Council of the Law Society of the Act v Legal Practitioner “D3” (Appeal)
[2015] ACAT 7
•22 May 2014
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT V LEGAL PRACTITIONER “D3” (Appeal) [2015] ACAT 7
AA 13/51
Catchwords: APPEAL – OCCUPATIONAL DISCIPLINE – Legal Practitioners – failure to comply with conditions for first home owner grant – forfeiture of grant – legal practitioner’s failure to advise Law Society about the outcome of his appeal to Supreme Court – complaint made three years after conduct - delay contributed by legal practitioner – additional evidence before appeal tribunal shows that Law Society was not at fault in relation to lapse of time - impossibility of investigating complaint of fraud within three year period - balancing of forensic prejudice with public interest and public interest outweighs – appeal allowed – legal practitioner’s strike out application is dismissed
Legislation: ACT Civil and Administrative Tribunal Act 2008, s 32
First Home Owner Grant Act 2000, ss 21 and 47,
Legal Profession Act 2006, ss 395, 417, 419 and 424
Taxation Administration Act 1999, part 9
Cases: Harrison v Commissioner for Social Housingin the ACT & Minister for Aboriginal and Torres Strait Islander [2012] ACAT 10
In the matter ofKang & R & D Regional Construction Pty Ltd [2013] ACAT 24
Jago v The District Court of New South Wales (1989) 168 CLR 23
Law Society of Tasmania v Matthews [2010] TASSC 60
Queen v FJL (2014) VSCA 57Robb & Anor v The Law Society of the ACT, ACT G34 of 1996
The Law Society of New South Wales v Boland (2001) NSW ADT 35
The Legal Practitioner v Council of the Law Society of ACT [2013] ACTSC 134
Thornthwaite and Commissioner for Social Housing (2012) ACAT 11
WSOL & John James Memorial Hospital (Unreported decision of ACT Supreme Court (Matter no. SCA No 1 of 2009), 22 May 2009)
Appeal Tribunal: W.G Stefaniak AM – Appeal President
Date of Orders: 22 May 2014
Date of Reasons for Decision: 22 May 2014
Date of published reasons for decision: 19 January 2015
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
AA 13/51
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT
Appellant
AND:
LEGAL PRACTITIONER ‘D3’
Respondent
APPEAL TRIBUNAL: W.G Stefaniak AM – Appeal President
DATE: 22 May 2014
ORDER
The Tribunal orders that:
The appeal is allowed.
The Tribunal’s order of 29 November 2013 is set aside and the Tribunal orders as follows
a)Pursuant to section 424 of the Legal Profession Act 2006 the Tribunal orders that the Councils failure to decide to extend time pursuant to section 395(2) of the said Act be disregarded.
b)The practitioner’s application filed on 18 September 2013, as amended, be dismissed.
c)The matter be listed for further directions before the Tribunal at first instance.
Signed ………………………………..
W.G Stefaniak AM – Appeal President
REASONS FOR DECISION
Might I say, to start with, that this is an unfortunate matter in that it would appear had section 395(2) of the LegalProfession Act 2006 (the Legal Profession Act) been considered and dealt with early in the piece prior to any investigation, I do not think any of us would be here in relation to this matter. That did not occur.
The circumstances in relation to this case are as follows: On 20 November 2008, the Commissioner for ACT Revenue made a complaint to the Law Society against the solicitor (also referred to as “D3”), who is the respondent in this matter. That was made some 14 days after the decision of the ACT Administrative Appeals Tribunal (ACT AAT) - on 6 November 2008, comprising Senior Member Brian Hatch, affirming the decision of the delegate of the Commissioner that was made on 17 December 2007. That decision was that the solicitor was not entitled to a first home owner's grant, which was paid to him on 7 January 2003 pursuant to the First Home Owner Grant Act 2000 (FHOG Act).
The delegate had decided that the solicitor was not entitled to the grant, as by operation of section 21 of the relevant Act the grant was automatically forfeited if settlement did not take place within 20 days after the date estimated for settlement and the solicitor did not make the property his principal place of residence within one year of settlement. The delegate stated in her decision that the applicant was also required to commence his residency in the property by 15 October 2005 for a continuous period of six months, which he did not do.
The delegate decided the grant of $14,000 should be repaid, and the delegate imposed a penalty of 75 per cent of the grant amount of $14,000 pursuant to section 47 of the FHOG Act. On 15 February 2008, the solicitor applied to the ACT AAT for a review of the delegate's decision. The ACTAAT - (which is now incorporated into ACAT) - on 6 November 2008 - affirmed the decision under review and-published its decision and reasons.
As a result of that decision the Commissioner complained to the Law Society on 20 November 2008. On 3 December 2008, the solicitor lodged an application for leave to appeal the ACT AAT decision to the Supreme Court of the Australian Capital Territory, and on 8 December of 2008, the solicitor lodged an affidavit, which had been affirmed on 1 December 2008, in support of his application for leave in the Supreme Court.
On 8 December 2008 as well that year, the Society wrote to the solicitor enclosing a copy of the Commissioner's complaint, and stated as follows:
It appears from the correspondence that the complainant has raised the following grounds of complaint:
(a) Dishonesty; and
(b) Unnecessary costs to the taxpayer in appealing on a meritorious decision.
The Society received a letter from the solicitor on 22 December 2008 advising that the ACT AAT decision had been appealed and it was now before the Supreme Court. It had been stood over generally by Master Harper on 12 December 2008, with liberty for the parties to apply to the listing clerk. The solicitor enclosed in his letter to the Society a copy of each of the documents he had lodged with the Supreme Court. He requested in his letter:
...this complaint be adjourned until such time that the Supreme Court has determined the issues before it, ...I undertake to advise you when the matter has been relisted….
The Society wrote back to the solicitor on 22 December 2008 stating,
As the substance of Mr Dowell's (the Commissioner’s) complaint concerns your appeal before the ACT Supreme Court, it is appropriate to defer further consideration of it pending completion of the appeal. Please advise the Society when this has occurred.
By letters dated 23 December 2010, some two years later, the Society asked both the Commissioner and the solicitor to advise what the current status of the Supreme Court matter was. On 7 January 2011, the Commissioner notified the Society that a consent order had been issued by the ACT Supreme Court on 6 November 2009. The solicitor notified the Society by letter dated 28 January 2011 that:
...by consent, the orders of the ACT Administrative Tribunal were set aside before the ACT Supreme Court.
Accordingly, I formally request that the complaint by the Commissioner be dismissed and no further action be taken by the Law Society.
The Society then requested a copy of the consent order from the Commissioner by letter dated 16 February 2011, and also from the solicitor by a letter dated 17 February 2011. The solicitor did not reply. The Commissioner notified the Society on 3 March 2011 that pursuant to Part 9 of the Taxation Administration Act 1999 the Commissioner was not able to provide a copy of the consent order.
The Society wrote to the solicitor on 12 April 2011 requesting by Friday, 29 April 2011:
a copy of the terms of the settlement, consent agreement and final orders of the court by consent.
The Commissioner also requested that the solicitor provide copies of all correspondence between himself and the Commissioner relating to the appeal. By an email on 20 April 2011 the solicitor provided the Society with a copy of the consent orders entered into on a without prejudice and no admission basis between the parties. The solicitor then stated:
You will readily note that the Commissioner has consented to setting aside the findings of the AAT which form the basis of his complaint to the law society. On the basis of the Commissioner's consent the ACT Supreme Court has set aside the decision of AT 32 of 2008 by Senior Member Hatch. In such circumstances, I submit I now have no case to answer regarding the complaint made by the Commissioner and request the Law Society now to dismiss the complaint.
The consent order of the ACT Supreme Court provided:
There will be court orders by consent as follows: (1) That the decision of the Administrative Appeals Tribunal dated 6 November 2008 in matter AT 32 of 2008 be set aside; and (2) That there be no order as to costs. The court notes the following: (1) The agreement of the parties that the appellant pay to the respondent the sum of $18,000.00 within 90 days of these orders; (2) The agreement of the parties that the respondent provide to the appellant a letter confirming that upon settlement of the payment of $18,000.00 by the appellant to the respondent the respondent will do all things necessary to procure the removal of any statutory charge over the property known as unit 58, block 6, section 17, Barton in the ACT; and (3) the parties intend to enter into a deed to reflect those and other matters.
Thereafter, and until 31 August 2011, there was correspondence between the Society and the solicitor in relation to the complaint. On 31 August 2011, Mr Michael Phelps was appointed by the Society to investigate the complaint. There was then further correspondence between the parties and the complainants, quite lengthy correspondence in relation to all of these matters, and that culminated in the final correspondence on 12 September 2012, where the solicitor indicated to the Law Society that he gave consent for any further documentation, specifically the T documentation, to be obtained.
