Council of the Law Society of New South Wales v Harrison
[2010] NSWADT 201
•13 August 2010
CITATION: Council of the Law Society of New South Wales v Harrison [2010] NSWADT 201 DIVISION: Legal Services Division PARTIES: APPLICANT
RESPONDENT
Council of the Law Society of New South Wales
Adrian Gregory HarrisonFILE NUMBER: 082030 HEARING DATES: On the papers SUBMISSIONS CLOSED: 29 July 2010
DATE OF DECISION:
13 August 2010BEFORE: Chesterman M - Deputy President; Hale S - Judicial Member; Tingle J - Non-Judicial Member CATCHWORDS: Solicitor – disciplinary application – application to amend LEGISLATION CITED: Administrative Decisions Tribunal Act 1997
Administrative Decisions Tribunal Rules 1998
Legal Profession Act 1987
Legal Profession Act 2004CASES CITED: Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27
Council of the New South Wales Bar Association v Archer (No 5) [2005] NSWADT 72
Etherton v Public Service Board of New South Wales [1983] 3 NSWLR 297
John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508
Johns v Law Society of New South Wales [1982] 2 NSWLR 1
Johnson v Miller (1937) 59 CLR 467
Ketteman v Hansel Properties Ltd [1987] AC 189
Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1
Law Society of NSW v Orford (No 2) [2008] NSWADT 221
Legal Services Commissioner v Ball [1999] NSWADT 45
Reynolds & Co v Australian Stock Exchange & Anor [2003] NSWSC 33
Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894REPRESENTATION: APPLICANT
RESPONDENT
C Webster, barrister
J McIntosh, barristerORDERS: 1. Leave is granted to the Applicant to file the Further Amended Application for Original Decision dated 14 July 2010 and handed up at the hearing on 14 July 2010
2. The costs of this application for leave are reserved
3. The proceedings are set down for further directions at 9.30 a.m. on Tuesday 17 August 2010. The matters to be dealt with will include those mentioned at paragraph [86] of these reasons.
REASONS FOR DECISION
Introduction
1 This decision relates to an application by the Council of the Law Society of New South Wales for leave to amend a Disciplinary Application that it had filed in the Tribunal naming a legal practitioner, Adrian Gregory Harrison (‘the Solicitor’), as the Respondent. The Solicitor, through his counsel, opposed the grant of leave.
Procedural history
2 In the Disciplinary Application (‘the Application’), which was filed on 2 December 2008, the Council of the Law Society of New South Wales (‘the Law Society’) claimed that the Solicitor, while practising as a solicitor, was guilty of professional misconduct ‘as set out in the following allegation (sic)’. The allegations, which were listed under the subheading ‘Professional Misconduct’, were as follows:-
1. Wilful breach of Section 61 of the Legal Profession Act, 1987.
2. Wilful breach of Section 62 of the Legal Profession Act, 1987.
3. Misappropriation of monies.
4. Unethical conduct:-
a. having clients sign authorities and thereafter backdating those authorities
b. having clients sign authorities and thereafter inserting amounts and making additions to those authorities.
5. Failure to account for settlement proceeds of the client’s workers compensation claim.
6. Charging and appropriating funds for solicitor/client costs contrary to the provisions of Section 116 of the Workplace Injury Management and Workers Compensation Act, 1998.
3 In the Application, the Law Society sought orders as follows against the Solicitor: (a) removal of his name from the Roll of Local Lawyers; (b) payment of the Law Society’s costs of the proceedings; and (c) such further and (sic) other orders as the Tribunal deemed appropriate.
4 Particulars of the allegations of professional misconduct were supplied in a schedule to the Application. They were in three sections, each headed by the name or names of one or more former clients of the Solicitor. The first section, headed ‘Terrence and Pamela Baxter’, contained 32 numbered paragraphs. The second section, headed ‘Frank Tuffy’, contained 6 paragraphs. The third section, headed ‘Barrie French’, contained 15 paragraphs.
5 In each of these three sections of the Particulars, an account was given of dealings between the Solicitor and the identified client or clients in course of a retainer to provide legal services. In this sense, three separate ‘matters’ made up the content of the Particulars.
6 On 2 December 2008, the Law Society also filed affidavits as follows:-
1. An affidavit sworn by its solicitor, Mr Raymond Collins, on 25 November 2008.
2. An affidavit sworn on 17 October 2008 by Ms Jean Sayer, to which were annexed two reports that she had prepared. She had prepared these reports in the capacity of an Investigator appointed to investigate the affairs of the Solicitor practising under the name of Harrison’s The Lawyers Pty Ltd, of which he was the sole director.
3. An affidavit sworn on 18 June 2007 by Mr Terrence Baxter.
4. An affidavit sworn on 18 June 2007 by Ms Pamela Baxter.
7 The first two of these affidavits were filed in compliance with Rule 25 of the Administrative Decisions Tribunal Rules 1998 (‘the ADT Rules’).
8 On 2 March 2009, the Solicitor filed a Reply to the Application, as required by Rule 27 of these Rules. In it, he stated that he opposed the orders sought by the Law Society. On 30 March 2009, he filed a short affidavit, sworn by him on 27 March 2009, briefly responding to the matters alleged against him and providing some information about his former corporate practice and his current situation.
9 On various later dates during 2009, the Law Society filed a second affidavit by Mr Collins, an affidavit by Mr Gary Napper (to which was annexed a report that he had prepared as an Investigator of the Solicitor’s corporate practice) and an affidavit by Mr Alexander Reetov, who was formerly employed as a solicitor in this practice.
10 On 20 May 2010, the Solicitor filed an Amended Reply. This documents differed substantially from the Reply. In it, he denied all the allegations made against him in the Application and set out his response to each paragraph of the Particulars.
11 On 26 May 2010, the Law Society filed an Amended Application. It differed from the Application only in amending one of the paragraphs of the Particulars.
