Council of the Law Society of the Act v Legal Practitioner D3 (Occupational Discipline)
[2016] ACAT 155
•21 December 2016
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER D3 (Occupational Discipline) [2016] ACAT 155
OR 20/2013
Catchwords: OCCUPATIONAL DISCIPLINE – legal profession – strike out application – reasons for decision to make application to ACAT – adequacy – whether jurisdictional error
Legislation cited: Legal Profession Act 2006 ss 395, 414, 415, 421, 424
Subordinate
Legislation cited: Court Procedures Rules 2006 r 3557
Legal Profession (Solicitors) Rules 2007 r 20
Cases cited: Aon Risk Management Services v ANU (2009) 239 CLR 175
Barwick v The NSW Law Society [2000] HCA 2
Council of the Law Society v Legal Practitioner [2016] ACAT 66
Foote v Dixon [2013] ACTCA 25
General Steel Industries Inc v Commissioner for Railways(NSW) (1964) 112 CLR 125
Harrington v Lowe (1996) 190 CLR 311
Menonv Council of the Law Society of New South Wales [2016] NSWSC 1322
National Employers Mutual General Assurance Pty Ltd v Waind [1978] 1 NSWLR 372
Practitioner D3 v ACT Civil and Administrative Tribunal and Anor [2016] ACTSC 61
Practitioner D3 v ACT Civil and Administrative Tribunal and Ors [2015] ACTSC 170
The Legal Practitioners v Council of the Law Society of the ACT [2016] ACTSC 248
List of
Texts/Papers cited: Handley K, R, The Doctrine of Res Judicata (Butterworths, 3rd Ed, 1996)
Aronson and Groves, Judicial Review of Administrative Action (Thomson Reuters, 5th Ed, 2013)
Tribunal: Senior Member B Meagher SC (Presiding)
Senior Member M Brennan
Date of Orders: 21 December 2016
Date of Reasons for Decision: 22 December 2016
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 20/2013
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT
Applicant
AND:
LEGAL PRACTITIONER D3
Respondent
TRIBUNAL: Senior Member B Meagher SC (Presiding)
Senior Member M Brennan
DATE:21 December 2016
ORDER
The Tribunal orders that:
The respondent's application to strike out the application, made on 7 October 2016 and amended on 22 November 2016, is dismissed.
Pursuant to section 424 of the Legal Profession Act 2006 the failure by the relevant council to observe the requirement to provide reasons in section 415 in respect of the original application is a procedural requirement that is to be disregarded.
The respondent is to pay the applicant's costs of the application except any costs associated with a subpoena dated 10 November 2016 addressed to Robert Reis issued at the request of the respondent.
The question of any costs in respect of the subpoena is reserved until the final decision in the matter.
…………Signed…………..
Senior Member B Meagher SC
delivered for and on behalf of the Tribunal
REASONS FOR DECISION
Background
This is an application made on 7 October 2016 and amended on 22 November 2016 by the respondent[1] D3 to strike out the application brought against him by the applicant seeking disciplinary action against him.
[1] We have referred to the Practitioner as the respondent in these reasons although he is also the applicant in the strike out application
In addition a subpoena dated 10 November 2016 addressed to Robert Reis, the Director of Professional Standards of the Law Society and returnable on 22 November 2016 had been adjourned to the hearing on 6 December 2016 when we heard the strike out application. The subpoena sought production of:
Each and every minute and or record held by the Applicant for each and every Application and Amendment to the Application (and discountenance of charges) with the statements of reasons required to be kept pursuant the Legal Profession Act 2006-section 414 and 415 and related provisions.
These were required to be produced on 22 November 2016.
The form has other options and it seems directed at only one being used. However it also sought that Mr Reis give evidence and produce documents on 6 December 2016. This time the description was wider and was as follows:
Each and every minute and or record held by the Applicant pursuant to the Legal Profession Act 2006 pertaining to each and every instruction for the Application, the Amendment of the Application and the discountenance of aspects of the Application along with a Statement of Reasons required by the Act for each and every Amendment and discontinuance.
The respondent relied on affidavits made by him on 7 November 2016 and 21 November 2016 as well as subpoenaed material provided on 22 November 2016 and subsequent correspondence between him and Mr Phelps the solicitor for the applicant. The documents produced on subpoena were the minutes of the Executive meeting dated 6 July 2011; minutes of Council meeting dated 17 June 2013; letter to the respondent of 19 June 2013 from Mr Reis now Exhibit A2 and minutes of Council meeting dated 16 December 2013. They are annexed to the Phelps affidavit of 2 December 2016 (referred to below) as annexure 8. The subsequent correspondence is contained in annexures 9-12 of the same affidavit.
The applicant relied on three affidavits by Mr Phelps of 27 July, 15 November and 2 December 2016. Also during the hearing on a call from the respondent there was produced a letter from Mr Reis dated 19 June 2013 and it was said to be the only document that was a statement of reasons. It became Exhibit A2. In addition four documents were tendered as Exhibit A3 being two letters from Mr Phelps of 19 June 2013 to the respondent. Also part of A3 was an email of 12 September 2013 and Mr Phelps’ reply dated 17 September 2013 in which he said A2 contained the reasons (although also asserting that the respondent was not entitled to reasons). We were also given a copy of the complaint from the Commissioner for ACT Revenue dated 20 November 2008 which is annexed to an affidavit of Mr Reis in the substantive proceedings. This complaint initiated the applicant’s investigation and decision to make the application.
