LEO CUSSEN INSTITUTE WILLS AND PROBATE CONFERENCE
Key Ethical Issues in Wills & Estates Matters
Carolyn Sparke SC with Nathan McOmish
Key ethical issues in will and estates matters, with reference to recent cases and rulings,
including:

Conflicts of interest

Delay in the finalisation of estates

Abuse of process and the strategic use of court proceedings in estate matters
Many of the issues covered in this paper are worthy of a paper in their own right. Many of
them cross over both ethical conduct and negligent conduct.
Deceased estates is the area which generates the second largest area for complaint by member
of the public against lawyers1 with the largest area of complaint being lawyers costs.
Ethical and conduct issues which can arise at each step of the will/estate process.
A.
When making the will:
A1.
Delay
The case of Fast v Rockman2 has already been discussed –the case raises the issue of the use
of solicitors’ notes and in what circumstances they would constitute an informal will.
However, it raises the question of what should a competent solicitor so when faced with a
situation of extremis.
Please have a look at Fischer v Howe3. A solicitor took instructions for a will from a elderly
lady, frail but not in ill-health. There was of about two weeks before the will was drafted,
which included the Easter break into which the testator agreed. The testator took a relatively
sudden turn for the worse and died before a will could be made. The solicitor was held liable
for not having given the testator the opportunity to sign instructions as an interim will.If
itteaches us anything, it is that even situations which are not apparently in extremis, but
where a testator is elderly and frail (and even where the testator agrees that the solicitor can
come back later to complete the will) will find the solicitor liable in negligence if they do not
make a will promptly, or have the client sign instructions.
1Lawyer
2Fast
complaint enquiries on rise in Victoria, 24 October, 2012 , New Lawyer Newsletter, Andrew Jennings
v Rockman [2013] VSC 18 (7 February 2013)
3Fischer
v Howe [2013] NSWSC 462 (2 May 2013)
A2.
Solicitor-executor and commission
When a solicitor drafts a will for a client which includes a provision whereby the solicitor is able
to charge commission or costs for acting as executor, the solicitor must comply with Rule 10 of the
professional conduct rules.4The rule is an ethical one, and does not contain either a sanction for
failing to comply, or approval of commission for compliance. However, it is hard to see how a
court is going to approve a commission application where Rule 10 has not been complied with5.
As an instance of getting it right, see : In Reese-Hackford v Standford [2012] VSC 315.
Whilst lawyers can be an ‘easy target’ for complaint, there are times when the solicitor plays
an important role, as recognised by Daly AsJ, who commented on the difficult and
responsible role cast upon a solicitor-executor.
See further comment later in this paper about the use of commission/costs as a bargaining
chip or otherwise improperly.
A3. Drafting errors
A subject for another paper of itself, this is just a reminder of those areas which create problems
for practitioners:-
4
Rule 10.1 of the Professional Conduct and Practice Rules 2005 (applying to wills drawn after 1 September 2005) provided
as follows:
10 Receiving a Benefit Under a Will or Other Instrument
10.1 A practitioner who receives instructions from a client to draw a will appointing the practitioner or an associate
of the practitioner an executor must inform the client in writing before the client signs the will –
10.1.1 of any entitlement of the practitioner, or the practitioner’s firm or associate, to claim commission;
10.1.2 of the inclusion in the will of any provision entitling the practitioner, or the practitioner’s firm or associate,
to charge legal costs in relation to the administration of the estate, and;
10.1.3 if the practitioner or the practitioner’s firm or associate has an entitlement to claim commission, that the
person could appoint as executor a person who might make no claim for commission.
5
In Szmulewicz&ors v Recht &anor [2011] VSC 368 the solicitor and accountant executors had taken their commission in
accordance with the rate permitted in the will. The solicitor’s firm had rendered a separate bill for professional legal work.
