Council of the Law Society of the Act v Legal Practitioner 2 (Occupational Discipline)
[2016] ACAT 81
•21 July 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER 2 (Occupational Discipline) [2016] ACAT 81
OR 34/2015
Catchwords: OCCUPATIONAL DISCIPLINE – legal practitioner – application for dismissal for abuse of process
Legislation: ACT Civil and Administrative Tribunal Act 2008 s 32
Legal Profession Act 2006 ss 412, 416, 419
Cases Cited:Byrne v Council of the Law Society of the ACT [2015] ACAT 19
Byrne v Production Magic Pty Ltd [2012] ACTSC 6
Giannarelli v Wraith (1988) 165 CLR 543
Gill v Walton (1991) 25 NSWLR 190
Health Care Complaints v Litchfield (1997) 41 NSWLR 630
Moti v The Queen (2011) 245 CLR 456
Rogers v The Queen (1994) 181 CLR 251
Walton v Gardiner (1993) 177 CLR 378
Weaver v Law Society of New South Wales (1979) 142 CLR 201
Texts/Papers
Cited:Pearce, Dennis Administrative Appeals Tribunal (4th edition, 2015)
Tribunal: Senior Member R Orr QC
Date of Orders: 21 July 2016
Date of Reasons for Decision: 21 July 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL OR 34/2015
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT Applicant
AND:
LEGAL PRACTITIONER 2
Respondent
TRIBUNAL:
Senior Member R Orr QC
DATE:21 July 2016
ORDERS
The Tribunal orders that:
1.The application for an order striking out, or for a permanent stay of, these disciplinary proceedings against Legal Practitioner 2 under section 32 of the ACT Civil and Administrative Tribunal Act 2008 is refused.
2.The matter will be listed for further directions on a date to be fixed.
………………………………..
Senior Member R Orr QC
REASONS FOR DECISION
1.These disciplinary proceedings arise from a complaint made by Mr Simon Byrne in a letter dated 23 May 2011 (complaint) to the Council of the Law Society of the Australian Capital Territory (council) against Legal Practitioner 2 (practitioner 2). The council dismissed the complaint, but Mr Byrne appealed to the tribunal for review of this decision, and on 3 March 2015 the tribunal ordered the council to bring disciplinary proceedings against practitioner 2. The council now does so in these disciplinary proceedings (disciplinary proceedings).
2.The disciplinary proceedings against practitioner 2 concern allegations in relation to actions he took, or did not take, in acting for Production Magic Pty Ltd and others in Supreme Court proceedings brought by Mr Byrne, Byrne v Production Magic Pty Ltd (No. SC 790 of 2006) (Supreme Court litigation).
3.Section 32 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) provides that the tribunal may dismiss an application which it considers an abuse of process. Practitioner 2 seeks such an order striking out these disciplinary proceedings, or an order that they be permanently stayed, on the basis that they are an abuse of process, principally because the relevant issues were determined in the Supreme Court litigation, or in light of elements of the Supreme Court litigation (dismissal application).
Summary of decision
4.In summary, the Tribunal is of the view that the issues in the disciplinary proceedings were not determined in the Supreme Court litigation. Even if they had been, this would not necessarily support a dismissal of the disciplinary proceedings. Further, the Tribunal is of the view that there is no other basis raised by practitioner 2 for dismissing the disciplinary proceedings as an abuse of process. Such a dismissal should only be made in an exceptional or extreme case, or one involving an unacceptable injustice or unfairness, and this is not such a case. In the Tribunal’s view the disciplinary proceedings should proceed to a substantive hearing.
Background
5.As noted, these disciplinary proceedings originated with a complaint by Mr Byrne in a letter dated 23 May 2011. Subsequent complaints were made by Mr Byrne.
6.The nature of the complaints are set out in Byrne v Council of the Law Society of the ACT [2015] ACAT 19 (Byrne v Law Society), and aspects of them are discussed further below. In summary, Mr Byrne operated a business as a sole trader; he wished to admit other investors; a firm of lawyers (firm) incorporated a company, Production Magic Pty Ltd (company); later other investors were admitted as shareholders (investing shareholders) and other directors appointed (incoming directors) of the company, and a ‘Directors and Shareholders Agreement’ was drawn up by the firm and executed. A significant dispute arose between Mr Byrne and the incoming directors, and in due course Mr Byrne commenced proceedings in the Supreme Court against the company, the investing shareholders and the incoming directors. The firm acted for the defendants in the Supreme Court litigation, and practitioner 2 was a partner of the firm and acted for the defendants in those proceedings. A major element of the complaint by Mr Byrne was that lawyers in the firm who acted for the defendants had a conflict of interest. The relevant complaints against practitioner 2 in the form now the subject of the disciplinary proceedings are set out below; in summary they involve his advice and actions, or failure to act, in relation to discovery and delay in the Supreme Court litigation.
7.The Supreme Court litigation was settled. But before this, there were two decisions which are central to these proceedings. The first was Byrne v Production Magic Pty Ltd [2012] ACTSC 6 (31 January 2012) by Master Harper which concerned an application by Mr Byrne to have the firm restrained from continuing to act for the defendants (removal decision and removal application). The removal application was dismissed. The second was Byrne v Production Magic Pty Ltd (9 October 2012) by Foster J and concerned subpoenas issued in the proceedings (subpoena decision and subpoena application).