During the hearing the respondent asked for Mr Reis to be called. After some debate about what the description in the subpoena could mean, Counsel for the applicant said there were no further documents that matched the description. We will refer to this in more detail in dealing with Grounds 3 and 4 of the application. In any event the need for Mr Reis to attend was met by clarification from Counsel for the Society. We do not propose to go into more detail about the arguments that had arisen concerning the subpoena but accept that there may be reasons to make a separate costs provision about it in due course should the circumstances enable us to do so by reference to section 433 of the Legal Profession Act 2006 (LPA).
In considering the application it is necessary to describe the application by the Council of the Law Society and its amendments and the long and difficult course of the proceedings since.
Justice Burns in his decision Practitioner D3 v ACT Civil and Administrative Tribunal and Ors [2015] ACTSC 170 at [1]-[31] explains the application as it then was and we adopt his description. Broadly it is alleged that the respondent contracted to buy off the plan a unit in Barton on 21 August 2001 (not 2011 as appears in the decision of Justice Burns at [5]). The nominated date for registration of the unit plan was 31 December 2002 and completion was to be within ten days of notification of the registration of the plan but the seller could extend the date and did. The respondent allegedly made an application for a First Home Owners Grant on 3 September 2001 for two amounts of $7000. The application said the completion date was 31 December 2002 (this would not allow for the ten days from notification, although not much seems to turn on that). As explained by Burns J a number of subsequent developments meant that the applicant alleged the respondent had acted knowing he would not or did not satisfy the residency requirements for the grant. In any event it is alleged that the Commissioner in February 2006 demanded the money and 75% interest be repaid. We understand that this was in effect a decision that the respondent was not eligible to have been paid the money or at least to have retained it. The respondent appealed to the ACT AAT and Mr Hatch sitting on the Tribunal confirmed the decision and made adverse comments about the respondent. The Commissioner then made his complaint to the applicant. In the meantime the respondent appealed the AAT decision. When the applicant wrote to him about the complaint he asked that it be deferred until the appeal was dealt with. The application alleges that he did not tell the applicant about the resolution of the appeal as he had undertaken to do. The appeal was settled and the decision of Mr Hatch was set aside and the respondent agreed to repay the Commissioner $18000. It is alleged that the respondent misled the Society about the settlement. Ground 1 of the application contained the allegations about the conduct concerning the First Home Owners Grant and Grounds 2 and 3 relate to the subsequent conduct in responding to the applicant. Grounds 2 and 3 were added by way of amendment.
After the application filed on 19 June 2013 there have been numerous applications, an internal ACAT appeal and an application for review to the Supreme Court. There is a chronology of these events at pages 4 and 5 of the affidavit of Michael Phelps of 27 July 2016. An initial strike out application was filed by the respondent in September 2013. It relied on section 395 of the LPA which requires that the Society must determine whether it should consider a complaint made more than three years after the alleged conduct occurred. The complaint as has been seen was in October 2008 but the respondent’s alleged conduct was in 2001. The Society failed to make a decision as required by section 395. The application was struck out by Presidential Member Symons in November 2013. The Society appealed and was successful in a decision of Appeal President Stefaniak in May 2014. The decision relied on section 424 of the LPA. This provision provides:
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.
The Appeal President found that the omission by the Society to make a decision under section 395 may be disregarded.
On 21 August 2014 Presidential Member Spender allowed amendments to the application adding ground 2 and 3.
Then followed the proceedings in the Supreme Court heard by Burns J. The respondent sought orders against ACAT for a number of reasons. All but one ground in the pleadings were struck out by His Honour. Some of the grounds are similar or the same as grounds in this application. The one argument that proceeded was the section 395 point and by the decision of [2016] ACTSC 61 Burns J concluded that the requirement in section 395 was procedural and section 424 enabled its omission to be disregarded.
In paragraph 24 of an affidavit of Michael Phelps of 15 November 2016 there is a list of earlier strike out applications made by the respondent. One dated 11 June 2014, which included aspects of the current application, was dismissed by Presidential Member Spender in her decision of 21 August 2014. A transcript of this decision was tendered and marked A1.
The current application
The application relies on five Grounds.
Ground 1
Ground 1 of the strike out application is that the Tribunal has no jurisdiction to deal with Ground 1 of the application for disciplinary action because it involves determining the entitlement of the respondent to a First Home Owners Grant and that power is exclusively given to the Commissioner for ACT Revenue under the First Home Owners Grant Act 2000 (FHOGA). It was included in this proposition that the Commissioner had made a decision favourable to the respondent and there was an issue estoppel. This relies on the following matters. The Commissioner had initially made an adverse decision requiring the respondent to repay the money and a penalty because he found that there was no entitlement to retain the money; an appeal by the respondent to the ACT AAT confirmed that decision; an appeal from the AAT to the Supreme Court was settled by an agreement that the decision of the AAT be set aside but that the practitioner repay the grant and an additional sum without admissions.
The respondent argued that the consent order of the Supreme Court had the effect of resolving the proceedings so that the original decision that he was eligible was reinstated.
The Law Society correctly submitted that there could be no issue estoppel, as it was not a party to the agreement or the appeal. We understand that the real submission by the respondent was that it was a res judicata.