The beneficiaries took issue with the commission, raising issues of whether Rule 10 had been complied with, and whether
informed consent had been given. The solicitor and accountant each gave evidence that they had known the deceased for
some time and that (as he anticipated family trouble) he wanted them, as professionals, to act, and that he discussed and
knew that there would be a cost in having them do so. The Court accepted that the fiduciary position involved required
proper informed consent to the charging clause. It accepted that such a discussion had taken place, but that it fell short of
informed consent
-
failing to advise about joint tenancies/tenancy in common6
-
failing to provide advice about superannuation assets, either to obtain instructions to
contact the superannuation fund or to advise the client to do so
-
failing to include an "adjustment clause" in a will – where the settled instructions are
that the testator desires equality but the payment of debts or the receipt of
superannuation may result in inequality
-
failing to include a residue clause at all. This is most likely to occur where firm
precedents are not properly checked, where a prior will is used to make notes and the
assistant asked to re-type it with the notes incorporated - the prior residue clause may
have been crossed out upon a change of mind and the assistant may not retype it.
A4. Rectification where errors have been made
Again, a topic for another paper, but where (in summary) the Testator’s instructions can be
ascertained clearly and the will contains a ‘ clerical error’ which is attributable to the solicitor for
failing to carry out those instructions, the court can rectify the will7. For present purposes I make
two points:- beware using a copy of the old will to take instructions for the new will. In ANZ Trustee v Hamlet
[2010] VSC 207, the will-maker used a combination of diary notes and writing on the old will
document in taking instructions. The order in which instructions were taken was not clear and the
original of the ‘written-on’ will document was not kept. The court refused rectification as they
instructions could not be clearly ascertained.
- the solicitor who improperly drafts the will is likely to be required to pay the costs of any
application8
6
Vagg v McPhee [2011] NSWSC 1584 upheld on appeal [2013] NSWCA 29 . In that case the joint tenant
understood the nature of a joint tenancy and included in her will pay "request" that the house be sold and half
of the proceeds paid to your beneficiaries. It could not take place by reason of the joint tenancy. That claim was
dismissed on its facts and the construction of that particular will. However, the court affirmed the duty of a
solicitor to the estate, and the need for a ‘notice of severance’ as part of the will-making process (as per CarrGlynn v Frearsons[1999] Ch 326 ), in certain cases to ensure that assets fall in to the estate (rather than in that
case, the disappointed beneficiary.)
7
8
Wills Act 1997, s 31
ANZ Trustees v Hamlet, supra; Taylor v Haygarth (unrep, 7/10/94 per Hodgson J); application of Spooner;
Long v Long [2004] NSWSC 1114;
B.
Proving the will
B1.
Section 50 Administration and Probate Act1958 (A & P Act)provides that a wide
range of people are entitled to see a copy of a will. Solicitors seems to generally be
aware of that provision but occasionally I still see people resist providing a copy. The
beneficiary is entitled to a copy of the will – not just the portion of it which affects
them.
B2.
Section 15 of the A & P Act provides that a person may require the person named as
testator or the person who holds custody of a will to bring it in to court. It is often
used as a means to ‘hurry up’ an application for probate (which ought, it is said, to be
made within 6 weeks9) .
There are no ethical consequences of failing to comply, but there may be costs
consequences (if application has been foreshadowed and then made to court, it is
likely that the testator/custodian/solicitor may be liable for costs).
There can also be consequences in negligence – Hawkins v Clayton10 is a case in
which the law firm defendant had custody of the will and never notified the named
executor that they were executor. He executor learned of the will some years later and
took probate but of a house property which by then was wasting and had lost value.
The law firm was held liable for that loss.
B3.
Doubts about validity of will?
What if the executor client has an affidavit/information which disputes capacity, but
nonetheless wants to prove the last will (or, conversely, wishes to proceed with a prior
will, in the face of information about the T actually having capacity?)
