Associate Justice Derham from time to time produces beautifully succinct and thorough summaries of the law, especially laws relating to procedure, in his careful judgments. Busy practitioners are very grateful. Here is his most recent such summary, from Fotopoulos v Commonwealth Bank of Australia  VSC 61. It is a helpful exposition of the substantive legal obligation which is sometimes referred to as an ‘implied undertaking’ or ‘the Harman principle’ after the House of Lords’ decision in Harman v Secretary of State for the Home Department  1 AC 280. Continue reading “The ‘implied undertaking’ which is really a substantive legal obligation”
The NSW Supreme Court has quashed decisions of the NSW Law Society to commence disciplinary proceedings against a Sydney solicitor following complaints that the solicitor advanced allegations of negligence in a costs assessment against two barristers without an adequate factual foundation: SAL v Council of the Law Society of NSW  NSWSC 834, a decision of Wilson J. The Court restrained the Council from continuing the disciplinary prosecution which had been stayed pending the application for judicial review. The Council’s reasons were inadequate in not dealing with exculpatory material advanced by the practitioner during the investigation, and in not disclosing the Council’s path of reasoning in relation to why the conduct was professional misconduct rather than unsatisfactory professional conduct or why it was appropriate to prosecute rather than make an in-house determination such as a reprimand and a compensation order.
The implications of this decision are profound, for many a set of reasons at the conclusion of a disciplinary investigation are likely no better than those which were examined in this case, for the simple reason that no one has ever really sought to take the adequacy of these kinds of reasons to task. First, those who are subject to current prosecutions might seek prohibition to stop them in their tracks: if you are involved in a disciplinary prosecution, careful study of this decision is advised. Secondly, with the rise in the quality of reasons at the conclusion of a disciplinary prosecution which one presumes the decision will generate, it may be hoped that better decisions about what to prosecute will be made. Continue reading “Disciplinary prosecution halted because Law Society’s reasons for deciding to prosecute were inadequate”
Parliament is considering a bill to re-instate the disciplinary register, and to prohibit the Bureau de Spank from trumpeting its successes before the respondent practitioners’ appeal rights are exhausted: Legal Profession Uniform Law Application Amendment Bill 2016 (Vic.). Cl. 150E of the Bill proposes to prohibit the Legal Services Board from providing to the public information about disciplinary orders made by the VCAT’s Legal Practice List while appeals or appeal rights are live. The prohibition extends beyond publication on the proposed disciplinary register to disclosure of information to the public more generally.
There is a problem with the Bill though: it focuses its protection of the profession on prohibitions of publications by the Legal Services Board about final orders. The Board shares a website and premises with the office of the Legal Services Commissioner. The CEO of the Board is in fact the Legal Services Commissioner, Michael McGarvie, who is also the applicant in all disciplinary prosecutions of lawyers in Victoria. Yet the CEO, qua Commissioner, is content for his staff to write about cases he is prosecuting, before any orders have been made and while the tribunal is considering what orders to make. On the homepage of the Board + Commissioner’s website, no less.
If parliament is concerned to ensure that the reputation of practitioners is not to be ruined by accounts of current proceedings by one of the parties to them where the aspect of things might change dramatically upon appeal, or even by bad decisions in such proceedings which are to be appealed, it ought to consider adding the Commissioner to the class of person covered by the prohibition, and to make clear that neither the Board nor the Commissioner ought publish details of disciplinary prosecutions while they are before the disciplinary tribunal.
It is not uncommon for appellate courts — the Supreme Court or the Court of Appeal — to reverse decisions unfavourable to lawyers in disciplinary prosecutions of lawyers in VCAT’s Legal Practice List, or to substitute decisions more favourable to lawyers than those of VCAT or the legal regulators. So the no publicity pending appeal proposition actually has some important work to do in the real world. Consider, to name a few, Legal Services Commissioner v McDonald  VSC 237, PLP v McGarvie  VSCA 253, Stirling v Legal Services Commissioner  VSCA 374, Burgess v Legal Services Commissioner  VSCA 142, Brereton v Legal Services Commissioner  VSC 378, Byrne v Marles  VSCA 78, Quinn v Law Institute of Victoria  VSCA 122, Byrne v Law Institute of Victoria  VSC 509. Consider also non-lawyers: Omant v Nursing and Midwifery Board of Australia  VSC 512, and Towie v Medical Practitioners Board of Victoria  VSCA 157 where the Court found that VCAT’s standard orders in disciplinary hearings were contrary to the privilege against penalties. It will be observed that some of those decisions were made by very experienced members of VCAT’s Legal Practice List, and several by its Vice-President, a judge.
