Groth v Audet

[2006] NSWCA 48

Reported Decision: 65 NSWLR 388

Court of Appeal

CITATION:	Groth v Audet [2006] NSWCA 48 This decision has been amended. Please see the end of the judgment for a list of the amendments.
HEARING DATE(S):	Monday 6 March 2006
JUDGMENT DATE:	20 March 2006
JUDGMENT OF:	Mason P at 1; Tobias JA at 2; Basten JA at 36
DECISION:	Leave to appeal granted, but the appeal itself dismissed with costs.
CATCHWORDS:	LEGAL PROFESSION ACT 1987 - certification requirement under s198L(2) - certificate not provided - consequence of breach - whether proceedings void ab initio - whether failure to provide certificate can be cured by subsequent provision - whether s198L(2) is a condition precedent to commencement of proceedings - legislative purpose of s198L
LEGISLATION CITED:	Civil Liability Act 2002 District Court Act 1973 District Court Rules 1973 Legal Profession Act 1987 ss 37, 127, 198J, 198K, 198L, 198M, 208P Legal Profession Act 2004 Limitation Act 1969 Motor Accidents Compensation Act 1999 s108 Uniform Civil Procedure Rules Workers Compensation Act 1987 ss 151C, 151D
CASES CITED:	Carroll v Mijovich (1991) 25 NSWLR 441 Dandashli v Dandashli (Court of Appeal, 16 December 1996, Unreported) Diaz v Truong [2002] NSWCA 265 Emad Trolley Pty Ltd v Shigar (2003) 57 NSWLR 636 Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427 John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 Mealing v P Chand (2003) 57 NSWLR 305 Morrison v Judd (Court of Appeal, 10 October 1995, Unreported) Nominal Defendant v Manning (2000) 50 NSWLR 139 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Sydney Ports Corporation v Collins (2003) 56 NSWLR 232
PARTIES:	Cheryl Groth Louise Audet
FILE NUMBER(S):	CA 40401/05
COUNSEL:	Cl: P Garling SC / P A Regattien Opp: R Toner SC
SOLICITORS:	Cl: Jones Staff & Co, Sydney Opp: Griffiths Tierney, Bega
LOWER COURT JURISDICTION:	District Court
LOWER COURT FILE NUMBER(S):	DC 43/02 (Bega); DC 4858/04 (Sydney)
LOWER COURT JUDICIAL OFFICER:	Armitage DCJ
LOWER COURT DATE OF DECISION:	06/03/2006

CA 40401/05
DC 43/02 (Bega)
DC 4858/04 (Sydney)

MASON P
TOBIAS JA
BASTEN JA

Monday 20 March 2006

CHERYL GROTH v LOUISE AUDET

Facts:

Section 198L of the Legal Profession Act 1987, which has now been replaced by s347 of the Legal Profession Act 2004, provided inter alia that a solicitor or barrister cannot file an originating process or defence for damages unless he or she certifies that there are grounds for believing the claim or defence, as the case may be, has reasonable prospects of success.

The opponent’s solicitor failed to provide this certificate when filing the opponent’s originating documents in the District Court. Because of this breach, the claimant sought to have the proceedings struck out on the basis that they were void ab initio or a nullity. Armitage DCJ held that the initial breach of s198L was cured when the opponent’s solicitor subsequently filed the required certificate.

Held, granting leave to appeal and dismissing the appeal with costs:

1. The clear intention of ss 198L and 198M, when read together, is to restrict the commencement or defence of proceedings by a barrister or solicitor where there are not reasonable prospects of success: [33].

2. The consequences of a breach of s198L(2) are clearly intended to fall on the responsible legal practitioner, rather than their client. The section was inserted to regulate the legal profession, and not for the benefit or detriment of parties to litigation: [33].

3. Section 198L of the Legal Profession Act 1987 is not a condition precedent to the commencement of proceedings in the same way as s151C(1) of the Workers Compensation Act 1987 and s108(1) of the Motor Accidents Compensation Act 1999. Section 198L goes only to the conduct of legal practitioners, while the latter provisions are directed to the entitlement of a party (or client) to commence proceedings: [33].

4. A breach of s198L(2) will not invalidate proceedings or render them a nullity and liable to be struck out on that account alone, although proceedings may be struck out if default continues after it has been brought to the attention of the defaulter: [34].

