Marcevski v Victorian Legal Services Board
[2024] VSC 323
•17 June 2024
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
JUDICIAL REVIEW AND APPEALS LIST
S CI 2023 06185
| Nick Marcevski | Applicant |
| v | |
| Victorian Legal Services Board | Respondent |
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JUDGE: | Quigley J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 4 June 2024 |
DATE OF JUDGMENT: | 17 June 2024 |
CASE MAY BE CITED AS: | Marcevski v Victorian Legal Services Board |
MEDIUM NEUTRAL CITATION: | [2024] VSC 323 |
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JUDICIAL REVIEW — Appeal from order of the Victorian Civil and Administrative Tribunal refusing application for stay — Cancellation of solicitor’s practising certificate — Relevant factors for grant of a stay — Use of evidence obtained by coercive powers under the Legal Profession Uniform Law (Victoria) — Admissibility of evidence as a consideration on a stay — Public or community interest consideration — No substantial injustice — Question of law not one which was raised before the Tribunal — Procedural fairness — Leave to appeal refused — No real prospect of success — Victorian Civil and Administrative Tribunal Act 1998 (Vic) ss 50, 51, 148 — Legal Profession Uniform Law (Victoria) ss 100, 370, 383, 466.
DECLARATION — No justiciable question raised — Prematurity — Alternative declaratory relief refused.
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APPEARANCES: | Counsel | Solicitors |
| For the Applicant | Mr E. Nekvapil SC Mr S. Warne | Rizkallah Partners |
| For the Respondent | Mr S. Senathirajah KC Ms C. Klemis | Victorian Legal Services Board (In‑house Counsel) |
HER HONOUR:
INTRODUCTION
This proceeding is an appeal from an order of the Victorian Civil and Administrative Tribunal (the ‘Tribunal’) refusing to stay the decision of the Victorian Legal Services Board (the ‘Board’) to cancel the Australian practising certificate of Mr Nick Marcevski.[1] The appeal, which requires leave of the Court, is brought pursuant to s 148 of Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘VCAT Act’).
[1]The Tribunal’s orders and written reasons delivered on 30 November 2023 in Marcevski v Victorian Legal Services Board (Legal practice) [2023] VCAT 1324 (‘Tribunal’s Decision’). In this judgment, ‘Tribunal’s Decision’ is used in order to distinguish it from the ‘Board’s Decision’ under review before the Tribunal.
The applicant challenged the Tribunal’s decision to refuse the stay on several grounds.
Primarily, he says that the operation of s 466(1) and (4) of the Legal Profession Uniform Law (Victoria) (‘Uniform Law’)[2] makes any evidence obtained directly or indirectly as a consequence of compliance with the coercive powers of the Uniform Law inadmissible against him. As a consequence, the material obtained via procedures undertaken by the Board could not be relied upon by it in making the Board’s Decision,[3] nor in the Tribunal proceedings or by the Tribunal in determining the stay application.[4]
[2]Applied as a law of Victoria by s 4 of the Legal Profession Uniform Law Application Act 2014 (Vic) (‘Application Act’).
[3]Defined at [7] below.
[4]This is raised as Question 1 in the applicant’s notice of appeal (filed 22 December 2023 in S ECI 2023 06185, Supreme Court of Victoria) (‘Notice of Appeal’).
Further grounds[5] challenged the Tribunal’s approach to consideration of the public interest in the context of a stay application and a denial of procedural fairness. The procedural fairness question was said to be based on an allegation that the Tribunal made findings in relation to matters which the applicant did not have the opportunity to address.
[5]Initially there were five questions of law and associated grounds raised in the Notice of Appeal, however Questions 3 (adequacy of reasons) and 4 (irrelevant considerations) were abandoned.
For the reasons which follow, on the question of leave to bring the s 148 appeal, I am not satisfied that the applicant has demonstrated a question of law which has a real prospect of success.[6]
[6]VCAT Act s 148(2A).
On the alternative declaratory relief sought in respect of the construction and application of s 466(4) of the Uniform Law, I am not satisfied that it is appropriate for the Court to embark on this course. The determination of the question posed is premature and nebulous at this point of the proceeding and may never in fact become an active justiciable controversy in this matter.
PROCEDURAL BACKGROUND
On 16 October 2023, a delegate of the Board decided to:
(a) cancel the applicant’s Australian practising certificate pursuant to ss 76 and 82 of the Uniform Law; and
(b) prevent him from applying for any practising certificate until 22 September 2028,
(together, the ‘Board’s Decision’).
The background and circumstances of the Board’s Decision is set out in the Tribunal’s Decision and is largely drawn from the letter sent by the Board to the applicant on 15 September 2023 (‘Preliminary View Letter’).[7] Whilst I note that the background set out in the Tribunal’s decision was said by the Tribunal to be ‘largely uncontentious’[8] this assertion was challenged before me.[9]
[7]Document 10.4.1, exhibited in Court Book (filed 30 May 2024 in S ECI 2023 06185, Supreme Court of Victoria) (‘CB’), 160.
[8]Tribunal’s Decision, [7].
[9]Transcript of Proceedings (Supreme Court of Victoria, S ECI 2023 06185, Quigley J, 4 June 2024) (‘Transcript’), 29, lines 8–20.