This appeal tribunal has now heard further evidence in relation the supplying of the Tribunal documentation. The third party, the Commissioner, was fairly prompt in supplying the documents. There were 1350 pages, which Mr Phelps duly went through, and between April and June of 2013 the Society deliberated on the matter, culminating in deciding in June 2013 to go ahead with an application to ACAT. Both parties to this appeal made comments in relation to that period of time that was not discussed during the hearing at first instance.. That fills in the missing link in terms of what was before the learned president at first instance, and what was before me.
I do not propose to list the correspondence between the parties from 31 August 2011 until 12 September 2012, but I am satisfied both parties were reasonably diligent in responding to each other during that period. There is one incidence of the wrong income tax return being sent. That is stated to be a mistake. There have been issues in terms of some time being taken just to get documents, and there were reasons given for that which appear to be, on the surface, quite reasonable, and I am certainly satisfied in relation to that period of time that both parties appear to be doing their best in terms of investigating this complaint and the solicitor in responding to it.
I have now also had the benefit of evidence as to what occurred during the further period between September of 2012 and June of 2013. Whilst possibly it could have been done a little bit quicker, (and that is fairly difficult for someone sitting in my position to determine), nothing really jumps out at me to indicate any significant delay between September 2012 and June 2013. A fairly lengthy process, perhaps, but not a great delay, although I take the solicitor’s point about no‑one again seems to have addressed section 395(2) of the Legal Profession Act.
On 19 June 2013, Mr Phelps notified the solicitor that the Council of the Law Society had resolved, on 17 June 2013, to apply to ACAT pursuant to section 419 of the Legal Profession Act for an order in relation to the complaint. On 19 June 2013, Mr Phelps lodged an application for disciplinary action against the solicitor. In that application the Society sought findings of professional misconduct and such orders pursuant to section 425 of the Act as the Tribunal deems appropriate.
The application, of course, was attached, and I will briefly go through the main points. I will not go through the whole lot; that has been dealt with before and it is also in the learned president’s uncontested paragraphs 3 to 21, but the salient points were that the Society had contended that the respondent, that is, the respondent solicitor in that instance, had in the course of the matter complained of, engaged in conduct involving an attempt to defraud the Commissioner for ACT Revenue by the improper pursuit of a first home owners grant in circumstances where the respondent did not satisfy the relevant criteria of occupying the property which was the subject of the grant, as his principal place of residence and such conduct amounted to professional misconduct.
The application for disciplinary action lodged with the Tribunal on 19 June 2013 stated the following ground for disciplinary action:
Grounds of complaints: (1) attempt to defraud the Commissioner for ACT Revenue.
It is interesting to note that the application was limited to that ground. The solicitor's failure to advise the Society of the outcome of his appeal to the Supreme Court in accordance with the undertaking offered in his letter of 22 December 2008 was not included as a ground for disciplinary action.
There were various orders made in relation to directions for the matter to proceed. The application before the Tribunal at first instance was listed for further directions on 20 September 2013. By an email received on 16 September 2013 the solicitor notified the Society and the Tribunal that he would be filing an application to dismiss the Society's application. He provided as an attachment an unsealed copy of his application. On 18 September 2013, he also lodged the strike-out application with the Tribunal in which he sought the following orders.
1. Pursuant to section 426 of the Legal Profession Act 2006, the application in
the matter OR13/20 be struck out and dismissed;
2. That costs on an indemnity basis be paid by the applicant to the respondent.That was heard on 20 September 2013. It was opposed by the Society. Written submissions were provided by the solicitor in the form of letters from Mr Phelps on 15 and 18 September 2013, and a letter from Mr Phelps to him dated 17 September. Also, Mr Phelps provided written submissions on 20 September 2013. Oral submissions were also given. At the conclusion of the hearing, the Tribunal reserved its decision.
In terms of strike-out applications, the learned president quoted section 32 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act), which gives this tribunal power to strike out a matter. That basically provides that if a tribunal considers an application is frivolous or vexatious, the tribunal may do a number of things, including dismissing the application. It also may vary or revoke a direction given and can do a number of things set out in section 32.
The Tribunal granted the solicitor leave to amend his application to rely on section 32 of the ACAT Act. That was not opposed by the Society, and accordingly it was not necessary for the learned president to consider the parties' submissions in relation to section 426 of the Legal Profession Act. The strike‑out application was based on three grounds, two of which were not accepted by the learned president. The second one, which was a period of three years had expired before the complaint was made and pursuant to section 395 of the Legal Profession Act, the Society, not having disclosed having made a determination pursuant to section 395(2), was statute barred from bringing the application.
The Tribunal referred to the case of Harrison v Commissioner for Social Housing in the ACT & Minister for Aboriginal and Torres Strait Islander[1] and considered the approach to be taken in relation to applications for dismissal under section 32. The learned president was satisfied that the principles set out in that case were applicable to the present matter before her. Those specifically included paragraph 6, which is,
(vi) A power to summarily dismiss or strike out an application is designed to prevent abuses of process. The applicant for summary dismissal must show, ...that the complainant's case is manifestly hopeless or obviously unsustainable or that it would not on any reasonable view justify relief.
And 7, which is,
(vii) A complaint can be dismissed or struck out if it is obviously unsustainable in law or in fact.
[1] [ 2012] ACAT 10
Those were the matters leading up to the determination by the Tribunal. The learned president, from paragraphs 37 through to 62 of her decision dealt with the second claim and indicated that the solicitor drew the Tribunal's attention to 395 of the Act.
Section 395. Complaints made more than three years after conduct
(1) A complaint may be made about conduct to which this chapter applies irrespective of when the conduct is alleged to have happened; (2) however, the complaint cannot be dealt with otherwise than to dismiss it or refer it to mediation if the complaint is made more than three years after the conduct is alleged to have happened, unless the relevant council for the person about whom the complaint is made decides that
(a) it is just and fair to deal with the complaint having regard to the delay and the reasons for the delay; or
(b) the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.
The solicitor, the respondent in this appeal, submitted that when the complaint was made on 20 November 2008 a period of three years had already elapsed from the date of his alleged misconduct. Particular 7 of the complaint identified the settlement of the subject property occurring on or before 15 October 2004, and that was when the FHOG Act[2] required the recipient of the grant to reside in the grant property as his principal place of residence within one year of settlement, namely, on or before 15 October 2005. The period of three years referred to in section 395 expired. 15 October 2008 was some five weeks, or thereabouts, prior to the complaint being made.
[2]Section 12
The solicitor requested the Society provide him with Council's determination to extend the statute bar pursuant to section 395(2) of the Legal Profession Act. That was not provided and the learned president stated either it did not exist, or if it did exist, he had not been given a copy of it. It clearly did not exist, as we have heard in this appeal. It was, as Mr Phelps has indicated, an oversight. It was not considered. It did not happen, and basically the Society went straight into an investigation mode when it should have considered that particular issue.
There was no evidence either before the learned president in the Tribunal at first instance or myself to indicate any reason other than just a total oversight. There is nothing to point to anything else, and that appears to have been the case probably right up until the time the matter came before my colleague, President Symons.
The learned president then decided the meaning of “may” and “must”, and referred to further comments made by the solicitor. The solicitor, at paragraph 42, submitted that the Society's application was brought for improper purposes and was an abuse of process, and in paragraph 43 he said this matter had impacted on him for the last five years and it was highly distressing. He described the proceedings as quasi judicial in nature, stating that he no longer practises and, thus, the proceedings had taken away his livelihood. He said, "There could not be anything more prejudicial for me."
The Society's response submitted that the complaint was made on 20 November, only 14 days after the AAT decision on the 6th, and it was only after the AAT findings in relation to the solicitor's conduct concerning the FHOG Act that it was appropriate for any complaint to be made to the Society as the regulatory body. The Society embarked on the investigative process by writing to the solicitor on 8 December 2008. He told the Society 14 days later that he had lodged an appeal and requested the Society defer its consideration until the appeal had been determined. He undertook to notify them when the appeal had been determined.
The practitioner did not tell the Society that the appeal had actually been finalised in November 2009. The society did not learn about that until 2011, when it had received advice from the Commissioner in response to their letter sent in December 2010. The Society also submitted that it had immediately revived its investigation of the complaint, and indeed the affidavits of Mr Reece and Mr Phelps set out in annexures, provided evidence of the solicitor's actions on a number of occasions which according to the Society delayed the investigation.
At the hearing, Mr Phelps confirmed, in response to a question from the tribunal, that the Society's counsel had not made a determination in accordance with section 395 subsection (2) of the Legal Profession Act. He referred the tribunal to its powers under 424 of that the Legal Profession Act, which gave the tribunal power to disregard the procedural lapses. Section 424 states,
The ACAT may order that a failure by the relevant council to observe a procedural requirement in relation to a complaint before an application is made to the ACAT is to be disregarded if satisfied that the parties to the hearing have not been prejudiced by the failure.
Now, the Society contended that neither the Society nor the solicitor would be prejudiced by its failure to observe the procedural requirement in section 395(2) of the Legal Profession Act and asked the tribunal to disregard the procedural lapse. That has been again raised in this Tribunal, and Mr Phelps contended that prejudice means to forensic prejudice.
