Barber v The Law Society of NSW

[2000] NSWSC 901

CITATION:

Barber v The Law Society of NSW [2000] NSWSC 901

CURRENT JURISDICTION:

Common Law

FILE NUMBER(S):

SC 10479 of 2000

HEARING DATE(S):

6 September 2000

JUDGMENT DATE:

6 September 2000

PARTIES :

CHARLES WILLIAM BARBER
(Appellant/Plaintiff)

v

THE LAW SOCIETY OF NEW SOUTH WALES
(Respondent/Defendant)

JUDGMENT OF:

Levine J

LOWER COURT JURISDICTION :	Supreme Court (Master)
LOWER COURT FILE NUMBER(S) :	10479 of 2000
LOWER COURT JUDICIAL OFFICER :	Master Malpass

COUNSEL :	D J Higgs S.C. K Rees (Appellant/Plaintiff) B Skinner (Respondent/Defendant)
SOLICITORS:	Dianne Burn & Yvonne Swift (Appellant/Plaintiff) A S Brown (Respondent/Defendant)
CATCHWORDS:	On appeal from Master - Legal Profession Act 1987 ss 79A & 80- claims against Fidelity Fund - in course of solicitor’s practice - extension of time to appeal
LEGISLATION CITED:	Legal Profession Act 1987
CASES CITED:	Gallo v Dawson (1990) 64 ALJR 458 Talarico v Law Society of NSW (Bruce J, unreported, 22 April 1998) Vassiliadis v Law Society of New South Wales (1997) 41 NSWLR 303 Vassiliadis v Law Society of New South Wales (Young J, unreported, 10 August 1994)
DECISION:	See paragraph 24

DLJ: 1
(Ex Tempore - Revised)
[2000] NSWSC 901

THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

No. 10479 of 2000

JUSTICE DAVID LEVINE

WEDNESDAY 6 SEPTEMBER 2000

CHARLES WILLIAM BARBER
(Appellant/Plaintiff)

v

THE LAW SOCIETY OF NEW SOUTH WALES
(Respondent/Defendant)

JUDGMENT (On appeal from Master - Legal Profession Act 1987 ss 79A & 80- claims against Fidelity Fund - in course of solicitor’s practice - extension of time to appeal)

1 HIS HONOUR: The appellant, Charles William Barber, appeals from a decision of Master Malpass of 31 May 2000 ([2000] NSWSC 466). The learned Master dismissed the summons filed on 21 September 1999 in which, relevantly, an extension of time was sought to appeal against the decision by the defendant disallowing Mr Barber's claim against the Fidelity Fund. 2 The appeal heard today was expedited. The appellant is aged about 87 years and the sum involved can be taken to be $325,000. 3 The learned Master had regard to three usual matters affecting the exercise of his discretion: (a) delay and explanation thereof; (b) the prospects or merits of the appeal sought to be instituted; (c) prejudice to the respondent. As to the third component, prejudice, paragraph 26 of the Master's judgment can be understood as indicating that prejudice played little, if any part, in the conclusion he reached. 4 It was the second basis, the merits, which in the hearing before me today received particular attention. In his judgment on this aspect, the Master said in paragraphs 11 to 14:

“I shall first turn to the question of the merits of the proposed appeal. In relation to this question, the parties agitated only one matter. It was whether or not there was an arguable case that the moneys had been received by or entrusted to Mr Hill in the course of his solicitor’s practice. On this matter, there was areal issue between the parties.
In his affidavit evidence, the plaintiff has provided great detail as to his dealings with Mr Hill. This material was supplemented by what was said in his oral evidence.
In substance, the material placed before this Court was similar to that which was put before The Law Society. The dealings certainly had unusual features. It is unnecessary to repeat the detail of what appears in the affidavit and oral material. I have already mentioned certain of it. The plaintiff has referred the Court to some of the decided cases. The case law provides but limited guidance and, generally speaking, each application will turn on its own particular circumstances.
It would be futile to grant an extension of time if the proposed appeal had no prospects of success. Whilst the plaintiff’s case on the relevant question may not be hopeless, at best, the prospects of success are slender”.