It is the duty of an executor to put all relevant matters before the Court. It is an
offence to conceal a will (s 33 A & P Act) and given the existence of the informal
will’ regime, it is not apparent now what is a ‘will’. It is not for the party, or their
practitioner to usurp the role of the court.
Practitioners are urged to make wills for persons with doubtful capacity, keeping
proper notes so that the court can be fully informed of the circumstances, on the basis
that the Court’s role ought not be usurped by the practitioner. Thus, even if there are
doubts, capacity is a matter for the Court rather than the practitioner.
9
Comment by Beach J in Sharpe v Forbath [2000]VSC 282 noting that the legislature fixed that time in s 15 A & P Act
10
(1988) 164 CLR 539
A practitioner should not give in to a client insisting on proceeding without all
information before the court. If a client refuses to do so, the practitioner should advise
in writing of their obligations and terminate the retainer.
The application for representation should proceed either by way of an application in
Solemn form, or by way of a Common form application, but with the ‘invalid will’ or
the information about capacity, forming part of the affidavit material filed.
Eg: Law Firm acting for Mr X. Mrs X had left an unsigned ‘will kit’ will, which left
the estate to mother/children. Should the application for representation proceed
without revealing the ‘invalid’ will to the court? LIV Ethical ruling R4677
(21/10/2010) held that the solicitor had an “overarching duty of candour to the Court
in applying for Letters of Administration and should advise the Court that a prima
facie invalid Will has been discovered, and exhibit a copy of it to the application for
Letters of Administration. (onthe question of notice to affected persons, the Ruling
also held that there “…does not appear to be any ethical obligation on the part of the
practitioner to notify the Executor named in the ‘invalid’ Will as she is not a ‘properly
appointed’ executor at this time”. The reality is that the Registrar is likely to refer in
to Court and the court is likely to require notice in any event)
C.
CONFLICT - Should the practitioner act?
There are a number of situations which give rise to potential conflict issues.
C1.
General comment
Practitioners will appreciate that they are prohibited from acting where (in very short
summary11):- they have obtained information in the course of acting for a client which is of a
confidential nature;
- They are in conflict
Not every involvement will give rise to a conflict. Sometimes practitioners (or their
opponents) have the view that if the practitioner drafted the will, that will create a conflict; or
that the practitioner-executor cannot also act for beneficiaries. Those views are not of
themselves correct (unless there are other issues which create a conflict).
C2.
Improper conduct by executor
Conflict can arise where an executor prefers their own interests to those of the estate.
Solicitors may not appreciate the conflict and simply continue to act on instructions.
Alternatively solicitors may appreciate the conflict, warn the executor but see themselves as
bound to follow the instructions of the executor.
That would not be appropriate and the solicitor should cease to act.
11
practitioners should consider the many rules contained in the Professional Conduct and Practice Rules 2005
A solicitor acting for a client executor who is acting improperly should:- advise and warn the executor of their duties, the improper conduct and the risks in
exposing themselves to liability;
- if the executor continues in breach in the practitioner should cease to act. The
practitioner’s duties to the Court and the law are higher than those to a client, and a
practitioner should not act on instructions which are in breach of the executor’s duties.
Further, a practitioner who “knowingly assists” with a breach of trust exposes
themselves to personal liability in the event of a claim by beneficiaries.12
The LPLC has expressed a view13 about whether the solicitor whose faces to act in these
circumstances has a duty to tell the beneficiaries about the executor's actions. The practitioner
is not acting for the beneficiaries but for the executor representing the estate. The law is
unclear as to whether the solicitor has duties to the beneficiaries separate from the duties
owed by the executor to the beneficiaries. To tell the beneficiaries could breach duties to the
executor client and breach client confidentiality. The LPLC recommends that a practitioner
should contact the LPLC to discuss their options.
C3.
Other matters
The solicitor having acted for the Testator may give rise to "confidentiality issues". Ruling
Number: R4287(October 2005) dealt with a request by a de facto partner to the solicitors,
seeking information given by the testator when he made his will. The Ruling was that:“The file notes that recorded the instructions given by the testator should remain the
property of the solicitor and need not be disclosed. The court may order otherwise.”
