Legal Services Commissioner v Bechara [1998] ACTSC 24 | Case summary

The same items appeared in the bills of costs prepared by the Respondent for the party/party assessment. 14. The Respondent charged the three clients an amount totalling $32,883.00 for 43.4. hours work. 15. At the 6 day hearing the Respondent was represented by a junior solicitor for whose attendance she charged the 3 clients a total of $29,775. The time spent by the junior solicitor at the hearing totals 39.7 hours. The junior solicitor was, in effect, charged out at $750.00 an hour. 16. On or about 18 April 2000, the Respondent had provided each of the clients with a copy of her conditional costs agreement. Paragraph 3 of each costs agreement stated that the Respondent would charge each client the following rates 'for each hour engaged in [your] Work'. partner/principal $280.00 solicitor $250.00 paralegal $200.00 It further stated that the Respondent would charge at the 6 minute time costing. 17. The conditional costs agreements were each provided to the respective clients prior to the hearing of the 3 matters being consolidated. 18. The Respondent charged each client $250 per hour for each hour of the six day hearing of the 3 matters being a total of $750.00 per hour, without reference to either the time actually spent on each matter. 19. In addition to the contractual requirement imposed on the Respondent by her own costs agreement that she only charge each client for the work actually undertaken by her for the client, she was also bound: By her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989; Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995 at [3] at page 4) at pages 4-5) to only charge for work actually performed by her for each individual client. By her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5,8 and 9. By her statutory obligation pursuant to section 208A of the Legal professional Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work. 20. In charging each client the full amount quoted in her costs agreement the Respondent was in breach of: The terms of her costs agreement in that she failed to apportion the time spent in Court by her junior solicitor with the result that each client was charged for time spent exclusively on matters relating to the other clients. She clearly stated in each costs agreement that she would charge only for work performed for the recipient of the costs agreement. Her obligation at law (see Law Society of NSW v Andrew Brian Fegent (judgment delivered on 24 April 1989); Veghelyi v The Law Society of New South Wales (Unreported, Court of Appeal, 6 October 1995 at [3] at page 4) at pages 4-5) to only charge for work actually performed by her for each individual client. Breach of that obligation resulted in each client being charged for time spent in court on matters exclusively relating to the other clients. Her obligation at law to charge each client only a fair and reasonable fee for services performed by her: see Veghelyi at 5,8 and 9. Her breach is three-fold: firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients; and thirdly, charging $750 per hour ... Her obligation under s 208A of the Legal Profession Act 1987 to charge only for work actually performed for each client and to charge only a fair and reasonable fee to each of her clients for that work. Her breach is three-fold: firstly, charging each client for time spent in court on matters exclusively relating to the other clients; secondly, charging a fee of $750 per hour for each hour spent in court in circumstances where a significant number of those hours did not relate to all 3 clients, and, thirdly, charging $750 per hour without reference to the nature of the actual work undertaken by the junior solicitor during each hour. 21. Alternately, in the circumstances, the Respondent, in order to meet her obligations both under her costs agreements, at law and pursuant to the Legal Professional Act 1987 should have apportioned her costs equally amongst the clients. Apportionment in the circumstances would, most likely, have resulted in a fair and reasonable fee being charged to each client, and a measure of justice and fairness achieved between the Respondent and the clients. 22. The Respondent was actively involved in finalising each of the bills both in the form in which they were sent to each client and the form used for the party/party assessment. The conduct of the Respondent complained of was deliberate in that she clearly intended to charge each client the costs set out in their respective bills. 23. Her knowledge that the amounts charged were grossly excessive is reflected in the fact that she informed each of the clients that on the party/party assessment the costs would be apportioned by the costs assessor (as they were) and her immediate agreement in her response to the Objections to the party/party bills prepared by her to the apportionment of the costs of the hearing. 19 The respondent practitioner contested a number of these further particulars mostly on the basis that the further particulars fell outside of the original complaint and particulars. These objections remained unresolved until well into the hearing of the substantive proceedings. That situation should not have been allowed to develop. SOME PRELIMINARY MATTERS 20 Although the whole of the case was argued before the Tribunal, there are some matters that may be dealt with as preliminary matters. As indicated, one matter was the subject of written submissions after the evidence had closed but raised an issue that may truly be regarded as a preliminary issue and should be dealt with as such. The issue was described as an allegation of denial of natural justice. This issue arises in the context of Mr McIntyre's referral to the Legal Services Commissioner, the way in which the Legal Services Commissioner dealt with the matter before proceeding in the Tribunal, and the evidence ultimately relied upon by the Legal Services Commissioner 21 Primarily, the respondent practitioner relied upon the decision of the Court of Appeal in Murray v Legal Services Commissioner (1999) 46 NSWLR 224 where the Court held that the failure of the Legal Services Commissioner to provide the practitioner with a copy of the complaint and allow time for the practitioner to respond to that complaint resulted in a denial of procedural fairness such that a decision to institute proceedings in the Tribunal with respect to the complaint was vitiated. Nothing of that nature has occurred in the present matter. The Legal Services Commissioner received a referral from Mr McIntyre and initiated a complaint in relation to Ms Bechara. The complaint was forwarded to Ms Bechara and there was considerable correspondence between the Legal Services Commissioner and the respondent practitioner about the issue of alleged overcharging and whether or not the amounts charged fell within the terms of the costs agreement with each client. At the conclusion of that exchange of correspondence and after the Legal Services Commissioner considered the transcript of proceedings in the District Court and the cost assessor's reasons, he advised the respondent practitioner that he had reached the point where, pursuant to s 155 of the 1987 Act, he should form the opinion that there was a reasonable likelihood that the legal practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. The respondent practitioner was invited to make submissions in relation to that matter and any of the options that might flow from a conclusion limited to unsatisfactory professional conduct and the consequences associated with such findings. The respondent practitioner did not avail herself of that opportunity and no further submissions were received from her. In evidence she stated that she did not received this correspondence. Some months later, under s 155, the Legal Services Commissioner formed the requisite opinion alleging unsatisfactory professional conduct or professional misconduct. Proceedings were commenced in the Tribunal. 22 The respondent practitioner's submission, however, raised a different issue. It was submitted that the Legal Services Commissioner's affidavit filed on 9 January 2008 made it plain that, before the proceedings were commenced, he understood "the elements of the complaint and that information about those elements was absent" when proceedings were commenced in September 2006. Reference was made to the Legal Services Commission regarding the evidence of Ms Castle as being "critical". It was said to be important that the Legal Services Commissioner expressed the view that the Tribunal should not determine the matter unaided by the evidence contained within Ms Castle's report. The substance of the argument for the respondent practitioner was that the Legal Services Commissioner, at the time he was required to make the decision under s 155 of the 1987 Act, could not have had all the material necessary for him to make the determination in the way described in Murray's case and to reach the degree of satisfaction necessary to allow him to conclude that there was a reasonable likelihood that the practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. The respondent practitioner then submitted that the institution of the proceedings was "vitiated", apparently relying on the approach in Murray and alleged that the proceedings were not properly commenced and could not be maintained. The procedural fairness point was said to arise because a finding against the respondent practitioner would deny procedural fairness since it would entail making an adverse finding regarding proceedings that were commenced which could not properly be maintained. It is difficult to treat the point so described as a procedural fairness point but it appears that the respondent practitioner really wishes to raise another point under the label of a procedural fairness issue. 23 In dealing with this point it is necessary to consider what was recorded by the Legal Services Commissioner pursuant to the provisions of s 156 (requiring the Commissioner to cause a record of his decision in respect to a complaint, together with the reasons for the decision, to be kept in respect of each investigation conducted under Division 5 of the 1987 Act). The record of decision was an annexure to Mr Mark's affidavit in the proceedings. On 3 July 2006 the Legal Services Commissioner recorded that, pursuant to the terms of s 155(2) of the 1987 Act, there was a reasonable likelihood that the respondent practitioner could be found guilty of professional misconduct or unsatisfactory professional conduct in relation to the three matters in which she appeared because she had deliberately charged grossly excessive amounts of costs. The reasons for that decision were as follows: 1. The practitioner simultaneously conducted three personal injury actions on behalf of three members of the same family, being Fatemah Hussein, Mohamed Hussein and Toufika Hussein, against the same defendant. Although the accidents giving rise to the injuries did not occur at the same time, all three matters were heard together before his Honour Judge Walmsley for seven days commencing on 13 November 2001 and it was agreed that evidence in each would be evidence in the others. 2. The practitioner failed to apportion costs common to the three matters. 3. The practitioner charged each client the total costs of the hearing rather than dividing costs of the hearing so as to charge each client for that part of the hearing relating to their claim and/or apportioning such cost so as to charge each client a proportion of the total cost of the hearing. 24 It is known that the Legal Services Commissioner instituted an investigation into the costs charged by the respondent practitioner in these three District Court matters because of a referral by Mr McIntyre pursuant to s 208Q of the 1987 Act. As a costs assessor, Mr McIntyre expressed his opinion that there was a failure to properly apportion the amounts claimed over the three matters when that "clearly should have been done". Pursuant to s 155 of the 1987 Act, the Legal Services Commissioner at the time had to be satisfied that there were was a reasonable likelihood that the practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct. At that time he had Mr McIntyre's reference and opinion as a costs assessor, including his reasons in the party/party assessment, he had the various responses from the respondent practitioner, he had been informed by her that, although she was willing to modify the costs, she was not prepared to apportion them and he had access to the transcript of the proceedings in order to see how they were conducted. Mr McIntyre is a very experienced practitioner and costs assessor who had previously served as a councillor of the Law Society and as its President. As already noted, Ms Bechara's was informed of the process and entered into an exchange of correspondence with the Legal Services Commissioner and there was no denial of procedural fairness arising from these actions by the Legal Services Commissioner. At this point it is difficult to understand how it could be suggested by the respondent practitioner that the Legal Services Commissioner could not have not been satisfied that there was a reasonable likelihood that a Tribunal would find her guilty in accordance with s 155(2). There was no cross-examination of the Legal Services Commissioner as to how he reached the state of satisfaction requiring him to commence proceedings in the Tribunal and in any event, as pointed out in Murray, that course may have been inhibited by the provisions of s 171R. 25 The "procedural fairness point" appears to arise from Mr Mark's second affidavit sworn on 9 January 2008 and filed in support of an application to be permitted to file additional evidence namely, the report and opinion of Ms Castle who was an experienced costs assessor. In the course of that affidavit Mr Mark records that, in the Galitsky matter, Mr McIntyre's report was subjected to detailed submissions with the respondent objecting to it being admitted into evidence substantially on the contention that the evidence constituted a bare expression of opinion based on an assumption of the existence of and obligation to apportion counsel's fees. Although Mr McIntyre's opinion was ultimately admitted into evidence by the Tribunal, it was admitted for the purpose of providing the Tribunal with an example of the manner in which an experienced costs assessor approached the issue of charging counsel's fees in the circumstances under consideration. Mr Mark noted that the Tribunal was a specialist Tribunal and the members could apply their own personal experience in determining whether the fees charged by the respondent practitioner constituted gross overcharging but nevertheless stated that the Tribunal would be better placed to consider the matter by having before it Ms Castle's detailed report. It was in that context that, by way of submission rather than evidence, Mr Mark stated that the applicant was seeking to adduce the evidence of Ms Castle's report because it was "critical to the applicant's case". The evidence from Mr Mark, given on a motion to adduce further evidence, was not an admission that he had no basis for his action under s 155 but was a comment about the possible state of the evidence before the Tribunal (Mr McIntyre's evidence not yet having been considered). From that statement concerning the form of the evidence before the Tribunal, the respondent practitioner has assumed that the material considered by the Legal Services Commissioner at the time he came to address the matters referred to in s 155(2) of the 1987 Act was so deficient that he could not have reached the state of satisfaction required by the Act. There was simply no evidence to support that bare assertion and it is a matter that was capable of being