JUDGE R MACKNAY QC (SUPPLEMENTARY DEPUTY PRESIDENT)

Citation : LEGAL PROFESSION COMPLAINTS COMMITTEE and O'HALLORAN [2011] WASAT 95

File No : VR 35 of 2009, VR 36 of 2009, VR 37 of 2009, VR 38 of 2009, VR 39 of 2009

Legal practitioner - Disciplinary hearing - Unprofessional conduct - Unsatisfactory professional conduct - Professional misconduct - Failure to comply with superannuation law - Entry into written costs agreement allowing charges in excess of statutory maximum - Grossly excessive charging - Charges for secretarial or administrative work - Unreasonable minimum charges - Failure to comply with order of registrar - Non­compliance with statutory obligations regarding trust moneys - Neglect or undue delay - Failure to provide itemisation of an account

Legal Practice Act 2003 (WA)

Legal Practitioners (Supreme Court) (Contentious Business) Determination 1996 (WA)

Legal Practitioners Act 1893 (WA)

Legal Profession Act 2008 (WA)

Motor Vehicle (Third Party Insurance) Act 1943 (WA)

State Administrative Tribunal Act 2004 (WA)

Workers' Compensation and Rehabilitation Act 1981 (WA)

Appellant : Mr N Morcombe QC & Mr G M C McIntyre SC

Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336

Council of the Law Society (NSW) v Koffel [2010] NSWADT 149

D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191

D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198

Defendi v Eden Hill Plasterers [2008] WASCA 269

Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56

Law Society of New South Wales v Bouzanis [2006] NSWADT 55

Legal Practitioners Complaints Committee v Camp [2010] WASC 188

Legal Profession Complaints Committee and O'Halloran [2011] WASAT 95

New South Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279

New South Wales Bar Association v Somosi [2001] NSWCA 285

New South Wales Bar Association v Young [2003] NSWCA 228

Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361

Tey v Optima Financial Group Pty Ltd [No 3] [2012] WASCA 113

1 MARTIN CJ: Leave to appeal should be refused for the reasons given by Pullin JA, with which I agree.

2 The appellant seeks leave to appeal against orders of the State Administrative Tribunal (Tribunal) finding the appellant guilty of various instances of professional misconduct and unsatisfactory professional conduct. Leave to appeal must be refused for the following reasons.

3 The conduct complained about by the respondent spanned a period from 1999 to 2007. Around that time there were two changes to the legislation regulating the legal profession. Until 1 January 2004 the Legal Practitioners Act 1893 (WA) (1893 Act) applied. It was replaced by the Legal Practice Act 2003 (WA) (2003 Act). Then the 2003 Act was repealed by the Legal Profession Act 2008 (WA) (2008 Act) which commenced operation on 1 March 2009, which was after all of the conduct by the appellant complained about by the respondent had occurred.

4 The respondent commenced the proceedings against the appellant on 26 February 2009, which was before the date of the commencement of the 2008 Act, but the hearing before the Tribunal occurred after that date. Section 607 and s 622 of the 2008 Act contained transitional provisions, the effect of which was summarised by the full bench of the Supreme Court in Legal Practitioners Complaints Committee v Camp [2010] WASC 188 [6] - [7] where the court said:

The overall effect of these provisions may be summarised as follows:

(a) disciplinary proceedings commenced under the 1893 Act or the 2003 Act against a practitioner are continued under the 2008 Act, s 607(2) - Legal Practitioners Complaints Committee v Segler [2009] WASAT 205 [30];

(b) the rights and entitlements of the practitioner and of the applicant arising from a reference commenced under the 1893 Act or the 2003 Act are continued under the 2008 Act - s 607(2); and Segler [30]; and

(c) in the event of any inconsistency between the rights and entitlements of the practitioner or of the applicant in relation to the references under the 1893 Act or the 2003 Act, and the provisions

in the 2008 Act, the provisions of the 2008 Act prevail - s 607(2)(b) and s 607(3).

In short, the effect of s 607 and s 622(2) of the 2008 Act is to treat the findings made against the respondent by the SAT which established contraventions of the 1893 Act or the 2003 Act as constituting contraventions of the 2008 Act. The 2008 Act therefore recognises the validity of findings made against a practitioner under the 1893 Act or the 2003 Act by treating them as constituting a contravention of the 2008 Act itself and, subject to its terms, directing that further proceedings relating to those matters shall be dealt with and regulated by the 2008 Act.

Unprofessional conduct, unsatisfactory professional conduct, professional misconduct

5 The 1893 Act rendered a legal practitioner liable to disciplinary action where the practitioner had been guilty of 'unprofessional conduct'. 'Unprofessional conduct' means conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, or that, to a substantial degree, fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competence: Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56 [61] (Parker J).

6 Some of the proceedings brought by the respondent alleged 'unsatisfactory conduct by unprofessional conduct'. The expression 'unsatisfactory conduct' appeared in the 2003 Act. 'Unsatisfactory conduct' was defined in the 2003 Act as including unprofessional conduct, illegal conduct, neglect or undue delay in the course of legal practice, a contravention of the 2003 Act and conduct occurring in connection with legal practice that fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.

7 The 2008 Act makes a legal practitioner liable to disciplinary action where the practitioner had been guilty of 'unsatisfactory professional conduct' or 'professional misconduct'. Section 402 defines 'unsatisfactory professional conduct' as including:

[C]onduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

8 Section 403 defines 'professional misconduct' to include:

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

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

9 Thus, it can be seen in subpar (a) of the definition, that professional misconduct is unsatisfactory professional conduct of a serious kind, either because of a single instance or because of the consistency of the failure to reach or maintain a reasonable standard of competence and diligence.

10 The 2008 Act does not define what conduct would justify a conclusion that a practitioner was not a fit and proper person to engage in legal practice in order to constitute 'professional misconduct' by reason of s 403(b) of the 2008 Act. However, conduct described as 'unprofessional conduct' in Kyle's case (that is, conduct which practitioners of good repute and competence would regard as disgraceful or dishonourable) would justify, in many cases, a finding that a person was not a fit and proper person to engage in legal practice. This prompts the observation that the separate and well understood concepts identified in the 1893 Act, namely:

(a) unprofessional conduct;

(b) illegal conduct;

(c) neglect;

(d) undue delay ...

which were still separately identified under the rubric 'Unsatisfactory Conduct' in the 2003 Act, have now been concealed in the generalised jargon found in the definitions of 'unsatisfactory professional conduct' and 'professional misconduct' in the 2008 Act.

11 An appeal is permitted to this court from a decision of the Tribunal, but only if this court gives leave to appeal: s 105(1) State Administrative Tribunal Act 2004 (WA). Section 105(2) states that the appeal can only be brought on a question of law. Despite s 105(2), if the Tribunal's decision has the effect of depriving a person of the person's capacity to lawfully pursue a vocation, an appeal may be brought on any ground, whether it involves a question of law, a question of fact or a question of mixed law and fact: s 105(13).

12 The Tribunal ordered a 6-month suspension from practice in relation to findings of professional misconduct concerning the entry by the appellant into three costs agreements and gross overcharging by the appellant in relation to four clients. Subject to the grant of leave, the appellant has the right of appeal on any ground in relation to those matters. The other findings of unsatisfactory professional conduct resulted in fines or reprimands so the appeals against those matters are restricted to appeals involving a question of law.

13 The power to grant leave to appeal is conferred in general terms without any express restriction or qualification. Leave should be granted if, in all the circumstances, it is in the interests of justice that there be a grant of leave. However, the importance of the question, either generally or to the would-be appellant, will be relevant. If the applicant must show that the appeal involves a question of law, then it must be shown that there is a real or significant argument to be put on that question of law. In addition, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although where the order is final that injustice will be more readily discernible: Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361.

CACV 78 of 2011 - failure to comply with superannuation law

14 The respondent alleged that the appellant was guilty of professional misconduct by failing to meet obligations either to pay superannuation contributions in relation to employees, or to provide a superannuation guarantee statement in default of those payments.

15 The allegations of fact which were admitted by the appellant revealed that the failure to meet the obligations extended over a period from 28 January 2004 through until 28 November 2007. The total number of persons he employed in that period ranged from eight to 15. For five of the last six quarters in that period of time, between 67% and 90% of his employees had unpaid superannuation on the due date for payment in relation to those quarters.

16 The Tribunal found that the appellant had not deliberately set out to avoid payment of superannuation and that ultimately he paid the full amount of his obligations, albeit by an arrangement with the Australian Taxation Office (ATO) for payment over a period of some months. Involvement of the ATO was brought about after the appellant's bookkeeper contacted the ATO at his request.

17 The appellant maintained that he had explanations for these failures which he contended meant he was not guilty of professional misconduct. For example, he said that at different times members of staff undertook the responsibility to deal with superannuation. The Tribunal found that the appellant's explanations for the failures could not be accepted. The Tribunal found that the appellant had been alerted to noncompliance by a member of staff and that the appellant did not respond adequately to the advice that payments had not been made on time.

