The fidelity fund is one of the areas of the legislation about lawyers I have never had much to do with. The basic principle is that when lawyers steal clients' money, or deal with it in breach of trust, a fund contributed to by all the lawyers in the state pays out the victims. We have professional indemnity insurance for negligence and other forms of civil liability, but it is not available where there is a 'defalcation or default as defined by' the Legal Profession Act, 2004 (or, before that, the Legal Practice Act, 1996), regardless of whether there is a claim on the Fidelity Fund (cl. 20.6(b) of the 2008/2009 policy). And we have the fund for fraud by solicitors involving trust money.

Justice Pagone's latest decision in Vaughan v Legal Services Board [2008] VSC 200, is a case about the washup of the crimes of former Kew solicitor Julie-Ann Laird who stole millions from her clients, telling them that everything she did was protected by the fidelity fund (a detail she denied in her police interview). It is a nice, spare, judgment. She lost her practising certificate for 20 years in the Legal Profession Tribunal, and subsequently, on 1 June 2005, Justice Kellam jailed her for 7 years with a minimum of 3 and a bit (see R v Laird [2005] VSC 185). This particular case, under the Legal Practice Act, 1996, turned on whether the monies received by Ms Laird were received by her in the course of legal practice. Justice Pagone was obviously comfortably satisfied that the wrongdoing did occur in the course of or in connection with legal practice, but held against the plaintiff claimants on the fund on the basis that an exception to the availability of the fund applied. The exception was s. 208(3)(b) and excluded claims in respect of defalcations arising out of the investment of money by a solicitor that is not merely incidental to the legal practice engaged. The whole of his Honour's analysis of whether what Ms Laird did was in the course of, or in connection with, legal practice is as follows:

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Justice Pagone's decision in Griffiths & Beerens Pty Ltd v Duggan [2008] VSC 230 came along just at the very moment I needed to find out the answer to a question I have always been unsure about. Say you have documents from one proceeding obtained from the other side on discovery. They are relevant to a related subsequent proceeding. Do you have to discover them? If so, do you have to give inspection of them? If not, would it be a contempt of Court to discover them? Justice Pagone says you should discover away and give inspection subject to anything the Court might do in the interests of justice, because the implied undertaking yields both to statutory compulsion (e.g. an ATO examination) and also to 'curial process' such as discovery and subpoenas. He also said something which, it appears to me, comes close to an assertion that the implied undertaking prima facie does not preclude use of a document obtained in one proceeding in another proceeding, and that what the undertaking is really about is the use of documents obtained in litigation for the purposes other than litigation (e.g. publication to the media). [Read more →]

Solicitors who are parties to litigation and don't hire other solicitors to represent them are the only people who are generally entitled to claim legal costs from the losing party even though they don't have to pay lawyers anything. Engaging in litigation involving themselves is therefore a profitable activity if they win. The principle dates back to London Scottish Benefit Society v Chorley (1884) 13 QBD 872. The Supreme Courts of the land are grumbling about the anamlous nature of the exception, but reluctantly applying it. The most recent case is Freehills, in the matter of New Tel Limited (in liq) (No 4) [2008] FCA 1085.

The leading Australian case is Guss v Veenhuizen (No 2) (1976) 136 CLR 47. The most recent High Court authority to touch on the question is Cachia v Hanes (1994) 179 CLR 403, though that was a case about a claim for costs of a self-represented consulting engineer who was successful in litigation, and the Court there doubted, in dicta, the cogency of the Guss Case's reasoning. A judge of the The Full Court of the Supreme Court of Western Australia refused to apply the exception in Dobree v Hoffman (1996) 18 WAR 36, but in the Freehills Case, McKerracher J of the Federal Court sitting in Perth decided to refer it directly to the Full Court of the Federal Court, without formally determining the case, commenting only that he would consider himself bound by Guss's Case. Other cases to apply the exception include: [Read more →]

and this is what The Times thinks lawyers should be reading on their summer holidays:

• The Art of the Advocate, by Richard Du Cann, QC, Penguin;
• Famous Trials, selected by John Mortimer, QC, Penguin;
• The Tyrannicide Brief, by Geoffrey Robertson, QC, Vintage;
• To Kill a Mockingbird, by Harper Lee, Pan Books;
• The Firm, by John Grisham, Arrow.

