The great transitional provisions debacle #1

There is a bill before the Victorian parliament, the Legal Profession Uniform Law Application Amendment Bill 2019. What the last few sections propose to do, rather sotto voce, is ‘validate’ retrospectively everything the Victorian Legal Services Commissioner has done since the 1 July 2015 commencement of the LPUL and repeal of the Legal Profession Act 2004 (Vic) in relation to investigations which commenced before that date. It also seeks to validate retrospectively orders made by VCAT in disciplinary prosecutions in matters arising from such investigations brought by the VLSC instead of the predecessor office, the Legal Services Commissioner (LSC). The relevant provisions are even going to commence retrospectively, on the date of the Bill’s second reading (Weird! Why?).

You’re probably sick of my fascination with transitional provisions by now, but this is actually quite the silent snafu which just shows why everyone should sweat over transitional provisions. Usually I curse those who draft these damned bits of legislation, but not this time. For once the drafters made their intentions clear in clauses 26 and 27 of the transitional provisions. It’s just that, presumably, nearly everyone assumed they intended something else, and read the transitional provisions with that bias.

If a person without standing (e.g. the VLSC) sought to invoke VCAT’s 2004 Act jurisdiction, then VCAT’s decisions were nullities (The Herald and Weekly Times Pty Ltd v Victoria [2006] VSCA 146 at [33]) whether or not the respondent lawyer took the point (since parties cannot bestow jurisdiction on a statutory tribunal: Thomson Australian Holdings Pty Ltd v Trade Practices Commission (1981) 148 CLR 150 at 163, 167), as this blog points out from time to time. So the validating legislation will retrospectively impose penalties upon practitioners where none previously existed as a matter of law. That’s quite an exercise of retrospective power.

The funny thing is that the VLSC responded to my clients’ arguments that she ain’t got no power and VCAT ain’t got no jurisdiction under the 2004 Act by saying that she did, and even convinced VCAT of that in one case in which the proper Applicant point was squarely taken. And the Attorney-General seemed to say in the second reading speech that the situation after the ‘validation’ will reflect parliament’s clear intent all along (hmmm). So it’s kind of weird if the VLSC or the Legal Services Board has asked the Victorian parliament to pass a law which undermines the VLSC’s contention that she has always had power to tidy up pre-1 July 2015 complaints, and kind of weird that the parliament can be bothered to clarify by ‘validation’ that which is apparently perfectly clear already. It’s all a bit ‘Nothing to see here, folks, move right along.’

The other weird thing is that VCAT seems to continue to exercise 2004 Act jurisdiction on the application of the VLSC, even after the introduction of this Bill into parliament, even while parliament’s lower house seems to be of the view that legislation is needed to allow the VLSC to invoke that jurisdiction. It could not be that VCAT is exercising jurisdiction it does not have because it is confident that such a course will in the future be retrospectively validated, so one wonders if anyone has actually raised this legislation with VCAT at a high level.

Legal regulators in Victoria seem to get themselves into this kind of imbroglio from time to time. Consider the great delegation debacle and Byrne v Marles -Gate.

For years clients of mine have been arguing that the only person with tidying up duties under the new regime implemented by the commencement of the Legal Profession Uniform Law (Vic) on 1 July 2015 was the person occupying the statutory office of ‘Legal Services Commissioner’ created by the Legal Profession Act 2004 (Vic). That person was Michael McGarvie, who as it happened, was also taken to have been appointed as the first Victorian Legal Services Commissioner, a new office created by the LPUL (see s. 166 of the Application Act). But from 2018, the second VLSC was appointed, Fiona McLeay, and at that point the distinction between the LSC and the VLSC became more corporeal.

Clauses 26 and 27 are ultra-specific transitional provisions in Sch. 4 of the LPUL and one really might think that all analysis would start with them, but it has not been so. The former said that, unless the default situation was changed by regulation or other statute (which it wasn’t, but which it is the purpose of the proposed Amending Act belatedly to do), the LSC was after 1 July 2015 to tidy up and finish off complaints he had already started to investigate, under the 2004 Act, while the latter said the VLSC was to work on complaints made after the LPUL’s commencement, even in respect of conduct which pre-dated it, and he was to do so under the LPUL with ‘necessary modifications’, including that he couldn’t take disciplinary action more onerous than the LSC could have taken under the 2004 Act.