12 On 2 June 2010, the Respondent filed an affidavit responding in some detail to the matters alleged against him.
13 Three successive days in July 2010 were allocated for the hearing of the Application. At the commencement of the hearing before us on 12 July, however, we were advised that the parties sought an adjournment because there was a prospect that they would agree on draft consent orders, which would be submitted to us for our consideration. We were advised that this process might take up two days, particularly because an application for consent orders requires the approval and participation of the Legal Services Commissioner. We accordingly adjourned the hearing to 14 July.
14 Before the hearing commenced on 14 July 2010, the Law Society served a Further Amended Application on the Solicitor.
15 At the resumption of the hearing on this day, we were advised that the parties had not agreed on consent orders. Instead, Ms McIntosh of counsel, appearing for the Solicitor, applied orally for an order that the Amended Application be summarily dismissed under section 73(5)(g)(ii) of the Administrative Decisions Tribunal Act 1997 (‘the ADT Act’). The ground that she advanced was that the Amended Application was ‘fundamentally flawed’, being in such a form as to deny procedural fairness to her client.
16 The basis of this submission by Ms McIntosh was that the Amended Application did not identify, with respect to each of the six allegations of professional misconduct, the ‘matter’ or ‘matters’ (using this term in the sense outlined above at [5]) to which the allegation related. It followed, she said, that the Solicitor was not properly informed of the case that he had to meet and, indeed, that if the Law Society were permitted to proceed on the Amended Application in its current form, it could ‘move the goalposts’ at any stage. It could, for instance, indicate that henceforth a particular allegation should be taken to be attached to a matter to which it had previously not been attached.
17 Ms Webster of counsel, appearing for the Law Society, then handed up a copy of the Further Amended Application. It was dated 14 July 2010 and had been served earlier that day on the Respondent. She made orally the application to which this decision relates: that is, an application for leave to file the Further Amended Application.
18 Having perused this document, we stated that we would deal with the Law Society’s application for leave to file it before addressing the Solicitor’s application for the proceedings to be dismissed. Ms McIntosh stated that the application for leave was opposed.
19 At the request of both counsel, we gave directions for the filing of written submissions relating to this application and the costs associated with it. We also indicated, without opposition from counsel, that we would determine the application ‘on the papers’, pursuant to section 76 of the ADT Act. We then adjourned the hearing pending the delivery of this decision. The Law Society subsequently filed a formal application and supporting submissions, and the Solicitor filed submissions in response.
The Further Amended Application
20 It is apparent from a reading of the Further Amended Application that the amendments made by it are designed to provide the information of the kind that Ms McIntosh identified as lacking in the Amended Application. They principally take the form of added phrases identifying, with respect to each of the six allegations, the ‘matter’ or ‘matters’ to which the allegation related.
21 The nature of this new material can be outlined under three headings as follows.
22 First, beside each of the six allegations listed under the subheading ‘Professional Misconduct’, an underlined note is added identifying the ‘matter’ or ‘matters’ to which the allegation is attached. The ‘matters’ are designated by use of the names of the client or clients.
23 By virtue of these changes made in the Further Amended Application, the list of six allegations now reads as follows:-
1. Wilful breach of Section 61 of the Legal Profession Act, 1987. [ with respect to Baxter, Tuffy and French]
2. Wilful breach of Section 62 of the Legal Profession Act, 1987. [ with respect to Baxter]
3. Misappropriation of monies. [ with respect to Baxter and French]
4. Unethical conduct:-
a. having clients sign authorities and thereafter backdating those authorities
b. having clients sign authorities and thereafter inserting amounts and making additions to those authorities.
[ with respect to Baxter]
5. Failure to account for settlement proceeds of the client’s workers compensation claim. [ with respect to French]
6. Charging and appropriating funds for solicitor/client costs contrary to the provisions of Section 116 of the Workplace Injury Management and Workers Compensation Act, 1998. [ with respect to French]
24 Secondly, the following new sentence appears at the foot of this list of allegations:-
[All complaints the subject of Grounds 1 to 6 were referred to the Tribunal by resolution of the Professional Conduct Committee on 13 November 2008 (see Collins pp 190-192)]
25 Thirdly, directly under the heading (comprising the name(s) of the relevant client(s) of the Solicitor) for each of the three sections of the Particulars, a new underlined passage has been inserted. It contains (a) the allegations of professional misconduct that are put forward as applicable to the ‘matter’ outlined in the ensuing section and (b) particulars of the complaints relating to this ‘matter’. By way of illustration, the passage added under the heading to the first section (‘Terrence and Pamela Baxter’) is as follows:-
GROUNDS:
1. Wilful breach of Section 61 of the Legal Profession Act, 1987.
3. Misappropriation of monies.
4. Unethical conduct:-
a. having clients sign authorities and thereafter backdating those authorities
b. having clients sign authorities and thereafter inserting amounts and making additions to those authorities.
[complaints made by the Society 31 August 2005 – Collins p22]
2. Wilful breach of Section 62 of the Legal Profession Act, 1987.
[complaints made by the Society 31 August 2005 – Collins p22 and 3 August 2006 – Collins p77]
26 Although it is not expressly stated in the Further Amended Application, it is evident that phrases such as ‘Collins p22’ refer to relevant pages in Mr Collins’ first affidavit, filed on 2 December 2008.
Relevant statutory provisions
27 The conduct alleged against the Solicitor and some of the complaints made against him preceded the date of commencement (1 October 2005) of the Legal Profession Act 2004 (‘the LP Act 2004’). The Application was filed after this date.
28 In circumstances such as these, the Tribunal proceedings are governed by Chapter 4 of the LP Act 2004 (see clauses 16 and 17 of Schedule 9 to this Act). This is subject to the proviso that the Tribunal ‘may not make any determination or order of a disciplinary nature’ against the Solicitor that is ‘more onerous than could have been made’ under the now-repealed Legal Profession Act 1987 (‘the LP Act 1987’).
