Legal Services Commissioner v di Suvero

[1999] NSWADT 138

CITATION:	Legal Services Commissioner -v- di Suvero [1999] NSWADT 138
DIVISION:	Legal Services
APPLICANT:	Legal Services Commissioner
RESPONDENT:	Henry Millo di Suvero
FILE NUMBER:	9810
HEARING DATES:	04/16/1999
SUBMISSIONS CLOSED:	04/16/1999
DATE OF DECISION:	17 December 1999
BEFORE:	C A Needham - Deputy President S Norton - Judicial Member M Costigan - Member
PRIMARY LEGISLATION:	Legal Profession Act 1987
APPLICATION:	Professional misconduct - barrister; Unsatisfactory professional conduct - barrister -
MATTER FOR DECISION:	Application by respondent for costs
REPRESENTATION:	Applicant: D Robertson of counsel instructed by Legal Services Commissioner Respondent: F McAlary QC instructed by Moray & Agnew
ORDERS:	1. Payment be made from the Statutory Interest Account to the Applicant of an amount by way of costs; 2. The amount be assessed on the basis of party/party costs in accordance with the Legal Profession Act; 3. The parties be directed to confer with a view to reaching agreement on the quantum of costs assessed on that basis; 4.There be liberty to restore the matter to the Tribunal for the purpose of making an order for payment of the agreed amount of costs or, failing agreement, to hear argument on the quantum of costs to be awarded; 5 . In the event that there is no agreement, the parties be directed to file and serve any evidence relied on and any written submissions 3 days prior to the date the matter is relisted.

1 In this matter the Tribunal gave judgment on 9 April 1999 dismissing the complaint by the Legal Services Commissioner. The Barrister seeks an under section 171E(2) that his legal costs be paid from the Statutory Interest Account on an indemnity basis.

2 The Tribunal heard oral argument on the application and was assisted by written submissions from the parties.

3 The power to order costs in proceedings in the Legal Services Division is contained in section 171E of the Legal Profession Act. That section provides:

(1) The Tribunal may make orders requiring a legal practitioner or interstate legal practitioner whom it has found guilty of unsatisfactory professional conduct or professional misconduct (or any associated solicitor corporation) to pay costs (including the costs of the Commissioner, the appropriate Council and the complainant).

(2) If, after it has completed a hearing relating to a complaint against a legal practitioner or interstate legal practitioner, the Tribunal is satisfied that the practitioner is not guilty of unsatisfactory professional conduct or professional misconduct, the Tribunal may (but only if it considers that special circumstances so warrant) order payment from the Public Purpose Fund to the practitioner of the legal practitioner's costs.

(3) An order for costs:

(a) may be for a specified amount or an unspecified amount, and

(b) if for an unspecified amount, may specify the basis on which the amount is to be determined, and

(c) may specify the terms on which costs must be paid.

4 Accordingly special circumstances are a prerequisite to an order for payment of the costs of the legal practitioner under s. 171E(2) although not for an order for costs against an unsuccessful legal practitioner.

5 The requirement of special circumstances recognises the public interest role of the Bar Council, the Council of the Law Society and the Legal Services Commissioner. The Legal Profession Act imposes a statutory obligation upon the Councils and the Commissioner to bring proceedings against a legal practitioner where satisfied that there is a reasonable likelihood of a finding of professional misconduct or unsatisfactory professional conduct.

6 The obligation arises under ss 155(2) and 160(2) and applies where there has been an investigation of a complaint or, in the case of the Commissioner, after a reinvestigation of a complaint subsequent to a review of a Council’s decision to dismiss a complaint or reprimand a legal practitioner rather than institute proceedings.

7 The position is otherwise under s. 160(1)(d) when the Commissioner commences proceedings after a review of a Council’s decision. If the Commissioner chooses not to have the complaint reinvestigated, the Commissioner may in his discretion confirm the decision of the Council, direct the Council to refer the matter to mediation, reinvestigate the complaint or direct the appropriate Council to do so or to institute proceedings against the legal practitioner or direct the relevant Council to do so.

8 In the present case the complaint had been dismissed by the Bar Council and reviewed by the Commissioner who decided to institute proceedings without a reinvestigation. In doing so the Commissioner was acting in his discretion under s. 160(1) and not pursuant to the statutory mandate.

