kea91158

IN THE SUPREME COURT
OF THE NORTHERN TERRITORY OF AUSTRALIA

No. 420 of 1991

BETWEEN:

ANDREW GORDON ROGERSON
Plaintiff

AND:

LAW SOCIETY OF THE NORTHERN TERRITORY
Defendant

CORAM:	KEARNEY J

REASONS FOR DECISION

(Delivered 25 November 1991)

The relief sought in the proceedings

On Monday 18 November 1991 the plaintiff instituted proceedings by way of originating motion, seeking the following relief:-

"1.	That the defendant its servants or agents be restrained from having unrestricted access to the files of the clients of Lofra Pty Ltd.

Alternatively to 1 that the defendant by itself, its servants and agents be restrained from access to any such files until it defines which files it wishes to examine and Lofra Pty Ltd has the opportunity in relation thereto to raise any professional priviledge (sic) before any examination takes place.

That the defendant be restrained from exercising against Lofra Pty Ltd and its professional employees its power under section 27(1)(g) of the Legal Practitioners Act by virtue of maintenance on any part of the right to silence (sic)."	(emphasis mine)

In para 2 of the plaintiff's affidavit filed on 18 November it is explained that Lofra Pty. Ltd. is a company "which trades as "Loftus & Cameron, Barristers and Solicitors""; it is clearly a "practising company" carrying on the practice of a legal practitioner under the Legal Practitioners (Incorporation) Act which provides for the incorporation of legal practices in the Territory.	The plaintiff is a legal practitioner and a director of Lofra Pty. Ltd..	Para 3 of his affidavit makes it clear that the basis of the relief sought in para.1 above is "privilege", and that the words underlined in para.3 above should read "any maintenance on my part of the right to silence".

The application for interlocutory relief

On the afternoon of Monday 18 November Mr McCormack of counsel for the plaintiff applied for interlocutory relief along the lines set out in the originating motion.	The plaintiff gave the defendant some notice of this application, which was made orally and supported by evidence on affidavit.	Although
Mr Henwood appeared for the defendant, he had had very short notice of the application and was not in a position to argue it;

the hearing proceeded on Monday as if the application had been made without notice.	It was clearly an application where full argument was necessary; accordingly, after hearing Mr McCormack in part, and upon certain interim undertakings being given by
Mr Henwood, I adjourned the hearing until Wednesday 20 November. The application was fully argued on Wednesday and Thursday; I ruled immediately thereafter that for reasons to be published today the plaintiff's application for the interlocutory relief sought was refused.	I added:-

"Speaking generally, I should say that I do not consider that the privileges known as legal professional privilege and the privilege against self-incrimination apply in relation to a solicitor who is the subject of a Law Society investigation under the [Legal Practitioners] Act.

I would be unable, on the material placed before me, to reach any conclusion on the question of whether
Mr Rogerson has done all that he is required to do in relation to the investigation; or, to the extent that he has obstructed the search, that he had a reasonable excuse to do so, in terms of s.47B of the Act.	But, more importantly, I consider that it is not appropriate that I should embark upon that question.

Speaking generally, it is, in my view, relevant to the question of a legal practitioner's fitness to practise that he or she co-operate, to the fullest extent consonant with the duty to the client, with an investigator, in any investigation by the Law Society of his or her professional conduct.

It is in general highly desirable that any such investigation proceed with the utmost expedition.

It is also clear, to my mind, that insofar as an investigation relates to an alleged charging of contingency fees, the dictates of fitness to practice require that a practitioner should immediately supply all such information as lies within his capacity to provide, in relation to that question.

I reserve liberty to each party to apply at any time upon 2 hours' notice to the other, should the continuing investigation by Mr Barbaro give rise to the need to have any further questions resolved by the Court, relating either to practical matters or to legal matters, or to a combination of the same."

The questions of costs and whether there should be a certificate for senior counsel in terms of
Rule 63.72(9)(a), were reserved.	I now publish the reasons for refusing the oral application of 18 November for interlocutory relief, I also rule upon the question of costs, and an ancillary matter.

The plaintiff's affidavit of 18 November 1991

In the application for interlocutory relief Mr McCormack relied on the plaintiff's affidavit of 18 November 1991.	It spelled out in paras 4-15 the "background to this action."	Paras 4-6 are as follows:

"4.	On Monday last, 11 November at approximately 8.30am Mr Geoffrey Barbaro [of Counsel] entered my office and produced a document signed by the President and Vice President of the defendant.	The letter purported to authorise Mr Barbaro to inspect my clients (sic) files.	The said letter is annexed hereto and marked with the letter "A".

[The "letter" is a formal instrument of delegation to Mr Barbaro dated 4 November 1991 under s.47A of the Legal Practitioners Act of the defendant's -

"functions and powers - - to investigate the professional conduct of Andrew Gordon Rogerson a legal practitioner and - - to:-
inspect books, accounts, documents or writings in the custody or control of

Andrew Gordon Rogerson - - or of a person employed by [him] - - ; and
make notes or copies of, or take extracts from, such books, accounts, documents or writings relating to the legal practice of Andrew Gordon Rogerson - - ."]

Notwithstanding the said letter was dated
4 November 1991 I was given no prior warning of
Mr Barbaro's arrival.	Mr Barbaro requested access to all of the firms (sic) matrimonial files.

