Law Society of the ACT v Powrie
[2017] ACTSCFC 4
•17 October 2017
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
FULL COURT
Case Title: | Law Society of the ACT v Powrie |
Citation: | [2017] ACTSCFC 4 |
Hearing Date: | 8 August 2017 |
DecisionDate: | 17 October 2017 |
Before: | Murrell CJ, Burns and Elkaim JJ |
Decision: | See [92] |
Catchwords: | LEGAL PRACTITIONERS – Law Society seeking order that respondent legal practitioner’s name be removed from the roll of people admitted to the legal profession – ACAT concluded practitioner not a fit and proper person to conduct the practice of law – recommendation that practitioner’s name be removed from roll of legal practitioners STATUTES - Interpretation – whether the Court may make different findings on matters of fact and law based on evidence in the ACAT proceedings and evidence in current proceedings – statutory regime for disciplining legal practitioners – Legal Profession Act2006 (ACT) s 431(3) – comprehensive regime of appeal from decisions of the ACAT on question of both fact and law – issue estoppel – statutory regime as a whole – would render conferral of authority nugatory – separate from exercise of Court’s inherent jurisdiction to discipline practitioners – whether the legislature intended that the decision of the ACAT as to the necessary findings of fact and their characterisation as professional misconduct would be final – not open to the practitioner to challenge essential findings of ACAT in this case – obligation to independently determine whether name of the practitioner should be removed from the roll – whether the proven conduct of the practitioner demonstrates that they are not a fit and proper person to practise law – marked departure from standard of honesty and candour – order removing name of practitioner from roll appropriate – practitioner to pay Society’s costs of application |
Legislation Cited: | ACT Civil and Administrative Tribunal Act 2008 (ACT) s 79(3) Court Procedures Rules2006 (ACT) r 5082 Supreme Court Act 1933 (ACT) s 11(4) |
Cases Cited: | A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1; 216 CLR 253 Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 |
Texts Cited: | G Spencer Bower, AK Turner and KR Handley, The Doctrine of Res Judicata (Butterworths, 3rd Edition, 1996) Chapter 5 |
Parties: | The Law Society of the Australian Capital Territory (Plaintiff) Alan Charles Powrie (Defendant) |
Representation: | Counsel Mr N Beaumont (Plaintiff) Mr D Ash (Defendant) |
| Solicitors Phelps Reid (Plaintiff) Self-represented (Defendant) | |
File Number: | SC 220 of 2015 |
THE COURT:
These are proceedings in which the Law Society of the Australian Capital Territory (the Society) seeks an order pursuant to s 431(3) of the Legal Profession Act 2006 (ACT) (the LPA) that the respondent legal practitioner’s name be removed from the roll of people admitted to the legal profession in the Australian Capital Territory (ACT).
Background
The practitioner, Alan Charles Powrie (the practitioner), was admitted as a barrister and solicitor of the Supreme Court of the ACT on 24 February 1993, and was issued with a restricted practising certificate on 19 October 1993, which he held until June 1998. On 1 July 1998 he was issued with an unrestricted practising certificate to practise as a sole practitioner under the firm name Powrie & Co. The practitioner did not renew his ACT practising certificate after 30 June 2012, although he was at that time issued with an unrestricted practising certificate by the Law Society of New South Wales.
We will outline the way in which the proceeding came before us. On 21 August 2013 an Application for Disciplinary Action was filed by the plaintiff in the ACT Civil and Administrative Tribunal (the ACAT). The Application related to a complaint made against the practitioner by a former client, Mr Noel Johnson, regarding the practitioner’s failure to pay Mr Johnson a sum of $10,000 owing to Mr Johnson pursuant to a written agreement.
In or about October 2005, Mr Johnson initiated proceedings in the Supreme Court of the ACT seeking damages for negligence arising from the practitioner’s handling of a defamation action on Mr Johnson’s behalf. Those proceedings were settled in April 2009 with the involvement of the practitioner’s professional indemnity insurers. One aspect of the proceeding, the claim by Mr Johnson for reimbursement of costs paid to the practitioner, was not covered by the professional indemnity insurer, and it was agreed that this issue would be referred to the Deputy Registrar of the Supreme Court for assessment of the quantum of costs Mr Johnson should recover. On 24 June 2009 the Deputy Registrar assessed the costs to be reimbursed at $500.00.
Mr Johnson sought a review of this decision, and on 29 September 2009 the Deputy Registrar confirmed her original decision.
Mr Johnson then appealed the Deputy Registrar’s decision. On 13 August 2010 Master Harper dismissed the appeal, with costs ordered against Mr Johnson.
Mr Johnson then appealed Master Harper’s decision to the ACT Court of Appeal; the appeal was heard on 13 May 2011. At the Court’s urging, the parties agreed to a mediation which proceeded on 31 August 2011. At that mediation the parties signed a memorandum of agreement (the mediated agreement) in the following terms:
It is agreed as follows:
1. Powrie will pay $10,000 by bank cheque to [Mr Johnson’s solicitors] within 28 days. Upon [sic] default interest to run at Supreme Court Rates.
2. That upon payment the parties to (sic) all things to ensure proceedings ACTA 40/10 be discontinued by consult with no order to costs.
3. That all extant cost orders including the Order of Master Harper be forgiven.
4. That the parties bear their own costs of and incidental to these proceedings.
5. That the parties execute a Deed of Release and Indemnity in terms of the above Agreement releasing each other absolutely in respect of the subject matter of this dispute.
A further dispute subsequently arose between the practitioner and Mr Johnson as to the interpretation of this written agreement. The practitioner argued that the payment of the $10,000.00 was conditional upon the Deed of Release and Indemnity first being entered into, and Mr Johnson argued that it was an absolute obligation on the practitioner to pay that sum within the 28 days allowed by the agreement.
The practitioner did not pay the $10,000.00 within 28 days. Mr Johnson instituted proceedings in the ACT Magistrates Court to recover the sum of $10,000 plus interest. The practitioner filed a defence in those proceedings denying that there was an enforceable agreement and asserting that the parties had agreed as to terms to be inserted into a proposed deed. The defence also asserted that Mr Johnson had not performed his obligation under the agreement to execute a deed of release and indemnity, that this non-performance amounted to a repudiation of the agreement, and that this repudiation of the agreement had been accepted by the practitioner.
10. The claim by Mr Johnson was listed for hearing on Monday, 27 May 2013 in the Magistrates Court. On 19 May 2013, the solicitor who had been acting for the practitioner informed Mr Johnson’s lawyers that his instructions had been withdrawn. On 23 May 2013, the practitioner advised Mr Johnson’s lawyers that his, that is the practitioner’s, lawyer was no longer acting for him and that he proposed seeking an adjournment of the Magistrates Court proceedings on 27 May 2013 to allow him to obtain further legal representation.
11. On the same day, 23 May 2013, the practitioner forwarded a debtor’s petition to a solvency accountant with completed documentation proposing the accountant as trustee of the practitioner’s bankrupt estate. The practitioner had previously met with the accountant on 14 March 2013 at which time he had been provided with the forms.
