Menon v Council of the Law Society of New South Wales

[2016] NSWSC 1322

Supreme Court

New South Wales

• Amendment notes

Medium Neutral Citation:

Menon v Council of the Law Society of New South Wales [2016] NSWSC 1322

Hearing dates:

14 June 2016

Date of orders:

20 September 2016

Decision date:

20 September 2016

Jurisdiction:

Common Law

Before:

Fagan J

Decision:

1. Declare that each of the decisions of the defendant, made 15 October 2015, that it was satisfied there is a reasonable likelihood the plaintiffs, respectively, would be found by the Tribunal to have engaged in professional misconduct and to institute proceedings in the Tribunal pursuant to s 537(2) of the Legal Profession Act 2004 (NSW), is void.

 

2. The defendant by its officers servants and agents is restrained from taking any further steps in the proceedings commenced in the Tribunal in reliance upon the decisions referred to in Order 1.

 3. The defendant is to pay the plaintiff’s costs of the summons.

Catchwords:

ADMINISTRATIVE LAW – judicial review – error of law on the face of the record – jurisdictional error – legal practitioners – decision of Council to commence proceedings in the Tribunal – unsatisfactory professional conduct – professional misconduct – duty to give reasons – whether reasons inadequate

Legislation Cited:

Accident Compensation Act 1985 (Vic)
Criminal Procedure Act 1986 (NSW)
Legal Profession Act 1987 (NSW)
Legal Profession Act 2004 (NSW)
Legal Profession Uniform Law Application Act 2014 (NSW)
Legal Profession Uniform Law (NSW)
Road Transport (General) Act 2005 (NSW)
Road Transport (Vehicles and Driver Management) Act 2005 (NSW)
Supreme Court Act 1970 (NSW)

Cases Cited:

Carson v Legal Services Commissioner [2000] NSWCA 308
Civil Aviation Safety Authority v Central Aviation Pty Limited (2009) 179 FCR 554; [2009] FCAFC 137
Dornan v Riordan (1990) 24 FCR 564
Murray v Legal Services Commissioner (1999) 46 NSWLR 224; [1999] NSWCA 70
Phosphate Resources Ltd v Minister for the Environment, Heritage and the Arts (No. 2) [2008] FCA 1521
Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28
Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWCA 112
Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212; [2003] HCA 56
Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43

Category:

Principal judgment

Parties:

Dev Menon & Daniel Clarke (Plaintiffs)
Council of the Law Society of New South Wales (Defendant)

Representation:

Counsel:
Neil Williams SC/Katharine Morgan (Plaintiffs)
Robert Stitt QC (Defendant)

  Solicitors:
Thomas Williams (Plaintiffs)
Anne-Marie Foord (Defendant)

File Number(s):

2016/051032

Judgment

1. The plaintiffs are both solicitors admitted to practice in New South Wales. In respect of each of them a decision was made on 15 October 2015 by the Council of the Law Society of New South Wales (“the Council”) that proceedings be instituted in the Civil and Administrative Tribunal (“the Tribunal”) to deal with complaints against the plaintiffs respectively. Each plaintiff seeks judicial review of the decision affecting him.

2. The first plaintiff, Mr Menon, was admitted to practice as a solicitor on 10 October 2008. He was employed by Mr Clarke in the practice of Clamenz Corporate Lawyers from 24 February 2009 and continued to work in that practice as an employee of Combined Legal Holdings Pty Ltd when that company took over the conduct of the practice from 1 April 2010. The second plaintiff, Mr Clarke, was admitted as a solicitor on 7 July 2006. He was a principal (within the meaning of that expression in s 7 Legal Profession Act 2004 (NSW)), of Clamenz Corporate Lawyers from 25 February 2009. From 1 April 2010 the legal practice of that name has been conducted by Combined Legal Holdings Pty Ltd of which Mr Clarke has at all times held all of the issued shares.

The Legal Services Commissioner’s complaints

3. On 26 June 2012 the Legal Services Commissioner determined to initiate complaints against both plaintiffs and against Peter Webb. Mr Webb had conducted a solicitor’s practice as the principal of Webbsite Enterprises Pty Ltd from 1 April 2003 to 31 March 2010. On the latter date Mr Clarke’s company, Combined Legal Holdings Pty Ltd, completed the purchase of Mr Webb’s practice and thereafter carried it on in the name Webb Lawyers. Mr Webb became an employee of Mr Clarke’s company on 1 April 2010 and continued in that position until 21 December 2010.

4. The allegations upon which the Commissioner initiated his complaints on 26 June 2012 were that Mr Webb and each of the plaintiffs in 2009 and 2010 had made false and/or misleading statements to the Roads and Traffic Authority (“RTA”), as it was then known. Certain functions and powers were conferred upon the RTA by the Road Transport (General) Act 2005 (NSW), which was in force from 14 April 2005. That Act was renamed the Road Transport (Vehicles and Driver Management) Act 2005 (NSW) with effect from 3 April 2013 and was repealed with effect from 10 February 2014. Under s 230 Road Transport (General) Act, as originally named, one of the functions of the RTA was to issue evidentiary certificates (“s 230 certificates”). Such certificates could cover any of a wide range of subjects, one of which was “that a specified vehicle was or was not registered under an Australian applicable road law” (s 230(1)(h)).

5. From 2007 to 2010 it was the practice of the RTA to issue s 230 certificates concerning registration particulars of motor vehicles only on the application of a solicitor and subject to the solicitor giving an undertaking that the certificate would be used “solely for the purpose of commencing legal proceedings in respect of a motor traffic accident but not for the purpose of commencing legal proceedings in respect of a judgment other than the subject of this specific undertaking”. The legal justification or other basis for the RTA requiring such an undertaking has not been made apparent to the Court in these proceedings but that does not appear to be important for resolution of the issues.

