Practitioner D3 v ACT Civil and Administrative Tribunal
[2015] ACTSC 170
•22 July 2015
SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
Case Title: | Practitioner D3 v ACT Civil and Administrative Tribunal & Ors |
Citation: | [2015] ACTSC 170 |
Hearing Date: | 28 April 2015 |
DecisionDate: | 22 July 2015 |
Before: | Burns J |
Decision: | See [79] |
Category: | Interlocutory application |
Catchwords: | PROFESSIONS AND TRADES – Lawyers – disciplinary action – whether a failure to comply with s 395 (2) Legal Profession Act 2006 (ACT) nullifies proceedings. APPLICATION – Interlocutory Applications – application for leave to amend originating application – application to strike out originating application – application for summary judgment – application to have proceedings in the ACT Civil and Administrative Tribunal permanently stayed – application for a declaration that proceedings in the ACT Civil and Administrative Tribunal constitute an abuse of process. |
Legislation Cited: | ACT Civil and Administrative Tribunal Act 2008 (ACT) s 32 Court Procedures Rules 2006 (ACT) rr 406, 493 (3), 501 Legal Profession (Solicitors) Rules 2007 (ACT) rr 25.1, 39.1 Taxation Administration Act 1999 (ACT) Part 9 |
Cases Cited: | R v Angel [1968] 2 All E.R. 607 R v Lewis [1979] 2 All E.R. 665 |
Parties: | Practitioner D3 (Plaintiff) ACT Civil and Administrative Tribunal (First Defendant) ACT Law Society (Second Defendant) Michael Phelps (Third Defendant) |
Representation: | Counsel Self-represented (Plaintiff) No Appearance (First Defendant) Ms T Dinh (Second and Third Defendants) |
| Solicitors Self-represented (Plaintiff) No Appearance (First Defendant) Phelps Reid Lawyers (Second and Third Defendants) | |
File Number: | SC 36 of 2015 |
BURNS J:
These proceedings arise out of ongoing proceedings in the Australian Capital Territory Civil and Administrative Tribunal (the ACAT) (ACAT Proceedings No OR 13/20) commenced by the second defendant (the Society) seeking disciplinary action against the plaintiff, a legal practitioner (the practitioner), arising out of an application by the practitioner for a First Home Owner Grant. The ACAT proceedings were commenced on 19 June 2013.
On 18 September 2013, the practitioner filed an application in the ACAT to strike out the disciplinary proceedings. The strike out application was heard by Presidential Member Symons on 20 September 2013. On 29 November 2013, Presidential Member Symons ordered that the ACAT proceedings be struck out and dismissed. The Society appealed those orders and, on 22 May 2014, Appeal President Stefaniak allowed the appeal and set aside the orders of Presidential Member Symons striking out and dismissing the ACAT proceedings. Appeal President Stefaniak also made an order pursuant to s 424 of the Legal Profession Act 2006 (ACT) “that the Council’s failure to decide to extend time pursuant to section 395 (2) of the [Legal Profession Act] be disregarded”.
The complaints against the practitioner
I will set out the background of the complaints against the practitioner which are the subject of the current proceedings in the ACAT (the disciplinary proceedings). The proceedings encompass three separate complaints, referred to as grounds.
Ground 1
Ground 1 alleges that the practitioner committed fraud on the Commissioner for ACT Revenue (the Commissioner) in that he, deliberately or recklessly, dishonestly:
(a)obtained a First Home Owner Grant of $7000.00 plus the additional grant of $7000.00 in circumstances where he knew he was not entitled to the grants;
(b)failed to notify the Commissioner of matters required to be disclosed by him, in breach of undertakings and the terms of the Commissioner’s letter to him dated 29 November 2011; and
(c)retained and failed to repay the grants when he knew he was not entitled to obtain and retain them.
The Society alleges that, on 21 August 2011, the practitioner entered into a contract for an off the plan purchase of a property known as 91/23 Macquarie Street, Barton in the ACT. The contract specified that the date for registration of the unit plan was 31 December 2002. Clause 24 of the Special Conditions to the contract provided that completion of the contract “shall be effected within 10 days of written notification from the Seller to the Buyer of the registration of the Units plan”. Clause 34 of the Special Conditions provided that the seller could extend the date for registration in certain circumstances.
The Society alleges that, on 3 September 2001, the practitioner completed and signed an application form for a First Home Owner Grant of $7000.00 and an addendum to the application claiming an additional $7000.00 grant. In each case, the practitioner stated that the intended settlement date was 31 December 2002.
It is alleged by the Society that one of the criteria for obtaining a First Home Owner Grant was that the dwelling to be purchased must be used as the principal place of residence of the recipient of the grant within 12 months of the date of settlement in the case of an established home, or 12 months from the date construction is completed for a new home. It is further alleged that the practitioner was aware of the requirement to notify the Commissioner if any part of the eligibility criteria was not met.
The Society alleges that, by signing the application form, the practitioner made, inter alia, the following declarations and undertakings (the first undertaking):
I have completed and submitted all relevant documents in support of my application and to my knowledge they are true and correct.
I undertake to notify the Commissioner of any notifiable event relevant to the legislation requirements under the First Home Owner Grant Act 2000 within 28 days of the occurrence of this event.
I have read and understood the information prepared by the ACT Revenue Office regarding the conditions of eligibility. I accept that if the conditions are not met, I may not be entitled to receive or retain the grant.