The learned president then considered the matter, and indicated in paragraph 50 of her decision that the 12-month period in which the solicitor was required to take up occupation of the property did not end until 15 October 2005. The complaint was not lodged until November 2008. That is clearly in excess of three years set out of section 395 of the Legal Profession Act.
In paragraph 51 of her decision, the learned president stated that the Council for the Society did not make the determination required by section 395(2) of the Legal Profession Act before commencing its investigation of the complaint. There was no evidence before the tribunal as to why the Society had not considered section 395 of the Legal Profession Act in November 2008, when the complaint was received, or in the intervening period between then, and the Society's decision in June 2013 to institute proceedings against the solicitor. She went on to say, "This is troubling." At paragraph 52, she stated:
Mr Phelps conceded the Society had not complied with section 395(2) and asks the Tribunal to treat this failure as a procedural lapse pursuant to section 424 of the LPA.
She noted that was strenuously opposed by the solicitor, and he stated that the Council and its Director of Professional Standards ought to have known of the requirements of section 395(2). He went on to say that the Council’s failure meant that it was barred from dealing with the complaint. The learned president then summarised the section and indicated the Tribunal was not provided with any explanation as to why the Council did not consider the clear requirements. In paragraph 56, the learned president stated:
The Tribunal has carefully considered the principles in Harrison in considering the interim application for summary dismissal and, in particular, that
(vi) It is a serious matter for the Tribunal, in an interlocutory proceeding to deprive a party of a chance to have their application heard in the ordinary course of a full hearing. The power should therefore be exercised with caution and consistently with the objectives set out in section 6 and the principles set out in section 7 of the ACAT Act, as well as any objective of the relevant law that authorises a substantive application; and
(vii) A complaint can be dismissed or struck out if it is obviously unsustainable in law or in fact.The learned president went on to note that:
The ‘General Procedural Matters about Complaints” are set out in section 417 of the LPA, which states:
...
‘(1) The rules of procedural fairness, to the extent that they are not inconsistent with this Act, apply in relation to the investigation of complaints and procedures of the Council under this chapter.
...
(2) A Council must deal with complaints as efficiently and quickly as practicable.She went on to say, (and I think the pertinent parts of her decision are as follows):
58. It is incumbent on the Council to deal with complaints in accordance with section 417 of the LPA. The purpose of section 395 is clearly aligned with section 417. It is intended to reduce the risk of unfairness that may attach to investigation of an old complaint. It reinforces the principle that complaints should be dealt with fairly and efficiently by barring investigation of an old complaint unless the Council, having turned its mind to issues of fairness and public interest, makes a considered decision to the effect that the concerns raised by the complaint are such that it should be dealt with, notwithstanding its age. That decision making process is an important procedural step that cannot be likely ignored.
59. Almost 8 years have now lapsed since the conduct of the subject of the complaint occurred. For almost five of those years the Society has been investigating the complaint. During that time the Society continued to issue practising certificates to the solicitor until 2012, having apparently concluded in the circumstances of the case that the potential denial of nature justice to the solicitor if it did not do so, was of greater concern than the need to protect the public. The solicitor's circumstances have changed in this period. In 2012 he left the ACT and moved interstate. He held a practising certificate in the other state during 2012 - 2013, but apparently did not renew the certificate when it expired.
60.While the solicitor contributed to the delay, particularly by failing to tell the Society of the outcome of his Supreme Court appeal, the Tribunal is satisfied from all the correspondence annexed to the affidavit of Mr Reece and Mr Phelps and the documents before it that the solicitor was not the sole cause of the delay. The Society also contributed.
61. In the absence of any explanation of why the Council did not consider the clear requirements of section 395(2) of the LPA, and noting the solicitor's submissions about prejudice to him, the Tribunal was not persuaded that this is a procedural lapse of a nature that would lead the tribunal to exercise the power given to it in section 424 of the LPA.
The learned president came to the following conclusion at paragraph 62:
The Tribunal agrees with the solicitor's submissions to this ground. The Tribunal is satisfied that the complaint as a result of the failure of the Council to comply with section 395(2), cannot be dealt with and is unsustainable in law.
The matter has now been appealed to this Tribunal. The general principles in relation to appeals, either to superior tribunals or superior courts, has been set out in a number of cases over a number of decades. In this Tribunal, it has been summarised in the matter of Thornthwaite and Commissioner for Social Housing[3], a decision on 4 April 2012. Paragraph 54 of that decision states:
The general rule on appeals is that an appeal court, or an appeal tribunal in this instance, will be reluctant to interfere with the order of a lower court or tribunal unless there is some manifestly obvious error made which, if it was not rectified, will have a substantive bearing, an adverse bearing on the case - an adverse bearing - that would not be in the interests of justice if it were allowed to stand.
[3] (2012) ACAT 11
The Tribunal then went on to give an example in relation to a Tribunal ordering $7500 damages to a car, when $10,000 was sought, and if that was reviewed and an appeal tribunal thought, look, I would have only given $6000, or I would have given $8500, that is tinkering and it would be far safer just to leave the original decision as it was. The tribunal, at paragraph 56, went on to say:
So we start from the premise that unless there is something obviously wrong, and it would be unjust not to rectify it, in the decision of Senior Member Lennard or Senior Member Anforth, the appeal tribunal has nothing before it that would justify altering the decisions.
That is the basic point in terms of appeals. The next point is in relation to the practitioner’s issue, which I will deal with fairly promptly as to whether this appeal is actually properly brought under section 79 of the ACAT Act.
In the matter of Kang & R & D Regional Construction Pty Ltd[4], a number of points were raised and the issue of jurisdiction was dealt with.
[4] [2013] ACAT 24
This was dealt with in the context of default judgments as opposed to ex parte judgments, but the principle remains the same and also referred back to an earlier unreported case. I stated there that:
37...The matter covered in Thornthwaite dealt with when an application has clearly been decided by the Tribunal because it has actually been set down for hearing, the parties have been sent notice to attend a hearing, a party does not turn up, a judgment is made either dismissing the matter or accepting what the applicant says. It deals with ex parte judgment.
Thornthwaite deals with a housing eviction. It’s common practice in this tribunal for some tenants not to turn up when the applicant is seeking a termination of the lease. The respondents only file documents after they have received notice that they are going to be evicted or even sometimes when the police turn up to evict them:
38. It is quite clear in all those circumstances the original application has been decided by the tribunal.
Thornthwaite goes into that in some detail. There are other appeals too where this is touched on. There is a view in ACAT in relation to default judgments, such as Ms Kang’s that an appeal such as hers cannot be a true appeal when one looks at section 79 of the ACAT Act, unlike appeals from ex-parte judgments such as Thornthwaite.
Section 79 states:
This section applies if,
(a) the tribunal has decided an application (the original application); and
(b) the original application was not an appeal from a decision by the tribunal.
In the Kang case, “original application” was highlighted at [41]: “Clearly, the original application in this matter was not an appeal from the tribunal”. It was from an order to set aside a default judgment. The tribunal then goes on in relation to further matters about ex parte matters and default judgments, default judgments effectively being an administrative matter.
An application was made here by the Law Society. It was an original application. Quite properly, the respondent exercised his rights, made objections and sought to have it struck out, and the learned president, accordingly, struck it out. She has thus decided an application. Now, whether that is right or wrong is why we are here today, because the appellant, who was the applicant below, brought an application, and was not satisfied with the learned president’s decision. It was a matter where documents had been filed. Both parties were indeed well and truly present.
In this case, this was a substantive and well thought out argument before the learned president and, accordingly, it clearly is the tribunal deciding an application, and that application was not an appeal from a decision by the tribunal.
It was the original application and accordingly this preliminary point does not have legs and the practitioner fails in relation to that submission.
Both parties made both written and oral submissions in relation to this matter. The appellant in this matter on 31 March filed with the Tribunal its submissions. It set out some preliminary matters. In 3(c) of its submissions, it stated:
The tribunal ruled that the consequence of its refusal to disregard the procedure failure was that the proceedings could be dismissed as frivolous and vexatious under section 32 of the ACAT Act.
The appellant/law society stated at the outset that even if it was proper for the tribunal to decline to disregard the procedural failures, a conclusion which it challenged, the consequence of that would be the Tribunal simply had no jurisdiction at all to deal with the application, that the Tribunal did not have the power to dismiss the application as frivolous or vexatious with the apparent consequence of not only the application but also the underlying complaint was thereby brought to an end.
To the contrary, it stated the consequences of the Tribunal having no jurisdiction was that an investigation of the complaint would start afresh and the Society would be compelled by law to deal with the complaint in accordance with law, including by making a determination under section 395(2) of the Legal Profession Act, and it further develop that point.
The appellant said there were some significant factual matters. It pointed out firstly that the complaint against the practitioner was “a very serious nature”. It was to the effect that the practitioner has attempted to defraud the Commissioner for ACT Revenue via the improper pursuit of the First Home Owner Grant in circumstances where the practitioner did not satisfy the relevant criteria. It stated that the seriousness of such a complaint was not to be underestimated and that the Tasmanian Supreme Court in Law Society of Tasmania v Matthews[5] had held that such conduct may amount to professional misconduct and warrant the removal of the practitioner’s name from the role of practitioners.
