Legal Services Commissioner v Murphy
[2015] QCAT 381
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- Unreported Judgment
- Appeal Discontinued (QCA)
- Legal Services Commissioner v Murphy[2015] QCAT 381
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Legal Services Commissioner v Murphy[2015] QCAT 381
Legal Services Commissioner v Murphy[2015] QCAT 381
CITATION: | Legal Services Commissioner v Murphy [2015] QCAT 381 |
PARTIES: | Legal Services Commissioner (Applicant/Appellant) |
| v |
| Mr John Paul Murphy (Respondent) |
APPLICATION NUMBER: | OCR087-13 |
MATTER TYPE: | Occupational regulation matters |
HEARING DATE: | 18 May 2015 |
HEARD AT: | Brisbane |
DECISION OF: | Justice Thomas, President Assisted by: Mr Thomas Bradley QC, Legal panel member Ms Julie Cork, Lay panel member |
DELIVERED ON: | 22 September 2015 |
DELIVERED AT: | Brisbane |
ORDERS MADE: |
|
CATCHWORDS: | PROFESSIONS AND TRADES – LAWYERS – DUTIES AND LIABILITIES – where counsel initiated a meeting with opponent’s client – where 2007 Barristers Rule requires that barristers must not deal directly with an opponent’s client unless the opponent has previously consented to the direct dealing - whether the opposing counsel consented to meeting. Legal Profession Act 2007 ss 418, 419 Legal Profession (Barristers) Rule 2007 r 55 Ex parte Ford; Re Caughey (1876) 1 Ch D 521 |
APPEARANCES and REPRESENTATION (if any):
APPLICANT: | Mr J Bell QC |
RESPONDENT: | Mr AJ Morris QC |
REASONS FOR DECISION
- [1]The following charge has been brought by the Legal Services Commissioner against Mr John Murphy.
- [2]On 22 July 2011, Mr Murphy breached rule 55 of the Legal Profession (Barristers) Rule 2007 (2007 Barristers Rule) by dealing directly with his opponent’s client without the opponent’s consent.
Background
- [3]Mr Murphy acted on behalf of Mr Allison in connection with a proceeding in the Supreme Court of Tasmania against, amongst others, Tuna Tasmania Pty Ltd and Mr Farrer (the Tasmanian litigation).
- [4]Mr Farrer was represented by the Hobart law firm of Gunson Williams.
- [5]Mr Allison instructed Mr Murphy that he would settle the proceedings provided that satisfactory terms were offered.
- [6]Mr Minniti was a mutual acquaintance of Mr Murphy, Mr Allison and Mr Farrer.
- [7]Prior to 22 July 2011, Mr Minniti telephoned Mr Murphy saying that Mr Farrer would be in Brisbane on 22 July 2011 and that Mr Farrer had agreed to meet Mr Murphy. Mr Minniti suggested that Mr Murphy should take the opportunity to travel to Brisbane to meet Mr Farrer in an attempt to settle the Tasmanian litigation.
- [8]Without seeking the consent of Gunson Williams, Mr Murphy agreed to meet, and met with, Mr Farrer in the absence of Mr Farrer’s lawyers.
- [9]An order was sought in the Supreme Court of Tasmania that Mr Murphy cease acting in the matter because he had attended the meeting with Mr Farrer.
- [10]Mr Murphy gave evidence in those proceedings. The following extracts from the transcript concern the background to the meeting:
Mr Gunson SC: Mr Murphy, when you spoke with Mr Farrer were you aware that it was wrong for you to do so?...yes
Then when I said it was wrong to do so, were you basing that belief on ethical standards you believed existed within the profession?... yes
Did you do it in the belief that you were breaching a particular rule or guideline of the association?... I knew there was a rule against it.
Yes – thank you. And are you in no doubt that the rule was in basically these terms; a barrister must not deal directly with a party other than his or her client who is legally represented?... Yes, that was rule 55.[1]
- [11]When referring to the exclusions to rule 55, Mr Gunson SC referred to the requirement that “the Legal Practitioner representing the party has previously consented”.