Under the Legal Profession Act 2004, if a lawyer applied for renewal of their practising certificate prior to the expiry of the old one, but a decision was not made before the old one runs out, the certificate is extended until either it is renewed or a decision to refuse renewal is finally determined by the exhaustion of all rights of review of that decision. No one has ever really known what that meant. There is a statutory review procedure in VCAT and then there are appeals all the way to the High Court. Are the appeals from the review ‘a right of review of the decision’? The Supreme Court has now determined that the certificate endures (if not earlier cancelled or suspended by the stipes) until the end of the High Court appeal.
The question arose in Batrouney v Forster (No 2)  VSC 541, handed down by Justice Robson yesterday (see paras  – ). It represents a further embarrassment for the Legal Services Board appointed receivers of David Forster’s practice, Hollows Lawyers, with a savage series of costs orders against the receivers in Mr Forster’s favour. That followed findings that the receivers’ proceedings were in part misconceived, and that they breached more than one provision of the Civil Procedure Act 2010. The question was at what point did Mr Forster cease to hold a practising certificate and so cease to be entitled to claim costs of acting for himself under the Cachia v Hanes (1994) 179 CLR 403 at 411–413 exception to the rule that self-represented litigants are not entitled to costs for work done by themselves.
The question is a matter of significance to practitioners who get themselves fairly deep into trouble. It means that those whose practising certificates are not renewed may continue to practice and earn income to put towards the legal costs of challenging that decision, and it also means that such practitioners may brief counsel directly in circumstances where, by virtue of Bar rules about direct access, they might not otherwise be able to. And of course, it also means that if successful in such proceedings, they will get a costs indemnity against the time spent running their litigation.
Mr Forster is a man with his back to the wall, the subject of an avalanche of litigation brought by professional regulators. Until recently, he had been singularly unsuccessful and much chastised. It is probably fair to say that some people in the administration of justice, including the profession, would see him as a pariah. It ought therefore be of some comfort to those responsible for the justice system that this result has obtained. It suggests that the cab rank principle is alive and well, that judges are capable of dealing with each case impartially on its merits and according to law without being unduly influenced by past cases, and that the State will not protect itself where the law requires that it be dealt with.
The Federal Court has given a landmark decision about regulatory prosecutions. In federal jurisdictions and state jurisdictions which follow the new decision, professional disciplinarians like ASIC and Legal Services Commissioners will no longer be able to enter into plea bargains in the expectation that the court or tribunal hearing them will rubber stamp the agreed outcomes so long as they are ‘within the permissible range’ of penalties. But nor will disciplinary prosecutors be able to submit what the appropriate penalty ought to be. Rather, they will be limited to making submissions about the appropriate sentencing principles, and about similar outcomes in similar cases.
The powerful judgment is at odds with a paragraph of dicta in a recent decision of the Victorian Court of Appeal in that it applies the High Court’s decision in Barbaro, a criminal case, to the quasi-criminal realm. How the case plays out in Victoria remains to be worked out, but if this case goes to the High Court (and both sides have filed special leave applications), all that may change. Certainly the settlement of proceedings by regulators just got more complicated.
There seems to be a discrepancy about fundamental norms of government between the dicta of our Court of Appeal and the ratio of the Federal Court’s decision. Once that gets resolved, however, each piece of legislation setting up the regulatory regime must be construed against the backdrop of those fundamental norms, and might give rise to different outcomes. The Federal Court approached the task of working out how Barbaro applies in regulatory prosecutions in an orthodox fashion, i.e. by a process of statutory construction based on a close textual analysis of the legislative scheme as a whole.