It is further alleged that the addendum to the application concerned an additional grant of $7000.00 available to those purchasing or building a new home. The addendum specified that, to qualify for the additional $7000.00, the applicant must satisfy the eligibility requirements for the First Home Owner Grant. The Society alleges that, by signing the addendum, the practitioner made the following further declarations and undertakings (the second undertaking):
I declare that the information provided above is to my knowledge true and correct.
I undertake to notify the Commissioner for Australian Capital Territory Revenue if any of the eligibility criteria, as declared in this application, are not met. I accept that if the conditions are not met, I may not be entitled to receive or retain the grant.
The Society alleges that, at the time of signing the application and the addendum, the practitioner knew that his eligibility for the grants was conditional upon:
(a)him occupying the property as his principal place of residence within 12 months of settlement; and
(b)settlement occurring on or before 31 December 2002.
It is further alleged that, at the time of signing the application and addendum, the practitioner knew that both the first undertaking and the second undertaking obliged him to notify the Commissioner within 28 days if:
(a)he had not occupied the property as his principal place of residence within 12 months of settlement; and
(b)settlement had not occurred by 31 December 2002.
On 29 November 2001, the Commissioner forwarded a letter to the practitioner advising that payment of the grant would be made on 31 December 2002, and further stated:
If settlement is delayed and does not proceed on 31 December 2002, a period of 20 days from that date will be allowed for settlement to be completed. If the transaction is still not completed by that time, you must advise the Commissioner for ACT Revenue of this and repay the First Home Owner Grant to the ACT Revenue Office.
If any of the details contained in your application change, or if the transaction does not proceed, you must advise the ACT Revenue Office immediately.
It is alleged that, following receipt of this letter, the practitioner knew and understood that:
(a)the criteria for payment of the grant had been varied in that settlement could occur by no later than 20 January 2003, rather than 31 December 2002; and
(b)he had an obligation to notify the Commissioner if a settlement had not occurred by 20 January 2003.
The Society alleges that, on 28 August 2002, the vendor’s solicitor advised the practitioner that, pursuant to clause 34 of the Special Conditions of the contract for purchase, the date for registration of the unit plan had been extended to 30 June 2003. Following receipt of that letter, the Society says the practitioner knew that settlement would not occur until after 30 June 2003, and certainly would not occur by 31 December 2002. Although the complaint is not pleaded in this way, I would also presume that the Society alleges that the practitioner must also have been aware that settlement would not occur by 20 January 2003.
It is alleged that the practitioner dishonestly failed to notify the Commissioner following receipt of the letter of 28 August 2002 from the vendor’s solicitor that settlement would not occur by 31 December 2002, which was in breach of the first undertaking, the second undertaking and the requirements in the Commissioner’s letter to him of 29 November 2001.
On 7 January 2003, the grant money of $14,000.00 was deposited into the nominated joint bank account of the practitioner and his then partner. It is alleged that the receipt of the grants by the practitioner in the circumstances was dishonest.
It is alleged that settlement of the property was delayed and did not occur until 15 October 2004.
The Society alleges that, on or after 20 January 2003, the practitioner dishonestly failed to notify the Commissioner that settlement had not occurred in breach of the first undertaking, the second undertaking and the requirements of the Commissioner’s letter to him of 29 November 2001. It is alleged that the practitioner dishonestly retained and failed to repay the grants to the Commissioner after 20 January 2003 in circumstances where he was not eligible to retain the grants.
It is alleged that, at the time he signed the application and the addendum, and at all other relevant times, the practitioner:
(a)did not intend to occupy the property as his principal place of residence within 12 months of the date of settlement; and
(b)intended to lease the property, as an investment property, as soon as possible after settlement.
It is alleged that the practitioner did not occupy the property as his principal place of residence within 12 months of the date of settlement and that, after 15 October 2005, the practitioner knew that he had not satisfied the residency requirement which was a condition of the payment of the grants, and that accordingly he was obliged to immediately repay the grants to the Commissioner. It is alleged that the practitioner dishonestly failed to notify the Commissioner that the residency requirement had not been, or would not be, complied with by 14 October 2005, which was in breach of the first undertaking, the second undertaking and the requirements in the Commissioner’s letter to him of 29 November 2001. It is further alleged that, after 15 October 2005, the practitioner dishonestly retained the grants and failed to repay them to the Commissioner in circumstances where he was not eligible to retain the grants.
Grounds 2 and 3
Ground 2 alleges that the practitioner breached r 25.1 and r 39.1 of the Legal Profession (Solicitors) Rules 2007 (ACT) (the Solicitors Rules) and breached his undertaking to the Society by failing to advise that the Supreme Court proceedings had been relisted or finalised. Ground 3 alleges a breach of r 39.1 of the Solicitors Rules by making false representations to the Society and attempting to mislead the Society.
The Society alleges that, on 20 February 2006, the Commissioner requested repayment of the grants from the practitioner together with payment of a 100 percent penalty and interest of $597.19. After consideration of the practitioner’s objection to the Commissioner’s decision to withdraw the grant, the Commissioner allowed the objection in part by reducing the penalty from 100 percent to 75 percent of the grant amount.
On 15 February 2008, the practitioner filed an application in the ACT Administrative Appeals Tribunal (now the ACAT) for review of the Commissioner’s decision. This proceeded to hearing before Senior Member Hatch in July 2008. On 6 November 2008, Senior Member Hatch affirmed the decision under review.