- [12]The following transcript extracts concern this issue:
Mr Gunson SC: And that wasn’t the case here was it?... Not that I knew of.
Well you knew it wasn’t the case, didn’t you? – you made no enquiries?... I made no enquiries.[2]
- [13]As to enquiry made by Mr Murphy the following exchange took place:
Mr Gunson SC: Yes, look Mr Murphy let’s cut to the chase here. You knew it was wrong to go to the meeting, didn’t you?... Yes, I did yes.
And that was prominent in your mind at the time you went to the meeting?... It was in my mind, yes.
Yes. And not withstanding any reservation you had, none the less you went?... That’s right.
And you didn’t ask Mr Farrer whether he contacted Mr Williams?... No.
I return to the question I put to you a little while ago and that is this. It was a deliberate decision on your part not to contact Mr Williams to tell him of this arrangement?... Well –
That’s true, isn’t it?... I decided not to contact Mr Williams for the reasons –
That’s right?... – the reasons I just gave you, yes
You decided you would not contact Mr Williams?... yes.[3]
- [14]As to that same issue:
Mr Gunson SC: On the basis of what you have just said you made a deliberate decision not to tell Mr Williams about the meeting… well, yes.
That’s a fact, isn’t it… Yeah, that’s a fact, yes.[4]
- [15]The object of the meeting between Mr Murphy and Mr Farrer was to try and influence Mr Farrer to settle.[5]
- [16]Through his counsel, Mr Morris QC, Mr Murphy conceded in the Tasmanian proceedings that his conduct was “entirely inexcusable”.[6]
- [17]In communication after the meeting of 22 July 2011, Mr Murphy indicated to Messrs Gunson Williams that “I thought it was blindingly obvious that Mr Farrer would report our meeting to you, if he had not already alerted you in advance, which I thought he very likely had”.[7]
- [18]In instructions dated 28 September 2011 to Mr Morris QC, Mr Murphy records:
“Lack of consent, or otherwise, from Farrer’s solicitors was the sine qua non of the application and orders. It seems to me that if Farrer attended with his solicitor’s knowledge and consent the whole case falls away. The worst I could be accused of then was attending the meeting while being very sure that he had their consent, but not being absolutely certain.”[8]
- [19]He continued:
“In the obvious circumstances that Farrer was not under my control, the only possible conclusion was that he would tell his solicitors about the meeting, as he did.
To me, at least, that fact itself shows that I really did think he had already done so – I would hardly have gone, knowing that they did not know, but also knowing that they would certainly find out.”[9]
- [20]Mr Williams swore two affidavits in these proceedings, one on 1 August 2013 and the second on 7 May 2015.
- [21]The May 2015 affidavit followed a request that further disclosure be made of certain emails.
- [22]As to the meeting which took place between Mr Murphy and Mr Farrer on 22 July 2011, Mr Williams swears that prior to the meeting, Mr Farrer had not advised him of his intention to attend the meeting with Mr Murphy. In fact, Mr Williams knew nothing about the meeting.[10]
- [23]
- [24]On Saturday 23 July 2011, Mr Murphy sent two emails to Mr Williams and in neither email did he mention the meeting.[13]
- [25]The affidavit sworn on 7 May 2015 followed Mr Farrer releasing Mr Williams from any obligation to maintain confidentiality with respect to a number of emails which have been requested for production by Mr Murphy.
- [26]In an email from Mr Farrer to Mr Williams on 19 July 2011, Mr Farrer says:
I will be in Brisbane on Friday.
There is the opportunity to have a meeting with the person who first paid for Allison and Mr Murphy who is now short of money!
Do I record the conversation.
Regards
John.
