Roberts v Financial Planning Association of Australia Limited
[2007] VSC 472
•10 October 2007
| IN THE SUPREME COURT OF VICTORIA | Not Restricted | |
AT MELBOURNE
PRACTICE COURT
No. 8092 of 2007
| GREGORY ROBERTS | Plaintiff |
| v | |
| FINANCIAL PLANNING ASSOCIATION OF AUSTRALIA LIMITED | Defendant |
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JUDGE: | KAYE J | |
WHERE HELD: | Melbourne | |
DATE OF HEARING: | 10 October 2007 | |
DATE OF JUDGMENT: | 10 October 2007 | |
CASE MAY BE CITED AS: | Roberts v Financial Planning Association of Australia Limited | |
MEDIUM NEUTRAL CITATION: | [2007] VSC 472 | |
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PRACTICE COURT – Application for interlocutory injunction to restrain pending disciplinary proceedings – Whether lack of adequate notice of charges – Defendant proposing that same tribunal hear separately two complaints against plaintiff – Whether serious question of apprehended bias – Rights of review – Balance of convenience – Whether injunction should be granted at preliminary stage of disciplinary process.
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Mr M.S. Osborne | Moray & Agnew |
| For the Defendant | Mr G.H. Livermore | Holding Redlich |
HIS HONOUR:
The plaintiff is a member of the defendant, the Financial Planning Association of Australia Limited. On 6 July of 2007, the plaintiff received notification from the Chief Executive Officer of the defendant of charges which were to be brought against him under the constitution of the defendant in respect of complaints by three former clients of the plaintiff, namely Ken and Frances Langdon, secondly, Vincent and Carol Wood and the Wood Retirement Fund, and thirdly, Trevor and Joyce Pollard.
On 28 August, the plaintiff commenced these proceedings by originating motion against the defendant claiming interlocutory and permanent injunctions restraining the disciplinary committee of the defendant from proceeding with those charges first, unless and until the defendants provide further particulars of the charges in response to the plaintiff's request dated 3 July and, secondly, restraining the disciplinary commitment from hearing the charges in respect of Langdon, Wood and Pollard otherwise than by conducting separate hearings in respect of each of the complainants before differently constituted disciplinary committees. On 3 October, the plaintiff issued the summons which is now before me seeking an interlocutory injunction.
The background facts of the matter can be shortly stated. The plaintiff's solicitors, on receiving the notice of charges, sent a letter to the defendant seeking, amongst other matters, that the three complaints be heard separately. Subsequently, the plaintiff on 3 July served requests for particulars in respect of each of three sets of charges. The defendant's solicitors responded by letter dated 20 July stating that the plaintiff was not entitled to the further particulars sought but that the defendant would, in due course, provide a statement of material facts.
On 25 July, the defendant's solicitor wrote a further letter agreeing to adjourn the charges in respect of the Pollard matter pending the completion of proceedings issued by the complainants against the plaintiff in the Federal Court. The defendant's solicitors further stated in their letter that they did not consider that the Wood and Langdon matters needed to be considered by different boards.
Following that letter there was further correspondence between the parties relating to that issue. Ultimately, on 14 September, the defendant's solicitor sent to the plaintiff's solicitor a letter which contained amended charges and the statement of material facts which had been foreshadowed. In that letter the defendant's solicitors stated:
"It is proposed that the Wood matter will be heard first with the hearing of the Langdon matter to commence at the conclusion of the hearing of the Wood matter."
The plaintiff responded to that letter by a letter dated 19 September arguing that the statement of material facts was still inadequate, and also contending that the Wood and Langdon complaints should be heard by separately constituted disciplinary tribunals. Subsequently the defendant's solicitors have notified the plaintiff's solicitors that the Wood matter is to be heard on 24 October followed by the Langdon matter on 25 October.
In this proceeding Mr Osborne, who appeared on behalf of the plaintiff, has submitted that the foreshadowed proceedings would be a breach of the plaintiff's right to a hearing by way of natural justice. He submitted that the plaintiff's claim was based on two juridical foundations; first, arising from the contract between the plaintiff and the defendant constituted by the plaintiff subscribing to the defendant's constitution; and secondly, arising from his rights under s.4 of the Administrative Law Act. He submitted that if the proceeding before the tribunal were to take place without the provision of the further particulars, the plaintiff would not have had adequate notice of the charges against him so that he would be unable to make proper defence to them.
Secondly, it was submitted that if the two sets of charges were heard before the same tribunal, such hearing would be infected by apparent bias. In other words, that there would be a reasonable apprehension in the minds of a fair minded observer that the tribunal which heard the second matter may have been adversely affected in its views in respect of the plaintiff, and the complaints against the plaintiff, by hearing the evidence in respect of the first matter, the Wood matter.
