State Acts’ power to regulate local lawyers’ overseas conduct

In Legal Practitioners Complaints Committee and MT QC [2009] WASAT 42, Judge Eckert’s 3 member tribunal considered the application to the Western Australian Legal Practice Act, 2003 of the laws relating to the power of state governments to make legislation regulating overseas conduct (i.e. ‘the law of extraterritoriality’).  Her Honour is Deputy President of the State Administrative Tribunal, and a judge of Western Australia’s District Court.  The Tribunal held that the Western Australian parliament had the power to make laws providing for the discipline of Western Australian lawyers who did things overseas which infringed the norms of their Australian peers, and that the parliament had in fact done so.  Her Honour also considered the relevance of compliance with overseas norms, and who has the burden of proving those norms.  This is one to store away for when you read it.  The relevant passage is:Jurisdiction – extraterritoriality – Indonesian law

11 As is explained below, the threshold issue in this application is whether the LPCC has established that Ms Corby was the client or prospective client of the practitioner. To the extent such a relationship was formed, this took place in Indonesia, although the relevant conduct, the disclosure of confidential information and statements to the media, largely took place within Australia (one disclosure was made from Bali). In this context the practitioner has raised several jurisdictional arguments.

12 In his response (December 2007) the practitioner submitted that any obligation he owed to Ms Corby was governed by a foreign law, namely the ‘proper law of Indonesia’ (sic). At the hearing no oral submissions were made in support of this claim.

13 In his written closing submissions under the heading ‘Jurisdiction Question’, Mr McCusker QC for the practitioner put the argument (in summary and without the helpful authorities referred to) as follows:

  1. The Western Australian Parliament is given broad legislative power to make laws for the peace order and good government of the (then) colony of Western Australia (s 2(1) Constitution Act 1889 (WA));
  2. There is a territorial limitation inherent in the grant of legislative power. Western Australia may only legislate for persons, events or things outside Australia, where the subject of the legislation is sufficiently connected to Western Australia. Although s 2(1) of the Australia Act 1986 (Cth) declares that each State has power to make laws having an extraterritorial operation, such laws are required to be laws for the ‘peace order and good government of the State’;
  3. The practice in Western Australia of legal practitioners founds jurisdiction over the capacity of the regulator to regulate their practice. However, there must be limits to that;
  4. If a Western Australian practitioner’s conduct overseas constitutes unprofessional conduct overseas, there may be jurisdiction to deal with that;

[We accept those submissions.]

  1. If a Western Australian practitioner’s conduct overseas does not constitute unprofessional conduct overseas, even if it could constitute unprofessional conduct in Western Australia, ‘it does not follow that the practitioner would be guilty of unprofessional conduct’; and
  2. There is no evidence as to whether there would be a duty of confidence owed by the practitioner in the circumstances of this case under Indonesian/Balinese law.

14 The LPCC’s outline of closing submissions on this subject was confined to the question raised in the practitioner’s response; that is, whether the proper law of the contract was Indonesia. That is not, as we understand, the basis of the argument as put in the practitioner’s written closing submissions and was, accordingly, of limited assistance.

15 There are difficulties with the practitioner’s submissions. The first is that the conclusion (‘it does not follow that the practitioner would be guilty of unprofessional conduct’ in Western Australia) does not appear to follow logically from the premises identifying the constitutional powers (which may generally be accepted as correct). If, as the practitioner recognises, the regulator has or may have jurisdiction with respect to a practitioner’s conduct an aspect of which takes place overseas, then of itself the status of the conduct overseas would not seem relevant. That is, it does not follow as a necessary inference that if the conduct was viewed overseas as being acceptable, the practitioner would not be guilty of unprofessional conduct in Western Australia. It does not seem open to suggest that some form of ethical relativism operates such that a local practitioner’s conduct overseas might be judged only by the standards of that country. How the conduct of the Western Australian practitioner is viewed here according to the standards of ‘members of the profession of good repute and competence’ remains the relevant enquiry. That is so even if the relationship of lawyer and client is created overseas.

16 The second difficulty with the submissions concerns the nature of the argument. That is, whether it is intended as a constitutional challenge to the power of the legislature to enact the LP Act to the extent it has extraterritorial operation with respect to conduct of a Western Australian legal practitioner overseas; or whether it goes to a question of construction of the LP Act, that is, whether in the circumstances it is intended to have such operation.

