Bowers v NSW Legal Services Commissioner

Solicitors: Office of the Legal Services Commissioner (Respondent) File Number(s): 2021/302652 Decision under appeal Court or tribunal: Supreme Court Jurisdiction: Common Law Citation: [2021] NSWSC 1095 Date of Decision: 6 October 2021 Before: Bellew J File Number(s): 2021/9177

Judgment

THE COURT: In 2018 the applicant, James Richard Bowers, commenced proceedings under the Succession Act 2006 (NSW) seeking provision from the estate of his mother. Judgment was delivered in February 2020.
In April 2020, the applicant made complaints to the Legal Services Commissioner under the Legal Profession Uniform Law (NSW) about the conduct of the firm of solicitors, two individual solicitors and counsel who had represented him in the proceedings. The Commissioner treated these as four complaints.
On a date which is not clear from the papers available to this Court, the Commissioner dismissed the complaint in relation to the junior solicitor who was brought into the matter shortly before the hearing in the Supreme Court. The complaints in relation to the firm, the principal solicitor with the carriage of the matter and counsel were dismissed for reasons given in three letters to the applicant dated 18 November 2020. At the same time, the Commissioner also dismissed a request to review the complaint with respect to the junior solicitor which had been earlier dismissed.
On 1 December 2020 the applicant requested a review of "all matters" and raised a question which he asserted had not been addressed before, despite having been raised in submissions. A further submission was sent by email on 7 December 2020.
On 13 January 2021 the Commissioner responded to the emails of 1 and 7 December 2020, declining to conduct a review of the earlier decisions. He gave reasons for that decision.
On 12 January 2021 the applicant filed a summons for judicial review in the Common Law Division, seeking orders setting aside the decisions of the Commissioner of 18 November 2020 and an order directing the Commissioner to perform his duty under the Legal Profession Uniform Law. The summons was amended on two occasions, but only to add the review decision of 13 January 2021 and to identify the relevant grounds as those set out in the applicant's emails to the Commissioner of 1 and 7 December 2020. Those grounds were said to support the conclusion that the decisions of the Commissioner were "perverse." In a proposed further amended summons, the applicant sought to add as parties to his proceedings the firm and the three practitioners against whom he had laid complaints.
On 7 May 2021, the Commissioner filed a notice of motion seeking to have the proceedings summarily dismissed pursuant to r 13.4(1)(b) of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR"). (The notice itself was not in the papers filed in this Court.) Rule 13.4(1)(b) provides for the court to dismiss proceedings where "no reasonable cause of action is disclosed". The Commissioner swore an affidavit on 11 May 2021 in support of the motion, to which were annexed, inter alia, his relevant decisions and the reasons for them.
That motion, together with a motion by the applicant to make further amendments to the summons, came before Bellew J on 26 August 2021. The judge dealt first with the motion to dismiss the proceedings and, having formed the view that no reasonable cause of action was disclosed, dismissed the applicant's notice of motion and dismissed the proceedings. [1] In the course of his Honour's reasons, the applicant's written submissions (other than on the question of joinder) were recorded: "[23] The plaintiff forwarded an email to my Associate on the morning of the hearing which, leaving aside what was put in relation to the issue of joinder, was in the following terms: '(3) The decisions of the Commissioner are perverse for the reasons stated by me in emails dated 1 December and 7 December 2020 to the Commissioner and an order in the nature of certiorari is available to correct an error of law on the face of the record: Bruce v Cole (1998) 45 NSWLR 163 - see headnote paragraph (3) and see Hockey v Yelland (1984) 157 CLR 124 per Gibbs CJ at paragraph 7 (Brennan and Dawson JJ agreeing). (4) The right to apply for judicial review of the Commissioner's decision is preserved: Hockey v Yelland (1984) 157 CLR 124 per Gibbs CJ at paragraph 6 (Brennan and Dawson JJ agreeing). (5) The test in General Steel is not satisfied and the matter must go to trial.'"
The matter now comes before this Court pursuant to a summons issued by the applicant on 25 October 2021 seeking leave to appeal from the judgment in the Common Law Division. The only ground of appeal identified by the applicant in the draft notice of appeal is in the following terms: "The General Steel test was not satisfied re the Hallen J complaint."
