Byrne v Law Institute of Victoria Pty Ltd

IN THE SUPREME COURT OF VICTORIA

Not Restricted

AT MELBOURNE

COMMON LAW DIVISION

No. 7576 of 2005

STEPHEN PETER BYRNE	Plaintiff
v
LAW INSTITUTE OF VICTORIA PTY LTD	Defendant

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JUDGE:	GILLARD J
WHERE HELD:	Melbourne
DATE OF HEARING:	9 and 12 December 2005
DATE OF JUDGMENT:	12 December 2005
CASE MAY BE CITED AS:	Byrne v LIV
MEDIUM NEUTRAL CITATION:	[2005] VSC 509	Revised 9 February 2006

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JUDICIAL REVIEW - Investigation of a complaint made against solicitor by Law Institute – Complaint resolved on the papers – Factual dispute concerning retainer – No statement obtained from complainant concerning crucial issue of retainer – Finding made on the papers contrary to the preponderance of evidence – Finding made ignoring solicitor’s version – Irrational conclusion – Solicitor not given opportunity to be heard on decision after investigation complete – Decision unreasonable under Wednesbury principle – Decision quashed.

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APPEARANCES:	Counsel	Solicitors
For the Plaintiff	Mr R. Berglund Q.C. with Mr J. Isles	Acquaro & Co
For the Defendant	Mr P. Riordan S.C. with Mr R.H. Stanley	Mr. J. Barravecchio

TABLE OF CONTENTS

Parties................................................................................................................................................... 2

Alleged Complaint and Investigation............................................................................................ 2

Judicial Review................................................................................................................................... 6

The Course of the Investigation.................................................................................................... 12

The Court Proceeding..................................................................................................................... 15

The Form of Complaint and the Decision................................................................................... 16

Judicial Review-Grounds............................................................................................................... 23

HIS HONOUR:

In this proceeding instituted by originating motion the plaintiff seeks judicial review pursuant to Order 55 of the Rules of Court of a decision made by a recognised professional association (“RPA”) pursuant to the Legal Practice Act 1996 (“the Act”). The decision made by the RPA was made after an investigation of a complaint pursuant to s.146 of the Act.

Parties

The plaintiff, Stephen Peter Byrne (“the plaintiff”) is a barrister and solicitor of the Supreme Court of Victoria who at the relevant time carried on practice as a sole practitioner in Melbourne. The defendant Law Institute of Victoria Ltd (“the Law Institute”) is a corporation and a recognised professional association accredited under s.299 of the Act and a RPA bound to investigate a complaint made to it concerning the conduct of a legal practitioner.[1]
[1]see s.146(1) of the Act.

Alleged Complaint and Investigation

On 21 March 2005 Mr Michael Clothier, a partner of a firm of solicitors Clothier Anderson & Associates sent a letter to the professional standards department of the Law Institute on behalf of a client Mrs Sunethra Arachchige (“the client”) seeking an investigation into “certain irregularities concerning her previous solicitor”, namely the plaintiff. The letter stated, “The facts according to our client are as follows”, and then certain facts were summarised.

According to the letter the client was the subject of an unfavourable decision of the Migration Review Tribunal on 6 December 2004. She had earlier consulted a registered migration agent in 2003, Mr Arthur Vasilopoulos, regarding her application but he was on leave when her hearing came on before the Tribunal. Upon learning of her lack of success Mr Vasilopoulos told the client that the next step would be a Federal Court review application which would have to be brought by a solicitor.

The client allegedly asked many times for the name of the solicitor and a contact number but according to what she told Mr Clothier she was not given the information. It is alleged that later she ascertained that the solicitor was Mr Byrne and that he had witnessed a statutory declaration made by her on 22 September 2004. It was then alleged that the plaintiff had not met the client other than witnessing the statutory declaration just referred to, had not received any direct instructions from her, and did not give her a s.86 agreement relating to information to be given to a client concerning costs.

It was alleged as was the fact that the plaintiff issued a Federal Court application on her behalf on 24 December 2004 seeking a review of the tribunal’s decision and thereafter continued with the case briefing counsel to draw and settle contentions in February the following year. On or shortly prior to 28 February 2005 the client retained Mr Michael Clothier’s firm and he sent a notice of change of practitioners to the respondent in the Federal Court proceeding and forwarded a copy to the plaintiff.

The letter to the Law Institute stated that the plaintiff refused to hand over the client’s file to Mr Clothier saying he held a lien over it for unpaid fees. Mr Clothier enclosed copies of the correspondence concerning the change of practitioner and the plaintiff’s assertion of the costs’ lien. Whilst I do not doubt that a solicitor could lodge a complaint on behalf of another with the Law Institute, and Mr Clothier’s letter repeats what his client has told him, it is conclusionary in relation to an important factual matter, namely that the client did not contract with the plaintiff. The terms of the letter suggest otherwise. Later events support that conclusion, that is that there was a retainer. The plaintiff maintained throughout that he was retained through the migration agent Mr Vasilopoulos.

In my view a statement should have been supplied by the client setting out the facts. The Law Institute has a duty to provide assistance to a person formulating a complaint.[2] The officer investigating the complaint neither saw the client nor did she seek or obtain a statement. The Law Institute has the power to require a complainant to give further details of the complaint and may require the complainant to verify any details by statutory declaration or in any other manner.[3]
[2]see s.140(2).
[3]see s.140(2).

Finally, the letter was written in the context of a stand off over a lien claimed in respect of costs. Sometimes pressure is brought to bear on a solicitor claiming a costs’ lien by stating that his or her conduct will be reported to the Law Institute. It behoves the Law Institute to carefully gather all the facts before deciding to investigate any complaint. It of course does have the power to dismiss an unjustified complaint.[4]
[4]see s.144(1).

