The Council of the Law Society of New South Wales v Australian Injury Helpline Limited - [2008] NSWSC 627

CITATION: THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES v AUSTRALIAN INJURY HELPLINE LIMITED & ORS [2008] NSWSC 627

HEARING DATE(S): 14/08/07, 15/08/07, 16/08/07, 11/09/07, 12/09/07

JUDGMENT DATE :
20 June 2008

JUDGMENT OF: Adams J at 1

DECISION: 1. The defendants are restrained from engaging in legal practice in contravention of s 14 of the Legal Profession Act 2004 and from representing that they are entitled to engage in legal practice in contravention of s 15 of the Legal Profession Act 2004.
2. The plaintiff to pay the defendants' costs in relation to the alleged contravention of the Legal Profession Regulation 2005 and the defendants pay the plaintiff's costs in respect of the contravention of ss 14 and 15 of the Legal Profession Act 2004
3. Liberty to apply on 14 days notice in respect of the forms of the orders.

CATCHWORDS: Injunctive relief - personal injury advertising by non-lawyers - Validity of Legal Profession Regulation 2005 - Ultra vires - whether excepting NSW litigation sufficient to comply - whether advertiser in legal practice - nature of relationship with lawyers on panel - nature of relationship with clients - whether representing that legal qualified - injunction granted

LEGISLATION CITED: Interpretation Act 1987
Legal Practice Act 1996 (Vic)
Legal Practices Act 1893 (WA)
Legal Profession Act 2004
Legal Profession Regulation 2002
Workers Compensation Act
Legal Profession Regulation 2005
The Sale of Land Act 1962

CATEGORY: Principal judgment

CASES CITED: APLA v The Law Society of New South Wales (2005) 224 CLR 322 at 423
Attorney-General v Quill's Wills Ltd & Ors (1990) 3 WAR 500
Australian Competition and Consumer Commission v Murray [2002] 132 FCR 428
The Council of the New South Wales Bar Association v Davison [2006] NSWSC 65
Cornall v Nagle (1995) VR 1888
The Council of the Law Society of New South Wales v Seymour (1999) NSWCA 117
Dow Jones & Co Inc v Gutnick [2002] 210 CLR 575
Felman v Law Institute of Victoria [1998] 4 VR 324
Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288
Law Society of New South Wales v Ramalca Pty Limited (1988) 12 NSWLR 34
Law Society of Victoria v Merrick & Anor [2006] VSC 361
In re Sanderson; ex parte The Law Institute of Victoria (1927) VLR 394
Ward v Brodie & Stone 215 ALR 716

PARTIES: The Council of the Law Society of New South Wales (Plaintiff)
Australian Injury Helpline Limited (First Defendant)
MACC Holdings (Aust) Pty Limited (Second Defendant)
Gary Michael Whelan (Third Defendant)

FILE NUMBER(S): SC 14891/2006

COUNSEL: G.F. Lindsay SC/C.A. Webster (Plaintiff)
N Perram SC/A Connolly (Defendants)

SOLICITORS: Raymond John Collins (Plaintiff)
Henry Davis York (Defendants)

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ADAMS J

Friday 20 June 2008

2006/14891 THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES v AUSTRALIAN INJURY HELPLINE LIMITED & ORS

JUDGMENT

HIS HONOUR:
Introduction

1 These are proceedings brought by the Law Society of New South Wales against Australian Injury Helpline Limited, MACC Holdings (Aust) Pty Limited and Mr G M Whelan (AIH) seeking injunctive relief under s 720 of the Legal Profession Act 2004. The Society alleges that AIH has advertised the provision of legal services contrary to the Legal Profession Regulation 2005 and has engaged in legal practice or represented that it has engaged in legal practice contrary to ss 14 and 15 of the Act.

2 AIH’s business is the referring of injured persons to lawyers on a panel maintained by it, obtaining fees for work associated with the referrals, which is undertaken in a manner that enables the successful plaintiff to obtain payment for the work from the unsuccessful defendant by way of a disbursement payable as part of a costs order. This “free” service is advertised on a website of which two versions have been tendered, one which was active at the commencement of the proceedings and the other which was slightly (though significantly) amended during the proceedings. It is not controversial that the websites contain personal injury advertising which would contravene the regulatory prohibition, subject to a qualification which I will discuss in due course. Because of the way in which the website is set up, the substantial arguments are whether the advertisement occurred in New South Wales and whether they advertise legal services to be provided in New South Wales. During the proceedings adjustments were made to the website set up so that, for practical purposes, it is not accessible in New South Wales. As I understand the Society’s present position, if that set up remains unchanged it will not seek injunctive relief in respect of it except to the extent that AIH be ordered not to vary the set up without appropriate notice. However, whether AIH was in breach of the Regulation is still a live issue since AIH maintains that it was not in breach and that no injunctive orders are necessary.

3 In general, injured persons are encouraged to use AIH and its panel because, AIH claims, the lawyers on its panel are highly specialised in personal injury litigation and such is AIH’s relationship with them, they will conduct the litigation, if undertaken, not only with efficiency but also keeping the client fully informed of each step in the process. Correspondence between AIH and the solicitors and the enquirers and clients indicate that, the Society alleges, taken together, such is the nature of AIH’s involvement that it amounts to conduct that is prohibited under ss 14 and 15 of the Act.

The advertising prohibition

4 For convenience, I have used the earlier form of the website as the template for this discussion. The first page of the website contains pictures of injured persons. The second page of the site contains two “buttons”, one of which is named “New South Wales” and the other “All other States & Territories”. If the former is pressed the website responds with a page stating, “Unfortunately, the law in New South Wales prevents us from making an advertisement to you” and the enquirer can go no further. If the enquirer goes back to the first page and presses the “other States” button, the same result occurs because a cookie has been placed on the enquirer’s computer preventing access to the “other States” pages. A knowledgeable enquirer could, of course, delete the cookie and thus, by then pressing the “other States” button obtain access to those pages. Were this the end of the matter I think that the Society would not have sought relief but, as always in computerland, things are not quite so simple.