What is uncontentious is that the letter referred to above was exhibited to the affidavit of the applicant in the material before the Tribunal, as was the Board’s Decision letter of 16 October 2023 (‘Decision Letter’).[10] This evidence was put before the Tribunal by the applicant.
[10]Document 10.4.11, CB, 224.
The Board formed the view that cancellation of the applicant’s practising certificate was warranted because it had formed the reasonable belief that the applicant was unable to fulfill the inherent requirements of an Australian legal practitioner.[11] The Board’s Decision followed from an investigatory process relating to the applicant’s operation of his trust account and in particular, the proper management and receipt of cash payments.
[11]Document 10.4.11, CB, 224.
The applicant lodged an appeal in the Tribunal on 18 October 2023 for a review of the Board’s Decision pursuant to s 100 of the Uniform Law. He also applied to the Tribunal for a stay of the operation of the Board’s Decision pursuant to s 50(3) of the VCAT Act.
The Tribunal heard the stay application on 3 November 2023. On 30 November 2023, the Tribunal made orders dismissing the application (‘Tribunal’s Orders’), providing written reasons for the decision.
On 22 December 2023, the applicant filed a notice of appeal in this court under s 148 of the VCAT Act by which he seeks leave to appeal the Tribunal’s Decision to refuse the stay.
By summons filed 5 March 2024, the applicant applied for a stay of the Board’s Decision and Order 1 of the Tribunal’s Orders. He also sought leave under r 64.12 of the Supreme Court (General Civil Procedure) Rules 2015 (Vic) (‘Rules’) to amend his notice of appeal to, inter alia, seek an order for a declaration as to the correct construction and application of s 466(4) of the Uniform Law.
The amendments to the notice of appeal were formally opposed by the respondent. However, it was conceded by the respondent that it was not prejudiced by the amendments sought and they were prepared to deal with the matter, even on the amended basis.
I have formed the view that whilst the amendment shifts the goal posts to a degree, the allegations which underpinned the original version of the notice of appeal were not so different that it could not be dealt with by way of submission at the hearing.
Consequently, I will allow the amendments sought by the summons filed 5 March 2024.
BACKGROUND TO THE BOARD’S DECISION
The applicant was admitted to practice in Victoria in 2006. He has practised primarily in criminal law, initially as an employee solicitor at a number of legal firms from the time of his admission until December 2014. He became a partner in the firm Tricarico & Marcevski Lawyers with Ms Sarah Tricarico in February 2015. In August 2016 he left that firm to establish his own practice Marcevski Lawyers Pty Ltd (‘Marcevski Lawyers’) where he had until recently been practising as a sole practitioner director. He has held a principal with trust practising certificate since August 2016.
Appointment of trust investigator
In March 2021, the Board appointed an external investigator under Division 4 of Part 4.2 of the Uniform Law to investigate the trust account records of Marcevski Lawyers. The investigator obtained certain records and information under s 370 of the Uniform Law and on 15 June 2023 the investigator examined the applicant under s 383 of the Uniform Law. The investigator provided information obtained under this process to the Board.
The Board’s investigation focussed on several matters. The key matters were:
(a) compliance by Marcevski Lawyers with the Financial Transactions Reports Act 1988 (Cth) (‘FTR Act’);
(b) the alleged mixing of trust monies and other monies; and
(c) the alleged receipt of cash deposits and other monies in the wrong name.
Board’s preliminary decision
The Board formed the view that the applicant breached provisions of the FTR Act in relation to cash payments received from or on behalf of clients in excess of $10,000 and s 400.9 of the Criminal Code (Cth), which concerns criminal offences relating to money laundering. Under s 400.9 it is an offence if a person ‘deals with money’ (including receiving money) and ‘it is reasonable to suspect that the money … is proceeds of crime[12]’ (referred to as the ‘reasonable suspicion requirement’). If the conduct involves a number of transactions that are structured or arranged to avoid the reporting requirements of the FTR Act the ‘reasonable suspicion requirement’ is taken to be satisfied.[13]
[12]Ie. proceeds of an indictable offence under Commonwealth or State law.
[13]Criminal Code (Cth) s 400.9(2)(a).
The Board formed the view that the applicant ‘breached the relevant provisions either intentionally or recklessly or with wilful blindness to his obligations’. The Board’s Decision was also made having regard to the applicant’s demeanour and behaviour when he was examined by the trust investigator, the false recording of certain cash payments and intermixing of funds. Other concerns were raised by reports of the manager which the Board had appointed to manage Marcevski Lawyers (in July 2023 and renewed on 26 October 2023).[14] These are referred to in the Preliminary View Letter.
[14]The practice has subsequently been wound up.
The applicant was given an opportunity to respond and did so with the material which was also before the Tribunal (and before this Court), including submissions in reply from his lawyers, a statement of the applicant and various character references.[15] The applicant’s response to the Board and submissions to the Tribunal in relation to the stay raised the allegation that the whole of the evidence relied on by the Board in its decision was inadmissible in the procedures before the Board associated with the cancellation of the applicant’s practising certificate.[16]
[15]Documents 10.4.2 to 10.4.10, CB, 160–223.
[16]It was also raised in the submission to the Tribunal on the stay as part of the argument as to whether there was a serious question to be tried. See Document 10.4.13, CB, 240.
