Barwick v Law Society of NSW: a case note

Sir Garfield’s eldest son Ross convinced the High Court to prohibit his further prosecution in a disciplinary tribunal. Though there had been no procedural unfairness to him, a disciplinary investigation by the Law Society hadn’t followed the rules, such that the Tribunal did not have jurisdiction: Barwick v Law Society of New South Wales [2000] HCA 2; (2000) 169 ALR 236. His counsel was Major-General Paul le Gay Brereton, now a judge of the Supreme Court of NSW.

The majority recorded at [44] that Mr Barwick’s ‘argument does not involve a claim that he was denied procedural fairness by not having a proper opportunity to understand the charges against him and respond to them’. Kirby J noted at [114] that ‘In this case … it was accepted that Mr Barwick had no complaint of any departure from the rules of natural justice (procedural fairness).’

Gleeson CJ, Gaudron and McHugh JJ formed a plurality and separate judgments of Kirby J and Callinan J were delivered agreeing as to the orders to be made. There was in fact much agreement in general; Justice Kirby only dissented in relation to one question, namely whether Mr Barwick had waived the right to take a point about amendment of the disciplinary charges, having consented to the amendment.

The first instance decision, overturned by the High Court, was Barwick v Law Society of New South Wales, NSWCA, 16 July 1998 per Sheller JA with whom Mason P and Priestly JA agreed, reported only as BC9803164, though the first instance decision was an application for judicial review to prohibit the continuation of proceedings in a statutory disciplinary tribunal. So it is a case in which 3 appellate judges interpreted the law one way and then five appellate judges interpreted it the other way. All agreed that the drafting of the legislation under consideration was poor ([67], [85], [143]).

After the High Court’s decision, the Law Society went back, followed the rules, and started the prosecution over, with the end result that Mr Barwick was struck off: Law Society of New South Wales v Barwick [2002] NSWADT 66. He appealed, and although the Court of Appeal found that the disciplinary tribunal had this time acted contrary to the requirements of procedural fairness, it confirmed the Tribunal’s decision to strike him off: even if the impugned findings were disregarded, the only possible result was that he be struck off anyway: Barwick v Council of the Law Society of New South Wales  [2004] NSWCA 32

A subsequent application to employ Mr Barwick as a clerk by a lawyer who had for a decade worked in firms of which he was a principal was refused by the Law Society, but that decision was overturned on appeal to the Administrative Appeals Tribunal: Miedzinski v Council of the Law Society of NSW [2007] NSWADT 268. A judge, a priest, an Aboriginal elder, and a barrister all vouched for his honesty and genuine contrition. The work of a clerk he was permitted to do sounds distinctly like legal work not usually done by clerks to me (‘i. Drafting deeds, documents, letters, contracts … ii. Research for professional staff … iii. Preparation of briefs to Counsel, observations for Counsel, drafting documents and written submissions to be settled by Counsel.’)

Now it seems he is back in practice in probate, wills and estates amongst other practice areas.

Facts

Mr Barwick, an aspirant Liberal parliamentarian and solicitor, was a principal of the firm Barwick Dechnicz and Boitanowas. Roman Dechnicz was indebted to a firm called Smits Leslie Barwick. He and Mr Barwick had previously been co-principals. Mr Barwick agreed with Mr Dechnicz to use the firm’s clients’ funds to repay Mr Dechnicz’s debts. Mr Dechnicz was struck off at the same time Mr Barwick was.

Mr Barwick was the executor of the estate of Sir Garfield’s secretary when he was one of Menzies’s Ministers, Everil Wilkinson. He had other clients called Mottram and Slepkowycz. The estate and the two clients lent in total $85,000 to Mr Barwick’s sister, Diane Roberts, secured by an unregistered, un-caveated second mortgage over her property. [5] She then lent it to Mr Barwick who ‘provided it to’ Mr Dechnicz to pay his pressing debts, but for which the viability of their partnership was jeopardized. She did not pay the interest required by the mortgage until after the Law Society’s intervention.

A trust account inspection of Mr Barwick’s firm led the Law Society to suspect that he was not permitted as executor to lend the estate’s money to his sister, and nor had Mottram authorised him to do so. Breaches of fiduciary duty to the clients and the sister, and trust irregularities were suspected.