18 The Tribunal concluded that the appellant failed to put in place an adequate system to ensure compliance. A summary of the appellant's response to the allegations of professional misconduct and the Tribunal's detailed findings are set out in Legal Profession Complaints Committee and O'Halloran [2011] WASAT 95 [17] - [35].

19 The Tribunal then considered whether these failures constituted professional misconduct. The Tribunal referred to New South Wales Bar Association v Cummins [2001] NSWCA 284; (2001) 52 NSWLR 279, which involved a barrister who failed to lodge tax returns or pay tax for 38 years. Spigelman CJ expressed the view that the preparation and filing of tax returns was closely related to the earning of income and therefore the link between the practitioner's failure and his profession was 'sufficiently close' to justify a finding of professional misconduct [66]. The Tribunal in this case correctly observed that the link was clearly present in Mr O'Halloran's failure to meet the superannuation obligations arising from his practice. The Tribunal also referred to decisions in New South Wales Bar Association v Somosi [2001] NSWCA 285 and New South Wales Bar Association v Young [2003] NSWCA 228, where the Court of Appeal found that the legal practitioners concerned were not fit and proper persons to remain on the roll of legal practitioners. In Young, Meagher JA observed and held that, for a practitioner to deliberately ignore the obligation to file income tax returns bespoke a lack of integrity, particularly if the practitioner was not ignorant of the consequence.

20 Non-compliance with statutory taxation obligations, particularly where the obligations arise in the context of legal practice, may sound in disciplinary action: Cummins, Somosi and Young.

21 The Tribunal also referred to Law Society of New South Wales v Bouzanis [2006] NSWADT 55, a case in which a tribunal found that a failure by a solicitor to pay an employee's superannuation for four years, which was remedied only after correspondence from the employee's solicitors and intervention by the NSW Law Society, amounted to professional misconduct. The failure related to one employee. In this case the failure related at times to up to 12 employees.

22 The Tribunal finally referred to Council of the Law Society (NSW) v Koffel [2010] NSWADT 149 and acknowledged that the mere fact of a failure to pay superannuation guarantee contributions on time did not of itself constitute professional misconduct. The Tribunal acknowledged that the circumstances surrounding the failure, the consequences of the failure and the actions subsequently taken by the solicitor determined whether the conduct constituted professional misconduct. In the case of Bouzanis, the New South Wales tribunal concluded that the failure by the solicitor involved to make superannuation payments until correspondence was received from solicitors representing the employee, represented a sufficiently serious abrogation of the solicitor's fiscal responsibility in the practice of law to warrant a finding of professional misconduct.

23 The Tribunal stated that the appellant's failure to pay superannuation was in the nature of omission and inadequate oversight and systems rather than wilful abrogation of his responsibility, and said:

The difficulty for [the appellant] is the extended period of time over which there was substantial non-compliance, that is, from mid 2005 until September 2007. Although [the appellant] professes to have been unaware of the level of non­compliance, his evidence is that from time to time non­compliance was drawn to his attention. He failed then to have sufficient regard to his obligations [46].

Complaints 1 (Radich), 2 (Fort) and 4 (Watson) involve failures in relation to one employee in the relevant quarter and involve relatively short delays before payment was made. We would not consider that those delays, which were most likely initially the responsibility of a bookkeeper, should be treated as unprofessional conduct on Mr O'Halloran's part.

In the third quarter of 2005, there were four delayed payments out of a total complement of 11 employees. Payment in respect of three of those employees was made 46 days after the due date. From that point on the position worsened significantly. Given that payments the subject of complaint 5 (Violaris), 6 (McNab) and 7 (V Fubbs) were made within 46 days, and represented the beginning of the problems emerging in relation to the non­payment of superannuation, it is reasonable to conclude that those non­payments did not demonstrate an indifference to Mr O'Halloran's taxation obligations. They represent however, the emergence of a problem that required careful attention. In those circumstances, unprofessional conduct is not, in our view, demonstrated in relation to complaints 5, 6 and 7.

The position changed thereafter, however. Having remedied the failures in quarter 3 2005, Mr O'Halloran should have been vigilant to ensure that no further non­compliance occurred. He was not, and the position deteriorated to the point where up to 90% of employees' superannuation was not paid. Against a background of earlier problems with timely payment, the extent of failures after that time demonstrates, in our view, an indifference to his taxation and superannuation obligations. The failures had assumed substantial proportions, and we find the failures in relation to complaints 8 through to 21 do amount to professional misconduct [47] - [49].

25 The appellant seeks leave to appeal against that decision. The single ground of appeal reads:

The Tribunal erred in law in directing itself that its finding that the practitioner failed to adequately address compliance with superannuation obligations was capable of comprising indifference to his taxation and superannuation obligations and capable of comprising a sufficiently serious abrogation of his fiscal responsibilities in the practice of the law to comprise professional misconduct.

26 The appellant's submissions consist of the following assertion:

The Tribunal found no more than a lack of vigilance and erred in law in directing themselves that it was open to draw an inference of indifference to his obligations, as a consequence of a lack of vigilance and to consequently conclude that his conduct amounted to a sufficiently serious abrogation of his fiscal responsibilities in the practice of the law as to amount to professional misconduct.

27 That assertion must be rejected. It was open to the Tribunal to find that the appellant's conduct constituted professional misconduct. No challenge is made to the Tribunal's approach which was to make findings of fact and then to determine whether or not the conduct revealed by those facts amounted to professional misconduct. The appellant's application for leave to appeal should be dismissed. The Tribunal did not err. It was correct for the reasons it gave.

Appeals CACV 79 of 2011 (Lovett); CACV 80 of 2011 (Pizzata); CACV 81 of 2011 (D'Agui) and CACV 82 of 2011 (Challen)

28 These four appeals raise a number of separate issues but also some common issues. In the case of Pizzata, D'Agui and Challen, the appellant was found guilty of professional misconduct by entry into a written costs agreement which allowed him to charge more than allowed by statute. Counsel agreed that if the appeal against this finding in the case of Pizzata were dismissed, then the appeal against the finding of professional misconduct against the same finding in D'Agui and Challen also would have to be dismissed (ts 41).

29 In the case of Pizzata, D'Agui, Challen and Lovett, the practitioner was also found guilty of professional misconduct by charging grossly excessive fees. Counsel for the appellant agreed that if the appeal against that finding in the case of Pizzata were dismissed, then the appeals against the same finding in the case of D'Agui, Challen and Lovett would likewise have to be dismissed (ts 41).

30 There were three complaints about the appellant's conduct in relation to this client. By complaint 'A', the respondent charged the appellant with unsatisfactory conduct by unprofessional conduct in that he entered into a written agreement with Ms Pizzata which purported to allow him to charge Ms Pizzata above that allowed by the Motor Vehicle (Third Party Insurance) Act 1943 (WA) (MV (TPI) Act) and the Legal Practitioners (Supreme Court) (Contentious Business) Determination 1996 (WA).

31 By complaint 'B', the respondent charged the appellant with unsatisfactory conduct by unprofessional conduct by charging Ms Pizzata grossly excessive fees.

32 By complaint 'C', the respondent charged the appellant with applying trust moneys which he held for the benefit of Ms Pizzata towards disbursements without complying with s 34A(b) of the 1893 Act.

Pizzata - Complaint 'A' - written agreement permitting charges not allowed by statute

33 At the relevant time, s 27A(2) of the MV (TPI) Act provided:

An agreement is not to be made for a legal practitioner to receive, for appearing for or acting on behalf of a person in an action to which this section applies, any greater reward than is provided for by a determination in force under section 58W of the Legal Practitioners Act 1893.

Section 27A(3) provided that an agreement made contrary to this section is void and any money paid under such an agreement is recoverable by the person who paid it.

34 Section 58W of the 1893 Act provided that the Legal Costs Committee may make determinations regulating the remuneration of practitioners. Determinations were in force during the period when the written agreement applied.

35 The appellant acted for Ms Pizzata in relation to claims for damages arising out of two motor vehicle accidents. The costs agreement signed by Ms Pizzata on 1 April 1999 read as follows:

I confirm that I have agreed to the following terms and conditions upon which PAUL O'HALLORAN will act for me in this or any other matter:

(a) $270 per hour for all time spent on my file including interviews, court appearance, incoming and outgoing telephone calls, perusing documents, drawing documents, travelling and waiting time, file reviews, conferences, etc.;

(b) Minimum charge of one tenth of an hour for time spent on the above matters and clerical or non-professional time;

(c) Minimum charge of two tenths of an hour per page (or part thereof) for outgoing correspondence, court documents, statements, proof etc;

(d) $130.00 per hour for all clerical and non-professional time spent for such things as collating and photocopying, outside deliveries and attendances; incoming and outgoing telephone conversations, messages, file notes, etc. (but excluding the making of appointments for me to see Paul O'Halloran or his staff).

