Re CDE
[2019] TASSC 43
•18 October 2019
[2019] TASSC 43
| COURT: | SUPREME COURT OF TASMANIA |
| CITATION: | Re CDE [2019] TASSC 43 |
| PARTIES: | CDE |
| FILE NO: | 2578/2018 |
| DELIVERED ON: | 18 October 2019 |
| DELIVERED AT: | Hobart |
| HEARING DATE: | 22 July 2019 |
| JUDGMENT OF: | Blow CJ |
| CATCHWORDS: |
Procedure – Costs – Parties and non-parties – Other parties – Application for admission to legal profession – Costs of professional regulatory bodies objecting to application.
Ex parte Lenehan (1948) 77 CLR 403; Gersten v Law Society of New South Wales [2003] NSWCA 39; Doherty v Law Society of New South Wales [2003] NSWSC 464; Mavrakis v Law Society of New South Wales [2008] NSWSC 816, referred to.
Aust Dig Procedure [1511]
REPRESENTATION:
Counsel:
Applicant: In person Objectors: C Gunson SC
Solicitors:
Objectors: Tremayne Fay Rheinberger
| Judgment Number: | [2019] TASSC 43 |
| Number of paragraphs: | 30 |
Serial No 43/2019 File No 2578/2018
In the matter of the Legal Profession Act 2007 and in the matter
of an application for admission of CDE to the legal profession
| REASONS FOR JUDGMENT | BLOW CJ 18 October 2019 |
1 On 26 September 2018, CDE applied to this Court for an order that he be admitted to the legal profession. On 5 December 2018 the Legal Profession Board of Tasmania ("the Board") and the Law Society of Tasmania ("the Society") objected to his admission. Each filed a notice of objection that asserted that he was not a fit and proper person to be admitted to the legal profession. After several months, CDE decided not to proceed with his application. On 26 June 2019 he filed a "Notice of Discontinuance" which said, "Take notice that the applicant wholly discontinues the proceeding for admission to practice." The two objectors have now applied for an order that CDE pay their costs in relation to the discontinued admission application. That application is opposed.
2 CDE lives in South Australia. He provided a lot of information about his background in an affidavit that he affirmed on 15 October 2018 and subsequently filed. In that affidavit he revealed the following:
•
In July 2001 he pleaded guilty to three counts of incitement to commit grievous bodily harm. These crimes were committed in 1999. The victim was his then wife's lover. He was sentenced by a judge of the District Court of South Australia to five years' imprisonment, with a non-parole period of 18 months. He was released on home detention after serving approximately 11 months in custody. He said that the offending occurred at a time when he was suffering from major depression and anxiety, and gave a lot of detail about his personal circumstances at that time.
•
In July 2010 he sought an intimation from the South Australian Board of Examiners ("the SABE") pursuant to s 15 of the Legal Practitioners Act 1989 (SA) with a view to applying for admission in that State. He was not provided with a positive intimation of suitability, and did not proceed with any application.
•
In July 2014 he made a second request for such an intimation. He subsequently asked that his request be treated as an application for admission. He was invited to appear before the SABE to answer questions regarding his application. He appeared with senior counsel. In February 2015 he was notified that the SABE would not recommend his admission to the Supreme Court of South Australia. No reasons were provided. He withdrew his application.
•
In April 2015 he made an application for admission as a legal practitioner in the Northern Territory. The day after he made that application he was assaulted by a police officer in South Australia, suffered a spinal injury, and was hospitalised. The "NT Board" (presumably the Legal Practitioners Admission Board of the Northern Territory) decided that, as a result of disclosures made by him, it would not support his admission. He withdrew his application because he was not physically capable of any full-time work.
• He is a disability support pensioner. •
He has been an "insolvent under administration" twice, first from 12 December 2003 to 17 September 2007, and then from 3 September 2012 to approximately 4 June 2014.
