Legal Services Commissioner v Roulstone [2011] NSWADT 269 (1 August 2011)

Last Updated: 30 January 2012

Administrative Decisions Tribunal New South Wales

Case Title:	Legal Services Commissioner v Roulstone
Medium Neutral Citation:	[2011] NSWADT 269
Hearing Date(s):	1 August 2011
Decision Date:	01 August 2011
Jurisdiction:	Legal Services Division
Before:	G Mullane - Judicial Member S Hale - Judicial Member C Bennett - Non-judicial Member
Decision:	1. The Applicant Legal Services Commissioner is granted leave to withdraw his application; 2. By consent the application is withdrawn and dismissed.
Catchwords:	Legal profession- discipline proceedings - withdrawal
Legislation Cited:	Legal Profession Act 2004
Cases Cited:	-
Texts Cited:
Category:	Principal judgment
Parties:	Legal Services Commissioner (Applicant) Scott Roulstone (Respondent)
Representation
- Counsel:	Counsel C Webster (Applicant)
- Solicitors:	Verekers Lawyers (Respondent)
File number(s):	092012
Publication Restriction:

REASONS FOR DECISION

INTRODUCTION

1. The applicant commenced these disciplinary proceedings against the respondent under Section 551 of the Legal Practitioners Act 2004 and at the hearing before us sought to withdraw them.

2. Section 568 of the Legal Practitioners Act 2004 provides:

Early termination of proceedings before Tribunal

(1) Proceedings before the Tribunal with respect to a complaint cannot be terminated, whether by withdrawal of the disciplinary application or otherwise, before the Tribunal makes its final decision about the complaint, without the leave of the Tribunal .

(2) The Tribunal may give leave for the purposes of this section if it is satisfied that continuation of the proceedings is not warranted in the public interest.

AGREED FACTS

3. Before us the following facts, a draft list of which was prepared by the Commissioner in February 2011 and the final form of which was agreed to in April 2011, were provided to us as uncontentious.

4. At all times since October 2002 each of Scott John Roulstone, Russell Walter Keddie and Tony Barakat (together "the principals") have been holders of unrestricted practising certificates. At all times between October 2002 and 31 December 2006 each of the principals were partners in the firm known successively as "Keddies", "Keddies Litigation Lawyers" or "Keddies the Insurance Law Specialists" (collectively "the firm").

5. At all times since 1 January 2007 each of the principals have been legal practitioner directors (as defined in Part 2.6 (lncorporated legal practices and multi-disciplinary partnerships) of the Legal Profession Act 2Q04) of the incorporated legal practice known as "Keddies lnsurance Law Specialists Pty Ltd" ("the ILP").

6. At all times between October 2002 and August 2007 Philip Scroope was a Senior Associate employed by the firm and a personal injury law accredited specialist holding a restricted practising-certificate.

7. Mr Scroope had:

7.1no authority from the principals to sign cheques or to authorise requisitions for movement of funds;

7.2authority from the principals to close files.

8. At all times between October 2002 and August 2007 David Marocchi was employee of the firm with a restricted practising certificate.

9. At all times between October 2002 and August 2007 Charles Ackroyd was employed by the firm as costs consultant.

10. Ms Shuang Ying Meng was injured in a motor vehicle accident on 29 September 2002. In October 2002 Ms Meng retained the firm to act for her in personal injury proceedings for the recovery of damages.

11. Mr Roulstone took Ms Meng's initial instructions when she was in hospital in Adelaide and discussed with her entering into a costs agreement with the firm.

12. Mr Scroope had day to day conduct of Ms Meng's matter.

13. Ms Meng entered into a costs agreement with the firm dated 7 March 2003 which provided for the charging of costs at rates set out in the agreement.

14. Under the costs agreement the firm agreed to charge Ms Meng only if she had a successful outcome, being a verdict or award or settlement in her favour (clause 8).