We note that the Court of Appeal has made it quite clear that appeals should not be resolved by consent.[2]
[2] See Foote v Dixon [2013] ACTCA 25
Assuming the order is not affected by any legal limitations in not following the principles explained in the Court of Appeal decision, we reject the proposition that a consent judgment made without admissions setting aside an order confirming the decision of the Commissioner that the respondent was not entitled to retain the money reinstates the original decision of the Commissioner that he was eligible or that if it did it was a res judicata. A consent order can constitute a res judicata in respect of matters that it can be taken to have decided.[3] Here the order was part of terms that were without admission by either party and required the respondent to repay a sum higher than the grants. This is inconsistent with the Court deciding that the original decision that the respondent was eligible by the Commissioner was somehow reinstated. We also reject the proposition that there is any binding decision to the contrary or that we are being asked to decide something differently to the Commissioner.
[3] See Handley K, R, The Doctrine of Res Judicata (Butterworths, 3rd Ed, 1996) page 21 at [38]
The Tribunal has the power under the LPA to determine whether the practitioner has been guilty of unsatisfactory professional conduct or professional misconduct. As part of that jurisdiction it may consider whether there has been conduct that involves the claim to be entitled to be granted or to retain a First Home Owners Grant. In doing so the Tribunal is not seeking to make a decision under the FHOGA and it is has no operative effect under that Act.
The applicant points out that this proposition has been made previously by the respondent and it has been rejected in Practitioner D3 v ACT Civil and Administrative Tribunal and others [2015] ACTSC 170 at [69] where it was said:
69. The next particular of abuse of process which the practitioner proposes to rely upon is “Absence of Power under the First Home Owners (sic) Grant Act 2000”. This is also a particular pleaded in the original pleadings. Neither the original pleadings nor the proposed amendments set out any basis for a suggestion that the provisions of the First Home Owner Grant Act 2000 has any relevance to an application to stay the disciplinary proceedings. In his written submissions in support of his application to amend and opposing the strikeout application, the practitioner has made no mention of this aspect of his claim. This part of the practitioner’s current and proposed amended pleadings will be struck out, and I decline to grant him leave to replead this issue.
This finding is an interlocutory ruling on a pleading point and was without the benefit of any developed argument. Strictly we are not bound to follow it but even after more developed argument we cannot see any merit in this ground.
In any event as the applicant points out on a strike out application we must apply the principles in General Steel Industries Inc v Commissioner for Railways (NSW) (1964) 112 CLR 125 and only strike out an application in a clear case. Here there is no such clear case.
The applicant apprehended that bound up in this ground was an argument that fraud could not be considered by the Tribunal without a conviction. This apprehension was caused by a written submission of the respondent. In oral submissions the respondent clarified that he only intended that submission to relate to the FHOGA point.
The applicant correctly submitted that it was not necessary for there to be a conviction and pointed out that Presidential Member Spender had already so decided at pages 10 and 11 of her decision of 21 August 2014. It had also been the subject of an adverse finding by Burns J in his decision in Practitioner D3 v ACT Civil and Administrative Tribunal and others [2015] ACTSC 170 at [70]. Even if it were permissible to come to a different conclusion we agree with the decision of Presidential Member Spender and Burns J.
Ground 1 is not made out.
Ground 2
Ground 2 is that the applicant had no power to deal with the complaint between the date it was made and Appeal President Stefaniak’s ruling on 22 May 2014 that the failure by the Society to comply with section 395 was a procedural lapse and allowing the application to continue under section 424 of the LPA. This ground was argued in subsequent Supreme Court proceeding and is referred to in Practitioner D3 v ACT Civil and Administrative Tribunal and others [2015] ACTSC 170 and upheld in Practitioner D3 v ACT Civil and Administrative Tribunal and Anor [2016] ACTSC 61.
It was argued that the order under section 424 related only to the unamended application dealt with by Appeal President Stefaniak and was not retrospective so as to apply to the investigation.
This argument was relevant to the added Grounds 2 and 3 relating to the practitioner’s conduct during the investigation. The argument was put to Burns J in Practitioner D3 v ACT Civil and Administrative Tribunal and Anor [2016] ACTSC 61 at [11(d)] and concluded at [32] and [33] in favour of the Society.
This submission is without any force. Section 395 refers to dealing with the complaint which must include the investigation and the decision to allow the matter to proceed affirmed by Justice Burns after Grounds 2 and 3 were added. The Supreme Court decision is to the effect that the failure by the Society to make a decision under section 395(2)(a) or (b) is procedural and is not a nullifying bar to any subsequent dealing with the application. It is true that the decision to allow the matter to proceed has the effect of legitimising all that had occurred from the time of the complaint and in that sense is retrospective but so are many procedural orders that are effective nunc pro tunc such as leave to proceed against a company in liquidation or to extend time under the Limitation Act after proceedings are commenced.
In any event, leave was given to amend by Presidential Member Spender and later President Crebbin on 21 August 2014 and 30 September 2016 respectively and section 421(3) specifically enables this notwithstanding the lapse of time. The applicant correctly submitted that the argument was an impermissible collateral attack on those amendment decisions.
Further, Grounds 2 and 3 were permitted to be added by way of amendment which the Tribunal was able to do under section 421 irrespective of the time lapse and even if it was not preceded by a complaint.
