[23.70]) – but that as the lawyer often has a better knowledge and understanding of the matter the subject of the complaint than the complainant, an investigator relies heavily upon the lawyer’s cooperation and candour.44

AUSTRALIAN CAPITAL TERRITORY Complaints and investigations

[24.35]

A written complaint about a lawyer’s conduct may be made to the relevant council (either the Law Society Council or the Bar Council).45 If a complaint, other than one that would likely produce a finding of professional 37 Sisson v Standards Committee 2 of the Canterbury-Westland Branch of the New Zealand Law Society [2013] NZAR 416 at [54] per Panckhurst, Chisholm and Whata JJ (“This is not to treat behaviour in the course of a disciplinary process as aggravating the misconduct”; instead “such behaviour is assessed and brought to account in the evaluation of the likely efficacy of available penalty options”). See, for example, Victorian Legal Services Commissioner v Mingos [2016] VCAT 918 (lawyer who failed to attend a court hearing for a client who, upon inquiry from the client, the client’s new lawyers and the Victorian Legal Services Commissioner, sought to cover up his error by dishonestly stating that the wrong date appeared on the hearing notice; this “cover up” was viewed as more serious than the original non-attendance, sufficient to justify a cancellation of his practising certificate for one year). 38 Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] 3 NZLR 103 at [187] per Winkelmann and Lang JJ. 39 Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 6 per Moffitt P. 40 Council of the Queensland Law Society Inc v Whitman [2003] QCA 438 at [36] per de Jersey CJ. See further Hart v Auckland Standards Committee 1 of New Zealand Law Society [2013] 3 NZLR 103 at [224] per Winkelmann and Lang JJ (“Public confidence in the legal profession depends significantly upon the premise that practitioners will co-operate fully in the investigative phase of the disciplinary process. By co-operation, we mean, as a minimum, that they will comply promptly with lawful requests made by investigating bodies and with timetables imposed”); Dal Pont, “An Attitude of Cooperation” (2008) 82 (Jul) LIJ 84. 41 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 141 (CA). See also Council of the Queensland Law Society Inc v Whitman [2003] QCA 438 at [36] per de Jersey CJ. 42 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 141 (CA). 43 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 141 (CA). 44 Law Society of South Australia v Jordan (unreported, FC(SA), 21 August 1998) at 46 per Doyle CJ. 45 ACT, s 394.

788

Lawyers’ Professional Responsibility

[24.40]

misconduct, could in the council’s view be resolved by mediation, it may suggest to the parties that they enter into a process of mediation.46 A complaint may be dismissed if, inter alia, the council forms the view that it is vexatious, misconceived, frivolous or lacking in substance.47 Except where a complaint is dismissed or withdrawn, or the subject of mediation, the council is required to investigate each complaint properly made to it, and may appoint a suitably qualified investigator for this purpose.48 For investigating a complaint, the council may refer a matter to the Supreme Court for an assessment of costs charged or claimed by the lawyer.49 Council determinations

[24.40]

After completing an investigation of a complaint, the council must dismiss the complaint if there is no reasonable likelihood50 that the lawyer will be found guilty of either unsatisfactory professional conduct or professional misconduct, or it is in the public interest to dismiss the complaint.51 If the council is satisfied of a reasonable likelihood that the lawyer will be found guilty of unsatisfactory professional conduct (but not professional misconduct), but that the lawyer is generally competent and diligent and that no other material complaints have been made against her or him, it may, inter alia, issue a caution or reprimand, make a compensation order, direct the lawyer to undertake stated further legal education or seek practice management advice from a stated person, and/or impose a fine up to $1500.52 Otherwise the council must make an application to the ACT Civil and Administrative Tribunal (ACAT), which it may also do without starting or completing an investigation if there is a reasonable likelihood that the lawyer will be found guilty of either unsatisfactory professional conduct or professional misconduct.53 A complainant may appeal to ACAT a council’s decision to dismiss a complaint, or to omit matter from an application to ACAT that was originally part of the complaint. The lawyer may appeal a council’s decision to make any of the disciplinary orders noted in the preceding paragraph.54

46 ACT, s 401. 47 ACT, s 399. 48 ACT, ss 406, 407. 49 ACT, s 409. 50 “Reasonable likelihood” refers to a lesser standard than the balance of probabilities, in view of its context, which does not require the resolution of disputed facts, nor consideration of all the evidence that might be proffered in the case of a dispute: Donaghy v Council of the Law Society of New South Wales (No 2) [2015] NSWCA 224 at [48] per Basten JA, with whom Gleeson JA and Sackville AJA concurred. 51 ACT, ss 410(1)(a), 412. 52 ACT, ss 410(1)(b), 413. 53 ACT, ss 410(1)(c), 411. 54 ACT, s 416.

[24.55]

24 Disciplinary Procedures

789

Hearing before ACAT

[24.45]

If, after ACAT has finished considering an application in relation to a lawyer, it is satisfied that the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, it has the power to make any one or more of a wide variety of listed disciplinary orders, and any other order it considers appropriate55 (which includes a power to impose no sanction at all).56 In addition to orders for removing, suspending, reprimanding the lawyer, or imposing conditions on the lawyer’s practising certificate, it may, inter alia, direct the lawyer to pay a fine,57 to undertake a stated course of further legal education or a stated period of practice under supervision, or make an order that the lawyer’s practice be managed or supervised in a set way. It may find a lawyer guilty of unsatisfactory professional conduct even though the complaint or charge alleged professional misconduct. If ACAT is not satisfied that the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, it must dismiss the complaint.58 Appeals from ACAT

[24.50]

If the tribunal has decided an application, a party thereto may appeal the decision to the tribunal (as an appeal tribunal) on a question of fact or law.59 It is open to the tribunal, in the alternative, to order that the appeal be removed or referred to the Supreme Court,60 and to refer to the court a question of law that arises if it raises an issue of public importance.61 If heard by the appeal tribunal, the tribunal may deal with an appeal as a new application or as a review of all or part of the original decision.62 A decision of the appeal tribunal may be appealed to the court on a question of fact or law only with the court’s leave.63

NEW SOUTH WALES AND VICTORIA [24.55]

With the enactment of the Legal Profession Uniform Law in New South Wales and Victoria, these jurisdictions share core commonalities in disciplinary procedures. Like other jurisdictions, these proceed on the basis of complaints, which trigger investigation and, if necessary, a disciplinary sanction. The Uniform Law schema, not unlike the former Victorian regime,64 differentiates by way of procedure and response “disciplinary matters” from “consumer matters”. 55 ACT, s 425. 56 Council of the Law Society of the Australian Capital Territory v Legal Practitioner RH (No 2) [2015] ACAT 68 at [10]. 57 The maximum amount that can be imposed by way of fine is prescribed by ACT, s 427(1). 58 ACT, s 426. 59 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 79. 60 ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 83, 85. 61 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 84. 62 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 82. 63 ACT Civil and Administrative Tribunal Act 2008 (ACT), s 86. 64 As catalogued in the preceding edition of this text: Dal Pont, Lawyers’ Professional Responsibility (5th ed, Lawbook Co., 2013), [24.205]–[24.225].

790

Lawyers’ Professional Responsibility

[24.60]

Complaints Any person or body may make a written complaint against a lawyer.65 A complaint is made to or by the designated local regulatory authority,66 being the Legal Services Commissioner (hereinafter the “Commissioner”) in the respective jurisdictions.67 The Commissioner, who is appointed by the Governor on the recommendation of the Attorney-General, must be familiar with the nature of the legal system and legal practice, although he or she need not be an Australian legal practitioner.68

[24.60]

A complaint may relate to either or both a consumer matter and a disciplinary matter69 (although the Commissioner can only make complaints as to disciplinary matters).70 A “consumer matter” targets so much of a complaint relating to the provision of legal services to the complainant that the Commissioner determines should be resolved by exercising functions relating to consumer matters.71 A “costs dispute” is a consumer matter involving a dispute over legal costs between a law practice and a person charged with those costs or is liable to pay them (other than under a court or tribunal order for costs), whether as a client or as a third party payer.72 A “disciplinary matter” refers to so much of a complaint about a lawyer or a law practice as would, were the conduct concerned established, amount to unsatisfactory professional conduct or professional misconduct.73 If a complaint contains or may contain both a consumer matter and a disciplinary matter, the Commissioner may give priority to resolving the consumer matter as soon as possible and, if necessary and appropriate, separately from the disciplinary matter.74 Investigation by Commissioner

[24.65]

The relevant Commissioner must make a preliminary assessment of a complaint,75 and close the complaint at any stage thereafter without further considering its merits in certain circumstances.76 He or she can recommend that an Australian practising certificate be immediately suspended if warranted in the public interest because of the seriousness of the alleged conduct.77 Requirements to 65 NSW, ss 266(1), 267(2); Vic, ss 266(1), 267(2). 66 NSW, s 267(1); Vic, s 267(1). 67 Legal Profession Uniform Law Application Act 2014 (NSW), s 11(1) (as to whom see Pt 3, Div 2); Legal Profession Uniform Law Application Act 2014 (Vic), s 10(1) (as to whom see Pt 3, Div 3). 68 Legal Profession Uniform Law Application Act 2014 (NSW), s 22; Legal Profession Uniform Law Application Act 2014 (Vic), s 511. 69 NSW, s 268(1); Vic, s 268(1). 70 NSW, s 266(2); Vic, s 266(2). 71 NSW, s 269(1); Vic, s 269(1). 72 NSW, s 269(2); Vic, s 269(2). 73 NSW, s 270; Vic, s 270. 74 NSW, s 271; Vic, s 271. 75 NSW, s 276; Vic, s 276. 76 See NSW, s 277; Vic, s 277. 77 NSW, s 278; Vic, s 278.

[24.80]

24 Disciplinary Procedures

791

notify the lawyer the subject of the complaint,78 and an entitlement of that lawyer to make submissions to the Commissioner, are statutorily prescribed.79 In an initiative unique to the Uniform Law, the Commissioner may, whether or not from a complaint, conduct an audit of the compliance of a law practice with the Uniform Law, the rules or other applicable professional obligations if he or she considers there are reasonable grounds to do so.80 Disciplinary matters

[24.70]

The Commissioner may investigate all or part of a complaint, and appoint a suitably qualified person to do so.81 For a disciplinary matter, the Commissioner may find that a lawyer has engaged in unsatisfactory professional conduct, and determine the matter by making one more orders short of suspension or striking off.82 These include cautions, reprimands, apologies, fines (not exceeding $25,000), or orders to redo work, waive fees or undertake training, education or counselling. Consumer matters

[24.75]

The Commissioner must not take action towards resolving a consumer matter unless he or she is of the opinion that at least one of the parties has made a reasonable attempt to resolve the matter and the attempt has failed, or it would be unreasonable to expect the complainant to so attempt.83 In this event, the Commissioner must endeavour to resolve a consumer matter by informal means as soon as practicable,84 and provision exists for it to be directed to mediation.85 If mediation fails, the Commissioner may further investigate the complaint and proceed to a determination that, in his or her view, is fair and reasonable in all the circumstances, and make one or more of the orders specified.86 Costs disputes

[24.80]

The Commissioner must deal with a costs dispute in the same manner as other consumer matters if the total bill for legal costs is less than $100,000 (indexed) payable in respect of any one matter or, if the bill equals or exceeds that amount, less than $10,000 (indexed) is in dispute.87 The Commissioner may make a binding determination about costs payable (not exceeding $10,000 (indexed)), by reference to what is fair and reasonable, if he or she is unable to resolve the dispute and the

78 NSW, s 279 (but note exception in s 281); Vic, s 279 (but note exception in s 281). 79 NSW, s 280; Vic, s 280. 80 NSW, s 256(1); Vic, s 256(1). 81 NSW, s 283; Vic, s 283. 82 NSW, s 299(1); Vic, s 299(1). 83 NSW, s 286; Vic, s 286. 84 NSW, s 287; Vic, s 287. 85 NSW, s 288(2); Vic, s 288(2). 86 NSW, ss 288(4), 290(1), 290(2); Vic, ss 288(4), 290(1), 290(2). 87 NSW, s 291(1); Vic, s 291(1).

792

Lawyers’ Professional Responsibility

[24.85]

total amount of costs still in dispute is less than $10,000 (indexed).88 For a costs dispute outside these monetary thresholds, the Commissioner must inform the parties of the right to apply for a costs assessment (see [15.40]–[15.90]) for the matter to be determined.89 In Victoria a party to a complaint that involves a costs dispute may apply to the Victorian Civil and Administrative Tribunal (VCAT) to determine the dispute if the total amount in dispute does not exceed $25,000 (indexed) and the parties have been informed by the Commissioner of their right to so apply.90 In determining a costs dispute, VCAT may make an order specifying, on the grounds of what is fair and reasonable, the amount payable as costs, which cannot exceed $25,000 (indexed), and any one or more other specified orders.91 Proceedings in designated tribunal

[24.85]

The Uniform Law empowers the relevant Commissioner to initiate and prosecute proceedings against a lawyer in the designated tribunal (in New South Wales the Civil and Administrative Tribunal (NCAT);92 in Victoria, the Victorian Civil and Administrative Tribunal (VCAT))93 if of the opinion that the alleged conduct may amount to unsatisfactory professional conduct that would be more appropriately dealt with by the tribunal, or that the alleged conduct may amount to professional misconduct.94 If, after it has completed a hearing into the lawyer’s conduct, the tribunal finds her or him guilty of unsatisfactory professional conduct or professional misconduct, it may make any orders that it thinks fit.95 These include any of the orders that the Commissioner can make in relation to a lawyer (see [24.70]), and any one or more other orders specified, including suspension and striking off. Proceedings in the tribunal can also be initiated, by way of appeal or review, by the lawyer-respondent to a determination of the Commissioner, and the tribunal may make any order it considers appropriate.96 In each instance, provision exists for an avenue of appeal or review of the tribunal’s decision to the Supreme Court.97 88 NSW, s 292; Vic, s 292 89 NSW, s 291(2); Vic, s 291(2). 90 Legal Profession Uniform Law Application Act 2014 (Vic), s 99(1). 91 Legal Profession Uniform Law Application Act 2014 (Vic), s 99(4), 99(5). 92 The Civil and Administrative Tribunal Act 2013 (NSW), which created the Civil and Administrative Tribunal as a “super-tribunal”, collapsed multiple tribunals into the one tribunal, albeit with multiple divisions. For the purposes of the legal profession legislation, the relevant division is the Occupational Division, to which particular procedural provisions apply (see Civil and Administrative Tribunal Act 2013 (NSW), Sch 5, Pt 4, Div 4). 93 The Victorian Civil and Administrative Tribunal was created by the Victorian Civil and Administrative Tribunal Act 1998 (Vic), and disciplinary proceedings are heard by the tribunal under its Administrative Division. 94 NSW, s 300(1); Vic, s 300(1). 95 NSW, s 302(1); Vic, s 302(1). 96 NSW, s 314; Vic, s 314. 97 NSW, ss 302(6), 314(3); Civil and Administrative Tribunal Act 2013 (NSW), s 83; Vic, ss 302(6), 314(3); Victorian Civil and Administrative Tribunal Act 1998 (Vic), s 148.

[24.100]

24 Disciplinary Procedures

793

NORTHERN TERRITORY Complaints and investigations

[24.90]

Any person may complain in writing to the Law Society (the “Society”) regarding the conduct of a lawyer.98 The Society may dismiss a complaint if, inter alia, it is vexatious, misconceived, frivolous or lacking in substance.99 In deciding whether or not to dismiss a complaint, the Society may conduct a preliminary assessment of the complaint for assessing its substance.100 If a complaint involves a consumer dispute,101 provision is made for mediation.102 Except where a complaint is dismissed or withdrawn, or the subject of mediation, the Society must investigate a complaint, and may appoint a suitably qualified investigator for this purpose.103 In doing so, the Society may apply for an assessment of costs claimed by the lawyer.104 Determination by Law Society

[24.95]

After completing an investigation, the Society must commence proceedings in the Legal Practitioners Disciplinary Tribunal (the “tribunal”), dismiss the complaint or summarily conclude the procedure by imposing a fine or reprimand.105 Which of those options the Society pursues depends on the same considerations that apply to a council in the Australian Capital Territory following its investigation of a complaint: see [24.40]. A lawyer may appeal a summary reprimand or fine directly to the Supreme Court.106

Appeal to and from the Legal Practitioners Disciplinary Tribunal

[24.100] The complainant can appeal to the tribunal against a decision of the Society to dismiss a complaint, whereas the lawyer can appeal the Society’s decision to issue a reprimand or fine.107 The tribunal must hear the appeal by way of rehearing.108 On hearing the appeal, the tribunal must do one of the following: affirm the Society’s decision, set it aside (and, if necessary, direct the Society to start disciplinary proceedings in the tribunal in relation to the whole or part of the complaint), or set aside the decision and order that the lawyer be reprimanded or 98 NT, ss 471, 472. 99 NT, s 478. 100 NT, s 477. 101 A “consumer dispute” is defined as a dispute between a person and a lawyer about the lawyer’s conduct to the extent it does not involve an issue of unsatisfactory professional conduct or professional misconduct: NT, s 480. 102 NT, Pt 4.5. 103 NT, ss 488, 491. 104 NT, s 493. 105 NT, ss 496–499. 106 NT, s 513(1). 107 NT, s 506. 108 NT, s 507(1). Procedure for the commencement and conduct of proceedings in the tribunal is prescribed by the Legal Practitioners Disciplinary Tribunal Rules 2011 (NT).

794

Lawyers’ Professional Responsibility

[24.105]

fined.109 If the tribunal, after completing a hearing, is satisfied the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, it may make the order it considers appropriate, including orders similar to those specified in relation to the ACT Civil and Administrative Tribunal:110 see [24.45]. The Law Society or the lawyer disciplined (or the complainant if he or she appeared at the hearing for the complaint) may appeal to the Supreme Court against a decision of the tribunal to make any of the above orders. On hearing the appeal, the court may make the order it considers appropriate.111

QUEENSLAND Complaints and investigations

[24.105] A complaint about the conduct of a lawyer is to be directed to the Legal Services Commissioner (the “Commissioner”),112 who is appointed by the Governor in Council, need not be a lawyer, and is independent of the profession.113 A complaint that is vexatious, misconceived, frivolous or lacking in substance may be dismissed.114 If a complaint involves a “consumer dispute”,115 provision is made for mediation.116 If the Commissioner believes that an investigation should ensue into a lawyer’s conduct about a matter (an “investigation matter”), he or she may refer it to the relevant regulatory authority (either the Law Society or the Bar Association). The referral may require the regulatory authority to report to the Commissioner by a set date about the complaint or investigation matter, and can include directions as to the conduct of the investigation.117 The report must include a recommendation about whether a proceeding in relation to the complaint or investigation matter should be started.118 A complaint or investigation matter that is not referred to a regulatory authority must be investigated by the Commissioner.119 The Commissioner must, in any case, conduct an investigation if he or she is satisfied that it is inconsistent with the public interest for the regulatory authority to do so, or that it is in the public interest for her or him to conduct the investigation.120 109 NT, s 511. 110 NT, s 525. 111 NT, s 533. 112 Qld, s 429. 113 Qld, Pt 7.1. 114 Qld, s 432. 115 A “consumer dispute” is a dispute between a person and a law practice about conduct of a lawyer to the extent the Commissioner considers that it does not involve an issue of unsatisfactory professional conduct or professional misconduct: Qld, s 440. 116 Qld, Pt 4.5. 117 Qld, s 435. 118 Qld, s 439(3)(b). 119 Qld, s 436(2). 120 Qld, s 436(1).

[24.115]

24 Disciplinary Procedures

795

The Commissioner may dismiss the complaint or investigation matter if he or she is satisfied there is no reasonable likelihood121 of a finding by the Legal Practice Committee122 or the Queensland Civil and Administrative Tribunal (QCAT)123 (collectively “disciplinary bodies”) of unsatisfactory professional conduct or professional misconduct, or that it is in the public interest to do so.124 Otherwise, the Commissioner may start a proceeding before a disciplinary body (a “discipline application”).125 The choice of disciplinary body is determined by the seriousness of the misconduct; conduct that the Commissioner believes amounts to professional misconduct should be pursued in QCAT. Proceedings before a disciplinary body

[24.110] The disciplinary body in which proceedings are instituted must hear and decide each allegation stated in the discipline application.126 If, in a matter heard by the Legal Practice Committee, the Committee is satisfied that the lawyer is guilty of unsatisfactory professional conduct, it may make one or more orders in relation to the lawyer, including a reprimand, a penalty (maximum $10,000), a compensation order, and/or an order for periodic inspection.127 If, when the lawyer is before QCAT, the tribunal is satisfied that he or she is guilty of unsatisfactory professional conduct or professional misconduct, it has within its arsenal a broader array of potential disciplinary sanctions, including the more serious sanctions of removal and suspension, and a maximum fine of $100,000.128 Appeals to the Queensland Civil and Administrative Tribunal and the court

[24.115] A party dissatisfied with a final decision of the Legal Practice Committee on a discipline application may apply to QCAT for a review of the decision.129 The review is by way of a fresh hearing on the merits.130 QCAT may confirm or amend the Committee’s decision, set it aside and substitute its own decision, or set it aside and return the matter for reconsideration to the Committee.131 121 “Reasonable likelihood” refers to a lesser standard than the balance of probabilities, in view of its context, which does not require the resolution of disputed facts, nor consideration of all the evidence that might be proffered in the case of a dispute: Donaghy v Council of the Law Society of New South Wales (No 2) [2015] NSWCA 224 at [48] per Basten JA, with whom Gleeson JA and Sackville AJA concurred. 122 The Legal Practice Committee is established pursuant to Qld, s 621 (and see generally Pt 7.3). 123 The Queensland Civil and Administrative Tribunal is established pursuant to the Queensland Civil and Administrative Tribunal Act 2009 (Qld) (with effect on 1 December 2009; before this date the relevant tribunal was the Legal Practice Tribunal). 124 Qld, s 448(1). 125 Qld, s 447. 126 Qld, s 453. 127 Qld, s 458(2). 128 Qld, s 456(2)–(4). 129 Qld, s 469(1). 130 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 20(2). 131 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 24(1).

796

Lawyers’ Professional Responsibility

[24.120]

A party dissatisfied with QCAT’s decision, or the Minister, may appeal that decision to the Court of Appeal.132 This appeal is by way of a rehearing on the evidence given in the matter before QCAT, although this does not prevent the Court of Appeal granting leave to introduce further evidence it considers material to the appeal.133

SOUTH AUSTRALIA Complaints and investigations

[24.120] In South Australia complaints against lawyers are directed to the Legal Profession Conduct Commissioner (the “Commissioner”),134 who is appointed by the Governor, following consultation by the Attorney-General with the Law Society and Bar Association.135 He or she must be a person familiar with the nature of the legal system and legal practice but need not be a legal practitioner.136 The Commissioner may, on her or his own initiative, investigate the conduct of a lawyer whom there is reasonable cause to suspect has been guilty of professional misconduct or unsatisfactory professional conduct.137 A complaint received relating to the conduct of a lawyer138 must be investigated unless, inter alia, the Commissioner considers it frivolous or vexatious, or its subject matter resolved.139 Provision exists for the Commissioner to arrange for a conciliation of a relevant disciplinary matter.140 If, following the investigation, evidence is found of unsatisfactory professional conduct or professional misconduct that can be adequately addressed by disciplinary sanctions available to the Commissioner,141 he or she may impose one or more of those sanctions.142 Otherwise, the Commissioner must lay a charge 132 Qld, s 468(1). 133 Qld, s 468(2), 468(3). 134 Prior to 1 July 2014, when the Legal Practitioners (Miscellaneous) Amendment Act 2013 (SA) entered into force, the function of the Commissioner was performed by the Legal Practitioners Conduct Board, which was an independent body corporate with nominees from the Attorney-General and the Law Society. 135 SA, s 71(2). 136 SA, s 71(3). 137 SA, s 77B(1). 138 A complaint that relates to overcharging must be investigated unless it is received more than two years after the final bill to which it relates was delivered to the client or the complaint is resolved before an investigation is commenced (SA, s 77N(1)), although the Commissioner must not proceed with the investigation while the bill to which the complaint relates is the subject of an application for adjudication of costs (as to which see [15.40]–[15.90]): SA, s 77N(3). There is scope in defined circumstances for the Commissioner, following an investigation, to make a determination as to whether or not there has been overcharging and, if so, the amount that has been overcharged, which is binding on and enforceable against the lawyer: SA, s 77N(7)–77N(10). 139 SA, s 77C(1). 140 SA, s 77O. 141 SA, s 77J(1)(a) (unsatisfactory professional conduct), 77J(1)(b) (unsatisfactory professional conduct, with the consent of the lawyer in question), 77J(2) (professional misconduct). 142 SA, s 77J(1) (unsatisfactory professional conduct), 77J(2) (professional misconduct).