Mr Clothier in his letter to the Law Institute made the following statement:

“This appears to be a classic case of litigation being conducted by a solicitor via a third party in this case, a migration agent. The dangers of doing things this way are obvious. In this case a solicitor never gets to meet the real client and must rely completely upon the migration agent for instructions. The client has decided that she wants another firm to run her Federal Court case and she instructs us that she does not believe that she owes any money to a solicitor whom she has never really met and with whom she has never contracted. She also instructs us that she paid moneys owing to the migration agent but was never given receipts for moneys (cash) which she paid to the agent.”

I observe that that paragraph does raise an issue as to whether or not there was a retainer. Indeed, on one view of the paragraph it suggests there was a retainer. The assertion by Mr Clothier that the client “has never contracted” with the plaintiff is conclusionary.

In the final paragraph Mr Clothier raised what he asserted was another irregularity in that he observed what appeared to be a difference in the signature of the plaintiff on the statutory declaration declared in front of him in September 2004, and on letters sent by Mr Byrne to Mr Clothier. As things turned out this matter was attended to. An explanation was given and it no longer assumed any relevance in the investigation.

A number of observations need to be made about the letter. First of all it states “details of irregularities” calling for investigation. It does not use the word “complaint.” The latter is not defined in the Act, but in context concerns a complaint about “the conduct of a legal practitioner.”[5] The word “conduct” is not defined, but the words “misconduct” and “unsatisfactory conduct” are.[6]
[5]see s.138(1).
[6]see s.137.

Whether the letter was a complaint in my view should have been considered. It is trite to observe that the statutory obligation resting on the Law Institute is to investigate a complaint within the meaning of the Act.[7] It is not authorised to investigate irregularities which do not amount to a complaint within the meaning of the Act.
[7]see s.146(1) and (2).

Part 5 of the Act deals with disputes with clients and also discipline. Division 2 is concerned with complaints against the practitioner’s conduct. It defines what is meant by “misconduct” and “unsatisfactory conduct.[8]
[8]see s.137.

Section 138 provides that any person may make a complaint about the conduct of a legal practitioner to inter alia the RPA of which the legal practitioner was a regulated practitioner. Section 146 sets out the procedural requirements relating to the form of the complaint. Section 141 empowers inter alia the Law Institute as an RPA to dismiss a complaint “if satisfied that the complaint is frivolous, vexatious, misconceived or lacking in substance.” If the RPA goes down that path, it is required to give written notice and the reasons for dismissing it under that section. Division 3 deals with investigation of the practitioner’s conduct. Section 146 requires the Law Institute as an RPA to investigate a complaint made to it, other than one which has been dismissed as being unjustified under s.141.

The Law Institute, through the Professional Standards Department, was of the view that a complaint had been made, and accordingly, it carried out an investigation. The person who carried it out was Mrs Mary Sealy, a solicitor and a delegate of the Law Institute of Victoria Ltd. Correspondence passed between the plaintiff and the Professional Standards Department between 20 April 2005 and 8 June 2005.

By letter dated 5 July 2005, Mrs Sealy wrote to the plaintiff informing him that she had completed the investigation of the complaint. She had referred the matter to the General Manager of Professional Standards, and the latter had formed the opinion based on the evidence that:

“There is a reasonable likelihood that the Legal Profession Tribunal would find you/your firm guilty of unsatisfactory conduct.
The General Manager of Professional Standards has decided pursuant to s.151(3) of the Legal Practice Act 1996 to:
Take no further action against you as he is satisfied:
(i)you are generally competent and diligent:
(ii)there has been no substantial complaint (other than this complaint) about your conduct within the last five years”

The letter went on to state that the reasons for the decision were set out in a letter which was sent to Mr Michael Clothier, the solicitor for the client and a copy was provided to the plaintiff.

Judicial Review

The plaintiff is aggrieved by the decision. He seeks a judicial review of it. On 8 August 2005 he instituted a proceeding in this court by originating motion.

The Law Institute is a body charged with the statutory obligation to investigate a complaint and is required after completion to deal with the matter in accordance with s.151 of the Act. In make a decision and giving effect to it the Law Institute may make a finding which is adverse to a solicitor and may affect his reputation. In my opinion the Law Institute in these circumstances is amenable to the Common Law Writ Prerogative Writ jurisdiction of this Court and no argument was advanced to the contrary by counsel appearing for it.

The Common Law jurisdiction of this court to review decisions of Tribunals is subject to the procedure set out in Order 56 of the Rules of Court. Jurisdictional review of a decision of a Tribunal is limited. The jurisdiction is supervisory and does not entitle the court to canvass matters that it would on an appeal. An appeal is a creature of statute.[9]
[9]see Fox v Perry (2003) 214 CLR 118 at para 20.

On the other hand this court is exercising its Common Law jurisdiction which is different to an appeal. The judicial review procedure is concerned with jurisdiction and the legality of what was done by the decision maker and is not concerned with the merits of the decision under review. This is to be contrasted with an appeal where the question is usually whether the decision is right or wrong, whereas the question on the judicial review is whether the decision is made within jurisdiction and in accordance with the law.

Order 56 is concerned with procedure only and abolishes the remedies in the nature of the old prerogative writs but nevertheless preserves the jurisdiction of this court to make prerogative writ-type orders. It is clear that the rules do not affect the Common Law jurisdiction of the court and it is equally clear that this court has jurisdiction to make an order in the form similar to the old prerogative writ of certiorari in quashing a decision under review.