5 It is necessary, regrettably, to descend to some degree into the technical arena. The website has a particular IP address which locates and identifies it. This address was assigned to the website by a company, which for convenience I will call SEO. SEO provides a number of services relating to the Internet including arranging for third parties to provide service space on web servers. SEO has provided website hosting services to AIH for some years. Since mid 2006, the web servers used by SEO for hosting AIH’s website was physically located in the United States. Contained within the website but not directly visible to someone who accesses the website by using AIH’s Internet addresses, the names of which directly correspond with the IP address of the website, are pages or internet files (called HTML files) such as “accident – compensation.html”, “accidents.html”, “attorney.html”, “car – accident.html”, “lawyers.html” and so on, all of which use words likely to be used by a person searching for information about personal injury claims when using a search engine such as Google or Yahoo. The key word is used by the enquirer to define the scope of the search and, when the search is conducted by the search engine, it throws up an index of results which will contain references to pages within particular websites. When, in turn, the results of the search are accessed by the enquirer, he or she might be directed to the main page of the website (in which event the choice between New South Wales and other places prevents further enquiry if the NSW button is pressed) but might well be taken directly to a page within the website which sets out the prohibited information.

6 It is possible to prevent access to what I might call the internal pages of the website from a search engine by making a technical adjustment which it is not necessary to describe. Indeed, by arrangements between the technical advisers to the parties this is what has now been done, so that a search leading to the website will always ask the user to make a decision regarding his or her location and, if New South Wales is chosen, will prevent further access to the website. This will also occur where an enquirer accesses any results from any search engine on the Internet such as Google, Yahoo or Sensis. Pending determination of this matter the defendants have undertaken not to make modifications which will re-open the now unobtainable access without giving adequate notice to the Law Society.

7 If the "other States" button is pressed, enquirers are able to access successive pages concerning the assistance which AIH suggests is both free and useful in attempting to obtain compensation for personal injury. The pages of both websites are set out in the appendix to this judgment. It is worth noting at this point that the second page of the "other States" site contains the following –

“Notice: This service is not offered for those accidents having some connection with NSW.”

8 In substance (in relation to the earlier website), the Law Society contends that, because the personal injury compensation information could have been obtained through a search engine which, in some cases, rendered the deflection inoperable, in those cases the advertising occurred where the enquirer is in New South Wales and was prohibited. Leaving aside the possible existence of the clear indication that enquirers in New South Wales could not be assisted, both by the button page and the exclusion on the second page, it seems to me that this contention is correct. The use of search engines such as Google and Yahoo is so widespread and conventional that any page on the internet identifiable by their use and accessible via the Google or similar website must be regarded as available to enquirers wherever they are, even though the site had a bypass mechanism on the “first” of its pages.

9 Consequently, subject to AIH’s contention that, because the website was not directed to New South Wales enquirers, it should not be regarded as having been published in New South Wales, it seems to me that it was published in New South Wales. I will need to return to this issue in due course. AIH also submits that, if the Regulation is interpreted in accordance with s 12 of the Interpretation Act 1987 as it should be, it has not contravened it, since it does not advertise the availability of legal services in New South Wales.

10 AIH mounts a more fundamental attack on the advertising case brought against it, however. It contends that cls 34 (1) and (2) of the Regulation are ultra vires the regulation making power conferred by the Act.

Is cl 34 of the Regulation ultra vires ?

11 The Act contains a general regulating-making power in s 738 and a specific regulation-making power concerning “the marketing of legal services” in s 85. These sections are relevantly in the following terms –

“738 Regulations
(1) The Governor may make regulations, not inconsistent with this Act, for or with respect to any matter that by this Act is required or permitted to be prescribed or that is necessary or convenient to be prescribed for carrying out or giving effect to this Act.
(2) Without limiting the generality of subsection (1), the Governor may make regulations for or with respect to matters for or with respect to which legal profession rules have been or may be made.
(3) A regulation may create an offence punishable by a penalty not exceeding 100 penalty units, unless another maximum penalty is authorised by another provision of this Act to be included in relation to the offence concerned.
…

85 Regulation of advertising and other marketing of services
(1) The regulations may make provision for or with respect to regulating or prohibiting conduct by any person that relates to the marketing of legal services, including (without limitation) regulating or prohibiting any of the following:
(a) advertising by a barrister or solicitor,
(b) advertising by any person for or on behalf of a barrister or solicitor,
(c) advertising by any person in connection with the provision of legal services,
(d) advertising by any person of services connected with personal injury.
(2) The regulations under this section may create an offence punishable by a penalty not exceeding 200 penalty units.
(3) The Attorney General may direct a person in writing not to engage in conduct described in the direction if the Attorney General is satisfied that:
(a) the conduct contravenes the regulations under this section, and
(b) the person has been engaging in conduct of that or a similar kind.

… “

12 Since it is clear that AIH is neither a barrister nor solicitor, its conduct so far as advertising is concerned is governed by sub-division 3 of division 2 of the Regulation. Of particular relevance are the following clauses –

“33 Definition of “personal injury advertisement”

personal injury advertisement

34 Restrictions on personal injury advertisements

13 “Advertisement” and “publish” defined in clause 23 as follows –

advertisement

publish

14 Such is the width of the prohibition that, if unqualified, it would follow that, for example, any television drama in which one character says to another that they should get a lawyer to help them make a claim for personal injury will be an offence under the Regulation if this were presented as good advice. This is because it will be an “personal injury advertisement” which promotes (in the sense of encourages) the use of a lawyer to obtain compensation. Similarly, a discussion in a newspaper about the wisdom of litigants making a claim for personal injury without the assistance of a lawyer, suggesting that lawyers might be a useful resource in this respect would amount to an offence and any discussion on a television news or current affairs programme that implied that lawyers are qualified to assist injured persons to make claims for personal injury and ought to be used renders all those who participated in the programme or publication criminally liable, with the sole exception of the publisher, who is excepted from liability unless the Attorney-General decides otherwise (cl 38, s 85). A lecturer in a university who suggests, for example in a lecture on public policy or corporate management, that personal injury claims are best handled by lawyers, commits an offence as would a lecturer in business studies who suggested to students that personal injury claims made in the course of a business are best handled by lawyers – in these circumstances, the exception in cl 37(c) would provide no defence since it is limited to an “advertisement” relating only to legal education and then in only in the course of the person’s business or functions as a provider of legal eduction and only if the lecture were delivered to lawyers.

