Advocates immunity spreads its wings … Pressuring client to settle found to be justified … Perth lawyer claims a vendetta by the complaints committee … Unexpectedly borrowing at 60 percent interest … Paper shuffling at bar ethics exam … The subjective test for recklessness … Bureau de Spank … Kate Lilly reports
David Davies J
SIX solicitors from Sydney law shop Watkins Tapsell have sidestepped a negligence action by successfully pleading the advocates’ immunity.
Trevor Stillman the director of Goldfields Crushing and Screening Pty Ltd retained the solicitors to defend a claim against him by Coast to Country Crushing and Screening Pty Ltd.
Watkins Tapsell represented Stillman in court-ordered mediation. The client later alleged the defendants coerced him to settle.
The NSW Supreme Court noted that, per D’Orta-Ekenaike v Victoria Legal Aid, advice in advance of a hearing is within the immunity if it “affects the conduct of the case in court.”
This includes bringing the case to an end by settlement. In this instance, the alleged negligence was out-of-court conduct, however it led to the decision to settle a case in a way that led to a final judgment against the plaintiff.
Therefore the immunity applied.
Legal Profession Board of Tasmania v XYZ
Chief Justice Alan Blow
The Tasmanian Supreme Court has ruled that the Legal Profession Board was entitled to re-open a disciplinary investigation after it resolved to refer the complaint to the Disciplinary Tribunal.
The Board has been investigating “XYZ” since March 2012. In August 2013, it decided to make an application referring the matter to the Disciplinary Tribunal, but such an application was never made.
On March 18, the Board resolved to continue with the investigation.
However, when the investigator contacted the practitioner in question, she refused to supply any further information – arguing the continued investigation was invalid.
Chief Justice Blow disagreed. He noted that under s.469 of the Legal Profession Act 2007 (Tas), the Board could not unilaterally reverse its decision to refer a matter to the Disciplinary Tribunal.
However, in this case, the Board changed its mind before any application was actually made.
Although HH recognised a certain level of finality is desirable for lawyers under investigation, he also stressed that the power to discipline legal practitioners only exists for the protection of the public.
“If the contentions of the respondent are correct, a difficult situation would arise if the Board were to receive significant exculpatory evidence between the making of a decision to apply to the Disciplinary Tribunal and the subsequent making of its application. The Board would have no power to vacate its decision, would be obliged to make its application to the Tribunal, and would then have to apply under s.469(1) for leave to withdraw that application.”
After considering the legislative scheme as a whole, Blow CJ found in favour of the Legal Profession Board.
” … nothing in the Act imposes any such express restriction in relation to the period between the making of a decision to apply to the Tribunal and the making of the application. Further, the fact that, after making the application, the Board can in effect change its mind, subject to the Tribunal granting leave, weighs against a conclusion that there is an implied absolute prohibition on the Board changing its mind between the making of the decision to apply and the making of the application.”
Masters v Dobson Mitchell & Allport
Robert Pearce J
TASMANIAN lawyer and former LCA president Timothy Bugg is not liable to a former client who claims he sought her instruction to settle before she was able to give informed consent.
Bugg represented Alicia Masters in a claim against the Commonwealth Bank of Australia. In 2004, during the course of mediation, Bugg offered to settle the claim for $115,000 inclusive of costs.
The bank’s solicitor accepted.
Mrs Masters claimed that she never wanted to settle and had only participated in the mediation process because the Tasmanian Supreme Court Rules require parties to certify that they have seriously explored the possibility of settlement before an action can be set down for trial.
She alleged that in the initial mediation, Bugg pressured her and her husband to accept the CBA’s offer of $100,000 and then $110,000 – both of which she refused.
Just as Bugg telephoned Mrs Masters and asked for her permission to settle, her husband fell ill and collapsed in the house.
Mrs Masters claimed, “because she was feeling under pressure she did not ‘hear it properly’, but said ‘yes’ to Mr Bugg because her husband was ill and to make Mr Bugg ‘go away’.”