6. The Commissioner’s complaints against the three solicitors arose out of applications which they had made for s 230 certificates in respect of registration details (registration number, registered owner’s name and address etc) for a large number of motor vehicles. The complaints concerned four such applications made by Mr Webb between 16 December 2009 and 29 March 2010, four by Mr Clarke (dated 29 May 2010, 12 July 2010, 16 August 2010 and 8 September 2010) and two by Mr Menon (dated 27 May 2010 and 18 June 2010).

7. In each case the Commissioner’s complaint was that whilst the respective solicitors had given the undertakings in the terms required by the RTA as quoted at [5] (or in the case of the application by Mr Clarke dated 29 April 2010, in modified but similar terms), in fact they used the information in the certificates by way of supplying it to a business conducted under the name Identisearch. This business in turn supplied the information to or for the benefit of financial institutions who used it to trace defaulting debtors under motor vehicle lease agreements.

8. On 28 June 2012 the Commissioner’s complaints were referred to the Council of the Law Society pursuant to s 513 Legal Profession Act 2004 (“the Act”). Section 513 at the relevant time provided as follows, so far as relevant:

“513 Referral of complaints to Council

(1) The Commissioner may refer a complaint made to or by the Commissioner to the relevant Council if the complaint is not to be investigated by the Commissioner under Part 4.4 (Investigation of complaints).

(2) When referring a complaint to a Council, the Commissioner may recommend that the Council investigate the complaint or refer it to mediation, or both.”

9. The Commissioner’s letter of referral recommended that the Council investigate the complaints. Upon receipt of this referral, by s 527 of the Act the Council was bound to conduct an investigation. Section 531 empowered the Council to “appoint a suitably qualified person as an investigator to investigate the complaint as agent for the … Council”. On 19 July 2012 Mr David Courtenay was engaged by the Council for this purpose.

Mr Courtenay’s Report to the Council of the Law Society

10. Mr Courtenay collected relevant records from the RTA and obtained affidavits from RTA personnel. He received from a detective in the New South Wales police force the results of a search of police records which showed that most of the vehicles for which information had been sought by the solicitors did not appear to have been involved in any accident. Mr Courtenay interviewed paralegal staff of the solicitors and the solicitors themselves, at length. In these interviews the plaintiffs respectively gave accounts of their actions and provided explanations by which they sought to exculpate themselves, at least to some extent, from what otherwise could be inferred from the documentary evidence. Namely, that they had given undertakings which were not intended to be complied with and which falsely and misleadingly conveyed the representation that the solicitors had instructions to conduct motor vehicle accident proceedings.

11. Mr Courtenay provided to the Council a written report of the results of his investigation dated 27 September 2012. In this he expressed the conclusion that the undertakings given by the plaintiffs “were all false”. By that he appears to have meant that at the time they were given the undertakings were not intended by the makers to be honoured or carried out. Mr Webb had since about 2007 adopted as a routine the practice of providing these undertakings to the RTA when he did not in fact intend to commence legal proceedings in respect of any motor vehicle accident. Another aspect of Mr Webb’s routine was that he passed the s 230 certificates on to Identisearch for use in debt recovery work. Mr Courtenay reported (at p 7):

“I can only attribute the continuation of the practice by Combined Legal Holdings Pty Ltd to poor management, poor judgment, lack of ethics and a misguided sense of duty to an existing client. None of the practitioners I interviewed appeared to have appreciated the significance or importance of a personal undertaking.”

12. Mr Courtenay also reported that the plaintiffs had sent the s 230 certificates to Identisearch with a covering letter which purported to impose unilaterally a restriction on the use Identisearch might make of the information. The wording of this restriction was precisely in accordance with the standard undertaking required by and given to the RTA as quoted at [5]. This form of covering letter was referred to in Mr Courtenay’s report as a “Certificate Letter”. He described the issue of such letters by the plaintiffs as a “stratagem” which he concluded was “fanciful”.

13. At p 5 of Mr Courtenay’s report he stated his satisfaction that “there is evidence, in respect of the complaints [i.e. those of the Commissioner, as referred to the Council: see [6] – [8]], that a breach of the [Act] or the regulations has been committed or evidence that a default, within the meaning of Part 3.4 has occurred in relation to the law practices whose affairs are under investigation”. At pp 12 – 14 he set out three further complaints, with a detailed statement of grounds for each, which he suggested the Council might wish to consider making.

The Council’s action on the Courtenay report

14. On 17 January 2013 the Council resolved to appoint a Professional Conduct Committee, the resolutions of which would be final. To this committee the Council delegated the powers contained in Ch 4 of the Act concerning complaints and discipline. Chapter 4 contains ss 494 – 609. Such delegation was permitted by s 699(3) of the Act. The Council’s resolution provided that either the Committee or the Council itself could refer a matter to a disciplinary body.

15. Members of the Professional Conduct Committee were appointed annually. A fresh resolution for the appointment of Committee members and for delegation to the Committee of some of the Council’s powers (in particular those under Ch 4 of the Act) was made on 15 January 2015. From time to time a member of the Committee resigned before completion of his or her period of appointment. Consequently the composition of the Committee has changed over time. There were 28 members during 2015. I infer that there would have been a similar number in 2013 and 2014, with some members serving over two of those years and some serving over all three.

