A South Australian solicitor has been struck off for a panoply of wrongs, one of which included failing to pay counsel’s fees: Legal Practitioners Conduct Board v Wharff [2012] SASCFC 116.  On this subject, broadly construed, see also: Council of the Law Society of NSW v PJB [2012] NSWADT 153,  Council of the Law Society of NSW v ML [2012] NSWADT 146, and Council of the Law Society of NSW v HI [2012] NSWADT 203 (where the NSW solicitor was struck off).  See also Legal Services Board v G-J [2012] VSCA 68 (re the Quistclose trust which may arise when a client pays solicitors moneys for the specific purpose of paying counsel’s fees), Victoria Lawyers RPA Limited v M O Lawyers Lawyers Pty Ltd TO217 of 2002, 31 October 2001 and Law Institute of Victoria Limited v SO & GS,TO555 & TO556 of 2005 10 November 2005, and Legal Services Commissioner v JHMcC [2011] VCAT 231 noted in this post.

In Wharff,  A Full Court of the South Australian Supreme Court (Kourakis CJ, Blue and Stanley JJ) said:

‘A solicitor who engages a barrister or solicitor agent undertakes a personal liability, either in honour or in contract as the case may be, to pay the barrister’s or agent’s fees, unless otherwise agreed.[3]  Where a legal practitioner undertakes such a personal liability, it is unethical to ignore his or her obligation, and hence a wilful or persistent refusal or failure to pay fees can amount to unprofessional conduct.[4]‘

[Read more →]

I had to read Abrahams v Wainwright Ryan [1998] VSC 335; [1999] 1 VR 102 from start to finish recently.  I noticed the paragraph the subject of this post which, it seems to me, might be useful in arguing in Victoria against a submission in a solicitor-client taxation that an expense should not be allowed because it was unusual and the unusualness not brought to the attention of the client before it was incurred.  The paragraph suggests that a failure to warn itself is insufficient to require its disallowance, at least where the lawyer suggests that even had the warning been given the client would have authorised the incurring of the cost. [Read more →]

A man tried to sue for professional negligence in his capacity as an assignee of the alleged victim of that negligence.  The case was determined on a limitations point, but in Kovarfi v BMT & Associates Pty Ltd [2012] NSWSC 1101 Justice McCallum of the Supreme Court of NSW gathered together the authorities in relation to the uncertain question of the assignability in Australia of causes of action in tort: [Read more →]

In Victoria, solicitors have only a non-extendable 60 days in which to seek taxation of counsel’s fees, but clients have 12 months in which to seek taxation of solicitors’ fees, and clients other than ‘sophisticated clients’ as defined may seek an extension of time in which to apply.  Where the greatest uncertainty exists, in my mind at least, is in the case of suits for taxation by third party payers — non-clients who promise to pay others’ legal fees, and most particularly non-associated third party payers — non-clients whose promise to pay others’ fees is made to the client rather than to the lawyers.  I imagine that solicitors do not generally give bills to non-associated third party payers, such as the mortgagors to whom their clients lend money under documents which require the mortgagor to pay the mortgagees’ costs.  Rather, I imagine that the mortgagees generally just demand a sum from the mortgagor as an adjustment at settlement, and hand over the bill from their lawyers only upon demand.  Yet non-associated third party payers are entitled to seek taxation, and the question is — when does the time in which such a taxation may be applied for begin to run?

I must warn you that the rest of this post is likely to be extremely boring for most people, and understanding it, despite my attempt to state it as clearly as I can, is likely to involve considerable mental effort.

In Viscariello v Oakley Thompson [2012] VSC 351, Justice Ferguson decided a dispute between an individual who guaranteed his company’s obligation to pay the company’s legal fees, and the company’s lawyers.  The individual was presumed for the purpose of argument to be an associated third party payer, which seems like a very reasonable assumption to me. The dispute was about when the time limits commenced.  But the judgment does not resolve many mysteries, because it seems that the company and the director received the bills simultaneously, and though no bills were addressed to the guarantor qua guarantor, since he in fact received the bills at the time the company received them, time started to run from then. [Read more →]

Frugtniet v Law Institute of Victoria [2012] VSCA 178 is the latest in the saga of a man with a Bachelor of Laws and a Master of Laws who has twice applied unsuccessfully for admission to the profession because of a failure to disclose his criminal convictions.  He had a degree of success in an appeal from a decision of the County Court.  But he became dissatisfied with his counsel after the hearing of the appeal and lodged an 18 page ‘Further Submission’ without leave, and without seeking leave.  The Court paid no attention to them and determined the appeal without further notice, saying the time for submissions is at the hearing.  One comes across this issue frequently, and you are probably sick of me banging on about it, but the other day I saw a litigant who should have known better just tack on to its submissions (which it had leave to file) a statutory declaration by way of supplementation of the evidence, many days after the end of the trial, and noting in the submissions that if the Tribunal was likely to find the evidence determinative, then it would like to make an application for leave to tender the hearsay into evidence.  Here is how the Court of Appeal fulminated unanimously in Mr Frugtniet’s case: [Read more →]