The applicant also filed a document entitled "Appellant's summary of argument" which contained four paragraphs, reading as follows: "1. Re Australian Broadcasting Tribunal; ex parte Hardiman 1980 144 CLR 35 and Ross v Lane Cove Council 86 NSWLR 34 and UCPR 59.3 requires all interested parties be joined to the action. 2. The test in General Steel is not satisfied. 3. Leave should be granted as the judgment of 6 October, 2021 effectively ended the proceedings: ex parte Bucknell 1937 56 CLR. 4. If leave is granted, the question is whether my summons contained an arguable cause of action: Spencer v Commonwealth 2010 HCA 51 at [24]."
With respect to the first paragraph, two inferences may be drawn. One may be that, because the only respondent is the body which would be required to reconsider the matter if the proceeding were successful and the matter remitted for further consideration, it should not be the active party resisting the appeal. [2] The second inference may be that the applicant's motion before the primary judge, which sought to join the firm and the three practitioners the subject of the applicant's complaints to the Commissioner, should have been granted. The latter point may be put to one side: all were informed by the Commissioner of the proceedings and indicated (with an immaterial qualification in the case of the counsel) that they did not wish to participate. In any event, it would arise only if the challenge to the summary dismissal of the proceedings were to succeed. As to the Hardiman point, to the extent that it applies, [3] and in the absence of any other respondent, it was appropriate for the Commissioner to defend the proceeding. He did not exceed the proper bounds in doing so.
The further paragraphs raised a challenge to the conclusion of the primary judge that the matter was an appropriate one to be dealt with summarily. The submission relied upon the principle established in General Steel Industries Inc v Commissioner for Railways (NSW). [4] That principle was conveniently restated in Spencer v The Commonwealth [5] by French CJ and Gummow J: "[24] The exercise of powers to summarily terminate proceedings must always be attended with caution. That is so whether such disposition is sought on the basis that the pleadings fail to disclose a reasonable cause of action or on the basis that the action is frivolous or vexatious or an abuse of process. The same applies where such a disposition is sought in a summary judgment application supported by evidence. As to the latter, this Court in Fancourt v Mercantile Credits Ltd said: 'The power to order summary or final judgment is one that should be exercised with great care and should never be exercised unless it is clear that there is no real question to be tried.' More recently, in Batistatos v Roads and Traffic Authority (NSW) Gleeson CJ, Gummow, Hayne and Crennan JJ repeated a statement by Gaudron, McHugh, Gummow and Hayne JJ in Agar v Hyde which included the following: 'Ordinarily, a party is not to be denied the opportunity to place his or her case before the court in the ordinary way, and after taking advantage of the usual interlocutory processes. The test to be applied has been expressed in various ways, but all of the verbal formulae which have been used are intended to describe a high degree of certainty about the ultimate outcome of the proceeding if it were allowed to go to trial in the ordinary way.' There would seem to be little distinction between those approaches and the requirement of a 'real' as distinct from 'fanciful' prospect of success contemplated by s 31A. That proposition, however, is not inconsistent with the proposition that the criterion in s 31A may be satisfied upon grounds wider than those contained in pre-existing Rules of Court authorising summary dispositions."
The reference in the last sentence to s 31A was to s 31A(2) of the Federal Court of Australia Act 1976 (Cth) which, relevantly for present purposes, provided that the court might give judgment for one party if satisfied that "the other party has no reasonable prospect of successfully prosecuting the proceeding". The power conferred by that section may be broader, but is certainly no narrower, than UCPR r 13.4(1)(b).
There is no dispute that the primary judge sought to apply the test articulated in General Steel Industries, and was correct to do so.
Noting that the applicant had characterised the decisions of the Commissioner as "perverse", the primary judge concluded that the applicant sought to invoke the legal standard of unreasonableness, as explained in Minister for Immigration and Citizenship v Li. [6] No error was suggested in that approach, which the applicant embraced before the primary judge.