[24.130]

24 Disciplinary Procedures

797

before the Legal Practitioners Disciplinary Tribunal unless he or she determines that it would not be in the public interest to do so.143 Legal Practitioners Disciplinary Tribunal

[24.125] The Attorney-General, the Commissioner, the Law Society, or any person claiming to be aggrieved144 by the alleged conduct of a lawyer, may lay a charge of unprofessional conduct before the Legal Practitioners Disciplinary Tribunal (the “tribunal”),145 which must inquire into the charge146 but may dismiss any charge it considers frivolous or vexatious.147 The tribunal can also hear an appeal from the lawyer or complainant as regards the Commissioner’s determination.148 If the tribunal finds the lawyer guilty of unprofessional or unsatisfactory conduct, it may make any one or more of the following orders:149 reprimand; periodic examination of the lawyer’s files or records; imposition of a fine not exceeding a specified amount; suspension of practice not exceeding a set period; imposition of conditions on the continuation of practice for a period of up to 12 months; and/or a recommendation that disciplinary proceedings be commenced in the Supreme Court: see [24.130]. Supreme Court

[24.130] The Supreme Court hears a disciplinary matter either from an appeal from the tribunal,150 or where the tribunal has recommended that disciplinary proceedings be commenced in the court.151 On an appeal the court can affirm, vary, quash or reverse the tribunal’s decision, and may administer any reprimand or make any order that should have been administered or made at first instance.152 On 143 SA, s 77L. 144 The phrase “any person claiming to be aggrieved” has been construed as a shorthand composite expression “to vest standing in those persons who have a particular kind of relationship with the charged unprofessional or unsatisfactory conduct”, namely persons who can show that, “on the hypothesis that the charged unprofessional or unsatisfactory conduct did occur, they are persons who, considered objectively, are really and directly affected by that conduct”: Viscariello v Livesey [2013] SASC 99 at [63] per White J (what this meant was that “complainants will not establish standing if their interest is no more than academic, emotional or of an intermeddling kind” (at [63]) and that, on the facts, one lawyer could not bring charges of unprofessional conduct against two other lawyers because he was not a person “claiming to be aggrieved by reason of the alleged unprofessional or unsatisfactory conduct” for this purpose (at [103])). 145 SA, s 82(2), 82(3). As to the establishment, constitution and operation of the Legal Practitioners Disciplinary Tribunal see SA, ss 78–81. 146 SA, s 82(4) (as to which see Legal Practitioners Conduct Board v Colton (2012) 113 SASR 467 at [22]–[30] per Stanley J). 147 SA, s 82(5). 148 SA, s 77K. 149 SA, s 82(6). 150 SA, s 86(1). 151 SA, s 89(1). 152 SA, s 86(3).

798

Lawyers’ Professional Responsibility

[24.135]

a recommendation from the tribunal the court may make one or more of a wide range of orders, including reprimand, suspension, striking off, conditional practice, and any other order it considers just.153

TASMANIA Complaints and investigations

[24.135] Any person may lodge a written complaint about the conduct of a lawyer with the Legal Profession Board (the “Board”).154 One of the Board’s functions is to receive, investigate and determine complaints against lawyers. As in other jurisdictions, the Board can dismiss summarily a complaint that is in its opinion vexatious, misconceived, frivolous or lacking in substance.155 If the Board considers that a complaint, other than one that would likely produce a finding of professional misconduct, is capable of resolution by mediation, it may suggest to the parties that they enter into a process of mediation.156 If any part of a complaint relates to a bill of costs, the Board may either refer the bill to a costs assessor to be assessed or deal with that part of the disciplinary complaint.157 Other than a complaint that is dismissed or withdrawn, the Board must investigate each complaint, and may appoint a suitably qualified person to do this.158 If, during an investigation, the Board considers that a matter may amount to professional misconduct, it must apply to either the Disciplinary Tribunal (the “tribunal”) or the Supreme Court to hear and determine the matter.159 If the Board is satisfied that the lawyer is likely to be found guilty of professional misconduct, it may also make an interim order for suspension or non-issue of her or his practising certificate if this is necessary in the public interest.160 Determination by Legal Profession Board

[24.140] After an investigation of a complaint, the Board may dismiss the complaint if satisfied that there is no reasonable likelihood161 that the lawyer will be found guilty of either unsatisfactory professional conduct or professional misconduct, or that it is in the public interest to do so.162 Otherwise, it may:163 153 SA, s 89(2). 154 Tas, s 427. The Legal Profession Board is established pursuant to Tas, s 589. 155 Tas, s 433(1). 156 Tas, s 436. 157 Tas, s 449. 158 Tas, ss 440, 442. 159 Tas, s 445. 160 Tas, s 446. 161 “Reasonable likelihood” refers to a lesser standard than the balance of probabilities, in view of its context, which does not require the resolution of disputed facts, nor consideration of all the evidence that might be proffered in the case of a dispute: Donaghy v Council of the Law Society of New South Wales (No 2) [2015] NSWCA 224 at [48] per Basten JA, with whom Gleeson JA and Sackville AJA concurred. 162 Tas, s 451.

[24.145]

24 Disciplinary Procedures

799

• if it considers that any matter within the investigation is capable of amounting to unsatisfactory professional conduct – hold a hearing;164 • if it considers that its subject matter is capable of amounting to unsatisfactory professional conduct insufficiently serious to warrant a hearing – deal with the complaint in accordance with the “procedure for less serious complaint”;165 • apply for the tribunal to hear and determine any matter it considers is capable of amounting to both unsatisfactory professional conduct and professional misconduct; or • apply for the tribunal or the Supreme Court to hear and determine the matter if it considers that the conduct is capable of amounting to professional misconduct. If, upon completing a hearing, the Board is not satisfied that the lawyer is guilty of unsatisfactory professional conduct, it must dismiss the complaint.166 If, conversely, it makes a finding of unsatisfactory professional conduct, the Board may make any one or more of a variety of determinations, but excluding striking off or suspension.167 Role of the Disciplinary Tribunal and the Supreme Court

[24.145] Either the complainant or the lawyer disciplined may apply to the tribunal or Supreme Court to have the matter to which the Board’s determination relates determined by the tribunal or court.168 The determination in question is to be by way of a re-hearing.169 In the alternative, any person, including the Board, can apply directly to the tribunal for the hearing and determination of a complaint.170 The tribunal may conduct a hearing into the application, refer it to be heard and determined by the Board,171 or dismiss a complaint if, inter alia, it is vexatious, misconceived, frivolous or lacking in substance.172 If, on completing a hearing, the tribunal is satisfied that the lawyer has engaged in unsatisfactory professional conduct or professional misconduct, it may make such orders as it thinks fit, including any one or more of the wide variety of orders, including striking off or suspension, specified by statute.173 The Board and any party to a complaint who is aggrieved by an order made by the tribunal may 163 Tas, s 450. 164 Tas, Sch 1 has effect with respect to hearings of the Board: Tas, s 453. 165 The “procedure for less serious complaint” is prescribed in Tas, s 456. 166 Tas, s 454(1). 167 Tas, s 454(2). 168 Tas, s 458(1). 169 Tas, s 458(3). 170 Tas, s 464. 171 Which it will do if it considers that the matter: (a) relates to unsatisfactory professional conduct; (b) is not sufficiently serious to warrant a hearing; or (c) is an alleged contravention of a regulation, rule or by-law made under the Act of a nature that it ought to be heard and determined by the Board: Tas, s 466(7)(b). 172 Tas, s 466(7). 173 Tas, s 470 (the orders being listed in Tas, ss 471–474).

800

Lawyers’ Professional Responsibility

[24.150]

appeal against that order to the Supreme Court.174 An appeal is dealt with by way of rehearing, and the court, in deciding the appeal, may confirm, vary, quash or substitute the tribunal’s order, refer the matter to the tribunal for rehearing, or make any other order it thinks appropriate.175 Provision is also made for any person to apply directly to the Supreme Court to hear and determine a complaint, but the court may, if it considers the application should be heard and determined by the Board or tribunal, refer the complaint accordingly.176 If the court elects to hear the matter, or to hear an appeal, it may make any order, including an order in respect of compensation, it thinks appropriate.177

WESTERN AUSTRALIA Complaints and investigations

[24.150] A complainant178 may make a written complaint to the Legal Profession Complaints Committee (the “Committee”, formerly known as the Legal Practitioners Complaints Committee), directly or through the Law Complaints Officer.179 The Committee is a committee of the Legal Practice Board,180 which is a body corporate consisting of the Attorney-General, the Solicitor-General and various lawyers.181 The Law Complaints Officer is a lawyer who may exercise the functions of the Committee, with the exception of its summary professional disciplinary jurisdiction (see [24.155]), and may appear at any investigation, inquiry or hearing into a disciplinary matter.182 The Committee is established to supervise the conduct of lawyers. Its broad jurisdiction includes receiving and inquiring into complaints, instituting professional disciplinary proceedings, and supervising and directing the Law Complaints Officer.183 The Committee may dismiss a complaint if, inter alia, it is vexatious, misconceived, frivolous or lacking in substance.184 If it considers that a complaint is capable of resolution by mediation, it may suggest to the parties that they enter into a process 174 Tas, s 484. 175 Tas, s 485. 176 Tas, s 486. 177 Tas, s 487. 178 Namely a lawyer, the Attorney-General, the Legal Practice Board or the Executive Director of the Law Society if authorised by a resolution of the Council, and any other person who has or had a direct personal interest in the matters alleged in the complaint: WA, s 410(1). 179 WA, s 410. 180 WA, s 555(2). 181 WA, s 536. 182 WA, ss 572, 573. 183 WA, s 557. As to the constitution and operation of the Legal Profession Complaints Committee see WA, Pt 16, Div 2. 184 WA, s 415(1).

[24.160]

24 Disciplinary Procedures

801

of mediation.185 It must otherwise investigate each complaint.186 For the purpose of an investigation, it may refer a matter for assessment of costs charged or claimed by the lawyer.187 The Committee may apply to the State Administrative Tribunal for an order suspending, or imposing conditions on, a lawyer’s practising certificate pending the result of its investigation, the hearing of a referral by the tribunal, or an appeal against a decision of the tribunal.188 Determination of Legal Profession Complaints Committee

[24.155] After an investigation is completed, the Committee may dismiss the complaint if satisfied of no reasonable likelihood189 that the lawyer would be found guilty of either unsatisfactory professional conduct or professional misconduct, or that it is in the public interest to do so.190 If the Committee is satisfied of a reasonable likelihood that the lawyer would be found guilty of unsatisfactory professional conduct (but not professional misconduct) and that the lawyer is generally competent and diligent, it may, with her or his consent, issue a reprimand, order payment of a fine, make a compensation order, or order the lawyer to seek and implement particular practice management advice (the summary professional disciplinary jurisdiction).191 Otherwise, the Committee must refer the matter to the State Administrative Tribunal.192 A person aggrieved by the Committee’s decision to dismiss a complaint, or to make any of the above disciplinary orders against a lawyer, may seek its review by the said tribunal.193 Role of the State Administrative Tribunal and the Court

[24.160] The State Administrative Tribunal is vested with jurisdiction to make a finding that a lawyer has engaged in unsatisfactory professional conduct or professional misconduct.194 If, after it has completed a hearing in relation to a referral, the tribunal is satisfied that the lawyer is guilty of unsatisfactory professional conduct or professional misconduct, it may make and transmit a report on the finding to the Supreme Court (full bench), or make any one or more 185 WA, s 417. 186 WA, s 421. 187 WA, s 423. 188 WA, s 436. 189 “Reasonable likelihood” refers to a lesser standard than the balance of probabilities, in view of its context, which does not require the resolution of disputed facts, nor consideration of all the evidence that might be proffered in the case of a dispute: Donaghy v Council of the Law Society of New South Wales (No 2) [2015] NSWCA 224 at [48] per Basten JA, with whom Gleeson JA and Sackville AJA concurred. 190 WA, ss 424(1)(a), 425. 191 WA, ss 424(1)(b), 426. 192 WA, ss 424(1)(c), 428. 193 WA, s 435(1). 194 WA, s 438(1).

802

Lawyers’ Professional Responsibility

[24.160]

of the wide variety of orders prescribed,195 but not extending to a striking off order within the jurisdiction. The Supreme Court (full bench), upon motion and upon reading the report, and without any further evidence, may make any order that the tribunal could make, but it can also make a striking off order.196

195 By WA, ss 439, 440, 441. 196 WA, s 444(2).

Chapter 25

Types of Misconduct [25.10] MISCONDUCT IN THE COURSE OF PRACTICE ..................................................... 805 [25.10] Misleading a court or tribunal ................................................................................... 805 [25.15] Misleading another lawyer or a third party ........................................................... 806 [25.35] Misleading a regulatory body ................................................................................... 809 [25.40] Disrespect to the court or its authority .................................................................... 809 [25.50] Trust accounting irregularities ................................................................................... 811 [25.55] Lawyer–client conflict ................................................................................................. 813 [25.60] Client–client conflict .................................................................................................... 813 [25.65] Breach of client confidentiality .................................................................................. 814 [25.70] Overcharging ................................................................................................................. 815 [25.85] Delay or neglect ........................................................................................................... 818 [25.90] Failure to properly supervise ..................................................................................... 819 [25.95] MISCONDUCT OUTSIDE PRACTICE .......................................................................... 820 [25.100] Relevance of a criminal conviction ......................................................................... 821 [25.110] Convictions for sex offences or domestic abuse ................................................... 823 [25.135] Drug-related convictions ........................................................................................... 828 [25.140] Conviction for stalking .............................................................................................. 830 [25.145] Conviction for other offences ................................................................................... 830 [25.155] Lawyers’ tax indiscretions ........................................................................................ 832 [25.175] Making misleading statements to a court or tribunal other than as a lawyer .................................................................................................................. 836

[25.05]

Lapses by a lawyer from the required standard of integrity, probity and trustworthiness may take different forms and be of varying degrees of seriousness. Their form and seriousness, adjudged by the principal barometers of public protection and reputational preservation (see [23.20]) most heavily influence the disciplinary response. Subsidiary influencing factors include those discussed at [23.115]–[23.170], which target to the frequency of the (mis)conduct and the lawyer’s attitude in respect of it. Although conduct capable of attracting a disciplinary order is described as “professional” misconduct at general law, behaviour outside the course of practice (sometimes termed “personal misconduct”) can also attract a disciplinary order. Hence, here the term “professional” does not operate to constrain the scope of misconduct. The point is evident under the statutory formulation of professional misconduct, which encompasses conduct whether or not it occurs in the course of practice: see [23.90]. Yet it is not always easy, if viewed through the supposedly

804

Lawyers’ Professional Responsibility

[25.05]

central prism of protecting the public, to explain disciplinary sanctions for personal misconduct unrelated to the lawyer’s practice. In these circumstances, in particular, it appears that the vice, professionally, of personal misconduct is in tarnishing the profession’s reputation and corresponding detriment to public confidence in the administration of justice.1 Not all are convinced that disciplinary bodies should exercise a power to deny the livelihood of a person based on vague perceptions of public status and repute.2 In any case, as misconduct within the course of practice is more directly connected with a lawyer’s status as a professional than personal misconduct, it ordinarily has greater bearing on fitness to practise than personal misconduct. It has been said, to this end, that the disciplinary response to the former is generally more marked than to the latter.3 For this reason, misconduct in the professional and the personal sphere are discussed separately in this chapter. Also within this chapter are various references to occasions in which lawyers have been convicted of criminal offences. It should not be assumed that a criminal conviction, by itself, necessarily spells a professional consequence, although a criminal conviction arising in the course of practice will almost certainly do so. On the other hand, the absence of conviction confers no immunity from disciplinary sanction;4 a criminal conviction may evidence underlying misconduct but is no prerequisite to proof of it, as a lawyer can commit misconduct without acting dishonestly or unlawfully. But proven dishonesty, particularly if sustained, ordinarily justifies a severe disciplinary sanction because it sits poorly with the most essential character attribute expected of a lawyer.5 It is what the evidence says about a lawyer’s character, and suggests regarding the confidence the courts and the public can place in her or him as a lawyer, that forms the central inquiry. It follows that the issue of misconduct, and the appropriate sanction for it, is determined on the facts of each case; the question “is not one of law to be determined by reference to previous decisions”.6 An attempt is nonetheless made below to catalogue the main types of behaviour decreed, by courts or by statute, to amount to misconduct. This catalogue is illustrative rather than exhaustive. Other instances, addressed elsewhere, include breaches of undertakings (see [22.50]), illegitimately communicating with an opposing client 1 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 290 per Fullagar J; Roylance v General Medical Council (No 2) [2000] 1 AC 311 at 332 (PC). 2 See, for example, Haller, “Lawyers and the Third Dimension: A Solicitor v Council of the Law Society of New South Wales” (2004) 23 UQLJ 211 at 216–217. 3 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 290 per Fullagar J. 4 Re Sawley (1894) 15 LR (NSW) 147 at 151 per Darley CJ; Re Crick (1907) 7 SR (NSW) 576 at 590 per Darley CJ. 5 Council of the Law Society of New South Wales v Green (No 2) [2009] NSWADT 297 at [16] (“the requirement for honesty and integrity in members of the profession is absolute. There are no shades of grey”). 6 Ex parte Lenehan (1948) 77 CLR 403 at 422 per Latham CJ, Dixon and Williams JJ. See also Law Society (Solicitors Regulation Authority) v Emeana [2013] EWHC 2130 (Admin) at [26] per Moses LJ, with whom Burnett J concurred.

[25.10]

25 Types of Misconduct

805

(see [21.270]), making unsupported allegations (see [17.220]–[17.235]), pursuing hopeless cases (see [17.260]–[17.275]) and engaging in harassment or discriminatory behaviour (see [21.170]).

MISCONDUCT IN THE COURSE OF PRACTICE Misleading a court or tribunal

[25.10]

The proper administration of justice necessitates that courts and tribunals be able to rely on what a lawyer says and does.7 For this reason, a lawyer proven to have knowingly and deliberately deceived a court or tribunal commits professional misconduct, and is not uncommonly struck off as a consequence.8 Recklessly misleading a court will also attract a disciplinary sanction – the law, it is said, recognises little difference between knowingly as opposed to recklessly making a false statement9 – although its severity may rest on the degree of recklessness.10 As explained by an English judge:11 [M]isleading the court is regarded by the court and must be regarded by any disciplinary tribunal as one of the most serious offences that an advocate or litigator can commit. It is not simply a breach of a rule of a game, but a fundamental affront to a rule designed to safeguard the fairness and justice of proceedings. Such conduct will normally attract an exemplary and deterrent sentence. That is in part because our system for the administration of justice relies so heavily upon the integrity of the profession and the full discharge of the profession’s duties and in part because the privilege of conducting litigation or appearing in court is granted on terms that the rules are observed not merely in their letter but in their spirit. Indeed, the reputation of the system of the administration of justice … and the standing of the profession depends particularly upon the discharge of the duties owed to the court. 7 Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 445 per Mahoney JA; Legal Practitioner v Council of the Law Society of the Australian Capital Territory [2014] ACTSC 13 at [309] per Refshauge J. 8 Re Sawley (1894) 15 LR (NSW) 147 at 150–151 per Darley CJ; Re Foster (1950) 50 SR (NSW) 149 at 152–153 per Street CJ; O’Reilly v Law Society of New South Wales (1988) 24 NSWLR 204 at 208 per Kirby P, at 230 per Clarke JA; Re Nelson (1991) 106 ACTR 1 at 23 per Higgins and Foster JJ; Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 446–447 per Mahoney JA, at 470–472 per Giles AJA; Council of the Queensland Law Society Inc v Wright [2001] QCA 58 at [67] per McMurdo P; Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42 at [27] per de Jersey CJ, at [33]–[35] per Williams JA; Council of the New South Wales Bar Association v Hart [2011] NSWCA 64; Legal Practitioners Conduct Board v Viscariello [2013] SASCFC 37; Legal Profession Complaints Committee v Brickhill [2013] WASC 369. Cf Vogt v Legal Practitioners Complaints Committee [2009] WASCA 202 (where the appellant lawyer, who was found to have knowingly misled the court, was suspended for three months). 9 Re Hodgekiss [1962] SR (NSW) 340 at 352–354 per Hardie J (in the context of statute referring to a “wilful failure” to account); Fidock v Legal Profession Complaints Committee [2013] WASCA 108 at [100]–[102] per the court; Legal Profession Complaints Committee v Giudice [2015] WASAT 10 at [61]–[74]. 10 See, for example, Law Society of New South Wales v McElvenny [2002] NSWADT 166 (solicitor who swore a false affidavit verifying a defence found to have committed unsatisfactory professional conduct, but not professional misconduct, because he “did not deliberately swear a false affidavit and had no intention to deceive” but had “acted recklessly when he verified the amended defence without even reading it”: at [61], [62]). 11 Brett v Solicitors Regulation Authority [2015] PNLR 2 at [111] per Lord Thomas CJ.

806

Lawyers’ Professional Responsibility

[25.15]

That the misleading of the court, where deliberate or reckless, was to benefit the lawyer’s client, is neither a defence to a finding of misconduct nor generally capable of mitigating the disciplinary sanction.12 Nor is it a defence that the deception persisted only briefly.13 But no finding of misconduct follows from an entirely innocent misleading of a court, lacking any dishonesty or recklessness. Of course, once the lawyer discovers the error, he or she cannot perpetuate it, and must instead bring it to the court’s attention. The same principles apply to misleading the court by way of a false document. In Myers v Elman,14 for instance, Viscount Maugham found the solicitor guilty of professional misconduct for “preparing and putting on the file affidavits of documents which he knew to be very inadequate”. Likewise, to allow a client to swear an affidavit knowing it contains false information is professional misconduct,15 as is knowingly making false allegations of fact in a pleading,16 falsely witnessing a document17 and knowingly and deliberately failing to discover a relevant document.18 Misleading another lawyer or a third party

[25.15]

The making of knowingly false statements, whether written or oral, by a lawyer to third parties, such as other lawyers, is prima facie professional misconduct. This occurred in Mellifont v Queensland Law Society Inc,19 involving attempts to deceive clients, another lawyer and the Minister for Justice in furtherance of a clear design to cover up misconduct by falsehood; and in Re Wheeler,20 where a lawyer knowingly made a false statement to another lawyer who inquired as to the whereabouts of moneys paid to the latter by a client. In 12 See, for example, Legal Profession Complaints Committee v Barber [2015] WASAT 99 (calculated conduct to mislead the relevant tribunal as to the identity of a client who purchased a business held to amount to professional misconduct). 13 See, for example, Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 (where the lawyer advanced to the court as true that which, on his instructions, he knew to be untrue, the Full Court of the Western Australian Supreme Court ruled that to deliberately mislead the court, even if foreseen as merely a temporary expedient, was a clear and conscious failure to observe the duty owed to the court; it upheld the finding of unprofessional conduct, reprimanded the lawyer and ordered him to pay the costs of the Law Society). 14 Myers v Elman [1940] AC 282 at 300–301. See also Re a Practitioner (2004) 145 A Crim R 557 (lawyer found guilty of four counts of perjury by swearing falsely in affidavits struck off). 15 See, for example, Minister for Justice and Attorney-General v Brown (unreported, CA(Qld), Fitzgerald P, Davies and Demack JJ, 11 June 1993). 16 Kyle v Legal Practitioners Complaints Committee (1999) 21 WAR 56 at 60 per Ipp J. 17 See, for example, Matter of M [1998] 3 LPDR 23. 18 See, for example, Guss v Law Institute of Victoria Ltd [2006] VSCA 88 (where Maxwell P, with whom Callaway and Chernov JJA concurred, remarked that for a lawyer “knowingly to withhold a relevant document and to stand silent while counsel engaged on behalf of his client made in open court what he … alone knew to be a false statement about the non-existence of such a document” was rightly to be viewed as “very serious conduct” that “went to the heart of the administration of justice”: at [40]). 19 Mellifont v Queensland Law Society Inc [1981] Qd R 17. 20 Re Wheeler [1991] 2 Qd R 690.

[25.25]

25 Types of Misconduct

807

Attorney-General v Bax21 the lawyer, acting for a client in dire financial circumstances, falsified documents and transactions, antedated a deed of loan and intentionally deceived a creditors’ meeting. Regarding the latter, McPherson JA made the following remarks:22 The spectacle of a solicitor, who was chairman of the meeting, falsely asserting a date for the execution of an instrument is one that is not likely to be readily forgotten by the large number of business people who were present on that occasion. It conveys a very poor image of the honesty and integrity of solicitors and so tends to bring the whole profession and its standards into disrepute.

