Liability of Legal Executives

[Ext User(Peter)]

A NZ case from some years ago bothers me. A man owed a finance company
$10,000 unsecured and could not pay. The company loaned him a further
$35,000 as long as he could find security for the $45,000, which he did by
courtesy of his elderly parents. He was bankrupt or about to be at the
time. A legal executive working for the finance company's solicitor
drafted guarantee and mortgage documents and the man uplifted the
Certificate of Title (mortgage free) from the parents' solicitor
(presumably he had their written permission to uplift it). They signed the
papers in front of the legal executive. She had grave misgivings about the
transaction, said she was acting for the finance company and not the
parents, and strongly advised them to seek independent advice, and made
them sign a memorandum to that effect. Having faith in their son they
signed anyway.

The parents obtained an interim injunction the day before the inevitable
mortgagee sale and there was a hearing a short time later on whether the
injunction should remain. Their lawyer tried to argue that the legal
executive had a fiduciary responsible to or were acting for the parents
which the judge rejected, at which point the house was nearly down the
gurgler. The astute and kindly judge suggested perhaps that the lawyer
consider the concept of an unconscionable bargain over lunch. The upshot
was that the legal executive knew it was an unconscionable bargain and that
this knowledge was imputed to the finance company through agency, hence the
house was saved. I could not find any further case on this matter in the
reports, so I assume that the liquidator of the finance company, being less
brave than Oliver Twist, was not going to come back for a second helping
from the same judge. I assume that the elderly couple still pray facing
east five times a day (just kidding!).

Sorry to bore you with this saga, but my concern is for the 27yo (then)
legal executive. Assuming she did not share her thoughts with her
employing solicitor or the principal of the finance company, could she be
personally liable for inadvertently dropping the finance company in it,
assuming that the solicitor's own pocket was not deep enough. Granted,
some aspects may be state/country dependent, but general principles would
presumably be the same.

Unfortunately the judgement is not on the internet, the case being Bowkett v
Action Finance Ltd [1992] 1 NZLR 449.

[Ext User(Phil Allison)]

"Peter"
>
>A NZ case from some years ago bothers me.


** What a desperate bloody wanker you are - Peter.

Do you actually read case drivel like this for fun ??

Go figure out what " natural justice " is and how it works in practice.

That should keep an autistic like you occupied for the next 20 -30 years.





............ Phil

[Ext User(Heretic)]

On Sat, 19 Nov 2005 15:44:31 +1100, Phil Allison wrote:

>
> "Peter"
>>
>>A NZ case from some years ago bothers me.
>
>
> ** What a desperate bloody wanker you are - Peter.
>
> Do you actually read case drivel like this for fun ??
>
> Go figure out what " natural justice " is and how it works in practice.
>
> That should keep an autistic like you occupied for the next 20 -30 years.


WWWWWHHHHHHHHOOOOOOOOOOSSSSSSSSSSHHHHHHHHHHHH!!!!! !!!!!!

You have NFI, toaster-boy.

[Ext User(Heretic)]

On Sat, 19 Nov 2005 17:19:20 +1300, Peter wrote:

> A NZ case from some years ago bothers me. A man owed a finance company
> $10,000 unsecured and could not pay. The company loaned him a further
> $35,000 as long as he could find security for the $45,000, which he did
> by courtesy of his elderly parents. He was bankrupt or about to be at
> the time. A legal executive working for the finance company's solicitor
> drafted guarantee and mortgage documents and the man uplifted the
> Certificate of Title (mortgage free) from the parents' solicitor
> (presumably he had their written permission to uplift it). They signed
> the papers in front of the legal executive. She had grave misgivings
> about the transaction, said she was acting for the finance company and
> not the parents, and strongly advised them to seek independent advice,
> and made them sign a memorandum to that effect. Having faith in their
> son they signed anyway.
>
> The parents obtained an interim injunction the day before the inevitable
> mortgagee sale and there was a hearing a short time later on whether the
> injunction should remain. Their lawyer tried to argue that the legal
> executive had a fiduciary responsible to or were acting for the parents
> which the judge rejected, at which point the house was nearly down the
> gurgler. The astute and kindly judge suggested perhaps that the lawyer
> consider the concept of an unconscionable bargain over lunch. The
> upshot was that the legal executive knew it was an unconscionable
> bargain and that this knowledge was imputed to the finance company
> through agency, hence the house was saved. I could not find any further
> case on this matter in the reports, so I assume that the liquidator of
> the finance company, being less brave than Oliver Twist, was not going
> to come back for a second helping from the same judge. I assume that
> the elderly couple still pray facing east five times a day (just
> kidding!).
>
> Sorry to bore you with this saga, but my concern is for the 27yo (then)
> legal executive. Assuming she did not share her thoughts with her
> employing solicitor or the principal of the finance company, could she
> be personally liable for inadvertently dropping the finance company in
> it, assuming that the solicitor's own pocket was not deep enough.

Maybe, but principals don't sue their agents for the principal's loss in
this sort of case. Be not concerned.

> Granted some aspects may be state/country dependent, but general
> principles would presumably be the same.
>
> Unfortunately the judgement is not on the internet, the case being
> Bowkett v Action Finance Ltd [1992] 1 NZLR 449.

This result might also occur in both the UK and Australia. Who knows where
this area of law, and unjust enrichment, might go? See "Account of
profits, contracts and equity", Gleeson and Watson, in The Australian Law
Jornal, November 2005, page 676.

[Ext User(MrFlibble)]

In article <437ea758@clear.net.nz>, Peter <peterwn@parazzdise.net.nz>
wrote:

> Sorry to bore you with this saga, but my concern is for the 27yo (then)
> legal executive. Assuming she did not share her thoughts with her
> employing solicitor or the principal of the finance company, could she be
> personally liable for inadvertently dropping the finance company in it,
> assuming that the solicitor's own pocket was not deep enough. Granted,
> some aspects may be state/country dependent, but general principles would
> presumably be the same.

Not in Australia no. The person was acting as an employee within their
job decription. So I doubt this would make them personally liable.

[Ext User(Peter)]

MrFlibble wrote:

>
> Not in Australia no. The person was acting as an employee within their
> job decription. So I doubt this would make them personally liable.

I may be wrong but I presume this is because employees are indemnified by an
explicit or implied condition of employment contracts (meaning in practice
any claimant would sue the employer in the first instance). Such an
indemnity becomes useless if the employer tanks. For the employee to
immune to such claims, there must be some wider law (legislation or equity)
that applies - not merely the employment contract. In practice many
employees would be protected by poverty - they are not worth suing.

[Ext User(Otter)]

"MrFlibble" <figfhifih@fifihfg.com> wrote in message
news:201120051046121387%figfhifih@fifihfg.com...
> In article <437ea758@clear.net.nz>, Peter <peterwn@parazzdise.net.nz>
> wrote:
>
>> Sorry to bore you with this saga, but my concern is for the 27yo (then)
>> legal executive. Assuming she did not share her thoughts with her
>> employing solicitor or the principal of the finance company, could she be
>> personally liable for inadvertently dropping the finance company in it,
>> assuming that the solicitor's own pocket was not deep enough. Granted,
>> some aspects may be state/country dependent, but general principles would
>> presumably be the same.
>
> Not in Australia no. The person was acting as an employee within their
> job decription. So I doubt this would make them personally liable.

You don't know much about the law of contractual obligations of agents to
their principals (including employees to their employers) or the principles
underlying vicarious liability, eh?

[Ext User(Tony Smith)]

Otter wrote:
> You don't know much about the law of contractual obligations of
> agents to their principals (including employees to their employers)
> or the principles underlying vicarious liability, eh?


Well, we are all ears.

How about you tell us what you know on the topic, and how you think it
applies.

I'm particularly interested in the vicarious liability part.