16. The Council’s resolutions of 17 January 2013 and 15 January 2015 provided that either the Committee as a whole or a subcommittee could exercise the powers delegated from the Council. The evidence does not disclose the names of the members who comprised the Committee or any subcommittee at the time of the passing of the resolutions relevant to the complaints against the plaintiffs.

17. Correspondence to and from the Council regarding complaints which were under consideration by the Professional Conduct Committee appears to have been entered into in the name of the Professional Standards Department of the Law Society. I take this to have been a secretariat to the Committee. The decision of which judicial review is sought in the present case was made by either the Professional Conduct Committee as a whole, or a subcommittee – it does not matter which – as constituted at the date of the decision. I will refer to it as the decision of the Council.

18. Mr Courtenay’s report was received by the Council on about the date it bears, 27 September 2013. On 12 December 2013 the Professional Conduct Committee resolved, pursuant to its delegated power, that complaints be made against each of the plaintiffs. The complaints specified were, in each case, failing to honour an undertaking (both generally and in breach of r 33) and making knowingly false representations (both generally and in breach of r 34.1). In the case of Mr Clarke additional particulars of complaint were listed: of misleading or attempting to mislead RTA officers and making certain specific misleading representations to the RTA on 27 October 2010.

19. By letters of 18 March 2014 the Council informed each of the plaintiffs of the complaints which the Council now made, pursuant to its resolution of 12 December 2013, and invited submissions in response. The Council’s letter enclosed a copy of Mr Courtenay’s report including a large volume of documents annexed to it.

20. On 22 April 2014 Mr T A Williams, a solicitor representing both the plaintiffs, submitted to the Professional Standards Department of the Law Society a long and detailed argument primarily directed to the proposition that the complaints should not be pursued as they were in respect of matters which had occurred more than three years earlier. The submission addressed the subject of the extent of Mr Clarke’s and Mr Menon’s knowledge of the use which would be made (by others) of the s 230 certificates. It denied dishonesty on the part of the plaintiffs and criticised Mr Courtenay’s conclusions.

21. On 29 May 2014 the Professional Conduct Committee resolved, pursuant to s 506(2)(b) of the Act, that its complaints against the plaintiffs involved allegations of professional misconduct and that it was in the public interest to deal with them notwithstanding that the events had occurred more than three years earlier. The making of this resolution was notified to Mr Williams, as representative of the plaintiffs by letters of 2 June 2014.

22. This drew a further long submission from Mr Williams dated 20 August 2014. He analysed the evidence which Mr Courtenay had considered and he relied upon passages in the interviews which Mr Courtenay had conducted with each of the plaintiffs. Mr Williams referred to the criteria for making a determination of professional misconduct and argued that, according to the rules of evidence which would apply on a hearing in the Tribunal, the material which would be available to the Council to tender and which would be admissible would be insufficient to discharge the Council’s burden of proof. Mr Williams relied upon the circumstance that no profit appeared to have been made by the plaintiffs from the provision of the s 230 certificates to Identisearch and that the absence of financial motive made it highly unlikely that the plaintiffs would have given undertakings which they intended not to carry out or made representations knowing them to be untrue.

23. There was a long delay before the Council took any further action. On 16 July 2015 the Professional Conduct Committee resolved that each of the plaintiffs be informed of (a) “the issues of professional misconduct which, in the opinion of the Committee, are involved in the complaint and in respect of which the Committee invites submissions within 21 days” and (b) “the Committee’s opinion that, subject to any submissions, it should resolve that it is satisfied there is a reasonable likelihood the legal practitioner will be found by the Tribunal to have engaged in professional misconduct and that proceedings be instituted in the Tribunal”. The plaintiffs were informed of these resolutions by letters of 23 July 2015.

24. By letter of 7 September 2015 Mr Williams sent to the Council a 27 page submission prepared by senior and junior counsel. This contained a further detailed analysis of the available and admissible evidence including exculpatory answers the plaintiffs had given to Mr Courtenay during his interviews with them. Counsel submitted that “[t]he material before the Committee cannot support a conclusion that there is a reasonable likelihood that either Clarke or Menon will be found by the Tribunal to have engaged in professional misconduct”. It was urged that the complaints ought be resolved by action of the Council itself, with no more than a caution to be administered to the plaintiffs.

The law governing the Council’s decision to institute proceedings

25. The Act was repealed with effect on and from 1 July 2015, by s 167(a) Legal Profession Uniform Law Application Act 2014 (NSW). From 1 July 2015 the Act was replaced by the Legal Profession Uniform Law (NSW) (“the Uniform Law”). The Uniform Law is a schedule to an act of the Victorian Parliament which is applied in New South Wales by force of the Legal Profession Uniform Law Application Act.

26. Section 476 of the Uniform Law enacts transitional provisions in Sch 4 thereto. Clause 26 of Sch 4 provides as follows:

“26 Current complaints and investigations

(1) This clause applies to —

(a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or

(b) an investigation referred to in old Chapter 4 that had begun but had not been completed before the commencement day.

(2) On and after the commencement day—

(a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; and

(b) for that purpose, the complaint or investigation is to continue to be dealt with by the entity responsible for dealing with it under those provisions (the current entity).”

27. In cl 26 “old Chapter 4” means Ch 4 of the Legal Profession Act 2004 (see the definitions in cl 1 of Sch 4). As the Council’s complaints had been resolved upon on 12 December 2013 and the making of these complaints had been communicated to the plaintiffs by letters of 18 March 2014, they were complaints “made under old Chapter 4 but not disposed of before the commencement day”, being 1 July 2015.