2 No 43/2019
• He has been a director of three companies that have gone into liquidation or administration. He said that one of them, Pescana Pty Ltd, owned a restaurant/café business and other property, was deregistered in May 2007, and was placed in administration by his former wife with a view to satisfying a property settlement order made by the Family Court. He said that all its creditors were paid either in full or in part. He said that he had been a director of Kingsford Olives Pty Ltd; that it was deregistered in May 2006, and that that resulted from the managing director misappropriating money. The third company that he mentioned was Kingsford Olives Distributors Pty Ltd. He said that it was deregistered in December 2005 as a consequence of the same misappropriation. • He has convictions for a drink driving offence, driving without a licence, several speeding offences, parking in a loading zone longer than permitted, contravening a no stopping sign, and managing a corporation whilst disqualified. • He has never engaged in legal practice. • In 2004 he was charged with forgery, but in 2005 the complaint was withdrawn because "evidence existed of both human and computer error". • In November 2007 he was charged with dishonestly taking property without the owner's consent, but the complaint was withdrawn. It related to taking his own legal files from his former solicitor's office. • In May 2009 he was arrested and charged for disorderly behaviour and failure to provide his name. He said that the complaints were withdrawn, that the police conceded that he did not commit any offence, and that a costs order was made in his favour. 3 There were other matters that CDE disclosed in his affidavit. I have listed only the disclosed matters that seem to me to be significant. The admission application and other documents, including the affidavit containing the various disclosures, were served on the Board and the Society on 29 November 2018. The application had been listed for hearing on 14 December 2018. Not surprisingly, the Board and the Society decided to object to CDE's admission.
4 On 5 December 2018 the solicitors for the Board wrote to CDE. Their letter included the
following:
"You carry the onus of establishing that you are a fit and proper person to be admitted to the legal profession. The onus is a heavy one to discharge particularly in light of your prior conduct.
In our view your affidavit in support of your application for admission is wholly to:
inadequate to justify the Court exercising its power to admit you.
1 Paragraph 24(i) – You have not disclosed any documents relevant to your application of 12 July 2010 to the South Australian Board of Examiners (SABE) seeking an intimation of suitability for admission;
2 Paragraph 24(ii) – You have not disclosed any documents relevant to your submission to SABE on 21 July 2014.
3 Paragraph 24(iii) – you have not disclosed any documents relevant to your application for admission to the legal profession in the Northern Territory on 2 April 2015.
Each of those applications are [sic] directly relevant to the Court's assessment of whether you are a fit and proper person to be admitted as a legal practitioner. We are
3 No 43/2019
of the view that the Court will most likely find that your lack of proper disclosure is,
of itself, a disqualifying factor for admission.
We also note the following:1 The Board and the Society are likely to incur significant costs to undertake an investigation of matters relevant to your admission;
2 The hearing will be several days [sic] and will involve considerable preparation time.
3 Whilst it is impossible to be definitive at this stage, it is not inconceivable that the Board's and Society's costs may be in the order of $50,000 - $100,000 if the matter proceeds to a final hearing.
4 The usual practice on applications for admission, even where successful, is for the applicant to be ordered to pay the regulator's costs of and incidental to the application (see, for example, Mavrakis v The Law Society [2008] NSWSC 816).
If having considered your position, and within the next 7 days, the Board and the
Society would not oppose you being granted the following orders:1 That the applicant have leave to discontinue the originating application with no order as to costs.
If you do not seek to discontinue your application within the next 7 days and at some future point wish do so, [sic] the Board and Society will consider whether the public interest would be better served by having the issues relating to whether you are a fit and proper person determined by the Court. Further, if your application for admission is dismissed, the Board and the Society will rely on this letter in support of a submission that the public interest warrants you being ordered to pay the Board's and Society's costs on an indemnity basis.
Finally, if you elect not to discontinue your application for admission, the Board and the Society will consider making an application for security for costs requiring you to pay into court such amount as the court considers appropriate."
5 The hearing of the admission application did not proceed on 14 December 2018. The objectors and CDE had the matter removed from the list for that day.
6 On 7 February 2019 the solicitors for the objectors wrote to CDE asking whether he intended to pursue his application, and saying that they would be applying for security for costs if he did.
7 On 18 February 2019 CDE wrote to the solicitors for the objectors offering to provide copies of documents relating to the applications in South Australia and the Northern Territory, arguing that there was no basis for an order for security for costs, and proposing a meeting to discuss resolution of the matter. His letter was acknowledged but no response was forthcoming. He sent a follow-up email to the objectors' solicitor on 21 May 2019.