9 Where an investigation has been conducted, s 155(4) provides:

“The Council or the Commissioner is to dismiss the complaint against the legal practitioner if satisfied that there is no reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct”.

10 Although the section is limited to cases where there has been an investigation or reinvestigation, we would think that the same approach is proper where there has been a review without a reinvestigation, as in this case. Accordingly we do not attach any particular significance to the presence or absence of the s 160(2) statutory mandate in considering whether an award of costs should be made under s 171E(2): contra Bar Association of New South Wales v John Dailly, Legal Services Tribunal No 2 of 1996, at paragraph 38 where the obligation to bring proceedings under s 155(2) was said to be significant factor in relation to costs.

11 The Barrister submits that there are special circumstances justifying an order under s 171E(2). It was submitted that an objective assessment of the undisputed facts shows that there was no reasonable likelihood that the complaint would be established hence the proceedings should not have been instituted.

12 It is a question of fact for this Tribunal whether there are special circumstances justifying a costs order. Broadly speaking, special circumstances may include a failure to act fairly, reasonably or in good faith or some impropriety in prosecuting or continuing the proceedings such as would, for example, justify an award of indemnity costs in a court of law.

13 The award of costs in this Tribunal is not governed by the principles applied in courts of law: Dailly, paragraph 38, cf the helpful discussion of the costs jurisdiction in the Medical Tribunal in Walton v McBride (1995) 36 NSWLR 440 at 470-475 per Cole JA.

14 Nonetheless guidance in relation to s 171E(2) may we think be found in the decisions where indemnity costs have been awarded. Relevantly in Fountain v Selected Meats (Sales) Pty Ltd v International Produce Merchants Pty Ltd (1988) 81 ALR 397; Re Bond Corp Holdings Ltd (1990) 1 ACSR 350 and Colgate Palmolive Co v Cussons Pty Ltd (1993) 46 FCR 225 indemnity costs were awarded against a party who had maintained proceedings that had no real prospect of success.

15 In this case the facts were contested. The whole of the material from which the complaint arose was contained in the transcript of the relevant parts of the trial before His Honour Judge Shillington upon which His Honour based his complaint.

16 The Barrister had at all times fully co-operated with the investigation of the Bar Association. The thorough and detailed responses which he provided during the investigation of the complaint covered all the issues likely to arise in any proceedings and clearly identified the grounds on which he answered the complaint.

17 His evidence before the Tribunal was consistent with his earlier written responses to the Bar Association. His defence was to the same effect as the submissions he had put to the Association.

18 No questions of credit arose at the hearing. Although there was cross examination of the Barrister, nothing new emerged in cross examination.

19 The Commissioner submitted that prior to the oral evidence of the Barrister and his explanation at the hearing of the matters of complaint, there was material which supported the conclusion that there was a reasonable likelihood that the Barrister would be found guilty of misconduct. It was submitted that the Barrister’s evidence at the hearing diverged from what he had said in one of his letters to the Bar Council. Reliance was also placed on a matter said to have been conceded by him in cross examination.

20 As we have said above, we do not accept that there was any divergence between the Barrister’s explanations during the investigation and the evidence at the hearing. The concession relied upon was not a matter of any or any substantial relevance to the issues for decision.

21 For the Barrister, reliance was placed on Dailly, supra, where an order was made under s 171E(2) for payment of costs on an indemnity basis. In that case there was a direct conflict of evidence between the Barrister and the complainant concerning the most significant complaint, which was an allegation that the Barrister had made a threat in order to obtain payment of excessive fees, that conduct being alleged to have been participated in by another barrister and the instructing solicitor. The Tribunal rejected the evidence of the complainant as a matter of credit.

22 In doing so the Tribunal relied on diary notes and other documents as showing that the Barrister’s denial should be accepted. Those documents had been available to the Bar Council.

23 The Tribunal said at paragraph 42:

“[W]e have found nothing in the statutory declarations and related documentation available to the Bar Council which, viewed as a whole, would have enabled the Bar Council to have been satisfied that there was a reasonable likelihood that the practitioner would have been found guilty of either of the complaints in this matter. It was not simply the word of Dr Pollnow in respect of both complaints against the word of the practitioner. There were contemporary documents and correspondence which allowed a weighing of the inherent likelihood of the complaint by Dr Pollnow”.