8.Following an investigation the council decided, pursuant to section 412 of the LP Act, to dismiss Mr Byrne’s complaint against practitioner 2 in August 2013. In September 2013 Mr Byrne filed an application in the tribunal for review of the council’s decision pursuant to section 416 of the LP Act. In Byrne v Law Society the tribunal ordered the applicant to bring proceedings against practitioner 2 under section 419 of the LP Act arising from Mr Byrne’s complaint. The council commenced these disciplinary proceedings against practitioner 2 on 4 August 2015, and filed an amended application on 1 September 2015.[1]
[1] Exhibit A1, affidavit of Jennifer Shaw sworn 11 March 2016, paragraph 3
9.Practitioner 2 joined in an application to the tribunal, with another practitioner from the same firm, to remove the disciplinary proceedings in the tribunal pursuant to the decision in Byrne v Law Society to the Supreme Court, but this application was dismissed by order of the tribunal dated 5 January 2016.[2]
[2] Exhibit A5
10.The dismissal application by practitioner 2, filed on 11 February 2016, seeks the following orders:
1. An order striking out the proceedings.
2. An order that the proceedings be permanently stayed.
3. Such further or other order as the nature of the case requires.
11.Section 32(2) of the ACAT Act allows the tribunal to dismiss an application which it considers is frivolous or vexatious, lacking in substance, otherwise an abuse of process or made by a person who has been dealt with by a court or tribunal in Australia as frivolous or vexatious (section 32(1)). Practitioner 2 brought this application under these provisions of the ACAT Act.
Hearing
12.The dismissal application was heard on 1 April 2016.
13.At the same hearing there was also an application by the council to amend the further amended application in the disciplinary proceedings, in particular by deleting paragraphs 10 to 13, and 72-80, and grounds 1 to 4, concerning an alleged conflict of interest, under section 421 of the LP Act.
14.Because these two applications were linked to some extent, evidence which was tendered was relied on in both. The council relied on an affidavit of Jennifer Ann Shaw sworn on 11 March 2016 (exhibit A1), an affidavit of Robert Anthony Reis sworn on 11 March 2016 (exhibit A2), an affidavit of Jennifer Ann Shaw sworn on 17 March 2016 (exhibit A3), an affidavit of Jennifer Ann Shaw sworn 10 March 2016 (exhibit A4), and a bundle of documents in relation to the complaint (exhibit A5). Practitioner 2 relied on an affidavit of William John Gerard McCarthy sworn on 29 February 2016 (exhibit R1) and an affidavit of William John Gerard McCarthy sworn on 31 March 2016 (exhibit R2).
15.In relation to the application to amend the application in the disciplinary proceedings, the council relied on an outline of submissions, dated 31 March 2016. Practitioner 2 indicated his conditional consent, the condition relating to costs. The Tribunal heard submissions on this issue, found that it was reasonable to make the amendment having regard to all the circumstances, granted the application to amend, and ordered that costs be reserved. The application in the disciplinary proceedings in the form after this amendment is the second further amended grounds of application, annexure A to exhibit A3, the affidavit of Jennifer Shaw sworn on 17 March 2016 (amended disciplinary application).
16.In relation to the dismissal application, practitioner 2 relied on an outline of submissions dated 18 March 2016 (practitioner 2’s outline of submissions), submissions in reply dated 31 March 2016 (practitioner 2’s reply), and a chronology dated 31 March 2016. The council relied on a respondent council’s outline of written submissions dated 29 March 2016 (council’s outline of submissions). There were also oral submissions. The Tribunal reserved its decision on this application.
Basis of dismissal application
17.The remaining allegations against practitioner 2 in the amended disciplinary application concern discovery (grounds 5 to 8) and delay (grounds 9 and 10) in relation to the Supreme Court litigation.
18.The dismissal application was made, in summary, on the basis that:
(a)the disciplinary proceedings are an abuse of process as they raise issues conclusively dealt with by the Supreme Court litigation (paragraph 3(a) of the grounds of application);
(b)they constitute a collateral attack on, seek to improperly prolong and are an impermissible attempt to reopen allegations that were decided in the Supreme Court litigation (paragraph 3(b));
(c)the relevant issues have been determined in the Supreme Court litigation, no adverse findings were made against practitioner 2, and accordingly the disciplinary proceedings contravene the rule against double jeopardy (paragraph (4)); and
(d)the council may not challenge the findings of the Supreme Court before the tribunal where such matters have already been heard and determined (paragraph 5).
In essence, these grounds all involve an argument that the relevant issues in the disciplinary proceedings had been determined in the Supreme Court litigation.