17 To the extent the argument goes to validity (that is, being a ‘Jurisdiction Question’), the Tribunal’s position may be put in general terms (as were the submissions) as follows. As the submissions record, the legislative authority of the Western Australia Parliament under the Constitution Act 1889 is to make laws for the peace, order and good government of Western Australia. These words do not constitute words of limitation. Specifically, they do not confine the power to make laws which operate only to persons or events within the State. Again as the submissions note, that the State legislatures have power to make laws with extraterritorial operation is recognised in the Australia Act 1986 (Cth). As to the extent of that power, the somewhat vague expression peace order and good government has been interpreted to mean that there must be a real connection between the subject matter of the legislation and the State. Whilst such a legislative power therefore requires a relevant territorial connection, and this requirement is perhaps also embedded in the federal structure of the government of Australia of which each State is a part, the test of relevance is to be applied liberally and even a remote or general connection will suffice. Pearce v Florenca [1976] HCA 26; (1976) 135 CLR 507; Union Steamship Company of Australia Pty Ltd v King [1988] HCA 55; (1988) 166 CLR 1; Mobil Oil Australia Pty Ltd v Victoria [2002] HCA 27; (2002) 211 CLR 1. For reasons given, there is here a direct and specific connection based upon the practitioner’s admission and practice in Western Australia (and also in this case, the extent to which the conduct complained of took place here).

18 To the extent the argument is intended to operate as a matter of statutory interpretation, that is, to confining the operation of the general language to a subject matter under the effective control of the legislature (or perhaps as invoking the common law presumption against extraterritorial operation), it is clear, in our opinion, that the LP Act does so. The relevant provisions of the LP Act provide for the LPCC to inquire into complaints and the conduct of a practitioner and refer the matter to the Tribunal, based upon her or his being admitted in Western Australia (as here) or being an interstate practitioner practising in Western Australia. That an aspect of the conduct was carried out overseas does not of itself deny jurisdiction as the submissions recognise. More specifically, there is nothing in the definition of unsatisfactory conduct in s 3 of the LP Act or Pt 12 generally which suggests it is limited to conduct exclusively undertaken in Western Australia. It would be easy to imagine circumstances where critical aspects of a practitioner’s conduct (the use of a client’s money) took place overseas. That could not deny the LPCC jurisdiction. Law Society of New South Wales v Glenorcy Pty Ltd [2006] NSWCA 250; (2006) 67 NSWLR 169, a case referred to by Mr McCusker.

19 But in any event, notwithstanding that (if proved) the relationship was formed overseas, the practitioner’s unauthorised disclosure of the client’s confidential information and statements to the media (if proved) took place (with one exception) in Western Australia and (so it is alleged) constituted unprofessional conduct. There could be no question that the LPCC and the Tribunal has jurisdiction in respect of that conduct. That being so, the question of where the relationship was formed, and according to what system of law, does not seem material and certainly not decisive. Further, to the extent relevant, we accept the LPCC’s submissions that the proper law of the contract and of the professional obligation of confidence was Western Australia rather than Indonesia. That is, the contract and obligation had its closest and most substantial connection to Western Australian law. We note on this aspect in relation to a claim for privilege: Kennedy v Wallace [2004] FCA 332; (2004) 208 ALR 424 (Kennedy) at [51]-[52].

20 The final difficulty with the argument is the concluding part of the practitioner’s submissions concerning the law (and practice) of Bali/Indonesia with respect to a lawyer’s disclosure of confidential information. The general principles governing conflicts of laws include that:

  1. the burden of proof lies on the party claiming that foreign law departs from the law of Western Australia; and
  2. in the absence of proof to the contrary, foreign law is presumed to be the same as local law.

21 No reasons have been advanced why these principles ought not apply in the circumstances, even if the second rule might be said to be subject to some difficulties. That would suggest the presumption (or the ‘default position’) operates such that the law and practice of Bali/Indonesia proscribes the conduct to the extent that it is proscribed here.

22 We should say for completeness that we have read the judgments in Kennedy: on appeal Kennedy v Wallace [2004] FCAFC 337; (2004) 213 ALR 108. These decisions were cited by Mr McCusker in support of the argument that regard must be had to how the issue would be considered overseas. We understand the basis for referring to these decisions by way of analogy, but in the event do not find them to be of assistance. First, because the subject, legal professional privilege, is conceptually different. Practical issues would necessarily arise where the document was privileged in one country but not in another. Second, because the primary judge raised the issue but made no statements of principle and decided the matter on the facts. Third, because on appeal, the issue of the relevance of privilege under the foreign law was left largely undiscussed and expressly undecided – as a ‘difficult question’ (see on appeal at [204], [214], [62]).

23 To the extent the conclusion contended for may be said to reflect professional standards generally, we mention that it has been addressed by the Code of Conduct of the Bar of England and Wales. Barristers engaging in ‘international work’ are relieved from some of the requirements of the Code. Such work is defined relevantly as being work which:

  1. relates to matters or proceedings essentially arising, taking place or contemplated outside England; and
  2. is to be substantially performed outside England.

24 Here relevantly, the practitioner’s services were substantially to be performed within Australia.

25 For these reasons we reject the practitioner’s submissions on the subject of jurisdiction.’

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