(e) 5% increase in charge rate per annum;

(f) 5% interest on unpaid fees per annum;

(g) 15% interest per annum on outlays incurred by Paul O'Halloran.

(h) I am responsible for the payment of medical, Barrister and other expenses necessarily incurred and I shall fully and promptly pay Paul O'Halloran for such expenses upon demand, whether or not I win my case.

(i) Paul O'Halloran is authorised to deduct monies from his Trust Account for fees and disbursements at any time;

(j) I confirm that you have advised me that I may seek independent legal advice before signing this agreement.

The respondent alleged professional misconduct because the agreement permitted:

(i) pursuant to clauses (b) and (d) charges for secretarial or administrative work;

(ii) pursuant to clause (c) unreasonable minimum charges;

(iii) pursuant to clause (e) 5% increase in charge rate per annum;

(iv) pursuant to clause (f) 5% interest on unpaid fees per annum;

(v) pursuant to clause (g) 15% interest per annum on outlays.

36 No reference will be made below to allegations (iv) (5% interest on unpaid fees) and (v) (15% interest on outlays). This is because, although the Tribunal considered that these clauses were not 'permissible', it concluded that entry into the costs agreement containing those provisions fell short of unprofessional conduct [106]. The findings made by the Tribunal on each of the first three allegations are set out below.

Pizzata - Complaint 'A' - Charges for secretarial or administrative work

37 The Tribunal recorded that it was not in dispute that in applying the relevant costs determination, a practitioner was not entitled to include any charge at an hourly rate for merely clerical, secretarial or administrative work carried out by a clerk, which properly forms part of the overheads of the practitioner's practice: D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191, 220 - 221. The respondent alleged that cls (b) and (d) of the Pizzata costs agreement permitted a charge to be made for purely secretarial or administrative work which was a charge not permissible under the relevant determinations and therefore the agreement was one contrary to s 27A(2).

38 The appellant acknowledged that cl (d) of the Pizzata costs agreement did reserve to him the ability to charge for purely clerical tasks such as collating and photocopying.

The prohibition in s 27A of the MV (TPI) Act is against the making of an agreement to receive greater reward than is provided for in the relevant determination. To the extent that the Pizzata costs agreement permitted the recovery of remuneration not recoverable under the relevant determinations, the agreement contravened s 27A. In his closing submissions, counsel for Mr O'Halloran conceded that Mr O'Halloran had recorded some work, in arriving at the rewards sought, which included some amounts referable to clerical work. That acknowledgment was rightly made. At least some work of a purely administrative nature, such as file notes or telephone calls made by clerical or administrative staff within Mr O'Halloran's office, were recorded as chargeable and were included in the charges raised. The Pizzata costs agreement permitted those costs to be made.

We find that by entering the Pizzata costs agreement containing clause (b) and clause (d), Mr O'Halloran acted in breach of s 27A of the MV (TPI) Act [73] - [74].

Pizzata - Complaint 'A' - Unreasonable minimum charges

40 The second aspect in respect of which the complaints committee alleged the agreement permitted charges not permitted by the relevant determination or which were unreasonable was cl (c), which provided for a minimum charge of two-tenths of an hour. Counsel for the respondent advised the Tribunal that no complaint was made in relation to cl (b) which provided for charging by reference to six minute units. The respondent acknowledged that there was a standard practice within the legal profession of charging by reference to six minute units. The respondent submitted however, that there was no general practice within the profession of charging a minimum of two-tenths of an hour per page for correspondence as provided for in par (c) of the agreement and that the charges on that basis were themselves unreasonable and had the effect of increasing the effective hourly charge rate beyond the maximum permissible under the relevant determination.

41 The appellant's response to this issue was set out by the Tribunal as follows:

Mr O'Halloran's response on this issue was that the setting of a minimum charge of 2/10 of an hour per page (or part thereof), for outgoing correspondence, court documents, statements and proof is not unreasonable when accounting for the fact that it includes professional time taken in considering the content of the document, dictating or otherwise drafting the documents, checking the document in its engrossed form, correcting any errors in typing, checking any amended form of the document, signing it and authorising its dispatch.

In his witness statement regarding Pizatta, Mr O'Halloran said:

At the time of rendering the work it was the practice adopted by my firm to have some standardised charges which were usually two units of six minutes time for drawing each page of the letters in general terms, which was thought to benefit the client and be an accurate time of all time spent in composing those letters, dictating those letters, typing those letters, reading the initial draft, re­drafting and amending the draft letter, re-reading the settled draft, checking the final form of the letter and signing the same. All this takes time and is not separately charged for in our office, but forms part of the charge even though that usually is less than the totality of all the time actually spent dealing with the separate components of a letter.

In his oral evidence at the hearing, Mr O'Halloran said that, in relation to incoming correspondence, his practice was to charge one unit of time for the first two pages, and two units of time if the letter was three, four or five pages [76] - [78].

42 As to the appellant's evidence and response, the Tribunal said:

It is difficult to reconcile [the appellant's] evidence with the WIP record. That is partly because of a difficulty in matching the WIP records with the contents of the client files so as to identify the documents referred to in the WIP records. It is apparent that the minimum charge of one unit was regularly applied in relation to reading incoming correspondence and documents. A random review of documents on file reveals that there are a large number of very short letters for which the standard one unit charge for reading was applied. Reading those letters takes a matter of seconds. By way of an extreme example, on 7 February 2002, the charge of one unit of time for a senior solicitor was charged for reading an invoice from a psychiatrist. The invoice comprised one line. On 7 March 2002, the WIP records show a charge of one unit for reading a letter from the other party's solicitor. That would appear to be a letter dated 6 March 2002 which reads:

We refer to a telephone discussion between Barbara and Fay Parrella on 5 March 2003.

We confirm an informal conference has now been arranged for Wednesday 26 March 2003 at 2.30 pm to be held at your offices.

We look forward to seeing you then.

There are numerous examples of correspondence of that nature on the client files. A charge of a unit of senior solicitor's time in relation to correspondence of that nature, repeated many times over the life of the file must inevitably have lead to a remuneration at an hourly rate greater than that permitted by the relevant determinations.

The Tribunal then continued by referring to the effect of cl (d) and said:

The same effect arises from the minimum charge of two units per page for outgoing documents. A random selection of documents from the file demonstrates that the provision for a minimum charge resulted in excessive charges for correspondence on a regular basis. By way of example, the WIP records record four units of senior solicitor time on 26 November 2002 for writing a letter to Dr Ismail asking for a report. The records show a further record on the same day, of four units of senior solicitor time writing a letter to Dr Mendelson seeking a report. Apart from short introductory paragraphs, the letters, which are approximately one and a half pages in length, are identical. The letters list the matters to be covered in the report. They are standard requests, and the letter appears to be, in substance, a standard letter. Even allowing for consideration of the file for the purpose of deciding to whom the letter should be addressed, and tailoring the introductory paragraphs, it is not possible to justify a charge for 48 minutes of time to generate, settle and dispatch those letters.

A further example is a letter on the Pizzata file to Dr Harper dated 17 July 2002. That letter encloses a cheque as prepayment for a medical report fee. It consists of two sentences. For that, a charge of two units of senior practitioner time, that is $56.90, was recorded in the WIP record.

The examples of brief routine correspondence attracting charges of that nature are common in the file. The files demonstrate that the provision in the agreement which permitted the charging of two units of time per page for correspondence inevitably led to a charge at an effective hourly rate significantly in excess of the permissible hourly rate under the relevant determination. Because of their capacity to significantly inflate the overall hourly charges beyond those permitted by the relevant determination, and given their cumulative effect on the overall charges to the client, the minimum two unit charge per page in relation to outgoing correspondence was, in our view, unreasonable [78] - [81].

Pizzata - Complaint 'A' - 5% per annum increase in hourly charge rate

43 The next aspect of the respondent's complaint, was that a 5% increase in a charge rate was provided for in cl (e) of the Pizzata costs agreement. That was so, notwithstanding that the hourly rate specified in the agreement represented the maximum hourly rates permissible under the 1996 determination. The Tribunal held that an increase of 5% each year on the maximum hourly rate chargeable under the determination was clearly impermissible unless a new determination raising the hourly rate came into effect. The Tribunal noted that as it happened, the next determination (the 1999 determination) left rates at the same level with no increase. The Tribunal held that this amounted to a breach of s 27A of the MV (TPI) Act.

When Mr O'Halloran rendered his principal account to Ms Pizzata on 27 October 2003, he included an amount of $3,051.82 which was described as follows:

Plus fee increases and interest on unpaid fees as per costs

agreement being 5% per annum being $6,766.18

but say as reduced $3, 051.82

Mr O'Halloran acknowledged that the clause permitting a 5% increase in hourly rates had the potential to result in a charge in excess of that permitted under the relevant determination. He said, however, that he never intended it to have that operation. It may be that Mr O'Halloran did not put his mind to the consequences of applying an increase to the hourly rate recorded, but he nevertheless brought to account an increase in his charges in reliance upon clauses (e) and (f) of his costs agreement. Although the precise calculation of the amount eventually charged is not clear, given that WIP was recorded at the maximum permissible hourly rate, the additional charges necessarily caused Mr O'Halloran's account to exceed that which was permissible under the relevant determination [84] - [85].