- [27]Mr Williams deposes that, when he read the 19 July 2011 email, he did not understand it to mean that there was an opportunity to meet with Mr Murphy. He read it as Mr Farrer advising him that Mr Farrer had an opportunity to meet with the person who had first paid for Mr Allison and for Mr Murphy. He read it as a reference to the unnamed person funding the litigation for Mr Allison and, through that funding, Mr Murphy as Mr Allison’s counsel.[14]
- [28]Mr Williams responded to that email at 2:52pm on Friday, 22 July 2011, saying:[15]
unfortunately recording of the conversation would probably be a breach of the Queensland equivalent (if any) of the Listening Devices Act that applies in Tasmania. I would be most interested to hear what he has to say.
- [29]Mr Williams deposes that, when sending the email on 22 July, he was under the impression it was intended that Mr Farrer would meet with the person who had paid for Mr Allison and for Mr Murphy.[16]
- [30]Mr Williams says:
- Having re-read the email of 19 July 2011 he accepts that it is capable of a different interpretation from that which he placed on it.
- At no time did he interpret the email as referring to an intended meeting with Mr Farrer and Mr Murphy.
- In his 34 years of practice he has never experienced a situation where his client had been invited to meet with the legal representative of the opposing party unless such a meeting was in a formal environment such as a mediation or a settlement conference where each party was represented.[17]
- Had Mr Williams read the email in the alternative matter, he would have advised Mr Farrer in the most emphatic terms that he should not attend such a meeting, and he would not have countenanced Mr Farrer doing so under any circumstances.[18]
- [31]By email sent at 7:29pm on 22 July 2011, Mr Farrer told Mr Williams of the meeting between himself and Mr Murphy that day, however Mr Williams did not read that email until the following Monday, 25 July.[19]
- [32]In his May 2015 affidavit, Mr Williams adheres to what he said in his earlier affidavit, namely his belief that Mr Farrer was to meet with the person who is funding or had funded Mr Allison or Mr Murphy in the litigation.
- [33]
- [34]Mr Williams also referred to instructions he received concerning the meeting by way of an email from his client on 27 July 2011 (as follows):
Lou Minniti asked for a meeting with John Murphy as he was short of money and wanted to work out a deal to stop working for Allison. I had a meeting with Mr Murphy only on Friday, 22 July 2011 at 2pm. At that meeting Mr Murphy said I would lose the case as he was an expert in this law. He had run the test case when he put the caveat on the Cape Cleveland. He said, one, I was holding all the assets in trust for Allison. Two, my super funds would be liable for millions. Three, Mr Murphy wanted one million each for himself and Allison. Four, Mr Murphy said he would send the settlement offer to you.[22]
- [35]In the subsequent cross examination, Mr Williams referred to his further confusion that he had assumed it was Mr Minniti (the financier) who was running short of money, which is the position he understood prior to the meeting. However, based on the instructions of 22 July, it appeared it had been put that it was in fact Mr Murphy who was short of money.[23]
- [36]Throughout the cross examination, Mr Williams did not depart from the evidence outlined in his affidavits. Understandably Mr Williams was vague in some of his recollection, but as to the central matter to do with his knowledge of the persons attending the meeting, Mr Williams adhered to the views previously expressed.
- [37]Mr Williams was a truthful witness who gave evidence carefully and in a considered fashion.
- [38]I find that, prior to the meeting on 22 July 2011, Mr Williams was not aware that Mr Murphy would be attending the meeting. The email communication dated 22 July 2011 from Mr Williams to Mr Murphy (which would have been transmitted after the meeting had commenced) must be considered in that context. I find that Mr Murphy took no steps to inform Mr Williams of the meeting and took no steps to seek consent from Mr Williams.
Discussion
- [39]The charge against Mr Murphy relates to an alleged breach of rule 55 of the 2007 Barristers Rule which, in the current context, provides that a barrister must not deal directly with the opponent’s client unless the opponent has previously consented.
- [40]Mr Murphy takes no issue with any of the particulars other than whether consent was given.[24]
- [41]Mr Morris QC submits that:
- Whilst Mr Murphy’s conduct “was stupid, was inappropriate and was inacceptable”[25] it was not in breach of rule 55.
- The rule, which requires consent, should not be elevated to the level of permission so that permission has to be obtained directly from the opposition. This interpretation does not flow from the words as they appear.