An absurd proposition certainly, for all but the most tragic (and there are many law tragics who are yet to come out of the cupboard), but for some reason I like the article. So here it is.

Ms Garde-Wilson's back in business. In fact she never went out of business, since following the non-renewal of her practising certificate, she held a deemed practising certificate pursuant to the Legal Profession Act, 2004, s. 2.4.5(3) pending her VCAT merits review application. The assertion that she had ceased to be a fit and proper person seems fundamentally to have been about her contempt of the Supreme Court of Victoria in refusing to answer questions on oath, and certain criminal charges which were pending against her. The criminal charges went away, and the Board obviously subsequently formed the view that the unusual circumstances of the contempt conviction were not such as to demonstrate her unfitness to engage in legal practice, and so gave her her practising certificate back. These things are determined at the date of a decision, and so the fact that the Board determined now that Ms Garde-Wilson was a fit and proper person does not necessarily suggest that its decision back then was wrong.

I suspect that Justice Bell commencing his decision in Garde-Wilson v Legal Services Board [2007] VSC 225:

'The plaintiff, a young and intelligent solicitor, was working hard in a firm specialising in criminal law,'

must not have harmed her cause. So too Justice Harper's reasons for not imposing any sentence on her upon finding her guilty of contempt of court, which began:

'Zarah Garde-Wilson, you are a solicitor who, on the evidence available to me, is intelligent, hard working and determined to represent your clients to the best of your ability. These are valuable attributes in any legal practitioner. Another such attribute is that combination of learning, technical legal skills and common sense which, appropriately mixed, results in sound judgment. None of us get the combination exactly right all the time.' (R v Garde-Wilson [2005] VSC 452)

The Age article alerted me to a Zarah decision I had missed, about the detail of which I will fill you in on soon. Here it is: Garde-Wilson v Legal Services Board [2008] VSCA 43. The Court of Appeal, led by Justice of Appeal Dodds-Streeton, overturned Justice Bell's decision mentioned above, which had dismissed Ms Garde-Wilson's application for judicial review of the Board's decision to suspend her practising certificate. Justice Bell had said that Ms Garde-Wilson had a perfectly adequate alternative remedy in the merits review option in VCAT, and that is a good reason why judicial review should not be availed of. Not so, said the Court of Appeal.

Stephen Witham (pictured) moved into Michael Flaherty's flat. The relationship quickly soured when Witham assaulted Flaherty's girlfriend, and stood over people for drugs and money. So Flaherty got some mates together, hit Witham about with baseball bats, hogtied him with ropes and cable ties, wrapped him in a doona, popped him in the boot, and drove him down Mirboo North way for the purpose of executing him in a pine plantation. Before shooting him, he had a chat with Witham and asked him if he had any final requests. Witham asked for a beer, and they each had one from a six pack. Then Flaherty kicked Witham so as to roll him down a hill, and acceded to his request not to be shot in the face, shooting him dead, in the back of the head. Afterwards, he boasted about the killing. It might have gone undetected but for an anonymous tip off to the police. He showed no remorse in his police interview, pleaded guilty at the first opportunity, and was not known to have been violent in the past. According to Justice Kaye, he did later come to realise the enormity of his offending and was genuinely contrite. [Read more →]