That same ruling dealt with a common problem - probate was not being applied for, but there
was a question about the release of the original will to disputing jointly named executors. The
ruling said:
“Both executors should have been given copies of the will and the original of the will
should only have been given according to instructions given jointly or a court order.”
Instances of ethical rulings having been given by LIV about conflict:C4.
OK to act:- solicitor A previously acted for Mrs X in relation to her will and her separation form
Mr X. Mr X died. Mrs X brought a Part IV claim. Solicitor A was by now acting for
Mr X estate. Held – OK to act as there was no confidential information obtained by A
in acting previously for Mrs X. (Ruling R4692)
12
Barnes v Addy (1874) LR 9 Ch App 244
13
"Weatherproofing wills and estates" brochure published by the LPLC in March 2013
- son, daughter and daughter husband named executors. The daughter foreshadowed
TFM claim firm, son and husband wished to apply for probate. Was the firm limited
in the information it could provide to the husband, given that his wife was intending
to make a TFM claim. – held , “The executor was entitled to all information relating
to the estate. The firm should advise its client that his duty as executor is to uphold the
will. The circumstances described do not prohibit the son-in-law from acting as
executor or give rise to a conflict of interest on the part of the solicitors”. (Ruling
4310, February 2006)
C5
-
Not ok to act
A solicitor acted in conflict in a number of ways – in acting for the widow/sole
beneficiary, he failed to realise that certain land was jointly owned ( and therefore not
part of the estate)14; recommended that the executor bring a TFM claim against the
estate (not only in conflict but mistaken as to the law, as the executor claimed the
deceased had gifted him the block of land); charged the estate for work done for the
executor personally (and claimed a lien – which was what prompted the complaint).
Ironically, the solicitor advised the executor of the executor’s conflict of interest in
making a claim against the estate. The solicitor did not advise the beneficiary about
the solicitor’s conflict in acting for both the beneficiary and the executor. He
continued to act for both parties for some time.
The solicitor was found guilty of unsatisfactory professional conduct for failing to
manage the evident conflict of interest (Rule 8.2 of the Professional Conduct and
Practice Rules 2005). He was reprimanded and ordered to pay the Commission’s
costs of $25,000 and to not to act as a solicitor to an executor until succession law and
ethical workshops are completed.Legal Services Commissioner v McNamara (Legal
Practice) [2011] VCAT 1228 and 1533.
-
Where law clerk moved from firm X (acting for an estate) to firm Y (acting for a
claimant on the estate) was there a conflict? The Ruling: “In the event that the
employee had obtained, or was perceived to have obtained confidential information
prejudicial to the estate client, Firm Y could have a conflict of interest in continuing
to act for their client in the Part IV Application.” (Ruling 4375, August 2006)
-
Firm A acted for T in drafting will. T’s daughter wished to bring Part of IV challenge
a later will (not made by firm A). Firm A had acquired information from T which
would be critical to the Part IV application, and the solicitor may be called as a
witness. Ruling – firm A should not act for the daughter in Part IV. (Ruling 3891,
Sept 2002)
It was said the solicitor “regrettably…seemed frequently to have lost sight of these important matters of fact
and law”.
14
D.
DELAY IN ADMINISTRATION
(as a separate issue, solicitor-executors have been criticised for holding their commission
/fees against the finalisation of the estate – also see separate heading below)
There are a couple of issues which arise in relation to delay:-
Interim payments
-
Taking too long to administer
-
taking not long enough to administer
D1.
Interim distribution and accounts
Ford v Princehorn; Estate of Ford [2012] NSWSC 1165 The estate was a small one
consisting of a house and investments readily converted to cash. The executor made a partial
distribution but held back the balance of the estate (more than required to meet a reasonable
debate about commission). He wrote a letter to the 19 beneficiaries seeking their consent to
commission of $10,000. The letter said that if any beneficiaries refused to give their consent,
the executor would need to seek a formal court order that would require a fully audited set of
accounts. This would delay any further distribution of the estate. The majority of the
beneficiaries consented.
