Legal Services Commissioner v Sampson [2013] VCAT 1177 | Case summary

Legal Services Commissioner v Sampson [2013] VCAT 1177 | Case summary | Zoe

[29]

The LSC also said that the layout and design of the Notice, the absence of any letterhead and the formal language used and the reference to 'Date fixed for filing of proceeding' all created an impression that it was an official notice. And this impression was not overcome by the disclaimer 'This is not a document produced by the courts'.
The LSC said Ms Sampson could not rely on the approval given by LIV Professional Standards in 2004 and 2005 of notices in a form which is similar to the Notice and Urgent Notice. This was because of the intervention of subsequent events, namely:
- The Supreme Court decision in Collection House Ltd v Taylor[3].
- The publication by the LIV of further guidelines relating to letters of demand in November 2007. These updated the guidelines published in 1999 (the 1999 Guidelines).
- The LSC's conclusion that Ms Sampson had engaged in unsatisfactory professional conduct in relation to the Kune complaint (see below) by sending documents similar to the Notices and Urgent Notices in this case in March 2009 (albeit that the LSC had determined to take no further action in light of there not having been any complaints substantiated against her in the last five years).
The LSC referred to the Federal Court finding on 17 October 2011 that Ms Sampson had engaged in misleading and deceptive conduct contrary to s.52 of the Trade Practices Act 1974 (TPA) (being the law then in force) by sending out notices in very similar form to those the subject of this case, again to video store debtors. [4] She did not contest those allegations brought by the ACCC. Orders were made by consent. She was restrained from any repetition of that conduct for five years. Newspaper advertisements detailing the decision were ordered to be published at her expense, and she was ordered to pay costs of $30,000.
The LSC also said that Ms Sampson could not rely on her belief that there was a contractual entitlement for the video stores to recover their pre-litigation legal costs. It said that in relation to each of the debtors, there was no such contractual entitlement. Secondly, it said Ms Sampson's evidence that she believed there nevertheless was such an entitlement, should not be accepted.
Nor should Ms Sampson's evidence that she believed she was entitled to claim pre-litigation legal costs in her notices, and that she had instructions to commence proceedings, be accepted.
The LSC said that Ms Sampson's misleading conduct was particularly bad or gross in relation to one of the Notices (the Burdett Notice) because it sought payment of a debt which was statute barred.
Finally, the LSC pointed to the particular professional obligations that legal practitioners have over and above other members of the community. It contended that Ms Sampson's misleading and deceptive conduct in this matter, particularly given that it was systematic and repeated on numerous occasions, seriously damages public confidence in the profession and the justice system as a whole, such as to indicate that Ms Sampson is not a fit and proper person to practise.

[35]

Ms Sampson argued that the notices used between 2004 and 2010 were approved by the relevant regulators, the LIV Professional Standards Section and the Legal Ombudsman. Mr Hamlyn-Harris argued that Ms Sampson was not advised of the different view taken by the LSC until she was advised of the Kune complaint, in December 2007, and not advised that this was definitively the view of the LSC until 27 March 2009, when, in its determination of the Kune complaint it reached the view that VCAT would find her guilty of unsatisfactory professional conduct. Accordingly, it was only in March 2009 that Ms Sampson became aware of the definitive view of the LSC that notices in the form previously approved by the Legal Ombudsman and the LIV were not acceptable to the LSC.
It was said that the Federal Court finding on 17 October 2011 that similar notices breached s.52 of the TPA faced a lower bar than does a finding of breach of rules 28.1 and 28.2. This is because a positive intention is required to be shown to prove a breach of the rules whereas breach of s.52 could occur unintentionally.
Mr Hamlyn-Harris submitted that VCAT may not rely on the Federal Court decision, or any finding of fact by the Federal Court as proof of the existence of that fact in this proceeding - under s.91 of the Evidence Act 2008 [5]. (The LSC accepts that, but contends VCAT can nevertheless take the fact of the Federal Court proceedings into account in considering the respondent's state of knowledge and experience.)
It was said Ms Sampson is being wrongly judged according to today's standards, which are materially higher than those previously applicable. Her conduct needs to be viewed in the context of standards applicable at the time.
Finally, it was submitted that if the charges were proved, then in all the circumstances, the conduct amounted to unsatisfactory professional conduct, not professional misconduct. In particular, the suggestion that the conduct demonstrated the Ms Sampson was not a fit and proper person to practise was contested.

[36]