8 On 22 May 2019 she responded by email rejecting the proposal for a meeting, telling CDE that he bore the onus of satisfying the Court that he was suitable for admission, advising that she was instructed to apply for security for costs, and advising that costs would be sought if he subsequently withdrew his application for admission.
9 CDE responded by email on 28 May 2019 requesting reasons for the decision to oppose his application, and foreshadowing a possible application for a judicial review.
10 On 29 May 2019 the objectors filed an interlocutory application seeking an order that CDE provide security for costs in the sum of $50,000, and for a stay until that security was given. No affidavits in support of that application were ever filed.
4 No 43/2019
11 There appear to have been no subsequent developments until CDE filed his notice of discontinuance on 26 June 2019. He did not have the right to unilaterally discontinue his admission application. That is because of r 377 of the Supreme Court Rules 2000. That rule reads as follows:
"(1) A proceeding or any part of a proceeding not commenced by writ may be discontinued —
(a) by leave of the Court or a judge; or (b) with the consent of all other parties.
(2) Leave may be granted on any terms as may be just."
12 The admission application was listed for mention before me on 22 July 2019. On that day I made an order granting CDE leave to discontinue the originating application with effect from 26 June 2019, that being the day of his notice. Counsel for the objectors then made the application for costs, and made oral submissions relating to it. CDE opposed the application, made written submissions in opposition to it, and filed an affidavit relating to the costs issue.
13 As CDE has pointed out, an application for admission is not a piece of litigation between parties. The objectors are not respondents to his application. Their role is to assist the Court in making a determination as to his fitness to practice. However the two objectors both constitute "parties" for the purposes of the Supreme Court Civil Procedure Act 1932 and the Supreme Court Rules. That is because s 3(1) of that Act defines "party" to include "every person with notice of or attending any proceeding, although not named on the record or in the process". The two objectors were both served with notice of the admission application, and both attended the proceeding on 22 July 2019 when I gave leave to discontinue.
14 The Court has the power to make orders for costs pursuant to s 12 of the Supreme Court Civil Procedure Act. That section reads as follows:
"(1) Subject to the provisions of this Act and the Rules of Court, and to the express provisions of any special statute which is not expressly or impliedly repealed by this Act, the Court and every judge thereof, whether sitting in court or in chambers, shall have jurisdiction to award costs in all causes and matters whatsoever (including proceedings for, or on, or in connection with an order of review under the Judicial Review Act 2000 or a writ of habeas corpus and causes and matters dismissed for want of jurisdiction) instituted in the Court or brought before the Court or a judge thereof by or against any party or person, including the Attorney-General and any body politic.
(2) Subject as provided in subsection (1) the costs of all proceedings whatsoever in the Court, including the administration of estates and trusts, shall be in the discretion of the Court or judge, and the Court or judge shall have full power and authority to determine by whom or out of what estate, fund, or property, and to what extent such costs are to be paid.
(3) The Court or any judge thereof may award costs as between solicitor and client in any case in which such costs may be awarded by the Court or a judge thereof at the commencement of this Act."
15 Counsel for the objectors submitted that neither the Board nor the Society should be put to the expense of responding to admission applications without orders for costs being made. The Board's funding comes from the Solicitors' Guarantee Fund under s 358(2)(b) of the Legal Profession Act 2007. Its funds are public money, though not taxpayers' money. The Society is largely funded by its members, who are members of the Tasmanian legal profession. It performs a great number of functions for the benefit of the public, including the administration of the system of practising certificates and the supervision of solicitors' trust accounts: Legal Profession (Prescribed Authorities)
5 No 43/2019
Regulations 2018. It acts in the public interest, as well as in the interest of the legal profession, in scrutinising admission applications and sometimes objecting to them.
16 I have not been able to find any case in which an order for costs has been either made or refused in relation to an admission application that was discontinued or dismissed. However there have been a number of cases in which legal practitioners have been ordered to pay the costs of professional bodies when questions of their fitness to practice have arisen.