The Board considered the material provided and issued its final decision which is recorded in the letter dated 16 October 2023.[17]
[17]Document 10.4.11, CB, 224–32.
TRIBUNAL’S CONSIDERATION OF THE STAY
The Tribunal’s power to grant a stay is found in s 50(3) of the VCAT Act, which provides that the Tribunal ‘may make an order staying the operation of a decision that is the subject of a proceeding for review’.
The making of a stay order is discretionary. The considerations relevant to the grant of a stay by VCAT are well established[18] and are generally referred to as set out in the decision of Bell and Eager v Liquor Licensing Victoria & Swapnil.[19] These considerations are:
[18]They have been consistently cited and applied by the Tribunal, including those relating to legal professional matters under the Uniform Law. See, eg, Zita v Victorian Legal Service Board (Legal Practice) [2022] VCAT 174 (‘Zita’) and Knight v Victorian Legal Service Board (Legal Practice) [2022] VCAT 87 (‘Knight’).
[19][2000] VCAT 214.
(a) whether the failure to grant a stay would render the application for review before the Tribunal nugatory;
(b) whether there is a serious question to be tried;
(c) whether there is any prejudice to the applicant;
(d) the community or public interest; and
(e) the period of time to the hearing.
Each of these factors were addressed by the parties’ submissions to the Tribunal.
The Tribunal’s reasoning
The Tribunal’s analysis commenced with the uncontroversial proposition that, generally, the ‘most important’ or ‘dominant’ consideration is whether the refusal to grant a stay would render the application for review nugatory.[20] The Tribunal went on to say that this consideration can, and often is, outweighed by other factors, in particular public or community interest considerations. It explained that the interest in the protection of the public from unsafe or unfit legal practitioners will outweigh that consideration in an ‘appropriate case’.[21] This recognises that the Uniform Law is ‘protective in its purpose’ and a stay may not be appropriate where ‘permitting the practitioner to remain in practice, even in the short term, poses a risk of harm to the public’ in terms of clients, employees, other practitioners or to the ‘administration of justice more broadly’.
[20]Tribunal’s Decision, [21] citing Knight, [24] and Zita, [36] citing Arulanantham v Medical Board of Australia [2021] VCAT 124, [17].
[21]Tribunal’s Decision, [21] citing Knight, [38].
Nugatory effect and prejudice
In dealing with the factors of ‘nugatory effect’ and ‘prejudice’, the Tribunal found that whilst it was not possible to conclude that the failure to grant the stay would render the applicant’s application for review of no value, it did accept that the failure to grant a stay would cause difficulty and hardship, causing prejudice to the applicant’s financial position. The Tribunal, nonetheless accepted the Board’s position that financial impact is true of every cancellation decision. Overall, the Tribunal considered the prejudice to the applicant pointed ‘moderately’ in favour of the grant of a stay but needed to be ‘balanced with the other considerations in play’.[22]
[22]Tribunal’s Decision, [33].
Serious question to be tried
The Tribunal acknowledged that the applicant contended that the ‘key legal controversy is how the Board will seek to prove the critical wrongful state of mind’ of the applicant, particularly having regard to s 466(4) of the Uniform Law. That section provides that any information obtained as a direct or indirect consequence of a person complying with specified requirements under the law (including providing information to a trust investigator) is ‘not otherwise admissible in evidence against that person’ (i.e. apart from disciplinary proceedings). The Tribunal recorded the applicant’s submission that this rendered the whole of the evidence relied upon by the Board’s decision inadmissible.[23] The Tribunal also acknowledged the submission of the applicant that there were ‘at least four other hotly contested legal contentions’.[24]
[23]Tribunal’s Decision, [36].
[24]Tribunal’s Decision, [37].
The Board, whilst challenging the strength of the applicant’s case, accepted that there was a serious question to be tried in the relevant sense.
The Tribunal said that it accepted the submissions of both parties that there is ‘a serious question to be tried’ in the proceeding and said that this points ‘moderately’ in favour of the grant of a stay, but needed to be balanced with other factors.[25]
[25]Tribunal’s Decision, [41].
Community or public interest
This was the factor which tipped the balance against the grant of a stay.[26]
[26]Tribunal’s Decision, [53].
The Tribunal considered the following submissions from the Board:
(a) that there are ‘very serious concerns’ about the applicant continuing to practice even in the short term on the basis that he appears ‘either willing to not comply with, or to be at least wilfully blind to the possibility that he may contravene, statutory duties and obligations in circumstances where it may improperly benefit his clients’;
(b) the result of such conduct is that is likely to prejudice or diminish public confidence in the administration of justice or bring the profession into disrepute;
(c) weight should be given to the Board’s expertise and statutory role as a regulator and the fact that it has clearly given serious consideration to the matter before making a decision; and
(d) the Board gave the applicant notice of its concerns in its 15 September 2023 letter and has responded to the applicant’s submissions in the Board’s Decision.