Looked at on their face, and without consideration of the circumstances applicable to the particular debt in each case, both types of notice are in a form which breaches rule 28.2 in that they are calculated to mislead and intimidate and grossly exceed the legitimate assertion of the rights or entitlement of the video store owners. I reject the arguments put on behalf of Ms Sampson which by reference to detailed analysis of each of the component sentences and phrases, sought to argue that they are not misleading.
The overall effect of the notices was to assert that the legal costs of preparing them were recoverable as part of the debt owed by the debtor to the video stores, and (in relation to the Notice) that proceedings would be taken, or in some manner the court process was underway, which would result in a court order for those costs to be paid (in addition to the debt itself).
Those assertions are wrong. Any lawyer who sent out letters of demand, asserting that there is an entitlement to legal costs of preparing letters of notices of demand, (in the absence of a contractual entitlement) would be liable to having disciplinary proceedings brought against them. Practitioners also need to be careful to avoid sending notices or letters of demand which 'cross the line' of being misleading or intimidating, including in terms of precisely what instructions they state a solicitor has received to take legal proceedings, and what the consequences will be for the alleged debtor. Practitioners must avoid notices being made to appear as if they are some sort of court or official document. As the LSC and the ACCC have made clear, some forms of notice which in the past would not have resulted in regulatory or disciplinary action against solicitors, now will. I refer to recent regulatory developments below.
A number of these regulatory developments occurred after Ms Sampson engaged in her dialogue with the regulators, or sent the notices the subject of this proceeding. Hence, the position in relation to Ms Sampson is not so simple as that described in the above paragraph. Here, numerous factual and legal issues are raised by the parties relating to the particular circumstances in which the five notices the subject of these charges were sent by Ms Sampson.
Ms Sampson said the form of the notices was approved by the Law Institute of Victoria (LIV) in 2004/5. The LSC said that subsequent events overrode any such approval. These include the development of the law in relation to debt collecting practises, and the updating of the LIV's Guidelines, reflecting a general tightening of consumer protections in this area. The LSC said it had made clear, in its letter to Ms Sampson of 27 March 2009, that it regarded the sending of the notices as breaching her professional duties.
In summary, I have made the following findings in relation to the specific charges brought. First, the LSC has not discharged its onus of proving under rule 28.1 that Ms Sampson knew, or reasonably believed that the representations in the notices were untrue. This charge requires proof of her state of mind. The wording of rule 28.1 makes it is very difficult to prove a charge against a practitioner in circumstances such as these. Here, there are factual and legal uncertainties. The LSC has not satisfied me, on the Briginshaw standard, that Ms Sampson 'reasonably believed' the representations in the notices were untrue. As a result, charges 1 and 3 are not proved.
The other three charges are brought under rule 28.2, and require proof, on the Briginshaw standard, that Ms Sampson's representations in the notices were calculated to mislead or intimidate debtors, and grossly exceeded the legitimate assertion of the rights of the video store owners.
In my view, this imposes an objective test, namely whether the representations were adapted, or are of a nature, or character, likely to mislead or intimidate. I have concluded they did both. And I have concluded that they grossly exceeded the legitimate assertion of the rights of the video store owners. This is on the basis that pre-litigation costs are not recoverable at all. Yet here, costs were sought ranging from two-thirds of the amount of the debt itself, to more than three times the debt itself.
However, in relation to the Webster debt, I find there was a contractual entitlement to pre-litigation costs. So, the charges are not proved to the extent they relate to that debt. So charge 5 is not proved.
That leaves the charges under rule 28.2 relating to the Burdett, Wallace and Egan Notices and the Wallace Urgent Notice (namely, charges 2 and 4). I find the charges proved in relation to these notices.
In relation to these charges, I accept certain things that were put on behalf of Ms Sampson:
- The Collection House v Taylor decision did not bring a significant change in relation to the specific circumstances of Ms Sampson's practice.
- The changes to the 1999 LIV Guidelines made to create the 2007 Guidelines were subtle. And could have been more clearly explained. As a result, there was possibly some ambiguity as to the view of the LIV about what might reasonably be included in letters of demand.
- It is true that there is inherently some element of threat, or at least pressure, in the sending of letters of demand for unpaid debts.
- The finding of the Federal Court does not have the effect that the 'untrue' element of rule 28.1, or the 'calculated to mislead' element of rule 28.2 are automatically satisfied. It was a finding that certain conduct was misleading and deceptive under the TPA. No mental element was required to be proved under s. 52 of the TPA. Mr Hamlyn-Harris argued that I should refuse to admit the evidence of the Federal Court's finding against Ms Sampson - applying s.91 of the Evidence Act 2008. Although the Evidence Act does not of course bind VCAT, I do not rely on that decision as a basis for my findings under rule 28.1 and rule 28.2.
But despite these matters, on any fair reading, those notices sent by Ms Sampson did amount to a representation that pre-litigation legal fees were recoverable as part of the primary debt, when in fact, that was not the case (except for the Webster notices). The words and format of the notices both contributed to this misrepresentation.
In relation to the Burdett debt, assuming it was statute barred, for the reasons set out below, I find that the notices were not misleading or intimidating on that additional ground.
The LSC contended that Ms Sampson's conduct amounts to professional misconduct, comprised by acts demonstrating unfitness to practise (under s 4.4.3(1)(b) of the Act), and on the basis of the breach of rule 28.2 (under s 4.4.4(a) of the Act). In all the circumstances of this case, I have found that rule 28.2 has been breached, as alleged in charges 2 and 4, and that this constitutes professional misconduct under s 4.4.4(a) only.

[38]

The question of how letters of demand should be expressed is a topic on which there has been, and likely still are, diverging views. These relate to the questions of:
- Whether letters of demand should seek legal costs prior to the issuing of proceedings.
- The extent to which the appearance of letters of demand may deviate from the normal form of a letter from a solicitor.
- What potential consequences alleged debtors could be told they face if they do not pay the amount demanded.
- How probable it is that recovery of particular amounts (especially for costs) will occur following the issuing of legal proceedings.
The old view was that it is perfectly acceptable for lawyers to adopt a robust approach, and to claim the cost incurred in writing letters of demand as well as the debt itself. Today, this view can no longer be maintained. Regulatory thinking on the question, and the law itself, have continued to evolve over the last several decades. There have been a number of decisions where considerations of consumer protection have more strongly informed the outcome.[6] Most significantly of course, there was the Federal Court decision which found that notices sent by the respondent which were very similar to those used in the present case were misleading and deceptive, and in breach of the TPA.
These changes in approach are reflected in the evolution of successive Guidelines published by the LIV. Also, in the successive editions of Lewis and Kyrou's Handy Hints on Legal Practice (1985, 1993, and 2004[7]). And more recently, in the LSC's 2011 Annual Report and Fact Sheet published in June 2011 entitled Issues and Complaints About Debt Collection.
When considering these matters, it is important to bear in mind that statements as to what the appropriate approach to drafting letters of demand should be, generally assume that no separate contractual entitlement to recover costs exists. Where it does, the analysis is different.
It is necessary to consider Ms Sampson's conduct in sending out the Notices during the period November 2008 to March 2010 in the context of the evolution of regulatory thinking and the law applicable to letters of demand at the relevant time, and also in the context of her particular dealings with the regulators about the form and content of these notices.
For this reason, in the recitation of events which follow, the regulatory developments are indispersed amongst the actions taken by Ms Sampson, or directly involving her.

[80]

The complainant was advised of her rights to seek review by the Legal Ombudsman, however, I was not advised of any subsequent actions being taken in relation to the Roycroft matter, so I assume there were none.
In her evidence, Ms Sampson produced two versions of an amended Notice of Creditors Intention, which she said reflected the process of re-drafting which took place as part of dealing with the Roycroft complaint, as described above. The documents produced were successive re-drafts of the Notice of Creditors Intention. The later of these two drafts (bearing a date in the footer of 11 November 2004) is in very similar form to the Notice the subject of Charges 1 and 2 in this proceeding. The only differences are that several references in the 2004 document to 'summons' have been altered to 'proceeding' or 'legal proceedings', and references in the 2004 document to 'Magistrates/Local Court' appear as 'Magistrates Court' in the Notice of Creditors the subject of Charges 1 and 2.
Ms Sampson gave evidence that although her letter of 15 November 2004 to Ms Meyers did not state that this 11 November 2004 version of the Notice of Creditors Intention was enclosed, she had no doubt that it was sent to LIV Professional Standards, given that Ms Meyers acknowledged receipt of the amended version on 19 November 2004 and indicated she was satisfied it was not misleading and did not infringe any Rules or guidelines.
I accept Ms Sampson's evidence as to that matter. I assume that if the position was any different, the LSC would have led evidence from the LIV to show the true position.
Ms Sampson said that this was the form of Notice to Creditors Intention which was used up until she ceased conducting her bulk debt recovery practice in early 2010.
It seems surprising that LIV Professional Standards agreed with this form of the Notice. It still contained a number of the defects which it had pointed out in its letter of 3 November 2004. It may be this was due to concern about the apparent disagreement between the LIV and the Legal Ombudsman. It might also reflect internal ambivalence in the LIV, given the traditional view that it is allowable to claim legal costs prior to issuing proceedings. That view was still reflected in the then version of LIV Guidelines, namely the 1999 Guidelines. It was not until the publication of the 2007 Guidelines, in November of that year, that this statement of the LIV's position was finally removed (see below).