We now know from the second Court of Appeal decision that Mr Barwick obtained a ‘general lending authority’ from a beneficiary on the basis it was legally necessary if she were to be paid the estate monies the firm had lent out, and then backdated it, all without disclosing that he had already lent out monies due to her. And that he prepared false file notes and placed them on the file. (I infer that Mr Barwick was not much of a typist. He was found guilty on the basis of what he dictated to his secretary, and what he told her about ‘tidying up’ the file. Then he told lies to the Law Society about these matters.)

Subsequently, the Legal Profession Act, 1987 (NSW) was substantially amended with effect from 1 July 1994, so as to be architecturally relatively similar to today’s regimes: a Legal Services Tribunal was set up to hear prosecutions by a new Legal Services Commissioner, and a three year time limit was imposed on disciplinary complaints. But a principal disciplinary investigator and prosecutor was still the Law Society, with the Commissioner in something of a supervisory and directory role, a bit like when the Legal Ombudsman had a similar role vis-a-vis the Law Institute in Victoria.

What is unusual to modern eyes about this case is that between August 1992 and 1 July 1994, the Law Society conducted a great deal of investigations following the trust account inspection, but without a complaint. In modern regimes, the Commissioner receives a complaint, or makes one themselves, and then investigates it. In the regime considered by the High Court, the Law Society had investigative roles antecedent to the formulation of a complaint, and a more formal investigation was to be carried out following the formulation of a complaint, by or under the supervision and direction of the new Legal Services Commissioner. One of the people who could do that more formal investigation was the Law Society. In this case, they did both the preliminary and the post-complaint investigations, and the problem was that they did not distinguish between them.

On 29 September 1994, the Law Society resolved to inform Mr Barwick of questions of professional misconduct in a complaint which they mistakenly understood to exist, and that subject to submissions he might make, it considered the questions to be made out. They resolved immediately afterwards to prosecute him for that misconduct. [18]

Things did not move fast. As requested by Mr Barwick, the Law Society re-considered its resolution to prosecute in June 1995, having already reconsidered its decision once before. Then on 8 June 1995, the Law Society, presumably having noticed that there was no complaint of the kind required by the amended Act, determined to initiate a complaint against Mr Barwick itself, and then a minute later resolved to prosecute him for the misconduct which was its subject. [22] Three of the four grounds in the complaint were substantially or exclusively conduct which occurred more than three years earlier.

The prosecution was not in fact launched until September 1996, and there was what sounds in substance to have been further investigation in the 15 months between the resolution to prosecute and the initiation of the prosecution by ‘an information’ as they call it up in Sydney. [23] As appears irresistible to legal regulators, one of the charges was of delay and incompetence in the administration of the estate of Wilkinson, a matter never made the subject of the complaint or investigated, and other aspects of other charges were newly popped into the charge for good measure too: [123].

The Law Society considered some of the statutory declarations filed by Mr Barwick in the disciplinary prosecution to be false and in July 1997 the Law Society resolved to prosecute him for misleading it and the Tribunal and amended the prosecution under s. 167A of the Legal Profession Act 1987 to include these allegations with leave of the Tribunal on 1 August 1997. [24]-[27] Mr Barwick consented to the amendments.

Only at the November 1997 hearing did Mr Barwick object to the Tribunal’s jurisdiction seeking a stay. The Tribunal initially indicated it would grant the stay, and then apparently acceded to an application by the Law Society to reverse that decision and dismissed the application, prompting Mr Barwick to go off and seek judicial review, pending which the Tribunal adjourned the trial. [81], [128]

Kirby J commented on the gross delay set out above at [80] as occasioning ‘grave concern’. ‘The interests of the public,’ his Honour said, ‘of complainants and of the legal practitioners themselves require that such matters be dealt with lawfully and fairly but also with more efficiency and expedition than has been the case here.’ He concluded ‘Unhappily, the recent experience of this court [citing Walsh] suggests that such delays may represent the norm, not an exception.’ [80]

Issues

As recorded at [28] et seq and [83] et seq, Mr Barwick said the tribunal did not have jurisdiction (in part or at all) because:

1. The complaints the subject of the prosecution were time-barred, contrary to s. 138(1) and the time bar had not been waived.

2. The Tribunal had allowed the Law Society to amend to add new complaints during the prosecution, which were themselves also statute barred, such that the amendments should not have been allowed.

3. The Law Society had not followed the rules during the investigation antecedent to the prosecution because there was no formal investigation under the supervision of the Legal Services Commissioner between the initiation of the complaint by the Law Society to itself and its decision to initiate the disciplinary prosecution.

