Obrart v Grego (No.2)

[2017] FCCA 3278

FEDERAL CIRCUIT COURT OF AUSTRALIA

OBRART v GREGO (No.2) [2017] FCCA 3278

Catchwords:
PRACTICE AND PROCEDURE – Implied incidental power of the Federal Circuit Court to regulate conduct of legal practitioners who appear before it – judgment given on the hearing of a creditor’s petition in which it was found onus shifted to legal practitioner to prove no impropriety but such onus was not discharged – opportunity given to legal practitioner by way of administrative hearing to tender material to discharge burden of the absence of impropriety - whether material put before the Court at the administrative hearing but which was not before the Court at the hearing of the creditor’s petition sufficient to discharge burden – material insufficient to discharge burden.

Cases cited:

De Pardo v Legal Practitioners Complaint Committee  (2000) 97 FCR 575

Applicant: NATALIE OBRART

Respondent: TONY GREGO

File Number: SYG 2268 of 2016

Judgment of: Judge Manousaridis

Hearing date: 29 August 2017

Date of Last Submission: 29 August 2017

Delivered at: Sydney

Delivered on: 29 August 2017

REPRESENTATION

Counsel for the Applicant: Dr C. Birch SC

Solicitors for the Applicant: JSM Lawyers & Notaries

No appearance required on behalf of the Respondent

ORDERS

1. No orders were made.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 2268 of 2016

NATALIE OBRART

Applicant

And

TONY GREGO

Respondent

REASONS FOR JUDGMENT

(Revised from transcript)

1. On 9 May 2017 I made orders in the matter Obrart v Grego[1] (Judgment) in which, among other things, I dismissed the creditor’s petition that Ms Obrart filed against Mr Grego.

   [1] [2017] FCCA 929

2. On the day on which I delivered the Judgment, I informed the legal representative of Ms Obrart who appeared by telephone, that I would be listing the matter for a hearing to consider whether the matter should be referred to the Legal Services Commission or whatever the relevant regulatory body is. I also indicated that if there were cogent material before me that indicated that documents had not been fabricated, as I had found in the Judgment that there was a basis for finding, although I made no finding that that was the case, then I would consider evidence and submissions about this question.  

3. The matter came before me on 14 June 2017 where Ms Obrart was represented by Dr Birch SC.  I must record that I took the view that Mr Grego had no further interest in this aspect of the matter, although I had not given the question of jurisdiction any great thought as to what I indicated I was willing to pursue at the time I made the orders.  I did have regard to the decision of the Full Federal Court in De Pardo v Legal Practitioners Complaint Committee.[2] I relied on the judgment French J (as his Honour then was), and in particular on the following passage from his Honour’s judgment:[3]

   The power in a federal court to regulate the conduct of legal practitioners appearing before it to the extent necessary to ensure the observance of their duties to the court and the integrity of its procedures is an implied incidental power.

   [2] (2000) 97 FCR 575 at [53]

   [3] (2000) 97 FCR 575 at [53]

4. I took the view that this Court has an implied incidental power to, at least, inquire into whether a legal practitioner whose conduct in proceedings before this Court is in question in some sort of way, and whether the conduct is a matter that should at the very least be referred to the relevant regulatory body.  

5. As I said, I heard the matter on 14 June 2017 where material was provided to me. I did not treat it as a hearing as such.  In my view it was in the nature of an administrative hearing, so I did not formally read the affidavit that was provided to me, although I certainly read the material that was provided.  For reasons which are not necessary for me to set out, the matter was adjourned for further hearing to today. Before today further material was provided to me and I today heard extensive submissions from Dr Birch SC. Dr Birch SC also brought before the Court an expert in forensics, Mr Towers to answer any questions I may have had. I asked questions and Mr Towers answered them. 

6. Towards the end of Dr Birch SC’s submissions, I indicated that I would not be referring the matter to the Legal Services Commission. I so indicated, not because I am satisfied that there was no impropriety or nothing worthy of being referred, but because I do not have it in my heart to do so.  The Judgment itself and the steps Ms Obrart has taken to seek to vindicate her position by bringing the matter before this Court, by itself, is a matter that has caused her distress and I personally, as a human being, do not wish to add to that distress by referring the matter elsewhere.  But whether I should express the opinion that I am satisfied that there has been no impropriety is not a matter of the heart, but a matter of the mind.  And in that regard, I must repeat that I have made no finding that Ms Obrart has engaged in any impropriety.  The issue I had to consider in the Judgment was whether there was a ground for finding impropriety. And the significance of that was to shift the onus on Ms Obrart to show an absence of impropriety.  On the evidence in that case, I found the burden was not discharged.

7. Now, there was evidence, and substantial evidence put before me, which is certainly more than the evidence that was before me at the hearing of the creditor’s petition.  But the material before me does not reach that level which satisfies me so as to issue a judgment which in some general way vindicates or makes findings in favour of Ms Obrart.  I will briefly identify what my concerns were and these will be conclusory and without any underlying reasons. 

8. I cannot discount the possibility that a letter dated 26 September 2012 providing a costs estimate of $319,000 had not been created and provided to the costs assessor. It is quite possible, and if the matter were the subject of a full investigation, that a fact-finder would find that no such thing occurred, but I, myself, given the limited nature of the hearing, where there is only one side of the story provided, cannot be so satisfied. What I just said about that concern applies to the next two concerns. 

9. I cannot discount the possibility that a costs disclosure letter disclosing a cost estimate of $319,000 was not sent to Mr Grego. Although there is very strong evidence to suggest that a document indicating a cost estimate of $319,000 was created on 21 November 2012, and that costs estimate found itself in two documents, one dated 26 September 2012, one dated 21 November 2012, I cannot discount the possibility that the document dated 21 July 2012[4] was the subject of some amendment in July 2013, whatever that amendment might be or had been. Finally, I cannot discount the possibility that Ms Obrart did not respond to clear allegations of fabrication for reasons that arguably constitute an admission. 

   [4] That is an error. It should be a reference to the letter dated 21 November 2012.

10. I understand that my not being willing to give a judgment to the effect that, having heard all of the evidence, there is no impropriety on the part of Ms Obrart, is a problem because there is the Judgment which raises at the level of possibility that Ms Obrart may have done so. However, there is an answer to that difficulty.  One is Ms Obrart can, in fact, request that I refer the matter to the Commissioner or the appropriate regulatory authority, where that matter will be the subject of a full investigation and presumably a full determination by that investigating body. In the absence, which I find there is, of clear evidence of conduct which was appropriate, the only way that issue can be fully investigated is by that means. That is a matter in the hands of Ms Obrart. All I can say is that, on the material that is before me, I cannot be satisfied to the level of conviction to which I think I need to be satisfied to find that Ms Obrart has provided to me evidence which would discharge the burden which in the Judgment I held the material before me then did not discharge.

I certify that the preceding ten (10) paragraphs are a true copy of the reasons for judgment of Judge Manousaridis

Date: 22 December 2017