24 Accordingly the Tribunal took the view that the Council should have dismissed the complaint.

25 Reliance was also placed on In the matter Symonds, Legal Profession Disciplinary Tribunal No 22 of 1992. In that case, the Law Society filed a complaint against Mr Symonds based on an allegation made by Ms Foreman in an affidavit filed in the Family Court of Australia. The allegation, if true, would have justified the complaint being filed. Ms Foreman withdrew her claim for costs and was thus never cross-examined on her affidavit. The Law Society was at the same time prosecuting Ms Foreman and alleging ‘that she was person upon whom one could not rely and was not a person who told the truth” (p11).

26 The Tribunal made the following observations:

“There is absolutely no question in our mind that, firstly, the Society had (and has) no absolute duty to bring proceedings against a legal practitioner in this Tribunal and, secondly, that it must only so do after very careful deliberation and careful weighing up of the evidence and the chances of success and only after a careful investigation, careful interview of the witnesses and a professional assessment of the chances of success”.

27 The Tribunal noted that it was a very serious matter to bring disciplinary proceedings against a solicitor as it put his or her professional reputation at risk. The Tribunal concluded:

“Consequently, it must follow that proceedings should only be brought in this Tribunal after careful consideration and weighing up of all the facts”. (p12)

28 The solicitor sought an order for costs. There was an argument before the Tribunal as to whether or not a hearing had occurred given that the Society had offered no evidence. The Tribunal found that a hearing within the meaning of section 171E(2) of the Act had taken place (p26). The Tribunal then went on to consider whether there was special circumstances sufficient to warrant an order for costs. The Tribunal concluded that the proceedings would never have been commenced if the Society had carried out a proper investigation and filed sworn rather then unsworn documents. Further, the solicitor had requested the Society to withdraw the complaint at an early stage but it had not done so. In the circumstances, the Tribunal made an order that the solicitor was entitled to his costs on a solicitor/client basis.

29 In Malfanti v Legal Profession Disciplinary Tribunal unrep CA 23 August 1993 the Court of Appeal in upholding an appeal by a solicitor ordered the Law Society to pay the solicitor’s costs of the appeal and made a special order for the costs of the hearing before the Legal Profession Disciplinary Tribunal for the Society to pay two-thirds of the solicitor’s costs of that hearing.

30 The complaint before the Tribunal contained ten grounds and the hearing extended over four days. Of the ten grounds, the solicitor succeeded on all but four. Those four, which related to trust accounts, were the subject of the successful appeal. In relation to those four complaints the Court of Appeal held that by reason of suspicious entries in the ledger accounts the Society had reasonable grounds for referring those matters to the Tribunal.

31 In relation to the grounds on which the solicitor was successful before the Tribunal, some were worded with imprecision which attracted the criticism of the Court of Appeal. Seven of the grounds had been unsupported by affidavit evidence. The Society called oral evidence at the hearing which not only had the effect of prolonging the hearing, but failed to substantiate the complaints. Nonetheless the Society sought to have the solicitor give evidence in relation to those grounds. That course was allowed over the solicitor’s objection. He gave evidence and was cross examined.

32 The Court considered that in respect of the trust account allegations, the nature of the entries in the ledger showed reasonable grounds for the Society to refer the matter to the Tribunal, although ultimately there was no evidence of wilful default. However the Society’s conduct in pressing on with the other grounds when there was no evidence to support them justified a costs order against the Society to do justice between the parties.

33 In In the matter of Currie, Legal Services Tribunal No 2 of 1995, the complainant alleged that a solicitor was guilty of unsatisfactory conduct because he failed to take or delayed in taking appropriate steps to recover a debt. By way of explanation of the delay, the solicitor said that he first tried to negotiate a settlement and then had a dispute with the Local Court over what documents needed to be filed. The complaint came before the Legal Services Tribunal on recommendation from the Legal Profession Conduct Review Panel (“the Panel”).

34 The Tribunal accepted that the solicitor had explored settlement although not “with tremendous vigour”. The solicitor had file notes which documented his attempts at settlement. The Tribunal further found that the solicitor’s view as to what documents were required to be filed was correct and that he had not acted unreasonably in attempting to persuade the Local Court what the rules required. They also found that he had not acted unreasonably in eventually filing the documents the Local Court wrongly required. The Tribunal found that the complainant’s evidence was undermined by internal inconsistencies and affected by inroads made in cross-examination. The complaint was dismissed.