--

Tony Smith

[Ext User(Otter)]

"Peter" <peterwn@parazzdise.net.nz> wrote in message
news:437fc668@clear.net.nz...
> MrFlibble wrote:
>
>>
>> Not in Australia no. The person was acting as an employee within their
>> job decription. So I doubt this would make them personally liable.
>
> I may be wrong

No "maybe" about it.

> but I presume this is because employees are indemnified by an
> explicit or implied condition of employment contracts (meaning in practice
> any claimant would sue the employer in the first instance).

Incorrect resumption.

> Such an
> indemnity becomes useless if the employer tanks. For the employee to
> immune to such claims, there must be some wider law (legislation or
> equity)
> that applies - not merely the employment contract. In practice many
> employees would be protected by poverty - they are not worth suing.

It's exactly the same when the employee is at fault in a standard
crash-and-bash case. The employee has no legal immunity. The employer will
have it's insurance coverage, even if it is insolvent. Whether the
employer's insurance coverage is good enough to protect the employee is in
the lap of the gods.

[Ext User(Otter)]

"Tony Smith" <adolphuzspriggs@ _hotmail.com> wrote in message
news:xn0e9yqzg1gmer6006@news.individual.net...
> Otter wrote:
>> You don't know much about the law of contractual obligations of
>> agents to their principals (including employees to their employers)
>> or the principles underlying vicarious liability, eh?
>
>
> Well, we are all ears.

If you are speaking for yourself, things must get rather noisy for you.

> How about you tell us what you know on the topic, and how you think it
> applies.

How about you put your money on the table?

> I'm particularly interested in the vicarious liability part.

No doubt. It's the non-contractual liability part, where employers get to
be vicariously liable for their employees' behaviour. The employer would
not otherwise be required to take responsibility.

[Ext User(Tony Smith)]

Otter wrote:



> > How about you tell us what you know on the topic, and how you think
> > it applies.
>
> How about you put your money on the table?

On the contrary, you have the floor.
Now lets see what you have got.

>
> > I'm particularly interested in the vicarious liability part.
>
> No doubt. It's the non-contractual liability part, where employers
> get to be vicariously liable for their employees' behaviour. The
> employer would not otherwise be required to take responsibility.


That's not a bad "dictionary" definition, but as I'm sure you realise,
it's a tad more complicated than that.

There have been some very interesting recent cases on vicarious
liability, I'm interested to see how you weave the decided case law
into an argument to support the position you have already taken.


Seems a reasonable request, particularly in a legal discussion forum.
But if you are empty handed, no problem.




Tony Smith

[Ext User(Peter)]

Otter wrote:

>
> "Peter" <peterwn@parazzdise.net.nz> wrote in message
> news:437fc668@clear.net.nz...
>> MrFlibble wrote:
>>
>>>
>>> Not in Australia no. The person was acting as an employee within their
>>> job decription. So I doubt this would make them personally liable.
>>
>> I may be wrong
>
> No "maybe" about it.
>
>> but I presume this is because employees are indemnified by an
>> explicit or implied condition of employment contracts (meaning in
>> practice any claimant would sue the employer in the first instance).
>
> Incorrect resumption.

Look at the situation where an employee gets personally sued over an
incident arising out of carrying out his or her normal duties, for example
someone suing a parking warden over a properly issued ticket, a power
company employee disconnecting someone for arrears or a manager taking
appropriate disciplinary action with respect to a subordinate. These
employees have the reasonable expection that the employer would deal with
any such lawsuit on their behalf, and that would be an implied term of
their employment contract. A similar situation would arise where employees
are sued for alleged errors of judgement, this being particularly
applicable to directors, senior managers and professional staff.

The employee can be in a bind where the activity accused of is outside the
usual bounds of employment, even where the employee is plainly innocent. eg
a teacher accused of sexual conduct. In such cases, unions may have
policies to coming to the aid of their members in such cases.

