George Mancini LPDT Decision

LEGAL PRACTITIONERS ACT 1981
LEGAL PRACTITIONERS CONDUCT BOARD
ACTION NO: 18 of 2010
IN THE MATTER of GEORGE MANCINI
REASONS FOR DECISION
1.
On 15 December, 2010 the Legal Practitioners Conduct Board ("the Board") charged George
Mancini ("the Practitioner") with unprofessional conduct based on two charges arising out of
the same set of facts. Particulars of the Charge (as amended on the first morning of the
hearing) are as follows:1. From 5 May 2009 until 20 December 2011 the Practitioner failed to comply with an
Order made in the Federal Court of Australia by the Honourable Justice Finn on 5
May 2009 whereby the court ordered the Practitioner personally pay the costs
thrown away of the re-listed Appeal Book Index Settlement appointment of 30
March 2009 in Action Number SADC 16 of 2009.
PARTICULARS OF CHARGE
•
in action number SADC 16/2009 in the Federal Court of Australia, South Australian
District Registry, Arthur Christopher Nicholls ("Nicholls") issued proceedings against
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the Australian Federal Police ("First Respondent")("AFP") and the Deputy
Commissioner of Taxation ("Second Respondent")("DCT") on 29 January, 2009.
•
Nicholls was represented by the Practitioner during the proceedings at first instance
before the Honourable Justice Mansfield and thereafter for part of an Appeal before the
Full Court of the Federal Court of Australia.
•
The First Respondent and Second Respondent were represented at all relevant times
by the Australian Government Solicitor ("the AGS").
•
On 15 January 2009 Justice Mansfield dismissed a challenge by Nicholls to the
execution of a Search Warrant at his premises. The said Warrant was executed in
connection with an investigation by the First Respondent into allegations that Nicholls
had committed serious criminal offences.
•
Nicholls appealed that decision. The Appellant was required to draft an Index to the
Appeal Books.
•
By letter dated 4 March 2009 from the Federal Court Registry, the AGS and the
Practitioner on behalf of Nicholls were notified that a conference had been listed before
the Registrar at 10.00 am on 17 March 2009 for the Index to the Appeal Books to be
settled.
•
Just before 10.00 am on 17 March 2009 the Practitioner requested that the Federal
Court Registry re-list the time for the conference on the basis that he was not ready to
proceed and needed more time to prepare the draft Appeal Book Index. The Registry
re-listed the time for the conference at 10.45 am on 30 March 2009.
•
On 30 March 2009 Greg Camilos on behalf of the AGS appeared before the Registrar
at the appointed time for the Appeal Book Settling Conference. The Practitioner did
not attend. Enquiries by the Court Officer indicated that the Practitioner was not in his
3
office but was in court. The Practitioner had not left any note or message in relation to
the Index Settling Conference before the Registrar.
•
The Registrar adjourned the conference to a date to be fixed and referred the nonappearance of the Practitioner and the Appellant as well as the Appellant's failure to
produce a draft Appeal Book Index to a Senior Judge of the Federal Court.
•
By letter dated 1 April 2009 from the Federal Court Registry the Practitioner was
notified that a directions hearing had been listed before Justice Finn on 3 April 2009.
•
On 3 April 2009 Greg Camilos appeared before Justice Finn on behalf of the AGS.
The Practitioner did not attend. Mr Bernie Walrut, a solicitor employed by the
Practitioner appeared on behalf of Nicholls.
•
Finn J observed that he had received no explanation from the Practitioner for his failure
to comply with the Court's Orders and made a number of Orders including inter alia an
Order adjourning the directions hearing to 9.00 am on 8 April 2009. The Court
subsequently re-listed that hearing to 9.00 am on 5 May 2009.
•
On 5 May 2009 the Practitioner appeared at the directions hearing before Justice Finn.
At that time the Practitioner had ceased to act for Nicholls.
•
On 5 May 2009 the Practitioner was required by Justice Finn to show cause why the
Court should not make an order for costs personally against the Practitioner. The
Practitioner said that he did not have any submissions to make in opposition to the
proposed personal costs Order.
•
An Order was made by the Court that the Practitioner personally pay the costs thrown
away with respect to the re-listed Appeal Book Index Settling appointment of 30 March
2009.
•
On 5 May 2009 the AGS wrote to the Practitioner by facsimile requesting that he pay
within 14 days a sum of $244.20 by way of the costs thrown away in relation to the
4
Appeal Book index Settling appointment. The Practitioner did not respond to that
letter.
•
On 3 June 2009 the AGS wrote by facsimile to the Practitioner to confirm that there
had been no response to the letter on 5 May 2009 and requesting that he pay the sum
of $244.20 by 4.00 pm on 5 June 2009. The Practitioner did not respond to that letter.
•
On 18 June 2009 the AGS filed a Bill of Costs for the sum of $1,134.00 which was
served on the Practitioner on 19 June 2009.
•
On 28 July 2009 the AGS filed an affidavit of service in relation to the Bill of Costs
which affidavit was served on the Practitioner on 29 July 2009.
•
On 18 August 2009 a Certificate of Taxation was issued by the Registrar of the Federal
Court of Australia certifying that the costs payable by the Practitioner were deemed to
be $1,134.00.
•
On 19 August 2009 the AGS wrote to the Practitioner enclosing the Certificate of
Taxation and requesting that he pay within 14 days.
•
The Practitioner paid the costs ordered to be paid by him personally by the Federal
Court of Australia on 21 December 2010.
2.
The Practitioner engaged in conduct in an attempt to defeat or avoid a Cost Order made
against him personally by the Honourable Justice Finn of the Federal Court of Australia on 5
May 2009.
PARTICULARS
•
The Board repeats the Particulars in paragraph 1.1 to 1.22 herein.
•
On 19 August 2009 the Practitioner telephoned the AGS and spoke to Greg Camilos.
The Practitioner said he wished to discuss settling the personal costs Order by taking
into account monies he claimed were owed to him by the Commissioner of Taxation.
5
The Practitioner requested Mr Camilos ask his client to suspend their demand for
payment of the costs Order.
•
On 19 August 2009 the AGS sent a letter by facsimile to the Practitioner informing him
that its clients (the Australian Federal Police and the Australian Taxation Office) were
not willing to suspend any demands for payment of the costs ordered by the Federal
Court of Australia and requested the payment of the sum of $1,134.00 within 14 days.
•
On 31 August 2009 the Practitioner telephoned Greg Camilos and said that he wanted
to write to the AGS about a claimed "set-off' that the Practitioner asserted in relation to
the sum of $1,134.00. The Practitioner was requested to provide particulars of the
basis on which he claimed that he had a 'set-off'.
•
The Practitioner said that he would write to the AGS by the afternoon of 1 September
2009 with "set-off' details. He did not write to the AGS on 1 September 2009.
•
On 4 September 2009 the AGS asked the Registrar of the Federal Court to request
that an Order be drawn up and sealed in favour of its clients for the sum of $1,134.00.
•
On 10 September 2009 the Registrar of the Federal Court made an Order that the
Practitioner pay the First and Second Respondents the sum of $1,134.00. The AGS
served the original Order under cover of a letter dated 11 September 2009 on the
Practitioner at his office by leaving it with one of his staff and in addition sent a copy of
the Order to the Practitioner by facsimile.
•
A request was made that the Practitioner pay the sum of $1,134.00 by 4.00 pm on 18
September 2009 failing which the AGS had been instructed to take enforcement
action.
•
At 4.30 pm on 18 September 2009 the Practitioner sent a facsimile to the AGS
claiming that the Australian Taxation Office owed him money in relation to a subpoena
and he proposed that each party bear their own costs. He stated that he attended the
6
Federal Magistrates Court on 3 February 2009 in response to a subpoena issued by
the Deputy Commissioner of Taxation against the Practitioner, seeking production of
documents in the Practitioner's possession relating to the dealings between the
Practitioner and Arthur Christopher Nicholls. The Practitioner stated that he conducted
an extensive perusal of his materials for the purposes of the respondents' subpoena
and further that he had to give consideration to the proposed amendments to the
subpoena. The Practitioner stated that his work involved five hours personal
attendance time and further that he had briefed Counsel to appear in Court on his
behalf.