5. (Per Basten JA) A statutory obligation imposed by Parliament in mandatory terms will not necessarily invalidate any act undertaken in breach of that obligation. A court may look to the broader statutory and legal context to determine the consequences of such a breach: [37], Carroll v Mijovich (1991) 25 NSWLR 441 referred to.

CA 40401/05
DC 43/02 (Bega)
DC 4858/04 (Sydney)

MASON P
TOBIAS JA
BASTEN JA

Monday 20 March 2006

CHERYL GROTH v LOUISE AUDET

Judgment

1 MASON P: I agree with Tobias JA and with the additional observations of Basten JA.

2 TOBIAS JA: In 1982 Cheryl Groth (the claimant) was a music teacher at Picton High School and Louise Audet (the opponent), then aged 15, was one of her pupils. The opponent alleges that between 1982 and the end of that year, both at and outside the school, she came under the influence, domination and control of the claimant which continued into and subsequent to 1983 when the opponent moved to Sydney. She further alleges that she was subjected to physical and psychological abuse as well as to indecent assaults by the claimant from mid-1982 until about 1988.

3 It would appear that the opponent did not seek legal advice as to whether she had a claim for damages against the claimant until 2002. By that time any proposed action was barred by the Limitation Act 1969. Accordingly, the opponent made an application to the District Court of New South Wales for an extension of time under that Act within which to institute proceedings against the claimant. That extension was granted by Acting Judge Gamble on 4 November 2002 whereupon on 29 November 2002 the opponent’s solicitor filed an Ordinary Statement of Claim in the Bega Registry of the District Court alleging negligence, trespass, assault and battery, breach of fiduciary duty and unconscionable conduct by the claimant.

4 Other than the causes of action founded on trespass and assault and battery, the opponent’s claims are subject to the provisions of the Civil Liability Act 2002 which, although assented to on 18 June 2002, commenced on 20 March 2002.

5 Relevantly for present purposes, Schedule 2.2[2] of the Civil Liability Act inserted, with effect from 18 June 2002, new Divisions 5B and 5C into Part 11 of the Legal Profession Act 1987 (the LP Act). Division 5B is headed “Maximum costs in personal injury damages matters” whereas Division 5C is headed “Costs in civil claims where no reasonable prospects of success”. The LP Act has now been repealed by the Legal Profession Act 2004, but Divisions 5B and 5C of the LP Act have been reproduced without relevant alteration in Divisions 9 and 10 of the 2004 Act.

6 Relevant to the issues before this Court are the following provisions of Division 5C:

“ 198J Solicitor or barrister not to act unless there are reasonable prospects of success
(1) A solicitor or barrister must not provide legal services on a claim or defence of a claim for damages unless the solicitor or barrister reasonably believes on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success.
…
(5) Provision of legal services in contravention of this section constitutes for the purposes of this Division the provision of legal services without reasonable prospects of success .
198K Preliminary legal work not affected
This Division does not apply to legal services provided as a preliminary matter for the purpose of a proper and reasonable consideration of whether a claim or defence has reasonable prospects of success.
198L Restrictions in commencing proceedings without reasonable prospects of success
(1) The provision of legal services without reasonable prospects of success does not constitute an offence but is capable of being professional misconduct or unsatisfactory professional conduct.
(2) A solicitor or barrister cannot file originating process or a defence on a claim for damages unless the solicitor or barrister certifies that there are reasonable grounds for believing on the basis of provable facts and a reasonably arguable view of the law that the claim or the defence (as appropriate) has reasonable prospects of success.
(3) Originating process or a defence on a claim for damages is not to be accepted for lodgement unless accompanied by the certification required by this section. Rules of court may make provision for or with respect to the form of that certification.
198M Costs order against solicitor or barrister who acts without reasonable prospects of success
(1) If it appears to a court in which proceedings are taken on a claim for damages that a solicitor or barrister has provided legal services to a party without reasonable prospects of success, the court may of its own motion or on the application of any party to the proceedings make either or both of the following orders in respect of the solicitor or barrister who provided the services:
(a) an order directing the solicitor or barrister to repay to the party to whom the services were provided the whole or any part of the costs that the party has been ordered to pay to any other party,
(b) an order directing the solicitor or barrister to indemnify any party other than the party to whom the services were provided against the whole or any part of the costs payable by the party indemnified.”