>
>> Such an
>> indemnity becomes useless if the employer tanks. For the employee to
>> immune to such claims, there must be some wider law (legislation or
>> equity)
>> that applies - not merely the employment contract. In practice many
>> employees would be protected by poverty - they are not worth suing.
>
> It's exactly the same when the employee is at fault in a standard
> crash-and-bash case. The employee has no legal immunity. The employer
> will
> have it's insurance coverage,
The employer has this cover in part for precisely for the above reason. This
would be of no salvation to a drunk employee, since an employer does not
need to indemnify an employee whose actions are 'beyond the pale'. I knew
of a case where an employee was drunk in a parked company car. a passer-by
concerned that the employee may be ill approached the car whereupon the
employee drove off and hit a tree totalling the car. The insurance paid
out on the car, then endeavoured to seek recovery from the employee (or
rather ex-employee).

> even if it is insolvent. Whether the
> employer's insurance coverage is good enough to protect the employee is in
> the lap of the gods.
Which comes back to the point I made above.

[Ext User(Peter)]

Phil Allison wrote:

>
> "Peter"
>>
>>A NZ case from some years ago bothers me.
>
>
> ** What a desperate bloody wanker you are - Peter.
>
> Do you actually read case drivel like this for fun ??
>
> Go figure out what " natural justice " is and how it works in practice.
>
> That should keep an autistic like you occupied for the next 20 -30
> years.
>
Thanks, Phil for your thoughtful contribution on this topic.

[Ext User(Otter)]

"Tony Smith" <adolphuzspriggs@ _hotmail.com> wrote in message
news:xn0e9ythl1jyhfo007@news.individual.net...
> Otter wrote:
>
>
>
>> > How about you tell us what you know on the topic, and how you think
>> > it applies.
>>
>> How about you put your money on the table?
>
> On the contrary, you have the floor.
> Now lets see what you have got.
>
>>
>> > I'm particularly interested in the vicarious liability part.
>>
>> No doubt. It's the non-contractual liability part, where employers
>> get to be vicariously liable for their employees' behaviour. The
>> employer would not otherwise be required to take responsibility.
>
>
> That's not a bad "dictionary" definition, but as I'm sure you realise,
> it's a tad more complicated than that.
>
> There have been some very interesting recent cases on vicarious
> liability, I'm interested to see how you weave the decided case law
> into an argument to support the position you have already taken.

The position I have taken is this -

"You don't know much about the law of contractual obligations of agents to
their principals (including employees to their employers) or the principles
underlying vicarious liability, eh?"

That's because the OP made some assumptions about whether an agent
(including an employee) is immune from liability to third parties, where
that liability is imposed on the agent's principal (including an employer).

If the OP wants to argue the toss, so be it. If you want to do so, please
proceed, but you can't ask me to deal with the OP's assumptions in detail.

> Seems a reasonable request, particularly in a legal discussion forum.
> But if you are empty handed, no problem.

You may have that straw man back.

[Ext User(Phil Allison)]

"Peter"

>>>
>>>A NZ case from some years ago bothers me.
>>
>>
>> ** What a desperate bloody wanker you are - Peter.
>>
>> Do you actually read case drivel like this for fun ??
>>
>> Go figure out what " natural justice " is and how it works in practice.
>>
>> That should keep an autistic like you occupied for the next 20 -30
>> years.
>>
> Thanks, Phil for your thoughtful contribution on this topic.
>


** What a pathetic kiwi arsehole.



.......... Phil

[Ext User(Otter)]