On 20 November 2008, the Commissioner filed a complaint with the Society in relation to the practitioner’s conduct.
On 3 December 2008, the practitioner filed an application in this Court for leave to appeal the decision of Senior Member Hatch.
On 8 December 2008, the Society provided the practitioner with a copy of the Commissioner’s complaint.
On 22 December 2008, the Society received a letter from the practitioner in which he informed the Society of the appeal against the decision of Senior Member Hatch and said:
I formally request that this complaint be adjourned until such time that the Supreme Court has determined the issues before it. I have not yet briefed Counsel, but it is my intention to do so in the New Year. I undertake to advise you when the matter has been relisted.
On 22 December 2008, the Society wrote to the practitioner and agreed to defer further consideration of the Commissioner’s complaint pending the resolution of the Supreme Court proceedings and asked the practitioner to advise the Society when that had occurred.
It is alleged that, on 26 November 2009, the Supreme Court proceedings were settled by consent, with the Court ordering on that date and by consent that the decision of Senior Member Hatch be set aside and noted in its orders the parties’ agreement that the practitioner pay the Commissioner the sum of $18,000.00 within 90 days of the date of the orders. It is alleged that the practitioner dishonestly failed to inform the Society that the Supreme Court proceedings had settled, which was in breach of the undertaking given by the practitioner to the Society on 22 December 2008.
On 23 December 2010, having heard nothing further from the practitioner, the Society wrote to the practitioner to enquire as to the status of the Supreme Court proceedings. On 28 January 2011, the practitioner sent an email to the Society in which he stated that the orders of senior Member Hatch were set aside in the Supreme Court by consent, and requested that the complaint by the Commissioner be dismissed and no further action be taken by the Society. The Society alleges that, in making those statements in the email, the practitioner was representing that the orders of Senior Member Hatch had been set aside in circumstances wholly favourable to the practitioner, such that there was no longer any basis for a continued investigation into the Commissioner’s complaint. It is alleged that these representations were, to the knowledge of the practitioner, false or misleading in that the Supreme Court proceedings had in fact been settled on the basis that the practitioner refunded the grants together with an additional sum.
The present proceedings
On 8 February 2015, the practitioner commenced the present proceedings by way of Originating Application seeking orders that the ACAT proceedings be permanently stayed, and also damages and costs. The grounds upon which the practitioner seeks the stay of proceedings, and other orders, are expressed as alleged abuse of process and an error of law by the ACAT “occasioning jurisdictional error”. The first defendant to the proceedings is the ACAT, the second defendant is the Society and the third defendant, Mr Phelps, is a legal practitioner and a principal of the firm which represents the Society in the ACAT proceedings.
On 16 March this year, the Society and Mr Phelps filed an application seeking that the practitioner’s Originating Application be struck out or summarily dismissed, or, in the alternative, that the ACAT and Mr Phelps be removed as parties to the proceedings.
On 2 April this year, the practitioner filed an application seeking orders that he be granted leave to amend his Originating Application.
Finally, on 16 April this year, the practitioner filed an application seeking the following orders:
(a)that judgment in this matter be entered in his favour;
(b)that proceedings number OR 20/2013 before the ACAT as commenced by the Society be permanently stayed;
(c)that a declaration be made that proceedings number OR 20/2013 before the ACAT commenced by the Society and the third defendant are an abuse of process;
(d)that, pursuant to r 493 (3) of the Court Procedure Rules 2006 (ACT), the assessment of damages be conducted at a later time; and
(e)that costs be awarded in favour of the plaintiff on an indemnity basis.
The application by the Society filed 16 March 2015 seeking that the practitioner’s Originating Application be struck out as well as the application of the practitioner filed 2 April 2015 seeking to amend the Originating Application came before me for hearing on 28 April 2015. I may say at the outset that the particulars pleaded by the practitioner in his Originating Application are clearly inadequate, and, indeed, frequently make no sense, or at least no legal sense. I will therefore concentrate on the particulars of the claim which the plaintiff seeks to bring by way of amendment. This was also the approach adopted by the Society and Mr Phelps. The practitioner seeks orders that the proceedings in the ACAT be permanently stayed, a declaration that they are an abuse of process, damages and costs. The particulars of the claim the plaintiff proposes to bring by amendment are:
1. Abuse of process:
Particulars
(a) The Charges (sic) were brought ultra vires of the enabling legislation;
Legal Profession Act 2006
(b) Unacceptable delay in the investigation stage and in bringing the prosecution prejudicing the fairness of the proceedings.
(c) Conduct of the Legal Professional (3rd Defendant) in breaching the Legal Professional Regulations concerning allegations of fraud. Professional Conduct Rules.
(d) Absence of Power under the First Home Owners Grant Act 2000
(e) Charge of fraud not within the powers of the Legal Profession Act 2006
(f) There is no “right of privacy” for members of the Law Council in the voting to authorise an application for Discipline against a Legal Practitioner.
(g) The First defendant erred in permitting an extension of time in characterising the failure to comply with section 395 of the Legal Profession Act 2006 as a procedural omission occasioning an abuse of process.
(h) the First defendant erred in not permitting evidence to be adduced by the Plaintiff before making findings regarding alteration of evidence by Mr Phelps and thus occasioning an abuse of process.