•
On 24 September 2009 the AGS wrote to the Practitioner rejecting his proposal and
requiring him to pay the sum of $1,134.00 by 4.00 pm on 25 September 2009.
•
On 1 October 2009 the Practitioner wrote to the AGS by facsimile asking that his
proposal be reviewed and stating that he had written separately to the Australian
Taxation Office to request payment of his expenses in answering the subpoena.
•
The Practitioner at no time claimed there was any "set-off" available for him with
respect to the First Respondent, the Australian Federal Police.
•
The sum claimed by the Practitioner as a "set-off" was not the subject of any Order nor
was there any Order for costs in respect thereof.
3.
On 10 March 2011 the Practitioner filed a Reply2 . In it the Practitioner, inter alia, admitted
the facts pleaded in paragraph 1.1 to 1.22 and paragraphs 2.1 to 2.13 but denied that the
admitted facts amounted to unprofessional conduct.
THE HEARING
4.
At the hearing before the Tribunal Ms E F Nelson QC with Mr T Bryant appeared for the
Board and Mr R J Whitington QC with Ms A Fleming appeared for the Practitioner.
Exhibit B2, page 7
7
5.
At the commencement of the hearing a "Statement of Agreed Facts" and an Agreed Book of
Documents was tendered by consent. 3 The Statement of Agreed Facts for the most part
repeated the significant facts as outlined in the Charge and in the Particulars of the Charge.
The additional facts were as follows:"1. The Practitioner is and was at all material times a lawfully qualified legal
practitioner registered as such and entitled to practice law in the State of South
Australia pursuant to the provisions of the Legal Practitioners Act 1981.
2. The Practitioner at all material times carried on practice in his own name as the
proprietor of the firm GEORGE MANCINI & CO of 43 Wright Street, Adelaide SA
5000.
3. NICHOLLS sought to appeal the decision of Mansfield J. and for that purpose
instructed the Practitioner to lodge all necessary appeal documents. A Notice of
Appeal was lodged. The Practitioner ceased to act for Mr Nicholls on 23 April
2009. Thereafter Nicholls represented himself on the appeal. The appeal was
dismissed by the Full Court of the Federal Court on 11 August 2009.
4. On 17 March 2009 the Practitioner requested the Registrar of the Court to re-list
the time for the conference on the basis that he was not ready to proceed and
needed more time to prepare the draft Appeal Book Index (it being an obligation
upon the Appellant in such proceedings to do so). The Registry re-listed the time
for the conference at 10:45 am on 30 March 2009. The Practitioner was advised
of the date and time of the re-listed conference.
5. Subsequently a directions hearing was listed before Finn J. in the Federal Court of
Australia on 3 April 2009. A solicitor from the Practitioner's firm appeared. Finn J.
made a number of orders and adjourned the directions hearing. The Practitioner
appeared before Finn J. at the adjourned directions hearing on 5 May 2009 when
3
Exhibit Bland B2 respectively
8
Finn J. sought that the Practitioner explain why he had not filed an affidavit, had
failed to appear on 30 March 2009 and failed to comply with the Rules of Court.
Bernie Walrut filed an affidavit purporting to explain why the Practitioner did not
attend on 8 April 2009.
6. The Practitioner as at 15 December 2010 had not paid the costs ordered to be
paid by him personally by the Federal Court of Australia. No challenge has been
made to nor any application made to set aside the costs ordered to be paid. Such
costs order was paid by the Practitioner on 21 December 2010.
7. By letter dated 30 January 2009 from the Assistant Commissioner of the
Australian Taxation Office to the Practitioner the Australian Taxation Office
undertook to meet his reasonable expenses incurred in complying with the
subpoena.
8. The sum claimed by the Practitioner as a "set-off" was not the subject of any order
nor was there any Bill of Costs in respect thereof. Any monies claimed by the
Practitioner against OCT concerning the proceedings in the Federal Magistrates
Court had not been quantified either by agreement with the OCT or a taxation of
costs in the Federal Magistrates Court.
9. On 2 October 2009 the AGS lodged a written complaint with the Legal
Practitioner's Conduct Board which complaint was forwarded to the Practitioner
under cover of letter dated 16 October 2009.
10. The Practitioner responded to the Legal Practitioner's Conduct Board by letter
dated 26 November 2009 and requested conciliation between the parties.
11. By letter dated 11 February 2010 the Practitioner requested the Legal
Practitioner's Conduct Board to conciliate or mediate."
6.
The hearing began on 6 February 2012 and was adjourned for addresses to 30 April 2012.
Addresses commenced on that day but further issues arose in the course of addresses and
9
the Tribunal advised the parties that pursuant to its obligations under section 82(4) of the
Legal Practitioners Act 1981 (the Act) it wished to consider whether it should enquire into
three matters relating to the conduct of the Practitioner not specifically the subject of the
Charges and with regard to which the Tribunal may require further evidence and
submissions. It was agreed that the matter would be further adjourned to enable the
Tribunal to formulate to the parties the issues that required further consideration.
7.
On 18 May 2012, the Secretary of the Tribunal wrote to the parties in the following terms. 4
"RE: TRIBUNAL HEARING 21 MAY 2012 — MANCINI
"I have been asked by the Tribunal to communicate with you relating to the issues
which arose at the hearing on 30 April 2012.
There are three issues upon which the Tribunal as part of its enquiry invites further
evidence and/or submissions as the parties deem appropriate:•
whether if the Tribunal were to find the facts alleged in paragraphs 1 and 2 of
the Charge to be proven, could it be said that proven conduct could amount to
"a contempt of Court";
•
whether the content and tone of the Practitioner's correspondence with the
AGS as set out in documents at Part C of the Amended Book of Documents
could amount to "unsatisfactory" or "unprofessional conduct" or could be taken
into account by the Tribunal with respect to its consideration of the whole of the
Practitioner's conduct?;
•
whether the circumstances and manner in which the Practitioner prepared
accounts with respect to his own purported claim to the AGL (sic) could amount
to "unsatisfactory" or "unprofessional conduct" or could be taken into account
generally in assessing the Practitioner's conduct.
Exhibit 7
10
In any event the Tribunal requires the Practitioner to produce his relevant files to the
Tribunal.
It is proposed to discuss these matters and the further progress at the hearing on
Monday 21 May 2012."
8.
The Practitioner then produced his file with respect to the subpoena for which he had
claimed costs against the ATO and the AFP.
9.
We will deal with these issues later in these Reasons.
10. On 27 July 2012 the hearing proceeded to its conclusion. On that date, the Practitioner gave
some further brief evidence but no other witnesses were called.
SUBMISSIONS
11. The Applicant provided a written outline of submissions and Ms Nelson also addressed the Court.
The Practitioner provided written submissions in relation to the discreet issue of the Federal Court
Order and Mr Whiting QC made oral submissions on his behalf.
A PRELIMINARY ISSUE
12.
During the course of the hearing another matter of some significance arose. On the first day
Mr Whitington QC provided the Tribunal with a short outline of his clients position. He
criticised the AGS for claiming a sum of $1,134 pursuant to the Order of Justice Finn. He
alleged:'What appears that has happened here, is that the AGS has ramped up costs because
they have been agreed that the Practitioner hasn't complied or paid, that the Registrar
has simply certified on the Bit/. 5
13.
During submissions on 30 April, Mr Whitington QC commented further:"It's like a magic pudding. How did $244 become $1100? I'll show the Tribunal how it
has become that and I will show the Tribunal how that was in flagrant breach of the
5
Transcript 06/02/12 21.17
11
Federal Court's Order, and how it cannot possibly be consistent with any model litigant
conduct." 6
14.
He also alleged that the AGS had "flouted" the Order of Finn J 7
15.
During the further hearing on the 30 th April 2012 with respect to the Tribunal's duty to
"enquire" further with regard to the conduct of the Practitioner, Mr Whitington QC said
"... so I would urge upon the Tribunal that if the Tribunal is going to range more widely,
it conduct an investigation into how the claim against the Practitioner was inflated in
this way and whether or not Registrar Christie's attention was ever draw to the term of
Finn J's Order." 8
16.