19.Counsel for practitioner 2 referred to comments in Moti v The Queen,[3] noting the comments of McHugh J in Rogers v The Queen,[4] that although the categories of abuse of process are not closed, many cases can be identified as falling within one of three categories: (1) the court’s procedures are invoked for an illegitimate purpose; (2) the use of the court’s procedures is unjustifiably oppressive to one of the parties; or (3) the use of the court’s procedures would bring the administration of justice into disrepute. It was argued that the first category is directly relevant, not because of an allegation of improper purpose, but because the issues raised in the disciplinary proceedings were the subject of two applications in the Supreme Court litigation,[5] constitute a collateral attack on the Supreme Court’s decisions in relation to those applications,[6] and will be a species of, or analogous to subjecting practitioner 2 to, double jeopardy.[7]
[3] (2011) 245 CLR 456 at [10], French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ
[4] (1994) 181 CLR 251 at 286
[5] Practitioner 2’s outline of submissions at [63] and [91]
[6] Practitioner 2’s outline of submissions at [64]
[7] Practitioner 2’s outline of submissions at [65] and [91]
20.Particular reliance was placed on Gill v Walton (Gill),[8] since this concerned disciplinary proceedings. In that case original complaints were made against medical practitioners, but were stayed by the NSW Court of Appeal as an abuse of process because of the prolonged delay after the relevant facts were known.[9] New complaints were made which were not the same as the original complaints, but arose out of the same pattern of professional conduct, and these were also stayed as an abuse of process by the Court of Appeal. It was held that as the new complaints were substantially the same as the original complaints, and the evidence lost and disadvantages suffered substantially the same, the new case was “a species of double jeopardy” and “unjustifiably oppressive.”[10] This decision was upheld by the High Court in Walton v Gardiner (Walton).[11] In doing so, Mason CJ, Deane and Dawson JJ referred to the need for a “weighing process involving subjective balancing of a variety of factors and considerations”, among them fairness to the practitioner, and “the protective character of such proceedings and … the importance of protecting the public from incompetence and professional misconduct on the part of … practitioners.[12]
[8] (1991) 25 NSWLR 190
[9] Herron v McGregor (1986) 6 NSWLR 246
[10] Gill at 206-207, Kirby P
[11] (1993) 177 CLR 378
[12] At 396
21.At the hearing, counsel for practitioner 2 argued for the dismissal application on the basis that the Supreme Court removal and subpoena decisions, and other matters, meant that the disciplinary proceedings involved significant unfairness to practitioner 2. Counsel for practitioner 2 stated that he was not arguing that there was issue estoppel in light of the Supreme Court decisions, but that the weighing process, discussed in Walton, suggested that the overlapping of issues, and other matters, demonstrated unfairness to practitioner 2.[13]
[13] Transcript of proceedings on 1 April 2016, pages 41-42 and 50-51
22.Counsel for the council argued that disciplinary proceedings were sui generis and that principles of finality are no answer to a complaint that may or will re-litigate findings made in earlier proceedings. He noted that Mason J stated in Weaver v Law Society of New South Wales[14] that the “court cannot disable itself from hearing and determining the very serious complaint against a solicitor that he has given false evidence merely because the complaint may or will involve the re-litigation of allegations of earlier misconduct of which the solicitor has previously been found not guilty.” Reference was made to numerous other cases where conduct the subject of court proceedings, or in court proceedings, were considered in disciplinary proceedings.[15]
[14] (1979) 142 CLR 201 at 207
[15] Council’s outline of submissions at [22]
23.At any rate here, it was argued, the earlier Supreme Court litigation concerned a different claim in civil proceedings, with different parties and different issues to the disciplinary proceedings.[16] Further, there was no other basis for finding unfairness in determining the disciplinary proceedings;
[16] Council’s outline of submissions at [30]-[51]
24.The council argued that a stay or dismissal of disciplinary proceedings should only be granted in an exceptional or extreme case, or where there the proceedings would involve an unacceptable injustice or unfairness.[17]
[17] Walton at 392; council’s outline of submissions at [6] and [58]-[62]
25.The Tribunal agrees with the council that the fact that disciplinary processes raise the same or similar issues to those considered in earlier court or tribunal processes does not of itself make those disciplinary processes an abuse of process. Indeed it is clear that there is generally no abuse of process where, for example, disciplinary proceedings follow criminal proceedings, even though they overlap or indeed deal with the same events.[18] However it is possible that specific circumstances may give rise to an abuse of process, and it is necessary to look at the particular issues involved, as Gill and Walton illustrate. This should be done weighing all the relevant factors, but on the basis that a stay or dismissal of such proceedings should only be granted in an exceptional or extreme case, or one involving an unacceptable injustice or unfairness. In this context the grounds in the amended disciplinary application are considered.
[18] Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630
Grounds of complaint in the amended disciplinary application
Ground 5 – failure to discover MYOB files
26.Ground 5 is as follows:
[legal practitioner 2], as an officer of the Court, in breach of his duty to the Court to ensure that he advise his clients in the conduct of the Litigation with respect to the disclosure of all relevant documents in the course of discovery failed to advise his clients to discover either or both a hard copy and soft copy of the MYOB files.
27.The terms of the amended disciplinary application assert that the relevant MYOB files were discoverable in the Supreme Court litigation, but were not discovered.[19] In particular it is alleged that the defendants stated that the MYOB files were not in their possession[20], that practitioner 2 had a duty to, but did not, advise the defendants to disclose the files or make inquiries of the company’s accountant as to the files[21], and that in answer to a subpoena to those accountants issued in July 2011 the files were produced.[22]
[19] Paragraphs 18-28, 50-51C
[20] Paragraph 22
[21] Paragraphs 25 and 51A-51B
[22] Paragraphs 41 and 42
28.Practitioner 2 relies in this dismissal application principally on the submission that this issue was determined by the Supreme Court, and that the determination of ground 8 in the disciplinary proceedings by the tribunal would therefore be an abuse of process. Practitioner 2 points to the fact that in the removal application in the Supreme Court litigation an order was sought seeking further and better discovery, but was apparently abandoned; that this was the appropriate opportunity to pursue this issue; that Mr Byrne was unaware whether the documents he was seeking had any relevance; the relevance remains unknown; and that Master Harper dismissed the application, including that for further and better discovery.[23]
[23] Practitioner 2’s outline of submissions at [42]-[48]
29.It was not disputed in this dismissal application that there was an obligation of discovery on the defendants in the Supreme Court litigation in relation to the MYOB files. It appears that the defendants’ position in the Supreme Court litigation was that the files were discoverable but were not in the possession of the defendants.[24]
[24] Exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure J, page 75 of the affidavit
30.Mr Byrne did pursue the issue of whether full discovery had been made to some extent in the Supreme Court litigation. The removal application did include an application for further and better discovery against the company.[25] Practitioner 2 concedes that this part of the application was abandoned.[26] It appears that there was no evidence led, submissions made or decision by the court on this part of the application, that is on whether further and better discovery should be given, including in relation to the MYOB files. The removal decision therefore does not address the issue of discovery, or the MYOB files.