Bugg maintained that he “detected nothing other than a desire on her part at that time to try to resolve the matter” and that he strongly advised the Masters to take the settlement as he thought they were unlikely to receive more than what was being offered.
The Supreme Court found for the lawyer.
The court held there was no realistic prospects of success for a claim greater than $55,000, excluding interest.
“The offer the CBA had made was a fraction of what [Mrs Masters] wanted, and although it represented a generous assessment of her prospects of success, it was no doubt disappointing for her. In those circumstances, it was not improper for Mr Bugg to advise her in strong terms and impose considerable pressure on her to settle, provided she was not overborne.”
Legal Profession Complaints Committee v Segler
Wayne Martin CJ, Andrew Beech and John Chaney JJ
PERTH lawyer Martin Segler has been removed from the roll of legal practitioners.
WA’s Legal Profession Complaints Committee applied for his removal after the State Administrative Tribunal found Segler had engaged in professional misconduct on a number of occasions, including:
This wasn’t Segler’s first brush with the stipes. The LPCC was careful to highlight his unfortunate disciplinary history:
In his defence, Segler argued that it was unfair “to focus solely upon his aberrant mistakes at the expense of his achievements”.
He also alleged that his “relentless prosecution” by LPCC was the result of personal vendetta against him, harboured by a senior practitioner on the committee. Overall, he felt his conduct was not enough to warrant striking his name from the roll.
The WA Supremes did not agree. In a joint judgment, the Full Bench held:
“That submission (relating to the alleged vendetta) demonstrates a concerning lack of insight on Mr Segler’s part and reveals a significant failure to accept responsibility for the conduct the subject of adverse findings against him.
His submissions which seek to justify or minimise the conduct the subject of adverse findings raise the same concern. The attempt by Mr Segler through his submissions to minimise the seriousness of his conduct, and to suggest that at least some of the findings against him should not have been made, demonstrates a failure to appreciate the effect of s.444(1) of the LP Act and indicates a failure on Mr Segler’s part to accept responsibility for his actions.”
Peter Hall J
THE NSW Supreme Court has found James Arkoudis breached his duty of care as a solicitor by allowing an elderly Macedonian couple to execute a mortgage without independent legal advice and without understanding what it was they were signing.
Mr and Mrs Bakovski believed they were securing a loan for family friend – in fact the agreement identified them as borrowers at an interest rate of 60 percent.
The Bakovskis agreed to put their Rockdale property up as security on behalf of a Mr Mitreveski. Mitreveski drove them to the offices of Lenehan & Co in Sydney’s CBD (where the defendant was employed at the time) and instructed them to ask for his solicitor, Arkoudis.
Arkoudis directed Bakovski to the sign the documents. Bakovski gave evidence that he cannot read English very well and that Arkoudis didn’t ask them to read the documents or explain them in anyway.
At trial, Arkoudis claimed that he explained what a mortgage was and advised the Bakovskis not to enter into the loan because the interest rate was “ridiculous.”
Remarkably, Arkoudis appeared to remember the meeting in great detail. He claimed that Mr Bakovski wanted go through with the loan, told him he had previous experience with property acquisition and said he would be refinancing the loan in two months.
Justice Hall found in favour of the Bakovskis. HH questioned the reliability of Arkoudis’ evidence, noting, among other things:
• Although the solicitor said that he gave strong advice against the loan, there was no file note or any note recording the advice purportedly given.
• The failure to make a file note or other record is contrary to the expected practice of an experienced solicitor.
• There was no explanation as to why, at the time of swearing his affidavit, Arkoudis was able to remember the detailed statements set out in his affidavit.
Justice Hall noted that the Bakovskis appeared to be sincere and conscientious witnesses. He held that the words Arkoudis attributed to Mr Bakovski were highly implausible, considering the Bakovskis were experiencing financial difficulty and had never been involved in any property development.
Lenehan & Co was found to be vicariously liable.