(i) The First Defendant erred in allowing multiple amendments to the claim against the practitioner:
a. Where the evidence was sought to be adduced by subpoena after the charges were filed;
b. Said evidence was not before the Law Society at the time the complaint was authorised;
(j) The Practitioner and Plaintiff (sic) have never had the charges or the amendment to the charges put to him before they were filed with the 1st Defendant and in failing to do so, the practitioner was nor (sic) afforded procedural fairness. The denial of procedural fairness constitutes and (sic) Abuse of Process.
(k) There being no evidence to justify the allegations of fraud or attempted fraud by the Plaintiff at any time in the proceedings before the 1st Defendant making the allegations themselves an Abuse of Process.
(l) The making of false allegations (in particular that the Practitioner had not lived in the Grant Property for a period of 6 months) constitutes and (sic) Abuse of Process.
(m) The application of subpoenas in the Tribunal Proceedings by the 2nd and 3rd defendants, in all the material circumstances particularly regarding the allegation of fraud, was an Abuse of Process by the 2nd and 3rd Defendants.
The proposed amendments to the Originating Application, whilst providing more information than the particulars originally pleaded, are not felicitously drafted. I can, for example, discern no recognisable cause of action pleaded against Mr Phelps. The sloppiness of the drafting reflects poorly on the practitioner, but that is not the issue in these proceedings. Before considering the issues which the practitioner apparently wishes to agitate in the amended pleadings, it may be of some assistance to consider the history of this matter, albeit that it will involve some necessary repetition of the matters referred to above.
A history of the proceedings
On 7 January 2003, a First Home Owner Grant of $14,000.00 was paid to the practitioner pursuant to the First Home Owner Grant Act 2000 (ACT). The application for and receipt of the grant forms the basis of Ground 1 of the disciplinary proceedings against the practitioner in the ACAT. Subsequently, a delegate of the Commissioner for ACT Revenue determined that the practitioner was ineligible to receive that grant on the basis that he had not complied with conditions of the grant. The delegate determined that the grant of $14,000.00 should be repaid, together with a penalty of 75 percent of the grant amount. On 15 February 2008, the practitioner applied to the ACT Administrative Appeals Tribunal for a review of the delegate’s decision. On 6 November 2008, the ACT Administrative Appeals Tribunal affirmed the decision. On 20 November 2008, the Commissioner for ACT Revenue made a complaint (the complaint) to the Society against the practitioner. On 3 December 2008, the practitioner lodged an application for leave to appeal to this Court against the decision of the ACT Administrative Appeals Tribunal of 6 November 2008. On 8 December 2008, the Society wrote to the practitioner enclosing a copy of the complaint and stating that it appeared to raise allegations of dishonesty and waste of taxpayer money by appealing a meritorious decision.
The Society received a letter from the practitioner on 22 December 2008 advising that the ACT Administrative Appeals Tribunal decision had been appealed and was now before the Supreme Court. It had been stood over generally by Master Harper on 12 December 2008, with liberty granted to the parties to apply to the listing clerk to have the matter relisted. In his letter, the practitioner requested that the complaint be adjourned until such time as the Supreme Court had heard the appeal, and undertook to advise the Society when the matter was relisted. The Society responded on 22 December 2008 agreeing to defer further consideration of the complaint pending the completion of the appeal in the Supreme Court, and requesting the practitioner to advise the Society when this had occurred.
By letters dated 23 December 2010 addressed to the practitioner and to the Commissioner, the Society enquired about the status of the Supreme Court appeal. The practitioner notified the Society by letter dated 28 January 2011 that orders had been made in the Supreme Court, by consent, setting aside the orders of the ACAT (previously the ACT Administrative Appeals Tribunal). He requested that the complaint by the Commissioner be dismissed.
The Society then requested a copy of the consent orders from the Commissioner and from the practitioner. The practitioner did not reply. The Commissioner notified the Society on 3 March 2011 that, pursuant to Part 9 of the Taxation Administration Act 1999 (ACT), the Commissioner was not able to provide a copy of the consent orders. On 12 April 2011, the Society again wrote to the practitioner requesting that he provide a copy of the terms of settlement, consent agreement and final orders made by consent in the Supreme Court by 29 April 2011. On 20 April 2011, the practitioner provided the Society with a copy of the consent orders, which were described as being entered on a without prejudice and no admission basis. The consent orders provided:
The Court orders, by consent, as follows:
(1) That the decision of the Administrative Appeals Tribunal dated 6 November 2008 in matter AT 32 of 2008 be set aside; and
(2) That there be no order as to costs.
The court notes the following:
(1) The agreement of the parties that the appellant pay to the respondent the sum of $18,000.00 within 90 days of these orders;
(2) The agreement of the parties that the respondent provide to the appellant a letter confirming that upon settlement of the payment of $18,000.00 by the appellant to the respondent the respondent will do all things necessary to procure the removal of any statutory charge over the property known as Unit 58, Block 6, Section 17, Barton in the Australian Capital Territory; and
(3) The parties intend to enter into a Deed to reflect those and other matters.
Further correspondence occurred between the parties from 20 April until 31 August 2011, at which time Mr Michael Phelps was appointed by the Society to investigate the complaint. Thereafter, there was further correspondence between the parties, with the Society seeking the consent of the practitioner to obtain the documents that had been before the ACT Administrative Appeals Tribunal. This consent was given by the practitioner on 12 September 2012. A large quantity of documents was provided to the solicitors for the Society.