15 It is notorious, of course, that moneys “in respect of personal injury” may be claimed under a multiplicity of insurance policies or employment contracts, quite apart from legal proceedings. Accordingly, any reference to or depiction of such possible claims or entitlements is prohibited, except by an insurer, insurance agent or broker in the ordinary course of that person’s business when the clause does not apply – this would come within one of the exceptions specified in clause 37. However, if the reference were made by anyone other than an insurer, insurance agent or broker then the offence would be committed.

16 Many other examples of common and hitherto regarded as entirely respectable conduct is rendered criminal if the plain unqualified language of the Regulation is applied.

17 I come then to consider the extent of the regulation power conferred by the Act.

18 It seems plain enough that the reference in the Regulation to the “recovery of money”, “a claim for money” or “an entitlement to recover money” must be read in context as meaning the recovery of or claim for money pursuant to some legal right to do so and the “entitlement” must mean a legal entitlement. This, however, does not mean that the power to prohibit the reference to or depiction of these matters is within the regulation-making power of s 738 of the Act. With the exception of s 738(2), which would authorise the control of advertising by lawyers, the control of advertising for legal services by others could not, I think, be “carrying out or giving effect to” the Act. It is no doubt for this reason that s 85 made specific provision for regulations dealing with the marketing of legal services.

19 In APLA v The Law Society of New South Wales (2005) 224 CLR 322 at 423, Kirby J (who dissented on the outcome) characterised the earlier Legal Profession Regulation 2002 (the language of which was more restrictive in some respects than the language of the present Regulation) in the following excoriating but entirely justified language (omitting references) –

“[295] The inhibition on communication is therefore quite remarkable. It would appear to put a legal practitioner in peril of criminal and professional offences were he or she to make a public statement suggesting to an individual, community group or service organisation that legal services might be available to assist a woman subject to domestic violence to obtain an apprehended violence order; to provide advice to a child in relation to sexual abuse; to afford assistance to a person seeking relief for disability discrimination; to aid a woman seeking a visa on the basis of marriage to an Australian citizen where she has suffered domestic violence at the hands of her husband; to provide immigration assistance to persons who might have suffered persecution in their country of nationality; to speak on such subjects to students in a high school legal studies class; to talk to a meeting of community organisations about changes to the law with respect to workers' compensation; to write a letter to a newspaper referring to difficulties faced by lawyers in visiting clients in prisons or mental hospitals; or to submit an article to a legal journal proposing an increase in legal aid in the areas of domestic violence, sexual abuse, disability discrimination and immigration assistance.

[296] In short, the Regulation is not the delicate work of a master drafter, seeking by filigreed language to avoid any risks of overreach into constitutional areas where State angels might fear to tread, an option that was open to the Parliament and about which it had been advised[270]. The Regulation is, instead, a legal blunderbuss. It fires its shots at everything within range and beyond. It does so with a scattergun effect – indifferent to any distinction that might exist by reference to rights, privileges and procedures afforded by, and under, federal law. It is this ambit of the Regulation that should alert this Court to the constitutional inconsistency of which the plaintiffs complain.

20 Of course, I am not here concerned with any constitutional invalidity, merely with the question whether the Regulation is validly made within the authority given by the Act. Nevertheless, the examples given by Kirby J – which are scarcely capable of controversy – also emphasise (as I have attempted to do) the reach of the Regulation and suggest that it grasps conduct significantly beyond that relating to the marketing of legal services.

21 The most crucial aspect of the grant of regulatory power is that the Act authorises regulations that relate to the “marketing of legal services”. Specific examples are given in wide terms. The phrases “relates to”, “in connection with” and “connected with” have very wide application indeed. It seems to me, however, that it is essential that the regulations be confined to conduct relating to matters that comprise two vital linked elements: “marketing of legal services”.

22 Before moving on to consider the implications of this point, I should deal with a submission made by Mr Lindsay SC for the Society concerning the interpretation of s 85(1). He submitted that each of the examples in paras (a) to (d) stood as independent authorisations of the regulation making power, relying on the words “without limitation” in parentheses in the opening words. I do not agree. If this interpretation were correct, it would mean, for example, that a regulation could be made, relying on para 1(d) prohibiting doctors from advertising their skills or a hospital from advertising its emergency services. I do not think that this could possibly have been the intention of the Parliament. The words in parentheses make it clear that the matters referred to in paras (a) to (d) are examples of the general class referred to in the opening words and should not be interpreted to limit the application of that general language.

23 It is difficult to understand why the Regulation did not use the language of the Act in terms for the purpose of defining the prohibited conduct.

24 Accepting that publish means, in effect, the public dissemination of information and that what is prohibited is the promotion of a product or service, such a communication may nevertheless not amount to “marketing” nor “conduct relating to marketing” although it seems that the draftsperson of the Regulations might have thought that the definitions of advertisement and publish did so. The mere public discussion of the desirability of involving lawyers in personal injury litigation, even if that discussion promoted the use of lawyers in the sense that it is commended or encouraged will not, without more, amount to marketing or to conduct relating to marketing. Nor would the objective imparting of information about legal services amount to marketing, even if the effect would be that the use of legal services was encouraged. Marketing, as it seems to me, requires more. The Macquarie Dictionary defines the word as: “The act of buying or selling in a market.” The Oxford English Dictionary defines it as: “The action or business of bringing or sending a product or commodity to market; (now chiefly, Business) the action, business, or process of promoting and selling a product, etc., including market research, advertising, and distribution”. It seems to me that the word connotes, in substance, the proposed sale by the marketeer, or someone on whose behalf the marketeer is acting, of a product or service and urging the audience to buy. Of course, charities might engage in marketing in the hope of attracting donations, but this is not different in principle. Each case will inevitably be one of fact and degree but the test must be whether the Regulation is limited to the statutorily defined conduct and, if synonyms are used in place of the statutory language, whether they remain inside the connotation of the statutory language. Accepting that “advertising” must mean more than mere informing, since the phrase in the definition is “advertising or otherwise promoting”, it seems to me, as I have said, that this is considerably wider in scope than “marketing”. In short, “promoting” means commending or encouraging; it does not involve any notion of sale – in short, any notion of a market. If, on the other hand, “advertising” is not an example of promoting, but stands independently, so that it means merely informing, then the Regulation moves even further outside the statutory authority. On either construction, therefore, the Regulation’s grasp exceeds the limits imposed by the Act.