When the matter came back before the tribunal on 21 May 2012 at a Directions Hearing, Ms
Fleming of Counsel appeared for the Practitioner. She again raised the issue and asked
whether or not other practitioners ie solicitors at the AGS who were involved in
communications with the Practitioner, would be called to give evidence.
17.
The Tribunal understood that to be a request that the Tribunal call such witnesses pursuant
to its powers under section 80(5) or section 84(1)(a) of the Act.
18.
Neither the Board nor the Practitioner was prepared to call such further witnesses.
19.
When the matter resumed on 27 July the Tribunal formally announced that it had resolved
not to call any evidence of its own volition. 9
20. The Tribunal's reason for taking that position is that in its view, section 80(5) and section
84(1)(a) of the Act provide the Tribunal with a wide discretion which must be exercised
judicially. It is to be exercised in an inquiry (section 82(4) of the Act) into the "conduct of the
legal practitioner .... to whom the charge relates". In Obacelol° Wilcox J. said that such a
Transcript 30/4/12 150.8
Transcript 30/4/12 150.26
8 Transcript 30/04/12 158.16
9
Transcript 27/07/12, 166.35
Obacelo Pty Limited & Moon v Taveraft Pty Limited & Stone [1986] FCA 192 at para 73
6
7
12
discretion should be exercised "in further course of justice and in exceptional circumstances"
and "if the interest of justice so requires"
21.
11,
In our view it would not have been appropriate to exercise our discretion solely for the
purpose of conducting a "de facto" inquiry into the conduct of solicitors at the AGS. In our
view, the appropriate consideration was whether or not such witnesses would be likely to
provide the Tribunal with relevant evidence relating to the "conduct" of the Practitioner. The
Tribunal had before it the agreed facts and all relevant documents. The Practitioner was to
give evidence at the Tribunal and in addition, all relevant correspondence between the
Practitioner and the AGS was before the Tribunal. The Tribunal formed the view that it is not
within the proper conduct of the enquiry with which the Tribunal is charged for it to
commence to enquire into the basis on which the Bill of costs was drawn. That is not an
issue relevant to this enquiry.
22.
After due consideration, the Tribunal formed the view that evidence from a solicitor at the
AGS was not likely to assist the Tribunal in any relevant way in determining the charges
relating to the conduct of the practitioner and the Tribunal should not exercise its discretion in
this case.
THE EVIDENCE
23. The only oral evidence led was from the Practitioner. The Practitioner also produced his file
relating to the subpoena issued by the Deputy Commissioner of Taxation against the
practitioner seeking production of certain documents in the practitioner's possession relating
to dealings between the practitioner and Arthur Christopher Nichols. That file included the
tax invoice subsequently generated by the practitioner with respect to work done by him on
that file which costs he considered were payable by the Deputy Commissioner of Taxation.
11
Obacelo (supra} para 76.
13
THE RELEVANT LAW
24.
Section 5 of the Act defines "unprofessional conduct" as:
"In relation to a legal practitioner means
an offence of a dishonest or infamous nature committed by the legal practitioner in
respect of which punishment by imprisonment is prescribed or authorised by law or
any conduct in the course of or in connection with practice by the legal practitioner
that involves a substantial recurrent failure to meet the standard of conduct
observed by competent legal practitioners of good repute."
25.
Section 5 of the Act defines "unsatisfactory conduct" as:
"In relation to a legal practitioner means conduct in the course of or in the
connection with practice by the legal practitioner that is less serious than
unprofessional conduct but involves a failure to meet the standards of conduct
observed by competent legal practitioners of good repute."
26.
While the Charges specifically allege unprofessional conduct on the part of the practitioner,
in our view, it is for the Tribunal to determine as to whether the conduct in question, if
proven, ultimately falls within the definition of either "unprofessional" or "unsatisfactory"
conduct.
Count 1
27.
The admission in the Response and Agreed Facts are sufficient to prove prima facie Count
1.
28. The Practitioner put forward a defence to this charge based upon a submission that the Bill
of Costs, the Certificate of the Registrar (ABD 39) and the Order of the Registrar made on 10
September 2009 (ABD 50) were not drawn within the authority of the order of Finn J of the 5
May 2009.
14
29.
This "defence" was not referred to by the Practitioner in any of the documents in Exhibits B2
and B3 or the other Exhibits nor is it mentioned in the Practitioners responses to the Board
dated 16 October 2009, 12 26 November 2009, 13 11 February 2010 14 nor 1 March 2010 15 .
30.
At the relevant time the Federal Court Rules provided for a particular procedure to be
followed by a party wishing to obtain an order for payment of costs. The following is a
shorthand version of what occurred in this case taken from the Agreed Facts and the
evidence of the Practitioner:5 May 2009 - The AGS wrote to the Practitioner seeking $244.20 within fourteen
•
days. The Practitioner did not respond.
•
18 June 2009 - The AGS filed a Bill of Costs for the sum of $1,134 which was
served on the Practitioner the next day.
28 June 2009 - The AGS filed an affidavit confirming service of the Bill of Costs
•
upon the Practitioner.
•
21 July 2009 - The Registrar of the Federal Court wrote to the Practitioner advising
him of his rights to file and serve a Notice of Objection pursuant to order 62, subrule 46(3)(c) and of the consequences of not doing so.
•
The Practitioner acknowledged receiving that letter for the Registrar. He did nothing
about it in terms of filing an Objection.
•
On 18 August 2009 in the absence of an objection from the Practitioner, a
Certificate of Taxation was issued by the Registrar certifying the costs payable by
the Practitioner at $1,134. 16
12
13
14
15
16
Exhibit
Exhibit
Exhibit
Exhibit
Exhibit
B2,
B2,
B2,
B2,
B2,
page 64
page 68
page 66
page 71
page 39
15
•
On 19 August 2009 the AGS served a copy of the taxed Bill of Costs with a letter
which contained the following:
"2 We have sought and obtained the following instructions from our client in
relation to the request you made to it during our telephone discussion.
2.1
Our client is not willing to suspend its demand to you to pay the sum
of $1,134 within fourteen days as set out in our earlier letter of even
date. Accordingly you are requested to pay the sum owed within
fourteen from today's date.
2.2
Our client is not aware of any monies owed by it to you in relation to
a subpoena. If such monies are owed to you, which is not admitted,
then these relate to some other matter. Consequently our client is
not willing to "off-set" such monies against the sum of $1,134 which
you owe to it in relation to this matter.
2.3
Our client has instructed the AGS to represent it in relation to all
aspects of the above matter, so it is not willing to engage in direct
communication with you concerning any issues connected with this
matter, including the issues of the payment of the sum of money
owed to it by you pursuant to the orders of Finn J. Accordingly
please contact me directly regarding any issues you would like to
discuss in relation to this matter.
3. Our client notes that you have failed to respond in any way to our
correspondence of 5 May and 3 June seeking payment of the costs of the
order of Finn J. Our client notes in particular that you did not seek to
personally contact the AGS by telephone to resolve the question of these
costs nor did you arrange for another member of your firm or one of your
support staff to do so or rather you only contacted the AGS after being
16
served with the Bill of Costs which our client had to prepare consequent
upon your failure to acknowledge or in any way respond to our
correspondence of 5 May 2009 and 3 June 2009.....
5. In the circumstances we confirm that our client requests that you pay the
sum of $1,134 within fourteen days of today's date."
•
The Practitioner responded by telephoning Mr Camilos at the AGS on the 19 August
2009 and had what he described as a "lengthy conversation" with him
17 .
Their
discussion revolved around whether the practitioner may have a set-off against the
AGS costs claim. The practitioner acknowledged in his evidence that Mr Camilos
made it quite clear during that conversation that in his view, there was no possible
set-off available to the practitioner. 19
•
On 4 September 2009 the AGS wrote to the Registrar seeking an order pursuant to
Rule 62(45)(3). That order was made on 10 September 2009 19 . Relevantly that
order contains endorsements pursuant to sub-section 35A(5) of the Federal Court of
Australia Act which set out the procedure for a review of the Registrars decisions
and the time within which any application could be made. No application was made
and there is no evidence to indicate that the Practitioner considered reviewing the
decision.
31.