On 19 June 2013, Mr Phelps or his firm notified the practitioner that, on 17 June 2013, the Council of the Society had resolved to apply to the ACAT for disciplinary orders in relation to the complaint. On 19 June 2013, the solicitors for the Society lodged an application for disciplinary action against the practitioner seeking findings of professional misconduct and orders pursuant to s 425 of the Legal Profession Act. That application alleged that the practitioner had engaged in an attempt to defraud the Commissioner for ACT Revenue.
On 18 September 2013, the practitioner lodged an application in the ACAT seeking to strike out the Society’s application. The application to strike out was heard on 20 September 2013, and was opposed by the Society. The application to strike out was based on three grounds, only one of which was accepted by Presidential Member Symons. The ground which was accepted by Presidential Member Symons was that a failure by the Society to comply with the terms of s 395 (2) of the Legal Profession Act meant that the complaint “cannot be dealt with and is unsustainable in law”. Presidential Member Symons then dismissed the proceedings, relying on the provisions of s 32 of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (the ACAT Act), which permits the ACAT to dismiss a “frivolous or vexatious” application.
It is appropriate at this point to refer to the provisions of s 395 (2) of the Legal Profession Act:
395 Complaints made more than 3 years after conduct
(1)A complaint may be made about conduct to which this chapter applies irrespective of when the conduct is alleged to have happened.
(2)However, the complaint cannot be dealt with (otherwise than to dismiss it or refer it to mediation) if the complaint is made more than 3 years after the conduct is alleged to have happened, unless the relevant council for the person about whom the complaint is made decide that –
(a)it is just and fair to deal with the complaint having regard to the delay and the reasons for the delay; or
(b)the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.
The provisions of s 424 of the Legal Profession Act are also relevant:
424 ACAT power to disregard procedural lapses
The ACAT may order that a failure by the relevant council to observe a procedural requirement in relation to a complaint before an application is made to the ACAT is to be disregarded if satisfied that the parties to the hearing have not been prejudiced by the failure.
The Society appealed the decision of Presidential Member Symons and on 22 May 2014. Appeal President Stefaniak upheld the appeal and dismissed the practitioner’s strike out application. In doing so, Appeal President Stefaniak noted that the Society accepted:
(a)that the complaint made by the Commissioner related to conduct of the practitioner which had allegedly occurred more that 3 years before the complaint was made; and
(b)that the Council of the Society had not made a decision to proceed with the matter under s 395 (2) of the Legal Profession Act before the disciplinary proceedings were commenced in the ACAT.
Appeal President Stefaniak determined that the failure of the Council to make a decision as required by s 395 (2) was a failure to observe a procedural requirement in relation to the complaint which should have been disregarded by virtue of s 424. In that context, he made an order pursuant to s 424 that the Council’s failure “to decide to extend time” pursuant to s 395 (2) was to be disregarded.
Whilst the appeal from the decision of Presidential Member Symons was pending, on 23 January 2014 the practitioner lodged a complaint with the Society regarding the professional conduct of Mr Robert Reis, the Professional Standards Director of the Society, and Mr Phelps. The Society dismissed these complaints, advising the practitioner by letter dated 14 January 2015.
On 22 May 2014, a subpoena (subpoena 1320b) was issued at the request of the practitioner seeking production by the Society of:
All minutes of meetings, including the names of members of Council in attendance, concerning the decision of the ACT Law Council and/or Executive to commence proceedings in ACAT against the Practitioner D3.
All documents, correspondences (sic) and communications where the ACT Law Society, its officers or assigns authorised the allegation of “attempted fraud” to be made against the Practitioner D3 and the provision of instructions for same to Solicitor Mr Michael Phelps.
On 11 June 2014, the Society filed an interim application in the ACAT seeking orders that subpoena 1320b be set aside completely, and amending the application for disciplinary action to include two new grounds alleging breaches of the Solicitors Rules by the practitioner allegedly breaching an undertaking to the Society’s solicitors and making false representations and attempting to mislead the Society. On 21 August 2014, Presidential Member Spender granted the Society leave to amend the application for disciplinary proceedings. On 10 June 2015, Presidential Member Spender ordered that subpoena 1320b be set aside completely on the grounds that neither category of document sought by the practitioner was relevant to any facts in issue in the disciplinary proceedings, and further that documents within the second category sought by the practitioner were protected by “legal professional privilege”.
On 7 July 2014, the Society issued five subpoenas (the Society’s subpoenas) in the disciplinary proceedings directed to:
(a)ActewAGL Distribution;
(b)ACTEW Water (as it was previously named);
(c)the Australian Electoral Commission;
(d)All Homes Pty Ltd; and
(e)the Road Transport Authority.
On 9 July 2014, the practitioner filed an application to set aside the Society’s subpoenas. Contrary to the directions of the ACAT, the practitioner failed to file submissions in support of his application to set aside the Society’s subpoenas and, on 17 April 2015, the ACAT dismissed his application and granted the parties access to the material produced under the subpoenas.
As I have already noted, the present proceedings in this Court were commenced on 6 February 2015. The Originating Application filed by the practitioner was expressed to be pursuant to s 86 of the ACAT Act, however, it was brought without leave of this Court as required by that section. The proposed amendments to the Originating Application remove any reference to s 86 of the ACAT Act, instead relying on the supervisory jurisdiction of this Court.
