Haralovic & Carr v Law Society of NSW

[2006] NSWADT 336

CITATION:	Haralovic & Carr v Law Society of NSW [2006] NSWADT 336
DIVISION:	Legal Services Division
PARTIES:	FIRST APPLICANT Robert Haralovic SECOND APPLICANT Peter David Carr RESPONDENT Council of the Law Society of New South Wales
FILE NUMBER:	062006
HEARING DATES:	01/11/06
SUBMISSIONS CLOSED:	11/01/2006
DATE OF DECISION:	11/29/2006
BEFORE:	Karpin A - ADCJ (Deputy President); Riordan M - Judicial Member; Kirkby E - Non Judicial Member
CATCHWORDS:	Disqualification of Tribunal Member on grounds of apprehended bias
MATTER FOR DECISION:	Interlocutory application
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 2004
CASES CITED:	Webb v R (1994) 122 ALR 41
REPRESENTATION:	FIRST APPLICANT T Hall, solicitor SECOND APPLICANT Written submissions in person RESPONDENT L Pierotti, solicitor
ORDERS:	1. The Tribunal is disqualified from hearing the matter further; 2. The issue of costs to be heard and determined by a freshly constituted Tribunal.

REASONS FOR DECISION

1 On 10 February 2006, the applicants Robert Haralovic and Peter David Carr filed an application seeking approval for the second applicant to be an associate of the first applicant pursuant to the provisions of s 17(1)(a) and (b) of the Legal Profession Act 2004, the second applicant being a person convicted of a serious offence and a disqualified person. Section 17 relevantly provides:

‘ 17 Associates who are disqualified or convicted persons

(1) A law practice must not have a lay associate whom any principal or legal practitioner associate of the law practice knows to be:

(a) a disqualified person, or

(b) a person who has been convicted of a serious offence,

unless the associate is approved by the relevant authority under subsection (3).’

2 By application filed 17 March 2006, the Council of the Law Society of New South Wales sought orders that pursuant to the provisions of s 67(4) of the Administrative Decisions Tribunal Act 1997 , the Council be made a party to the proceedings. Filed on the same day was an affidavit of Raymond John Collins, manager of the Professional Standards Department of the Law Society of New South Wales which recorded a resolution of the Council of the Law Society carried on 16 March 2006 as follows:
‘Resolved that, pursuant to the provisions of section 67(4) of the Administrative Decisions Tribunal Act 1997 , application be made to the Administrative Decisions Tribunal for the Council of the Law Society of New South Wales to be made a party to these proceedings upon the grounds that the Council of the Law Society is the appropriate body to assist the Tribunal on the substantive application.

Further resolved to direct the Society’s solicitor to inform the Administrative Decisions Tribunal that the Society opposes the application by Messrs Carr/Haralovic for Mr Haralovic to employ Mr Carr as an associate.’

3 Ultimately, the Tribunal ordered that the Council of the Law Society be joined as a party to the proceedings and, further, that its role, having regard to the resolution passed on 16 March 2006, extended beyond merely assisting the Tribunal, to include an obligation to put forward material supporting reasons for that resolution.

Background Facts

4 The second applicant (Mr Carr) was admitted as a solicitor of the Supreme Court of New South Wales on 19 August 1977. On 16 May 2002 Mr Carr was found guilty of two offences:

1. Between 1 July 1993 and 30 June 1996, being a director of a body corporate namely, J M Sturrock Pty Ltd, Mr Carr defrauded the said company of $321,666; and

2. On 29 June 2000 Mr Carr fraudulently misappropriated to his own use the sum of $358,952.68, having received that sum upon terms requiring him to deliver it to Danglas Pty Limited.

5 As a consequence of his conviction on those two offences, Mr Carr was sentenced to a period of four years’ imprisonment with a non-parole period of two years expiring on 15 May 2004 upon which date he was released on parole for a further two years.

6 On 18 December 2003, the Court of Appeal removed Mr Carr’s name from the roll of practitioners.

7 The application was set down for hearing to commence 9 June 2006 before a Tribunal consisting of Acting Judge Karpin, Deputy President, M Riordan, Judicial Member and E Kirkby, Non-judicial Member.

8 A substantial body of material had been filed prior to the commencement of the proceedings. In the course of reading that material, Judge Karpin became aware that there was a connection or a possible connection between her husband, then a consultant to Turnbull Hill Lawyers, and the fact that at some point Mr Carr had been a partner in that firm.