12. On 27 May 2013 the practitioner appeared on his own behalf in the Magistrates Court and sought an adjournment of the proceedings, which was opposed by Mr Johnson’s lawyers. The practitioner obtained an adjournment of the proceedings after submitting to the Magistrate that Mr Johnson would suffer no prejudice by the adjournment as he, the practitioner, would pay Mr Johnson’s costs occasioned by the adjournment. The same day, the solvency accountant was appointed as trustee of the practitioner’s bankrupt estate.
The ACAT proceedings
13. On 21 August 2013, the Society filed an Application for Disciplinary Action in the ACAT. The matter proceeded to hearing on the basis of a Further Amended Application (the FAA). The FAA contained 4 grounds:
· Ground 1 – alleging a failure by the practitioner to conduct dealings with his former client honestly and fairly. Under this ground, the Society alleged that the practitioner failed to honour his agreement with Mr Johnson and, deliberately or recklessly, engaged in conduct to avoid so doing in breach of his duty to conduct himself honestly and fairly in his dealings with members of the community;
· Ground 2 – alleging a failure to act with candour and frankness in his dealings with the Magistrates Court in:
(a)failing to disclose to the Court the steps he had taken on 23 May 2013 to initiate a voluntary bankruptcy; and
(b)representing to the Court at the hearing on 27 May 2013 that the basis for his application for an adjournment was that he was no longer legally represented and that he needed to obtain alternative legal representation, when the real basis for the application was that, if an adjournment was granted, he expected to be able to frustrate the proceedings by reason of his impending bankruptcy.
· Ground 2A – alleging the practitioner deliberately or recklessly misled the Magistrates Court in that he:
(a)represented to the Court that he did not think there would be any prejudice to Mr Johnson if the adjournment was granted when he knew or believed that there would be prejudice to Mr Johnson because of his pending bankruptcy; and
(b)submitted to the Magistrates Court that his offer to pay costs thrown away would cure any prejudice to Mr Johnson resulting from the adjournment, when he knew or believed that any such costs order would be likely to be of little, if any, benefit because the practitioner believed he was insolvent and had commenced processes to make himself bankrupt.
· Ground 3 – alleging a failure by the practitioner to act with candour and frankness with a fellow practitioner, by:
(a)failing to disclose to Mr Johnson’s lawyers, or Mr Johnson, the steps he had taken on and before 23 May 2013 to initiate a voluntary bankruptcy;
(b)representing to the lawyers for Mr Johnson on 23 May 2013 and also at Court on 27 May 2013 that the basis for his application for an adjournment was that he needed to obtain alternative legal representation, when the real basis for the application was that, in the event an adjournment was granted, he expected to frustrate the proceedings by means of voluntary bankruptcy.
14. With regard to Ground 1, the ACAT reviewed the history of the mediated agreement and the proceedings in the Magistrates Court. It noted that after the practitioner’s lawyer and Mr Johnson’s lawyers engaged in correspondence in October 2011, Mr Johnson’s lawyers forwarded a draft deed repeating the terms of the mediated agreement to the practitioner’s lawyer on 8 December 2011, while still maintaining that payment of the sum of $10,000.00 by the practitioner was not contingent on the provision of the deed. The practitioner made no complaint about the terms of the draft deed, but apparently sought to argue that Mr Johnson had breached a confidentiality condition in the agreement to mediate entered into by the parties prior to the mediation. At the hearing in the ACAT it became apparent in cross-examination of the practitioner that the alleged breach was the complaint made to the Law Society by Mr Johnson about the practitioner’s behaviour.
15. In light of the practitioner’s refusal to sign the draft deed, Mr Johnson commenced the proceedings in the Magistrates Court to enforce the mediated agreement. The ACAT noted that, in its final form, the practitioner’s defence in the Magistrates Court proceedings alleged:
(a)the mediated agreement was not enforceable, as it simply embodied terms which the parties had agreed would be inserted into a deed;
(b)alternatively, if the mediated agreement was a contract, Mr Johnson had repudiated it by failing to execute a Deed of Release and Indemnity as required by clause 5, and the practitioner had accepted that repudiation; and
(c)the parties had executed a deed on 24 April 2009 settling that part of Mr Johnson’s claim against the practitioner in which the practitioner’s professional indemnity insurer was on risk which specified “[t]he Releasor will indemnify and hold harmless the Releasee against any Claim related to or connected in any way to the subject matter of the Proceedings however asserted.” The practitioner claimed that this deed precluded Mr Johnson from seeking to enforce the mediated agreement.
16. The ACAT then considered the evidence given by the practitioner in the proceedings before it. The practitioner agreed in cross-examination that he had regarded himself as honour bound to go into the mediation in good faith and in an attempt to resolve the outstanding issues between himself and Mr Johnson. He similarly regarded himself as honour bound to do what he could to ensure that the mediated agreement was performed. The practitioner agreed that the only two proper alternatives available to him upon receipt of the draft deed on 8 December 2011 was either to agree to it in its draft form or suggest amendments. He agreed that he took neither alternative, and gave no real reason for having done so. He was also unable to identify any evidence that would have led him to believe that Mr Johnson was unwilling to execute a deed, particularly after the draft deed of 8 December 2011 provided for settlement of all claims between them.
17. The ACAT also noted that the alleged breach of confidentiality given by the practitioner’s then lawyer as a reason for not executing the draft deed was not the subject of any evidence by him in the proceedings.
18. The ACAT expressed the view that no reasonable reading of the mediated agreement indicated that it was intended to be an agreement to enter into a later agreement. The dispute between the parties, ACAT said, related to the amount of money the practitioner was to pay to Mr Johnson. The mediated agreement quantified that sum and provided for a period for payment. The ACAT opined that the deed contemplated by the mediated agreement was a deed of release ancillary to the settlement of the costs dispute.
19. The ACAT concluded that from at least the time that the practitioner received the draft deed his motive for failing to execute the deed and for defending the Magistrates Court proceedings was to postpone or avoid his obligation to pay Mr Johnson the sum of $10,000.00 agreed to in the mediated agreement. The ACAT were satisfied that the claim by Mr Johnson was “indefensible”, and that the conduct of the practitioner would have resulted in considerable waste of time and money by Mr Johnson, which he was unlikely ever to recover. The ACAT concluded that Ground 1 was made out.
20. With regard to Ground 2, the ACAT noted that the complaint in subparagraph (a) of Ground 2 did not assert that the practitioner directly misled the Magistrates Court, but rather asserted that as a result of his failure to provide to the Court relevant information known only to him “an incorrect belief or impression was created”.
21. It is useful at this point to refer to some of the evidence before the ACAT. The practitioner withdrew his instructions from his lawyer on or prior to 5 May 2013. On 19 May 2013 the practitioner’s former lawyer wrote to Mr Johnson’s lawyers advising that the practitioner had withdrawn his instructions. On 23 May 2013 at 4.32 pm the practitioner sent an email to Mr Johnson’s lawyers stating that his lawyer was “no longer acting” for him, before going on to say:
I am seeking your consent to adjourn the matter until 11 June 2013, so that I can attempt to obtain representation. I appreciate that it is “late in the day” however, I would be prepared to mention the matter on your behalf and consent to any costs thrown away because of the adjournment.