In response, Mr Livermore of counsel, who appears on behalf of the defendant, has submitted, firstly, that the proceeding before me is defective. He particularly submitted that the originating motion does not set out any basis or cause of action upon which the injunctions are sought. Secondly, he submitted that there is not a serious issue to be tried in respect of the particulars which have been provided by the defendant to the plaintiff of the charges against the plaintiff. He submitted that the plaintiff has had more than sufficient notice to meet the requirements of the rules of natural justice.
Thirdly, Mr Livermore submitted that there is no basis to enjoin the tribunal proceeding to hear the two matters sequentially, that is, the Wood and the Langdon matters. He submitted that there is no proper basis upon which it could be said that, if the tribunal proceeded to hear those two matters in sequence, its proceedings would be infected by apprehended bias. He pointed out that the proceedings of the tribunal or the disciplinary tribunal are subject to review under the rules of the defendant. He also submitted that, even if there was a case made out of a serious issue to be tried in respect of apprehended bias, it is inappropriate at this premature stage for an interlocutory injunction to be granted against the defendant.
I turn, first, to the question of the constitution of this action. In my view, Mr Livermore is correct that the proceeding has not been properly constituted. The originating motion is patently deficient in failing to spell out properly any basis upon which the plaintiff comes to this Court to seek relief. However, notwithstanding that criticism, in my view, it is nonetheless appropriate that I entertain this application. It does seem, at least in large measure, that the grounds of dispute between the parties have become clarified, albeit that I agree with Mr Livermore that the second basis of complaint has really only become clarified in the course of hearing today.
In my view, the plaintiff does have an arguable claim based in contract, in the sense that he has an arguable basis for submitting that, in accordance with his agreement between the plaintiff with the defendant, he was entitled to be accorded a hearing under the rules of natural justice by the disciplinary committee which is to hear his charge.
I agree with Mr Livermore, however, that I very much doubt that s.4 of the Administrative Law Act provides any basis to the plaintiff upon which he can come to this Court before the charges are heard by him by the disciplinary committee.
I turn then to the two main complaints which are made by the plaintiff in respect of the intended processes of the disciplinary committee which is to hear the charges against him.
It is not in issue that the plaintiff is entitled to sufficient notice of the charges brought against him in order to enable him to prepare his response and to make proper response to those charges. Further, the plaintiff is entitled to sufficient notice which enables the issues, to be determined by the tribunal, to be adequately defined so that both parties to the proceedings before the disciplinary committee are able to understand and, if necessary, make objection in respect of matters which may or may not be irrelevant. However, in my view it is clear, virtually beyond argument, that the plaintiff has been given more than sufficient notice of the charges brought against him and that the particulars and the material provided in relation to those charges are certainly more than sufficient to adequately inform him of the nature of the charges and to enable him to make answer to them.
The amended charges which were provided to the plaintiff on 14 September are in the same form as the original charges. Each charge is set out in the same form. It commences with setting out the text of the rule which is relied upon by the defendant. It then sets out the particulars of the charge, and then the evidence which may be relied upon in support of each charge. Pausing there, in my view, properly understood, those details were adequate to enable the plaintiff to make answer to the charges. However, as I have stated, on 14 September the defendant also provided a detailed statement of material facts.
That statement, in my view, sets out adequately and sufficiently the details of the substantial facts which are to be alleged against the plaintiff in the proceedings and properly references each of the statements of fact to the charges which were brought against the plaintiff.
The request for particulars that was delivered by the plaintiff's solicitors on
3 July is extraordinarily broad ranging. In my view, much of it would be objectionable if such a request were served in civil litigation in this Court. However, the proceedings which are to take place before the disciplinary committee are not civil litigation but are a disciplinary proceeding of a domestic tribunal. Bearing that matter in mind, it is clear in my view, beyond argument, that the defendant was not obliged to make answer to the request for particulars served on it on 3 July.
In argument Mr Osborne sought to refine the criticisms which he made of the various charges in support of his submission that nonetheless sufficient particularity had not been provided in relation to them. It is not necessary for me in these reasons to rehearse the matters that were discussed with counsel in the course of argument. However, it did become clear that some of the criticisms made of the charges were in fact answered by reference to the statement of material facts. Thus, for example, the criticism of charge No. 1, that is, that the charge failed to identify the commission that was payable to the plaintiff, was overcome by the statement of facts which clearly sets it out.
A number of the other matters which were the subject of criticism by
Mr Osborne were, in my view, overly pedantic. It seemed to me quite clear that the plaintiff is well informed as to the basis upon which the charges are laid.
