Law Society of Tasmania v Turner [2001] TASSC 129, 11 Tas R 1, followed.

Judgment Number: [2019] TASSC 39

1. The respondent, James Kitto, is a legal practitioner based in Launceston. The Legal Profession Board of Tasmania has applied under s 486 of the Legal Profession Act 2007 ("the Act") for this Court to hear and determine a complaint concerning his conduct. The complaint concerns a disgraceful delay on Mr Kitto's part in paying some costs that a judge ordered him to pay personally.
2. The Board is seeking a declaration that Mr Kitto is guilty of professional misconduct. He accepts that his conduct amounted to unsatisfactory professional conduct, but does not concede that it amounted to professional misconduct.
3. The Board has sought other orders, all of which are consented to by Mr Kitto, in the following terms:

1. That the Respondent pay a fine in a sum determined by the Court.
2. That the Respondent, at his own expense, undertake, and successfully complete, a course in legal ethics and professional responsibilities approved by the Applicant ('the Course') as follows:

(a) The Respondent must identify and obtain the approval of the Applicant for the Course he proposes to undertake within six months of the date of this order;

(b) The Respondent must successfully complete the Course within six months of the Applicant providing its approval;

(c) Within 28 days of completing the Course, the Respondent is to provide to the Applicant:

(i) documentary evidence of successful completion of the Course;

(ii) a reflective practice report demonstrating, to the satisfaction of the Applicant, that the Respondent has reflected on the issues that gave rise to this order and how the Respondent has incorporated or proposes to incorporate the lessons learned from the Course into the Respondent's practice;

(d) Should the respondent fail to successfully complete the Course, he shall undertake any further course in legal ethics and professional responsibilities as approved by the Applicant ('the Further Course') until such time as he successfully completes the Further Course and complies with orders 4(c)(i) and (ii) above.

(e) Should the respondent fail to successfully complete the Course or any Further Course within 12 months of the date of this order, his practising certificate shall be suspended until such time as he successfully completes the Course or Further Course and complies with orders 4(c)(i) and (ii) above.

1. ...
2. That the Respondent pay [the complainant's] costs of and incidental to her complaint made to the Applicant in respect of the Respondent dated 24 January 2017.
3. That the Respondent pay the Applicant's costs of and incidental to this application."
4. I am satisfied that I should make all of the orders that have been consented to. The only two matters that I have to determine are whether or not Mr Kitto's conduct amounted to professional misconduct, and the amount of his fine.
5. The costs order was made by Judge Roberts of the Federal Circuit Court of Australia on 10 June 2014. It was well deserved. Mr Kitto was acting for a man who was involved in litigation in the Federal Circuit Court. That man had made an application that was listed for hearing in Launceston at 10am on 10 June 2014. Mr Kitto and his client made arrangements for the client to appear without legal representation on that day. Mr Kitto told his client that the hearing was in Burnie, and he went there. When the matter was called on in Launceston, neither Mr Kitto nor his client was present. Mr Kitto had not notified anyone that his client would be appearing without representation. Enquiries were made. Mr Kitto appeared before his Honour, who adjourned the case to the following afternoon in Launceston, and made an order in the following terms:

"That the respondent's costs thrown away today fixed in the sum of $1,250 are to be paid by the applicant's lawyer, James C Kitto, within 60 days of today."