[99]

On 25 October 2007, the LSC (now the relevant regulator) received a complaint from Mr Randall Kune of the Monash/Oakleigh Legal Service Incorporated, on behalf of his client, Ms Nashed. This was referred to as the Kune complaint. Ms Nashed was a customer of Network Video, Wheelers Hill. The complaint related to two 'Urgent Notices', a 'Notice of Impending Proceedings' and a 'Notice of Creditors Intention to Commence Proceedings' sent to Ms Nashed in sequence over the period 17 July 2007 to 31 August 2007. The first and last of these notices were, in all significant respects, the same as the Notice and Urgent Notice the subject of this present proceeding. Ms Sampson was notified of this complaint by letter from the LSC dated 11 December 2007.
On 21 December 2007, Ms Sampson responded, denying the allegations that the notices were threatening to sue unless the legal costs sought were paid. She said this matter had previously been considered by 'Professional Ethics'. She said modifications had been made to all the letters arising from the negotiations between this office and 'Professional ethics'. She concluded by asserting that there was no claim made for payment from debtors which was 'in breach of the Ethics ruling'.
This response was conveyed back to the Monash/Oakleigh Legal Service. On 23 January 2008, it replied, reiterating its view that the four notices amounted to a misrepresentation.
It was at this point, around the beginning of 2008, that Ms Sampson began acting for Civic Video, Alice Springs. She said she acted for them during 2008 and 2009. This was to be a 'short sharp job' to get their books back into shape.
The next correspondence produced to VCAT was six months later. It was a 'Byrne v Marles' letter of 5 August 2008 from the LSC to Ms Sampson. That letter referred to a letter from the LSC to Ms Sampson dated 22 July 2008 which was not provided, but appears to have invited her submissions as to whether the complaint should be summarily dismissed - this opportunity being given in light of the decision in Byrne v Marles[22].
The letter of 5 August 2008 from the LSC included the following:

[104]

The LSC did not respond to this offer. It did not engage with the issue of the acceptance by the previous regulator, the LIV, of the form of the Notices, as amended following its input. The Tribunal was not provided with any evidence of further communication between the LSC and Ms Sampson until February 2009.
In the meantime, on 13 November 2008, the first of the notices the subject of this proceeding was sent, the Notice to Mr Burdett.
The next document put into evidence in relation to the Kune complaint was in the nature of a 'Murray'[23] letter dated 8 February 2009 from the LSC to Ms Sampson. It set out in seven numbered paragraphs why the LSC took the view that the Nashed correspondence may be in breach of rules 28.1 and 28.2 or 29.1[24]
By 3 March 2009, the LSC had not heard from Ms Sampson, and wrote to her giving her a further 16 days to respond. On 27 March 2009, the LSC notified Ms Sampson of its conclusion that there was a reasonable likelihood that VCAT would find her guilty of unsatisfactory professional conduct. However, pursuant to s.4.4.13(3)(c) of the LPA, the LSC had determined to take no further action against Ms Sampson in the light of her general competence and diligence and because there has been no other substantiated complaint about her conduct within the last five years.
The letter of 27 March 2009 stated:
1. The letter that was sent to the your client dated 17 July 2007 advised that the outstanding amount of $77.00 was owed by your client, and that the practitioner acted in relation to the recovery of that amount, together with $30.00 solicitor's costs, being a 'total amount of $107.00'.
2. At the top of the letter it states that the 'amount' is $107.00. Following this the letter states that: 'This amount is required to be forwarded to this office within five (5) business days of the date of this letter failing which we have received instructions to proceed with Legal action without further notice'.
3. The letters of Demand Guidelines published by the Law Institute of Victoria state:

[106]

The letters dated 31 July 2007 and 17 August 2007 refer to the 'amount' as $137.00 and $167.00 respectively. The Urgent Notice dated 31 July 2007 notes 'with concern that the amount outlined above remains outstanding' before going on to say that there are 5 days to resolve the matter before legal proceedings are issued. This Urgent Notice does not distinguish between the debt owed by the complainant to Network Video Wheelers Hill ($77), and the solicitors' costs. The only amount mentioned is $137.00.
The Notice of Impending Proceedings dated 17 August 2007 itself states that the 'amount due' remains outstanding without any distinction between the amount mentioned ($167.00) and the debt owed by your client to Network Video Wheelers Hill ($77).
What is said in the letter could be viewed as at best misleading in light of what is detailed above, and as such, in the sending of the above 3 pieces of correspondence to your client [sic] the practitioner may be in breach of rules 28.1 and 28.2 of the Professional Conduct and Practice Rules 2005.
The LSC's conclusion that the notices to Ms Nashed breached the 'Letters of Demand Guidelines' appears in its context to be a reference to the 2007 Guidelines. By March 2009, these were 16 months old. Technically, however, they should be taken to be a reference to the 1999 Guidelines, since the Nashed notices were dated July and August 2007, and the 2007 Guidelines were not published until 15 November of that year. The quoted statement appears in both versions, although as shown above, the 2007 Guidelines represented a further tightening of the regulatory approach.
As stated, none of the documents put into evidence demonstrated any response by the LSC to the statement by Ms Sampson that her notices had previously been found to be acceptable by the Legal Ombudsman and LIV Professional Standards. The LSC correspondence produced to the Tribunal simply did not engage with this issue. Presumably, therefore, the LSC disagreed with the decisions made by the previous regulators, although nothing produced indicates that this was expressly conveyed to Ms Sampson. It was a case of 'ships in the night'. In any event, it is clear the LSC took the view that the use of the notices in the form sent to Ms Nashed was 'at best misleading', and may be in breach of rules 28.1 and 28.2, the reason being that they threatened to sue the debtor not only if the debt itself not paid, but also if the if was costs incurred were not paid as well. This is clear from the LSC's letter of 27 March 2009, and also from the earlier correspondence which led up to this letter.
In her evidence in chief, Ms Sampson said that after receiving the letter of 27 March 2009 from the LSC, her