That was already a bit rude in terms of retrospective operation, because on the VLSC’s view of things, clients’ confidences were newly apt to be disregarded in certain kinds of complaints where the VLSC gained new powers to over-ride their privilege. Further, the VLSC became a decision maker in the disciplinary realm whereas the LSC had been but an investigator-prosecutor. And the Victorian Charter of Human Rights and Responsibilities had no operation at all in respect of matters arising under the LPUL so as not to prejudice the uniform interpretation of the uniform law in heathen states and territories without a Charter. Compare the LSC under the 2004 Act, who probably was bound by the Charter.

What seems to have happened is that Mr McGarvie’s people treated the transition as a rebranding exercise in which a V was added to the old letterhead and everyone carried on as before but with an extra V, whether they were exercising 2004 Act jurisdiction or LPUL jurisdiction and whether they were delegates of the LSC or the office with the extra V. Indeed the VLSC and the Legal Services Board created a new combined website under the brand ‘Victorian Legal Services Commissioner + Board’ which caused all kinds of legal confusion in those who were not paying close attention, who were numerous.

As you can imagine, most of the work on 2 July 2015 was tidying up duties and little of it was complaints made that day or the day before. And so it continued for some years until, presumably, post-1 July 2015 complaints were generating more work than those still going since before 1 July 2015.

An early decision of VCAT on the interpretation of the transitional provisions applicable to disciplinary prosecutions was VLSC v Henderson [2016] VCAT 1280 where the proper Applicant point does not seem to have been taken by anyone. The decision concentrated at [59] et seq on whether it was appropriate for VCAT to exercise 2004 Act jurisdiction or LPUL jurisdiction, finding that 2004 Act jurisdiction should be exercised. There is nothing controversial about that finding. The VLSC appears not to have relied on cl. 26. The Tribunal ‘noted’ it, but seems to have made its decision by reference to a general interpretation provision (s. 14 of the Interpretation of Legislation Act 1984 which, it might have been argued, ought to have been found to have been intentionally displaced by the more particular transitional provision (cl. 26)). It is a curiosity of that case which was commenced in 2014 when the office of VLSC did not exist, that it must have been commenced by the LSC. Yet by the time of the final orders, the Applicant was the VLSC, so the proper applicant question must have been considered by someone at some stage.

In my experience, the VLSC continued to rely on s. 14, which preserves after the repeal of Acts certain rights and obligations which had accrued on the date of the repeal, to justify her moving to have practitioners spanked under the 2004 Act. There are some problems with that analysis. First, whatever accrued right or obligation might have existed on 1 July 2015, and been preserved by s. 14, it was a right or obligation of the LSC, not of the VLSC. Secondly, one might think that s. 16 which deals with repeal and re-enactment is the more apposite provision, the result of which would be that things done pre-1 July 2015 under the 2004 Act would be taken to have been done under the LPUL, a consequence so antithetical to the legislative purpose articulated by cll 26 and 27 that no one could buy it. The third reason I have already mentioned: the general provision in a separate Act must yield to the specific provision in the LPUL itself.

And not all scenarios were the same for s. 14 purposes either. So, in Henderson the disciplinary prosecution was already on foot on 1 July 2015, so s. 14 could attach to a ‘legal proceeding’. The case in which one of my clients first took the point was one where the decision to prosecute following a completed investigation had been made before 1 July 2015 but the prosecution was commenced after that date. There, the VLSC argued that s. 14 attached to the right and/or obligation of the LSC to prosecute having arrived at the statutory state of satisfaction which was the sine qua non of a prosecution. In other cases the investigation continued into the second half of 2015 and beyond. In that last category of cases, it is hard to see what accrued right or obligation the LSC might have had on 1 July 2015, mid-way through a disciplinary investigation. These cases might be expected to have come into view last, and perhaps it was the difficulty of making s. 14 fit them which shifted the focus to cl. 26 which says rather starkly that the LSC and not the VLSC is to tidy up under the 2004 Act, whereupon the Bureau realised it had a problem.

