Murray v Legal Services Commissioner & Anor [1999] NSWCA 70
On 21 February 1997, the Legal Services Commissioner wrote to Murray, a solicitor stating that he had received a complaint from Dr Rajski “concerning your involvement in negotiations for settlement concerning various parties including Tectran, Raybos, Rajski and others”. That letter:
a) Informed Murray “My purpose at this stage in addition to notifying you that I have received the complaint is to advise that I am investigating it. I have not as yet totally summarised the complaint and will provide you with full particulars shortly.”;
b) proceeded “in brief” to state what the complaint alleged, namely, that Murray:
i) was involved in the insertion of improper and unlawful conditions in a settlement deed, specifically that payment under the settlement of the Tectran and Raybos civil litigation was contingent upon termination of criminal charges concerning Mr Moshe Yerushalmy and Mr David Bruce Cowper.
ii) was involved in negotiations resulting in the obtaining of moneys by Allen Allen and Hemsley under the terms of their insurance cover with LawCover, and that the subsequent non-payment of those moneys to the person designated in the claim for insurance constituted a criminal offence under s178A of the Crimes Act 1900; and
iii) that the non-payment of those moneys to the Raybos and Rajski interests and the use of those moneys as a lever by Murray’s firm in an attempt to have the criminal matters of perjury withdrawn, constituted an attempt to pervert the course of justice, an offence “under section 344A/319 of the Crimes Act”.
Pavlakis, the solicitor who first acted for Murray wrote to the Commissioner on numerous occasions requesting a copy of the complaint and/or pointing out that he had still not received a copy of the complaint. The Commissioner did not provide Murray with further particulars or a copy of the complaint nor did he offer Murray an opportunity to answer the complaint.
On 4 May 1998, the NSW Commissioner wrote formally advising that as a result of his investigations into the complaint, he had determined to institute proceedings against Murray in the Tribunal in terms of the Information and particulars, which were served with the letter, “as I am satisfied that there is a reasonable likelihood that you will be found guilty by the Legal Services Tribunal of unsatisfactory professional conduct or professional misconduct.”
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 171J of the Act provides:
“Notification of decisions of Council or Commissioner
(1) A Council or the Commissioner must cause the decision with respect to a complaint, together with the reasons for the decision, to be notified in writing to the complainant and to the legal practitioner or interstate legal practitioner against whom the complaint was made.
(2) In the case of a decision of a Council to dismiss the complaint or reprimand the legal practitioner or interstate legal practitioner, the right of the complainant to apply to the Commissioner for a review of the decision must also be included in the notice to the complainant.
(3) A notice to a complainant is not required under this section if the complaint was made by the Commissioner or a Council.”
Cases
In Carroll v Sydney County Council (1989) 15 NSWLR 541 at 548-550, the respondent adopted the Amusement Parlour Resolution 1981. The resolution, which stated that it was passed pursuant to s 362 and s 363 of the Local Government Act 1919 (NSW) and the respondent’s other powers under that Act, made rules for the use of amusement parlours within the City of Sydney. Section 362 and s 363 provided that the respondent may control and regulate premises and appliances used for public amusements and the conduct of people therein. After the resolution was adopted, the respondent served the appellant with a letter which asserted that his premises were being used unlawfully and notified him that unless an application was made for a licence to use the premises, legal proceedings would be commenced against him. The Court of Appeal of New South Wales held that for a resolution against specific individuals to be validly made pursuant to s 362 and s 363, notice that the individual may make representations as to whether the resolution should be enforced against him may be given after the resolution is made. The primary judge had decided that the respondent was not in breach of the rules of procedural fairness because it had given a copy of the resolution to the appellant and informed him that, unless he made an application for a licence, legal proceedings would be commenced against him. However, the Court of Appeal decided that that procedure did not comply with the rules of procedural fairness. It was necessary that the appellant be expressly informed of the opportunity to be heard. It was not sufficient that the appellant could, if he knew of his rights, have made representations. McHugh JA (Kirby P & Clarke JA agreeing) referred to Babalis and said:
“I think that at the present time obligations imposed by the rules of natural justice are not fulfilled simply because the person affected, if he knew his rights, could make representations. For a public authority to comply with its statutory duty to give a person affected by the exercise of its powers the opportunity to be heard, the authority, as Cox J pointed out in Babalis, must expressly inform the person affected ‘of his rights in that respect’ (549).”
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.”
Murray submitted that the NSW Commissioner by failing to provide Murray with a copy of the complaint and give him an opportunity to respond to it before instituting proceedings in the Tribunal was guilty of a denial of procedural fairness to him.
Mr Murray relied upon Carroll v Sydney County Council as well as a legitimate expectation based on the previous practice of the Bar Council, of the Law Society Council and of the Commissioner in dealing with complaints, on the terms of the correspondence in which the Commissioner on 21 February 1997 offered to provide Mr Murray with full particulars of the complaint “shortly” and on the Commissioner’s failure to traverse Mr Pavlakis’ statement addressed to him on 10 March 1997: “In any event, I take it that Mr Murray will be given a proper opportunity to respond to matters raised before any decision is made concerning the complaint.”