The Chief Justice of the Federal Court allocated three judges to hear a preliminary question in the regulatory prosecution at first instance, in which the parties had already agreed on a proposed outcome, the result of a settlement (or, if you will, a plea bargain). The proceeding was brought against the CFMEU and the judgment’s aim was apparently to sort out once and for all if, and how, the High Court’s decision in Barbaro is to apply in proceedings for a penalty. The mouthful of a case is reported as Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union  FCAFC 59, but seems set to be called ‘the CFMEU Case’.
It’s quite a judgment: indignant, keen to cut cant, and argued from first principles in relation to the place of the courts in civil society. It is a further step in the demolition of the nonsense about disciplinary proceedings being sui generis, fundamentally distinct from criminal prosecutions, and (oh, spare me!) protective and not punitive in a way which means the protection of those against whom punishment is sought need not be extended. The punishment of citizens is, and must be seen to be, a job for the courts (except where parliament has expressly provided otherwise); where the State is seeking to punish citizens the label applied to the proceedings is a distraction; and in such cases, the Courts having been tasked with ascertaining the appropriate penalty, they must do so conscientiously themselves, however convenient it might be for them, for regulators, and for the regulated, to cede that task to a regulator which is part of the machinery of the executive arm of government, and to pay lip service to the inquiry conducted by the Court into the appropriateness of a deal done behind closed doors. So said the Court.
The indignation extends to the many judges and other decision makers who have convinced themselves post-Barbaro that the decision does not apply to them, often on the basis that criminal proceedings are special and proceedings for a penalty are civil proceedings and nothing like criminal prosecutions. Distinguishing Barbaro away has been de jour. Continue reading “Submissions on penalty in regulatory proceedings like ASIC and disciplinary prosecutions”
The Supreme Court of Tasmania has made an important ruling in Legal Profession Board of Tasmania v XYZ  TASSC 33 about the finality of decisions made by legal regulators at the end of disciplinary investigations. The decision suggests that in those jurisdictions with similar statutory provisions, until a disciplinary prosecution is launched, such decisions may be less final than I suspect many lawyers in Australia have previously believed. A decision of the Victorian Court of Appeal, which related to a different situation where one of two courses following a disciplinary investigation was gone down and completed and the professional regulator sought subsequently to go back down the alternative course, was distinguished: Kabourakis v Medical Practitioners Board of Victoria  VSCA 301. Continue reading “Can a legal regulator rescind a decision to bring disciplinary proceedings”
In Dennis v Council of the Law Society of New South Wales  NSWSC 1487, the Law Society suspended a sole practitioner’s practising certificate with immediate effect and appointed a manager to his practice. He had not responded to commands by a trust investigator to produce documents and answer questions in relation to a disciplinary complaint. The Society said that he had failed to do so wilfully and without reasonable excuse, and this, it said, made it necessary to abolish the man’s livelihood.
Hoeben CJ at CL found that the commands were invalid in law, and there had been no failure at all to comply with them. But even if the Society’s interpretation of the provisions of the Legal Profession Act 2004 (NSW) in question had been correct so that there had been a failure to comply with them, his Honour said, this would still not have been an appropriate occasion on which to exercise the ’emergency powers’ which the Law Society exercised. It simply was not ‘necessary’ for the protection of the public to shut down a sole practice like that. Especially since, prima facie, the appropriate place for the complainant to raise the practitioner’s conduct was in the proceedings in the Supreme Court of Victoria which were the backdrop to the conduct complained of and which were pending at the time of the complaint. And more especially still where the practitioner had cited the commercial sensitivity to that litigation of confidential information sought by the Law Society and had suggested that the investigation be paused pending the imminent completion of those proceedings.
Given that the complaint in which the practitioner was said wilfully to have failed to obey the stipes’ commands was the complaint of a non-client, I will be interested to learn what it is about NSW law which means that the solicitor could be obliged to deliver up privileged information even if the commander had the power to issue the commands. The Victorian Bureau de Spank has no such powers: B v Auckland District Law Society  UKPC 38, a decision of the Privy Council and Legal Services Commissioner v Shulsinger  VCAT 965. Continue reading “New South Wales Law Society misconceivedly suspends sole practitioner’s PC peremptorily”
Kinghorn v HKAC Asset Management Services (AFFL) Pty Ltd  NSWDC 232 reviews the law at the extremities of the tort of malicious prosecution. I must say that I had always assumed that there needed to be a criminal prosecution before the tort of malicious prosecution might be made out, but there is no doubt that that is not the case: an action to bankrupt an individual or wind up a company may also found the tort, along with certain other kinds of actions set out at . But this case required consideration of whether it could be said that malicious prosecution of a civil proceeding which involved no element of the seeking of a penalty could be seen not to found the tort clearly enough to justify summary dismissal of the claim. The answer was no; the suit for summary dismissal failed. (There seems to be more resistance to expanding the law to provide a remedy for maliciously instituted disciplinary proceedings (see Gregory v Portsmouth City Council  1 AC 419 at 432; Noyce v Robbins  WASC 98).) Continue reading “Punk sues you in civil court: can you sic them for malicious prosecution?”