As against these arguments the applicant submitted that:
(a) ‘any threat which [he] might represent to the public or administration of justice’ is ‘relatively low’ in circumstances where he will ‘not receive cash and will not be involved in trust accounting’ during the period of the stay on the basis of his ‘intention that he will be employed by [Ms Tricarico’s] law practice’ and that he would ‘have the strongest possible motives to refrain from anything that might be inappropriate’ while the various matters hang over his head;
(b) the Board’s position on the stay was inexplicably inconsistent with:
(i) the renewal of the applicant’s practising certificate while the trust investigator has been reviewing his trust accounts; and
(ii) the Board’s agreement to an adjournment of the stay of his law practice’s challenge to the appointment of the manager resulting in him being able to continue to practice, apparently without supervision, in the meanwhile;
(c) it was a ‘long bow’ to suggest that where the applicant’s state of mind is in issue, these matters would impact on public confidence or bring the profession into disrepute. This was in stark distinction to the legal practitioners in the examples of Knight, Ansell[27] and Teffaha[28] who had each engaged in ‘disgraceful conduct’ and displayed a ‘lack of remorse’; and
(d) the Tribunal could impose conditions on a stay, including a restriction that the applicant not receive any cash or otherwise being involved in handling client funds or dealing with any trust accounts. The applicant would agree to a condition restricting him to working as an employee.
[27]Ansell v Victorian Legal Services Board (Legal Practice) [2022] VCAT 1228.
[28]Teffaha v Victorian Legal Services Board (Legal Practice) [2021] VCAT 590.
The Tribunal’s analysis of this consideration was critical to its exercise of discretion to refuse the stay.
The Tribunal referred to the decision of the Court of Appeal in Medical Practitioners Board of Victoria v Lal[29] where the Court observed that public confidence in the medical profession is important because where that confidence exists, people are more likely to seek appropriate advice and treatment. The Tribunal said that observation is ‘equally true of the legal profession given its critical role within the justice system.’[30] The Tribunal went on to acknowledge that:
[49]While there may be valid questions about the admissibility of any admissions made by Mr Marcevski during the trust account investigation, the fact that he received cash from many of his clients – sometimes above, and in many cases close to, the FTR reporting limit – cannot be seriously in doubt, and can be proved from business records alone. That there is a limit of $10,000 on cash transactions is something that is well known to members of the community and it is difficult to accept, on face value, that Mr Marcevski – who had been practising criminal law for more than a decade at the time of the events in question – was unaware of that limit (and had no reason to be suspicious of the repeated cash payments just below it) or that as a legal practitioner he had reporting obligations.
[50]Whether or not the Board can establish any criminal conduct, the circumstances raise serious questions about his conduct and ethics and therefore his ability to fulfil the inherent requirements of a solicitor. While it may be accepted that there is no suggestion of trust account defalcation, I do not accept that Mr Marcevski’s conduct – if established – is less ‘disgraceful’ than that of Mr Knight, Mr Ansell or Ms Teffaha. As for remorse, there is some evidence (although that evidence is also subject of objections as to admissibility, and denied by him) that he continued to receive cash payments from clients even after he was warned by the trust account investigator about AUSTRAC reporting obligations.
[29](2009) 23 VR 702, [58] (‘Lal’).
[30]Tribunal’s Decision, [48].
The Tribunal assessed that in granting a stay in these circumstances, the effect of which would be to restore the applicant’s practising certificate as a principal with trust (that is, conferring a right to carry on his own practice and manage a trust account) while such matters remain to be resolved could well have an adverse impact on the reputation of the legal profession and, in turn, impact on public confidence in the administration of justice.[31]
[31]Tribunal’s Decision, [51].
The Tribunal was unconvinced that those concerns would be adequately addressed by the imposition of conditions and, in the circumstances, the Tribunal considered the community public interest was a factor that points ‘strongly’ against the grant of a stay.[32]
[32]Tribunal’s Decision, [52]–[53].
Period of time to the hearing
The final matter considered by the Tribunal was the period until the likely hearing of the substantive review. The Tribunal identified that the proceeding was at an early stage and that it was likely to be some months until the parties are in a position to exchange their material and produce a Tribunal Book.
It was also acknowledged that the content of the Tribunal Book was likely to be of debate given the issues raised as to admissibility of material to be relied upon by the Board and this may well necessitate a preliminary hearing if the parties cannot come to some agreement in this regard. In such circumstances, it was unlikely that the hearing would take place until late 2024. This was considered to be a moderate factor in support of a stay being granted.
Tribunal’s conclusion
The overall conclusion, in weighing the factors considered, was that in this case:
(a) the community or public interest points strongly against the grant of stay;
(b) the failure to grant a stay would not render the application for review nugatory; and
(c) no factor pointed strongly in favour of a stay.
This was a case where, in the Tribunal’s view, the community or public interest outweighs other considerations[33] even when other considerations are considered collectively.
[33]Those being that there is a serious question to be tried, the failure to grant a stay will cause some financial prejudice to the applicant, and that there is likely to be a lengthy period of time to the hearing.
THE APPEAL
The decision of the Tribunal was a discretionary one made at a preliminary stage of the proceeding. The decision was not a final order. The bar to success on appeal in such circumstances is a significant one and the Court will be slow to interfere in the absence of clear error. The Court must be satisfied that the decision of the Tribunal was clearly wrong. The legal error must be demonstrable.
The first question of law and the declaration sought involve the construction and operation of s 466(4) of the Uniform Law in the context of the Board’s decision and the lawfulness of the Tribunal’s consideration (either directly or indirectly) of evidence which was obtained by utilising the coercive powers under the Uniform Law.