The scope of the jurisdiction was discussed by the High Court in Craig v South Australia.[10] In a joint judgment the court said:[11]

“Where available certiorari is a process by which a superior court in the exercise of original jurisdiction supervises the acts of an inferior court or other tribunal. It is not an appellant procedure enabling either a general review of the order or decision of the inferior court or tribunal or a substitution of the order or decision which the superior court thinks should have been made. Where the writ runs, it merely enables the quashing of an impugned order or decision upon one or more of a number of distinct established grounds. Most importantly jurisdictional error, failing to observe some applicable requirement of procedural fairness, fraud and error of law on the fact of the record.
Where the writ is sought on the ground of jurisdictional error, breach of procedural fairness or fraud, a superior court entertaining an application for certiorari can subject to applicable and procedural evidentiary rules take account of any relevant material placed before it. In contrast where relief is sought on the ground of error of law on the face of the record the superior court is restricted to the record of the inferior court or tribunal and the writ will enable the quashing of the impugned order or decision only on the ground that it is affected by some error of law which is disclosed by that record.”
(Emphasis added).

[10](1995) 184 CLR 163 especially at 175-6

[11]at p.175.

In Chief Constable of North Wales v Evans[12] Lord Brightman said:[13]

“Judicial review is concerned not with the decision but with the decision making process. Unless that restriction on the power of the court is observed the court will in my view under the guise of preventing the abuse of power be itself guilty of usurping power.”
(Emphasis added).

[12][1982] (1) WLR 1155.

[13]at 1173.

In R v District Court Ex p White[14] Justice Windeyer said:[15]

“We do not sit in this court to weigh the evidence and decide whether or not the applicant should be exempt from military service. That decision has been committed by parliament to a magistrate with an appeal to the court of review constituted by a District Court or a Supreme Court judge. The court of review has given its decision. Parliament has said that its decision is ‘final and conclusive’. It is not for us to say whether it was right or wrong. Nevertheless the applicant seeks to bring the case before us alleging an error of law which it is claimed entitles him to an order either for certiorari or prohibition ...
I am not disposed to a narrow view of the scope of either certiorari or prohibition or of the power of this Court to use these writs and also mandamus to ensure that administrative tribunals exercising functions under Commonwealth law proceed according to law and keep within the law but we must not use these writs to give an appeal on the facts.”

[14](1966) 116 CLR 644.

[15]at 655.

The plaintiff has no right of appeal against a decision made by the Law Institute. The only avenue open to him is to establish that the decision was made without jurisdiction, a legal error was made in the decision making process, that he was denied natural justice or that there is some other recognised ground justifying the exercise of the supervisory jurisdiction of this court. This court is only concerned with the legal correctness of the Law Institute’s decision making process. The High Court in Craig’s case[16] identified the most important established grounds namely jurisdictional error, failing to observe some applicable requirement of procedural fairness, fraud or error of law on the face of the record. This court is not concerned with examining whether the decision maker made the right decision or whether the Law Institute in reaching its decision misapplied some principle of law. The court is concerned with ensuring that the decision making process was performed within jurisdiction and in compliance with the law.
[16]supra at 176.

The limited nature of the jurisdiction was stated by the High Court in Craig’s case where the court drew a distinction between tribunals and inferior courts. The court said:[17]

“In considering what constitutes jurisdictional error it is necessary to distinguish between on the one hand inferior courts which are amenable to certiorari and on the other those other tribunals exercising governmental powers which are also amenable to the writ.”

[17]at 176.

The High Court referred to what Lord Reid said in Anisminic Ltd v Foreign Compensation Commission.[18] The High Court made it clear that the statements made by His Lordship should not be accepted in Australia as an authoritative statement of what constitutes jurisdictional error by an inferior court but it impliedly accepted that His Lordship’s observations applied to an administrative body. The High Court went on to say:[19]

“If such an administrative tribunal falls into error of law which causes it to identify a wrong issue, to ask itself a wrong question, to ignore relevant material, to rely on irrelevant material or at least in some circumstances to make an erroneous finding or to reach a mistaken conclusion and the tribunal’s exercise or purported exercise of power is thereby affected it exceeds its authority or powers. Such an error of law is jurisdictional error which will invalidate any order or decision of the tribunal which reflects it.”
(Emphasis added).

[18][1969] 2 AC 147 at 178.

[19]at 179.

What the court said accords with what Lord Reid said in his well known speech in the Anisminic case. His Lordship stated a list of matters that may vitiate the decision made and emphasised that his list was not intended to be exhaustive. He listed the following:
·    may have given its decision in bad faith;
·    made a decision it had no power to make;
·    failed to comply with requirements of natural justice in the course of the decision making process;
·    may have misconstrued the provisions giving it power to act so that it failed to deal with the question remitted and decided some other question;
·    may have refused to take into account something which it was required to take into account; or
·    it may have based its decision on some matter it had no right to take into account.

His Lordship concluded again emphasising the limited nature of the jurisdiction. He stated:

“If it decides a question remitted to it for decision without committing any of these errors it is as much entitled to decide that question wrongly as it is to decide it rightly.”

It can be seen from the statements of the law concerning administrative tribunals making decisions that the judicial review jurisdiction has wider application than review of an inferior court order. In the Attorney General for the State of New South Wales v Quin[20] Justice Brennan as he then was had this to say:

“The consequences of the scope of judicial review must be defined not in terms of the protection of individual interests but in terms of the extent of power and the legality of its exercise”.
(Emphasis added).

[20](1990) 170 CLR 33 at 36.

Order 56 obliges the plaintiff to state the grounds upon which relief is sought. Rule 56.01(4) requires that the grounds upon which the relief is sought must be specified in the originating motion. The motion in this proceeding does not state the grounds upon which relief is sought. The motion sets out what is described as the “Statement of relief or remedy sought”. Paragraph 1 seeks an order in the nature of certiorari to quash the decision made by the Law Institute on 5 July 2005.