15. Clause 2 of the costs agreement provided for charges to be made at the following rates, exclusive of GST:

We will charge you the following rates for the work we do.

Partner$390.00 per hour ($39 per unit)

Senior Litigation Lawyer/Accredited Specialist$360.00 per hour ($36 per unit)

Litigation Lawyer$300.00 per hour ($30 per unit)

Paralegal/Legal clerk$220.00 per hour ($22 per unit)

Administrative Staff$160.00 per hour ($16 per unit)

All work will be charged in six-minute units at these rates.

16. Clause 3 of the costs agreement provided for payment of a 25% premium on costs and Clause 4 for a 25% premium on disbursements paid by the firm.

17. Clause 12 of the costs agreement provided that the firm would require payment of all costs and disbursements immediately if instructions were withdrawn or the costs agreement was terminated by the firm under clause 11, and that interest would be charged at the Supreme Court rate if the bill remained unpaid for more than 30 days.

18. At all relevant times the firm and the ILP have maintained computerised time and accounting records.

19. Ms Meng's matter and her husband's and son's matters settled on 13 December 2005.

20. On 2l December 2005 Mr Scroope handed to Mr Sui Sheng Lee on behalf of Ms Meng a reconciliation statement in relation to the settlement monies of $3,525,000 and a detailed narrative bill dated 21 December 2005 ("the narrative bill"). The narrative bill was prepared by or under the direction and control of Mr Scroope and signed by him.

21. The narrative bill contained charges totalling $819,694.77, comprising:

21.1 Professional costs $507.119.84

(total includes costs totalling $47,629.27 transferred

in relation to Yue Chen ("John") Wang's matter

($21,500.69, page 115), and in relation to Teng

Yong Wang's matter ($26, 1 28.58, page 122))

21.2 GST 50,711.98

21.3 Professional costs incl GST 557 ,831.82

21.4 Disbursements incl GST 254,922.48

21.5 Interest on disbursements (to date) incl GST 6,610.47

21.6 Additional disbursement re Zeng Wang 330.00

21.7 Total disbursements 261,862.95

TOTAL $819,694.77

22. The narrative bill did not identify the amounts charged, by rate or time spent, for the individual items of work set out or the persons who did the work.

23. The narrative bill contains duplication of charges and errors.

24. Ms Meng agreed to pay the costs in her husband's and Son's matters. The narrative bill states that costs were transferred to Ms Meng's file from her husband's and son's matters.

25. Mr Roulstone does not have direct knowledge as to how the narrative bill was prepared.

26. 21 December 2005 is the relevant date for a determination as to what is the fair and reasonable amount of costs.

27. The reconciliation statement recorded the following:

BY: Settlement monies $3,525,000.00

TO: Our Memorandum of Costs

and Disbursements as per attached $819,694.77

TO: Health lnsurance Commission $352,500.00 (10% advance payment to be

refunded to you in full)

TO: Ernst Group $8,521.26

TO: Treatment accounts:

Para Quad $10,614.97

Douglas Moir Pathology $64.00

Roxby Downs Hospital $1,105.00

TO: Advance payment of settlement $10,000.00 monies to you

TO: Cheque to you herewith $2,322,500.00

Total $3,525,000.00 $3,525,000.00

28. The firm's trust account ledger for Ms Meng's matter records receipt, by direct deposit, on 22 December 2005 of $3,172,500 being the settlement monies less the 10% HIC advance payment.

29. The firm's trust account ledger records the following payments on 22 December 2005:

29.1 an amount of $2,322,500 paid to Ms Meng;

29.2 an amount of $44,000 paid to counsel, part of the disbursements recorded in the narrative bill, and

29.3 amounts of $10,000 representing a refund of two advances, each of $5,000.00, made to Ms Meng;

29.4 $628,402.65 transferred to the firm's office account for costs and disbursements.

30. The firm's trust account ledger records payment, between 6 and 12 January 2006, of:

30.1 the charges to Ernst Group and the treatment accounts shown in paragraph 26; and

30.2 amounts totalling $137,564.20 in respect of disbursements recorded in the narrative bill.