Dedicated readers will already have been following the saga of the misconduct prosecution of Kylie Minogue's one-time lawyer. Casual readers can lap it all up here. Deputy President Dwyer's reasons for refusing to stay the disciplinary proceedings have hit the internet: Legal Services Commissioner v MB [2008] VCAT 1341. For some reason, the lawyer adduced into evidence a letter from the Australian Crime Commission which said that there was no overlap between the subject matter of the disciplinary charges and the subject matter of the Australian Crime Commission's investigation, 'pulling the rug', as Deputy President Dwyer put it, from the lawyer's own case. Apart from some newspaper articles suggesting that up to 50 people might be prosecuted as a result of 'Project Wickenby', there was not a lot of evidence that the solicitor was going to be prosecuted imminently or otherwise. So it is not an especially interesting decision, legally. It is helpful to have a VCAT decision which rehearses the authorities on the question of stays pending criminal proceedings in their application to disciplinary proceedings, though. [Read more →]

In Stanoevski v Council of the Law Society of NSW [2008] NSWCA 93, Justice of Appeal Campbell, with whom Justice of Appeal Hodgson and Acting Justice of Appeal Handley agreed, has provided important guidance on who bears which burdens of proof in cases where a legal regulator seeks to cancel a practising certificate or have a lawyer struck from the roll. (Cancellation by a legal regulator of a practising certificate lasts only as long as the practising certificate (i.e. until the end of the financial year), whereas striking off the roll lasts until an application for readmission succeeds, at which point, an application may be made for a practising certificate. To complicate things, though, cancellation of a practising certificate as a result of a disciplinary hearing by VCAT may result in a condition that the lawyer not reapply for practising certificate for a specific period. Being struck off the roll and having your practising certificate cancelled are not all that different really.) In summary, the situation is as follows:

• applicants for admission have the burden of establishing that they are fit and proper persons to be admitted to practice and enrolled by signing the roll of practitioners: Re B [1981] 2 NSWLR 372 at 403; Wentworth v NSW Bar Association (Court of Appeal, 14 February 1994, unreported) at 5;
• legal regulators who apply for an order cancelling a practitioner's practising certificate have a civil onus of proving on the Briginshaw standard that the practitioner is not, at the time of the hearing, a fit and proper person to practise;
• legal regulators who apply for an order striking off a practitioner, that is, for an order that their name be struck off the roll of practitioners, have a civil onus of proving on the Briginshaw standard that the lawyer is not a fit and proper person to practise, and that the likelihood is that they will continue not to be for the indefinite future;
• lawyers who have either been struck off, or who have been found guilty of misconduct but rely on remediation during the time between the misconduct and the hearing so as to argue that they are now fit to engage in practice bear the burden of proving that the new leaf they have turned over is as green and shiny as they claim. [Read more →]

In Nicholson v B&S [2000] VLPT 28, the Legal Profession Tribunal's Registrar Howell considered whether the costs disclosure provisions of the Legal Practice Act, 1996 constituted a code which demonstrated an intention of the parliament to displace the common law. 'Nope', he said:

'I have considered whether the provisions of Division 1 of Part 4 of the Legal Practice Act 1996 created a code for the provision of information to clients and thus relieved legal practitioners from their previous obligations to provide information. I have concluded that Division 1 is not a code because there is nothing in Division 1 which indicates to me that the legislature intended to change the position at common law or to relieve practitioners of their fiduciary obligations.'

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In VCAT's Legal Practice List the other day, defending a firm alleged to have charged too much at the rate of $230 an hour, I made the point in cross-examination that London tax silks were wont to charge £600 per hour. As I uttered the words, I was visited by self-doubt. The amount sounded wrong, too much. But hell was I out of date! They don't charge £600 an hour anymore: they just charge £20,000 ($41,000) an advice. In fact top London firm partners charge between £600 and £1400 an hour. Or so The Times says in a feature entitled 'Are Top Lawyers Worth Their Huge Fees?' And the AFR reports today that each of Freshfields, Linklaters, Allen & Overy and Clifford Chance topped the £1 billion mark in turnover, more than half of it from outside London, including China and he Middle East. Victoria's Attorney General, worried about my confrères' wont* to charge $14,000 a day has just gotta take a chill pill. This is the most interesting bit of The Times's article: [Read more →]