The following are the salient points of our discussion:
the firm had many thousands of files under its control;
the files go back over a period of 12 years;
it would be a huge task to extract matrimonial files from the general body of files;
several thousand files were kept at the firms (sic) Darwin and Katherine offices but the majority of files over two years old were kept in archive boxes at a special storage facility at Winnellie run by Wormald Security.
the cost of retrieving boxes from Winnellie was $38 per box plus an average of one and a half man hours had to be spent by my records officer in going to Winnellie and locating the particular file.
I was unable to allocate the required number of staff at short notice to extract matrimonial files kept in the office.
my own committments (sic) as a practitioner and as the principal of the firm precluded me from organising the task for Mr Barbaro at short notice.
I questioned the legality of actions proposed by the Law Society and would need to consult one of Her Majesty's Counsel.
Following our discussion Mr Barbaro agreed to leave my office and return on Thursday morning." (emphasis mine)

It may be noted that notwithstanding the unlimited scope of Mr Barbaro's authority of 4 November, para.5 indicates that, at this stage at least of his investigation, he was confining it to

Lofra's matrimonial files.	It is convenient to set out at this point some of the provisions of the Legal Practitioners Act which are relevant to these proceedings.

Section 46B provides:-

"The Law Society -
may, of its own motion;
shall, upon receipt of a complaint under section 46 [which refers to complaints regarding the professional conduct of a legal practitioner]
- - -
investigate the professional conduct of a legal practitioner."

Section 47(3) provides:-

"Without limiting the generality of the powers of the Law Society under sub-section (1) [which includes, inter alia, the power to "receive, consider and investigate a complaint regarding the professional conduct of a legal practitioner"], it may, for the purposes of an investigation under section 46B, at any time during ordinary business hours -
inspect books, accounts, documents or writings in the custody or control of the legal practitioner or of a person employed by the legal practitioner, and
make notes or copies of, or take extracts from, such books, accounts, documents or writings."

Section 47A provides:-

"(1) The Law Society may, by instrument in writing, delegate to a person any of its powers or functions under this Division [which deals with the functions and powers of the Law Society] - -

(2)	A power or function delegated under this section, when exercised or performed by the delegate, shall, for the purposes of this Act, be deemed to have been exercised by the Law Society.

- - "

Section 47B provides:- "A person who -
wilfully delays or obstructs; or
being a legal practitioner, or a person employed by him, refuses without reasonable excuse to produce any book, account, document or writing when required to do so by,
the Law Society when it is investigating a complaint, or a delegate of the Law Society when the delegate is exercising a power of the Society under section 47(3), is guilty of an offence.
Penalty:	$5,000 or imprisonment for 12 months."

Section 27(1) provides:-

"The Law Society may - - cancel a practising certificate or suspend it for a specified period, if the - - holder of the certificate -
- - -
has failed -
to produce any book, account, document or writing when required to do so for the purposes of section 47(3) - - "

I return to the narrative set out in the plaintiff's affidavit of

18 November.

On Thursday 14 November Mr Barbaro returned and the plaintiff "allowed Mr Barbaro to commence his investigation" (para 7).	I observe that it was not competent for the plaintiff to "allow" Mr Barbaro "to commence his investigation"; his authority to do so stemmed from the Act.	This is one indication of several in the plaintiff's affidavit and annexures which indicate a

misapprehension on his part of what is required of him when a statutory investigation under the Legal Practitioners Act is being carried out.	Later that morning, after receiving legal advice, the plaintiff requested "Mr Barbaro to desist on the grounds of the files being covered by legal professional priviledge (sic)".
Apparently Mr Barbaro did desist.

On 15 November 1991 the plaintiff wrote to the defendant, inter alia as follows:-

"This letter - -	concerns the ambit of the authority [of 4 November 1991].

My understanding of that authority which purports to be given pursuant to Section 47A of the Legal Practitioners Act is that its scope is unlimited and encompasses every file in this office and every file this practice and its predecessors in title have maintained.

In as much as Section 47A of the Legal Practitioners Act does not evince any intention to oust legal professional priviledge (sic) any exercise of the power under the section must be subject to this priviledge (sic).

I request that you identify forthwith any individual client's files that you may wish to inspect pursuant to the Act.

I am mindful of the provisions of Section 47B of the Act and I believe that my refusal to permit an unlimited inspection which refusal I conveyed to Mr Barbaro on the 14th instant and on the grounds of priviledge (sic) constitutes a reasonable excuse within the terms of that section.	The obstruction constituted by my refusal is intentional because I would be in dereliction of my duty as a solicitor if I opened all of my files as
Mr Barbaro's authority says that I shall.

Because of the exigencies of the Act I must request that if you intend to pursue inspection and because of my responsibilities concerning priviledge (sic) you must advise me forthwith what particular individual client's files and trust account records you regard as

encompassed by the authority [of 4 November 1991] so that I can raise any objections of priviledge (sic) that might be appropriate in relation to those individual client's files.	If I do not receive a satisfactory response to this letter by close of business today I must assume you intend to rely on the literal scope of the authority and I shall have no alternative but to make an appropriate application in relation thereto to the Supreme Court."

Two points may be noted about this letter.	First, as noted earlier, while the delegation of 4 November by the defendant to Mr Barbaro was in "unlimited" terms, para 5 of the plaintiff's affidavit of 18 November (p.5) indicates that what Mr Barbaro in fact sought on 11 November was "access to all of the firms (sic) matrimonial files."	I was informed from the Bar table that some 30% to 50% of Lofra's business involved matrimonial legal work; it employs 7 solicitors, and most "are handling currently family law files which in total could number several hundred" (para.15).	The number of files is nothing to the point, as regards the investigation, except that it highlights a practical need for the plaintiff to co-operate with the investigator so as to cause minimum disruption to the practice.	Second, it is quite unnecessary - and may frequently be completely impossible and sometimes wholly undesirable - for an investigator under the Act to identify in advance the files he wishes to inspect.

Para.10 shows that the plaintiff's letter of 15 November elicited a vigorous and unequivocal response from the defendant on the same day, viz:-

"- - -
We reject your claim for privilege against the Law Society.	The Legal Practitioners Act gives clear power for the investigation that was being undertaken to be carried out.

As the claim for privilege would apply equally to all files, whether specified or not, we see no reason why your action [this is presumably a reference to the "appropriate application - - - to the Supreme Court"] should be delayed pending specification by the Law Society.

