Barwick v NSW Law Society [2000] HCA 2; (2000) 169 ALR 236; (2000) 74 ALJR 419

Ross Barwick, a solicitor, was the executor of the will of the late Everil May Wilkinson, who died in 1988.

The investigation

A routine trust account inspection carried out by an officer of the NSW Law Society in August 1992 detected irregularities in Barwick’s firm’s trust account, and led to subsequent requests for further information, and correspondence between Barwick and the Law Society over a lengthy period.

The Law Society alleged that Barwick:
→ had caused the estate to make a loan of $38,000 to his sister Mrs Roberts
→ had caused other clients to lend money to his sister without proper authority
→ had thereby breached his fiduciary duties to his clients and trust account regulations
→ had also breached his fiduciary duties to Mrs Roberts.

The Legal Profession Reform Act 1993 (NSW) commenced on 1 July 1994, making changes to changes to Pt 10 of the Legal Profession Act 1987 (NSW) (“the Act”). These changes occurred after the Law Society had commenced examining Barwick’s conduct, but before it had taken any decision as to what, if any, action might be taken against him.

On 29 September 1994, a Professional Conduct Committee, having considered material relating to Barwick resolved that:

→ Barwick be informed of questions of professional misconduct “involved in the complaint”
→ submissions from him be invited and that, subject to any submissions, the Committee was of the opinion that there was a reasonable likelihood that he would be found guilty of professional misconduct.
→ that proceedings be instituted “with respect to the complaint” pursuant to s 155(2).

On 23 February 1995, a Professional Conduct Committee again met to consider the matter, considered a further report, and again resolved that the Committee was satisfied there was a reasonable likelihood that Barwick would be found guilty of professional misconduct, and that proceedings should be instituted in the Tribunal.

Disciplinary proceedings

Proceedings were commenced by Information filed in the Tribunal on 30 September 1996.

On 17 July 1997, a Professional Conduct Committee considered further allegations of Barwick misleading the Law Society, and the Tribunal, and of breach of fiduciary duty owed to Mrs Roberts. The Council, adopting the recommendations of the Professional Conduct Committee, resolved that a complaint against Barwick be initiated pursuant to s 135 of the Act in relation to the further allegations. It then immediately resolved that the Council was satisfied that there was a reasonable likelihood that Barwick would be found guilty by the Tribunal of professional misconduct and that proceedings be instituted in the Tribunal pursuant to s 155(2) of the Act. The Legal Services Commissioner was notified.

On 24 July 1997, the Law Society filed an Amended Information adding the allegations the subject of the 17 July 1997 resolutions. On 1 August 1997, the Tribunal gave leave to amend the Information accordingly.

Barwick’s objections to the Tribunal’s jurisdiction were:

→ That the “complaints” with respect to which the information against him had been instituted in the Tribunal were time-barred by s 138(1) of the Act and, although made outside the time limitation period, had not been accepted by the Legal Services Commissioner appointed under the Act (“the Commissioner”) in accordance with s 138(2) of the Act.
→ That additional allegations unrelated to the initial complaint against him had been impermissibly included in the proceedings in purported reliance upon s 167A of the Act. This provision permitted the addition of “additional allegations” to vary the initial information. It did not, so it was argued, permit the addition of new complaints which would themselves be statute-barred by s 138(1) without the exercise by the Commissioner of the discretion under s 138(2) to accept such complaints.
→ That the scheme of Pt 10 of the Act required the formulation of a “complaint”, and investigation of that “complaint”, leading to a decision under s 155 of the Act. At least in respect of the second complaint but arguably for both complaints, the decisions to initiate the “complaint” under s 135 and to institute proceedings in the Tribunal under s 155 were made at the same time thereby affording no possibility of an “investigation” as contemplated by the Part.

