Margaret Campbell-Maruca Mary-Lou Buck Mary Button Cecilia Flanders Muriel Vale Mavis Davis Eileen Button Kevin Stewart Cedric Button Cyril Davis and Registrar of Indigenous Corporations
[2012] AATA 678
•4 October 2012
[2012] AATA 678
| Division | GENERAL ADMINISTRATIVE DIVISION |
| File Number(s) | 2012/0467 |
| Re | Margaret Campbell-Maruca Mary-Lou Buck Cyril Davis |
| APPLICANTS | |
| And | Registrar of Indigenous Corporations |
| RESPONDENT |
DECISION
| Tribunal | Hon. Brian Tamberlin, QC, Deputy President |
| Date | 4 October 2012 |
| Place | Sydney |
The application to exclude the solicitors is dismissed.
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Hon. Brian Tamberlin, QC, Deputy President
CATCHWORDS
PRACTICE AND PROCEDURE – application to exclude representative solicitors – potential for conflict of interest - discretion of the Tribunal to determine how a matter is to be conducted before it – power of the Tribunal to exclude representative – application to exclude solicitors dismissed.
LEGISLATION
Administrative Appeals Tribunal Act 1975
Corporations (Aboriginal and Torres Strait Islander) Act 2006, s 487-1(1)
National Crime Authority Act 1984, s 25
CASES
Australian Securities Commission v Bell (1991) 104 ALR 125
Kallinicos v Hunt [2005] 65 NSW LR 561
National Crime Authority v A, B and D (1988) 18 FCR 439
Shi v Migration Agent’s Registration Authority (2007) 235 CLR 286
TJ Board & Sons Pty Ltd v Samuel Castello [2008] VSC 91
Zarah Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235
REASONS FOR DECISION
Hon. Brian Tamberlin, QC, Deputy President
4 October 2012
These reasons concern an application by the Respondent for a direction that the firm of solicitors for the Applicants, Eddy Neumann Lawyers (the solicitors), not be permitted to represent the Applicants in this proceeding on the ground that the conduct of the firm will be a material issue in the review proceedings, leading to a potential for conflict of interest such that a fair minded, reasonably informed member of the public could conclude that the proper administration of justice requires that the solicitors not act for the Applicants.
The substantive proceeding is an application for review of a decision by a delegate of the Registrar of Aboriginal and Torres Strait Islander Corporations that the Dunghutti Elders Council (the Aboriginal Corporation) was to be under special administration pursuant to section 487-1(1) of the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (The CATSI Act). The decision was made on 2 September 2011.
The Applicants are former directors of the Aboriginal Corporation.
BACKGROUND
On 3 April 2012 the Tribunal was informed that Eddy Neumann Lawyers would be representing the Applicants and Mr Neumann subsequently appeared on the Applicants’ behalf at conferences held on 4 April 2012 and 6 June 2012.
The Respondent has raised concerns regarding Mr Neumann’s participation in the proceedings as a legal representative and on 19 June 2012 the solicitors advised that Mr Neumann intended to act as the solicitor for the Applicants unless ordered by the Tribunal not to do so.
The Respondent’s concern arises from the reasons given by the delegate for the determination in the following respects.
In his reasons for decision, the delegate was concerned about the financial position of the Aboriginal Corporation, among other things, and its pattern of expenditure was described as “unsustainable”. In particular, concern was expressed at the amount of legal fees expended in proportion to total expenditure as being exceptionally high for the Aboriginal Corporation, having regard to its size and nature, particularly in the financial years ended 30 June 2008 to 2010. The delegate noted that such expenditure amounted to 50.8 per cent of the Aboriginal Corporation’s total expenditure in the financial years ended 30 June 2009 and 2010.
The Respondent submits that prior to the Aboriginal Corporation’s legal disputes, which began in mid-2007 to 2008, reported expenditure on legal costs was minimal, being less than one per cent. The Registrar examined the fee invoices for legal work done by the solicitors. These recorded that some of the expenditure was incurred partly in years earlier than those in which it was reported. The magnitude of the fees was extremely large and this is common ground. For example, between September 2008 and March 2011 the Aboriginal Corporation was invoiced $1,387,241 for legal services, of which a little less than half was attributable to the solicitors. The delegate noted that no explanation has been advanced which would suggest that the level of expenditure was justified, and he concluded that the former directors of the Aboriginal Corporation had become overly defensive in relation to the affairs of the Corporation and had incurred “unnecessary” legal expenditure. The delegate referred to Mr Neumann being at a number of meetings in Kempsey, and considered that he had a close relationship with the Applicants.