[5] [2010] TASSC 60
It went on to say that, secondly, the complaint was made by the Commissioner of Revenue on 20 November 2008, less than five weeks after the three‑week period for the making of complaints ended, and it was made 12 days after a finding by the ACT AAT, affirming the decision of the delegate that the practitioner was not entitled to the First Home Owner’s Grant.
The appellant’s third point was that whilst the period of time for making the complaint, from November 2008 to the commencement of disciplinary proceedings in June 2013 was over four and a half years, the delay of two and a half of those years from November 2008 to April 2011 was caused wholly and palpably by the practitioner. In the period April 2011 to June 2013 the Council of the Law Society corresponded with the practitioner and conscientiously pursued the investigation. It stated that because the complaint had been made five years after the conduct arose, albeit only less than five weeks, it was required to determine and deal with the complaint pursuant to section 395(2).
The Council at the time of the commencement of the disciplinary proceedings in June 2013 had not made such a determination, nor did it make any determinations subsequently and, rather than exercise the tribunal’s power pursuant to 424 to disregard their failure, the tribunal proceeded to make a number of errors, fundamental errors it said, in the exercise of its discretion and ultimately ordered that the Council’s application for disciplinary action be struck out pursuant to section 32 of the ACAT Act on the basis that the application was frivolous or vexatious.
The Society asked this Tribunal to review the original decision but, having found error, it should then re-exercise the discretion under section 424 of the Legal Profession Act for itself as part of the traditional appellate function. It sought an order which it then set out. It stated the tribunal did not have the power to dismiss the application as frivolous or vexatious and that not only the application but also the underlying complaint was thereby brought to an end. To the contrary, the consequences of the tribunal having no jurisdiction was that investigation of the complaint would start afresh, the society would be compelled by law to deal with the complaint in accordance with the law, including making a determination under 395(2) of the Act.
The Society stated in terms of the settlement of 6 November 2009 – and I am not going to go through some of the other parts of its submissions because I have gone through the factual matters that have not been in dispute - but it stated that the Supreme Court matter settled on terms whereby the practitioner agreed to pay to the Commissioner $18,000. That amount represented the full amount of the grant, $14,000 plus part of the penalty sought by the Commissioner. It was a condition of that settlement that the decision of the ACT AAT would be set aside but, given the amount that the practitioner agreed to pay, the settlement clearly represented a substantial win for the Commissioner:
In breach of this undertaking the practitioner failed to advise the council that the matter had settled, let alone on such unfavourable terms to him.
The Society then reiterated that it had written to him and the Commissioner in late December 2010. On 28 January 2011, he had written to them indicating that:
I ... write to advise that by consent the orders of the ACT Administrative Tribunal was set aside before the ACT Supreme Court. Accordingly, I formally request that the complaint be dismissed and no further action taken.
The Society indicated that that was an incomplete description of what occurred and it stated that it was indeed downright misleading because he failed to mention that he agreed to pay the Commissioner $18,000. He stated that that was just part of the compromise. He then used that very partial and misleading incomplete disclosure as the basis for requesting the matter be dismissed:
In this way he has prima facie misled and obstructed the council in its investigation.
The Society went on to say it was not until 20 April of 2011, after two more requests, that it got the full order. It stated:
The correspondence between the council and the practitioner from April 2011 to commencement of proceedings shows the council conscientiously pursued the investigation at all times.
Then, it dealt with the statutory provisions (sections 395 and 424). It submitted that in construing section 424, firstly regard ought to be had to the fact that section 424 is part of Part 4.7 (Disciplinary action) of the Legal Profession Act, and the purposes of such proceedings is to protect the public, it went on to say:
Such proceedings are not in the nature of a contest between private parties. That distinction is significant and is directly relevant to the exercise of the tribunal’s discretion to terminate proceedings brought to protect the public other than on their merits.
Secondly, both the terms of 424 and its legislative history show that the power is remedial. It is relevant to observe that section 424 of the ACAT Act is equivalent to section 561 of the New South Wales Legal Professional Act 2004 which was originally introduced as section 171 of the New South Wales Legal Profession Act 1987. That provision was intended for the purposes of overcoming the Draconian effects of the High Court’s decision in Barwick v Law Society of New South Wales [2000] 169 ALR 236.
The Society also referred to the second reading speeches in the NSW Parliament for the Legal Profession Amendment (Complaints and Discipline) Bill, 31 May, and 6 and 8 June 2000, copies of which it provided. It stated that in Barwick v NSW Law Society[6], the High Court had held that the failure of the Legal Services Commissioner to exercise his discretion to accept the complaint more than three years after the alleged conduct meant that the tribunal lacked the jurisdiction to determine the complaint.
[6] [2000] HCA 2; (2000) 169 ALR 236
It stated that the context was significant and it stated the learned president found in the circumstances of this case that the Council’s failure was not a procedural lapse of the nature that should lead the Tribunal to exercise the power given to it. It stated, in fact, that failure was precisely of the same nature as the failure of the Commissioner in Barwick which led to an introduction of the remedial power to disregard a procedural failure in the first place.
The Society then dealt with prejudice. It stated that the tribunal ought to have determined that the test required that it had to only determine whether or not the parties to the hearing had been prejudiced by the failure, in the sense of an incurable forensic disadvantage, in the prosecution or the defence of their case, and then determine that the parties to the hearing wouldn’t be prejudiced by the procedural lapse and, therefore, for the procedural lapse to be disregarded pursuant to section 424.
The Society submitted that it is plain that the prejudice contemplated by the section is prejudice, (1) caused by the procedure failure and, (2) irreversible and of a forensic nature in the conduct of the parties’ case at the hearing. It stated the tribunal erred in taking into account the practitioner’s submissions about prejudice to him. The Society went on and said:
The tribunal identified two forms of prejudice, namely the matter it impacted on and for the last five years was highly distressing, and the proceedings were quasi-judicial in nature –
and sought by way of relief, an order that he no longer practise, not that those matters amount to prejudice in the sense contemplated by section 424. The practitioner’s complaint about personal distress to him was no prejudice within the meaning of that. It was almost impossible to imagine any disciplinary proceeding against a legal practitioner, particularly one involving the possibility to strike off, which would not result in personal distress to the practitioner. If that kind of prejudice was relevant to section 424, the section would be a dead letter rather than the remedial provision that it clearly is
Similarly, the practitioner’s complaint about the nature of the proceedings and the possibility they had the potential to take away his livelihood was irrelevant. That was essentially a complaint about the nature of the disciplinary proceedings themselves and could not have been prejudice in the relevant section.
The Society then talked about the delay. It stated that the Tribunal should have found that the delay was caused wholly or mostly by the conduct of the practitioner, not the Council. In any event, the delay needs to be weighed against the fundamental importance of the proceedings, having regard to the seriousness of the charge, and attempt to defraud the revenue office, the serious question as to the practitioner’s fitness to practise, the need to protect the public and the public interest in pursuing the application against the practitioner. It went on to state the practitioner’s culpable conduct in causing the delay from November 2008 to April 2011 has been discussed and the Council thought that was highly significant.
It also stated that the tribunal made no findings of fact at all about any act of delay by the Council for the period 20 April 2011 to the commencement of the proceeding, yet the tribunal found the Council had contributed to the delay and felt that the council was equally culpable in this respect. They felt that was the wrong finding.
The Society went on to say that there was nothing in the material before the tribunal which was capable of suggesting any explanation in terms of 395(2) other than mistake or oversight, and that was a procedural lapse. The obvious and natural inference was that failure was a mistake and that that was something the tribunal should have taken into account. It was a mistake and nothing more. The Society went on to say:
At any rate, even if it could be said the council bore the onus to explain the reason for the failure, the totality of the evidence before the tribunal demonstrably stated that the failure was simply a mistake or oversight on the part of the council. There’s nothing to suggest anything to the contrary.
The Society also submitted in grounds 7 and 8 there was no jurisdiction:
Even if and which it’s denied the tribunal didn’t err in declining to exercise its power under 424, the correct and only consequence of the finding would have been to dismiss the proceedings for a want of jurisdiction, consistent with the usual practice of courts and tribunals prior to the introduction of remedial legislation and following the decision in Barwick (also see Fetchnic v Law Society of New South Wales [2002] NSWADT 198).
It stated:
The commencement of fresh proceedings was exactly what would have eventually followed had the proceedings been dismissed for a want of jurisdiction.
The Society indicated were I to find in their favour on the first point, that second point is irrelevant, but were I to find that the learned president got it right in terms of section 395(2), effectively she would not have jurisdiction. The Society concluded by respectfully submitting that the Tribunal should allow the appeal and substitute the orders that it sought.