Consideration of the paragraph dealing with the relief sought enables the court to determine what are the grounds of complaint. These were confirmed in the course of opening submissions with counsel for the plaintiff. They can be summarised:

(i)The decision was not reasonably open to the Law Institute to be satisfied there was reasonable likelihood that the Legal Profession Tribunal would find the plaintiff guilty of unsatisfactory conduct;
(ii)The Law Institute failed to take into account relevant matters which were then enumerated being some seven alleged factual matters;
(iii)A denial of natural justice which was unspecified save it was asserted that the Law Institute decided the matter on the basis of a previous decision of the Tribunal to which the plaintiff had no opportunity to respond. In opening counsel for the plaintiff amplified the allegation of denial of natural justice by stating that the Law Institute had failed to inform the plaintiff of the nature and content of the material being considered by it, the nature of the charge which was being considered by it and the elements of the charge when deciding what action it should take pursuant to s.151 of the Act. The ground was the subject of an amendment to the originating motion;
(iv)The Law Institute made the finding of unsatisfactory conduct which was not the subject of the original complaint and was not a matter to which the plaintiff had been requested to respond;
(v)That the Law Institute officer who conducted the investigation was biased or had behaved in a manner to suggest perceived bias. This ground was abandoned.

The plaintiff was granted leave during the course of the hearing to add the following ground:

(vi)The Law Institute had no jurisdiction to make the finding that there would have been a reasonable likelihood that the tribunal would find the plaintiff guilty of unsatisfactory conduct in relation to acting for the client without instructions because no person made any such complaint, that the Law Institute was not authorised to conduct the investigation it did, and that the Law Institute investigated a complaint which was not the original complaint.

The plaintiff claims an order in the nature of prohibition that the Law Institute be prohibited from relying upon the decision it made pursuant to s.151(3) of the Act. A declaration was sought to the effect that the Law Institute could not be satisfied that there was a reasonable likelihood that the tribunal would find him guilty of unsatisfactory conduct. In the alternative an order in the nature of Mandamus directing the Law Institute to investigate the complaint according to law.

The Course of the Investigation

The procedure involved in an investigation is set out in Division 2 of Part V. The first step is for the Law Institute to determine whether or not a complaint is a justifiable one and if not dismiss it under s.141. This can be described as the initial filtering process; see Prasad v General Medical Council.[21]
[21][1987] 1 WLR 1695 at 1700.

If it comes to the conclusion that it is not an unjustified complaint then the Law Institute is bound to investigate the complaint under s.146.” The Law Institute was bound to report to the Legal Ombudsman on request upon the progress of the investigation it was conducting, and the Legal Ombudsman was bound to monitor the investigation.[22]
[22]see s.147.

By reason of s.149, the Law Institute has the power to require the plaintiff to provide information and documents. It had the power to require the plaintiff to provide a full written explanation of his conduct. It was also entitled to demand of him to verify any explanation, information or documents by statutory declaration or some other method. It had the power to require another legal practitioner to provide information.[23] A requirement calling upon the plaintiff to provide information required the plaintiff to comply within 14 days. He was not permitted to refuse to comply on the grounds of legal professional privilege or confidence, or indeed, on the ground of incrimination. Section 140 dealt with the form of the complaint, and not only must the Law Institute give assistance to a person formulating a complaint, but it was authorised to require a complainant to give further details of the complaint and if necessary to verify it by a statutory declaration or some other form of proof.
[23]see s.149(2).

Section 150 required the investigation to be conducted expeditiously. Section 151 makes provision for what is to happen after an investigation is completed. A decision has to be made. Sub-s.(2) obliges the Law Institute to bring a charge in the Legal Profession Tribunal against the legal practitioner if it was “satisfied there is a reasonable likelihood the tribunal would find the practitioner . . . guilty of misconduct.”

Sub-section(3) permitted the Law Institute to adopt a less stringent outcome if the Law Institute was satisfied “that there is a reasonable likelihood that the tribunal would find the legal practitioner guilty of unsatisfactory conduct.”

In those circumstances, the Law Institute had a discretion to bring a charge in the tribunal against the practitioner, or with his consent, reprimand or caution him, or take no further action against him if satisfied that:

“(i)the practitioner .. is generally competent and diligent;
(ii)there has been no substantiated complaint (other than the complaint that led to the investigation) about the conduct of a practitioner .. within the last five years.”[24]

[24]see s.151(3).

The decision made by the Law Institute concerning the plaintiff was pursuant to s.151(3)c. The decision having been made to take no further action against the plaintiff it had the effect that the complaint made against him was dismissed.[25] The Law Institute was bound to give the complainant written notice of its decision, including its reasons. Further, s.152(2) required it to give the complainant a statement outlining a procedure for review. Section 153 gives the power to a complainant to apply for a review of the decision to dismiss the complaint. In addition, the Law Institute was obliged to give written notice to the plaintiff of its decision under s.151(3)c.[26]
[25]see s.152(1)b(ii).
[26]see s.152(4).

As the Law Institute after completion of the investigation formed the belief that there was a reasonable likelihood that the tribunal would find the plaintiff guilty of unsatisfactory conduct, it is necessary to go to the definition of “unsatisfactory conduct.” The definition is found in s.137. It is extremely wide. “Unsatisfactory conduct” may be committed by a legal practitioner who “falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner .. or conduct by a legal practitioner’ that would be regarded by a legal practitioner .. in good standing as being unacceptable including –

(i)conduct unbecoming a legal practitioner .. or
(ii)unprofessional conduct.”

In addition, unsatisfactory conduct is constituted by a contravention of the Act, the regulations, or practice rules that relate to legal practice not amounting to misconduct, failing to comply with a condition or restriction of which the practice and certificate is subject, or failing to pay a premium or instalment due under a contract for professional indemnity insurance not amounting to misconduct.