Law

Section 134 of the Legal Profession Act 1987 (NSW) provided for any person to ‘make’ a complaint about a practitioner and s. 135 provided for the Law Society to ‘initiate’ a complaint, in which case it was required to forward a copy to the Commissioner. Section 136 allowed for the Commissioner to initiate a complaint in which case the complaint was ‘taken to have been made’ to the Commissioner for the purposes of Part 10 (complaints and discipline). [141] (Kirby J considered that ‘taken to have made’ had the consequence that a Commissioner taken to have made an out-of-time complaint to themselves was therefore required to consider their own complaint and whether to waive the time limit: [93].)

Section 138 provided that ‘A complaint may only be made within 3 years after the conduct is alleged to have occurred.’ It went on to provide for the Commissioner to accept a complaint made after that time if it was just and fair to do so or it was necessary in the public interest to investigate a complaint of misconduct.

The provision which gave the Legal Services Tribunal jurisdiction in relation to a matter was s. 167, which said that ‘Proceedings may be instituted in the Tribunal with respect to a complaint against a legal practitioner or interstate legal practitioner by an information laid by the appropriate Council or the Commissioner in accordance with this Part [10],’ whereupon the Tribunal was ‘to conduct a hearing into each allegation particularised in the information’. See [155].

By s. 167A the Tribunal was permitted, if it was fair to do so, to grant an application by the prosecutor to vary the information so as ‘to include additional allegations’. Nothing was said about any limit on this power in terms of how old the conduct added into the prosecution by amendment could be.

Section 167A is a NSW phenomenon. Even today, the Legal Profession Uniform Law Application Act 2014 (NSW) s. 140 gives NCAT a power to amend a disciplinary charge (even on its own motion, even where the additional allegation was never the subject of a complaint, even where it is out of time), which is not to be found in Victoria’s LPUL legislation. The NSW parliament prevailed over the views of the High Court in this regard, as we will come to. By contrast, VCAT’s power to amend is a general one: s. 127 Victorian Civil and Administrative Tribunal Act 1997, and VCAT does not allow proceedings before it which are required to be preceded by an investigation phase to be amended so as to allege matters which were not first investigated: see Nekvapil, Pizer’s Annotated VCAT Act (6th ed, 2017) at [VCAT.127.40] at the three bullet points commencing with the penultimate one on p. 783.

History of s. 167A

Kirby J found at [102] that the purpose of s. 167A was to address the scenario which transpired in Smith v NSW Bar Association (1992) 176 CLR 256. There, the Court of Appeal, sitting as a trial court, struck a barrister off in part because he lied to it on oath during the disciplinary prosecution (see [1991] NSWCA 213). There was no disciplinary complaint about that, and the disciplinary proceeding was not amended so as to allege a ground of misconduct constituted by lying to the Court of Appeal. The High Court reversed the Court of Appeal on the basis that it was impermissible to take into account a matter not the subject of a formal allegation in the papers delimiting the matters before the Court such as to put the respondent on notice and provide a formal opportunity to establish that the allegedly false evidence may have been based on a mistake rather than a fraud, if that was even an appropriate course, procedurally.

Indeed, in Barwick, the Court noted that the Attorney-General had said that the purpose of s. 167A was to allow the formal complaint to be varied or a fresh matter to be added having regard to developments in the course of a hearing: [101], [158]. Callinan J raged against such procedure:

‘[159] There are … difficulties in inviting a Tribunal to decide not only what I will describe as the original and substantive issues in a matter, that is, whether the practitioner has been guilty of misconduct as a practitioner in carrying on a practice, but also, whether, in dealing with those issues, either at the investigative stage or more particularly during the proceedings in the Tribunal itself, he or she has been guilty, in effect, of perjury or a lack of necessary candour. … True it may be that the rule in Briginshaw … does not involve a different standard of proof from the civil standard in cases of fraud and other serious misconduct, and that in civil cases there may be a range of seriousness of the various issues to be decided, but because the state of satisfaction of the mind required for, say, a finding of unsatisfactory conduct, might in practice be quite different from that required for a finding of conduct tantamount to, or of perjury, it is obviously preferable that they be the subject of separate proceedings if possible.

[160] In both ordinary civil and criminal proceedings a court usually has no power to make definitive findings of misleading conduct (unless that is the or an issue) during the proceedings and to impose a sanction on any party in those proceedings (other than an adverse decision or verdict on a matter in issue).  Dishonest conduct in relation to the proceedings themselves will rightly be the subject of quite separate proceedings, which a different court may be expected to approach with an open mind after due notice has been given to the person against whom the dishonest conduct is alleged.’