Having made the findings that the Pizzata costs agreement offended against the MV (TPI) Act or permitted unreasonable charges to be made, it was then necessary to consider whether this constituted unprofessional conduct.

Pizzata - Complaint 'A' - Did entry into the agreement constitute unprofessional conduct

45 The Tribunal correctly directed itself that it did not necessarily follow that the making of a costs agreement which offended the MV (TPI) Act or permitting unreasonable charges to be made, or the making of charges under such an agreement, constituted unprofessional conduct. See D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198, 209 - 210.

46 The Tribunal directed itself that whether or not the entry into the agreement constituted unprofessional conduct was a question of degree and depended upon the facts of the individual case [104]. The Tribunal noted that s 27A of the MV (TPI) Act was inserted by an amendment in 1994 and that it had been in place for five years prior to the entry into the Pizzata costs agreement. The appellant practised in the personal injuries field and the Tribunal found that he was 'well aware of the statutory limitation of costs'.

47 The Tribunal found that the entry into the Pizzata costs agreement containing cls (c), (d) and (e) amounted to unprofessional conduct. The Tribunal explained this as follows:

Given the nature of the practice, and, as the files demonstrate, the extensive amount of routine correspondence, clause (c), in particular, has an obvious capacity to enable recovery of costs at an effective hourly rate well in excess of the maximum permissible rate under the determination. That situation was aggravated by the capacity to add a 5% per annum increase in charge rates. The entry into those aspects of the agreement so clearly enabled recovery of costs in excess of the appropriate determination that they cannot be justified. We have found the charge under clause (c) to be unreasonable. The entry into the agreement containing those terms, in breach of the statutory limitation on costs, fell short of the standard of professional conduct observed by members of the profession of good repute and competence, and did so to a substantial degree. In our view, Complaint A is made out, and the practitioner is guilty of professional misconduct in the manner alleged in Complaint A [107].

Pizzata - Complaint 'A' - Grounds of appeal

48 Ground 1 asserts that the Tribunal erred 'in law' in directing itself that in entering into the Pizzata costs agreement, the practitioner engaged in conduct which amounted to professional misconduct. This ground is supported by written submissions containing the surprising proposition that because an agreement made contrary to s 27A(2) was by s 27A(3) rendered void, that the statute therefore provided a remedy for a breach and that in consequence an agreement in breach of s 27A could not amount to unprofessional conduct. In oral submissions senior counsel appearing for the appellant agreed that this submission was 'expressed in too absolute a term'.

49 The appellant's written submissions contended that the costs agreement was not a 'deliberate act'. By that, the appellant meant he did not intend to deliberately flout s 27A. However, senior counsel conceded that the appellant knew of s 27A. This means that the appellant held his belief that he did not offend s 27A contrary to the facts found by the Tribunal and which established the breach of s 27A. Ground 1 has no merit.

50 Ground 2 alleges that the Tribunal erred 'in law' in directing itself that it was open to it to conclude that a provision in a costs agreement for the charging of two units of time per page inevitably led to a charge at an effective rate significantly in excess of the permissible hourly rate under the relevant determination because of the capacity of such charges to significantly inflate the hourly rate under the relevant determination. The appellant criticises the Tribunal for relying on 'randomly chosen examples' from the file (which had been provided in full to the Tribunal) in concluding that entry into the costs agreement was in breach of the statutory limitation on costs. The appellant contended that the conclusion that the charging of two units per page for correspondence inevitably led to a charge at an effective rate significantly in excess of the permissible hourly rate was a 'speculative conclusion' and that the Tribunal had merely made an 'extrapolation from a random selection of the evidence'.

51 The appellant's submissions misrepresent the Tribunal's reasons. The Tribunal did not take just a few examples and extrapolate. It was clear that the Tribunal considered the whole of the Pizzata file. This is clear from [80] and [81]. At [80], the Tribunal gave an example of a letter on the file to Dr Harper, dated 17 July 2002, which enclosed a cheque as prepayment for a medical report fee. It consisted of two sentences and, for that, a charge of two units of a senior practitioner's time, that is $56.90, was recorded in the WIP record. The Tribunal then added in [81] that examples of brief routine correspondence attracting charges of 'that nature' were common in the file. The Tribunal found that the files demonstrated that the provision in the agreement which permitted the charging of two units of time per page for correspondence inevitably led to a charge at an effective hourly rate significantly in excess of the permissible hourly rate under the relevant determination.

52 In any event, the finding of unprofessional conduct only required an examination of the agreement and what it permitted. The Tribunal merely reviewed the file and gave examples to illustrate why the clause in the agreement offended against the Act. Whether there was actual overcharging or not was the subject of complaint 'B'. There is no merit in this ground.

53 Ground 3 alleges that the Tribunal erred in relation to its finding about the 5% increase in charge out rate each year. This ground is not supported by anything more than an assertion that this provision did not breach the prohibition in the statute. The agreement provided for the maximum charge under the determination and allowed for a 5% increase in that maximum, even if the determination did not increase the maximum. That was a breach of s 27A(2). This ground has no merit.

54 During oral submissions, counsel for the appellant said that the main point relied on in the appeal was that the appellant 'believed' that the Pizzata costs agreement did not offend s 27A. Counsel appearing for the appellant on this appeal said that if the appellant had that belief, he could not be guilty of unprofessional conduct. There is no doubt that the appellant believed that the Pizzata costs agreement did not offend against s 27A because the Tribunal said that the appellant 'believed, in 1999, and indeed still believes, that the Pizzata costs agreement did not offend s 27A of the MV (TPI) Act' [106]. By reason of the submission made by senior counsel on this appeal, it appears that the appellant still holds this belief, even in the face of the Tribunal's reasons which spell out why the Pizzata costs agreement did offend against s 27A.

55 Probably the appellant was in fact contending that because he thought that when charges were actually made under the agreement, they evened out, as he said, by 'swings and merry-go-rounds' and that the total charges made to his clients were not unreasonable. That belief affords no answer to a charge of professional misconduct for entering into the agreement. Whether or not he did overcharge was a matter for consideration in relation to the allegations of gross overcharging.

56 The Tribunal did not err in concluding that there was professional misconduct in entering into the Pizzata costs agreement. As a result, the appellant's application for leave to appeal against the finding of professional misconduct by entering into the Pizzata costs agreement must be dismissed.

57 Because the same arguments were advanced in relation to the finding of professional misconduct by entering the written agreement with D'Agui and Challen, the grounds of appeal which challenge the findings of professional misconduct in relation to those agreements also lack merit and leave to appeal against those findings must be refused. In the case of D'Agui, s 84ZL of the Workers' Compensation and Rehabilitation Act 1981 (WA) was the statutory provision equivalent to s 27A(2) of the MV (TPI) Act.

Pizzata - Complaint 'B' - Grossly excessive charging

58 Ms Pizzata's claim was settled for a total of $50,000. This total was made up of $35,000 for the first accident and $15,000 for the second accident. The appellant instructed a barrister specialising in legal costs matters to prepare a party/party bill which came to a total of $19,864.56 which was described by the barrister as 'drawn rather generously'. She said she anticipated reduction at taxation. The barrister advised that if the matter proceeded to taxation, that she thought that Ms Pizzata would be awarded about $12,000. Costs were taxed subsequently on a party/party basis and allowed at $11,089.31.

59 The appellant charged Ms Pizzata $32,804.49 (made up of $27,368.16 for professional fees, $2,384.51 being GST on professional fees and $3,051.82 being fee increases and interest on unpaid fees. See [54]) which, together with disbursements, make a total of $36,271.55. The respondent alleged that this was a grossly excessive charge.

60 At the hearing before the Tribunal, an expert, Mr Forbes, called on behalf of the respondent, expressed the opinion that a reasonable sum for the costs to be charged would be $10,769.56. Mr Lang, an expert called on behalf of the appellant, offered the opinion that reasonable costs would be $21,130 in respect of the appellant's charges, not including disbursements. Mr Tedeschi, a barrister, also retained by the appellant, expressed the opinion that the total of reasonable legal fees was $32,988.09 which was slightly more than the appellant had charged (excluding disbursements): see [118] - [125].

61 The Tribunal considered that the significant difference in assessment between Mr Forbes and both Mr Lang and Mr Tedeschi was the extent of reliance on the WIP records [132]. Because of the deficiencies in the WIP records which allowed for charges which would result in a breach of the statutory limit, the Tribunal considered that the WIP records were not a reliable guide to assessment of work done, or more particularly time spent on the items recorded.