[25] Exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure K, page 81 of the affidavit
[26] Practitioner 2’s outline of submissions at [42]
31.Rather the removal decision of Master Harper states at [1] that “[t]his is an application by the plaintiff that the solicitors on the record for the defendants … be restrained from continuing to act for them”. Master Harper at [20] found that an “ordinary member of the public may well see … [the firm acting for the defendants] as inherently unfair”, but did not restrain the solicitors from continuing to do so principally on the basis of the delay in bringing the removal application.[27] The Court ordered that the application dated 17 May 2011 be dismissed, but there is no decision in relation to discovery generally, or discovery of the MYOB files in particular.
[27] at [21]-[25]
32.Subpoenas were later issued seeking further documents, but the subpoena decision of Foster J does not deal with discovery issues. Practitioner 2 conceded that the subpoena application did not relate to the production of documents on discovery.[28]
[28] Practitioner 2’s outline of submissions at [50]-[51]
33.On the evidence before the Tribunal there was no decision in the Supreme Court in relation to ground 5. In the Tribunal’s view therefore the disciplinary proceedings in relation to this allegation are not a collateral attack on, and do not seek to reopen allegations that were heard and decided in, the Supreme Court litigation, or challenge such decision or relevant findings, or contravene the rule against double jeopardy. There was no relevant hearing, findings or decision by the Supreme Court.
34.At any rate the proceedings in the Supreme Court were not against practitioner 2, nor were they in relation to his compliance with his ethical obligations under the LP Act. Even if the Supreme Court had expressly dealt with the matter of discovery of the MYOB files, this may not have prevented disciplinary proceedings; but as noted this is not the position.
35.It is true that no adverse findings were made against practitioner 2 in the Supreme Court. Practitioner 2 argued that this indicated that there had been no breach of duty in this regard. The Tribunal does not accept this argument. First, as noted the Court did not consider this issue. It did not review the MYOB files, nor any issue as to whether they were discoverable in the proceedings, nor any advice by practitioner 2. In such a case it does not seem appropriate for the lack of any adverse comment to be determinative of whether there was a breach of his duty. Second, while it is true that notwithstanding this the court generally supervised the litigation, this cannot mean of itself that everything lawyers did in that litigation was therefore lawful and ethical. Such an argument gives the concept of court supervision an inappropriately broad effect. Third, counsel for practitioner 2 noted that in Giannarelli v Wraith[29] Brennan J referred, in the context of considering whether immunity of counsel should be maintained, to “judicial supervision” as one of the existing mechanisms for regulating the conduct of counsel. But his Honour also noted the mechanisms of “publicity of court proceedings … appeals, peer pressure and disciplinary procedures to prevent neglect in the performance of counsel’s duty and to avoid any injustice which might result therefrom in an individual case.” There is no suggestion that any court supervision made disciplinary procedures an abuse of process. At any rate practitioner 2 was not counsel in the Supreme Court litigation.
[29] (1988) 165 CLR 543, at 580
36.It is possible that Mr Byrne could have made greater efforts to have issues in relation to discovery dealt with in the Supreme Court litigation. Whatever the reason, his failure to pursue the application concerning further and better discovery does not make his pursuit of the complaint mechanism, and that of the council, an abuse of process. Also, the fact that Mr Byrne was unaware whether the documents he was seeking had any relevance, and that the relevance remains unknown, does not make consideration of his complaint about the conduct in failing to provide them an abuse of process.
37.This is a very different situation to that in Gill and Walton which concerned two disciplinary proceedings dealing with overlapping issues, the first of which was stayed as an abuse of process. It was not just that there were overlapping issues. Indeed it is clear that there is no abuse of process where, for example, disciplinary proceedings follow criminal proceedings, even though they overlap or indeed deal with the same events.[30] Here there is earlier Supreme Court litigation which did not determine an issue raised in the subsequent disciplinary proceedings. It is difficult to see how a determination of whether the practitioner’s conduct was unethical can be said to be an abuse of process, in light of the relevant protective character of such proceedings.
[30] Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630
38.On this basis, the Tribunal does not think that the removal decision or the subpoena decision and the related matters raised by practitioner 2 support a finding that ground 5 in these proceedings is an abuse of process.
Ground 6 – failure to discover the General Ledger
39.Ground 6 in the amended disciplinary application concerns a similar alleged breach of duty with respect to the ‘General Ledger’, being records of the company’s accountant.[31] It is alleged that while discovery was given to the accountant’s working papers, the solicitors for Mr Byrne asserted that parts of the General Ledger provided were missing or incomplete. In response, it is alleged that the defendants stated that the documents were provided by the accountants and that a complete copy could not be provided,[32] and that practitioner 2 had a duty to, but failed to, advise the defendants to disclose a complete copy of the General Ledger or to advise the defendants to obtain a copy from the accountants.[33]
[31] Paragraphs 28A-45, 50-51C
[32] Paragraph 37
[33] Paragraphs 25 and 51A-51C
40.This ground is in the same position as ground 5.
