Courtside notebook

The days when graduates could go straight to the bar are over ... WA CJ says Perth law firm would not prefer its own interests in liquidation dispute ... Wayne's law ... Kate Lilly courtside 

Blow CJ: bar applicant needs supervision

A LAW graduate who attempted to go straight to the Tasmanian bar has been knocked back in the Supreme Court.  

Thirty-four year old Erol Cinar hoped to practice as a barrister in Tasmania, despite the fact he has never practiced as a lawyer of any sort.  

Optimistically, he secured a room in chambers and arranged to undertake a period of pupillage with two senior briefs. 

Unfortunately for Mr Cinar, the Law Society of Tasmania refused his application for a ticket.  

Under s.59 of the Legal Profession Act Tas, a practitioner can only undertake supervised legal work during the first two years of his practicing certificate. 

The supervised period can only be reduced where a practitioner is experienced enough to justify an exemption. 

The Law Society argued that granting Cinar a practicing certificate would necessarily preclude him from practicing as a barrister.  

The Act defines supervised legal work as including employment at a law practice, partnership at a law firm or work "in a capacity approved under a legal profession rule". 

Chief Justice Blow agreed that practicing as a barrister does not amount to supervised legal work – although junior barristers are required to undertake a 12-month period of pupilage.  

HH noted that Cinar was a well-qualified person.  

He received his Bachelor of Laws and Master of Laws at Monash University and completed his practical legal training in 2011. He had also completed 200 hours of voluntary legal work and a five-week placement at a Victorian law firm where he received favourable reports.

Despite this, Blow CJ held that Cinar did not have the required experience to be exempt from supervision. 

He concluded:

"Although the appellant is a suitable person to commence practice as a barrister, subject to supervision under the pupilage policy, and although two experienced barristers are willing to undertake that supervision as his pupil masters ... I am not satisfied that the appellant does not need to be supervised. I therefore have no power to exempt him from the "supervised legal practice" requirements of s 59(1)." 

See: Cinar v Law Society of Tasmania 

*   *   *

Martin CJ: fanciful that law firm would prefer its own interests

IN July the Commonwealth Bank applied to restrain Perth law firm Jackson McDonald from acting in proceedings concerning a major property development at Raine Square.

The development was undertaken by Westgem Investments Pty Ltd and financed by the CBA.  

In 2012, Jackson McDonald commenced proceedings against the CBA on behalf of Westgem (now in liquidation). Here's what Wayne Martin CJ said:

"The claim is for an amount remaining to be quantified, but it is reasonable to assume at this stage that the claim is for hundreds of millions of dollars. The pleadings in that case are not yet finalised, and it is clear from my case management of those proceedings that the current statement of claim, which is itself contentious, has taken years to formulate and is based on a very extensive review of relevant facts and circumstances occurring in relation to a complex commercial development over a number of years.

There is a clear inference, and I find, that the case is a complex commercial case, the hearing of which will be likely to take many months, and the fees for the solicitors acting for the various parties in that case are likely to be measured in terms of many millions of dollars. The fees of Westgem are, as I understand it, being met by a litigation funder - Bentham IMF Ltd." 

Westgem claims the CBA knew the developer was likely to default in late 2010 and decided to stop providing support under their financing agreement.  

This is relevant to the issue of Westgem's insolvency, as it affected the developer's capacity to pay its debts.

Between October 2009 and November 2010, Jackson McDonald received payments from Westgem of around $400,000 - payments that Westgem's liquidator may now claim as preferences.

As insolvency is a pre-requisite to the recovery of preferential payments, the CBA claimed there is a potential conflict between Jackson McDonald's interest in resisting a claim from the liquidator and the firm's duty to advance Westgem's case. 

Wayne Martin held a fair-minded observer would conclude that Jackson McDonald is unlikely to prefer its own interests in Westgem not being insolvent.

He noted, among other things, that Westgem had obtained independent legal advice regarding the potential for conflict and "indicated unequivocally" that it consented to Jackson McDonald continuing with the brief.  

He also suggested that Jackson McDonald's fees in relation to Westgem and other parties connected with the claim are likely to exceed any loss the firm will suffer in relation to the liquidator.    

The CJ said that the CBA's application called for "an exceptional order to protect the proper administration of justice." He held: 

"The authorities also establish quite clearly that ... account must be taken of a number of considerations which include the desirability of litigants not being deprived of the lawyer of their choice; the avoidance of prejudice to the administration of justice by delay and the desirability of avoiding substantial legal cost being thrown away.

It is also clear from the cases that the exercise of this exceptional jurisdiction is not an occasion upon which another party to proceedings should look to obtain forensic advantage from a decision made by the court on the basis of the administration of justice."

Martin thought the possibility of Jackson McDonald modifying its behaviour to protect its own interests was "entirely fanciful." 

Application dismissed. 

See: Commonwealth Bank of Australia v Jackson McDonald