In our opinion this ground had no substance and on any view does not satisfy the General Steel test.
Grounds 3 and 4
These grounds were referred to as an absence of authority but involved two propositions. The first argument was that there were no minutes of Council dealing with instructions to its lawyers after 17 June 2013; that there had been several amendments and an appeal but no separate minutes evidencing such instructions; there had been several letters requesting written evidence of any further instructions and a subpoena to Mr Reis had not produced any further documents referring to such instructions.
The respondent acknowledges that he was not seeking documents protected by legal professional privilege and appeared to accept that communications between the Society and its lawyers were privileged. In case there is any doubt, as has been said twice before, once by Presidential Member Spender and once by Justice Burns, such communications are privileged. An objection to production of privileged documents may be made without setting aside the subpoena.[4]
[4] See National Employers Mutual General Assurance Pty Ltd v Waind [1978] 1 NSWLR 372
The respondent’s argument was tied to the requirements of the LPA to provide reasons for the decisions listed in section 414 and 415. These sections provide respectively:
S414 Record of decision of council about complaint
(1) A council must make and keep a record of its decision in relation to each complaint dealt with by it under this chapter.
(2) The record must include its reasons for the decision.
s415 Council to give reasons to complainant and practitioner
If a complaint is made about a person, the complainant and the person about whom the complaint is made are entitled to receive a statement of reasons from the relevant council if any of the following decisions are made by it:
(a) a decision to dismiss the complaint;
(b) a decision to make an application to the ACAT under part 4.7 in relation to the complaint;
(c) a decision to refer a matter to the Supreme Court under section 409 (Referral of matters for costs assessment—complaint investigation) in relation to the complaint;
(d) a decision to take action under section 413 (Summary conclusion of complaint procedure by fine etc);(e) a decision to omit, from the allegations particularised in an application made by it to the ACAT under part 4.7 in relation to the complaint, matter that was originally part of the complaint
It was argued that because there was an extra requirement of formality attached to decisions to amend, any instructions ought be the subject of reasons that would contain evidence of such further instructions.
On the return of the subpoena and at the hearing of the application it was made clear there were no more documents relating to amendments.
Because of the negative return on the subpoena and calls made by the respondent during the hearing it was submitted that there had been no further instructions to the current lawyers to amend or appeal or act.
The second proposition was that the need for reasons for amendments made any amendments without them void.
It was common ground that there were no statements of reasons in respect of amendments.
The applicant submitted that the only time it was required to provide reasons was for the original decision and not for any subsequent amendments. However, it is clear that section 415(e) does require reasons for a decision when omitting from the application to ACAT any matter which was in the original complaint.
We were provided with a copy of the complaint which was annexed to an affidavit of Mr Reis filed in the substantive application. The original application does not refer precisely to the matters in the complaint and specifically does not rely on findings made by Mr Hatch in the ACT AAT adverse to the respondent. This was obviously because by then the appeal had resulted in the decision being set aside. It was asserted that there was an omission from the original application by a later amendment. This appears to refer to the reference in the amended application to the more appropriate rule in paragraph 32. This is not the removal of a matter the subject of the original complaint. This part of the application deals with complaints by the applicant arising from its investigation of the original complaint. Such amendments can be made even though there is not a complaint dealing with them under section 421(3)(b). This provision is:
(1) The ACAT may, on application by the relevant council or on its own initiative, amend an application to omit an allegation or to include an additional allegation, if satisfied that it is reasonable to make the amendment having regard to all the circumstances.
(2) Without limiting subsection (1), in considering whether or not it is reasonable to amend an application, the ACAT must have regard to whether amending the application will affect the fairness of the proceeding.
(3) The ACAT may amend an application to include an additional allegation even though the alleged conduct—
(a) happened more than 3 years before the amendment is made; or(b) has not been the subject of a complaint or investigation under this chapter.
Thus section 415(e) does not apply. The section does not otherwise require reasons for any amendment.
The applicant makes these points and submits that it was clear from the minute of 17 June 2013 that they retained lawyers to pursue the matter and there is no evidence to suggest this ceased. It also referred to the presumption of regularity.
In so far as the argument relates to amendments there has been no failure to comply with the LPA and there is no basis for concluding that the current lawyers are not instructed.
The applicant pointed out that this argument had been run before unsuccessfully and we should not entertain it again. In this regard we were referred to the decision of Justice Burns in Practitioner D3 v ACT Civil and Administrative Tribunal and Ors [2015] ACTSC 170 at [68] and [71] and of Presidential Member Spender in her decision of 21 August 2014 at page 10. These decisions may not completely resolve the point but it was submitted that the arguments should have been made before Burns J and Presidential Member Spender and it amounted to an abuse of process to continue to agitate matters even though they had been previously rejected. There is much force in that argument but we have preferred to decide it on its merits again and reject the submission again.
In addition, in relation to Ground 4 we were referred to the rule requiring instructions before alleging fraud.[5] It was asserted there were no such instructions because evidence had not been produced and no response had been given to the respondent when the applicant was asked for it in correspondence.