31. The firm's trust account ledger records on 18 January 2006 a further amount of $9,727.92 transferred to the firm's office account for costs and disbursements.

32. Each of John Wang and Zeng Wang entered into costs agreements with the firm dated 29 September 2005 which provided for the charging of costs at hourly rates as set out in the costs agreement, with all work done to be charged in 6 minute units at those rates.

33. Clause 3 of the each of John Wang and Zeng Wang's costs agreements provided for a 25% premium if the insurer denies liability, the insurer alleges the client was at least 25% at fault, the insurer alleges the claim is fraudulent, the client lacks legal capacity or the claim is exempt from being referred to a claims assessor.

34. The amount transferred in relation to John Wang's matter is stated to be $21,500.69, at page 115 of the narrative bill.

35. The amount transferred in relation to Zeng Yong Wang's matter is stated to be $26,128.58, at page 122 of the narrative bill.

36. The earlier pages of the narrative bill contain duplicated narratives for the same apparently transferred work.

37. Ms Meng directed the firm to provide her file to her new solicitors, Margiotta, by direction dated 26 October 2006, which was provided to Mr Scroope on 31 October 2006.

38. By letter dated 7 November 2006 Ms Meng's new solicitors requested the provision of an itemised bill, in taxable form.

39. Disputes regarding costs arose between Ms Meng and the firm which were settled on the basis of a deed, pursuant to which payments totalling $180,000 were made to Ms Meng in August 2007 as follows:

39.1 by the firm $150,000

39.2 counsel and an investigator, in total $30,000

40. Mr Roulstone's former partner, Mr Keddie has undertaken to the Tribunal and by letter dated 20 October 2010 to Ms Meng has undertaken to her, that if the Tribunal decides there is a different figure for costs and disbursements which Ms Meng has paid, the Respondent refund that amount immediately with interest from 21 December 2005. Mr Roulstone adopts that undertaking.

41. Mr Roulstone's former partner, Mr Keddie has expressed his regret and has apologised to Ms Meng by his letter dated 20 October 2010. Mr Roulstone adopts that apology.

42. Mr Roulstone accepts that Ms Meng was overcharged.

THE GROUNDS IN THE APPLICATION

43. The application raised the following grounds against the respondent:

GROUND 1Over charging

The respondent in a personal injuries matter conducted for Ms Shuang Ying Meng, date of accident 29 September 2002 ("Ms Meng's matter") charged grossly excessive amounts of costs in that:

(a)Ms Meng was charged excessive amounts for work performed;

(b)Ms Meng was charged amounts representing work in excess of the work performed;

(c)Ms Meng was charged for work which was not performed;

(d)Ms Meng was charged for work undertaken and time spent on her file which included steps which were excessive and unnecessary.

GROUND 2Over servicing

In Ms Meng's matter:

(a)work was undertaken, and charged for, by persons of inappropriate seniority or qualification;

(b)unnecessary work was undertaken.

GROUND 3 Misrepresenting costs

The Respondent in Ms Meng's matter misrepresented costs to Ms Meng in that:

(a)The narrative bill contains charges for work in excess of time spent and for work which was not done.

(b)the narrative bill contains duplicated charges for work performed in relation to Yue Chen ("John") Wang's matter and Zeng Yong Wang's matter.

(c)The narrative bill contains charges at professional rates apparently for the fee earner PJS (Mr Scroope) for work performed by Mr Lee and/or Ms Liu, which work was also invoiced by Baiyi Language Services which invoices were charged as disbursements.

GROUND 4Failure to supervise

By reason of the Respondent's failure, jointly or separately with each of the other principals, properly or adequately to supervise the work done and charged for with respect to Ms Meng's matter and the contents and total amounts of the charges rendered to Ms Meng:

(a)grossly excessive amounts of costs were charged to Ms Meng, as set out severally in Grounds 1 and 2; and

(b)costs were misrepresented to Ms Meng as set out in Ground 3.

