Queensland Building Services Authority v Dibblebrook Pty Ltd
[2010] QCAT 214
•20 May 2010
| CITATION: | Queensland Building Services Authority v Dibblebrook Pty Ltd [2010] QCAT 214 |
| PARTIES: | Queensland Building Services Authority |
| v | |
| Dibblebrook Pty Ltd |
| APPLICATION NUMBER: | QD034-09 |
| MATTER TYPE: | Occupational Regulation Matters |
| HEARING DATE: | Decision on the papers |
| HEARD AT: | BRISBANE |
| DECISION OF: | P McGrath - Member |
| DELIVERED ON: | 20 May 2010 |
| DELIVERED AT: | BRISBANE |
ORDERS MADE: | (1) That the firm VC Cantanzaro cease to represent the Respondent in these proceedings (2) That the Respondent advise the Tribunal and the Authority within 14 days of the details with new legal representative, if any (3) That each party bear their own costs of and incidental to the application |
| CATCHWORDS : | Application for directions, Rule 13 of the Solicitor’s Rules, independence and the avoidance of personal bias, section 100 of the Queensland Civil and Administrative Tribunal Act 2009, costs order not warranted. |
APPEARANCES and REPRESENTATION (if any):
| APPLICANT: | Queensland Building Services Authority. |
| RESPONDENT: | Dibblebrook Pty Ltd |
REASONS FOR DECISION
This is an application for miscellaneous matters brought by the Queensland Building Services Authority (the Authority) against Dibblebrook Pty Ltd (the Respondent) the Authority seeks the following directions:
(1)That the firm VC Cantanzaro cease to represent the Respondent in these proceedings
(2)That the Respondent advise the Tribunal and the Authority, within 14 days of the details of its new legal representative if any
(3)That the firm VC Cantanzaro pay the Authority costs of and incidental to the making of this application.
This history of the matter is that the Authority filed an application for disciplinary proceedings against the Respondent in the Commercial and Consumer Tribunal on 24 November 2009 alleging that during its 2008 – 2009 license year the Respondent exceeded its allowable annual turnover by $2,383,610.23 without first notifying the Authority or obtaining the Authorities approval.
The Respondent filed a response through its solicitor V C Catanzaro and Directions hearings have been held and a further directions hearing is scheduled for 20 May 2010.
The Authority has filed submissions with the Tribunal in support of the application for Directions and the Respondent’s solicitor has provided submissions in response.
In its submissions the Authority summarises its case as follows:
that the Respondent is currently represented by Dorothy Switala, an employee of V C Catanzaro (also known as Vincenzo Cateno Catanzaro Solicitor and Registered Tax Agent). The Authority makes the application for Directions on the basis that it has become apparent to the Authority that Mr Catanzaro:
(a) Will be required to give evidence material to the determination of contested issues before the Queensland Civil and Administrative Tribunal (“the Tribunal”) in these proceedings
(b) Has personal interests and issue in this matter
Mr Cantanzaro who filed an affidavit in the proceedings deposes that his occupation is Solicitor or Accountant, he further deposes that his firm undertakes legal and accounting services for the Respondent. In particular Mr Cantanzaro executes independent review reports (“IRR’s”) for inclusion as part of the Respondent’s license renewal applications to the Authority. The Respondent carries on business trading as M W F Plumbing which operates as a plumbing contractor in the town of Stanthorpe and also operates a retail plumbing business from premises situated in Stanthorpe.
Mr Cantanzaro in his affidavit has certified the Respondent’s annual IRR’s since about the year 2001. The Authority submits that Ms Melanie Hanlon, a legal officer and employee of the Authority, spoke to Mr Cantanzaro by telephone on 20 January 2010 and during that conversation Mr Cantanzaro told Ms Hanlon he held instructions to act on behalf of the Respondent in the matter and he also offered Ms Hanlon potential reasons for the occurrence of the alleged breach which involved his own conduct.
The Authority referred to various rules of the Legal Profession (Solicitors) Rule 2007 the (“Solicitor’s Rules”) in relation to the suitability of Mr Cantanzaro to continue to act for the Respondent in the proceedings before the Tribunal. The Authority submits that as an officer of the Court, a lawyer’s duty owed to the Court and the Tribunal “override the duties owed by a lawyer to a client or other persons that duties to the Court, and the Tribunal specifically require:
(a) candour or fairness in the conduct of legal process and proceedings
(b) the exercise of objective and independent judgement in representing a client and upholding their professional responsibilities
(c) that he or she avoid waste in terms of cost and the unnecessary use of the Tribunal’s time.”