Accordingly, I am of the view that the first basis put forward by the plaintiff before me is not sufficiently arguable to justify, at this preliminary stage, an interlocutory injunction lying against the defendant to restrain its disciplinary committee from proceeding with the charges.
The second matter relied upon by the plaintiff, namely, whether the complaints of the three complainants, and now two complainants, should be heard together or separately, is a matter which has evolved. For most of the debate which has occurred between the plaintiff and the defendant, the substance of the argument that was made on behalf of the plaintiff was that the two sets of complaints should not be heard together but should be heard separately.
The letter of the defendant's solicitor dated 14 September, to which I have already referred, does state that the matters are to be heard separately, however it does not set out how the matters are to proceed. It would seem, and in my view this is the correct construction of the letter, that it is intended that the disciplinary committee hear the Wood matter to completion and, having done so, the same constituted disciplinary committee proceed to hear the Langdon matter.
In light of that, it is now submitted on behalf of the plaintiff that, if the same disciplinary committee were to hear in sequence the Wood charges, and then the Langdon charges, then the committee would be biased in respect of the hearing of the Langdon charges, in the sense that a fair minded observer might reasonably apprehend that the committee in hearing the Langdon charges might have been adversely affected by the views it formed in relation to the allegations made in respect of the Wood charges which had come before it.
On behalf of the defendant, Mr Livermore has submitted that if that is a correct construction of the letter of 14 September, nonetheless the plaintiff has failed to make out an arguable case of apprehended bias. Mr Livermore in fact submitted to me that the procedure to be adopted by the disciplinary committee is not yet clear, and indeed the committee may simply be foreshadowing that it is acting pragmatically, that is by hearing one set of allegations before the other, albeit in the same hearing. However, Mr Livermore submitted that even if the two matters are to be heard sequentially by the same committee, the plaintiff has failed to make out an arguable case of apprehended bias, and if he has done so nonetheless that it is inappropriate at this early stage that an interlocutory injunction be granted against the defendant.
As already foreshadowed, it is my view that, notwithstanding its deficiencies, the letter of the defendant's solicitor to the plaintiff's solicitor dated
14 September does make it sufficiently clear that what is proposed is that the same disciplinary committee proceed first with the Wood matter, that it hear it, complete that hearing and then, having done so, proceed to hear the Langdon matter.
The question before me firstly, therefore, is whether in those circumstances the plaintiff has an arguable case that the proceedings of the disciplinary committee would be infected by apprehended bias. The test which is applicable is that which has been stated in a number of authorities, including Livesey v. New South Wales BarAssociation[1].
[1](1983) 151 CLR 288, 293 - 294.
The question is whether the parties or the public might entertain a reasonable apprehension that the tribunal might not bring an impartial and unprejudiced mind to the resolution of the question involved in the second proceedings, having heard to conclusion the first set of proceedings. In general, in determining that question, the courts do it through the perspective of a fair minded and properly informed observer.
In the present case, it is significant that, before the letter of 14 September, the nub of the debate which passed between the plaintiff and the defendant arose from the similarity of the allegations made against the plaintiff in respect of the Wood allegations and the Langdon allegations.
It was that matter which gave concern to those representing the plaintiff and to the plaintiff that, by hearing the two matters together, the committee would be infected by the view which it took in respect of one matter in determining its views in respect of the other. In my view there is a reasonable basis in those circumstances upon which the plaintiff might argue that if the disciplinary committee were to first hear the Wood matter, and then the same constituted disciplinary committee were to proceed to the Langdon matter, a fair minded and informed observer might well apprehend that the committee might be affected by the allegations in respect of the Wood matter in forming its views in respect of the Langdon matter.
Indeed, in my view, that impression would be reinforced in the mind of the fair minded and reasonably informed observer by the history of the matters which preceded the letter of 14 September. Given the debate which took place between the parties, in my view, a fair minded observer might well conclude that the committee had acceded to the fact that there was some force in the proposition that the two matters should be heard separately for the very reasons which have been relied upon on behalf of the plaintiff and his advisers.
I therefore consider that there is a serious issue to be tried in relation to that matter. However, the question is whether I should grant an injunction. Mr Livermore has submitted, and with some force, that this is still a preliminary stage in the disciplinary proceedings. It is unusual for a court to intervene at this early stage and to grant an injunction. Ordinarily the approach which is taken is to await the outcome of the disciplinary proceedings and then, when the Court is in a position to be better informed, it can form a view whether those proceedings were infected with bias.
In respect to that, further Mr Livermore has pointed out that, under the constitution of the defendant there is a review process, so that there is in effect some right of appeal in relation to any decision made by the disciplinary committee.
In response to those matters, however, in my view the following points can be properly made.