[111]

So Ms Sampson's position was that she had amended her Notices in 2004-5, in accordance with the request of the then regulator, the LIV, and she had again offered to consider any requests made by the regulator in August 2008. But none had been made, and the regulator did not revert to her again until February 2009. Then in March 2009, it had 'dropped' the matter. And she didn't turn her mind to the question of the form of the Notices after that. Rather, she turned her mind to running her practice, and finalising the dissolution of the partnership. Also, from April 2009, she experienced serious health problems.
I reject Ms Sampson's explanation that by the letter of 27 March 2009 she had received approval from another regulator. Quite clearly, the LSC had expressed its conclusion on 27 March 2007 that her conduct constituted a breach of her professional obligations. The LSC said it constituted unsatisfactory professional conduct. That is quite different to approval by the LSC. It was perfectly clear that the LSC had formed an adverse view, but in light of her clear record in terms of disciplinary findings in the last five years, decided to take no further action. In effect, she had been let off with a warning.
It is true, as Ms Sampson pointed out, that 17 months elapsed from the time of receipt of the Kune complaint of 25 October 2007, until the LSC's decision on 27 March 2009. It is also true that the LSC had not engaged explicitly with the question of the approval of the previous regulator. However, Ms Sampson could have been in no doubt as to the LSC's view. The fact that it had not suggested changes that she should make to her standard forms of notice to debtors is not something she can rely on after 27 March 2009. And in relation to the Urgent Notice, it was an opportunity to reconsider the form she was using, and to check she was always using the form applicable, depending on whether her client had a contractual right to pre-litigation costs, in each particular case.
It is not for the regulator to suggest specific drafting changes to her template letters. It might choose to do so (as the LIV did in 2004-5), or it might engage in detailed discussion in response to specific changes she suggested, but it is going too far to say that the regulator had responsibility to tell her what changes she should make to her letters. It would perhaps have been useful for the LSC to go on and say that its position was that she needed to revise her template notices. But it was not strictly necessary for the LSC to do so. It is the duty of practitioners to ensure they are complying with their professional obligations. Ms Sampson had more than a hint that the regulator would pursue her if she continued to use notices in the form of those sent to Ms Nashed. I understand that a number of matters were looming over her from the end of March 2009, including the onset of her serious medical condition. There was no evidence that Ms Sampson was completely incapacitated from the day the 27 March 2009 letter was received, however. Once this letter was received, dealing with it should have been her top professional priority. Clearly, it had major implications for her bulk debt-collecting practice, which involved sending out sometimes many thousand notices a month.
The consequence of her not doing so was that notices in the existing forms of Notice and Urgent Notice continued to be sent out for at least another 12 months. These included Notice and Urgent Notice sent to Wallace, and the Notices sent to Egan and Webster.

[112]

In April 2009 Ms Sampson became quite ill. Ms Sampson said she was affected by serious health problems through until March 2011.
On 15 April 2009 the Wallace Notice was sent.
Ms Sampson said that her bulk debt collection practice acting for video stores commenced to be wound down in 2009 and ceased to be a part of her practice by the middle of 2010.
On 1 July 2009 the buyout of her former partner Andrew Goddard came into effect after an acrimonious partnership dispute. Mr Goddard had been sick, and negotiations for the buyout had been going on for some time.
In late August 2009 Ms Sampson had a suspected heart attack. She spent five days in hospital.
On 16 September 2009, the Wallace Urgent Notice was sent.
In November 2009 Ms Sampson had a heart operation. A stent was inserted. This later failed.
On 4 November 2009 the Egan Notice was sent.
On 11 March 2010 the Webster Urgent Notice was sent.
By mid 2010, Ms Sampson said she had wound up her bulk debt collection practice.
On 2 September 2010 the LSC informed Ms Sampson of the four complaints the subject of this proceeding. Correspondence between Ms Sampson and the LSC continued until 22 December 2010 and then resumed again on 25 January 2012 (after the Federal Court decision of October 2011).
On 7 October 2010, an interim injunction was ordered against Ms Sampson by the Federal Court. In practical terms, this was the point at which she ceased to conduct her bulk debt collection practice altogether.
In January 2011 Ms Sampson had open heart surgery. This resolved her medical condition. She returned to work part time in February 2011 and described herself as being back to full strength by May 2011.
On 17 October 2011 the Federal Court decision was handed down. This related to a number of notices, including notices which of which were in very similar form to the Notices and Urgent Notices the subject of these proceedings. Ms Sampson consented to a finding that she had breached s.52 of the TPA by sending these various notices.
The orders made by the Federal Court were as follows:
- Declarations were made that Ms Sampson had engaged in misleading and deceptive conduct.
- Injunctions restraining any repetition of that conduct for five years.
- An advertisement in specified form was ordered to be published in four national publications (The Australian Financial Review, The Australian, Lawyers Weekly and The Australian Institute of Credit Management publication Credit Management in Australia). This stated the Federal Court had found that Ms Sampson had made misleading and deceptive claims that video stores were entitled to an extra amount in addition to the claimed debt, for legal fees; that the customer would incur additional costs associated with legal action; and that Goddard Elliot could enforce judgement by itself, without a court order. It also stated that the Court had found that one of the notices was misleading and deceptive because it was similar in format to a court document.
- Ms Sampson, and all employees of Goddard Elliott involved in debt collection were required to undertake regular practical training, focussing on trade practices law compliance.
- Ms Sampson was to pay the ACCC $30,000 costs.
On 14 November 2011, the LSC sent a letter to Ms Sampson stating that its investigation would be recommenced. On 25 January 2012, the LSC sent Ms Sampson a letter seeking a response to the four complaints. On 28 February 2012, Ms Sampson's solicitor, Mr Howell, wrote to the LSC repudiating the Webster complaint. The primary basis was that there was a contractual term in Ms Webster's agreement with Video Ezy that she would pay the shop's legal costs. In a separate letter, also on 28 February 2012, Mr Howell wrote repudiating the Burdett/Wallace/Egan allegations. This was firstly on the basis that there was a contractual entitlement (subsequently in early 2013 found to be mistaken). Secondly, points were taken in relation to the interpretation of the document. It was also said that costs would 'almost certainly' be incurred by the renter, that Ms Sampson did not have the requisite knowledge under rule 28.1 and 28.2, and that her acceptance of the ACCC settlement proposal did not constitute an admission (including in the context of her health).
On 31 May 2012 the LSC sent a 'Murray' letter to Mr Howell in relation to the four complaints. On 28 June 2012 Mr Howell responded on behalf of Ms Sampson. Amongst other things, he referred to the Roycroft complaint and enclosed documents relating to it. He also indicated reliance on a contractual entitlement to legal costs prior to the issuing of proceedings, in relation to all four complainants.
On 20 December 2012, the LIV issued a new guideline entitled Letters of Demand Guidelines (2012 Guidelines). This referred to recent ACCC action against Ms Sampson and LSC concerns about the practices of some solicitors in the area of debt collection. It referred in some detail to the Federal Court finding against Ms Sampson. The two sample precedent letters from the 2007 Guidelines were reproduced. They remained unchanged. Under the heading 'Practical Issues' the following new or amended text was added:

[121]

An argument was put on behalf of Ms Sampson relating to the requirements for proving charges under rule 28.1. Because I have accepted that argument, it is convenient to deal with that issue at this point.
Rule 28.1 is alleged to have been breached in charge 1 (in relation to the Burdett, Wallace and Egan Notices) and charge 3 (in relation to the Wallace and Webster Urgent notices).
I accept the argument put on Ms Sampson's behalf that the LSC has not discharged its onus of showing that Ms Sampson knew or reasonably believed that the statements and implied assertions in the notices were untrue.
The LSC was not able to show actual knowledge on Ms Sampson's part of the untruth of the statements and implied assertions in the Notices. So it had to rely on the evidence as showing that she 'reasonably believe[d]' these to be untrue. That is, it had to demonstrate that was her subjective belief. Ms Sampson denied this in evidence. She said she had a belief at the time that all the notices were backed up by contracts which entitled the video store owners to recover pre-litigation legal costs. She also said she believed she was entitled to claim these under the law as it stood at the time, and that this was something which the LIV regarded as acceptable practice. Further, Ms Sampson said in evidence that despite any provisions curtailing the power to award costs for small debt recovery matters, her experience was that costs were invariably awarded unless there was some technical defect with the claim.
The LSC argued in effect that the surrounding circumstances were such that it should be implied that she did not have this subjective belief.
Rule 28.1 would proscribe, for example, a practitioner asserting in a letter on behalf of a client, something which the client tells her to say, but which the solicitor knows to be untrue. Further - and this is the more complex aspect- she must not assert in such a letter anything which she 'reasonably believes' is untrue. Take the situation where her client instructs her that certain matters are true, and she is to assert that in a letter to the other side, yet the solicitor, looking at the matter objectively, forms the belief that those matters are not true, and that belief is based on reasonable grounds. In that situation, the solicitor must not send the letter.
Here, the situation is complicated by the fact that the thing alleged to be reasonably known or believed by the practitioner to be untrue depends in part on legal questions, not just factual questions. The LSC needs to show that she formed the belief that there was no legal entitlement to pre-litigation costs. It did not show this on the evidence to the required Briginshaw standard.
For the LSC in this case, rule 28.1 presents a difficult hurdle to overcome. I accept the contention that rule 28.1 imposes a requirement which is one of the elements the prosecution has to prove, in order to prove the charge, rather than a defence available to the practitioner. To require the defence to establish the reasonableness of the belief is, in effect, to impose a reverse onus where the provision does not do this.
The exact application of the requirement of reasonableness in rule 28.1 is a difficult question. I was not referred to any authority on this point. Mr Hamilyn-Harris said that if Ms Sampson had a genuine belief, even if unreasonable, this would defeat the charge. I am not sure the provision goes that far.
For the above reasons, I find that the LSC has not proved charges 1 and 3. In the analysis which follows, therefore, I have focussed on the requirements of rule 28.2, not 28,1.

[123]

The first page of the 'NOTICE OF CREDITORS INTENTION TO COMMENCE PROCEEDINGS AT A MAGISTRATES COURT' sent to each of the hirers Burdett (on 13 November 2008), Wallace (15 April 2009) and Egan (on 4 November 2009) was identical, save for the details applicable to the individual hirer. The Wallace Notice has additional text on the reverse side, which did not appear on the copies of the Burdett and Egan Notices relied on by the LSC. The Wallace notice is Appendix B to this decision.
Extensive arguments were put on behalf of Ms Sampson to the effect that the Notice was sufficiently clear, and only asserted things which were properly claimable.
I reject those submissions in part. The Notice was misleading and intimidatory. It asserted that costs were payable as part of the primary debt. That assertion was untrue. That is the primary vice of the Notice.
That meaning was clearly conveyed by the Notice. In particular, by the highlighting of the 'TOTAL AMOUNT' and the lack of any clear recognition of the distinction between the debt itself (which was claimable) and the costs (which were not). The threat is made to enter judgement if the 'full amount' is not paid. In context, this is a threat to enter judgement if the total amount is not paid, that is, the debt, plus the costs.
Whilst the message was clearly conveyed that the debtor must pay the debt plus costs to avoid unpleasant consequences, other aspects of the Notice were quite unclear. Lawyers should strive for clarity when drafting documents. But this Notice achieves the opposite. And the consequences of this lack of clarity were magnified, because many thousands of notices were sent out.
Of course there are arguments which could be made about what different parts of the Notice mean, because it is so unclear and ambiguous. It is hard to escape the conclusion that it was drafted with deliberate ambiguity in part, so as to scare debtors into paying the full amount of $153.55 (in this case) immediately.
In particular, the Notice was unclear in that:
- The statement that a date has been 'fixed' for filing of a proceeding suggests that a court is already seized of this matter in some way or other and has been involved somehow in fixing a date for some step to be taken in relation to the alleged debt. This is reinforced by the fact that the Notice looks more like a court document than a solicitor's letter, and that the threat is made to enter judgement, 'once issued at Court'. It is true that the effect of the Notice is to convey that proceedings have not yet been commenced, but this does not overcome the impression created that the costs are required to be paid as at the date of the Notice, as part of the primary debt.
- There is no letterhead, and no clear statement that this is a letter of demand by Goddard Elliott, who are solicitors acting for Civic Video. There is no statement that the costs of $100 are legal costs which have been incurred by Goddard Elliott. If the person read and re-read the notice, they might conclude it is from a debt collecting agency and/or Goddard Elliott, who may be solicitors associated with a debt collecting agency, or a debt collecting agency themselves.
Whilst it is legitimate for letters of demand to point out to debtors the unpleasant enforcement consequences which may follow from non-payment (including a potential warrant, garnishee or attachment of earnings order, seizure of their property by the Sherriff) there is an obligation to do so in a manner which clarifies the circumstances, rather than confuses them.
This notice does not comply with the statement in the 1999 and 2007 LIV Guidelines that a letter should not threaten to sue a person if they do not pay legal costs incurred by a creditor prior to proceedings having been commenced. This letter goes much further than 'optional further letter two' set out in the 2007 LIV Guidelines. It also goes further than the text in optional further letter two in the 1999 LIV Guidelines, in that on a fair reading, it does threaten to sue the hirer if he does not pay the total amount of the debt to Civic Video of $53.55 (in the case of Wallace) plus the costs of $100, (a total of $153.55). Whilst there are arguments that certain phrases in the notice have the effect that the threat to sue only relates to the primary debt of $53.55, the clear impression which the form and content of the Notice overall leaves is that if the hirer does not pay $153.55 immediately, court proceedings will be proceeded with against the hirer.
Putting aside other defences for the moment, for the above reasons, the Notice is to that extent calculated to mislead and intimidate. It also grossly exceeds the legitimate assertions of Civic Video's rights. This is because it seeks pre-litigation costs that are not recoverable. And the costs sought ranged from an amount slightly in excess of the debt itself, to more than three times the debt.
The position is less clear-cut in relation to the allegations made in the further particulars of the charges, that the Notice was misleading or intimidating on the further bases that it indicated:
- Ms Sampson has been instructed to commence proceedings, and
- If she does, her client will inevitably be successful, and
- Further costs to the debtor will inevitably follow, and
- These will be enforced by warrant to the sheriff, garnishee orders, or the like.