62 The Tribunal said that what was clear, was that entries were made in the WIP records routinely, without regard to actual time spent upon the task recorded. The Tribunal added that as it had already noted 'entries for time spent on outgoing correspondence had the potential to, and in many cases did, significantly overstate the actual time spent'.

63 The Tribunal made the obvious point that Mr Lang's estimate of $21,130, even before it was reduced, was significantly lower than the figure of in excess of $33,000 [sic], exclusive of disbursements, charged by Mr O'Halloran to Ms Pizzata [138]. The Tribunal concluded that the evidence of Mr Tedeschi was not as reliable as that of Mr Lang or Mr Forbes.

64 The Tribunal then considered that the reasonable costs properly chargeable were in the vicinity of Mr Forbes' estimate of reasonable costs [139] and that the disparity between the charges made and Mr Forbes' figure, even if adjusted to allow for some additional information from the practitioner about some of the work which had been disallowed, led to the conclusion that the charges made to Ms Pizzata were grossly excessive and amounted to unprofessional conduct or in terms of the 2008 Act, professional misconduct [140].

65 Having made the finding of professional misconduct, the Tribunal added some extra paragraphs which it said 'reinforced' the finding that the fees charged were grossly excessive. The Tribunal did this by referring to one of the factors identified by Ipp J in D'Alessandro; that is, the amount or value of the subject matter in issue. The Tribunal said that charges in excess of $36,000 in respect to a claim for $50,000 were disproportionate. The practitioner sought to counter that point by saying that Ms Pizzata settled for $50,000 contrary to the advice of counsel. However, the evidence was that Mr Marshall, the counsel briefed by the appellant to advise in relation to the first of the two accidents, reported that the defendant proposed to file an offer of $21,700, noted that a claim of $100,000 had been put to the defendant, but recommended settlement at a lower level, mainly between $40,000 to $50,000.

66 The practitioner gave evidence that he thought the claim in relation to both accidents was worth in excess of $150,000. That evidence was rejected by the Tribunal. No basis for the appellant's assessment was disclosed. The amount recovered by way of damages was $35,000 in respect of the first accident and $15,000 in respect of the second.

67 The Tribunal said that it was difficult to see how the value of the claim could conceivably be in excess of $150,000 as the appellant claimed. There was other evidence detailed by the Tribunal between [144] to [149] which makes it clear that there was nothing before the Tribunal to justify the appellant's contention that the claims were worth $150,000.

68 The Tribunal said that even if some greater amount might have been recovered had Ms Pizzata gone to trial, it was difficult to conclude that the amount charged would have been proportionate to any ultimate award of damages. The Tribunal said [149] that this conclusion reinforced the Tribunal's earlier finding (at [139]) that the charges made to Ms Pizzata were grossly excessive.

69 The Tribunal also considered the respondent's allegation that the fees charged included charges which were not properly able to be charged. The respondent alleged that these fell into three categories:

(a) charges for work which was purely administrative in nature;

70 The Tribunal's observations about the first category must be disregarded because the Tribunal made an error. The Tribunal said:

The objection to the charges is on [the] ... basis [that charges were made on the basis of one unit charge for each telephone call] not on the basis of raising a charge for the clerical work [151].

71 This was an error because it was outside the scope of the inquiry and the respondent concedes that the Tribunal erred in this respect. However, the other two categories of improper charges were properly considered by the Tribunal.

72 In relation to the second category which related to duplication, the appellant admitted duplication but contended that it occurred by oversight. The total amount of duplication asserted by the respondent was $1,002.18. Of that, $413.70 of duplicated charges were admitted by the practitioner and the balance was not admitted. The Tribunal said it was not necessary to go through each item not admitted to resolve the issue. The Tribunal noted that it was 'sufficient that an overcharge of $413.70 at least resulted from duplicated charges' [152]. The Tribunal added:

The method by which the WIP records were compiled was inevitably prone to error of this type occurring. It was incumbent upon the practitioner to carefully review the charges to avoid the client being charged twice for the same work. It is clear that he did not do so. An overcharge of $400 is not insignificant to a client, particularly a client of limited means as Ms Pizzata was [152].

73 As to the third category (ie work of no benefit to the client) this was set out in table (f) to particulars to par 74 of the respondent's application relating to the Pizzata matters. The Tribunal said that without dealing with each item separately, it considered that the respondent's assertions had substantial merit. The Tribunal observed that the raising of the charges resulted from the manner in which the WIP records were compiled, namely the practice of automatically recording events which occurred by reference to minimum time periods without any assessment as to whether the particular work was chargeable and without any proper assessment at the time of billing as to whether or not unbillable items were included within the WIP record.

74 Having reached those conclusions, the Tribunal concluded that the grossly excessive charges, including charges which were improperly made, constituted professional misconduct [154]. This finding was in addition to the earlier finding that the grossly excessive bill constituted professional misconduct. See [139] and [140].

Pizzata - Complaint 'B' - Grounds of appeal

75 There were six grounds of appeal which are categorised and reordered as follows:

(a) Grounds 7, 8 and ground 9 (particular 3) allege that the Tribunal erred in finding that certain charges were improper charges constituting 'an ingredient' of gross overcharging constituting professional misconduct and that such a finding was made without according the appellant procedural fairness.

(b) Ground 4 alleges that the Tribunal erred because it should have directed itself that in order for the fee charged to amount to professional misconduct it must grossly exceed a fee which could be charged on a reasonably arguable basis.

(c) Ground 5 and ground 9 (particulars 1, 2 and 4) allege that the Tribunal erred in concluding that Mr Lang and Mr Tedeschi relied on items in the costs agreement and work in progress records.

(d) Ground 6 alleges that the Tribunal erred in law in directing itself that it was open to conclude that the fees of the practitioner were grossly excessive because the amount charged in fees on a time-costed basis was disproportionate to the amount of damages which the Tribunal estimated might have been recovered.

Pizzata - Complaint 'B' - Grounds 7, 8 and 9 (particular 3)

76 By ground 7, the appellant alleged that the Tribunal erred in law 'by denying the practitioner procedural fairness when it concluded that clerical charges were improper charges because they were based on a minimum charge per unit when that reason for the charges being improper charges had not been alleged against him and he had no opportunity to respond to such allegation'.

77 The Tribunal's finding was outside the scope of the inquiry. That ground and the associated ground 8 are conceded by the respondent (and ground 9 (particular 3) raises the same point) but the respondent submits that this did not detract from the ultimate finding that the improper charges constituted professional misconduct. This submission must be accepted because the extent of the overcharging was found to be professional misconduct by the Tribunal at [139] and [140] before it turned to consider whether the overcharging was also improper because of the three categories of charges including the first category which should not have been the subject of any finding. If the first category of improper charges is ignored, the Tribunal still found two categories of improper charges. They justified the finding of professional misconduct and even if they did not, the total amount of the costs charged had already been found independently at [139] and [140] to amount to gross overcharging amounting to professional misconduct. For that reason the Tribunal's error does not affect the ultimate finding. Thus, although there is merit in these grounds there is no injustice caused if leave to appeal is refused.

78 This ground was developed by senior counsel in the following way. He first referred to the case of D'Alessandro which involved in one aspect an argument about the amount which the appellant was entitled to charge for getting up a case for trial. It is not necessary to set out the detail of the argument in the D'Alessandro case, but it was about the correct meaning of words in O 66 r 21 Rules of the Supreme Court 1971 (WA). Ipp J regarded the argument as a 'technical' argument. The argument proffered on behalf of the practitioner was held by Wallwork J in earlier proceedings to be 'very attractive in some respects'. On appeal, Ipp J (Pidgeon & Franklyn JJ agreeing) said that because Wallwork J found the practitioner's argument to be attractive, it indicated a view that the submissions were at least reasonably arguable. Ipp J continued (223):

In my view, that was a highly relevant factor to be taken into account in determining whether the amount charged under the bill of costs was grossly excessive. It seems from the Tribunal's reasons that it was not taken into account. If a practitioner claims a fee on a reasonably arguable, but wrong basis, it could hardly be said that his or her conduct in so charging is to be characterised in any way as unprofessional.

79 From that, senior counsel in this case argued that because:

(a) the appellant believed that he was not overcharging; and

(b) Mr Tedeschi considered the charges made by the appellant were reasonable,

it was not possible to conclude that the appellant was guilty of professional misconduct because it was 'reasonably arguable', based on the appellant's belief and Mr Tedeschi's opinion that the charges were reasonable.

80 This case is distinguishable from the circumstances in the D'Alessandro case. In this case, what the appellant believed does not avail the appellant. His belief was not a reasonable belief and it was not a belief based on Mr Tedeschi's opinion. His belief that he was not overcharging was because of a feeling that by reason of 'swings and merry-go-rounds', as he expressed it, there was no overcharging. This was a belief without reasonable foundation. A mere belief contrary to the facts cannot be taken into account. There is no doubt that the 5% increase of the hourly charge rate per annum was applied, that the two six-minute units minimum charge rate was applied and that the appellant was also impermissibly charging for clerical work. His belief was unreasonable.