The Court Proceeding

In support of the motion, the plaintiff swore two affidavits on 5 August 2005 and 21 September 2005 respectively. In addition, Arthur Vasilopoulos swore an affidavit on 19 September 2005 which was some months after the decision was published to the plaintiff. This court is concerned with the decision making process of the Law Institute. The court is concerned with the material that was before the Law Institute. It is clear from the affidavit of Arthur Vasilopoulos that what is contained in the affidavit was not before the Law Institute prior to the decision being made although some information provided by the plaintiff to the Law Institute was corroborated by Mr Vasilopoulos.

In my view, subject to any evidence which may bear on the investigation and decision making process, that affidavit is irrelevant. Further, the second affidavit of the plaintiff in my view is also irrelevant, save for anything which may bear on the decision making progress. It is argumentative. It seeks to raise argumentative matters in response to matters raised in an affidavit sworn by Mary Sealy. The Law Institute filed three affidavits, namely one sworn by Paul Bean on 9 September 2005, one by Gary Clothier on 9 September 2005, and finally the one sworn by Mary Jane Sealy on 14 September 2005. Some material in all the affidavits is irrelevant, and some argumentative.

As I have stated, this court is concerned with the decision making process on information provided to the Law Institute and considered by it. Correspondence has passed between the plaintiff and the Law Institute post the decision. I interpolate to observe that it is indeed most unwise for a decision maker to seek to explain a decision when reasons have already been given. Insofar as anything said in the correspondence is relevant to the decision making progress, then it is relevant and admissible in this proceeding. However, most of it, is not. Further, in light of the fact that the bias allegation is not pursued, the affidavits of Paul Bean and Gary Clothier are not relevant.

It appears from the material that the decision was made on information provided by the complainant’s new solicitor Mr Clothier and by the plaintiff. There was no face to face meeting between Mrs Sealy and the plaintiff. Correspondence passed between the plaintiff and the Law Institute. The plaintiff was required to provide information which he did. The information included his file. Mrs Sealy did not have contact with the client, nor did she obtain any statement from her. Mrs Sealy exhibited her investigation file to an affidavit in this proceeding on a confidential basis. It has been inspected by the court and plaintiff’s counsel.

Inspection revealed the existence of two letters which were not disclosed to the plaintiff in the course of the investigation. The letters raised questions about whether or not a complaint was actually made and secondly, provides some evidence which in my view is also apparent in the original letter of Mr Clothier that there was a retainer in existence at some time between the plaintiff and the client. I will return to these letters later. It is now necessary to consider the form of the complaint as stated by the Law Institute and the reasons given for the outcome of the investigation and decision resulting there from.

The Form of Complaint and the Decision

It is clear from the consideration of Division 2 of Part 5 read in context that when a complaint is made which is not dismissed as being without substance, and the statutory investigation is performed, the investigation comes to an end and then the next step takes place, namely a decision is made. This is clear from a number of provisions, and I refer to s.150(2) which relevantly provides:

“(2)until investigation arising from the complaint is completed and a decision is made under s.151, the body”.
(Emphases added).

Section 151 deals with what happens after the investigation is completed. I have already summarised the relevant part of Mr Clothier’s letter to the Law Instituted dated 21 March 2005. As earlier noted the purposes of the letter were to bring “certain irregularities”, to the attention of the Law Institute and to request an investigation. On 20 April 2005 Mrs Sealy forwarded a letter to the plaintiff which stated that she had received a complaint letter (sic) “Dated 21 March and 24 March 2005” from Mr Clothier. The letter went on to sate that she enclosed a copy, “for your consideration”. However, she did not forward a copy of the letter of 24 March 2005.

On the previous day 19 April there had been a conversation between the plaintiff and Mrs Sealy. According to the plaintiff’s version Mrs Sealy was somewhat aggressive towards him. In Mrs Sealy’s letter dated 20 April 2005 appears the following:

“It appears to me that the complainant is raising the following issues:
1.The complainant alleges that you have acted without instructions in relation to a Federal Court application”.

There were two other issues stated namely that he had failed to provide the costs information required by s.86 of the Act and also an issue concerning the signature on the statutory declaration. In the end these two issues were not the subject of any decision. The plaintiff was required to provide to Mrs Sealy a full written explanation of his conduct, the subject of the complaint within 14 days. It is noted that the issue said to have been raised was the plaintiff acted without instructions in relation to the Federal Court application.

Close analysis of the letter written by Mr Clothier on 21 March raises real doubts whether in fact the complainant was saying the plaintiff acted without instructions. His letter in this regard is uncertain and to some degree ambiguous. The uncertainty is exacerbated by the later correspondence which was never given to the plaintiff. The plaintiff requested Mrs Sealy to give him a copy of Mr Clothier’s letter of 24 March. She refused to do so, saying it was irrelevant and was not taken into account. The letter did raise some queries about the nature of the complaint. It states omitting formal parts:

“I note that you are the solicitor who will be investigating my client’s complaint about Mr Byrne.
I have never spoken to Mr Byrne and I have only sent him one piece of mail but he sent me two very strange letters. I am enclosing copies of all our correspondence as I believe that Mr Byrne may need some professional mentoring. Please note that I am not making a complaint against him, I just think he needs help. It would be a great pity if his career were to be destroyed because his fellow practitioners did not do anything about the warning signs that are evidenced in this correspondence.”
(Emphasis added).

Later Mrs Sealy raised the query with Mr Clothier whether in fact he was making any complaint. It would appear that it was his client’s complaint however he was the one who was providing information from her, some of it in the form of a conclusion, to the Law Institute. I have looked at the letters dated 28 February 2005 and 11 March 2005 and I cannot accept that the letters are strange. The letter of 28 February 2005 from the plaintiff to Mr Clothier points out that the change of practitioner leaves him in an invidious position concerning fees and he set out the steps which had been taken on behalf of the client. That letter concludes: “Kindly have your client contact us about our fees and send through an executed authority to release our file if you want it. Thank you.”