The Respondent contends that it is clear from the circumstances and records that proceedings will bring into issue the propriety of the legal expenditure made by the Aboriginal Corporation, including work performed by the solicitors, and says that the presence of Mr Neumann at directors’ meetings and annual general meetings indicates that he may have been closely involved with governance of the Corporation.
In submissions in response, Mr Neumann has stated that his firm has represented the Aboriginal Corporation over several years and that proper accounts have been provided as required by law. He says these accounts have been audited by independent accountants and that no complaint has ever been made by those auditing the accounts or by the Aboriginal Corporation about the quantum or propriety of the legal fees.
Mr Neumann submits that the work was necessary and appropriate if one has a proper understanding of the history of the Aboriginal Corporation’s activities. Whilst conceding that the amounts are large, he submits that it is necessary to have regard to the complexity and level of assistance required by the indigenous litigants and the context in which the fees were incurred. He submits that there is no basis to restrain or prevent him from acting in the proceedings. He points out that he has acted as a solicitor for the directors for a considerable period and that to substitute another firm of solicitors to represent the Applicants would result in unnecessary delay, costs, and duplication which could have the effect of preventing the Tribunal from determining the decision to appoint the Administrator because the Applicants would not have funds and they would be unable to progress the matter. Mr Neumann contends that there is no specific evidence that any items have been overcharged and that if there were a real problem with the accounts they would have been challenged in an appropriate forum.
He submits that any assertion that he would be a material witness is without merit as there is no proper basis on which he could be called as a witness and that any attempt to call him as a witness or to question him about his dealings, including his advice to, or communications with, the Applicants would be an abuse of process and breach of privilege.
Mr Neumann also submits that this Tribunal has no power under the Administrative Appeals Tribunal Act 1975 (the AAT Act) to refuse permission to a legal representative to appear on a review application.
ISSUES
There are two issues:
(a)Whether this Tribunal has power to refuse permission to a legal representative to appear on a review application.
(b)Whether in the circumstances, if such power exists, such order should be made.
POWER OF THE TRIBUNAL
The general principles concerning the jurisdiction of a superior court to restrain a legal representative from appearing were examined in detail by Brereton J in Kallinicos v Hunt [2005] 65 NSW LR 561 at [31] – [76].
In that case His Honour ordered a legal representative to cease acting for the defendants. The primary reason was that it was likely that the solicitor in question would be a material witness in controversial issues of substance, and that his evidence and the propriety of his conduct would come under scrutiny, such that he would be in a position where his client’s interest, his own interest, and his obligation to the court would be in conflict.
At [76] His Honour summarised his conclusions and the relevant points made for present purposes were as follows:
the court always has an inherent jurisdiction to restrain solicitors from acting, as an incident of its inherent jurisdiction over its officers so as to control its process in aid of the administration of justice.
the test to be applied in exercising this jurisdiction is whether a fair minded and reasonably informed member of the public would conclude that the proper administration of justice requires that a legal practitioner should be prevented from acting in the interests of the protection of the integrity of the judicial process and the due administration of justice, including the appearance of justice.
the jurisdiction must be regarded as exceptional and must be exercised with caution.
due weight should be given to the public interest in a litigant not being deprived of a lawyer of his or her choice without due cause.
the timing of the application may be relevant in that cost, inconvenience or impracticality of acquiring lawyers to cease to act may provide a reason for refusing to make such an order.
The above principles provide some useful guidance to the Tribunal in the present case, notwithstanding that the Tribunal does not have the inherent jurisdiction attached to superior State courts. Legal practitioners appearing in the Tribunal are not in any sense “officers” of the Tribunal. In the present case, the power to exclude must be found, whether expressly or impliedly, in the AAT Act which establishes the Tribunal and delineates its powers and functions.