1. The opposing party in the Federal Circuit Court matter was Mr Kitto's client's former partner. She is the person who subsequently made the complaint to the Board.
2. After the costs order was made, the following events occurred:
   • The time for the payment of the costs expired on 9 August 2014.
   • The complainant's solicitor sent Mr Kitto an email on 11 August 2014 asking if he was in a position to make a payment.
   • On 13 August 2014 Mr Kitto's client sent him an email saying, "... as soon as I get the money to fix account up I will". Some minutes later, Mr Kitto sent an email to the complainant's solicitor saying that he expected to be in funds in the next 14 days, and requesting the other solicitor's trust account details. The complainant's solicitor provided those details that day.
   • On 1 September 2014 Mr Kitto wrote to his client about the costs of the proceedings in the Federal Circuit Court. In that letter he listed the amounts payable pursuant to what he called "costs orders that have been made against you and this Firm". His list included the amount of $1,250. He mentioned that the order had been made against him personally, but included the amount as if he expected his client to pay it.
   • On 4 September 2014, the complainant's solicitor sent Mr Kitto another email requesting payment before the close of business on 8 September 2014. There was no reply.
   • On 9 September 2014 she sent him another email urging him to respond with either payment or an indication of when payment would be received. She wrote, "Can I respectfully draw your attention to the non payment of a solicitor cost order could be a matter that is reportable to the Legal Profession Board as either professional misconduct or unprofessional conduct."
   • Mr Kitto responded by email that day. He said that he noted "your further threat in relation to complaining to the Legal Profession Board in relation to the subject costs order, which I suspect is without any merit whatsoever". He said that his client had graciously advised him that he intended to pay the account, and that settlement was likely to take place in the following four weeks.
   • Over four months went by, but no payment was made. On 23 January 2015 the complainant's solicitor wrote to Mr Kitto advising that the balance outstanding amounted to $1,298.01 inclusive of interest to that date. She wrote that she had been instructed to proceed to enforcement if the full sum was not received by the close of business on 2 February 2015. There was no response.
   • On 11 September 2015, the complainant's solicitor applied to the Federal Circuit Court for an enforcement warrant that authorised the seizure and sale of Mr Kitto's property to satisfy the costs order. The warrant was issued and a Mr Marshall was appointed as the enforcement officer.
   • On 22 January 2016, the complainant's solicitor instructed Mr Marshall to take action on the warrant.
   • On 27 January 2016, Mr Marshall emailed the complainant's solicitor. He told her that he had spoken to Mr Kitto by telephone; that Mr Kitto had said he would speak to his client about paying the amount owed; and that he threatened that he would take action against Mr Marshall if he took action to seize any of his properties.
   • On 9 March 2016, Mr Marshall asked the complainant's solicitors to sign a document providing him with an indemnity. They were not willing to sign that document. As a result, no further action was taken in relation to the warrant.
   • On 12 May 2016, Mr Marshall sent an invoice to the complainant's solicitors for $385 for his services. They subsequently paid that amount.
   • On 1 June 2016, the complainant's solicitor sent Mr Kitto an email advising that the amount payable by way of costs and interest was then $1,436.36. There was no response.
   • On 24 January 2017, the complainant made a written complaint to the Board.
   • The Board notified Mr Kitto of that complaint by a letter dated 15 February 2017. He was asked to provide the Board with submissions within 21 days.
   • On 13 March 2017, Mr Kitto wrote to an officer of the Board requesting a further 14 days to respond to the Board's letter. He added, "In the meantime, the general submission is that the complaint ought be dismissed."
   • On 14 March 2017, an officer of the Board emailed Mr Kitto saying that he had an extension of time until the close of business on 24 March 2017.
   • That deadline passed without any submissions being received. On 29 March 2017, an officer of the Board wrote to Mr Kitto saying that, in the absence of any response from him by 5 April, a complaint assessment would be prepared for the Board to consider at its meeting in May.
   • On 4 April 2017, Mr Kitto wrote back seeking a "final extension of time" to 10 April. He added, "I also note that I have submitted that the complaint ought be dismissed."
   • On 5 April 2017, an officer of the Board wrote to Mr Kitto saying that if his submission was not received by 10 April it might not be considered by the Board before it decided what action was to be taken. She said that, in the absence of compelling evidence that he needed more time, no further extension would be granted.
   • Mr Kitto did not send in a submission by 10 April. At some stage between 5 April and 19 April he proposed that the complainant take part in a mediation. On 19 April 2017, the complainant declined. An officer of the Board immediately sent Mr Kitto an email advising that the complaint would be placed before the Board at its meeting on 22 May 2017.
   • At that meeting, the Board resolved that the complaint was to proceed to investigation.
   • On 25 July 2017, the investigator appointed by the Board sent Mr Kitto a notice under s 572(1) of the Act requiring him to provide answers to a series of questions, verified by a statutory declaration, no later than 4pm on 21 August 2017.
   • On 21 August 2017, Mr Kitto made a statutory declaration in response to that notice. It was received by the Board the next day, one day late. Mr Kitto thoroughly explained the background to the making of the costs order. He said that he had not charged his client and had not satisfied the costs order. In response to a question as to what steps he had taken to respond to the requests for payment, he wrote, "I have not taken any steps to respond to the requests for payment of the Costs Order other than advising the complainant's solicitors via email that [his client] had graciously offered to pay the Costs Order, but this did not occur."
   • In or about late October 2017, Mr Kitto's client informed him that he would not be able to pay the costs.
   • Mr Kitto paid the costs of $1,250 plus interest of $321.22 on 31 October 2017.
   • On 22 January 2018, an officer of the Board sent Mr Kitto a "Murray's case letter" setting out allegations that were to be considered by the Board, forwarding copies of material relating to those allegations, and inviting him to make submissions: Murray v Legal Services Commissioner [1999] NSWCA 70; (1999) 46 NSWLR 224.
   • On 12 February 2018, Mr Kitto wrote to the Board in response. Amongst other things, he said that his client had "agreed on his own volition" to pay the costs on his behalf; that his client's email of 13 August 2014 confirmed that; and that the costs in question were being included in a claim made by his client in separate litigation, in which another legal practitioner was acting. He also said that, but for his client's insistence on paying the costs on his behalf, he would not have delayed in paying.
   • On or about 12 February 2018, Mr Kitto paid the complainant's solicitors their costs in relation to the attempts to enforce the order, as well as Mr Marshall's fee of $385.
3. The Board contends that Mr Kitto is guilty of professional misconduct not just because he failed to pay the costs until October 2017, but also because he resisted paying the costs without his client first having paid him the required amount. The declaration sought by the Board is one that Mr Kitto is guilty of professional misconduct by reason of the following:

"(a) Breaching a Court Order dated 10 June 2014 made by Judge Roberts in Federal Circuit Court proceedings no LNC611/2009 ('the Costs Order'), which order was against the Respondent personally and required payment within 60 days, the Respondent not paying the Costs Order until or about [sic] 31 October 2017.

(b) The Respondent's breach as set out in (a) was serious and/or aggravated by reason of excessive delay in payment and his resistance to meet the Costs Order personally until such time as his client had put him in funds to satisfy the Costs Order."

1. Mr Kitto does not dispute the accuracy of that description of his conduct.
2. Section 421(1) of the Act contains a non-exhaustive definition of "professional misconduct". That definition reads as follows:

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice."

1. The Board does not rely on par (b) of that definition. There is no suggestion that Mr Kitto is not a fit and proper person to engaged in legal practice.
2. Apart from the categories of professional misconduct mentioned in the definition, professional misconduct also includes "behaviour on the part of a legal practitioner which would reasonably be regarded as disgraceful or dishonourable by legal practitioners of good repute and competence": Law Society of Tasmania v Turner [2001] TASSC 129, 11 Tas R 1 at [45].
3. Section 420 of the Act defines "unsatisfactory professional conduct" as follows:

"unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner."

1. In Law Society of Tasmania v Turner (above) Crawford J (as he then was) considered the distinction between professional misconduct and "unprofessional conduct". The latter term was used in the Legal Profession Act 1993, which has since been repealed. His Honour said, at [50]:

"In a general sense, professional misconduct should be regarded in this State as a more grave form of misconduct than unprofessional conduct. There may well be an overlap and the same conduct might in some cases amount to both of those things."

1. For the purpose of undertaking an assessment of Mr Kitto's conduct in relation to the costs order, it is important to bear in mind that, when a court orders a legal practitioner to pay an opposing party's costs personally, there can be a punitive aspect to the order. In the Federal Circuit Court, the making of costs orders against lawyers is governed by r 21.07 of the Federal Circuit Court of Australia Rules 2001 (Cth). The relevant provisions in that rule read as follows:

(1) The Court or a Registrar may make an order for costs against a lawyer if the lawyer, or an employee or agent of the lawyer, has caused costs:

(a) to be incurred by a party or another person; or

because of undue delay, negligence, improper conduct or other misconduct or default.