The application for leave to appeal the Tribunal’s decision is made pursuant to s 148 of the VCAT Act. Such an appeal is on a question of law only and the Court must be satisfied that the appeal has a ‘real prospect of success’ for leave to be granted.
In addition, the applicant seeks a declaration as to the proper construction of s 466(4) of the Uniform Law.
The application for leave to appeal and, if granted, the appeal and the declaration are opposed by the respondent.
For the reasons which follow, I am not satisfied that the application for leave has a real prospect of success.
Nor am I satisfied that the circumstances are such that the Court should exercise its discretion and grant declaratory relief. I am not persuaded that there is a legal question which satisfies the test of justiciability and that it would be proper for the Court to deal with such a question at this time where there is an insufficient factual substratum for the court to be confident that such an exercise could be undertaken and not be more than theoretical. In this sense, the application for a declaration prematurely seeks to answer a question which may never actually arise in the proceeding before the Tribunal. Further, if it did, and the Tribunal decision was unsatisfactory to one or other party, it would then be open for the question to be properly formulated and for it to sit within a factual matrix which would be meaningful. In essence, the question which underpins the applicant’s complaint is premature.
GROUND 1: INADMISSIBLE EVIDENCE
The applicant submitted that s 466(4) of the Uniform Law applied to the Tribunal proceeding preventing the information received as a result of compliance with under s 466(1) of the Uniform Law being used against him. It was submitted that it was necessary for the proper construction of s 466(1) and (4) to be determined in this appeal.
Section 466 provides:
466 Provisions relating to certain requirements under this Law
(1)This section applies to a requirement under—
(a) section 154 to give written notice of an irregularity in connection with a trust account, a trust ledger account or trust money; or
(b) section 348 to give access to documents or information; or
(c) section 370 to produce documents or provide information; or
(d) section 371 to produce documents, provide information or otherwise assist in, or cooperate with, an investigation; or
(e) section 375(1)(j) to do a specified thing; or
(f) Part 7.4 to produce documents, provide information or do anything else under that Part.
(2)The validity of the requirement is not affected, and a person is not excused from complying with the requirement, on—
(a) the ground of legal professional privilege or any other duty of confidence; or
(b) the ground that a law practice or Australian legal practitioner has a lien over a particular document or class of documents.
(3)A person is not excused from complying with the requirement on the ground that compliance with the requirement, or an answer, document, information or assistance provided in complying with the requirement, may tend to incriminate the person.
(4)Any information, document or other thing obtained as a direct or indirect consequence of a person complying with the requirement is admissible against the person in proceedings or procedures—
(a)for making a false or misleading statement; or
(b) for an offence against this Law; or
(c)relating to a disciplinary matter—
but is not otherwise admissible in evidence against that person.
(5)A person complying with the requirement is not subject to any liability, claim or demand merely because of compliance with the requirement and, without limitation, is not liable for any loss or damage suffered by another person as a result of the person's compliance with the requirement.
(6)A failure of an Australian lawyer or Australian registered foreign lawyer to comply with the requirement is capable of constituting unsatisfactory professional conduct or professional misconduct.
(7)A local regulatory authority may recommend to the designated local regulatory authority that an Australian practising certificate or an Australian registration certificate be suspended while a failure by the holder to comply with the requirement continues.
The applicant submitted that the coercive nature of the powers described in s 466(1), especially in light of abrogation of privilege in ss 466(2) and (3), supports an interpretation of s 466(4) that completely prohibits use of information against the person coerced other than as expressly permitted by ss 466(4)(a)–(c). It was submitted that the Tribunal erred by relying on the information which is alleged to have been obtained utilising the coercive powers caught by s 466. It was said that the information was obtained as a direct or indirect consequence of the applicant complying with a requirement under either or both of ss 370 and 383.
It was submitted that informing the Tribunal’s conclusions about ‘serious question to be tried’ and ‘public or community interest’ was the Tribunal’s reliance on the coerced information as evidence in the proceeding, including by relying on assertions or findings in the Board’s reasons which were themselves derived from the coerced information.
It was argued that the Tribunal could only give strong weight to the public interest in refusing the stay if it rested on factual findings made on the stay application. The public interest factor could not outweigh all others if the Tribunal was satisfied only of a real prospect that findings at the final hearing would establish a public interest in affirming the Board’s decision. Rather, the Tribunal had to conclude on findings made on the stay application, that the public interest weighed against the decision being stayed from the time of the stay application until the final hearing.
It was conceded that even if contrary to these submissions, the Tribunal was permitted on the stay application to put off deciding the s 466(4) question to the final hearing, the Tribunal erred in any event by failing to conclude that s 466(4) on its proper construction made the serious question to be tried consideration overwhelmingly strong in favour of the stay.
The question of the proper construction and application of s 466 was not argued before the Tribunal. Rather, the effect of s 466 was raised in the context of whether there was a serious question to be tried. The determination of this construction question does not properly arise from any deficiency in the reasoning of the Tribunal upon which the Tribunal made its order.