The old statutory regime

Prior to 1 July 1994, there were a number of bodies which, depending upon the nature and seriousness of a matter, might become involved in dealing with an allegation against a practitioner. Members of the public were entitled to make a complaint against a practitioner to the appropriate Council (s 130). In the case of barristers, the appropriate Council was the Bar Council, and in the case of solicitors, the appropriate Council was the Council of the Law Society (s 123). The Councils were empowered to delegate their functions to committees (s 136). A Council could dismiss a complaint summarily, but if it did not do so it was obliged to conduct an investigation into each complaint, and make a decision about it, recording the reasons for the decision (s 133). One possible course for a Council to take, following investigation, was to refer a complaint to the Legal Profession Standards Board (which dealt with complaints of unsatisfactory professional conduct) or to the Legal Profession Disciplinary Tribunal (which dealt with complaints of professional misconduct) (ss 134, 143 and 157). The Board or the Tribunal, as the case may be, would then conduct a hearing into the complaint.

A Council had the power, of its own motion, to make a complaint to the Board or the Tribunal against a legal practitioner (s 135). This, if it occurred, would follow some information-gathering process, but not an investigation conducted following a complaint by a member of the public.

The new statutory regime

From 1 July 1994, changes to Pt 10 of the Legal Profession Act 1987 (NSW) (“the Act”) applied, including:

→ A Legal Services Tribunal was substituted for the Board and the earlier Tribunal.
→ the creation of a Legal Services Commissioner, who had an important role in respect of complaints.
→ The complaints system was altered in some ways and, in particular, a time limit on complaints was imposed, subject to a discretionary power in the Commissioner to accept a complaint after such time had expired.

Division 3 of Pt 10, dealing with complaints about legal practitioners, included ss 134 to 138 and s 140, in the following terms:

“134 (1) Any person may make a complaint to the Commissioner about the conduct of a legal practitioner or interstate legal practitioner.
(2) Any such complaint that is duly made is to be dealt with in accordance with this Part.
(3) This section does not affect any other right of a person to complain about the conduct of a legal practitioner or interstate legal practitioner.

“135 (1) A Council may initiate a complaint against any legal practitioner or interstate legal practitioner under this Part.
(2) A copy of any such complaint is to be forwarded immediately to the Commissioner.
(3) A complaint that is made to a Council instead of to the Commissioner is to be forwarded immediately to the Commissioner by the Council.

“136 (1) The Commissioner may initiate a complaint against any legal practitioner or interstate legal practitioner under this Part.
(2) Any such complaint is, for the purposes of this Part, taken to have been made to the Commissioner.

“A complaint:
(a) must be in writing, and
(b) must identify the complainant and the legal practitioner against whom the complaint is made, and
(c) must give particulars of the alleged conduct of the legal practitioner that is the subject of the complaint.

“138 (1) A complaint may only be made within 3 years after the conduct is alleged to have occurred.
(2) However, the Commissioner may accept a complaint made after that time if:
(a) the Commissioner is satisfied that it is just and fair to do so having regard to the delay and the reason for the delay, or
(b) the Commissioner is satisfied that the complaint concerns an allegation of professional misconduct and that it is necessary in the public interest to investigate the complaint.
…
140 (1) The Commissioner:
(a) may require further particulars of a complaint to be given, and
(b) may require the complaint, or any further particulars, to be verified by statutory declaration.
(2) The requirement is to be notified in writing to the complainant and is to specify a reasonable time for compliance.”

Section 155 provides:

“(1) After a Council or the Commissioner has completed an investigation into a complaint against a legal practitioner or interstate legal practitioner, the complaint is to be dealt with in accordance with this section.
(2) The Council or the Commissioner must institute proceedings in the Tribunal with respect to the complaint against the legal practitioner or interstate legal practitioner if satisfied that there is a reasonable likelihood that the legal practitioner or interstate legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct.
(3) However, if the Council or the Commissioner is satisfied that there is a reasonable likelihood that the legal practitioner or interstate legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct (but not professional misconduct), the Council or the Commissioner may instead:
(a) reprimand the legal practitioner or interstate legal practitioner if the legal practitioner or interstate legal practitioner consents to the reprimand, or
(b) dismiss the complaint if satisfied that the legal practitioner or interstate legal practitioner is generally competent and diligent and that no other material complaints have been made against the legal practitioner or interstate legal practitioner.
(4) The Council or the Commissioner is to dismiss the complaint against the legal practitioner or interstate legal practitioner if satisfied that there is no reasonable likelihood that the legal practitioner or interstate legal practitioner will be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct.
(5) If a Council or the Commissioner decides to dismiss a complaint or to reprimand a legal practitioner or interstate legal practitioner under subsection (3) and the complainant requested a compensation order in connection with the complaint, the Council or the Commissioner may require the payment of compensation by the legal practitioner or interstate legal practitioner or the successful mediation of the consumer dispute before the decision takes effect.”