25 The Regulation departs from the statutory language, not only as to “marketing” but also as to “legal services”. Thus, although cl 34(1)(a) refers to the provision of legal services, cl 34(1)(b) does not. The prohibition plainly covers advertising that has nothing to do with the provision of legal services. It is obviously because of the width of the latter paragraph that insurers, insurance agents and brokers are excepted from compliance. But others than those persons “advertise” insurance for personal injury. Similarly – as the exception in cl 37(c) implies – a lecture about the need for services including financial assistance for victims of crime, if made, say to social workers or a public seminar on child abuse would amount to an offence, though it had nothing to do with the provision of legal services. Any service or product that was advertised (in whatever sense) or promoted, even if it had nothing to do with the provision of legal services but which mentions the possibility of the payment of any money in respect of personal injury is criminal. If “advertise” is not limited by “promotes”, the Regulation would prohibit the dissemination of a torts textbook, though the publisher might be protected.

26 To use Kirby J’s metaphor of the blunderbuss, the question is whether, by application of s 32 of the Interpretation Act 1987, the Regulation can be read down so that the barrel is narrowed to limit the blast to the statutory target. One possible mode of doing so is by implying the words “relating to the marketing of legal services” in the opening words of cl 34, so that they would be understood as meaning –

“34 Restrictions on personal injury advertisements

relating to the marketing of legal services

APLA

27 McHugh J said (224 CLR at 370-372, omitting most references) –

“[90] Clause 140 allows the Law Society of New South Wales, for example, to maintain its lists of accredited specialists in personal injury matters. For those who are already aware of their rights or sufficiently informed to make enquiries, this exception to cl 139 enables those persons to obtain advice concerning their federal rights. But to say the least it seems highly unlikely that more than a small percentage of those who have federal rights would be aware of practitioners' directories. And even those who know of them may not be aware that the accredited specialists can assist them. One of the purposes of some of the advertisements of the plaintiffs is to inform citizens that they may have rights of which they are unaware. The enactment of cl 139 is itself eloquent testimony that, without advertisements of the kind that the plaintiffs wish to use, many persons will remain ignorant of their rights and their causes of action will not be enforced.

[91] It follows that the Regulation cannot validly apply to advertisements that concern causes of action in federal jurisdiction.

Severability

[92] The question then is whether the invalid part of the Regulation is severable. New South Wales contends that the Regulation should be read down in accordance with s 31 of the Interpretation Act 1987 (NSW) and the ‘fundamental rule of construction that the legislatures of the federation intend to enact legislation that is valid and not legislation that is invalid.’ However, severability will only save legislation if the Court is able to uphold certain parts of that legislation without itself being required to legislate. When a court applies a severability provision and declares that so much of an invalid enactment is valid, it does so by a process of construction. It determines whether the law would be valid if it had been enacted without that part of it that is invalid. And it determines, as a matter of construction, that what remains after the severance gives effect to what the legislature intended to be the law on the subject. Expressly or by inference, therefore, the enactment must contain ‘a standard or test that can be applied so as to confine the enactment within constitutional power.’ For a court to give effect to its own ideas of how a valid law should operate would require the court to legislate.

[93] On its face, cl 139 prohibits any advertisement by a barrister or solicitor that refers to or depicts in any way personal injury or circumstances in which personal injury might occur or refers to a legal service relating to the recovery of money in respect of personal injury. It applies to all advertisements concerning personal injury and legal services relating to personal injury irrespective of whether an injury gives rise to any right of action. In prohibiting these advertisements, it does not distinguish between kinds of personal injury or the sources or nature of any rights, claims or privileges that might arise in respect of those injuries. Nor does it refer to the courts where any right of action concerning personal injury may be enforced.

Victoria v The Commonwealth

Pidoto v Victoria

Interpretation Act

Bank of New South Wales v The Commonwealth

28 Kirby J said (224 CLR at 446-447, omitting references) –

The severance issue:

[368] The principle to be applied in all cases within such statutory prescriptions is that, wherever possible, conformably with the legislative declaration, a law should operate on ‘so much of its subject matter as Parliament might lawfully have dealt with’.

[368] A difficulty arises where the impugned law affords no textual foundation for applying a ‘blue pencil’ to the offending parts ‘so that the valid portion could operate independently of the invalid portion’. Such is the case here. Assuming for present purposes that Pt 14 of the Regulation could operate validly upon communications in the State of New South Wales in respect of rights and privileges afforded exclusively by that State's law, the Regulation does not attempt to differentiate such subject matters from its purported, and invalid, operation on federal rights, privileges and remedies and their prosecution in federal courts, State courts exercising federal jurisdiction and before federal tribunals.

29 Two points of possible distinction might be made: the first is that their Honours were dealing with Constitutional invalidity rather than the excess of regulation making authority; the second, that the posited solution appears to be the addition of the statutory words themselves. On the other hand, it is clear to the point of demonstration, for example by reference to the need to except legal eduction lectures to lawyers (but not to students!) and insurers, that cl 34(1)(b) was deliberately drafted to apply to services that were by no means limited to legal services. I have not found this problem easy to resolve but, in the end, I have concluded that I should abide by the approach adopted by McHugh and Kirby JJ. I think that the distinctions to which I have referred are matters of form rather than substance.

30 It follows that subcl 34(1) is ultra vires the Act.

31 Subclause 34(2) refers specifically to lawyers but not in respect of their conduct or functions. If it can be supported, this must be by reference to s 85(1) of the Act, since there is nothing in the Act, the carrying out or effectuation of which might be assisted by it, subcl 34(2) must, therefore, also fall.