The respondent also provided detailed submissions in relation to this matter and he stated that the submission of the Law Society was materially misleading, and what the tribunal below was stating is that section 395(2) of the Legal Profession Act is a statutory provision and cannot be overridden by section 424.
In any event, the misconduct of the Law Society and its solicitors acting, is a relevant consideration as to why any discretion that existed should not be exercised. He stated that Mr Phelps attempted until his objection, to mislead the tribunal to admit into evidence documents he knew had been materially altered to remove the names of the members of the Law Council. That document was critical in determining a jurisdiction question of whether section 395(2) had been complied with.
The respondent said that the reasons why the names of the members of the Council were relevant were threefold: (a) a quorum is required before a decision of the Council can be made and it has not been demonstrated that one was pressent; (b) Mr Brian Hatch was a member of the Council and was the primary decision‑maker in the ACT AAT decision that he appealed to the Supreme Court and that it was inappropriate that he be involved in a decision regarding his own decision; (c) two other members of the Council were apprehended with bias at the time.
The respondent went on to submit that despite numerous attempts to seek the tabling of the minutes of the Council, the ACT Law Society has continued to refuse to do so. Its refusal smacks of corruption and is certainly designed to prevent scrutiny of the procedures of the ACT Law Society. It is still a common law right to be able to know the identifier of an accuser. The alteration of any documents intended to be entered into evidence by a solicitor constitutes an attempt to pervert the course of justice and is presently the subject of a complaint.
Further, solicitors acting for the Law Society are not exempted from the provisions of the Legal Profession Act and its regulations or rules and it is unlawful under those rules to make an allegation of fraud or dishonestly without specific instructions from a client to do so and available evidence to support the charge. Repeated requests to provide evidence that the Council of the Law Society instructed Mr Phelps to make the allegation of attempted fraud had simply not been replied to by Mr Phelps.
The respondent went on to say that as a matter of public policy and accountability, it cannot be the case that solicitors acting for the Law Society are exempt from the rules they seek to impose on other practitioners. The Tribunal should set its sight against such conduct and it should require Mr Phelps to provide evidence that those instructions were received by him from the Council. The respondent went on to say that Mr Phelps refused to disclose or alter the documents and then quoted at paragraphs 39, 47 and 50 what the learned president had said where she said that the solicitor requested the Society to provide him with council’s determination to extent the statute bar in subsection 395(2) of the Legal Profession Act. It was not provided. Either it did not exist, or if it did, he had not given a copy of it.
At the hearing at first instance, Mr Phelps in response to a question from the tribunal that the Society's counsel had not made a determination in accordance with section 395(2),referred the tribunal to its powers in section 424 of the Legal Profession Act, which gave the tribunal power to disregard procedural lapses; and to the 12-month period in which the solicitor was required to take up occupation of the property as his principal place of residence, which did not end until 15 October 2005.
The respondent sated that the complaint was not lodged until November 2008. This was clearly in excess of the three-year period. He went on to say:
In simple terms, the Law Society has the power to override section 395(2), but failed to exercise the power. It's apparent that until my strike-out application, no one had turned their mind to the issue of the jurisdiction of the Law Council, the exercise of that power being a preliminary requirement for a complaint to proceed. It stands to reason that a non‑compliant investigation cannot form the basis of a valid application to ACAT. The application was void from the outset.
Section 395(2) of the LPA was enacted by the Assembly as a statute of limitations against complaints concerning alleged conduct that is said to have occurred three years prior to the complaint. There's a public policy reason to do so, it is so that people cannot be unfairly prejudiced by conduct unrelated to their fitness to be admitted or the fit and proper person criteria as a practitioner.
In this case the Law Society issued practising certificates for every year I was a practitioner in Canberra. The submission from Mr Phelps that it could not have been procedurally unfair ignores the fact that the Legal Practitioners Act 2006 at section 467 imposes a duty on the council to report a suspicion of a serious offence to law enforcement authorities. To date the Law Council hasn't done so for an offence and its knowledge, now styled in this attempt, as an attempt to defraud the Commissioner for Revenue.
Only the Law Society, by specific resolution, may extend that statutory bar. It didn't do so. ACAT is not vested in power to do so. The power to alter the statutory bar is vested by legislation by the authority of the legislative assembly in the Law Council. There is no discretion exercised by this tribunal that abrogates the statutory provision. President Symons was correct to say that when the Law Society failed to extend the bar, it could not be remedied by operation of 424.
The legal practitioner then went on to discuss the explanatory statement of Simon Corbell, MLA, Attorney-General, which related to complaints against legal practitioners and solicitors in the Legal Practitioner Bill 2006. Like most explanatory statements in the Legislative Assembly, it does not tend to go into much more than just regurgitating what the section says, or, in this case, a summary of several sections, but at any rate, it does state:
Part 4.2 (clauses 393-400) enables complaints to be made about the conduct of Australian legal practitioners. Complaints may be made by clients, a council or any other person.
And the respondent highlighted:
Complaints must be made within three years after the alleged conduct occurred, unless the relevant council decides that it is just and fair to do so or, if the complaint relates to professional misconduct, it's in the public interest to deal with the complaint. The practitioner against whom a complaint is made must be notified of the complaint, and have an opportunity to make submissions about it.
And it goes on to state other matters. It then states "cannot be dealt with", dealing with words such as "may" and "must".
The respondent then deals with the issue of no legislative power to conduct this appeal by ACAT. The power to conduct the appeal is found in section 79. I have already ruled on that earlier so there is no need to discuss that further.
He then referred to abuse of power of ACAT and the current appeal. No application has been decided by the tribunal. As the tribunal correctly found, the Council failed to make a valid application in the first instance; again felt there was no appeal. I have dealt with that submission too on the same basis as referred to in paragraph 83 above.
The respondent then dealt with admissions that the Council did not exercise its power to extend the statutory bar. He said, "It's not controversial between the applicant and the respondent that the Law Council didn't exercise its discretion to prosecute a matter which was more than three years old." He stated that:
The tribunal was correct in finding the prejudice in the exercise of discretion which the Law Society ought to have exercised, is a relevant consideration. The tribunal opined that the failure of the Law Council to consider the import of section 395(2) was troubling.
He went on to say that the tribunal was correct to note his submissions as to prejudice, stating that this matter has been on foot for more than five years and it is more than 14 years since he applied for his home owner's grant. He felt that the tribunal below correctly rejected the Society’s submission about section 424. In strict jurisdictional terms the comments by the tribunal concerning prejudice should be viewed as obiter. There was no other valid complaint, and as a consequence, there was no application pursuant to the Legal Profession Act to ACAT. He further stated:
In relation to the questions of delay that the delay of the investigation was, in fact, irrelevant because there was no valid complaint upon which it could rest. The cost, time and anxiety caused by the Law Society pursuing its unlawful actions had been absolutely extensive. The real question is whether the conduct of solicitors acting for and repressing on the ACT Law Society Council are subject to the Legal Practitioners Act or not. We must remember always that accusation is not proof, and the conviction depends upon evidence and due process of law (Edward R. Morrow, a report of Senator Joe McCarthy, 9 March 1954).
The respondent went on to say that the interim application had been brought by him raising a statutory limitation as a defence, and the admission by the applicant meant that the tribunal had no other course of action open to it other than to dismiss the invalid application for want of jurisdiction. He further, talking about delay, stated that:
The reason for the delay is the ACT Law Society omitted to properly discharge its public obligations, and that 15 solicitors, the body of the Law Council, and professional standards director, Mr Reece, the solicitor acting, Mr Phelps, and senior counsel acting, failed to appreciate that statutory limitations applied to their conduct and prosecuting this complaint accordingly.
This appeal represents a further abuse of process, extending now to eight years after the alleged conduct is said to have taken place and 14 years after the application of a First Home Owner Grant was made. Again, it is noted that no conviction or even investigation into dishonest dealings has ever been conducted against me.
He then commented in relation to the relief sought by the Law Society. He concluded that there was no evidence that his application for First Home Owner Grant was invalidly made. The application was assessed and approved by Revenue. Even the accusations of Revenue never alleged that a valid or legitimate application had not been made. He said:
The reason ACT Revenue consented to setting aside the decision in the Supreme Court is because the statements made by Brian Hatch were outrageously and manifestly factually wrong. Evidence of that error was filed in my affidavit supporting my appeal against his decision and is contained in the appeal book. The reason I agreed to the out of court settlement (note, not the repayment of the grant) was that after nine years with ACT Revenue and one excursion into the Supreme Court with a developer, I no longer had the energy or resources to continue the matter. The sum was insignificant in comparison to the time and expense I spent. It was not an admission that ACT Revenue was correct.
He went on to say that:
Brian Hatch and two other members of the Law Council improperly participated in the decision to commence this disciplinary proceeding against me for improper and political reasons, and the context of a clear apprehension of bias. Put simply, in conjunction with Mr Robert Reece, whom I have previously lodged a complaint against, the above-named persons abrogated their professional and public responsibilities to act with impartiality in the public interest, and used their respective positions to conduct an abuse of process to prevent me from expanding my practice or obtaining jobs with other employers.
