Hurburgh, Andrew David v Law Society of Tasmania

[1998] TASSC 169

169/1998

PARTIES:  HURBURGH, Andrew David
  v
  LAW SOCIETY OF TASMANIA

TITLE OF COURT:              SUPREME COURT OF TASMANIA (FULL COURT)
JURISDICTION:                   APPELLATE
FILE NO/S:  FCA 93/1997

FCA 112/1997

DELIVERED:  24 December 1998
HEARING DATE/S:             3 November 1998
JUDGMENT OF:                  Cox CJ, Crawford J, Slicer J

CATCHWORDS:

Professions and Trades - Lawyers - Other matters - Appointment of manager by court - Remuneration of manager - Definition of "legal practitioner" under the Legal Profession Act 1993.

Cheney v Spooner (1929) 41 CLR 532, applied.
Centronics Systems Pty Ltd and Others v Nintendo Co Ltd (1992) 111 ALR 13; The Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110, followed.
Legal Profession Act 1993 (Tas), ss35(3), 56, 111(4), 119(1) and (2).
Aust Dig Professions and Trades [174]

REPRESENTATION:

Counsel:
           Appellant:  M B Hunniford and L J Hunniford
           The Law Society of Tasmania:     G L Sealy

The Solicitors' Trust:                   C A A Cunningham

Solicitors:
           Appellant:  Hunnifords
           The Law Society of Tasmania:     Piggott Wood & Baker
           The Solicitors' Trust:                   Simmons Wolfhagen

Judgment category classification:
Court Computer Code:  
Judgment ID Number:  169/1998
Number of pages:  8

Serial No 169/1998
File No FCA 93/1997

FCA 112/1997

ANDREW DAVID HURBURGH v THE LAW SOCIETY OF TASMANIA

REASONS FOR JUDGMENT  FULL COURT

COX CJ
CRAWFORD J
SLICER J
24 December 1998

Orders of the Court:

Appeals dismissed.

Serial No 169/1998

File No FCA 93/1997
FCA 112/1997

ANDREW DAVID HURBURGH v THE LAW SOCIETY OF TASMANIA

REASONS FOR JUDGMENT  FULL COURT

COX CJ
24 December 1998

I agree in substance with the Reasons for Judgment prepared by Slicer J and which I have had the advantage of perusing in draft form.  The appeals should be dismissed.

Serial No 169/1998

File No FCA 93/1997
FCA 112/1997

ANDREW DAVID HURBURGH v THE LAW SOCIETY OF TASMANIA

REASONS FOR JUDGMENT  FULL COURT

CRAWFORD J
24 December 1998

I also agree in substance with the Reasons for Judgment of Slicer J which formed the basis upon which I joined with the other members of the Court at the conclusion of the hearing to advise the parties that the appeals would be dismissed.

Serial No 169/1998

File No FCA 93/1997

FCA 112/1997

ANDREW DAVID HURBURGH v THE LAW SOCIETY OF TASMANIA

REASONS FOR JUDGMENT  FULL COURT

SLICER J

24 December 1998

The appellant seeks review of orders made by Zeeman and Underwood JJ in separate judgments which awarded payment of remuneration to the manager appointed to oversee the appellant's legal practice pursuant to the Legal Profession Act 1993 ("the Act").  The basis of the appeal is that a person once removed from the Roll of Legal Practitioners is not susceptible to such an order.

The appellant conducted a legal practice which became enmeshed in financial problems in December 1996.  On 23 December 1996, his name was removed from the Roll of Legal Practitioners but the order was stayed pending appeal until the withdrawal of such appeal on 13 January 1997.  Following the order of 23 December, the appellant wrote to the Law Society on 27 December advising that he wished to relinquish his practising certificate forthwith.  The Society was then faced, irrespective of the status of the practitioner, with a statement that there existed a legal firm responsible to members of the public which lacked a managing partner.  The Law Society, in meeting its obligations, made an application for the appointment of a manager in accordance with the Act, s119(2)(b), such application being granted on 31 December.  At the time of the making of that order, the appellant was a legal practitioner, either by reason of the stay of the order made on 23 December, or because his statement of resignation from the right to practice did not constitute removal from the Roll in accordance with the Act, s35(2).  Following the making of the order, the manager conducted the practice and, on 10 September and 14 November 1997, orders were made awarding the payment of the cost of the administration of the legal practice to the Solicitors' Trust.

The appellant contends that since, at the time of the making of the orders, he was not a legal practitioner, their making was beyond power.  The respondent claims that the appeal ought be dismissed, since at the time of the making of the application the appellant was a legal practitioner susceptible to the Act, and the making of consequential orders did not affect the power of the Court because the status of the person subject to the application had changed.

For the purpose of the determination of this appeal, it will be accepted that the status of the appellant, as of the date of hearing or the making of the orders (10 September and 14 November 1997) was not that of a legal practitioner.  On any view of the facts, the appellant was not a legal practitioner as of 13 January 1997.