32 Subclause 34(3) depends upon the survival of the other subclauses. Consequently, it must fall.

33 Accordingly, the whole of cl 34 of the Regulation is void.

Has AIH contravened the Regulation at all events?

34 This question again requires an interpretation of the Act and the Regulation, which do not of course, express any geographical limitation in their application. Such limitations are to be implied in accordance with s 12 of the Interpretation Act 1987, which is as follows –

“12 References to New South Wales to be implied

35 In APLA, a number of the Justices dealt with the implicit geographical range of the Regulation by reference to s 12.

36 Gleeson CJ and Heydon J said (224 CLR at 354) –

Extra-territoriality

Legal Profession Act

37 Gummow J said (at 388-389, omitting references) –

“[154] Paragraphs (d) and (e) of question 1 may be considered together. They ask whether ‘by virtue of the nature of its extra-territorial operation’ Pt 14 of the regulation exceeds the legislative powers of the state and the powers under the Act (which is to be read as a reference to s 216(1)) to make regulations.

Interpretation Act

[156] It may be conceded for present purposes that material uploaded onto a computer server outside New South Wales but available to be displayed in New South Wales on an internet website and to be downloaded there nevertheless is not published in New South Wales within the meaning of the definition of ‘publish’ in cl 138. It is unnecessary to decide the point.

38 (His Honour’s statement about where the publication occurs in para [156] is contrasted by his Honour with Dow Jones & Co Inc v Gutnick [2002] 210 CLR 575.)

39 Neither McHugh nor Kirby JJ needed to deal with the extra territoriality issue. Hayne J agreed with Gummow J (224 CLR at 449) but added (ibid at 463) that the purpose of the Regulation was “preventing the advertisement in New South Wales of the legal services with which they deal”.

40 In dealing with the argument advanced under s 92 of the Constitution, Callinan J said (224 CLR at 482) –

New South Wales

[463] It is not suggested that the contested provisions are incapable of having some conceivable effect upon advertisements originating or read outside the State of New South Wales. They are, however, the laws which have as their real object the prescription or proscription, in a non-discriminatory way, of a particular kind of professional conduct in or in relation to litigation in the courts of New South Wales … “

41 It is, I think, worth mentioning that, on behalf of the New South Wales, Mr M G Sexton QC, the Solicitor General, stated (224 CLR at 331) –

Interpretation Act

42 Although these statements were made in a somewhat different context – the constitutional propriety of the 2002 Regulation – it seems to me that I should accept them as authoritative in the present case. It would not be appropriate for me to adopt a reading of the Regulation inconsistent with that of a majority of the High Court in relation to precisely the same question, namely the extra-territorial reach of an identical (so far as geography and subject matter are concerned) statutory instrument.

43 Accordingly, the publication must concern the provision of legal services in New South Wales.

44 A somewhat more difficult question is whether the publication must occur in New South Wales. It seems clear enough that the Parliament of New South Wales can legislate to prohibit conduct that occurs outside the State in respect of matters that have a “relevant territorial connection” and, accordingly, the prohibition of advertising outside the State of services to be provided in New South Wales would be within this State’s constitutional competence: see, for example, APLA per Gleeson CJ and Heydon J (224 CLR at 354).

45 However, it is one thing to have the power to make a particular enactment and quite another to enact it. I am unable to see in the Act or the Regulation any intent to avoid or vary the application of s12 of the Interpretation Act 1987. In my view, the application of s 12 requires that the publication in question must both have been published in New South Wales and concern the provision in this State of legal services.

46 In the present case, the earlier form of the advertisement, which was accessible in this State as I have described by the use of conventional and widely available search sites, was a prohibited publication, subject to the question whether it advertised the provision of legal services in New South Wales. Mr Perram SC for AIH contended that, because the website was plainly not directed to persons in this State and sought to discourage them from accessing it, it was not published here even if it appeared on a computer screen in the State. He relied on Ward v Brodie & Stone (215) ALR 716, in which Merkel J held that the display on a website seen in Australia was not a “use” of a trade mark here because the relevant product was not available here. I find it difficult to accept that “use” in patent law has the same meaning as “display on an internet website” as that phrase is used in the definition of “publish” in cl 23. In my view, that display here, though not, as it were, aimed at New South Wales residents, is a publication here. It had certainly been seen in New South Wales by employees of the Law Society and was so easily capable by the use of conventional means of being published here that injunctive relief against the possibility would properly have been given in respect of it if the additional element that it concerned the provision of legal services in New South Wales was present.

47 It cannot be argued that the website, in both forms, does not constitute marketing of legal services. In my opinion, however, the legal services in question are not those to be undertaken in New South Wales. This is made clear both by the attempt to deflect any New South Wales enquirer and by the clearly stated exclusion of “accidents having some connection with New South Wales”. It is difficult to see how any accident having no connection whatever with New South Wales could call for the provision of legal services in New South Wales, with the exception of a New South Wales resident seeking legal assistance here for litigation to be conducted interstate. It seems to me that such an eventuality is not a legal service of the relevant kind. It is unlikely that the Parliament of New South Wales were concerned with the conduct by lawyers in this State of litigation elsewhere. It seems to me that is made clear by the Second reading speech of the Minister, the Honourable John Hatzistergos, who commenced by saying –

“The manner in which lawyers’ services are advertised and marketed can have a detrimental effect on both the court system and the availability of affordable insurance.”

“These amendments … [are] critical to ensure that such advertising does not have a detrimental effect on the court system and on public liability and workers’ compensation insurance premiums.”

48 There is no suggestion of a serious apprehension that the form of the website, so far as the exclusion of non-New South Wales connected accidents is concerned, will be changed. There is no proper basis, therefore, quite apart from the ultra vires character of the Regulation, for the grant of injunctive relief in respect of the website.

Is AIH acting as a solicitor or representing that it is?