- The requirement under the rule is a minimal one. The opponent must have given consent prior to the meeting. The consent does not have to be given directly to the barrister. It does not have to be expressed in terms of permission. It simply has to have been given.[26]
- At some time prior to 2.00pm on the day in question (22 July 2011), Mr Williams gave such consent when he dictated to his secretary the email which was subsequently sent to his client.[27] At that point of dictation he gave his consent - not at the time the email was sent to his client nor when his client opened the email and read it.[28]
- It is not relevant whether Mr Murphy honestly thought that such consent had been given. The consent was the act of Mr Williams when he put in writing or directed that there be put in writing his approval to the meeting proceeding.[29]
- Mr Murphy’s intention to attempt to settle the matter and to attempt to settle the matter without the involvement of Mr Farrer’s lawyers is irrelevant. After the point of consent, such matters are irrelevant.[30]
- The evidence from Mr Williams should be treated with some hesitation and not believed.[31] Even if believed, the highest Mr Williams’ evidence becomes is that in giving consent he had made a mistake because he didn’t read the email carefully or properly.[32]
- The nature of the consent required is objective consent. A barrister cannot be held liable in circumstances where a consent has in fact been given but it didn’t carry with it the mind or intention of the person giving it. The rule can’t refer to some sort of subjective state of mind as to whether Mr Williams intended the consent or whether the consent that was articulated carried with it his full conscious understanding. If that were the interpretation, it would be a peril for anyone acting under the rules that what, on its face, looks like consent actually was not.[33]
- [42]Mr Bell QC on behalf of the Legal Services Commissioner submits:
- The evidence by Mr Williams was very credible and measured and thoughtful. Based upon this evidence it is possible to be satisfied that prior to the meeting on 22 July Mr Williams did not consent to his opponent, Mr Murphy, negotiating directly with his client. There can be no doubt about that.[34]
- A sensible construction of rule 55 must be adopted. It requires that a barrister must not deal directly with the opponent’s client, the relevant exception being where there has been previous consent.
- The rule requires that the barrister take steps to obtain the consent.
- What happened in the current case illustrates why it is on the shoulders of the barrister to seek consent.
- If it is left to the client on the other side to take the appropriate steps with respect to consent the client may not do a very good job of it – exactly as has happened in this case.[35]
- [43]The short issue in this case is whether Mr Murphy’s opponent previously consented to Mr Murphy dealing directly with the opponent’s client.
- [44]I have found that the communication from Mr Farrer transmitted on 19 July 2011 to Mr Williams was not understood by Mr Williams to be referring to any direct communication between Mr Murphy and Mr Farrer.
- [45]Essentially, the submission of Mr Morris QC is that Mr Williams was consenting at the time to something about which he was not aware he was being asked to consent.
- [46]The concept of consent has been considered in the context of various areas of law.
- [47]Consent generally involves a reasoned or a considered act in the face of a situation calling for a choice or decision. Consent can only occur against the background of knowledge and so presupposes knowledge of the matter about which consent is being sought.[36]
- [48]Consent must involve an affirmative act, which again presupposes knowledge of the subject matter.
- [49]This is particularly so in the context of the aim of rule 55, which is to ensure that clients have the benefit of advice from legal representation in a matter, and to prevent a lawyer dealing directly with a litigant and taking advantage of a person who is not legally qualified. In those circumstances in particular, the consent must be informed by knowledge.
- [50]In the result, I conclude that Mr Murphy dealt directly with Mr Farrar and Mr Williams did not previously consent. Mr Murphy was in breach of rule 55.
- [51]In relation to the application of rule 55, Mr Morris QC referred to a peril for anyone acting under the rules if “some sort of subjective state of mind as to whether Mr Williams intended to consent or whether the consent that was articulated carried with it his full conscious understanding” were imposed.[37] Peril as described by Mr Morris QC would assume that Mr Murphy was misled by a consent articulated to him. Of course, Mr Murphy took the deliberate decision not to seek consent. This peril can, of course, be avoided by the practitioner approaching his opponent in a full, frank and honest way, informing his opponent of what is intended and seeking consent against that background. That would leave no doubt as to whether consent is given and so would remove any ‘peril’ due to uncertainty.