From memory, Williams is a bit light on when it comes to authority for the general rules guiding the exercise of discretion in relation to costs following an application to set aside a default judgment, so here’s some from the Supreme Court of the ACT, in a case between a lawyer and a legal regulator, just for double relevance to this humble newspaper. In Ezekial-Hart v Law Society of the ACT [2012] SCACT 135, a default judgment had been irregularly entered and was set aside ex debito justitiae, that is, as of right.  Ordinarily, an applicant to set aside such a judgment will get costs.  Not here, though, in part because the Law Society overlooked the irregularity and fought the judgment as if regularly entered until the judge pointed out their better point.  At [53], the meaning of ‘costs in the cause’ is spelt out, and at [54] various other kinds of costs orders’ effects are summarised.  There is also a review of cases relating to the costs consequences of not engaging in mediation, or not engaging in a bona fide manner.  Back to the costs of what is called in the Magistrates’ Court though: [Read more →]

It is sometimes said that once the time for taxation has expired, a bill for legal fees may be ‘sued on as a debt’.  Quite frankly, I have never quite understood what the difference between a debt claim and a damages claim is, or why it matters in general, though there are certain consequences I’m aware of in terms of the  civil procedures applicable.  By way of first instalment: I just saw this little passage in Copuss Pty Limited v Nix [2012] NSWSC 671, and thought to squirrel it away on the blog:

’56              There is no reason why Copuss should not be entitled to recover the loans it made to Mr and Mrs Nix. The recovery of those loans do not depend on the contract and whether Mr and Mrs Nix were in breach of it. As the High Court explained in Young v Queensland Trustees Ltd (1956) 99 CLR 560 at 567:

The common law does not and never did conceive of indebtedness in a sum certain for an executed consideration as a mere breach of contract: it is rather the detention of a sum of money and that was so whether the creditor enforced his demand by an action of debt or by indebitatus assumpsit.

 And later it said (at 569):

 A debt recoverable under an indebitatus count was not and is not now conceived of simply as a cause of action for breach of duty or obligation. In other words it is a mistake to regard the liability to pay a debt of a kind formerly recoverable in debt or indebitatus assumpsit as no more than the result of a breach of contract, a breach which the creditor must affirmatively allege and prove.’

Update, 4 June 2012:  This post prompted quite a few readers privately to email me sharing various frustrations they have.  One pointed me to an article by a Qld silk, Anthony Morris, venting his top 7 pleading frustrations, ‘Seven Deadly Sins of Pleading’, Hearsay, Issue 32, December 2008.  I completely agree with the first 6 and all of the 7th except for the bit which recommends against using automatic cross-references to other paragraphs of the pleading — technology must have moved on since 2008.  I am in heated agreement with him in relation to his second point, and wonder whether any Victorians consider that pleading in numbered paragraphs what might ordinarily be contained within particulars, so as to force (or even entice) the responding party to state their position in relation to that allegation, might not be permitted for some reason.

Original post: One might think that nothing could be more central to commercial litigation practice than to plead an agreement.  Sometimes the line between facts and evidence — one you plead and the other you don’t — can be a bit blurry, but one might think that it would give a lawyer pause before pleading an invoice given pursuant to an agreement as a particular of the agreement itself.  Yet it happens all the time, perhaps none moreso than in the solicitor who sues for fees, representing himself.

Then there seems to be a pathological inability in pleaders to allege a straight written agreement.  It’s always partly implied to give business efficacy to the agreement, but the implied term is never stated and nor are the reasons why the agreement would be inefficacious in a business sense without the implied term.  And often enough, it’s partly oral too, but the thrust of the words spoken so giving rise to the oral terms are not set out.

Speak up if you can better this pleading (bear in mind in order to be valid all the terms of a costs agreement have to be in writing or evidenced in writing) which is paining my Saturday evening, or just send me your favourite examples of the same phenomenon: [Read more →]

(Amended on 31 May 2012) Except that I had a feeling creditors were obliged to apply debtors’ payments to the oldest outstanding debt, I have never known until recently what the law was exactly in relation to a creditor’s obligations and entitlements where a debtor makes a payment which could be applied to one of several debts.  I suspect many lawyers are in the same situation. Experience teaches that allocations of payments against debts can have many ramifications, the most obvious of which are in relation to interest, and the application of statutes of limitations.  This statement was recently re-stated as good law in Victoria:

‘When a debtor is making a payment to his creditor he may appropriate the money as he pleases, and the creditor must apply it accordingly. If the debtor does not make any appropriation at the time when he makes the payment the right of application devolves on the creditor.’