It is further submitted that a lawyer has a duty to exercise skill and care in acting for a client and must act in good faith and with absolute fairness and openness towards the client.
10. Rule 13 of the Solicitor’s Rules deals with independence and the avoidance of personal bias. It provides:
“13.1 A solicitor must not act as a mere mouth piece of the client or of the instructing legal practitioner, must exercise the forensic judgements called for during the case, independently after appropriate consideration of the clients and the instructing solicitors wishes, where practicable. The term “forensic judgements” is defined in the Solicitors Rules –
“forensic judgements” means the decision of the solicitor made in the course of the case but does not include a decision as to
(a) The commencement of proceedings
(b) The joiner of parties
(c) Omissions or concessions of fact
(d) Amendments of pleadings
(e) Undertakings to a court
(f) A plea in criminal proceedings, but doesn’t include advice to given to assist the client or instructing solicitors to make such decisions.
It is further submitted that it is a fundamental fiduciary duty that the lawyer must avoid a conflict between their duty of the client and their own interests. Rule 9 of the Solicitor Rules provides:
“9.1 A solicitor must not, in any dealings with a client
9.1.1 Allow an interest in the interest of an associate of the solicitor to conflict with the client’s interests
9.1.2 Exercise any undue influence intended to dispose the client to benefit the solicitor or associate in excessive the solicitor’s fee or remuneration for the legal services provided to the client
9.2 A solicitor must not accept instructions to act or continue to act for a person in any matter when the solicitor is or becomes aware that the persons interests in the matter is or would be in conflict with the solicitor’s own interests or in the interest of an associate.”
11. The Solicitors rule defines the term associate as follows:
“Associate” in reference to a solicitor means:
(a) A partner employee or agent of a solicitor or the solicitors law practice
(b) A corporation or partnership in which the solicitor has a material beneficial interest
(c) A member of the solicitors immediate family
(d) A member of the immediate family of a partner of the solicitors law practice.
12. It was submitted that further by the Authority that delegating work to an employee lawyer will not resolve the lawyer from a breach of fiduciary duty.
13. In relation to Mr Cantanzaro’s availability as a material witness the Authority submitted that there is various Judicial Authority for the principle that:
“A lawyer must not accept a retainer in which there is reason to believe that he or she will be required to give evidence material to determination of contested issues before the court. If this becomes apparent during the course of proceedings the lawyer should withdraw but should arrange for an independent lawyer to take over the matter.”
14. The Authority submits that Mr Cantanzaro will be called as a material witness at the hearing of this matter. He will be required to give evidence on deposed matters in relation to elements of the alleged breach, the subject of the disciplinary application, as well as matters concerning an alleged defence of the breach.
(1) The 2008 IRR – Mr Cantanzaro will be examined about the information he certified, the basis of why he certified the IRR and the way he did, and his opinion on how the IRR should have been interpreted by the Authority
(2) The 2009 IRR – Mr Cantanzaro will be examined about the information he certified.
15. The Authority submitted that the circumstances are not exceptional and the hearing date has not yet been set in the proceedings giving the Respondent adequate time to obtain new legal representation.
16. The Authority submits that the Tribunal has several expressed powers allowing it to make decisions with respect to matters of legal representation. In particular section 43 of the QCAT Act, and it is also submitted that the express provisions do not provide an exhaustion of the relevant circumstances to be considered by the Tribunal. It is further submitted that the Tribunal necessarily has implied jurisdiction in this case to ensure that the Tribunal’s objects of fair and just dealings in this matter are met, and that it is further submitted that the Tribunal impliedly has the power to determine which legal representatives may represent a party in matters of conflict of interest in/or duties which are raised in the proceeding.
17. In the response to the submissions made by the Authority the Respondent, through its solicitor, opposes the order sought by the Applicant and submits whilst Mr Cantanzaro may be required to give evidence on behalf of the Respondent, it denies that Mr Cantanzaro has personal interest/issue which is
(a) not properly particularised
(b) Scandalous and offensive
The Respondent admits the various Solicitors Rules referred to by the Authority but in the main says that the submission amounts to no more than a “text book statement” which contains no material allegation against the Respondent or its advisor/s.