9 At the commencement of proceedings, accordingly, Her Honour made that fact known to the parties in the following terms:

‘HER HONOUR: Before we commence this matter I just want to put this on record, I see when I began to read the papers in this matter that Mr Carr was articled and was ultimately a partner in Turnbull Hill, Lawyers. That is a firm to which my husband is a consultant. I asked him if he knew Mr Carr, he didn’t seem to remember him but he said that he did remember that when there was a – there must have been a break up with that partnership, he was consulted by Mr Hill about some documentation and that’s as much as I know, as much as I asked him about, but I thought I should put that on record, I assume it’s not something that will disturb anybody but--

HALL: No, your Honour.

HER HONOUR: It should be noted.

PIEROTTI: I’ll just get some instructions. There’s no objection to that, your Honour.’

Thereafter the matter proceeded.
10 Following the evidence of the second witness for the applicant and after an adjournment for morning tea, counsel for the applicant made an application for Judge Karpin to disqualify herself based upon the following:
‘HALL: Your Honour, we’ve developed what appears to be an insurmountable difficulty over the adjournment period and that is, I’ve had some discussions with my friend about this as well. Your Honour will recall my friend questioning the last witness, Ms Brown, in relation to dealings with the Fidelity Fund. I had a word with Mr Carr during the adjournment concerning those dealings and evidence that he would give orally that perhaps filled in the picture in relation to some of the things that we heard from Shirley Brown. Regrettably what Mr Carr advised me of is that he now recollects in perhaps greater detail than he did at first instance this morning, it was in fact, as he understands Mr Karpin that gave the advice to Turner Hill that--

HER HONOUR: Turnbull Hill, is the name of the firm.

HALL: Yes, thank you. That perhaps a claim should be made on the Fidelity Fund in relation to Mr Carr concerning that matter and that he also believes that it was Mr Karpin that gave particular advice that perhaps an action of one form or another should be commenced by that firm against Mr Carr. That as I say is a recollection that sprang to light in its full significance during the adjournment and in those circumstances regrettably and not meaning any disrespect to yourself and particularly to Mr Karpin as well whom I have to say I know personally, I don’t know if he remembers me but I know him personally.

HER HONOUR: I wouldn’t know.

HALL: We would like to renew our or to pursue an objection to the current panel sitting and we’d ask respectfully that you give consideration to disqualifying yourself from hearing the balance of the proceedings.’

11 Following submissions from both counsel for the applicant and from Mr Pierotti, solicitor appearing for the respondent, the matter was stood over for a decision to be made on the issue of Judge Karpin disqualifying herself from dealing with the matter further on the grounds of apprehended bias. Both parties subsequently provided written submissions on that issue.

12 Whilst that matter was still unresolved insofar as no decision had been handed down by the Tribunal, the matter was relisted on 6 September 2006 at which point the parties sought orders in the following terms:

Order

Noting that the applicant has filed submissions as to costs, by consent, the Tribunal makes the following orders:

1. Applicant (Carr’s) application for disqualification is withdrawn.

2. The Tribunal notes the agreement of the parties that the substantive application in these proceedings is to be dismissed.

3. Respondent is to file and serve any submission as to costs on or before 27 September 2006.

4. Applicant to file and serve any submissions in reply on or before 29 September 2006.

5. Either parties to make any application for the matter to be listed for oral argument on or before 4 October 2006; in default of which issues as to costs are to be determined on the papers.

13 Those orders were duly made on 6 September 2006. However, Judge Karpin raised an issue as to the capacity of the previously constituted Tribunal to consider the issue of costs in the light of the applicant’s application for Judge Karpin to disqualify herself, combined with the fact that because the issues had been ventilated before the whole Tribunal, Judge Karpin expressed her reservations as to whether the matter could in any way proceed before the Tribunal as then constituted.

14 Thereafter the matter was in directions hearings on several occasions whilst it remained possible the costs issue could be resolved amicably between the parties. That did not eventuate.

15 On 26 September 2006 the respondent filed its submissions on the question of costs. On 6 September 2006, the applicant Carr filed his submissions on costs and on 4 October 2006 solicitors for Mr Haralovic filed his submissions on costs.

16 The matter came before Judge Karpin on a directions hearing on 1 November 2006. Mr Hall of counsel appearing for Mr Haralovic indicated that he no longer acted for Mr Carr and sought to have the matter resolved by the Tribunal on the written submissions together with the transcript of further submissions which he wished to make on that day. Judge Karpin agreed to the matter proceeding in that fashion.