49 The Law Society contends that the relationship between AIH and the solicitors on its panel and the enquirers and clients is such that it is engaged, or purports to be engaged in legal practice contrary to ss 14 and 15 of the Act. The Society also alleges that there is evidence from the correspondence between AIH and some of the enquirers from which it ought to be inferred that AIH was giving legal advice to them about the prospects and character of their claims. Of course, the present proceedings concern only New South Wales practitioners on the panel and to whom, as it happened, AIH referred a substantial number of potential clients.

50 Section 14 of the Act is, relevantly, in the following terms – l

“14(1) A person must not engage in legal practice in this jurisdiction for fee, gain or reward unless the person is an Australian legal practitioner.

Maximum penalty: 200 penalty units”

51 Section 15 of the Act is, relevantly, as follows –

“15 Prohibition of representing or advertising entitlement to engage in legal practice when not entitled

(1) A person must not represent or advertise that the person is entitled to engage in legal practice unless the person is an Australian legal practitioner.

Maximum penalty: 100 penalty units.

(2) A director, officer, employee or agent of a body corporate must not represent or advertise that the body corporate is entitled to engage in legal practice unless the body corporate is an incorporated legal practice or a complying community legal centre.

Maximum penalty: 100 penalty units

(3) …

(4) A reference in this section to a person:

(a) representing or advertising that the person is entitled to engage in legal practice, or

(b) representing or advertising that a body corporate is entitled to engage in legal practice,

includes a reference to the person doing anything that states or implies that the person or the body corporate is entitled to engage in legal practice.”

52 What then is meant by the phrase “engage in legal practice” for the purposes of these provisions? This phrase has been considered in a number of contexts and it is necessary to refer briefly to some of the authorities. In Victoria, the Legal Practice Act 1996 (Vic) provides that persons “must not engage in legal practice in Victoria” unless they “are properly qualified and admitted” and s 316 gives power to the Supreme Court to “grant an injunction restraining a person engaging in legal practice, or representing or advertising that they are qualified to engage in legal practice” when they are not. The meaning of the phrase “engage in legal practice” was considered in Felman v Law Institute of Victoria [1998] 4 VR 324. Kenny JA (with whom Winneke P and Brooking JA agreed) said (at 352) -

“The appellant contended … that the expression ‘engaging in legal practice’ meant engaging in the work which is done exclusively by those who are qualified legal practitioners, but this would plainly circumscribe the expression more narrowly than Parliament intended … .

as a legal practitioner

53 This passage was referred to with approval by the New South Wales Court of Appeal in Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288 by Giles JA (with whom on this point the other Judges agreed) at [16]. Giles JA went on to refer, as a second way of acting as a solicitor, to the well known judgment of Cussen J in In re Sanderson; ex parte The Law Institute of Victoria (1927) VLR 394 at 369 –

“ … if a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor – if he combines professing to be a solicitor with action usually taken by a solicitor – I think he then does act as a solicitor.”

54 Giles JA noted that this manner of acting as a solicitor was adopted and applied in New South Wales in The Council of the Law Society of New South Wales v Seymour (1999) NSWCA 117. His Honour referred to the decision of Phillips J in Cornall v Nagle (1995) VR 1888 as a third way of acting as a solicitor. In that case, Phillips J stated that “a person might also ‘act or practice as a solicitor’ by doing something which was positively proscribed by an act or rules of court unless done by a duly qualified legal practitioner, or by doing something which, in order that the public might be adequately protected, was required to be done only by those who have the necessary training and expertise in law”. Giles JA pointed out ((1999) NSWCA at [17]) that taken literally, this proscription “extended to a variety of activities legitimately carried on by legally qualified persons, including, judges, legal academics, and arbitrators, who were not acting or practising as a solicitor, or purporting to do so, when carrying out those activities”. It therefore needed some qualification. Giles JA concluded by quoting the following passage in The Council of the Law Society of New South Wales v Seymour (unreported, NSWCA 3 May 1999) from the judgement of Fitzgerald JA (with whom the other judges agreed) which I think is helpful for present purposes –

“While some activities regularly performed by solicitors are also frequently lawfully performed by persons who are not solicitors, for example, by accountants, merchant bankers, financial advisers, etc. other activities regularly performed by solicitors, including activities which may be lawfully performed by a person who is not a legal practitioner with a current practising certificate, might seldom, if ever, be performed by any person who is not a solicitor. Although activities which fall into either category are material, an affirmative answer to the second question drawn from In re Sanderson (1927) VLR 394, will likely be difficult to arrive at if the only relevant activities are in the first category and are limited in their number and nature. There is no policy justification for including activities which may be lawfully carried out by any person who does not act as though he or she has a status which he or she does not possess within the monopoly of legal practitioners with practising certificates.

…

The inference required by the second question based on Sanderson…,must be considered by reference to a reasonable person with knowledge of the material activities, which will include any statement by which the person performing the activities misrepresents that he or she is a solicitor or explains that he or she is not a solicitor. The reasonable person to be considered is a person dealing with the person alleged to have acted as a solicitor. When activities may lawfully be carried out by a person who is not a solicitor, his or her knowledge that the person with whom he or she is dealing is aware that he or she is not a solicitor, even if not based on his or her acknowledgment of the true position, makes it difficult, if not impossible, to be satisfied that the only reasonable inference open is that he or she acted as a solicitor.”

55 Whether a person is engaging in a legal practice in the relevant sense where work involves some legal advice or the making of legal judgment is plainly a question of fact and degree. A number of particular examples have been cited to me, to which I will refer, but in each case it was necessary for the Court to analyse in some detail what was undertaken and then arrive at a judgment about whether the particular defendant had engaged in the prohibited conduct. What these cases show is that there is no bright line in separating the permissible legal work from the impermissible legal practice.

56 The Society relied, in particular, upon Attorney-General v Quill’s Wills Ltd & Ors (1990) 3 WAR 500 in which Ipp J considered whether the defendants’ business to sell a “will making franchise” based on the use of computers and software to create wills containing clauses drafted or settled by legal practitioners amounted to the giving of legal advice prohibited by s 76 of the Legal Practices Act 1893 (WA). The language of the section was very wide but the essential distinctions required to be made were, to my mind, the same as those necessary to be made in New South Wales and Victoria. It is sufficient to quote from the headnote the findings of Ipp J (3 WAR at 501) –

“We write with further reference to your potential compensation claim and would confirm receipt of the incident report received you. Many thanks for sparing the time; it was of great assistance.