Ground 7 – claim of legal professional privilege
41.Ground 7 is as follows:
[legal practitioner 2], as an officer of the Court, in breach of his duty to the Court that he advise his clients in the conduct of the Litigation with respect to their duty to disclose all relevant documents in the course of discovery, failed to advise his clients that the maintenance of claims of legal professional privilege with respect to the Privileged Document was unsustainable and contrary to a party’s obligation to give full and proper disclosure.
42.There is then reference to the matters sets out in paragraphs 54-71 of the amended disciplinary application. These concern a particular document, called the ‘Privileged Document’, namely a letter from the firm to the company dated 13 October 2005, over which it is alleged legal professional privilege was claimed in the discovery process.[34] The allegation is then that this Privileged Document should have been discovered in the Supreme Court litigation in or around November 2008,[35] and that in breach of his duty the practitioner failed to give the defendants relevant advice as to this matter.[36]
[34] Paragraph 54
[35] Paragraph 56
[36] Paragraphs 57-59
43.In September 2012 a subpoena was issued to the firm. It is alleged that the defendants asserted legal professional privilege over the Privileged Document in that context[37], and that in the hearing of the subpoena application before Foster J the defendants abandoned this claim.[38] It is then alleged that practitioner 2 had a duty to, but did not advise the defendants not to maintain untenable claims for legal professional privilege and to make timely disclosure of all relevant documents.[39]
[37] Paragraphs 60-64
[38] Paragraph 65
[39] Paragraphs 69-71
44.Legal practitioner 2 points to similar issues to those raised in relation the MYOB documents, in particular relying on the removal decision and the subpoena decision.[40]
[40] Paragraph 28 above; practitioner 2’s outline of submissions at [41]-[54]
45.The defendants in the Supreme Court litigation do appear to have claimed privilege in the discovery process.[41]
[41] Exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure J, page 73 of the affidavit, item 74
46.As discussed, in relation to the MYOB documents, the removal decision did not deal with discovery, nor any claim for legal professional privilege.
47.In relation to the subpoena proceedings, document WM-02 in exhibit R2, the affidavit of William McCarthy dated 31 March 2016,[42] sets out the documents over which privilege was claimed in response to the subpoena to the firm (October 2012 subpoena privilege list), and document 2 on that list is the Privileged Document. In the subpoena decision, Justice Foster at [8] stated that it was common ground between the parties that the documents on the October 2012 subpoena privilege list were privileged when created, and the privilege was that of the company. But that counsel for the defendants conceded that Mr Byrne was entitled to inspect those documents created in the period prior to the date of his undisputed resignation as director, namely prior to 3 November 2005, which included document 2 on the October 2012 subpoena privilege list, the Privileged Document.[43] The argument in that hearing was therefore confined to other documents, and privilege in relation to them.
[42] See also exhibit A4, affidavit of Jennifer Shaw sworn 10 March 2016, paragraph 4 and exhibit A to the affidavit
[43] See also exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure S, page 398 of the affidavit, transcript of proceedings on 9 October 2012 in relation to the subpoena application
48.Practitioner 2 conceded that the subpoena decision held that Mr Byrne was entitled to see the advices which had been claimed to be privileged. This is not the full picture, however. In relation to the Privileged Document, counsel for the defendants conceded Mr Byrne was entitled to inspect the document. Justice Foster did not inspect the Privileged Document, and there was no evidence led, submissions made or decision on whether the Privileged Document was in fact subject to legal professional privilege as against Mr Byrne.
49.The subpoena decision of Foster J did go on to consider in some detail the claim for privilege in relation to a number of other documents, namely those listed 3-17 on the October 2012 subpoena privilege list.[44] But this does not include the Privileged Document referred to in grounds 7 and 10 of the amended disciplinary application, which as discussed is document 2 on the October 2012 subpoena privilege list. Nor does it consider the other pre 3 November 2005 communications referred to in grounds 8 and 10, which as discussed below are documents 1, 21 and 22 on the list, or not on the list. The substance of the subpoena decision is therefore not relevant to the grounds in the amended disciplinary application.
[44] Subpoena decision at [9]
50.As noted, the October 2012 subpoena privilege list concerned the subpoena to the firm. The relevant application in the subpoena proceedings had sought an order that the documents produced to the Court by the firm be made available for inspection by Mr Byrne.[45] The relevant order of Foster J was that the defendants produce the documents listed at paragraphs 3-10 of the list of documents, which seems to be the October 2012 subpoena privilege list (order 4). Order 6 was that any further argument about the subpoena to the firm be adjourned to the commencement of the hearing. There seems therefore to be no order concerning the Privileged Document, document 2 on the October 2012 subpoena privilege list, nor the other pre November 2005 communications referred to in ground 8. There was no final hearing.
[45] Exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure P, page 310 of the affidavit, paragraph 2
51.In the Tribunal’s view therefore the disciplinary proceedings in relation to ground 7 are not a collateral attack on, and do not seek to reopen allegations that were heard and decided in, the Supreme Court litigation, or challenge such decision or relevant findings, or contravene the rule against double jeopardy. There was no relevant hearing, findings or decision by the Supreme Court.
52.At any rate proceedings in the Supreme Court were not against practitioner 2, nor were they in relation to his compliance with his ethical obligations under the LP Act. Even if the Supreme Court had expressly dealt with the matter, this may not have prevented disciplinary proceedings; but as noted this is not the position. This is a very different situation to that in Gill and Walton which concerned two disciplinary proceedings dealing with overlapping issues, the first of which was stayed as an abuse of process.
