Jajoo v Micheletto
[2021] FCA 1238
•13 October 2021
FEDERAL COURT OF AUSTRALIA
Jajoo v Micheletto [2021] FCA 1238
File number(s): NSD 680 of 2021 Judgment of: STEWART J Date of judgment: 13 October 2021 Catchwords: ADMINISTRATIVE LAW – application for judicial review of orders of a judge of the Federal Circuit Court – where orders contained a notation referring the applicant solicitor to the Law Society of New South Wales – where primary judge impugned the professional conduct of the applicant – where applicant was neither a party to the proceeding nor the solicitor on record for one of the parties – where applicant was not called to give evidence and was not afforded an opportunity to be heard – denial of procedural fairness – declaration made as to invalidity of the subject notation Legislation: Federal Court of Australia Act 1976 (Cth) ss 20A(2)(c), 37AF(1), 37AG(1)(a)
Judiciary Act 1903 (Cth) s 39B
Federal Circuit Court Rules 2001 (Cth) r 10.01(3)(s)
Cases cited: Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564
Annetts v McCann [1990] HCA 57; 170 CLR 596
Ashby v Slipper [2014] FCAFC 15; 219 FCR 322
Bale v Mills [2011] NSWCA 226; 81 NSWLR 498
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1
Moorgate Tobacco Co Ltd v Phillip Morris Ltd [1980] HCA 32; 145 CLR 457
Rafidi v Commonwealth Bank of Australia Ltd [2017] NSWCA 96
Riva NSW Pty Ltd v Fraser & Clancy t/as Fraser Clancy Lawyers [2020] NSWCA 210
Division: General Division Registry: New South Wales National Practice Area: Administrative and Constitutional Law and Human Rights Number of paragraphs: 26 Date of last submissions: 1 October 2021 Date of hearing: Determined on the papers Counsel for the Applicant: S Lloyd SC and R Davies Solicitor for the Applicant: David Legal Counsel for the First Respondent: The first respondent filed a submitting notice Counsel for the Second Respondent: The second respondent filed a submitting notice Counsel for the Third Respondent: The third respondent did not appear Counsel for the Fourth Respondent: The fourth respondent filed a submitting notice ORDERS
NSD 680 of 2021 BETWEEN: SABRINA JAJOO
Applicant
AND: FABIAN KANE MICHELETTO & MICHAEL CARRAFA (AS JOINT AND SEVERAL TRUSTEES OF THE PROPERTY OF AID ESHI, A BANKRUPT)
First Respondent
STEPHANIE BHNAN
Second Respondent
AID ESHI
Third Respondent
FEDERAL CIRCUIT COURT OF AUSTRALIA
Fourth Respondent
ORDER MADE BY:
STEWART J
DATE OF ORDER:
13 OCTOBER 2021
THE COURT DECLARES THAT:
1.The notation in the orders of the Federal Circuit Court of Australia on 4 June 2021 in file number MLG 2043 of 2020 is invalid because it was made without affording the applicant procedural fairness.
THE COURT ORDERS THAT:
2.The orders made and reasons for judgment published today be published only to the parties to the proceeding until their further publication would not be in contravention of non-publication orders made by the Federal Circuit Court of Australia on 21 July 2021 in file number MLG 2043 of 2020, and to such other people as may be necessary for the purposes of Order 3 below.
3.The applicant forthwith apply to the Federal Circuit and Family Court of Australia for variation of the orders of the Federal Circuit Court referred to in Order 2 so as to not restrict the publication of the orders made and reasons for judgment published today, and notify the Associate to Stewart J when such variation has been made.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
STEWART J:
The applicant is a solicitor having been admitted in 1997. She has practised in the area of property law, both residential and commercial, since about 1999.
In 2019, the applicant was engaged on a property transaction during the course of which she prepared two receipts to record the receipt by the seller of two part payments by the buyer. She says that her instructions were that the payments for which the receipts were prepared had been made and received. She says that she had no reason to believe that that might be false, or that the seller was insolvent or might shortly become insolvent.
The estate of the seller was subsequently sequestrated. Thereafter, proceedings were brought in the Federal Circuit Court by the seller’s trustees, citing both the seller and the buyer, to declare the transfer of the property void under s 121 of the Bankruptcy Act 1966 (Cth). The applicant in the present case was not a party to that proceeding. Also, neither she nor the firm at which she is employed were solicitors on the record for any party in that proceeding.