We are an independent Company here to assist you in ensuring you receive professional advice in relation to the potential compensation entitlement to which you would appear rightly entitled – all at no charge to you.

Based on the information and paperwork provided, it would appear that there could well be grounds for a compensation claim on your behalf. In order to determine whether this is in fact the case while taking into consideration the current state of liability law in your State, we are proceeding to have your matter referred onto a Specialist solicitor for review in order to obtain their considered opinion on the matter.

The solicitors are Specialists in Personal Injury law and therefore have the expertise and experience to advise with respect to your potential compensation entitlements.

We note however that it would appear that you have not ledged a compensation claim with the Dooley’s Hotel insurer as yet. Please note that this aspect is essential in order to pursue your potential lump sum entitlements and we would therefore urge you to proceed to lodge this claim ASAP!

Upon hearing further regarding the potential claim, we shall be in contact with you directly. In the meantime, should you have any queries whatsoever, please do not hesitate to contact myself direction on….”

88 The phrase in the third paragraph “there could well be grounds for a compensation claim on your behalf” strikes me as at least having the colour of a legal opinion. However, its provisional nature is immediately demonstrated by the following sentence, which indicates that “to determine whether this is in fact the case” the matter will be referred to a solicitor for review. It seems to me that it cannot in any sensible way be suggested that this was a letter that gave legal advice. The scheme of course depended on the process by which the Panel Solicitor, in every practical sense, made the decision whether the prospects of success warranted the institution of proceedings and, hence, referral although a refusal to accept referral was communicated to AIH not the enquirer. On the assumption that AIH communicated the refusal to the enquirer, stating the reason for it, this would not in my opinion be engaging in legal practice providing it was made clear that the refusal to refer arose from AIH’s acceptance of advice that it had been given.

89 The plaintiff relied on several examples of letters sent to enquirer in New South Wales. The first of these, dated 13 June 2006 is said, at the top of the letter to be “Without Prejudice” (I do not understand what the effect of this mantra is; it seems to me to be meaningless) and goes on to state –

“Dear John

Re: Your Mother in law’s Potential Compensation Claim

Further to our telephone conversation with you, firstly we would like to thank you for your enquiry and we hope that you are ‘on the road’ to recovery from the injury sustained.

FREE

Many thanks for supplying the initial information over the telephone. To speed this matter up and enable us to build up a complete picture of the events and thereafter supply you with a free and ‘considered’ view on the potential claim, we would request you to:

· Answer all the relevant questions, which have not been completed on the enclosed form.

· Supply a detailed description of the events surrounding the injury sustained.

· Sign and date the enclosed Incident Report Form.

· Please outline the extent of the injuries sustained, the treatment prescribed and the prognosis?

· Please supply any medical evidence available. Please supply copies of the medical notes from the hospital concerned, which are available for a small administration fee.

· Please supply as much information and documentation as possible, particularly relevant would be any correspondence received from the insurer concerned.

NO CHARGE

1300 721 684

Thanks”

90 (It is obvious that this is a form letter churned out of the word processor from the fact that although it concerns the potential compensation claim to be made by John’s mother, the opening sentence expresses the hope that John is “on the road to recovery from the injury sustained”.)

91 The second sentence promises the provision of “advice and assistance in relation to the matter” which necessarily concerns the potential compensation claim. It is not clear whether this help is of a legal character but, in the context, this is one strongly available implication. The penultimate paragraph confirms the ambiguity of the nature of the help, the “’considered’ view on these matters” suggesting a legal opinion although the fact that “considered” is itself in quotes suggests some qualification. It is difficult to avoid the conclusion that these ambiguities are deliberate and that, although AIH does not wish to state that it is going to provide legal advice – and it plainly has no intention of doing so – it wishes the client to think that it might well be doing so, a case I think of suppressio veri, suggestio falsi.

92 The giving of advice as to the legal character and prospects of potential litigation, especially implying that this would be done following a detailed assessment of evidentiary materials supplied by the person in question is unarguably engaging in legal practice. A statement that this is what will be done necessarily implies that the person to be proffering the advice is entitled to do so. In my view, letters of the kind of which the above is obviously but one an example, are prohibited representations within the meaning of s 15 of the Act.

93 A second example of a letter (dated 24 August 2006) to an enquirer, also stated to be “Without Prejudice”, is in the following terms –

Re: Your Potential Compensation Claim

“We write with further reference to your potential compensation claim and would confirm receipt of the incident report received you. Many thanks for sparing the time; it was of great assistance.

The solicitors are Specialists in Personal Injury law and therefore have the expertise and experience to advise with respect to your potential compensation entitlements.

94 This letter is more carefully drawn and, as it seems to me, does not suggest that AIH intends to give legal advice although the penultimate paragraph contains a strong suggestion which might be read in that way. I do not think that the letter would imply to a reasonable person that the solicitor is employed by AIH, especially because of the phrase “referred on”, though the matter is susceptible of some ambiguity. On the whole, I conclude that letters in this form do not hold out that AIH is engaging in legal practice.

95 The Society also points to what is suggested to be a typical tax invoice, in this case dated considerably earlier than the letters to which I have adverted namely, 21 August 2003. The invoice is addressed to solicitors dealing with a client accepted by that firm under the referral scheme. So far as is material this document reads -

GST TAX INVOICE – ABN 76 095 175 107

To:

Upon request, initial discussions with Ms… about her rights under Workers Compensation Act and the legal process in ‘general’

Interviewing and taking details and statements from Ms…about the potential claim and assisting her in this respect, particularly in relation to Workers Compensation Act and outlining the options available

70.00

Total $ 770.00

Payment is strictly 7 days

96 Of concern to the Society is the claim that AIH discussed with the client to rights under the Act, the relevant legal processes, outlined her “options” in relation to claims under the Workers Compensation Act and discussed with her the “legal differences and options available”. Certainly these claims are strongly indicative of undertaking of legal work, especially with a client who may not understand the precise capacity in which the AIH investigator gave the advice or consulted with her.

