The practising certificate suspension challenge that went wrong

Update, 8 November 2008: When I wrote this post, the Court of Appeal had authoritatively answered another of the questions posed below, about the penalty privileges, but I had not yet read the case, CT v Medical Practitioners Board [2008] VSCA 157.  Now I have, and I have posted here about it.

Original post: WPE v Law Institute of Victoria [2008] VCAT 1277 shows that you’ve got to be careful when challenging a decision to cancel or suspend your practising certificate because if the Law Institute wants to sic you, they can seek to establish misconduct against you in the merits review proceedings, and if they get up, VCAT has the same suite of powers as it would following a disciplinary prosecution: s. 2.4.37(3) Legal Profession Act, 2004.

Sometimes, rather than engage in litigation, it is better to play the game, take an early long service leave, help some orphans, have a moment on the road to Damascus, and send in a well thought out application for a new certificate at a well judged time in the future. Saves a lot of costs and maybe a few orphans,  lets you have a holiday at the same time, and means there’s never a hearing into the conduct which gave rise to the suspension and/or cancellation. Spend half the money you would have spent on lawyers on a public relations consultant and a lobbyist and you’re doing even better. Other times it’s better to avoid merits review — the obvious remedy specifically provided for in the Legal Profession Act, 2004 — and go for judicial review proper (a course which we now know since Zarah G-W’s cases is kosher; c.f. Perkins v Victorian Bar Inc [2007] VSC 70), especially where the decision making process leading up to the suspension or cancellation is dubious.  But sometimes, if a disciplinary charge seems imminent, the question of costs referred to below might recommend getting in early with an application for review of a practising certificate decision which might prevent the laying of disciplinary proceedings proper and lead to adjudication of the issues in a more costs friendly regime.  There is much to weigh up in choosing one’s approach when challenging a practising certificate decision.

How these hybrid administrative law and quasi-criminal proceedings are supposed to pan out has been a bit of a mystery to date.  They are a new concept.  Maybe they are unique — who knows?  Anyway, there was certainly no analogue under the Legal Practice Act, 1996.  Who bears the burden of proof?  Who should go first?  Does the privilege against penalties protect the lawyer?  Is it an inquisitorial or adversarial proceeding?  Should the matters the Law Institute will argue should found disciplinary findings be the subject of properly particularised charges?  What about costs?  Can the Law Institute apply for disciplinary findings at all, or is it a jurisdiction which must be invoked by VCAT?  Judge Ross provided answers to a couple of these questions only in this case.

WPE v Law Institute of Victoria [2008] VCAT 1277 tells the story of how after a trust account audit, the Institute suspended Mr E’s practising certificate. He sought merits review of that decision, but by the time it could be heard, he had applied for renewal of the suspended certificate, and had been unsuccessful, so he sought merits review of the decision not to renew his certificate, and the two applications were heard together.  The hearing resulted in dismissal of the applications and findings of misconduct.

The final orders were made following a subsequent hearing akin to the plea in a criminal case, and have just been published: [2008] VCAT 2034.  The Law Institute wanted him struck off, but Judge Ross said he would not refer Mr E to the Supreme Court.  Instead, his Honour found Mr E guilty of misconduct and told him not to reapply for a year and 9 months (3 years since the date of the suspension), not to apply for a principal’s certificate for a further 3 years and not to apply for trust account rights for five years after that (i.e. until mid-2018).

Mr E’s sin was to have ceded responsibility for his trust account to his one-time clerk who grew into his practice manager, and ultimately gobbled the practice up until the solicitor was just a frontman with a practising certificate which provided cover for an unqualified conman.  Some people lost a lot of money, though there was no evidence that Mr E saw any of it.

Disposition

(‘Disposition’ is my language for the sentence-like thing which happens at the end of disciplinary hearings.  I use it to remind me of the primarily non-punitive nature of the jurisdiction.) The extent of the discount Issac B got for plea bargaining on the eve of trial is apparent from a comparison of the two cases, both decided by Judge Ross.  Issac B’s professional misconduct was characterised as ‘attended by a significant aggravating factor’, as ‘a serious breach of fiduciary duties’, accompanied by a ‘lack of remorse and insight into his wrongdoing’, and as the culmination of a series of previous disciplinary infractions which spoke of ‘an indifference to professional standards’.  Multiple charges of wrongdoing were established in the same hearing as well.  He was told that a holiday of 9 months would be just the tonic, but there were no restrictions on the kinds of certificate he could apply for thereafter.

