30. Another solicitor or other person's error
- A solicitor must not take unfair advantage of the obvious error of another solicitor or other person, if to do so would obtain for a client a benefit which has no supportable foundation in law or fact.
Commentary
30.1 No taking advantage of error
Rule 30 is aimed at sharp practice. It is both unprofessional and unconscionable to take advantage of an obvious error e.g. a drafting error. A solicitor owes a professional responsibility to disclose to the other side the error the opponent has made (see Wall QC DCJ's 8 point summary in Paynter Dixon Queensland Pty Ltd v The Ayr Anzac Memorial Club Inc [2002] QDC 227). An attempt to take advantage of the other party's 'clerical or arithmetical error' is 'just a shabby trick and indubitably unconscionable', and will produce a result against which equity will give relief: Deputy Commissioner of Taxation v Chamberlain (1990) 93 ALR 729, 741, cited with approval in Paynter Dixon.
The solicitor is under no duty to seek the client's instructions before informing the opponent of the error. If a solicitor wishes to notify the client of the obvious error and the obligation to correct it, it should prudently be put as a matter requiring that action, rather than an enquiry as to how the client wishes to proceed. The solicitor's duty both to the court and to the client requires the correction. The solicitor's paramount duty to the court and the administration of justice are likely ill-served by conduct that the court may consider 'a shabby trick' or 'unconscionable'. Neither is it the client’s best interests. In Tamlura NV v CMS Cameron McKenna [2009] EWHC 538, a draft share sale agreement erroneously contained a mechanism for valuing the shares that differed from that previously agreed by the parties. Mann J found that the solicitor was obliged not to take advantage of the mistake and not obliged to contact the client. Rather, in that case, taking advantage of the mistake may have involved the client in a rectification action, imperiled the transaction or resulted in misleading other shareholders. Similar cases may lead to a finding of misleading or deceptive conduct, or other negative consequences for the client.
Exception. A defence lawyer has no duty to disclose a client's previous convictions when the prosecution has failed to do so: see Rule 19.10 and its commentary.
Disciplinary consequences. In Chamberlain v Law Society of the ACT (1993) 43 FCR 148, the ATO took action against the solicitor to recover unpaid income tax. The writ stated that the amount of unpaid income tax due was $25,557.92, rather than the correct sum of $255,579.20. The legal practitioner was 'well aware' of the mistake and took advantage of it by getting the ATO to sign terms of settlement and consent to a judgment for the lower figure. The solicitor's conduct 'transcended mere "sharp tactics'" by inveigling the ATO to enter a 'corrupt judgment.' The Supreme Court of the ACT found the solicitor guilty of professional misconduct, and the Federal Court dismissed his appeal.