97 No evidence was led by AIH as to the mode by which it conducts its business and no attempt was made to explain what might be regarded, at the very least, as strong indications about the provision of legal services. In the absence of any evidence about what occurred from which it might be concluded that the invoice should not be accepted on its face, it seems to me that I am justified in inferring that AIH has from time to time indeed engaged in legal practice of the kind it has described in its own words. Furthermore, it has on occasions given its enquirer to understand that it is in a position to offer legal services relating to the making of claims for compensation or damages and thus is entitled to do so. Moreover, I think that the correspondence shows that it considers that it is commercially advantageous, even if the representation is not directly made, to use language which is calculated to convey that impression to lay persons. It is clear that, at least indirectly, this conduct is undertaken for “fee, gain or reward” within the meaning of s 14 of the Legal Profession Act 2004.

98 The Society has also tendered material relating to the nature of the charges imposed by AIH on solicitors – and by implication on the clients – which had been drafted with a view to enable those fees to be recovered as a disbursement from the unsuccessful defendant in the event of a satisfactory conclusion of any claim. There are examples of circulars to solicitors that set out changes to the way that invoices are set out to enable them more readily to be accepted as disbursements. There is indeed an element of construction in those documents which suggests that the charges are not adequately transparent and give sufficient disclosure for the purpose of enabling a proper assessment of costs either by an unsuccessful defendant or an officer of a court. Of course, any solicitor who was less than properly candid in seeking payment of costs is in breach of professional responsibilities. I certainly do not wish to suggest that any of the solicitors to whom I have made reference have acted or would act inappropriately. But I think the Society’s point that there appears to be a manipulation of the cost recovery process is well taken. I do not have to consider this matter any further since the particular issues are not before me and I do not see this matter as relevant to a consideration of the relief sought by the Society. But this is a matter that warrants some further inquiry.

Conclusion

99 I have concluded, therefore –

Legal Profession Regulation

Legal Profession Act

100 It seems to me that I should order that the defendants be restrained from engaging in legal practice in contravention of s 14 of the Legal Profession Act 2004 and from representing that they are entitled to engage in legal practice in contravention of s 15 of the Legal Profession Act 2004.

101 I order the plaintiff to pay the defendants’ costs in relation to the alleged contravention of the Legal Profession Regulation 2005 and the defendants to pay the plaintiff’s costs in respect of the contravention of ss 14 and 15 of the Legal Profession Act 2004.

102 I reserve liberty to apply on 14 days’ notice in respect of the forms of the orders.

**********

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Citations

The Council of the Law Society of New South Wales v Australian Injury Helpline Limited [2008] NSWSC 627

Most Recent Citation

Ereira v Roads and Traffic Authority [2009] NSWADT 299

Cases Citing This Decision

Council of the New South Wales Bar Association v Dwyer [2015] NSWCA 302

Hagipantelis v Legal Services Commissioner of New South Wales [2010] NSWCA 79

Cases Cited

Statutory Material Cited

Carrigan v Honourable Senator Michaelia Cash [2017] FCAFC 86

Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288

CITATION:	THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES v AUSTRALIAN INJURY HELPLINE LIMITED & ORS [2008] NSWSC 627
HEARING DATE(S):	14/08/07, 15/08/07, 16/08/07, 11/09/07, 12/09/07
JUDGMENT DATE :	20 June 2008
JUDGMENT OF:	Adams J at 1
DECISION:	1. The defendants are restrained from engaging in legal practice in contravention of s 14 of the Legal Profession Act 2004 and from representing that they are entitled to engage in legal practice in contravention of s 15 of the Legal Profession Act 2004. 2. The plaintiff to pay the defendants' costs in relation to the alleged contravention of the Legal Profession Regulation 2005 and the defendants pay the plaintiff's costs in respect of the contravention of ss 14 and 15 of the Legal Profession Act 2004 3. Liberty to apply on 14 days notice in respect of the forms of the orders.
CATCHWORDS:	Injunctive relief - personal injury advertising by non-lawyers - Validity of Legal Profession Regulation 2005 - Ultra vires - whether excepting NSW litigation sufficient to comply - whether advertiser in legal practice - nature of relationship with lawyers on panel - nature of relationship with clients - whether representing that legal qualified - injunction granted
LEGISLATION CITED:	Interpretation Act 1987 Legal Practice Act 1996 (Vic) Legal Practices Act 1893 (WA) Legal Profession Act 2004 Legal Profession Regulation 2002 Workers Compensation Act Legal Profession Regulation 2005 The Sale of Land Act 1962
CATEGORY:	Principal judgment
CASES CITED:	APLA v The Law Society of New South Wales (2005) 224 CLR 322 at 423 Attorney-General v Quill's Wills Ltd & Ors (1990) 3 WAR 500 Australian Competition and Consumer Commission v Murray [2002] 132 FCR 428 The Council of the New South Wales Bar Association v Davison [2006] NSWSC 65 Cornall v Nagle (1995) VR 1888 The Council of the Law Society of New South Wales v Seymour (1999) NSWCA 117 Dow Jones & Co Inc v Gutnick [2002] 210 CLR 575 Felman v Law Institute of Victoria [1998] 4 VR 324 Kekatos v The Council of the Law Society of New South Wales [1999] NSWCA 288 Law Society of New South Wales v Ramalca Pty Limited (1988) 12 NSWLR 34 Law Society of Victoria v Merrick & Anor [2006] VSC 361 In re Sanderson; ex parte The Law Institute of Victoria (1927) VLR 394 Ward v Brodie & Stone 215 ALR 716
PARTIES:	The Council of the Law Society of New South Wales (Plaintiff) Australian Injury Helpline Limited (First Defendant) MACC Holdings (Aust) Pty Limited (Second Defendant) Gary Michael Whelan (Third Defendant)
FILE NUMBER(S):	SC 14891/2006
COUNSEL:	G.F. Lindsay SC/C.A. Webster (Plaintiff) N Perram SC/A Connolly (Defendants)
SOLICITORS:	Raymond John Collins (Plaintiff) Henry Davis York (Defendants)