29 The following provisions within Chapter 4 of the LP Act 2004 bear upon the question whether the Law Society should be granted leave to amend the Amended Application:-
(3) The objects of this Chapter relating to the providers of legal services are as follows:…494 Purposes and objects
(b) to ensure that the rules of natural justice (being rules for procedural fairness) are applied to any disciplinary proceedings taken against lawyers,…
(1) Proceedings may be commenced in the Tribunal with respect to the whole or part of a complaint against an Australian legal practitioner by an application (a disciplinary application ) made by the Commissioner or a Council in accordance with this Chapter and containing one or more allegations of unsatisfactory professional conduct or professional misconduct.551 Commencement of proceedings
(2) An allegation in the disciplinary application must relate to the subject-matter of the complaint but need not be an allegation made in the original complaint or have been the subject of separate or further investigation under this Chapter.
The Tribunal is to conduct a hearing into each allegation particularised in a disciplinary application made to the Tribunal.553 Hearings
555 Variation of disciplinary application
(1) The Tribunal may vary a disciplinary application, on the application of the person who made the disciplinary application or on its own motion, so as to omit allegations or to include additional allegations, if satisfied that it is reasonable to do so having regard to all the circumstances…
(4) The inclusion of an additional allegation is not precluded on any or all of the following grounds:(3) Without limiting subsection (1), when considering whether or not it is reasonable to vary a disciplinary application, the Tribunal is to have regard to whether varying the disciplinary application will affect the fairness of the proceedings.
(a) the additional allegation has not been the subject of a complaint,(c) the alleged conduct concerned occurred more than 3 years ago.(b) the additional allegation has not been the subject of an investigation,
(1) A disciplinary application in respect of a complaint cannot be challenged on the ground that the allegations contained in the application do not deal with all of the matters raised in the complaint or deal differently with matters raised in the complaint or deal with additional matters.556 Nature of allegations
(2) This section applies whether the allegations were included in the disciplinary application as made to the Tribunal or were included by way of variation of the application.
The rules of procedural fairness, to the extent that they are not inconsistent with the provisions of this Act or the regulations, apply in relation to the investigation of complaints and the procedures of the Commissioner and the Councils under this Chapter.591 Rules of procedural fairness
30 In addition, the following provisions of the ADT Act are relevant:-
73 Procedure of the Tribunal generally
(2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice…(1) The Tribunal may, subject to this Act and the rules of the Tribunal, determine its own procedure.
(5) The Tribunal:..
(g) may dismiss at any stage any proceedings before it in any of the following circumstances:…
(ii) if the Tribunal considers that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance,…
81 Amendments and irregularities
(2) Any such amendment may be made:(1) The Tribunal may, in any proceedings before it, make any amendments to the proceedings that the Tribunal considers to be necessary in the interests of justice.
(b) on such terms as the Tribunal thinks fit (including, if it can award costs in the proceedings, terms as to costs).
(a) at any stage of the proceedings (including the commencement or purported commencement of proceedings), and
The Law Society’s submissions
31 The main components of Ms Webster’s submissions on behalf of the Law Society can be summed up in the following four propositions:
(a) The Solicitor could have discovered without difficulty the additional information contained in the Further Amended Application by referring to the complaints (set out in the material annexed to Ms Collins’ first affidavit) from which the allegations in the Application were derived, and could thereby have ascertained at the outset the case being made against him.
(b) Any doubts that the Solicitor had as to which allegations were ‘attached’ to each of the three ‘matters’ in the Application could have been resolved by a request for further and better particulars, yet no such request was made, either before or after he filed his Reply.
(c) The powers conferred on the Tribunal by the LP Act 2004 and the ADT Act to grant leave for the amendment of a disciplinary application were clearly broad enough to include the amendments contained in the Further Amended Application, particularly since they did not include any new allegation of misconduct.
(d) A grant of leave would not cause significant prejudice to the Solicitor and was necessary in the interests of justice.
32 In support of the first proposition, Ms Webster referred to the pages in Mr Collins’ affidavit mentioned above at [24 – 26]. At one of those pages (p 22), references are made to the earlier of the two reports (which related to the Baxter and Tuffy matters) that were attached to Ms Sayer’s affidavit. Ms Webster’s contention was that because these two affidavits were served on the Solicitor together with the Application in its original form he had at the outset all the material that was needed to identify the ‘matter’ or ‘matters’ to which each of the allegations were attached.
33 With regard to the second proposition, Ms Webster pointed out that under Rule 19(2)(a) of the ADT Rules a party to proceedings could be directed by the Tribunal ‘to provide any party or the Tribunal with further particulars of any allegation or claim made in the proceedings’. She also cited two decisions of the Legal Services Division of the Tribunal relating to the provision of particulars: Legal Services Commissioner v Ball [1999] NSWADT 45 and Law Society of NSW v Orford (No 2) [2008] NSWADT 221.
34 Ms Webster’s submissions relating to the third proposition were chiefly based on the powers of the Tribunal to ‘vary’ a disciplinary application under section 555 of the LP Act 2004 and to make amendments to proceedings under section 81 of the ADT Act. She drew attention particularly to the requirements in subsections (1) and (3) of section 555 that the Tribunal, when varying an application, should be satisfied that it is ‘reasonable’ to do so and should consider whether the proposed variation ‘will affect the fairness of the proceedings’. While maintaining that the amendments being sought by the Law Society did not introduce any new allegation of misconduct, she pointed out that under section 555 it was permissible for a variation to do this. She added that both the Application, as originally filed, and the Further Amended Application complied with the requirement in section 551 that each allegation made must ‘relate to the subject-matter of the complaint’ from which it derived.
35 In addressing the fourth of the above propositions, Ms Webster was chiefly concerned to distinguish the present case from the High Court’s decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 (‘Aon’). In that case, on which Ms McIntosh placed strong emphasis in her submissions, the Court overturned decisions at first instance and on appeal in the Supreme Court of the Australian Capital Territory permitting the plaintiff, at the commencement of a four-week trial of a commercial case against its insurers and its insurance broker, to amend its statement of claim against the broker. Shortly before the application to amend, the plaintiff had settled its claim against the insurers.
36 The features of this case on which Ms McIntosh particularly relied are outlined below. In arguing that it should be distinguished, Ms Webster emphasised in particular that, in contrast to the present case, (a) the amendment sought by the plaintiff in Aon involved the addition of ‘a substantial new claim’ against the insurance broker and (b) the application to amend was made at the start of a hearing listed for four weeks, which had to be vacated.