He went on to say:
The conduct of Mr Phelps, Mr Reece and the Council of the ACT Law Society is worthy of investigation of the relevant Legislative Assembly committee or other independent inquiry.
He concluded by saying:
I formally request that the tribunal dismiss this appeal and make a recommendation to the ACT Attorney-General that an investigation and report be commissioned by the Attorney pursuant to section 466 of the Legal Practitioners Act. In all other regards I adopt the submissions and correspondence written by me and appearing in the appeal books.
The Society, in its reply, took umbrage at some of the matters raised by the respondent and basically regurgitated some of the matters that they had already submitted on. The Society concluded by saying:
The practitioner has asserted factual maters in this part of his submissions which concern the merits of the underlying complaint. those matters, which are unsupported by sworn evidence, have no relevance to the questions arising on appeal and should, with respect, be disregarded.
It sought leave to clarify its written submissions as follows. Dealing with the Barwick 3 year rule (Paragraph 59 of its submission), the Society stated:
We note the tribunal in Dechnicz in fact declined to order that the proceedings be dismissed, but rather held the tribunal could do no more than note in its records, as an administrative matter, the proceedings lacked jurisdiction. Notwithstanding the decision in Dechnicz, we submit that the tribunal does have the power to determine its own jurisdiction and to order that the proceedings be dismissed on the basis they lack jurisdiction. That was an approach taken in a later decision of the Law Society of New South Wales v Carver (2003).
Mr Phelps also took me to other sections in the Legal Profession Act. Sections he submitted were also relevant were section 406(1) (“A council must investigate each complaint properly made to it.”), and section 410(1) ("After finishing an investigation of a complaint against a person, the relevant council... must make an application to the ACAT under part 4.7.") – part 4.7 deals with sections 419 to 435.
DISCUSSION AND FINDINGS BY THIS APPEAL TRIBUNAL.
A lot of this complaint related to sections 395(2) and 424. I find that effectively the first time section 395(2) was really looked at by the Society was after they actually commenced the proceedings before ACAT. This clearly was a mistake. There is no explanation whatsoever for it. It seemed to me that having got the Commissioner's complaint, the Society went very quickly into investigation mode, rather than ticking the boxes and having a Council meeting and at that meeting duly noting the complaint was out of time, and then proceeding with its investigation, having given due consideration to section 395(2).
The Society naturally relies on section 424 of the Act. It is interesting to consider some of the legislative background to that section. As a reaction to the Barwick matter, the New South Wales Parliament and, ultimately, the ACT legislative Assembly enacted legislation to overcome the problems associated with Barwick. On 31 May 2000, in the NSW Parliament, Mr Moss, who was the parliamentary secretary for Attorney-General Whelan, moved that the bill now be read a second time. He stated at the bottom of page 6237 of Hansard that:
It is clearly in the public interest for clients, potential clients and other practitioners to be made aware that this action has been taken, and the bill provides for the councils and the commissioner to publish details. In the decision of Barwick, the High Court held that a Law Society Council could not initiate a complaint that related to conduct that had occurred more than three years before. The only way for such a complaint to be initiated and investigated was for the complaint to be made by the commissioner, using a procedure set out in section 138 of the Act. Previous decisions of the Supreme Court had stated that the councils, as well as the commissioner, could initiate such complaints, investigate them and refer them to the lower tribunal. Such powers are necessary because the misconduct of a solicitor or barrister may come to light some years after it has occurred.
The bill amends the Act to enable the Law Society Council and the Bar Council to initiate and investigate complaints which related to conduct which is more than three years old. However, in order to ensure that the power is exercised fairly, the bill provides that such a complaint can only be made if the Law Society Council or Bar Council is satisfied that it is just and fair to do so, having regard to all of the relevant circumstances, or if the complaint involves professional misconduct and it is in the public interest to do so. This is the test which is currently used by the Legal Services Commissioner when he makes a decision about accepting a complaint in similar circumstances.
He went on to say:
The bill also validates certain decisions made by the councils, the tribunal, the former Legal Services Tribunal and the Supreme Court before 4 February 2000, concerning complaints against legal practitioners.
Mr Hartcher, member for Gosford, indicated that the coalition did not oppose it and noted that the bill would authorise the Law Society in certain circumstances to accept complaints relating to conduct more than three years old. He went on to say:
The power to investigate conduct that occurred more than three years before complaining of the conduct was considered necessary because the conduct complained of may not come to light until some years after it occurred, and there is no reason why people who act wrongly should be able to take advantage of a procedural bar if the substance of the matter could still be properly investigated...
Three years is not a long period. Many instances of misconduct or conduct that can be justifiably complained about, even if it is not misconduct, do not come to light until many years after the event. Often that is because those who have control of the information are the ones who committed the improper conduct, and it is only when the aggrieved party is able to access the information held in files, computer records or some other repository, that they can initiate a complaint...
It is appropriate that the time limit not be a full bar in all cases and that, accordingly, the decision of the High Court be varied in that regard. The public interest will be enhanced rather than reduced by the amendment.
Further speeches were put before me in this appeal. The Complaints Against Lawyers, an interim report; Law Reform Commission Report 99 of April 2001 was also referred to by the NSW Parliament. Point 4.10(2) of that report stated:
The Commissioner considers that a practitioner should not be able to rely on noncompliance by the LSC, the Law Society or the Bar Association with the procedural requirements of Part 10 to invalidate tribunal proceedings unless the procedural irregularity has caused the practitioner substantial injustice. To permit procedural defects to invalidate tribunal proceedings when no substantial injustice has resulted creates unnecessary complexity and inefficiency in the administration of Part 10 and contributes to the serious delays referred to by Kirby J.
The recommendation was that:
Part 10 of the New South Wales Act be amended to provide that proceedings under that Part are not invalidated by formal defect or an irregularity in the making or referring of the complaint to the tribunal, or the decision‑making of the Commission, the Law Society, the Bar Association, unless the court or tribunal before which the objection on that ground is made is of the opinion that substantial injustice has been caused by the defect or irregularity, and that injustice cannot be remedied by order of the court or tribunal.
Further amendments to the bill were also read. Mr de Boss at this time indicated that the recommendations of the Law Society would be taken up:
A new section 171, taken from the national model laws, will allow the tribunal to order that a failure to observe a procedural requirement may be disregarded if the parties have not been prejudiced by the failure. Giving the tribunal power to rectify technical errors made by the regulatory authorities is sensible and pragmatic, particularly when the only consequence has been that the practitioner has been able to practise for longer than they would have otherwise.
New section 171U ensures that a breach of an undertaking made to the regulatory authorities by a practitioner is capable of being unsatisfactory professional conduct or professional misconduct. This amendment implements recommendation 20 in the Law Reform Commission's report
The Society included in its material provided to the Tribunal the above extracts as well as further extracts from Acts of parliament and explanatory statements and speeches from Hansards. Included in this material was the explanatory statement to Part 4.7 of the ACT’s Legal Professional Bill 2000. As indicated earlier, when I read out the solicitor’s (respondent’s) submissions, the Legislative Assembly explanatory statement takes a global position in relation to a number of sections. In relation to Part 4.7, and it says that that Part:
Sets out the procedural requirements for applications to the disciplinary tribunal, and the hearing and determination of complaints before the Tribunal. Proceedings are commenced by the relevant council, by way of application under clause 419. A disciplinary application must include the charges of unsatisfactory professional conduct, professional misconduct or unsatisfactory employee conduct that the council considers arise out of the complaint. The Tribunal is bound by the rules of evidence, and hearings are to be open to the public unless the Tribunal directs otherwise.
The Part sets out the disciplinary orders, including interlocutory and interim orders and orders for payment of costs that may be made by the Tribunal. Relevant councils are obliged to give effect to orders of the Tribunal. Disciplinary action taken under this Part does not affect any other right that a complainant may have in relation to the conduct of the person investigated.
At the hearing in September 2013 in the tribunal below, a number of things were said that Mr Phelps for the appellant directed me to and which seem to me to have relevance to this appeal, namely at page 51 of the appeal book, page 19 of the transcript, the respondent said -
Well, it’s not, Mr Phelps, because you’re accusing me of attempted fraud.
Mr Phelps said:
And that would be the substantive case we need to make out but we’re not here for that purpose today.
And, also what was said from about line 36 on page 30 of that transcript. Mr Phelps:
Thank you, Presidential Member. I don’t wish to add any more other than address two points. The extent to which I need to address the issue about whether or not the Society’s application - sorry, the oral application by the practitioner that the Society’s application should be treated as frivolous and vexatious and I would simply suggest that the Society as the regulatory authority has embarked upon the appropriate investigation of a complaint properly laid by the Commissioner of ACT Revenue and it would be most improper of the society not to pursue the investigation into the complaint and if prima facie satisfied that findings involving the conduct of the practitioner arises from the proceedings, then it is appropriate for it to be referred to the Tribunal to test it.