Finally, in terms of principle, the applicant's reference to Ex parte Bucknell [7] was apt to invoke the principle that where, although the judgment was characterised as "interlocutory" for the purposes of requiring leave, the practical effect of the judgment was to determine the rights of the parties, there is at least a prima facie case for granting leave to appeal and in some cases leave would be granted almost as of course. [8] However, care must be taken in adopting such broad statements of principle without regard to the particular circumstances of the case and the context in which the issue arises. It is necessary to have regard to the likelihood of an appeal being successful were leave to be granted, whether any issue of principle is involved and whether a substantial injustice has been caused to the applicant by the dismissal of the proceedings. Were it otherwise, a motion to dismiss a matter summarily, far from providing a quick and cheap method of disposing of unjustifiable proceedings, would, if successful, constitute an invitation to appeal.
Further, it is necessary to be satisfied that other bases for requiring leave are not also engaged. In the present case the complaints to the Legal Services Commissioner, if entirely upheld, could in theory only give rise to awards of compensation in favour of the complainant in the amount of $25,000. There could not be separate amounts against the firm and its solicitors; accordingly, the statutory threshold under s 101(2)(r) of the Supreme Court Act 1970 (NSW) would not be satisfied. Leave would be required for that additional reason.
The other significant matter concerns the subject-matter of the proceeding. That involved the exercise of a broad discretion vested in a professional regulatory body not to pursue, or further pursue, an investigation into a complaint. Although the submissions and the correspondence from the Office of the Legal Services Commissioner referred to the Commissioner's "absolute discretion", a term used in s 313 where its intended function is clear, no statutory discretion is absolute: a power cannot be exercised for an improper purpose. In the present case that is of little concern, because the applicant's case is that the decisions were manifestly unreasonable. Unless a high bar is set for the satisfaction of that ground of challenge, judicial review for legal error will become indistinguishable from appellate review of the merits of a decision.
In order to understand the applicant's case, it is necessary to note the principles governing the exercise of the Commissioner's functions under Ch 5 of the Legal Profession Uniform Law in dealing with complaints, either of unsatisfactory professional conduct or professional misconduct on the part of a legal practitioner (described as a "disciplinary matter"), [9] or a complaint about the provision of legal services (described as a "consumer matter" [10] ).
The Commissioner has statutory duties (i) to deal with all complaints properly made and to deal with them in accordance with the Legal Profession Uniform Law and the Legal Profession Uniform Rules (s 315); (ii) in exercising or considering whether or how to exercise any applicable discretions (including the conduct of any investigation), to act in a fair manner, having regard to the respective interests of the complainant and the respondent and to the public interest (s 316); (iii) to deal with complaints (including the conduct of any investigations) as efficiently and expeditiously as is practicable (s 317); and, (iv) relevantly, to give the complainant and the respondent written notice of a decision to close the complaint, including a statement of reasons for the decision (s 318).
The Commissioner is required to conduct a preliminary assessment of all complaints: s 276(1). Having done so, he or she at any stage "may close the complaint without further consideration of its merits", if satisfied that "the complaint requires no further investigation", except to the extent it involves a consumer matter: s 277(1)(h).
In dealing with a consumer matter, the Commissioner may, under s 290(2), if it is fair and reasonable to do so, make any of a number of orders, namely: "(a) an order cautioning the respondent or a legal practitioner associate of the respondent law practice; (b) an order requiring an apology from the respondent or a legal practitioner associate of the respondent law practice; (c) an order requiring the respondent to redo the work that is the subject of the complaint at no cost or to waive or reduce the fees for the work; (d) an order requiring - (i) the respondent Australian legal practitioner; … to undertake training, education, counselling or be supervised; (e) a compensation order against the respondent in accordance with Part 5."
In dealing with a disciplinary matter, the Commissioner may find that the respondent lawyer has engaged in unsatisfactory professional conduct and may determine the disciplinary matter by making any of a range of orders: s 299(1). These include initiating and prosecuting proceedings in the Occupational Division of NCAT if of the opinion that the alleged conduct may amount to unsatisfactory professional conduct that would be more appropriately dealt with by NCAT, or that the alleged conduct may amount to professional misconduct: s 300(1).
The Commissioner's substantive decisions to close the complaints may be characterised, (i) insofar as they were disciplinary matters, as decisions under s 277(1)(h) and that they required no further investigation; (ii) insofar as they were consumer matters, as decisions under s 290(1) and that he was not satisfied that it was fair and reasonable to make any of the orders referred to in subs 290(2).