28. The “provisions of the old legislation” in accordance with which the complaints must continue to be dealt with are, relevantly to the issues in the present proceedings, ss 537, 541 and 542. These sections are in the following terms, omitting irrelevant words and sub-sections and with emphasis added:

“537 Decision of Commissioner or Council after investigation

(1) After completion of an investigation of a complaint against an Australian legal practitioner, the Commissioner or a Council must:

(a) commence proceedings in the Tribunal under this Chapter, or

(b) dismiss the complaint under this Part, or

(c) take action under section 540 (Summary conclusion of complaint procedure by caution, reprimand, compensation order or imposition of conditions)).

(2) Unless section 540 (Summary conclusion of complaint procedure by caution, reprimand, compensation order or imposition of conditions) applies, the Council or the Commissioner must commence proceedings in the Tribunal with respect to a complaint against an Australian legal practitioner if satisfied that there is a reasonable likelihood that the practitioner will be found by the Tribunal to have engaged in unsatisfactory professional conduct or professional misconduct.

…

541 Record of decision

The Commissioner or a Council must cause a record of their decision with respect to a complaint, together with reasons for the decision, to be kept in respect of each complaint dealt with under this Part.

542 Reasons to be provided to complainant and practitioner

(1) If a complaint has been made about an Australian legal practitioner, the complainant and the practitioner are entitled to receive a statement of reasons from the Commissioner or Council, as the case requires, in relation to:

(a) …

(b) a decision to commence proceedings in the Tribunal with respect to the complaint …

(2) The right of the complainant to apply to the Commissioner for a review of the decision must be included in the statement under this section, except in the case of a decision to commence proceedings in the Tribunal.”

The Council’s decision and reasons

29. Pursuant to s 537(2) of the Act the Professional Conduct Committee on 15 October 2015 passed two resolutions, one in respect of each plaintiff, in terms which were identical except as to the particulars of professional misconduct, as follows:

“RESOLVED that the Committee is satisfied there is a reasonable likelihood [name of plaintiff] (Solicitor) will be found by the Tribunal to have engaged in professional misconduct and that proceedings be instituted in the Tribunal pursuant to Section 537 (2) of the Legal Profession Act, 2004.

Professional misconduct

[particulars given]

Orders to be sought

1 The Solicitor’s name be removed from the Roll.

2 The Solicitor pay the costs of the Society as agreed or assessed.

3 Any further or other order the Tribunal deems fit.

Reasons for decision

Having regard to the facts arising from, and the material annexed to, the Report of Mr Courtenay dated 27 September 2013 (“the report”) and the correspondence between the Society and the practitioner’s legal representative the Committee is satisfied there is a reasonable likelihood the practitioner will be found by the Tribunal to have engaged in professional misconduct.”

30. “Professional misconduct”, as defined in s 497 of the Act, includes:

“(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and

(b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.”

31. “Unsatisfactory professional conduct” is defined, similarly by reference to what it includes, in s 496 in these terms:

“unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.”

The plaintiffs’ case in this Court

32. Pursuant to its decision of 15 October 2015 the Council on 12 April 2016 commenced separate proceedings, one against each of the plaintiffs, in the Tribunal with respect to the complaints against them as referred to at [18]. In each of those proceedings the Council seeks an order that the name of the solicitor be removed from the Roll and that he pay the Law Society’s costs.

33. By their amended summons the plaintiffs now claim against the Council the following relief:

1. A declaration that each of the Council’s decisions, that there was a reasonable likelihood the first and second plaintiff would be found by the Tribunal to have engaged in professional misconduct and to institute proceedings in the Tribunal, is void.

2. A permanent injunction restraining the Council from taking any steps to continue the proceedings in the Tribunal.

3. In the alternative an order that the Council furnish the plaintiffs with reasons for its decision pursuant to s 537(2) of the Act and an injunction restraining the Council from taking any further steps in the Tribunal until 28 days after the provision of the reasons.

34. The grounds upon which this relief is sought are that the defendant’s decision suffers the following flaws, each of which is said to be an error of law on the face of the record and/or a jurisdictional error:

1. Failure to provide any reasons for the decision, contrary to s 542.

2. Failure to provide adequate reasons, sufficient to enable the plaintiffs to identify the Council’s reasoning, the Council’s findings of material facts or the evidence upon which such findings were based.

3. Adopting Mr Courtenay’s report of 27 September 2013 “while failing to consider the irrational and illogical conclusions in the report”.

4. Finding that the plaintiffs breached r 34.1 (that is, knowingly made misleading statements) in the absence of any evidence to support such findings.

5. The decision “lacks an evident and intelligible justification [and] is irrational and illogical” because it purports to have been made upon the basis of both the Courtenay report and the submissions of the plaintiffs but does not explain how differences between the report and the submissions are resolved.

6. The decision was “so unreasonable that no reasonable decision maker could have made it”.

35. Pursuant to the regime under which the defendant reconstitutes its Professional Conduct Committee annually, the committee which made the decision of 15 October 2015 as delegate of the Council was a committee which had been constituted in January 2015. Reconstitution took place with effect from January 2016. The plaintiff contends that reasons cannot now be given by the Committee which made the decision; that an order for reasons to be furnished therefore could not now be complied with and that it follows the decision should simply be declared void, the absence of reasons being incurable.