7 When the opponent’s solicitor filed an Ordinary Statement of Claim on 29 November 2002, he did not provide the certificate required by s198L(2). That notwithstanding, the Registry accepted the document for lodgement. Accordingly, there was a breach by the solicitor of s198L(2) and by the Registry of s198L(3).

8 On 27 June 2003 an Amended Ordinary Statement of Claim was filed but, again, the opponent’s solicitor did not comply with the requirements of s198L(2). Again, the Registry accepted the amended document for lodgement. On 7 November 2003 the claimant’s solicitor filed Grounds of Defence to the Amended Ordinary Statement of Claim which was accompanied by the necessary certificate. However, the claimant did not raise in her defence any question of the proceedings being a nullity due to the non-compliance by the opponent’s solicitor with s198L(2) with respect to the filing of the original or amended Statement of Claim.

9 On 10 May 2005 the claimant filed a Notice of Motion in the Bega Registry of the District Court seeking an order that the Amended Ordinary Statement of Claim filed in the proceedings be struck out. The basis for the motion was that the proceedings were said to be void ab initio or a nullity due to the failure of the opponent’s solicitor to comply with the certification requirements of s198L(2). The opponent’s solicitor lodged the necessary certificate in the Registry on the following day, 11 May 2005. However, the claimant contended that the breach of s198L(2) and the consequent invalidity of the proceedings could not be cured by the later filing of the certificate.

10 His Honour Judge Armitage heard the Notice of Motion in Bega District Court on 18 May 2005. After hearing argument, his Honour delivered an ex tempore judgment ordering that the claimant’s motion be dismissed. It is from that order that the claimant seeks leave to appeal to this Court.

The reasons of the primary judge

11 The claimant submitted before the primary judge that the originating process constituted by the original and amended Ordinary Statements of Claim should be struck out upon the basis that the failure to comply with the certification requirement of s198L(2) rendered the proceedings void ab initio or a nullity, which could not be cured by the later filing of such a certificate. It was submitted that s198L(2) and (3) were mandatory in their effect and that, in this regard, s198L(2) was comparable to the provisions of s151C(1) and (2) of the Workers Compensation Act 1987 (the WC Act) and s108(1) of the Motor Accidents Compensation Act 1999 (the MAC Act).

12 Section 151C(1) and (2) of the WC Act is in the following terms:

“(1) The person to whom compensation is payable under this act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation until six months have elapsed since notice of the injury was given to the employer.
(2) Despite subsection (1), a person is entitled to commence court proceedings against the employer if either of the following occurs:

(a) the employer denies all liability in respect of the injury,

(b) the employer admits partial liability in respect of the injury but the person is dissatisfied with the extent to which liability is admitted.”

13 Section 108(1) of the MAC Act is in similar terms and provides as follows:

“(1) The claimant is not entitled to commence court proceedings against another person in respect of a claim unless:
(a) the principal claims assessor has issued a certificate in respect of the claim under s92 … or
(b) a claims assessor has issued a certificate in respect of the claim under s94 …”

14 His Honour noted that each of these provisions had been held to be a condition precedent of a procedural nature which must be satisfied prior to the commencement of proceedings so that any proceedings commenced in breach of their requirements was invalid. In so noting, he referred, inter alia, to the decisions of this Court in Sydney Ports Corporation v Collins (2003) 56 NSWLR 232 and Emad Trolley Pty Ltd v Shigar (2003) 57 NSWLR 636.

15 The general effect of these decisions is that s151C(1) of the WC Act and s108(1) of the MAC Act each impose a condition precedent of a procedural nature such that proceedings commenced in contravention thereof are not validly commenced unless either s151C(2)(a) or (b) is satisfied or, in the case of the MAC Act, the requirements of either s108(1)(a) or (b) are satisfied: see also Gordon v Berowra Holdings Pty Ltd (2005) 62 NSWLR 427 at 433 [33]-[39]. It was therefore submitted that s198L(2) should be similarly construed as a complete prohibition upon the commencement of proceedings by the filing of a statement of claim or a defence which is not accompanied by the required certificate. It was further contended, at least before this Court, that the prohibition was even more stark in the case of s198L(2) as, unlike the provisions of the WC Act and MAC Act to which I have referred, there are no exceptions to that prohibition.