That the lawyer was, in so doing, seeking to assist a client facing bankruptcy, and derived no personal pecuniary benefit, did not mollify the seriousness of the misconduct, especially as he had persisted in the deception. The lawyer was struck off. The disciplinary outcome would have been different had the deception been entirely inadvertent, lacking an element of dishonesty.23

[25.20]

False statements to a funding body, such as a legal aid commission, also undermine a lawyer’s claim to the requisite integrity. In Legal Practitioners Conduct Board v Hannaford24 the lawyer received from a client moneys for fees in advance. He failed to bring this to the Legal Aid Commission’s attention and instead declared to the Commission that the client had no prospects of private funding. The Full Court of the South Australian Supreme Court found that this behaviour justified striking the lawyer off the roll. The same fate met the respondent in Council of the Law Society of New South Wales v Wilson25 stemming from the submission of false claims to Legal Aid, coupled with misappropriation of trust funds. Also, the intentional or reckless misleading of (prospective) clients as to access to, or the availability of, legal aid will sound in a disciplinary sanction.26

[25.25]

Misconduct of this kind has further manifested itself in, inter alia, deceitful practices in relation to lending institutions,27 misstatements in contracts to

21 Attorney-General v Bax [1999] 2 Qd R 9. 22 Attorney-General v Bax [1999] 2 Qd R 9 at 13. See also at 20–22 per Pincus JA. 23 See, for example, Attorney-General v Clough [2002] 1 Qd R 116 (lawyer who falsified documents and transactions, and used false and misleading statements of loss and damage and answers to interrogatories, in an attempt to further a client’s case by unfair means, suspended for 12 months given the finding that no element of dishonesty or reprehensible intention, but only some negligence, was involved). 24 Legal Practitioners Conduct Board v Hannaford (2002) 83 SASR 277. 25 Council of the Law Society of New South Wales v Wilson [2015] NSWCATOD 93. 26 See, for example, Legal Profession Complaints Committee v Love [2014] WASC 389 (where the respondent solicitor, who established a website that misled potential clients into believing that they were applying to Legal Aid, when instead the solicitor received the application and then caused it to be made to Legal Aid, was struck off by reason of his deliberate dishonesty, driven for personal advantage). 27 See, for example, Law Society of New South Wales v Dennis (1981) 7 Fam LR 417 (where the solicitor was struck off for being a party to a dishonest scheme whereby a building society that advanced loans to purchasers (who were the solicitor’s clients) from a vendor company for which the solicitor also acted, was misled as to the true purchase price paid by the purchasers).

808

Lawyers’ Professional Responsibility

[25.30]

reduce incidence of revenue imposts,28 wrongful evasion of late payment penalties in respect of revenue imposts,29 and false or misleading representations that a lawyer has explained documents30 or witnessed signatures to security documents.31 Incidents of these kinds have ordinarily generated reprimands coupled with fines, at least for singular instances for which the lawyers were evidently remorseful,32 although this is without prejudice to misstatements of this kind attracting liability in tort (see [21.30]–[21.40]) or under statute (see [21.130]).

[25.30]

The duty of candour that underscores eschewing misleading statements in the course of practice applies with equal force at the admission stage: see [2.90]. Hence, applicants for admission who misstate their qualifications, or furnish false certificates of good character, prima facie display the lack of candour and honesty expected of members of the legal profession. Such persons are almost invariably candidates for striking off once the deception comes to light.33 Striking off, or at least suspension has, for the same reasons, met lawyers who make applications for employment by misstating their qualifications or experience.34

28 See, for example, Re Scarfone [1998] 2 LPDR 26. 29 See, for example, Re Freeman [1993] 2 LPDR 3. 30 See, for example, Fraser v Council of the Law Society of New South Wales (unreported, CA(NSW), 7 August 1992). 31 See, for example, Re Demetrios [1993] 3 LPDR 3; Legal Services Commission v Nguyen [2006] LPT 7; Law Society of New South Wales v Georgas [2008] NSWADT 82; Legal Services Commissioner v Comito [2011] VCAT 497; Legal Services Commissioner v Lamplugh [2012] VCAT 279. 32 Cf Legal Practitioners Conduct Board v Rowe [2012] SASCFC 144 (where the solicitor, who arranged for a client to sign blank pages so that his affidavit could be printed on to them without the client having to attend to sign the document, was precluded from applying for a practising certificate for three years); Council of the Law Society of New South Wales v Selim [2016] NSWCATOD 29 (where the solicitor made and propounded a false declaration that documents pertaining to a loan for her own benefit had been properly witnessed when in fact the purported witnessing was a forgery; when coupled with an attempt to mislead the Law Society upon its investigation, this led to her removal from the roll). 33 See, for example, New South Wales Bar Association v Jetnikoff (unreported, NSWCA, Kirby P, Clarke and Cripps JJA, 18 December 1992) (signature on certificate of good character forged by applicant led to an order for his removal); Law Society of South Australia v De Souza [2003] SASC 316 (where the lawyer’s admission, obtained by providing false and misleading information about academic and practical qualifications, was revoked). 34 See, for example, Legal Services Commissioner v Spicehandler [2012] VCAT 630 (five year suspension for providing a false resumé and practising without a practising certificate); Legal Services Commissioner v PFM [2014] VSC 341 (striking off for using a forged academic transcript and providing false information to a referee); Legal Services Commissioner v Grosser [2014] VCAT 1533 (seven year ban from holding a practising certificate stemming from false and exaggerated claims for academic qualifications and work experience); Legal Services Commissioner v Ge [2016] NSWCATOD 25 (two year ban from holding a practising certificate stemming from alteration of academic transcripts). Cf Legal Services Commissioner v Foster [2016] QCAT 101 (reckless, but not dishonest, provision of incorrect academic record in an application for employment held to amount to unsatisfactory professional conduct, for which a reprimand ensued). See further Dal Pont, “The ‘Padded’ Sell” (2013) 87 (Nov) LIJ 78.

[25.40]

25 Types of Misconduct

809

Misleading a regulatory body

[25.35]

As lawyers are obliged to be entirely frank in communications with their regulatory body (see [24.30]), misleading that body is usually misconduct.35 The case law is replete with examples of lawyers who made false statements in an attempt to conceal misconduct, which often sets in train a litany of subsequent false statements. This has led to occasions where a lawyer has been struck off for misleading an investigator, even though the misconduct being investigated would not of itself have justified a striking off order. In Law Society of New South Wales v McNamara,36 for instance, a lawyer who delayed a client’s case and lied to the client as to its progress gave misleading replies to Law Society inquiries (prompted by the client’s complaint) and persisted with deception in subsequent evidence to the (then) Solicitors’ Statutory Committee. It was his attempts to mislead the Law Society and the Statutory Committee that, in particular, led the New South Wales Court of Appeal to conclude that the lawyer had demonstrated his unfitness to remain on the roll. Hutley JA said:37 Though I regard the attempt to deceive the officers of the Law Society as serious, I regard the attempt to deceive the Statutory Committee as still more serious. The assumption which seems sometimes to have been made that the accused cannot be expected to tell the truth to his own detriment in criminal proceedings has no place in proceedings before the Statutory Committee, which is not punitive but for the benefit of the public.

It follows that an attitude lacking in candour in disclosures in respect of any legitimate inquiry into a lawyer’s professional conduct, whether or not the lawyer believes the complaint to be well founded, can clearly impact upon the severity of a disciplinary response. Moreover, it should be noted that being obstructive to the course of the investigation is no different in substance, disciplinary sanction-wise, from making misleading statements to the investigator(s).38 Disrespect to the court or its authority

[25.40]

A court may punish a lawyer who has shown disrespect to the court for contempt of court: see [17.25]. This behaviour can also generate disciplinary consequences.39 In Legal Services Commissioner v Turley40 a solicitor was reprimanded

35 Legal Practitioners Conduct Board v Kerin (2006) 246 LSJS 371 at [24] per Gray J, at [45] per White J; Law Society of the Australian Capital Territory v Burns (2012) 6 ACTLR 282 at [42]–[44] per Refshauge, Penfold and Burns JJ; Legal Practitioners Conduct Board v Colton (2012) 113 SASR 467 at [50]–[53] per Stanley J; Legal Profession Board of Tasmania v Haque [2015] TASSC 5 (issuing a two year suspension to a practitioner who made misleading statements to the Law Society concerning his residence within the State). 36 Law Society of New South Wales v McNamara (1980) 47 NSWLR 72. 37 Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 at 78. See also Legal Practitioners Conduct Board v Hay (2001) 83 SASR 454 at [62] (FC). 38 See, for example, Law Society of South Australia v Jordan (unreported, FC(SA), 21 August 1998) (lawyer who had delayed, and to some extent frustrated the Legal Practitioners Conduct Board in its attempts to deal with the complaints in question, was struck off). 39 Prothonotary of the Supreme Court of New South Wales v Costello [1984] 3 NSWLR 201 at 203 per Glass and Samuels JJA (case reported in part); di Suvero v New South Wales Bar Association [2001] NSWADTAP 9 at [34]. 40 Legal Services Commissioner v Turley [2008] LPT 4 (noted Jones (2009) 28 UQLJ 353).

810

Lawyers’ Professional Responsibility

[25.45]

for using “grossly offensive language” in court proceedings and adopting “an intimidatory approach to a judicial officer based on an untenable interpretation of what had occurred in the Court proceedings”. In Ellis v Law Society41 a solicitor was suspended for persisting in allegations of an offensive and derogatory character directed at the Law Society and some judges. It was “quite impossible”, Leveson J opined, to see how the solicitor could impartially represent clients to the necessary standard “in and within a system which he rejects as forcefully as he does”.42 And in Council of the New South Wales Bar Association v Slowgrove43 a barrister was struck off for writing a letter – in a threatening tone and containing inappropriate, inflammatory language – aimed at swaying a magistrate in the discharge of his function. Even a private communication with a judge that shows lack of respect for the judicial officer or office is capable of triggering disciplinary consequences.44 A lawyer’s conviction for contempt will not always produce disciplinary consequences, though. Not all contempts are the same, and in disciplinary proceedings it is necessary to take into account, in addition to the fact of the conviction, factors including: the nature of the contempt; the entirety of the circumstances surrounding its commission; the sentence imposed (including aggravating or mitigating circumstances); and other relevant considerations (such as the lawyer’s history of practice, remorse for committing the offence and the likelihood, if any, that he or she might reoffend).45 The relevant court or tribunal, for the purposes of evaluating the character of alleged rudeness or disrespect to the court, takes into account the circumstances in which the statements were made or the behaviour occurred. It bears in mind, to this end, that “the practice of the advocate takes place in a pressured environment where frustration and difficulty can cause temporary lapses in behaviour that are quickly regretted, apologised for and not repeated”.46 Accordingly, not every such lapse is contempt or misconduct.47

[25.45]

Disrespect to the court can generate disciplinary consequences where it occurs during the course of the disciplinary proceedings. In Legal Practitioners

41 Ellis v Law Society [2008] EWHC 561 (Admin). 42 Ellis v Law Society [2008] EWHC 561 (Admin) at [36]. See also Law Society of Singapore v Gopalan Nair [2011] 4 SLR 607 (where the respondent, who posted blogs in which he accused two Singaporean judges of “prostituting” themselves in court hearings by being “nothing more than an employee of Lee Kwan Yew”, and breached an undertaking to the court to remove the offending posts, was struck off); Legal Profession Complaints Committee v in de Braekt [2013] WASC 124 (where the respondent was found guilty professional misconduct by, inter alia, interrupting the magistrate on multiple occasions and then levelling an entirely unfounded allegation of bias against the magistrate). 43 Council of the New South Wales Bar Association v Slowgrove [2009] NSWADT 150. 44 See, for example, Doré v Barreau du Québec [2012] 1 SCR 395 (disciplinary council determination to reprimand a lawyer who wrote a private letter to a judge, criticising the judge in impolite terms, upheld by the court); Council of the Law Society of New South Wales v Griffin [2016] NSWCATOD 40 (lawyer who wrote a private letter to a judge couched in grossly offensive terms, including aspersions as to the judge’s integrity, found guilty of professional misconduct and reprimanded). 45 Garde-Wilson v Legal Services Board [2007] VSC 225 at [115], [116] per Bell J (appeal allowed in part on a different point: Garde-Wilson v Legal Services Board (2008) 19 VR 398). 46 Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 at [177]. 47 See, for example, Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209 at [176] (where the tribunal found that the respondent’s apparent rudeness to the court was unintended,

[25.50]

25 Types of Misconduct

811

Complaints Committee v De Alwis,48 for example, the respondent practitioner’s unfitness for practice was demonstrated by the way in which he conducted himself in the disciplinary proceedings. His affidavits were replete with argumentative material, including allegations of gross misconduct against judicial officers, practitioners and court staff, none of which had any foundation, and he repeatedly failed to comply with time limits and directions imposed by the court. Trust accounting irregularities

[25.50]

The fraudulent misappropriation of trust money is clearly professional misconduct (as well as a crime) and usually justifies an order striking off the lawyer.49 This is invariably the case where it occurs persistently over time. It is not unusual for a lawyer who has misappropriated trust funds to compound the seriousness of this behaviour by attempting to conceal the misappropriation, which in turn may lead to misleading others, like clients, investigators, disciplinary tribunals or a court. In other cases, dishonesty in trust account dealings is demonstrative of the lawyer’s general attitude, and so may bring to light other dishonest behaviour.50 The seriousness with which trust account defalcations are viewed stems from the fact that the misuse of trust funds impacts not merely on the individual client whose trust has been betrayed but also on public confidence in the profession. As explained by King CJ in Re a Practitioner:51 [The court] has a duty to vindicate the inviolability of the trust imposed upon a practitioner to treat his clients’ money in all respects as their money and to use their money for their purposes and no other. The public can feel confidence in legal practitioners and their handling of their money only if they know that there is involved no element of judgment on the part of the practitioner, and that their money must remain in his trust account until it is disbursed in accordance with their direction; because no matter how good the intentions of a practitioner might be, no matter how confident he might be that the money can be made good, whenever a client’s money is deliberately used for a purpose other than the purpose for which the client entrusts it to the distinguishing the case from one where “an advocate knowingly persisted in making rude or offensive remarks after being made aware of the nature of his or her conduct or where the remarks tended to bring the administration of justice into disrepute”). 48 Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 at [111] per the court. 49 Prothonotary of the Supreme Court of New South Wales v Trimarchi [2003] NSWCA 385; Legal Profession Complaints Committee v Brennan [2010] WASC 198; Legal Services Board v Di Cioccio [2012] VSC 41; Kumar v Legal Services Commissioner [2015] NSWCA 161; Prothonotary of Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258. 50 See, for example, Council of the Queensland Law Society Inc v Wakeling [2004] QCA 42 (solicitor who dishonestly appropriated client money, as well as deliberately misled the Supreme Court and the Queensland Law Society in relation to a probate application, struck off). 51 Re a Practitioner (1982) 30 SASR 27 at 31. See also Re a Barrister and Solicitor (1979) 40 FLR 44 at 62 (FC(ACT)); Re Nelson (1991) 106 ACTR 1 at 23 per Higgins and Foster JJ; Re Maraj (a legal practitioner) (1995) 15 WAR 12 at 25 per Malcolm CJ; Legal Practitioners Conduct Board v Boyes (2001) 83 SASR 449 at [22] per Prior ACJ; Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 at [105]–[110] per the court; Legal Profession Complaints Committee v Masten [2011] WASC 71 at [21]–[25] per Martin CJ, Murray and E M Heenan JJ; Prothonotary of Supreme Court of New South Wales v Dimitrious [2015] NSWCA 258 at [21], [22] per Meagher JA, with whom Beazley P and Leeming JA concurred.

812

Lawyers’ Professional Responsibility

[25.50]

practitioner, there is an act of dishonesty on the part of the practitioner and one which exposes the client to some element of risk as to his money.

This explains why lawyers struck off for trust account misappropriations face significant hurdles in any readmission application:52 see [2.165]. That a lack of awareness or appreciation of the statutory requirements for trust moneys (discussed in Ch 9), even absent dishonesty, will likely amount to professional misconduct shows how crucial integrity in trust account dealings are to a lawyer’s continuing entitlement to practise.53 In Re Robb,54 for instance, solicitors who undertook personal injury work on a “no win no fee” basis entered into an arrangement with a panel of counsel who accepted briefs on the same basis. The solicitors transferred trust money for the payment of counsel’s fees to their office account but delayed in paying counsel for several months. In effect, they were treating as their own, albeit for a limited time, money belonging to clients to be disbursed according to client instructions. That the solicitors failed to appreciate that their conduct amounted to a breach of trust, and that they had not intended to act dishonestly, did not prevent a finding of professional misconduct. So seriously are trust account breaches viewed, that statute requires a lawyer who has reasonable grounds for suspecting that another lawyer has dealt with trust moneys in a dishonest or irregular manner, to report the facts and circumstances of the dealing to the relevant regulatory body.55 The gravity of trust account defalcations, moreover, also means that with regard to disciplinary sanction, the character of the default is not mitigated by the fact that clients have lost no money or have even made money, or that the lawyer intended or expected to make good the defaults.56 Conversely, technical breaches of trust account requirements that involve no element of dishonesty, such as an isolated failure to pay moneys directly into a trust account or a failure to account, may not justify suspension or disbarment.57 The position may be otherwise for persistent and egregious failures to comply with trust account regulations.58 Certainly, if the breaches involve dishonesty – for instance, the unauthorised use of trust funds to finance the lawyer’s personal 52 Ex parte Macaulay (1930) 30 SR (NSW) 193 at 194 per Street CJ. 53 Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at 740 per Hope JA; Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 15 per Moffitt P; Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 at [105]–[110] per the court. 54 Re Robb (1996) 134 FLR 294 (FC(ACT)). 55 ACT, s 231(2); NSW, s 154(2) (formerly NSW 2004, s 263(2)); NT, s 256(2); Qld, s 260(2); SA, Sch 2, cl 24(2); Tas, s 254(2); Vic, s 154(2) (formerly Vic 2004, s 3.3.22(2)); WA, s 227(2). 56 Re a Barrister and Solicitor (1979) 40 FLR 1 at 20–22 (FC(ACT)); Re a Practitioner (1982) 30 SASR 27 at 30–31 per King CJ. 57 Re a Practitioner of the Supreme Court [1940] SASR 154 at 155–156 per Murray CJ; Re Hodgekiss (1959) 62 SR (NSW) 340 at 348–349 per Owen J; Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 150 (CA); Mellifont v Queensland Law Society Inc [1981] Qd R 17 at 28–30 per Andrews J. 58 See, for example, Law Society of the Australian Capital Territory v Gates [2006] ACTSC 126 (12 month suspension, but no striking off order, in view of the absence of any dishonesty in the impugned conduct, the solicitor’s ill health and the general competence with which the solicitor otherwise conducted his practice).

[25.60]

25 Types of Misconduct

813

ventures,59 or a scheme to keep a client ignorant as to trust funds held60 – they amount to misconduct and justify striking off. Lawyer–client conflict

[25.55]

Lawyers who personally transact with clients without ensuring that the clients receive independent advice breach fiduciary duty (see Ch 6) and may, for that reason, be guilty of misconduct. The scenario repeated in the case law is that of a lawyer who borrows moneys from clients without making full disclosure of the borrowing or its incidents, thus denying clients the opportunity of giving informed consent to what amounts to a breach of fiduciary duty. The classic case is Law Society of New South Wales v Harvey61 (discussed in greater detail at [6.55]), where the solicitor used client funds, without informed client consent, as a reservoir for cheap risk moneys for his private speculative ventures. That clients may have benefited financially from these practices does not prevent a finding of misconduct; in fact, any attempt to justify the practices on this ground will likely speak of the lawyer’s fundamental lack of appreciation of her or his professional responsibilities, which by itself may be sufficient to justify a striking off order.62 Client–client conflict

[25.60]

Acting for two or more clients whose interests conflict represents a breach of fiduciary duty, with a corresponding liability to compensate a client who has suffered loss as a result: see [4.50], [7.05]. That this behaviour can also have disciplinary consequences appears from the following remarks from Nathan J in Zaicos v Law Institute of Victoria:63 [I]t does not follow that a breach of a fiduciary duty must necessarily amount to professional misconduct, but it is correct to say that in most cases a breach of the prime duty a solicitor owes to his client will also be an act of professional misconduct. It is the position of trust and faith, a repose of confidence in a professional person, which is abused, which of its very nature must raise in the professional mind notions of affront and offence, leading inevitably to the conclusion that such affronts and offences are disgraceful conduct of a professional kind amounting to misconduct.

In Zaicos the solicitor acted on behalf of two parties in a property development scheme when a conflict between them arose, but nonetheless continued to act for 59 See, for example, Re a Barrister and Solicitor (1976) 11 ACTR 13 at 19 per Blackburn J (solicitor a member of a gem-buying syndicate using client trust funds without authority). 60 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 150 (CA). 61 Law Society of New South Wales v Harvey [1976] 2 NSWLR 154. 62 See, for example, Law Institute of Victoria v Gough (unreported, SC(Vic), Hansen J, 10 February 1995) (involving a solicitor who, having borrowed client funds for use in financing property developments without informed client consent, sought to justify this conduct on the ground that he was doing his clients a personal favour by paying them a rate of interest greater than they would otherwise have achieved; Hansen J ordered that the solicitor be struck off). Cf Legal Practitioners Complaints Committee v Verschuer Edward [2007] WASC 287 (solicitor who borrowed trust moneys arising out of a deceased estate for her own personal and business purposes, maintaining full records and repaying the loans with interest, ordered to comply with a supervisory regime, and not struck off or suspended due to the lack of any dishonesty, the fact that she took and accepted advice from senior counsel and recognised her error). 63 Zaicos v Law Institute of Victoria (unreported, SC(Vic), Nathan J, 19 July 1995) at 10–11.

814

Lawyers’ Professional Responsibility

[25.65]

each party. Nathan J held that, although the strong character and mind of one of the clients contributed to the solicitor’s error of judgment, his conduct “would properly appall his professional peers”,64 and so amounted to professional misconduct. His Honour affirmed the Law Institute’s withdrawal of the solicitor’s right to practise as a principal, and pronounced an order requiring him to practise as an employee, if at all, for three years. The foregoing shows that a single instance of acting for multiple parties in a matter in circumstances of conflict may be unprofessional, even if motivated to assist one or more of them,65 but is unlikely to merit the most severe disciplinary sanction66 unless it is egregious and punctuated by other misconduct.67 Disciplinary consequences, usually in the form of a reprimand or fine, can also arise out of former client conflicts (discussed in Ch 8), where the courts’ main concern is protecting a former client’s confidential information. In Fordham v Legal Practitioners Complaints Committee,68 for instance, the lawyer entered a plea of mitigation on behalf of a client on a charge of possessing an unlicensed firearm stemming from the client’s alleged abduction. He then acted on behalf of that client in commercial matters. At a later date, the lawyer defended the person who had allegedly abducted the former client, cross-examining the latter on his financial affairs and prior convictions. The Full Court of the Western Australian Supreme Court upheld the Disciplinary Tribunal’s determination that the lawyer be reprimanded for unprofessional conduct. Breach of client confidentiality

[25.65]

Given the importance of confidentiality to the lawyer–client relationship (see [10.05]), which is recognised by both the general law and professional rules (see [10.15]), an unauthorised disclosure of confidential information, even if

64 Zaicos v Law Institute of Victoria (unreported, SC(Vic), Nathan J, 19 July 1995) at 12. 65 See, for example, Legal Services Commissioner v Blaker [2013] VCAT 87 at [53] (in the context of assisting neighbours in a small community; a reprimand and substantial fines issued); Victorian Legal Services Commissioner v Hume [2015] VCAT 1818 (where the solicitor, in an attempt to expedite the administration of an estate and confine its costs, acted as solicitor for a deceased estate, for one of the beneficiaries and as an executor, which ultimately triggered a client-client conflict, and a professional misconduct finding sounding in a reprimand and a fine). 66 Re a Practitioner (1975) 12 SASR 166 at 172–173 per Bray CJ. See, for example, Legal Services Commissioner v McNamara [2011] VCAT 1228 (where a solicitor who acted for both an aged widow suspected of suffering dementia and her neighbours as regards a proposed gift from the widow to the neighbours, and who failed to take appropriate steps to ascertain the widow’s capacity, was found to have committed unsatisfactory professional conduct). 67 See, for example, Law Society of Singapore v Uthayasurian Sidambaram [2009] 4 SLR(R) 674 (where a lawyer who acted for the promoters and an investor in a property development, and did not protect the investor’s interests or advise him that the main promoter was an undischarged bankrupt, was suspended for one year); Withers v Standards Committee No 3 of the Canterbury Westland Branch [2014] NZHC 611 (lawyer who continued to act, for over two years, for two clients with conflicting interests, in a matter in which he had a personal interest that he sought to conceal, was struck off against the backdrop of a lengthy disciplinary history). 68 Fordham v Legal Practitioners Complaints Committee (1997) 18 WAR 467. See also Florida Bar v Wilson (1998) 714 So 2d 381; Black v New Zealand Law Practitioners Disciplinary Tribunal (unreported, CA(NZ), 14 May 1999); Law Society of New South Wales v Nguyen [2009] NSWADT 199.