The letter of 11 March 2005 reveals that the plaintiff told Mr Clothier that he did have a retainer and he notes that the client now denies retaining him. He set out the steps taken by him to protect her interests in the Federal Court. I interpolate to observe that as the law then stood, if the client wished to review the decision made by the Tribunal she was bound to file a proceeding in the Federal Court no later than 24 December 2004. The plaintiff, pursuant to instructions given by the migration agent on behalf of the client did so. If that document had not been filed then the client would have been out of court with no remedy. Mr Byrne made that point in the letter. His letter concludes by noting that his firm had a lien for his costs. I must say I do not see anything strange about the letter at all. Indeed on the basis he did have a retainer, prima facie he had a lien over the file for his costs. In my view after receiving this letter of 24 March 2005 Mrs Sealy should have, before laying any complaint, obtained a statement from the client with respect to what was clearly a real factual issue, namely had she retained the plaintiff. It is trite to observe that a person can be authorised on behalf of another, to create a contract between principal, that is, the client, and a solicitor.

The plaintiff provided the information sought by the Law Institute. In a six page letter dated 12 May 2005, the plaintiff explained his conduct. On the face of the information given there was evidence that he did have a retainer with the client through the instructions of Mr Vasilopoulos. Mr Vasilopoulos signed each page of the letter and it is noted in the letter that he had taken the trouble to read the response and the plaintiff wrote, “has confirmed my recitation of facts and circumstances”.

The Law Institute completed the investigation. A decision was then made. A finding was made concerning the allegation about acting without instructions and a decision made pursuant to s.151(3c). The reasons given in relation to the allegation are set out in the letter of 5 July 2005 sent to Mr Clothier (a copy sent to plaintiff) as follows –

“In relation to your allegation that the practitioner has acted without instructions, the general manager is satisfied that there is evidence to support that allegation and has determined to make a finding that there is a reasonable likelihood that the Legal Profession Tribunal would find the practitioner guilty of unsatisfactory conduct. From the practitioner’s response it is clear that the client has not at any time provided the practitioner with specific instructions in relation to her migration matter.
It is not clear whether the practitioner ever met the client. It is clear that the practitioner relied upon instructions from a migration agent to lodge an appeal on behalf of the client even though the client had failed to appear at four separate appointments made for her with the practitioner. Notwithstanding a lack of instruction the practitioner proceeded to lodge the appeal and then some six weeks later, again without having received any specific instructions from the client, briefed counsel on the client’s behalf prior to the client having instructed your firm. The general manager is satisfied on the material that has been considered that the practitioner did not have instructions to undertake any of the work that he undertook yet proceeded in the face of an ongoing failure by the client to even meet with the practitioner let alone provide him with instructions to undertake work on her behalf. The general manager is satisfied there is a reasonable likelihood that the Legal Profession Tribunal would find the practitioner guilty of unsatisfactory conduct in relation to acting for the client without instructions.”

(Emphasis added).

The letter concludes by noting the general manager has made the determination and exercised his discretion pursuant to s.151(3) of the Act. The plaintiff was not told of the facts found on the investigation prior to the decision being made. He was not given any opportunity prior to the decision being made to make any submissions in relation to the findings and what the Law Institute should do, in making a decision under s.151.

The investigation was carried out and the findings were made, on the papers. The investigator had the allegations made by Mr Clothier apparently on the instructions of the client and a conclusionary assertion in his letter of 21 March that his client had never contracted with the plaintiff. On the other hand, throughout it was the contention, clear on the face of the documents, that the plaintiff was retained through an agent namely the migration agent to file the application in the Federal Court.

The statements made in the letter of complaint by Mr Clothier provide some evidence that there was such a retainer. Indeed in a letter received by Mrs Sealy on 24 June 2005 before the investigation was finalised, Mr Clothier wrote that the application by the client to the Federal Court had been successful. Further the respondent to that application was obliged to pay the client’s costs. His letter concluded:

“We have nearly reached agreement over the quantum of our costs and disbursements but I have advised the other side that there may be further disbursements which were paid out by Mr Byrne and which Mr Byrne may want us to recover for him. Whilst I have not yet sought instructions from my client about this I think it would probably be fair to at least try to reimburse Mr Byrne for his disbursements. I would be willing to advise my client accordingly if Mr Byrne was to send me copies of those receipts.”

This letter was never provided to, or disclosed to the plaintiff. On one view it provides some evidence that there was a retainer. As things turned out the client did adopt all that the plaintiff had done in her interests leading up to when Mr Clothier took over the Federal Court matter and thereafter progressed it on her behalf to a successful outcome. In my view there was evidence of a retainer, first contained in the original letter of complaint, the plaintiff’s letter setting out all the circumstances corroborated by Mr Vasilopoulos and finally the letter of Mr Clothier dated 22 June 2005. As against this conclusion is the conclusionary assertion made by Mr Clothier that there was no contract. There was no direct evidence from his client on this question.

In my view steps should have been taken by the Law Institute to obtain a statement from the client concerning the events leading to the filing of a Federal Court application and the briefing of a barrister in February 2005 by the plaintiff. With respect to this latter matter, plaintiff informed the Law Institute that he was contacted by a barrister seeking a brief, the inference being that the latter was approached directly by the agent and the client in respect to the Federal Court matter.