Grounds 1 and 2 – failure to provide reasons or adequate reasons

36. Section 542 provides that the plaintiffs are “entitled to receive a statement of reasons from [the defendant] … in relation to … a decision to commence proceedings in the Tribunal with respect to” the complaints which the defendant has made against them. The Council became bound by force of s 537(2) to commence proceedings, without making a decision expressly in terms to do so, upon reaching satisfaction of the reasonable likelihood of the Tribunal making an adverse finding against the plaintiffs. However, I consider that the expression “a decision to commence proceedings in the Tribunal”, as it appears in s 542(1)(b), must be construed as including a decision to be satisfied of the reasonable likelihood that the practitioner will be found by the Tribunal to have engaged in unsatisfactory professional conduct or professional misconduct, from which decision there would necessarily follow the commencement of Tribunal proceedings.

37. The purported reasons of the defendant quoted at [29] do no more than recite the statutory formulation of the matter of which the Council had to decide whether it was or was not satisfied, in the terms of s 537(2). Whether such minimal reasons fulfil the requirement of s 542(1)(b) is a question of statutory construction to be answered having regard to:

1. the nature of the decision for which the reasons are required and

2. the implicit purpose of the Legislature in prescribing that practitioners in the position of these plaintiffs “are entitled to receive a statement of the reasons”.

38. In Wingfoot Australia Partners Pty Ltd v Kocak (2013) 252 CLR 480; [2013] HCA 43 at [43] – [56], the duty to give reasons was imposed by express statutory provision. Namely, s 68(2) Accident Compensation Act 1985 (Vic). The decision maker was a medical panel. The panel was required to give its own opinion on medical questions referred to it by the Victorian Magistrates Court in relation to a claim by an injured worker against his employer. The panel’s opinion would be binding upon the parties in relation to the worker’s claim for statutory compensation: [36] – [38].

39. The following extensive quotation from the High Court’s decision is warranted because the principles stated have important relevance to the present case:

“[45] General observations, drawn from cases decided in other statutory contexts and from academic writing, about functions served by the provision of reasons for making administrative decisions are here of limited utility. To observe, for example, that the provision of reasons imposes intellectual discipline, engenders public confidence and contributes to a culture of justification, is to say little about the standard of reasons required of a particular decision-maker in a particular statutory context. The standard of reasons required even of courts making judicial decisions can vary markedly with the context.

[46] Two considerations are of particular significance in determining by implication the standard required of a written statement of reasons in order to fulfil the duty imposed on a Medical Panel by s 68(2) of the Act. One is the nature of the function performed by a Medical Panel in forming and giving an opinion on a medical question referred to it. The other is the objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion.

[47] The function of a Medical Panel is to form and to give its own opinion on the medical question referred for its opinion. In performing that function, the Medical Panel is doubtless obliged to observe procedural fairness, so as to give an opportunity for parties to the underlying question or matter who will be affected by the opinion to supply the Medical Panel with material which may be relevant to the formation of the opinion and to make submissions to the Medical Panel on the basis of that material. The material supplied may include the opinions of other medical practitioners, and submissions to the Medical Panel may seek to persuade the Medical Panel to adopt reasoning or conclusions expressed in those opinions. The Medical Panel may choose in a particular case to place weight on a medical opinion supplied to it in forming and giving its own opinion. It goes too far, however, to conceive of the function of the Panel as being either to decide a dispute or to make up its mind by reference to competing contentions or competing medical opinions. The function of a Medical Panel is neither arbitral nor adjudicative: it is neither to choose between competing arguments, nor to opine on the correctness of other opinions on that medical question. The function is in every case to form and to give its own opinion on the medical question referred to it by applying its own medical experience and its own medical expertise.

[48] The reasons that s 68(2) of the Act obliged the Medical Panel to set out in a statement of reasons to accompany the certificate as to its opinion were the reasons which led the Medical Panel to form the opinion that the Medical Panel was required to form for itself on the medical question referred for its opinion. What is to be set out in the statement of reasons is the actual path of reasoning by which the Medical Panel arrived at the opinion the Medical Panel actually formed for itself.” [Citations omitted].

40. At [49] – [53] the High Court reviewed relevant legislative history, which led to the conclusion that the statement of reasons was required to be “adequate to enable a court to see whether the opinion does or does not involve any error of law”. The judgment continued as follows:

“[54] The objective, within the scheme of the Act, of requiring the Medical Panel to give a written statement of reasons for that opinion can therefore be seen to be that persons affected by the opinion automatically be provided with a written statement of reasons adequate to enable a court to see whether the opinion does or does not involve any error of law. There is an obvious benefit in requiring a written statement of reasons for an opinion always to meet that standard. The benefit is that it enables a person whose legal rights are affected by the opinion to obtain from the Supreme Court an order in the nature of certiorari removing the legal effect of the opinion if the Medical Panel in fact made an error of law in forming the opinion: an error of law in forming the opinion, if made, will appear on the face of the written statement. To require less would be to allow an error of law affecting legal rights to remain unchecked. To require more would be to place a practical burden of cost and time on decision-making by an expert body for no additional legal benefit and no identified systemic gain.

[55] The standard required of a written statement of reasons given by a Medical Panel under s 68(2) of the Act can therefore be stated as follows. The statement of reasons must explain the actual path of reasoning by which the Medical Panel in fact arrived at the opinion the Medical Panel in fact formed on the medical question referred to it. The statement of reasons must explain that actual path of reasoning in sufficient detail to enable a court to see whether the opinion does or does not involve any error of law. If a statement of reasons meeting that standard discloses an error of law in the way the Medical Panel formed its opinion, the legal effect of the opinion can be removed by an order in the nature of certiorari for that error of law on the face of the record of the opinion. If a statement of reasons fails to meet that standard, that failure is itself an error of law on the face of the record of the opinion, on the basis of which an order in the nature of certiorari can be made removing the legal effect of the opinion.” [Citations omitted].

