Schulman v Abbott Tout Lawyers (No 2)

[2010] FCA 526

FEDERAL COURT OF AUSTRALIA

Schulman v Abbott Tout Lawyers (No 2)

[2010] FCA 526

Citation:

Schulman v Abbott Tout Lawyers (No 2) [2010] FCA 526

Parties:

FREDRICK SCHULMAN and JGS DOVER CORP v ABBOTT TOUT LAWYERS (A FIRM) T/AS ABBOTT TOUT SOLICITORS

File number:

NSD 2351 of 2007

Judge:

RARES J

Date of judgment:

17 May 2010

Catchwords:

EVIDENCE – statutory interpretation – whether s 723 of the Legal Profession Act 2004 (NSW) prohibits use of copy letter – copy produced by author without objection and made available for inspection in answer to subpoena – original letter sent by author in the course of administration of the Act – offence to disclose information obtained in administration of Act – purpose of s 723 is to prevent a person disclosing information obtained in the administration of the Act – information obtained in the administration of the Act distinguished from information otherwise known to the parties or in the public domain

Held:  Use in cross-examination of copy letter produced by author on subpoena, inspected without objection, not a disclosure of information obtained in the administration of the Legal Profession Act 2004 (NSW) within the meaning of s 723.

Words and Phrases:  

“In the administration of this Act”

Legislation:

Evidence Act 1995 (NSW)
Income Tax and Social Services Contribution Assessment Act 1936 (Cth) s 16

Legal Profession Act 2004 (NSW) s 723

Cases cited:

Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1 considered

Date of hearing:

17 May 2010

Place:

Sydney

Division:

GENERAL DIVISION

Category:

Catchwords

Number of paragraphs:

19

Counsel for the First and Second Applicants:

MBJ Lee and DM Bampton

Solicitor for the First and Second Applicants:

Levitt Robinson

Counsel for the Respondent:

M Einfeld QC and J Emmett

Solicitor for the Respondent:

Yeldham Price O’Brien Lusk

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY
GENERAL DIVISION	NSD 2351 of 2007

BETWEEN:

FREDRICK SCHULMAN
First Applicant

JGS DOVER CORP
Second Applicant

AND:

ABBOTT TOUT LAWYERS (A FIRM) T/AS ABBOTT TOUT SOLICITORS
Respondent

JUDGE:	RARES J
DATE:	17 MAY 2010
PLACE:	SYDNEY

REASONS FOR JUDGMENT
(REVISED FROM THE TRANSCRIPT)

1. The respondent firm of solicitors, Abbott Tout, have objected to use being made by the applicants in evidence, in the proceedings, of a copy letter dated 16 May 2006.  The copy letter was produced by Abbott Tout from its own records in answer to a subpoena.  It was written by Abbott Tout and addressed to the Professional Standards Department of the Law Society of New South Wales.  There is no dispute that the original of that letter was sent to the Law Society and contained in its original form information that the Law Society obtained in the administration of the Legal Profession Act 2004 (NSW). The letter apparently was written in the course of the Law Society’s investigation of a complaint made by, or on behalf of, the applicants in relation to Abbott Tout’s professional conduct.

2. When Abbott Tout produced their copy of the letter of 16 May 2006 in answer to the subpoena, they did not object to the applicants being able to inspect it.  The applicants seek to use that copy in the course of the further cross-examination of Ellis Varejes.  He was a partner of Abbott Tout.  As I apprehend, he was a person against whose conduct some of the complaint was made by the applicants to the Legal Services Commissioner.  The Commissioner had referred the complaint for investigation by the Law Society.

   THE STATUTORY CONTEXT

3. Under s 723 of the Act, a person who discloses any information obtained in the administration of the Act is guilty of an offence except in certain circumstances. Critically, the prohibition created by s 723 is against a person disclosing information that has a particular character, namely that it was obtained in the administration of the Act. The section provides as follows:

   “723    Unlawful disclosure of information

   A person who discloses any information obtained in the administration of this Act is guilty of an offence unless the disclosure:

   (a)is made with the consent of the person to whom the information relates, or

   (b)       is authorised under a provision of this Act, or

   Note. Examples of authorised disclosure provisions include Part 4.10 (Publicising disciplinary action) and section 677 (Permitted disclosure of confidential information obtained in course of investigation, examination or audit).

   (c)       is made in connection with the administration of this Act, or

   (d)is made for the purpose of legal proceedings arising out of this Act or of any report of any such proceedings, or

   (e)       is made with other lawful excuse.