[5] rule 20(2) of the Legal Profession (Solicitors) Rules 2007
This argument had been run and rejected by Presidential Member Spender in her decision that is Exhibit A1. She said it was a private matter and not relevant to the validity of the application. We agree. Firstly any such instruction is not required to be part of the record although indirectly that may be apparent if full reasons were given and kept under section 414. Whilst there is no material that shows that such instructions were given, equally any communications between the Society and Mr Phelps are obviously privileged. Thus we cannot infer there were no such instructions. In any event, it is not a matter that impacts on the validity of the decision to prosecute the application. It may however demonstrate whether there have been adequate reasons given for the decision to apply to ACAT.
New Ground arising from Ground 3
During his submissions on Ground 3 the respondent widened his complaint to include an attack on the original decision to bring the application. The applicant complained correctly that this was not the case it came to meet. However the Tribunal considered that if both parties had adequate opportunity to deal with the submission we should proceed as otherwise there may be further delays to the proceedings. This occurred and full argument was presented. In the course of argument by Senior Counsel for the Society, he made an application to disregard any shortcomings in the provision of reasons under section 424.
The respondent objected. He withdrew the objection when he was told he would be given ample time to deal with it. We gave him leave to file any submissions on this point by 4pm on Monday 12 December and the Society any reply by 4pm the next day. This was an agreed timetable. Since then we have received further submissions and the respondent opposes the Society seeking an order under section 424. We will address those arguments after considering whether section 424 needs to be considered.
As earlier mentioned, a letter of 19 June 2013 from Mr Reis to the respondent was tendered and is Exhibit A2. It is the only document that may be described as a statement of reasons for the decision to commence these proceedings. It was not in dispute that the respondent had been given a copy of the original complaint. We were not given any submissions by him in response to the complaint other than the request for a stay until the appeal to the Supreme Court from the ACT AAT was dealt with.
The letter says:
I refer to my letter of 18 July 2011. As advised in my letter, this matter was referred to the Society’s panel solicitors for advice as to whether there are any misconduct issues arising from this complaint.
Mr Michael Phelps ‘advice was considered by Council at its meeting on 17 June 2013. Council considered and was satisfied that in pursuing a First Home Owner Grant to which you were not entitled, you attempted to defraud the Commissioner for ACT Revenue. Accordingly Council resolved pursuant to s419 (1) of the Legal Profession Act 2006 to apply to the ACT Civil & Administrative Tribunal (ACAT) for an order in relation to a complaint against you.
On 12 September 2013 the respondent emailed Mr Phelps and asked for a statement of reasons in this and two other matters the Society was considering. This is part of Exhibit A3.
The respondent received a response from Phelps Reid dated 17 September 2013 which is part of Exhibit A3. In that letter it was wrongly asserted that the respondent was not entitled to a statement of reasons but said the letter at Exhibit A2 was such a statement.
It was submitted by the applicant that the letter at A2 in its context where there had been an ACT AAT hearing about the First Home Owners Grant and the complaint itself, which had attached it, made the reasons obvious and thus it was an adequate statement of reasons.
Mr Beaumont SC very properly provided us and the respondent with a very recent decision of Justice Fagan in the NSW Supreme Court of Menonv Council of the Law Society of New South Wales [2016] NSWSC 1322 (Menon).
In that case a decision to commence disciplinary proceedings under the NSW Legal Profession Act 2004 (NSW) was held to be a nullity as there had been no adequate reasons given and this was a condition precedent to the commencement of proceedings. The only reasons given to the lawyer were as follows:
Having regard to the facts arising from, and the material annexed to, the Report of Mr Courtenay dated 27 September 2013 (“the report”) and the correspondence between the Society and the practitioner’s legal representative the Committee is satisfied there is a reasonable likelihood the practitioner will be found by the Tribunal to have engaged in professional misconduct in the following terms…
The lawyer had been given the report of Mr Courtenay beforehand and had made lengthy submissions urging no action. It can be seen that the reasons are perfunctory but there had been context that made explicable what the Courtenay advice was. Here we are not told that any advice from the Society’s lawyers had been given to the respondent or if he had made submissions. In the absence of any direct evidence we anticipate that the advice had not been given although there was probably some correspondence from the respondent before the decision.
Justice Fagan said:
The purported reasons of the defendant …do no more than recite the statutory formulation of the matter of which the Council had to decide whether it was or was not satisfied, in the terms of s 537(2). Whether such minimal reasons fulfil the requirement of s 542(1)(b) is a question of statutory construction to be answered having regard to:
(a) the nature of the decision for which the reasons are required and
(b) the implicit purpose of the Legislature in prescribing that practitioners in the position of these plaintiffs “are entitled to receive a statement of the reasons”. [37] His Honour referred to Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [43] – [56], including the following passage“[54] The objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion can therefore be seen to be that persons affected by the opinion automatically be provided with a written statement of reasons adequate to enable a court to see whether the opinion does or does not involve any error of law. There is an obvious benefit in requiring a written statement of reasons for an opinion always to meet that standard. The benefit is that it enables a person whose legal rights are affected by the opinion to obtain from the Supreme Court an order in the nature of certiorari removing the legal effect of the opinion if the Medical Panel in fact made an error of law in forming the opinion: an error of law in forming the opinion, if made, will appear on the face of the written statement. To require less would be to allow an error of law affecting legal rights to remain unchecked. To require more would be to place a practical burden of cost and time on decision-making by an expert body for no additional legal benefit and no identified systemic gain.