22. As we have already noted, on 14 March 2013 the practitioner met with an solvency accountant and obtained forms to lodge a debtor’s petition in bankruptcy. At 4.35 pm on 23 May 2013, three minutes after he sent the email referred to in the last paragraph to Mr Johnson’s lawyers, the practitioner sent an email to the solvency accountant saying:
Attached is my Debtor’s Petition. I do not have some tax records and will provide these as soon as practicable.
Could you please advise whether (sic) my bankruptcy starts. Is it today or at a later date?
When he applied for an adjournment of the Magistrates Court proceedings on 27 May 2013, the practitioner made no mention of his application for bankruptcy or that he was insolvent, saying that he wished to obtain further legal representation.
24. The ACAT noted that the practitioner had sought to justify not advising the Magistrates Court of his bankruptcy application by asserting that no matter what the outcome of his application for an adjournment, Mr Johnson would receive no money from his “meagre estate”. The ACAT dealt with this submission as follows:
97. Although the ultimate practical outcome of the proceedings following the bankruptcy was likely to be that the former client would receive no payment, that circumstance was of less significance than the effect that adjournment combined with bankruptcy would have on the course of the proceedings. Disclosure of the debtor’s petition thus was relevant to consideration of whether an adjournment should be granted. The magistrate was entitled to be fully informed about the circumstances of the request for adjournment. That is because bankruptcy after adjournment would result in staying of the proceedings if not completed. Also, there could be some advantage to the former client in obtaining a judgment on 27 May 2013. This advantage was referred to by Mr Nicholl in his affidavit of 13 February 2014 and he was later cross examined on his evidence.
25. The ACAT concluded that by not referring to his application for bankruptcy, the practitioner “permitted the magistrate to assume that there would be no change in the course of the litigation and the status and entitlements of the parties if the case were adjourned to a later date”.
26. The ACAT stated that the practitioner’s duty to the court was summarised in the preface to the section of the Legal Profession (Solicitors) Rules 2007 (ACT)(the Solicitors Rules) headed “Practitioners’ Duties to the Court”, which reads:
Practitioners, in all their dealings with the courts, whether those dealings involve the obtaining and presentation of evidence, the preparation and filing of documents, instructing an advocate or appearing as an advocate, should act with competence, honesty and candour. Practitioners should be frank in their responses and disclosures to the Court, and diligent in their observance of undertakings which they give to the Court or their opponents.
27. Having regard to these principles and the erroneous impression created by the practitioner’s failure to disclose his application for bankruptcy, the ACAT concluded that the practitioner had breached his duty to the Court, and found Ground 2(a) was made out.
28. With regard to Ground 2(b), the ACAT found that the evidence established the following:
(a)the practitioner had actively avoided meeting his obligations under the mediation agreement both prior to and after the commencement of enforcement proceedings by the former client until the time of the adjournment application;
(b)he had defended the enforcement action brought by the former client on untenable grounds;
(c)adjournment of the proceedings would postpone judgment and there was at least a real prospect that the practitioner would be made bankrupt prior to an adjourned hearing;
(d)the amount of costs involved ($3,000.00) were disproportionate to the amount of the claim ($10,000.00 plus interest);
(e)the practitioner had not provided any reason for withdrawing his instructions from his lawyers, either to the Magistrate or in the proceedings in the ACAT;
(f)the practitioner’s lawyer was a close friend of his, who at the time his instructions were withdrawn was owed a significant sum in fees. Notwithstanding this fact, he offered his services to the trustee in bankruptcy “on a speculative basis” on 7 June 2013 and represented the practitioner in the proceedings before the ACAT;
(g)the practitioner was insolvent and unable to pay his debts and faced a judgment for a liquidated sum which included a claim for interest;
(h)the unexplained withdrawal of instructions occurred only days before the listed hearing date giving little time for retaining alternate representation and thus increasing the likelihood of an adjournment being granted; and
(i)there was no independent evidence of any reason for the practitioner having withdrawn his instructions.
29. The ACAT concluded that the absence of any attempt by the practitioner to provide an alternative explanation to that urged by the Society allowed it to more safely draw the inference that the application for an adjournment was not for the purpose of obtaining alternative legal representation, but was because he expected to be able to frustrate the proceedings by reason of his impending bankruptcy. The ACAT was satisfied that Ground 2(b) was made out.
30. With respect to Ground 2A, the ACAT noted that rule 18.1 of the Solicitors Rules provided:
18. Frankness in court
18.1 A practitioner must not knowingly make a misleading statement to a court on any matter.
31. The practitioner has never denied that he made a submission to the Magistrates Court that Mr Johnson would not be prejudiced by an adjournment of the hearing because he would pay the costs thrown away. The ACAT was satisfied that at the time he made that submission, the practitioner knew:
(a)he had submitted a debtor’s petition to his solvency accountant for the commencement of bankruptcy proceedings;
(b)that he had been told that it was likely to come into effect within 24 to 48 hours after submission;
(c)if the Magistrates Court proceedings were adjourned, the possibility of judgment being entered was postponed;
(d)his bankruptcy may take effect prior to any adjourned date; and
(e)upon bankruptcy, the Magistrates Court proceedings would be stayed with the likely result of frustration of the proceedings.
32. The ACAT was satisfied that the submission made to the Magistrate was therefore incorrect and would have misled the Court about the likelihood of prejudice being suffered by Mr Johnson if the adjournment were granted. Similarly, the ACAT was satisfied that the practitioner knew when he made his submission to the Magistrate that it was unlikely that he would ever be able to actually pay the costs thrown away by reason of any adjournment because of his insolvency, but deliberately made the submission to enhance the prospects of the adjournment being granted. The ACAT therefore found Ground 2A of the complaint to be made out.
33. With respect to Ground 3, the ACAT was notified that the practitioner’s duty to fellow practitioners was expressed in the Solicitors Rules under the heading “Relations with other practitioners”, and in the following terms:
In all of their dealings with other practitioners, practitioners should act with honesty, fairness and courtesy, and adhere faithfully to their undertakings, in order to transact lawfully and competently the business which they undertake for their clients in a manner that is consistent with the public interest.
34. On the basis of the facts and circumstances referred to above, the ACAT determined that the practitioner had failed to comply with the duty imposed on him in his dealings with the lawyers for Mr Johnson by failing to advise them of the steps he had taken to initiate bankruptcy and by failing to advise them of the true reason for seeking an adjournment of the Magistrates Court proceedings. The ACAT found the complaints in Ground 3 to be made out.
35. Following publication of its findings in relation to the FAA on 2 October 2014, the ACAT adjourned the further hearing of the proceedings to enable it to consider three issues: whether a global finding of categorisation of conduct should be made covering all of the Grounds in the FAA, the proper categorisation of the conduct and what sanction should be imposed. The parties were directed to file and serve evidence in relation to these three issues, and on 23 February 2015 a further hearing was conducted by the ACAT. On 31 March 2015 final orders were made by the ACAT with an indication that its reasons would be delivered later. On 12 May 2015 the ACAT published its reasons.