37 Ms Webster argued also that, in terms of section 81 of the ADT Act, the amendment sought was ‘necessary in the interests of justice’, by virtue of the ‘issues now raised in relation to the original Application’. This was the case, she submitted, even though (i) the Solicitor had filed a Reply without making any request for further particulars and (ii) the affidavits served on him together with the Application had contained relevant material regarding the complaints from which the allegations in the Application were derived.
The Solicitor’s submissions
38 The starting-point of Ms McIntosh’s submissions on behalf of the Solicitor was the principle, reflected in sections 494(3) and 591 of the LP Act 2004, that the Law Society was obliged to afford procedural fairness to the Solicitor by stating its case against him fairly, precisely and intelligibly, so that he was made fully aware of the case that he was required to meet.
39 Ms McIntosh argued that in the Application as originally filed, which she described as ‘vague and ambiguous’, the Law Society had ‘failed to state the essential factual ingredients relied upon’, to which the Solicitor could effectively plead in reply. At paragraphs 13 and 14 of her submissions, she outlined its deficiencies as follows:-
13 The Applicant in their Application made 6 allegations. Each of the six (6) allegations appear to be alleged to be made only once however that is now patently ambiguous and open to interpretation.
14 Nowhere on the face of the Application does the Applicant state whether each allegation is repeated, how many times it is repeated and to which matter does each allegation attach.
40 In consequence, she said, ‘the whole of the proceedings from the commencement are flawed’. She relied here on authorities relating to the framing of criminal charges, in which it has been held that an information is defective and liable to be struck out if it fails to identify an essential factual ingredient of the offence charged.
41 In relation to these propositions, the cases cited by Ms McIntosh included the High Court decisions in John L Pty Ltd v Attorney-General (NSW) (1987) 163 CLR 508 and Kirk v Industrial Relations Commission; Kirk Group Holdings Pty Ltd v WorkCover Authority of New South Wales (Inspector Childs) [2010] HCA 1. It is sufficient here to quote the passage of relevance from the latter case (being in the majority judgment of French CJ and Gummow, Hayne, Kiefel, Crennan and Bell JJ), since much of it is drawn from the former. Footnotes are omitted:-
26 The common law requires that a defendant is entitled to be told not only of the legal nature of the offence with which he or she is charged, but also of the particular act, matter or thing alleged as the foundation of the charge. In John L Pty Ltd v Attorney-General (NSW) , it was explained that the older cases established that an information could be quashed as insufficient in law if it failed to inform the justices of both the nature of the offence and the manner in which it had been committed. In more recent times the rationale of that requirement has been seen as lying in the necessity of informing the court of the identity of the offence with which it is required to deal and in providing the accused with the substance of the charge which he or she is called upon to meet. The common law requirement is that an information, or an application containing a statement of offences, "must at the least condescend to identifying the essential factual ingredients of the actual offence"[this quotation is from John at 520]. These facts need not be as extensive as those which a defendant might obtain on an application for particulars. In Johnson v Miller [(1937) 59 CLR 467], Dixon J considered that an information must specify "the time, place and manner of the defendant's acts or omissions". McTiernan J referred to the requirements of "fair information and reasonable particularity as to the nature of the offence charged".
42 Ms McIntosh argued that these principles were applicable to disciplinary proceedings such as these, having regard to the ‘grave nature’ of the outcome sought by the Law Society.
43 As to Ms Webster’s claim that the Solicitor could have ascertained the precise relationship between each of the six allegations and the ‘matters’ described in the Particulars, Ms McIntosh submitted that this was ‘ludicrous and almost inconceivable’. She added that the assertion that he should have ‘waded through’ the Law Society’s evidence to ‘find the case that he was required to answer’ was ‘refuted by the fact that it was always open to the Applicant to press some allegations arising from their complaint but not others’. She also pointed out that for the Law Society to remedy the defects in the Application was a ‘relatively simple step’, since the Society seemed also to have been ‘aware of what they intended to allege and which matters they intended to ground the allegation in’.
44 Ms McIntosh argued that the reason why the Solicitor did not make a request for further and better particulars was that the issue did not ‘lie in’ any requirement for such particulars, but in ‘the allegations themselves and in the failure of the Applicant to express how they relate to the subject matter as defined by the Particulars’.
45 With reference to one of the statutory provisions regarding amendment relied on by Ms Webster – namely, section 556 of the LP Act 2004 – Ms McIntosh submitted that it did not bear upon the circumstances of this case and was therefore irrelevant.
46 Finally, Ms McIntosh maintained, as already indicated, that the High Court’s decision in Aon Risk Services Australia Ltd v Australian National University (2009) 239 CLR 175; [2009] HCA 27 operated as a bar to the granting of leave to file a Further Amended Application. In her submissions, she quoted the following three passages from the Court’s judgments. The first of them is from the judgment of French CJ and the remaining two from the joint judgment of Gummow, Hayne, Kiefel, Crennan and Bell JJ:-
5 In the proper exercise of the primary judge's discretion, the applications for adjournment and amendment were not to be considered solely by reference to whether any prejudice to Aon could be compensated by costs. Both the primary judge and the Court of Appeal should have taken into account that, whatever costs are ordered, there is an irreparable element of unfair prejudice in unnecessarily delaying proceedings. Moreover, the time of the court is a publicly funded resource. Inefficiencies in the use of that resource, arising from the vacation or adjournment of trials, are to be taken into account. So too is the need to maintain public confidence in the judicial system. Given its nature, the circumstances in which it was sought, and the lack of a satisfactory explanation for seeking it, the amendment to ANU's statement of claim should not have been allowed. The discretion of the primary judge miscarried.
94… Where a party had had a sufficient opportunity to plead his or her case, it may be necessary for the court to make a decision which may produce a sense of injustice in that party, for the sake of doing justice to the opponent and to other litigants.