The issue of forensic prejudice has been raised quite correctly by the parties. I do find that indeed it is forensic prejudice we are talking about in this matter. There is some assistance in the authorities. Referring to Jago v The District Court of New South Wales[7], the NSW Administrative Decisions Tribunal stated in The Law Society of New South Wales v Boland[8] (at paragraph 26);
No evidence was given by the practitioner as to prejudice. No formal reply has been filed to the information. As we understand Jago, the onus is on the applicant practitioner to demonstrate actual prejudice rather than simply relying on ‘presumptive prejudice’. Claimants ‘nevertheless refer to and rely upon the practical considerations as to the usual consequences of delay’... ‘Memories fade, relevant evidence becomes lost. In the very nature of the adversarial process, which applies in the Medical Tribunal as well as in the ordinary civil and criminal courts, a person’s capacity to wage a forensic contest in defence of conduct which occurred some fifteen or more years earlier may reasonably be expected to be diminished by the lapse of time. That is a matter of common experience and common sense.’
[7] (1989) 168 CLR 23
[8] (2001) NSW ADT 35
In a criminal matter Queen v FJL[9], dealing with an application against a permanent stay for indecent assault on children aged under 16, where the most recent allegation related to an incident that occurred some 32 years prior to trial, the Victorian Court of Appeal said:
In the present case the length of delay is very extended and such as to give rise to doubts as to the accuracy of aspects of memory simply as a matter of common human experience. There are no adequate reasons advanced by the prosecutor to justify the delay and the delay is not the responsibility of the respondent.
[9] (2014) VSCA 57 at [20]
Thirty-two years certainly is a very great length of time. I do note, in terms of that particular offence, we are now seeing instances where witnesses are coming forward 20 to 30 or more years after the events and the matters are being tried and convictions are being recorded ( e.g. the Rolf Harris case in the UK and at a local level the case involving former Marist Brother John Kosta Chute). But, clearly it is obvious from those authorities that a substantial delay, and this was alluded to by Mr Phelps, is an important matter to consider in relation to section 424 and it does deal with situations of witnesses simply not being available, they have died, or if they are available, memories fade and that is a relevant consideration when one deals with forensic delay.
103There are other issues to consider as well. In Robb & Anor v The Law Society of the ACT, (ACT G34 of 1996), the issue of the public interest as against prejudice to the appellant was addressed:
The ACT Supreme Court clearly regarded Mr Robb’s professional conduct as serious. Equally it found him to be ignorant of or indifferent to his fiduciary responsibilities. The court went on to say—‘Notwithstanding the appeal lodged to allow Mr Robb a stay in the face of such findings would require the demonstration of a reason of some cogency, I do not consider that the prejudice asserted given as I will indicate the prospect of its mitigation in some degree outweighs the very distinct prejudice to the public interest that could be sustained if a stay were granted even if the stay were subject to such undertakings that have been offered by Mr Robb and his partners. The decision to stay a suspended order subject to appeal on arguable grounds must in my view involve an instant specific question. There are a variety of factors of which account can or should properly be made when considering a stay in such cases. These are the seriousness of the misconduct found, the likely prejudice to public confidence both in the integrity of the disciplinary processes themselves and the reputation of the profession if a practitioner is granted a stay, the means available to mitigate the prejudice alleged, then the expedition which the appeal would need.
Some of the facts and reasons given in the Robb case are not relevant to the present case , but it is clear there is a balancing act between the public interest and the interests of the practitioner that is the issue and that case is some authority for how to apply that balancing act. In the Robb case Public interest won out.
In relation to forensic prejudice, the key point in my view is indeed public interest and the interests of the practitioner. Clearly, when talking prejudice we are talking forensic prejudice and not ordinary prejudice.
Court proceedings of any nature taken by anyone are stressful. Proceedings by the Law Society against a practitioner are very, very stressful. I would put them probably up towards the higher end of stress but any court case is stressful. The comments made by the practitioner are apposite. He clearly would suffer significant stress and feel significant prejudice against him personally as a result of these matters. That is to be balanced obviously against a number of other factors. What we are talking about here is it is a given that there is prejudice in the normal English language meaning of the word. Anyone who is on the wrong end of court proceedings is going to be prejudiced in some way. It is whether that prejudice and the public interest outweighs that individual prejudice the person may suffer and accordingly, the correct test is forensic prejudice as alluded to initially by Mr Phelps, as I have briefly discussed there in relation to those particular cases.
In relation to these matters, I am satisfied that there was a 17 month delay, firstly caused from the time that the Law Society should have been told by the practitioner of the fact that the matter had been settled in the Supreme Court and the time when he gives them a part summary of the case and a further two-month delay when they chase up the whole order. From November 2009 to April 2011, that amounts to some 17 months. The remainder of that first period of time from December 2008 through to 31 August 2011 (when Mr Phelps was appointed to investigate) is explainable, the parties initially awaiting the Supreme Court ruling (December 2008-November 2009) and then normal correspondence between the parties from April 2011 to August 2011.
From August 2011 until 12 September 2012 there is, what I am prepared to find as “normal “correspondence between the practitioner and the Law Society. That is, correspondence one would expect to see between the parties as Mr Phelps investigates on behalf of the Society the complaint and the practitioner responds. If one were perhaps a bit cynical, one might think perhaps in one instance the solicitor, by sending the wrong tax return, might have been trying to drag the matter out. I simply do not know. I think that could simply have been a mistake. He then sends the correct tax return. There is nothing in those documents to indicate to me that either the Society or the solicitor are doing anything other than investigating this complaint and responding to it accordingly.
Mr Phelps also mentioned the further 9-month delay (September 2012 to June 2013). Perhaps there is anything up to two months where perhaps the Society could have been a bit quicker in studying the papers. It appears that the government authorities were pretty prompt. At most, I would think perhaps if there is a delay, one could say it is possibly about two months. So, it would seem in terms of the delay that the main delay was between November 2009 and April 2011 of some 17 months when the respondent did not adhere to his undertaking to provide the Society with the decision of the Supreme Court, in this case, the consent order.
I also note that a number of relevant matters in this case did not come to light until many years after the event. In this instance, there are issues between the practitioner and the Commissioner for Revenue. These issues relate to his first home owners’ loan. There are other issues concerning the construction of the houses which he quite properly puts. There is a court matter where he receives $48,000 as a result of a settlement out of court. I would have to consider that a significant win in the circumstances, not all that much less than what he was actually claiming. So, there are all sorts of reasons for this matter effectively not being in a position until late 2008 when any complaint could possibly be made.
There are the issues between the Commissioner and the practitioner. The Commissioner does not make a determination until 2007. The practitioner exercises his rights to go to the ACT AAT in relation to that determination. He is unsuccessful and some 12 days or so after that, the Commissioner makes a complaint. The Society has to take action in relation to that complaint. This complaint is in the circumstances of this case, made as soon as possible after a definitive decision has been made by a tribunal. i.e. only a number of days after a decision has been made in a tribunal that would enliven such a complaint. I would think it would be impossible for anyone to conjure up a complaint before then.
So, that is a very relevant factor in terms of the normal three-year timeframe. This is not something that could possibly come to light until after the three years is up.
The Society then, to everyone’s detriment (because we probably would not be here today if it had all been done properly), rather than have a meeting and saying, “Look, we should have a look at section 395(2) and then make the determination”, basically does not consider that, a rather unfortunate oversight for everyone concerned. It then launches into the complaint and, as I said, the complaint appears to have been properly investigated and apart from that 17-month gap I have referred to, it appears to be that both the practitioner and the Society are cooperating in terms of that complaint. It takes a little bit longer than one might hope, but when one simply reads the documentation, there appears to be good reason for that and apart from that 17 months, I cannot find anything in this matter, apart from that additional two months last year where maybe the Society could have been quicker, which would indicate the parties really could do anything more than they were doing.
Suffice to say, there is a 17 months of delay which the practitioner is responsible for and which he cannot rely on and even if I subtract the possible two months I have extrapolated for the Society, that still means that there is a net minus on the practitioner’s side in terms of a delay of 15 months. Then, the matter is put before my learned colleague, the case is appealed and I have to look, at these matters and, fundamentally, it really is considering section 395(2) and section 424 and the facts of this case that are relevant to the issue.
Fraud is a very serious allegation. Misconduct by persons such as Senior Member Hatch, Mr Phelps, Mr Reece, and indeed, by implication, the other members who may or may not have been members of the Council at that time is equally serious. Referring something to the Attorney-General is a very serious matter . These allegations are something I take very seriously.
In terms of the allegations by the Council, fraud, or attempted fraud, is a very serious allegation to make against a practitioner. Now, disregarding the rights and wrongs of this allegation, (because it is not yet before the Tribunal and has not been and was not before the learned president) allegations of fraud go to the very heart of being a practitioner. It is an arduous profession. It is a profession where people often will make unreasonable complaints. It is a profession where, if the Society barred everyone from practising on getting a complaint, you would probably have a reasonably significant percentage of solicitors sitting on the sideline not practising waiting for their complaints - some of which might be totally spurious or largely spurious - to be dealt with. The Society, it seems to me, urges on the side of caution and does have to apply natural justice to a person in the respondent’s position and continue to renew his practising certificate.