36. On 31 March 2015 the ACAT made a global finding that the practitioner was guilty of professional misconduct in relation to the conduct alleged in the FAA and which it had found proven. The ACAT made the following orders:
1.The Tribunal recommends that the respondent’s name be removed from the roll of legal practitioners in the Australian Capital Territory, and from any interstate roll.
2.The Tribunal recommends that the respondent’s interstate practising certificate be cancelled.
3.The respondent practitioner is to pay the applicant’s costs of this application calculated on a party/party basis in accordance with the Supreme Court scale, in an amount as agreed or, failing agreement, to be determined in accordance with the procedure set out below.
37. When the ACAT published its reasons for making these orders, it said:
6.The Tribunal took the view that there had been a continuing course of action arising from a single source. That was the respondent’s desire to avoid an obligation he had to pay a sum of money to his former client. The Tribunal agreed with the following submission made by counsel for the applicant:
the whole conduct was designed to thwart the recovery from the practitioner by his former client of the relevant fees charged by the practitioner, that is the fees for the work the subject of the client’s professional negligence claim.
7.When considering the culpability of the behaviour, there was no utility in breaking the conduct up into sub-categories.
8.This was a case in which the Tribunal had little difficulty in coming to a conclusion in categorisation of the conduct of the respondent. He entered into an agreement with a former client regarding payment of a sum of money representing fees paid by the client to him which the practitioner should repay according to a judgment of the Court. The practitioner had agreed to the order for costs and to the quantification of the amount of it at mediation. These matters are referred to at paragraphs 5 to 10 of the Tribunal’s Reasons for Decision of 2 October 2014, referred to above.
9.The practitioner reneged on his obligation at an early stage and did everything in his power to avoid the debt. This extended to deliberately misleading a Court and a fellow practitioner who was acting for the respondent. The Tribunal took the view that the conduct of the respondent at all stages was most dishonourable. He went to great lengths to use his training and experience in the legal profession and his knowledge of the courts and their procedures to thwart the legitimate entitlement of the former client. That conduct clearly drew on his knowledge of the reliance placed by courts and other practitioners on the veracity of what they are told by another legal practitioner in the course of day to day dealings and on the honesty and reliability of that person when doing so.
38. The ACAT acknowledged that the primary objective of disciplinary proceedings is the protection of the public. In determining the appropriate orders, the ACAT took into account:
(a)that the practitioner had been involved in prior disciplinary proceedings. On 8 June 2011 consent orders were made in the ACAT to the effect, inter alia, that the practitioner had recklessly represented to the Consumer Trade and Tenancy Tribunal at Goulburn in NSW that he represented the complainants in proceedings before the Tribunal as a friend on a pro bono basis when he knew that was not the case. It was agreed that this constituted professional misconduct. The practitioner was reprimanded and ordered to pay the costs of the Law Society. Subsequently there were further disciplinary proceedings in the ACAT which were resolved by consent orders on 8 August 2013. Those proceedings involved a complaint of the practitioner giving instructions to another legal practitioner to pursue recovery of monies owing to a company of which the practitioner had at one time been a director, but which he subsequently sold to a third party and ceased to be director. On his instruction, the other legal practitioner, who was unaware of the true state of affairs, commenced proceedings in the company’s name, and obtained default judgment. The practitioner then instructed the other legal practitioner to commence bankruptcy proceedings to recover the judgment debt. The practitioner consented to a finding in the ACAT that he engaged in unsatisfactory professional conduct by recklessly failing to disclose to the legal practitioner he instructed to represent the company that he was not a director of the company and he did not have authority to conduct the proceedings on behalf of the company, and by recklessly representing to the other legal practitioner that he was a director of the company and had authority to act for it, and by having falsely sworn an affidavit claiming to be a director of the company. He further consented to findings that he had engaged in professional misconduct by recklessly swearing an affidavit in which he claimed to be a director of the company, and by recklessly misleading the Court. The practitioner was again reprimanded, was ordered to pay a fine of $5,000.00 and was ordered to pay the costs of the Law Society;
(b)the practitioner’s subjective circumstances including references from other practitioners and family members;
(c)that the practitioner had been under significant stress in the period leading to and encompassing the conduct complained of; and
(d)the gravity of the conduct complained of.
39. Based upon these circumstances the ACAT expressed itself as driven to the conclusion that the practitioner is not a fit and proper person to conduct the practice of law, and therefore recommended that his name be removed from the roll of legal practitioners in the ACT.
40. On 18 June 2015 the Society commenced proceedings in this Court, seeking an order removing the practitioner’s name from the roll of local practitioners. On 20 November 2015, the practitioner filed an application in the ACAT seeking leave to appeal out of time from the ACAT’s decision on liability and penalty. That application was heard and dismissed by Appeal President Stefaniak on 3 December 2015. On 3 February 2016 the practitioner commenced proceedings in this Court seeking leave to appeal out of time pursuant to rule 5082 of the Court Procedures Rules2006 (ACT) against the decision of Appeal President Stefaniak. This application was heard by Elkaim J on 3 August 2016. On 9 August 2016 Elkaim J handed down his decision striking out the application as incompetent.
Evidence on the hearing of the present application
41. The Society relied upon an affidavit sworn by Robert Anthony Reis on 15 June 2015 and an affidavit sworn by Michael James Phelps on 14 March 2017. These affidavits set out the history of the matter and annexed the relevant application before the ACAT, as well as the ACAT’s orders and reasons. No objection was made by the practitioner to the contents of these affidavits, and the deponents were not required for cross-examination.
42. The practitioner relied upon an affidavit affirmed by himself on 6 June 2017. The only objection raised to the contents of this affidavit was to a report dated 3 February 2015 from a forensic psychologist, Tim Watson-Munro, which was an annexure to the affidavit. The objection to this report was on the basis that the practitioner had sought to tender the report in the ACAT proceeding, but had withdrawn the tender after parts of the report had been rejected by the ACAT following objection by the Society. The report was received by this Court provisionally. We will deal with this issue below.
43. In his affidavit the practitioner stated that he was 62 years old and has been on the roll of practitioners since 23 February 1993. He ceased practice in October 2014. While engaged in legal practice he acted on a pro bono basis for numerous organisations, including Amnesty International, Narcotics Anonymous NSW, Winnunga Nimmityjah Aboriginal Health Service and Gulwan Aboriginal Youth Organisation. A number of medical reports, apart from that of Mr Watson-Munro, were annexed to his affidavit. In a handwritten report dated 24 November 2014, Dr C. K. Webber, a general practitioner, stated that the practitioner had a number of significant medical problems, including obstructive sleep apnoea, raised body mass index, hypertension, bleeding duodenal ulcer, chronic allergies, and chronic anxiety and insomnia requiring medication. Dr Webber said that in July 2010 the practitioner had very abnormal biochemistry with raised blood sugar levels, low sodium, evidence of renal failure, raised cholesterol and raised liver function tests. At this time. Dr Webber said, the practitioner had been drinking heavily, and a subsequent reduction in his alcohol intake had reversed many of the biochemical abnormalities.