OTHER RELEVANT FACTS

44. These proceedings against the respondent were commenced by the applicant on 22 May 2009 at the same time as the Legal Services Commissioner commenced disciplinary proceedings against each of the other principals of the firm and also against Philip Scroope and David Marocchi.

45. On 9 June 2011 leave was granted by the tribunal (a different panel) for the Commissioner to withdraw the application against Mr Barakat. Those proceedings were then withdrawn.

46. On 1 June 2011 Deputy President Haylen J made orders on application of the Commissioner joining the applications in the matters of Keddie Roulstone and Scroope for the purpose of a joint hearing and for the evidence in each matter to be evidence in all matters subject to any further objection raised pursuant to the provisions of Section 136 of the Evidence Act.

47. The respondent filed his reply on 19 February 2010. The applicant filed affidavits affirmed on 22 May 2009 and 21 January 2011. The respondent filed an affidavit sworn 16 November 2010.

48. Since the filing of the application there have been issues raised as to whether the costs charged were excessive and, if so, whether they were so excessive that charging of those costs constituted professional misconduct or unsatisfactory professional conduct.

49. Mr Scroope has accepted only limited responsibility, because he was supervised by Mr Keddie.

50. Mr Keddie accepts ultimate responsibility for, and that he had been guilty of professional misconduct by reason of, inadequate supervision of Mr Scroope, without conceding gross over-charging. He said that on about 13 December 2005 he spoke with Mr Scroope and asked about the work in progress recorded on the firms computerised time cost ledger, and accepted the figure Mr Scroope referred to, which he thinks was about $400,000. He did not see the narrative bill before it was delivered.

51. In relation to Ground 1, Mr Keddie has said:

[149]I admit each of the allegations [in the Amended Common Particulars], subject to specific qualifications that I set out in the following paragraphs ...

52. In relation to Ground 4, Mr Keddie says:

[185] ..... l felt that my level of involvement in the actual running of the matter was adequate especially having regard to Mr Scroope's seniority, experience and demonstrated reliability. However, I admit that I did not supervise the entries in the narrative descriptions of the individual attendances and items of work represented to have been done in Ms Meng's matter or for her husband and son's matters... I did not supervise the manner in which Ms Meng was charged in the narrative bill. I accept ultimate and responsibility for any acts or omissions by Mr Scroope and all other staff with the carriage and conduct of Ms Meng's file and those of her son and husband such. I accept that she was overcharged and I accept that my conduct constitutes professional misconduct.

53. The respondent's evidence is that he met with Ms Meng in October 2002 when the firm was instructed, he did not see or confer with her again until after the informal settlement conference on 13 December 2005. Mr Roulstone relied on Mr Scroope's experience, seniority and personal injuries specialist accreditation in running the matter on his own during the time they each worked in the Ashfield office of Keddies between April 2005 and May 2006. Mr Roulstone had no involvement with the issue of the narrative bill.

54. Mr Roulstone says in the proceedings:

[31]As at October 2002 I regarded Mr Scroope as a very competent and experienced solicitor. He was an accredited specialist in personal injury practice. I had no doubt that he was able to conduct Ms Meng's matter effectively on his own. Prior to 2007 I was unaware of any complaints ever having been made concerning his skill as a solicitor or the fees charged by the firm for work performed by him.

[32] During the 13 months in which each of us worked out of the Ashfield office, l had occasion, from time to time, to confer with Mr Scroope about various client matters upon which he was working. Sometimes he would approach me for advice or to consider ideas about particular matters. I have no specific recollection, however, of any discussions concerning Ms Meng's matter.

[33] Between October 2002 and the settlement conference held on 13 December 2005 at which Ms Meng's claim for damages for personal injury was settled, l had no contact with Ms Meng.

