Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Cummins v Bolster [2016] NSWCATOD 74 Hearing dates: On the papers Date of orders: 08 June 2016 Decision date: 08 June 2016 Jurisdiction: Occupational Division Before: Cowdroy ADCJ, Principal Member J Pheils, Senior Member E Hayes, General Member Decision: Claim for compensation dismissed. Catchwords: Finding of unprofessional conduct against solicitor; claim by client for compensation arising from such conduct; loss claimed having no relationship to conduct Legislation Cited: Legal Profession Act 2004 Cases Cited: Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 HL, 39 Bedfordshire Police Authority v David Constable [2009] Lloyds Report IR30. Category: Principal judgment Parties: Patricia Cummins (Applicant) Mark Desmond Bolster (Respondent) Representation: Counsel: T Williams (Respondent) Solicitors: Patricia Cummins (Applicant in person) File Number(s): 1620058 REASONS FOR DECISION 1. Disciplinary Proceedings were brought by The Council of the Law Society of New South Wales against Mark Desmond Bolster (the solicitor). The solicitor's conduct was found to constitute unprofessional conduct. 2. Patricia Cummins (the complainant) was the client of the solicitor. The complainant now brings these proceedings (without an oral hearing) claiming compensation pursuant to s570 of the Legal Profession Act 2004 (the Act) which prevailed at all relevant times but which has now been repealed. The relevant portion of s570 provided: 1. A complainant may request a compensation order in respect of the loss suffered by: (a) the complainant, or (b) ... Because of the conduct the subject of the complaint ...". 1. The conduct which led to the adverse finding against the solicitor (the conduct) consisted of a delay in the provision by the solicitor to the complainant of a detailed costs statement, as is considered hereunder. The actual findings against the solicitor were: 1. he delayed in providing an itemised account to the complainant; 2. he failed to provide an updated estimate of costs to the complainant 1. It follows from the finding of the Tribunal that the complainant is entitled to make a claim for a compensation order pursuant to the above section. It is accordingly necessary to consider the nature and extent of the claim in order to determine whether, in fact, the complainant is entitled to compensation because she has suffered a "loss". The facts 1. The complainant engaged the solicitor to act for her in defending a claim brought against the complainant by her brother and sister. The claim related to a will of the late father of the complainant which was alleged to have been procured by undue influence. The litigation in question was instituted in the Supreme Court of Queensland. On 15 March 2010 Directions were made by that Court for an Independent Case Appraisal between the parties to the litigation. The case appraisal resulted in a negative finding against the complainant who was the executrix. The finding indicated that the costs of all parties should be borne by the complainant if the litigation proceeded to a hearing. 2. On 27 January 2011 the plaintiffs made an Offer to Settle (the first offer) to the complainant. The solicitor and Mr Daniel Morgan of counsel attended the conference with the complainant and her son. The conference was convened to attempt to settle the proceedings (the first conference). 3. The complainant wrote to the Solicitor on 23 February 2011 seeking by 1 March 2011 advice as to her costs and disbursements to date as well as any plaintiffs costs arising from the Proceedings. 4. On 3 March 2011 the complainant and the complainant's son attended a conference with the solicitor and counsel. The parties agree that the matter of costs was discussed at the conference, however there is disagreement as to the details of the relevant discussion. 5. On 4 March 2011 the solicitor's secretary faxed to the complainant a letter which relevantly stated that: "the disbursements only incurred to date are $10,238.06. This amount does not include Dan Morgan's associated fees or our fees to date in conduct of the matter". 1. No further information was provided to the complainant in the 4 March 2011 letter. There was no indication as to the Solicitor's fees or the extent of counsel's fees. 2. On 14 April 2011 the complainant then sought the assistance of another counsel who offered to act for her pro bono and on 23 April 2011 she engaged another firm of solicitors, Dillon Legal to act for her. 3. On 17 May 2011 a further meeting occurred between the solicitor and counsel with the plaintiff's solicitors (the second conference). The complainant was not in attendance. 4. On that day a second offer to settle was made (the second offer). In general terms this provided that all parties costs be paid on an indemnity basis out of the estate as assessed or agreed and that the parties consent to a Court Order determining that a property of the estate known as 1/35 Kiata Parade, Tweed Heads (the property) was held on trust for the estate, and that the net estate be divided equally between the three children of the deceased (which included the complainant). 5. On 18 May 2011, Gold Coast Legal Costs provided the solicitor with an invoice of his costs and disbursements. The invoice was not an itemised assessment. 6. On or about 24 May 2011 the Solicitor was notified by letter from Dillon Legal sent on the complainant's behalf that the complainant had terminated the solicitor's retainer. 7. On or about 28 May 2011 the solicitor's tax invoice, as drafted by Gold Coast Legal Costs, was rendered to Dillon Legal. The Solicitor asserted a lien on the papers. 8. The solicitor admitted that he failed to provide an updated estimate of costs. The solicitor admitted that he could have provided estimates at least on a staged basis. 