We advise that the investigation will be continued and we will require complete co-operation from yourself.

We ask you to note the provisions of s27(1)(g) of the Legal Practitioners Act which you will find in amendment number 36 of 1987.

In the event of a failure to provide the books, accounts, documents and writings required from you, the Law Society will convene in order to decide whether to exercise the powers contained in s27(1)(g).

We note in your letter of 14 November 1991 to Mr Barbaro [which is not before the Court] that you confirmed that you are "currently arranging to bring this matter before the Supreme Court to seek a declaration and injunctive relief.	It is unlikely that [you] will be able to arrange to get before the Court this afternoon but anticipate a hearing in regard to the injunction sought tomorrow morning [15 November]."

We note that the Law Society has not received any Court documents and there is nothing to indicate that relief has been sought.

We therefore advise that the investigation will continue forthwith."

On the same day, 15 November, Mr Barbaro wrote to the plaintiff as follows:-

"For the purpose of continuing my authorised investigation I require the following books, accounts, documents or writings:

all books, accounts, documents or writings in relation to Ms Jane Cook/Holmes;

all books, accounts, documents or writings in relation to any clients who have signed or who have been requested to sign at any time any document relating to costs in Family Law matters which includes an agreement that:

"added to the basic fee arrived at in accordance with the above scale we shall retain 5% of the gross award or settlement sum received by you."

or any similarly phrased agreements." (emphasis mine)

I note from this letter that, at least at this initial stage of his investigation, Mr Barbaro had further narrowed, very considerably, the matters on which he wished to focus; I consider he had gone as far as was practicable for an investigator to go in meeting the plaintiff's request of 15 November (p.8) that the defendant "identify forthwith any individual client's files that you may wish to inspect - -".		As to the words "I require" I note that s.27(1)(g)(i) contemplates that a practitioner may be "required" to produce documents etc, when the defendant is exercising, as here, power under s.47(3); and s.47B creates an offence when a practitioner declines to fulfil such a requirement "without reasonable excuse".	I also note that the words "added to - - received by you", quoted by Mr Barbaro, are identical with wording used by the plaintiff in a costs agreement of February

1990 he had entered into with his then client Mrs Holmes (see p.14).

Mr Barbaro's letter made the plaintiff very well aware of the object of his investigation, with considerable precision, at that stage.	There is nothing to suggest that the focus of the investigation has since been changed in any way.	Mr Barbaro's letter of 15 November,	for the purposes of the present application for interlocutory relief, concretizes the scope of his investigation, and it is in the light of what is sought in that letter that the plaintiff's present application must be considered.	I approach the application against that background.
Should the scope of the investigation be later changed, other considerations may arise and different conclusions may be reached; for present purposes I am concerned only with the investigation into the matters particularized by Mr Barbaro on 15 November.

Mr Barbaro's letter of 15 November apparently resulted in a verbal response by the plaintiff that Mr Barbaro could examine the files mentioned after the plaintiff had first perused them; see Mr Barbaro's letter of 17 November at Annexure "E".	By this letter Mr Barbaro rejected this offer, contending, inter alia, that "the Law Society maintains its rights of access to your files", and advising that he would continue with his investigation at the plaintiff's offices "at approximately 9.00 am", presumably on Monday 18 November.	There may have been some misunderstanding between the plaintiff and Mr Barbaro at this point.	Mr Barbaro

clearly required access only to the files etc primarily for the purpose of ascertaining the content of the costs agreement.	The plaintiff was apparently concerned about the substantive content of the files.	It was clearly a case for simple procedural arrangements to be devised, "lubricated by a little elementary good sense and courtesy" as Lord Widgery C.J. put it in Reg. v Peterborough Justice; ex p. Hicks (1977) 1 WLR 1371 at p.1376.

The plaintiff continued at paras 13-14 of his affidavit of 18 November, viz:-

"13. I have no wish to interfere with the defendant's lawful exercise of statutory power.	However I believe that its said correspondence to me and the authority to and requests from Mr Barbaro raise serious questions of legal professional priviledge (sic), my right to silence and my priviledge (sic) against self incrimination.

14. The files of Lofra Pty Ltd contain many communications of a sensitive and highly confidential nature."

The plaintiff then dealt in paras 16-22 of his affidavit with the "background in regard to former client Jane Holmes/Cook", the person mentioned for the first time in Mr Barbaro's letter of
15 November (p.10).	In essence the plaintiff deposed that he had acted for Mrs Holmes in litigious matrimonial proceedings at the end of which the legal costs due to Lofra were in excess of $6000.
He said that "no contingency fee was charged" (para.18). Following a "dispute over the level of repayment" (para.18) of

these costs by Mrs Holmes, his Bill of Costs eventually came before Barblett DCJ of the Family Court of Australia.

Para 19 of his affidavit is as follows:-

"19. Counsel for Mrs Holmes [before Barblett J] raised the legality of part of a costs agreement which Mrs Holmes had signed which provided for a contingency fee. - - - "

This "costs agreement" is in the form of a letter dated

16 February 1990 sent by the plaintiff to Mrs Holmes, marked as annexure "B" but clearly intended to be annexure "F".	After stating that "it is difficult and undesirable to quote a lump sum fee" for certain proposed legal work under the Family Law Act 1975 (C'lth), it sets out "the basis upon which we [that is, Loftus & Cameron] propose to charge you for the conduct of this matter." This takes the form of a "scale of costs" for drawing documents and so on; a solicitor's time spent on skilled work other than the scaled work, is costed at $120 per hour.	The letter then states
-

"The amount of time spent and the length of documents prepared will be in accordance with our own estimation of the requirements of your case in order that the work be carried out properly.

