Post updated 7 April 2013: See now ML v Australian Securities and Investments Commission  NSWSC 283 (application to disbar liquidator not stayed pending related criminal proceedings which were ‘on the cards’: suggested that a secrecy regime could be imposed in respect of the disciplinary proceedings so as to protect the liquidator in the criminal proceedings).
Post updated 1 March 2013: See also Re AWB Limited  VSC 473.
Original post: Dedicated readers will already have been following the saga of the misconduct prosecution of Kylie Minogue’s one-time lawyer. Casual readers can lap it all up here. Deputy President Dwyer’s reasons for refusing to stay the disciplinary proceedings have hit the internet: Legal Services Commissioner v MB  VCAT 1341. For some reason, the lawyer adduced into evidence a letter from the Australian Crime Commission which said that there was no overlap between the subject matter of the disciplinary charges and the subject matter of the Australian Crime Commission’s investigation, ‘pulling the rug’, as Deputy President Dwyer put it, from the lawyer’s own case. Apart from some newspaper articles suggesting that up to 50 people might be prosecuted as a result of ‘Project Wickenby’, there was not a lot of evidence that the solicitor was going to be prosecuted imminently or otherwise. So it is not an especially interesting decision, legally. It is helpful to have a VCAT decision which rehearses the authorities on the question of stays pending criminal proceedings in their application to disciplinary proceedings, though.
Dwyer DP cited with approval the following principles from McMahon v Gould (1982) 1 ACLC 98 in relation to civil proceedings, and said that they were helpful by analogy with disciplinary proceedings:
(a) Prime facie a plaintiff is entitled to have his action tried in the ordinary course of the procedure and business of the court;
(b) It is a grave matter to interfere with this entitlement by a stay of proceedings, which requires justification on proper grounds;
(c) The burden is on the defendant in a civil action to show that it is just and convenient that the plaintiff’s ordinary rights should be interfered with;
(d) Neither an accused nor the Crown are entitled as of right to have a civil proceeding stayed because of a pending or possible criminal proceeding;
(e) The court’s task is one of ‘the balancing of justice between the parties’, taking account of all relevant factors;
(f) Each case must be judged on its own merits, and it would be wrong and undesirable to attempt to define in the abstract what are the relevant factors;
(g) One factor to take into account where there are pending or possible criminal proceedings is what is sometimes referred to as the accused’s ‘right of silence’, and the reasons why that right, under the law as it stands, is a right of a defendant in a criminal proceeding;
(h) However, the so-called ‘right of silence’ does not extend to give such a defendant as a matter of right the same protection in contemporaneous civil proceedings . The plaintiff in a civil action is not debarred from pursuing action in accordance with the normal rules merely because to do so would, or might, result in the defendant, if he wished to defend the action, having to disclose, in resisting an application for summary judgement, in the pleading of his defence, or by way of discovery or otherwise, what his defence is likely to be in the criminal proceeding;
(i) The court should consider whether there is a real and not merely notional danger of injustice in the criminal proceedings;
(j) In this regard factors which may be relevant include:
(i) the possibility of publicity that might reach and influence jurors in the civil proceedings;
(ii) the proximity of the criminal hearing;
(iii) the possibility of miscarriage of justice eg by disclosure of a defence enabling the fabrication of evidence by prosecution witnesses, or interference with defence witnesses;
(iv) the burden on the defendant of preparing for both sets of proceedings concurrently;
(v) whether the defendant has already disclosed his defence to the allegations;
(vi) the conduct of the defendant, including his own prior invocation of civil process when it suited him;
(k) The effect on the plaintiff must also be considered and weighed against the effect on the defendant. In this connection I suggest below that it may be relevant to consider the nature of the defendant’s obligation to the plaintiff;
(l) In an appropriate case the proceedings may be allowed to proceed to a certain stage, eg, setting down for trial, and the stayed.
Nevertheless, there are cases which say that disciplinary proceedings should generally be subordinated to pending criminal proceedings in relation to the same subject matter: Herron v McGregor (1986) 6 NSWLR 246; Hammond v Commonwealth of Australia(1982) 152 CLR 188, 196 per Gibbs CJ. The lawyer also relied on Guglielman v Trescowthick (No 3)  FCA 139 and ASIC v HLP Financial Planning (Aust) Pty Ltd  164 FCR 487, at 504.
The lawyer said his right to silence in respect of the allegedly pending criminal charges would be prejudiced if he were compelled to meet the Commissioner’s case. No doubt he was referring to cases like Re Veron; Ex parte Law Society of New South Wales (1966) 84 WN(NSW) (Part 1) 136 at 141 where the NSW Court of Appeal said that officers of the court were expected to give evidence in disciplinary hearings against them, subject to the privilege against self-incrimination. Deputy President Dwyer pointed out that in all VCAT proceedings, there is no right to refuse to answer questions by reference to the privilege against self-incrimination by virtue of s. 105 of the VCAT Act, 1998. But Deputy President Dwyer held that the lawyer ‘is not compelled to give evidence (or even to participate) in the Tribunal proceeding, and the proceeding does not directly impinge on his right to silence’. That would be true if VCAT accepts that disciplinary proceedings are proceedings for a penalty such that the lawyer is entitled to put the prosecutor to its proof, and not obliged to furnish evidence to the tribunal in advance of its case, or be criticised for a failure to adduce evidence at hearing: see Rich v ASIC (2004) 220 CLR 129. That is a theme I will return to in future posts.
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