[55] The standard required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act can therefore be stated as follows. The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion.” [Citations omitted].Fagan J added at [43]-[45]
In reaching satisfaction as to “reasonable likelihood” that unsatisfactory professional conduct or professional misconduct will be found in the Tribunal, the Council would be entitled to take the evidence against the solicitors at its face value and significance, subject to making due allowance for any features of the evidence itself or of surrounding circumstances which might cause the Tribunal to discount the evidence or to put an innocent construction upon the facts. A limitation is placed upon the degree of detail required in the Council’s reasons by the circumstance that it does not make under s 537(2) a final decision on the merits of the complaints. The Council’s decision is a filter upon the cases which are to go to the Tribunal for the resolution of parties’ rights arising out of a complaint. It follows from this consideration that the reasons which the Council is to give under s 542(1)(b) need not address competing submissions nor purport to resolve conflicts of evidence or alternative constructions of possible findings of fact.
“With respect to the second of the considerations referred to at [46] in Wingfoot Australia Partners Pty Ltd v Kocak, I infer from the structure of the Act that the purpose of the legislature in requiring that reasons be given is, as was the case for the legislation which was under consideration by the High Court, “to enable a court to see whether the opinion does or does not involve any error of law”. The consequences for a legal practitioner of disciplinary proceedings being commenced by the Council in the Tribunal are obviously very significant. While such proceedings are pending, in a case where the Council seeks an order that the solicitor’s name be removed from the Roll, there is an imminent threat to the solicitor’s pursuit of his occupation and livelihood. Damage to reputation merely from the institution of disciplinary proceedings may destroy a professional practice. Pendency of such proceedings must at least hamper business and professional plans and development and create uncertainty for clients of the practitioner.By enacting s 542(1)(b)[6], Parliament has recognised the need for a mechanism to ensure that Tribunal proceedings are not commenced capriciously or without due consideration. I infer that the purpose of requiring reasons to be given is to enable the affected practitioner to verify that the Council has acted according to law in forming its satisfaction regarding the reasonable likelihood of the Tribunal making a finding adverse to the solicitor. For this purpose, as in the case of the legislation considered in Wingfoot Australia Partners Pty Ltd v Kocak, reasons which explain the path by which the Council reached its conclusion will suffice. The reasons need not also identify items of evidence which the Council discounts or facts which it considers insignificant or the basis upon which it expects arguments exculpatory of the solicitor will not be accepted.
[6] Section 415 in the ACT
Justice Fagan concluded that the reasons there were inadequate. At [46] he explained:
There is nothing in this that would answer the description of a path of reasoning. In a document which disclosed a path of reasoning sufficiently to indicate whether the Council proceeded according to law one would expect to see identification of factual findings, which the Council considers reasonably likely to be made in the Tribunal, about the solicitors’ communications with the RTA; reference to evidence which the Council believes is credible and likely to satisfy the Tribunal that the solicitors’ communications were false; a statement of an expectation that the Tribunal would likely infer (from some identified facts) that the solicitors must have known their communications to the RTA were false and reference to rules or principles which the Council would expect the Tribunal to apply to the facts, with the result that findings of professional misconduct would be made.
He referred to Murray v Legal Services Commissioner (1999) 46 NSWLR 224; [1999] NSWCA 70 where this was explained.
In this case while we can guess at what the reasons were and there is no secrecy about the material on which it was based the Tribunal finds that the letter which is Exhibit A2 does not satisfy the tests referred to in Menon.
Given the requirements in s414 of the LPA, the communications by Mr Reis and Mr Phelps to the respondent are inadequate and do not address the bare minimum requirements explained in Menon.
Thus we conclude that no adequate, if any reasons, were given to the respondent prior to commencing the application.
The applicant criticised Menon for a reasoning process that led to the conclusion that reasons are a condition precedent to commencing proceedings. At [61] the judge said:
In any event, in the Act now under consideration the requirements of recording reasons (s 541[7]) and of issuing them (s 542) are conditions precedent to the making of a valid decision to institute proceedings in the Tribunal and are therefore jurisdictional. Construing the Act in accordance with the principles enunciated in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, the considerations referred to at [44] – [45] are clear indicia of legislative intent that the requirements relating to reasons are indispensable to a valid decision under s 537(2). In adopting this interpretation I also take into account that s 541 explicitly envisages that reasons will be formulated before the decision is made and will be recorded contemporaneously with it.
[7] Section 414 in the ACT Act
The last sentence is criticised because it is submitted that reasons follow a decision. In the regime envisaged under the LPA a complaint is made to the Council of the Law Society who will notify the practitioner and usually ask for an explanation and may appoint an investigator if more facts are needed. Once sufficient information is obtained it may seek advice and will then consider the advice. Assume, as here, the advice is to commence proceedings in ACAT, the Council may accept the advice completely or in part and will consider why it should proceed. Reasons may have been prepared in advance for the Council to adopt if it agrees with the advice. It does not seem inconsistent with section 414 for the decision to be made and the yet to be articulated reasons to be prepared afterwards. Section 414 does not specify the timing of the reasons but the requirement to minute its decisions including the reasons for decisions. In normal practice the reasons would be included at the time the minutes are prepared but the minutes would need then to be accepted as correct at a subsequent meeting.