Added to the basic fee arrived at in accordance with the above scale we shall retain 5% of the gross award or settlement sum received by you."	(emphasis mine)

Mrs Holmes signed a copy of the letter of 16 February 1990 in which she agreed to these terms.	It will be noted that the clause underlined was specifically set out by Mr Barbaro in his letter to the plaintiff of 15 November (p.11), as the litmus test by which the files he required to see were identified; it is clear that at least at this stage of his investigation his concern was with any charging by Lofra of a contingency fee of the type set out.
The provision underlined proposes a contingency fee in the sense that part of the solicitor's remuneration is to be a percentage of the amount which might be recovered by the client in the litigation then contemplated.	It should be noted that a solicitor's fee may be "contingent" in more than one sense.	It may be contingent, in the sense that a lawyer may agree not to charge his fees unless his client is successful; as will be seen, this is a perfectly proper contingency agreement.		The fee is contingent simply on the outcome of the litigation.		That is not what the plaintiff proposed here.		He proposed to charge a percentage of any amount received by his client.	His fee was contingent both on a successful outcome and on the sum received.
As will be seen, such a fee arrangement, known as champerty, involving gambling in litigation, is wholly improper, unethical and tortious.	This is because, as Lord Denning MR put it in Re Trepca Mines Ltd. (No.2) (1962) 3 WLR 955 at p.966:-

"The common law fears that the champertous maintainer might be tempted, for his own personal gain, to inflame

the damages, to suppress evidence, or even to suborn witnesses."

Setting aside for the moment the clause providing for a contingency fee, I make the following observations about the costs agreement of 16 February 1990.	First, most of the itemized amounts listed under "Scale of Costs" therein appear to exceed the costs for those items then allowable in the Family Court under Order 38 Rule 3.	Second, the making of a costs agreement of this type is authorized under Order 38 Rule 8 of the Family Law Rules and must meet both the requirements of Order 38 and those of the general law.	This costs agreement is notably deficient in both respects.	An off-hand sentence:	"You are advised that you may wish to obtain independent legal advice in relation to these costs arrangements" is not a sufficient compliance with Order 38 Rule 8(4)(b) which requires the solicitor, before a costs agreement is entered into, to advise the client of the availability of independent legal advice.	A glance at a practice book on Family Law would show this obligation is properly to be discharged.	The agreement does not put Mrs Holmes on notice that the costs to be charged by the plaintiff exceed the scale costs.	It does not inform her that she may be able to instruct a solicitor who will act for her for lower charges, and without the need to enter into a costs agreement.		It does not inform her that she may request a detailed account, provided she does so no later than 28 days after service upon her of a notice of her rights.	Pointlessly, it attaches a copy of Order 25 of the Rules; it fails to attach a

copy of the Principal Registrar's pamphlet prepared under Order 38 Rule 8(4)(a).	And so on.	In short, it is a notably deficient costs agreement as far as concerns the client's rights; it does not contain essential acknowledgments, authorizations and instructions from the client.

Paras 20-22 of the plaintiff's affidavit deal with the outcome of para 19, viz:-

"20. Following discussions with my Counsel I decided to abandon the proceedings [to recover his costs].	I therefore agreed to terminate the action on the basis that Mrs Holmes be forgiven her debt of approximately $6,000 to the firm - -

A month or so after the said court case Mrs Holmes complained to the defendant about me.	She accused me of champerty.	(I am advised by the defendant's executive officer that this complaint has since been withdrawn.)

I cannot locate a copy of the said complaint. However a copy of my reply thereto dated 3 July 1991 is annexed hereto and marked with the letter "H"."

Annexure "H" is a copy of a letter from the plaintiff to the defendant of 3 July 1991.	In it the plaintiff says, inter alia:-

"When this matter [that is, clearly, the aspect of a proposed contingency fee] was first raised in the Family court by Barblett DCJ I was most shocked as I had drawn the costs agreement between myself and my client without any sense of wrongdoing in relation to it.	I am most distressed, and still shocked by the further

developments in the matter.	Any action on my part which, on the face of it, may seem to have been contrary to law or to amount to some form of professional misconduct, was completely inadvertent.	I was totally unaware that the queried clause [this is clearly a reference to the clause providing for a contingency fee] amounted to any breach of law or practice.	I must confess to having been quite ignorant of the decision of the High Court in Clyne v NSW Bar Association. [(1960) 104 CLR 186].

Had I been aware of any such prohibition [against charging remuneration proportionate to the amount which might be recovered by the client in litigious proceedings] I would most certainly not have inserted a clause of that nature or anything like it in the agrreement (sic).	Once my attention was drawn to that situation I immediately expunged the percentage clause from all costs agreements and propose to maintain that situation for the future.
- - -
[Senior counsel] has pointed out to me that rr.8 and 8A of 0.38 of the Family Court Rules are drawn	in the broadest of terms and do not, in terms, specifically prohibit contingency fees, a fact indirectly adverted to by Fogartty J (sic) in the case of R Sheehan v Sheehan
13 Fam.L.R.	This case has also been drawn to my attention since drawing costs agreement.

Moreover, senior counsel also advises me that there is considerable doubt as to the continued existence in the Northern Territory of any offence of champerty. - -

However, despite any such legal uncertainties or confusion I have, as indicated above, determined to abide by the principle stated by the High Court in Clyne's case before any of the above legislation was introduced and to cease absolutely charging any form of contingency fee.	I again, also, would repeat my regret for an unintended breach of professional discipline and assure the Committee that it will not happen again in the future.