41. The Court rejected a submission that the Medical Panel’s reasons were required to include an explanation of the reasoning upon which it rejected other medical opinions that may have been submitted to it. At [56] the Court dismissed the “premise” that the Panel’s opinion “must be adopted and applied for the purpose of determining all questions or matters arising under or for the purposes of the Act”. Their Honours also rejected a propounded analogy between the function of the Panel and the function of a judge deciding the same medical question. The Court held:

“[56] … Rejection of the premise and the analogy, for reasons already stated, entails rejection of the conclusion that the higher standard is required. A Medical Panel explaining in a statement of reasons the path of reasoning by which it arrived at the opinion it formed is under no obligation to explain why it did not reach an opinion it did not form, even if that different opinion is shown by material before it to have been formed by someone else.”

Scope of the requirement for reasons under the Act

42. By reference to the two considerations identified at [46] of the judgment in Wingfoot Australia Partners Pty Ltd v Kocak it may be said in the present case, first, the nature of the Council’s decision under s 537(2) of the Act may be compared with that of the Local Court deciding whether a defendant facing a criminal charge should be committed to the District or Supreme Court for trial, pursuant to the Criminal Procedure Act 1986 (NSW). The Council is not required to make factual findings upon all of the evidence that its investigations may have unearthed. Nor is it required to choose between reports or advice which it may have received, on the one hand, and exculpatory submissions for the solicitors against whom complaint has been made on the other hand.

43. In reaching satisfaction as to “reasonable likelihood” that unsatisfactory professional conduct or professional misconduct will be found in the Tribunal, the Council would be entitled to take the evidence against the solicitors at its face value and significance, subject to making due allowance for any features of the evidence itself or of surrounding circumstances which might cause the Tribunal to discount the evidence or to put an innocent construction upon the facts. A limitation is placed upon the degree of detail required in the Council’s reasons by the circumstance that it does not make under s 537(2) a final decision on the merits of the complaints. The Council’s decision is a filter upon the cases which are to go to the Tribunal for the resolution of parties’ rights arising out of a complaint. It follows from this consideration that the reasons which the Council is to give under s 542(1)(b) need not address competing submissions nor purport to resolve conflicts of evidence or alternative constructions of possible findings of fact.

44. With respect to the second of the considerations referred to at [46] in Wingfoot Australia Partners Pty Ltd v Kocak, I infer from the structure of the Act that the purpose of the legislature in requiring that reasons be given is, as was the case for the legislation which was under consideration by the High Court, “to enable a court to see whether the opinion does or does not involve any error of law”. The consequences for a legal practitioner of disciplinary proceedings being commenced by the Council in the Tribunal are obviously very significant. While such proceedings are pending, in a case where the Council seeks an order that the solicitor’s name be removed from the Roll, there is an imminent threat to the solicitor’s pursuit of his occupation and livelihood. Damage to reputation merely from the institution of disciplinary proceedings may destroy a professional practice. Pendency of such proceedings must at least hamper business and professional plans and development and create uncertainty for clients of the practitioner.

45. By enacting s 542(1)(b), Parliament has recognised the need for a mechanism to ensure that Tribunal proceedings are not commenced capriciously or without due consideration. I infer that the purpose of requiring reasons to be given is to enable the affected practitioner to verify that the Council has acted according to law in forming its satisfaction regarding the reasonable likelihood of the Tribunal making a finding adverse to the solicitor. For this purpose, as in the case of the legislation considered in Wingfoot Australia Partners Pty Ltd v Kocak, reasons which explain the path by which the Council reached its conclusion will suffice. The reasons need not also identify items of evidence which the Council discounts or facts which it considers insignificant or the basis upon which it expects arguments exculpatory of the solicitor will not be accepted.

Deficiency of the Council’s purported reasons

46. What the Council stated to be its reasons, quoted at [29], does not constitute reasons at all. The Council’s brief statement merely identifies in a general way the body of material the Council considered and then states the conclusion reached in terms of the statute. There is nothing in this that would answer the description of a path of reasoning. In a document which disclosed a path of reasoning sufficiently to indicate whether the Council proceeded according to law one would expect to see identification of factual findings, which the Council considers reasonably likely to be made in the Tribunal, about the solicitors’ communications with the RTA; reference to evidence which the Council believes is credible and likely to satisfy the Tribunal that the solicitors’ communications were false; a statement of an expectation that the Tribunal would likely infer (from some identified facts) that the solicitors must have known their communications to the RTA were false and reference to rules or principles which the Council would expect the Tribunal to apply to the facts, with the result that findings of professional misconduct would be made.

46. Reasons sufficient to demonstrate a path of reasoning along the above lines would not be likely to occupy more than one or two pages in relation to each of the plaintiffs. I reject the plaintiffs’ submission that compliant reasons would have to explain how competing, exculpatory evidence or arguments can be reconciled to the Council’s view. Because the Council is not making an adjudication on competing contentions when it arrives at the requisite satisfaction under s 537(2), there is no requirement for its reasons to be elaborated in that way.

47. These conclusions are supported by Murray v Legal Services Commissioner (1999) 46 NSWLR 224; [1999] NSWCA 70 in which predecessor legislation was considered. Section 155(2) of the Legal Profession Act 1987 (NSW) (“the 1987 Act”) was in terms equivalent to s 537(2). Section 156 of the 1987 Act required that “A Council or the Commissioner must cause a record of its decision with respect to a complaint, together with the reasons for the decision, to be kept in respect of each investigation conducted under this Division”. This is identical to s 541 of the 2004 Act which I have to consider.