9. The solicitor accepted that his conduct particularised above constituted unsatisfactory professional conduct. Complainant's submissions 1. The complainant submits that her claim for compensation is based on the following: 1. she makes a "global monitory [sic] claim for the loss of opportunity to resolve the litigation in a timely manner", alleged to result from the failure of the solicitor to provide her with an updated estimate of costs and of the necessity to thereafter retain a subsequent legal team to resolve the litigation; 2. a claim for financial loss "incurred through my efforts to obtain updated estimates of costs at three specific stages" during the conduct of the proceedings by the solicitor; 3. a claim for financial loss "incurred in my efforts to obtain his itemised account because of his delay in providing me with it". It is alleged that such failure resulted in a loss of opportunity to the claimant to complete probate and resolve the estate matter in which she was involved in a timely and efficient manner. She also claimed that she suffered financial loss pursuing the solicitor's itemised bill of costs and because of the necessity to obtain alternative solicitors. The complainant also claims the time for resolution of the litigation was extended resulting in further litigation costs and the loss of market value of the properties owned by the estate when housing prices were decreasing. 1. The complainant states: "Because Mr Bolster had failed to provide me with his updated estimate of costs and because of his delay in providing his itemised account, the time for resolution of the litigation was extended resulting in further litigation costs and the loss of market value of the deceased's properties at a time when housing prices were decreasing." 1. The complainant claims that the plaintiff's representatives believed that the dispute between the parties was settled by joint agreement on 17 May 2011 in accordance with the second offer of settlement. The complainant claims that at this time "the economical loss was doubled. Both parties lost the legal costs they paid for holding the meeting. The plaintiffs had prepared for and attended the meeting in good faith. This good faith was lost irrevocably after the meeting and caused further friction in negotiations with the plaintiffs until more effective terms were renegotiated six months later with my legal team". 2. The complainant claims that she was not provided with communications and that the solicitor's actions occurred too late "for me to be fully aware of the activity of the case and hence take a more informed role". The complainant further states: "It also created the situation where I was not able to monitor the costs charged on a regular basis and review the items regularly for their accuracy." Observations 1. As can be seen from the chronology, a partial list of disbursements had been provided to the complainant on 4 March 2011. Counsel's fees were not included. The complainant made her first request for an itemised account apparently at the first conference on 27 January 2011, and again on 22 February 2011. A third request was allegedly made by telephone on 3 March 2011. 2. The complainant had engaged other solicitors to act before the second conference took place on 17 May 2011 which was attended by the solicitor and counsel. She consulted de Groote Lawyers for a second opinion and then engaged Dillon Legal. The complainant apparently authorised the solicitor to attend a settlement conference with counsel on 17 May 2011 when the legal representatives of the plaintiffs were in attendance, even though she did not attend, even though the complainant disputes such instructions. 3. Section 309 of the Legal Profession Act 2004 (now repealed) required a law practice to disclose an estimate of total legal costs if reasonably practicable or, a range or estimates of the total legal costs. If the matter is a litigious matter, an estimate of the range of costs which the client might be ordered to pay is to be provided (see s309(1)(f)). The Tribunal has found that the solicitor failed in this regard. 4. Section 310 provides that there is to be disclosure if the law practice "intends to retain another law practice on behalf of a client' and obliges the law practice to disclose information required under s309. In this instance counsel was retained. The complainant knew of this fact because of the communications and conferences she held with Mr Morgan in chambers. However this is also encompassed in the complaint made to the Law Society upon which the Tribunal has already ruled. 5. Section 313 requires disclosure where there is to be a settlement of litigious matters and provides that before any settlement is executed, a reasonable estimate of the amount of legal costs payable by the client is to be provided, (see s313(1) and (2)). Findings (a) Principles 1. The purpose of an award of damages is as follows: "Damages in the vast majority of cases are the pecuniary compensation, obtainable by success in an action for a wrong which is either a tort or a breach of contract, the compensation being in the form of a lump sum awarded at one time ...": see Bedfordshire Police Authority v David Constable [2009] Lloyds Report IR30. 1. In the matter before the Tribunal the claim arises as a result of the operation of a statute by way of a compensation order. Nevertheless the same principle applies. As was said by Lord Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 HL, 39: "Where any injury is to be compensated by damages, in settling the sum of money to be given for ... damages you should as nearly as possible get at that sum of money which will put the party who has been injured, or who has suffered, in the same position as he would have been if he had not sustained the wrong for which he is now getting his compensation 1. To obtain a compensation order in her favour, the complainant must show that she has actually suffered a loss resulting from the conduct of the solicitor. That is, there must be a causal connection between the conduct and the loss. The critical fact for determination is whether the complainant has suffered "loss because of the conduct of the solicitor (s572(1)(a)". That conduct is confined to two issues in respect of which the adverse finding was made, namely delay in providing an itemised account of costs, and failure to provide an updated estimate of costs. Pursuant to s571(5) of the aforesaid Act, the limit of compensation is $25,000. 