Similar sentiments had been expressed in Smith at [37]-[40] (Brennan, Dawson, Toohey and Gaudron JJ), and Deane J at [4]-[7].

Complaints out of time and the scope of the amendment power

The Law Society argued that s. 138’s 3 year time limit, confined in its terms to complaints ‘made’, had no application in relation to complaints ‘initiated’ by the Law Society under s. 135.

The plurality noted that s. 138 was smack in the middle of other provisions which had application to all kinds of complaints ([69]), and gave short shrift to the Law Society’s literal reading at [71]:

‘The purpose of s 138 is to set a time limit on complaints, whilst allowing the Commissioner an overriding discretion, to be exercised upon specified grounds, to accept complaints that would otherwise be out of time. That discretion protects the public interest. It has not been exercised in this case. It is not apparent why that legislative purpose would not embrace complaints under s 135 as well as complaints under s 134. The practitioner’s need for protection against stale complaints is the same. There is nothing in the Act to suggest that the Council was intended to have the same power as the Commissioner to override any need for such protection. There are no statutory constraints governing the exercise by the Council of any such power, of the kind that apply to the Commissioner.’

The plurality accordingly found that Mr Barwick was entitled to succeed on this issue to the extent that the complaints were initiated more than 3 years after the conduct they concerned: [72].

The plurality characterised the s. 167A amendment argument as ultimately being ‘that the out-of-time grounds cannot be saved by adding them under s 167A’: [74]. They agreed, saying at [74]-[76]:

‘where there has been no exercise of discretion by the Commissioner under s 138(2), the clear intent of the statute is that the procedures of Pt 10 of the Act cannot be invoked after the period of three years referred to in s 138 has elapsed. A complaint which is not accepted by the Commissioner under s 138(2) has no statutory effect. The consequences of s 138 cannot be negated by an exercise by the Tribunal of its power of variation of an information under s 167A. The matters to be considered by the Commissioner in deciding whether to exercise the discretion under s 138(2) are not repeated in s 167A, which simply applies a test of reasonableness. What is there involved is a discretion of a different character. Section 167A is not intended to subvert the protection given by s 138. The appellant is entitled to succeed on this issue.’

Kirby J came to the same conclusions via a detailed examination of the text and parliamentary papers associated with the Act at [90]-[97]. As to policy, he effectively agreed precisely with the plurality at [96]:

‘it is difficult to see why, as a matter of policy, the time provision enacted in s 138 should not apply as much to complaints initiated by a Council or the Commissioner as to complaints made by any other person. The potential for injustice and oppression in the case of delayed complaints is the same wherever they may originate. The statutory facility to accept the complaint out of time, before it is placed before the Tribunal, is always there and is most ample. It is to be exercised by an independent statutory office-holder with appropriate expertise who can develop consistent practices applicable to complaints across the board. The construction urged by Mr Barwick furthers the attainment of the overall balance enacted by Parliament.’

Kirby J dissented in relation to the appropriate outcome in relation to the amendment issue because Mr Barwick had consented to the amendment application at first instance, and waived his right to object: [108]-[109], but commented at [108] that had he objected ‘no variation of the information under s 167A which would have the effect of subverting other provisions of the Act (including the time limitation in s 138(1)) could be allowed.’ He essentially agreed with the plurality on the statutory construction of s. 167A at [100]:

‘The only express limitation in s 167A, preventing the inclusion of “additional allegations”, is stated by reference to the satisfaction of the Tribunal, “having regard to all the circumstances, that it is reasonable to do so”. However, s 167A, which was added to the Act after Pt 10 was introduced to afford a measure of flexibility to proceedings before the Tribunal, has to be read in its statutory context. That context includes a distinct procedure for the receipt of complaints, their investigation and the institution of proceedings with respect to them. Furthermore, there is a limitation of general application upon the making of complaints in relation to conduct beyond a three-year period after the conduct is alleged to have occurred. In this context it is obvious that no construction of s 167A could be adopted which permitted the Tribunal to vary an information in a way that would undermine the general scheme for the handling of complaints under Pt 10 of the Act.’

He continued, to the effect that the Tribunal’s amendment power did not extend to including matters which were never the subject of a proper investigation: ‘Nor could it defy the specific limitation on the kinds of complaints which alone could give rise … to the formal procedure of an information in the Tribunal envisaged by the Act.’ And he so found despite having noted that s. 167 made plain that the requisite relationship between the allegations in the proceeding and those in the complaint were that the information be ‘with respect to a complaint’, a phrase of ‘broad connection’ ([107).