One beneficiary sought an account. The executor wrote to the beneficiaries stating that the
executor was not obliged to provide an accounting to beneficiaries before distribution was
made, unless pursuant to a court order and further, that if an account was to be provided, an
independent accountant would be necessary to prepare accounts at the beneficiaries’ cost.
The Court held that the executor was not justified in withholding a partial distribution of the
estate whilst his claim for commission was negotiated. The executor acted for his own benefit
rather than the benefit of the estate. There was also no basis for the executor’s statements
about accounts.
The executor was ordered to fie accounts (the interim distribution having been made after the
proceedings were issued). He was ordered to pay the beneficiaries’ costs and was not entitled
to indemnity out of the estate.
D2.
Taking too long to administer
The LPLC receives a number of complaints about this. It is also an area which is ripe for
negligence actions.
Delay can be caused by problems with executors - not providing timely instructions,
executors disagreeing about the administration. Delay can also be caused by the estate
solicitor not acting in a timely way.
The LPLC also sees problems with breakdown of communication. They recommend that, at
the outset of administration, you discuss the means and frequency of communication. Is the
solicitor required to communicate with both executors and beneficiaries? All or one of the
executors? Here's the solicitor required to take instructions for every decision which is made
in Administration or can the "housekeeping" decisions being made without seeking
instructions? Is that solicitor retained to administer or are the executors going to administer
and have recourse to the solicitor only for advice hands transactions such as conveyancing?
When the time comes to finalise the estate, the solicitor may be waiting for instructions and
the executor may be waiting for advice as to what to do. The LPLC recommends that well
organised solicitors will provide a book of information to executors at the beginning of the
retainer. (they also recommend proper supervision of junior and non-legal staff, who often
have the conduct of everyday administration matters; also proper diarising and supervision,
as estate administration can ‘fall to the bottom of the list’ compared with urgent or deadline
driven transactions)
Problems encountered:-
failure to realise assets (eg: shares) can lead to a loss of value, where the market falls
in value. (the LPLC gives an instance of the shares in an estate changing during the
course of the administration due to reorganisation of the company. The soliicotr
acting for the estate was not aware, and sold only part of the shears. They failed to
check the number of shares upon actual sale. They failed to investigate, when a
dividend cheque was received six months later. The solicitor was the subject of a
negligence claim)
-
failure to rent out estate property if for some reason it cannot be sold in a timely way.
(noting that the commencement of a TFM claim does not automatically "freeze" the
administration of an estate. In most instances the estate assets can be realised, and
should be realised if they are not generating income, whilst waiting for the claim to be
settled/litigated)
-
failure to advise that principal place of residence should be realised (‘ sold and settled
‘) within two years of the date of death so as to avoid Capital Gains Tax.
-
Failure to locate or enquire about a certificate of title, with the result that the
settlement of a conveyance took months longer than it ought to have
Arguably (although I have not seen cases to this effect) if an estate is in a position to be
distributed shortly after the expiry of the TFM 6-month timeframe, it should be and there
could be a potential claim if an ‘out-of-time’ TFM claimant makes a claim they could not
have made if the estate was ‘finally distributed’.
D3.
Taking not long enough to administer
Ironically, this can also lead to problems.
The first is neither a negligence, nor an ethical issue but one which the courts have described
as "embarrassing". Ideally, an estate should not be distributed within six months of the date
of grant of probate, pending the possibility of a TFM claim being brought.15
If advising an executor who wishes to distribute early, you must advise that the executor
remains personally liable to meet any claim which is made. The executor has a right to call
back in the assets of the estate, but that may or may not be practically possible to do.