(2) A lawyer may be in default if a hearing may not proceed conveniently because the lawyer has unreasonably failed:

(a) to attend, or send another person to attend, the hearing; or

(b) to file, lodge or deliver a document as required; or

(c) to prepare any proper evidence or information; or

(d) to do any other act necessary for the hearing to proceed."

1. In giving his reasons for making the costs order, Judge Roberts said the following:

"[14] In this matter there have been costs thrown away. The whole of the morning has been taken up by this matter, and it is quite clear that a half a day has been wasted. That has been caused by the fact that firstly, Mr ... was given wrong advice and told to go to Burnie and that is clearly negligence; secondly, by the fact that Mr Kitto and Mr ... did not bother to tell anybody else that Mr Kitto was not going to appear so a lot of time was wasted trying to contact Mr Kitto. Eventually we got him on the telephone when his receptionist, Abby I think her name is, provided his mobile telephone number.

[15] She was - and I say this to her credit, because there was certainly no fault on her part, she might be an employee or agent of his, as described in the Rules, but she cannot be blamed - she tried, as I would expect a receptionist to do, not to give us Mr Kitto's mobile telephone number. She was reluctant to do so, but I think the pressure of the Court came to bear and we were given Mr Kitto's mobile telephone number. The Court then rang Mr Kitto. I spoke to him and insisted that he come around. I don't think Mr Kitto was going to come here at all. He was going to continue his discourtesy to the Court simply because he said he wasn't instructed to appear. I think Mr Kitto needs to learn that he owes a duty to the Court as an officer of the Court. And that, in my view, comes into the other misconduct or default referred to in Rule 21.07 subsection 1."

1. Mr Kitto was present when Judge Roberts made those comments.
2. When a lawyer is ordered to pay costs personally, the order is both compensatory and punitive. In Currie & Co v The Law Society [1977] 1 QB 990, May J said, at 997-998:

"The jurisdiction is in my opinion both punitive and compensatory in this sense: where the costs of litigation are unnecessarily increased by the substantial failure on the part of a solicitor to fulfil this duty to the court to promote in his particular sphere the cause and proper administration of justice, then the court will require him to compensate those who have incurred costs which they would not otherwise have incurred but for such failure by that solicitor, or whose costs have been similarly increased thereby; and as those costs have to be paid by the solicitor personally, and not by the party to the litigation who would otherwise have to pay them, the order is in that sense and to that extent punitive."

1. Those comments were referred to with approval by Lord Lane CJ, delivering the judgment of the English Court of Appeal, in Holden & Co v Crown Prosecution Service [1990] 2 QB 261. His Lordship said the following at 269:

"... it seems clear that the object of the order is primarily to reimburse a litigant for costs which he has incurred because of the solicitor's default .... The costs which the solicitor will have to pay from his own pocket will be those, and only those, which his default has caused. There is nothing to be added to that figure to mark the disapproval of the court or by way of deterrence. To that extent the object of the jurisdiction is to compensate.

However there is a punitive element ..., in that the solicitor is having to pay a bill which would otherwise have to be met by one of the parties to the litigation. There is also necessarily an element of deterrence in that solicitors will wish to avoid the expense and adverse publicity that the exercise of the court's jurisdiction entails." [Case references omitted.]

