Word of the day is "client"

Not a client for the purposes of seeking to declare a fee agreement null and void ... But, definitely a client when barristers need to hook into claims against the fidelity fund - in cases where solicitors have misappropriated the loot ... Interesting juggling from Vic Supremes 

Lawyers in Victoria may be under the yoke of the Legal Profession Act 2004, but on occasions it can be a beautifully flexible instrument. 

A few weeks ago Vic Appeals found that the legislation allowed barristers to be defined as "clients" for the purpose of recovering fees from the fidelity fund if their solicitors default. 

However, the same legislation applied in different circumstances can bind a person to a fee agreement, even if they are not a client and didn't enter into the agreement. 

Bravo. These are worthwhile strikes for the legal profession. 

Let's take the second instance first: 

Julian Hamilton v Russell Kennedy (a law shop)  

The appellant's brother, Alan Hamilton, entered into a fee agreement with Russell Kennedy on October 3, 2005. The shop was to act in a dispute that Alan Hamilton's mother, Beryl, was having with her neighbours. 

At that time Alan and his brother Julian were joint administrators of their mother's estate. 

In 2008, Alan applied to VCAT seeking a reduction in RK's fees. Julian was joined as an applicant because the tribunal incorrectly believed he was a joint administrator. 

In fact, State Trustees had been appointed as administrator in November 2007. 

VCAT sliced a tiny $409.20 off RK's bill and Julian and Alan were ordered to stump-up $17,133.16. 

Julian commenced new proceedings in the tribunal seeking to have the fee agreement declared null and void. He alleged: 

"Russell Kennedy, acting through Ross Hodgens, breached its obligation [to the appellant] as well as the joint administrators, by purporting to contract with Alan Hamilton alone …" 

After a two year delay he was downed by Ass. Justice Robyn Lansdowne. 

The jurisdictional issue loomed large on appeal. 

Russell Kennedy said that as the appellant was neither an administrator nor an executor at the time he commenced his action - therefore not "a client" for the purpose of setting aside the costs agreement - 3.4.32 of the Legal Profession Act.  

Julian submitted that the meaning of "client" is broad - being someone to whom legal services are provided. 

Also, as a beneficiary under Beryl's will, he had a relevant interest in the provision of legal services to his mother's estate, so he had an interest in the outcome of the VACT proceedings. 

And he had been placed by the tribunal under a obligation to pay the costs. 

In the view of Justice Karin Emerton, the legal services charged under the RK fee agreement were not provided to or for Julian Hamilton, but to Beryl. 

His interest in the estate was insufficient to make him a client - therefore he had no jurisdiction to seek to bowl over the fee agreement. 

In other words, pay-up. 

Legal Services Board v Gillespie-Jones  

While "client" got a narrow interpretation in Hamilton, it was fortunate enough to get a broad one in this case.

Under different provisions of the Legal Profession Act, a "person" (a barrister anxious to get his fees from a solicitor who had defaulted) could be regarded as a "client" for the purposes of asking the Legal Services Board to get the fidelity fund to cough-up. 

Vic Appeals (Nettle, Redlich & Hansen) dismissed an appeal by the LSB from a decision of Judge Maree Kennedy in the County Court, who held that barrister Simon Gillispie-Jones had suffered pecuniary loss as a result of solicitor Michael Grey misappropriating $33,000 of a client's trust money.  

The purpose under 3.6.1 of the Legal Profession Act is to "compensate clients for loss arising out of defaults by law practices …" 

Under 1.2.1 "client" includes any person to whom or for whom legal services are provided. 

The Act then goes on to say in 3.6.7 that: 

"A person who suffers pecuniary loss because of a default to which this part applies may make a claim against the fidelity fund to the board about the default." 

Fortunately, the appeal judges found that "person" is a word that is not confined to "clients" - regardless that the compensation provisions only talk about "clients". 

They rejected the LSB's argument that the trial judge erred in holding that a claimant did not need to have an interest in money that was the subject of a default, and established that there was no requirement for Gillespie-Jones to demonstrate a legal or equitable interest in the trust money.

The board's case that the trust money was not held for or on behalf of the barrister and therefore could not constitute grounds for a claim - also bit the dust. 

Instead, the court discovered a lurking Quistclose trust, thereby creating an interest by the barrister in the client's money.