16 Before the primary judge, reliance was particularly placed upon the following statement of Handley JA in Dandashli v Dandashli (Court of Appeal, 16 December 1996, unreported) where his Honour said (at 3-4):

“Where a statute imposes a condition precedent of a procedural nature which must be satisfied prior to the commencement of proceedings, it will be difficult for a court to treat the condition as a condition subsequent which can be satisfied after proceedings have been commenced as that will be contrary to the intention of Parliament as expressed in the statutory language.”

17 The opponent referred further to the decision of this Court in Mealing v P Chand (2003) 57 NSWLR 305. That case concerned the provisions of s151D(2) of the WC Act, which provided as follows:

“A person to whom compensation is payable under this Act is not entitled to commence court proceedings for damages in respect of the injury concerned against the employer liable to pay that compensation more than 3 years after the date on which the injury was received, except with the leave of the court in which the proceedings are to be taken.”

18 It was there held that it was open to the court to grant such leave after proceedings had been commenced outside the three year period so that the proceedings were validated retrospectively. Handley JA, with whom Meagher A-CJ and Young CJ in Eq agreed, observed (at 307 [9]) as follows:

“If s 151D(2) is construed, as I consider it should be, as a limitation provision with a procedural operation which does not extinguish the worker’s cause of action or right, then the appellant had a cause of action when he commenced these proceedings and the procedural bar imposed by the limitation provision was susceptible of removal by a subsequent order granting leave with retrospective effect.”

19 His Honour therefore rejected the submission that an order granting leave nunc pro tunc to commence proceedings out of time would have the effect of creating a new right. He said (at 307 [10]):

“However, this would only be true if s151D(2) not only barred the remedy but extinguished the right, but that is not how a provision such as 151D(2) has hitherto been construed.”

20 Although the opponent also relied upon this decision before this Court, in my opinion it has no application to, nor does it assist in, the construction of s198L(2). Section 151D(2) of the WC Act is not only in different terms to s198L(2) of the LP Act but its objective or purpose is also different. But that is not to say that s198L(2) should not be construed in the same manner as this Court has construed s151C(1) and s108(1) of the WC Act and MAC Act respectively, but that is another matter.

21 Ultimately the primary judge concluded that ss198L(2) and (3) were procedural rather than substantive provisions because they did not bar the right of the opponent sought to be exercised in the proceedings but simply governed the exercise of her remedy. In reaching this decision, his Honour seems to have applied what Handley JA said in Mealing. Although not referred to in that case, the relevant distinction between a procedural and substantive provision was authoritatively established by the High Court in John Pfeiffer Pty Ltd v Rogerson (2000) 203 CLR 503 where, at 543 [99], Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ in a joint judgment said this:

“… matters that affect the existence, extent or enforceability of the rights or duties of the parties to an action are matters that, on their face, appear to be concerned with issues of substance, not with issues of procedure. Or to adopt the formulation put forward by Mason CJ in R W Miller & Co (SA) Pty Ltd v McKain (1991) 174 CLR 1 ‘rules which are directed to governing or regulating the mode or conduct of court proceedings’ are procedural and all other provisions or rules are to be classified as substantive.”

22 Accordingly, the primary judge considered that the filing of the Ordinary Statements of Claim in the District Court, and their acceptance for lodgement in contravention of ss198L(2) and (3) was only procedural in nature. Thus the failure of the opponent’s solicitor to accompany the filing of the Statements of Claim with the necessary certificate did not render invalid the proceedings thereby commenced. His Honour supported that finding with the following observations (with which I agree):

“It seems to me also that s198M reinforces the interpretation I have reached, because it refers to the possibility of a costs order against a barrister or solicitor who, despite a certificate under s198L, commences proceedings without reasonable prospects of success. The clear intention of ss198L and 198M, when read together, is to restrict the commencement of proceedings by a barrister or solicitor and then, having so restricted them, to provide sanctions if, despite observance of the restrictions, the proceedings are found to be commenced without reasonable prospects of success. It is natural in those circumstances to read s198L(3) as referring only to proceedings commenced by a barrister or solicitor and not proceedings commenced in exercise of the right of s43(1)(b) of the District Court Act by a party himself, herself or itself. In other cases, s198M would have no work to do of course because, in accordance with ordinary principle, costs can always been sought against a party personally in the event of the proceedings failing, whether with or without reasonable prospects of success.”