In all the circumstances I can only ask that the Law Society treat my actions with all possible lenience (sic) that can be attributed to an unintended breach of principle. - - - " (emphasis mine)

As to this letter, it is shocking and distressing, to use the plaintiff's language, that a legal practitioner of some 10 years standing - "first called to the Bar by the Honourable Society of the Middle Temple in 1981", and a legal practitioner in the Territory "for the last five years" (para.2) - should have thought it proper to enter into a costs agreement with a client providing for a contingency fee of this type, in relation to litigation.	It needs to be said plainly that a solicitor is precluded from acting on such a basis.	Such an arrangement is unethical for a solicitor and tortious, though not criminal, for reasons which emerge in the following discussion of some of the points raised in the plaintiff's letter of 3 July 1991.	The agreement of 16 February 1990 providing for such a fee is contrary to public policy, unenforceable, and void; there can be no question of the plaintiff having "forgiven" Mrs Holmes her "debt" for costs (para.20) in any meaningful sense of those words, because the plaintiff in these circumstances had no right to obtain his costs from her, having instituted to a void transaction; see Re Trepca Mines Ltd (No.2) (supra) at pp.967-8 per Lord Denning MR, and pp.974-5 per Pearson LJ.	Five points may be noted in the plaintiff's letter of 3 July.

First, in Clyne (supra), an Information had been laid against a solicitor charging him with what the High Court described at p.192 as the "obscure and dubious offence" of maintenance.	That offence involves a person giving assistance to

a party to litigation when that person neither has an interest in the litigation nor a lawful motive which justifies his doing so.
At pp.203-5, the High Court discussed the position of a solicitor in relation to the offence of maintenance.	The Court noted at
p.203 that maintenance was "still a civil wrong", and continued:-

"- - whether we regard it as a crime or as a civil wrong only, it is obvious that, in relation to maintenance, special considerations must apply to a solicitor, since it is, in a sense, the business of a solicitor to maintain litigation for his clients.	It would appear indeed to be impossible for a solicitor to be held in relation to legal proceedings conducted for a client, to be guilty of maintenance except perhaps in two cases, one of which might amount to champerty.		For a solicitor could hardly be held guilty of a crime in respect of conduct which is recognised by the law as perfectly proper professional conduct.	And it seems  to be established that a solicitor may with perfect propriety act for a client who has no means, and expend his own money in payment of counsel's fees and other outgoings, although he has no prospect of being paid either fees or outgoings except by virtue of a judgment or order against the other party to the proceedings.	 This, however, is subject to two conditions.	One is that he has considered the case and believes that his client has a reasonable cause of action or defence as the case may be.	And the other is that he must not in any case bargain with his client for an interest in the subject-matter of litigation, or (what is in subtance (sic) the same thing) for remuneration proportionate to the amount which may be recovered by his client in a proceeding: See Fleming, The Law of Torts (1957) p.638, where it is pointed out that the position in the United States is different."	(emphasis mine)

It can be seen that the contingency fee arrangement proposed by the plaintiff to Mrs Holmes in his letter of 16 February 1990 fell within the second condition mentioned by the High Court, and is not permissible.	It is the aggravated form	of maintenance known as champerty ('campi partitio', division of the field),

where litigation is maintained in consideration of a promise to give the maintainer a share in the proceeds of the litigation. See generally Sievwright v Ward (1935) NZLR 43.		While this is quite legitimate in the United States of America (though not in matrimonial matters) because of its law as to costs and the lack of legal aid, it has no place as yet in our law, though modified systems of contingency fees are under discussion in various places.	At best, the plaintiff's behaviour in seeking this fee, openly as he did, reveals a lamentable and wholly inexcusable ignorance on his part of a fundamental rule in	a solicitor's practice.

Second, in In Marriage of Sheehan (1990) 97 FLR 190, maintenance and champerty were alleged, the major contention being that the wife's solicitors had acted for her on a contingency basis in the sense that they would be paid their proper fees in the event of her action being successful, but would not be paid if it was unsuccessful.	It was the charging of this type of contingency fee which the High Court described as a practice of "perfect propriety" in Clyne (see p.15); it can be seen that it is not champertous.	In Sheehan, Fogarty J discussed the concepts of maintenance and champerty at pp.198-200 and, following Clyne (supra), held at p.205 that an agreement to be paid proper legal costs only in the event of success is not champerty or maintenance and is not contrary to public policy.	With respect, the decision is clearly correct; the plaintiff in his letter of 3 July 1991

appears to have misapprehended his Honour's views, and the nature of the contingency fee under discussion in Sheehan.

Third, it is correct that Order 38 Rules 8 and 8A of the Family Law Rules "do not, in terms, specifically prohibit contingency fees".	The Rules do not have to do so; the law does so, as far as concerns contingency fees of a champertous nature.
There is nothing wrong with a contingency fee of the type dealt with in Sheehan (supra).	That is very different from the type of champertous agreement entered into by the plaintiff with his client Mrs Holmes on 16 February 1990.	It is ludicrous to suggest that the Rules give any semblance of validity to champertous fee arrangements; in that respect there are no "legal uncertainties or confusion" as suggested by the plaintiff.

Fourth, it is clear, in my opinion, that there is no criminal offence of champerty in the Northern Territory, and there has been no such offence at least since the Act establishing the Criminal Code came into force on 1 January 1984.	Champerty, however, remains a tort throughout Australia, except where specifically abolished by statute, as in Victoria (though not for solicitors).	Wiggins v Lavy (1928) 44 TLR 721 illustrates the circumstances in which a solicitor may nevertheless take up a case on behalf of a poor client, and the terms on which he may do so.

Fifth, the plaintiff's letter of 3 July 1991 should have immediately caused alarm bells to ring within the Law Society, with its reference to the plaintiff having "immediately expunged the percentage clause from all costs agreements" and having determined "to cease absolutely charging any form of contingency fee".	Questions to which such references give rise are what, if any, contingency fees have been charged in the past; and, if they have, and they were of a champertous nature, what arrangements were being put in hand by the plaintiff to repay the client the fees wrongly charged.	Information on these aspects is not before me, but clearly the plaintiff's letter of 3	July 1991 necessitated that further enquiry be made.

The plaintiff's letter of 21 November 1991

During the hearing of the plaintiff's application, the plaintiff wrote the following letter to Mr Barbaro:-

"Further to your letter of the 15th instant, in as much as the laying of the complaint by Ms Jane Holmes/Cook would seem to waive her privilege you are welcome to inspect all books, accounts, documents etc in relation to her Family Law file (in four volumes) which is her only file in this office.