Whilst the reasons may well be reduced to writing before the resolution, section 414 does not expressly nor necessarily impliedly require it. We do not accept the applicant’s argument that the reasons always follow the decision. In a court case they usually are given together but occasionally the decision is made with reasons to follow. Justice Fagan contrasts this section with other legislation and this would include the ADJR Act where reasons need not be given unless requested and must follow the decision. A further consideration is the point made by Fagan J that the reasons should be part of the record so that it can be determined whether the decision is affected by an error of law on the face of the record.
In another case on costs before Burns J, The Legal Practitioners v Council of the Law Society of the ACT [2016] ACTSC 248 at [64] His Honour noted the following:
The Law Society submitted that the failure of the Council to provide a Statement of Reasons prior to commencing the proceedings in the ACAT does not fall within the “wilful disregard of known facts” or dishonest conduct of that detailed by Sheppard J in Colgate-Palmolive. It submitted that the Council accepted that it failed completely in providing a Statement of Reasons. It submitted that at the time, the Law Society had the view that s 415 of the Legal Profession Act imposed no condition precedent upon the commencement of the ACAT proceedings. At that time, the Law Society took the view that the compilation of a Statement of Reasons would essentially involve a duplication of the preparation of the application to the ACAT, such that that application to the ACAT would set out all the facts of the matters upon which the Law Society based its decision to refer the matter to the ACAT. Mr Travis, on behalf of the Law Society, submitted that it has now adopted a different view of its obligations with respect to the Statement of Reasons.
What that different view might be was not explored but it seems reasonable to infer that at least the reasons should have been given before the ACAT application.
In Practitioner D3 v ACT Civil and Administrative Tribunal and Anor [2016] ACTSC 61 it was submitted to Burns J that all the steps in the relevant parts of the Act were procedural[8] as the Act had adopted remedial provisions to overcome an earlier High Court decision of Barwick v The NSW Law Society.[9] Thus section 421 allowed an amendment to be made even though there was no complaint or even though it was more than three years old and section 424 was enacted to enable these provisions to be disregarded. Part of the Society’s argument was the requirements of section 414 and 415 regarding reasons were procedural because of this legislative history. Part of the application by D3 at least in respect of Grounds 2 and 3 was the failure to provide reasons. Burns J accepted the Society’s submissions[10] and it follows that not only is the time limit in section 395 procedural but so too are the other steps listed in LPA. Specifically the requirement to give reasons is part of these provisions and that is why section 421 and section 424 were passed.
[8] at [17]
[9] [2000] HCA 2
[10] at [30]
These arguments were not canvassed by Fagan J. It seems to us that the two decisions are inconsistent. In his subsequent written submissions the respondent argues that following Menon, the reasons are a condition precedent and are not procedural but jurisdictional.
This Tribunal follows Justice Burns’ reasoning and finds that the reasons are not a condition precedent to an application but a procedural requirement that may be remedied in an appropriate case by an order under section 424. We do so because it is a decision of a judge of this jurisdiction and of a Court to which appeal may be taken and because it appears to us to be correct. Even if we are wrong about Ground 1, Grounds 2 and 3 were not included in the application until an amendment was made pursuant to section 421 which clearly envisages a decision to add a ground that is not preceded by a complaint. The grounds are not those considered by the Council before proceedings were commenced and there was not thus an occasion for the provision of reasons for them under section 415 and there is no failure in respect of those grounds on any view.
We also note that the respondent could have raised section 415 in September 2013 when he got Mr Phelps’ letter. He could have made the submission during any of the numerous applications made during this protracted matter. The history has already been referred to.
In addition, the current application did not raise this submission but it was argued by the respondent during the hearing of the application. There is nothing the reasons would tell him that he would not have known and there is no forensic prejudice to him in respect of defending the application. This is the correct test as explained by Appeal President Stefaniak in his decision in this case and also by Senior Members Brennan and Orr QC in Council of the Law Society v Legal Practitioner [2016] ACAT 66.
In addition, the objective of the protection of the public and the considerable costs and resources already expended are overwhelming in this case.
Further, the time for seeking an order in the nature of a remedy under a prerogative writ is 60 days after the grounds for the grant of relief first arose unless the Court extends the time because of special circumstances.[11]
[11] see rule 3557 of the Court Procedures Rules 2006
For more abundant caution we order that the failure to give adequate reasons for the decision to apply to ACAT may be disregarded under section 424.
Returning to the question of validity and discretion in respect of judicial review, the orthodox view appears to be that assuming a decision is one that may be later nullified it remains valid until the order has been made. This has been referred to as the relative invalidity doctrine.[12] It is also clear there is discretion[13] whether to grant relief and non-compliance with time limits, delay, failure to include it in several earlier applications and the time and resources that would be wasted if the matter was to be now ended are obvious matters a superior court might consider. In the appeals to Appeal President Stefaniak and Burns J they both accepted that by then the procedural lapses there relied on may be disregarded.
[12] See Aronson and Groves, Judicial Review of Administrative Action (Thomson Reuters, 5th Ed, 2013)at [10.210] and Harrington v Lowe (1996) 190 CLR 311, 327
[13] Ibid at [12.250]
This amended ground is rejected and in any event we order under section 424 that the failure to give reasons is to be disregarded.
Ground 5
This alleges that the decisions of Council to proceed to bring the application for disciplinary orders are tainted by bias.