53.Practitioner 2 also argues that the Supreme Court made no adverse comment or finding against him, nor did it criticise him for the privilege claim over those documents.[46] But as noted the Court did not consider this issue. In such a case it does not seem appropriate for the lack of any adverse comment to be determinative of whether there was a breach of his duty.
[46] Practitioner 2’s outline of submissions at [54]
54.It is possible that Mr Byrne could have made greater efforts to have issues in relation to this issue determined in the Supreme Court litigation, but this does not make his pursuit of the complaint mechanism, and that of the council, an abuse of process.
55.On this basis, the Tribunal does not think that the removal decision or the subpoena decision and the related matters raised by practitioner 2 support a finding that ground 7 in these disciplinary proceedings is an abuse of process.
Ground 8 – failure to discover pre 3 November 2005 communications
56.Ground 8 is as follows:
[legal practitioner 2], as an officer of the Court, in breach of his duty to the Court that he advise his clients in the conduct of the Litigation with respect to the disclosure of all relevant documents in the course of discovery, failed to advise his clients to discover the pre 3 November 2005 communications (other than copy of a letter … dated 13 October 2005 in respect of which privilege was claimed) and the File Notes in the Defendants’ List of Documents.
57.There is then reference to the matters set out in paragraphs 46 to 49C and 52 to 53 of the amended disciplinary application. The pre 3 November 2005 communications are four documents, one of which is the Privileged Document, dated 11 or 13 October 2005. It is alleged that, except for the Privileged Document, these documents were not on the Defendants’ List of Documents in relation to discovery in the Supreme Court litigation.[47] It is alleged that practitioner 2 had a duty to, but did not, advise the defendants as to the need to disclose the pre 3 November 2005 communications, or take steps to recover them from the firm’s own records.[48]
[47] Paragraph 48
[48] Paragraphs 50 and 52-53
58.Legal practitioner 2 points to similar issues to those raised in relation the MYOB documents, in particular relying on the removal decision and the subpoena decision.[49]
[49] Paragraph 28 above; Practitioner 2’s outline of submissions at [41]-[54]
59.As discussed, in relation to the MYOB documents, the removal decision did not deal with discovery, nor any claim for legal professional privilege.
60.These documents are on the October 2012 subpoena privilege list (apparently numbers 1, 2, 21 and 22).[50] Documents 1, 21 and 22 were treated the same way as document 2, the Privileged Document, in the subpoena decision of Foster J. Justice Foster did not inspect, consider or determine the position in relation to these documents. There was no order in relation to them. This part of ground 8 is therefore in a similar position to ground 7.
[50] Document WM-02 in exhibit R2
61.Further it is alleged that on 12 October 2012, after the subpoena decision, practitioner 2 produced a number of file notes dated 7 October 2005 to 2 November 2005 (file notes),[51] and that these were also not disclosed in the Defendants’ List of Documents in relation to discovery in the Supreme Court litigation.[52] It is alleged that practitioner 2 had a duty to, but did not, advise the defendants as to the need to disclose the file notes, or take steps to recover them from the firm’s own records.[53]
[51] See paragraph 49 of the amended disciplinary application
[52] Paragraphs 49-49C
[53] Paragraphs 50 and 52-53
62.As discussed, the removal decision did not deal with discovery, nor any claim for legal professional privilege.
63.These file notes apparently were not on the October 2012 subpoena privilege list. They were not considered by Foster J. They were provided to Mr Byrne after the subpoena decision.[54] This part of ground 8 is also therefore in a similar position to ground 7. In relation to this part of ground 8 it is of even less significance that the court made no adverse comment or finding in respect of practitioner 2, since the documents were apparently not on the October 2012 subpoena privilege list before the court and referred to in the subpoena decision. This part of ground 8 is therefore in a similar position to the other part, and ground 7.
Ground 9 – failure to reply to letters with respect to discovery of the General Ledger
[54] Exhibit A5, letter from the firm to Dibbs Barker dated 12 October 2012 and attachments
64.Ground 9 is as follows:
[legal practitioner 2], as an officer of the Court, in breach of his duty to the Court in the conduct of the Litigation to assist in the efficient and expeditious resolution of proceedings, failed to reply to the letters from Dibbs Barker between 22 June 2010 and 17 May 2011 with respect to the defendants failure to give proper discovery of the General Ledger.
65.There is then reference to the matters set out in paragraphs 29 to 42 of the amended disciplinary application. It is alleged there that on 22 June 2010 solicitors for Mr Byrne wrote to practitioner 2 stating that parts of the General Ledger were incomplete or missing from the discovered documents, subsequent letters were also sent, and that the Deputy Registrar of the ACT Supreme Court directed a response. It is alleged that no response was provided until 17 May 2011 when it was said on behalf of the defendants that the General Ledger was provided by accountants of the company and accordingly a complete copy could not be provided.[55]
[55] Paragraphs 39-37
66.Practitioner 2 argued that these purported failures were superseded by the removal application, which included an application for further and better discovery, and decision, and the subpoena application and decision, which dealt with the issue of privilege without any criticism of practitioner 2.[56]
[56] Practitioner 2’s outline of submissions at [56]
67.The decision of Master Harper on the removal application was given on 31 January, 2012 which is after the relevant period. This decision, as discussed above, said nothing about discovery. There was also no evidence, argument or decision about the failure of practitioner 2, or the firm, to answer correspondence concerning discovery.