Prothonotary of the Supreme Court of New South Wales v Hendrick Jan van Es
Robert MacFarlan, Mark Leeming JJA, Ronald Sackville AJA
THE New South Wales Court of Appeal struck Hendrick Jan van Es off the Jam Roll.
This has been one of the more talked-about cases from the Bureau de Spank.
In 2012, van Es attempted to cheat in a legal ethics examination and fibbed to officers of the Bar Association after he was captured on CCTV footage stuffing study notes under his trousers.
The court determined that van Es was not a person of good fame and character.
On February 24, 2012 van Es attended a Legal Ethics for Barristers examination.
The officer supervising the examination, Chris D’Aeth, noticed van Es appeared to be shuffling through papers at his desk and requested to see them.
When van Es refused, he was asked to leave the exam. A few minutes later, van Es approached D’Aeth outside the examination room and showed him his papers – perhaps hoping to re-enter and continue.
He was advised to register for the next round of examinations. CCTV footage subsequently revealed that van Es had extracted certain pages in the corridor and hid them under his clothing before approaching D’Aeth.
A few days later, van Es had a meeting with bar executive director, Philip Selth, where he claimed that he suffered a panic attack during the exam and maintained he didn’t bring any unauthorised materials into the room.
Only after Selth revealed the CCTV footage did van Es admit to concealing unauthorised study notes. Later, van Es sent a letter to the Bar Association, in which he apologised yet insisted he went to the meeting intending to be “frank, open and honest”.
Justice Leeming noted that van Es owed an obligation of candour in his dealings with the Bar Association.
HH was unimpressed with van Es’ take on “candour”, saying …
“that obligation was breached, repeatedly, by Mr van Es, on the morning of the ethics examination and again in his dealings with senior officers of the association. He did not tell the whole truth; in fact he actively and repeatedly sought to conceal the truth by telling lies.”
Giudice v Legal Profession Complaints Committee
Wayne Martin CJ, Michael Buss JA, James Edelman J
THE Western Australian Court of Appeal has granted Peter Giudice leave to appeal the State Administrative Tribunal’s decision that he is guilty of unsatisfactory professional conduct under the Legal Profession Act 2008 (WA).
Unfortunately for Giudice, the court did not grant the appeal on the grounds he originally proposed, which Chief Justice Martin described as “incredibly difficult to comprehend”.
Instead, the court was of the view that the tribunal might have found Giudice guilty of a more serious charge, had it applied the correct test for “recklessness”.
Giudice had represented a client who was convicted of child sexual offences. The client retained Giudice in 2009 for the purpose of applying for contact with his children prior to sentencing and telephone calls with them after the sentencing.
Giudice allowed a law clerk, with only a few weeks experience, to prepare an affidavit, which stated that the client’s bail conditions had previously been altered to allow him to spend time with his children.
This was false.
The State Administrative Tribunal found Giudice had recklessly disregarded whether the statement was true or false on the balance of probabilities, and was therefore guilty of unsatisfactory professional conduct.
Seeking leave to appeal, the lawyer submitted that no reasonable tribunal could have made such a finding.
However, the court found the evidence not only supported the tribunal’s decision – it suggested that Giudice was actually aware the statement might be untrue.
Accordingly, the court held the tribunal incorrectly applied an objective test to the question of Giudice’s recklessness, instead of a subjective test.
It was noted that the tribunal might have found Giudice guilty of the greater charge of professional misconduct (as opposed to unsatisfactory professional conduct).
The court remitted the matter to the tribunal for further consideration with Justice Edelman noting:
“A finding of subjective recklessness would have been an extremely serious finding that a legal practitioner settled an affidavit without caring about the truth of an assertion by his client … The finding would be even more serious in circumstances in which the client had informed the practitioner two months earlier that the client intended to plead guilty to seven charges of indecently dealing with a child under the age of 13 years, and two charges of sexual penetration of a child under the age of 13 years.
It is difficult to see how a finding of recklessness, if intended in a subjective sense, could have been considered to involve a failure to reach or maintain a reasonable standard of competence and diligence but not to involve a ‘substantial’ failure’.”