As we understand the argument, there is no criticism (nor in our view could there be) of the
procedure adopted by the AGS which led to the order of the Registrar of 10 September
2009.
32.
Mr Whitington QC submitted that the Certificate of Taxation of the Registrar dated 18 August
2009 "does not direct payment of the money referred to in the Certificate it is only an order of
the court made under Order 62 Rule 45(3) that directs the payment of the money. With
i
19
Transcript 6/2/12 at 92.19
Transcript 6/2/12 at 92.28
82 page 50
17
respect, we agree but such an order was made by the District Registrar on 10 September
2009. 2°
33.
Mr Whitington QC also submitted that the cost items that were listed on the draft Bill of Costs
filed by the AGS contained items which did not properly fall within the relevant part of the
order of Finn J. made on 5 May 2009, namely that the Practitioner "personally pay the costs
thrown away of the relisted Appeal Book Index Settlement appointment of 30 March 2009 at
10:45 am".
34.
Mr Whitington submitted
"25. The Bill of Costs drawn by Australian Government Solicitor (see ABD 34)
only strictly complied with the terms of the Order of Finn J. as at Item 1. In
other words the Bill of Costs for some reason which has so far been
unexplained in the evidence, went well beyond the terms of the Order of
Finn J. as would have been obvious to the legal practitioner or clerk within
Australian Government Solicitor who drew it."
35.
We have already referred to Mr Whitington QC's submission that the AGS had "ramped up"
the amounts of costs claimed but, in our view such a submission is contrary to the evidence
of the Practitioner.
36.
When asked about his reaction upon receiving a letter from the AGS dated 19 June 2009
enclosing the draft Bill of Costs the Practitioner responded:"A: l read it, I didn't respond to it. I thought "they're now taking this approach
again". I didn't understand why it was necessary to take this approach. I
saw that it was a substantially larger amount. That's what happens I
suppose. At that time I was having the view that that's what happens when
you don't do the deal that's proposed and it might well be that the Bill of
Costs is somewhat much large than it might have been when first formed
20
82 page 50
18
and I didn't think any more about it. I looked at the items, I thought the
quantum and the attendance seemed to be legitimate in terms of what a
solicitor would have done and there's no need to take any challenge to it, nor
would it have been necessarily appropriate given that the taxing minutes of
costs is not very efficacious."
Q: If I understand, you didn't place any particular store on the fact that the
amount claimed and granted of $244.20 to the amount of $1,134.
A: No.
Q: Nor did you, as I understand you, think that you weren't obliged to pay this
sum of money. Is that what you're saying?
A: That's right.
Q: At least on the face of it.
A: Yes." 21
37.
We reject that part of the submission. The practitioner on his own evidence considered the
claim for costs reasonable at the time and there is no evidence before the Tribunal to support
that submission by the practitioner's counsel.
38.
It was Mr Whitington QC's submission that the inclusion in the Certificate of Taxation of items
2 and 5 22 was outside of the powers conferred upon the Registrar to tax under Schedule 3 of
the Federal Court Rules and Order 46 Rule 7AA.
39. This submission invites this Tribunal to carry out a review of the taxation and ignore the
sealed Order and Certificate of the Federal Court which are before us by consent. The
Federal Court of Australia is a "superior court of record and is a court of law and equity" by
virtue of section 5(2) of the Federal Court of Australia Act. This Tribunal's jurisdiction is
limited by the terms of the Act.
21
22
Transcript 6/2/12, page 43.3
Exhibit B2, page 34
19
40. Section 84(7) of the Act is in the following terms:"In the course of an enquiry, the Tribunal may
(a)
receive in evidence a transcript of evidence taken in proceedings before a
court of any State (and any exhibits referred to in such a transcript) and
draw any conclusion of fact from the evidence that it considers proper
(b)
adopt, as in its discretion it considers property, any findings decision reason
of judgment or reasons of judgment, of any court that may be relevant to the
proceedings."
41. Even if the submission that the Registrar had exceeded her powers is correct, the orders
were voidable not void (Official Receiver in Bankruptcy v Nestles Pty Ltd (In Liquidation)
(2000) 99 Federal Circuit Court 554).
42.
In our view this Tribunal has no power to go behind the sealed Order of the Federal Court.
The Practitioner has not at any time attempted to exercise his right to review this Order.
43.
After consideration of all the evidence and upon noting the agreed facts, the Tribunal finds
that Count I is proven.
Count 2
44.
Count 2 alleges that the practitioner engaged in conduct in an attempt to defeat or avoid a
cost order made against him personally by the Honourable Justice Finn of the Federal Court
of Australia on 5 May 2009. The particulars are recited at paragraph 2 supra.
45.
A consideration of Count 2 involves an analysis of the conduct of the Practitioner following
his receipt of the facsimile from the AGS dated 5 May 2009 which contained the initial claim
of $244.20.
46. We begin by saying that in our view any practitioner who finds him or herself the subject of a
personal costs order from any Court is required to deal with the situation expeditiously. A
practitioner is in a different position to any other person who is the subject of an order from
the Court;
20
47.
It has not been suggested at any stage by the Practitioner that he was unable to pay the
claimed sum of $244.20 or $1,134.00 at any time since 5 May 2009.
48.
The agreed facts set out the chronology of events fully after the initial request for $244.20.
We will not repeat the particulars.
49.
In our view also, it is relevant to consider the practitioner's state of mind when he read the
letter from the AGS of 5 May 2009. In his evidence he stated that he considered the costs
sought were in his view an appropriate sum and that he "resolved to attend to it in due
course" It was a small amount. I didn't think it would be something that needed
immediate attention. I had in the back of my mind that at that time there was this issue about
my expenses on the subpoena in the Federal Court and I could raise that and I thought "Ill
deal with this in due course". I had a lot on at the time, as usual, at this particular time my
practice was extraordinarily busy'. 23
50.
As to the request contained in that letter for payment within 14 days the Practitioner further
said in his evidence:"I put it to one side. I thought that the time limit was unilateral and somewhat
extraordinary and that I'd be attending to payment in due course, or raising with
Mr Camilos when I had the chance to do so, that whilst there was an order for
payment I could speak to him because we have had dealings in the past, not just
over this matter but when he was a practitioner in the DPP and we got on well
and we were able to communicate so I thought I'd be able to organise something.
I had it again still in the back of my mind about talking to him about the other
matter." 24
23
24
Transcript 6/02/2012, page 41.06
Transcript 6/02/2012, page 41.34
21
51. When asked to explain why he thought that the claim and demand for payment were
"extraordinary", he responded 25
"A:
First of all, I've always practised in the courts of this State or elsewhere,
where you pick up the phone and you talk to someone, if you can, and if
you've got time and you do that; you chat to lawyers when you can, you
might see them in the coffee shop, you might see them on the way to court,
you might see them at court. You talk to people and you have open lines of
communication and that's what I naturally assumed was the sort of
approach that was always taken.
Q:
Except you didn't take it.
A:
Well I didn't take it — I didn't ignore the letter because I read it, I didn't do
anything in response to either letter.
CHAIRPERSON:
A:
That's not ignoring it?
Well it required me to make payment and I understood I would make the
payment. I didn't see it as being a letter in either terms of paying within 14
days, that meant they were going to take any further action necessarily Your
Honour. That was a request, it was not a timeline that I understood was
required of me.
)00;Q: Did you think that that order meant that you could comply with it when you
got around to it?
A:
No, it meant that I was to pay the order for costs and I wanted to pay it or I
wanted to adjust it, but I wanted to adjust it and I had in mind they would
want to do, or at least try to do that. At the end of the day I didn't think it
was a lot of money for them, there would be a lot of money for me in terms
25
Transcript 6/02/2012, page 77.30
22
of my costs in answer to the subpoena but I wasn't terribly interested in that
if! could write it off and fix it all up and move on."
52.
The practitioner did not respond at all to the letter of 9 May 2009.
53.