It is my belief that there are no files held by Loftus & Cameron containing any costs agreement including the percentage clause set out in paragraph (b) of your letter.

I am unable to advise you even by inspecting all of the Family Law files in the practice of any clients who have been requested to sign such an agreement at any time.

I am prepared to abide by the guidelines agreed between the Commissioner of Taxation and the Law Council of Australia in regard to inspection of client's files.

I reiterate the observation in my letter of 3 July of this year that I believe there is doubt whether a percentage costs agreement per se constitutes professional misconduct.	I would prefer that this issue be dealt with in relation to Holmes/Cook matter prior to the enormous disruption to my practice contemplated by the proposals the Society has set out in its letter of the 17th instant.
- - - "

To some extent the statement in the second paragraph of this letter does not square with the earlier statement by the plaintiff of 3 July 1991 (pp.17-18).	It is clear that the only proper course for the Society was to proceed to examine the files of the plaintiff.	It may well be that the Guidelines referred to in para.4 may in some respects provide a useful and practicable mechanism by which the Society might choose to proceed, in its investigation.		As to the final paragraph, I express no opinion as to whether the champertous agreement with Mrs Holmes constitutes professional misconduct, since that issue is not before me; that it is unethical and wrong behaviour by a solicitor is elementary.	It is obvious that the question of professional misconduct can only be considered after the Society is satisfied as to the full extent and circumstances of any champertous fee arrangements; the "enormous disruption" referred to in para.5 may well be avoided by full
co-operation with the investigator.

The submissions by the applicant

The privilege against self-incrimination

Mr McCormack submitted that by his letter of 15 November (p.10-11) Mr Barbaro in effect "required" the plaintiff to investigate himself.	Insofar as the charging of a contingency fee of the type set out in Annexure F	might amount to professional misconduct by the plaintiff, he was therefore being required to locate the very materials which would constitute the basis of any such charge of professional misconduct.	In Mr McCormack's submission the plaintiff could not lawfully be "required" to do so, because of the privilege or common law substantive right against self-incrimination	- "nemo tenetur seipsum prodere".

This expresses a fundamental principle of law: that no one is bound to answer any question or produce any document if to do so would tend to expose him to the imposition of a civil penalty or to conviction for a crime.	It may be said immediately that there is no question of criminal conduct here; champerty is not an offence in the Territory.

In this submission Mr McCormack relied on the principle set out in Hammond v The Commonwealth of Australia (1982) 152 CLR 188, as developed in Sorby v The Commonwealth of Australia (1983)
152 CLR 281.	In Hammond the applicant for injunctions had already been committed for trial on a charge under s.86(1)(a) of the Crimes Act (C'lth) of conspiring to export prohibited meat, when he was called before a Royal Commission and asked questions about

that conspiracy.	He objected to answering the questions on the ground that he might thereby incriminate himself.	The High Court granted an injunction restraining the questioning until the applicant had stood his trial, on the basis that the questioning would otherwise constitute a contempt of the trial court, there being a real risk that it would interfere with the course of justice.

The parties were in agreement as to several matters, including a submission that a witness before the Commission was not entitled to refuse to answer a question on the ground that the answer might incriminate him.	As to this, Gibbs CJ said at p.197-8:-

"I am by no means satisfied that these submissions are correct.	It would be necessary to find a clear expression of intention before one could conclude that the legislature intended to
over-ride so important a privilege as that against self- incrimination."

At p.200 Murphy J said:-

"- - the privilege is presumed to exist unless it is excluded by express words or necessary implication, that is, by unmistakable language."

Brennan J said at p.202 that the applicant:-

"- - is not amenable to compulsory interrogation [by the Commission] designed to obtain from him information as to the issues to be litigated at his trial:
- -
It is sufficient for present purposes to appreciate that it is a principle deep-rooted in our law and history that the Crown may not subject an accused person to compulsory process to obtain his answers upon the issue of his guilt of an offence with which he has been charged."

His Honour characterized the privilege against self-incrimination, at p.203, as follows:-

" - - a freedom so treasured by tradition and so central to the judicial administration of criminal justice."

Deane J said at p.206:-

"- - - it is fundamental to the administration of criminal justice that a person who is the subject of pending criminal proceedings in a court of law should not be subjected to having his part in the matters involved in those criminal proceedings made the subject of a parallel inquisitorial inquiry by an administrative tribunal with powers to compel the giving of evidence and the production of documents which largely correspond (and, to some extent, exceed) the powers of the criminal court.	Such an extracurial inquisitorial investigation of the involvement of a person who has been committed for trial in the matters which form the basis of the criminal proceedings against him constitutes, in my view, an improper interference with the due administration of justice in the proceedings against him in the criminal court and contempt of court."

It will be noted that these statements of the principle were in the content of a witness facing criminal charges, and there was

considerable emphasis on the requirements of the administration of criminal justice.

Sorby (supra) was a somewhat similar case involving witnesses proposed to be questioned before a Royal Commission; by this time, however, the Royal Commissions Act 1902 (C'lth) had been amended to provide that a witness could not refuse to answer "on the ground that the answer to the question might tend to incriminate him" (s.6A(2)).	Sorby had not been charged with any criminal offence.	In discussing generally the rule of the common law that no person may be compelled to incriminate himself,  Gibbs CJ said at pp.289-290:-

"Although the legislature may abrogate the privilege,there is a presumption that it does not intend to alter so important a principle of the common law.
In Kempley v The King [1944] A.L.R. 249, at p.253, Starke J. went so far as to say that "where authority is given to compel the examination of persons, the ordinary rule of the common law which protects a person from answering questions which tend to criminate him applies unless expressly excluded".	However, he went on to say that "whether the rule is excluded must depend upon the provisions of the legislative act or the nature of the subject", and this appears to recognize that an intention to exclude the privilege may appear although there are no express words of exclusion.	Although there are not wanting other statements to the effect that the privilege will not be taken away without express words (see, for instance, Crafter v Kelly [1941]
S.A.S.R. 237, at pp.241-242), it is not correct to say that if the legislature wishes to render the privilege unavailable it must in every case do so expressly.	The character and purpose of the statute may indicate that it should not be construed so as to preserve the privilege; see, e.g. Mortimer v Brown (1970) 122 C.L.R. 493, and Rees v Kratzmann (1965) 114 C.L.R. 63, esp. at
p.80, but cf. Mitcham v O'Toole (1977) 137 C.L.R. 150.