The applicant’s concession (extracted below) demonstrates to me that the necessity to determine the proper construction and application of s 466 in the Tribunal proceedings is premature:[34]
… in a proceeding for review of a decision of a disciplinary nature, the applicant is the regulated person and the respondent is the regulator, at the final hearing it is for the respondent to adduce evidence to persuade the Tribunal that the decision under review is the correct or preferable decision …
[34]Applicant’s Submissions in Support of Stay (filed 5 March 2024 in S ECI 2023 06185, Supreme Court of Victoria) (‘Applicant’s Stay Submissions’), [104] citing Goodrich v Racing Victoria Racing Appeals and Disciplinary Board [2020] VSCA 110 at [72]–[74] (‘Goodrich’).
As submitted on behalf of the Board, the review before the Tribunal is a hearing de novo and, at present, the application for review is not yet at the stage where the evidence has been filed on behalf of the Board.
The applicant has sought a review of the Board’s Decision pursuant to s 100 of the Uniform Law. In exercising its review function, the Tribunal has all of the functions or powers of the original decision maker relevant to the decision under review.[35] It is also subject to the same legislative constraints. The Uniform Law expressly provides that fresh evidence, or evidence in addition or substitution for matters considered by the Board, may be given.[36] The Tribunal hears the matter de novo and must form its own view of the evidence, including making its own decisions as to admissibility of evidence and make a correct decision. In exercising its power under s 51(2) of the VCAT Act, the Tribunal is to make the correct or preferable decision after considering the merits of the evidence adduced and submissions made before it.
[35]VCAT Act s 51(1)(a). In s 3 of the VCAT Act, ‘function’ is defined to include ‘power’.
[36]Uniform Law s 100(6).
The evidence before the Tribunal on the stay application was necessarily limited. It was constituted by an affidavit of the applicant and an affidavit of Mark Johnson on behalf of the Board. The applicant’s affidavit exhibited a number of documents. Key amongst them was the Preliminary View Letter and Decision Letter. These were documents relied upon by the applicant.
It is notable that the Board did not put into evidence any documents such as a transcript of the investigations and the like. The evidence which was complained of as being improperly obtained and subject to the prohibition in s 466(4) was put into evidence by the applicant.
In the stay application before the Tribunal, the applicant did not raise for determination the question of the applicability and construction of s 466. Consequently, the Tribunal did not form a view about this issue. Rather, the Tribunal acknowledged that there was an anticipated argument about the admissibility of evidence and directly took that circumstance into consideration.[37]
[37]Tribunal’s Decision, [49].
In my view, it would be going beyond the supervisory role of this Court in an appeal from a stay application which, of itself, is an interim and not final decision, to consider legal questions that were not required to be adjudicated upon as part of the considerations relied upon in support of either the serious question to be tried or public interest factors. Given the manner in which the arguments were put before the Tribunal, in particular, the express reservation on behalf of the applicant that the admissibility or otherwise of evidence was not a matter for the determination of the Tribunal in a stay application, the question of the proper interpretation and construction of s 466 does not arise as a relevant question of law in this appeal.
I am not satisfied that the Tribunal erred in the manner in which it dealt with this issue and this Ground is not made out.
GROUND 2: PUBLIC INTEREST
The applicant submitted that the Tribunal relied heavily on matters of hypothetical public perception of the grant of the stay as potentially impacting on the ‘reputation of the legal profession’ and in turn on ‘public confidence in the administration of justice’.[38]
[38]Applicant’s Stay Submissions, [114] referring to Tribunal Decision, [51].
The applicant referred to Director of Public Transport v XFJ[39] and the comment by Maxwell P of the ‘sheer implausibility of the proposition that a decision to accredit one taxi driver could have any material effect on public confidence in the taxi industry’ and Maxwell P’s reference to Lal at [59] where the Court of Appeal observed:
… public confidence in the medical profession is not turned on and off like a switch. Public confidence is won – or lost – gradually, as the cumulative effect of the experiences of thousands of individuals in their dealings with medical practitioners over many years. The decision to register a particular person to practise medicine is unlikely, in our view, to have any material or lasting effect on the established reputation of the medical profession as a whole.
[39](2011) 33 VR 612, [69].
The applicant submitted that reasoning which tended to treat a decision made under a professional regulatory regime with particular caution where a stay of its operation was being considered was becoming orthodox. As was said in Spencer v Medical Board of Australian[40] ‘There is a powerful public interest in protecting the public from unsafe practitioners and a clear public interest in maintaining standards in regulated professions.’
[40]Spencer v Medical Board of Australia [2023] VCAT 944 at [28] cited in the Applicant’s Stay Submissions, [116].
The applicant criticised the Tribunal's reasoning and its reference to the authorities relied upon (such as its reliance on the proposition in Lal at [58] without considering the further statement at [59] which ‘substantially qualified’ this proposition[41]) suggesting that the authorities relied upon by the Tribunal support consideration of the public interest promoted by the statute in protecting the public ‘in fact.’ I have understood this submission to draw a more nuanced distinction between the perception of risk or harm and proof of actual harm.
[41]Transcript, 33, lines 7–17 (Mr Nekvapil SC).
The applicant argued that if the Tribunal had founded its conclusion on the public interest on the need to protect the public ‘in fact’ from further wrongful conduct by the applicant, then those authorities would have provided a support for that approach. However, it was submitted that that is not what the Tribunal did on a fair reading of the Tribunal’s Decision. The analysis, it was suggested, was concerned to at least a significant extent with public confidence based on the perception of a ‘notional public’ rather than a conclusion that there was ‘in fact’ a need to protect the public from the activities of the applicant by not granting a stay.