On 12 March 2015, the practitioner served the Society and the third defendant with notices to produce, requiring them to produce the following documents:
1. The unedited and complete copy of the Minutes of the meeting of the Council of the ACT Law Society (inclusive of the mover, any seconder and all those in attendance at the meeting) which resolved to instruct you to make an Application to the 1st Defendant.
2. A copy of the instrument or instruments where the Council of the ACT Law Society provided instructions to:
a. Appeal the decision of Presidential Member Symons in matter D3 before the 1st Defendant (ACAT)
b. Instruct the allegation of fraud be made against the Plaintiff.
3. Any and all evidence that supports the allegation that the Plaintiff “obtained” a First Home Owners (sic) Grant fraudulently.
Particulars: Ground 1 of amended complaint dated 19 June 2014.
4. Any and all evidence that supports the allegation that the Plaintiff “retained and failed to repay” a first (sic) Home Owners (sic) Grant fraudulently.
Particulars: Ground 1 of amended complaint dated 19 June 2014.
On 17 March 2015, the Society and the third defendant filed the application to strike out these proceedings.
On 26 March 2015, the practitioner served the Society and the third defendant with a Notice to Admit Facts setting out 51 propositions which the Society and third defendant were called upon to admit. Many of those propositions can only be described as extraordinary, requiring the Society and the third defendant to admit matters which would plainly be the subject of client professional privilege or which would require them to reach a conclusion of law.
As I have already noted, on 9 April 2015, the practitioner filed an application for leave to amend the Originating Application.
The competing applications to amend and to strike out
The law relating to the application to amend is not in dispute. Rule 501 of the Court Procedures Rules 2006 provides that all necessary amendments of a document must be made for the purpose of deciding the real issue in the proceedings, correcting any defect or error in the proceedings or avoiding multiple proceedings. Rule 502 provides that, at any stage of proceedings, the court may, on application or on its own initiative, give leave for a party to amend an originating process in the way it considers appropriate. It was accepted by the parties that I have the power to grant the practitioner leave to amend the Originating Application.
The Society and Mr Phelps opposed the application to amend on the grounds that, even if the amendments are allowed, these proceedings should nevertheless be struck out as an abuse of process. They contend that these proceedings are properly characterised as an improper attempt by the practitioner to appeal various interim decisions of the ACAT in the disciplinary proceedings. It is therefore necessary to consider the application to amend in the context of the history of the matter in the ACAT, and the nature of the general allegations made in the proposed amended Originating Application. The Society and Mr Phelps accepted that, if I refuse the application to amend and I strike out the practitioner’s current pleadings, I have a discretion to allow the practitioner an opportunity to replead his case.
As I have already noted, the overarching complaint made by the practitioner is that the disciplinary proceedings in the ACAT are an abuse of process. In the proposed amendments, the practitioner apparently seeks to also argue that the investigation carried out by the Society and Mr Phelps, and upon which the disciplinary proceedings are founded, was also an abuse of process. It is, in my opinion, impossible to rationally argue that the investigations undertaken by the Society and by Mr Phelps constitute an abuse of the processes of the ACAT. I accept that questions relating to the conduct of any investigation by the Society or Mr Phelps may become relevant to determining whether the proceedings before the ACAT are an abuse of process, but that is different to suggesting that the investigations themselves constitute an abuse of the processes of the ACAT.
The Society and Mr Phelps accepted that this Court has the power to supervise proceedings in the ACAT, which includes a power to stay proceedings in an appropriate case: Walton v Gardiner (1993) 177 CLR 378. The majority of the High Court in that case (Mason CJ, Deane and Dawson JJ) accepted that an order staying proceedings before an inferior tribunal will only be made “in an exceptional or extreme case” and that a factor to be taken into consideration is whether the jurisdiction of the tribunal is “protective – i.e. protective of the public”. The Society and Mr Phelps argue, however, that, in the current proceedings, the practitioner is attempting to appeal from a number of interlocutory rulings made by the ACAT where an appeal is not otherwise available. This Court should be vigilant to discourage the fragmentation of ACAT proceedings by appeals against such orders being made under the guise of an application for a stay of proceedings based on alleged abuse of process.
Under the umbrella of abuse of process, the practitioner proposes to argue that the disciplinary proceedings were brought “ultra vires of the enabling legislation”. By this, I understand him to be alleging that the provisions of s 395 (2) of the Legal Profession Act were not satisfied at the time that the disciplinary proceedings were commenced in the ACAT. It appears to me that the practitioner wishes to challenge the correctness of the decision made by Appeal President Stefaniak that the commencement of the disciplinary proceedings in circumstances where the Council of the Law Society had not made a decision under s 395 (2) was a failure to observe a procedural requirement which could be disregarded by virtue of the provisions of s 424 of the Legal Profession Act. The use of the term “ultra vires” by the practitioner supports that contention. It is difficult to see how the allegation that the disciplinary proceedings were commenced in circumstances where the Council of the Law society had not made a decision under s 395 (2) could be a particular of an allegation that the disciplinary proceedings are an abuse of process if the practitioner is not challenging the decision of Appeal President Stefaniak.
The challenge contemplated to the jurisdiction of the ACAT based upon the commencement of the disciplinary proceedings where the requirements of s 395 (2) of the Legal Profession Act have not been satisfied is, in reality, an application for a declaration that the proceedings in the ACAT are a nullity.