However, a statute will not be construed as excluding so valuable a privilege unless an intention to do so clearly appears; see R v Associated Northern Collieries (1910) 11 C.L.R. 738, at p.748, and Ex parte Grinham; Re Sneddon [1961] S.R. (N.S.W.) 862, at pp.870-871, 874-
875."

In Sorby (supra) at pp.309-310 Mason, Wilson and Dawson

JJ said:-

"We reject the submission that the privilege is merely a rule of evidence applicable in judicial proceedings and that it cannot be claimed in an executive inquiry.	We adhere to the conclusion we expressed in Pyneboard [(1982-83) 152 CLR 328] that the privilege against self- incrimination is inherently capable of applying in non- judicial proceedings.	See Kempley	[1944] A.L.R. 249., esp. at pp. 253 (per Starke J); 254 per Williams J.; Ex parte Grinham; Re Sneddon (1959) 61 S.R. (N.S.W.) 862; Commissioner of Customs and Excise v Harz [1967] 1 A.C. 760, at p.816.

The privilege against self-incrimination is deeply ingrained in the common law.	The principle is that a statute will not be construed to take away a common law right, including the privilege against self- incrimination, unless a legislative intent to do so clearly emerges, whether by express words or necessary implication: Pearce, Statutory Interpretation in Australia, 2nd ed. (1981) pars. 113-16; Pyneboard; Crafter v Kelly [1941] S.A.S.R. 237, at p.242.

Mortimer v Brown (1970) 122 C.L.R. 493 furnishes a compelling illustration of a statute which abrogates the privilege by necessary implication.	There it was held that s.250 of the Companies Act of 1961 (Q.) excluded the privilege in the public examination by a judge of directors of a company involved in voluntary liquidation.	In Pyneboard we concluded that it is less difficult to show that the privilege has been impliedly abrogated in the ordinary case where a statute imposes an obligation to answer questions otherwise than on oath, provide information or produce documents in the course of an administrative investigation than in the case of an examination on oath before a judicial officer whether or not an object of that examination is a preliminary to committal for trial or summary

prosecution.	As we there said, in deciding whether a statute impliedly excludes the privilege much depends on the language and character of the provision and the purpose which it is designed to achieve.	It is unnecessary to repeat the discussion of the various considerations that we undertook in that case." (emphasis mine)

At p.311 their Honours said, with reference to provisions in the Commissions of Inquiry Act of 1950 (Q'land):-

"The context furnishes provisions - - which protect a witness in respect both of a refusal to answer questions and to produce documents if he has a reasonable excuse.
There is no sufficient indication in the Act that a witness is not entitled to that protection if the reason for his refusal is a well-grounded claim to the privilege against self-incrimination.

According, in our opinion, the State Act does not abrogate the privilege."

It is clear from the authorities that the privilege against self-incrimination is inherently capable of applying in non-judicial proceedings such as the Law Society investigation presently under way.	Whether it is available in that investigation depends on the proper construction of the relevant provisions of the Legal Practitioners Act.	There are no words in the Act which expressly exclude the privilege.	The question then is whether it is clearly implicit in the Act that the Legislative Assembly intended to exclude the privilege.

I incline to the view that it did not.	The purpose of Part VI of the Act is the discipline of the legal profession.

What is in issue in an investigation under Part VI is the professional conduct of a practitioner.		The	Society has ample power under s.47(3) to carry out any such investigation, without intruding upon the privilege as far as it concerns the solicitor under investigation.	Under s.47B it may lawfully require a practitioner to produce all his files.	If the practitioner refuses to do so on the basis that he has a "reasonable excuse" for refusing, based on his privilege against self-incrimination, the public interest would usually appear to require the immediate suspension from practice of that practitioner under one or other of the powers in s.27(1) of the Act, and a full and immediate investigation by the Society of the files of the practice, completely independently of the practitioner.

But it is not necessary to reach a concluded view on the question whether the Act excludes the privilege against self- incrimination.	As noted earlier, no question of an offence under the criminal law arises in relation to the subject matter of the present investigation; champerty is not an offence in the Territory.	As is made clear in Pyneboard (supra) the privilege against self-incrimination applies to the answering of questions and the provision of information which might tend to expose the party to the imposition of a civil penalty, as well as to those which might tend to expose him to conviction for a crime.	But the scope of the privilege does not extend beyond civil penalties and crimes.	No question of a civil penalty is in issue here; any

proceedings by the Law Society for professional misconduct are not properly so characterised.

Accordingly, I reject Mr McCormack's submissions insofar as they rely on the privilege against
self-incrimination.

Legal professional privilege

Mr McCormack submitted that the interlocutory relief sought should be granted because the plaintiff, as a solicitor, was prevented from disclosing to the Society's investigator, confidential communications passing between himself and his clients.	This prohibition on the plaintiff is an aspect of the privilege of his client, known as legal professional privilege.
To fall within its scope the communications must be made either to enable the client to obtain legal advice or the solicitor to give it; or made with reference to litigation actually taking place or reasonably contemplated.