"Peter" <peterwn@parazzdise.net.nz> wrote in message
news:437fee01@clear.net.nz...
> Otter wrote:
>
>>
>> "Peter" <peterwn@parazzdise.net.nz> wrote in message
>> news:437fc668@clear.net.nz...
>>> MrFlibble wrote:
>>>
>>>>
>>>> Not in Australia no. The person was acting as an employee within their
>>>> job decription. So I doubt this would make them personally liable.
>>>
>>> I may be wrong
>>
>> No "maybe" about it.
>>
>>> but I presume this is because employees are indemnified by an
>>> explicit or implied condition of employment contracts (meaning in
>>> practice any claimant would sue the employer in the first instance).
>>
>> Incorrect resumption.
>
> Look at the situation where an employee gets personally sued over an
> incident arising out of carrying out his or her normal duties, for example
> someone suing a parking warden over a properly issued ticket, a power
> company employee disconnecting someone for arrears or a manager taking
> appropriate disciplinary action with respect to a subordinate. These
> employees have the reasonable expection that the employer would deal with
> any such lawsuit on their behalf, and that would be an implied term of
> their employment contract. A similar situation would arise where
> employees
> are sued for alleged errors of judgement, this being particularly
> applicable to directors, senior managers and professional staff.

The specific examples you mention are all cases where the person concerned
acted correctly as the agent of the principal. The agent is legally
entitled to whatever protection the principal has to justify or authorise
the action.

You don't need any theory of implied terms in this situation.

In the case of errors of judgement, the error of judgement is either within
the scope of the agent's (or employee's) authority or it is not. If it is,
the same principle applies as above. If it is not, the agent (or employee)
is at some risk. As it happens, the courts apply a rather generous approach
to what is within the scope of authority, so most injured third parties will
be able to go after the principal (or employer), who is more than likely
insured.

The cases you have not mentioned is the everyday case of the employee
travelling during their emploment who has a car accident due to their
negligence. The third party can sue the employee (ie their car insurer) or
the employer (ie their insurer).
There isn't much practical need to sue the employee, but they always retain
their personal liability for their own torts on first principles.

> The employee can be in a bind where the activity accused of is outside the
> usual bounds of employment, even where the employee is plainly innocent.
> eg
> a teacher accused of sexual conduct. In such cases, unions may have
> policies to coming to the aid of their members in such cases.

Not a good example, I would have thought!

>>> Such an
>>> indemnity becomes useless if the employer tanks. For the employee to
>>> immune to such claims, there must be some wider law (legislation or
>>> equity)
>>> that applies - not merely the employment contract. In practice many
>>> employees would be protected by poverty - they are not worth suing.
>>
>> It's exactly the same when the employee is at fault in a standard
>> crash-and-bash case. The employee has no legal immunity. The employer
>> will
>> have it's insurance coverage,
>
> The employer has this cover in part for precisely for the above reason.
> This
> would be of no salvation to a drunk employee, since an employer does not
> need to indemnify an employee whose actions are 'beyond the pale'. I knew
> of a case where an employee was drunk in a parked company car. a
> passer-by
> concerned that the employee may be ill approached the car whereupon the
> employee drove off and hit a tree totalling the car. The insurance paid
> out on the car, then endeavoured to seek recovery from the employee (or
> rather ex-employee).
>
>> even if it is insolvent. Whether the
>> employer's insurance coverage is good enough to protect the employee is
>> in
>> the lap of the gods.

> Which comes back to the point I made above.

The employee may well be personally liable in circumstances where the
employer is insolvent and has no insurance cover. That is, and has always
been, a possibility in our legal system ie the common law system of torts.
The employee has no a priori legal immunity protecting them from their own
torts.

[Ext User(Tony Smith)]

Otter wrote:

>
> The position I have taken is this -
>
> "You don't know much about the law of contractual obligations of
> agents to their principals (including employees to their employers)
> or the principles underlying vicarious liability, eh?"
>

Then you would be very, very wrong wouldn't you...

> That's because the OP made some assumptions about whether an agent
> (including an employee) is immune from liability to third parties,
> where that liability is imposed on the agent's principal (including
> an employer).
>

I wasn't interested in the (wrong) assumptions made by the OP, I was
interested in how you were going to support the statements you made.


But I see that your "argument" is as empty as your head.

Never mind, perhaps some other time on a topic you are more comfortable
with.