What I think nearly everyone overlooked is that the LSC and the VLSC were separate legal entities even though the last LSC was for a time the first VLSC. The Legal Services Board was specifically given continuity of legal personality, but the Commissioner was not. No doubt that was because one uniform office was created for both NSW and Victoria (the LPUL, as the ‘Uniform Law’ bit suggests, introduced a uniform law between the two states), so that one uniform set of transitional provisions needed to deal with two states’ scenarios and so the drafters just abolished the old regimes’ offices in the two states and set up a new one. Readers of the transitional provisions assumed that these ones would follow the pattern of old ones, without realising that NSW’s insertion into the picture was prone to disrupt that analysis. I fell prey to a not dissimilar error of thought at one stage.

The relevant provisions of the Bill propose to insert into the Legal Profession Uniform Law Application Act 2014 the following provisions:

Division 11—Legal Profession Uniform Law Application Amendment Act 2019

185   Substituted entity

For the purposes of clause 26(3) of Schedule 4 to the Legal Profession Uniform Law (Victoria) and despite anything to the contrary in that clause, the Victorian Legal Services Commissioner is the substituted entity and is to deal with a complaint or investigation referred to in clause 26(1) of that Schedule.

186   Validation

(1)       On and after 1 July 2015 and before the day on which section 185 (as inserted by section 10 of the Legal Profession Uniform Law Application Amendment Act 2019) comes into operation, any of the following done or made, or purported to be done or made, in relation to a complaint made under Chapter 4, or an investigation referred to in Chapter 4, of the Legal Profession Act 2004 has and is taken always to have had the same force and effect as it would have had if section 185 had been in operation during that period—

(a)  any thing done or purported to be done by or on behalf of the Victorian Legal Services Commissioner, an Acting Victorian Legal Services Commissioner or a delegate of the Victorian Legal Services Commissioner; 

(b)  any thing done or purported to be done by or on behalf of the Victorian Legal Services Board;

(c)  any decision or order made or purported to be made by a court or tribunal in a proceeding arising out of the complaint or investigation…

The relevant passage of the Explanatory Memorandum makes no sense to me, leading me to wonder whether those involved completely understand the issues:

Where a complaint or investigation was ongoing at the commencement of the Principal Act, clause 26 of Schedule 4 to the Legal Profession Uniform Law provides that the complaint or investigation is either dealt with under the Legal Profession Act 2004 or a substituted entity where such a substituted entity is prescribed. Clause 10, by inserting new section 185, provides that the [Victorian Legal Services] Commissioner is the substituted entity.

What it should say is that cl. 26 provides for pre-1 July 2015 complaints under the 2004 Act to be dealt with by the LSC or a substituted entity. It continues:

Part 3 is retrospective in its operation.  The Commissioner has operated on the basis that it is the correct body since the commencement of the Principal Act, and has concluded in excess of 200 complaints and investigations.  It is necessary for the purposes of certainty to apply the Part retrospectively, to ensure that it also covers the concluded matters as well as any current or future matters.

The ‘Statement of Compatability‘ says:

Part 3 might limit rights under the Charter. However, those limitations are justified in view of the amendment’s objective of protecting the public from legal practitioners who have engaged in misconduct.

Of course one might ask how the parliament knows that the practitioners retrospectively to be affected have engaged in misconduct, if all the VCAT decisions in question are legal nullities.

It troubles me that the analysis of compatibility with the Charter earnestly analyses all the little issues, but does not grapple with the big issue of imposing penalties on persons retrospectively and suspending them from practice without any legally recognised process. Generally, retrospective legislation does not operate to defeat the rights of persons who have taken the point in pending proceedings, but this Bill purports to do so. What is to happen to the costs of persons who have spent money taking this point in proceedings, and to proceedings in which the proper Applicant point is a live issue? Will a person who has failed to pay a fine pursuant to an order which was a nullity at the time of the non-satisfaction be liable to be prosecuted for contempt of court or professional misconduct because the order will be taken to have been effective at that time?

The parliamentary process seems to have been held up by a committee with responsibility for scrutinising Bills having served some requisitions on the Attorney-General. The Committee is concerned that by directing the VLSC to do the 2004 Act tidying up duties, lawyers will lose the protection of the investigator being a public entity required to act in accordance with Victoria’s Charter of Rights and Responsibilities.

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