48. Section 171J(1) provided, similarly to s 542(1)(b):

“(1) A Council or the Commissioner must cause the decision with respect to a complaint, together with the reasons for the decision, to be notified in writing to the complainant and to the legal practitioner … against whom the complaint was made.”

50. Sheller JA, with whom the other members of the Court of Appeal agreed, held at [97] that a letter in which the Commissioner merely said “I am satisfied that there is a reasonable likelihood that you will be found guilty by the Legal Services Tribunal of unsatisfactory professional conduct or professional misconduct” did not qualify as “reasons” in the way that word was used in ss 156 and 171J of the 1987 Act. Sheller JA said:

“The Commissioner should, at the least, have explained by reference to the material before him how he came to the conclusion that he did.”

51. At [98] Sheller JA held:

“In Dornan v Riordan (1990) 24 FCR 564 at 573, the Full Federal Court held that a substantial failure to state reasons for a decision in the circumstances that a statement of reasons is a requirement of the exercise under the statute of the decision-making power constitutes an error of law. Relevantly, this means that the legal practitioner has no means of knowing, as the legislature intended the practitioner should, whether the decision-making power has been properly exercised.”

52. In Murray v Legal Services Commissioner there had also been a failure of the Commissioner to accord the solicitor an opportunity to be heard before the decision about satisfaction of the likely outcome of Tribunal proceedings was reached. The court declared that the Commissioner’s decision to institute those proceedings was void and made an order prohibiting and restraining the Tribunal from proceeding upon the information filed before it. This grant of relief was evidently based upon both the failure to accord a hearing and the failure to state reasons in circumstances where the court held that the want of reasons constituted an error of law.

53. Upon comparison of the 1987 Act with the legislation which governs the present proceedings I find no basis for distinguishing the decision in Murray v Legal Services Commissioner and I consider myself bound by it. The decision was followed and applied in Carson v Legal ServicesCommissioner [2000] NSWCA 308, a case which also concerned the 1987 Act.

54. The defendant's written submissions at par 2.11 conceded that it would not be sufficient to satisfy the requirements of the Act “solely to give as a reason that ‘the Committee is satisfied there is a reasonable likelihood the practitioner will be found … ’” etc, in terms of s 537(2). However the defendant contended that the reasons given by the council did more than that. I do not think that they did.

55. The defendant submitted the following at par 2.12:

“The reasons expressly state that the facts which arise from the [Courtenay] report and the supporting material and the submissions which were made on behalf of the practitioners are capable of supporting the relevant finding by the Tribunal.”

56. In my judgment the purported reasons, as quoted at [29], do no more than identify the extent of the material the Council had looked at. This is very similar to the approach of the decision maker in Dornan vRiordan (1990) 24 FCR 564. There it was held that a mere catalogue of competing submissions and conflicting evidence followed by a statement that all such material had been taken into account did not constitute reasons for a decision.

Consequence of the deficiency of reasons

57. It follows that the Council’s decisions, in respect of each of the plaintiffs, to commence proceedings in the Tribunal are vitiated by error of law on the face of the record. The plaintiffs are entitled to the declaration they seek, that each decision is void. They are also entitled to an injunction restraining the defendant from taking further steps in the proceedings in the Tribunal which it has initiated pursuant to the decisions.

58. The statute itself, in s 541, prescribes what must constitute the record of decisions of this nature by the Council. The resolutions in the form quoted at [29] clearly constitute that record in the present case. This also follows from s 69(4) Supreme Court Act 1970 (NSW). The resolutions show on their face that what purport to be reasons, as recorded, do not qualify as such. The legal error is manifest.

59. There is a clear statement in Wingfoot Australia Partners Pty Ltd v Kocak that error of law on the face of the record will support an order in the nature of certiorari:

“[26] Jurisdictional error constitutes one basis on which the Supreme Court can make an order in the nature of certiorari to remove the purported legal consequences of a purported exercise of power under a State statute. That basis for the Supreme Court making an order in the nature of certiorari is entrenched by the Commonwealth Constitution [Kirk v Industrial Court (NSW) (2010) 239 CLR 531 at 580-581 [98]; [2010] HCA 1]. Error of law on the face of the record constitutes a separate and distinct basis on which the Supreme Court can make an order in the nature of certiorari to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power under a State statute [Craig v South Australia (1995) 184 CLR 163 at 175-183; [1995] HCA 58]. That basis for the Supreme Court making an order in the nature of certiorari is not entrenched by the Commonwealth Constitution; its application can be excluded by statute. Where it is not excluded, however, it applies independently of jurisdictional error. That is to say, where error of law on the face of the record is not excluded by statute as a basis for making an order in the nature of certiorari, and where an error of law on the face of the record is found, an order in the nature of certiorari can be made so as to remove the legal consequences or purported legal consequences of an exercise or purported exercise of power irrespective of whether the error of law also constitutes a breach of a condition of the valid exercise of that power.”