81 Secondly, just because, long after the bill was raised, another practitioner offered an opinion that the bill was reasonable, did not provide him with any basis for a belief about the reasonableness of the bill when he raised it.

82 Senior counsel for the appellant agreed that the first step the Tribunal had to take in determining whether there had been gross overcharging amounting to professional misconduct, was to ascertain what a reasonable sum to charge would have been: see D'Alessandro (214) (Ipp J). That is what the Tribunal did. It did this by assessing the evidence of the three experts each of whom had a different opinion and making a finding as to what was a reasonable sum to charge. The Tribunal did that and concluded that a reasonable charge was in the vicinity of Mr Forbes' estimate of reasonable costs. The Tribunal considered that Mr Tedeschi's opinion was not as reliable as that of Mr Forbes because Mr Tedeschi relied on the WIP records which recorded the impermissible charges.

Pizzata - Complaint 'B' - Grounds 5 and 9 (particulars 1 and 2)

83 The appellant contends by grounds 5 and 9 that Mr Lang and Mr Tedeschi did not rely upon the WIP records and that he made his own assessment of reasonable costs. The oral submissions concentrated on Mr Tedeschi's evidence because only Mr Tedeschi was of the opinion that the costs charged were less than his assessment. Mr Lang's opinion did not assist the appellant. The contention that Mr Tedeschi did not rely on the WIP records is not borne out by the transcript. When the three experts were giving evidence together, the transcript reveals that Mr Tedeschi was asked whether he 'went to the WIP records and the audit of unbilled time as well as the file'. Mr Tedeschi said that he had, and he also agreed that he regarded the WIP records as substantially accurate. He also agreed that the WIP records 'reflected actual time spent'. The appellant's assertion that Mr Tedeschi did not rely upon the WIP records must be rejected.

84 Mr Forbes made his estimate of the reasonableness of the costs without regard to the costs agreement or the WIP records. The finding that Mr Forbes' estimate reflected the approximate reasonable costs for the work carried out was open to the Tribunal. There was a contest between Mr Tedeschi, Mr Lang and Mr Forbes. The Tribunal was not bound to accept Mr Tedeschi or Mr Lang's evidence in preference to that of Mr Forbes.

85 Once it was found what a reasonable charge would have been, the Tribunal then correctly compared that amount with the amount actually charged, found that the actual charge was grossly excessive and found that the appellant was guilty of professional misconduct. Other factors, ie, that the amount charged was disproportionate to the amount in issue and the fact that improper charges were raised, confirmed the finding.

86 By this ground the appellant challenges the tribunal's conclusion that the amount of costs compared with the amount of the claim lacked proportionality. Ipp J correctly observed in D'Alessandro that one factor to be considered in deciding whether a practitioner was guilty of gross overcharging is the amount or value of the subject matter in issue. This is because the level of costs will be influenced by that factor. So for example, practitioners of good repute are likely to charge less for a small claim in the Magistrates Court than costs charged for a major claim in the Supreme Court. Hourly charges are likely to be less. The time spent is likely to be less. It is a factor which provides a reference point for a decision about whether gross overcharging amounting to unprofessional conduct has occurred.

87 However, the relevance does not extend beyond providing a reference point. Once the work has been done, the extent of the costs charged measured against the claim or value of the claim cannot per se determine whether unprofessional conduct has occurred. The concept that the amount of costs should be proportionate to the amount of the claim is a concept which may readily be applied prospectively, but not so readily applied retrospectively. Thus, the legislation considered in Defendi v Eden Hill Plasterers [2008] WASCA 269 required consideration to be given to whether the likely costs of an appeal would be disproportionate to the amount of the claim. If the likely costs of an appeal were likely to be disproportionate, then the court could strike out the appeal.

88 However, after the costs have been incurred, it is not possible to make a simple judgment about lack of proportionality by merely comparing the total quantum of costs against the quantum of the claim. An assessment has to be made as to what has occurred. For example, a litigant with a small claim who behaves reasonably in the litigation, but is faced with an unreasonable opponent, may incur costs way beyond those which would be regarded as proportionate to the claim. A good example is provided by the reasons for decision in Tey v Optima Financial Group Pty Ltd [No 3] [2012] WASCA 113. In that case the plaintiff sued for $550 in the Magistrates Court and gained judgment. The defendant, Mrs Tey, brought a large number of proceedings and appeals relating to this claim. In Tey [No 3], the court noted that at that stage, taxed costs of $34,000 had been awarded against Mrs Tey, which means that the plaintiff had incurred those costs in relation to the $550 claim. The fact that the plaintiff's lawyers charged costs of at least $34,000 relating to a $550 claim was not excessive because they were driven to do the work by the unreasonable conduct of the defendant.

89 In this case the unprofessional conduct consists not of charging costs disproportionate to the claim, but of charging a grossly excessive amount for the work which was carried out [139] - [140]. The reference to lack of proportionality was an afterthought [149]. The separate consideration of the costs compared with the amount of the claim is not in accordance with Ipp J's observations in D'Alessandro. His Honour said the amount of the claim was a relevant factor in considering whether there had been gross overcharging. However, it is not necessary to say more on the subject because the appellant's ground 6 contends that the Tribunal erred in concluding that the fees of the practitioner were grossly excessive because the amount charged in fees on a time costed basis was disproportionate to the amount of damages which the Tribunal estimated. That misstates what the Tribunal did. As mentioned already, the Tribunal did not find that the fees were grossly excessive because of the lack of proportionality. The Tribunal reached an independent conclusion that the costs were grossly excessive and then added that the conclusion that the costs appeared to be disproportionate 'reinforced' the earlier conclusion that the costs charged were grossly excessive to a degree which constituted professional misconduct.

90 Ground 6 has no merit. This conclusion means that the appeal against the Tribunal's finding that the gross overcharging in relation to the Pizzata matter has no merit and leave to appeal must be refused.

91 Likewise, and for those reasons, leave to appeal about gross overcharging in relation to D'Agui, Challen and Lovett must be refused. Senior counsel's concession that the conclusion on the Pizzata matter would determine the gross overcharging matters in relation to D'Agui, Challen and Lovett suggests that any other issues raised in relation to those matters fell away.

92 However, if the concession was not in fact an abandonment of ground 3 particular 1 in relation to the gross overcharging finding in relation to Lovett, then it is appropriate to deal with that now. This ground (in CACV 79 of 2011) alleged the Tribunal erred in fact in concluding that the appellant rendered an account to Ms Lovett in March 2007 for $6,152.80. That issue was covered by the Tribunal in [262] - [267]. The argument of the appellant was that he could not have been guilty of gross overcharging if the account had never been sent.

93 There is no doubt that an account was raised by the appellant. It was tendered as an exhibit. Whether or not the account was sent to Ms Lovett was the subject of direct and circumstantial evidence. There is no dispute that the appellant sent a letter dated 7 March 2007 to Ms Lovett. The letter referred to an attendance by Ms Lovett upon the appellant on 26 February 2007; gave some advice about the claim which Ms Lovett wanted to bring; stated that a brief had been forwarded to counsel to prepare a statement of claim; advised that if she lost the case she would be liable, not only for her own costs, but for the costs of the opposition and said:

As such, we do need to make financial arrangements with regard to prosecuting this claim. As such, we enclose an account to date.

94 Ms Lovett testified that she received the letter and the account from the appellant dated 7 March 2007 for $6,152.80. On 13 March 2007, the appellant wrote, enclosing another account issued by ProCol Recoveries Australia for the amount of $198 for urgent service of the writ.

95 By letter dated 11 April 2007, Ms Lovett wrote to the appellant. The last paragraph of the letter read:

Your account for over $6,000 plus the other account I received for $198 and would like to know what other accounts will turn up [sic]. I have asked for an itemised account for your bill which I have not received as yet. When all accounts have been presented I will endeavour to make some arrangement with you to pay them.

96 The appellant testified that he did send the letter of 7 March 2007, but, despite its content, he testified that the account was not included. When, in cross-examination, it was put to him that this evidence was 'untrue', the appellant said, '[n]o, it's not at all. That's my recollection - but I have made it clear that I could be wrong, because it was four years ago': GAB 13 in appeal CACV 79 of 2011. The Tribunal referred to other circumstantial evidence suggesting that the account had been sent. See [265] - [266].

97 In the light of all this evidence, it is surprising that it was contended before the Tribunal that the account was not sent, and even more surprising that this ground of appeal is raised contending that the Tribunal erred in finding that it was.