Section 156 requires a Council to cause a record of its decision with respect to a complaint, together with the reasons for the decision, to be kept in respect of each investigation conducted under Div 5. Division 6 provides for a review of certain decisions of a Council. For example, a complainant may apply to the Commissioner for a review of a Council’s decision to dismiss a complaint (s 158(1)).

Section 167A provides:

” (1) The Tribunal may, on the application of a Council or the Commissioner who laid an information, vary the information laid so as to omit allegations or to include additional allegations if the Tribunal is satisfied, having regard to all the circumstances, that it is reasonable to do so.
(2) Without limiting subsection (1), when considering whether or not it is reasonable to vary an information, the Tribunal is to have regard to whether varying the information will affect the fairness of the proceedings.”

Relevant cases

In Carver v Law Society of New South Wales (1998) 43 NSWLR 71 at 98, Powell JA, considering an argument that the provisions of Div 3 of Pt 10 were directory rather than mandatory, and that the time bar imposed by s 138 was irrelevant to the jurisdiction of the Tribunal, said that:

“[T]he jurisdiction of the Tribunal to entertain, and the duty of the Tribunal to conduct a hearing into, a complaint depends, not on compliance with the provisions of Div 3 of Pt 10 of the Act – in which Division the provisions of (inter alia) s 135 and s 138 of the Act may be found – but upon an information being laid with the Tribunal following the passing by the Council of the relevant professional body of a resolution of the type contemplated by s 155(2) of the Act.”

Sheller JA, (with whom Mason P and Priestley JA agreed), expressed the view that the language of Pt 10 is not always precise:

“This is demonstrated by a consideration of the word ‘complaint’, which, in this context, usually means an accusation or charge or statement of injury or grievance laid before a tribunal or other body for the purpose of prosecution or redress. Div 3 of Part 10 contemplates three sources of complaint about legal practitioners. These are a complaint by ‘any person’ (s 134(1)), a complaint by a Council (s 135(1)), and a complaint by the Commissioner (s 136(1)). Those three subsections draw a distinction between, on the one hand, the making [of] a complaint to either the Commissioner (s 134(1)) or the Council (s 135(3)) and, on the other, the initiating of a complaint by the Council or the Commissioner, though the second is, for the purposes of Pt 10, taken to have been made to the Commissioner (s 136(2)). Section 171J(3) refers to the complaint ‘made by the Commissioner or a Council.'”

Their Honours went on to hold that s 138(1) should be read as referring only to a complaint “made”, that is by a person (other than the Commissioner or a Council) under s 134(1) and not to a complaint “initiated” by a Council or by the Commissioner.

The  Court of Appeal dismissed each of the objections to the jurisdiction of the Tribunal. Sheller JA held that the time limitation in s 138 applies only to complaints “made” by a person under s 134(1) of the Act and not to a complaint “initiated” by a Council or by the Commissioner. Sheller JA also said:

“I read s 155 as giving the legal practitioner important protection after the investigation has been completed. If the Council or the Commissioner is satisfied that there is no reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct or professional misconduct, the complaint must be dismissed. This protection would be undermined to a significant degree if, before the investigation were completed, proceedings were instituted in the Tribunal with respect to the complaint.”