Although the issue was not fully argued before me, the suggestion that the disciplinary proceedings are a nullity because the provisions of s 395 (2) were not satisfied before they were commenced is not without merit, at least with respect to Ground 1. It is eminently arguable that the failure to satisfy the provisions of s 395 (2) before commencing the proceedings in the ACAT is more than a mere procedural omission. On its face, s 395 protects practitioners from the requirement to address complaints relating to events that occurred more than three years prior to the complaint. It is subject to exceptions which require the Council of the Law Society to consider issues of fairness to the practitioner and the public interest. In the absence of a determination by the Council of the Law Society that one of the exceptions applies, the Legal Profession Act forbids the commencement of disciplinary proceedings. This is analogous to requiring the consent of the Attorney-General to commence criminal proceedings. In the context of criminal proceedings commenced without a required consent to prosecute, it has been held that the proceedings are a nullity: R v Warn [1968] 1 All E.R. 339; R v Angel [1968] 2 All E.R. 607. The same has been held to be true where criminal proceedings were commenced outside a time limit provided by statute: R v Lewis [1979] 2 All E.R. 665. It is arguable that the provisions of s 395 (2) do not simply dictate how complaint proceedings may be commenced, but whether they can be commenced at all.
The current pleadings and the proposed amendments are inadequate with respect to such a claim, and the current pleadings should be struck out and the proposed amendment refused. I will, however, grant the practitioner leave to replead this aspect of his case. It is true that, in one sense, this is akin to an appeal from the decision of Appeal President Stefaniak, but, if the proceedings before the ACAT are a nullity, the practitioner should not be required to expend further time and money participating in those proceedings. It is in everybody’s best interests to determine this issue expeditiously.
A complicating circumstance is that the disciplinary proceedings involve three grounds of complaint, and on the face of it only Ground 1 is affected by the s 395 (2) issue. Grounds 2 and 3 concern alleged conduct on the part of the practitioner which occurred within three years of the commencement of the disciplinary proceedings. The practitioner, in oral argument, submitted that the investigation conducted by the Society into the complaint made by the Commissioner was tainted by the non-compliance with s 395 (2). This appears to raise the question of whether conducting an investigation into a complaint to which s 395 applies constitutes “dealing with” the complaint for the purposes of s 395 (2). Even if that be the case, there is still a further question as to what extent that affects the continued hearing of Grounds 2 and 3 in the ACAT. Neither the current pleadings nor the proposed amended pleadings deal with these issues at all. The practitioner will be granted leave to replead his case on this issue.
The second particular of the allegation that the disciplinary proceedings are an abuse of process which the practitioner proposes advancing is that delay in the investigation of the complaint against him and in bringing the disciplinary proceedings has prejudiced the fairness of those proceedings. This particular is also pleaded in the original pleadings. Delay is a well recognised basis for an application for a stay of proceedings, although it must be recognised that delay in itself will rarely, if ever, justify a stay of proceedings. As I understand it, the practitioner sought a stay of the proceedings in the ACAT on the basis of this alleged delay, which was refused. It is undesirable to fragment the proceedings in the ACAT by entertaining what is, in effect, an appeal from an interim decision of that body. If the practitioner is dissatisfied with the outcome of the ACAT proceedings, it is a matter he may seek to agitate on appeal. This aspect of the practitioner’s claim will be struck out and he will be refused leave to amend or replead it.
The third particular of the allegation that the disciplinary proceedings are an abuse of process is the conduct of Mr Phelps “in breaching the Legal Professional Regulations concerning allegations of fraud”. This pleading is entirely opaque. It does not comply with the requirements of r 406 of the Court Procedures Rules 2006, which requires a pleading to contain a statement in summary form of the material facts on which a party relies. This allegation is part of a collateral attack by the practitioner on the decision to commence the disciplinary proceedings, and seeks to raise issues of the instructions provided to Mr Phelps by the Society, and whether Mr Phelps has complied with his personal professional obligations concerning the pleading of allegations of fraud. This avenue of attack on the decision to commence the disciplinary proceedings is doomed. The practitioner seeks to examine the content of the instructions provided to Mr Phelps and his firm by the Society, which would clearly breach client legal privilege. The right of the Society and Mr Phelps to assert this privilege was upheld in the ACAT by Deputy President Spender as recently as 10 June 2015. The proposed pleadings do not assert, nor did the practitioner in his submissions assert, that client legal privilege has somehow been lost with respect to this material. This portion of the existing pleadings will be struck out, and the application to amend the pleadings by including this particular of the claim will be refused. The practitioner will not be granted leave to replead on this issue.
The next particular of abuse of process which the practitioner proposes to rely upon is “Absence of Power under the First Home Owners (sic) Grant Act 2000”. This is also a particular pleaded in the original pleadings. Neither the original pleadings nor the proposed amendments set out any basis for a suggestion that the provisions of the First Home Owner Grant Act 2000 has any relevance to an application to stay the disciplinary proceedings. In his written submissions in support of his application to amend and opposing the strikeout application, the practitioner has made no mention of this aspect of his claim. This part of the practitioner’s current and proposed amended pleadings will be struck out, and I decline to grant him leave to replead this issue.
The next particular pleaded by the practitioner is “Charge of Fraud not within the powers of the Legal Profession Act 2006”. This is, again, an opaque piece of pleading which cannot be allowed to stand. It is found in both the original pleading and in the proposed amended pleading. It would indeed be surprising if the provisions of the Legal Profession Act did not permit the Society to commence proceedings alleging that a legal practitioner had engaged in fraud. I am satisfied that this should be struck out and the practitioner should not be permitted to replead this issue.