44. In a further report dated 12 May 2016, Dr Webber referred to a deterioration in the practitioner’s mental health to the stage that he was severely depressed with marked psychomotor retardation and emotional fragility. Dr Webber noted that the practitioner had been referred to a consultant psychiatrist, Dr Owen, and that he had agreed to commence medication.
45. A report from Professor Cathy Owen, Professor of Psychiatry, dated 2 June 2016, was annexed to the practitioner’s affidavit. The report was obviously prepared to support an application by the practitioner that the proceedings against him be postponed. Professor Owen noted that the practitioner had consulted her for treatment of a major depressive disorder which was being treated by medication. When she saw him, his cognitive impairments of poor concentration, attention, planning and memory function made him, in Professor Owen’s opinion, unfit to participate in the proceedings.
46. In the report from Dr Watson-Munro, to which objection was taken by the Society, a history of the practitioner was set out. Dr Watson-Munro noted that the practitioner came from a high achieving family and that he had achieved both academic and athletic success. He had worked as a solicitor since the time of his graduation. During the course of his training he was employed by the Australian Tax Office for 10 years before establishing his own practice. The practitioner was married in 1991, and his wife is a qualified solicitor. They have two children. He reported chronic stress for many years related to long working hours. The practitioner told Dr Watson-Munro that in July 2010 he travelled with his wife to South Korea. His wife’s health dramatically deteriorated following their arrival, resulting in her being conveyed to hospital and the practitioner was advised that she may die. She was apparently diagnosed with atypical pneumonia. His wife remained in a coma for about three weeks during which he remained by her side. He reported that he found this experience very traumatic. Adding to the stress on the practitioner was the fact, he said, that his wife’s illness was not covered by travel insurance, so that her treatment placed him under severe financial strain. Eventually she regained her health and returned to Australia. Dr Watson-Munro opined that the current proceedings have also taken a toll on the practitioner, with the practitioner acknowledging at times that he experiences suicidal ideation.
47. Dr Watson-Munro stated that prior to seeing him in 2011, the practitioner was drinking heavily as a means of self medication. The practitioner agreed to accept ongoing treatment from Dr Watson-Munro, including reading self-help books. The practitioner, nevertheless, continued to work long hours with extensive travel.
48. Dr Watson-Munro stated that the practitioner’s problems were exacerbated when he was bankrupt in 2013. He reported substantial problems with his sleep due to intrusive thoughts and anxiety. He was prescribed Valium.
49. On the occasions that Dr Watson-Munro spoke with the practitioner, the practitioner was well oriented in time, place and person with no indication of major psychiatric disturbance. He presented as highly anxious and depressed, and tended to perseverate upon his issues. The main source of his anxiety as at February 2015 was the proceedings involving the Society. The practitioner told Dr Watson-Munro that he feared that if he were deprived of his capacity to generate income there would be a multiplier effect in terms of the impact on his family. He reported that although his wife is a legal practitioner she is very reliant upon him at an emotional level.
50. Dr Watson-Munro concluded his report by stating that the practitioner presented as a cooperative though clearly psychologically distressed man. The practitioner had attempted to rehabilitate himself before seeing Dr Watson-Munro by reading self-help books and addressing a prior propensity to abuse alcohol as a means of self medication. The practitioner suffered from a range of physical and psychological ailments dating back to at least 2010. His wife’s serious illness in South Korea, ongoing financial stressors and the protracted nature of the proceedings with the Law Society had all taken “an enormous toll” on the practitioner. Dr Watson-Munro was particularly concerned about an acknowledgement of suicidal ideation, and expressed the view that if the practitioner was struck off and lost his livelihood this would become a potentially dangerous issue at a clinical level.
51. In his affidavit, the practitioner pointed out that the ACAT had accepted that he “had significant stress in the period leading up to and encompassing the conduct”. At [19] of the ACAT reasons on penalty delivered on 12 May 2015, it stated, concerning the stress he was under at the time: “This is clearly relevant, and it explains in part why the respondent behaved the way he did. It provides, however, no justification or excuse for his behaviour.”
52. In the course of its reasons on penalty, the ACAT observed that the practitioner had not demonstrated any contrition for his conduct, and had not provided an apology for his conduct even after the ACAT published its reasons on liability and indicated to the parties on 23 February 2015 its finding on categorisation of his conduct. In his affidavit in the present proceedings the practitioner accepted he did not show contrition in the “initial hearing on liability” in the ACAT as he did not believe that he was guilty of professional misconduct. In his present affidavit he said that he accepted that his financial and medical state subsequent to the trip to South Korea did not justify or excuse any misconduct, and he regretted that he had not taken steps to ensure that his financial and medical affairs did not impact on the discharge of his professional obligations. The practitioner acknowledged his disciplinary history, and expressed his regret in relation to those matters.
53. In his affidavit, the practitioner has referred to the death of his daughter in September 2015, and the subsequent need to deal with police investigating the death, which, he said, had exhausted him physically and mentally since December 2015.
54. With regard to his current position, the practitioner deposed to a desire to recommence practice, and stated his belief that he has much to offer the community. As to his medical position, the practitioner stated that his prognosis was unclear, and acknowledged that the Law Society would be entitled to be reasonably satisfied of his mental state if it came to consider any application by him for a practising certificate.
55. The practitioner concluded his affidavit by seeking that this Court make orders that the Society’s application be dismissed and that the findings and orders made by the ACAT on 31 March 2015 be set aside.
56. The practitioner was cross-examined on his affidavit. With regard to whether he had demonstrated any contrition for his conduct, he agreed that he was arguing in the present proceedings that the ACAT had been wrong to find him guilty of professional misconduct on Ground 1. The practitioner said that the events surrounding Ground 1 raised a “Masters v Cameron” argument (referring to the High Court decision in Masters v Cameron (1954) 91 CLR 353), and he was concerned to obtain an executed deed from Mr Johnson before paying him the $10,000.00. He agreed that he did not accept the ACAT’s finding that he had failed, without justification, to comply with the mediated agreement. He also said that he rejected the findings of the ACAT that his conduct to avoid without justification honouring the terms of the mediated agreement commenced no later than receipt of the draft deed.
57. With regard to Grounds 2 and 2A, the practitioner stated that he disagreed with the ACAT finding that he had misled the Magistrates Court. He also disputed the ACAT finding on Ground 3, that he had misled Mr Johnson’s lawyers as to his real reason for seeking an adjournment of the Magistrates Court proceeding. The practitioner was cross-examined extensively as to whether he accepted that any of his conduct was wrong, but he failed to give any clear answer to these straight forward questions.
A challenge to the findings of the ACAT
58. These proceedings were commenced by way of an Originating Application, in which the Society seeks an order that the name of the practitioner be removed from the roll of local practitioners. The present proceeding is based upon evidence taken and findings made in the ACAT proceeding. As was made clear by the practitioner in his affidavit in the present proceedings, he initially sought orders not only that the present application be dismissed, but also that findings and orders made in the ACAT proceedings be set aside. In the course of argument before us, the practitioner’s counsel conceded that in the hearing of the present application this Court had no power to set aside the findings or orders of the ACAT. The practitioner’s counsel instead submitted that it was open to us to make our own, different findings on matters of fact and law based on the evidence in the ACAT proceedings and the evidence in the current proceedings, which may conflict with the findings of the ACAT. For the reasons that follow, we do not accept that submission.