Callinan J doubted at [161] whether the parliament had succeeded in legislating for the procedural laxity craved by the Attorney-General in the second reading speech referred to above, because such matters as arose during the course of a disciplinary hearing would not satisfy s. 167’s ‘with respect to a complaint’ requirement for the nexus between the information initiating the disciplinary prosecution and the antecedent investigation of the complaint: [161].

Callinan J discerned from s. 167 an intention ‘that there be a relationship between the conduct the subject of the complaint, any information laid in respect of it and the allegations in the information of the conduct.’ Another way of putting it, he said, was ‘that the allegations in the information must be reasonably related to, and be of the conduct the subject of the complaint.’ [156]

In relation to the amendment question, his Honour said:

‘[162] … as to the question whether s 167A permits the addition of allegations of conduct that is out of time, that is conduct occurring more than three years before the laying of an information and not the subject of a decision to enlarge the time, the answer must be in the negative. Such allegations would not be allegations in the information with respect to conduct the subject of a relevant complaint within time.’ See also [174].

Callinan J recorded an argument of Mr Barwick which was not expressly dealt with by the other judges, namely that ‘the amendments should not have been allowed, for three reasons: first because the allegations which were added were not “with respect to [the] complaint”‘ as required by s. 167: [172]. But, like the other judges, his Honour did not express a concluded view in relation to this question, observing only, at [174]:

‘”With respect to” is a phrase capable of having a very wide import. However as I have said, there must be a reasonable relationship between conduct the subject of the complaint and the variations in the allegations sought to be made.’

His Honour had earlier said something similar at [156].

Consequences of not following the rules, even where there is no procedural unfairness

Previous decisions of the NSW Court of Appeal had held that the procedural provisions for investigations by legal regulators were directory rather than mandatory, such that non-compliance did not go to the jurisdiction of a tribunal whose powers were invoked by reference to the non-compliant investigation. The plurality said that after Project Blue Sky, the distinction between mandatory and directory provisions was no longer a useful one, and looked for the legislative intention as to the consequence of non-compliance with the statute by closely analysing the text of the statute: [47]-[49].

The plurality observed at [53] that ‘Not every departure from the procedures laid down … will result in a lack of jurisdiction’. But they said that one of the purposes of the legislation was to provide for supervision of the Law Society’s investigations by the Legal Services Commissioner and that did not happen. They said that even though a formal investigation following the making or initiation of a complaint might be brief where there had already been much investigation leading up to the initiation of a complaint, nevertheless, some formal investigation capable of being monitored by the Legal Services Commissioner was required by the legislation, properly construed, and found, without any suggestion that the non-compliance with the obligation to conduct such an obligation in fact adversely affected Mr Barwick in any way, found that ‘there was such a departure from the requirements of Div 5 as to deprive the Tribunal of jurisdiction’.

For Kirby J, the very fact that there had been non-compliance with a requirement for post-complaint investigation which was not immaterial or insignificant meant that the Tribunal did not have jurisdiction: [115]-[117]. In earlier times the relevant provisions would have been described as ‘mandatory’.

Though Callinan J spent most of his reasons analysing the out of time and amendment questions, his conclusions were not confined to those matters. At [181] his Honour said:

‘It follows that the first complaint in respect of grounds 2.1 to 2.6, 3.1 to 3.5, 3.7 and 4.1 to 4.8 is not a valid complaint because it was not made within three years of the conduct the subject of the complaint, and the Commissioner has not been asked to and has not turned his mind to the matters to which he should, and cannot have satisfied himself as he must, of the matters referred to in s 138. The balance of the first complaint must also fail because the initiation of the complaint, and the decision to institute the proceedings were made in virtually simultaneous resolutions at the same meeting and without any intervening consideration of the adequacy of such investigation as may have occurred, and whether there should be any further investigation. Nor could there have been any recording as required by s 156 of any decision on the complaint before the decision to lay the information. The decision of the Council on 17 July 1997 to institute proceedings with respect to the second complaint suffers from similar defects. Ground (b) of it was in respect of conduct that had occurred more than three years before that date. There was no investigation of the second complaint and again the decision to institute the proceedings was made in, and as part of the same or successive resolutions as initiated the second complaint. The power of amendment conferred bys 167A did not permit the introduction of allegations of conduct that had occurred more than three years earlier.’ (emphasis added)

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