68.The decision of Justice Foster in the subpoena application was given on 9 October, 2012, which was also after the relevant period. This decision, as discussed above, also said nothing about discovery. There was also no evidence, argument or decision about the failure of practitioner 2, of the firm, to answer correspondence concerning discovery.
69.In the Tribunal’s view therefore the disciplinary proceedings in relation to this allegation are not a collateral attack on, and do not seek to reopen allegations that were heard and decided in, the Supreme Court litigation, or challenge such decision or relevant findings, or contravene the rule against double jeopardy. There was no relevant hearing, findings or decision by the Supreme Court.
70.At any rate the proceedings in the Supreme Court were not against practitioner 2, nor were they in relation to his compliance with his ethical obligations under the LP Act. Even if the Supreme Court had expressly dealt with the matter, this may not have prevented disciplinary proceedings; but as noted this is not the position. This is a very different situation to that in Gill and Walton.
71.It is true that no adverse findings were made against practitioner 2 in the Supreme Court. But as noted the court did not consider this issue. In such a case it does not seem appropriate for the lack of any adverse comment to be determinative of whether there was a breach of his duty.
72.It is possible that Mr Byrne could have made greater efforts to have issues in relation to discovery and the failure to answer correspondence dealt with in the Supreme Court litigation, but this does not make his pursuit of the complaint mechanism, and that of the council, an abuse of process.
73.On this basis, the Tribunal does not think that the removal decision or the subpoena decision and the related matters raised by practitioner 2 support a finding that ground 9 in these disciplinary proceedings is an abuse of process.
Ground 10 – failure to advise that claims for privilege were unsustainable
74.Ground 10 is as follows:
[legal practitioner 2], as an officer of the Court, in breach of his duty to the Court in the conduct of litigation to assist in ensuring the efficient and expeditious resolution of proceedings, failed to advise his clients that the maintenance of the claims of privilege with respect to the Privileged Document and the pre 3 November 2005 communications was unsustainable.
75.There is then reference to the matter sets out in paragraphs 53 to 71 of the amended disciplinary application. There is significant overlap between this ground and grounds 7 and 8. The position of the Privileged Document has been discussed above in the context of ground 7. The position of the pre 3 November 2005 communications has also been discussed above in the context of ground 8.
76.Legal practitioner 2 argued that these purported failures were superseded by the removal application, which included an application for further and better discovery, and decision, and the subpoena application and decision, which dealt with the issue of privilege without any criticism of practitioner 2.[57]
[57] Practitioner 2’s outline of submissions at [56]
77.For the same reasons given in relation to grounds 7 and 8, the Tribunal does not believe that proceeding with this ground is an abuse of process.
Nature of alleged conduct
78.In written submissions and at the hearing counsel for practitioner 2 also relied in part on other factors in arguing for the dismissal application, not referred to in the dismissal application filed on 11 February 2016. One was that the major allegation against practitioner 2 concerning conflict of interest has now been abandoned. It is true that the conflict of interest was a central concern of Mr Byrne. But he was also concerned with the conduct of the Supreme Court litigation. These issues are not so linked that failure to pursue one means that failure to pursue the other is unfair.
79.A related submission was that the remaining allegations were minor. In particular it was said that the failure to respond to correspondence was at most discourteous. The amended disciplinary application refers to a solicitor’s duty to the court to ensure full and proper disclosure of relevant documents in the course of discovery, and to assist in ensuring the efficient and expeditious resolution of proceedings. These are important obligations, linked to the role of lawyers in the fair and efficient administration of justice. Whilst it is clear that there are more significant breaches of a solicitor’s duties, the Tribunal does not believe that pursuit of allegations of this nature is for this reason an abuse of process.
80.A further submission put at the hearing was that there was no evidence of what the relevant “standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner,” as referred to in the definition of ‘unsatisfactory professional conduct’ in section 386 of the LP Act, nor any allegation of wilful failure to comply with that standard.[58] Counsel for the council replied that the definition in section 386 is inclusive, allowing for other unsatisfactory professional conduct, that section 389 of the Act refers to other such conduct, and that wilfulness is not a requirement of the common law or the LP Act, though it occurs in other statutory contexts not relevant here.[59] The Tribunal accepts the submissions of the council and does not believe that these issues demonstrate an abuse of process.
Settlement of the Supreme Court litigation
[58] Transcript of Proceedings 1 April 2016, pages 56-59
[59] Transcript of Proceedings 1 April 2016, pages 67-68
81.Another factor raised was that the Supreme Court litigation were settled for a significant sum and costs. Practitioner 2’s outline of submissions argued that the settlement orders represent an “exceptional commercial result” for Mr Byrne, and that he ceased from then on to have any detriment, real or perceived.[60] But this settlement was agreed by all the parties, who no doubt saw it in some way as being in their interests. Further, it is not necessary for a complaint against a practitioner, or disciplinary proceedings, to be accompanied by any, or significant, economic loss. The Tribunal does not believe that the agreed settlement or the alleged absence of such loss makes the proceedings an abuse of process.
Delay
[60] At [57]-[60]
82.The dismissal application filed on 11 February 2016 also does not mention delay in bringing the disciplinary proceedings as a ground for dismissal. However some of the submissions made on behalf of practitioner 2 referred to this issue.[61] It was pointed out that the Supreme Court litigation was commenced in 2006, the complaint was made in 2011, and the dismissal of the complaint by the council occurred in 2013.