It was a matter for Tribunal to form its own view of the seriousness of the allegations and determine for itself the public or community interest effect. I disagree with the applicant’s categorisation of the Tribunal’s reasoning. The relevant part of the Tribunal’s reasons are at [42]–[53]. The Tribunal’s analysis of public interest is about the public risk posed by the applicant because of his pattern of conduct. It was primarily for reasons of actual public protection that the Tribunal concluded that the community or public interest is a factor that points strongly against the grant of a stay. The Tribunal identifies both the risks to the public posed by the applicant continuing to practice and the added overall risk of that behaviour prejudicing or diminishing public confidence in the administration of justice or bringing the profession into disrepute.
The weight to be given to the public or community interest was a matter of discretion for the Tribunal. The Tribunal was entitled to form its own view of the matters which were contained in the material before it. The allegations were serious allegations. They were the culmination of extensive investigations as set out on the Board’s letters which were before the Tribunal. It was not submitted that there was no evidence upon which the Tribunal could form a view of the public interest. It will inevitably be the case (in the absence of admission by a party) that the information before the Tribunal on a stay application will be preliminary and untested. This is precisely the position here.
The Tribunal accepted the submissions of both parties that there was a serious question to be tried. Inevitably in such cases there will be an element of public confidence and community interest.
It was (properly) accepted by both parties that at this preliminary stage there will be no merits determination or ruling on admissibility of evidence. There was no submission to the Tribunal that the Tribunal had to make a finding on the admissibility of evidence.
In addition, I agree with the submission of the Board that the issue of public confidence is not binary in the sense of being either present or absent. Public confidence is impacted gradually; the impact on public confidence of the decision to restore an individual’s practising certificate will depend on a range of circumstances. However, in circumstances where it is open to the Tribunal to find on the material before it in a preliminary hearing that the applicant’s registration poses an ongoing public risk of non‑compliance with anti‑money laundering laws, there is nothing illogical or irrational to conclude that the granting of a stay could also have an adverse impact on the reputation of the legal profession and in turn impact on public confidence in the administration of justice.
A further aspect of Ground 2 was argued by the applicant to be the ‘failure to clothe the notional public with a full understanding of the matters relevant to the Tribunal’s reasoning,’ including that the Tribunal was making no findings of fact based on the relatively contentious background facts at the time of the stay application.
In my view, a fair reading of the Tribunal’s Decision makes it clear that the stay application is a preliminary one and no final findings of fact or law were made nor were the questions about admissibility of evidence determined. The Tribunal’s reasons made it clear that the merits of the decision and the evidence was contested.
The weight given to the factors relevant in the exercise of discretion are matter for the Tribunal to determine and, as such, no appeal on a question of law lies.[42]
[42]House v King (1936) 55 CLR 499, 504–5.
I am not satisfied that the Tribunal erred in its consideration and weight given to the public or community interest in determining to refuse the stay.
GROUND 5: PROCEDURAL FAIRNESS
There may be a denial of procedural fairness where a finding or conclusion of a Tribunal comes ‘out of the blue’ in that it is ‘unexpected’ and ‘could not reasonably have been anticipated’.[43]
[43]Barrett Burston Malting Co Pty Ltd v Kotzman [2013] VSC 248, [48].
The applicant claimed that the contentions referred to in [49] and [52] of the Tribunal’s Decision were not advanced by it and that the Tribunal did not make it clear to the applicant that it intended to rely on those contentions or that they would be important in its decision‑making.
This is not sufficient to establish a breach of procedural fairness. It is also necessary to demonstrate that the error was material or vitiating of the decision by reason that there could not, or would not, realistically have been a different outcome had there been no error.[44]
[44]LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12, [2]–[16] (‘LPDT’).
The applicant claimed that if fairly put on notice, it might have addressed the contentions by way of further submissions or evidence and that the Tribunal would have approached the applicant’s further evidence or submissions with an open mind.[45]
[45]Applicant’s Submissions on Leave and Appeal (filed 24 April 2024 in S ECI 2023 06185, Supreme Court of Victoria), [25] citing LPDT, [15]–[16].
The applicant submitted that it would have called evidence or made submissions by reference to existing evidence, including:
(a) that there is no limit of $10,000 on cash transaction;
(b) that the public would not be confused by a practising certificate subject to conditions and that there are many cases where stays have been granted on that basis;
(c) the supervision regime to which he would submit as an employee solicitor;
(d) his willingness to change the name of his law practice; and
(e) the flight of nearly all of the clients of his law practice with active files to Ms Tricarico’s law practice.
I am not satisfied that the contentions referred to in paragraph [49] and [52] ‘came out of the blue’ or that it can properly be said that they were unexpected or could not reasonably have been anticipated.
Rather, submissions were made both orally and in reliance on the material submitted to the Board in response to the Preliminary View Letter indicating an intention to cancel the practising certificate that was before the Tribunal.
The applicant bore the onus of demonstrating that a stay was justified. The applicant had ample opportunity to file any evidence upon which he sought to rely and no issue of time both to prepare and present his case is apparent.