The orders were made pursuant to the Act, s119(2), the relevant portion of which states:

"On the hearing of an application in respect of a legal practitioner, a judge may make any or all of the following orders:

…

(b)      an order appointing a person as manager of the practice of that legal practitioner;

…

(e)      any other order it thinks appropriate."

The contention is that at the times of the making of the orders, the appellant was not a legal practitioner and that the statutory power is only exercisable in respect of a current practitioner.

The Act, s119(1), provides:

"The Council may apply to a judge for an order to be made under this section in respect of a legal practitioner if it is satisfied —

(a)      that the legal practitioner has died or cannot be located; or

(b)      that the legal practitioner is unable to attend properly to the practice; or

(c)      that a default order has been made in respect of the legal practitioner; or

(d)      that it is necessary to do so for the protection of money or other property belonging to a person."

The appellant's argument depends, in part, on the scheme of the Act, Pt 8, which provides for disciplinary proceedings involving a legal practitioner.  Part 8, s56, defines a practitioner as meaning a person who:

"(a)    is a barrister or legal practitioner; or

(b)      holds a certificate issued under section 41(2); or

(c)      was a barrister or legal practitioner on the date on which any matter which is the subject of a complaint occurred; or

(d)      was a barrister or solicitor or barrister and solicitor of any jurisdiction on the date on which any matter which is the subject of a complaint occurred ... "

Given that Pt 8 provides for sanction, the status or description of persons susceptible to sanction might require precise definition.  The appellant's argument depends on acceptance of the proposition that since Parliament found it necessary to define legal practitioner by reference to "former status", in Pt 8 it intended to refer only to current practitioners in relation to proceedings involving the management of a practice.  The argument is misconceived.  The words "in respect of a legal practitioner" relate to the status of the subject matter giving rise to a need to provide remedy.  The question is whether the state of affairs requiring court intervention arose out of conduct which had been carried out by a legal practitioner acting in that capacity.  The purpose of the legislation is to provide for the regulation of the affairs of the legal profession and effect is given to that purpose by a scheme providing for matters of governance, regulation, discipline and protection.  Differing regulatory means are employed to achieve those obligations.  Part 9 is concerned with the protection of moneys held on behalf of members of the community and remedies and sanctions are afforded in cases where any risk or detriment to the public arises from the conduct of the affairs of a legal practitioner.  The governing words are "in respect of", which, in the context of this legislation, has causal rather than temporal connotations.  As Mann CJ observed in The Trustees Executors & Agency Co Ltd v Reilly [1941] VLR 110 at 111:

"The words 'in respect of' are difficult of definition, but they have the widest possible meaning of any expression intended to convey some connection or relation between the two subject-matters to which the words refer."

In Centronics Systems Pty Ltd and Others v Nintendo Co Ltd (1992) 111 ALR 13, Beaumont and Burchett JJ rejected an interpretation of the words as being solely temporal in nature, stating at 57 - 58:

"As has been noted, under s 7, an action does not lie 'in respect of' any act done before 1 October 1990.  Here, the act of importation for sale was before 1 October 1990.  But, it is proper to construe s 7 as applicable to exclude an action based on the sale itself, even if that sale takes place after 1 October 1990?

In our opinion, s 7 should be so construed.

We accept that, in some contexts, the act of importation, even if for sale, and the act of sale, even of the same goods, may be capable of being distinguished for some purposes. But, in the present context, to separate and distinguish the relevant conduct of Centronics in this way, even if literally possible, would, we think, give an unjust, irrational, and inconvenient result.  In such circumstances, the literal reading of the statute should be rejected:  see Cooper Brookes Wollongong Pty Ltd v FCT (1981) 35 ALR 151; 147 CLR 297 per Mason and Wilson JJ at 321. A literal interpretation of the Act would mean that goods could be lawfully imported for sale but not lawfully sold although imported for that very purpose. That would give a 'capricious' result which should only be adopted if the language is 'intractable': see Cooper Brookes at CLR 320.

In our view, the language is not intractable.  For present purposes the critical question is the meaning to be given to the words 'in respect of any act'.  It has been said that the words 'in respect of' have the 'widest possible meaning of any expression intended to convey some connection or relation between the two subject matters to which the words refer' (per Mann CJ in Trustees, Executors & Agency Co Ltd v Reilly [1941] VLR 110 at 111). See also Tarea Management North Shore Pty Ltd  (in liq) v Glass (1991) 28 FCR 93 at 100; 99 ALR 549.

These words should be given a wide meaning in the present context, so that no action lies under Pt III, not only for the importation of the subject goods, but also for any other conduct connected or related to that importation.  Since the importation was made for the purpose of sale, there is a sufficient connection or relation between the importation of the goods and their subsequent sale."