If you are a solicitor and someone other than your client or former client has lodged a disciplinary complaint against you in Victoria, you should not disclose the subject matter of any communications to which legal professional privilege attaches, or might arguably attach, unless you are instructed to do so by your client or former client. Nor should you give up any document which records such a communication, or disclose any communication which tends to reveal the content of a privileged communication.
That is so even if the Legal Services Commissioner purports to compel the information, for in the case of investigations of non-client complaints, the client’s or former client’s privilege trumps the Commissioner’s powers of compulsion. If you have already disclosed privileged communications, assuming that the Commissioner had the power to compel you to do so, you should be aware that the disclosed communications may well still be privileged notwithstanding the disclosure to the Commissioner, and so unable to be used against you in a disciplinary prosecution arising from the investigation, and you should probably advise your client or former client.
Until recently, the Commissioner took the view that legal professional privilege was impliedly abrogated in the case of non-client complaints by necessary intendment of the Legal Profession Act, 2004. Not so. The reasons why follow below. These propositions are good law in VCAT’s Legal Practice List, at least.
Remember that it is still the common law which regulates legal professional privilege for the purposes of Legal Services Commissioner investigations and (except to the extent that it adopts the Evidence Act, 2008 in any particular proceding) in VCAT’s Legal Practice List. Continue reading “Legal professional privilege and disciplinary complaints by non-clients”
Update, 13 May 2012: See now Finlayson v Legal Practitioners Conduct Board  SASC 77.
Original post: Rosemary Pattenden’s The Law of Professional-Client Confidentiality is one of those books which, until now, I would like to have but could not bring myself to shell out for. Just now, I spent $134 on a second-hand copy, and here’s why. In a web-based update for the book is a reference to B v Auckland District Law Society  UKPC 38 which I wish I had known about earlier, like when I was arguing whether the Legal Profession Act, 2004 abrogates by necessary intendment legal professional privilege over client documents which the Legal Services Commissioner purported to compel the client’s solicitor to produce as part of a disciplinary investigation of a complaint by a non-client, namely the client’s opponent in litigation. All this time I have been languishing in the darkness of ignorance of the Privy Council’s view that a New Zealand statute not dissimilar to the Legal Profession Act, 2004 did not impliedly abrogate privilege in the way the last Legal Services Commissioner believed the 2004 Act did. Of course, every statute is different, and the question is always one of statutory construction. But the New Zealand provision was pretty bog ordinary, and the resolute interpretation of the Commonwealth’s highest court is a promising place for the analysis to start from the point of view of clients. Continue reading “Privy Council on privilege as an answer to legal regulators’ powers of compulsion”
Goldberg v Ng  HCA 39; (1995) 185 CLR 83 is exhaustively treated in this sister post. The purpose of this post is to isolate some comments about the Law Society’s extraordinary conduct in the disciplinary complaint which is the subject of the case. Continue reading “Law Society’s conduct in Goldberg v Ng”
Note: I drafted this post last financial year. Since then, the value of a penalty unit increased today by about 3%, to $116.82, with the result that the dollar figures referred to below will be commensurately too low. See the details at Quis Custodiet Ipsos Custodes.