- [52]I conclude that rule 55 requires that the practitioner should take steps to contact the opposition to fully inform the opposition of what is proposed and, in that context, to seek consent. That matter should not be left to the client. If the rule were interpreted in any other way it would mean that the client could be deprived of the benefit of advice as to the invitation to attend the meeting.
- [53]Sections 418 and 419 of the Legal Profession Act 2007 define the concepts of “unsatisfactory professional conduct” and “professional misconduct”.
- [54]Each side has made broad submissions about whether or not the conduct should be regarded as unsatisfactory professional conduct or professional misconduct. The respondent has also made preliminary submissions about penalty, although Mr Bell QC respectfully submits that the Tribunal consider “culpability or liability”[38] and that the parties make further submissions subsequently.
- [55]I direct that:
- (1)By 27 October 2015 each party file with the Tribunal 4 copies of any submissions upon which they intend to rely as to the characterisation of the conduct (whether or not it be unsatisfactory professional conduct or professional misconduct) and also penalty, and serve 1 copy of those submissions on the other party.
- (2)Unless either party requests an oral hearing, the matter is to be heard on the papers after 3 November 2015.
- (1)
Footnotes
[1] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 32, lines 30 to 45.
[2] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 33, lines 20 to 27.
[3] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 50, lines 44 to 46.
[4] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 78, line 43 to page 79, line 4.
[5] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 66, lines 32 and 33.
[6] Transcript of proceedings in the Supreme Court of Tasmania, Allison v Tuna Tasmania Pty Ltd & Ors, 14 and 15 September 2011, page 14, line 43.
[7] Letter from John Murphy to Messrs Gunson Williams, dated 31 July 2011, page 1.
[8] Letter from John Murphy to Mr AJ Morris QC, dated 28 September 2011, paragraph 27.
[9] Letter from John Murphy to Mr AJ Morris QC, dated 28 September 2011 paragraphs 29 and 30.
[10] Affidavit of Timothy John Williams, sworn 1 August 2013, paragraph 4.
[11] Affidavit of Timothy John Williams, sworn 1 August 2013, paragraph 5.
[12] Affidavit of Timothy John Williams, sworn 1 August 2013, paragraph 6.
[13] Affidavit of Timothy John Williams, sworn 1 August 2013, paragraphs 7 and 8.
[14] Affidavit of Timothy John Williams, sworn 7 May 2015, paragraph 8.
[15] Email from Mr Timothy Williams to Mr Farrer, transmitted 22 July 2011 at 2:52pm.
[16] Affidavit of Timothy John Williams, sworn 7 May 2015, paragraph 12.
[17] Affidavit of Timothy John Williams, sworn 7 May 2015, paragraph 13.
[18] Affidavit of Timothy John Williams, sworn 7 May 2015, paragraph 14.
[19] Affidavit of Timothy John Williams, sworn 1 August 2013, paragraph 4.
[20] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 5, lines 39 to 47.
[21] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 6, lines 5 to 7.
[22] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 13, lines 32 to 42.
[23] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 14, lines 5 to 9.
[24] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 30, lines 25 to 27.
[25] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 30, lines 33 to 35.
[26] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 31, lines 10 to 14.
[27] The text of the email is set out at paragraph 28 of these reasons.
[28] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 31, lines 15 to 19.
[29] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 31, lines 20 to 26.
[30] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 31, lines 38 to 46.
[31] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 31, lines 1 to 3.
[32] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 32, lines 3 to 7.
[33] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 32, lines 16 to 30.
[34] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 30, lines 9 to 17.
[35] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 30, lines 1 to 8.
[36]Ex parte Ford; Re Caughey (1876) 1 Ch D 521.
[37] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 32, lines 16 to 30.
[38] Transcript of proceedings in the Queensland Civil and Administrative Tribunal, 18 May 2015, page 20 lines 31 to 33.