addressed as a preliminary issue, with the parties and as advised, taking all necessary steps to meet the point. This course was not taken at an appropriate time or in any appropriate way and is, in any event, unable to succeed based as it is on a mere assertion and on assumptions as to what was considered by the Legal Services Commissioner. The respondent practitioner's denial of procedural fairness point is not made out. 26 It is possible that the respondent practitioner's real point was that there was a total failure of the process for referral to the legal Services Commissioner because Mr McIntyre had not satisfied himself that the overcharging was "deliberate". The point, however, was never put with such clarity. Section 208Q of the 1987 Act proceeded on the basis of a costs assessor considering any conduct of a solicitor involving "the deliberate charging of grossly excessive amounts of costs". In his letter of referral, Mr McIntyre did say that he did not have "sufficient information to determine whether or not the conduct was deliberate" but asserted that he had sufficient information to require him to refer the matter pursuant to s 208Q. 27 The role of the costs assessor under s 208Q is not to be confused with the obligations imposed on the Legal Services Commissioner under s 155 - the costs assessor is not required to be satisfied that there is a reasonable likelihood that the practitioner will be found guilty by the Tribunal of unsatisfactory professional misconduct or professional misconduct. The cost assessor is to carefully delineate and assess the material and if he "considers" that there was deliberate overcharging, he is obliged to refer the matter to the Legal Services Commissioner. Mr McIntyre had seen the party/party costs and had called for the solicitor/client bill of costs and was aware that the total time spent in court by the solicitor was not divided or apportioned. As he said in his letter of referral and in his affidavits, he was satisfied that there was sufficient information to require him to refer the matter to the Legal Services Commissioner. In his affidavit after setting out matters he had considered he stated: On the basis of that information I formed the opinion that the solicitor and the barrister engaged in this litigation may have engaged in conduct involving the deliberate charging of grossly excessive amounts of costs. 28 Following referral of such a matter it is the Legal Services Commissioner who investigates the matter and makes the assessment required by s 155. In no sense did s. 208Q require Mr McIntyre to determine whether the overcharging was deliberate - all he was required to do was to express a considered opinion. In this case there was no flaw in the referral by Mr McIntyre that would operate so as to vitiate the entire investigation of the Legal Services Commissioner. 29 It is to be remembered that any person could complain to the Legal Services Commissioner about the conduct of a legal practitioner (s 134(2). The Commissioner could have treated Mr McIntyre's letter as a complaint under s 134(2) if there was doubt about it as a referral under s 208(Q). Once he commenced an investigation and had grounds under s 155 to commence proceedings in the Tribunal, it mattered not that he thought he was acting under a s 208Q referral when in fact he was acting on a complaint made under s 134. It had long been accepted that the validity of decisions, including administrative determinations, is unaffected by mistaking the source of the power to make them. (Brown v West (1990) 169 CLR 195; Moore v Attorney-General (Irish Free State) [1935] AC 484; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487; R v Moore; Ex parte Graham (1977) 138 CLR 164; Mercantile Mutual Life Insurance Co Ltd and anor v Australian Securities Commission and ors (1992) 112 ALR 563) 30 A further issue that might appropriately be described as a preliminary issue was the operation of s 208C of the 1987 Act and how it affected the jurisdiction of the Tribunal and the evidence that could be received by the Tribunal in these proceedings. The respondent practitioner again pointed out that there was a costs agreement with each of her clients and although they had been served with a detailed bill of costs, none of them had contested those costs set out in the bill. The significance of these matters was said to be firstly, pursuant to the provisions of s 208C of the 1987 Act, a costs assessor was obliged to decline to assess a bill of costs where the disputed costs were subject to a costs agreement that complied with Division 3 and the costs agreement specified the amount of the costs or the dispute related only to the rates specified in the agreement for calculating the costs. It was argued that, had the clients raised any dispute, then the only possibility was that if circumstances were shown to exist under s 208C(2) then the costs assessor would resolve any other dispute by applying the costs specified in the costs agreement and was not at liberty to set some other rate. The second point made by the respondent practitioner was that, as no complaint was made by the client, there was no jurisdiction in the Tribunal to embark upon a determination of what may have been the outcome of a solicitor/client assessment on the footing of a notional dispute sought to be raised by the Legal Services Commissioner or, the possibility that the Hussein family could have (but did not) raise a dispute. The Legal Services Commissioner could not raise a theoretical dispute when none existed in order to test, through the Tribunal, the existence of its apportionment obligation theory. The operation of s 208C(1) could not be circumvented. 31 The terms of s 208C of the 1987 Act are as follows: 208C Costs Agreements not subject to assessment (1) A costs assessor is to decline to assess a bill of costs if: (a) the disputed costs are subject to a costs agreement that complies with Division 3, and (b) the costs agreement specifies the amount of the costs or the dispute relates only to the rate specified in the agreement for calculating the costs. (2) If the dispute relates to any other matter, costs are to be assessed on the basis of that specified rate despite section 208A. The costs assessor is bound by a provision for the payment of a premium that is not determined to be unjust under section 208D (3) This section does not apply to any provision of a costs agreement that the costs assessor determines to be unjust under s 208D. (4) This section does not apply to a costs agreement applicable to the costs of legal services if a barrister or solicitor failed to make a disclosure in accordance with Division 2 of the matters required to be disclosed by section 175 or 176 in relation to those costs. 32 In the course of submissions senior counsel for the respondent practitioner accepted that s 208C (1)(b) firstly referred to a costs agreement that specified total costs, being a lump sum agreement and that the cost agreement in these three matters was not a lump sum agreement but set an hourly rate for work to be performed on the case. Secondly, it was accepted that, to the extent there is a dispute and one being raised by the Legal Services Commissioner, the dispute did not relate to the rates specified in the agreement for calculating the costs. It will be remembered that, in the party/party costs, Mr McIntyre did not reduce the hourly rate charged at $250 for a junior solicitor but apportioned the amount so that each client paid for one-third of the time spent on each hearing day. The dispute was about how that rate was applied not whether that rate of $250 per hour should be applied or some other lower rate. In those circumstances, s 208C(2) permitted such disputed costs to be assessed by a costs assessor on the basis of the specified rate despite the provisions of s 208A dealing with the general approach to assessing a bill and concentrating upon unfair or unreasonable costs. Further, by s 208C(3), the section did not apply to any provision of a costs agreement that a costs assessor determined to be unjust under s 208D. Under s 208D, a costs assessor may determine whether a term of the particular costs agreement entered into by a barrister or solicitor and the client is unjust in the circumstances relating to it at the time it was made. 33 Having regard to the matters referred to above, the respondent practitioner's point is misconceived. It appears to proceed on the basis that the statutory scheme operates so that firstly, no issue (including a disciplinary issue) can now be raised about fees when the clients did not take the point and secondly, if an issue could be raised but was not raised by the clients, the Tribunal cannot deal with the issue effectively acting on a de facto costs assessment. Having regard to the terms of the respondent practitioner's costs agreement, a costs assessor was not shut out of assessing the bill of costs by s 208C(1) and could have dealt with any dispute about apportionment on the rates specified in the costs agreement under s 208C (2). In addition, there was also room for the operation of s 208D in relation to a costs assessor determining that the costs agreement was unjust if the circumstances were shown to support such a finding. 34 The respondent practitioner's argument also leaves out of consideration the provisions of s 153 of the 1987 Act. For the purposes of investigating a complainant, the Legal Services Commissioner could apply under Pt 11 (Legal fees and other costs covering the provisions of s 173 through to s 208V) for an assessment of costs claimed by a legal practitioner and Pt 11 would apply to such an application as if the Commissioner were a client of the legal practitioner. That provision undermines the conceptual basis of the submissions for the respondent practitioner on this point. Further, the respondent practitioner's submissions also proceed on the erroneous basis that the Tribunal will effectively act, in effect, as a cost assessor in conducting the proceedings whereas the Tribunal is required to engage in a very different task, namely, determining whether or not the amounts charged were deliberately charged at grossly excessive rates such as to lead to the conclusion that the respondent practitioner is guilty of professional misconduct. In undertaking that exercise the Tribunal may be assisted by the evidence of a cost assessor as to what may be reasonably allowed on a solicitor/client assessment but not every charge disallowed as being unreasonable will necessarily raise issues of misconduct. 35 There are also other matters that demonstrate the error in the approach urged on behalf of the respondent practitioner. In Veghelyi v The Law Society of New South Wales(1989) 17 NSWLR 669, the Court of Appeal dealt with a challenge to the finding of the previous disciplinary Tribunal that a solicitor was guilty of professional misconduct by gross overcharging. Mahoney JA dealt with the history of regulating legal fees and why gross overcharging had been held to be professional misconduct. His Honour noted that the court had traditionally and for centuries exercised control over the "excessive fees and other unnecessary demands" made by solicitors of the court, noting that clients may frequently be in a vulnerable position in relation to their solicitors. The lack of equality of knowledge and understanding between the client and the solicitor of what is an appropriate fee and what might be a fair and reasonable charge meant that clients were entitled to be protected against the abuse of such an advantage in the hands of the solicitor. His Honour then stated: The determination of what are the principles upon which charges are to be categorised for this purpose and the categorisation of charges in a particular case each pose particular problems. Mr Roberts' argument has, in my opinion correctly suggested that the consequences of-overcharging are serious and that, in the context of the present day practice of law, it may be difficult to determine whether, in a particular case, charges are to be so categorised. 36 In noting that a solicitor's entitlement to remuneration is conveniently stated in terms of what was fair and reasonable in the circumstances, his Honour acknowledged the principles stated in such terms was "inherently indeterminative". His Honour then turned to his attention to what might fall within the category of fair and reasonable costs stating: .... Mr Roberts, in his submissions, placed reliance upon this. A finding of professional misconduct should not, the submission suggested, turn upon an error of judgment. His submissions suggested further that it would be wrong to categorise as grossly excessive and so professional misconduct a solicitor's quantification of costs where the solicitor relied upon the terms of a written costs agreement and calculated his costs accordingly or where the quantification resulted from the fact that he had an excessive view of the value of his own services. 37 His Honour accepted that the fact that the charges had been calculated in accordance with the costs agreement made with the solicitor was an important fact but noted there were limits. There could be circumstances in which costs, even though calculated in accordance with the costs agreement, would in total be unacceptably excessive. Mahoney JA, in expressing himself in that manner, clearly contemplated that the existence of a costs agreement and charging in accordance with its terms could not avoid scrutiny of the solicitor's conduct on the basis of overcharging. In a separate judgment, Priestley JA appeared to accept the Tribunal's determination that the existence of a valid fee agreement (a matter found in favour of the appellant solicitor) did not end the matter. The Tribunal was still required to determine whether the costs "actually charged by the solicitor" pursuant to the agreement represented such a gross overcharge as to introduce a connotation of disgraceful or dishonourable conduct and justify a finding of professional misconduct. His Honour then noted that there was evidence of the opinion of two experienced solicitors that the charges were unjustified and excessive. Priestley JA was satisfied that this evidence had a proper basis and was an adequate basis for the opinion expressed. Having satisfied himself that there was a proper basis for the opinions for both views, his Honour concluded that it was open to the Tribunal to act on this evidence and, indeed, on that material his Honour would come to the same conclusion as the Tribunal. Kirby P concurred with the judgment of Priestley JA. Having regard to these judgments it is clear that the existence of a costs agreement will not operate to exclude investigation of the costs actually charged by a practitioner and will not prevent a finding of professional misconduct for the charging of grossly excessive costs. That line of reasoning is quite contrary to the propositions put forward on behalf of the respondent practitioner and the suggestion that the fact that there has been no client complaint means that s 208C operates to prevent the Legal Services Commissioner pursuing the issue by investigation and by proceedings before this Tribunal. Further, it demonstrates that there is no irregularity in deciding an issue of overcharging by a solicitor on the properly admitted evidence of the opinion of other experienced solicitors. 