[42] I was not involved in any way in preparing or supervising the preparation of the narrative bill issued by Keddies to Ms Meng dated 21 December 2005 ...

55. Mr Roulstone says in relation to Ground 3 (Misrepresenting costs):

[66]Whilst I accept that the total amount charged by the narrative bill exceeds a proper charge for the work done and time spent on Ms Meng's matter, for the reasons set out above I deny that I intended to or did make any misrepresentations to Ms Meng.

56. Mr Roulstone's evidence in relation to Ground 4 (Failure to supervise) is that:

[69]I believe, given Mr Scroope's seniority, experience and specialist accreditation that the firm's level of supervision of his work on Mrs Meng's claim as such was appropriate and adequate.

RELEVANT CASELAW

57. We were referred o the decisions of the Tribunal in New South Wales Bar Association v LG [2005] NSWADT 180 and of the Court of Appeal in Council of the NSW Bar Association v Li [2005] NSWCA 415 (2005) 64 NSWLR 603 . Both of those decisions were in relation to the Legal Profession Act, 1987 which did not contain any provision similar to Section 568 of the Legal Profession Act 2004.

58. In both those decisions it was held that in disciplinary proceedings in the Legal Services Division where the applicant seeks to withdraw the application, para 73(5)(g) of the Administrative Decisions Tribunal Act, (which provides that the tribunal " may dismiss at any stage any proceedings before it if the applicant withdraws the application to which the proceedings relate.... ") gave the tribunal a discretion whether or not to allow the proceedings to be withdrawn and dismissed.

59. But in these proceedings under the Legal Profession Act 2004, section 568 applies and it is clear that the tribunal has that discretion.

THE APPLICANT'S REASONS FOR WITHDRAWAL OF THE APPLICATION

60. In his affidavit of 28 June 2011, the Commissioner gave evidence that:

5. As recorded in Annexure V of my first affidavit (from page 93), on 22 May 2009 I was satisfied, pursuant to the terms of s.537(2) of the LPA 2004, that there was a reasonable likelihood that Mr Roulstone would be found by the Tribunal to have engaged in professional misconduct or unsatisfactory professional conduct in respect of the complaints in the Disciplinary Application relating to the charges made by the firm Keddies for Ms Meng's personal injury proceedings.

61. He said that he has now given further consideration to the complaints against the respondent Mr Roulstone in the disciplinary action, particularly in light of the contents of his affidavit, the affidavit of Mr Keddie, and the uncontentious matters in the proceedings.

62. In his affidavit of 28 June 2011 the Commissioner swore that:

7 With respect to Mr Roulstone I do not remain of the view I formed on 22 May 2009. That is, I no longer hold the view that there is a reasonable likelihood that Mr Roulstone would be found to have engaged in either professional misconduct or unsatisfactory professional conduct with respect to the complaints in the Disciplinary Application

CONCLUSION

63. The grounds relied upon in the application relate to over-charging in the bill, charging in the bill for over servicing, misrepresenting costs in the bill, and failure to properly or adequately supervise the work done and charged for, the contents of the bill and the total amounts of the charges rendered to Ms Meng.

64. The evidence is that :

• Mr Scroope had the day to day conduct of the matter and he was an accredited specialist in personal injury work, with considerable experience and seniority;
• Mr Keddie was responsible for supervision of Mr Scroope's work for Ms Meng and the giving of the bill; and
• Mr Roulstone had no involvement in the day to day conduct of the matter, the supervision of Mr Scroope's work for Ms Meng in the matter or the preparation and rendering of the bill.

65. Having considered all the material before us, we accepted that there was no reasonable likelihood that Mr Roulstone would be found by the Tribunal to have engaged in either professional misconduct or unsatisfactory professional conduct in respect to the grounds relied upon.

66. We were therefore satisfied that continuation of the proceedings was not warranted in the public interest.

I hereby certify that this is a true and accurate record of the reasons for decision of the Administrative Decisions Tribunal.

Registrar

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