17 Mr Hall emphasised the fact that Mr Carr had withdrawn his s 17 application and withdrawn his application for Judge Karpin to disqualify herself on the basis of apprehended bias. That submission, whilst it is factually correct, does not overcome the problem of the stance now adopted by Mr Carr in his written submissions. It is appropriate to set out those submissions in relevant detail:

‘These proceedings were part heard on 9 August 2006.

Over the weekend of the 10th and 11th of August I refected [sic] on the manner the proceedings had been conducted on the 9th. I also considered my perception that Her Honour Karpin J had a conflict of interest. I was concerned at the potential for bias against me through my previous dealings with the Law Firm Turnbull Hill Partners. At the commencement of proceedings Her Honour Karpin J. disclosed that her husband had had a past relationship with this firm.

Over the weekend of the 10th and 11th I conducted a web search against Alwyn Karpin. This resulted in a link to the website of Turnbull Hill Lawyers. I have attached a copy of this webpage.

In 1987, Mr Karpin was engaged by Turnbull Hill Lawyers to advise on proceedings against me arising out of my decision to quit the partnership of Turnbull Hill Lawyers. Mr Karpin has from that time remained a consultant to that firm.

During the proceedings on the 9th August, the respondent in cross examination of Mrs Brown raised a matter relating to a claim against the fidelity fund that involved the company, Prime Television Limited, for whom she then worked. That claim, which to my mind was settled was bought [sic] on the complaint of Turnbull Hill Lawyers, at the time Mr Karpin was a consultant to that firm.

My wife was present in the Tribunal room during the argument over bias. She said to me after the proceedings adjourned that she thought that Her Honour Justice Karpin had taken the suggestion of bias personally, and appeared angry that the matter had been raised. She expressed her fear that I shared, that I would not get an unbiased hearing if Her Honour refused to excuse herself.

After lengthy discussion with my wife we also concluded that the proceedings would not be resolved within a reasonable timeframe. We faced the prospect of many months of uncertainty, and little income. In the circumstances, I decided to withdraw my application and pursue alternative employment.

My reasons for doing so included the fact that the proceedings were and had become much more adversarial in nature than I had ever contemplated. I was also concerned at the potential lengthy delays which would preclude me from earning income. For these reasons decided to discontinue the proceedings.’

18 Whilst Judge Karpin and the two other members of the Tribunal emphatically reject the suggestion that Her Honour appeared angry about the issue of bias being raised, the members of the Tribunal are of the view that the apparent perception of Mr Carr and his wife is sufficient grounds for the Judge to disqualify herself and, for the other members of the Tribunal also to disqualify themselves.

19 The High Court in Webb v R (1994) 122 ALR 41 settled the appropriate test to apply on the issue of apprehended bias: ‘When it is alleged that a Judge has been or might be actuated by bias, this Court has held that the proper test is whether fair-minded people might reasonably apprehend or suspect that the Judge had prejudged or might prejudge the case. The Court has applied the same test to a Commissioner of the Australian Industrial Relations Commission and to a member of the Australian Broadcasting Tribunal. The Court has specifically rejected the real likelihood of bias test. The principle behind the reasonable apprehension or suspicion test is that it is of “fundamental importance that justice should not only be done, but should manifestly and undoubtedly be seen to be done”. Although the role of the juror is not the same as that of the judge, a commissioner or a member of a quasi-judicial tribunal, we do not think that the difference between the role of the juror and the role of those persons warrants any different test for alleged bias.’

20 The test whether a fair-minded person might objectively reasonably apprehend or suspect bias has been applied in numerous cases since then. One of the four categories identified by Deane J in Webb v R was disqualification by association. His Honour said: ‘It will often overlap the first and consists of cases where the apprehension of prejudgment or other bias results from some direct or indirect relationship, experience or contact with a person or persons interested in, or otherwise involved in, the proceedings. The fourth is disqualification by extraneous information. It will commonly overlap the third, and consists of cases where knowledge of some prejudicial but inadmissible fact or circumstance gives rise to the apprehension of bias.’

21 It is clear from the material which has been advanced by Mr Carr, both at the time when Mr Hall of counsel appeared for him and in Mr Carr’s written submissions when appearing for himself, that an objective fair-minded observer would harbour an apprehension of bias.

22 The inevitable consequence of that is that the mere fact that, as a matter of convenience, Mr Carr has now withdrawn his objection to the Judge dealing with the matter. The Tribunal cannot accede to a request that they now deal with the matter further.

23 In the circumstances the matter will be listed before a fresh Tribunal. That Tribunal will be invited to deal with the issue of costs on the papers. If the fresh Tribunal is not prepared to deal with the matter on the papers, the parties will be advised in due course.