The contentions of the parties

23 The claimant submitted that Division 5C of the LP Act has as its primary objective the avoidance of litigation where there is no reasonable prospect of its success. The statutory evil Parliament was trying to address was the burgeoning cost of litigation, and the point of s198L was to prevent the commencement of litigation and its maintenance where the lawyer acting for a party failed to certify that the proceedings had such prospects or were properly defensible.

24 The claimant accepted that even if a statement of claim was filed with the required certificate, the obligation of the plaintiff’s lawyer (whether a barrister or solicitor) was nonetheless ambulatory. That is, subject to s198K, if at any time legal services were provided during the course of litigation which was without reasonable prospects of success at the time of their provision, then that provision of those services would be capable of being professional misconduct or unsatisfactory professional conduct pursuant to s198L(1), and/or a costs order could be made against that solicitor or barrister pursuant to s198M(1).

25 The claimant further submitted that there was no reason why non-compliance by a plaintiff’s solicitor with s198L(2) should not strike at the rights of the client even if, when the proceedings were struck out, the client was left without a remedy against the defendant due, for instance, to a limitation provision which had expired. It was submitted that in any event the client would not be remediless because he or she would be able to sue the solicitor in negligence.

26 With respect to this last submission, I interpolate at this point that, as has been said on numerous occasions, the fact that a client may sue his or her lawyer for negligence in such circumstances does not of itself provide a basis for construing legislation in a manner which deprives the client of a right or remedy as a consequence of the solicitor’s breach of one of its provisions unless it can be discerned that the object or purpose of the legislation is that an act done in breach of that provision should be invalid.

27 Thus, in Morrison v Judd (Court of Appeal, 10 October 1995, unreported), Kirby P, with whom Meagher and Powell JJA agreed, extensively discussed the authorities relating to the relevance to an application for an extension of time of the fact that a client, whose solicitor had permitted a limitation provision for the service of a statement of claim to expire, would still have a remedy in negligence against the defaulting solicitor. The President concluded his analysis in these terms:

”The availability of an action against a negligent legal representative is relevant because common sense says that it is so. It means that the litigant, who may be wholly or mainly innocent, is not put out of court without some chance of redress, however difficult that chance may be to enforce. To that extent an injustice, which might otherwise occur to the litigant, may be capable of being avoided. However, precisely because of the kind of difficulties which Smith J listed in Scardamaglia , it is a consideration which ‘ cannot carry much weight ’.”

28 These remarks of Kirby P have been referred to, expressly or impliedly, in a number of subsequent cases: see for example, Diaz v Truong [2002] NSWCA 265 at [11]; Nominal Defendant v Manning (2000) 50 NSWLR 139 at 176 [146]. I would therefore give little weight to the submission that in the present case the opponent would not be left remediless if the proceedings were struck out.

29 Returning to the parties’ contentions, the opponent invoked the principles articulated in the joint judgment of McHugh, Gummow, Kirby and Hayne JJ in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 390 [93], by submitting that the purpose of the LP Act in general and the provisions of Division 5C of Part 11 in particular was solely to regulate the legal profession, to discipline, and if appropriate mulct in costs, lawyers who provide legal services without reasonable prospects of success. Thus, it was contended that Division 5C was only intended to inhibit lawyers from commencing proceedings or filing a defence in circumstances where there are no such prospects. The sanctions provided by the LP Act itself are, so it was submitted, directed solely at lawyers who proceed to provide services in breach of the governing provision of Division 5C namely, s198J(1).

30 Sections 198L(1) and 198M(1) provide the sanctions for breach of the primary obligation contained in s198J(1). It was therefore submitted by the opponent that there is nothing in Division 5C in particular or the LP Act in general that is directed at penalising the client of the defaulting lawyer. On the contrary, the defaulting lawyer may be required under s198M(1) to repay costs ordered by the client to be paid to the other party and there are provisions within the costs provisions of the LP Act which would disentitle the lawyer from being paid his or her costs by the client where those costs have been improperly incurred or have been wasted by the lawyer’s default: see s208P.

Was the primary judge correct to refuse to strike out the proceedings?