[25.70]

25 Types of Misconduct

815

well-intentioned, can generate professional disciplinary consequences.69 This is all the more where the disclosure is directed at benefiting the lawyer, including by publicity,70 or is made to a person with an interest adverse to the (former) client to whom the duty is owed.71 Overcharging

[25.70]

The charging of grossly excessive costs by a lawyer is professional misconduct,72 as is charging of costs and disbursements where none are properly chargeable.73 The statutory definitions of misconduct – via inclusion of “charging of excessive legal costs in connection with the practice of law” or, under the Legal Profession Uniform Law, “charging more than a fair and reasonable amount for legal costs in connection with the practice of law”,as capable of constituting misconduct – highlight that overcharging is viewed seriously in a disciplinary sense.74 The relevant inquiry, and this arguably remains so under the revised language of the Uniform Law,75 is whether the lawyer has charged fees grossly exceeding those that would be charged by lawyers of good repute and competency. It should not be assumed that a single instance of gross overcharging will prevent a finding of professional misconduct, although it is unlikely to generate a striking off or suspension order.76 The latter is ordinarily reserved for repeated gross overcharging.77 A court or tribunal will inform itself about what would be an approximate reasonable fee or range of fees for the work in question, compare that with the 69 See, for example, Legal Services Commissioner v Scott [2009] LPT 7 at [58] per Fryberg J (respondent solicitor who permitted a client to copy documents of other clients found to have engaged in professional misconduct); Legal Profession Complaints Committee v Johnston [2013] WASAT 159. 70 See, for example, Legal Practitioners Complaints Committee v Trowell (2009) 62 SR (WA) 1 (where the barrister made media disclosures about a proposal to bribe the judiciary of a country in which his client was charged with drug offences, and criticised the client’s foreign legal team; these breaches of confidentiality were held to constitute unprofessional conduct, for which the respondent was reprimanded: Legal Practitioners Complaints Committee v Trowell (2009) 61 SR (WA) 125); Legal Services Commissioner v Tampoe [2009] LPT 14 (respondent struck off as a result of disclosing to the media, in the course of a television interview and subsequent documentary, information concerning a former’s client’s family and his observations regarding the former client’s criminal trial); Legal Practitioners Complaints Committee v Camp [2010] WASC 188 (lawyer who disclosed client confidences to the media for his self-interest suspended for six months and fined $2500). 71 See, for example, Legal Practitioners Complaints Committee v Walton [2006] WASC 213 (respondent struck off the roll for, inter alia, making an unauthorised disclosure of information confidential to a former client). 72 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 144 (CA); D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 214 per Ipp J. 73 Baker v Legal Services Commissioner (No 2) [2006] 2 Qd R 249. 74 ACT, s 389(b); NSW, s 298(d) (formerly NSW 2004, s 498(1)(b)); NT, s 466(1)(b); Qld, s 420(b); SA, s 70(b); Tas, s 422(1)(b); Vic, s 298(d) (formerly Vic 2004, s 4.4.4(b)); WA, s 404(b). 75 See Dal Pont, “Contextualising Lawyer Overcharging” (2016) 42 Mon ULR (forthcoming). 76 See, for example, New South Wales Bar Association v Meakes [2006] NSWCA 340 (that the barrister was found to have engaged in only a single instance of gross overcharging, had admitted his impropriety and taken steps to rectify the situation, did not prevent a finding of professional misconduct: at [94] per Tobias JA). 77 See, for example, Legal Profession Complaints Committee v O’Halloran [2013] WASC 430.

816

Lawyers’ Professional Responsibility

[25.75]

actual charge, and then decide whether the difference is so gross as to amount to misconduct.78 It is a question of degree and frequency. Relevant factors include the amount the costs in question were, or would likely be, taxed or assessed at (see [25.75]), the novelty, complexity or difficulty of the case, the experience of the lawyer, the quality of her or his work, the amount of time spent on the matter, the responsibility involved, the amount or value of the subject matter in issue, and any costs agreement entered into (see [25.80]).79 Deficiencies in the law practice’s computerised costing system may not mitigate a finding of gross overcharging80 but may reduce culpability, at least of employee lawyers, to a level of unsatisfactory professional conduct.81 Impact of costs allowable on taxation or assessment

[25.75]

A determination of overcharging does not necessarily require a court or tribunal to rely on or conduct a taxation or assessment of costs, because “[t]he search is to see whether or not there is a gross overcharge, not just an unreasonable fee which would not be allowed on a taxation [or assessment]”.82 It follows that a lawyer who charges a fee substantially exceeding what would be allowed on assessment or taxation will not necessarily have acted unprofessionally.83 Yet the quantum so allowable cannot usually be ignored. For example, in Council of the Queensland Law Society Inc v Roche,84 where the bill of costs submitted to the client ($620,000) far exceeded the costs assessed on an indemnity basis ($240,000), it was remarked that “this disparity suggests that the fees charged by the respondent’s firm were exorbitant and well outside those charged by any reasonable practitioner”. In each jurisdiction the legal profession legislation makes provision for a costs assessor to refer a matter for disciplinary inquiry, not confined to overcharging, that arises in the course of costs assessment.85 Impact of costs agreement

[25.80]

That a properly made costs agreement (as to which see [14.75]–[14.145]) commits the client to fees greatly exceeding scale fees, where otherwise applicable, is not of itself evidence of misconduct. Merely because the court, taxing officer or

78 De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 at [110] per Carr J. 79 D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 214 per Ipp J. There are parallels in this list with the factors found in s 172(2) of the Legal Profession Uniform Law directed to determining what is fair and reasonable for a lawyer to charge in the relevant circumstances: see [14.165]. 80 Legal Services Commissioner v Keddie [2012] NSWADT 106. 81 Scroope v Legal Services Commissioner [2013] NSWCA 178 at [45]–[52] per Beazley P, with whom Bathurst CJ and Hoeben JA concurred. 82 De Pardo v Legal Practitioners Complaints Committee (2000) 97 FCR 575 at [110] per Carr J. See also at [45], [46] per French J. 83 Re Veron (1966) 84 WN (Pt 1) (NSW) 136 at 144 (CA); Re Evatt (1967) 67 SR (NSW) 236 at 243–244 (CA) (on appeal: New South Wales Bar Association v Evatt (1968) 117 CLR 177). 84 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 at [54] per McMurdo P. 85 ACT, s 303; NSW, s 202 (formerly NSW 2004, s 393); NT, s 370; Qld, s 343; SA, Sch 3, cl 50; Tas, s 332; Vic, s 202 (formerly Vic 2004, s 3.4.46); WA, s 307.

[25.80]

25 Types of Misconduct

817

costs assessor decides to vary or set aside a costs agreement on the ground of unreasonableness (see [14.150]–[14.205]) also does not of itself equate to a finding of misconduct;86 an agreement may not have been “reasonable” but may not be so unreasonable as to be “grossly excessive”.87 Also, provision now in the Legal Profession Uniform Law to the effect that a costs agreement is prima facie evidence that costs disclosed therein are fair and reasonable if the requirements surrounding costs disclosure (see [14.25]) and costs agreements (see [14.90], [14.95], [14.140], [14.145]) have been fulfilled88 may be sensibly construed as providing some protection from professional discipline in this context. Yet proof of a costs agreement is not, by itself, a total bar to disciplinary proceedings for overcharging.89 Clients may not have given fully informed consent to the agreement or the charges themselves may speak of inexcusable rapacity.90 Unscrupulous lawyers could otherwise “overreach ignorant or unsuspecting clients by entering into costs agreements with them, providing for grossly excessive costs”,91 which could be set aside only by the clients bringing proceedings alleging unreasonableness, and could generate disciplinary action only upon such an application by clients. The court considers the circumstances in which the charge was made and the terms of the agreement in question.92 That the lawyer, for instance, is acting on a “no win no fee” basis is a relevant factor here because, say in personal injury or medical negligence matters, there is a risk that the action may involve years of work and not succeed, with the result that the lawyer cannot recover her or his own fees and, depending on the terms of the costs agreement, remains liable for disbursements (which may well be substantial). This, it has been judicially suggested, makes it reasonable for lawyers accepting retainers of this kind to charge at a substantially higher rate than otherwise would be the case.93 But here too, fees well outside the range chargeable by a reasonable lawyer in the circumstances may trigger disciplinary action. Council of the Queensland Law Society Inc v Roche,94 noted above at [25.60], was such a case, as was Re Law Society of the Australian Capital Territory & Roche,95 where solicitors charged clients a blanket $250 hourly fee for all staff, swelled by 30% for care, skill and consideration, as well as 15% “interest” or a levy on disbursements. In the latter case the court described the solicitors’ practice as “extortionate”, as they “cheated and, effectively, defrauded 86 D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 202 per Pidgeon J. 87 Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 at [35] (FC(ACT)). 88 NSW, s 172(4); Vic, s 172(4). 89 D’Alessandro & D’Angelo v Cooper (unreported, SC(WA), Owen J, 9 May 1995); D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 211 per Ipp J. 90 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 at [32] per de Jersey CJ. 91 D’Alessandro & D’Angelo v Cooper (unreported, SC(WA), Owen J, 9 May 1995). 92 D’Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198 at 203 per Pidgeon J. 93 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574 at [54] per McMurdo P. 94 Council of the Queensland Law Society Inc v Roche [2004] 2 Qd R 574. 95 Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138.

818

Lawyers’ Professional Responsibility

[25.85]

their clients of many thousands of dollars intended for their compensation”.96 That the practice was habitual justified a finding of professional misconduct. Delay or neglect

[25.85]

Gross neglect and delay can constitute professional misconduct because it both endangers client interests and brings the profession into serious disrepute.97 Disciplinary-wise the concern is not chiefly on an isolated instance of neglect or delay, but on where it is either sustained or gross.98 As such, a single instance of neglect or delay ordinarily will not justify a finding of misconduct,99 and nor by itself will a failure to answer correspondence.100 Where the correspondence emanates from the relevant regulatory body for the purpose of inquiry into the lawyer’s professional conduct, a failure to respond is viewed more seriously, and repeated failures can constitute professional misconduct. Representatives of that body “are not adversaries, but [are] charged by statute with specified duties which they must fulfil and … in fulfilling those duties, they are entitled to cooperation and courtesy from the legal profession”.101 It is not uncommon for failures to promptly respond to inquiries from regulatory bodies to be coupled with other forms of neglect or delay, and to evidence disregard for professional obligations generally. In Law Society of South Australia v Murphy,102 for example, the solicitor had appropriated for fees money from his trust account without giving to the client an account, failed repeatedly to reply to client inquiries and requests for information, neglected to take action in the client’s interests or as instructed, and persistently failed to reply to requests by the Legal Practitioners Complaints Committee relating to complaints. This led the court to order that the solicitor’s name be removed from the roll. 96 Re Law Society of the Australian Capital Territory and Roche (2002) 171 FLR 138 at [67] (FC(ACT)). 97 Re Moseley (1925) 25 SR (NSW) 174 at 178 per Street CJ; Re Nelson (1991) 106 ACTR 1 at 20 per Higgins and Foster JJ; A Legal Practitioner v Law Society of Tasmania (2005) 13 Tas R 448 at [18] per Underwood CJ; Legal Practitioners Complaints Committee v Eley [2007] WASC 148 at [63]–[66] per Steytler P. 98 See, for example, Law Society of Tasmania v Scott [2007] TASSC 30 (the respondent’s repeated neglect and delay in relation to conveyancing matters over a period of six months, coupled with, inter alia, her failure to supervise an employee, verbal abuse of clients and minor overcharging, was unprofessional conduct); Legal Practitioners Complaints Committee v Eley [2007] WASC 148 (respondent struck off following persistent neglect of client affairs and persistent disregard of proper inquiries and demands from the relevant investigatory body); Legal Profession Complaints Committee v Fitzpatrick [2011] WASC 320 (where the repeated and sustained neglect of client matters during a two year period, for which no explanation had been given, triggered a striking off order); Legal Practitioners Conduct Board v Lind (2011) 110 SASR 531 (where the respondent’s multiple failures over a lengthy period to progress the administration of a deceased estate, coupled with failures to report and account to beneficiaries, led the court to order that she be censured, fined $20,000, placed under supervision, and restricted in the number of matters she may conduct at any one time; but as the respondent failed to appear on the date adjourned for the making of orders, the court ordered her interim suspension: Legal Practitioners Conduct Board v Lind (No 2) (2011) 277 LSJS 247). 99 See, for example, A Legal Practitioner v Law Society of Tasmania (2005) 13 Tas R 448 (neglect in relation to the one client held not of a sufficient degree to amount to professional misconduct). 100 Re a Barrister and Solicitor (1976) 11 ACTR 13 at 19 per Blackburn J. 101 Legal Services Commissioner v Nikolaidis (No 3) [2005] NSWADT 200 at [140]. 102 Law Society of South Australia v Murphy (1999) 201 LSJS 456.

[25.90]

25 Types of Misconduct

819

Failure to properly supervise

[25.90]

The lawyer’s individual personal responsibility to a client has been described as “the essence” of the lawyer–client relationship.103 Serious omissions to properly supervise employees, or be vigilant to the activities of partners, may amount to professional misconduct. The reported cases highlight the importance of supervision and vigilance, particularly over trust funds. For example, in Law Society of New South Wales v Foreman104 a clerk employed by the solicitor lent client money to an entity in which the clerk’s wife had an interest, raising a conflict of interest situation. As the solicitor did not supervise the clerk’s activities, he did not detect the transaction. Mahoney JA noted that not all failures to supervise were professional misconduct, but that the solicitor’s gross failure to concern himself with the clerk’s activities amounted to professional misconduct.105 In so ruling, his Honour made the following important observations:106 Where a clerk is to have the conduct of matters of that kind, it is ordinarily the duty of the solicitor responsible for him to satisfy himself that the clerk is aware of the principles involved and has a proper appreciation of what they involve. It will ordinarily be his duty to have at least a sufficient acquaintance with the transactions to enable him to satisfy himself that there is nothing to suggest that those principles have not been applied. And where fiduciary obligations and conflicts of interest are apt to be involved, he should take appropriate steps to ensure that there is no apparent breach of them. I do not mean by this that a solicitor must himself scrutinise every step of such transactions or that in every case he must be concerned with all such transactions. He may be in a position from past knowledge and experience of the clerk to exercise a more general rather than a particularised supervision of such matters. But he must give attention to the extent of supervision necessary in each case and maintain a sufficiently close oversight of cases in which principles of the kind to which I have referred are apt to come into operation.

The lawyer’s duty to be vigilant is stricter if he or she is aware of factors that may indicate to a reasonable person so positioned that greater supervision is required. That the clerk in Foreman was, to the solicitor’s knowledge, an undischarged bankrupt and yet was placed unsupervised in control of trust funds, influenced Mahoney JA’s conclusion. Similarly, in Bridges v Law Society of New South Wales107 103 Re Bannister (1975) 5 ACTR 100 at 104 per Fox J. See also at 110 per Blackburn J. 104 Law Society of New South Wales v Foreman (1991) 24 NSWLR 238. 105 Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 at 252. 106 Law Society of New South Wales v Foreman (1991) 24 NSWLR 238 at 251. See also Re a Solicitor [1960] VR 617 (“deliberate failure to exercise any control or supervision on the clerk who handled his clients’ money” which made the misappropriation possible); Re Miles (1966) 84 WN (Pt 1) (NSW) 163 (deliberate failure to exercise any control or supervision of the clerk who handled his clients’ money); Law Society of New South Wales v McNamara (1980) 47 NSWLR 72 at 78 per Hutley JA (“By asking a clerk in a court office, a professional man does not discharge his responsibilities”); Cheney v Queensland Law Society Inc [2001] QSC 338 (where a solicitor, who trusted her husband to maintain the practice trust account while suspecting that he was not doing so scrupulously (albeit without suspecting dishonesty), was suspended until the resultant shortfall in the trust account was made good); Council of the Queensland Law Society Inc v Cummings [2004] QCA 138 at [14], [15] per McMurdo P (solicitor who was found guilty of professional misconduct as a result of foolishly accepting others’ assurances that trust account requirements were being met, was suspended for 12 months and fined). 107 Bridges v Law Society of New South Wales [1983] 2 NSWLR 361.

820

Lawyers’ Professional Responsibility

[25.95]

the appellant was aware that his partners had perpetrated gross breaches of fiduciary duty by means of illegitimate loans, but accepted at face value their verbal assurances that no more offending loans would occur. In these circumstances, the court considered that the appellant “must have appreciated that it was his duty actively to police that there was no more”, adding that in this situation a partner “cannot absolve himself by saying that he obtained verbal assurances; he had to look”.108 This justified an order striking off the appellant. In this context the words of Reynolds and Hutley JJA in Re Mayes are pertinent:109 It is no answer for [a lawyer] to claim that he left the conduct of the financial affairs of the firm to his partner. It would be no answer generally and certainly not … where the [lawyer] neglected his responsibilities despite warnings that all was not well. Feelings of delicacy in the belief that queries or checks might be regarded as offensive to the spirit of mutual trust between partners do not … excuse or justify an abdication of responsibility. Instances of defalcation by persons of apparently excellent character are not unknown, and every solicitor should appreciate that there is some risk involved if he allows one partner to be in the position of a sole practitioner so far as control of the trust account is concerned … We reject totally the argument that a solicitor who is in partnership can, without being guilty of professional misconduct, simply leave the management of their joint trust account to his partner after he has reason to be apprehensive as to his misuse of it, if it subsequently appears that this facilitated misappropriation.

In Mayes the solicitor, having trusted his partner, was found to have shown “a complete indifference … to the performance of his statutory obligations in relation to the trust account”,110 and as a result to have committed professional misconduct. Reynolds and Hutley JJA added that each partner has a responsibility to see that there is in existence a proper system that ensures the relevant statutory requirements are being obeyed, but warned that such a system cannot by itself relieve partners from personal vigilance. Their Honours did accept, however, that the extent to which each partner must be personally concerned with the financial controls in a partnership will vary with the size of the partnership and the office organisation.111 It is equally important to maintain supervision over the preparation of court documents by inexperienced staff. A failure to exercise proper supervision, where a document proves to have been misleading, can amount to professional misconduct.112

MISCONDUCT OUTSIDE PRACTICE [25.95]

Both the general law definition of “professional misconduct” and its statutory namesake envisage that a disciplinary consequence can arise out of

108 Bridges v Law Society of New South Wales [1983] 2 NSWLR 361 at 369 per Hutley JA. See also at 377 per Mahoney JA (appellant was under an “obligation to check”). 109 Re Mayes [1974] 1 NSWLR 19 at 25–26. 110 Re Mayes [1974] 1 NSWLR 19 at 22 per Hardie JA. See also at 26 per Reynolds and Hutley JJA. 111 Re Mayes [1974] 1 NSWLR 19 at 26. 112 See, for example, Legal Profession Complaints Committee v Giudice [2015] WASAT 10 (involving an application for the variation of bail conditions, which contained misleading information, prepared by an inexperienced employee of the respondent); Legal Services Commissioner v Mould [2015] QCAT 440 at [100]–[115], [122] per Carmody J.

[25.100]

25 Types of Misconduct

821

conduct by a lawyer unrelated to her or his legal practice: see [23.85], [23.90]. Below are discussed some forms of personal misconduct that have been held to trigger disciplinary responses, prefaced by an explanation of how conviction for an offence in a private capacity impacts upon disciplinary proceedings. Relevance of a criminal conviction

[25.100] A criminal conviction for conduct inconsistent with the integrity expected of members of the legal profession may be prima facie evidence of misconduct, and may serve to discharge a disciplinary tribunal or court from making detailed findings of its own regarding the facts of the matter. The findings and comments of the criminal court may, generally speaking, be accepted.113 For example, a conviction for repeated acts of dishonesty, even if not involving large sums, is clearly probative in a disciplinary matter, as it bears directly on an aspect of the lawyer’s character that is central to legal practice.114 At the disciplinary stage, a tribunal or court may well reason as follows:115 [D]eceitfulness is a character flaw that is thought by most legal practitioners as well as others not to be confined in separate compartments of one’s life. It is commonly thought that people who have indulged in deceit for their own advantage are likely to be deceitful again when it suits them, whatever they are involved in and whether it be in the course of legal practice or otherwise. Trust is one of the cornerstones of legal practice. Honest dealing is fundamental to fitness to practise law.

In Re a Practitioner,116 for example, a lawyer who was convicted of four serious offences of making improper use of his position as chairman of a company to gain for himself an advantage and to cause detriment to the company was struck off the roll, the court being influenced by the fact that these offences were committed over a long period of time rather than momentary aberrations. Likewise in Prothonotary

113 The New Zealand Supreme Court has envisaged that it may be an abuse of process for a regulatory body to refer allegations of aberrant conduct by a lawyer to a disciplinary tribunal if the scope of a disciplinary inquiry would simply replicate the exercise that a criminal court has undertaken if that process has resulted in an acquittal, adding that bodies of this kind “must be careful not to permit their processes to be used simply as a reserve means of punishing conduct of a criminal nature after criminal proceedings have been unsuccessful”: Z v Dental Complaints Assessment Committee [2009] 1 NZLR 1 at [133] per McGrath J, who also delivered the judgment of Blanchard and Tipping JJ. See also at [3] per Elias CJ (“where there is entire coincidence between the professional misconduct charged and the commission of a crime (so that the professional misconduct consists of the commission of the crime), there must be some sufficient reason either to re-run the very issue in respect of which an acquittal has been entered at trial or, where trial has not taken place at all, to proceed to find the facts ahead of their determination in criminal proceedings”). Contra at [149]–[155] per Anderson J (dissenting on this point). 114 See, for example, Law Society of Tasmania v Matthews [2010] TASSC 60 (where the respondent was convicted before a magistrate of offences arising out of her false declarations to secure the first home owner’s grant; Tennent J, in making an order striking off the respondent, queried (at [28]): “[i]f she was prepared to flout the law to that degree, how can it be said she is otherwise a person this court can hold out as a fit and proper person to practise”?). 115 New South Wales Bar Association v Sahade [2005] NSWADT 159 at [83]. 116 Re a Practitioner (1997) 95 A Crim R 467 (FC(WA)).

822

Lawyers’ Professional Responsibility

[25.105]

of the Supreme Court of New South Wales v Carr117 the New South Wales Court of Appeal ruled that a solicitor convicted of defrauding a company whilst a director should be struck off. Convictions other than for dishonesty may attract disciplinary consequences, where their seriousness evidences a lawyer’s lack of fundamental respect for the law, or an absence of self-control, in circumstances where to allow the matter to pass without a disciplinary response could threaten the public perception of the proper administration of justice: see [25.110]–[25.140]. The legal profession legislation addresses the issue explicitly by branding conduct in respect of which a lawyer has been convicted of a serious offence,118 a tax offence (see [25.160]) or an offence involving dishonesty as capable of being unsatisfactory professional conduct or professional misconduct.119

[25.105] Where a conviction stems from an offence unrelated to the practice of law, whether or not it should generate a disciplinary sanction and, if so, what sanction, rests on the extent to which (if any) the lawyer’s conduct underlying the conviction can be isolated from her or his status as a lawyer. For this purpose, a disciplinary tribunal or court may inquire into the evidence underlying the conviction, not with a view to questioning the correctness of the conviction, but to determine the separate issue of whether the lawyer remains fit to practise and, if so, on what terms.120 As the disciplinary inquiry is directed to objectives different from criminal proceedings (see [23.20], [23.25]), that a lawyer has been punished criminally does not obviate disciplinary proceedings,121 and no issue estoppel arises.122 It also means that a lawyer cannot use the disciplinary forum as a vehicle to sustain that he or she was wrongly convicted; the appropriate forum for such an argument is an appeal in the courts on the recognised grounds. The tension between criminal and disciplinary jurisdictions is highlighted in the leading case, Ziems v Prothonotary of the Supreme Court of New South Wales,123 where the appellant barrister had been convicted of motor manslaughter. It was alleged that, at the time of the accident, the barrister was under the influence of alcohol. 117 Prothonotary of the Supreme Court of New South Wales v Carr [2003] NSWCA 2. 118 As defined in ACT, Dictionary; NSW, s 6(1) (formerly NSW 2004, s 4(1)); NT, s 4; Qld, Sch 2; SA, s 5(1); Tas, s 4(1); Vic, s 6(1) (formerly Vic 2004, s 1.2.1); WA, s 3. 119 ACT, s 389(c); NSW, s 298(e) (formerly NSW 2004, s 498(1)(c)); NT, s 466(1)(c); Qld, s 420(c); SA, s 70(c); Tas, s 422(1)(c); Vic, s 298(e) (formerly Vic 2004, s 4.4.4(c)); WA, s 404(c). 120 Re a Solicitor (1952) 69 WN (NSW) 356 at 357 per Street CJ; Prothonotary of the Supreme Court of New South Wales v Pangallo (1993) 67 A Crim R 77 at 80–81 per Kirby P, at 85 per Clarke JA; Prothonotary of the Supreme Court of New South Wales v Sharp [2006] NSWCA 27 at [10]–[12] per the court; Sudath v Health Care Complaints Commission (2012) 84 NSWLR 474 at [83], [101], [102] per Meagher JA, with whom Whealy JA agreed. 121 It may, however, obviate or reduce a fine that might otherwise have been imposed at a disciplinary level, the sanction imposed instead relating directly to the lawyer’s right to practise: see [23.170]. 122 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 302 per Taylor J. Cf Re Weare [1893] 2 QB 439 at 445–446 per Lord Esher MR, at 450 per Lopes LJ; Re a Solicitor [1961] Ch 491 per Lord Parker CJ. 123 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279.