The applicant conceded before the Tribunal that he failed to comply with his reporting obligations to provide significant cash transaction reports under the FTR Act in relation to cash payments received from or on behalf of clients in excess of $10,000. What he did submit, contrary to the Board’s contention, was that he did not deliberately or recklessly breach those obligations but rather his failure to report was due to his ignorance of the law. In those circumstances, the applicant could and should have reasonably expected that the Tribunal would assess the plausibility of his submission in undertaking the balancing exercise on the stay application and, in doing so, take into account prevalent community knowledge of the reporting obligation by way of judicial notice.
The Tribunal expressly concluded that it was not convinced that the imposition of conditions on the applicant continuing to practice as identified in the applicant’s materials and evidence would adequately address the relevant concerns raised by the Board despite the applicant’s main proposal that Ms Tricarico would in effect become the principal of his legal practice and that he would work for her.
I agree with the Board that the applicant simply failed to make out his case on the evidence.
ALTERNATIVE DECLARATORY RELIEF
Declarations are discretionary relief and a consideration is whether there is a real justiciable and not theoretical controversy.
I am not satisfied that, despite having the jurisdictional power to do so, to make a declaration as to the correct interpretation and application of s 466 of the Uniform Law is appropriate in the context of this proceeding.
I am of the view that the substratum of facts is not sufficient for the Court to conclude that there is a judiciable issue which is sufficiently connected to be of utility in determining the dispute. At present, the issue would be a theoretical one.
Section 466 of the Uniform Law does not operate in a vacuum and in order for the question to be determined with utility it would be necessary for each piece of information which was to be relied upon to be considered and a finding as to whether it was obtained voluntarily, and/or directly or indirectly in consequence with a requirement contained in s 466(1). That is a procedural or preliminary matter for the Tribunal to determine, as the Tribunal recognised in its decision.
As submitted by the Board, it is a matter for the Tribunal to determine the application for review on its merits and this includes forming a view on the evidence and admissibility of evidence which the Board puts before it. To second‑guess what that evidence might be and make a pre‑emptory decision about its admissibility would be to subvert the role that the legislature has probably allocated to the Tribunal.
In my view, there is no proper basis upon which this exercise ought to be engaged in by the Court at this juncture.
Reliance upon the Civil Procedure Act 2010 (Vic) does not assist to change my view.
CONCLUSIONS ON LEAVE TO APPEAL
In in order to succeed on the application for leave to appeal, the Court must be satisfied that there is a real prospect of success. The onus of demonstrating an error of law or sufficient doubt about the correctness of the Tribunal’s order and any substantial injustice in leaving that order unreversed sits with the applicant.
No Substantial injustice
There would be no substantial injustice in leaving the Tribunal’s order undisturbed because the Tribunal’s order properly balanced the relevant considerations required of it and its reasoning and decision reflect the forensic realities of the way in which the applicant’s case was put to it.
The status quo for over the past five months has been that the applicant has not held an Australian practising certificate. Whilst the applicant’s delay in prosecuting this appeal is not substantial, the passage of time undermines to an extent the submission made by him that a refusal to grant a stay will cause substantial injustice.
The reversal of the Tribunal’s order will neither prevent the applicant from being subject to media attention nor his law practice from being wound up. Both of these have occurred, the legal practice having been wound up on 8 March 2024.[46]
[46]Affidavit of Mark Johnson (filed 28 March 2024 in S ECI 2023 06185, Supreme Court of Victoria), Exhibit ‘MJ‑1’, 60–1.
No right to appeal other than on a question of law
The primary question of law relied upon by the applicant (and the matter which was subject of the separate declaratory relief) was not a question which was argued for determination before the Tribunal.
The approach by the Tribunal to the considerations relevant to the grant of a stay, of which the applicant had the burden to persuade, was appropriate in the circumstances. The considerations and the weight attached to them was executed within the proper exercise of the Tribunal’s discretion under s 50(4) of the VCAT Act.
Whilst the consideration of the correct approach and application of s 466(4) may be of legal interest, I am of the view that the determination of that question does not properly arise in this proceeding. It was not a matter before the Tribunal for its determination and quite properly it did not do so in its deliberations on the interim stay application. The parties’ submissions to the Tribunal did not ask the Tribunal to do so. Rather, the question was appropriately parked for a another day and the Tribunal’s reasons demonstrate that position. The written and oral submissions made on behalf of the applicant accepted that the Tribunal ought not and should not make determinations of material facts or law at this preliminary phase of the proceeding.
Prematurity
Further, as submitted by the respondent, the question of the admissibility of evidence based on s 466 or otherwise is a matter which has yet to crystalise.
It may be that the matter will never arise as the hearing before the Tribunal is a hearing de novo and it will be a matter for the Board to prove the allegations which support the cancellation before the Tribunal.
It is premature for the question to be determined by this Court either as a proper ground of appeal in the s 148 application or as a separate question of declaration.
ORDERS TO BE MADE
I allow the amendments to the notice of appeal sought by the summons filed 5 March 2024.
However, for the forgoing reasons, I refuse leave to appeal.
I also refuse the declaration sought by the summons dated 5 March 2024.
I will reserve costs and provide an opportunity for the parties to file and serve any written submissions they with to make in respect of costs.
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