The above principles were applied by Hollingworth J in TJ Board & Sons Pty Ltd v Samuel Castello [2008] VSC 91 at [4]. That case also concerned the powers of a superior court.
In National Crime Authority v A, B and D (1988) 18 FCR 439 the Full Federal Court considered the powers of a Federal statutory authority, namely the National Crime Authority, to refuse permission to a solicitor who sought to appear for a witness in an investigation. The National Crime Authority Act 1984 (the NCA Act), s 25, provides for representation of witnesses during such an investigation by a legal practitioner. The Full Court decided that the Authority had power to exclude a practitioner whose conduct was preventing the Authority from proceeding with a hearing. The Court pointed out that the right to representation was conferred on the witness in that case and was not a right of the representative. Furthermore, the Court noted that the section did not confer an absolute right in all circumstances to have a legal representative present. It noted that under s 19 of the NCA Act, the Authority had power to do all things necessary and incidental to the performance of its functions, and that this provision operate to read down and constrain the section which gave right to representation.
At [717] the Court said:
We think that the essential nature of the Authority and the functions with which it has been entrusted, when considered along with s 19 of the Act, lead to the conclusion that the power exists. …namely, that the Authority has power to regulate the conduct of its proceedings as it thinks fit.
…In our opinion the only answer one can give is that it will be qualified to empower the Authority to refuse to permit a particular legal representative to appear if it concludes on reasonable grounds and in good faith that to allow the representation either will, or may, prejudice the investigation which it is obliged to carry out pursuant to the terms of its statute.
…the Authority's power does not work any injustice to a witness called before it. The witness may still be represented by any legal practitioner of his or her choice save a practitioner excluded by the Authority for good reasons (emphasis added).
While the statutory provisions in the above case are different, to some extent, from the present I consider that the above observations of the Court are apposite in the present case.
The power of an administrative tribunal to exclude a legal representative was also considered by the Full Federal Court in Australian Securities Commission v Bell (1991) 104 ALR 125 in relation to an inspector’s power to exclude a legal representative. In that case Sheppard and Lockhart JJ agreed that subject to a clear legislative provision to the contrary, tribunals of all kinds had power to regulate and control their own proceedings, and that such power extended to an inspector excluding a representative where there were grounds for exercising that power. Sheppard J said at [138-9]:
Unless there was a clear legislative intention otherwise, tribunals of all kinds will have the power to regulate and control their own proceedings. That power is implied into the statutory provisions pursuant to which a given tribunal is created. The power is implied because it is necessary that the Tribunal have it in order to be able properly to discharge its functions. …
If it were not for the matters provided for in s 23(2) it would be clear, in my opinion that the inspector would have the power, if there were grounds for it to do so, to exclude a particular lawyer from the examination and thus deprive the examinee of his or her services. This would be so notwithstanding the fact that ss 22 and 23 confer upon the lawyer the right to be present. The power would be implied because it would be necessary for the proper discharge by the inspector of his powers and functions (emphases added).
In Zarah Garde-Wilson v Corrs Chambers Westgarth [2007] VSC 235, Bell J of the Victorian Supreme Court granted an injunction restraining a law firm from acting for the Legal Services Board in an application for review of a decision before the Civil and Administrative Tribunal. His Honour at [35] – [43] observed that jurisdiction to restrain a lawyer from acting for a party in litigation before a court “logically extends to restraining a lawyer from acting in proceedings in a tribunal”. The test is an objective one, namely whether a fair minded, reasonably informed member of the public would reasonably conclude that the proper administration of justice required the lawyer to be restrained from acting.
THE ADMINISTRATIVE APPEALS TRIBUNAL ACT 1975
By s 3 of the AAT Act the objectives of the Tribunal require it to provide a mechanism that is fair, just, economical and quick. That is to say it is required provide a “procedure” which meets those objectives.
Under s 32 of the AAT Act, parties to the proceedings may appear in person or may be represented by some other person. This right to be represented is a right which attaches to the party and not to the representative. It is necessary to give due weight to the consideration that parties should normally be entitled to select their representative and to receive the assistance of solicitors and counsel of their choice unless there is good cause for excluding the representative.