31 In my opinion the primary judge’s decision to refuse to strike out the proceedings was correct although his reasoning is not entirely complete. Thus I would agree with his Honour that the provisions of s198L(2) are procedural in nature in that, in one sense, they are directed only to regulating the mode or conduct of court proceedings. However, of itself, such a conclusion is insufficient to found the dismissal of the claimant’s motion. Furthermore, it may well be that to categorise a provision which requires some condition precedent to be performed as procedural or substantive will not of itself be determinative of the legal effect of any non-compliance with that requirement.

32 Thus as observed by Mason P, with whom Sheller and Beazley JA agreed, in Berowra Holdings at 433 [33]-[34], it is not correct that proceedings commenced in contravention of a condition precedent of a procedural nature that must be satisfied before the commencement of those proceedings by the filing of an originating process, are necessarily a nullity or void ab initio. As the President observed at 434 [40], this would depend on the application to the particular statute of the additional inquiry as to whether

“one can discern from the legislative scheme an intention that invalidity or nullity will be the consequence of non-compliance with a prohibition however clearly it is expressed.”

33 In my opinion, having regard to the apparent purpose and statutory context of the relevant provision, the following factors emerge as bearing upon its construction:

(a) As the primary judge observed, the clear intention of s198L and s198M, when read together, was to restrict the commencement of proceedings by a barrister or solicitor and to provide sanctions if, despite the initial observance of those restrictions, the proceedings are later found to have been commenced or maintained without reasonable prospects of success.

(b) The sanction for providing such services is a finding of professional misconduct or unsatisfactory professional conduct with all that that entails and/or the making by the court of a costs order against the solicitor or barrister concerned in terms of s198M(1)(a) or (b).

(c) Furthermore, a breach by a solicitor or barrister of s198L(2) may itself constitute professional misconduct if the regulations so provide (see s127(1)(d)). Such a contravention also constitutes a ground for the Law Society Council or the Bar Council to refuse to issue, cancel or suspend the defaulting lawyer’s practising certificate (see s37(1)(f)).

(d) Sections 198L(2) and (3) are clearly intended to complement each other by imposing an obligation on the Registry to decline to accept for lodgement an originating process or defence filed by a solicitor or barrister when unaccompanied by the certification required by s198L(2). In that sense s198L(3) itself provides a sanction for non-compliance by the solicitor or barrister with s198L(2), being the rejection of the document attempted to be filed. Furthermore, the omission to provide a certificate may also constitute evidence of an absence of reasonable grounds, with potential consequences for the lawyer and also the party he or she represents.

(e) In other words, the LP Act in general and Division 5C of Part 11 in particular are clearly directed to the conduct of the legal profession and its members and not to that of their clients. The provisions of Division 5C were inserted for the public purpose of ensuring that proceedings are only commenced (or a defence to those proceedings only filed) where the lawyer having the carriage of the matter has reasonable grounds for believing that the claim or the defence, as the case may be, has reasonable prospects of success. The section was inserted to regulate the legal profession, and not for the benefit or detriment of the actual parties to the litigation: cf Lemoto v Able Technical Pty Ltd [2005] NSWCA 153 at [121], [124]-[126], [142] and [190].

(f) The claimant submitted that at least one purpose of s198L(2) was to protect the defendant when an originating process was filed without the necessary certificate. However, as the District Court Rules stood at the relevant time, there was no necessity for the certificate to form part of, or to be annexed to, the statement of claim or for it to be served upon the defendant. It was only required to accompany its lodgement at the Registry. This would indicate that the requirement of s198L(2) to provide a certificate was only intended to provide evidence of, or an assurance that, there were reasonable prospects of success for the benefit of the court, rather than the parties. This was so notwithstanding that the Chief Judge of the District Court had, pursuant to Part 47 Rule 2(2) of the then Rules, published a form for use as a certificate under s198L of the LP Act (Form 10A). That position has now changed under the Uniform Civil Procedure Rules in that the certificate is now part of the statement of claim. Nevertheless, there is much to be said for the view that the object of providing the certificate to which I have referred has not changed as a consequence of a change in the Rules.

(g) Although the claimant submitted to the contrary, it seems to me that the opening words of s198L(2) of the LP Act - “ A solicitor or barrister cannot file originating process or a defence … unless the solicitor or barrister certifies … ” are distinguishable in their terms and, therefore in the nature of the relevant prohibition, from the opening words of s151C(1) of the WC Act and s108(1) of the MAC Act. Those provisions expressly provide that a person to whom compensation is payable on the one hand and a claimant on the other “ is not entitled to commence court proceedings ” unless certain requirements are met. They are therefore directed to the entitlement of the party (or client) to commence proceedings, unlike s198L(2) which is directed only at the client’s barrister or solicitor.