The receipts that had been prepared by the applicant were tendered in evidence in the Federal Circuit Court proceeding and became the subject of discussion in the judgment of Judge Street. His Honour upheld the claim to declare the transfer void and made other consequential orders. His Honour also recorded the following notation in the orders:
THE COURT NOTES THAT:
1. The Court will have the Registrar notify the Law Society of New South Wales about the conduct of the lawyer, Ms Sabrina Jajoo, the subject of these proceedings in respect of the creation, it appears, of two documents dated 4 December 2019 and 17 January 2020 that would not be consistent with the standards expected of a legal practitioner.
Judge Street delivered ex tempore reasons for judgment on 4 June 2021 and subsequently written reasons dated 20 July 2021.
In his reasons for judgment, Judge Street identified the applicant by name in several places and found that the receipts in question had been prepared by her. His Honour also found that the receipts were patently false and reasoned that it is “difficult to understand how the two false receipts would not have been readily apparent or that the fraud on the financier as the incoming mortgagee would not have been readily apparent” (sic, at [17]). His Honour also stated the following (at [39]):
The Court is not in a position to make clear findings in relation to the role played by the solicitor, who acted on both sides of the record, beyond the assertions advanced in the evidence of the creation of what are patently false and fraudulent receipts. The Court does not know whether that was in fact a document created by the solicitor, Ms Jajoo, and is deeply troubled by what appears to on the evidence to be the departure from the standards expected of a legal practitioner in respect of the conduct of Ms Jajoo in this case if in fact she created or was aware of the two false receipts. The Court is not, however, in a position to make any findings in that regard, given the absence of both the bankrupt and Ms Jajoo. (sic)
The applicant was given no notice of the proceeding, that any conduct of hers might be impugned in the proceeding, of the findings that might be made or of the notation in the Court’s orders. The first she knew anything about those matters was some weeks later when they were brought to the attention of the principal of the firm at which she is employed who then brought them to her attention.
On 13 July 2021, the applicant commenced the present proceeding which at that time sought, amongst other relief including the declaration referred to further below, an interlocutory injunction against Judge Street from publishing written reasons for the notation. The matter was listed for hearing before a duty judge of this Court on 22 July 2021 but that hearing was vacated on 21 July 2021 and no further orders were made. That was because the applicant had in the meanwhile brought an urgent application in the Federal Circuit Court for the suppression of the publication of her name in both the notation and reasons of Judge Street. The application came before the duty judge, Judge Manousaridis, who on 21 July 2021 made interim orders to that effect. The written reasons of Judge Street do not appear to be publically available, presumably because of the suppression orders.
The applicant now seeks a declaration that the notation is invalid because it was made without affording her procedural fairness. The other relief, including the injunction, set out in the originating application is no longer pressed because it has been overtaken by the events described above.
The application is unopposed, three of the respondents including the Federal Circuit Court having filed submitting notices and the remaining respondent having failed to appear.
I acceded to the applicant’s request to decide the matter on the papers on the basis that its determination would not be significantly aided by an oral hearing: Federal Court of Australia Act 1976 (Cth) (FCA Act), s 20A(2)(c).
The Court has jurisdiction to hear and determine the application under s 39B(1) of the Judiciary Act 1903 (Cth). That is on the basis that an injunction was sought “against an officer of the Commonwealth” which gave the Court jurisdiction which continues notwithstanding that that question has become unnecessary to decide: Moorgate Tobacco Co Ltd v Phillip Morris Ltd [1980] HCA 32; 145 CLR 457 at 472 per Gibbs J and 476 per Stephen, Mason, Aickin and Wilson JJ. Also, the matter arises under a law of the Parliament: Judiciary Act, s 39B(1A)(c).
A decision “to refer papers” to some regulatory or policing authority is an independent administrative decision by a court and not part of the judicial process: Rafidi v Commonwealth Bank of Australia Ltd [2017] NSWCA 96 at [16] per Basten JA, Emmett AJA agreeing. Aside from any other source, the Federal Circuit Court would appear to have had power under r 10.01(3)(s) of the Federal Circuit Court Rules 2001 (Cth) to make the notation, i.e., to make directions “on any other matter that the Court or Registrar considers appropriate.”
In RivaNSW Pty Ltd v Fraser & Clancy t/as Fraser Clancy Lawyers [2020] NSWCA 210, a judge of the District Court of New South Wales had made directions that the professional associations of a party’s legal representatives be notified “of their failure to comply with their duty to the Court and legal obligations under s 56 of the Civil Procedure Act” (at [22]). Macfarlan JA, with whom McCallum JA and Wright J agreed, held that the directions incorporated an assertion of fact that the legal representatives had failed to comply with their duty to the Court and their obligations under legislation (at [24]). It was held that the making of those directions, particularly to the extent that they incorporated the judge’s views as to the misconduct of the legal representatives, in the absence of those persons being given an opportunity to be heard, constituted a denial of procedural fairness to them (at [25]).