Mr E’s wrongdoing, on the other hand, was characterised as ‘sins of omission rather than comission’ from which he derived no personal benefit, and the result of being deceived by a rogue.  Unrepresented, his plea in mitigation was observed to be less than scrupulously accurate.  He was told an appropriate holiday would be 3 years, and that he could not practice as a principal even without a trust account for 6 years.  Given that he was admitted to practice 35 years ago and is a disability support pensioner, one might imagine the likelihood of finding a job as an employee are relatively slim so that the orders might spell the end of his career in the law.  Mr E admitted the allegations put to him by the Law Institute without bargaining for anything in return.  It wasn’t like he could really ‘plead guilty’: he was the applicant in the case.

Burden of proof

It has been suggested to me, about one of these proceedings, that since the lawyer is the applicant, the lawyer has the burden of proof in relation to all issues, including in relation to the disciplinary aspects.  Either that, or there is no burden of proof, it was said, since there is authority to say that merits review proceedings are inquisitorial, not adversarial.  There is no room for doubt about who bears the burden of proof now, though, and what the appropriate standard is after Judge Ross’s decision:

’16.  The LIV [Law Institute] bears the onus of proof in respect of the allegations of misconduct made against Mr [E]. The standard of proof required of the LIV is proof on the balance of probabilities, or to put it another way the allegations must be established to the ‘reasonable satisfaction’ of the Tribunal. [Footnote: Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J] The strength of evidence necessary to establish a fact on the balance of probabilities may vary according to the circumstances. As their Honours Mason CJ, Brennan, Deane and Gaudron JJ said in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [(1992) 110 ALR 449]:

“The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.” [footnote: at 449 – 450, footnotes omitted]

17. In the circumstances of this case I am conscious of the seriousness of the allegations made against Mr [E] and the potential gravity of the consequences for him in the event that the allegations are established to the ‘reasonable satisfaction’ of the Tribunal. It follows that clear and cogent evidence will be required before reasonable satisfaction that the allegations have been made out can be attained on the balance of probabilities.’

Costs

In relation to the question of costs, Judge Ross said that the general provision that VCAT must order costs against a lawyer who has been found guilty of a disciplinary offence may not apply where those findings are made in an application to review a decision about a practising certificate.  His Honour said:

’51.  Clause 46D of Schedule 1 to the VCAT Act deals with costs in disciplinary matters, it says:

“(1) Subject to this clause, the costs of a proceeding under Division 4 or 5 of Part 4.4 of the Legal Profession Act 2004 are in the discretion of the Tribunal.

(2) The Tribunal must make an order requiring an Australian legal practitioner whom it has found guilty of unsatisfactory professional conduct or professional misconduct to pay costs (including the costs of the Commissioner and the complainant (if any) unless the Tribunal is satisfied that exceptional circumstances exist.

(3) The Tribunal must not make an order for costs against the Commissioner unless satisfied that special circumstances make it appropriate to do so.

(4) Section 109 [VCAT’s main costs provision] does not apply to a proceeding under Division 4 or 5 of Part 4.4 of the Legal Profession Act 2004.

(5) In this clause, ‘Australian Legal practitioner’, ‘Commissioner’ and ‘complainant’ have the same meaning as in the Legal Profession Act 2004.”

52.  This proceeding arose out of applications by Mr [E] seeking a review of decisions by the LIV to firstly suspend his practising certificate and then to refuse to renew it. Such applications were instituted pursuant to s 2.4.37 of the 2004 Act. Section 2.4.37 is in part 2.4 of the 2004 Act and accordingly there is some doubt as to whether clause 46D(2) applies in the circumstances of this case.

53.  But it is unnecessary for me to express a concluded view about that issue because even if clause 46D(2) applies I am not persuaded that I should award costs in the circumstances of this case.

54.  Mr [E] is a disability support pensioner and an undischarged bankrupt. He did not personally benefit from his misconduct and made admissions which resulted in a significant saving in hearing time. Having regard to the particular circumstances of this case I am satisfied that “exceptional circumstances” exist, within the meaning of clause 46D(2) and decline to make an order for costs.’

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