38 The general thrust of these conclusions, contrary to the submissions put forward on behalf of the respondent practitioner, are further supported by the decision of the Court of Appeal in New South Wales Bar Association v Meakes [2006] NSWCA 340. That case was an appeal against a decision of the Tribunal finding a barrister guilty of unsatisfactory professional conduct and that he be publicly reprimanded and pay the costs of proceedings before the Tribunal. The Bar Association appealed seeking a finding of professional misconduct in circumstances where the Tribunal found that there was gross overcharging by the barrister. Although the barrister resisted attempts to have his fees assessed, when application was finally made to appoint a costs assessor the matter was settled by the repayment of certain monies and the client withdrew his complaint. The Bar Association, nevertheless, proceeded to investigate the matter and ultimately made its own complaint against the barrister in relation to the overcharging, alleging professional misconduct or alternatively, unsatisfactory misconduct. In relation to the respondent practitioner's submissions in the present matter, the relevance of that case is that, although the client's complaint was settled and withdrawn, there was no suggestion that the Bar Association could not proceed with disciplinary charges arising from the same conduct. The absence of a formal costs assessment (the matter having settled before that took place) was not suggested as inhibiting the jurisdiction of the Tribunal. In this case, the barrister did not rely upon the terms of a written costs agreement. The evidence for the Bar Association before the Tribunal primarily consisted of an expert report prepared by a barrister with extensive experience in the common law/personal injury jurisdiction and with ten years' experience as a Supreme Court costs assessor. That evidence expressed views as to the rates chargeable by an ordinarily competent barrister of the respondent's experience in the area of personal injury litigation and also expressed the opinion that the amounts charged by the barrister were in excess of those considered rates. While the Court of Appeal was ultimately of the view that the overcharging was closer to 90 per cent than the 66 per cent found by the Tribunal, both the Court and the Tribunal concluded that the amount of the overcharging represented "gross overcharging" 39 In Riley - Solicitors Manual (Butterworths) it is noted in several places that the proof of the existence of a costs agreement is no bar to disciplinary proceedings being brought against a legal practitioner arising out of a complaint of overcharging. In every case the relevant inquiry was whether the practitioner had charged fees grossly exceeding those that would be charged by lawyers of good repute and competency (eg at 15,020.20 and 35,085) citing D'Alessandro v Legal Practitioners Complaints Committee [1995] 15 WAR 198 at 211 per Ipp J; Law Society of the Australian Capital Territory v Lardner [1998] ACTSC 24 at [120]; Council of the Queensland Law Society Inc v Roche [2004] 2 Wd R 574 re de Jersey CJ. Having regard to the entirety of the Legislative scheme as well as the authorities referred to above, the respondent practitioner's submissions cannot be sustained to the extent that they challenged the jurisdiction of the Tribunal to entertain the application or the investigation conducted by the Legal Services Commissioner, including the decision to proceed with the application before this Tribunal. These authorities also support the admissibility of expert evidence and evidence regarding the usual and acceptable practice of charging. 40 As the case developed a major issue was the legal practitioner's obligations under her costs agreement and the proper construction of the terms of the costs agreement. On this approach the opinions given by Mr McIntyre and Ms Castle were generally helpful, being primarily addressed to the existence of a general obligation to charge only for work performed. Ms Castle's Evidence and Report 41 Ms Castle was asked by the Legal Services Commissioner to provide an independent expert's report in relation to the fees charged by the respondent practitioner for the six hearing days the Hussein family matters were before the District Court. Ms Castle was a solicitor and until late 2007, was a principal of a legal costs firm specialising in the provision of legal costing services to the legal profession. Those services included the preparation of bills of costs, notices of objection, response to notices of objection, submissions for the purposes of costs assessments being conducted through the costs assessment system, advice, experts' report and like services. From 1991 Ms Castle was responsible for performing research, writing articles and practice notes on a wide range of legal costing issues. She was the author of the three volume loose leaf publication on legal costs and "Costs Guide New South Wales" published by the Law Book Co between 1996 and 2006, had written newsletters and articles on costs as well as a chapter on costs in "Practical Forms and Precedents" published by the Law Book Co. 42 As an expert witness Ms Castle's status in relation to costs and the assessment of costs was not questioned by the respondent practitioner but it was said, amongst a number of objections, that her report dealt with matters of law not fact and proceeded on the basis that there could be some assessment of the respondent practitioner's costs despite the provisions of s 208C of the 1987 Act. As earlier dealt with in this Decision, on the Tribunal's approach, s 208C presents no barrier in receiving Ms Castle's report into evidence. The remaining objections were overruled on the basis that Ms Castle had clearly set out the basis upon which she had expressed her opinion and to the extent that the operation of certain provisions of the 1987 Act might be stated, such statements represented the basis upon which her opinion was formed and were open to be overturned by the respondent practitioner as was any other assumed basis from which an opinion was formed. The Tribunal was in no doubt that Ms Castle was eminently qualified to express opinions about the practice of costs assessing, including in the context of contested costs in a solicitor/client costs assessment and what costs were professionally acceptable or unacceptable. 43 Ms Castle responded to a number of specific questions. Firstly, she was asked if she was aware of any decision or guideline applicable in circumstances, such as those under consideration in the respondent practitioner's case, where the solicitor had an obligation to apportion costs equally between the clients or to apportion costs to reflect the time actually spent on each client's matter. Ms Castle replied that she was unaware of any court or tribunal decision directly on point but stated that the general principle emerging from the practice of costs assessment and from taxation practice is that a lawyer "cannot charge the same unit of time more than once". By way of example she said that, if a lawyer spent between 10.00 am and 11.00 am drafting a document that was relevant to two clients, a lawyer could not charge that hour for both clients: an apportionment must be made so that the total time charged is the total time spent. Where an hour was spent, only one hour could be charged. The apportionment was made either equally or in accordance with the time actually spent where it was possible to ascertain what time was attributable to each client. Ms Castle stated that, in terms of costs assessment practice, it was the solicitor's "obligation" to make the apportionment. The bills sent to the clients then reflected that apportionment. To the extent that apportionment was not made, a costs assessor would disallow as unreasonable any costs that exceeded the apportioned value of the amount charged. 44 Ms Castle was then asked if the respondent practitioner's clients had challenged each bill of costs, would an experienced costs assessor have approached the solicitor/client assessment on the basis set out in s 208A of the 1987 Act (namely, on the basis of whether the amount charged was fair and reasonable in the circumstances). Ms Castles stated that, if such a challenge had occurred, an experienced costs assessor would have approached the solicitor/client assessment first by reference to what was provided for in the costs agreement. That agreement governed their contractual rights and obligations subject to the costs agreement being valid and to the overriding requirement to the Legal Profession Act. The effect of ss 208A and 208B of the 1987 Act was to require a costs assessor only to allow such costs as were "fair and reasonable". Costs assessors took the view that ss 208A and 208B provided an overriding statutory requirement that operated independently of any costs agreement and that a solicitor should only be allowed on assessment such costs as were "fair and reasonable". This was the way in which costs assessors would approach the matter. 45 The next question was, would an experienced costs assessor have allowed the respondent practitioner to charge each client the full amount (based on the time spent) for each day of the hearing, or required the respondent practitioner to apportion costs between the clients equally or required her to apportion costs between the clients to reflect the time actually spent on each client's matter. In relation to this question Ms Castle stated that a costs assessor should not have and on current costs assessment practices would not have, allowed the respondent practitioner to charge each client the full amount based on the time spent for each day of the hearing. There were two reasons for this: first in construing the costs agreement, a costs assessor would most likely interpret Cl 3 in the way such clauses are customarily interpreted. Clause 3 read - "we will charge you for each hour engaged on your Work". That sentence was routinely interpreted to mean "for each hour engaged exclusively on your work". The hourly rate charge was charged for the work in that context and that was the way such clauses were interpreted on a costs assessment. Ms Castle said that she had not seen such a clause interpreted in the way as had been used by the respondent practitioner. Ms Castle then said to the extent that the clause meant otherwise, namely, that the client would be charged for each hour engaged on their work even if the solicitor was also charging others for the same work, that it was a most unusual clause and the charges made under it would be likely to be reduced pursuant to ss 208A and 208B on the basis that they were not fair and reasonable. Secondly, by Cl 3 the costs agreement was "vulnerable to being set aside" by a costs assessor under s 208D because it was unjust with the result that the charge that had not been apportioned would be reduced on the basis that, under ss 208A and 208B ,they were not fair and reasonable. To the extent that a costs agreement purported to charge in the way utilised by the respondent legal practitioner it was "vulnerable to being set aside" under s 208D unless the client's attention was specifically drawn to Cl 3 and its effect and to the fact that the routine practice of solicitors is to apportion costs in such circumstances, that is, not charge in the way the respondent practitioner sought to charge, so that the client was fully informed that, in retaining her, the client was choosing to pay more than he or she should expect to pay other solicitors. Ms Castle stated that costs assessors regularly exercised the power under s 208D to set aside costs agreements where the costs agreement contained a clause that resulted in unfair or unreasonable charges being charged to the client. This was particularly where the client was at a disadvantage in terms of education, intellect, language, commercial sophistication and the like. 46 In relation to what was the correct approach to apportionment, namely, an equal division or a calculation based on the time actually spent on each case Ms Castle stated that the approach taken by costs assessors in apportioning costs between multiple clients or parties in a party/party context was as follows: (a) where there was sufficient evidence to indicate the time actually spent, or attractable, to each particular client, that time was allowed to be charged to the client; (b) where there was insufficient evidence, or it would be artificial to apportion costs other than equally, then an equal apportionment would be made. 47 On a solicitor/client costs assessment, Ms Castle stated that the solicitor bore the onus of proving that that the costs had been correctly charged in accordance with the costs agreement. Where time was spent for more than one client it was to be appropriately apportioned according to the principles referred to earlier. Where the solicitor's bill failed to apportion costs, the costs assessor must make the apportionment. Often there was insufficient evidence to do other than make an equal apportionment. A costs assessor had power to call for a wide range of documents and could have called for the transcripts to establish a more appropriate manner in which to make the apportionment in relation to the hearing days. This exercise involved looking at how long each of the plaintiffs were involved in giving evidence, what other witnesses were involved and whose matter their evidence went to and like matters. Often it was too difficult to make an accurate apportionment so an equitable apportionment was made. 48 In cross-examination Ms Castle said that, in her report, she made no reference to s 208C because it did not directly arise in relation to the topic she was asked to cover. Strictly speaking it was unnecessary to address the operation of s 208C for her to reach her opinion because she considered she was being asked, theoretically, if the matter proceeded to assessment what a costs assessor's opinion would be. She considered whether the matter could proceed to assessment and in her opinion it could have been assessed but nevertheless she understood the question to be theoretical, namely, if the matter proceeded to a costs assessment what would be the approach of a costs assessor to the charging for the hearing days. In her view, on the facts that she was asked to assume, the prohibiting operation of s 208C did not arise. Approaching the matter on that basis, Ms Castle's view was that the solicitor's obligation was to charge in accordance with the costs agreement and that the matter of charging in the bill revealed a manner of charging contrary to the terms of the costs agreement. The costs agreement would have required the costs to be apportioned. The respondent practitioner was entitled to charge in accordance with the costs agreement and the proper construction of the costs agreement was that, where work was done which benefited all three clients, it did not permit each client to be charged that entire amount of time. 49 On the respondent practitioner's approach to the operation of the costs agreement, the costs charged for the hearing dates would be considered by a costs assessor to be unjust and in that context, s 208D was relevant. As Ms Castle understood it she had been asked about the approach of a costs assessor and her experience informed her that a costs assessor, seeing these three costs agreements and the charges made for the same work for each of the three clients might, of his or her own motion or prompted by a submission put, have made a finding that the costs agreements were unjust. Having read the pleadings and the application she had not been informed that the Legal Services Commissioner was not arguing that the costs agreements here were unjust but she was acting as an expert and obliged to answer the questions asked of her and it was her opinion that, as part of the costs assessor's approach to these matters, those provisions would be a relevant consideration. It was put to Ms Castle that, if there was no allegation against the practitioner that the costs agreement was unjust, then she would have to accept that the opinion she expressed on the potential operation of s 208D would fall away but that was a proposition that she could not accept. That was because a costs assessor would approach the matter as she had already stated, that is, would firstly look at the terms of the costs agreement but if the costs agreement was set aside then the costs assessor would have no term to apply and would only apply the test referred to in ss 208A and 208B. If the costs agreement stood and was considered to be valid, the costs assessor assessed the costs in accordance with the agreement as modified or subject to the overriding statutory tests of "fair and reasonable" costs. 