[25.110]

25 Types of Misconduct

823

This the barrister denied, maintaining that he was suffering from shock and concussion from a violent attack in a hotel an hour earlier. Kitto J noted that although the conviction was for a serious offence, the reason for regarding it so was not a reason going towards the propriety of continuing to be a member of the profession.124 His Honour observed that the barrister’s conduct, as it was isolated, not premeditated and did not indicate tendency to vice or violence or a lack of probity, did not warrant any conclusion as to his general behaviour or inherent qualities. This led Kitto J to find that the conviction had neither connection with, nor significance for, any professional function, and so was consistent with the previous possession of a deservedly high reputation. In similar vein, Taylor J remarked that “it cannot be suggested that a barrister should be disbarred upon proof that he has committed any offence whatever its nature or consequences”.125 His Honour noted that “manslaughter” covers a wide range of acts, meaning that proof of conviction gave no real clue to the conduct of the person concerned and did not enable the court to make any real assessment of her or his character or reputation.126 This made it essential to look further and to form a judgment – so far as was possible upon the evidence before the court – concerning the nature and character of the barrister’s conduct.127 Having assessed the evidence, and also the conduct of the trial, Taylor J entertained doubts over whether the lawyer’s injuries did not substantially contribute to the accident.128 Fullagar J similarly considered that the court was bound to ascertain the real facts of the case and, by virtue of what he characterised as two unsatisfactory features of the criminal trial, also expressed doubt over whether the ultimate issue should have been found against the barrister.129 Kitto J’s approach is preferable because it avoids a disciplinary tribunal or court inquiring into or questioning the correctness of a criminal conviction. The latter is not its role, as in disciplinary proceedings the issue concerns the implications of the nature and quality of the act in question for the lawyer’s fitness to practise. Prevailing public policy dictates that a final decision of a criminal court should not be subject to collateral attack via civil proceedings.130 The underlying rationale – to avoid undermining the integrity of a criminal conviction – applies equally to disciplinary proceedings. Convictions for sex offences or domestic abuse

[25.110] So far as lawyers’ sexual misconduct is concerned, the disciplinary tribunal or court relies heavily on the finding of the criminal court. For a lawyer convicted of a sex offence, the public stigma attached to such a conviction has, in 124 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 299. 125 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 301. 126 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 301–302. 127 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 303–304. 128 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 308. 129 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 291. 130 Hunter v Chief Constable of the West Midlands Police [1982] AC 529. The same policy underscores barristerial immunity in Australian law: see [5.270], [5.275].

824

Lawyers’ Professional Responsibility

[25.115]

recent times in particular, motivated professional bodies to pursue disciplinary action, and for judges and tribunals to take the matter seriously in a professional sense.131 Domestic or partner abuse, with or without a sexual element, is likewise treated seriously. For example, in Council of the New South Wales Bar Association v Franklin (No 2)132 the respondent, who was convicted of multiple sexual offences against his former partner, occurring over a 12 hour period in the context of a complex and troubled relationship, was struck off against a backdrop of having knowingly given false evidence in the criminal trial process. In most instances, though, where the events leading to the conviction occur outside the practice of law, to target a disciplinary order at public protection is problematic. A disciplinary order may serve little role in protecting the public from the repetition of the events in question. In reality, therefore, any disciplinary order, and certainly a striking off or suspension order, draws its justification from the need to protect the reputation of the profession, which may be tarnished if no professional response is forthcoming.

[25.115] Certain sex offences are particularly amenable to undermining the trust that persons are entitled to place in practising lawyers. Child sex offence convictions present a case in point. In Law Society of South Australia v Rodda133 the respondent solicitor pleaded guilty to two counts of indecent assault of a minor, and received a suspended sentence. The sentencing magistrate saw the solicitor not as a sexual predator, and unlikely to re-offend. This did not prevent the solicitor from being struck off in the disciplinary proceedings. Though conceding that the conduct was unconnected with the solicitor’s ability to provide competent legal services, the court was concerned that the offences for which the solicitor had been convicted would lead other lawyers not to readily place trust and confidence in him, would cause detriment to the reputation and standing of the profession in the public eye were he permitted to remain in practice, and would undermine the trust and respect that clients, especially vulnerable persons, could place in him.134 Similarly, in an ostensibly more heinous case in Barristers’ Board v Pratt,135 involving a barrister who pleaded guilty to 12 child sex offences, de Jersey CJ made the following observations: Personal offending of such gravity carried on over a substantial period is inimical to the high standard of respect for the law, integrity, trustworthiness and common decency expected of members of the Bar both by the Courts of law and the public. It is intolerable to think that the Court would hold out as fit to practise as a barrister a person who has shown such blatant disrespect for the law he is ethically and otherwise obliged to uphold. No response, short of striking off, should be made in this situation. 131 See, for example, Legal Practitioners Complaints Committee v McKerlie [2007] WASC 119 (lawyer convicted of three sex offences in relation to the same set of events struck off). 132 Council of the New South Wales Bar Association v Franklin (No 2) [2014] NSWCA 428. See also American case law on domestic abuse and its professional sanctions catalogued in Iowa Supreme Court Attorney Disciplinary Board v Blessum (2015) 861 NW 2d 575 at 591–595. 133 Law Society of South Australia v Rodda (2002) 83 SASR 541. 134 Law Society of South Australia v Rodda (2002) 83 SASR 541 at [25]–[29] per Doyle CJ. Williams and Besanko JJ delivered concurring judgments. 135 Barristers’ Board v Pratt [2002] QCA 532.

[25.120]

25 Types of Misconduct

825

A striking off order also befell a former magistrate in Law Society of South Australia v Liddy136 who had been convicted on multiple counts of indecent assault and unlawful sexual intercourse, for which he was sentenced to imprisonment for 25 years with a non-parole period of 18 years.

[25.120] The public profile surrounding the evils of child pornography, and dedicated policing resources directed at uncovering and prosecuting those involved in this behaviour, make it hardly surprising that the net has captured some practising lawyers. Case law has highlighted that convictions for possession and transmission of child pornography can undermine fitness to practise law. In Legal Services Board v McGrath137 Warren CJ cautioned against a conclusion that one or more convictions for possession of child pornography necessarily demonstrate unfitness to practice law, in part because the convictions occur outside the lawyer’s practice. But in her Honour’s final determination in the matter, having granted the applicant liberty to reapply to particularise its case, she ordered that the respondent, who had pleaded guilty to one count of knowingly possessing child pornography and another of using an online information service to publish child pornography, be struck off. Warren CJ made three basic points germane to her determination. First, conviction for any serious breach of the law calls into question a lawyer’s willingness and ability to obey the law, which is integral to the civic office which lawyers perform and the trust reposed in them to properly perform that function.138 Second, as the legal profession demands both empathy and insight into the victims of criminal behaviour, “[a]ny conviction which appears to show a disdain for such victims will raise a serious concern about a practitioner’s professional and moral fitness to remain an officer of the court”.139 Third, “any suggestion that crimes committed at arm’s length, such as those which involve child pornography, can be considered of lesser seriousness in deciding upon an individual’s fitness to remain on the roll should be the subject of intense scrutiny”.140 The lack of judgment and understanding displayed by this conduct was, said her Honour, “incompatible with the judgment and understanding required of members of the legal profession”.141 This raised a presumption as to the defendant’s unfitness to practice, which the defendant had, by failing to appear at the hearing, not ousted.142 The year before, in Legal Services Board v Williams,143 a retired Queen’s Counsel was removed from the roll by consent, as a result of pleading guilty to possessing, accessing and transmitting child pornography. Pagone J did not, as a result of the consent, need to determine whether the offences justified a striking off order, but 136 Law Society of South Australia v Liddy [2003] SASC 379. 137 Legal Services Board v McGrath (2010) 29 VR 325 at [28]–[39]. 138 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 at [14]. 139 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 at [15]. 140 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 at [16]. 141 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 at [25]. 142 Legal Services Board v McGrath (No 2) (2010) 29 VR 325 at [27]. 143 Legal Services Board v Williams [2009] VSC 561.

826

Lawyers’ Professional Responsibility

[25.125]

did observe that the offences were “serious by modern community standards”.144 Courts today are accordingly more likely to view lawyers’ involvement with child pornography as a disciplinary issue than in the past, especially given of the public opprobrium attached to this behaviour, and the negative perception, professionally, of lawyers remaining in practice under its shadow. Were confirmation of the point required, it appears from the judgment of the Full Court of the South Australian Supreme Court in Legal Practitioners Conduct Board v Power,145 in striking off a lawyer convicted of indecent filming of persons (including minors) and possessing child pornography. That the lawyer was genuinely remorseful and demonstrated insight into his conduct, had taken positive steps towards rehabilitation and addressing the conflict between his religious beliefs and his sexuality, and was unlikely to re-offend, did not preclude his removal from the roll. The offences disclosed, the court explained, “character defects … of a kind that damage a practitioner’s ability to maintain a relationship of trust and confidence with other members of the profession and with clients”.146

[25.125] As with criminal behaviour of any kind, though, the circumstances of both the offending and the offender impact on the severity of the disciplinary response. Not every involvement, however sparing, in child pornography will, for this reason, dictate a lawyer forfeiting her or his livelihood. For example, in Legal Services Commissioner v CBD147 the respondent, who pled guilty to possessing child exploitation material, was sentenced to 12 months’ imprisonment, suspended with an operational period of two years. That he had no previous criminal history or blemish on his professional status, and had effectively been deprived of his practising certificate as a result of the offence, influenced the Queensland Court of Appeal against imposing further professional sanctions. The latter noted that the respondent had, by reason of the criminal conviction and curtailment of his right to practise, “been severely punished”, and that depriving him of the ability to earn a living via his chosen profession “will harm him and do nothing to maintain public confidence in the legal profession or otherwise serve the good of the legal professional or the public”.148 Influencing this finding was a psychiatric opinion that the respondent, who suffered an “avoidant personality disorder”, had no abnormal sexual urges or conditions, and was now cognisant of the need to be careful not to access offending material and presented a low risk of reoffending. The imposition of any further disciplinary sanction, the court reasoned, would impact more heavily on the respondent’s physical and mental health than for persons without this disorder. While accepting that “primary regard must be had to the protection of the public and the maintenance of proper professional standards”, it remarked that “it does 144 Legal Services Board v Williams [2009] VSC 561 at [8]. 145 Legal Practitioners Conduct Board v Power [2013] SASCFC 118. 146 Legal Practitioners Conduct Board v Power [2013] SASCFC 118 at [39]. The court, however, accepted that in view also of his young age (namely 30), the lawyer appeared to be a candidate for re-admission to legal practice within a relatively short time: at [41]. 147 Legal Services Commissioner v CBD [2012] QCA 69. 148 Legal Services Commissioner v CBD [2012] QCA 69 at [32] per Muir JA, with whom Margaret Wilson AJA and Applegarth J concurred.

[25.130]

25 Types of Misconduct

827

not follow that the impact of penalties on a practitioner, particularly insofar as they may affect the practitioner’s health and ability to practise in future, are irrelevant”.149

[25.130] Ultimately, heinousness of sexual offences in the public eye does not absolve a disciplinary tribunal or court from close scrutiny of the facts underscoring the conviction, and what these indicate as to the lawyer’s character, to determine what disciplinary outcome is justified. The point is highlighted in the only High Court decision in the area, A Solicitor v Council of the Law Society of New South Wales,150 which has not passed without criticism. The case did involve unusual facts – a point implicit in the judgment151 – resulting in the court allowing the solicitor’s appeal against being struck off for his conviction on four counts of aggravated indecent assault on the two young daughters of his partner. These offences arose out of events in 1997, which generated a three-year good behaviour bond. The solicitor was again convicted in 2000, shortly after he married his partner, upon further allegations by one of the daughters but the conviction was quashed on appeal in April 2001. The Law Society commenced disciplinary proceedings against the solicitor arising out of his 1997 behaviour, in response to which the solicitor made no mention of the second set of charges. In ruling that the New South Wales Court of Appeal had erred in finding that the solicitor’s personal misconduct constituted professional misconduct, the High Court cited extracts from the judgment of the sentencing judge, to the effect that the assaults were not as serious as some, and that the solicitor had recognised their gravity, shown true contrition, and been forthcoming in police investigations. The case was also made exceptional in that the victims’ mother had forgiven and then married him, coupled with psychiatric evidence that his behaviour was most unlikely to recur. This led the High Court to rule as follows:152 It is true that the conduct involved a form of breach of trust, being the trust reposed in the [solicitor] by the mother of the children (who later forgave, and married, him) and the children themselves. However, the nature of the trust, and the circumstances of the breach, were so remote from anything to do with professional practice that the characterisation of the [solicitor’s] personal misconduct as professional misconduct was erroneous.

The facts were, explained their Honours, distinguishable from those in Rodda (as to which see [24.115]), in view of evidence as to the solicitor’s character and rehabilitation, the exceptional circumstances in which the offences were committed, and his efforts to obtain professional advice and assistance.153 These do seem, with respect, somewhat flimsy grounds to distinguish facts that were, for all intents and purposes, indeed similar. The High Court did not address the matters that led the South Australian Full Court in Rodda to make the striking off order, which were 149 Legal Services Commissioner v CBD [2012] QCA 69 at [33] per Muir JA, with whom Margaret Wilson AJA and Applegarth J concurred. 150 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253. 151 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 at [37] (FC) (“These cases turn upon a close consideration of their own facts”). 152 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 at [34] (FC). 153 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 at [37] (FC).

828

Lawyers’ Professional Responsibility

[25.135]

chiefly based on public knowledge of the identity of the lawyer and his offences. Yet the reason for lack of “notoriety” in A Solicitor stemmed from the solicitor’s name being suppressed to protect his victims’, a luxury not available to the solicitor in Rodda. In any case, what compounded the solicitor’s behaviour was his failure to be candid with the Law Society as to the second set of criminal charges. In other cases, a lack of candour to a professional body has justified a striking off order, even though the conduct not disclosed would not have by itself justified such an order: see [24.30]. The High Court addressed the non-disclosure point but appeared to treat the matter separately rather than in tandem with the sexual assault convictions and charges. On this point their Honours made the following remarks:154 [T]he [solicitor’s] professional obligations to the law society required him to disclose facts that were material to the [law society’s] decision as to what, if any, action to take against him. Giles JA [in the Court of Appeal] was right to observe that the [solicitor] “succumbed to the temptation of keeping from the law society something clearly relevant to its decisions because he feared that disclosure would be against his interests”. It is no excuse that he believed in his own innocence, and that his convictions were ultimately quashed. Frankness required the disclosure of the convictions and sentence, even if he regarded them as unjust, and hoped (or even expected) that they would be overturned on appeal. Furthermore, the [solicitor’s] duty of candour in his dealings with the law society was a professional duty, and its breach was professional misconduct.

So the court’s finding of professional misconduct arose out of the non-disclosure but not out of the offences themselves. It seems odd that, together, these should not support a striking off order. This led one commentator to opine that “sexual abuse combined with deception makes this decision, at the most, provocative and at the least, unsafe”.155 The High Court did concede that it would have been appropriate for the solicitor to have been suspended from practice, but declined to make such an order because the solicitor had, due to the 1997 events, not renewed his practising certificate since the 1998–99 year. In effect, this meant that he had been unable to practise for more than five years. As courts are unlikely to order suspensions of that duration, the court ruled that, aside from the original order for costs against the solicitor, there was no need for a further order against him.156 Drug-related convictions

[25.135] Conviction for drug trafficking is not usually seen as consistent with fitness to practise law, and so will ordinarily generate a striking off order. This occurred, for instance, in Re a Practitioner157 to a lawyer imprisoned for seven years for being knowingly concerned in the importation of narcotics, and the possession of and trafficking in drugs of dependence. A failure to disclose convictions for two counts of supplying a dangerous drug led to the same fate for a lawyer in both 154 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 at [30] (FC). 155 Evans, “Deliberately Concealed” (2004) 78 (Apr) LIJ 80 at 80. 156 A Solicitor v Council of the Law Society of New South Wales (2004) 216 CLR 253 at [40] (FC). 157 Re a Practitioner [2004] WASCA 283.

[25.135]

25 Types of Misconduct

829

Queensland158 and New South Wales159 disciplinary proceedings: see [2.95]. In Prothonotary of the Supreme Court of New South Wales v Sukkar160 a lawyer convicted of being knowingly concerned in the importation of a large quantity of the drug “ecstasy”, who had given false evidence in the course of the criminal trial and not acknowledged the extent of his involvement in the criminal activity, was likewise found unfit to practise. Perhaps the most outlandish example in this context is the police prosecutor in National Standards Committee v Sarah,161 who sold illicit drugs in the court environs during his lunch break, and warned drug associates by using police database data. In these circumstances, the New Zealand Lawyers and Conveyancers Disciplinary Tribunal saw striking off as “inevitable”.162 Although “[t]here is no place in the profession for drug addicts”,163 a conviction arising out of personal use may attract a more lenient disciplinary response, depending on the circumstances and the prospects of rehabilitation. An order for suspension, or imposition of practising certificate conditions, and not a striking off order, may better address disciplinary aims. In Prothonotary of the Supreme Court of New South Wales v P,164 for example, a solicitor had been convicted of importing a small quantity of cocaine to feed her addiction. The sentencing judge, in sentencing her to three months’ imprisonment, believed the solicitor to be remorseful. In the subsequent disciplinary proceedings, the New South Wales Court of Appeal emphasised the importance of avoiding a draconian rule of thumb, and the need to look closely at the facts with a view to determining whether the protection of the community and the profession would be endangered were the solicitor to remain on the roll.165 What influenced the court against ordering the solicitor’s removal from the roll was that, inter alia, the offence was unrelated to the practice of the law – the addiction had not impacted on her professional duties or harmed her clients or others – coupled with clear and convincing evidence of rehabilitation.166 As to the latter, the evidence showed that the solicitor had been drug-free for four years, notwithstanding difficult circumstances in the intervening period. Her rehabilitation, according to the court, could be monitored by way of an undertaking, for a period of two years, to undergo regular drug testing. In circumstances where the court or tribunal is satisfied that drug possession or use does not represent a sustained

158 Barristers’ Board v Darveniza (2000) 112 A Crim R 438. 159 Prothonotary of the Supreme Court of New South Wales v Darveniza (2001) 121 A Crim R 542. 160 Prothonotary of the Supreme Court of New South Wales v Sukkar [2007] NSWCA 341. 161 National Standards Committee v Sarah [2014] NZLCDT 2. 162 National Standards Committee v Sarah [2014] NZLCDT 2 at [13]. 163 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [15] per Young CJ in Eq. 164 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320. 165 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [16] per Young CJ in Eq. 166 Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [24]–[26] per Young CJ in Eq.

830

Lawyers’ Professional Responsibility

[25.140]

course of conduct, and the risk of recurrence has been adequately addressed, there may be no need even to impose conditions on the lawyer’s practice.167 The disciplinary response will be more severe where, in an unfortunately more common scenario, the drug addiction is manifested in dishonest or reckless behaviour in client matters, or in other criminal behaviour (for instance, theft). In Re a Practitioner,168 for example, the court made a striking off order against the backdrop of convictions for dishonesty stemming in part from the need to fund a heroin addiction. The same fate met the respondent in Auckland Standards Committee v Flewitt,169 arising out of convictions for 17 dishonesty offences – including petrol theft, shoplifting, misuse of others’ credit cards and defrauding the New Zealand equivalent of the Legal Aid Commission – to sustain a drug habit. Conviction for stalking

[25.140] The appropriate disciplinary response to a conviction for stalking rests heavily on its duration and severity. Lengthy and invasive endeavours to stalk can mark the lawyer as unfit to practise. In Legal Practitioners Complaints Committee v Tomlinson,170 for instance, the respondent solicitor pleaded guilty to stalking his former girlfriend. The stalking occurred over four months and involved repeated damage to the victim’s car and other possessions, stealing her dog and her goods, attendances at her home, and the sending of videotapes to the victim’s place of employment of her sexual activity. The respondent’s nine-month gaol sentence was suspended for 18 months. The nature of his behaviour, coupled with his lack of interest in seeking therapy and a continuing belief in a justification for that behaviour, was, according to the court, “conduct inimical to his capacity to practice [sic] as a legal practitioner”.171 Stalking less invasive and personal may preclude the lawyer being struck off, but nonetheless merits disciplinary sanction.172 Conviction for other offences

[25.145] Convictions for more minor offences, which are tried summarily and do not involve dishonesty, may not necessarily amount to misconduct or be inconsistent with an entitlement to remain on the roll. Whether a disciplinary response is called for, and its severity, will rest on the seriousness of the offence, what it displays regarding the lawyer’s respect for the law, the frequency of the misbehaviour, and the lawyer’s attitude to law enforcement authorities in the 167 See, for example, Legal Practitioners Complaints Committee v Bull [2006] WASAT 217 (where the respondent was charged with possessing 1.05 grams of cocaine, but in light of his exemplary personal and professional background, his honesty and co-operation with the authorities, the fact that the offence was unrelated to the practice of law and that he had voluntarily undertaken a six month drug testing regime, when coupled with genuine contrition and remorse, led the tribunal to impose no more than a fine). 168 Re a Practitioner [2002] WASCA 93. 169 Auckland Standards Committee v Flewitt [2010] LCDT 12. 170 Legal Practitioners Complaints Committee v Tomlinson [2006] WASC 211. 171 Legal Practitioners Complaints Committee v Tomlinson [2006] WASC 211 at [22] per the court. 172 See, for example, Victorian Bar Inc v Himmelhoch [1999] VSC 222 (where a barrister who repeatedly stalked and harassed a person for the repayment of a fictitious debt was suspended for 12 months, the evidence showing that he had been suffering from Adult Attention Deficit Disorder).

[25.145]

25 Types of Misconduct

831

course of the criminal process. In New South Wales Bar Association v Bryson,173 for instance, a barrister convicted for handling a firearm in a public place was found guilty of professional misconduct, for which he was reprimanded and fined $10,000. But even minor offences can generate a declaration of unfitness where the lawyer, in an attempt to conceal them, engages in dishonest conduct. For example, in Legal Practitioners Complaints Committee v Palumbo174 a lawyer who ran a red light arranged for his nephew to take responsibility for the infringement, paying the nephew a small sum of money in return. He steadfastly maintained this conspiracy when questioned by police until finally conceding what had occurred. The lawyer entered a guilty plea to the offence of conspiracy to defeat the course of justice, being fined $3,000. Coupled with a subsequent plea of guilty to possessing a small quantity of cocaine for his personal use, this led the court to find the lawyer unfit to remain in practice. Steytler P, with whom Wheeler and McLure JJA concurred, reasoned as follows:175 The practitioner has shown a very substantial disregard for the law and for the proper operation of the system of justice of which he was an integral part. His engagement in a conspiracy to pervert the course of justice was especially serious … [I]t was engaged in by the practitioner after an opportunity of some hours of reflection, rather than on the spur of the moment. It is of the utmost importance that the Court is able to be satisfied that those appearing before it will not mislead it and will conduct themselves in accordance with the law and discharge their duty even when not subject to scrutiny … The dishonest way in which the practitioner has acted, and his disregard for the law, so severely undermine the confidence which can be placed in his conduct as a practitioner as … to render him unfit for practice …

It follows that although running the red light and the conviction for possession were not sufficient by themselves to spell unfitness to practise, a single instance of dishonesty that strikes at the heart of the justice system will likely do so. The same object lesson derives from the New South Wales Court of Appeal’s ruling in Council of the New South Wales Bar Association v Einfeld,176 in removing from practice a senior barrister (and former Federal Court judge) found to have on multiple occasions made false statements to a court to avoid minor traffic infringement notices. The respondent’s behaviour, said the court, showed “not an unfortunate and apparently uncharacteristic lapse but a studied and deliberate attempt to avoid the consequences of his actions and to deflect and pervert the course of justice”.177

173 New South Wales Bar Association v Bryson [2003] NSWADT 19 (affd Bryson v New South Wales Bar Association [2003] NSWADTAP 29). 174 Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129. 175 Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129 at [26]. 176 Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768. 177 Council of the New South Wales Bar Association v Einfeld (2009) 258 ALR 768 at [70] per the court.