1. There is no suggestion that Mr Kitto lacked the means to pay the required $1,250 within the period of 60 days that Judge Roberts allowed for payment. If his client indicated a desire to pay those costs himself, the only honourable course was to insist on paying the costs personally as ordered by the court. By looking to his client for payment, Mr Kitto was looking to an innocent man for the payment of money that that man had no legal or moral obligation to pay, and was seeking to circumvent an order made by a judge that was partly punitive in nature. Mr Kitto's letter of 12 February 2018 shows that he saw nothing wrong with the costs in question being included in a claim made by his client against another person in separate litigation, even though his client had no legal liability to pay those costs, and even though their inclusion in the claim might have misled the recipient of that by creating an impression that there was such a liability. The complainant was not a wealthy woman. For over three years she remained out of pocket because Mr Kitto stubbornly failed and refused to pay her money that a judge had ordered him to pay her. She was put to further expense in relation to the enforcement proceedings. Mr Kitto's conduct was disgraceful conduct of a sort that tends to bring the whole of the legal profession into disrepute.
2. Mr Kitto's conduct in relation to this matter from 2014 to 2018 says quite a lot about his standards of competence and diligence - the subject matter of par (a) of the statutory definition of "professional misconduct". He repeatedly ignored communications from the complainant's solicitor. He repeatedly sought to fob off the Board's officers with requests for more time and ignorant suggestions that the complaint should be dismissed. For years he apparently did not understand that he should not have been looking to his client for the money to satisfy the costs order, even if the client was keen to pay the money.
3. This is a clear case of professional misconduct. Mr Kitto's conduct amounted to professional misconduct in the common law sense, in that he behaved in ways which would reasonably be regarded as disgraceful and dishonourable by legal practitioners of good repute and competence. His conduct also fell within the scope of par (a) of the statutory definition of "professional misconduct", in that it involved a consistent failure to reach or maintain a reasonable standard of competence in relation to his understanding of the obligation to pay the costs personally as ordered, as well as a consistent failure to maintain a reasonable standard of diligence in relation to his dealings with the complainant's solicitor and the Board's officers. I am satisfied that Mr Kitto is guilty of professional misconduct in the respects alleged in the declaration sought by the Board. Having made that finding, I am inclined to think that I do not need to make a formal order declaring Mr Kitto guilty of professional misconduct in the respects alleged. I will hear counsel as to whether I should do that.
4. There are a number of matters that I must take into account when deciding on the size of Mr Kitto's fine. The powers of the Court to discipline practitioners are "entirely protective in character": Dickens v Law Society of Tasmania (Unreported, 42/1981, Cosgrove J). That is to say, the disciplinary powers exist only for the purpose of deterring practitioners from engaging in inappropriate conduct, and thereby protecting the public. The fine should be no greater than is necessary to maintain professional discipline and high standards of conduct within the legal profession.
5. The impact on the complainant is a relevant consideration. Mr Kitto has paid the $1,250 with interest as well as the costs of the enforcement proceedings. Although the complainant is no longer out of pocket, it is clear that she found it very stressful to have to go to the lengths of taking enforcement action and making a complaint to the Board. Quite apart from Mr Kitto's conduct, she was troubled by the stress of ongoing litigation under the Family Law Act 1975 (Cth). His misconduct made a bad situation worse for her, and did so for over three years.
6. Mr Kitto was admitted as a legal practitioner some 20 years ago, on 8 March 1999. He has practised in Tasmania ever since. He has held a principal's practising certificate since November 2001. This appears to be his third disciplinary prosecution. The first concerned a complaint made to the Law Society of Tasmania in August 2002. He was fined $350 in respect of that complaint. No other details of that prosecution are available to me. In 2017 he was found guilty of unsatisfactory professional conduct and reprimanded by the Board. That reprimand related to a finding that, when a former client requested sealed Family Court documents from his file, Mr Kitto provided photocopies instead of the sealed documents that the former client had a right to receive.
7. Mr Kitto was under considerable stress in 2014 and 2015 for a number of reasons. His relationship with his partner broke down. A police family violence order was made against him. He was prosecuted for assaulting the partner, but was acquitted. For a long time he did not have contact with his children. For a long time he had no secretarial assistance in his practice. There was litigation between family members. His office was in a property that was the subject of that litigation. For a time he feared that he would have to find other premises. However all of those stressors appear to have abated long before the costs were paid in October 2017.
8. Mr Kitto has written letters of apology to the complainant, and to the Launceston District Registrar of the Federal Circuit Court. However those letters were not written until 13 August 2019, three days before I heard this application.
9. By virtue of the relevant rules of court, Mr Kitto was required to pay interest on the $1,250 at a rate exceeding 8% per annum. The prescribed interest rates are obviously intended to encourage prompt payments.
10. Having regard to all the circumstances, I have decided to impose a fine of $3,000.