On 3 June 2009 the AGS wrote once more to the practitioner requesting payment by 4:00
pm on Friday 5 June and indicating that if payment was not received that the AGS would
refer the matter back to Finn J. When questioned as to his response to that letter. the
practitioner's evidence was:"A: It was 3 June and "paid or otherwise we'll take action". I found that approach
now to be somewhat extraordinary because in dealing with practitioners one
usually has an approach that is usually you get on well in Adelaide, you
speak to people, you liaise with people, you work together in doing things
and that's how I've worked and always worked in all my litigation over the
years and don't need to seek to necessarily take the cudgels to the ultimate
degree."
54.
It is common ground that again, the practitioner did not respond to that letter. In our view,
the practitioner's position and his continued lack of response at this point was completely
unacceptable. His inaction, in our view, left the AGS with little choice but to proceed to tax
its costs. Despite asserting subsequently that he was owed money arising out of his
responding to a subpoena issued by the ATO he did not raise the issue in response at that
point or make any effort to quantify the costs that he perceived to be owed to him. He
continued to ignore the communications from the AGS.
55.
On 19 June 2009, the filed Bill of Costs was served on the practitioner and on 29 July 2009,
an affidavit in relation to the Bill of Costs was served on the practitioner.
56. In response to a further letter sent by the AGS to the practitioner on 19 August 2009 in which
the AGS requested payment of $1,134.00 within 14 days, the practitioner finally responded
by way, first of a phone call on 19 August 2009 in which he asserted that he was owed a
23
sum by the ATO for costs he had incurred in responding to a subpoena. He undertook to put
in writing details of his claim by 1 September 2009. He failed to abide this promised timeline.
57.
It was not until 18 September that the practitioner next made contact with the AGS. The
Practitioner responded to that letter by facsimile dated 18 September 26 proposing, inter alia,
that each party "bear their own costs" which he agreed with his Counsel was intended to
convey:"That if your Costs order is satisfied by virtue of the liability of the Australian
Taxation Office to me. That proposal is made without prejudice." 27
58.
He did not quantify at that point the sum that he asserted was due to him by ATO but
asserted that the quantum of work carried out by him with respect to the subpoena issue was
such that his own costs exceeded the costs being claimed against him by the AGS.
59.
When asked in evidence as to why he had not abided the previously promised timeline the
practitioners response was
"A. No doubt there are reasons for that associated with my workload and nothing else."
60.
On 24 September 2009, in a letter sent from the AGS to the practitioner that proposal was
rejected.
61.
On 1 October 2009, the practitioner responded to that letter by a facsimile requesting to
know why his proposal had been rejected, requesting that the matter be referred to Mr
Cannilosi "superior" and asserting that he had separately written to the ATO to request
payment of his expenses and asserting a set-off. 28
62.
As to that, in cross-examination, the Practitioner said:"Q: You've got Mr Camilos saying 'Well I'm not agreeable to that", that's correct,
isn't it, or "my client's not agreeable to that"?
27
Exhibit B2, page 52
Transcript 3/2/2012, page 48.32
28
B2 page 61.
26
24
A: Yes
Q: Didn't that put you in the situation of having to comply with the personal
costs order and pursue your remedy against the Australian Taxation Office's
separately?
A: It may have put me into that position. That was one of the avenues.
Another avenue might have been that if they were going to enforce by
pursuing judgment then one would have a resolution through another
mechanism.
Q: What do you mean by that?
A: You sit down and you say "Listen, you owe me this and I owe you that."
Q: But you're not saying for one moment are you, that if they took enforcement
proceedings and applied for judgment, applied to enforce the personal costs
order against you, but somehow in the course of those proceedings you'd be
able to argue to the court that you are entitled to some trade-off for
something else?
A: No, I was of the view that it could be settled mediated discussed
commercially involved.
Q: But Mr Camilos did not share that view, did he?
A: Yes, but it's a view that can change, it's a view that can be changed and I
was, that I was seeking to change.
0: What by forcing one to take enforcement proceedings?
A: I didn't force him to take enforcement proceedings, but I wanted them in a
sense to approach the matter in a realistic commercial
11
63. Given that the practitioner's proposal had been rejected by letter of the 24 September, in our
view it should have been patently clear to the Practitioner even before his facsimile to the
AGS of the 1 October 2009, that the AGS (or its clients) were not prepared to accede to the
25
Practitioner's proposal and that the AGS wanted the costs orders paid. Despite this, the
practitioner made no effort to pay the costs.
64.
On 24 September 2009 29 the AGS advised the Practitioner that if the money were not paid a
complaint would be made to the Legal Practitioner's Conduct Board. The Practitioner
expressed his response to that as follows 39
"I thought that was an extraordinary response in the circumstances in which I had
been discussing matters with him, and even if my proposal had been rejected and
they were seeking enforcement of the order as set out in item 4, it was a matter of
enforcement again, it's something one could commercially resolve and that why
would you want to go to this length of taking it up to the Conduct Board."
65.
On 30 September 2009, by facsimile to the ATO, the Practitioner quantified his costs in a
general way in relation to the subpoena issue as being $2,000.00. 31
66.
The Practitioner still did not make any effort to pay the costs.
67.
On 2 October 2009 the AGS made the complaint to the Board. That complaint was sent to
the Practitioner on 16 October 2009. 32
68. On 26 November 2009 the Practitioner wrote to the Board asserting, inter alia:
•
33
Mr Camilos' letter "setting out the history of the matter is incomplete in material
respects. It provides a gloss in respect to certain matters. I dispute other matters."
"It is clear that for no apparent reason he does not want to communicate with me in
any meaningful way about the issues. I have had to take that up with the head office in
Canberra"
"I thought I had made a perfectly reasonable proposal for set-off and
nothing has been explained about why that cannot be achieved. That is why
29
39
31
32
33
B2 at page 58
Transcript 3/02/2012 at page 50.7
B2 at page 79 - p 3
Bn page 64
B2 page 68
26
conciliation would be appropriate".... "Furthermore, his assertions that there is no basis
for a set-off is unfounded and not explained or explored"....
•
"The fact of the matter is that I owe the Commonwealth money. The fact of the matter
is the Commonwealth owe me money". That should be resolved"...
69. The Practitioner was questioned about this response as follows:
"Q: Then on 26 November 2009 at page 68 of B2 you wrote to the Conduct
Board and you say on the first page of the penultimate paragraph you
thought you had a perfectly reasonable proposal to set-off but nothing has
been explained about why that can't be achieved. Right?
A: Yes
Q: So if there is no legal or equitable set-off why did you believe that the AGS
had to explain to you or anyone else a reason for not complying with the setoff list?
A: I asked for an explanation, that's all I asked for. I asked in my fax to Greg
Camilos on 1 October'? would like to know why my proposal has been
rejected".
Q: But he had told you hadn't he in a previous letter in August 2009 and he told
you on the telephone conversation, there is no commercial relationship
between the representative clients, there is no set-off available and what's
more my client won't agree to it.
A: Yes I was wanting to seek to resolve the matter commercially which would
have been, and I was still maintaining that position then before I quantified
an invoice that would have been to the substantial advantage of the Tax
Office and to my disadvantage and I was prepared to concede that. That
would have been in everyone's interest because I thought it would bring an
27
end to the matter. In other words, I wasn't so interested in pursuing my
expense claim if we could achieve that."
70.
The Practitioner's position had no legal basis and in our view has been inconsistent. There
could be no legal or equitable set-off in circumstances where the set-off involved only one of
two other parties.
71.
In his cross-examination 34 the Practitioner admitted that Camilos had probably told him on 19
August that any concept of a "set-off' was not appropriate given that the costs were awarded
to both the AFP and the Australian Taxation Office.
72.
The Practitioner conceded in his evidence to the tribunal that the traditional notion of set off
did not apply to the situation that he found himself in and said
"A:
35
Well it was ultimately not to say 'right", in the sense of its not to say that the
traditional set-off would be, which is "here's my dollar value" and you set-off
against someone else's dollar value." "You've got a claim against me for the
amount of costs, $1,134. I have a claim for expenses in a related context
concerning the very same person Mr Nicholls and another party." It is more
than that "wouldn't it be just better for each party to walk away?"
73.