832

Lawyers’ Professional Responsibility

[25.150]

[25.150] The incidence of alcohol abuse in lawyers, exceeding that of the general population,178 makes it unsurprising to find lawyers who have been convicted of offences stemming from alcohol consumption. The typical illustration involves drink driving, which has translated into a disciplinary sanction where it is habitual179 or associated with other misconduct involving disrespect for the law or lawful authority.180 Lawyers’ tax indiscretions

[25.155] Courts and professional bodies have adopted an increasingly robust approach to disciplining lawyers who have failed to meet their tax obligations. Negative press coverage of lawyers (mainly barristers) who did not lodge returns or pay tax for years (who on some occasions opted for bankruptcy as a means of avoiding tax liabilities whilst building up assets in family members) led judges and parliaments to address the issue. Although the cases focus on income tax obligations, the same issues arise in respect of obligations to meet other forms of taxation, including obligations to withhold tax from payments to others or to make superannuation contributions on employees’ behalf.181

178 See generally Rovzar, “Putting the Plug in the Jug: The Malady of Alcoholism and Substance Addiction in the Legal Profession and a Proposal for Reform” (2015) 10 U Mass L Rev 426; Krill, Johnson and Albert, “The Prevalence of Substance Use and Other Mental Health Concerns Among American Attorneys” (2016) 10 J Addict Med 46. 179 See, for example, Canterbury-Westlands Standards Committee v Taffs [2013] NZLCDT 13 (third drink driving infringement generated a three month suspension); Waikato Bay of Plenty Lawyers’ Standards Committee No 1 v Pou [2014] NZLCDT 86 (where the respondent, having been convicted for a third drink driving offence and an offence of driving while disqualified, was suspended from practice for two months). 180 See, for example, Hawkes Bay Standards Committee v Beecham [2012] NZLCDT 29 (two year suspension where the lawyer had also been convicted of resisting a police officer and obstruction, had behaved very badly when apprehended and showed no insight into her alcoholism); Prothonotary of Supreme Court of New South Wales v Montenegro [2015] NSWCA 409 (lawyer who had inadequately disclosed multiple drink driving and other traffic and property-related convictions, lied to police when apprehended, and obtained a driver’s licence by a false statement, was struck off). 181 See, for example, Law Society of New South Wales v Bouzanis [2006] NSWADT 55 (solicitor who had failed to make the superannuation contributions required by law for an employee was found to have committed professional misconduct, and was reprimanded and fined); Law Society of New South Wales v Vosnakis [2007] NSWADT 42 (solicitor’s failure to meet statutory requirements for his employees’ superannuation and his own taxation, when coupled with the multiple occasions where he had carelessly dealt with client funds inconsistently with statutory requirements, justified his removal from the roll); Council of the Law Society of the Australian Capital Territory v Legal Practitioner “D1” [2014] ACAT 17 (lawyer who failed to provide a payment summary to an employee for tax purposes found guilty of unsatisfactory professional conduct and reprimanded); Council of the Law Society of New South Wales v Etherington [2016] NSWCATOD 31 (failure to pay superannuation contributions for employees held to constitute professional misconduct, but its less serious nature in the circumstances dictated only a reprimand as the sanction).

[25.160]

25 Types of Misconduct

833

Tax offences

[25.160] It is now clear that civic failures to pay tax do not fall outside the disciplinary net for being unrelated to the practice of law.182 A leading case is New South Wales Bar Association v Hamman, Mason P making the following pointed remarks as to the seriousness with which defrauding the revenue should be viewed disciplinary-wise:183 I emphatically dispute the proposition that defrauding “the Revenue” for personal gain is of lesser seriousness than defrauding a client, a member of the public or a corporation. The demonstrated unfitness to be trusted in serious matters is identical. Each category of “victim” is a juristic person whose rights to receive property are protected by law, including the criminal law in the case of dishonest interception. “The Revenue” may not have a human face, but neither does a corporation. But behind each (in the final analysis) are human faces who are ultimately worse off in consequence of the fraud. Dishonest non-disclosure of income also increases the burden on taxpayers generally because rates of tax inevitably reflect effective collection levels. These explain why there is no legal or moral distinction between defrauding an individual and defrauding “the Revenue”.

The barrister in Hamman had pleaded guilty to five charges of knowingly understating income to obtain a benefit and defrauding the Commonwealth, the understatement exceeding $600,000 in three years. The understatement was caused by a practice of paying creditors by endorsing for payment cheques received for his fees without any banking record of receipts. Mason P feared that the barrister’s behaviour had jeopardised the reputation and standing of the profession, and concurred with the view that a court should not permit the public to gain the impression that lawyers flout revenue laws or that it tolerates or belittles the seriousness of crimes against the revenue.184 The proven misconduct and conviction, Mason P found, established his unfitness to practise and thus his removal from the roll.185 The same fate met a barrister convicted of tax offences out of a failure to lodge tax returns for 17 years in New South Wales Bar Association v Somosi.186 In line with the High Court’s decision in Ziems187 (discussed at [25.105]), their Honours remarked that it was the conduct underlying the convictions rather than the conviction that carried the most weight, namely his failure “over a long period of time and in a systematic way, to comply with his legal and civic obligations”.188 182 In fact, Spigelman CJ has viewed the preparation and filing of tax returns as closely related to practice, namely the earning of income, including professional income: New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at [66]. 183 New South Wales Bar Association v Hamman (1999) 217 ALR 553 at [85]. 184 New South Wales Bar Association v Hamman (1999) 217 ALR 553 at [87]. 185 Priestley JA agreed with this order, whereas Davies AJA, in a dissenting judgment, expressed the opinion that a suspension for a period of three years would have been an appropriate order. 186 New South Wales Bar Association v Somosi (2001) 48 ATR 562. 187 Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279. 188 New South Wales Bar Association v Somosi (2001) 48 ATR 562 at [75] per Spigelman CJ, with whom Sheller and Giles JJA concurred. Cf Legal Services Commissioner v Moore [2010] VCAT 742 (an unusual case of a barrister convicted of offences also arising out of a failure to lodge tax returns or pay tax for 17 years, but who in the circumstances – including his acknowledgment of the wrongfulness of the conduct, his seeking of treatment for addictions to gambling and alcohol that

834

Lawyers’ Professional Responsibility

[25.165]

The nature of the tax offence capable of generating a striking off order is not confined to non-disclosure or understatement of income. Tax offences take various forms, and are not confined to the income side of the ledger. In Prothonotary of the Supreme Court of New South Wales v Livanes189 the respondent was struck off as a result of convictions for defrauding the revenue arising from a systematic and substantial claiming of tax deductions to which he was not entitled.

[25.165] A statutory initiative, now found in legal profession legislation, is to explicitly brand conduct in respect of which there is a conviction for a tax offence190 as capable of being unsatisfactory professional conduct or professional misconduct.191 Another requires each lawyer to inform the relevant regulatory body of any conviction for a tax offence, and supply a written explanation as to why he or she remains a fit and proper person to hold a practising certificate.192 Tax indiscretions independent of tax offences

[25.170] Disciplinary consequences are not reserved for tax indiscretions supported by convictions. From the reasoning in Hamman193 and Somosi194 (each discussed at [25.130]) it can be seen that the severe disciplinary response was not premised on the conviction but on proof of events behind the convictions. The point was confirmed by the New South Wales Court of Appeal’s decision in New South Wales Bar Association v Cummins195 to strike off a barrister for professional misconduct for not lodging a tax return in 38 years of practice, even without a conviction. What influenced the court was the barrister’s “complete disregard of his legal and civic obligations with respect to the payment of income tax” by a systematic course over such a long period of time.196 prompted the misbehaviour, his attempts to rectify past failings by exceeding his legal obligations as a bankrupt and working hard to increase his earnings during the period of his bankruptcy in order to maximise the return to his bankrupt estate – was allowed to remain in practice subject to a reprimand and a $50,000 fine). 189 Prothonotary of the Supreme Court of New South Wales v Livanes [2012] NSWCA 325. 190 “Tax offence” is defined in ACT, dictionary; NSW, s 6(1) (formerly NSW 2004, s 4(1)); NT, s 4; Qld, Sch 2; SA, s 5(1); Tas, s 4(1); Vic, s 6(1) (formerly Vic 2004, s 1.2.1); WA, s 3. 191 ACT, s 389(c); NSW, s 298(e) (formerly NSW 2004, s 498(1)(c)); NT, s 466(1)(c); Qld, s 420(c); SA, s 70(c); Tas, s 422(1)(c); Vic, s 298(e) (formerly Vic 2004, s 4.4.4(c)); WA, s 404(c). 192 ACT, s 61; NSW, s 88 (formerly NSW 2004, s 67); NT, s 62; Qld, s 68; SA, s 20AH; Tas, s 73; Vic, s 88 (formerly Vic 2004, s 2.4.27); WA, s 62. 193 New South Wales Bar Association v Hamman (1999) 217 ALR 553. 194 New South Wales Bar Association v Somosi (2001) 48 ATR 562. 195 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279. 196 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 at [28], [67] per Spigelman CJ. See also New South Wales Bar Association v Young (2003) 54 ATR 22 (barrister struck off as a result of not filing a tax return for 16 years and not paying tax for 20 years); New South Wales Bar Association v Stevens (2003) 54 ATR 25 (senior barrister struck off for not lodging tax returns or paying income tax for nearly 25 years; see also Legal Practitioners Complaints Committee v Stevens [2006] WASC 314, being the Western Australian striking off proceedings relating to the same lawyer); Davison v Council of the New South Wales Bar Association (2007) 69 ATR 402 (striking off a senior barrister who flouted his tax obligations, funded a lavish lifestyle with the funds in question and took steps to place income and assets beyond the reach of the tax office); Legal Services Commissioner v Hewlett [2008] LPT 3 (barrister who failed to lodge tax returns for 11 years, where the evidence showed that

[25.170]

25 Types of Misconduct

835

At a disciplinary hearing, the tribunal or court is concerned not just with how long tax obligations have been shirked, but with the lawyer’s attitude to those obligations. Cases such as Cummins carry the necessary inference that the barrister had total disregard for tax obligations, largely due to the lengthy period of time over which the non-compliance occurred, so as to cast serious doubt upon his personal integrity. On other occasions, where the non-compliance period is far shorter, a closer inquiry into the lawyer’s actual attitude, and the reasons behind it, assume greater significance. In Wardell v New South Wales Bar Association,197 for instance, the barrister was made bankrupt on his own petition after his creditors, the largest being the Australian Taxation Office, rejected a proposed scheme of arrangement. The evidence revealed that the barrister enjoyed an income “far in excess of that required to meet ordinary living expenses”, and pursued a “lavish lifestyle” spending in a way that relegated his tax debt to last priority.198 This, said Cripps AJ, revealed “such a reckless disregard for his obligations as to amount to an intention to avoid them”.199 His Honour declined to interfere with the Bar Council’s decision to cancel the barrister’s practising certificate, reasoning as follows:200 [I]t is generally recognised by most right thinking members of the community that people have an obligation to meet their debts, if they can, and that failure to do so over a long period of time without any exculpating features other than that the money was spent elsewhere would promote in the minds of right thinking people in our community that that person was not a fit and proper person to hold a practising certificate.

The events in Wardell can be contrasted with those in New South Wales Bar Association v Murphy,201 where the barrister also became bankrupt on his own petition with liabilities owed chiefly to the Australian Taxation Office. He had not paid tax for some seven years, and was not prosecuted for any tax offence. What led to this state of affairs, according to the trial judge, was that the barrister’s income in the 1990 financial year was substantially more than in prior and subsequent years. The barrister had been poorly advised in relation to making an application to vary provisional tax, out of which the barrister’s problems stemmed. The barrister made a bona fide, though unsuccessful, effort to meet his taxation obligations by selling his remaining assets. The trial judge saw the barrister’s conduct as deserving of strong criticism, but not so as to justify a finding that he

he did so deliberately, preferring to use his available resources to meet debts other than those due to the tax office, was struck off). See also Legal Services Commissioner v Stirling [2012] VCAT 347 (barrister’s practising certificate suspended for three years as a result of failing to lodge tax returns or pay tax for nearly a decade, whilst earning a high income and pursuing a lavish lifestyle, where the barrister persisted in displaying a laxness in fulfilling his tax obligations). 197 Wardell v New South Wales Bar Association (2002) 50 ATR 302. 198 Wardell v New South Wales Bar Association (2002) 50 ATR 302 at [24], [26] per Cripps AJ. 199 Wardell v New South Wales Bar Association (2002) 50 ATR 302 at [45]. 200 Wardell v New South Wales Bar Association (2002) 50 ATR 302 at [42]. 201 New South Wales Bar Association v Murphy (2002) 55 NSWLR 23.

836

Lawyers’ Professional Responsibility

[25.175]

was not a fit and proper person to continue in practice.202 This finding was affirmed on appeal, Giles JA being influenced by the following findings:203 The respondent was not indifferent to his taxation obligations. There was not the regard to compliance with the taxation laws which there should have been in 1990, but apart from that the respondent’s failings were not in the probity required of a legal practitioner, but in the ability properly to order his affairs and cope with the taxation consequences of fluctuations in income … If the respondent were to be judged unfit to hold a practising certificate, it would be because his failings so reflected upon his ability to act in the affairs of his clients that protection of the public warranted cancellation of his practising certificate. I do not think that they do. In my judgment the circumstances as found do not reveal such deficiency in character or competence as a legal practitioner that the respondent is not fit to practise as a barrister.

Similarly, in Law Society of Tasmania v Schouten204 Cox CJ declined to strike off a solicitor who, over some 15 years of repeatedly breaching tax laws requiring him to disclose his assessable income, “was not motivated by a desire to cheat the revenue”. The non-compliance was, in his Honour’s words, “the result of inertia which he did not discipline himself … to overcome”,205 stemming from personal and professional pressures as well as documented medical conditions. But this did not prevent a finding of professional misconduct. Making misleading statements to a court or tribunal other than as a lawyer

[25.175] For a lawyer to knowingly give false evidence, even outside the course of legal practice, is treated severely in a disciplinary forum. The concern is that misleading the court in a personal capacity displays a lack of integrity that may directly translate to dishonesty in a professional environment. As explained by de Jersey CJ in Barristers’ Board v Young,206 in striking off a barrister who had knowingly given false evidence on oath before a Criminal Justice Commission Inquiry: The notion of a barrister’s deliberately giving false evidence on oath is utterly repugnant to the essence of what goes to make up a barrister’s fitness to practise: such as to erode, if not destroy, the complete confidence which a client, a fellow practitioner, the courts and the public should be able, without hesitation, to assume. It is fanciful to think those persons would not be at least sceptical about the honesty, thence fitness and propriety, of a barrister who had so recently lied on oath on important matters before a significant Commission of Inquiry. 202 Murphy v Bar Association of New South Wales (2001) 49 ATR 48 at [177] per McClellan J. 203 New South Wales Bar Association v Murphy (2002) 55 NSWLR 23 at [170]–[172] (paragraph breaks omitted). 204 Law Society of Tasmania v Schouten [2003] TASSC 143 at [22]. 205 Law Society of Tasmania v Schouten [2003] TASSC 143 at [22]. See also Legal Services Commissioner v Long [2012] VCAT 193 (lawyer who suffered depression, and failed to meet his tax obligations for 12 years through disorganisation and a lack of foresight, found to have committed professional misconduct and suspended for four months). 206 Barristers’ Board v Young [2001] QCA 556 at [15]. See also Legal Services Commissioner v Puryer [2012] QCAT 48 (lawyer found to have deliberately misled the Supreme Court in litigation pursued in a private capacity struck off, a finding upheld on appeal, where the court observed that “[t]he misleading of a court on what was, effectively, an ex parte application speaks strongly against the appellant’s fitness to practise as a legal practitioner”: Puryer v Legal Services Commissioner [2012] QCA 300 at [39] per Holmes JA, with whom Gotterson JA and North J concurred).

[25.175]

25 Types of Misconduct

837

It follows that the lawyer’s duty of candour to a court or tribunal is not diminished where the lawyer acts in a personal capacity. For instance, it has been doubted that there would be a case “where a practitioner who knowingly swears a false affidavit that is filed in court could be regarded as fit to practice [sic]”.207 The same applies as regards lawyer-litigants who deliberately conceal matters that should be disclosed to the court.208 The position is otherwise if the false or misleading statements stem from mistake or oversight. In Law Society of Tasmania v R (a Practitioner),209 for example, during cross-examination the respondent lawyer made a false statement. Underwood CJ remarked that “the fact that the respondent gave an untrue answer while under oath does not amount to misconduct”,210 and found that no misconduct had been established because the respondent was genuinely mistaken regarding the matter in question. In so ruling, the Chief Justice was influenced by a finding that the respondent had no motivation to deliberately give a false answer, and that the events to which the answer related occurred some two years earlier.211

207 Coe v New South Wales Bar Association [2000] NSWCA 13 at [10] per Mason P (solicitor who swore a false affidavit as to his estimated income in family law proceedings between him and his former wife was struck off). 208 See, for example, Legal Practitioners Complaints Committee v Dixon [2006] WASCA 27 at [10] per the court (ruling that a lawyer who, in contested divorce proceedings, did not make full disclosure of his assets and deliberately concealed the true position from his wife, had engaged in “very serious unprofessional conduct” indicating his unfitness to practise). 209 Law Society of Tasmania v R (a Practitioner) [2006] TASSC 108. 210 Law Society of Tasmania v R (a Practitioner) [2006] TASSC 108 at [29]. 211 Law Society of Tasmania v R (a Practitioner) [2006] TASSC 108 at [30].

Index A Abuse of process, ........................ [17.215]–[17.275] applications to disqualify as, ... [8.260]–[8.270] baseless aspersions or allegations, ........................................ [17.220]–[17.240] criminality, ......................................... [17.230] family law proceedings, ................. [17.235] third parties, ..................................... [17.240] hopeless cases, ........................ [17.260]–[17.275] personal costs order, threats to seek, . [21.190] preemptive retention of adverse representation, .............................. [8.270] wasting time and money in proceedings, ........................................................ [17.245] Academic misconduct disclosure upon admission, ..... [2.120], [2.125] Acceptance of work briefs, reasons for declining competence, ......................................... [3.165] disinterestedness, ............................... [3.160] independence, ..................................... [3.160] practicality, .......................................... [3.170] cab rank principle, ...... [3.150], [3.155], [5.305], [19.80] moral views, ............................................. [19.80] solicitors, .................................................... [3.175] competence, ......................................... [3.180] conflict of interest, ............................. [3.185]

disciplinary proceedings, .... [2.110], [2.115] educational requirements, ............ [2.05]–[2.15] lawyer, definition, .................................... [2.140] legal practitioner, distinguished, ..... [2.140] mutual recognition, ................................... [2.50] practical training requirements, .............. [2.15] readmission — see Readmission to practice Advertising generally, ..................................... [20.05], [20.10] restrictions on, ............................ [20.15]–[20.50] comparisons and testimonials, ........ [20.35] false, misleading or deceptive, ............................................ [20.15]–[20.25] personal and work injury matters, . [20.50] prior success or results, representations of, .......................................................... [20.45] specialty or expertise, ........................ [20.40] vulgar or sensational, ........................ [20.30] Advice privilege — see Legal professional privilege Agent, lawyer as — see Authority of lawyers Allinson test, .................................................... [23.85] Assessment of costs — see Taxation/assessment of costs Attendance at practice, .............................. [20.215]

Access to justice duty to promote, .......................... [4.90]–[4.130] Actual authority of lawyer, .......................... [3.90], [3.100]–[3.130] Admission to practice academic requirements, ............................ [2.10] character-based requirements, ..... [2.20]–[2.45] good fame and character, ...... [2.35]–[2.45], [2.55] mitigating factors, ................ [2.130], [2.135] reason for, .............................................. [2.25] responsibility for assessing, ............... [2.30] disclosure requirements, ............. [2.85]–[2.125] academic misconduct, ......... [2.120], [2.125] candour, importance of, ...................... [2.90] criminal charges, ................................ [2.105] criminal convictions, ............. [2.95], [2.100]

Authority of lawyers actual authority, .............. [3.90], [3.100]–[3.130] agent, lawyer as, ........................................ [3.80] forms, ................................................ [3.85]–[3.95] holding out of, .............................. [3.95], [3.135] implied authority, ....................... [3.100]–[3.130] compromise, to, .................................. [3.130] contract, to, ......................................... [3.120] costs and disbursements, to incur, . [3.105] notices, to receive, .............................. [3.125] proceedings, to institute, .................. [3.115] receive money, to, .............................. [3.110] ostensible, ........................ [3.90], [3.135]–[3.145] compromise, to, .................................. [3.145] medium of communication, to act as, .......................................................... [3.140] warranty of authority, breach of, ........ [21.110]

840

Lawyers’ Professional Responsibility

B

Client care rules, ............................................. [4.85] Client-client conflicts — see Concurrent conflicts

Bankruptcy of lawyer, effect, ................... [20.220] Client perjury, .............................. [17.130], [17.135] Bar associations, .............................................. [1.45] professional rules, .................................... [1.115] Barrister — see Counsel Barristerial immunity, .................... [5.260]–[5.345] arguments against, ................................... [5.310] background, .............................................. [5.260] justifications for, ......................... [5.265]–[5.305] scope of, ....................................... [5.315]–[5.340] Crown counsel, ................................... [5.340] D’Orta decision, impact of, .............. [5.330] in court and out of court work, distinguished, ................. [5.320], [5.325] negligence, not confined to, ............. [5.315] settlement advice, .............................. [5.325] solicitor-advocates, ............................. [5.335] statute, ouster by, ..................................... [5.345] Borrowing from clients, .................... [6.55], [6.60]

C Cab rank principle, ......... [3.150], [3.155], [5.305], [19.80] Calderbank letter, ......................................... [12.90] Candour admission, on, ............................................. [2.90] disciplinary investigations, in, ............... [24.30] facts, in presentation of, .......... [17.95]–[17.145] law, in presentation of, .............. [17.75]–[17.90] readmission, on, ....................................... [2.180] Capacity, of client to enter retainer, ........... [3.10] Chinese walls, ...................... [7.50], [8.200]–[8.255] efficacy of, .................................... [8.230], [8.235] concurrent conflicts, in, ............................. [7.50] onus of proof, ........................................... [8.215] professional rules, ...................... [8.230], [8.235] Class actions, conflicts in representation in, .......................................................... [7.110]

Coaching of witness, .................................. [17.165] Commissions received by lawyers, ............................................ [6.105]–[6.120] Common interest privilege, ...................... [11.190] Competence controls on, ...................................... [4.25]–[4.35] definition, .................................................... [4.20] refusal of work for lack of, ...... [3.165], [3.180] remedies for lack of, .................. [4.150]–[4.175] setting aside conviction or judgement, ........................................................ [4.200]– .......................................................... [4.210] Competition law business structures, .................................... [1.60] competitive conduct rules, application of, ............................................................ [1.55] impact on legal profession, .......... [1.50]–[1.60] price fixing, ................................................. [1.55] public sector, ............................................... [1.65] third line forcing, ....................................... [1.55] Complaints against lawyers — see Misconduct by lawyers Concurrent conflicts alertness to, ................................................. [7.25] cause of action, ........................................... [7.10] Chinese walls, scope for, .......................... [7.50] contentious work, ............. [7.35], [7.95]–[7.110] class actions, ........................................ [7.110] criminal defendants, .......................... [7.100] insured and insurer, .......................... [7.105] disciplinary consequences, ..................... [25.60] fiduciary law, role, ......................... [7.10], [7.15] firm, application to, ....................... [7.40], [7.45] government lawyers, ............. [13.115], [13.120] importance of issues, ................................. [7.20] limiting scope of retainer, ......................... [7.75] loyalty, .......................................................... [7.05] non-contentious work, ... [7.35], [7.115]–[7.160] lender and borrower, acting for, ..... [7.140] partners, joint representation of, ..... [7.145] professional rules, ................ [7.150]–[7.160]