104 The salient features of the application for leave to amend in this case were, as Lander J pointed out in his dissent, that the amendments sought to introduce new and substantial claims; they were so substantial as to require Aon, in effect, to defend again, as from the beginning; the application was brought during the time set for the trial of the action and would result in the abandonment of the trial if granted; and there was a question whether costs, even indemnity costs, would overcome the prejudicial effects on Aon if the litigation to this point was not productive of an outcome.
47 As Ms McIntosh pointed out, their Honours acknowledged that the second of these passages was derived from the judgment of Waller LJ in Worldwide Corporation Ltd v GPT Ltd [1998] EWCA Civ 1894.
48 In addition, Ms McIntosh quoted the following passage from the judgment of Lord Griffiths in Ketteman v Hansel Properties Ltd [1987] AC 189 at 220. She pointed out that this judgment was cited with approval in the majority judgment in Aon at [100]:-
Another factor that a judge must weigh in the balance is the pressure on the courts caused by the great increase in litigation and the consequent necessity that, in the interests of the whole community, legal business should be conducted efficiently. We can no longer afford to show the same indulgence towards the negligent conduct of litigation as was perhaps possible in a more leisured age. There will be cases in which justice will be better served by allowing the consequences of the negligence of the lawyers to fall upon their own heads rather than by allowing an amendment at a very late stage of the proceedings.Whether an amendment should be granted is a matter for the discretion of the trial judge and he should be guided in the exercise of the discretion by his assessment of where justice lies. Many and diverse factors will bear upon the exercise of this discretion. I do not think it possible to enumerate them all or wise to attempt to do so. But justice cannot always be measured in terms of money and in my view a judge is entitled to weigh in the balance the strain the litigation imposes on litigants, particularly if they are personal litigants rather than business corporations, the anxieties occasioned by facing new issues, the raising of false hopes, and the legitimate expectation that the trial will determine the issues one way or the other. Furthermore to allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence.
49 Ms McIntosh maintained that the present case was governed by the principles just stated, because if leave to file the Further Amended Application were granted, the Solicitor would be required, in effect, to ‘defend again’. It would add ‘substantially’ to ‘the whole of the litigation’ because there would be a ‘requirement for a Further Amended Reply’. When case management concerns and ‘the consideration of the interests of the public as a whole’ were taken into account, as these principles required, it was evident that leave should not be granted.
Discussion and conclusions
50 It is established beyond doubt, as Ms Webster acknowledged, that the Solicitor is entitled to know the case being brought against him by the Law Society. This fundamental dimension of the broad concepts of natural justice and procedural fairness has been emphasised more than once in relation to proceedings of a disciplinary nature: see for example Etherton v Public Service Board of New South Wales [1983] 3 NSWLR 297 at 307; Reynolds & Co v Australian Stock Exchange & Anor [2003] NSWSC 33 at [102].
51 In our judgment, the Application in its original form did not depict with sufficient precision and clarity the case being brought against the Solicitor, for the specific reason advanced by Ms McIntosh. Standing alone, it did not express how each of the six allegations of professional misconduct related to the various ‘matters’ outlined in the Particulars. The task of discerning this relationship was left to be performed by the Solicitor. In the case of allegations 4, 5 and 6, this was not a difficult task because the content of the Particulars made it clear that each of them could only refer to one ‘matter’. But the identity of the ‘matter’ or ‘matters’ to which allegation 1 (wilful breach of section 61 of the LP Act 1987) or allegation 3 (the distinctly serious allegation of misappropriation) was ‘attached’ was not at all clear from the face of the document.
52 The expedient suggested by Ms Webster – that of expecting the Solicitor to consult the evidence filed by the Law Society along with the Application – was the subject of express disapproval in a Supreme Court decision that we have just mentioned. In Etherton v Public Service Board of New South Wales [1983] 3 NSWLR 297 at 305-306, Hunt J said:-
But the Board has argued that it was sufficient compliance with any obligation to give particulars simply to give to the officer who has been charged, in advance of the hearing, copies of all of the documents to be tendered against him. The Board says that the plaintiff knew what his duties were. The documents, it is said, identified for the plaintiff the complaints which had been made to the department concerning the way in which his district office had operated. He should therefore, it is said, be able to work out for himself what case he had to meet.
There may be any number of bases for the charge against the plaintiff in such circumstances. It may be that the plaintiff was vicariously responsible for the acts or omissions of a subordinate of which he had no knowledge and of which he was not expected to have any such knowledge. It may be that he was personally responsible by reason of some act of his own. It may be that he was personally responsible by reason of some omission of his own — which in turn could be an omission to train or to supervise his subordinates, were doing or as to what they had omitted to do. Or it may be that, with knowledge of the conduct or misconduct of his subordinates, the plaintiff failed to take correcting action. It is only by knowing precisely the basis upon which the Board has charged the plaintiff that he can properly prepare for the hearing. And it is only with such knowledge that both he and the Board (or its delegate) can determine what material is relevant to the case made against him and thus admissible in evidence.In my view, this somewhat cavalier attitude is quite wrong…
53 In Law Society of NSW v Orford (No 2) [2008] NSWADT 221, a decision to which Ms Webster drew our attention, this passage was quoted at [112]. As it happens, the Tribunal in this case was constituted by the member who is presiding in the present Panel, and Ms Webster appeared for the Law Society. It concerned an application by a respondent solicitor, in proceedings involving alleged professional misconduct, for further and better particulars of the disciplinary application that the Society had filed. The Law Society had maintained that the particulars already supplied were adequate. The Tribunal held that some, but not all, of the particulars sought by the respondent should be furnished. It rejected an argument by the respondent that because the Law Society had refused without good reason to grant the particulars requested, the proceedings should be dismissed summarily or permanently stayed.
54 Following the above quotation from Etherton, the Tribunal’s decision in Orford continued as follows:-
114 A further authority cited by Mr Lovas was a short passage in the Tribunal’s judgment in Legal Services Commissioner v Ball [1999] NSWADT 45. It related to a statement in the Commissioner’s answer to a request for particulars that the relevant information could be ascertained from documents that included an affidavit filed by the Commissioner. The Tribunal said, at [27]:-113 Mr Lovas [counsel for the respondent solicitor] referred also to an observation by Moffitt P in Johns v Law Society of New South Wales [1982] 2 NSWLR 1 at 5. Here, the President expressed disapproval of the Law Society’s action in failing to provide particulars of a question that it put before the Solicitors’ Statutory Committee in disciplinary proceedings. Instead, the Law Society had left the matter ‘to be discerned from the evidence’ (which included, his Honour said, ‘a mountainous volume of documentary evidence’).