59. In order to explain our reasons for rejecting this submission, it is necessary to consider the statutory regime for disciplining legal practitioners found in the LPA.
60. Chapter 4 of the LPA is headed “Complaints and discipline”. The making of complaints about legal practitioners is governed by Part 4.2. In some circumstances, such complaints may be subject to mediation: Part 4.3. Some complaints may be dismissed by the “relevant council”, in this case the Law Society: s 412. Some complaints may be dealt with summarily by the relevant council and a caution, a reprimand, a fine or other specified orders may be made against the legal practitioner: s 413. Where the relevant council does not dispose of the complaint in either of these two ways, it must make an application to the ACAT under Part 4.7 of the LPA: s 410. This is what occurred in the present matter.
61. Part 4.7 of the LPA is headed “Disciplinary action”. By virtue of s 419 the relevant council may apply to the ACAT for an order in relation to a complaint against the practitioner. Such an application must include the charge of unsatisfactory professional conduct or professional misconduct the relevant council considers arises out of the complaint: s 419(3). If, after considering an application under Part 4.7, the ACAT is satisfied that a practitioner is guilty of unsatisfactory professional conduct or professional misconduct, s 425 of the LPA permits it to make one or more of specified orders set out in subsections (3), (4) and (5) of s 425, including an order recommending that the practitioner’s name be removed from the relevant roll of legal practitioners.
62. A practitioner dissatisfied with a decision of the ACAT may appeal the decision to an appeal tribunal within the ACAT on a question or law or fact: s 79(3) ACT Civil and Administrative Tribunal Act 2008 (ACT) (the ACAT Act). An appeal tribunal may, as it considers appropriate, deal with an appeal either as a new application or as a review of all or part of the original decision. These two options equate to a hearing de novo and a rehearing respectively.
63. Where a practitioner is dissatisfied with a decision of the appeal tribunal, her or she may, with the leave of this Court, appeal to this Court from the decision of the appeal tribunal on a question of fact or law. If the ACAT makes an order recommending that the name of a local lawyer be removed from the local roll, a copy of the order may be filed in this Court and the Court may order the removal of the name from the roll: s 431(3) of the LPA.
64. Certain features of this legislative disciplinary regime are important in this case. First, the inherent jurisdiction and powers of this Court in relation to the control and discipline of local lawyers are not affected by anything in Chapter 4 of the LPA: s 462 LPA. Secondly, proceedings in the ACAT commenced by an application under s 419 are complete when the ACAT either dismisses the application under s 426, or makes a finding that the practitioner is guilty of unsatisfactory professional conduct or professional misconduct and makes one or more of the orders specified in sub-sections (3), (4) or (5) of s 425 of the LPA. Thirdly, the LPA provides the power for this Court to remove the name of a legal practitioner from the local roll in s 431(3). Finally, the legislature has provided for a comprehensive regime of appeal from decisions of the ACAT on question of both fact and law. The first such level of appeal, to the appeal tribunal within the ACAT, is by right and may be conducted as a hearing de novo if the appeal tribunal consider it appropriate, but otherwise as a rehearing. The second level of appeal to this Court, may also be on a question of fact of law, but is subject to leave being granted.
65. These features of the statutory regime are important in considering the nature of the jurisdiction we are exercising in these proceedings, and the implication that has for the submission made by the practitioner that we are not bound by the findings or determinations of the ACAT.
66. The practitioner accepted that the present proceedings are not an appeal from the decisions of the ACAT, but he submitted that this Court is not bound to follow the recommendation of the ACAT. He further submitted that the Court’s inherent jurisdiction and powers regarding the discipline of legal practitioners was “an overarching backdrop” to the present proceedings. He submitted that the subject matter and reach of the inherent jurisdiction and powers of the Court were summarised in the following passage from Re Robb (1996) 134 FLR 294 at 297:
The nature of the Court’s jurisdiction and the power exercisable in relation to the admission, direction and disciplining of persons admitted by it to practise as barristers and solicitors is well-known and has been the subject of statements by this Court on many occasions, most recently in Re Grosse (unreported, Supreme Court, ACT, 22 February 1996). It is an inherent jurisdiction and is circumscribed by the Legal Practitioners Act and other legislation only by express provision or necessary implication. Proceedings for professional misconduct on the part of a solicitor may be brought by the Law Society. Such proceedings are brought and determined in the public interest. But the Court has the inherent power and the responsibility, to initiate such proceedings of its own motion on information brought before it: see, eg, Re Gruzman; Ex parte Prothonotary (1968) 70 SR (NSW) 316. Whether or not the proceedings have been brought by the Law Society as in the present case, the Court is not restricted to considering the precise allegations as formulated. If the evidence is capable of establishing misconduct other than that alleged, the Court must in the discharge of its duty consider the questions that arise relating to possible misconduct, so long as the practitioner is on notice of the nature of the case and the case proceeds to a determination of those questions without unfairness to the practitioner.
67. Referring to the statement in the above passage that the Court “is not restricted to considering the precise allegations as formulated” by the Law Society, the practitioner questioned whether in the present case, “where the Society makes an application on an order of the ACAT”, the position was any different. In particular, he questioned whether the Court was precluded from considering whether the particular conduct founding the order of the ACAT, which in turn founds the present application, is in fact less serious than the ACAT found, and in turn precluded from doing anything other than giving effect to the ACAT’s recommendation. The practitioner submitted that the answer to these questions must be “yes” if the findings and orders of the ACAT amount to a “res judicata”. He, however, submitted that they do not. The practitioner accepted that the doctrine of res judicata extends to a decision by a tribunal with jurisdiction over the cause and the parties which disposes once and for all of the fundamental matters decided, citing Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 453. He accepted that the ACAT had jurisdiction over a cause arising out of the FAA, and over the parties to the cause who are also parties in the present proceedings. He submitted, however, that the ACAT’s decision did not dispose once and for all of the fundamental matters involved. He submitted that the legislature could have expressly provided that the ACAT’s reasons for decision be taken to be conclusive as to all facts and findings therein, as has been done in other jurisdictions: see Legal Profession Act 2008 (WA) s 444(1); Legal Profession Complaints Committee v in de Braekt [2013] WASC 124. The fact that the ACT legislature has not so provided implies, the practitioner submitted, that it was not the legislative intention that the findings and orders of the ACAT would be final and conclusive. The practitioner concluded by submitting that while the Court would be slow to disturb the ACAT’s findings, it was not bound by them.