17 Ex parte Lenehan (1948) 77 CLR 403 concerned an application for admission as a solicitor by a man who had stolen money in the course of his employment in the 1920s. His application for admission was made in 1946, and was refused by the Full Court of the Supreme Court of New South Wales. He successfully appealed to the High Court. The majority (Latham CJ, Dixon and Williams JJ) held that he had become a fit and proper person to be admitted as a solicitor. The Incorporated Law Institute of New South Wales was represented at the hearing of the appeal. It was not a party to the appeal, but appeared by counsel to assist the court. Its counsel argued that the appeal should be dismissed. Even though the appeal succeeded, the appellant was ordered to pay the Law Institute's costs. Latham CJ, Dixon and Williams JJ said at 425:
"The Incorporated Law Institute of New South Wales has taken part in these proceedings for the purpose of assisting the courts in elucidating the facts and applying appropriate principles in the decision upon the appellant's application. The Institute is not a party to the proceedings, but it would not be right to require the Institute to bear the cost of performing this duty to the public as well as to the legal profession. It is proper to order that the appellant pay the costs of the Institute in this Court and in the application in the Supreme Court."
18 Gersten v Law Society of New South Wales [2003] NSWCA 39, concerned an application by a solicitor who had been suspended from practising as an attorney in Florida. Pursuant to a provision in the Supreme Court Rules 1970 (NSW), he was automatically suspended from practice, but a judge had the power to lift that suspension. At first instance, his application to lift the suspension was unsuccessful: Gersten v Law Society [2001] NSWSC 748, 53 NSWLR 206. On appeal, the Court of Appeal made an order lifting his suspension: Gersten v Law Society of New South Wales [2002] NSWCA 344, 56 NSWLR 16. However the Court of Appeal ordered the solicitor to pay the Law Society's costs of the proceedings at first instance. The court (Handley and Stein JJA and Davies AJA) said, at [4]:
"[4] ... The Law Society however appeared in the proceedings to safeguard the standards of the profession in the public interest and for the protection of the public. ... We have not been persuaded that the Law Society stepped outside this role. It follows that this was not adverse litigation in the ordinary sense."
19 In Doherty v Law Society of New South Wales [2003] NSWSC 464, that Law Society had cancelled a solicitor's practising certificate and refused an application for its renewal. The solicitor successfully appealed. Even though his appeal was successful, Studdert J ordered the solicitor to pay the Law Society's costs. His Honour said at [17] and [19]:
"[17] My conclusion is that the Society acted in a responsible manner from the time that resolutions were first passed ... until the time that the hearing concluded. It seems to me that in its conduct of these proceedings the Society has served the public interest. As I observed in my earlier judgment ... the need to protect the public was a major consideration for the Court in determining the appropriate outcome on the summons, and the manner in which the Society conducted the proceedings assisted the Court in what was perceived by the Court to be the appropriate outcome.
...
[19] It is to be recognised that the nature of the proceedings before me differs from the nature of the proceedings in Gersten, but I am satisfied that the present proceedings were prompted by the responsible cancellation of a practising certificate
6 No 43/2019
and by the responsible refusal of an application for a practising certificate. It seems to me that what can be drawn from Gersten is that the Court should consider favourably an application such as has been made by the Society in the present case, provided that the Court is satisfied that in its conduct of the proceedings in which the application for costs is made the Society has been seen to have conducted itself in the public interest."
20 In Mavrakis v Law Society of New South Wales [2008] NSWSC 816, a legal practitioner had successfully appealed against the suspension of his practising certificate. Even though he had been successful, Hidden J ordered him to pay the costs of the Law Society. His Honour referred to Lenehan, Gersten and Doherty, and concluded, at [14]:
"[14] ... The usual approach, whereby the successful practitioner still pays the costs of the professional body, could be productive of significant hardship. That may well be true of the present case. Nevertheless, the public policy behind the usual approach is clear and I see no good reason to depart from it."
21 CDE sought to distinguish these authorities on the basis that his application was an application for admission, not an application for re-admission or restoration of a practising certificate. I reject that submission. The two objectors were acting in the public interest for the purpose of assisting the Court in precisely the same way as the professional bodies in the cases I have referred to.