With respect, that is simply not a proper answer to a request for particulars. Not only should inadmissible material not be put before a court or tribunal… but it is quite inappropriate and in our view improper to put the burden upon the legal practitioner to somehow divine from a bundle of material the precise allegation that is being made.
115 Mr Lovas submitted that the Law Society adopted this improper approach in stating as follows in its replies to Question 13:-
Further Reply : The Respondent’s submission that the final paragraph of the Applicant’s response of 23 April 2007 is an “unlawful” method of providing particulars is otiose.
First Reply : The Information sought by the Respondent is contained within the Application for Original Decision and the Affidavits lodged with the Tribunal in support of the Application.117 In my opinion, no question can be raised regarding the general principles relied on by Mr Lovas in this context. I conclude therefore that the ‘global reference’ made to the filed affidavits in the two statements made by the Law Society in its replies to Question 13 is indeed inappropriate…
116 Ms Webster did not specifically address these issues in her submissions.
55 Our conclusion that it was inappropriate for the Law Society to expect the Solicitor to consult the affidavits filed along with the Application in order to ascertain what precisely was alleged against him is reinforced by the following features of the Application and the affidavits. The Particulars in the Application relating to the Tuffy matter do not state expressly, or indeed by implication, that the only form of alleged misconduct to which they are intended to relate is that embodied in the first of the allegations – wilful breach of section 61 of the LP Act 1987. Ms Webster indicated in her submissions to us that, as stated in the Further Amended Application, the complaint from which the allegation relating to the Tuffy matter was derived was to be found on page 22 of Mr Collins’ affidavit. At this page is a copy of a letter to the Solicitor from the Law Society, stating that the Society had made a complaint against him ‘in respect of the matters raised in’ Ms Sayer’s first report. Ms Sayer’s account of her investigation of the Tuffy matter is at pp 28-33 of this report (which, incidentally, contains 121 pages and is chiefly concerned with the Baxter matter). This account contains no mention of section 61 of the LP Act 1987.
56 A further short passage relating to the Tuffy matter appears in the report at page 36. The heading for this section of the report, which is at the foot of page 33, is ‘Section 61’. This, as far as we can tell, is the only link disclosed in the report or in Mr Collins’ affidavit between section 61 and the Tuffy matter.
57 To further confuse matters, the short passage at page 36 of Ms Sayer’s report gives reason to believe that an allegation of misappropriation might be being made against the Solicitor, based on his behaviour in the Tuffy matter. This passage is as follows:-
There has been a breach of ( sic ) $9,515.00 received into the Trust Account in respect of the matter of Tuffy – Dust Diseases Claim on 4 th March, 2004. The amount drawn by the solicitor in the sum of $64,924.89 included payments totalling $9,515.00 due to Counsel and Prudence Consulting which have not been paid. There has been a failure to account by the solicitor for the sum of $9,515.00.
58 The Particulars relating to the Tuffy matter do nothing to dispel this impression. They refer to funds being allegedly transferred by the Solicitor from his trust account to his general account for the payment of costs and disbursements, followed by a failure to pay some of the alleged disbursements.
59 The need to state clearly in a disciplinary application which allegations of professional misconduct or unsatisfactory professional conduct are applicable to specific sections of the accompanying particulars – or, to express it in another way, which parts of the particulars are put forward as the basis for each allegation – was in fact spelt out by the Tribunal in Orford, in the following extracts from the decision at [99 – 105]:-
99 The third defect alleged by Mr Lovas was that each ground of complaint should have been, but was not, accompanied by particulars that related exclusively to the ground in question. He submitted that the narrative provided for Grounds A(1) – (3) was deficient in this way. It was not clear in relation to a number of paragraphs within them whether they related to Ground A(1) only (‘conflict of interest’), to Ground A(2) only (‘failure to protect the mortgagee’s interest’) or to both of these grounds. As illustrations, Mr Lovas referred to paragraphs 3 (final dot-point) and 5…
101 In response… Ms Webster asserted that the distinctions referred to could be sufficiently drawn when the content of the Particulars was given careful consideration.
102 It will be seen that the general issue raised here is whether the Particulars sufficiently notified to the Solicitor, with respect to each of the grounds of complaint, what specific conduct by him was claimed (a) to have occurred and (b) to have been wrongful...
103 In my opinion, these arguments by Mr Lovas should be accepted. Notably in relation to Grounds A(1) and (2), it is not clear whether a number of the paragraphs in the accompanying Particulars (a) allege wrongful conduct under (i) the former Ground, (ii) the latter Ground, or (iii) both Grounds, or (b) set out no more than the context to either or both of these Grounds…
105 It would be feasible, for instance, for the Law Society to retain the narrative for Grounds A(1), A(2) and A(3) more or less as it is (i.e., in 36 numbered paragraphs, supplemented by the First Reply and the Further Reply) and to add a brief notification of the following: (a) which of these numbered paragraphs, taken in conjunction, constitute the allegations of misconduct made against the Solicitor with respect to each of these three Grounds, taken separately;…104 In upholding these contentions by Mr Lovas, I place significant weight on the fact that to classify the individual paragraphs according to these criteria should not be particularly difficult, nor need it involve long-winded pleading.
60 For these reasons, we endorse Ms McIntosh’s claim that the Application, in its original form, was defective. It was indeed clearly so, and the defects in it should have been remedied before it was filed, particularly since the date of filing was later (and not very much later) than the date (12 August 2008) on which the decision in Orford was delivered.
61 The course taken by the Solicitor did not, however, include any measure designed to draw to the Law Society’s attention these defects in the Application or the difficulties that he faced in preparing a Reply to it. He chose, in fact, to file a Reply, then to file an amended Reply with very different content, then to claim, after the hearing had commenced and more than 18 months after the Application had been filed and served, that he had not been properly informed of the case being brought against him.