Original post: I acted for a fellow whom the Law Institute as delegate of the Legal Services Board was purporting to investigate, and noticed for the first time what a rich repository of crimes is the Legal Profession Act, 2004. Two are punishable by imprisonment of up to 5 years or more: s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and s. 5.5.15 (interfering with property to defeat a receivership of a law practice). A third, s. 2.2.2(1) (unqualified practice) is punishable by up to 2 years’ imprisonment respectively. Eight are punishable by fines of up to about $27,000, about 25 by fines of up to about $13,500, about 57 by fines of up to about $7,000, and another 14 by fines of between up to about $500 and about $2,500. That’s over 100 crimes. As far as I know, the only conviction is likely to have been under s. 3.3.21.
All of the offences punishable only by fines are summary offences: 600 penalty units (a fine of about $68,000) and imprisonment for up to 5 years being the level of seriousness which brings offences into the indictable category: see s. 112 read with s. 109 of the Sentencing Act, 1991. So s. 3.3.21(1) (having or causing a trust account deficiency or failing to pay trust money) and 5.5.15 (interfering with property to defeat a receivership of a law practice) appear to be the only indictable offences created by the Act. They may be prosecuted at any time, while all those punishable by fines, and unqualified practice, are summary offences which may generally be prosecuted only within 12 months after the allegedly criminal conduct occurred, by virtue of s. 26(4) of the Magistrates’ Court Act. Do not allow an investigator under the Legal Profession Act, 2004 to investigate a summary offence if the conduct allegedly occurred more than a year beforehand! (Whether the Legal Services Commissioner may entertain a disciplinary complaint more than a year after the relevant conduct is a more difficult question. See this post.)
I really wonder about the social utility of having all those crimes there. Continue reading “Offences created by the Legal Profession Act, 2004”
Speaking of the need for speed as Justice Heydon and I were on this blog yesterday, there are two other instances worthy of reporting.
First, the High Court has recently considered the need for speed in criminal proceedings, and were not nearly as excited about it as in commercial litigation. This time, they rolled the court below for saying that enough delay was enough and staying a criminal prosecution that had hung around for too long, resulting in the loss of exculpatory evidence. The decision in R v Edwards  HCA 20 might have application by analogy in disciplinary cases. It is blogged about at Quis Custodiet Ipsos Custodes, and there is a short note in the latest Law Institute Journal.
Secondly, delay by the Legal Services Commissioner has had a consequence in a serious disciplinary prosecution. Parliament requires the Bureau de Spank to conduct their investigations ‘as expeditiously as possible’, and to give the complainant progress reports at least 6 monthly: s. 4.4.12, Legal Profession Act, 2004. If the Commissioner complies with these injunctions, the degree of expedition which is possible is not always great. In fact, sometimes the rate at which investigations progress is astonishing. So glacial can progress be that the possibility that climate change sceptics might actually have some kernel of truth buried away beneath all of their hot air (-not) begins to nag at you. There is a letter in the latest Law Institute Journal complaining about the Commissioner’s April 2009 response to a solicitor’s September 2008 letter (August 2009, p. 10).
An unexplained period of apparent inactivity of 18 months was taken into account in favour of the lawyer prosecuted for misconduct in Legal Services Commissioner v ER  VCAT 1445. This is a factor which might be brought to bear in many a plea in a disciplinary prosecution. What Judge Ross’s tribunal said on this issue is: Continue reading “Commissioner’s unexplained delay reduces penalty for serious misconduct”
The rule in Home Office v Harman governs the use of documents and information obtained by people generally by various forms of compulsion in litigation: the court rules about interrogatories (a form of statute), Court orders for discovery, witness statements served pursuant to an order to do so. But when I carefully checked this point a while ago, it seemed clear that the principle had no application outside litigation, the exception being, perhaps, arbitration.
Outside litigation, however, the main source of powers to compel the production of documents and the disclosure of information is statute, and the main repository of them mandarins. When a mandarin (disguised say as a Commissioner, or an Inspector) obtains information by compulsion, there is an important limit on what the mandarin may do with it. The important limit is that the information may only be used for the purpose the power of compulsion was bestowed. This is a proposition which I vaguely knew I had read somewhere, but which has several times eluded me when I tried to look it up. But now it’s back in my quiver, courtesy of Apache Northwest Pty Ltd v Agostini  FCA 534. The relevant High Court authority is Johns v Australian Securities Commission (1993) 178 CLR 384;  HCA 56, which is posted about separately here.
