Goodbye job applications, hello dream career
Seize control of your career and design the future you deserve with LW career

WA solicitor launched proceedings that were ‘doomed to fail’

A principal of a Western Australian commercial law practice accused of commencing action in the Supreme Court and seeking indemnity costs in a proceeding that was “doomed to fail” was found to have engaged in unsatisfactory professional conduct. 

user iconNaomi Neilson 18 June 2021 Big Law
Perth
expand image

Small firm Metaxas Legal’s principal Arthur Metaxas is yet to hear the penalties and costs for “commencing, serving, maintaining and prosecuting proceedings which were always doomed to fail” after he and an opposing solicitor failed to agree on an arbitrator. He was found to have engaged in unsatisfactory professional conduct. 

Mr Metaxas was accused of commencing civil proceedings “which lack a legal foundation”, with the Western Australian State Administrative Tribunal (WASAT) cautioning that “to do so squanders valuable court time and resources and results in the practitioners’ own client incurring unnecessary costs” in addition to the risk of adverse costs. 

The Legal Practice Complaints Committee (LPCC) contended that the public, who funds the legal system, is entitled to expect that proceedings would not commence when there is no basis for doing so. Agreeing with this, the tribunal found that Mr Metaxas’ conduct “fell short of the standard of competence and diligence” that a member of the public is entitled to expect of a reasonably competent Australian practitioner. 

 
 

In 2018, Mr Metaxas was instructed to act for a client in relation to a dispute arising under a contract for the sale of a rent roll and concerned a payable sum. Under the contract, if a dispute arose it would be resolved by an arbitrator agreed on by the parties. If one is not agreed, either party could ask the president of the Law Society of Western Australia to appoint an arbitrator seven days after initial nomination.

In March of that year, Mr Metaxas nominated an arbitrator that was ultimately not accepted by the opposing party and, on 9 April, “self-evidently, significantly more than seven days [later]”, Mr Metaxas wrote to the president to request a referral. 

On receipt of that email, the opposing solicitor emailed the president and copied Mr Metaxas to inform the Law Society that the appointment of an arbitrator in the dispute was premature and requested that the president defer the appointment. 

Seven days later, Mr Metaxas wrote to the opposing counsel and informed him that unless he withdrew his email to the president by close of business that same day, he would commence proceedings the next. Two days later, after the opposing counsel said he would not withdraw, Mr Metaxas filed an originating summons and a supporting affidavit seeking the court to appoint his originally desired arbitrator. 

The next day, the president returned their emails informing both parties that she had found an arbitrator, different to the barrister requested by Mr Metaxas. That afternoon, opposing counsel emailed Mr Metaxas endorsing the appointment. 

Mr Metaxas accepted that before he commenced proceedings, he made no inquiries of the president about whether, despite having received the opposing solicitor’s request to defer the appointment, she intended to appoint an arbitrator to their dispute and, if she did, what time they should expect the referral. 

He maintained under cross-examination that he did not do so because he believed there was no procedure in place for parties to contact the president to make inquiries about the progress of the appointment of an arbitrator and he had a “strong conviction” that having a “private communication” with the president would have been improper “because it would have been embroiling her in the dispute”. 

The tribunal noted that neither of the emails to the president were deemed to be private because each solicitor copied the other into their communications. 

“We do not accept that [Mr Metaxas] was entirely honest in his evidence before us about matters crucial to the resolution of this matter. Instead, we find the practitioner has endeavoured to justify or explain aspects of his conduct with the benefit of hindsight and in a way which would put the best light upon particular actions or statements made by him in the course of his representation of his client and his dealings with the Legal Profession Complaints Committee,” WASAT submitted. 

Prior to the directions hearing but after the president’s arbitrator referral, Mr Metaxas prepared and filed affidavits in support of an application that the defendants pay the plaintiff’s costs of the proceedings on an indemnity basis. At the hearing, the court dismissed the proceedings and the costs application and instead ordered that the plaintiff pay the defendant’s costs in the sum of $700. 

In addition, the practitioner intended to file proceedings under section 11(4) [included below] of the Commercial Arbitration Act 2010 (CA Act) due to a “reasonable belief for him to do so” but that he had simply made a typographical error in instead filing it under s 11(3), as he did in correspondence with opposing solicitor and originating summons.

“Even if we were wrong about the practitioner’s intentions and were to accept the practitioner’s evidence that he had intended to proceed under s 11(4) of the CA Act, we do not accept that he would have had a reasonable basis for commencing the proceedings when he did so,” the tribunal found. 

Mr Metaxas submitted that in circumstances where seven days had passed since the request for appointment had been made and having heard nothing from the president as to her intentions over that time, he was entitled to conclude that the agreed appointment process had failed, and he could commence proceedings. 

Although the tribunal contended that it was regrettable there had been no communication from the president despite the fact she had received several pieces of correspondence about the arbitrator appointment from both parties, it noted that taking seven days to respond to a request did not “amount to such a delay that it was reasonable to conclude, in the absence of an inquiry as to her intentions, that the president had no intention of appointing an arbitrator.” 

“Further, once the appointment of the arbitrator had been made by the president and [Mr Metaxas] had been informed that the arbitrator was agreed to by the [opposing solicitor], the making of an application of indemnity costs was of itself unjustified and doomed to fail,” the tribunal added. 

The entire judgement can be found on AustLII: Legal Profession Complaints Committee and Metaxas [2021] WASAT 82 (14 June 2021).

The particulars of the Commercial Arbitration Act 2010 can be found here

*Section 11(3) and 11(4) are also below: 

11(3):

Failing such agreement, 

  •     (a) In an arbitration with three arbitrators and two parties, each party is to appoint one arbitrator, and the two arbitrators so appointed are to appoint the third arbitrator; if a party fails to appoint the arbitrator within 30 days of receipt of a request to do so from the other party, or if the two arbitrators fail to agree on the third arbitrator within 30 days of their appointment, the appointment is to be made, on the request of a party, by the court, and
  •     (b) In an arbitration with a sole arbitrator, if the parties are unable to agree on the arbitrator, an arbitrator is to be appointed, on the request of a party, by the court, and
  •     (c) In an arbitration with two, four or more arbitrators or with three arbitrators and more than two parties the appointment is to be made, at the request of a party, by the court.
11(4):

Where, under an appointment procedure agreed on by the parties: 

  •     (a) A party fails to act as required under the procedure, or
  •     (b) The parties, or two or more arbitrators, are unable to reach an agreement expected of them under the procedure, or
  •     (c) A third party, including an institution, fails to perform any function entrusted to it under the procedure. 
Any party may request the court to take necessary measures, unless the agreement on the appointment procedure provides other means for securing the appointment.