(h) The basis upon which those provisions of the WC Act and MAC Act have been held to constitute a condition precedent that must be satisfied before the commencement of court proceedings is that their purpose is to promote settlement by the injured party (that is, the client) before litigation is commenced. The authorities to which I have referred in [14] above make that abundantly clear. The public policy behind that objective is thus different to that behind Division 5C. As noted above, Division 5C was inserted for the benefit of the public generally in order to regulate the legal profession rather than being directed at the parties to the litigation.

(i) Finally, no justifiable reason was advanced by the claimant as to why the ultimate sanction of the proceedings being struck out where there is a default in compliance with s198L(2), let alone 198L(3), is the most appropriate sanction available for protecting a defendant or plaintiff from an originating process or defence filed by barrister or solicitor which has not been certified as having reasonable prospects of success. If the defendant, in the case of an originating process filed in breach of s198L(2), needs protection, then the most appropriate sanction is for the defendant to apply to the court for a stay of proceedings unless and until the necessary certificate is filed. If this be so, as I consider it is, then it must follow that the sanction sought by the claimant is not proportional to the seriousness or nature of the breach.

34 For the foregoing reasons, I am of the opinion that a breach of s198L(2) does not carry with it the consequence that the proceedings so commenced are invalid in that they are a nullity and liable to be struck out on that account alone. This is not to deny the power to strike out if the default continues after it has been brought to the attention of the defaulter. The primary judge was therefore correct to reject the argument supporting the striking out of the proceedings and to have dismissed the claimant’s notice of motion.

35 As the issue raised in the summons for leave to appeal is of some general importance, I consider that leave to appeal should be granted but that the appeal itself should be dismissed with costs.

36 BASTEN JA: I agree with the orders proposed by Tobias JA and with his Honour’s reasons.

37 It by no means follows that because Parliament has imposed a statutory obligation in mandatory terms, the consequence of non-compliance is legal invalidity of the act so undertaken. As is demonstrated by Carroll v Mijovich (1991) 25 NSWLR 441, it has long been established that a court, in determining the consequence of such a contravention, may find it necessary to look not only at the statutory context in which the obligation appears, but also at the broader legal context and whether there are other sanctions for non-performance, which the Parliament may have deemed sufficient. Where an obligation is imposed in mandatory terms as a pre-condition to the exercise of governmental power which, absent statutory authority, would limit fundamental rights, freedoms or immunities, it is more likely that the Court will imply an intention to invalidate, absent compliance with the statutory preconditions. However, even in that field, the result is by no means certain.

38 Factors which militate against such a conclusion include the availability of alternative sanctions for non-compliance, the fact that the obligation is not imposed on a government authority and the fact that it does not condition interference with fundamental rights, freedoms or immunities of a citizen.

39 Furthermore, a different view may be taken to that of Meagher JA in Carroll (at 454D-F) where his Honour treated a failure to advert to the consequences of breach as poor drafting. In some circumstances, that may be so. In others, the failure to identify consequences with precision may flow from recognition that a procedural non-compliance may occur in a wide variety of circumstances, the appropriate sanction for which is left to the discretion of the Court.

40 In the present case, four factors are of critical importance. The first is that Parliament expressly adverted to possible consequences of a contravention. Secondly, the statutory context, namely an Act regulating the legal profession, confirms the inference that the stated consequences of contravention, involving the potential liabilities of practitioners, were intended to be at least the primary sanctions for contravention. Thirdly, the variety of circumstances in which a contravention could arise, without fault on the part of the client, militates against an implied sanction against the client. Fourthly, such a sanction would fall unevenly on a plaintiff, as compared with a defendant, whose lawyer fails to include a certificate.

41 Accordingly, it is not appropriate to infer that Parliament intended to visit the consequences of a contravention by a legal practitioner on the plaintiff by invalidating, beyond repair, the initiation of proceedings.

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26/04/2006	-	Amendment to the opponent's counsel's name. - Paragraph(s) Coversheet
05/02/2007	-	Incorrect party referred to. - Paragraph(s) 3, 10, 11