The Practitioner has denied the allegation made by Camilos in the letter of complaint to the
Board that he "made this excessive and highly unsubstantiated claim for expenses in relation
to the subpoena in order to give himself the excuse that he has a set-off to the personal
costs order made against him by Finn J. and thereby having to avoid to pay those costs". 36
74. We are not prepared to make a finding along those lines. Nevertheless in our view the
Practitioner's explanation for not paying the sum due by him after about August 2009 was
"disingenuous" and evidenced a complete lack of appreciation of his position as an Officer of
the court. It is also concerning that he had not previously raised this costs issue despite the
Transcript 03/02/2012, page 92.32
Transcript 3/02/2012, page 52.29
36 Transcript 3/02/2012, page 52.03
34
35
28
numerous communications he had received from the AGS requesting that he pay the costs
ordered by Finn J.
75.
In a letter to the Board dated 11 February 2010 the Practitioner said: 37
"The bald assertion by him (Camilos) that there is no such set-off is wrong and I
cannot know the basis upon which he asserts it and it is apparent that he either has
not made the enquiry as I have requested that he undertake or that he does not
,
appreciate the true situation."
76.
The Tribunal has decided that it is not appropriate to consider whether the practitioner's
course of conduct in this case amounted to a "contempt" in the legal sense of the word .That
is something that could only, in the Tribunal's view, be determined in a proceeding in the
Federal Court once full procedural fairness had been accorded to the practitioner with
respect to such a charge and once the matter was fully canvassed by the court with the
appropriate burden of proof applying
77.
Nevertheless Lased on the undisputed facts and based on the practitioner's evidence the
tribunal is satisfied on the balance of probabilities that the practitioner showed a complete
disregard for Justice Finn's order and a lack of respect of the Federal Court and a senior
officer of that Court. He went to great lengths to avoid complying with an unambiguous order
of the Court.
78.
79.
In our view, COunt 2 insofar as it relates to a period after August 2009 is proven.
THER
ATTER
80. We have already referred to the three further matters that the Tribunal considered should be
the subject of nquiry and which were the subject of further evidence particularly on 27 July
2012.
37
B2 page 66
29
(a) Contempt
81.
The tribunal is not prepared to make findings in that regard other than as set out in
paragraphs 76 and 77 of this decision.
82.
The Practitioner's evidence was that he at no stage considered that a failure to pay the costs
or indeed his "conduct at the time" 38 constituted contempt. He denied that he made a
"conscious decision to flout a court order". 39
83.
In answer to questions from the Chairman the following appears in the evidence:-
40
And your position, is as I understand it, and you correct me if I am wrong,
that you did resolve not to pay the costs and I suggest obey the order on the
basis you felt that you were owed a greater sum of money and that there
should be some — to use the expression that has been used in this case in a
non-technical sense, a "set-off against it. You tell me if I'm wrong about
that.
A:
Well I had in mind not that I wouldn't pay the order but indeed that it would
be paid by having the adjustment of the set-off made because that would be
a satisfaction of the order. What I believed is I had a right, as a person
subject to a court order, to negotiate that question on a commercial basis."
84.
In our view a finding of contempt in the circumstances depends upon whether the
Practitioner's failure to pay the costs was wilful. In World Netsafe,
41
Spender J said that
requirement:
"will not be made out unless it can be shown that the person the subject of the order
had the capacity to comply with it, in whole or in part. A truly impecunious person
88
89
40
4/
Transcript 27/07/2012, page 169.36
Transcript 27/07/2012, page 171.04
Transcript 27/07/2012, page 171.15
Australian Competition & Consumer Commission v World Netsafe Pty Ltd (2003) 127 FCR 542
30
who does not make a payment which a court has ordered him to pay his not guilty
of contempt in my opinion." 42
85.
It has not been suggested in this case that the Practitioner did not have the means to pay the
sums required of him at any time until he did pay in December 2012.
86.
However, we accept that the Practitioner did not intentionally set out to completely disregard
the Order. In our view he undertook a misguided effort to deal with his situation.
(b) The tone of the Practitioner's communications with the AGS.
87.
In the letter of complaint from the AGS to the Board 43 an allegation was made that during a
telephone conversation with a solicitor at the AGS, Mr Paul d'Assumpcao (at the time Mr
Cannilos was on sick leave) the Practitioner became "very angry at the fact that he'd been
served with a Bill of Costs and he became very abusive", so much so that Mr d'Assumpcao
had to terminate the call.
88.
When that was put to him, the Practitioner denied that he was "very angry at being served
with a Bill of Costs" and he said that he expressed his concern "in direct terms", and that the
AGS were pursuing the matter without perhaps "communicating with me in a manner that I
thought a practitioner could be communicated with." 44 Thereafter the following appears in
the transcript45
How would you describe your mood; they allege you were angry, how would
you describe it?
A:
Direct and forceful.
Q:
It is alleged that you became very abusive.
A:
No. I don't know what he means by that. I don't know Paul d'Assumpcao. I
was concerned, in fact and I — because this doesn't set out the conversation.
ACCC page 553
B2, page 12.24
44 Transcript 27/07/2012, page 181.3
45 Transcript 27/07/2012, page 181
42
43
31
/ have a clear memory of parts of that conversation because I had received
a letter from the AGS which was purportedly from Mr Camilos, but he had
not sent the letter or signed it and yet it was signed in his name, I was
concerned that I was being given a letter signed by a lawyer who was not in
the office and had not been in the office at the time and had sent the letter
and I thought it was somewhat misleading to suggest that Mr Camilos had
signed off on this letter, so I was concerned about that. I ....
Q:
What was your concern about that? Did it matter who signed the letter that
came out of the AGS's office?
A:
Yes, because the letter was, I thought, therefore from Mr Camilos, right, and
he was signing it, but he wasn't there, as I understood it at —
MEMBER MASON
Q:
But was it signed on his behalf?
A:
I don't know, I didn't understand. I understood it was signed by him and it
was his letter, but he wasn't, in the office, so the letter didn't indicate to me
that anyone else was involved necessarily in the matter, so I expressed my
concern about that. I wanted to speak to what they were seeking to pursue
in terms of the time limits to discuss matters, to negotiate matters. There
was an element of frustration about that because they were making it clear
they didn't want to engage in that. Mr d'Assumpcao was not the person with
the conduct of the matter. I wanted to speak to someone who could take
instructions or might be prepared to discuss matters with me, so — I was
never abusive. I don't know what's meant by that. I mean I don't abuse
people in a phone call, or to their face. I might be expressing myseff in a
direct fashion and indeed Mr Camilos spoke to me about that conversation
subsequently and I think in another conversation that I had with him Mr
32
Camilos was "I would describe, just as forceful and direct as myself' and I
reflected with him because we had a reasonable rapport at the time, that he
was perhaps being just as direct and forceful with me as I had been with Mr
d'Assumpcao, and he, I think, pulled back and understood that, yes, indeed
that was probably the case but, I mean he didn't in those subsequent
conversations and this is the first time that anyone has suggested that I was
abusive."
89.
The Practitioner agreed that Mr d'Assumpcao had terminated the call and said that he
thought that occurred because sometimes in his experience practitioners don't want to speak
on the phone anymore and hang up. 46
90.
The Practitioner was questioned about a further allegation in the letter of complaint that on
the same day he said to the AGS's Legal Assistant that "we had to stop treating him like a
litigant instead of a practitioner and that we were to take no more action in relation to the
Certificate of Taxation until he'd spoken with Mr d'Assumpcao's supervisor.
47
91. The Practitioner's response when asked about that was:- 48
Well / asked something to the effect of "I don't think I should be treated as a
litigant, but rather as a practitioner, that I was asking for that sort of
consideration. I just found the approach somewhat surprising and
extraordinary. In all my years of litigation in all fields I have not been treated
in such a fashion and I don't think I made comment about that at the earlier
hearing. I was asking that no further action be taken until I'd spoken to the
person in charge of the Adelaide office. So I was asking because there
were these time limits that were imposed, I was asking for the opportunity to
speak to the supervisor before any action was taken."
"
47
48
Transcript 27/07/2012, page 183.17
B2 15.24
Transcript 27/07/2012, page 184.20
33
92.
The Practitioner made a similar allegation in a later telephone conversation with Camilos.
He suggested that there was a "professional courtesy" that needed to be "extended" to him."
93.