98 The appellant submits that the Tribunal should have referred to the evidence of Ms Percy. The appellant's statement at GAB 23 reveals that Ms Percy was associated with the Injured Persons Action and Support Association. This court was provided with one page of an affidavit or statement by Ms Percy which was apparently tendered to the Tribunal. Only par 25 of that statement was referred to. It reads:

I also do not believe Mr O'Halloran sent his second bill of about $6,000 to Mrs Lovett. He told me that he had drawn up a bill but decided not to send it off because she could not afford it and he did not wish to distress her. I think he provided her with a work in progress printout to show the work done. I double-checked the position regarding the bill over the telephone with Mrs Lovett in 2009. In the first telephone conversation she made it clear that she had never received a bill and added, 'no, no and I don't want one either.' I believe, knowing Mrs Lovett as I do, that if she had received this bill she would have rung me immediately to either complain about it or mention it. She never did.

99 Three comments can be made about this paragraph. First, much of its content is not relevant. What Ms Percy 'believed' is of no relevance. Secondly, it appears that she had a telephone conversation with Ms Lovett in 2009 which was about two or more years after the account in issue had been prepared and, according to Ms Lovett, sent to her. The third point is the lack of precision in describing the nature of the telephone conversations.

100 It is not surprising that the Tribunal did not refer to this evidence, it having so little significance compared with the direct evidence of the witnesses and the contemporaneous documents. The appellant also contends that the Tribunal 'could not have been satisfied to the standard required by Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 that the account dated 7 March 2007 was rendered'. There was no merit in that submission. The evidence that the account was rendered was overwhelming. It was open to the Tribunal to make the finding that the account was sent. The Tribunal did not err. This ground has no merit.

Remaining points D'Agui - Complaint D - Failure to comply with Registrar Rimmer's order

101 The appellant was found guilty of unsatisfactory professional conduct in that he made no, or no adequate, attempt to comply with or otherwise address a direction made by Registrar Rimmer of the Supreme Court on 23 June 2006 to serve Mr D'Agui with an itemised bill of costs by 4 August 2006.

102 The background is that on 3 October 2005 the appellant's instructions were terminated by Mr D'Agui. New solicitors requested a release of Mr D'Agui's file. On 25 November 2005 the appellant sent an account for a total of $31,084.91.

103 On 6 February 2006, Mr D'Agui sought an itemised account. On 20 February 2006 the appellant responded, demanding payment of the outstanding invoice. On 22 March 2006, another firm wrote to the appellant requesting an itemised account which was to be filed at the Supreme Court for taxation. On 12 May 2006, Mr D'Agui applied through his new solicitors to the Supreme Court to have the appellant's account taxed. On 23 June 2006, Registrar Rimmer gave a direction that by 4 August 2006 the practitioner serve an itemised bill of costs in taxable form and the taxation was then adjourned sine die.

104 Subsequently, the appellant instructed Ms Coulson, a barrister practising in the area of legal costs to prepare a bill of costs. On 26 September 2006 the registrar wrote to the appellant's employee or former employee referring to the direction made by the registrar on 23 June 2006 and advising that if action were not taken without delay, a further appointment would be scheduled with a view to summary disposal of the costs issue.

105 On 10 October 2006, Ms Coulson wrote to the appellant. She enclosed a draft solicitor/client bill of costs for taxation which claimed a total of $16,588.75. The letter went on to note that it appeared on her assessment that the client had been significantly overcharged and recommended a refund to the client.

106 The Tribunal held that against the background of instructions having been terminated in October 2005, the delay in the provision of a bill in taxable form in accordance with the registrar's direction was inordinate and that it amounted to unsatisfactory professional conduct.

107 The appellant appeals by contending that non-compliance with an order under s 234 of the 2003 Act did not constitute unsatisfactory professional conduct. The appellant acknowledged that the section empowered the registrar to make the order that he did. The section provided that in default of a sufficiently detailed account being filed, the taxing officer could reduce the amount of the costs that might otherwise have been certified by a proportion not greater than 25%.

108 The appellant submitted that because there was a potential sanction for failure to comply with the order, and because the practitioner would potentially disadvantage himself by placing himself in default, that '[i]t can hardly be the case that to disadvantage himself in that way the practitioner is also engaging in' conduct that falls short of the standard of diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

109 In effect, the appellant argues that he could decide at his own discretion whether or not to comply with the order of the registrar. That submission has no merit. The Tribunal did not err in finding unsatisfactory professional conduct. Leave to appeal should be refused.

Pizzata - Complaint 'C' - Non-compliance with s 34A(b) of the 1893 Act

110 The Tribunal found the appellant guilty of unsatisfactory professional conduct because on various dates in 2001, 2002 and 2003 he applied trust moneys which he held for the benefit of Ms Pizzata towards disbursements without complying with s 34A(b) of the 1893 Act.

The application of trust moneys to the payment of costs, etc.

A practitioner may apply trust moneys towards the payment of the costs and disbursements charged against the person for whose use or benefit the moneys are held by or under the control of the practitioner if ­

(a) that is authorised by the client under the terms on which the moneys are so held under the control of that practitioner; and

(b) a practitioner within 14 days thereafter causes to be served upon that person a bill of costs in respect of those costs and disbursements showing that trust moneys have been applied by the practitioner towards the payment of those costs and disbursements.

112 In short, the appellant received various sums of money with instructions to pay medical practitioners. At different times after receiving the moneys the medical practitioners were paid. It is not in issue that the appellant did not serve on Ms Pizzata a bill of costs showing the payment out of the trust moneys within 14 days or at all [157].

113 The Tribunal stated, correctly, that the object of s 34A is to enable clients to remain fully informed as to the application of trust money. The client is entitled to know that the funds provided have been utilised for the designated purpose and should be told when that occurs.

There is of course no suggestion of any inappropriate use of trust funds by Mr O'Halloran. He clearly applied the funds for the purpose for which they had been deposited in his trust account (save for the recovery of Dr Mendelsohn's fee from the defendant). Nevertheless, we consider that the requirement to promptly account for expenditure from a trust account was such a basic and well known requirement, that the failure to meet that requirement on five separate occasions falls below the standard of practice expected of practitioners of good repute and competence. We consider that that conduct amounted to unprofessional conduct. For the purposes of the 2008 Act, we would characterise the conduct as unsatisfactory professional conduct rather than professional misconduct [168].

115 The appellant's single ground of appeal (ground 10) contains the assertion that contrary to the Tribunal's conclusion, the appellant's conduct did not constitute unprofessional conduct. He contends that 'no public harm' has been done and that a breach of s 34A(b) of the 1893 Act is a 'technical' breach. The appellant said that he understood the application of s 34A applied only where he rendered an account for costs and disbursements and that it had not occurred to him that it applied to the passing on of funds to a third party.

116 There was no error, legal or otherwise, in the Tribunal's reasons. The reasons were correct. The breach was not merely 'technical'. Section 34A(b) is unambiguously clear. The provision exists so that the person who has provided trust moneys to cover costs and disbursements knows within 14 days that the trust moneys have been applied by the practitioner. The standard of professional conduct observed or approved by members of the profession of good repute and competence between 2001 and 2003 included knowing and understanding the scope and operation of s 34A and adherence to that provision. Leave to appeal against this finding should be refused.

Lovett - Complaint 'B' - Neglect or undue delay

117 The appellant took initial instructions from Ms Lovett in October 2005. Mr Haynes who was employed by the appellant then took the primary conduct of the file until he left the firm in June 2006. Between then and September 2006, the work carried out on the file consisted of a letter being sent to the client's former solicitors Ilberys on 14 December 2005 seeking release of the file, writing to QBE Insurance enquiring about its attitude to the client's level of disability, a brief letter to the ATO seeking copies of the client's tax returns, responding on 16 January 2006 to a letter from the client dated 4 January 2006 and collecting Ilberys' file. Some additional work was done which involved reading reasons for decision by a WorkCover officer, reading the Ilberys file when it was received, reading the ATO returns and reading a response from QBE on 14 February 2006 as well as sending an account to the client on that day.

118 The writ was served not long before the writ became stale (which would have been on 3 October 2006). In November 2006, steps were taken to brief counsel to prepare a statement of claim.

In our view, there was undue delay in progressing Ms Lovett's matter. If the reason for that lack of progress was a lack of funds, then it was incumbent upon Mr O'Halloran, or the solicitor conducting the matter to make clear the requirement for funds to progress the matter, and to follow up the client on a regular basis. All that happened was that some initial work was done and then the file appears to have been ignored substantially from about February 2006 until October 2006. Thereafter, the process of briefing counsel and organising for the preparation of a statement of claim did not proceed in a timely way.

Mr O'Halloran took initial instructions, and accepts that he had responsibility to supervise the conduct of the matter, notwithstanding that it appears that (despite Mr Haynes' indication to the contrary in his evidence), Mr Haynes had primary responsibility for the Lovett matter until he left the firm in June 2006. From June 2006 until October 2006, responsibility for progressing the matter clearly rested with Mr O'Halloran.

In our view, Complaint B alleging neglect or undue delay in the course of dealing with Ms Lovett's matter is made out. We would characterise that conduct as unsatisfactory professional conduct [293] - [295].

