Australia, April 28 -- New South Wales Land and Environment Court issued text of the following judgement on March 28:

1. By Originating Process filed on 29 January 2025, CharterLaw Legal Pty Ltd ("CLL") applies to set aside a creditor's statutory demand ("Demand") served by the defendant, Mr Michales.

2. That Demand was served by Mr Michales when he was not legally represented and much of his conduct of the case has also occurred while he was not legally represented. On a previous occasion, I had sought to explain to Mr Michales the limits of the Court's jurisdiction in respect of an application to set aside a creditor's statutory demand, which is the exercise of a confined statutory power conferred upon the Court by the Corporations Act 2001 (Cth) ("Act"). This application will not determine all matters which may be in dispute between Mr Michales and CLL, but that is inevitable by reason of the limited scope of the Court's jurisdiction in an application of this character. The intent of the creditor's statutory demand regime is to deal with undisputed debts and, where there is a genuine dispute as to a debt, it is open to the parties, and has always been open to Mr Michales, to commence substantive proceedings where a Court will determine that dispute on its merits.

3. The Demand is dated 13 January 2025 and Mr Michales there contends that CLL owes Mr Michales the amount of $298,216.88, being the amount of a debt specified in the Schedule. The Schedule describes the debt as follows:

"The Amounts listed are payments to [CLL] as a result of [CLL] continuing to practise, unlicensed/unqualified after 30 June 2024. In accordance with Ch 2 of the Legal Professional Uniform Law [sic] in respect of the entity now unqualified. Any amount so received may be recovered as a debt by the person who paid it.

Creditors/plaintiff is exercising its rights under s 10(2) LPUL NSW".

4. The reference to "LPUL NSW" is plainly to s 10 of the Legal Profession Uniform Law (NSW) ("LPUL") which I address below.

5. The Demand then sets out a series of amounts that it appears were paid by Mr Michales to CLL. I should point out, to avoid any misunderstanding, that there is no suggestion that those amounts were paid to CLL or received by it at a time that it did not hold registration as a legal practice. The last of those payments was made in mid-2023 and CLL subsequently ceased to be a registered legal practice on 27 June 2024, when an apparently associated entity commenced practice.

6. A supporting affidavit in respect of the Demand, sworn by Mr Michales, indicates that he is a former client of CLL and refers to a debt owed by CLL to him, relating to a suggested breach of the LPUL when CLL ceased to practise on 30 June 2024 but, Mr Michales contends, "continued to practice unqualified" after that date. There is also no suggestion here that CLL provided legal services to Mr Michales after that date, although I will refer below to a costs assessment that continued after that date in respect of the costs of legal services that had been provided to Mr Michales well prior to the date.

7. That affidavit in turn refers to relevant provisions of the LPUL, specifically s 10 of the LPUL, to which I referred above, which provides that an entity must not engage in legal practice in this jurisdiction, unless it is a qualified entity; and, in the sub-section on which Mr Michales relies:

"An entity is not entitled to recover any amount, and must repay any amount received, in respect of anything the entity did in contravention of subs (1). Any amount so received may be recovered as a debt by the person who paid it."

8. I pause to note that provisions of this kind are not unique to the LPUL; similar provisions are found, for example, in the Act in respect of the recovery of fees paid to unlicensed financial advisers. Ordinarily, however, those provisions are invoked in respect of persons who have not, at the time of providing services, held the requisite licences. Their purpose in supporting a licensing regime, and protecting a client who been provided services by an unlicensed person, are apparent in that situation.

9. Mr Michales's affidavit also sets out his claim that CLL is an unqualified law practice, presumably because it ceased to be registered to conduct practice from 30 June 2024, and asserts his claim to recover the amounts that he had paid to CLL prior to it ceasing to be registered to conduct that practice. He in turn indicates that:

"I believe that there is no genuine dispute about the existence or the amount of the 'debt/' [sic] any of the debts."

*Rest of the document can be viewed at: (https://www.caselaw.nsw.gov.au/decision/195edf7805cceb40d7189d92)

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