There are other passages in the evidence where the Practitioner professed indignance at the
attitude he perceived of the AGS towards him.
94.
In our view all the evidence points to the Practitioner's professional indignation at the
perceived attitude of the AGS being completely unfounded. In our view his attitude to the
AGS was unnecessarily arrogant, inappropriate and completely unjustified. There is no
evidence to support the practitioner's view that he was being dealt with in a professionally
inappropriate or unreasonable way by the AGS.
(c)
95.
Tax Invoices
On 24 September 2009 the AGS had written to the Practitioner setting a deadline for the
payment of $1,134 ie "by no later than 4:00 pm (CST) on Friday 25 September 2009".
96.
As we have pointed out it was not until 30 September 2009 (over four months after the initial
request of the AGS that he pay $244.20) that the Practitioner first put a proposition to the
AGS in the sense of quantifying his claim with regard to his expenses relating to the
subpoena. 5° The Practitioner claimed the sum of $2,000 and gave a short resume of the
work that was alleged was covered by that fee. It was not in our view, helpfully
particularised. At that time the Practitioner had an outstanding account to Mr Dart of
Counsel (as he then was) for work he had done in February 2009 in the sum of $907.50. Mr
Dart had rendered that account in February of 2009. 5 '
97.
On the face of the document of 30 September 2009 it would seem that $2,000 included the
sum owed to Mr Dart. In evidence, the Practitioner explained how that figure was arrived at
as follows:-
49
59
51
Transcript 27/7/2012, page 185.17
B2, item 3
B2 page 78
34
Well they wanted me to render a Tax Invoice, I put in $2,000 to — as a quick
resolution. It was my bid they wanted me to render a Tax Invoice, that
meant a GST component but that also meant that oh well, /I/ actually now
charge them for what I've done. 52
Q:
Right
A:
In a sense or asked to be paid. I don't think I was charging him but I asked
to be paid for what I then could identify. So I was — sought to at least
identify it to the substantial blocks of time."
98.
The Practitioner responded by facsimile to the AGS on 1 October 2009 indicating that he had
been away from Adelaide until 28 September and went on to say:"/ must say I now find the approach in this matter to be somewhat concerning.
I would like to know why my proposal has been rejected. I'd also like to have that
reviewed. In the light of the history of this matter please refer this to your superior.
I have separately written to the Australian Taxation Office to request payment of my
expenses in answering the subpoena. I am concerned that there is the threat to report
me to the Conduct Board. I have a set-off. That is a proper reason for non-payment. It is
not unprofessional.
I would also like to know why that threat is now being made. I would like to know who is
the decision maker about that and I would like to seek a review of that.
There is nothing in what I have done that amounts to unsatisfactory conduct or
unprofessional conduct. ...."
99.
The AGS requested a Tax Invoice from the Practitioner and on 9 March 2011 (we note five
months later) he faxed such a document. 53 In total it was for $3,080 including GST.
52
53
Transcript 27/7/2012, page 177.12
B3.5
35
100. When asked in chief by his Counsel as to how he went about "preparing this Tax Invoice" the
Practitioner said
"A:
Well, / was asked to prepare a Tax Invoice by the Tax Office so I reflected
on the work that I'd done in each of the items. So in item 1, I had a look at
the subpoena, a look at the transcript and materials that had been provided
to me by my client, I think it was about 50-odd pages, in the Federal Court
so I estimated that to be an hour. I charge at $400 an hour which is not my
hourly rate, it is less than my hourly rate and I then looked at Item 2, in terms
of that reflected on the volume of materials, the work I had to do in checking
the volume of materials both the hard copy and the computer version of the
file, and making sure I had to read every communication from Mr Nicholls, of
which there were many, to make sure I was satisfied that there was not
anything to do with the question to do with the bankruptcy, so I estimated
that to be two hours work. In item 2 it was the attendance my attendance, in
the Federal Court. That was an error which I corrected subsequently, but
that was in respect to my attendance and so there was submissions made,
again attending there, formulating my views in preparation. In item 4 I
prepared the letter to Mr Dart which is in the book and I attended upon him, I
estimated that in items 4 and 5 and in preparing that letter I had to go
through my materials and I compiled all of that myself. And then in item 6
whilst I put "preparing affidavit" that's an error but after there was the
conclusions of proper terms of the subpoena I made sure I went through all
of my materials over again so that I was fully satisfied of that and I estimated
that to be two hours and charged accordingly."
101. According to the Practitioner's evidence, that initial Tax Invoice included two errors. The
following were incorrectly included:-
"Item 3
Item 6
$400.00
Attending Federal Court hearing 19 February 2009 Preparing affidavit and further checks of my hard copy
and computer copy of file; 2 hours
$800.00
(insofar as it refers to the
affidavit)"
102. The Practitioner was asked in cross-examination why the error concerning the preparation of
the affidavit was made. He said:Because I thought I had prepared an affidavit but I made a mistake.
Q: Did you not check your records before you did the invoice?
A: I checked what I could in terms of that and I had a belief that I'd prepared an
affidavit." 54
103. He said he was "relying on my memory". 55 He said that he did not go back through his file
before he prepared that document and "was relying on my memory and an awareness of the
volume of material".
104. He was then asked by the Chairman why he set out his account in such an itemised way in
that event and he then gave what, in our view, was an extraordinarily convoluted answer;
"A: Well firstly they wanted me to render an account. I thought I'd set out the work I'd
done in the, the best global item I was formed so it may not even reflect all the work
and I thought lid fix an hourly rate which was not my hourly rate, it's less than my
hourly rate, I would identify a time frame which is probably conservative. Say that,
for example, item 1 perusing the subpoena and the transcript of materials at the
Federal Court and related material, "1 hour", that was as a result of receiving the
subpoena speaking to the client about the subpoena and what it was about and him
supplying me with the transcript, I think by email, of the Bankruptcy proceedings
and reading them and then reflecting on what the subpoena and the issues were
54
55
Transcript 6/2/12, 61.34
Transcript 27/7/2012, page 174.33
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and so an hour was a very fair and generous statement of the time taken to do that.
Secondly, checking the hard copy of the file and the computer version of my file that
was taking 2 hours, that — only did I did that at night, it was after hours. I then had
an understanding of what the client was asserting. I was very conscious that this is
a very very — how can I say — particular client who has a long controversial history
of litigation and it required very particular care to go through the file because he was
making an assertion he'd communicated something to me and I didn't have that in
my mind and I wanted to see where that could possibly have arisen as I had my
doubts about that because he was suggested that he'd told me that he'd been
served with a Bankruptcy Notice and I had no understanding that he'd been the
subject of any Bankruptcy proceedings at the time and for him to say that there was
some email about that — and he's preferred communication was email — it meant I
really had to go through everything I had about that material. So it was a subpoena,
I wanted to make sure I got it right at least in terms of anything to do with those
sorts of proceedings and made sure I went through an extensive amount of material
for that purpose. So two hours was based on my memory. I didn't keep a record of
it but that reflected both the fact that I have a clear memory of doing it, I had a clear
memory of doing, I don't think I received a subpoena in the past so it was an
extraordinary event and it reflected the fact that there was a lot of material to go
through. So two hours; again, might have been 15, 20 minutes, half an hour short of
the actual time spent. So I wanted to fix something for the tax office solicitor to
have an understanding as to the work that was done what my claim as and how I
quantified my claim. At the end of the day it was for them to respond. There was
no agreed hourly rate, there was no retainer agreement, it was not the client, it was
just a claim. They could reject it, they could negotiate I could ask for $20,000. I
wasn't going to ask for $20,000, I was going to ask for what reflected what! thought
38
was a reasonable expense, it may not have reflected everything I did. So there
may have been numerous occasions I looked at things briefly without charging for
them. And so that is, in essence, what I did in reflecting that there was the
attendance at the Federal Court hearing when I attended myself, the attendance at
the — with Counsel. Again I may have been it may have been 40 minutes or
thereabouts certainly it was, I think, at a lunch time or thereabouts — preparing the
letter of instruction probably took longer than that frankly." 56
105. The assertion of the Practitioner of having a clear memory is contrary to his admission that
the item regarding the affidavit and with respect to his attendance at court were incorrectly
included in the first Tax Invoice.