50 Ms Castle accepted that, on the assumption that the costs agreement was valid and there was no suggestion that the costs agreement was unjust, the only persons capable of raising a dispute about the costs were the Hussein family or possibly the respondent practitioner. 51 Because of the way in which Ms Castle had approached the matter, she had no need to consider the authorities on the operation of s 208C although she was aware that the respondent practitioner had been a party to judgments in the Supreme Court about the operation of that section Evidence of Mr McIntyre 52 Although Mr McIntyre was called only as to matters of fact and had not been qualified as an expert, he was cross-examined. His evidence was accepted by the respondent practitioner on a similar basis to its acceptance in the Galitsky proceedings. Mr McIntyre agreed that he had conducted only a party/party costs assessment in the Hussein matters but he had called for the solicitor/client bill for the purpose of establishing that the indemnity principle had not been breached. He explained the indemnity principle to be that where a costs assessor was assessing on a party/party basis, the assessor needed to ensure that the obligation on the client to pay the solicitor was not in a lesser sum than the amount claimed in the party/party bill, otherwise there would be a profiting on the party/party bill. Mr McIntyre accepted that, in approximately 2006, litigation solicitors were generally aware of the indemnity principle. The solicitor/client bill would usually be sighted in a party/party costs assessment where one party required the assessor to be satisfied that the indemnity principle was not breached. It was commonplace to be told that the solicitor/client bill and the party/party bill were in fact identical. Mr McIntyre said that, on an assessment on an indemnity basis, the general principle was to allow everything except those things that were regarded as "unfair or unreasonable" - the onus in relation to costs was "switched around". Party/party costs were assessed on a fair and reasonable basis and that may result, for one reason or another, in the whole of the amount of the costs claimed being granted. On an indemnity basis the principle was that the parties were entitled to all their costs unless the assessor formed the view that, for some reason, the costs were unfair and unreasonable or excessive. 53 Mr McIntyre was then cross-examined on the deregulation of legal costs in New South Wales from the middle of 1994 whereby litigation costs in personal injury matters were no longer governed by a scale of costs. This was accompanied by an obligation for solicitors to enter into costs agreements and under the 1987, Act in personal injury matters, practitioners were permitted to charge a success premium of up to 25 per cent. Mr McIntyre understood that, in certain cases, one justification for the conditional fee uplift was that the solicitor carried the cost of the disbursements in the matter. Mr McIntyre's experience was that it was common for costs agreements to provide for time-based charging in increments or units of time. 54 Mr McIntyre conducted a party/party assessment and was not involved in the solicitor/client assessment and therefore had no need to consider the operation of s 208C of the 1987 Act. In other matters he said that he had undertaken many solicitor/client assessments. Against that experience he accepted that there was a difference between costs of the same matter for the same work assessed on a party/party basis on the one hand and on a solicitor/client basis on the other. It was not unusual to see a bill prepared on a solicitor/client basis at a rate of $400 and the same rate being claimed on a party/party basis. The costs assessor might determine on a party/party basis a fair and reasonable hourly rate is $350 and there would be a difference between what was appropriate on a solicitor/client basis. It was also possible that, in relation to a solicitor/client arrangement, there was work performed on instruction that was not strictly necessary but which the client wished to have performed and that cost would be allowed on a solicitor/client basis but not on a party/party basis. This might occur with a client who was particularly demanding but where numerous telephone calls from the client would not be allowed on a party/party basis but would be allowed on a solicitor/client basis. It was not uncommon now to have the client attempt to have, on a solicitor/client assessment, the costs agreement set aside and only reasonable costs allowed. 55 In relation to Mr McIntyre's referral of these matters to the Legal Services Commissioner under s 208Q of the 1987 Act, he accepted that he had no material to determine whether the excessive rates were deliberately charged by the respondent practitioner. He understood his obligation under the Act was to be satisfied on a prima facie basis that there was excessive charging and if that were so, he had an obligation to report it so that the Legal Services Commissioner could then investigate the other elements in order to make out or justify an allegation of either unprofessional conduct or professional misconduct. His process of thinking was that he had been practising for a long time and he had never seen this type of charging before and had never seen it done before. He had been involved in litigation matters where he had acted for multiple clients and it was always his experience in such circumstances that the charges had been apportioned amongst the clients. In Mr McIntyre's view, because it was not apparent in the costs agreements, this charging arrangement by the respondent practitioner had been outside the costs agreement. If outside the costs agreement and if this charging regime had been disclosed to the client and they had accepted it, then he might have come to the conclusion that the charging was not excessive or deliberately overcharging. However, faced with the material that was before him he felt he had no alternative than to make a report and referral and this was the first and only time he had felt he had to do so. 56 Mr McIntyre agreed that the circumstances of the Hussein family litigation were unusual. In this case there were a number of objections by the defendant to the respondent practitioner's bill but she persisted in claiming the amount in her bill. Mr McIntyre agreed that, throughout the party/party assessment, the respondent practitioner maintained her entitlement to the costs charged for the hearing days and at no stage abandoned them. In cross-examination it was put to Mr McIntyre that, in his experience, it was commonplace for solicitor/client bills to be assessed in much higher amounts than the same bills assessed on a party/party basis but Mr McIntyre could not agree with the statement that they were "much higher". He understood the whole idea of statutory amendments under the deregulated systems was to try to ensure the recovery on a party/party basis was as near as possible to the solicitor/client costs. He now saw bills prepared on a party/party basis where the solicitor/client costs were in an almost identical amount and where there had been instances where the recovery had been as high as 95 per cent or more. Mr McIntyre confirmed that the reason he allowed hearing fees much less than those claimed for by the respondent solicitor was because the hearing fees had not been equally apportioned between the three cases. He made an allowance for each matter of one-third of the hearing costs for each day. Mr McIntyre accepted that, in making that assessment, he had not mentioned any authorities, publications or documents about costings that bore upon the issue but operated on his understanding of his obligation under the legislation and his experience as a solicitor and a costs assessor. On that basis he had formed the view that there had been gross overcharging and thus he had an obligation to report the matter to the Legal Services Commissioner. When Mr McIntyre first saw the bill he thought that the costs for the hearing days might have been claimed "somewhat casually" or had been put in "by accident". He expected to see an explanation to that effect. The evidence of Mr Brabazon 57 To deal with the issues raised by Ms Castle's report, the respondent practitioner relied on the affidavit of Mark Brabazon, a barrister in private practice who between 1995 and 1999 had been a costs assessor under the 1987 Act and since that time had advised and appeared in a number of appeals and cases relating to legal costs. He had presented numerous papers on the subject. Mr Brabazon's affidavit took the unusual course of arguing why Ms Castle's report should not be accepted as expert evidence primarily because it was said to ultimately involve questions of the interpretation and application of statute law and the common law in New South Wales, that is, they were the opinions of a lawyer (as were his opinions) about the law in this jurisdiction. The Tribunal is unable to accept that description of Ms Castle's report. In exercising the role and functions of a costs assessor under the Act, it is necessary to have regard to the provisions of the Act that control and direct the costing task. To the extent that Ms Castle explained the practice of a costs assessor by reference to certain provisions of the Act and the way those provisions have been applied by costs assessors, Ms Castle merely set out the basis upon which her opinion had been formed. If it could be shown that Ms Castle had misapplied or misunderstood any of those provisions, then such a finding would undermine the basis of her opinion. Cases have already been cited where the evidence of experienced practitioners in the area of costs in a particular jurisdiction were received and used in determining the issue of misconduct and used without criticism of such a course. Disciplinary issues involving costs and allegations of overcharging by legal practitioners is a notoriously difficult area and besides its own experience as a specialist Tribunal, the Tribunal is entitled to the benefit of any opinion, including expert evidence properly brought forward that deals with the practice of, inter alia, costs assessing. 58 Mr Brabazon did not directly give answers to the several questions posed to Ms Castle but expressed an opinion as to why they were irrelevant or not proper questions for expert evidence. He referred to the deregulation of legal costs from mid-1994 and how the old "scale-based taxation regime" was replaced by a new Division 11 of the Legal Profession Act 1987. He referred to the new regime as involving costs being de-regulated in favour of a market-based regime with information based consumer protection features. He referred to both solicitor and client having the right to take a bill to assessment and should a solicitor's costs go to assessment, specific provisions applied including ss 208A to 208D of the 1987 Act. Section 208A(1) specified matters that a costs assessor must consider and s 208B specified matters to which a costs assessor may have regard in assessing what was a fair and reasonable amount of costs. He noted that s 208C specifically "overrode the assessment process" including ss 208A and 208B. Section 208D allowed a costs assessor to determine whether a term of a particular costs agreement was unjust in the circumstances relating to it "at the time it was made" thus focusing on the circumstances at the time when making the contract. Mr Brabazon noted that the costs agreements were dated 11 April 2000, but the proposal for a joint hearing occurred in September 2001. The terms of the three costs agreements he regarded as being "totally unremarkable", simply providing hourly rates differentiated by the capacity and seniority of the person engaged. He was of the view that, if there was any scope for applying s 208D to these costs agreements, they were not unjust. Shortly stated his position was that, if a contract in the form of a costs agreement applied, there was "no room for any set of directions or guidelines" to apply other than the law of contract itself. 59 Given that an hourly rate was specified in the costs agreement, Mr Brabazon was of the view that, prima facie, s 208C excluded consideration of the matters referred to in s 208A(1)(c) namely, the fairness and reasonableness of the amount of the costs in relation to that work. Therefore, it followed that s 208B was not engaged in respect of those matters. He proffered the view that, as a matter of law, ss 208A(1)(c) and 208B were excluded to the extent that a compliant costs agreement specified an applicable rate that was not determined to be unjust under s 208D. This view was contrary to an opinion expressed by Ms Castle. He was also of the view that it was incorrect to say that the view taken by costs assessors is that ss 208A and 208B provide a statutory requirement overriding the terms of a costs agreement and account had to be taken especially of the operation of s 208C. 60 Mr Brabazon concluded with the following expression of his view: If the contract, properly interpreted and applied, allowed full charge and recovery from each client, an assessor would have been bound to assess accordingly. If the contract, properly interpreted and applied, allowed a full charge to each client but only single recovery for a particular service provided to them in common, the full amount would still be properly billable to each and assessable accordingly, with a client potentially enjoying rights contribution and subrogation inter se. If the contract, properly interpreted and applied, somehow required a fractional apportionment, that would have to be reflected in the assessment. The respondent practitioner's evidence 61 The respondent practitioner swore and filed an extensive affidavit, in particular dealing with her review of her own files in the three District Court matters. In that affidavit she referred to a meeting in mid-April 2000 with Mrs Hala Hussein in relation to the three matters. The respondent practitioner told Mrs Hala Hussein (the daughter-in-law of Mohamed and Tofika Hussein) that she would look at the files from former solicitors engaged and advise her about the matter. She would take the case on the basis that they pay all disbursements, including doctors' report fees and any liability expert's report fees. Her costs were conditional: if they won their cases they would have to pay but if they lost their cases they would not have to pay. Her hourly rate was $280 and other rates would apply for different staff within the firm and those rates would be disclosed in the costs agreement. They would pay an additional 25 per cent premium on costs if they were successful because she was accepting the case on a conditional basis. Mrs Hala Hussein apparently accepted those statements as the basis for proceeding with the cases. The respondent practitioner later received instructions directly from each of the plaintiffs. 62 The respondent practitioner stated that, on 18 April 2000, she prepared three "conditional costs agreements" with each of the prospective clients and they were "pro forma cost agreements" she had been using for some time in relation to speculative personal injury accidents. The critical term of each costs agreement appears in paragraph [3] of this Decision. 