First, the outcome of the proceedings before the disciplinary committee can potentially have a significant and adverse effect on the plaintiff's livelihood. The disciplinary proceedings are brought against him in relation to his capacity as a financial planning adviser. The allegations that are contained in the charges are serious. There are some eight charges in the Langdon matter and five in the Wood matter.
An adverse finding by the committee would have a significantly adverse effect on the livelihood of the plaintiff and his ability to pursue it. It is true that there is a right of review, but that right of review is somewhat limited. The right of review is in relation to the matters which were before the defendant and the rules of the defendant provide that the defendant may, if it thinks it necessary to do so, provide a hearing to the plaintiff. However, it would seem from that rule that it would be very difficult for a person, who has come before the disciplinary committee, to overturn a finding of fact which was made after hearing evidence by the disciplinary committee. Those findings of fact could have quite an impact on the ultimate outcome of the disciplinary proceedings.
In my view, given the fact that the potential departure from the rules of natural justice in this case is substantially clear, there is a sufficient basis upon which to enjoin at this interlocutory stage the defendant by its disciplinary committee from proceeding to hear the two matters by the same constituted disciplinary committee.
In my view, the balance of convenience lies in favour of doing so. As I have stated, the proceedings which are before the disciplinary committee have the potential to have a substantially adverse impact on the reputation and livelihood of the plaintiff.
On the other hand, the rules of the defendant, and in particular rule 3.5.6, enables the defendant to differently constitute disciplinary committees. In other words, it is well within the power of the defendant to appoint differently constituted disciplinary tribunals to hear the matter if the defendant desires that the disciplinary proceeding should nonetheless continue before this proceeding is heard at trial.
It must be borne in mind that I am simply hearing at this stage an application for interlocutory relief. As the Court of Appeal has recently stated,[2] my role is to determine which course should carry the lower risk of injustice should it ultimately turn out to be wrong.
[2]Tymbook Pty Ltd v State of Victroia; Bradto v State of Victoria [2006] VSCA 89.
In my view, the course which would be adopted by granting an injunction would not create a significant risk of injustice to the defendant and the interests that it properly represents. It would lie in the hand of the defendant, if it chose to do so, to press on with the disciplinary proceedings, albeit by differently constituted disciplinary committees.
On the other hand, as I have already stated, if I were to decline the plaintiff his injunction until he had the opportunity to properly argue this matter and present it in court, then that remedy would be lost to him before the disciplinary committee heard its proceedings. It is true that the plaintiff would still have in his hands the ability to come back to this Court to seek to quash those proceedings, but nonetheless the outcome of the proceedings may well have a significantly adverse effect on him. Further, as I have already stated, the review process available to him is only of a limited ambit.
For those reasons, I am prepared to grant an injunction on the plaintiff giving the usual undertakings to damages.
MR OSBORNE: I've got those instructions.
HIS HONOUR: Thanks Mr Osborne. I am prepared to grant an interlocutory injunction substantially in the form of the paragraph 2 of the originating motion. Now that may need, gentlemen, to be adjusted but it would seem appropriate to grant an injunction pending the hearing and determination of this proceeding restraining the disciplinary committee of the Financial Planning Association of Australia Limited from proceeding with hearings of misconduct charges against the plaintiff upon the complaints of the Langdons and the Woods ( I don't think the Pollards are necessary) otherwise than by conducting separately hearings in respect of each of the complaints before differently constituted disciplinary committees.
Subject to hearing from counsel it would seem to me that an injunction in that form, in an interlocutory form, would conform with the reasons that I have just pronounced.
MR OSBORNE: Yes, certainly from the plaintiff's perspective I think that would be both satisfactory and all that could be asked for.
HIS HONOUR: Yes, thanks for that. Thanks, Mr Livermore. Costs?
MR OSBORNE: Well it's an interlocutory injunction.
HIS HONOUR: They're normally reserved, are they not?
MR OSBORNE: Yes.
HIS HONOUR: And I would think probably liberty to apply might be appropriate.
MR OSBORNE: Yes, Your Honour.
HIS HONOUR: You've got it anyway but grant liberty to apply. Is there any other matter? Are you able to prepare those orders, Mr Osborne, show them to Mr Livermore and send them up to my chambers and I'll make those orders?
MR OSBORNE: Certainly, sir.
HIS HONOUR: Thank you, now bear in mind that I go on circuit next week so if that could be - it would be a good idea if you made haste by doing that.
MR OSBORNE: Thank you, sir.
HIS HONOUR: I thank both counsel for their assistance and the high quality of the argument they presented. Thank you, gentlemen, and you're both excused.
MR LIVERMORE: Thank you, Your Honour.
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