Distributing the assets within six months will not defeat the making of a TFM claim, and
exposes the executor to personal risk.
Conceivably (although I do not know of any cases) and executor could have an action against
a solicitor who fails to provide that advice, if they are unable to claw back in assets and can
establish that they would not have permitted distribution within six months had they known
of the risk.
D4.
Other problems:-
distributing without advertising for creditors. A notice should be published under
section 33 of the Trustee Act (Vic) 1958.
-
Distributing without dealing with all creditors. The classic creditor which is
overlooked is the Deputy Commissioner of Taxation. (The LPLC gives an instance
where a tax assessment was expected but was overlooked as the actual assessment
arrived after the estate had been finalised. The solicitor wrote to the relevant
beneficiaries requesting a return of the relevant amount. A claim was made by the
beneficiaries and the LPLC met half of the claimed amount.)
-
and over zealous realisation of assets without checking that those assets should be
distributed ‘in specie’ under the will
-
making interim advances to, or for the benefit of, infant beneficiaries, if the will does
not in fact permit you to do so. The Trustee Act16permits limited advancement and
maintenance powers if the will has no power of advancement.
Re Simson (decd) [1950] Ch 38 – where it was said that an LPR should “…think once, twice and several times before
allowing any part of all of the estate to be paid out to any beneficiary ... while any application under this act is either pending
or impending…”
15
16
Sections 37, 38 Trustee Act 1958
E.
THE SOLICITOR-EXECUTOR AND EXECUTORS COMMISSION
The solicitor-executor has been crticised in recent years on a couple of fronts.
A few of the problems committed by solicitor- executors happened in Hession (below) which
teaches us ( among other things) that the will not necessarily accept a solicitor’s defence that
he acted on (his costs consultant’s) advice.
E1
Legal Services Commissioner v Hession (Legal Practice) [2010] VCAT 1328 and
1687
The will appointed a solicitor as executor and included a charging clause, but no commission
clause. The estate was valued at approximately $2.2 million. The executor charged
commission of 5 per cent ($109,669) and legal fees of $34,033. he took commission before
the administration was complete.
Following a trust account inspection, the executor paid commission money back into the
estate’s trust account to restore the deficiency. He then wrote a letter to the beneficiaries
seeking consent to commission. That letter was criticised by the court, and the executor was
found guilty of unsatisfactory professional conduct and breach of fiduciary duty as the letter
did not provide the beneficiaries with full and accurate information:a. The letter falsely represented that the Supreme Court had formulated guidelines
for the payment of executor’s commission;
b. The letter falsely represented that commission can be payable at a rate of up to 7
per cent on capital and 3-5% on commission (without any reference to s 65 of the
A&P Act, the limit of 5%, the court’s discretion, the need for commission to be
just and reasonable for the pains and troubles’;
c. The letter omitted to mention the advice from the legal costs assessor and the
consequences that followed, including the payment of commission, the trust
account audit and the repayment;
The executor’s primary defence was that he received independent advice from a legal
costs consultant that he was entitled to charge commission of between 2 and 5 per cent,
and that he could take commission “as you go”.
The court did not accept that. Per Hutley JA at 740:
“It is no answer to a charge of professional misconduct in relation to transactions with
his client’s money that the solicitor did not appreciate that what he was doing
constituted misconduct.”
Referring to Hope JA in Law Society of NSW v Moulton [1981] NSWLR 736 at 751:
“The minimum standards include, to my mind, basic legal knowledge and application
to keep abreast of the law in his field of practice.”
The executor was found guilty of professional misconduct and misconduct and common
law for charging commission. His conduct could reasonably regarded as disgraceful and
dishonourable as a whole as:
a. A competent legal practitioner would have made proper enquiry to ascertain
whether the costs assessor’s advice was correct;
b. The calculated commission of 5 per cent was not based on the executor’s pains
and trouble, nor was it just and reasonable;
c. Double dipping for professional work cannot be the subject matter of charges
both for legal costs and commission;
d. The executor transferred part of the commission before the other executors
renounced probate and without their approval; and
e. The executor transferred part of the commission before he obtained a grant of
probate.