18. The submissions on behalf of the Respondent go on to say that the issues are complex and that Mr Cantanzaro and members of his firm have expertise in the matters to be determined, further that the authority can not dictate to the Respondent where to seek alternate legal advice as was suggested by the authority in its submissions.
19. The Respondent further submits that the Tribunal is constrained by the expressed provisions of the statute by which it was established or empowered and that the Tribunal has no inherent or “implied” jurisdiction.
20. The Queensland Civil and Administrative Tribunal was established by the Queensland Civil and Administrative Tribunal Act 2009 and came into effect on 1 December 2009. The objects of the Act are contained in section 3, which states:
(a) The object of the Act is to establish an independent Tribunal to deal with the matters it is empowered to deal under this Act or an enabling Act and
(b) To have the Tribunal deal with matters in a way that is accessible, fair just, economical, informal and quick;
21. In dealing with legal representation before the Tribunal, section 43 states:
(1) The main purpose of this section is to have parties represent themselves unless the interests of justice require otherwise.
(2) In a proceeding, a party—
(a) may appear without representation; or
(b) may be represented by someone else if—
(i) the party is a child or a person with impaired capacity; or
(ii) the proceeding relates to taking disciplinary action, or reviewing a decision about taking disciplinary action, against a person; or
(iii) an enabling Act that is an Act, or the rules, states the person may be represented; or
(iv) the party has been given leave by the tribunal to be represented.
(3) In deciding whether to give a party leave to be represented in a proceeding, the tribunal may consider the following as circumstances supporting the giving of the leave—
(a) the party is a State agency;
(b) the proceeding is likely to involve complex questions of fact or law;
(c) another party to the proceeding is represented in the proceeding;
(d) all of the parties have agreed to the party being represented in the proceeding.
22. There is no dispute in this case that the Respondent is entitled to be represented by a lawyer in these proceedings. The question remains of course as to who that lawyer should be.
23. Section 62 of the QCAT Act deals with the making of directions, it states:
(1) The tribunal may give a direction at any time in a proceeding and do whatever is necessary for the speedy and fair conduct of the proceeding.
On this basis it may be suggested that the application filed by the Authority seeking a direction that the firm VC Cantanzaro cease to represent the Respondent in these proceedings; that the Respondent advise the Tribunal and the authority within 14 days of the details of its new legal representative, if any; and that the firm VC Cantanzaro pay the authorities costs of and incidental to the making of the application are directions within the meaning of section 62.
Section 62 goes on to state that:
(6) The tribunal may act under this section on the application of a party to a proceeding or on the tribunal’s own initiative.
(7) The tribunal’s power to act under this section is exercisable
only by—
(a) the tribunal as constituted for the proceeding; or(b) if the tribunal has not been constituted for the proceeding—a legally qualified member, an adjudicator or the principal registrar.
24. Even if the directions sought by the Applicant Authority do not fall within the purview of the section dealing with directions, to my mind the Authority could seek an injunction pursuant to section 59 of the QCAT Act. That section states:
(1) The tribunal may, by order, grant an injunction, including an interim injunction, in a proceeding if it is just and convenient to do so.
…
(3) The tribunal may act under subsection (1) on the application of a party to the proceeding or on its own initiative.
(4) The tribunal’s power to act under subsection (1) is exercisable only by a judicial member.
25. I am satisfied that the application for directions is amply covered by section 62(1). In particular the reference to making a direction that is necessary for a speedy and fair conduct of a proceeding.
26. It is clear that the solicitor, Mr Cantanzaro, acted in an accounting/financial advisory capacity for the Respondent over a number of years, as well as his firm acting for the Respondent in a legal sense. Up until this time the solicitor should have been aware that he may be called to give evidence of his involvement in the company and its dealings with the Authority which has lead to the application for disciplinary action being brought. It is clear that there is a significant conflict of interest between the solicitor Mr Cantanzaro, continuing to represent the company either directly or through an employee of his firm and to act as an accountant/financial advisor to the company during the course of the proceedings as well as being available to give evidence of his dealings with the company and the Authority over a long period of time.
