Former Keddies man successfully fends off claims he breached court order to keep away from a former client … Overcharging … Whether Roulstone had “communicated” with the client by addressing a cheque to him … Candour and honesty … Bar ordered to issue a trading ticket … Some unexplained issues linger
TEFLON man Scott Roulstone, a former partner of the notorious law shop Keddies, has had another courtroom victory, with the NSW Supremes ordering the local Bar ‘n’ Grill to give him a practising ticket.
Roulstone has jumped all the regulatory and disciplinary hurdles strewn in his path and now has the green light to take out an unconditional bar trading licence.
Disciplinary complaints to the Legal Services Commissioner went nowhere. His bankruptcy was found not to amount to a dishonest attempt to defeat creditors. The Law Society’s objections to his ticket were successfully challenged. Now, the bar’s allegations that he breached undertakings and orders have fizzled.
Roulstone commenced proceedings after it was deemed that the bar had failed to stamp his ticket, because of a three months delay in determining his application.
The onus was on Roulstone to prove he is fit and proper, while the onus was on the bar to show he’d breached undertakings and orders of the Supreme Court and failed to discharge a duty of candour, honesty and frankness.
A settlement for overcharged fees involving one of Keddies’ clients, Mr Xi Li, was at the heart of the bar’s case.
Xi Li’s injury claim had been settled for $325,000 in June 2005, with Keddies charging $124,025.39 in fees and disbursements.
Xi Li was one of numerous clients who had taken overcharging complaints to Stephen Firth’s law shop.
At one stage between 130 and 140 overcharging proceedings had been commenced against the Keddies’ partners (Russell Keddie, Scott Roulstone and Tony Barakat).
The former partners faced liabilities of $12 million and by the time they went bankrupt in 2012 had paid out about $2 million to former clients.
The Law Society suspended Barakat’s and Roulstone’s tickets, claiming they had sought to defeat creditors by transferring assets before their bankruptcies.
Justice Robert Beech-Jones in June last year found that the “impugned” transactions were kosher and overturned the ADT’s cancellation of their Law Society tickets.
In the latest twist, the bar has failed to prove that Roulstone committed a contempt of court by breaching an undertaking and orders made by Justice Michael Adams in November 2011.
Justice Peter Hall has made preliminary orders that the bar issue Roulstone with a local practising certificate for the year to June 30, 2016.
Adams had granted the injunction against Roulstone and his partners on the application of Firth, who complained that clients for whom he was acting in the overcharging cases, had been snitched back by the Keddies’ boys as part of their attempts to do deals and settle with the aggrieved customers.
Adams’ order read:
“That the defendants be restrained from, either by themselves or by their servants or agents, at any time contacting, approaching or in any way communicating or attempting to communicate with any of their former clients or any of the former clients of Keddies the Insurance Law Specialists Pty Ltd in respect of whom the third plaintiff [Firth] has served an authority to transfer the file or any other person or persons acting on behalf of such former clients (other than any solicitor acting on behalf of such former clients on the record) who have provided instructions to Firths The Compensation Lawyers to act on their behalf in respect of the subject matter of those instructions.”
Helena Li, a Chinese interpreter, along with Siu Sheng Lee, a Chinese liaison officer, had their engagement with Keddies terminated in 2006. Shortly afterwards former clients started to sue the firm alleging they had been overcharged.
Naushad Husaini, who had managed Xi Li’s file, left Keddies in January 2011 and joined Margiotta Solicitors in Leichhardt.
Helena Li and Sheng Lee formed an association with Margiotta, and Keddies received about 75 authorities to transfer files to the Leichhardt law shop.
By late November 2011, Helena was playing an active role in the settlement of Xi Li’s overcharging case. Why she was involved and who asked her to facilitate the settlement is not clear.
Nor is it clear how Xi Li understood, as the bar contended, that Keddies would settle for around $75,000 before he even met Husaini at Margiotta’s.
Strangely, Helena was not called to give evidence in Roulstone’s application. The evidence was that she told Xi Li to go to Husaini at Margiotta. Xi Li said he wanted $90,000 to settle the case, ultimately accepting $80,000 from Keddies, plus costs.
Just prior to the settlement, Rob Tassell at Verekers, solicitor for the Keddies’ partners told Husaini that the court order prevented him from doing anything other than communicating with the solicitor on the record.
Husaini promptly got instructions to act for Xi Li and in the process to settle the claim for $80,000.
Roulstone played a part in the settlement and the bar contended that in doing so he breached Adams’ restraining order. He told Husaini on November 30, 2011 that the Keddies’ partners were “happy to settle”. At that stage Husaini was not the solicitor on the record.
Roulstone also wrote the $80,000 cheque and put it in an envelope addressed to Xi Li.
The bar said that the execution and addressing of the cheque constituted a “communication” in breach of the court order and this should count against Roulstone having a bar licence.
The settlement was rushed and the money was handed over prior to a deed of release being executed.
Roulstone had not disclosed to the bar association prior to the hearing that he had said he was “happy to settle” – that only emerged from a file note that had been discovered.
The bar submitted that the agreement had been rushed because of the need to undermine any attempt by Firth to enjoin the settlement. The judge rejected this, finding that the settlement had been arranged quickly because that is what Xi Li wanted after being threatened over the phone by Firth.
Hall said there was not sufficient evidence to support, to the requisite standard, the making of adverse findings against Roulstone.
There was not enough evidence to say Roulstone was behind the settlement offer – but who was? Helena Li was certainly liaising with Husaini and Barakat. Her motive is unclear.
Hall said that “happy to settle” did not amount to an approach by Roulstone and was not an inducement in an attempt to terminate Xi Li’s retainer with Firth.
Further, he found that “communication” did not extend to enclosing a cheque in an addressed envelope.
As for lack of candour, Hall found some of Roulstone’s answers “deficient”, but not deliberately false.
Roulstone was home safely and now plies his trade at the bar without the need for interim conditional licences.
Bernie Coles, former president of the NSW Bar Association, acted for Roulstone and Angus Stewart for the bar.
Roulstone v NSW Bar Association
See earlier reports from Justinian:
The triumph of gross overcharging
Bar wants to protect the public from Roulstone