At the relevant times Brian Hatch and Kay Barralet had been members of the Council. Mr Hatch had been the decision maker in the AAT decision and had made unfavourable remarks about the respondent. Ms Barralet had worked with the respondent and had made a complaint against him to the Society. Both were obviously persons who ought not be involved in the relevant decisions.
In an affidavit of Michael Phelps of 2 December 2016, annexing minutes of Council meeting where the complaint against the respondent was discussed, it was clear that both these persons absented themselves from the relevant meetings and took no part in the discussion or the decisions.
Whilst it is understandable why the respondent needed to be reassured about that, on the available evidence there was no involvement by the two Council members and there is no substance in this ground.
Further submissions by the respondent
In spite of what we have said earlier about what happened at the hearing the respondent filed written submissions asserting that the application under section 424 was an abuse of process, improper and ought not be allowed.
The abuse of process point is based on an assertion that there are no instructions from the Council to the lawyers to proceed. This is a repetition of the first part of Ground 3 and extends to the absence of instructions to make a section 424 application. It is clear from the evidence that Phelps Reid and Mr Beaumont SC were instructed by a resolution of the Council on 17 June 2013. There is no statutory requirement that any instructions be part of a specific Council resolution. Any instructions may be by direct communication between the Council or its authorised officers and its lawyers. Any such instructions are privileged. There is no negative inference available to demonstrate any absence of instructions. It would be improbable that there were no such instructions but that is a matter between the Council and the lawyers. The assertion that they are not instructed is rejected and the application is not an abuse.
The second point in opposition to the application is that it is improper. This argues, in addition to the incorrect assertion that it needs to be accompanied by a resolution by the Council, that it should be in a written form and with a fee paid. ACAT has wide powers to control its procedure and there is no reason why the application cannot be made orally where appropriate. We have already said we would consider the application and the need for it arose because of a new submission made in the respondent’s application to include an argument based on reasons for the original application, which we allowed notwithstanding the lack of written notice. Not to allow the Council the opportunity would be unfair. We were conscious when allowing both applications that both parties should be afforded adequate time to deal with the matter and that is why we gave directions enabling additional submissions to ensure there was such an opportunity. We do not accept this challenge.
Next there is a submission that the lawyers for the Council had hidden the lack of reasons which it now admitted should have been given and that it was admitted that they had not given reasons nor retained them with the minutes.
Mr Beaumont SC accepted that the respondent had been entitled to reasons but argued that he had been given reasons. Exhibit A2 is argued to be the reasons. This is not a new argument. There was no secret about it. We have found that in our opinion the reasons were inadequate contrary to the submission by the Council. It is not clear what follows from the assertions made here and in any event they appear unfounded.
Next the respondent deals with the substance of the matter and argues that the reasons are inadequate and following Menon there is jurisdictional error. We agree that his argument is correct if Menon is to be followed. We have explained above why we have followed Burns J’s decision instead and so found compliance with section 414 is procedural and pursuant to section 424 this procedural lapse can be disregarded.
There then follows a submission that there has been a lack of candour by the Council’s representatives. We will not repeat the assertions. We have already indicated that we note the lack of reasons initially given but we have not been persuaded that this amounts to lack of candour or that any of the conduct criticised was done for improper reason. Obviously there have been mistakes but that is as far as it can be taken. Even if there had been some misbehaviour we do not see how that is said to impact on the issues here.
Next the decision of Aon Risk Management Services v ANU[14] was said to require us not to show any more leniency to the Council. It was said there had been already been leniency to the Council in respect of amendments and section 395. The Aon case depended on rules of Court which are not applicable here. The general principles it stands for however are pertinent. We agree that there should be no more delays. We have refrained from allotting blame for such delays. The Society points to the number of failed applications made by the respondent as showing that he is to blame. Ultimately our decision is one that is to be made in the public interest not to reward or punish parties.
[14] (2009) 239 CLR 175
In concluding remarks it is said that the reason the respondent had not included the absence of adequate reasons for the original application in the strike out application was because it was not until 6 December 2016 that he knew that all the records had been produced. The respondent has advised that an application has been filed with the Supreme Court seeking relief based on Menon. The applicant in reply points to the letter of Mr Phelps of 17 September 2013 Exhibit 3. To the extent that it may matter in our opinion it was crystal clear from 13 September 2013 that the only reasons were in the letter that is Exhibit A2.
In the meantime it is appropriate to proceed with the matter and make directions to enable the hearing in February to proceed unless the Supreme Court orders otherwise.
Costs
Whilst a number of points raised by the respondent were not correct and some had been dealt with before to some extent, it was not in our opinion such as to warrant a special order of indemnity costs, but costs should follow the event. Because there is an unresolved argument about the costs relating to the subpoena we reserve the question of any costs in respect of it.
………………………………..
Senior Member B Meagher SC
delivered for and on behalf of the Tribunal
HEARING DETAILS
FILE NUMBER: | OR 20/2013 |
PARTIES, APPLICANT: | Council of the Law Society of the ACT |
PARTIES, RESPONDENT: | Legal Practitioner D3 |
COUNSEL APPEARING, APPLICANT | Mr N Beaumont SC, Ms V Bulut |
COUNSEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | Phelps Reid Lawyers |
SOLICITORS FOR RESPONDENT | N/A |
TRIBUNAL MEMBERS: | Senior Member B Meagher SC, Senior Member M Brennan |
DATES OF HEARING: | 6 December 2016 |
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