63 Between 12 May 2000 and 12 November 2001 the matters were prepared, counsel was briefed, advice given and settlement was explored. The respondent practitioner stated that part of each case on liability relied on the same evidence "being that part that related to knowledge of the Husseins' landlord about water leakage, but the remainder of each case on both liability and quantum was different from plaintiff to plaintiff. Each of Toufika, Mohamed and Fatimas' cases were considered to be separate, and were treated accordingly". The respondent practitioner was at pains to point out that she conferred separately with each of the plaintiffs and how, within her firm, the matters had been kept separate. 64 On 14 September 2001 the respondent practitioner conferred with her clients concerning the defendant's proposal that the matters be heard "together". She received advice from Mr Galitisky and concluded that, in order to contain costs should they fail in opposing the defendant's proposition, they would consent to the three matters being "heard together". Up until the hearing of the matters, each client was billed separately in relation to issues arising in their case. 65 After verdicts were entered in the District Court in favour of the plaintiffs, the respondent practitioner pursued certain costs with her three clients and a large amount of detail was provided in relation to those steps. During August 2003 the respondent practitioner and Ms Petroulakis, an employed solicitor, prepared an itemised party/party bill and it was noted that such party/party bill for each client was less than the corresponding practitioner/client bill. This did not surprise the respondent practitioner because in her experience (and her belief was that) party/party costs were only a partial indemnity for practitioner/client costs and hence would always be less. In October 2003 the respondent practitioner prepared and sent to the defendant's solicitors a compromise for party/party costs but received no response to those offers. Shortly after she applied for assessment of party/party costs and in December 2003 received the defendant's lengthy notices of objection. 66 In her global response to the defendant's objections the respondent practitioner conceded "certain claims in the bills of costs should be apportioned as between the related proceedings". The respondent practitioner then appeared to make a concession of one-third in relation to the hearing costs between 13 November 2001 and 25 February 2002, representing the six days of the District Court hearing. In her affidavit the respondent practitioner stated that she made this concession because she believed that it was more likely that the defendant would agree to a figure for party/party costs without the need to await for the costs assessor to make determinations and if this occurred, it was to her clients' advantage because it would have meant that there was no possibility of any review by the defendant of a costs assessor's decision nor was there any possibility of any subsequent appeal from any review and there would be a saving of costs that would otherwise have been incurred during the re-assessments. In August 2003 the respondent practitioner had advised each client that, on an assessment, they were unlikely to be awarded the entire amount claimed in the party/party bill of costs and amongst the reasons proffered, stated as follows: Although his Honour ordered that the defendant pay your costs in the proceedings, as you are aware your matter was heard together with matters of ... and the Housing Corporation and as such a costs assessor appointed by the Supreme Court to make an assessment of party/party costs is unlikely to allow the full amount of certain items of costs and disbursements claimed in the bill of costs on the basis that such costs should only be awarded as a proportion; such items will include, counsel's fees, some hour (sic) attendances at court particularly our attendances at the hearing of the matter, certain of the work carried out with respect to obtaining an expert's report. 67 In the costs assessor's reasons for assessment of party/party costs and disbursements relating to Toufika Hussein, Mr McIntyre stated: The response of the costs applicant to the respondent's notice of objections did not in my view adequately address the objection of the costs respondents that no time apportionment was applied by the solicitor for the costs respondent in preparing the bill of costs for the three matters which were heard together. There were a number of examples of this in the three bills of costs. The most glaring however was that the total time spent at court by the solicitor for the costs respondent during the days of hearing was not divided between the three matters but instead the same time was claimed for each matter. This resulted in the solicitor for the costs applicant, for example claiming a total of $6,000 per day for instructing at the hearing. It should also be noted that counsel claimed fees on the same basis. In dealing with each hearing day Mr McIntyre apportioned the fees for attendance by a junior solicitor at the District Court, reducing the figure claimed on each day for each client by two-thirds. 68 In mid-January 2005 the respondent practitioner wrote to each of her clients enclosing the reasons of the costs assessor, pointing out where she thought the costs assessor had been in error, and, giving advice concerning a re-determination and the risks attendant on such a course. The respondent practitioner then noted that there were outstanding solicitor/client professional costs and that, on a without prejudice basis, she was prepared to reduce those costs and disbursements by accepting the payment already received as being in full and final payment of the balance of outstanding costs and disbursements. 69 In relation to the Legal Services Commissioner's allegations, the respondent practitioner denied that she overcharged any of her clients and maintained that she was entitled "by the terms of my costs agreements, to charge my clients for services that I provided pursuant to those agreements". Further, she said that on several occasions she or a solicitor in her employ simultaneously provided separate services for the Hussein family including, but not limited to, instructing Mr Galitisky in court during the hearing of the three sets of proceedings. The respondent practitioner also noted that none of the clients had made any complaint about the costs agreement, her fees or any apportionment or any other matter to do with her fees. There had been no step taken to have the practitioner/client bills assessed. 70 In her oral evidence the respondent practitioner stated that she understood the complaint made against her was that she had not apportioned the costs of each hearing day between the three plaintiffs and stated that, in her years of practice, she was unaware of any obligation on a solicitor in her position to apportion hearing costs in that way. Apart from what was in the Legal Services Commissioner's materials and Ms Castle's report she had not heard of such an obligation to apportion from any other source in the profession. Her view was that she was under no such obligation and at no stage did she have any intention to overcharge the Hussein family in any way. Apart from the 25 per cent lift specified in the costs agreement, the fact was that she would only get profit costs if she won the case and that did not lead her to overcharge the Hussein family. She never had any intention of taking money from their "personal pockets" other than out of the proceeds of verdicts and costs orders. 71 A serious dispute had arisen with the defendant over party/party costs and in order to assist settlement of the issues, the respondent practitioner had written twice to her clients offering to make a "without prejudice" significant reduction in her profit costs. This occurred twice and before she had received notification of the complaint from the Legal Services Commissioner. The respondent practitioner said her practice was predominantly in the personal injury field and she conducted cases for injured plaintiffs on a no win, no fee basis. It was common for disputes to arise with defendants over party/party costs after cases were won. In her practice in relation to the same types of cases, the quantification of party/party costs was relevant to the amount that the respondent practitioner intended to charge clients on a solicitor/client basis and disbursements. In this case the verdicts were modest and the respondent practitioner said that what she intended to charge "depended on ultimately what we got for party/party costs". 72 The respondent practitioner said she was aware of the indemnity principle in the context of party/party costs assessments. In her experience in cases such as the Hussein family cases there were many party/party costs disputes that were settled privately between the solicitor and the defendant. There were some such disputes that could not be settled and her understanding at the time of the Hussein matters was that the indemnity principle operated such that a costs assessor would allow the costs on a solicitor/client basis, being the full amount of the costs that were charged to the client by the solicitor. When matters proceeded to a party/party costs assessment, her practice was to send an itemised solicitor/client assessment of costs to the client and she did so because she regarded it as being "good practice". The client was entitled to know what they would be charged so they were provided with an itemised bill and it also avoided "breach of the indemnity rule". This occurred if the matter proceeded to assessment and the costs assessor called on the solicitor/client bill and it was important to show the costs assessor that the solicitor was not making a claim on party/party costs that were not going to be charged to the client. The Hussein family had been sent an itemised solicitor/client bill but when that bill was sent the respondent practitioner did not intend that the Hussein family would be obliged to pay the amount set out in that bill. Ultimately that was because what she intended to charge them depended on the amount received in each of the party/party costs assessments. After sending the clients the itemised solicitor/client bills the respondent practitioner received no complaints or objections from those clients about any matter contained within those itemised bills. 73 In late June 2005 the respondent practitioner had advised the Legal Services Commissioner that she had reduced her fees in the three matters in the following sums: in relation to Toufika Hussein, a reduction of more than $29,000; in the case of Fatemah Hussein, a reduction of nearly $51,000 and in the case of Mohamed Hussein, a reduction of nearly $62,000. In oral evidence the respondent practitioner said that those reductions were in fact made out of her own profit costs. After making those reductions and taking account of counsel's fees she had borne all the disbursements herself other than counsel's fees. The Legal Services Commissioner had earlier invited her to reduce her fees for the hearing days to the amounts allowed by Mr McIntyre on assessment on a party/party basis but she declined to do so. She had made the clients aware of Mr McIntyre's assessment and had drawn attention to areas where she disagreed with his approach. The clients were advised they were entitled to seek a re-determination of the party/party assessments and were told of the benefits and risks of taking that course. Each of the clients instructed her not to proceed with a re-determination application and so there was no challenge to Mr McIntyre's assessment. The respondent practitioner did not consider that she was entitled to challenge Mr McIntyre's assessment without instructions to do so. 74 In cross-examination the respondent practitioner accepted that, when it was agreed that the three matters should be heard together, it could be assumed that there would be a saving in time and costs. There were, however, separate experts' reports prepared for each case. The costs agreement used by the respondent practitioner, described as her usual "pro forma" agreement, were used for these types of cases by her and she believed they were in a standard form issued by the Law Society. Her position was that she billed in accordance with the rates set out in the costs agreement and on that basis had defended the Legal Services Commissioner's complaint. Clause 3 of the agreement stated: We will charge you, subject to the successful outcome of the work at the following hourly rates for each hour engaged on your Work which she understood to mean that her firm would charge the client "for the work we did for that client, and for no other clients". 75 On 31 March 2003 the respondent practitioner had written to each of the clients concerning their liability claim and their liability to pay the costs in relation to an attached bill of costs. At the conclusion of that letter there was a note stating that if monies were held in trust or control monies were held on behalf of the client, the firm would apply those monies towards the payment of this bill of costs after the expiration of thirty days unless the client objected to the bill of costs before the expiration of thirty days. It was put to the respondent practitioner that those letters indicated that the clients were bound to pay the amounts set out in the bill of costs. The respondent solicitor stated that it was not her intention, however, to charge the total costs and those bills were sent in that form because that was her practice in these matters and because she wanted to make sure that if the costs assessor asked for the solicitor/client bill of costs, then that bill was available and could be produced. She accepted that her intention was not expressed in those words in that letter or in the bill of costs or anywhere else. At the time the letter was sent there was no money in the trust account, although if money did come into the trust account after 30 days she would be entitled to transfer any funds in satisfaction of the bill. 76 In relation to the hearing dates the respondent practitioner said that she billed in accordance with the rates set out in the costs agreement and that she was there on each day representing each client and charged accordingly. She conceded that each client was charged the full amount of the time spent in court - she did not hold the view that she had to make an assessment as to whether in fact every hour of each one of those days was spent on matters related to all three plaintiffs. She said that she was entitled to charge each plaintiff for every hour that was spent in court because she was "there representing each plaintiff separately". It was put to the respondent practitioner that, in fact, not every hour spent in court was referrable to all three plaintiffs. The respondent practitioner replied that she did not know what hours were referrable to a specific client on those days but they were there for three separate matters and three separate clients and their matters were listed on those days and she was entitled to charge a separate fee for each client for being there on that day. That was her honest belief held at that time and was still held. She denied that she deliberately decided not to ascertain the time that was spent in court referrable to each plaintiff or deliberately decided not to determine what time was spent in court common to all plaintiffs. The bill of costs sent to each client did not involve an assessment of what time was spent on behalf of each of the clients. 