68. Based upon the submission that this Court is not bound by the findings of the ACAT, the practitioner argued that the ACAT was wrong with regard to Ground 1 in finding that the interpretation of the mediated agreement adopted by him was not reasonably arguable. With regard to Grounds 2, 2A and 3 the practitioner argued that the ACAT’s condemnation of his conduct was premised on findings that he expected to be able to frustrate the Magistrates Court proceedings by reason of the undisclosed information about his pending bankruptcy, that his representation to the Magistrate in seeking an adjournment that Mr Johnson would suffer no prejudice if an adjournment were granted was made in circumstances where he knew and believed that Mr Johnson would, or would likely suffer prejudice, and that if the Magistrate had been told about the practitioner’s pending bankruptcy it was reasonably likely that the Magistrate would have proceeded to hear and determine Mr Johnson’s claim. Thus the practitioner sought to challenge findings of fact made by the ACAT, and the determination that based upon the facts that the practitioner was guilty of professional misconduct.
69. The Society submitted that following the making of an order by the ACAT recommending that the name of a practitioner be removed from the roll, and the filing of a copy of that order in this Court as permitted by s 431(3) of the LPA, the exercise by this Court of its “discretion” is not merely an administrative step but must involve a hearing in which the Court decides for itself whether to accept the recommendation made by the ACAT. The Society was thus submitting that this Court is granted a power to remove the name of the practitioner from the roll by the terms of s 431(3). In support of this proposition, the Society cited the decision in Law Society of the Australian Capital Territory v Diana Mary Burns [2012] ACTSC 91; 6 ACTLR 282, where the Court (Refshauge, Penfold and Burns JJ) said, at [10], with regard to s 431(3) of the LPA, that this was “an express power in the Supreme Court to remove the name of a local practitioner from the roll following a complaint process through the relevant professional body and the ACAT.”
70. The Society’s submission was that there is a distinction between the statutory process found in the LPA for removal of the name of a practitioner from the roll, and the exercise of the inherent jurisdiction. Where the Court exercises its inherent jurisdiction with regard to control and discipline of legal practitioners it must decide the underlying facts for itself, although the process of fact finding may be delegated to a single judge: s 11(4) Supreme Court Act 1933 (ACT). By contrast, the Society submitted that the consideration by the Court of a recommendation under s 431(3) of the LPA is the culmination of a process in which the ACAT is charged with making findings and orders.
71. The Society submitted that it was not open to the practitioner to seek to reagitate in these proceedings findings made in the ACAT. The Society submitted that this conclusion arises from the following matters:
(a)that the present proceedings are founded upon the statutory disciplinary process found in the LPA, as opposed to being an exercise of the Court’s inherent jurisdiction; and
(b)that the parties had a right of appeal within the ACAT and, with leave to this Court from the determination of the ACAT at first instance.
72. The Society submitted that it could not have been the intention of the legislature, in providing for the statutory disciplinary process in the LPA, that a practitioner could unsuccessfully challenge the findings of the ACAT by way of appeals, including in this Court and the Court of Appeal, and yet raise the same challenges in this Court when it comes to consider under s 431(3) the recommendation of the ACAT. The Society further submitted that a practitioner who has not appealed, or (as here) who failed to do so within the prescribed time, cannot be in a better position.
73. The Society described the present proceedings as the Court “exercising a jurisdiction to perfect the very same proceedings, in the sense of making final orders in relation to them, that are the subject of the purported challenge by the Practitioner”.
74. The Society drew our attention to the decision of Refshauge J in The Law Society of the Australian Capital Territory v Legal Practitioner [2017] ACTSC 107; 319 FLR 109. This was an application by the practitioner in the present proceedings to vacate an earlier hearing date. The practitioner had apparently informed his Honour of his intention to challenge, in these proceedings, findings made in the ACAT. With respect to this information, Refshauge J said, at [59]-[61]:
59.The Legal Practitioner accepts, it appears, the difficult task he faces in persuading the Full Court that the ACAT’s recommendation should not be accepted. As I noted above, the Full Court is unlikely to be persuaded to investigate the facts of the matter as on an appeal. The nature of the hearing is one of some unclarity. The absence, in this case, of any appeal or successful appeal from the factual findings of the ACAT, including the finding that the conduct of the subject of complaint constituted professional misconduct may be relevantly conclusive as findings made inter partes by a tribunal of competent jurisdiction. It would seem to me likely that the ACAT was, for the doctrine of res judicata, a judicial tribunal in the relevant sense: Administration of Territory of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 402, 458; Basser Medical Board of Victoria [1981] VR 953 at 975.
60.If that is so, the doctrine would mean that the facts found by the ACAT cannot be overturned by the Full Court and the Legal Practitioner may not challenge them.
61.That, of course, does not apply to the recommendation of the ACAT: Legal Profession Complaints Committee v in de Braekt [2013] WASC 124 at [31].
75. The Society adopted the provisional views expressed by Refshauge J.
76. Consonant with its obligation to draw to our attention any relevant authority that may not support its submission, the Society referred us to the decision of Evans J in Legal Profession Board of Tasmania v W [2011] TASSC 67 (Legal Profession Board of Tasmania v W), where his Honour held, with regard to legislation apparently similar to the LPA, that in the absence of a provision in the Legal Profession Act 2007 (Tas) giving “evidentiary status” to a recommendation of the Disciplinary Tribunal that the name of the practitioner be removed from the roll, the Supreme Court may be required to conduct a full rehearing of the complaint against the practitioner.
77. The Society submitted that the decision in Legal Profession Board of Tasmania v W was plainly wrong, and in any event did not address the issue of issue estoppel which has been raised in these proceedings. The Society accepted that this Court is not bound to follow the recommendation of the ACAT.
Consideration
78. In our opinion there are 2 reasons for rejecting the submission that we are entitled to review the findings and determinations of the ACAT, and to make different and conflicting findings if we choose. The first is based upon the terms of the LPA, and the second upon the basis of issue estoppel. These 2 reasons are not unconnected.
79. When one considers the statutory regime in the LPA as a whole, including the authority given to the ACAT to determine whether conduct constitutes professional misconduct or unsatisfactory professional conduct, and the availability of appeals from such determination, it is impossible to conceive that the legislature intended that this Court, in determining whether to accept and act upon a recommendation of the ACAT that the name of a practitioner be removed from the roll, would engage in a review of those determinations. To construe the relevant provisions of the LPA otherwise would be to effectively grant the practitioner a right of appeal outside the terms of the statute. Such a construction would also negate the very purpose of the provisions, because there would effectively be no difference between the Court considering a recommendation of the ACAT under s 425 of the LPA, and the exercise of its inherent jurisdiction. In the statutory process for disciplining practitioners found in the LPA, the legislature has seen fit to bestow upon the ACAT, and not upon this Court, the authority to make findings of fact and to determine how the facts as found are to be characterised. To construe the LPA as submitted by the practitioner would be to render that conferral of authority nugatory.
80. It follows from the above that we consider the statutory process under the LPA for removal of the name of a practitioner from the roll to be completely separate from the exercise of the Court’s inherent jurisdiction to discipline practitioners. The consequence of this conclusion for the orders that the Court can make on an application such as the present, other than either acceding to or declining to accede to the recommendation of the ACAT, may need to be considered in an appropriate case. We were not taken in detail to the legislation considered by Evans J in Legal Profession Board of Tasmania v W, and in the absence of full argument on the basis for the decision in that case, we cannot, with respect, comment on the correctness of that decision as an exercise of the interpretation of the relevant legislation.