This is a little adjunct to my post ‘Restraints on Use of Information Obtained by Compulsion’, a place to store away for future reference the little case note of Johns v Australian Securities Commission (1993) 178 CLR 384;  HCA 56 penned by Justice McKerracher in Apache Northwest Pty Ltd v Agostini  FCA 534. In digesting the quotation from Johns, it is helpful to know what s. 25 of the Australian Securities Commission Act, 1989 said. Here is Justice McKerracher’s case note:
By far the commonest disciplinary prosecution of lawyers in Victoria is for breach of s. 149 of the Legal Practice Act, 1996 or s. 4.4.11 of the Legal Profession Act, 2004. The Victorian thing to do is to say:
‘Yep, sorry, I didn’t respond. I was, like, really stressed at the time and had quite a lot of work on. It’s not professional misconduct, it’s only unsatisfactory professional conduct. I’ll pay the $1,000 fine. Can we agree on a reasonable sum for costs?’ Continue reading “Validity of a Bureau de Spanque notice requiring information in relation to a complaint”
Justice Pagone considered the Commissioner of Taxation’s invocation of a power to compel the production of documents and information (s 264(1)(b) of the Income Tax Assessment Act 1936 (Cth)). In this case, the subject of the compulsion was the Law Institute, more used to flinging such powers around itself. Legal regulators not infrequently list poorly formulated allegations drafted by angry laypeople and then requiring ‘a full written response’ from lawyers. Sometimes, requiring a ‘full written response’ is specifically contemplated by statute (e.g. s. 4.4.11(1)(a) of the Legal Profession Act, 2004, which is about investigating disciplinary complaints) but sometimes it is not (e.g. s. 7.2.7 of the same Act, which relates to investigations of offences against the Act). If the response is not ‘full’ in the way the regulators think about ‘fullness’, the respondents risk being convicted of the crime of non-cooperation (seriously: see s. 7.2.7(1)). His Honour cautioned regulators and said they must use such powers ‘wisely and responsibly’: Continue reading “Statutory powers of compulsion to be invoked reasonably”
I have previously posted about Justice Pagone’s rejection of the Law Institute’s blanket invocation of public interest immunity to excuse production of documents required for production under a statutory power of compulsion available to the Tax Man. Now his Honour has decided the case based on the kind of specific arguments he considered to be necessary: Law Institute of Victoria Limited v Deputy Commissioner of Taxation (No 2)  VSC 179. The documents sought by the Tax Man were divided into 3 categories:
- The first were documents about the practice history of the solicitor of interest to the Tax Man, which included copy practising certificates, records of when the solicitor held a practising certificate, and of what kind, and change of address forms.
- Secondly, the Tax Man sought records of audits of the solicitor’s trust accounts;
- Thirdly, he sought ‘all records in respect of the cessation of [the solicitor’s] registration as a practising lawyer, including documents stating Mr Kephala’s election not to renew his practising certificate, or notification of his ineligibility, or notification of the requirement for investigations to be conducted before it could be renewed.’
His Honour held that the first and third documents were not protected by public interest immunity, but the second was. The reasons in relation to the audit documents are set out below. Some of the documents produced by the Institute contained information to persons other than the solicitor in whom the Tax Man is interested. His Honour also hinted strongly that a responsible regulator ought to advise them that information relating to them was proposed to be produced to the Tax Man, and that the Institute had not done so. His Honour contrasted that course with that adopted in Federal Commissioner of Taxation v Coombes (No 2) (1998) 160 ALR 456. Continue reading “More on Law Institute records and public interest immunity”
This is a note about a decision by a judge who is only a year older than me, Justice Nye Perram, a novel and somewhat unsettling circumstance: Collard v Australian Securities & Investments Commission (No. 3)  FCA 1681. I looked him up because the judgment is so beautifully written, and found a welcome in Bar News (go to p. 97). The case is about lawyers’ rights to appear for clients to be examined by ASIC (and also, incidentally, by the National Crime Authority). It is also of interest to me because of its discussion of who bears the burden of proof when seeking review in administrative law of a bureaucratic act which statute stipulates may only be taken if it is reasonable (or necessary) to do so. Who bears the burden of establishing reason or unreasonableness? Continue reading “Review of decisions to exclude lawyers from ASIC and NCA examinations”