35 The solicitor sought costs. The Tribunal found that there were special circumstances. Those circumstances included the fact that the Panel did not invite any comment or submission from the solicitor prior to making its decision and did not give sufficient consideration to the solicitor’s file notes nor did they give the appropriate weight to the Law Society’s reasons for dismissing the complaint. The Attorney-General was ordered to pay the costs.

36 Although Currie refers to a failure to give sufficient weight to the Law Society’s reasons for dismissing the complaint, this should not give rise to any suggestion that the Commissioner should have been guided by the decision of the Bar Council. The Commissioner must clearly exercise his discretion independently of the decision of the Council although the deliberations of the Council or a Professional Conduct Committee may identify the relevant matters said to constitute misconduct or which show there has been no misconduct.

37 For an award of costs under section 171E(2) clearly more is required than a determination in favour of the legal practitioner. It is not sufficient that we disagree with the opinion of the Commissioner or Council and have dismissed the complaint. Although a case is ultimately unsuccessful it may nonetheless be one where a reasonable mind could have been satisfied that there were reasonable prospects of success.

38 In assessing the likelihood of success, the standard of proof to be applied is the balance of probabilities applying the Briginshaw test which requires the Tribunal to be comfortably satisfied that it has reached both a correct and a just conclusion.

39 The Barrister submits that in a case which is evenly balanced the Commissioner cannot be reasonably satisfied of likelihood of guilt on the Briginshaw standard. We accept this submission. At best this was a case which might have gone either way and we do not consider that such a case should have proceeded.

40 The Commissioner relied on the difference of opinion revealed in the initial draft report of the Professional Conduct Committee and the resolution of the Bar Council.

41 We agree that the history shows clearly that this was a matter where legal minds might reasonably differ. However we do not consider that this assists the Commissioner but rather confirms our view that this was a case where the Briginshaw standard was not satisfied.

42 The Barrister also submitted that the complaint was bound to fail since the essence of the complaint was that the Barrister had breached an undertaking to the court and the prosecution. Clearly no express undertaking was given by the Barrister. This was apparent from the transcript. Concerning the alternative allegation of an implied undertaking, it was submitted in the substantive proceedings and again on this costs application that this is a creature unknown to the law and hence the complaint was bound to fail.

43 We are not persuaded by this submission since the conduct complained of, had we considered it to be improper, may well have been caught by the alternative ground of complaint which encompassed conduct falling short of an undertaking but nonetheless constituting professional misconduct or unsatisfactory professional conduct.

44 The Barrister points as well to the lengthy delay in the commencement of proceedings. Between the time of the dismissal of the complaint by the Bar Council and the institution of the proceedings by the Commissioner some six years had elapsed. In the interim the Barrister had been counselled at the direction of the Bar Council.

45 We are satisfied that the major responsibility for the delay lies with the Office of Legal Services Commissioner and we consider that the lengthy delay is a relevant factor to be taken into account in relation to costs. It is regrettable that a complaint which was capable of adversely affecting the Barrister’s professional reputation and was ultimately dismissed was so protracted.

46 Taking all of these matters into account, and bearing in mind the public role of the Commissioner, we consider that the circumstances of this case justify the making of the costs order sought.

47 In conclusion we are of the view that:

1. At best this was a complaint which could have gone either way and accordingly the Commissioner could not have been satisfied to the requisite standard that it had reasonable likelihood of success;

2. The proceedings were delayed and protracted by the actions of the Commissioner to the detriment of the Barrister;

3. These matters constitute special circumstances justifying an order for costs under s 171E(2).

48 We consider that the proper basis for assessment in this case is the party/party basis.

49 Accordingly we order that:

1. Payment be made from the Statutory Interest Account to the Applicant of an amount by way of costs;

2. The amount be assessed on the basis of party/party costs in accordance with the Legal Profession Act;

3. The parties be directed to confer with a view to reaching agreement on the quantum of costs assessed on that basis;

4. There be liberty to restore the matter to the Tribunal for the purpose of making an order for payment of the agreed amount of costs or, failing agreement, to hear argument on the quantum of costs to be awarded;

5. In the event that there is no agreement, the parties be directed to file and serve any evidence relied on and any written submissions 3 days prior to the date the matter is relisted.

Last Updated: 01/05/2000