62 In this connection, Ms McIntosh argued that the reason why he did not attempt to deal with these difficulties by requesting further and better particulars of the Application was that the issue did not ‘lie in’ any requirement for particulars. Instead, she claimed, it related to ‘the allegations themselves’ and ‘the failure of the Applicant to express how they relate to the subject matter as defined by the Particulars’.
63 We do not accept this submission. The decision in Orford made it clear, in the passage from which we have just quoted, that specification of the relationship between each of the allegations in the Application and the accompanying Particulars was an entirely legitimate topic to be included in a request for further and better particulars. The Tribunal held in Orford, at [26 – 27], that the term ‘particulars’ embraces ‘both (a) details of factual allegations made by the Law Society concerning relevant conduct by the [respondent] and (b) the specific legal rules governing the professional behaviour of solicitors which, according to the Law Society, the [respondent] breached through engaging in such conduct’ (see the decision at [26]). The authorities on which Orford is based – notably the decisions in Etherton and Johns – contain nothing to contradict this.
64 Ms McIntosh’s submissions included the following assertion: ‘Each of the six (6) allegations appear to be alleged to be made only once however that is now patently ambiguous and open to interpretation.’ She provided no explanation, however, as to why it should have been assumed that each of six allegations was ‘made only once’ with regard to Particulars containing three (not six) discrete sections, nor as to why a document to which the Solicitor had previously raised no objection was ‘now’ ambiguous. The Application was in fact ambiguous at all times, for reasons that Ms McIntosh herself explained quite clearly in her submissions.
65 We do not go so far as to say that the Solicitor, as soon as he discerned the defects in the Application, was under a legal duty to try to remedy them by drawing attention to them in a request for further and better particulars. But by delaying as he did before making any mention of them and, indeed, filing two markedly different versions of a Reply, he must be taken to have implied that he understood the case being made against him. He therefore bears a significant degree of responsibility for the delay and the cost associated with the Law Society’s late application for leave to amend.
66 Having set out our opinions regarding the claimed defects in the Application and the steps that could have been taken, but were not taken, to remedy them, we turn now to the Law Society’s application for leave to remedy them by filing the Further Amended Application.
67 There can be no doubt that the Tribunal’s powers in relation to proceedings before it include the power to grant the leave to amend that the Law Society seeks. Section 73(1) of the ADT Act empowers the Tribunal to ‘determine its own procedure’ and section 81(1) authorises it to ‘make any amendments to the proceedings that [it] considers to be necessary in the interests of justice’. If, as Ms McIntosh appeared to contend at paragraph 13 of her submissions (quoted above at [39]), one effect of the amendments sought is to increase the number of allegations of professional misconduct through repeating one or more of the allegations originally made, this form of ‘variation’ is expressly permitted by section 555(1) of the LP Act 2004.
68 We have carefully considered Ms McIntosh’s submission, based on the High Court’s judgments in Aon, that the Tribunal should decline, in its discretion, to exercise its power to permit the amendment sought. Our conclusion is that, for the reasons advanced by Ms Webster and for some additional reasons that we will shortly outline, the present case is not governed by Aon and the correct decision is to permit the amendment to be made.
69 As Ms Webster argued, this is not a case in which the amendments sought involve the addition of ‘a substantial new claim’ against the Solicitor. What they are primarily designed to do is to clarify the relationship between six allegations of professional misconduct, which remain unchanged, and the factual narrative in the Particulars, which also remain unchanged. Depending on how the Application in its original form is interpreted, they may, as has just been suggested, result in the addition of one or two allegations. But these are much less substantial and significant amendments than the amendments to its statement of claim that the plaintiff wished to bring about in Aon.
70 As Ms Webster also argued, this application by the Law Society for leave to amend did not have the effect of vacating a hearing listed for a substantial period such as four weeks. As explained above at [13], it was made on the third of three days that had been scheduled for the hearing of the case. The first two days were mainly taken up with unsuccessful negotiations that, if successful, would have resulted in draft consent orders being put before us for our consideration. If the Law Society had not made its application for leave to amend, a hearing of the case on its merits could have commenced on the third day. But additional hearing days would have had to be scheduled. It follows from this that the additional expense that the application, if granted, requires to be borne by the parties and by the administration of justice in this State is a great deal less than was at stake in Aon.
71 There are three further reasons why we consider that Aon is clearly distinguishable and that we should exercise the Tribunal’s power to grant leave to file the Further Amended Application.
72 First, the Solicitor, for reasons explained above at [61 – 65], bears a significant degree of responsibility for the delay and the cost associated with the Law Society’s application for leave to amend. By seeking further and better particulars of the Application in its original form, or by indicating in correspondence with the Law Society that because the Application was ambiguous he could not plead to it, the Solicitor could have contributed to ensuring that the hearing of the case was ready to proceed on the scheduled days. Instead of taking steps such as these, he filed both a Reply and a very different Amended Reply, and he did not put forward his argument that the Application was defective until after the hearing had commenced.
73 Our second reason is that, in contrast to Aon, these proceedings do not involve a civil dispute between private parties. They are disciplinary proceedings, in which there is a substantial public interest in the trial and determination of the issues raised. In explaining this matter, it is convenient to refer once again to Orford.
74 As indicated above at [53], the Tribunal in that case rejected an argument by the respondent that because the Law Society had refused without good reason to grant the particulars that had been requested, the proceedings should be dismissed summarily or permanently stayed. Its reasons for so doing included the following (see Law Society of NSW v Orford (No 2) [2008] NSWADT 221 at [136]):-
136 It is very much in the public interest that a Disciplinary Application, once it has been filed following the investigation required under both the past and the existing Legal Profession Act , should proceed to a hearing on the merits. If there is no determination as to whether or not professional misconduct or unsatisfactory professional conduct occurred as claimed, serious allegations regarding the professional behaviour of a legal practitioner are likely to remain untested. The public, the legal profession and, potentially, the practitioner are all disadvantaged. When these considerations are taken into account, it is, in my opinion, clear that the difficulties that have arisen with regard to particulars in this case fall well short of necessitating that the proceedings be brought to a premature conclusion.