77 In August 2003 the respondent practitioner had written to the three plaintiffs and had expressed the view that, on an assessment, it was unlikely that they would be awarded the entire amounts claimed and one item specified as falling into that category was the full costs of the hearing. The respondent practitioner said that concession was made because, in her years of experience as a solicitor with party/party costs assessments, that would be the advice she would give to clients with matters of a similar nature. In that correspondence she had accepted that the costs would only be allowed as a proportion. When asked whether that meant she was fully aware, on a party/party assessment, there was a very substantial likelihood that an assessor would require the hearings costs to be apportioned the respondent practitioner disagreed stating that her opinion was based on her experience over the years in dealing with applications for assessment and the fact that costs assessors were "notoriously radical" in their approach and the results they gave at the end of the day. When writing that letter she had not conceded that an apportionment would be made but spoke of a likelihood based upon her years of experience with costs assessors and the different approaches they adopted in assessing party/party costs. She said that statement in the letters to her clients had nothing to do with her agreement with the clients. She did not agree that her experience was that the costs assessor had regarded the way the hearings were billed as being unfair and unreasonable - she thought it was quite reasonable to make the claim for the hearings in the way she did, particularly in light of the court's order in each matter that the defendant pay costs on an indemnity basis from a particular time. The respondent practitioner accepted that, although an indemnity costs order had been made from a particular day, it was still her view that the costs assessor was unlikely to allow the full amount claimed for the hearing days in regard to each plaintiff. Further, in the letter the legal practitioner was referring to whether the full hourly rate would be paid or whether the assessor might reduce it. 78 In negotiations about the party/party costs the respondent practitioner had made a concession that, in the hope of settling the issue, there should be apportionment as between the related proceedings. That was a concession made in the party/party costs dispute and was not made in a solicitor/client assessment. As she understood it the respondent practitioner was trying to resolve the matter because the costs assessor could still award whatever costs he or she saw fit. The respondent solicitor understood that, since the deregulation of costs from approximately 1994, the previously existing significant gulf between party/party costs and solicitor/client costs no longer existed and while that was her understanding, practice informed her otherwise. She accepted that a difference between party/party and solicitor/client costs on assessment was that the solicitor and her own client costs may include unreasonable or unusual costs if the work was authorised by the client. Nevertheless, the respondent practitioner did not expect that on a solicitor/client assessment of her costs the assessor would have taken the same approach to the costing of the hearings as he would have taken during the party/party assessment. She said that she would have expected and argued that the costs assessor should apply the rates set out in the costs agreement between herself and each client. 79 When it was put to the respondent practitioner that the concession as to apportionment made in relation to party/party costs meant that there would be a large difference between those costs and solicitor/client costs, she replied that it was never her intention nor was it her practice to recover from clients any excess money they were awarded by way of judgment and/or party/party costs. It was always her intention and it had always been her practice to reduce her costs so that the client was left with some money in their pocket. While the practice was not reflected in the solicitor/client bill it was reflected in the correspondence sent to the clients offering to reduce her costs. Her experience as a sole practitioner since 1994 and acting in hundreds of these types of cases led her to the view that the party/party costs assessor awarded costs substantially less than solicitor/client costs and would not allow the full amounts claimed for the hearing dates. Further, her understanding had been and still was that she was entitled to bill each client separately, she had represented them separately and was entitled to bill them according to the rate in her costs agreements. In fact that is what she did. In relation to the number of personal injury cases the respondent practitioner handled she could not recall being involved in "too many cases" with a joint hearing and it was unusual to have three plaintiffs in the one hearing. She could only recollect a few occasions when she had matters listed jointly for hearing Deliberation 80 It was accepted by the parties that the majority judgement in Leon Nikoliadis v Legal Services Commissioner [2007] NSWCA 130 insofar as it construed s 208Q(2) of the 1987 Act was to be applied to the present matter. The approach to be adopted to the words "the deliberate charging of grossly excessive amounts of costs" required there to be a finding of significant personal misconduct such that there must be a finding that the solicitor's conduct was deliberate in relation to the gross excessiveness of costs and not simply in relation to the charging of the costs that were, as a matter of fact, grossly excessive (see the separate judgment of Hodgson JA). As McColl JA noted in her separate judgment, the word "deliberate" was the touchstone of misconduct in s 208Q and was a synonym for "wilful". Both words connoted an intentional act. Significantly, as had been found by the Tribunal, McColl JA (Hodgson JA agreeing) found that the sending of the bill of costs to the client completed the act of overcharging. This construction is not only consistent within the provisions of the Act but appears to be in accordance with the ordinary meaning of the word "charge". In Black's Law Dictionary (West, 5th ed) the word "charge" is defined as: "to impose a burden by duty, obligation or lien; to create a claim against property; to assess; to demand; ... in commercial transactions, to bill or invoice". 81 The approach of the majority in Nikoliadis requires an analysis of the evidence in order to determine whether there was a relevantly intentional act by the respondent practitioner to charge grossly excessive costs. In summary, the respondent practitioner's evidence before the Tribunal was: (a) that she had conducted hundreds of speculative common law cases and was unaware of any obligation, rule or authority that required her to apportion the costs of the hearing between parties when there was more than one plaintiff, yet she was aware of the concept of apportionment in party/party costs; (b) that when the cost agreement was entered there was no suggestion that the cases would be heard at the same time or that there would be any issue about the appropriateness of her costs agreement with each of the three clients; (c) the costs agreement was a pro forma document offered by the Law Society of New South Wales; (d) that she had no intention to overcharge these clients and had rendered her detailed bill of costs in order to ensure that she did not fall foul of what she understood to be the "indemnity principle" namely, that she could not seek a higher level of costs against the defendant than she proposed to recover from her own clients; (e) that it was her practice in conducting these speculative actions that the actual amount of costs ultimately recovered from the client was dependent on her consideration of the level of damages received and a consideration of the party/party costs obtained after assessment; (f) in the three Hussein cases, the damages were "modest" and the fees/costs were significant. There were a number of charges disputed by the defendant and the costs assessor had reduced a number of items charged, including allowing only one-third of the costs of each hearing day in each of the three cases; (g) although the respondent practitioner believed the charges she made for each hearing day were in accordance with her costs agreement and that she was under no obligation to apportion those costs, she had made an offer to reduce the costs (including the costs for the hearing days) in order settle the costs dispute but was unable to reach a settlement; (h) her clients accepted the respondent practitioner's advice concerning the risks associated with a review of the costs assessor's determination and had also agreed to a proposal by the respondent practitioner to substantially reduce her costs; (i) that the reduction in those costs meant that, in any event, the respondent practitioner had not, in fact, charged each client $250 per hour for each of the six hearing days but had ultimately charged almost nothing for those days; (j) that it was not her intention that any of the Hussein family would have to pay anything out of their own pockets to meet her costs but it was her intention that some of her costs should be paid out of the verdict and they should be able to take away some money from their successful litigation. 82 There was no cross-examination of the respondent practitioner about her usual practice in relation to billing and the recovery of costs in these speculative actions. In cross-examination it was put to the respondent practitioner that she did intend to charge more than she was entitled to in relation to the hearing days but she rejected that proposition, relying on the terms of the costs agreements and pointing out that any compromises that she tried to reach on party/party costs were the result of practical considerations and what was achievable without putting more of the clients' verdict at risk by protracted arguments. 83 Before embarking on the task of applying these principles to the evidence in this matter, it is appropriate to give consideration to the concept of apportionment as that concept was central to the allegation raised by the Legal Services Commissioner. 84 The lack of clarity in this area is highlighted by commentary in two texts. In "Law of Costs" (G E Dal Pont, Butterworths, 2003) at paragraph [11.3] the learned author states: Where in separate actions two or more plaintiffs sue the one defendant, or the one plaintiff sues multiple defendants, the court may leave it to the taxing officer to apportion such costs between the various actions. 85 That brief comment in Dal Pont might then be considered in the context of the commentary contained in Quick on Costs (Thomson Lawbook)at [4.3380] dealing with the topic of the same solicitor acting in two or more actions, where the following is stated: Where two plaintiffs represented by the same solicitor bring two separate actions against the same defendant, and the actions are not consolidated nor are treated as a test case decisive of the other, each plaintiff is prima facie entitled, if successful, to have her or his own action treated as distinct from the other, except as to work which was required to be done only once for the two cases, the costs of such work being divided between the two. In Oppenshaw v Whitehead; Mucklow v Whitehead (1854) 9 Ex 384; 156 ER 163, Pollock CB considered that a taxing officer ought not to take into consideration that the same attorney was employed by two or more plaintiffs, unless indeed there has been a consolidation of the actions. With respect to such matters as may be required to be done but once for both causes, such as subpoenaing a witness, making a journey, or the like, of course the charges must be divided. What was in question in the case was work which had actually been done in two cases heard at the same sittings against the one defendant. Despite the fact the briefs were substantially identical, drawing was allowed in full to both plaintiffs, the court stating, "the attorney is entitled to the same charges as if two different attorneys had been employed". That statement is something of an incentive to double charging. It was doubted in Boguslawski v Gdynia Ameryka Linie (1951) 2 KB 328 (at 334) as being too sweeping. In that case the same solicitor acted for all plaintiffs in separate actions against the same defendants. Although no order for consolidation was made and the first case was not considered a test case, it was agreed that the evidence in the first case should be deemed to be taken in the others. It was held, on taxation in the first case, that there should be no apportionment of costs as the purpose of the agreement was not to diminish the defendant's liability for costs in the first action, but to diminish the costs of all parties in the other actions. There will, however, be circumstances where the way of dealing with separate actions or appeals closely approximates to consolidation although there is no order for consolidation. The idea of close approximation to consolidation was described in Boguslawski [1951] 2 KB 328 at 333 as a difficult one and there has not been a uniform practice of apportionment in Australia. The need to ensure economy in the administration of justice does, however, require that where proceedings are heard together, they deal with substantially the same issues and parties are represented by the same solicitor or the same solicitor and counsel that consideration be given to apportionment even if there is no formal order for consolidation. In R v Hore; Ex parte Brisbane City Council [1969] Qd R 75 fourteen appeals were heard together by consent. There was no order for consolidation. All appellants were represented by the same solicitors and counsel. The Full Court indorsed apportionment, noting that had the case been one where several defendants had been represented by the same solicitor there would in effect have been apportionment had one succeeded, the plaintiff being obliged to pay only the costs of the proceedings relating to the successful defendant and a proportionate part of the costs of the proceedings taken jointly for all defendants: see Ellingsen v Det Skandinaviske Compani [1919] 2 KB 567 and above, [4.3260] . Hoare J, with whom Hanger and Stable JJ agreed, said ( R v Hore; Ex parte Brisbane City Council [1969] Qd R 75 at 91): Where there are a number of appeals involving precisely the same points, if there has been an early agreement to have them heard together, it would be quite unrealistic to allow a full fee on brief on each appeal and comparable solicitor's costs. Depending on the particular circumstances, in such a case both in respect of the fee on brief and refreshers, I should think that a normal full fee should not be allowed on each separate appeal. On the other hand, I should think that usually it would be equally incorrect to allow only a total fee of an amount appropriate to one appeal only. Generally speaking (and again depending on circumstances) it would appear appropriate that some moderate increase be made in the proper fee for one appeal and an apportionment of the total among all appeals would, I think, be quite justified. It seems to me that a similar approach would be the correct one on relevant items of solicitor's costs. See also Meade v Queensland Ambulance Service (unreported, Qld Sup Ct, White J, 24 April 1996, No 1414 of 1995); Leslie v Marsland (unreported, Tas Sup Ct FC, 24 October 1997, No 119 of 1997). The Full Court of the Supreme Court of Tasmania in Leslie v Marsland (unreported, SC Tas, Underwood, Wright and Zeeman JJ, 24 October 1997, App No 4/1997) affirmed the trial judge's decision to award costs to the second respondent against each of the three plaintiffs separately. Zeeman J, giving the leading judgment, stated that Oppenshaw is 'authority for the proposition that that where costs have been incurred in the common defence of two or more actions it is appropriate to leave the question of apportionment to the taxing officer and for the taxing officer to divide such costs between the various actions' (at p 2). 