5 The substance of the relief sought in the principal appeal relates to a finding by the Fund that the sums of money paid by Mr Barber to Mr Hill were not paid to the latter in the course of his solicitor's practise: s 79A(1) Legal Profession Act 1987. Thus there was no failure to account for the purposes of a claim against the fund, s 80(1). 6 I have been referred to the learned Master’s review of the evidence and to the evidence itself. The latter, for present purposes, is constituted by the appellant's affidavit sworn 17 September 1999 and his oral testimony before the Master on 12 May this year. 7 The evidence covered a course of dealings between the appellant and Hill over the period 1984 to 1993, as I understand it. 8 It was submitted for the appellant before me that that evidence, which I will not rehearse, is capable of establishing that the monies were handed over at the inception of the relationship to Hill as a solicitor, for on-lending by him in that capacity in the course of his practise as a solicitor, and for the purposes of bridging loans. 9 The cross-examination of the appellant before the Master, who it seems to me made no adverse findings as to credit, when viewed in the totality of evidence, it was submitted, did not derogate from the availability of a conclusion that it could be found that the monies were paid in the course of Hill's practise as a solicitor. 10 The absence of what I will describe as "formalities", for example mortgage documentation (compare Talarico v Law Society of NSW (Bruce J, unreported, 22 April 1998) trust accounts and the like, could not preclude, as I understand the submission, such a finding, as it seems to have influenced the Fund in its approach to the claim. 11    Further, what I will describe as the Queensland development matters which arose well into the relationship between Mr Barber and Hill, or the cross-examination of the appellant on his understanding of taxation implications, would not be determinative, could not be determinative, adversely to Mr Barber on this issue. It was submitted that the totality of the evidence points to a relationship between a person and a solicitor of the kind that would attract fiduciary obligations and duties of care and of disclosure. 12    The factual issues clearly were in dispute before the Master. That, of course, cannot end the matter, nor did it. The learned Master simply came to the view that the prospects of success were "slender". 13    For the respondent Law Society it was argued before me on this discrete point that the relationship, starkly put, was that of a private lender and a private borrower at best lacking, for example, that mortgage component to which I referred as in Talarico. All this does, however, is to highlight the conflict or dispute. 14    If the test applied by the Master was whether or not the appeal was arguable, I am of the view that his discretion miscarried: such a conclusion was plainly unreasonable on the whole of that evidence. A reasonable view of the evidence on this issue, namely whether the money was received in the course of the solicitor's practise, is that it clearly is arguable, or is not "hopeless" and has "prospects of success" to use other phrases adopted by the Master. 15    A reasonable view of the evidence should have led to a conclusion that the prospect of merits were of substance, as opposed to “slender,” as found by the Master for reasons which are by no means clear. Thus I hold that the learned Master's discretion in this regard miscarried. 16    It was also argued by the respondent Law Society that the appeal in any event would be, if not futile, then of questionable, to say the least, utility. 17    The Fund made no finding as to Hill having been dishonest. No finding was made one way or the other. In the event that the Fund had found the first leg, as I will describe it, namely in the course of the solicitor's practise, and found no dishonesty, the claim would fail. This is clearly so: Vassiliadis v Law Society of New South Wales (1997) 41 NSWLR 303 at 387A-C. 18 In the instant case there has been no finding, as I have said, one way or the other. That point was not reached, nor indeed it seems to me was it adverted to either in annexure B or annexure N to Mr Barber's affidavit in which context I happen to note the observation of Young J at first instance in Vassiliadis (unreported, 10 August 1994) at p 8 as to the question of whether there was a public duty to make any finding. 19 Whilst it may be the law that the finding as to dishonesty, first, is a necessary element, secondly, can only be made by a Fund, the absence of any finding at all as to the latter cannot render futile or of little utility the proposed appeal on an issue which would be binding on the fund if the appellant were to succeed on it. 20 On the hearing of the substantive appeal whether a finding as to dishonesty could or should be made by Judge will no doubt be the subject of debate. In Talarico Bruce J made a finding but remitted the matter, as I understand it, to the Fund. The Judge on the hearing of the substantive appeal may uphold the appeal as to the course of the solicitor's practise issue and remit the matter, without a finding of dishonesty, to the Fund. 21    The mere availability of these mechanisms does not, and cannot, affect the merits of the appeal on an issue allocated to this court for its decision. Thus I propose to allow the appeal. 22    I add, however, that should it have been necessary for me to so decide, contrary to the structure of how this appeal before me was conducted, I would have concluded that the matters going to delay should reasonably have been taken to have been satisfactorily explained. The status of annexure N to the affidavit should reasonably have been considered as a rejection of the claim with notice of the right of appeal, something omitted from annexure A. 23    The conclusion expressed by the Master in paragraph 21 of his judgment as to the lack of clarity as to the position, was not reasonably open, in my respectful view. To ignore it as a point of time consideration, as was inherent in the submissions for the respondent Law Society, was artificial in the extreme. Even taking into account the four months delay between the retaining of the present solicitors and the filing of summons, the evidenced material in the chronology, should reasonably have led to a conclusion other than that reached by the Master, and I add, in my view, without offending against anything said by McHugh J in Gallo v Dawson (1990) 64 ALJR 458. 24 I make the following formal orders:

1. The appeal is allowed.

2. Judgment of Master Malpass of 31 May is set aside.

3. The time for appealing against the respondent's decision extended to 21 September 1999.

4. The respondent to pay the appellant's costs of the hearing of 12 May 2000 and of this appeal.

5. The respondent's Notice of Motion of 20 October 1999 is dismissed.

6. The hearing of the appeal is to be expedited.

7. I grant liberty to the parties to approach the List Judge.

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Last Modified: 09/27/2000