   Maximum penalty: 50 penalty units.”

4. The purpose of s 723 is clear enough. Persons involved in making or responding to complaints against lawyers in respect of their professional conduct may need to disclose information to the Commissioner or to a person or body (such as the Law Society) appointed by him to investigate the complaints. Those communications may need to comprise of confidential, and perhaps legally professionally privileged, material in order that a proper investigation can be made of a complaint. As with many aspects of the law of confidentiality there is a public policy reflected in the terms of the prohibition in s 723. That provision facilitates the protection of the legitimate interests of persons in their confidential information that is sometimes required to be disclosed in order for an investigation to proceed, yet should not lose its confidentiality by reason of the need for that investigation.

5. I am of opinion that the focus of the section involves three key concepts.  First, the prohibition against disclosure;  secondly, the identification of particular information;  and thirdly, the identification of the character of the information as having been obtained in the administration of the Act.

6. Disclosure involves making known information that has not been made known beforehand.  Secondly, information that is “obtained” will have come into the possession of, or be acquired or procured by, effort or request:  see the definition in the Macquarie Dictionary.  A similar sense is contained in the Oxford English Dictionary online, (draft revision of March 2010) which gives the following meaning to the verb “obtain” in its primary sense, “to come into the possession of;  to procure;  to get;  acquire or secure”. 

7. It is common ground that part of the way that professional misconduct complaints are ordinarily investigated under the Act is that the Commissioner, or the body to which he has referred the investigation, will convey to the person complained about and to the complainant, copies of correspondence and other documents received from the other. This is in order that each party may comment fully upon the matters the other has raised. With that background in mind, one can readily see why the prohibition in s 723 was cast in the wide terms that it appears to have. The section seeks to encourage candour both by the complainant, the person complained against and others who may be asked or required by the Commissioner or his investigator to provide information in the course of the investigation of a complaint.

8. In Canadian Pacific Tobacco Co Ltd v Stapleton (1952) 86 CLR 1, Dixon CJ considered the terms of s 16 of the Income Tax and Social Services Contribution Assessment Act 1936 (Cth).  That was a secrecy provision.  That section defined an officer as a person appointed or employed by the Commonwealth or a State, and who either by reason of that appointment or employment or in the course of it, “may acquire or has acquired information respecting the affairs of any other person, disclosed or obtained under the provisions of this Act” (emphasis added).  Such a person was required to deal with any such information in accordance with the terms of that section.

9. The Chief Justice found that an officer of the Commissioner had interviewed a person with a view to obtaining confessional statements, under a section of the Income Tax Act that authorised such inquiries.  It was an offence for the interviewee not to disclose information to the officer.  The officer then proposed to use the information in bankruptcy proceedings brought by the Commissioner against another person and it was argued that he was not authorised to do so.  Dixon CJ decided that the information there fell within the terms of the section.  He held that because of the policy of s 16(1), a very wide meaning should be given to the words “disclosed or obtained under the provisions of this Act”:  Stapleton 86 CLR at 5-6. He considered that the officer divulged information that been obtained under the provisions of the Act by making an affidavit for use in the proceedings. However, Dixon CJ then found that the disclosure fell within an exception permitting the officer to divulge the information in the performance of his duty. He also said that the provision protected the officer against being compelled to disclose information, but did not make inadmissible evidence which he was prepared to give under instructions from his superiors or the Commissioner: Stapleton 86 CLR at 6-7. The Full Court upheld the Chief Justice.

10. Here, the applicants seek to make use of information contained in the copy letter produced in answer to a subpoena, and about which no objection to inspection was taken.  No ground was argued under any provision of the Evidence Act 1995 (NSW) that made the document or information contained in it inadmissible or incapable of being used in the course of questioning a witness in cross-examination.

11. It is important to appreciate a distinction between information obtained in the administration of the Legal Profession Act, and the information itself. The prohibition in s 723 is directed to a person disclosing only information that has been obtained in the administration of that Act. I infer that the copy letter, that I have not seen, contained information in the possession of Abbott Tout reflecting their own knowledge and understanding of events and matters with which it deals. No person who obtained that information in reading the copy letter produced on subpoena did so in the administration of the Act.

12. Rather, the copy letter records information that had been conveyed in the original to the Law Society. In that sense, such information, when obtained by the Law Society was information the disclosure of which was covered by the section. When the original was copied by the Law Society and was passed on to the applicants for their comment, as I assume it was, that also occurred in the course of the investigation of the complaint. But it could not be that any information conveyed in this way thereafter became immediately cocooned from disclosure by force of s 723. For example, I assume, the name and address of Abbott Tout appeared on the original of the letter. That information, plainly, is and always was in the public domain. It was not information obtained in the administration of the Act.