60. I find nothing in the Act or in any of the other legislation cited to me which has the effect of denying the plaintiffs their entitlement to orders in the nature of certiorari arising from the Council’s error of law in failing to record or give reasons. In Wingfoot Australia Partners Pty Ltd v Kocak at [29] and [30] the High Court appears to have decided that such an error will ground orders to remove the purported legal consequences of an administrative decision, without undertaking an exercise in statutory interpretation to determine whether the error was jurisdictional. Relief in a case such as this is not to be limited to an order in the nature of mandamus requiring that reasons be given:

“[29] Whether non-compliance by the Medical Panel with its duty to give a written statement of reasons also constitutes a breach of a condition of the valid performance of the duty imposed on it by s 68(1) and (2) of the Act to form, and to give a certificate as to, its opinion on a question referred to it is not to the point. That issue would only be determinative in an application to the Supreme Court for an order in the nature of certiorari to remove the purported legal consequences of a medical opinion on the basis of jurisdictional error [Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212 at 226 [48], 227 [55]; [2003] HCA 56]. In an application for an order in the nature of certiorari to remove the legal consequences or purported legal consequences of a medical opinion on the basis of error of law on the face of the record, the issue simply does not arise.

[30] The Court of Appeal was therefore correct to conclude that an order in the nature of certiorari is available to remove the legal consequences or purported legal consequences of an opinion in respect of which reasons given by a Medical Panel are inadequate to meet the standard required of a written statement of reasons under s 68(2) of the Act.”

61. In any event, in the Act now under consideration the requirements of recording reasons (s 541) and of issuing them (s 542) are conditions precedent to the making of a valid decision to institute proceedings in the Tribunal and are therefore jurisdictional. Construing the Act in accordance with the principles enunciated in Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28, the considerations referred to at [44] – [45] are clear indicia of legislative intent that the requirements relating to reasons are indispensable to a valid decision under s 537(2). In adopting this interpretation I also take into account that s 541 explicitly envisages that reasons will be formulated before the decision is made and will be recorded contemporaneously with it. This scheme of the Act distinguishes it from legislation considered in other cases where the courts have held that administrative decisions will not be regarded as made without authority upon the decision-maker’s failure to give reasons: Re Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Palme (2003) 216 CLR 212; [2003] HCA 56; Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Secretary of the Treasury [2014] NSWCA 112 at [48] – [58].

62. Application of the law stated at [60] and of my conclusion that the requirement to record and issue reasons is jurisdictional means that the Court should not withhold relief in the nature of certiorari to permit the Council, belatedly, to record and issue reasons. The conditions precedent not having been fulfilled, the Council’s decision is not capable of being cured or validated by ex post facto attention to these requirements.

63. I expressly do not decide the matter on the alternative basis propounded by the plaintiffs, that the Council’s reconstitution of the Professional Conduct Committee from January 2016 has made it impossible, as a matter of fact, for reasons now to be given. The evidence does not permit me to determine whether the Committee members had agreed upon their reasons in October 2015 so that they could now set them to writing: compare Civil Aviation Safety Authority v Central Aviation Pty Limited (2009) 179 FCR 554; [2009] FCAFC 137 at [111] – [132]. I also do not have evidence to establish whether any belated articulation of reasons would necessarily be artificial or fictional: compare Phosphate Resources Ltd v Minister for the Environment, Heritage and the Arts (No. 2) [2008] FCA 1521 at [42].

64. No discretionary reason for refusing relief has been demonstrated. It has not been shown, for example, that it would be futile to set aside the Council’s decision or to stay the Tribunal proceedings because the Council would inevitably make the same decision again. Even if that were the case it would be irrelevant to the Court’s exercise of discretion with respect to granting relief in the nature of certiorari. The plaintiffs were entitled by statute to know the reasons why disciplinary proceedings were to be commenced against them, before that happened, in sufficient detail to be able to apply for relief under s 69 Supreme Court Act 1970 (NSW) if it should have then appeared from the reasons that the Council had made its decision contrary to law.

65. It is true that the plaintiffs may soon enough find out why the Council saw fit to commence the disciplinary proceedings by obtaining particulars and written evidence as part of the interlocutory procedures in the Tribunal. However that again is irrelevant to the exercise of the Court’s discretion with respect to the plaintiffs’ present claim for relief. Provision of detailed information concerning the case against them, given in the course of the Tribunal proceedings, is not equivalent to or a suitable substitute for the issuing by the Council of reasons under s 542 prior to commencement in the Tribunal.

Grounds 3, 4 and 5 – Council’s failure to resolve factual issues

66. As a result of reaching the above conclusions on grounds 1 and 2 it is unnecessary to deal with the remaining grounds in the plaintiffs’ summons. I will refrain from doing so because they involve detailed examination of the evidence which the Committee received as a result of the investigation of the complaints. These grounds also address the extensive submissions and counter arguments which were before the Committee. Where there appears to be a clear basis for resolving the administrative review on the issue of failure to give reasons I do not consider it appropriate for the Court also to delve into the volume and detail of the evidence and arguments, all of which is a matter for the Council and, if a valid decision should hereafter be made to institute proceedings, for the Tribunal.

Orders

67. For these reasons the orders of the Court are:

1. Declare that each of the decisions of the defendant, made 15 October 2015, that it was satisfied there is a reasonable likelihood the plaintiffs, respectively, would be found by the Tribunal to have engaged in professional misconduct and to institute proceedings in the Tribunal pursuant to s 537(2) of the Legal Profession Act 2004 (NSW), is void.

2. The defendant by its officers servants and agents is restrained from taking any further steps in the proceedings commenced in the Tribunal in reliance upon the decisions referred to in Order 1.

3. The defendant is to pay the plaintiffs’ costs of the summons.

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Amendments

05 October 2016 - [28] - citation amended.

[37] - grammar corrected.

[45] - citation amended.

[50] - citation amended.

[51] - name corrected.

[54] - grammar corrected.

23 September 2016 - [20] - date corrected.

Decision last updated: 05 October 2016