Murray further submitted that the NSW Commissioner had not complied with the obligation under Section 171J which imposed an obligation to cause the reasons of this decision to be notified in writing to the complainant and the practitioner. Factually, the Commissioner submitted that his letter to Mr Murray of 4 May 1998 met the requirement in s171J to cause the decision with respect to a complaint, together with the reasons for the decision, to be notified in writing to the complainant.
Sheller JA, (with whom Priestley and Stein JJA agreed), held that:
88 I find it hard to imagine that the Council or the Commissioner would reach the level of satisfaction required without taking account of the legal practitioner’s response to the complaint if the legal practitioner, under compulsion pursuant to s152, or voluntarily, gave it. The duty of the Council or the Commissioner to act either by instituting proceedings in the Tribunal or in some other way does not arise on a satisfaction or opinion that a prima facie case had been made out, so that any material favouring the legal practitioner may be ignored; compare Wentworth v Rogers (1984) 2 NSWLR 422 at 429 and 436. The duty of the Council or the Commissioner involves an attempt to predict the outcome of a hearing in the Tribunal; compare Saffron v Director of Public Prosecutions (1989) 16 NSWLR 397 at 400, 402 and 411. Ordinarily, a factor in this prediction would be the legal practitioner’s answer to the complaint, if the legal practitioner gives one, or the failure to answer the complaint, if the legal practitioner gives none. These matters lead me to conclude that a Council or the Commissioner cannot and does not reach the required satisfaction without providing the legal practitioner with a copy of the complaint and calling upon the legal practitioner to respond to it. Proper performance of the Commissioner’s duty preserves, in the words of Lord Slynn of Hadley, the legal practitioner’s “right to know and to reply”.
89 If the Council or the Commissioner is satisfied that there is a reasonable likelihood that the legal practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct (but not professional misconduct), then, despite s155 (2), the Council or the Commissioner may reprimand the legal practitioner, if the legal practitioner consents to the reprimand, or dismiss the complaint if satisfied that the legal practitioner is generally competent and diligent and that no other material complaints have been made against the legal practitioner. Thus, even if the Council or the Commissioner are satisfied that there is a reasonable likelihood that the facts complained of would be made out before the Tribunal, the possible consequences are such that the legal practitioner could reasonably expect the opportunity to advance a case to the Council or the Commissioner that it should be satisfied only that there was a reasonable likelihood that the legal practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct and that the legal practitioner was generally competent and diligent and that no other material complaints had been made against the legal practitioner.
90 In my opinion, proper performance of the duty and proper exercise of the powers conferred on the Commissioner by s155 require that, before the Commissioner completes an investigation into the complaint against the legal practitioner and decides how in accordance with s155 the complaint is to be dealt with, the legal practitioner be given the opportunity to see a copy of the complaint and answer it and to advance argument against it and in favour of the lesser charge than that of professional misconduct or in mitigation. This would enable the legal practitioner to submit that the Commissioner should be satisfied that there was no reasonable likelihood that the legal practitioner would be found guilty by the Tribunal of either unsatisfactory professional conduct or professional misconduct and that the complaint should be dismissed under subs (4).
91 This conclusion follows from the structure and operation of s155 and is a matter of statutory interpretation. I think it also follows from the nature of the power conferred upon the Commissioner by s155 which is apt to “destroy, defeat or prejudice the legal practitioner’s rights, interests or legitimate expectations”. By way of example, a legal practitioner faced, without seeing the complaint or being heard, with a finding by a Council or the Commissioner that there was a reasonable likelihood that the legal practitioner would be found guilty by the Tribunal of unsatisfactory professional conduct, must decide, without being heard, whether to consent to a reprimand. In Wiseman v Borneman [1971] AC 297 the question was whether procedural fairness required a Tribunal to give a taxpayer an opportunity to be heard before it decided whether there was or was not a prima facie case for proceeding in the matter, Lord Wilberforce said at 320:
“On the taxpayer’s side, there is the natural aversion against allowing a decision to be made on the basis of material he has not seen: and he can meet the objection that to allow him to see the counter-statement and comment on it invites an infinite process of contestation with the argument that in practice this will not result, since it will be exceptional that, after a counter-statement has gone in, the taxpayer can show there is no prima facie case. On the side of the commissioners it can be said that the taxpayer already has the essentials of justice in his right to put in a statutory declaration. In the normal case in which the section is likely to be invoked, the taxpayer will know quite well what are the relevant circumstances, will be aware of the case against him, and will know as much as, probably more than, the commissioners themselves. A case where he is unable to convince the tribunal that there is no prima facie case for proceeding on the strength of his statutory declaration is in the nature of things one which will have to be decided.”
The decision of the NSW Commissioner under s155 (2) of the NSW Act to institute proceedings with respect to the complaint was declared void and ordered to be quashed.