106. An amendment to the Tax Invoice was made on 6 November 2011. The Practitioner agreed
that he did not prioritise his claim. Mainly we think, because he had come to an arrangement
whereby Counsel, Mr Dart had agreed not to press for his charges.
107. We have some difficulties with the Practitioner's explanation as to why it took him so long to
particularise his alleged claim. He did not make any timely attempts to retrieve his file to
which he told us it was necessary for him to refer for the purposes of preparing his Tax
Invoice.
108. Later in questioning from the Tribunal as to how the error we have referred to was made the
following appeared:- 57
"Chairman Q: I'd just go back. I'm having difficulty for myself understanding how it
came about that you identified that there had been a mistake in that account
and that you should not have included in the March Tax Invoice the cost of
preparing an affidavit.
SE
57
Transcript 27/7/2012, page 174.38
Transcript 27/7/2012, page 178.22
39
A:
I think it was in the context of these proceedings and going back over, in
preparation to look at things I prepare instructions for my solicitors, they
checked on things, and still had in mind that they had done an affidavit for
some reason, I don't know why now I thought that but that's what! had in
mind. I mean Mr Nicholls' litigation that I was acting in, in the Federal Court,
was quite complicated and there are affidavits here, there and everywhere,
so I just thought I'd done an affidavit and when I came to check things I said
"Oh I haven't done an affidavit at all."
Q:
How did you check things?
A:
Well in this case I went to my computer file. So if there was an affidavit it
would have been on my computer file.
Q:
Is there some reason why you didn't do that when you produced the earlier
two Tax Invoices? That is check your computer.
A:
No. There's no reason why I didn't check. That's just an oversight. I
thought my Tax Invoice was accurate. It — in terms of reflecting work that
was done."
109. In our view when a practitioner records a Tax Invoice he or she is warranting to the recipient
that the contents are accurate and that it properly reflects the amount of time that the
practitioner spent carrying out the work certified therein. In our view, it is the professional
responsibility of the practitioner to undertake reasonable steps to ensure that the content of
accounts is accurate. It is quite clear from the practitioners evidence that that he did not take
steps to properly check his file and ensure the accuracy of the invoice rendered. He also
failed to render such an invoice in a timely fashion and the invoice was finally rendered as a
direct response to the AGS insisting that he pay the costs order of the Federal Court.
110. Further, and of greater concern to the Tribunal in this case, is that having produced an
amended Tax Invoice, deleting any specific reference to the items relating to the attendance
40
at court on 19 July 2008 there was no deduction to the amount of the charge to reflect that.
The Practitioner was asked to explain. He said:
"A:
Well, item 6 is essentially the same as item 2, both terms of the nature of the
work and the extent of the work. It was essentially me doing the same
exercise. There was just probably more paper in the short time but probably
not much more paper. It reflected my claim for 2 hours work in respect of
that work. So the 2 hours work again may have and probably was less than
the actual time taken. I was reflecting that was my claim. In essence the
fact that they made a mistake I don't think affected what they were seeking
from the tax office again it was for the tax office to respond.
Q:
Well it was — would it not be reasonable for someone reading your March
Tax Invoice and then the September invoice and looking at item 6 to
understand from it that what you were charging for — that when you
rendered your September Tax Invoice you were charging at item 6 for less
work than you were charging for in the March Tax Invoice, That is, work
involved in preparing your affidavit.
A:
My September Tax Invoice was substitution for the March invoice." 58
111. We do not accept the Practitioner's explanation. In our view it is a further example of the
Practitioner's cavalier approach to the situation he found himself in rather than a deliberate
attempt to deceive the AGS. It was an attempt to make something of an "ambit claim" from
which he wished to negotiate with the AGS. In our opinion, a practitioner receiving such a
Tax Invoice in the terms that the Practitioner rendered such an account in March and then
again in September was entitled to assume that the practitioner who had prepared that
document had made a genuine attempt at a proper assessment of relevant costs.
58
Transcript 27/7/2012, page 179.19
41
112. In our view, the Practitioner's conduct regarding the issue of these Tax Invoices should be
taken into account when assessing his conduct as a whole in the context of whether or not
he has been guilty of unsatisfactory or unprofessional conduct.
APPL CAT
N
THE LAW
113. The Tribunal has already referred to the definitions to which it must have regard under
Section 5 of the Act. The Tribunal has found that both charges are proved and has now to
decide whether either one or both of these charges amount to unprofessional conduct rather
than the lesser count of unsatisfactory conduct.
114. With respect to the definition set out in Section 5 of the Act, it is appropriate for the Tribunal
to consider in this case whether in relation to either count, it could be said that the conduct
which was in the course of or in connection with practice by the Practitioner involved "a
substantial recurrent failure to meet the standard of conduct observed by competent legal
practitioners of good repute."
115. Alternatively, is it merely unsatisfactory conduct in that it involves "a failure to meet the
standards of conduct observed by competent legal practitioners of good repute".
116. The test for the Tribunal to use is an objective test in the circumstances and not a subjective
test. 59
117. The word "substantial" is to be given its usual and ordinary meaning. The definition of
"substantial" is defined as "significant, considerable or consequential".
118. With respect to Count 1, we find that the Practitioner as a legal practitioner of some seniority
and as an office of the Court was well aware of his obligation to promptly pay the costs order
of Justice Finn made on 5 May 2009. On his own admission and for a period of over one
and a half years, he failed to pay those costs, initially ignoring repeated requests by the AGS
that he do so and then insisting that he had a "set-off' that absolved him from the
59
Vaezi (2009) SASC 271
42
requirement of paying the costs order when he knew full well, on his own evidence, that such
a set-off did not exist at law. He should have known that it was not appropriate for him to be
endeavouring to avoid a payment of a personally directed costs order in the circumstances.
119. The admitted facts speak for themselves. The Practitioner when giving his evidence
continued to show a lack of insight into his behaviour and continued to try to justify his
actions subsequent to the order being made.
120. It is of great concern that even when a complaint had been made to the Conduct Board and
an investigation was being carried out by the Board, he still did not pay the costs order and it
was not until shortly before the commencement of the hearing before the Tribunal and after
the charge had been laid by the Board that he finally paid the costs order.
121. in the circumstances, it is the Board's view that his recurrent failure to pay the costs order
even in the face of the a complaint to the Conduct Board by the AGS was a serious breach
of his professional obligations and amounted to a substantial recurrent failure to meet the
standard of conduct observed by competent legal practitioners of good repute.
122. In the circumstances, the Tribunal finds that Count 1 amounts to unprofessional conduct.
123. With respect to Count 2, which alleges that the Practitioner engaged in conduct in an attempt
to defeat or avoid a costs order made against him personally, the Tribunal has made various
findings.
124. The agreed facts again show that the Practitioner did all that he could to avoid paying the
costs order even in the face of the AGS making it very clear that they would not accept his
argument of set-off at a very early stage after he first raised that argument in an attempt to
avoid having to pay the costs order.
125. On his own admission, the Practitioner did not consider the costs order to be excessive. He
had the capacity to pay that order. His costs which he argued should be set off against the
costs order were not even raised by tax invoice until months after the work had been done
43
and even then, it appears that the invoice was generated solely in the context of the
argument that the Practitioner was having with the AGS over Justice Finn's order.
126. The Tribunal was not impressed at the production by the Practitioner of a subsequent tax
invoice in a higher sum and his explanations for the variation in that later invoice from the
sum originally claimed.
127. The Practitioner's conduct in endeavouring to raise a set off that he himself knew was not
applicable and in ignoring requests by the AGS that he pay the sum again showed a
substantial and recurrent failure to meet the standard of conduct observed by competent
legal practitioners of good repute.
128. In the circumstances the Tribunal finds that Count 2 also amounts to unprofessional conduct.
129. In view of the Tribunal's findings and given the serious nature of the unprofessional conduct
and in particular his failure to abide an Order of the Federal Court over a substantial period
of time, we consider it appropriate that the matter be adjourned to enable submissions to be
put to this tribunal with respect to penalty.
DATED the 20 day of March 2014
GG HOLLAND
Chairman
Ms L HASTVVELL
Ms J MASON j