22 CDE also argued that the objectors had not acted reasonably. I reject that submission. When they were served with the admission application and the supporting affidavit, they did not have time to conduct appropriate investigations before the day when the admission application had been listed. The only reasonable course was for them to file notices of objection, commence investigations, and keep open minds as to whether their objections should be withdrawn. The stance taken by the objectors in correspondence was reasonable. CDE was warned that if he proceeded he might end up being ordered to pay the objectors' costs.
23 CDE argued that the Court has no power to make an order for security for costs in relation to an admission application, and that the application for security for costs was made unreasonably.
24 The Court has the power to order individuals to give security for costs both pursuant to r 828(1) of the Supreme Court Rules and pursuant to an inherent power of the Court. Rule 828(1) provides as follows:
"(1) The Court or a judge, on the application of a party to proceedings, may order an opposite party to give security for the costs of the party applying for security and that the proceedings against the party applying for security be stayed subject to the provision of security if the opposite party from whom security is sought is a plaintiff, applicant, defendant pursuing a counterclaim or respondent pursuing a cross application and if —
(a) the opposite party is ordinarily resident out of Tasmania; or (b) the opposite party is a corporation; or (c)
the opposite party, not being a party who sues in a representative capacity, sues only for the benefit of some other person and there is reason to believe that the opposite party does not have sufficient assets in Tasmania to pay the costs of the party applying for security; or
(d)
a proceeding by the opposite party in another court, in Tasmania or elsewhere, for the same claim is pending; or
(e)
the address of the opposite party is not stated, or is not correctly stated, in the originating process; or
(f)
the opposite party has changed address after the commencement of the proceedings in order to avoid the consequences of the proceeding; or
7 No 43/2019
(g) under any law the Court may require security for costs."
25 As an admission application is not adversarial litigation, it probably cannot be said that either of the objectors was an "opposite party" within the meaning of r 828(1). There are reported cases in England as to the meaning of "opposite party", but I am unaware of any case in which the meaning of that term has been considered in non-adversarial proceedings.
26 However I have no doubt that the Court has the power to make an order for security for costs in non-adversarial proceedings. It is well established that a power to order security for costs exists as part of every superior court's inherent power to regulate its own procedure, regardless of the existence or scope of any rules conferring similar powers: J H Billington Ltd v Billington [1907] 2 KB 106 at 109, 111; Lines v Tana Pty Ltd [1987] VR 641 at 642; O'Callaghan v Duhst [1931] SASR 369 at 373; August Investments Pty Ltd v Poseidon NL (1971) 2 SASR 65 at 69; Rajski v Computer Manufacture & Design Pty Ltd [1982] 2 NSWLR 443 at 447; O'Neill v De Leo (1993) 2 Tas R 225 at 229-230. According to Professor G E Dal Pont (Law of Costs, 3rd ed, LexisNexis Butterworths 2013, at [28.6]):
"Superior courts possess, without the aid of an authorising provision, inherent jurisdiction to regulate their own procedure and in so doing prevent abuse of their process. As the chief purpose of an order for security for costs is to prevent the court's processes being frustrated, manifold judicial references link the court's power to order the security costs to the court's inherent power to regulate its own procedure."
27 Having regard to the authorities, and to the rationale for the existence of the inherent power to order security for costs, there is no reason to think that the Court lacks the power to make an order for security for costs in favour of either the Board or the Society in relation to an objection to an admission application.
28 From the material before me, it appears that the objectors were in a strong position to seek an order for security for costs. CDE lives in another State. He is a disability support pensioner. He has been bankrupt twice. He provided a lot of information in his affidavit that warranted investigation. The costs of a defended hearing would probably have been enormous. I have no information as to the extent of CDE's assets, save that they do not preclude him from receiving his pension. I am certainly not persuaded that it was unreasonable for the objectors to apply for security for costs, having regard to the circumstances known to me.
29 I am satisfied that the objectors acted responsibly in objecting to CDE's application and in applying for security for costs. They took part in the proceedings for the purpose of assisting the Court. It would not be right to require them to bear the cost of performing their public duties. It follows that the costs should be borne by CDE.
30 For these reasons, I order that the applicant pay the costs of the objectors of and incidental to the originating application and the interlocutory proceedings.
0
7
10