The executor was fined $30,000 and ordered to pay the Commission’s costs of $38,162.
The executor undertook to participate in courses relating to deceased estates.
E2.
Similar criticism was made of the solicitor-executors in Walker v D’Alessandro,
Dimos v Skaftouris[2004] VSCA 141)
In Dimos, which was an application to remove a solicitor-executor, the solicitor was
criticised for a number of things. Among them was the solicitor-executor:- Seeking commission of 3 per cent be included in the terms of settlement of a Part IV
action;
-
Withholding payments to creditors until the executor’s costs and commission were
agreed and paid;
Estate of Pump; Walker v D’Alessandro (2010) VSC 15, also referred to in Estate of Zsusanna
Gray [2010] VSC 173
In thiscase, the solicitor-executor sought consent from beneficiaries for commission. The letter , in
summary, suggested that failing to give consent would mean that no distributions could be made,
and that he estate would take some time to wind up. They agreed, but later sought orders to set
aside that agreement. The Court granted those orders, saying that the solicitor was in a fiduciary
position with respect to the beneficiaries and had to obtain proper consent.
These cases make it clear that a letter from a solicitor-executor seeking consent to commission
should be ‘informed’ consent:-
the correspondence should be balanced and transparent. A solicitor executor should not
simply baldly state that the claimed amount is “fair” but should be properly mindful of the
various factors set out above in assessing the appropriateness of commission claims.
-
The beneficiaries should not be told that agreement is necessary before the estate can be
distributed (rather, legitimate amounts can be held back for proper expenses, costs etc)
-
Accounts, including a description of the costs incurred by the estate, and the work done by the
executor, should be provided. (the court took into account the fact that the Assoc J hearing
commission applications would ordinarily require a bill in taxable form to be prepared, so that the
court can see exactly what work had been done which has already been charged for; and the fact
that (according to Vance) a standard part of the recommended form of letter seeking an agreement
to commission would include an estate account (which would ordinarily include the solicitor’s
costs).)
-
The beneficiaries should be told that they may obtain their own legal advice if they wish to do so
E3.
Charging both fees and commissions
Where a solicitor got it wrong, and a solicitor charged both fees and commission where the
will contained no charging clause at all, see In re McClung (decd) [2006] VSC 209).
There,the professional-executor was forced to refund even those fees which related to
professional services on the estate. (however, his requirement to refund professional fees was
offset against such commission as he was entitled to claim).
F.
OTHER ISSUES
F1.
Capacity to give instructions
Legal Services Commissioner v McNamara (Legal Practice) [2011] VCAT 1228 and 1533
This case has been referred to, above. The widow client was in fact of doubtful capacity, and
had a guardian appointed.
A para-legal at the solicitor’s office determined the beneficiary to have capacity. However,
there were clear doubts about her capacity, evidenced by the appointment of a guardian, the
report of a clinical psychologist and delusional behaviour. It was incumbent on the solicitor
to have the client professionally assessed or contemplate ceasing to act for either party17.
17Also
see ethical ruling R456817 (July 2008)
F2
Misrepresentation in mediation
Legal Services Commissioner v Mullins [2006] LPT 012 (Qld)
This matter involved a barrister, but the same issues apply to all legal practitioners. The claim
( in personal injury) was pleaded on the basis of certain loss calculated on a certain life
expectancy. Prior to mediation, the barrister became aware that the client had secondary lung
cancer and the life expectancy assumption was no longer sound. The barrister did not
disclaim the life expectancy assumption at mediation, but remained silent. The barrister was
found liable for misrepresentation. He was publicly reprimanded, fined $20,000 and ordered
to pay the applicant’s costs.
Carolyn Sparke S.C.
Nathan McOmish
20 June 2013