120 There was one ground of appeal in relation to this finding. It was that:

The Tribunal erred in law in directing itself that the conduct of the practitioner was capable of amounting to neglect of the matter and undue delay comprising unsatisfactory professional conduct, where the Tribunal found that the conduct was the failure to make clear the requirement for funds to progress the matter and to follow up the client in that regard on a regular basis when the client failed to provide funds to progress the matter.

121 In written submissions, the appellant acknowledged that the Tribunal rejected the defence which had been run at the hearing before it, which was that the appellant's retainer was limited to issuing a writ and investigating the merits of proceeding further (see [290] - [292]).

However, the Tribunal did accept that a possible reason for lack of progress was a lack of funds.

123 The submissions continued that the Tribunal erred in finding unsatisfactory professional conduct on a 'postulated obligation to 'make clear the requirement for funds to progress the matter, and to follow up the client on a regular basis' [293]'. The appellant submitted that the failure to fulfil that obligation was the basis on which the Tribunal found the practitioner guilty of neglect or undue delay.

124 There are two points to be made about that submission. First, the Tribunal did not 'accept' that a possible reason for lack of progress was a lack of funds. It made an observation about an argument that the appellant apparently advanced to explain the delay. However, the Tribunal did not make a finding that the lack of progress was caused by a lack of funds properly called for by the appellant.

125 Secondly, the Tribunal did not misdirect itself as to the law. This ground is an attempt to convert an issue of fact into a question of law. In relation to this matter, the appellant was confined to an appeal on a question of law because the penalty was a reprimand. This ground has no merit.

Lovett - Complaint 'C' - Failure to provide itemisation of an account

126 Ms Lovett made a request on 14 March 2007 for an itemised account. No itemised account was provided. The respondent complained that the appellant was guilty of 'unsatisfactory conduct by unprofessional conduct and/or neglect in the course of the practice of the law' by failing to respond to that request.

127 The appellant's response was substantially based on his claim that the account of 7 March 2007 was never rendered to Ms Lovett. That claim was rejected by the Tribunal. The Tribunal found that the account was sent, enclosed with the appellant's letter to Ms Lovett dated 7 March 2007 [267]. The challenge to that finding has been dealt with above.

128 The Tribunal in its reasons [296] - [299] observed that the appellant did not ultimately require Ms Lovett to pay the March account but that the appellant's file revealed that as late as 13 June 2007, Ms Lovett was still expressing concern to Mr Haynes about her capacity to pay the bill. Her letter of 11 April 2007 demonstrated that she still considered herself liable for the bill as of that date. The Tribunal having concluded that the decision not to pursue the account was not made until some months after March 2007, found the appellant guilty of unsatisfactory professional conduct because he did not provide an itemised account in accordance with Ms Lovett's request within a reasonable time. The Tribunal indicated however, by its reasons, that if the appellant had advised his client within a reasonable time that he did not propose to enforce payment of the account, then he would not have been guilty of unsatisfactory professional conduct. Thus, the Tribunal found that his failure was a failure either to advise his client that he did not propose to enforce payment of the account, or to provide an itemised account in accordance with Ms Lovett's request.

129 Sections 230, 231 and 233 of the 2003 Act read:

(1) A legal practitioner must not sue for the recovery of any services, fee, charges or disbursements until a bill for the services, fee, charges or disbursements has been served upon the party charged.

(2) The bill may be -

(a) a bill containing detailed items; or

(b) a bill for a lump sum.

(1) A legal practitioner must include in each bill of costs for a lump sum served under section 230(2)(b) a notice to the person charged in the following form -

Within 30 days of receipt of this account you may require me by notice in writing to provide to you an itemised bill of costs the subject of this account. Within 30 days of receiving an itemised bill of costs, you may require me by notice in writing to submit the bill of costs to a taxing officer of the Supreme Court for review of the amount of costs charged to you, the subject of this account.

(2) The notice must appear on the face page of each bill of costs in at least 10 point type size.

(3) At any time within 30 days from the service of the bill for a lump sum the party charged may require the legal practitioner to serve upon the party charged, in lieu of the lump sum bill, a bill containing detailed items.

(4) Upon a requirement being made under subsection (3) the lump sum bill is of no effect except that proceedings for recovery already instituted under section 230 may be continued unless stayed by the court in which those proceedings were instituted or under section 236.

1. Party not served with requested itemised bill may have lump sum bill taxed

(a) a person, under section 231(3), has requested a legal practitioner to serve a bill of costs containing detailed items in lieu of a lump sum bill; and

(b) the itemised bill is not served upon that person within 30 days from the serve of the request upon the legal practitioner,

the person may apply to have the lump sum bill taxed by the taxing officer by lodging the bill with the taxing officer.

130 The appellant contends that s 231(3) does not impose an obligation upon a legal practitioner. He contends that it 'invests a power in a client to make a demand for an itemised account ... [and] provides the condition precedent for rendering the lump sum bill of no effect, pursuant to subsection (4)'. The appellant submits that the legislative scheme does not give rise to an obligation to provide an itemised account within a 'reasonable time' or to advise of an intention not to enforce the account and therefore challenges the Tribunal's conclusion [296] - [299].

131 The appellant submits that because no proceedings had been commenced by the appellant for 'recovery of any services, fees, charge or disbursement' before the request was made for the itemised account, the bill was, by operation of s 231(4), unenforceable immediately upon the request for an itemised account having been made'.

132 The appellant by those submissions demonstrates a failure to appreciate that there is a difference between the statutory consequences of noncompliance with a request for an itemised account and a practitioner's professional conduct.

133 If a person requests an itemised account, they are entitled to it. The client has a statutory entitlement to 'require' a legal practitioner to serve upon the party charged, in lieu of the lump sum bill, a bill containing detailed items. The Tribunal was correct to state that if the practitioner decides that he will not pursue recovery of the bill, he may inform the party charged of that fact. If that is not the practitioner's intention, then reasonable practitioners of good repute would comply with the request. This ground of appeal has no merit.

135 NEWNES JA: I agree with Pullin JA, for the reasons his Honour gives, that leave to appeal should be refused. I simply wish to make some comments in relation to what his Honour has designated 'Complaint B - Ground 4' in relation to Ms Pizzata.

136 That ground concerns the appellant's contention that it was not open to the Tribunal to conclude that the appellant was guilty of professional misconduct if it was reasonably arguable that the amount charged was not excessive. That proposition was based on a statement by Ipp J in D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198, which is reproduced in the reasons of Pullin JA at [78]. The appellant submitted, in effect, that in circumstances where the appellant believed that the charges were reasonable and an independent practitioner,

Mr Tedeschi, was of the same opinion, a finding that the appellant's conduct constituted professional misconduct was not open.

137 D'Alessandro is, as Pullin JA notes, clearly distinguishable from the present case. In D'Alessandro, the issue with which Ipp J was there concerned involved the proper construction of O 66 r 21 of the Rules of the Supreme Court 1971 (WA) and, in particular, whether, in circumstances where the action had been settled just before trial, the appellant's solicitor was entitled to charge his client for getting up for trial on the ad valorem basis applicable under item 13 of the scale, or whether the solicitor was only entitled to charge for the work actually done by way of getting up. The solicitor had charged $6,787.69 on the former basis. The taxing officer had taxed the costs on the latter basis and reduced that amount by $4,771. On a review of the taxation, Wallwork J found that on the proper construction of O 66 r 21 the taxation officer's approach was correct, but observed that the argument for the solicitor was 'very attractive in some respects'.

138 In relation to a complaint of unprofessional conduct by the solicitor by overcharging, Ipp J noted that Wallwork J's observation indicated a view that the submissions put by the solicitor as to the proper basis for the charges 'were at least reasonably arguable'. Ipp J considered that a highly relevant factor to be taken into account, as the conduct of a practitioner who claims a fee on a reasonably arguable, but wrong, basis cannot be characterised as unprofessional (223).

139 That is a long way removed from the present case. In the present case, no question arose as to the basis upon which the appellant was entitled to charge his client. The fundamental question was simply whether the appellant had charged his client an unreasonable amount for the work the appellant had done. That fell to be determined by the Tribunal on the basis of the evidence before it, including the expert evidence. Having considered that evidence, the Tribunal concluded, as it was entitled to do, that the client had been grossly overcharged and that that amounted to professional misconduct. There was nothing before the Tribunal which was capable of supporting the proposition that the amount charged had been charged on a reasonably arguable, but mistaken, basis.

140 In that connection, it was not to the point that the appellant believed the amount of the costs to be reasonable. Nor did it assist the appellant that another practitioner, Mr Tedeschi, came to the same view. In neither case could it be said that the opinion was a reasonable one. In the appellant's case, as Pullin JA has pointed out, the belief had no proper foundation. In Mr Tedeschi's case, his opinion was based upon the WIP records which, unbeknown to Mr Tedeschi, provided an unsound foundation for an opinion as to the reasonableness of the charges.