[61] Practitioner 2’s outline of submissions at [79]-[80]
83.The conduct the subject of the disciplinary proceedings against practitioner 2 took place between 2007 and 2012. Mr Byrne only learnt of the full extent of the practitioner’s alleged conduct in 2012 when documents were provided to him. Mr Byrne originally complained in 2011. Practitioner 2 asked for some delay in consideration of the complaint.[62] In August 2013 the complaint was dismissed by the council. Mr Byrne applied to the tribunal appealing the council’s dismissal.[63] Practitioner 2 chose not to take part in those proceedings. On 3 March 2015 in its decision in Byrne v Law Society the tribunal set aside the dismissal by the council and ordered that an application be made to the tribunal in relation to the complaint. In doing so it indicated that there were serious allegations raised by the complaint. The delay which has occurred has not therefore been unexplained or unwarranted. Further, practitioner 2 has provided no evidence as to the adverse effect of any delay. In these circumstances the delay involved does not provide a ground for finding an abuse of process.
Earlier tribunal decisions
[62] Exhibit R1, affidavit of William McCarthy sworn 29 February 2016, annexure D, pages 49-50 of the affidavit, letter from the firm to the ACT Law Society dated 6 June 2011; exhibit A5, first document, letter from the firm to the ACT Law Society dated 1 February 2012
[63] See exhibit A4, affidavit of Robert Reis at [25]-[31]
84.As noted, in Byrne v Law Society the tribunal ordered the council to bring proceedings against practitioner 2 under section 419(1) of the LP Act arising from Mr Byrne’s complaint. There was no appeal from that decision. The tribunal considered the complaint against practitioner 2 at [103]-[106]. The tribunal concluded in relation to the complaint against practitioner 2, under the heading “delay by ... [practitioner 2] in conducting proceedings brought by the applicant, failing to properly discover documents including maintaining an untenable claim for privilege, and supervising the work of P1 the subject of the applicant’s complaint”, that there was “a reasonable likelihood that a finding of either professional misconduct or unsatisfactory professional conduct by the ACAT would be made.”[64]
[64] At [106] in Byrne v Law Society
85.The compliant, as now formulated in the amended disciplinary application, has been considered in this dismissal application and decision. No submission was put by the council that the decision in Byrne v Law Society prevented the dismissal application. It is unlikely that principles of estoppel and res judicata apply in the tribunal.[65] Even if they did it is unlikely they would encompass the relationship between Byrne v Law Society, in which practitioner 2 was not a party, and this dismissal application. In considering the issues raised in this application the Tribunal has looked at the evidence before it. But the history of the matter and the decision in Byrne v Law Society seem relevant to the weighing process required in relation to the dismissal application, and weigh against a finding that these proceedings are an abuse of process. There would be some level of inconsistency in the tribunal in Byrne v Law Society ordering proceedings be brought, and a finding that those proceedings were an abuse of process. Further, it is noted that the decision in Byrne v Law Society did not involve a full hearing of all the relevant evidence in relation the complaint, and practitioner 2 did not participate. This hearing has also not involved a full hearing of all the relevant evidence in relation to the amended disciplinary application. This history of the matter suggests that rather than dismissal, a full hearing of the allegations is the more appropriate course.
[65] Pearce, Dennis Administrative Appeals Tribunal (4th edition, 2015), at [17.8]
86.The council did point out in argument that the contention that these proceedings involve a collateral attack on decisions of the Supreme Court was put by practitioner 2 as a basis for removal of these proceedings to the Supreme Court. General President Crebbin rejected that argument and was not satisfied that there was any real risk of inconsistency. This decision also weighs against dismissal.
87.The Tribunal notes that it would have reached the same conclusion on this dismissal application without these earlier tribunal decisions.
Conclusion
88.In summary, the Tribunal is of the view that the issues in the disciplinary proceedings were not determined in the Supreme Court litigation. This view is reached on the basis of the evidence before the Tribunal. Even if they had been, this would not necessarily support a dismissal of the disciplinary proceedings.
89.Further, the Tribunal is of the view that the other arguments raised by practitioner 2 do not support dismissing the disciplinary proceedings as an abuse of process. The fact that no adverse findings were made against practitioner 2 in the Supreme Court decisions and that Mr Byrne could have made greater efforts to have issues resolved in the Supreme Court litigation, do not suggest these proceedings are an abuse of process. Nor does the fact that it is possible to conceive of more serious breaches than those alleged, or that the Supreme Court proceedings by Mr Byrne were settled by a significant payment to him and an amount for his costs.
90.Such a dismissal should only be made in an exceptional or extreme case, or one involving an unacceptable injustice or unfairness, and this is not such a case. Also, a decision not to dismiss is more consistent with the tribunal’s decision in Byrne v Law Society and the removal application. In the Tribunal’s view the disciplinary proceedings should proceed to a hearing. This decision should not be taken to suggest anything about the likely outcome of these proceedings, or the level of seriousness of the allegations.
………………………………..
Senior Member R Orr QC
HEARING DETAILS
FILE NUMBER:
OR 34/2015
PARTIES, APPLICANT:
Council of the Law Society of the ACT
PARTIES, RESPONDENT:
Legal Practitioner 2
COUNSEL APPEARING, APPLICANT
Mr N Beaumont SC, Ms R Withana;
COUNSEL APPEARING, RESPONDENT
Mr Stitt QC, Mr M Walsh
SOLICITORS FOR APPLICANT
Eakin McCaffery Cox
SOLICITORS FOR RESPONDENT
Bradley Allen Love
TRIBUNAL MEMBERS:
Senior Member R Orr QC
DATES OF HEARING:
1 April 2016
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