[129]

The only evidence about the practice in relation to debt recovery in Victoria was given by Ms Sampson. She said that on each occasion she had entered judgement in default in a small debt matter in Victoria, the Court has awarded costs.[33] This was presumably in accordance with the discretions in the above provisions. Thus it cannot be said that costs will definitely not be awarded against a debtor in relation to a small debt.
I have described above the most recent steps which the LIV, LSC and ACCC have taken in relation to tightening the regulatory regime relating to debt collecting practices by solicitors. This includes the LSC Annual Report of 2011, the ACCC's letter to debt recovery practitioners in December 2011 and the new Guidelines adopted by the LIV Council on 20 December 2012. These steps draw on the Collection House decision, certain decisions relating to debt collection practices on behalf of car parking operators[34] and the ACCC v Sampson decision itself.
I accept the submission made on behalf of Ms Sampson that VCAT should be wary of any unfairness to her which might arise from her actions in 2008-10 being too readily judged according to today's paradigm. As stated below, the Collection House decision did not bring about a major change in Ms Sampson;s obligations in drafting notices to video store creditors - it related primarily to different aspects of debt collection. Similarly, there is no allegation made against her that she 'lent' her letterhead to debt collecting agencies, or was involved in falsely claiming moneys from debtors by way of supported 'fines' or 'liquidated damages' - all of which are aspects of the conduct of some solicitors which are presently of concern to regulators.
In my view, the key vice of the Notices sent by Ms Sampson is the assertion that legal costs are recoverable as part of the primary debt. The other assertions, such as that the Notices are misleading and intimidating on the basis that they state that Ms Sampson has been instructed to commence proceedings, which will inevitably be successful, that further costs to the debtor will inevitably follow, and that these will be enforced by a warrant to the Sherriff, garnishee orders etc, are in all the circumstances here less clear-cut. So I make my finding on the basis of the assertion that legal costs are recoverable as part of the primary debt is misleading, in the way described in paragraphs [144] to [153] above, rather than on these other bases.

[130]

The Urgent Notices sent to Wallace (on 16 September 2009) and Webster (on 11 March 2010) were the same, save for the details relevant to the individual hirer. But the version of the Webster Urgent notice filed with the LSC's application included an extra page headed 'DO NOT IGNORE THIS NOTICE'. Because of the finding made below in relation to the Webster Notice that there was a contractual entitlement to pre-litigation costs, it is only necessary to consider the Wallace Urgent Notice. Also in light of that finding, it is not necessary to examine the additional page headed 'DO NOT IGNORE THIS NOTICE'. The Wallace Urgent Notice is attached as Appendix C.
The Wallace Urgent Notice was sent some months after the Wallace Notice. In contrast with the Notice, it is explicitly a letter of demand by solicitors on behalf of their client. It is on Goddard Elliot letterhead. It states that the firm has 'received instructions to proceed with Legal action without further notice'. In this context, I infer that 'Legal action' refers to the commencement of proceedings in a court.
As with the Notice, the key vice of the Urgent Notice is that the overall meaning it conveys is to assert- wrongly- that there is an entitlement to pre-litigation costs as part of the primary debt. Once again, it does mention the costs figure of $100, as well as the primary debt of $53.55. But the overall meaning it conveys is that the debtor must pay the total amount of $153.55, and that there is a legal entitlement to that whole amount. In particular, this follows from the reference to 'AMOUNT $153.55' in the tram tracks, and from the statement in the second paragraph that if $153.55 is not paid within opposite the five business days, Goddard Elliot have received instructions to proceed with legal action.
For this reason, once again, the Urgent Notice is in breach of rule 28.2. As a result of that false representation, the Urgent Notice can be said to be calculated to mislead and intimidate. The Wallace Urgent Notice sought costs of $100 plus the primary debt of $53.55. Because these are not recoverable as part of the primary debt, I find this grossly exceeded the legitimate assertion of the creditor's rights.
Similarly to the position with the Notice, the other alleged bases on which the Urgent Notice is said to be misleading in breach of rule 28.2 are not so clear-cut. Again, the matter which is perhaps of greatest concern is the assertion that Ms Sampson has instructions to commence proceedings.
However, given my finding on the key issue of the claim for costs as part of the primary debt, once again, I find that rule 28.2 has been breached on that basis, rather than on the basis of on those additional allegations.