Index Concurrent conflicts — cont vendor and purchaser, acting for, .. [7.130], [7.135] opposing lawyer, relationship with, ................................................ [7.55]–[7.65] proscription on multiple clients, ............ [7.10], [7.15], [7.115] client consent, ........................... [7.80]–[7.90] scope of, ..................................... [7.30]–[7.90] Conditional costs agreements, ................. [14.140] Conducting another business deemed, where, ...................................... [20.110] disclosure, need for, ............................... [20.105] estate agency, .......................... [20.115], [20.120] generally, ................................................... [20.95] mediation — see Mediation separation and control, ......................... [20.100] sharing premises, ..................................... [20.90] Confidentiality, duty of assessment of, ......................................... [10.185] breach of, ................................................. [10.140] disciplinary consequence, ................. [25.65] client, to, ................ [1.95], [4.65], [4.70], [10.05] cloud computing, ................................... [10.155] duration of, ............................................... [10.35] exceptions to, ............................ [10.45]–[10.135] client authorisation, ............. [10.50]–[10.65] costs, disclosure to substantiate, ..... [10.85] criminal conduct or intent, disclosure of, ........................................ [10.100]–[10.125] disciplinary charge, disclosure to defend, .......................................................... [10.90] disclosure compelled by law, ............................................ [10.70]–[10.80] legal proceedings, disclosure to defend, .......................................................... [10.90] non-confidential information, .......... [10.95] public interest, disclosure in, ........ [10.130], [10.135] former clients — see Former client conflicts legal professional privilege, compared, to, .......................................................... [10.40] limits to, ..................................... [10.45]–[10.135] non-client, ..... [8.160]–[8.190], [21.110], [21.115] preservation of, ....................... [10.145]–[10.170] cloud computing, ............................. [10.155] email, .................................................. [10.165] fax, ...................................................... [10.160] mobile telephones, ........................... [10.170] priority of, ................................................. [10.35] privacy, distinguished, .......................... [10.180] privileged communications, ... [10.80], [21.175] prospective clients, .................................... [3.75] rationale for, .............................................. [10.10]

841

remedies for breach of, ........................... [4.190] scope of, ....................................... [10.20]–[10.40] contract, ............................................... [10.20] equity, ................................................... [10.25] professional rules, .............................. [10.30] source of, ................................................... [10.15] trust accounts, ............................................ [9.95] unauthorised disclosure, ...................... [10.140] Conflict of interest client and client, between current clients — see Concurrent conflicts former and current client — see Former client conflicts lawyer investment in client enterprise, ............................................................ [6.75] conducting another business — see Conducting another business business consent to by client, .................................. [4.60] dealings with clients, ................... [6.40]–[6.100] borrowing from, ....................... [6.55], [6.60] buying from, ......................................... [6.80] disciplinary consequences, ............... [25.55] general proscription, ................ [6.40]–[6.50] investment in client enterprise, ........ [6.70], [6.75] lending to, ............................................. [6.65] refusal of work because of, ............. [3.160], [3.185] selling to, ............................................... [6.80] decline of work because of, ..... [3.160], [3.185] former clients, dealings with, ...... [6.85]–[6.95] independence undermined by, .............. [17.60] multiple clients — see Concurrent conflicts non-clients, dealings with, .................... [6.100], [8.160]–[8.190] proscription on, .............................. [6.05]–[6.35] appearance of, ...................................... [6.10] circumstances, ....................................... [6.35] client consent to, ...................... [6.25], [6.30] counsel to advise, ................................ [6.20] imputation to firm, .............................. [6.15] secret profits, ............................... [6.105]–[6.120] Consumerism, impact of, .............................. [1.60] Contempt disrespect to court, .................... [25.40], [25.45] duty to court, breach of, ........... [17.25], [17.30] undertaking, breach of, ........................... [22.10]

842

Lawyers’ Professional Responsibility

Contingent fee agreements — see Costs agreements Continuing legal education, ........... [4.30], [5.355]

trust accounts, ................................ [9.70], [9.80] unusual expenses, .................................. [14.185] Costs revision — see Taxation/assessment of costs

Contract — see Retainer Costs agreements, .......................... [14.75]–[14.205] conditional costs agreements, .............. [14.140] construing, ................................................. [14.80] contingent fee agreements advantages, ........................................ [14.115] definition, ........................................... [14.110] drawbacks, ......................................... [14.115] general law, at, .................. [14.120]–[14.130] statutory regulation, ........ [14.135]–[14.145] contract, as, ................................. [14.80], [14.85] effect of, ..................................................... [14.85] formalities for signature, ............................................. [14.95] writing, ................................................ [14.90] overcharging, consequence, ................... [25.80] setting aside of, ....................... [14.150]–[14.205] fairness, concept of, ......... [14.170]–[14.190] jurisdiction, ........................ [14.155]–[14.165] reasonableness, concept of, ........................................ [14.195]–[14.205] statutory factors, .............. [14.160], [14.165] taxation/assessment of, .......................... [15.65] time charging, ......................................... [14.205] unenforceable or void, costs recovery where, ........................................................ [14.100] uplift fee agreements, ............................ [14.145] Costs assessment — see Taxation/assessment of costs Costs disclosure, .............................. [14.15]–[14.70] consequences of failure, .......................... [14.60] lawyer-executors, disclosure of commission by, .................................................... [14.70] requirements of, .......................... [14.15]–[14.60] settlement, disclosure prior to, .............. [14.65] Costs recovery bill, need to deliver, ................... [15.30], [15.35] contract, based on, ....... [14.10], [15.05], [15.10] costs assessment — see Taxation/assessment of costs restrictions on, ............. [15.15], [15.20], [15.30], [15.35] securing the recovery of costs, ............. [15.25], [15.100]–[15.110] irrevocable authorities, ................... [15.105] lien — see Solicitors’ liens security for costs, taking, ................ [15.110]

Counsel advice, reliance by solicitor on, ............. [5.205] cab rank principle, ...... [3.150], [3.155], [5.305], [19.80] competence, decline of brief, ................. [3.165] conflict, advise on instructing solicitor’s, ............................................................ [6.20] decline of brief, reasons for, ..... [3.160]–[3.170] direct access to, .......................................... [1.60] fees, recovery of, ...................................... [15.10] fees, solicitor liability for, ..................... [21.100] immunity from negligence — see Barristerial immunity incompetence as ground for setting aside conviction, ....................... [4.200]–[4.210] independence, decline of brief, ............. [3.160] retainer agreements with, ............. [3.40], [3.45] return of brief, .......................................... [3.225] Court, duty to — see Duty to the court Criminal charges disclosure upon admission, ................... [2.105] Criminal convictions disclosure upon admission, ....... [2.95], [2.100] impact on professional discipline, ........................................ [25.100]–[25.160] Criminal defence lawyers, .......... [18.95]–[18.125] advice on plea and giving evidence, .. [18.125] guilt of the accused, .............................. [18.100] attribution to another, ..................... [18.115] clear confession, ............................... [18.105] denial of guilt, .................................. [18.110] guilty plea, ........................................ [18.110] prior convictions, disclosure of, .......... [18.120] Criminal prosecution — see Prosecuting counsel Cut-price legal work, ................................... [4.100]

D

Decline of brief, reasons for competence, ............................................... [3.165] disinterestedness, ..................................... [3.160] independence, ........................................... [3.160]

Index Decline of brief, reasons for — cont practicality, ................................................ [3.170] Defence lawyers — see Criminal defence lawyers Direct access to counsel, .................... [1.60], [3.40] Disappointed beneficiaries, liability to, ............................................ [21.55]–[21.85] Disciplinary orders, ...................... [23.95]–[23.110] factors that impact on, ........... [23.115]–[23.170] addiction, ........................................... [23.145] appreciation of wrongdoing, ......... [23.135] attitude, .............................................. [23.130] experience, level of, ......................... [23.140] frequency of misconduct, ............... [23.120] loss suffered by lawyer, .................. [23.170] loss suffered by others, ................... [23.165] medical condition, ........................... [23.145] pressure and external stressors, .... [23.150] previous disciplinary findings, ...... [23.125] testimonials, ...................... [23.155], [23.160] reprimand, ............................................... [23.110] striking off, .............................................. [23.100] suspension, .............................................. [23.105] Disciplinary proceedings Australian Capital Territory, .... [24.35]–[24.50] costs in, ...................................................... [23.75] court jurisdiction of, ....................... [23.10], [23.15] role, ....................................................... [23.05] disciplinary orders — see Disciplinary orders generally, ................................................... [24.05] misconduct, types of — see Misconduct by lawyers New South Wales, ...................... [24.55]–[24.85] Northern Territory, ................... [24.90]–[24.100] objectives of, ................................ [23.20]–[23.45] onus of proof, ........................................... [23.50] orders in — see Disciplinary orders procedural fairness, ................... [23.55]–[23.70] bias of decision-maker, ..................... [23.70] disciplinary hearings, ........................ [23.65] investigation, ....................................... [23.60] publicising of, ........................................... [23.80] Queensland, ............................. [24.105]–[24.115] response to inquiries, .............................. [24.30] role of, ........................................................ [23.05] South Australia, ...................... [24.120]–[24.130] standard of proof, .................................... [23.50] Tasmania, ................................. [24.135]–[24.145] Victoria, ........................................ [24.55]–[24.85] Western Australia, .................. [24.150]–[24.160]

843

Disclosure requirements on admission, .............................................. [2.85]–[2.125] academic misconduct, ............... [2.120], [2.125] candour, importance of, ............................ [2.90] criminal charges, ...................................... [2.105] criminal convictions, ................... [2.95], [2.100] disciplinary proceedings, .......... [2.110], [2.115] Discrimination by lawyers, ...................... [21.170] Disqualification from acting abuse of process, application to disqualify as, ............................................ [8.260], [8.265] consequence of, .............................. [8.20], [8.60] jurisdiction for former client conflict, ........... [8.10], [17.20], [21.115] witness, lawyer as, ............................. [17.50] Documents destruction, illegitimate, ....................... [17.145] ownership on termination of retainer, . [3.230] privileged documents — see Legal professional privilege removal, illegitimate, ............................. [17.145] retention of, ............................................... [3.235] Duties to client access to justice, promoting, ....... [4.90]–[4.130] pro bono work, ..................... [4.105]–[4.130] account — see Trust accounts care, breach of duty of — see Negligence client care, promotion of, ......................... [4.85] client’s interests, identifying, ................... [5.20] competence — see Competence confidentiality — see Confidentiality, duty of fiduciary duties — see Fiduciary duties loyalty — see Fiduciary duties nature of, ..................................................... [4.05] quality, promotion of, ................................ [4.80] remedies for breach of — see Remedies for breach of duty schema of, ....................................... [4.10], [4.15] settlement, encouraging, ........... [4.135], [4.140] tax advice, ................................................. [19.70] tort — see Negligence undue influence, ............ [4.75], [6.125], [6.130] warn, duty to, ................................. [5.30], [5.35] Duties to self-represented parties, ......... [21.275], [21.280] Duties to third parties contract, in, agency, .................................. [21.90]–[21.115] fees of counsel, ................................. [21.100]

844

Lawyers’ Professional Responsibility

Duties to third parties — cont fees of third parties, .......................... [21.95] liability, ................................................ [21.90] warranty of authority, breach of, .. [21.105] disclaimer of responsibility, ................... [21.40] equity, in accessory to fiduciary or trust breach, ........................................................ [21.125] confidentiality, ................... [21.110], [21.115] fiduciary duties, ............................... [21.120] generally, ................................................... [21.05] professional duties communications with third parties author’s names on letters, ............ [21.230] client of another lawyer — see No-contact rule criminal proceedings, threatening, .................................................. [21.225] generally, ....................................... [21.220] media disclosure, threatening, ...... [21.225] no-contact rule — see No-contact rule other lawyers, to, .............. [21.140]–[21.215] animosity, ...................................... [21.150] complaints, .................................... [21.195] confidential communications, ....... [21.175] derogatory comments, .................. [21.145] disciplinary consequences, ............. [25.15] discrimination, harassment and vilification, .................................................. [21.170] honesty, .......................... [21.155]–[21.165] improper advantage of referrals, .. [21.185] mistake, taking advantage of, .................................. [21.205]–[21.215] personal costs order, threats to seek, .................................................. [21.190] recording conversations, ............... [21.180] second opinions, ........................... [21.185] suing, ............................................. [21.200] unrepresented parties, ..... [21.275], [21.280] statute, under, ......................... [21.130], [21.135] tort, in assumption of responsibility, .......... [21.20], [21.25] assurance or undertaking to, ........... [21.45] disappointed beneficiaries, . [21.55]–[21.85] delay in preparing will, .................. [21.60] former wills, .................................... [21.85] relief, ................................. [21.70], [21.75] executor of will, failure to notify, ... [21.50] general rule, ........................................ [21.10] liability, extension beyond client, .... [21.15] misstatement to a third party, ............................................ [21.30]–[21.40] relevant factors, .................................. [21.15]

Duty of care — see Negligence Duty of fairness and impartiality — see Prosecuting counsel Duty to obey and uphold the law, ............................................ [19.05]–[19.85] advice, unlawful purpose for, ............... [19.50] taxation advice, ........................... [19.55]–[19.85] unlawful behaviour by client, .. [19.10]–[19.25] consequences for lawyer, .... [19.30]–[19.45] civil, ................................................ [19.35] criminal, .......................................... [19.40] disciplinary, ..................................... [19.45] false names, use of, ........................... [19.20] illegal transfer of money, .................. [19.15] lawyer’s duty, ..................................... [19.10] premises, use for illegal purposes, . [19.25] Duty to the administration of justice criminal defence — see Criminal defence lawyers criminal prosecution — see Prosecuting counsel family lawyers, ....................... [18.130]–[18.145] Duty to the court abuse of process, .................... [17.215]–[17.275] applications to disqualify as, .......... [8.260], [8.265] baseless aspersions or allegations, ........................................ [17.220]–[17.240] criminality, .................................... [17.230] family law proceedings, ............... [17.235] third parties, .................................. [17.240] hopeless cases, .................. [17.260]–[17.275] preemptive retention of adverse representation, .............................. [8.270] wasting time and money in proceedings, ........................................ [17.245]–[17.255] candour in presentation of facts, .......................................... [17.95]–[17.145] breach of, discipline for, ................... [25.10] client’s intention to disobey court order, ........................................................ [17.140] destruction of documents, .............. [17.145] ex parte applications, ...................... [17.120] false documents, ............................... [17.110] half-truths, ......................................... [17.115] importance of, ..................................... [17.95] limits to, ............................................. [17.105] nature of duty, .................................. [17.100] perjury, ............................... [17.130], [17.135] removal of documents, ................... [17.145] verification of client’s narrative, ... [17.125] candour in presentation of law, ............................................ [17.75]–[17.90]

Index Duty to the court — cont assisting court, .................................... [17.80] withholding authorities, ..... [17.85], [17.90] contempt, ................................................... [17.25] defence lawyers — see Criminal defence lawyers disqualification from acting, ...... [8.10], [17.20] enforcement of, ........................... [17.15]–[17.30] family lawyers, ....................... [18.130]–[18.145] independence, ............................. [17.35]–[17.70] conflict of interest, ............................. [17.60] employed lawyers, ............... [13.35], [13.50] presentation of the case, ................... [17.40] relationship with client, ..... [6.140]–[6.150], [17.65] relationship with opposing lawyer, .................................. [7.50]–[7.60], [17.70] witness, lawyer as exceptions, ...................................... [17.55] jurisdiction to disqualify, ................ [17.50] proscription, .................................... [17.45] judge, communications with, ............. [17.190], [17.195] media communications, ....... [17.200]–[17.210], [18.15] misleading court, ........ [17.25], [17.30], [17.75], [17.95], [25.10] officer of the court, lawyer as, ............... [17.10] paramount duty, ......................... [17.05], [17.10] prosecutors — see Prosecuting counsel public disclosures, .................. [17.200]–[17.210] sanction for breach, ................... [17.25], [17.30] witnesses, dealing with, ........ [17.150]–[17.185] coaching, ............................................ [17.165] communication in cross-examination, ........................................................ [17.170] conferring together, ......................... [17.155] confidentiality, .................................. [17.185] integrity, maintaining, ..................... [17.150] no property in, ................. [17.175], [17.180] suborning, ......................................... [17.160]

E Employed lawyers, ....................................... [13.05] agency, liability in, ................................... [13.15] capacity, ..................................................... [13.45] ethical issues specific to, ........... [13.10]–[13.65] government lawyers, ............... [13.70]–[13.125] client-client conflicts, ....... [13.115], [13.120] criticism of judiciary and government, .......................................................... [13.90] executive considerations, .................. [13.95] former client conflicts, ..... [13.115], [13.120] identity of client, .............. [13.100], [13.105] legal aid lawyers, ............................. [13.105]

845

management advice, .......................... [13.95] model litigant, .................................... [13.85] moral considerations, ........................ [13.95] professional responsibilities, ............ [13.70] public interest, duty to foster, ......... [13.80] public servants, responsibilities as, ........................................................ [13.125] specific responsibilities, ..... [13.75]–[13.120] identity of client, ...................................... [13.60] government lawyers, ....... [13.100], [13.105] independence, ............................. [13.35], [13.50] legal aid lawyers, ................................... [13.105] legal professional privilege claims, .... [11.145], [13.40]–[13.55] liability of client, ...................................... [13.15] non-legal role, ........................................... [13.30] other clients, acting for, .......................... [13.65] pressure to behave unethically, ............. [13.25] termination of retainer, ........................... [13.20] Entire contract doctrine, ................. [3.195]–[3.205] duty to complete work, .......................... [3.195] qualifications to, ......................... [3.200], [3.205] recovery of fees, ......................... [3.210], [3.215] Ethics concept of, ....................................... [1.05], [1.15] legal ethics, ...................................... [1.10], [1.85] concept of, ............................................. [1.10] ethics and, ............................................. [1.15] rules “legalising”, .................................... [1.130] societal attitudes, changes in, .................. [1.85] Ex parte applications, candour in, .......... [17.120] Expertise advertisement of, ..................................... [20.40] standard of care, ...................................... [5.190] External intervention trust accounts, ............................. [9.100]–[9.115]

F

Family law baseless aspersions or allegations, ..... [17.220], [17.225] child, interests of child, ......... [18.130]–[18.145] former client conflicts, ................ [8.85], [8.140] independent children’s lawyer, ........... [18.145] interests of client, ..................... [5.160], [18.135] mediators, ................................................ [18.145] separate representatives, ....................... [18.145]

846

Lawyers’ Professional Responsibility

Fidelity Fund claims, ................................... [9.125] Fiduciary duties accounting for trust money — see Trust accounts conflict of interest, avoiding — see Conflict of interest consent to by client, .................................. [4.60] lawyers, of, .......................... [1.95], [4.40]–[4.65] loyalty to client, .................. [4.05], [6.05], [7.05] multiple clients, .............................. [7.10], [7.15] nature of, ..................................................... [4.40] remedies for breach of, ............. [4.180], [4.185] role for, ......................................................... [4.55] strictness of, ................................................ [4.55] Financial advice client, required by nature of, .... [5.110]–[5.140] duty to provide, no general, .................. [5.100] lawyer’s duty of care, .... [5.25], [5.100]–[5.140] professional indemnity insurance, ......... [5.25], [5.105] retainer, within scope of, ........... [5.110]–[5.140] Foreign lawyers, ............................................ [2.160] Former client conflicts abuses of process applications to disqualify as, .......... [8.260], [8.265] preemptive retention of adverse representation, .............................. [8.270] alertness to, ................................................. [8.20] circumstances where in issue, ................. [8.15] consent of former client, ........................... [8.45] consequence of disqualification, . [8.20], [8.60] criminal law matters, ................ [8.140], [8.145] current client conflicts, compared, .......... [8.05] disciplinary consequences, ..................... [25.60] family law matters, ...................... [8.85], [8.140] firm, imputation to, ................... [8.195]–[8.255] Chinese walls, role of, ......... [8.200]–[8.235] migratory lawyers, ... [8.15], [8.240]–[8.250] migratory non-lawyer staff, ............. [8.255] government lawyers, ............. [13.115], [13.120] inadvertent disclosure, risk of, ................ [8.90] jurisdiction to disqualify, ............ [8.10], [17.20] loyalty, .............................................. [8.35], [8.40] non-clients, .................................. [8.160]–[8.190] association with client, ........ [8.170], [8.175] preliminary consultation, .... [8.180]–[8.190] social relationship, ............................. [8.165] public interests, .......................................... [8.50] relevant inquiry, ........................... [8.70]–[8.155] confidential information, nature of, ............................................ [8.135]–[8.155] criminal law matters, .......... [8.140], [8.145]

detriment of former client, . [8.100]–[8.115] family law matters, ................ [8.85], [8.140] general law, ........................................... [8.70] onus of proof, ....................... [8.120]–[8.130] professional rules, ................................ [8.75] real possibility, .......................... [8.80]–[8.90] reasonable observer, ............................ [8.95] relevant interests, ........................... [8.25]–[8.65] appearances, .......................................... [8.50] confidentiality of former client, .................................... [8.30]–[8.45], [8.55] current client, ............................ [8.55], [8.60] lawyer, .................................................... [8.65]

G General lien — see Solicitors’ liens Good fame and character admission to practice, ........ [2.35]–[2.45], [2.55] factors relevant to academic misconduct, ......... [2.120], [2.125] criminal behaviour, .... [2.60], [2.95]–[2.105] improper conduct, ..... [2.65]–[2.75], [2.110], [2.115] infirmity, ................................................ [2.75] non-disclosure, ........................ [2.85]–[2.125] mitigating factors age, ....................................................... [2.130] external stressors, ............................... [2.135] Government lawyers — see Employed lawyers

H Harassment by lawyers, ............................ [21.170] Hopeless cases, pursuing, ......... [17.260]–[17.275] civil proceedings, ................... [17.260]–[17.270] criminal proceedings, ............................ [17.275]

I Implied authority, ........................... [3.100]–[3.130] Implied retainer, .................................. [3.60]–[3.75] Incompetence of counsel ground for setting aside conviction, ............................................ [4.200]–[4.210] Incorporated legal practices background, ............................. [20.135]–[20.145] multidisciplinary practices, .................. [20.165]

Index Incorporated legal practices — cont statutory regulation, .............................. [20.170]

847

Insolvency of lawyer, ................................. [20.220]

quality assurance, ...................................... [4.80] remedies for breach of — see Remedies for breach of duty retainer, under the — see Retainer settlement, duty to encourage, ............. [4.135], [4.140] tort — see Negligence undue influence, ............ [4.75], [6.125], [6.130]

Interstate lawyers, ......................................... [2.155]

Legal aid lawyers, ....................................... [13.110]

Investing in client enterprise, .......... [6.70], [6.75]

Legal ethics — see Ethics

Irrevocable authorities, .............................. [15.105]

Legal profession barrister — see Counsel business structures, .................................... [1.60] changes in legal landscape affecting, ..... [1.50] competition law, impact on, ......... [1.50]–[1.65] competitive conduct rules, application of, ............................................................ [1.55] consumerism, impact of, .......................... [1.70] discipline of — see Disciplinary proceedings dissatisfaction of members, ...................... [1.80] lawyer, definition, .................................... [2.140] practising law, definition, ....................... [2.145] professional responsibility, sources of, .............................................. [1.90]–[1.140] public service, ................................. [1.30], [1.35] regulation of, ............................................... [1.75] self-regulation, ................................ [1.40], [1.45] societal attitudes and perceptions, changes in, ................................................ [1.70]–[1.85] special skill and learning, ......................... [1.25]

Independence — see Duty to the court In-house lawyers — see Employed lawyers

J Joint privilege, ............................. [11.195], [11.200]

L Law societies, ................................................... [1.45] professional rules, .................................... [1.115] Lawyer advertising — see Advertising Lawyer discipline — see Disciplinary proceedings Lawyer misconduct — see Misconduct by lawyers Lawyer undertakings — see Undertakings Lawyer-client dealings — see Conflict of interest Lawyer-client relationship access to justice, duty to promote, .............................................. [4.90]–[4.130] client care rules, ......................................... [4.85] client interests, identifying, ...................... [5.20] communication with client, ..................... [4.85] competence, need for — see Competence confidentiality — see Confidentiality, duty of conflict of interest — see Conflict of interest contract — see Retainer duties arising out of, ..................... [4.05]–[4.15] loyalty — see Fiduciary duties misleading or deceptive conduct, liability for, ............................................................ [5.15] negligence — see Negligence pro bono service, ........................ [4.105]–[4.130]