It is trite to observe that to decide a dispute of fact on the papers is a near impossibility. If on a true analysis of all the facts there is a substantial dispute as to whether or not the plaintiff had a retainer with the client, that dispute could not in the circumstances be resolved by merely looking at the documents and the information that they reveal. The end result would be pure speculation. Indeed when weighing the facts on that question, on one side there is an allegation by Mr Clothier, namely the conclusionary statement allegedly made by his client that she did not have a contract with the plaintiff and on the other hand an abundance of evidence from the plaintiff supported by Mr Vasilopoulos of what occurred in relation to the progress of the Federal Court matter. Further the initial letter of complaint contains material leading to the conclusion that there was a retainer.

In my opinion the finding by the general manager which is underlined in the above passage was not a finding that could be made on the evidence. To say that the plaintiff, “Did not have instructions to take any of the work he undertook” is manifestly wrong. There was no way that decision maker could logically and rationally possibly come to that conclusion on the evidence. Indeed the preponderance of the evidence pointed the other way. The resolution of the dispute was done on the papers and in my view that was an impossible task in the circumstances.

There is authority in this state highlighting the difficulties involved in seeking to resolve disputed questions of fact on the papers. See Humphries v Poljak[27] and Petkovski v Galletti.[28] As observed by Southwell and Teague JJ in the latter case, it may be wrong to reject a party’s version when it was untested by cross‑examination. However, as their Honours observed each case must depend upon its own facts. Further, Deane and Gaudron JJ in Z.P. v P.S.[29] held that in the circumstances of that case, it was an error of principle to decide a matter on the papers when there were issues that had to be investigated and decided.[30] See also the observations of Brennan and Dawson JJ.[31] See generally the observations of Brooking JA in Palmer Tube Mills v Semi.[32] The failure to give a party an opportunity to test another party’s version may in the circumstances be a breach of the rules of procedural fairness.
[27][1992] 2 VR 129 at 133.
[28][1994] 1 VR 436 at 455.
[29](1994) 181 CLR 639.
[30]see at 671 and 673.
[31]at p.668.
[32][1998] 4 VR 439 at 446, 448-9 and 451.

The procedure adopted by the Law Institute in dealing with the alleged complaint involved a finding being made which was made on the papers and which was pure conjecture.

Judicial Review-Grounds

Judicial Review is concerned with the decision making process. Was the process exercised in accordance with the authority which established it, in this case the Act in accordance with the law and in accordance with the principles of natural justice?

Upon conclusion of an investigation of a complaint the next step is the decision. Whether or not natural justice applies depends on all the circumstances. Where a preliminary filtering procedure is to be performed such as whether or not the complaint is one of substance and what should be done thereafter it is arguable that the rules of natural justice would not apply. There is a preliminary filtering process under the Act and the allegations made were not dismissed as lacking substance.

It follows that investigation must be performed and findings made and then the next step is the decision as to what to do.

If the decision made is to lay a charge before the Legal Practice Tribunal the legal practitioner has the opportunity of clearing his name. On the other hand if upon completion of the investigation a decision is made not to lay a charge but nevertheless to make a finding under s.151(3), unless the legal practitioner is given the opportunity to be heard in respect of the outcome it becomes a fait accompli.

In other words the investigation is completed, findings are made and a decision is made against the legal practitioner which has adverse consequences. Even though the complaint in the end is dismissed nevertheless a finding is made which is published to a complainant and also the Legal Ombudsman and reflects on the legal practitioner’s professional reputation.

I have no doubt at all that the investigation and decision making steps require compliance with the rules of natural justice. While some investigative procedures do not require compliance with the rules of natural justice, for example the police investigating a possible crime leading to the formation of a belief that a charge should be laid, the investigating procedures laid down by the Act require the legal practitioner to provide all information to the investigating body and is obliged to provide information that may be incriminating.

In Murray v Legal Services Commissioner[33] the NSW Court of Appeal held that the principles of natural justice applied in respect to an investigative process and the decision making thereafter pursuant provisions of the New South Wales Legal Profession Act 1987 which is in similar terms to s.151 of the Victorian Act. Mr Riordan did not argue that the principles of natural justice did not apply in relation to the investigation or decision making process.
[33](1999) 46 NSWLR 244.

I have set out the grounds above. Judicial review is concerned with a legality of the decision making process. The grounds raise issues concerning whether the Law Institute took into account all relevant matters, that there had been a denial of natural justice in the decision making process, and an error occurred because no real complaint was made that the plaintiff had acted without instructions when acting for the client. The grounds also invoke the Wednesbury Unreasonableness Principle.[34]
[34][1948] 1 KB 223.

I am satisfied that the finding made by the general manager that the plaintiff did not have any instructions to undertake any of the work that he did was wrong, it was not open to him, it could not have been arrived at on the papers bearing in mind the evidence of the plaintiff, and it was contrary to the preponderance of the evidence before the Law Institute. In other words, the inference was not soundly based. It was submitted on behalf of the Law Institute that this was not a ground for judicial review. It was submitted it was a matter that related to the merits and accordingly review as not available.

The narrowness of the common law jurisdiction concerning an attack on fact finding was summarised in Australian Broadcasting Tribunal v Bond[35]where Chief Justice Mason said:[36]

“Thus at common law according to the Australian authorities want of logic is not synonymous with error of law. So long as there is some basis for an inference - in other words a particular inference is reasonably open - even if that inference appears to have been drawn as a result of illogical reasoning, there is no place for judicial review because no error of law has taken place.” (emphasis added)

[35](1990) 170 CLR 321.

[36]at 356.

His Honour noted that the English cases supported a ground of judicial review that there was “no sufficient evidence”.

The law has moved on since 1990. The High Court in Re Minister for Immigration and Multicultural Affairs Ex parte Applicant S20/2002,[37] considered the question and four of the five judges held that extreme irrationality or illogicality in a decision maker’s fact finding process can amount to a jurisdictional error. Chief Justice Gleeson appeared to put this complaint on a natural justice basis.
[37](2003) 198 ALR 59.