27. I find that the application is properly brought and that the Tribunal has all necessary power available to it pursuant to section 62 of the QCAT Act to make the directions sought by the applicant. I then turn to the question of costs, the Applicant Authority, in its application, sought that the firm VC Cantanzaro pay the Authorities cost incidental to the making of this application. In its submission the Authority submitted that the Tribunal’s power to award costs in the circumstances lies in section 71 of the Commercial and Consumer Act 2003 (now repealed); that section states:
(1) In a proceeding, the tribunal may award the costs it considers appropriate on—
(a) the application of a party to the proceeding; or
(b) its own initiative.
(2) The costs the tribunal may award may be awarded at any stage of the proceeding or after the proceeding has ended.
(3) If the tribunal awards costs during a proceeding, the tribunal may order that the costs not be assessed until the proceeding ends.
(4) In deciding whether to award costs, and the amount of the costs, the tribunal may have regard to the following—
(a) the outcome of the proceeding;
(b) the conduct of the parties to the proceeding before and during the proceeding;
(c) the nature and complexity of the proceeding;
(d) the relative strengths of the claims made by each of the parties to the proceeding;
(e) any contravention of an Act by a party to the proceeding;
(f) for a proceeding to which a State agency is a party, whether the other party to the proceeding was afforded natural justice by the State agency;
(g) anything else the tribunal considers relevant.
28. However, in the alternative section 103 in the QCAT Act provides:
(1) If the tribunal considers a representative of a party to a proceeding, rather than the party, is responsible for unnecessarily disadvantaging another party to the proceeding as mentioned in section 102(3)(a), the tribunal may make a costs order requiring the representative to pay a stated amount to the other party as compensation for the unnecessary costs.
(2) Before making a costs order under subsection (2), the tribunal must give the representative a reasonable opportunity to be heard in relation to making the order.
29. The Authority submits that a need to make the application could have been avoided by the firm’s prudence and diligence in upholding its professional obligations. Consequently it is appropriate in this case that the firm pay the Authority’s costs of and incidental to making this application.
30. Section 100 of the QCAT Act states:
“Other than as provided under this Act or an enabling Act, each party to a proceeding must bear the party’s own costs for the proceeding.”
Section 102 allows the awarding of costs if the Tribunal considers the interest of justice required to make the order. Subsection 102 (3) states:
In deciding whether to award costs under subsection (1) or (2)
the tribunal may have regard to the following—
(a) whether a party to a proceeding is acting in a way that unnecessarily disadvantages another party to the proceeding, including as mentioned in section 48(1)(a) to (g);
(b) the nature and complexity of the dispute the subject of the proceeding;
(c) the relative strengths of the claims made by each of the parties to the proceeding;
(d) for a proceeding for the review of a reviewable decision—
(i) whether the applicant was afforded natural justice by the decision-maker for the decision; and
(ii) whether the applicant genuinely attempted to enable and help the decision-maker to make the decision on the merits;
(e) the financial circumstances of the parties to the proceeding;
(f) anything else the tribunal considers relevant.
31. In response to the application for costs, the Respondent submits that the application for costs should be dismissed and that the Applicant should pay the Respondent’s costs because the Applicant has failed to demonstrate any basis for VC Cantanzaro seeking to act in reliance on vague assertions, unparticularised allegations, statements of opinion and textbook statements on general legal principles. It was further submitted that the application of the submissions are embarrassing and amounts to an abuse of the Tribunal’s process, namely by interfering with the Respondent’s right to select and be represented before the Tribunal by the legal practitioner of its choice.
32. Whilst I have found that the application by the Authority has regard to the Respondent being represented by a solicitor other than VC Cantanzaro solicitors, I do not consider that the actions of the Respondent’s solicitor Mr Cantanzaro or of any of his employees in relation to these proceedings warrant a making of an order for costs against the Respondent’s solicitors firm. Neither do I consider that any order for costs should be made in favour of VC Cantanzaro and Associates against the Authority. I prefer to rely on the provisions of section 100 of the QCAT Act, stating as it does, that each party should bear their own costs unless there are particular circumstances that should warrant otherwise. I do not find that any such circumstances have been made out in this case.
33. The orders in respect of the application are as follows:
(1)That the firm VC Cantanzaro cease to represent the Respondent in these proceedings.
(2)That the Respondent advise the Tribunal and the Authority within 14 days of the details of their new legal representative, if any.
(3)That each party bear their own costs of and incidental to the application.
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