It was also held that even if the directions had simply been for a referral of the conduct of the legal representatives to the appropriate authorities, the publication of the directions in the judgment would have been liable to adversely affect their reputations without them having been afforded procedural fairness (at [25]).
The Court held (at [27]-[28]) that the failure to afford procedural fairness constituted jurisdictional error which justified the making of a declaration of the invalidity of the directions to mark the Court’s disapproval of their making and to lessen any harm to the reputations of the persons concerned.
Importantly, the Court acknowledged (at [26]) that “[i]t is of course important that misconduct, whether criminal or professional, which comes to the attention of a court should be referred to the appropriate authorities for consideration”, but that it should not be done in a public fashion without notice being given to those concerned. With respect, I adopt that view.
The basis for procedural fairness attaching to a decision causing reputational harm is that “when a statute confers power upon a public official to destroy, defeat or prejudice a person’s rights, interests or legitimate expectations, the rules of natural justice regulate the exercise of that power unless they are excluded by plain words of necessary intendment”: Annetts v McCann [1990] HCA 57; 170 CLR 596 at 598 per Mason CJ, Deane and McHugh JJ; Ainsworth v Criminal Justice Commission [1992] HCA 10; 175 CLR 564 at 576 and 578 per Mason CJ, Dawson, Toohey and Gaudron JJ.
In Ashby v Slipper [2014] FCAFC 15; 219 FCR 322 at [141]-[143], Mansfield and Gilmour JJ held that where serious issues are raised in proceedings concerning a non-party solicitor in relation to their professional conduct and which go to their integrity, the matters alleged require careful consideration. Bale v Mills [2011] NSWCA 226; 81 NSWLR 498 at [66] was quoted with regard to fairness in the administration of justice extending not only to ensuring a fair trial for the actual parties, but also to ensuring that a witness who is not a party is treated fairly. The importance of guarding against unfairness to someone who is not even a witness, such as the applicant in this case, is heightened.
The notation records Judge Street’s opinion that “it appears” that the conduct of the applicant was not consistent with the standards expected of a legal practitioner. That is neither a neutral nor a private referral; it is a referral that impugns and is harmful to the reputation of the applicant. That is made even clearer in the reasons for judgment, particularly in the portions quoted at [6] above, which imply the falsity of the invoices and the fraud on the financier would have been clear to the applicant and that the judge could make findings, albeit not “clear findings”, in relation to the conduct of the applicant which led to his Honour being “deeply troubled”.
In the circumstances, I am satisfied that the decision to make the notation attracted procedural fairness. It is plain that the applicant was not afforded any procedural fairness.
As indicated, all that the applicant now seeks is a declaration that the decision reflected in the notation is invalid because it was made without affording the applicant procedural fairness. Such a declaration will have utility because it will reduce the reputational harm suffered by the applicant and it will appropriately mark the Court’s disapproval of the public making of the notation in circumstances where she had been denied procedural fairness: Riva NSW at [28].
For completeness, I mention that the applicant has at some length set out on affidavit her involvement in preparing the two receipts in question. At the very least, her explanation shows that had she been given the opportunity she would have been able to proffer a reasonable explanation for their creation. Certainly, the applicant suffered “practical injustice” in being denied such an opportunity: cf. Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam [2003] HCA 6; 214 CLR 1 at [37]-[38] per Gleeson CJ.
The applicant does not seek a costs order.
Finally, it is necessary to deal with the fact that the non-publication orders made by the Federal Circuit Court on 21 July 2021 have the effect that the applicant’s name as it appears in the notation and in various parts of the reasons for judgment of Judge Street of 20 July 2021 must not be published or otherwise disclosed other than in certain restricted circumstances. Those restricted circumstances do not include publication as a consequence of this Court making the declaration that the applicant seeks in this proceeding in which she does not seek to suppress her name by the use of a pseudonym, or publishing these reasons for judgment which necessarily reproduce or refer to restricted parts of the reasons for judgment of Judge Street.
In order to avoid any conflict between the non-publication orders and the publication of the judgment and reasons in this case, I will make orders preventing the publication of the judgment and reasons beyond the parties to the case until such time as the non-publication orders are varied in such a way as to allow their publication to the public. Such a temporary restriction is justified as being necessary to prevent prejudice to the proper administration of justice: FCA Act, ss 37AF(1) and 37AG(1)(a). I will also direct the applicant to forthwith apply to vary the non-publication orders so as to allow the wider publication of the declaration and reasons for judgment.
I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Stewart. Associate:
Dated: 13 October 2021
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