In my view the decision made was irrational because it could not have been made on the papers and in the face of the evidence of the plaintiff supported as it was by Mr Vasilopoulos. Further the letter of Mr Clothier dated 21 March 2005 and his letter dated 22 June 2005 contained some evidence leading to a conclusion that there was a retainer. In addition, adopting the words of Mason CJ – “the inference was not reasonably open” on all the material before the Law Institute.

The House of Lords in R v Criminal Injuries Boardex parte A[38] recognised a ground of judicial review where there has been a misunderstanding or ignorance of an established and relevant fact. Lord Slynn of Hadley who wrote the leading speech at p.345 accepted what was said in de Smith, Woolf and Jowell, Judicial Review of Administrative Action 5th Edition:

“The taking into account of a mistaken fact can just as easily be absorbed into a traditional legal ground of review, by referring to the taking into account of an irrelevant consideration or the failure to provide reasons that are adequate or intelligible or the failure to base a decision on any evidence. In this limited context material error of fact has always been a recognised ground for judicial intervention”.

[38][1999] 2 AC 330.

Lord Slynn speaking for the House then went on to observe:

“For my part I would accept that there is a jurisdiction to quash on that ground in this case but I prefer to decide the matter on the alternative basis of argued, namely that what happened in these proceedings was a breach of the rules of natural justice and constituted unfairness”.

In my opinion the Law Institute did not carry out the decision making process in accordance with the law. The crucial and important finding of fact was made on the papers in the face of substantial evidence to the contrary. The process was illogical but more importantly unfair - it paid lip service to the evidence placed before the Law Institute by the plaintiff. It is a well established ground of judicial review that relevant matters have been ignored.

The process employed resulted in the relevant evidence of the plaintiff, which was cogent in all the circumstances, being ignored. In my view a number of grounds for judicial review have been made out, namely the extremely irrational or illogical fact finding process employed in the circumstances, the failure to give effect to relevant evidence, the exercise of deciding a crucial fact on the papers without more, the inference that the plaintiff was not retained was not reasonably open, and finally a breach of natural justice, namely, that the determination process was unfair in all the circumstances.

In addition the decision reached, based as it was the papers, contravened the Wednesbury unreasonableness principle. The latter is discussed by Brennan J in Attorney General for NSW v Quin.[39] His Honour said:

“Properly applied, Wednesbury unreasonableness leaves the merits of a decision or action unaffected unless the decision or action is such as to amount to an abuse of power: (authorities quoted). Acting on the implied intention of the legislature that a power be exercised reasonably, the court holds invalid the purported exercise of the power which is so unreasonable that no reasonable repository of the power could have taken the impugned decision or action.”

[39]supra at 36.

In my view the exercise of the power was unreasonable in the circumstances because of the way the a disputed question of fact which was absolutely crucial to the finding was made on the papers and in my view was no more than speculative conjecture. I reject the submissions of Mr Riordan that the attack on the decision making process in this matter is to attack the merits of the decision, that is not so. The decision making process was flawed.

The findings made in the course of the investigation were made contrary to law by deciding the facts on the papers leading to a result which is speculative. In addition the procedure adopted and decision making process in those circumstances was unfair.

It becomes unnecessary to consider the other matters raised, in particular whether the plaintiff was entitled to be heard after the investigation was completed and findings were made and prior to a decision being made as to what was to take place. The decision of Murray v Legal Services Commissioner[40] provides some authority for the proposition that he should have been given the opportunity to be heard after the investigation was complete and before the decision was made pursuant to s.151.[41]
[40]supra.
[41]See Murray’s case supra at pp.247-8.

I do not think it would be a good answer to the contention to say that the legal practitioner should have anticipated his right to be heard when responding to the complaint. If it is a requirement of natural justice at the very least the Law Institute should have alerted him to the right to be heard if it thought the procedure laid down required him to respond to a possible decision that the complaint was established when responding to the complaint.

However, in all the circumstances, it is unnecessary for me to finally decide whether or not the rules of natural justice required these steps to be taken. In my opinion the decision made upon the investigation pursuant to s.151 must be quashed.

In conclusion I am satisfied the plaintiff has established grounds for judicial review of the decision made by the Law Institute and it must be quashed. The plaintiff also sought a further order in the nature of prohibition. In my opinion that is not appropriate in this case. I have been informed that the new Legal Practice Act comes into force this day. Whether the complaint if it be one, should be investigated and by whom will depend upon, inter alia, the new Act.

I wish to make a few observations however. If it is decided to look at these alleged irregularities, in my view it is vital first to determine whether a complaint concerning the conduct of the plaintiff is actually being made. In determining that question in my view it is necessary to obtain a statement from the client. And more importantly to determine whether or not she wishes to make a complaint within the meaning of the Act.

Secondly the complaint should be properly formulated so there is no doubt what the plaintiff has to respond to. Thirdly if a complaint is made it should be investigated by a person other than the investigator who investigated the one the subject of this proceeding.

Finally all the information which is to be considered in performing the investigation should be made available to the plaintiff. By reason of this proceeding he has been given further information in the form of two letters written by Mr Clothier. Both raise some queries about the complaint and whether there was a retainer.

Subject to submissions by counsel I propose to order that the decisions set out in the letter dated 5 July 2005 made by the Professional Standards Department of the Law Institute be quashed.

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Byrne v Law Institute of Victoria Pty Ltd [2005] VSC 509

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Byrne v Marles & Anor [2007] VSC 63

Cases Citing This Decision

3

Donaghy v Council of the Law Society of NSW (No 2) [2015] NSWCA 224

Legal Practitioner “M” v Council of the Law Society of the Australian Capital Territory [2015] ACTSC 312

Byrne v Marles & Anor [2007] VSC 63

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[2005] VSC 509

12 December 2005