Mr McCormack referred to Grant v Downs (1976) 135 CLR 674.	In that case a report had been prepared following the death of a patient in a psychiatric hospital.	The report had been made to serve several purposes, one of which was to obtain legal advice as to any possible civil liability.	The High Court rejected the claim that the report was subject to legal professional privilege in proceedings for discovery in an action, on the basis that the privilege was confined to documents brought into existence for the

sole purpose of being submitted to legal advisers for advice, or for use in legal proceedings.	The rationale for the privilege is expressed at p.685, viz:-

"The rationale of this head of privilege, according to traditional doctrine, is that it promotes the public interest because it assists and enhances the administration of justice by facilitating the representation of clients by legal advisers, the law being a complex and complicated discipline.	This it does by keeping secret	their communications, thereby inducing the client to retain the solicitor and seek his advice, and encouraging the client to make a full and frank disclosure of the relevant circumstances to the solicitor.	The existence of the privilege reflects, to the extent to which it is accorded the paramountcy of this public interest over a more general public interest, that which requires that in the interests of a fair trial litigation should be conducted on the footing that all relevant documentary evidence is available.
As a head of privilege legal professional privilege is so firmly entrenched in the law that it is not to be exorcised by judicial decision.	None the less there are powerful considerations which suggest that the privilege should be confined within strict limits."

I do not consider that the particular costs agreements the subject of Mr Barbaro's investigation fall within the protection of the privilege; in no meaningful way are they part of any actual or anticipated litigation.	They cannot be said to be of a confidential nature.	They do not fall within the rationale for the privilege, as expressed in Grant v Downs.

Mr McCormack also referred to Baker v Campbell (1983)

153 CLR 52, which makes it clear that the privilege is a general right protecting from compulsory disclosure communications falling within its scope.	It applies also in extra-judicial proceedings.

The privilege can be abrogated by statute, but this will not lightly be inferred.	There is nothing in the Legal Practitioners Act which expressly abrogates the privilege.	The question is whether it applies in investigations being carried out by the Law Society under Part VI of the Act.

Parry-Jones v Law Society (1969) 1 Ch.1 is an authority apparently directly in point.	In an application similar to the plaintiff's application, the Court of Appeal held, inter alia, that the contractual duty of confidence owed by a solicitor to his client was overriden by the duty to obey the general law.
Diplock LJ considered that legal professional privilege was irrelevant when the subject of concern was not judicial or quasi- judicial proceedings; that view does not now represent the law in Australia - see Baker v Campbell (supra).		In other respects, however, I do not consider that Baker v Campbell diminishes the thrust of the reasoning in Parry-Jones.	It is necessary in the public interest, in my view, that the investigative power of the Law Society under Part VI over-ride the plaintiff's duty of confidence and the client's legal professional privilege; as
Lord Denning MR said at p.8 of Parry-Jones:-

"In my opinion that rule [by the Law Society] is a valid rule which overrides any privilege or confidence which otherwise might subsist between solicitor and client.
It enables the Law Society for the public good to hold an investigation, even if it involves getting

information as to clients' affairs.	But they and their accountant must, of course, themselves respect the obligation of confidence.	They must not use it for any purpose except the investigation, and any consequential proceedings.	If there should be subsequent application to the disciplinary committee, the information can be used for that purpose.	In all other respects the usual rules of legal professional privilege apply - see section 45(6) of the Act."		(emphasis mine)

This appears to me, with respect, to be full of common sense.	Parry-Jones was followed in Brayley v Wilton (1976) 2 NSWLR 495, where it was held that a solicitor was bound to produce his clients' files to an inspector acting under the Legal Practitioners Act (1898 NSW).	However, insofar as it rested on the law as to legal professional privilege as stated by Diplock LJ in Parry-Jones, it is no longer good law.	I adopt the approach indicated by Smart J in A Solicitor v The Law Society (unreported,
26 November 1987, Supreme Court of New South Wales).

I do not consider that the privilege will apply in practice to investigations under the Act directed to the professional conduct of a solicitor vis a vis his client, at least as far as investigations of costs agreement are concerned.	It cannot be said in such cases that in general the solicitor cannot answer questions without disclosing communications made to him professionally by his client.

Further, costs agreements of the type the subject of this investigation, containing champertous provisions, are

contrary to the public interest and fall outside the scope of the privilege.	There is ample evidence in this case to warrant the concern of the Law Society that the solicitor has entered into champertous costs agreements.	I consider it would be contrary to the public interest and the administration of justice to allow legal professional privilege to be used to protect costs agreements which on their face are champertous.	I note in passing that in A.M. & S. Europe Ltd v Commission of the European Communities (1983) QB 878 at pp.927 and 951 the European Court of Justice recognised that legal professional privilege may be abused and that this possibility would be reduced if the proper standards of professional ethics are observed and enforced.	That is the object of the investigation under Part VI of the Act.

It is clear that the choice of the means of exercising the investigative power under Part VI should be determined by the Society with a view to interfering with the confidential relationship of solicitor and client to the least possible extent necessary to achieve the ends sought by Part VI.

Adapting and applying what was said in Attorney-General (NT) v Kearney (1985) 61 ALR 55, I consider that it would be contrary to the public interest which legal professional privilege is designed to serve	- the better administration of justice - that it be used to protect champertous costs agreements framed by

solicitors.	Such agreements are directed against the public interest.

For these reasons I would not grant the relief sought on the basis of the arguments advanced as to legal professional privilege.

These are the reasons for the order made on 21 November refusing the relief sought.

Addendum

On 21 November I reserved consideration of the question

of costs. I now rule that the defendant should have its costs of the application, and I certify for senior counsel in terms of Rule 63.72(9)(a).

During the course of the hearing and at the request of the plaintiff, I ordered that the publication of the names of the parties and of the evidence be prohibited.		It is possible that that order was expressed in terms too wide to fall within the proper scope of s.57 of the Evidence Act.	In any event, I see no further need for any such prohibition and I now revoke all such orders made during the hearing.