[135]

The LSC contended that there was no evidence that this applied to the Webster hire contract, and second, that it did not provide a contractual basis for claiming legal pre-litigation costs in any event.
The LSC submitted that there was no evidence of any agreement between Ms Webster and Video Ezy. Ms Webster gave evidence by telephone. She said she could not recall what happened when she joined Video Ezy Flemington. The evidence of the former owner of Video Ezy Flemington, Mr Philip Mahon, was to the effect that the procedure was that new customers signed a membership application form which included the above clause 1K. He said he had kept the old paper membership records for the required period for tax purposes, but has now destroyed all the records. Interrogating the business' computer system now would not produce a copy of the membership form, because they were not kept electronically. There is however no reason to conclude that Ms Webster did not complete a form in the usual way. I am satisfied that that term would have applied in Ms Webster's case.
In relation to the effect of clause 1K, the LSC submitted that 'legal action' in this context means the actual commencement of proceedings. For Ms Sampson it was contended that the clause encompasses pre- litigation legal costs, either through the phrase 'costs of collection', or the phrase 'reasonable legal fees'. I agree. In my view, this clause is broad enough to cover the fees of debt recovery firms or mercantile agents, or legal fees incurred prior to litigation being commenced, and therefore not recoverable under an ordinary costs order by the court.
Nor, for the reasons stated above, do the statutory provisions which seek to make recovery of costs for small claims an exception, rather than the rule, provide an impediment to the recovery of pre-litigation costs in relation to Webster.
Accordingly, I find in relation to Webster that there was a contractual entitlement to pre-litigation legal costs, and so rule 28.2 was not contravened in relation to the Webster Urgent Notice on that basis. In the circumstances, I am not prepared to find that the Webster Urgent Notice contravened rule 28.2 on any of the other bases suggested, either. Therefore, charge 5 is not proved.
This conclusion also constitutes a further reason why charge 3, under rule 28.1, is not proved insofar as it relates to the Webster Urgent Notice.

[137]

The LSC pointed to the Collection House decision as altering the law applicable in relation to the question of the form of notices sent by her on behalf of her video store clients. That was a case relating to a commercial agent whose business involved purchasing aged debts from a finance company at a discount, and then seeking to collect them from the debtors. In that case, an employee of Collection House Ltd , purporting to be a lawyer acting for it, had 'cold called' a debtor in relation to a small debt on a car loan, 10 years old, which with interest had ballooned out to over $10,000. The debtor was impecunious, had virtually no assets, and was living in rented accommodation with her 16 year old deaf dependent child, for whom she received no government assistance. The call was at 6.30 in the evening. The possibility of legal action against her was raised, and in a further telephone call half an hour later, she agreed to 'settle' the debt for $5,000, of which she immediately paid $4,500 using her credit card. She sought to have this overturned after she received legal advice the next day from 'Good Shepherd and the Citizens Advice Bureau'. She brought a proceeding at VCAT. VCAT found that Collection House had acted in a way that was misleading and deceptive, and unconscionable, contrary to the FTA. Collection House appealed to the Supreme Court, constituted by Nettle J. The Court upheld VCAT's decision that the conduct was unconscionable. The Court found, applying the equitable doctrines which are applicable in considering unconscionable conduct,[37] that VCAT's conclusion that the debtor was under a 'special disadvantage' was correct. The Court however upheld Collection House's appeal on a natural justice ground. Also, in relation to the question whether it was misleading and deceptive for Collection House to make the statement that it could still pursue the debt, even though it was statute barred (this statement being made after the $4,500 was paid, and the debtor received advice that it was statute barred) Nettle J did not express a final view.
The LSC's submissions invoked the Collection House decision in several ways: First, its application to the Burdett debt, which was said to be statute barred. Second, in support of its contentions that the conduct of Ms Sampson was misleading and deceptive (in relation to the Burdett debt, and the other debts as well). And third, as the basis for the changes made to produce the 2007 Guidelines.
I turn first to claims by a creditor for debts which are statute barred. Mr Jonathan McCarthy, Senior Lawyer at the Central Australian Aboriginal Legal Aid Service (CAALAS) gave evidence by telephone, and produced CAALAS' file relating to the Burdett debt. It was noted on the file that the Burdett debt was statute barred: it had been incurred on 10 August 2005, and the Notice from Goddard Elliot was dated 13 November 2008. That was outside the three year limitation period under the Limitation Act (NT). The LSC made generalised submissions, drawing on the words of Nettle J in the Collection House decision, to the effect that a lawyer is obliged not to take unconscientious advantage of the opportunity placed in her hands by the fact that a debtor is poor, inexperienced or less highly educated and does not have the benefit of independent legal advice.
This case is quite different from the Collection House situation, however. In this case, Mr Burdett was sent a Notice as part of a bulk debt collection process, seeking to recover a debt of $66. There was no recognition that the debt was statute barred, and no assertion about whether the debtor was still liable to pay it if it was. There was no personal contact with the debtor as there was in Collection House. Little specific evidence was given in relation to Mr Burdett's debt. The evidence would fall well short of what would be required to show unconscionable conduct. But that was not what the LSC alleged in relation to the Burdett debt. Rather, it said that the fact that the Burdett debt was statute barred indicated that the misleading assertions alleged to be in breach of rules 28.1 and 28.2 were particularly bad or gross in relation to the Notice to Mr Burdett.
In relation to misleading and deceptive conduct, the LSC said:

[144]

Ms Sampson's stance in this hearing was that whilst she had consented to the findings against her in the Federal Court proceedings that her conduct was misleading and deceptive, she did not concede in these proceedings that the notices contained statements which were untrue, or that her conduct was misleading or intimidating. The tests are different in this disciplinary proceeding. It was noted that the 2011 finding was a civil, not a criminal one, and that intention did not have to be proved under s 52 of the TPA. Also, she said there were various practical reasons for her agreeing to the consent orders in the Federal Court, including her illness, and the complexity, stress and cost entailed in contesting the case.
Ms Sampson also relied on s 91 of the Evidence Act 2008. This has the effect that evidence of a finding of fact in another proceeding is not admissible to prove the existence of a fact that was in issue in that other proceeding. There are exceptions to this in s 92, but they are not applicable here.
Ms Anderson contended that I could have regard to the findings in the Federal Court decision, not to prove facts in issue in this case, but as part of the general history relevant to Ms Sampson's suitability, which is a factor which is to be taken into account under s 4.4.3(2) of the Act when considering whether a practitioner is fit and proper. This is akin to taking into account findings of guilt for various offences under s 4.4.4(c). Also, VCAT is not bound by the rules of evidence.[40]
I accept it is appropriate for me not to rely on the Federal Court findings for the purpose of determining whether Ms Sampson had acted contrary to rules 28.1 and 28.2- for the reasons articulated above: different criteria apply. I have not done so. I have come to the conclusions I have without reliance on those findings. I also note that the Federal Court determination was made by consent, and does not contain any analysis by the Judge of how it is that the notices were misleading and deceptive. Further, in view of the findings I have reached, it is not necessary for me to have reference to the suitability matters in the Act (which are invoked by s 4.4.3(2)).