It is a statement of Lord McNaughten in Cory Brothers & Company v Owners of Turkish Steamship ‘Mecca’ [1897] AC 286 at 293 and Deeley v Lloyds Bank Limited [1912] AC 756, 783 is apparently to like effect.  In response to the original version of this post, two readers, fellow barrister blogger in Melbourne Paul Duggan and Brian Lambert of Brisbane’s Birch & Co, alerted me to an additional proposition, being the one I had had a vague undertanding of.  Namely that where neither creditor nor debtor makes any conscious appropriation (as will frequently be the case), the default position is that the payment will be applied to the oldest debts first: Devaynes v Noble (‘Clayton’s Case‘) (1816) 1 Mer 572.

The rule was re-asserted by Mason CJ and Dawson, Toohey and Gaudron JJ in Sibbles v Highfern Pty Ltd (1987) 164 CLR 214; [1987] HCA 66 at [11], and was neatly summarised by Lockhart J in Re Walsh; Ex Parte: Deputy Commissioner of Taxation (1982) 60 FLR 355; [1982] FCA 88 in a passage which also explains what is meant by the debtor making an appropriation. His Honour said:

‘A debtor who owes two debts to a creditor is entitled to appropriate a payment which he makes to his creditor to one debt rather than to the other. If he omits to do so, the creditor may make the appropriation. If neither makes any appropriation, the law appropriates the payment to the earlier debt. If there is specific appropriation by the debtor cadit quaestio. In the absence of a specific appropriation it is a question of fact whether there was any appropriation by the debtor. To constitute an appropriation there must be more than an intention to appropriate by the debtor. I respectfully adopt the following passage from the judgment of Greene L.J. in Leeson v. Leeson (1936) 2 K.B. 156 at pp. 162-163:-

“When, however, he does not notify the creditor of his intention, and when the circumstances are such that the creditor receives the payment merely in satisfaction of the debts and the payment is not more appropriate to the payment of the one debt than to that of the other the creditor is entitled to make the appropriation. When it is said that there need not be an express appropriation of a payment, but that the appropriation can be inferred, that does not mean that appropriation of a payment can be inferred from some undisclosed intention in the mind of the debtor. It is to be inferred from the circumstances of the case as known to both parties. Any other view might lead to injustice, as the creditor’s right to appropriate a payment would be defeated. When the matter is examined upon principle it will be found that an undisclosed intention in the mind of the debtor is not sufficient to support an appropriation. If authority is needed for that proposition it can be found in the judgment of Lush J. in Parker v. Guinness 27 Times L.R. 129, 130 where he said: ‘What is to be considered is this. Is the true inference to be drawn from all the circumstances of the case that the debtor paid the moneys generally on account, leaving the creditor to apply them as he thought fit, or is the true inference that he paid them on account of special portions of the debt for the purpose and with a view to wipe these out of the account? His undisclosed intention so to do would, of course, not benefit him. It is what he did in fact, and not what he meant to do that is to be regarded.’ A debtor’s undisclosed intention to appropriate a payment to one of two debts owed by him to a creditor cannot benefit him.”‘

It may be professional misconduct for a party’s lawyer to communicate with the judge’s associate (or, of course, the judge) without her opponent’s consent if the purpose of the communication is to influence the conduct or outcome of the case: Legal Profession Complaints Committee v NKC [2012] WASAT 77 at [147] et seq.  In this solicitor’s case, the disciplinary tribunal said the unilateral communication amounted to ‘a substantial failure to reach the standard of competence and diligence that a member of the public is entitled to expect from a reasonably competent Australian legal practitioner’.

Victorian solicitors’ conduct rules say at r. 18.5

‘A practitioner 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 current proceedings unless:

1. the court has first communicated with the practitioner in such a way as to require the practitioner to respond to the court; or

2. the opponent has consented beforehand to the practitioner communicating with the court in a specific manner notified to the opponent by the practitioner.’

I know of at least one complaint to the Legal Services Commissioner against a Victorian barrister for filing supplementary submissions after the close of argument which was found made out but not prosecuted.  The appropriate response, in the event that this increasingly common wrong is perpetrated against your client is to write and request consent to a reply, and in default of an appropriately timely consent, apply for the relisting of the matter to complain in open court.

The rule was recently reiterated by the Full Federal Court in Comcare v John Holland Rail Pty Ltd (No 3) [2011] FCA 164, albeit from the perspective of what a judge should and should not do: [Read more →]