A similar approach was taken by Oliver J in Vaughan-Neil v IRC [1979] 3 All ER 481, when in considering income tax legislation and the time at which a particular liability arose, he said at 491:

"I return, therefore, to what I conceive to be the principal point:  was the payment made 'in respect of' or 'for' the giving of the undertaking in cl 1?  I do not think it can be enough simply to look at the face of the deed and to treat the only reality of the transaction as that which emerges from the juxtaposition of the covenant for payment and the taxpayer's covenant to cease practice.  Pritchard (Inspector of Taxes) v Arundale was concerned with the not dissimilar question of whether a transfer of shares pursuant to a deed which provided for such a transfer 'in consideration of the taxpayer undertaking to serve the Company' was an emolument from his employment, a question which involved the consideration of whether it was (to use the words of Upjohn J in Hochstrasser (Inspector of Taxes) v Mayes) a payment made 'in reference to the service the employee renders by virtue of his office'.  That question (to quote again Upjohn J) '… is a question to be answered in the light of the particular facts of every case.'"

The power afforded by the Act, s119, is not limited to a currently enrolled legal practitioner.

There is further reason for concluding that the court had the power to make an order for costs against the appellant.  An order was made establishing a court fund in accordance with the Act, s111, which refers to "a firm or legal practitioner corporation".  In s3, a firm is defined as meaning:

"(a)    a person practising as a legal practitioner on the person's own account; or

(b)      an association of 2 or more persons practising as legal practitioners in partnership …"

No challenge has been made to the validity of the order appointing the manager, yet if one accepts the appellant's argument, that order would be beyond power because of the claimed status of the appellant.  Whilst that order remains in force, s111(4), comes into effect.  It states:

"If a Court fund is established in respect of a firm or legal practitioner corporation, the Supreme Court may make any order specified under section 119(2)."

The logic of the appellant's argument can be tested by reference to this section.  On the appellant's argument there would be no power to establish a court fund or dispose of a practice pursuant to s117 in circumstances where a legal practitioner had died, since there is no provision similar to that provided by s119(1)(a).  This interpretation would render parts of the legislative scheme inoperable in any circumstances except those involving a live and enrolled legal practitioner.  Yet, an examination of the evidence in this case illustrates the clear need for intervention, irrespective of the status of the legal practitioner at the time of intervention.  The manager described the state of the practice when he commenced his duty in the following terms:

"It was a rudderless ship.  When I went there it was during the Christmas vacation and I had a number of days there without any staff or clients being present, but when the staff came back it became fairly clear that there was a fair level of disorganisation about the place which was explained to me on the basis that Mr Hurburgh had been sick and had been distracted by disciplinary proceedings against him in the latter part of the 1996.  There was some office procedures that were being followed, many of them not well and the normal housekeeping that one would expect to take place in a reasonably run office simply was not being done and there didn't appear to be any satisfactory oversight or supervision of what was happening.  I discovered, to my astonishment, that a junior practitioner who was not a partner was an authorised signatory to the trust account on his own.  Things such as this indicated to me that the practice had not had a guiding hand - a firm guiding hand on it and posed the potential for serious ramifications for clients.

Q:  Did the absence of - not your words but mine - the absence of usual office systems have any effect on your ability to manage the practice?
A:  Not ultimately but it was necessary to establish what was happening under that roof and the sooner the better and it all took time.  For instance, we had to work out how the computer system worked ourselves; how the computerised trust accounting system worked, which we did but it took time and just finding files - clients' files too a lot of time particularly if one was looking at - trying to see the history or something and find previous files.  They were held in different places on the premises and in other premises and the system that ought to have been in place to find them wasn't functioning well and it's still not possible to find some files.  That took extra time.

Q:  In relation to the mortgage portfolio, that part of the practice, did you discover any regularities?
A:  It was obvious to me within half an hour of looking at it that there were likely to be significant problems with it because of the state of the security documents themselves and what one would see when comparing those security documents to ledger accounts relating to them and so it proved to be.

Q:  I'm not sure whether you answered the question.  Did you discover irregularities? A:  Oh, yes."

It is the affairs and conduct of the practice which form the basis for the exercise of legislative power.

Even assuming that by reason of a narrow interpretation of the provision, the term "legal practitioner" confines the power afforded by the Act, s119, to current or deceased practitioners, the right to appoint a manager in relation to a disbarred practitioner is preserved by the Act, s35(3), which states that:

"The disbarment, suspension or striking off or removal from a roll does not prevent any investigation, hearing or proceedings under this Act from commencing, continuing or being determined."

The term "any proceedings" covers all phases of an action or cause (Cheney v Spooner (1929) 41 CLR 532; Krextile Holdings Pty Ltd v Widdows [1974] VR 689; Quazi v Quazi [1979] 3 All ER 424). The sub-section applies to the whole of the Act and is not confined to proceedings referred to in s35. If there be any doubt as to the power afforded in Pt 9, Div 4, then it is removed by this section.

It is for these reasons that I joined with the other members of the Court in advising the parties that both appeals would be dismissed.