13. So it is necessary to concentrate on the relevant prohibition to which the section is directed. Relevantly, this is designed to protect a participant in the process of investigation of a complaint from someone else engaged in that process or the administration of the Act using information that the participant had disclosed in the course of that investigation, except in the circumstances provided in the exceptions to s 723 itself. The subject matter of the copy letter may exist, and be capable of being proved, independently of what was in the document actually received by the Law Society, or passed on by it to the applicants. Much of the communications between a legal practitioner and his or her client will concern subject matter that is either in the public domain or was known to each of them quite outside of the complaints process. The section is not directed to prohibiting the disclosure of such information merely because it is also conveyed in the course of the investigation of a complaint against the legal practitioner. Thus, a complainant who disclosed to third parties a copy of correspondence received from the Law Society in order to comment on it, ordinarily would contravene s 723 unless he or she came within an exception in that provision. But a complainant who disclosed information he or she already knew because, for example, he or she was present on an occasion or had received the information in other ways prior to becoming involved in the complaints process, could not be said to disclose the information merely because the same information was also conveyed in a letter sent to him or her in the administration of the Act.

14. The debate about the admissibility of the letter, or the permissibility of the use of information contained in it, has proceeded before me on the hypothesis that the applicants seek to ask Mr Varejes questions about a conversation that occurred before a complaint was made to the Commissioner.  Both he and Mr Zalman Silber, who has given in the proceedings and was acting on behalf of the applicants, were said to have been present during the conversation.  It took place at a time when, as I apprehend, the argument Mr Silber was engaged in a dispute with Abbott Tout about, among other things, the subject matter of these proceedings.

15. Abbott Tout did not identify any particular information in the copy letter that they assert had been obtained in the administration of the Act, beyond the general description that the whole contents of that letter in some way amounted to such information. I am of opinion that this argument failed to maintain the distinction between, first, the fact that the letter was a copy kept by Abbott Tout in their own files and, secondly, was not itself the information obtained either by the Law Society, or by the applicants, in the administration of the Act. I have assumed that the copy letter reflected the terms of an original that was in fact despatched in the administration of the Act. But that fact does not clothe all information in the copy letter, that was produced in answer to the subpoena, with the character of the information to which s 723 is directed.

16. Nonetheless, Abbott Tout argued that the wide construction favoured by Dixon CJ in Stapleton 86 CLR at 5 ought be given to the general prohibition in s 723 as better reflecting the section’s purpose. I reject that argument. The purpose of s 723 is to prevent a person disclosing something that he or she obtained through the administration of the Act. If third parties, for example, found the original or a copy of such a letter that had been left somewhere accidentally or obtained it illicitly, then their use or disclosure of that material could be prevented, if discovered in time, by an injunction given in aid of protecting any confidential information contained in it. And there may also be circumstances where a breach of the criminal law may have been involved in the obtaining of that material. However, it does not appear to me that the person would have obtained the information in those circumstances in the administration of the Act. The person may be guilty of aiding or abetting an offence if someone else, who had obtained it in the administration of the Act, had deliberately provided them with such information. But, that is not this case.

17. Here, the copy letter was produced in answer to a subpoena and no objection to it being inspected by the applicants was made at the time.  No particular information contained in the copy letter has been identified as possessing the character of information that, itself, was obtained in the administration of the Act, as opposed to being information that was otherwise available from the copy letter.

18. Additionally, it seems to me that the failure to object to the applicants being allowed to inspect the copy letter when produced in answer to the subpoena, means that it was disclosed with the consent of Abbott Tout, being the persons to whom, I have assumed, the information related within the meaning of s 723(a). If the information in the copy letter were otherwise protected by s 723, then Abbott Tout would have had a ground to refuse to permit inspection of it when inspection was originally sought. This is because the contents would not be able to be otherwise disclosed to the applicants if they had the character of information obtained in the administration of the Act.

19. The fact that the copy letter itself confirmed an objective fact may or may not, depending on the circumstances, comprise information of the kind protected under s 723. But, in the circumstances of this application, on the scant material before me, I am unable to find that the use in cross-examination of the copy letter would amount to a disclosure of information obtained in the administration of the Act.

I certify that the preceding nineteen (19) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rares.

Associate:

Dated:       27 May 2010