Section 33(1) of the AAT Act provides that in a proceeding before the Tribunal the “procedure” is within the discretion of the Tribunal. This is a broad discretion, in other words, subject to the Act and the Regulations, it is for the Tribunal to decide how matters are conducted before it. This conferral of power is sufficiently broad, in my view, to encompass power to do everything that is incidental or necessary to ensure that the Tribunal is able to perform its duty and care function which is to review the matter before it in order to reach the correct and preferable decision: Cf Shi v Migration Agent’s Registration Authority (2008_235 CLR 286.
The authorities referred to earlier support the conclusion that the right of a party to be represented is not absolute, but is qualified by a requirement that the choice of representative by a party must not be such as would be likely to hinder the performance by the Tribunal of its statutory duty to make the correct and preferable decision. The Tribunal has power to protect the integrity of its process. If the Tribunal properly considers that a representative is in such a conflict of interest position, for example, that to permit the representation would mean that the review process could be compromised, then the Tribunal has the power to exclude that representative.
In many respects such power is analogous to the power of the courts but it is derived from an implied statutory power to protect the integrity of its process rather than from its inherent jurisdiction or it control of representatives as officers.
The test to be applied by the Tribunal is whether if the representative were not excluded a fair minded, reasonably informed member of the public might reasonably conclude that the proper performance of its review functions requires that the legal representative should not act in the proceeding.
For the above reasons I consider that, provided the above test is satisfied, the Tribunal has power to exclude a legal representative from appearing before it in order to protect its process and that it is not necessary that such a restraint should be imposed on the representative by a court order in the form of an injunction or direction.
SHOULD THE POWER BE EXERCISED?
The authorities make it clear that the exercise of power to exclude a legal representative of choice is an exceptional one which must be exercised with caution to ensure there is sufficient evidence or material to support the exclusion.
On 3 April 2012 the Respondent filed a statement of issues in the proceeding. These are cast in general terms and make no direct allegations in relation to the conduct of the solicitors. The issues raised are directed at governance and actions of the directors in relation to the Aboriginal Corporation and the conduct of its affairs. There is no allegation that counsel have acted improperly in any way in relation to fees or otherwise.
There is no specific or direct evidence before me at this stage as to any “improper conduct” on the part of the solicitors which has been called into question. As noted above, there are statements to which my attention has been directed, in the Statement of Reasons for Decision of the delegate which refer to the financial position of the Aboriginal Corporation and to the very large amounts expended on legal services for the solicitors over recent years and which may call for some explanation. As noted earlier there are references to records of the Aboriginal Corporation which indicate that its expenditures have been incurred but where there has been no satisfactory explanation by the directors to the delegate. There is a suggestion in the submission of the Registrar that Mr Neumann may have been intimately involved with the governance of the Aboriginal Corporation but the allegations are vague and generalised. On the material presently before me I am not persuaded there is a sufficiently substantial ground for exclusion of the solicitors from acting as representatives for the Applicants.
The central issue in these proceedings concerns the conduct of the directors in the governance of the Aboriginal Corporation; their role; and reasons for the large expenditure on legal services. There will be matters called into question, but they are primarily directed to the actions of the directors and not of the legal representatives.
The consideration that Mr Neumann may be called to give evidence as to the work carried out is not sufficiently cogent to warrant his exclusion. I have taken into account the consequences of excluding the solicitors from further participation and the wasted time, delay and expense likely to be involved in obtaining alternative legal representation at this point, in circumstances where Mr Neumann has acted for the Aboriginal Corporation over several years and is familiar with its affairs.
Having regard to the above matters, a case has not been made by the Respondent for the exclusion of the solicitors.
For the above reasons, although I am satisfied that the Tribunal has power to refuse permission to a representative to appear for a party provided that the relevant grounds are made out. The evidence is not sufficient to provide a proper foundation for exercise of that power.
The application to exclude the solicitors is therefore dismissed.
| I certify that the preceding 39 (thirty -nine) paragraphs are a true copy of the reasons for the decision herein of the Hon. Brian Tamberlin, QC, Deputy President |
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Associate
Dated 4 October 2012
| Date(s) of hearing | 9 August 2012 |
| Solicitors for the Applicant | Eddy Neumann Lawyers |
| Solicitors for the Respondent | Australian Government Solicitor |
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