75 Thirdly, if section 555 of the LP Act 2004 is in fact engaged, for the reasons outlined above at [67], we find that the conditions of reasonableness and fairness stipulated in subsections (1) and (3) are satisfied.
76 For the foregoing reasons, we grant leave to the Law Society to file the Further Amended Application for Original Decision dated 14 July 2010 and handed up at the hearing on 14 July 2010.
Costs
77 Section 566 of the LP Act 2004 contains the following provisions regarding costs of disciplinary proceedings under the Act:-
566 Costs
(2) The Tribunal may make orders requiring an Australian legal practitioner whom it has not found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), if satisfied that:(1) The Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist.
(a) the sole or principal reason why the proceedings were commenced in the Tribunal was a failure of the practitioner to co-operate with the Commissioner or a Council, or
(c) there is some other reason warranting the making of an order in the particular circumstances.(b) the practitioner has contravened an order of the Tribunal made in the course of proceedings concerned, or
(3) The Tribunal may make orders requiring payment of an Australian legal practitioner’s costs from the Public Purpose Fund, but may do so only if satisfied that the practitioner did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders. The Tribunal is to have regard to the length and complexity of the proceedings when making a determination under this subsection.(5) The Tribunal may make orders requiring a person to pay costs (including, as appropriate, the costs of the Commissioner, a Council, the complainant and the Australian legal practitioner against whom the complaint was made), if satisfied that:(4) The Tribunal may make orders requiring an Australian legal practitioner in respect of whom proceedings are pending before the Tribunal to pay costs on a interlocutory or interim basis.
(b) the failure or delay contributed to delay in commencing, conducting or concluding the proceedings in such a way as to warrant the making of the orders.
(a) the person, whether before or during the proceedings, failed to produce or delayed in producing any document required or requested to be produced, and(7) An order for costs may specify the terms on which costs must be paid.
(6) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under Part 3.2.
78 The position taken by the Law Society was that, irrespective of the outcome of its application for leave to amend, the preferable course for us to adopt was to reserve the costs of the application.
79 Citing Council of the New South Wales Bar Association v Archer (No 5) [2005] NSWADT 72 at [32], Ms Webster commenced her argument by submitting that the Tribunal had no inherent power to award costs. This meant, she said, that the starting-point for any costs order in proceedings such as these must be the provision just quoted, section 566 of the LP Act 2004. But although subsections (1) and (3) of this section might appear, at first sight, to provide a basis for an order they did not in fact do so at this stage of the proceedings. This was because they could only be invoked when the Tribunal had determined whether or not the applicant had made out a case of professional misconduct, or in the alternative unsatisfactory professional conduct, against the respondent. Neither subsection (2) nor subsection (5) was applicable to the particular circumstances of these proceedings. The remaining subsection under which an award might be made – subsection (4) – provided a basis for ordering the Solicitor to pay the Law Society’s costs of the present application. But the Law Society did not seek an order under this provision.
80 Ms Webster’s submission also dealt with a provision in the ADT Act – namely, section 88 – empowering the Tribunal to award costs. So far as relevant here, this section states:-
88 Costs
(1A) Subject to the rules of the Tribunal and any other Act or law, the Tribunal may award costs in relation to proceedings before it, but only if it is satisfied that it is fair to do so having regard to the following:…(1) Each party to proceedings before the Tribunal is to bear the party’s own costs in the proceedings, except as provided by this section.
(a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings by conduct such as:…
(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,…
(iv) causing an adjournment, or…
(5) However, the Tribunal may not award costs in relation to proceedings for an original decision unless the enactment under which the Tribunal has jurisdiction to make the decision provides for the awarding of costs.
81 Referring to Council of the New South Wales Bar Association v Archer (No 5) at [67] and to Council of the New South Wales Bar Association v Osei [2009] NSWADT 196 at [42], Ms Webster submitted that in disciplinary proceedings under both the LP Act 1987 (with which those decisions were concerned) and the LP Act 2004, section 88 of the ADT Act had no impact on issues of costs as between the parties to the proceedings. Its only field of operation was when costs orders were sought by or against third parties (as was the case in the Archer decision).
82 Ms McIntosh submitted that because of the Law Society’s failure to commence these proceedings with an application that properly articulated the case being made against the Solicitor, the Society should pay his costs forthwith, on an indemnity basis, irrespective of the outcome of its application for leave to file a Further Amended Application. She based this argument primarily on a claim that it would be ‘fair’, within the meaning of section 88(1A) of the ADT Act, for such an order to be made because the Law Society’s conduct had unreasonably prolonged the proceedings.
83 Ms McIntosh argued that section 88 was applicable for the following reasons: (a) because of the presence of section 566 in the LP Act 2004, the condition laid down in section 88(5) – namely, that the enactment under which the Tribunal has jurisdiction provides for the awarding of costs – is satisfied; (b) since section 566 is not ‘exhaustive’ on the matter of costs, it cannot be taken to cover the situation where an applicant unnecessarily prolongs the proceedings, and it therefore leaves scope for section 88 to deal with this situation.
84 We reject this argument by Ms McIntosh, on the ground that it fails to take account of two important aspects of these provisions. The first is that section 88(1A) is expressly made subject to ‘any other Act or law’ – that is, in the present situation, to section 566. Secondly, section 566 explicitly states that while the Tribunal may make orders requiring payment of an Australian legal practitioner’s costs from the Public Purpose Fund, it may do so only (our emphasis) if it is satisfied (inter alia) that the practitioner did not engage in unsatisfactory professional conduct or professional misconduct. This express condition limiting the Tribunal’s power to order payment of the Solicitor’s costs has not been fulfilled, so an order to this effect is not within our power.
85 We accordingly order that the costs of this application are reserved.
86 The case is set down for further directions at 9.30 a.m. on Tuesday 17 August 2010. The matters to be dealt with in those directions will include the filing of any further evidence by the parties and the scheduling of hearing days.
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