Nevertheless, the respondent does make a valid point . If the complaint was that serious, why did the society continue to renew his practicing certificate. The Society has indicated on balance it decided that there would be a much greater prejudice to the solicitor in not doing so and the solicitor, of course, had to be afforded natural justice as well. I am not going to cavil with that decision. I think that is the correct course. It is only in quite serious matters after findings have been made against the practitioner and usually after there has been tribunal decisions adverse to the practitioner, that practising certificates are not issued. So, I do not put a huge amount of store on the fact that the Society continued to issue practising certificates. It has explained that and there are the competing interests, including natural justice that needs to be afforded to the practitioner and the old concept, which goes back many centuries in our law, innocent until proven guilty.
As I have already indicated, fraud is a very serious matter and a serious allegation. It goes to the fundamentals involved in being a solicitor and that is trust. It goes to such things like- can we trust this person with the trust account? can we trust this person in their dealings with the public? Of all the professions (and in any profession there has to be a high degree of trust), in the legal profession, because of the vulnerability of clients who are utterly dependent in many instances on their solicitors, trust is essential. Allegations such as this are serious matters.
Allegations such as the practitioner made against Mr Phelps, Senior Member Hatch and other members of the Society are also very serious matters. In fact, if anything, they are possibly more serious, because people in a position of trust, people who are actually regulating the persons who have to show a high degree of propriety, are accused themselves, effectively, of corruption, bias and improper conduct. They appear to be highly offended by that, but just as all the allegations in relation to the practitioner have not been fully investigated yet by ACAT or anyone else, neither have the allegations made by the practitioner.
I do note that if the respondent practitioner has made complaints in relation to these matters, some of these very same people he is complaining about might be dealing with those complaints themselves. This would be like putting the fox in charge of the hen house. So, that is an issue to consider as well. Can the practitioner, if he has got any case in relation to this, be confident that those complaints themselves would be properly considered?
The Society says that no evidence has been put forward in relation to those complaints. No doubt, were the matter to proceed before ACAT, those complaints would be dealt with further, because they are highly pertinent to the decision of Senior Member Hatch and a number of other issues which really impact on this case, and it is clear to me that Senior Member Hatch - one only has to read his decision - is highly critical of the practitioner and, in fact, he finds his answers untruthful. He does not accept what he says. It is a fairly brief decision but the Senior Member was and still is a Senior Member of ACAT.
It is a fact that there were three days of hearing and anyone in the position of a member of a tribunal or a magistrate or a judge in a court has a duty to make findings of fact and when those findings on fact are made in the absence of any evidence to the contrary, they are indeed pretty powerful statements- whether they are right or wrong,- until there is further evidence, they are powerful statements which cannot be disregarded.
This is not a matter that is trivial or vexatious, and it appears to me to be not a matter that is so hopeless it does not have any real chance of success. I feel in this matter that the learned president did make a number of errors in terms of her judgment. Firstly, she did not seem to give much emphasis, for whatever reason, and perhaps simply because it was not really discussed (and I cannot see it being discussed much in the transcript) of what occurred between 31 August 2011 and 12 September 2012. She appears to indicate the delay there was caused by the Society. I cannot see how the Society is at fault. At Paragraph 60 of the transcript of the decision below, she states:
While the solicitor contributed to the delay, particularly by failing to tell the Society of the outcomes of the Supreme Court appeal, the Tribunal is satisfied from all of the correspondence annexed to the affidavits of Mr Reece and Mr Phelps and the documents before it that the solicitor was not the sole cause of the delay. The Society also contributed.
Apart from the evidence that was not before her and that was before me, where one might say there might be, at most, a couple of months' delay from September 2012 to June 2013 that could, perhaps, be attributed to the Society, there is really nothing in the documentation which would indicate to me that the Society was contributing to the delay. The additional evidence adduced before me confirmed that the Society was prompt and could only be lumbered, at the most, with no more than 2 months’ tardiness.
Some of the learned president's remarks, such as when she stated that it was incumbent on the Council to deal with complaints in accordance with section 417 of the Act are fair enough. And also that section 395 is clearly aligned with 417.
It is intended to reduce the risk of unfairness that may attach to an investigation of an old complaint. Complaints should be dealt with fairly and efficiently by barring investigation of old complaints, unless the Council, having turned its mind to the issue of fairness and public interest, makes a considered decision. The Council did not here. It leapt in by investigating the complaint. One can imply from that it felt the complaint, having been received from the Commissioner for ACT Revenue, a person one would think would not make a complaint lightly, should be investigated, and in its hurry, perhaps, to start investigating that complaint missed the procedural step necessary in 395.
One can only speculate there, and even Mr Phelps has not indicated anything other than this was basically just a very, very unfortunate procedural lapse. The learned president states:
That almost eight years have now lapsed since the conduct the subject of the complaint and for almost five of those years the Society has been investigating the complaint.
However, I have already covered the lapse of time, and I have clearly indicated that the Commissioner, some 12 days after the finding by Senior Member Hatch, makes his complaint. With the greatest respect to my colleague, I feel that this is the when the time really runs from and not the eight years since the conduct complained of occurs. If a practitioner was investigated for murder, embezzlement or sexual assault charges 30 years ago, the time lapse would not be the deciding factor. Events often don’t come to light until many years have passed as has been noted by the relevant legislators who amended the Legal Practitioners Acts in NSW and the ACT in the early part of this century.
In this case, no one would be in a position, until that matter before Senior Member Hatch was finalised, to be able to make a complaint, and even though, it is outside the statutory time in section 395, it is impossible for this complaint to be investigated within the three-year period. This appears to be something, with the greatest of respect, I think the learned president has not covered adequately nor does she appear to have adequately taken into account. She went on to say, from paragraph 61:
In the absence of any explanation of why the Council did not consider the clear requirements of 395(2) of the LPA, and noting the solicitor's submissions about prejudice, the Tribunal is not persuaded this is a procedural lapse of the nature that would lead the Tribunal to exercise its power given to it in section 424 of the LPA. The Tribunal agrees with the solicitor's submissions in relation to this regard. The Tribunal is satisfied that the complaint is a result of the failure of the Council to comply with section 395 subsection (2) cannot be dealt with and is not sustainable by law.
The learned president also quotes the solicitor in terms of the prejudice to him, (see earlier quote in paragraph 39 of this judgement). It is obvious to me from reading this that prejudice was an issue for the learned president, and it appears to be the obvious prejudice suffered by the solicitor himself as a result of the matters that had been brought against him, rather than forensic prejudice, which I find to be the correct test in matters such as this.
It does seem to me that this is just the type of matter where section 424 was intended to be invoked.
The allegations are serious. The counter allegations, if anything, are even more serious. The one further matter I would like to just briefly mention is an unreported decision of Master Harper in the matter of WSOL v John James Memorial Hospital on Friday, 22 May 2009.[10] It is unfortunately a decision against a matter which I struck out as incompetent, a discrimination matter. There, Master Harper, quite properly, stated that even though you had six witness statements saying one thing and the sole applicant saying something different, that still needed to be tested. Those six people could be lying. The case effectively highlights the importance for matters to actually be given a chance to be aired properly before a court or tribunal.
[10]SCA No 1 of 2009
This matter before the learned president had not got started. There were a lot of issues in relation to it. There was an application to strike out based on the two sections that I have mentioned. I do not feel my learned colleague gave sufficient weight to,- and, in fairness, I do not think it was put to her - what was behind the enactment of section 424, and, also indeed in terms of when one analyses clinically the facts in this matter, the fact that this complaint could not have possibly been brought within the three-year period.
It is highly unfortunate that section 395(2) was not considered when it should have been. But, for the reasons I have given, I don't think that is fatal to this matter. This is a matter that should be heard. I think the public interest needs this matter to be heard and outweighs any detriment to the solicitor, and there is still the time factor. It is a lengthy investigation. There are a lot of matters to investigate. Some 17 months of that too, were caused by the practitioner, but it was a detailed investigation.
It is also highly relevant that the practitioner also has made allegations which are very concerning and troubling and which obviously need to be backed up by evidence, but which do need to be aired and tested. They go to the very heart of our system of justice and the rule of \law. .
All in all, I would have to say that the public interest outweighs any other consideration in relation to this matter and as a result Section 424 is effectively invoked.
Accordingly, it is my order that firstly, the appeal will be allowed and, secondly, the tribunal's orders of 29 September 2013 are set aside. This Tribunal orders as follows:
(a)pursuant to section 424 of the Legal Profession Act 2006, the Tribunal orders that the Council's failure to decide to extend time pursuant to section 395(2) of the Act be disregarded;
(b) the practitioner's application filed on 18 September 2013 as amended be dismissed; and
(c) the matter be listed for further directions.
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Mr W.G Stefaniak – Appeal President
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