From time-to-time LPLC is contacted by practitioners who are contemplating dabbling in interstate work. Taking on work in a new jurisdiction which is outside your usual area of expertise and experience, or which you don’t practice in regularly is high risk and may lead to a professional negligence claim.
Consider this scenario. Your long-established clients are retiring and permanently moving interstate to New South Wales to be near their family. They engage you to do the conveyancing of their property in Victoria, and you prepare the sale documents for an auction in a few weeks’ time. Everything goes well at the auction, and you now hold a validly signed and enforceable contract of sale of land. The deposit is held in the selling agent’s trust account.
You then receive a message from the client to say they have purchased a property on the New South Wales coast, they would like you to manage the conveyance and they have already emailed you a proposed contract of sale for you to review. You call the client and tell them you don’t usually do interstate work, but they are excited about their move and beautiful property on the water and really want you to help. They have negotiated a six-month settlement so they can travel before relocating. You find it too difficult to say no and accept the retainer.
You review the contract of sale of land and call the clients a few days later with your comments. Without experience in New South Wales property transactions, it is difficult for you to provide specific advice. In addition, you don’t provide the clients with comprehensive advice in writing, as you always do for Victorian property, because the standard advice letter you use only applies to the law in Victoria and is not relevant to this property. Everything appears to go well until you receive a land transfer duty assessment from Revenue NSW that includes penalty interest. You have not dealt with Revenue NSW before and expected duty to be payable at settlement in line with your experience in Victoria. You did not know that transfer duty in NSW must be paid by the purchaser within three months of signing a contract of sale. Given the six-month settlement period, the unpaid duty attracts interest for which the client is now liable. They look to you to recover this amount. (Note that in this scenario the penalty is relatively modest but some claims from an error when doing interstate work, such as missing a limitations date, result in substantial loss).
Never assume that your knowledge and experience in a particular practice area in Victoria will automatically give you the expertise in the same area in another State. Each jurisdiction is unique with different legislation, procedural rules, time limits and case law, and you must be fully across the detail and nuances to provide accurate advice to clients and meet your professional obligations. You cannot provide appropriate warnings, raise risks and be proactive if you don’t have the in-depth knowledge and experience to foresee potential issues. This can’t be learned ‘on the run’ and requires building expertise and experience over time in a planned and strategic way before taking on the work.
If you are asked to dabble in work in a different jurisdiction, it is important to be direct with the client and tell them that you cannot accept their instructions, but can help find an interstate practitioner who can and has the expertise to do this work.