<snip mindless blathering abut straw men>




Tony Smith

[Ext User(Deadly Ernest)]

On Sat, 19 Nov 2005 17:19:20 +1300, Peter <peterwn@parazzdise.net.nz>
wrote:

>A NZ case from some years ago bothers me. A man owed a finance company
>$10,000 unsecured and could not pay. The company loaned him a further
>$35,000 as long as he could find security for the $45,000, which he did by
>courtesy of his elderly parents. He was bankrupt or about to be at the
>time. A legal executive working for the finance company's solicitor
>drafted guarantee and mortgage documents and the man uplifted the
>Certificate of Title (mortgage free) from the parents' solicitor
>(presumably he had their written permission to uplift it). They signed the
>papers in front of the legal executive. She had grave misgivings about the
>transaction, said she was acting for the finance company and not the
>parents, and strongly advised them to seek independent advice, and made
>them sign a memorandum to that effect. Having faith in their son they
>signed anyway.
>
>The parents obtained an interim injunction the day before the inevitable
>mortgagee sale and there was a hearing a short time later on whether the
>injunction should remain. Their lawyer tried to argue that the legal
>executive had a fiduciary responsible to or were acting for the parents
>which the judge rejected, at which point the house was nearly down the
>gurgler. The astute and kindly judge suggested perhaps that the lawyer
>consider the concept of an unconscionable bargain over lunch. The upshot
>was that the legal executive knew it was an unconscionable bargain and that
>this knowledge was imputed to the finance company through agency, hence the
>house was saved. I could not find any further case on this matter in the
>reports, so I assume that the liquidator of the finance company, being less
>brave than Oliver Twist, was not going to come back for a second helping
>from the same judge. I assume that the elderly couple still pray facing
>east five times a day (just kidding!).
>
>Sorry to bore you with this saga, but my concern is for the 27yo (then)
>legal executive. Assuming she did not share her thoughts with her
>employing solicitor or the principal of the finance company, could she be
>personally liable for inadvertently dropping the finance company in it,
>assuming that the solicitor's own pocket was not deep enough. Granted,
>some aspects may be state/country dependent, but general principles would
>presumably be the same.
>
>Unfortunately the judgement is not on the internet, the case being Bowkett v
>Action Finance Ltd [1992] 1 NZLR 449.

Two points - the legal executive would have had
a fudiciary responsibility to their principal and
not anyone else. I do note that the person had
enough moral courage to point out that they felt
the parents should get their own legal advice,
this alone should have let them off any hook.

Second point - there was a similar case in NSW
many years ago involving the Bank of NSW, yep that
old, and a son who talked the dodering parents to
cover his business loans with a mortgage on their
house. The bank was forced to write of the loan
without forclosing when they tried to foclose as
the courts found that the loan was unconscionable
due to the bank officer knowing that neither the
parents or the son could service it on their stated
incomes. The son did end up in further hot water
on this issue as the court felt that he had misled
his parents and requested that the police review the
matter to see if there was enough evidence for a
criminal charge.

I forget the full details of the case but it was
about a house in western Sydney and made big news
in the papers at the time - about a yeat before
the Wales became Westpac.

[Ext User(Heretic)]

On Sun, 20 Nov 2005 07:23:00 +0000, Tony Smith wrote:

> Otter wrote:
>
>>
>> The position I have taken is this -
>>
>> "You don't know much about the law of contractual obligations of
>> agents to their principals (including employees to their employers)
>> or the principles underlying vicarious liability, eh?"
>>
>
> Then you would be very, very wrong wouldn't you...

Your claim - you get to support it.

[Ext User(Tony Smith)]

On Sun, 20 Nov 2005 22:41:16 +1100, Heretic wrote:

> On Sun, 20 Nov 2005 07:23:00 +0000, Tony Smith wrote:
>
>> Otter wrote:
>>
>>>
>>> The position I have taken is this -
>>>
>>> "You don't know much about the law of contractual obligations of
>>> agents to their principals (including employees to their employers)
>>> or the principles underlying vicarious liability, eh?"
>>>
>>
>> Then you would be very, very wrong wouldn't you...
>
> Your claim - you get to support it.

No.