The next particular pleaded by the practitioner submits that there is no “right of privacy” for members of the Law Council in the voting to authorise an application for disciplinary proceedings. As the practitioner has pleaded none of the necessary facts which may allow a court, or other parties, to make sense of this pleading, it should be struck out in its current form. It appears that this is an attempt by the practitioner to re-agitate contentions raised by him unsuccessfully in the ACAT. If the proceedings in the ACAT continue, and if the practitioner is dissatisfied with the outcome of those proceedings, this is an issue which he may raise on appeal. It is not appropriate that this Court deal with that issue at this time and in the context of alleged abuse of process. This should also be struck out and the practitioner is refused leave to replead on this issue.
The next particular pleaded by the practitioner is that the ACAT erred in characterising the failure to comply with s 395 of the Legal Profession Act as a procedural omission. This is simply a restating of the argument that the proceedings are a nullity, and is not properly a particular of an allegation of abuse of process. The pleading should be struck out in its present form, but the practitioner should be permitted to replead this allegation as part of the claim that the disciplinary proceedings are a nullity.
The next particular pleaded by the practitioner under the heading of abuse of process is that the ACAT erred in not permitting the practitioner to adduce evidence before making findings concerning the alleged alteration of evidence by Mr Phelps. As I understand it, the complaint that Mr Phelps altered evidence is based upon the redaction of the names of members of the Council of the Law Society from copies of records of the Society provided to the practitioner concerning the decision of the Council to commence disciplinary proceedings. The practitioner is concerned that certain members of Council would have had a conflict of interest, and the redaction of the names of members of Council from the documentation provided to him does not allow him to reassure himself that this is not the case. In his oral submissions, the practitioner said that all he requires is an assurance that those members nominated by him were not present and voting. No facts are pleaded to enable this Court or the other parties to understand this pleading. This also appears to be an attempt by the practitioner to challenge rulings made in the disciplinary proceedings. These pleadings will be struck out and the practitioner will not be granted leave to replead this aspect of his case. I will, however, make some further comments about this issue below.
The next particular pleaded is that the ACAT erred in allowing multiple amendments to the proceedings where “the evidence was sought to be adduced by subpoena after the charges were filed” and “said evidence was not before the Law Society at the time the complaint was authorised”. Yet again, no facts are pleaded which would enable this Court or the other parties to understand this aspect of the practitioner’s claim. This also appears to be an attempt by the practitioner to challenge rulings made in the course of the disciplinary proceedings. It is inappropriate that this Court be asked to determine the correctness of the ACAT rulings in proceedings such as these. This aspect of the practitioner’s claim will be struck out and he will not be granted leave to replead.
The practitioner next complains that he has been denied procedural fairness, which he says constitutes an abuse of process. This aspect of his claim is based on the assertion that “the charges” and “the amendment to the charges” were never put to him before proceedings were commenced in the ACAT. It is inappropriate that this Court be asked to rule upon these issues at this time. If the proceedings continue in the ACAT, and if the practitioner is dissatisfied with the result, he may raise this issue on appeal. This particular will be struck out and the practitioner will be refused leave to amend or replead on this issue.
The next two particulars may conveniently be dealt with together. The practitioner alleges abuse of process by the Society making allegations of fraud or attempted fraud in the circumstances where the allegations are, he says, false and there is no evidence to support them. It is clearly inappropriate for this Court to be asked to determine at this time, prior to any hearing in the ACAT, whether there is evidence to support an allegation of fraud. It is also impossible, in the absence of hearing the evidence, to determine whether any such allegation is false. These particulars will be struck out and the practitioner will be refused leave to amend or replead on these issues.
The final particular which the practitioner proposes to rely upon as evidencing an abuse of process is the application for subpoenas by the Society on 7 July 2014. This is clearly an attempt by the practitioner to re-agitate the submissions he put to the ACAT with respect to the subpoenas in 2014. It is inappropriate for this Court to be called upon, at this time, to determine whether it was appropriate for those subpoenas to be issued. This portion of the practitioner’s claim will be struck out and he will be refused leave to replead.
A matter of concern
The efforts of the practitioner to obtain documents from the Society concerning those who were present and who voted at the meeting of the Council of the Law Society, during which it was resolved to commence the ACAT proceedings, is based upon a concern that one or more of those councillors present may have had a conflict of interest such that the decision to commence the ACAT proceedings may be tainted. I express no opinion about the availability of any entitlement of the practitioner to challenge the validity of the decision of the Council to commence the ACAT proceedings on this basis. It does seem to me, however, that the practitioner should be entitled to know whether any of the nominated Council members were present during the discussion of the proposal to commence proceedings, and whether any of those members voted on the resolution.
Conclusion
The formal orders I make are:
(a)the grounds pleaded in the practitioner’s Originating Application dated 6 February 2015 be struck out;
(b)the application to amend by the practitioner is refused; and
(c)the practitioner is granted leave to replead his claim, limited to a claim for a declaration that proceedings number OR 20/2013 in the ACAT are a nullity by reason of the provisions of s 395 (2) of the Legal Profession Act 2006 (ACT) not being satisfied at the time of the commencement of those proceedings.
| I certify that the preceding seventy-nine [79] numbered paragraphs are a true copy of the Reasons for Judgment of his Honour Justice Burns. Associate: Date: 22 July 2015 |
10
2
6