Legal Profession Uniform Law, ................. [1.110] Legal professional privilege accountants, application to, .................. [11.135] advice privilege, ....................................... [11.10] anticipated litigation communications, .......................................................... [11.50] attachments to privileged documents, . [11.80] bills of costs, ............................................ [11.100] client contact details, ............................... [11.90] client identity, ........................................... [11.85] common interest privilege, ................... [11.190] communication, definition, ..................... [11.70] confidential communications, ............... [11.10], [11.105] confidentiality, compared to, ................. [10.40] copies, ......................................................... [11.75] dominant purpose test, .............. [11.35]–[11.45] draft documents, .................................... [11.115] employed lawyers, ..... [11.145], [13.40]–[13.55] entitlement to claim, .............. [11.175]–[11.200] client, .................................................. [11.175]

848

Lawyers’ Professional Responsibility

Legal professional privilege — cont common interest, parties with a, ... [11.190] deceased client, ................................. [11.185] entity client, ....................................... [11.180] insolvent client, ................................ [11.185] joint interest, parties with a, ......... [11.195], [11.200] final form, documents in, ..................... [11.115] foreign law, advice on, .......................... [11.150] foreign lawyer, advice from, ................ [11.150] forms of, ..................................................... [11.10] fraudulent communications, ..... [11.55]–[11.65] onus of proof, ..................................... [11.65] generally, .................................................... [11.05] in-house lawyers, ........ [11.145], [13.40]–[13.55] joint privilege, ......................... [11.195], [11.200] litigation privilege, ................................... [11.10] modifications of non-privileged documents, .......................................................... [11.75] non-judicial proceedings, ...... [11.205]–[11.220] onus of proof, ........................................... [11.30] professional relationship, need for, ......................................... [11.120]–[11.155] accountants, application to, ............ [11.135] admission to practice, ..................... [11.140] capacity, communication made in professional, ................ [11.130], [11.135] competence, ....................................... [11.140] independence, ................................... [11.145] retainer, .............................................. [11.125] rationale for, ................................ [11.15], [11.20] search warrants, ...................... [11.210]–[11.220] sole purpose test, ........................ [11.35]–[11.45] statute, ouster by, .................... [11.225]–[11.240] third parties, communications with or from, ...................................................... [11.160]– .............................................................. [11.170] agents of a client, ............................. [11.160] agents of the lawyer, ....................... [11.165] witness statements, .......................... [11.170] translations of non-privileged documents, .......................................................... [11.75] trust account records, .................. [9.95], [11.95] uniform evidence law, under, ............... [11.25], [11.105] joint privilege, ................................... [11.200] unrepresented parties, ..................... [11.155] waiver of privilege, .......................... [11.250] unrepresented parties, ........................... [11.155] video footage, .......................................... [11.110] waiver of, ................................. [11.245]–[11.300] general law, at, .................................. [11.245] intentional disclosure, by, ......................................... [11.255]–[11.270] legal advice, disclosure of, ........... [11.265] partial disclosure, .......................... [11.270] pleadings or affidavit, disclosure in, .................................................. [11.260]

uniform evidence law, under the, . [11.250] unintended disclosure, by, ......................... [11.275]–[11.300], [21.175] lawyer’s duty, ................ [11.290], [11.295] mistaken, ........................ [11.275]–[11.285] overhearing by third parties, ........ [11.300] Lender and borrower, acting for, ............... [7.140] Lending to clients, .......................................... [6.65] Liability duty of care, breach of — see Negligence immunity in counsel — see Barristerial immunity limiting professional indemnity instance, .... [5.350] professional standards regime, ........ [5.355] Lien — see Solicitors’ liens Litigation privilege — see Legal professional privilege

M Managers, trust accounts, ............................ [9.115] Mandatory continuing legal education, ... [4.30], [5.355] Marketing opinions, ..................................... [19.85] Media comments to, ............. [17.200]–[17.210], [18.15] disclosure to, threatening, .................... [21.225] Mediation, ..................................... [20.175]–[20.200] accreditation, ........................................... [20.185] agreement for, ......................................... [20.195] characteristics of, .................................... [20.180] lawyer skills, ........................................... [20.190] termination of, ........................................ [20.200] Migratory lawyers, .............. [8.15], [8.240]–[8.250] non-lawyer staff, ...................................... [8.255] Miscarriage of justice failure to disclose, .................................... [18.70] guilty plea, erroneous advice, ............. [18.125] incompetence, ............................. [4.200]–[4.210] misleading court, ..................................... [17.30] Misconduct by lawyers complaint

Index Misconduct by lawyers — cont ACT, ..................................................... [24.35] NSW, .................................................... [24.60] NT, ........................................................ [24.90] Qld, ..................................................... [24.105] SA, ...................................................... [24.120] Tas, ...................................................... [24.135] Vic, ........................................................ [24.60] WA, ..................................................... [24.150] court, by, .............................................. [24.10] lawyer, by, .............................. [24.15]–[24.25] disciplinary procedures — see Disciplinary proceedings generally, ................................................... [25.05] investigation ACT, ..................................................... [24.35] NSW, .................................................... [24.65] NT, ........................................................ [24.90] Qld, ..................................................... [24.105] SA, ...................................................... [24.120] Tas, ...................................................... [24.135] Vic, ........................................................ [24.65] WA, ..................................................... [24.150] personal misconduct, ............... [25.95]–[25.175] criminal conviction, ......... [25.100], [25.105] domestic abuse, ................................ [25.110] drug offences, ................................... [25.135] minor offences, ................. [25.145], [25.150] misleading statements to a court or tribunal, ....................................... [25.175] sex offences, ....................... [25.110]–[25.130] stalking, ............................................. [25.140] tax obligations, .................. [25.155]–[25.170] professional misconduct Allinson test, ........................................ [23.85] client-client conflict, ........................... [25.60] common law, ....................................... [23.85] confidentiality, breach of, ................. [25.65] delay, .................................................... [25.85] disrespect to court, .............. [25.40], [25.45] lawyer-client conflict, ........................ [25.55] misleading a court or tribunal, ....... [25.10] misleading a regulatory body, ......... [25.35] misleading another lawyer or a third party, .......................................................... [25.15] neglect, ................................................. [25.85] overcharging, ........................ [25.70]–[25.80] statute, definition under, .................. [23.90] supervise, failure to, .......................... [25.90] trust accounting irregularities, ........ [25.50] reporting court, by, .............................................. [24.10] lawyer, by, .............................. [24.15]–[24.25] Misleading or deceptive conduct court or tribunal, misleading, . [17.25], [17.30], [17.75], [17.95], [25.10], [25.175] lawyer, misleading another, ................... [25.15]

849

liability for, .................................................. [5.15] regulatory body, misleading, ................. [25.35] third party, misleading, .......................... [25.15] Mistake taking advantage of opponent’s, ........................................ [21.205]–[21.215] Model Laws, ................................................... [1.105] Model litigant, government as, ................. [13.85] Moral advice, ...................... [5.145]–[5.160], [19.80] Multi-disciplinary partnerships background, ............................ [20.135], [20.145] benefits of, ............................................... [20.150] concerns underscoring, ......................... [20.155] incorporation of, ..................................... [20.165] justifications for, ..................................... [20.150] regulation of, ........................................... [20.160] Multiple clients, conflict of interest — see Concurrent conflicts Mutual recognition regime, .......................... [2.50]

N National practising certificate scheme, .... [2.155] National legal profession, ............. [1.105], [1.110] Negligence disclaimer of liability, .............................. [5.210] disclosure by lawyer, ................................. [4.35] disclosure of information client consent to non-disclosure, ....... [5.90] imputation of duty to the firm, ......... [5.85] scope of the duty, ................................. [5.80] third party information, ...................... [5.95] duty of care, scope of advice, non-legal, ................. [5.145]–[5.160] circumstances advice given in, ......... [5.50], [5.55] failure to warn, . [5.30], [5.35], [5.65]–[5.75] financial advice, ....... [5.25], [5.100]–[5.140], [19.70] improvident transaction or dealing, . [5.75] moral advice, ......................... [5.145]–[5.160] nature of client, impact of, ..... [5.40], [5.45] preliminary advice, .............................. [5.60] retainer, relationship to, ..................... [5.05], [5.25]–[5.35]

850

Lawyers’ Professional Responsibility

Negligence — cont tax advice, ........................................... [19.70] transaction or dealing, nature of, ................................................ [5.65]–[5.75] unusual terms, .......................... [5.65], [5.70] urgent advice, ........................... [5.50], [5.55] immunity in counsel — see Barristerial immunity liability for contract/tort relationship, .................. [5.05] exclusion of, ........................................ [5.210] limitation on by professional standards regime, ........................................... [5.355] tort, in, ................................................... [5.10] omission, .......................................... [5.30], [5.35] professional indemnity insurance limiting liability, ................................. [5.350] non-legal advice, ........ [5.20], [5.25], [5.105] standard of care, ......................... [5.165]–[5.255] client, meeting with, ............ [5.235], [5.240] counsel, reliance on advice of, ........ [5.205] disclaimers, ......................................... [5.210] expert evidence, relevance of, ......... [5.220] foresight, .............................................. [5.180] general law, ......................................... [5.165] hindsight, ............................................. [5.185] knowledge of law, .............................. [5.175] professional rules, relevance of, ...... [5.220] raising the standard, ......................... [5.190] reducing the standard, ........ [5.195]–[5.215] retainer, scope of, ................. [5.210], [5.215] settlement advice, ................ [5.225], [5.230] specialised areas, ................................ [5.255] statute, under, ..................................... [5.170] urgency, impact of, .... [5.50], [5.55], [5.200] unqualified advice, .................... [5.245], [5.250] No-contact rule agents of a lawyer, ................................. [21.240] clients, ...................................................... [21.245] consequences of violation, ................... [21.270] corporate body as opposing party, ..... [21.255] exceptions to, .......................................... [21.265] generally, ................................................. [21.235] indirect communications, ..................... [21.260] lawyer-litigant, ....................................... [21.250] unrepresented parties, ........................... [21.280] Non-legal advice by lawyers, .......... [5.20], [5.25], [5.100]–[5.160]

O Officer of the court, ...................................... [17.10] Oral retainer, .................................................... [3.55] Ostensible authority of lawyer, .................. [3.95], [3.135]–[3.145] Outsourcing of legal work, ...................... [20.210]

P

Particular lien — see Solicitors’ liens Perjury by client, ........................ [17.130], [17.135] Personal misconduct — see Misconduct by lawyers Personal undertakings — see Undertakings Poaching clients, ........................................... [20.65] Practical legal training, .................................. [2.15] Practice names, .............................................. [20.75] Practice stationery, ........................................ [20.80] Practising certificate, ....................... [2.140]–[2.150] foreign lawyers, ........................................ [2.160] interstate lawyers, .................................... [2.155] national scheme, ....................................... [2.155] requirement for, ........................................ [2.140] Price fixing, ....................................................... [1.55] Privacy obligations, .................................... [10.180] Privilege — see Legal professional privilege Privilege in aid of settlement admission, ................................................. [12.20] Calderbank letter, ..................................... [12.90] connection between admission and settlement, .......................................................... [12.25] exceptions to, ............................ [12.35]–[12.100] child welfare, ...................................... [12.85]

Index Privilege in aid of settlement — cont compromise agreement, .................... [12.40] costs, ....................................... [12.90], [12.95] criminal cases, .................................. [12.100] estoppel, ............................................... [12.65] illegitimate threats, allegations of, .. [12.55] mitigation of loss in issue, ............... [12.75] perjury, allegations of, ....................... [12.50] reprehensible behaviour, ..... [12.45]–[12.60] waiver, .................................................. [12.80] want of prosecution, proceedings struck out for, ............................................ [12.70] other persons, against, ............................ [12.30] parameters of, ............................. [12.10]–[12.30] rationale for, .............................................. [12.05] requirements for, ........................ [12.10], [12.15] uniform evidence law, under, . [12.15], [12.60], [12.95], [12.100] Pro bono work, ................................ [4.105]–[4.130] Profession elements of, ................................................. [1.20] law as, .......................................................... [1.20] public service, ................................. [1.30], [1.35] self-regulation, ................................ [1.40], [1.45] special skill and learning, ......................... [1.25] Professional disciplinary proceedings — see Disciplinary proceedings Professional indemnity insurance limiting liability, ....................................... [5.350] non-legal advice, ........................................ [5.20] financial advice, ..................... [5.25], [5.105] Professional misconduct — see Misconduct by lawyers Professional responsibility legal ethics, ...................................... [1.10], [1.15] sources of, ...................................... [1.90]–[1.140] general law, ........................................... [1.95] Legal Profession Uniform Law, ....... [1.110] Model Laws, ....................................... [1.105] professional rules, ................ [1.115]–[1.140] statute, .................................... [1.100]–[1.110] Professional rules, ........................... [1.115]–[1.140] allegations, .............................................. [17.225] binding on lawyers, ................................. [1.115] borrowing from clients, ............................ [6.60] candour in presentation of facts, ........ [17.105] Chinese walls, ................. [7.50], [8.230], [8.235] confidentiality, duty of, ........................... [10.30] criminal conduct or intent, disclosure of, ...................................................... [10.105]–

851

........................................................ [10.125] conflict of interest, ..................................... [6.05] cross-examination, conferring during, ........................................................ [17.170] disclosure, duty of, .................................. [18.60] fees of third parties, ................................ [21.95] form of, ...................................................... [1.135] former client conflicts, .............................. [8.75] inadvertent disclosure, .......... [11.290], [11.295] independence, ........................................... [17.40] judge, communication with, ............... [17.190], [17.195] media communications, ........ [17.200]–[17.210] multiple clients, .. [7.10], [7.30], [7.150]–[7.160] non-legal advice, ........................ [5.125], [5.150] other lawyers, dealings with, .............. [21.140] plea, advice on, ...................................... [18.125] promulgation, ........................................... [1.115] referral fees, .............................................. [20.70] role of, .......................................... [1.125], [1.130] rule-commentary approach, ................... [1.140] standard of care, ...................................... [5.220] uniformity, ................................................. [1.120] Professional standards regime, .................. [5.355] Professionalism concept of, ....................................... [1.25]–[1.45] consumerism, impact of, .......................... [1.70] Prosecuting counsel attitude of, ................................... [18.20]–[18.45] detachment and self-control, ................. [18.25] disclosure, duty of, .................... [18.50]–[18.70] emotive language, .................................... [18.35] fairness and impartiality, duty of, ........ [18.10] breach of, ............................... [18.40], [18.45] public comment, ................................. [18.15] sentencing, ........................................... [18.90] inflaming bias against accused, ............. [18.30] sentence, submissions on, ...................... [18.90] standard of fairness, observing, ........... [18.40], [18.45] witnesses, calling of, .................. [18.75]–[18.85] Public service element of professionalism, ......... [1.30], [1.35] mega-firms as threat to, ............................ [1.35]

R

Readmission to practice candour, importance of, .......................... [2.180] conditional, ................................................ [2.190] curial approach, ........................................ [2.165]

852

Lawyers’ Professional Responsibility

Readmission to practice — cont findings on removal, importance of, .... [2.175] redemption and rehabilitation, evidence of, .......................................................... [2.170] timing, ........................................................ [2.185] Receivers, trust accounts, ............................ [9.105] Recovery of costs from clients — see Costs recovery Referral fees offered by lawyers, .................................. [20.70] received by lawyers, .................. [6.105]–[6.115] Relationship with client, . [6.135], [6.140], [17.65] Relationship with opposing lawyer, .................................. [7.55]–[7.65], [17.70] Remedies for breach of duty, ....... [4.145]–[4.210] competence, ............................................... [4.150] causation, ............................... [4.160]–[4.175] contract, remedy in, ............... [4.155], [5.05] disclaimer of liability, ........................ [5.210] exclusion of liability, .......................... [5.210] tort, remedy in, ........... [4.155], [5.05], [5.10] confidentiality, breach of, ....... [4.190], [10.140] fiduciary duty causation, ............................................. [4.185] scope, .................................................... [4.180] generally, ................................................... [4.145] setting aside conviction or judgement, ............................................ [4.200]–[4.210] undue influence, ...................................... [4.195] Reprimand, ................................................... [23.110] Requirements for practice admission to practice — see Admission to practice foreign lawyers, ........................................ [2.160] interstate lawyers, .................................... [2.155] national scheme, ....................................... [2.155] practising certificate, .................. [2.140]–[2.150] requirement for, ........................................ [2.140] Retainer acceptance of work counsel, .................................. [3.150]–[3.170] solicitors, ................................ [3.175]–[3.185] authority under — see Authority of lawyers cab rank principle, ...... [3.150], [3.155], [5.305], [19.80] capacity to create, ...................................... [3.10] client, identity of, ....................................... [3.35]

contract, as a, .............................................. [3.05] costs, basis of claim for, .......................... [14.10] counsel, with, .................................. [3.40], [3.45] definition, .................................................... [3.05] duties under, ................................... [3.20], [5.25] prospective clients, .............................. [3.75] implied, ............................................ [3.60]–[3.75] importance of, ............................................. [3.20] liability under beyond scope of retainer, ........ [5.30]–[5.45] scope of, within, ................... [5.210], [5.215] tortious liability, relationship with, .. [5.05] oral, ............................................................... [3.55] professional relationship, as proof of, ........................................................ [11.125] proof of, ........................................... [3.50]–[3.75] parties to, ......................................... [3.35]–[3.45] prospective clients, .................................... [3.75] termination of, ............................ [3.190]–[3.235] counsel, by, .......................................... [3.225] documents, ownership of on termination, .......................................................... [3.230] duties on, ............................................. [3.220] employed lawyers, ............................. [13.20] entire contract, ...................... [3.195]–[3.205] terms of, express, .................................................. [3.25] implied, .................................................. [3.30] Retaining lien — see Solicitors’ liens

S Second opinions, ......................................... [21.185] Secret commissions, ........................ [6.110], [6.115] criminal responsibility for, ..................... [6.120] Secret profits, .................................... [6.105]–[6.120] commissions, ............................... [6.110], [6.115] criminal responsibility, ...................... [6.120] fiduciary principle, .................................. [6.105] undisclosed referral fees, .......... [6.110], [6.115] Self-regulation bar associations, role of, ........................... [1.45] element of professionalism, ......... [1.40], [1.45] law societies, role of, ................................. [1.45] Self-represented parties, duties to, — see Duties to self-represented parties Settlement duty to encourage, ...... [4.135], [4.140], [5.225], [5.230]

Index

853

Sex with client, ................................ [6.140]–[6.150]

Speculative fee agreements, ..................... [14.140]

Sharing premises, ......................................... [20.85]

Standard of care — see Negligence

Sharing receipts with non-lawyers relaxation of prohibition, ...................... [20.130] traditional prohibition, .......................... [20.125]

Striking off, .................................................. [23.100] Suborning of witness, ................................ [17.160] Successive conflicts — see Former client conflicts

Social media, use by lawyers advertising, ............................................... [20.10] approaching clients, ................................. [20.60] confidentiality, impact on, .................... [10.175] “no contact” rule, as breach of, ........... [21.235]

Supervision of practice, ............. [20.205], [20.210] Supervisors of trust money, ........................ [9.110] Suspension from practice, ........................ [23.105]

Solicitation of work advertising — see Advertising approaching prospective clients, .......... [20.55], [20.60] contacting clients upon leaving firm, ... [20.65] poaching clients, ...................................... [20.65] referral fees, offering, .............................. [20.70] referrals, improper advantage of, ........ [20.70], [21.185] Solicitors’ liens forms of, .................................................... [16.10] generally, ................................................... [16.05] particular lien competing claims, ............ [16.135]–[16.155] former solicitor, ............ [16.150], [16.155] third parties, .................................. [16.140] nature of, ............................ [16.115]–[16.130] operation of, ...................... [16.115]–[16.130] ouster by statute, ............................. [16.160] policy underlying, .................................... [16.15] retaining/general lien client changes solicitor, operation where, ........................................................ [16.55]– .......................................................... [16.70] coverage, ................................ [16.25]–[16.50] nature of, ............................................. [16.20] ouster and loss of lien agreement or conduct, by, ............. [16.90], [16.95] court, by the, ................................... [16.75] disciplinary proceedings, in, ........... [16.85] payment of bill, ............................. [16.110] possession, loss of, ....................... [16.105] statute or rules, by, ......................... [16.80] third party interests, clash with, ... [16.100] trust money, over, ........................ [9.75], [16.45]

T Tax advice client, duty to, .......................................... [19.70] family lawyer, by, ..................................... [5.255] legislation, responsibility of, .................. [19.65] marketing opinions, ................................. [19.85] standard of care, ...................................... [5.255] uphold the law, duty to, ........... [19.55]–[19.85] Tax obligations of lawyers, ....... [25.125]–[25.140] indiscretions, ........................................... [25.170] offences, ................................... [25.160], [25.165] Taxation/assessment of costs alternatives to, .......................................... [15.95] application for, .......................................... [15.55] approach to, ................................ [15.60]–[15.70] concepts, ...................................... [15.40], [15.45] costs agreements, under, ......................... [15.65] costs of, ...................................................... [15.75] overcharging, consequence, ................... [25.75] rationale for, .............................................. [15.50] scale, under, .............................................. [15.70] reasons for determination, ..................... [15.80] review of, ..................................... [15.85], [15.90] Termination of retainer — see Retainer Third line forcing, .......................................... [1.55] Third parties, duties to — see Duties to third parties Time charging, ............................................. [14.205] Tort contractual liability, relationship with, .. [5.05] liability in, ................................................... [5.10]

854

Lawyers’ Professional Responsibility

Tort — cont negligence — see Negligence Trust accounts audit of, ....................................................... [9.90] confidentiality of, ....................................... [9.95] controlled money, ....................................... [9.10] costs, money received for, ............ [9.25], [9.70] external examination, ................................ [9.90] external intervention, ................. [9.100]–[9.115] managers, ............................................ [9.115] receivers, .............................................. [9.105] supervisors of trust money, .............. [9.110] failure to account Fidelity Fund claims, ......................... [9.125] other consequences, ............. [9.125], [25.50] false names in, ............................................ [9.60] financial services, ....................................... [9.20] investigation, ............................................... [9.90] lawyers, duties of, ...................................... [9.05] overdrawing, ............................................... [9.50] privilege, ........................................ [9.95], [11.95] records, ......................................................... [9.35] statement of account, ................................ [9.40] third party debt, ......................................... [9.80] transit money, ............................................. [9.10] trust money accounting for, .......................... [9.30]–[9.80] defalcations of, duty to report, .......... [9.55] lien over, .................................. [9.75], [16.45] meaning of, ................................ [9.10]–[9.25] mixing with non-trust money, ........... [9.45] use of, ..................................................... [9.80] withdrawal of, .......................... [9.65]–[9.80] verification of, ................................. [9.85]–[9.95]

personal, assuming, ........................... [22.15] scope, .................................................... [22.10] partners and staff, .................................... [22.75] terms of clear and unambiguous, ................... [22.60] construing, ............................. [22.20], [22.45] Undue influence, ............................................. [4.75] gifts from client, ....................................... [6.130] presumption of, ........................................ [6.125] remedies for, ............................................. [4.195] sex with client, ............................ [6.140]–[6.150] Unrepresented parties, duties to, ........... [21.275], [21.280] Uplift fee agreements, ............................... [14.145]

V Vendor and purchaser, acting for, ............ [7.130], [7.135]

W

Warranty of authority breach of, ................................................. [21.105] Wills beneficiaries, duty to, ................ [21.55]–[21.85] breach, relief for, .................. [21.70], [21.75] former wills, .............................................. [21.85]

Trust money — see Trust accounts

U Unconscionable dealing, ............................. [6.135] Undertakings abiding by, importance of ...................... [22.05] accepting, ................................................... [22.70] client’s authority, ...................................... [22.55] contract, liability in, ................... [22.10]–[22.20] control of, .................................................. [22.65] court’s jurisdiction to enforce, . [22.25]–[22.45] discretionary nature, ........... [22.30], [22.35] summary nature, ................................ [22.40] disciplinary consequences, ..................... [22.50] interpretation of, ........................ [22.20], [22.45] liability avoiding, ................................ [22.55]–[22.75] contract, in, ............................ [22.10]–[22.20]

Without prejudice privilege — see Privilege in aid of settlement Witnesses coaching, .................................................. [17.165] communication in cross-examination, ........................................................ [17.170] conferring together, ............................... [17.155] confidentiality, ........................................ [17.185] court, calling by, ....................................... [18.85] dealing with, ........................... [17.150]–[17.185] expert, ...................... [17.155], [17.175], [17.185] integrity, maintaining, ........................... [17.150] lawyer as, ..................................... [17.45]–[17.55] no property in, ....................... [17.175], [17.180] prosecuting counsel, calling by, ............................................ [18.75]–[18.85] prosecution witness, interviewing, ..... [17.180] refusal to call, ........................................... [18.80] suborning of, ........................................... [17.160]