86 The difficulty with the collection of cases referred to in the commentary is that many of them are very old and reflect different taxing regimes and also, of course, deal with circumstances different to those before the Tribunal in the present matter but a general approach to apportionment emerges from these cases. In addition, the respondent practitioner relied upon the judgment in Carter v Newcastle Wallsend Coal Co (1909) 9 SR(NSW) 474. In that case two matters were tried together as they arose from one mine accident and in each case the defendants were charged with negligence. It was found at first instance that the combined case took longer than had each case been tried separately. It was held that, initially the Prothonotary was wrong in allowing two separate refreshers on each day as if there had been two separately tried actions. It was accepted that the two actions had very different features and one might have succeeded and the other failed. In the Full Court, Simpson ACJ was of the opinion that the amount allowable was at the discretion of the Prothonotary. The allowance of refreshers to counsel as if each case had been tried separately had been the practice for a very long time and it was significant that, there were two distinct and separate cases and that considerations that might arise from the two cases and the duties and responsibilities of counsel to their different clients might well justify the payment of separate refreshers. 87 The Tribunal does not find that any assistance is derived from the judgment in Carter bearing in mind the different costs regime applicable at the time and the different circumstances of the case. In the present matter, the respondent practitioner at no stage argued that the responsibilities of the junior solicitor who appeared on the six hearing days was affected by the differences in the three cases or the different issues raised in each or some of the three cases or that legal issues of novelty or complexity or responsibility arose such that a full day's hearing was properly chargeable to each client. The respondent practitioner's position was simply that her costs agreement allowed such charges to be made. 88 It has been noted from the journals and texts that there appears to be no uniform practice in relation to apportionment and that undoubtedly is a reflection of the numerous factors that need to be taken into account in applying the principle. That practical recognition that an absolute rule may be difficult to lay down and the circumstances of each matter have to be considered should not lead practitioners to conclude that routinely charging more than once for the same legal service without apportionment is unlikely to raise issues of professional misconduct. Having regard to the importance of the issue it would be of assistance to both the legal community and their clients for the professional associations and the Legal Services Commissioner to give some prominence to the issue of appropriate apportionment. 89 Some advantage was argued by the respondent practitioner to flow from the fact that there was no formal order for consolidation of the three matters. However, there is force in the extract from Quick and from the approach in Boguslawski that the similarity of separate actions and hearing them together closely approximates to consolidation. Under the previous rules of court (now under the Uniform Civil Procedure Rules) where several proceedings are pending in the court and it appears to the court that they involve a common question or the rights of relief claimed in them are in respect of or arise out of the same transactions or series of transactions or if for some other reason it is desirable to make an order for consolidation, the court may order that the proceedings be consolidated or tried at the same time or have one heard immediately after the other. In the present case, absent a formal order of consolidation, in substance what was done effectively consolidated the cases. To the extent that the respondent practitioner appears to accept that a different costs result and an apportionment may properly flow from a formal order for consolidation, then no different result should flow from what actually happened in the present cases. This result is consistent with the discussion in paragraphs [84] and [85]. 90 As earlier indicated, the respondent practitioner had consistently relied upon the terms of the costs agreement as permitting her to charge her three clients for the full six hearing days and that there was nothing in the costs agreement that required her to apportion that time. It is therefore necessary to consider the terms of the costs agreement and in particular Cl 3 that is reproduced in paragraph 3 of this Decision. In essence, that clause stated that the respondent practitioner, subject to the successful outcome of the work, would charge certain specified rates including $250 per hour for a solicitor "... for each hour engaged on your work". The work was defined as meaning the clients' common law claim for damages involving negotiating a settlement, taking court proceedings if the matter did not settle, preparing the matter for hearing and taking appropriate instructions to bring the matter to a conclusion. In cross-examination, the respondent practitioner accepted that Cl 3 meant that she would charge the client "for the work we did for that client and for no other clients" 91 That plainly appears to be the proper construction of Cl 3. At the time when the costs agreement was entered into, all the matters were being treated as separate matters and it was not in contemplation that the matters would be consolidated or heard together with the evidence in one case being the evidence in the others. There was no evidence to suggest that, at the time the costs agreement was entered, that some different costs regime would apply should the matters be consolidated or heard together. There is no evidence before the Tribunal that course was contemplated. The costs agreement was said to be in a standard form made available by the Law Society and had been adopted by the respondent practitioner in conducting many speculative common law claims for damages. 92 On the basis of the meaning referred to above, Cl 3 obliged the client to pay for each hour spent on their work and no other client and so the question arises as to what should happen when the work performed for that hour involved performing the same task for one or more other clients? The evidence of Ms Castle and Mr McIntyre was to the same effect: a central rule of costs assessing and the ascertainment of the fairness and reasonableness of costs charged was that a lawyer could not charge the same unit of time more than once. Ms Castle spoke about this as being a general principle so that that where a lawyer spent one hour drafting a document that was relevant to two clients, the lawyer could not charge that hour to both clients but had to apportion the time so that the total time charged was the total time spent on the task: as one hour had been spent, only one hour could be charged. That concept also runs through the cases referred to in the commentaries referred to above. Mr McIntyre said that, when he saw how the respondent practitioner had charged for the hearing days, it was the first time he had seen that approach although he had conducted many solicitor/client assessments. He had been practising for many years and had never seen this type of charging and his experience was that, where there were multiple clients, the charges would be apportioned. He regarded the charges as outside the costs agreement and expected to see an apportionment for the hearing costs but when none was made he thought that the bill might have been rather casually put together or might have been explained as a mistake but that did not occur. Ms Castle had a similar approach indicating that the costs agreement clause in these three matters would normally be construed so as to require an apportionment of the hearing days. Ms Castle's view was, if the costs agreement was construed to allow the total cost of the hearing days to be charged to each client separately, then such a clause was vulnerable to being struck down for unfairness and in those circumstances a costs assessor in determining a fair and reasonable rate would apportion the costs. That apportionment took place because of the general principle that one unit of time worked could not be charged more than once. 93 There was no direct challenge to Ms Castle's evidence that the general principle and what was fair and reasonable was that a solicitor could not charge the same unit of time more than once. This principle was relied upon by the Legal Services Commissioner in the further particulars supplied at the invitation of the Tribunal but was not addressed in the evidence called for the respondent practitioner, nor was it directly dealt with in submissions. It may be accepted that a costs agreement may contain a specific provision allowing the charging of full costs rather than applying apportionment where one unit of time is attributable to more than one client but the provision would need to be fully disclosed to the client, together with information that other solicitors may apportion such costs. As already mentioned, nothing of this nature was disclosed to the Hussein family - not surprising in view of the fact that a joint hearing was not in contemplation at the time. Further, the respondent practitioner had little experience with cases that were heard at the same time. They were a rare occurrence in her practice yet she said she believed that the Law Society of New South Wales' pro forma costs agreement she used covered this type of case and entitled her to charge, in this case, for 18 hearing days when there were only 6 actual hearing days. It is to be recalled that the evidence of Mrs Castle was that, absent specific disclosure as to the operation of the clause, if the cost agreement did provide for the full charging of each hearing day by each client it would be struck down as unfair. A cost assessment would then proceed on the basis of allowing fair and reasonable costs and so the costs of the hearing days would be apportioned between the three clients. The Tribunal accepts that evidence. 94 Having regard to that evidence, the Tribunal's own experience and upon the proper construction of the clause, the costs agreement did not entitle the respondent practitioner to charge each client the full amount for attendances at the six-day hearing of the matters. Further, where the costs were incurred for more than one client during any hour of attendance then the costs of that hour had to be apportioned so that each client paid for the work actually performed for their case or, where appropriate, the time would be simply equally shared between them. While it follows from that conclusion that the respondent practitioner was in error in proceeding on the basis that the costs agreement for each client did not require her to apportion the costs of the hearing and was in error to the extent that she asserted the costs agreement actually permitted her to charge each client separately for the whole of the hearing time, that conclusion does not necessarily lead to a finding of professional misconduct. 95 In determining what was intended by the respondent practitioner it is relevant that the detailed bill of costs forwarded to the clients contained the statement that, unless objection was raised within 30 days, any monies held in trust would be applied to satisfy what was clearly intended to be conveyed as an obligation on the Hussein family to pay the amounts set out in the detailed bill of costs (see ss 192 of the 1987 Act 331 of the 2004 Act). The difficulty for the respondent practitioner and her evidence as to her usual practice about reducing costs in these speculative common law actions where verdicts were obtained for the plaintiffs was her other evidence that she was mindful of the "indemnity principle" and the need to demonstrate to the costs assessor that she was, indeed, intending to seek these costs from her clients. It appears to have been open to the respondent practitioner to have rendered a detailed bill of costs and to have made a provision either that she would seek from her client no more than what was allowed on a party/party costs assessment or, having knowledge of the modest size of the verdicts, to make a provision that she would seek no more than what was allowed on party/party costs assessment plus a nominated amount resulting from her assessment of the verdicts obtained. Such a step may have been more indicative of what she described as her "usual practice", but no such stipulation was made in the bill of costs. It follows from the respondent practitioner's "usual practice" in solicitor/client costs that, if her costs (or the costs of the hearing days) were not challenged on a party/party basis or were not subjected to assessment, then she would have received the full costs of the hearing days from each client. The respondent practitioner's usual practice, therefore, provides no support for the submission that she never intended to be paid the amounts in the bill of costs, especially as the respondent practitioner was mindful of avoiding being in breach of the indemnity principle. 96 These matters establish that the respondent practitioner intended to seek the payment of $250 per hour for each client for each of the six hearing days. Alone, those circumstances may not necessarily establish that it was her intention to seek, by charging those amounts, to receive what she knew to be grossly excessive amounts of the costs. The Tribunal is of the view that the deliberate act of overcharging is made out, firstly by reference to the terms of the costs agreements, secondly, by reference to the amount of the charges, and thirdly, by the operation of the general principle that a unit of time can only be charged once by a legal practitioner. The respondent practitioner acknowledged that, in each case, the costs agreement with each client allowed her to charge only for the work performed for that client. During the hearing there was substantial debate as to whether the word "exclusively" should be implied in the costs agreement so that it was to be read as enabling the respondent practitioner to charge only for the work "exclusively" performed for each client. The Tribunal does not find it necessary to imply the word "exclusively" in each agreement but from the terms of the costs agreement itself and the respondent practitioner's evidence about her costs agreement with these three clients, it is apparent that they were to be charged only for work relating to their own matter. 97 In cross-examination, in a general sense it was accepted by the respondent practitioner that there were likely to be some cost savings in having the three matters heard together although there was no precision as to the extent of those savings. What is obvious is that these three cases were heard together, with some savings and occupied a total of six days. The fact is that the respondent practitioner attended court through a junior solicitor for six days and in reality charged for 18 hearing days. She did that deliberately, knowing that was the effect of the detailed bills of costs served on each of the clients and in so doing must have been aware that such a claim was a deliberate charging of grossly excessive amounts of costs. 