[150]

Ms Sampson can claim reliance to some degree on LIV 'approval' in relation to the Notice, however. In 2004, in dealing with the Roycroft complaint, the LIV raised a number of the problems which I have found existed with the Notice. Certain changes were required to be made, but these did not deal with all of the unsatisfactory aspects of the Notice. The outcome of the Roycroft complaint was that Ms Sampson was told, in effect, she could continue to use the Notice, in amended but still unsatisfactory form. And she did so for the next five or so years.
When the 2007 Guidelines were published in November of that year, they did tighten the regulatory regime to some extent. However, for the reasons stated above, they did not significantly alter the position from Ms Sampson's point of view. In my view, the LIV approval remained a major factor which Ms Sampson was entitled to take into account when considering whether the form of Notice she were using were in accordance with legal and ethical requirements.
But this changed with the letter of 27 March 2009 from the LSC. It made it quite clear that the regulator's view now was that the Notice did not comply with the legal requirements or her professional duties. From that point, she was obliged to reconsider the wording of the Notice. However, she continued to use it for at least another year.
There could be an argument that she had been made aware of the fact that the Notice was non-compliant before March 2009, given the views expressed by the LSC at earlier stages of handling the Kune complaint. In my view it had always been the case that the Notice was deficient- It had always been in breach the 1999 Guidelines by threatening to sue for costs together with the primary debt. It might be argued this should have been clear to Ms Sampson all along, despite the LIV's approval. However, in the light of the fact that the regulator had given its approval in 2004, it would not be appropriate to expect her to second guess the regulator.
In my view, the effect of the approval is to narrow down the time during which serious concerns about Ms Sampson's conduct in relation to the Notice should be considered. The key period is between 27 March 2009 and mid 2010, when she ceased to conduct her bulk debt collecting practice. Two of the three Notices were sent during this period.
The Burdett Notice was sent in November 2008, some four and a half months prior to the LSC's letter of 27 March 2009. So, in relation to the Burdett Notice, Ms Sampson can claim that the regulatory 'approval' given in 2004 was not yet 'countermanded'.
Beyond 27 March 2009, I have found that Ms Sampson had no basis on which to assume (as she said she did) that the LSC had no concerns about her utilisation of this form of Notice. Nevertheless, there was an element of 'ships in the night' in that the LSC did not explicitly say that it disagreed with the approval previously given by the LIV. In fact, it did not engage with that issue at all, despite it having been raised on several occasions by Ms Sampson. Certainly, it did not explicitly 'override' it. It did not state in so many words that Ms Sampson should cease to use Notices in that form. As stated above, a practitioner is not entitled simply to wait for a regulator to tell him or her what to do or not to do. But given the history of this matter, a clearer message could have been sent. In my view, the overall effect of the interactions Ms Sampson had with the regulators was to reduce to some extent her culpability for her conduct in sending out the Notices after March 2007 (but not the Urgent Notices).

[151]

Other 'mitigating' or relevant factors here are as follows:
- Shortly after the letter of 27 March 2009 would have been received by Ms Sampson, she began to suffer serious health problems, which I accept over time would have impacted on her ability to respond to the new position taken by the regulator, together with the partnership dispute, which was also coming to a head during 2009.
- In Victoria, the attitude of regulators, and the law generally, has evolved over the last few decades. As recently as late 2007, the LIV's 1999 Guidelines were applicable, which stated the LIV's view that costs to-date are properly claimable in a letter of demand. Although I have found that Ms Sampson went further than this, and I have rejected her argument that she was not in fact threatening to sue for pre-litigation costs, it is necessary to be mindful of not dealing with her conduct as if it were occurring today.
- The LSC's conclusion conveyed by its letter of 27 March 2009 was that there was a reasonable likelihood that VCAT would find her guilty of unsatisfactory professional conduct (rather than professional misconduct).
- The concept of a 'fit and proper person' to engage in legal practice is not one which can be defined with precision.[41] However, it is frequently manifested by dishonesty. Here, however, the situation is not clear-cut. The finding against Ms Sampson by the Federal Court that notices in very similar form were misleading and deceptive was, of course, a civil, not a criminal finding. Moreover, the Federal Court determination, since it required no finding of dishonesty or even carelessness, imports no moral obloquy. I do not regard Ms Sampson's conduct, in all the circumstances of this case, as demonstrating that she is not a fit and proper person to practise.
- Upon becoming aware of the Federal Court decision, the LIV on 11 November 2011 requested an explanation from Ms Sampson as to the issue it raised as to whether she was a fit and proper person to hold a practising certificate. Following a submission on her behalf, the LIV determined that her practising status would not be affected by the decision.
The LPA does not provide a clear line between the concepts of professional misconduct, and unsatisfactory professional conduct. It is clear the former relates to more serious[42] breaches of professional responsibilities. Beyond that, it is left to the Tribunal's assessment of the individual circumstances of each case. In Legal Services Commissioner v Pollard[43], the Tribunal said that the distinction under the old Legal Profession Act 1996, whereby misconduct needed to be 'wilful or reckless' provided a 'useful insight' into the question. I note, however, that distinction has been removed from the legislation.
Giving due weight to the 'mitigating' factors, Ms Sampson's conduct in breaching rule 28.2 by sending the three Notices (and in particular the Notices sent to Wallace and Egan after March 2009) and in sending the Urgent notice to Wallace, constitutes professional misconduct under s.4.4.4(a) (but not under s 4.4.3(1)(b)).
From March 2009, it was made quite clear to Ms Sampson that the regulator's (correct) view was that the Notice was not in a form which complied with her legal and ethical obligations. Nor should this confirmation have come as a surprise to her, given the number of earlier statements commenting on the Notice by the LSC, and even, earlier on, by the LIV (despite the fact that surprisingly, it 'approved' the form of the Notice in 2004).
The Urgent Notice did not suffer from all the vices which the Notice did. But it was still affected by the key vice - the assertion that pre-litigation costs were payable as part of the primary debt. And in relation to Wallace, the LIV 'approval' arising from the Roycroft complaint in 2005, could not be relied upon by Ms Sampson, because the form was 'approved' for use in circumstances where the video store had a contractual entitlement to pre-litigation costs, which was not the case for Wallace.
The continued use of these forms of notice after March 2009 was, at the least, reckless, in all the circumstances. Some degree of robustness is obviously a legitimate part of debt collection. However, Ms Sampson's conduct when beyond that. It displayed a disregard for the entitlement of debtors to receive information in letters of demand which was accurate rather than misleading, in that it asserted an entitlement to pre-litigation costs which did not exist.
Accordingly, I find, under s 4.4.4(a) of the Act, in relation to those charges which are proved, namely, charges 2 and 4, that Ms Sampson is guilty of professional misconduct.

Legal Services Commissioner v Sampson

At a glance

Court

Decision date

Source

Judgment (253 paragraphs)

Legal Services Commissioner v Sampson (Legal Practice) [2013] VCAT 1177 (10 July 2013)

Parties

Cases Cited (2)