81. Turning to the Society’s submission that the findings and determinations of the ACAT create an issue estoppel precluding the practitioner from challenging them in these proceedings, the practitioner accepted that the ACAT was, for this purpose, a judicial body which had jurisdiction to hear proceedings between the same parties to the present proceedings and concerning the same subject matter. The practitioner acknowledged that the findings he asked us to make are inconsistent with those made by the ACAT, but he submitted that there is no issue estoppel created by the ACAT proceedings as they did not finally dispose of the issues the ACAT determined, as the further step of making an order removing the practitioner’s name from the roll had to be taken in this Court. This submission should be rejected.
82. In Blair v Curran (1939) 62 CLR 464 Dixon J said at 531-532:
A judicial determination directly involving an issue of fact or of law disposes once for all of the issue, so that it cannot afterwards be raised between the same parties or their privies. The estoppel covers only those matters which the prior judgment, decree or order necessarily established as the legal foundation or justification of its conclusion, whether that conclusion is that a money sum be recovered or that the doing of an act be commanded or be restrained or that rights be declared. The distinction between res judicata and issue-estoppel is that in the first the very right or cause of action claimed or put in suit has in the former proceedings passed into judgment, so that it is merged and has no longer an independent existence, while in the second, for the purpose of some other claim or cause of action, a state of fact or law is alleged or denied the existence of which is a matter necessarily decided by the prior judgment, decree or order.
83. It is, we think, unnecessary to determine whether the present proceedings are, for present purposes, entirely separate to the ACAT proceedings, or should be properly regarded as an extension to or culmination of the ACAT proceedings. As is apparent from Spencer Bower, Turner and Handley, The Doctrine of Res Judicata (Butterworths, 3rd Edition, 1996), Chapter 5, the distinction between interlocutory and final decisions is not always helpful in this area of discourse. Issue estoppel may operate not only in subsequent suits between parties, but also in subsequent proceedings in the same suit: Fidelitas Shipping Co. Ltd. v V/O Exportchleb [1966] 1 QB 630 at 642 per Diplock LJ; O’Toole v Charles David Pty Ltd (1990) 171 CLR 232 at 245, 260 and 298 (O’Toole v Charles David). The question is whether, in a case such as this, the legislature intended that the decision of the ACAT as to the necessary findings of fact and their characterisation as professional misconduct would be final. This is consistent with the approach taken by Mason CJ in O’Toole v Charles David at 245. For the reasons we have given above we are satisfied that the legislature did intend that the relevant findings and determinations of the ACAT are to be final, subject to the exercise of any right of appeal. The essential findings of the ACAT, including the practitioner’s state of mind at the time he engaged in the conduct complained of, and the determination that his conduct constituted professional misconduct therefore found an issue estoppel which operates in these proceedings.
84. For these reasons, we conclude that it is not open to the practitioner, in these proceedings, to challenge the essential findings made by the ACAT. We will simply add that the practitioner’s challenge to the findings of the ACAT with regard to Ground 1 on the ground that the ACAT was wrong to find Mr Johnson’s claim in the Magistrates Court seeking to enforce the mediated agreement was “indefensible”, was misconceived. The essential finding by the ACAT was not that the practitioner’s defence was unsustainable as a matter of contract law. The ACAT’s finding addressed the practitioner’s state of mind, in essence his motive for defending the claim as he did. Based upon the accepted evidence that the practitioner had been provided with a draft deed, to the contents of which he raised no objection, and his own evidence that the only proper courses available to him upon receipt of the draft deed were to execute it or to seek amendment to its terms, and his acknowledged but unexplained failure to adopt either of those courses, it was well open to the ACAT to conclude that the real motive for the practitioner’s conduct was to postpone or avoid entirely having to meet his obligation to pay Mr Johnson the agreed sum of $10,000.00 plus interest.
85. As we have an obligation to independently determine whether the name of the practitioner should be removed from the roll, we will receive the report of Dr Watson-Munro, excising those parts to which objection was taken by the Society, for that limited purpose. We consider the report to be one providing useful context, but it does not adequately explain the practitioner’s conduct by reference to any psychological condition from which he may have suffered at the time.
86. Although we are bound by the essential factual findings of the ACAT and its characterisation of the practitioner’s conduct as professional misconduct, we are not bound to accept the recommendation of the ACAT. We must make our own determination of whether the conduct engaged in by the practitioner warrants the removal of his name from the roll. We have no doubt that the law applicable to this question is the same in these proceedings as it is in proceedings under the inherent jurisdiction of the Court.
87. A finding that a practitioner is guilty of professional misconduct does not, of itself, justify an order removing their name from the roll: A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1; 216 CLR 253 per Gleeson CJ, McHugh, Gummow, Kirby and Callinan JJ at [21]. The question is whether the proven conduct of the practitioner demonstrates that they are not a fit and proper person to practise law: Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279.
88. We consider the finding by the ACAT that the practitioner knowingly misled the Magistrates Court in his application for an adjournment of the proceedings before that Court to be the most serious finding (Ground 2A). In Brett v Solicitors Regulation Authority [2014] EWHC 2974 (Admin); [2015] PNLR 2, Lord Thomas CJ said, at [111]:
[M]isleading the court is regarded by the court and must be regarded by any disciplinary tribunal as one of the most serious offences that an advocate or litigator can commit. It is not simply a breach of a rule of a game, but a fundamental affront to a rule designed to safeguard the fairness and justice of proceedings. Such conduct will normally attract an exemplary and deterrent sentence. That is in part because our system for the administration of justice relies so heavily upon the integrity of the profession and the full discharge of the profession’s duties and in part because the privilege of conducting litigation or appearing in court is granted on terms that the rules are observed not merely in their letter but in their spirit. Indeed, the reputation of the system of the administration of justice... and the standing of the profession depends particularly upon the discharge of the duties owed to the court.
89. The events considered by the ACAT were not, of course, the first occasion on which the practitioner had been found guilty of professional misconduct for misleading a judicial body: see [38(a)] above. On the previous occasions the practitioner was found guilty of reckless conduct, whereas on this occasion the ACAT was satisfied that his conduct was intentional.
90. When considered as a whole, the practitioner’s conduct exhibits such a marked departure from the standard of honesty and candour to be expected of a practitioner as to justify a finding that he is not a fit and proper person to practise law. The fact that the practitioner has demonstrated no remorse or insight into the wrongfulness of his conduct, together with the fact that this was not an isolated incident, justify a finding that his unfitness is not a transient state, or amenable to correction.
91. As we are satisfied that an order removing the name of the practitioner from the roll is appropriate, it is unnecessary to determine whether we have the power to make an order other than that sought by the Society.
92. We order that the name of the practitioner be removed from the roll. The practitioner is to pay the Society’s costs of the application.
| I certify that the preceding ninety-two [92] numbered paragraphs are a true copy of the Reasons for Judgment of the Court. Associate: Date: 17 October 2017 |
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