98 It might be asked whether these conclusions may be altered in light of the fact that, in the District Court, the parties agreed that the evidence in each matter would be evidence in the others. That was announced and accepted at the commencement of proceedings although there was no formal order for "consolidation". The respondent practitioner argued that, in accordance with the rules of the court, there was no consolidation of the actions. No party addressed the significance, if any, of this agreement as to the evidence. It is difficult to understand what the parties meant when they accepted that the evidence in each matter would be evidence in the other matters. These actions were described as common law claims for damages and involved three different plaintiffs suffering slip and fall type injuries on different days in two separate areas of the same residence owned by the same defendant. The source of the risks to each plaintiff was said to be a defect in the apartment above arising from faulty piping and the pooling of water. While it is understandable, especially in relation to the alleged cause of injuries, that some or similar expert evidence would be relevant to all cases, there would also be a class of evidence relating to the particular details of each plaintiff's accident that were unlikely to have any relevance for the other cases. 99 During the proceedings before the Tribunal counsel for the Legal Services Commissioner handed up an analysis of the time spent on each case and while initially resisted by the respondent practitioner, ultimately no objection was taken to the Tribunal receiving that calculation although it's worth and weight were questioned. That document showed that approximately 45 per cent of the six day hearing dealt with evidence that was relevant to all cases. Perusal of the transcript suggests that calculation to be reasonably accurate. In her evidence, the respondent practitioner stated that she had made no assessment of the time taken within the six days that was relevant to each of the three cases and had never turned her mind to that issue or the necessity to undertake such a task. 100 In the evidence called on behalf of the respondent practitioner and in the submissions made on her behalf there was no suggestion that, in fact at any time during the six day hearing, matters relevant to all three cases were being dealt with by the District Court. The approach adopted was that all three matters were in the list and in that sense were before the court and therefore, according to the terms of the costs agreement, the respondent practitioner was entitled to charge each client for each hour of the hearing. Absent an analysis supporting a finding that all three matters were relevant to the other matters, then it is difficult to give any significance to the court's acquiescence in the parties' agreement that the cases would proceed on the basis that evidence in one matter would be evidence in the others. That statement itself rather indicates that they were separate cases with some common features. As already observed in opening the case in the District Court, counsel for the plaintiffs stated that they were three "distinct cases" but all arising from the same premises and that he proposed to conduct the cases "plaintiff by plaintiff". There should have been no great difficulty therefore in charging each client for those parts of the hearing that related to their case even allowing that, from time to time, there would be evidence heard that related to all three cases. 101 There is also substance in the Legal Services Commissioner's submission that, even if these cases proceeded in such a way that the evidence in each matter was in fact relevant to the other matters, nevertheless there should have been an apportionment of the daily fees for the six-day hearing. If the cases had so close a connection then the Tribunal's experience leads to the expectation that the daily fees would simply be apportioned amongst the clients. Ultimately, for the operation of apportionment it mattered nought that the cases were intermingled to the extent that each case was before the Court for the full six days or, that there were times when that occurred and other times when only one or two of the cases were being considered. These matters were only relevant to the mechanism of apportionment and did not affect the requirement for apportionment. 102 In further written submissions also addressed orally, the parties put before the Tribunal calculations designed to indicate what amounts were actually charged by the respondent practitioner for the six-day hearing. This exercise was prompted by submissions for the respondent practitioner that, in compromising the costs issues on the party/party assessment and to ensure that the clients obtained some money from the proceedings, the solicitor/client costs were significantly reduced to the extent that it was initially suggested that nothing was charged for the hearing days although it was later acknowledged there may have been some charge but it was far less than the amount appearing in the bill of costs. Both parties produced calculations by reference to source documents held by the respondent practitioner but they were not in agreement as to what conclusion was indicated by the calculations. 103 Calculations for the respondent practitioner were carried out on the basis that, as there were no challenges to the other costs charged by the practitioner, if account was taken of the total actually paid to her and how that figure was significantly lower than the figure appearing in the bill of costs, then it had to be apparent that very little was paid by reference to the six-day hearing. It was accepted that calculation was theoretical and that in making concessions and compromising her costs, the respondent practitioner did not reduce her costs on a line-by-line basis or item-by-item basis but took a global approach. The calculations submitted on behalf of the applicant established that, in the matter of Toufika Hussein, the respondent practitioner had been paid just under 86 per cent of her professional costs as stated in the bill of costs, that in relation to Mohamed Hussein the respondent practitioner had been paid just under 35 per cent of her professional costs as stated in the bill of costs and that in relation to Fatemah Hussein, the respondent practitioner had been paid just under 38 per cent of her professional costs as stated in the bill of costs. For the purposes of this exercise, as the respondent practitioner took a global approach to reducing her solicitor/client costs, it is appropriate to take the same approach in attempting to establish what charges were actually made for the six-day hearing. On that global approach, in broad terms, there was a reduction of 14 or 15 per cent for those days in relation to Toufika Hussein, a reduction of approximately 65 per cent in relation to Mohamed Hussein and a reduction of a little over 62 per cent in relation to Fatemah Hussein. On this approach, in two of the three cases the respondent practitioner actually obtained what Ms Castle and Mr McIntyre would regard as a fair and reasonable fee after apportionment, while in the other case there has been a 14 per cent reduction in the fee when on a proper apportionment there should have been a sixty-six per cent reduction. 104 Adopting the global approach significant issues are raised as to whether there has been professional misconduct in the charges made in the bill of costs. In Nikoliadis the Court spoke of the requirement to demonstrate a deliberate gross overcharging meaning that the overcharging had to be intentional, fully considered and not impulsive. Accidental overcharging would not suffice. There had to be an intention to charge the amounts and for the client to pay it. For there to be professional misconduct there must be significant personal misconduct and the practitioner must be guilty of a personal default, either by a deliberate wrongful act or by personal negligence. The practitioner needed to be personally implicated in the wrongdoing. 105 It is also to be recalled that, in Nikoliadis McColl JA at [166] spoke of the Tribunal, in finding that the practitioner in that case, although not the original author of the bill, had at all relevant times adopted the bill as if he were the author, was a finding that embraced both the appellant's conduct in permitting the bill to be rendered on his behalf as well as his conduct in submitting it for assessment and propounding its correctness throughout the disciplinary proceedings. Her Honour noted that, to the extent that finding encompassed conduct that occurred after the bill was rendered, it conflicted with the Tribunal's conclusion that the act of "sending" the bill completed the act of overcharging and that was a view with which she concurred. Hodgson JA agreed with her reasons and it is possible from the views expressed by Beazley JA in paragraph [85] her Honour was also of that view with the focus to be on the conduct constituting professional misconduct and how that was not dependent upon whether a client asserted a legal right after engaging in such conduct. 106 It was, nevertheless, urged upon the Tribunal by the respondent practitioner that it was appropriate to have regard to subsequent conduct in order to determine whether there had been professional misconduct. That course, however, is in direct conflict with the binding authority of at least the majority of the Court of Appeal in Nikoliadis. In the present case it can be said that, even if regard was given to the substance of the entire case including the conduct following the intentional overcharging, the Tribunal would conclude that professional misconduct occurred at that point. Undoubtedly, the subsequent conduct referred to by the respondent practitioner is of relevance as to what consequential orders should be made but those matters are for another day. 107 Lastly, reference should be made to some particular cases that featured in submission for the respondent practitioner. The respondent practitioner relied upon the decision of Master Malpass in Malouf v Jazairy (2003) NSW SC 762. So far as is relevant to the present proceedings, that case deals with the circumstances in which s 208D(2) can be relied upon to interfere with an otherwise valid costs agreement. It was noted that a determination made pursuant to s 208D had the effect that s 208C did not apply to the relevant provision having in mind that s 208C required a declining to assess where its provisions were met. In the way in which the Tribunal has approached the matter, the provisions of s 208D are not in issue. 108 In Bechara v Kobeissi [2005] NSW SC 192, Master Malpass again dealt with the provisions of 1987 Act and in particular the operation of s 208C. In that case it appears that there were two costs agreements, one being a conditional costs agreement between the solicitor and the client provided to the client but being undated and unsigned by the client and the other one was a copy of a costs agreement signed by the client's wife and provided by the solicitor. The reasons of the costs assessor made no mention of the costs agreement. It was assumed, therefore, that the costs assessor did not have regard to any question concerning what may have been a costs agreement and the provisions of s 208C of the 1987 Act. The matter then went to a costs panel and in its reasons the panel dealt with the matters of s 208C and the costs agreement. It was held that the panel did not properly appreciate and deal with the fact that the costs assessor had not turned his mind to whether there was a costs agreement and then the operation of s 208C. This decision has no relevance for the present matter. 109 The 2005 decision in Kobeissi resulted in the matter being submitted for re-consideration and it ultimately re-emerged to be dealt with by Whealy J in 2007 (unreported, 26 March 2007 15241/06). A new assessor had been appointed and Ms Bechara was moved to review that determination and so the costs came before a second review panel. The costs assessor had found the terms of the costs agreement unjust but the panel was of the view that the assessor had insufficient regard to the terms of the costs agreement and had failed to consider s 208C. Under s 208C the assessor had to enforce the rates in the costs agreement and was not able to substitute other rates. Whealy J found that the costs assessor, relying on s 208A, had not applied the relevant rate contained in the costs agreement but had substituted a different rate. That was prohibited by s 208C(2). His Honour found the same problem that had been identified by Master Malpass in Malouf. The grounds upon which a costs assessor was to have regard under s 208D were not to be treated as matters giving rise to breaches of the section. His Honour appears to deal with the matter on the basis that the client had not made any allegation or application that the costs agreement was unjust and in that regard, the costs assessor apparently moved on his own motion. Ultimately, this is another decision about the operation of s 208D and the effect of s 208C - neither being relevant to the present proceedings in light of the conclusions reached by the Tribunal on what has been described as the preliminary matters raised by the respondent practitioner. 110 Having regard to the many issues raised by the parties, the Tribunal concludes that the respondent practitioner is guilty of professional misconduct. The Tribunal accepts that a finding of professional misconduct is a most serious step and should not occur unless the matter warrants such a finding. In reaching this conclusion the Tribunal acknowledges the requuirement to be comfortably satisfied that the conduct amounts to professional misconduct, having regard to the seriousness of the allegation and its potential to have an adverse effect on the professional standing of the respondent practitioner (Briginshaw v Briginshaw (1938) 60 CLR 336). We are also guided by the following statements of the Court of Appeal in Re: Veron; Ex parte Law Society of New South Wales (1966) 84 WN(NSW) 136: The Court does not sit as taxing officers dealing with individual items of costs. Nor is it such an approach realistic in the present circumstances. We are guided by experience and a broad sense of what is reasonable and fair and not by any narrow approach to questions of mere overcharging (at 142). It is obvious to us from the evidence which we have heard that the conduct displayed on the solicitor's part, no exercise of special skill, no special attention and no special exertions such as might sometimes be found to permit, without departure from proper professional standards of conduct, of the charging of fees higher than those allowed by the ordinary scale (at 144). 111 In the present case the Tribunal is firmly of the view that the conduct of the respondent practitioner could not be appropriately described as mere overcharging, an error of judgement or an example of an excessive view of her own worth. Section 127(1)(c) of the 1987 Act states that, for the purposes of Pt 10 Div 1 (Complaints and Discipline) of the Act, professional misconduct includes conduct that is declared to be professional misconduct by any provision of the Act. In turn, s 208Q(2) states that, for the purposes of the Act, deliberate charging of grossly excessive amounts of costs is declared to be professional misconduct. In the present case, for reasons already outlined, the Tribunal is of the view that when the respondent practitioner charged the full costs to each client for each of the six hearing days, that the respondent practitioner deliberately charged grossly excessive fees. That conduct amounts to professional misconduct and the Tribunal so finds. The matter shall be listed again at a convenient time to consider the appropriate orders to be made.

Legal Services Commissioner v Bechara

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Judgment (11 paragraphs)

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Cases Cited (10)

Cited By (1)