His Honour rejected Barwick’s further argument by saying:

“However, I do not read the sections as requiring that the investigation be begun after the complaint has been initiated. This would involve a degree of inflexibility which was not intended. Ordinarily one would expect the investigation to be begun before the complaint was initiated and no doubt in many cases completed. It would be quite absurd to read the Act as intending that after the complaint has been initiated another investigation be undertaken. Even if this were a mere formality, it would be a triumph of form over substance. I think the legal practitioner is entitled to have an investigation and have it completed before proceedings are instituted in the Tribunal, but that investigation can be begun and can be completed before any complaint is initiated. No doubt, the Council’s investigation into a complaint referred to it by the Commissioner would not begin until after the reference but in the case of a complaint initiated by the Council there is no reason why that should be so.”

The New South Wales Court of Appeal made the following declaration:

“The Information is defective, if it was laid before the conduct of the Council’s investigation into the complaint, pursuant to s 148(1) of the Act, was completed within the meaning of s 155(1) and should, unless the claimant waives the defect, be struck out”.

The majority decision

Gleeson CJ, Gaudron and McHugh JJ held that:

“An important aspect of Div 5 of Pt 10 is the duty imposed upon the Commissioner, under s 149, to monitor investigations by a Council. One evident purpose of this provision is to enable the Commissioner to supervise the way in which a Council deals with a complaint, and to ensure, for example, that the conduct of a practitioner is treated with appropriate seriousness.

”Not every departure from the procedures laid down by Pt 10, and, in particular, Div 5, will result in a lack of jurisdiction under s 167. However, one of the purposes of the legislation is to bring about the result that, before a matter comes to the Tribunal, it will have been the subject of a complaint which was the subject of an investigation monitored by the Commissioner and considered and dealt with by a Council or the Commissioner under s 155…

”The proper focus of attention should not be whether enquiries were made by the Council before the initiation of the complaint, or after the laying of the information. The focus of attention should be whether, in the events that happened, there was an investigative stage which permitted the requirements of Div 5 to be satisfied, and the legislative purpose of the Division to be fulfilled…

”In the present case the Law Society Council does not appear to have directed its attention to the need for initiation of a complaint, and for compliance with Div 5, until late in the course of its enquiries, and then, in the relevant resolutions, the procedures of initiating a complaint and making decisions under s 155 were telescoped. In the result, in the case of both complaints, there was nothing that can be described as the investigative stage required by Div 5.

”It would be inconsistent with the legislative purpose to conclude that the Tribunal has jurisdiction to deal with a matter brought before it in circumstances where the procedures established by Div 5 have been substantially bypassed. No doubt, at least in the case of the first complaint, the reason that occurred was related to the legislative changes during the course of the Law Society’s consideration of the matter, although it is difficult to see how that could explain the manner in which the second complaint was dealt with. However that may be, there was such a departure from the requirements of Div 5 as to deprive the Tribunal of jurisdiction.

”The appellant has made good his contention that the jurisdiction of the Tribunal was not regularly invoked under s 167 and he is entitled to an order for prohibition on that ground.”

The majority also agreed that the complaints were time barred because they were made three years after the conduct the subject of them:

“The statutory context of s 138 is significant. It follows a provision, s 137, which applies generally to all complaints, whether under s 134, s 135, or s 136. It precedes provisions (ss 140, 141 and 142) which also apply generally to all complaints, although some of them might be thought, in practice, to have more relevance to complaints by a member of the public than complaints by a Council…
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 majority also held that the requirements of s 138, which set a time limit on complaints, applied before any further Information being laid under Section 167A, as “s 138 is to set a time limit on complaints, whilst allowing the Commissioner an overriding discretion”.

Kirby and Callinan JJ concurred in the Orders allowing the appeal.

Kirby J

Kirby J eschewed the construction of the Act adopted by the Court of Appeal:

”the provision of a statutory limitation on the time within which a complaint might be made was a novel feature of the legislation which introduced s 138. It was part of a general reform of procedures for the handling of complaints against legal practitioners outside the inherent jurisdiction of the Supreme Court. The object of that reform was to secure greater transparency in the determination of complaints and to establish new institutions for the process but with balancing provisions designed to afford procedural and other safeguards for the practitioner involved. These safeguards should not be narrowly construed. In its comment on the approach to a new system for handling complaints against legal practitioners, the New South Wales Law Reform Commission remarked that:

“Lawyers should never be subjected to procedures which arbitrarily or unfairly do harm to their reputations or qualify or remove their practising rights. The Commission makes a number of recommendations … aimed at improving the level of procedural fairness for a lawyer who is the subject of a complaint. For example, the Commission proposes that there be a limitation period on complaints (of six years, with discretion in the Legal Services Tribunal to consider claims out of time) …”

Kirby J held that:

”Grounds 1 to 4 of the information filed on 30 September 1996 and pertaining to the first complaint (initiated by the Council against Mr Barwick on 8 June 1995 in relation to alleged professional misconduct) all related to conduct alleged to have occurred substantially or exclusively more than three years before the complaint was initiated (ie before 8 June 1992). No steps had been taken in accordance with s 138(2) of the Act to have the Commissioner consider whether to accept the complaint although outside that time. Accordingly, the proceedings instituted in the Tribunal against Mr Barwick by the information (laid by the appropriate Council) were not, to that extent, in accordance with Pt 10 of the Act. The variance is not an immaterial or a purely procedural one. It goes to the admissibility of the complaint at the threshold. Denial of an insistence upon consideration by the Commissioner of the discretions reposed in that office-holder by s 138(2) is not only an impermissible attempt to bypass the Commissioner’s responsibilities under the Act. It also deprives Mr Barwick of provisions enacted by Parliament for the protection of legal practitioners. This is a serious departure from the scheme and requirements of the Act. The defects complained of therefore concern the power or jurisdiction of the Tribunal to hear and determine the complaint otherwise than in accordance with Pt 10 of the Act. Accordingly, Mr Barwick is entitled to relief on his first objection…
in so far as both the original and subsequent resolutions of the Council of the Law Society proceeded directly from the institution of a “complaint” against Mr Barwick to a decision that proceedings be instituted in the Tribunal, no “investigation into each complaint … initiated by the Council”, as required by the Act, could take place. No monitoring by the Commissioner of the conduct of such investigation by the Council could occur[67]. Thus, although the remarks of Sheller JA about form and substance and practicalities are immediately attractive, they are impossible to reconcile with the language of the provisions in Pt 10, Div 5 of the Act. They also appear difficult to reconcile with the later decision of the Court of Appeal in Murray; but that is not before us. Mr Barwick is entitled to relief on his third objection.”

Callinan J concurred with the majority that the 3 year time limit under s 138 applied to complaints made by the Council:

In principle there is no reason why the Commissioner should not be bound to turn his mind to the matters referred to in sub-s (2) of s 138 in those cases in which the Council is the complainant, in the same way as those matters must be considered if the complaint originates from some other person. Further, there is no reason for the denial to the practitioner of justice and fairness, or the requirement of regard to a public interest in the investigation of the complaint, because its maker is the Council and not somebody else.
In my opinion therefore s 138 applies to complaints made by the Council.

Callinan J also held that the time limit under s 138 applied to the amendments in the Amended Information:

“With respect to” is a phrase capable of having a very wide import[84]. 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. So too, allegations of conduct occurring more than three years before may not be introduced because to do so would be to defeat the intended operation of s 138…
Section 148(1) does not direct that an investigation be into relevant conduct but “into each complaint”. There cannot be an investigation into something which does not yet exist. The appellant points out that in this case the decisions to initiate the complaint under s 135 and to institute proceedings in the Tribunal under s 155 were made at the same time and by immediately consecutive resolutions, and therefore without any possibility of a proper investigation. The submission by the first respondent (which was the subject of an application for leave to cross-appeal) that the primary purpose of s 155 is to ensure that an administrative decision to dismiss a complaint by a “lay complainant” can be the subject of review under Div 6 of Pt 10 of the Act, must be rejected. Even if that be a purpose of s 155 there is another important purpose of that section and that is to ensure that the Council or the Commissioner turn its or his or her mind to the reasonable likelihood or otherwise, of a guilty finding by the Tribunal against the practitioner and reach a state of satisfaction of mind in that regard. In so doing they must also have regard to the distinction between professional misconduct and unsatisfactory professional conduct.