2. The litigation concerned the claim that the will of the complainant's late father was the subject of undue influence by the complainant. The appraisal provided to the Supreme Court of Queensland and delivered on 14 December 2010 found that the claim should be upheld with the result that the deceased's estate should be divided as if the estate was an intestacy. As a consequence the complainant's brother and sister together with the complainant, would be the beneficiaries under such finding. 3. The first offer in the litigation on 27 January 2011 proposed that the estate be divided equally and that the complainant bear her costs personally. Such offer was unacceptable to the complainant. 4. The second offer made on 25 May 2011 provided, as already stated, that the costs be paid out of the estate of all parties on an indemnity basis and that the estate be divided in equal shares. It appears (but it is not certain on the evidence before the Tribunal) to have been the ultimate basis of a settlement negotiated by Dillon Legal. 5. In a letter dated 6 June 2011 Dillon Legal claimed: "Our client was not aware of the recent offer made by the plaintiffs dated 17 May 2011 until you provided us with a copy on 27 May 2011. Our client does not agree with the terms that were negotiated by you that have now been proposed as an offer of settlement by Wheldon & Associates. We are advised that it was specifically raised with you on 3 March 2011 and our client would not agree under any circumstances to pay the plaintiff's costs or that all of the legal costs would be paid out of the estate with the plaintiffs' legal fees were likely to be significantly more than hers. In addition she was not prepared to negotiate on payment of costs until she knew what yours and the plaintiffs' costs were likely to be". 1. It clearly emerges from such correspondence that if there was any delay in the acceptance of the second offer of 27 May 2011 it was not solely because the solicitor had not provided an account of his costs. It was also dependent upon the plaintiffs providing an estimate of their costs to the complainant. 2. The evidence before the Tribunal shows that the solicitor and Mr Morgan had instructions to appear on the settlement conference on 27 May 2011, despite the complainant's claims. There is evidence before the Tribunal that both the solicitor and counsel were instructed to explore settlement. The letter of Dillon Legal dated 6 June 2011 also tends to confirm this position. (b) Alleged Financial Loss 1. The Tribunal now refers to the specific financial claims made by the complainant. 2. The "global claim for subsequent financial loss for a ball park amount of $20,000' is without foundation. No particulars of any loss are provided. There is no evidence that the failure of the solicitor to provide a costs estimate resulted in any diminution of the sale price of the property nor could it be causally connected to the conduct. 3. There is no causal connection for an amount of $1,780 for the complainant's travel costs and loss of income for her son for the conference on 3 March 2011. Such figure was the allowance made by the cost assessor and bears no relationship to the loss allegedly sustained by the complainant. 4. The complainant made a claim for $490 being a fee paid to de Groots Lawyers in respect of advice she sought on 22 February 2011 in relation to the second opinion she sought. The invoice from such firm relates to an entirely different consultation which occurred on 27 July 2011. 5. The complainant claims $3,000 charged by Dillon Legal for correspondence. However there is nothing to link that claim for any matter for which the solicitor has been found liable. Further, as to the claim for $3,300 for fees paid to D G Thompson Legal Costs Lawyers, there is no causal connection between her incurring such costs and the conduct found against the solicitor. The complainant chose to continue her opposition to any settlement of her own solicitor and choice, and in doing so retained Dillon Legal. This course does not render the solicitor liable for such costs. 6. The complainant has also made claims for $308.50 for requesting files of John Flynn Private Hospital and $93.50 for requesting files of Dr T. Kay. These claims are irrelevant to the issues before the Tribunal and are unrelated to the conduct. The same observation can be made in relation to the amount of $796.73 claimed by the complainant for Suncorp Insurance for the home of the deceased. Conclusion 1. The complainant's claim for compensation fails. It does so because the Tribunal is not satisfied on the evidence before it that the complainant sustained any loss which has arisen from the conduct of the solicitor. The thrust of the complainant's claim is that, because she did not know the extent of the costs of her solicitor when the settlement offer was considered on 27 May 2011 or thereabouts, she lost an opportunity which was available to her to accept the offer. The facts show that such a claim simply cannot be supported by the evidence. 2. There appear to be other reasons why the complainant decided not to accede to the settlement at or from the date of the first offer. The solicitor cannot be held responsible for any loss caused by the complainant's own conduct by declining to accept the offers made to her to settle the litigation. 3. In summary, the Tribunal finds, firstly, that there is no conduct which might have caused any loss to the complainant, being the conduct in respect of which the Tribunal has disciplined the solicitor. In this regard the Tribunal notes that the complainant lodged more than 40 complaints to the Law Society concerning the solicitor's conduct but only five were upheld and these have been dealt with, resulting in the adverse finding referred to in [4] above. However, there is no causal connection between the conduct and the damages claimed. I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 08 June 2016