The Commissioner's two decisions not to review his earlier substantive decisions were decisions under s 313(1), under which the regulatory authority (the Commissioner) is empowered "at its absolute discretion" to conduct an internal review of an earlier decision, if considered "appropriate to do so". The decisions of the Commissioner are otherwise "final", save for a right of appeal under s 314 to NCAT by a respondent lawyer from certain decisions: s 312. The language of ss 312 and 313, read together, emphasise the absence of implied constraints on the Commissioner's discretion.
Thus the criterion for resolving a consumer matter is the Commissioner's opinion as to what is "fair and reasonable in all the circumstances": s 290(1). On one view, that is the most favourable result available to the client of a legal practice because there is no defining threshold for what may be considered not to be fair and reasonable. It is possible that an order of the kind referred to in s 290(2) may be made if the practitioner has exhibited a degree of negligence which the Commissioner considers warrants some form of compensation, although there would be no question of disciplinary action. At the same time, the Commissioner's decision to "close the file", without taking any action, is one which will be difficult to challenge on the ground of manifest unreasonableness. The Commissioner is not obliged to act on a consumer matter because there might be a claim under either the general law or statute.
The circumstances of the present case do not provide a basis for doubting the conclusion of the primary judge that no reasonable cause of action had been identified. Some of the issues raised in the grounds relied on in the Court below, being the emails to the Commissioner of 1 and 7 December 2020, were stated in terms which prevent demonstration of error. For example, the applicant stated in the earlier email: "There was no reason whatsoever for [counsel] not asking the questions of my brother and sister - it has nothing to do with forensic judgment - it was simply a matter of following instructions."
The premise that counsel is bound to ask, in the course of cross-examination, questions identified by the client is fallacious. If there are exceptions to that proposition, none was identified.
By contrast, more detail was provided with respect to the course of settlement proposals. The applicant stated: "To advise an opening settlement offer of $1.1m was grossly excessive and cost me a settlement. [The solicitor] had previously advised me that my case was worth $675,000 and $800,000. [The solicitor] cannot rely on the advice of counsel as he has held himself out as being competent to advise on settlement by the previously advised as to quantum. And in any event, the barrister herself was negligent in advising an opening offer of $1.1m. [Counsel] is also liable. Bearing in mind [the solicitor's] other advices on quantum $675,000 and $800,000, [senior counsel's] advice on quantum of $750,000 and what the Judge ordered $750,000, the opening offer by [the solicitor] and [counsel] of $1.1m was grossly excessive."
This was at least a clearly comprehensible complaint. It suffered, however, from three major flaws. First, the lawyers were employed to seek a settlement of the claim, which they did. While there may be different negotiation techniques in such cases, to start with an offer from which you are willing to depart by 35% might well be thought to be an entirely reasonable position. At least it is impossible as a matter of principle to see any basis for concluding that the Commissioner was manifestly unreasonable in adopting such a proposition.
Secondly, the complaint was lacking context where no indication was given as to the position taken by the other parties. At the family provision trial, in their respective final submissions, the applicant's counsel sought $1.2m and the executor suggested $300,000. The judge adopted the mid-point.
Thirdly, there was no self-evident ground for inferring that the opening bid cost the applicant a settlement.
The applicant also complained about the failure of the lawyers to tender a medical report which would have updated the evidence otherwise before the Court. The basis of the complaint lay in the fact that the judge noted the absence of any updating report. However, there was no material from which any inference could be drawn that the report would have assisted the applicant. Rather, there was a suggestion that the report would have disclosed that he was employed for a particular period. At least on one view, that might have reduced his need for provision or further provision from the will. In any event, it appeared from the judgment that the employment was otherwise revealed by the evidence.
For present purposes, it is not necessary (nor helpful, given the degree of rhetoric and imprecision involved in the submissions) to explore the detail of the allegations made by the applicant. These examples may illustrate why the Court cannot be satisfied that an appeal from the judgment in the Common Law Division would have any real prospects of success. Other complaints depended on disputed accounts which the Commissioner could not resolve. The quantum of compensation claimed by the applicant vastly exceeded the Commissioner's limited consumer jurisdiction. At their highest, the applicant's complaints contained allegations in respect of which views might reasonably differ as to whether there might have been a breach of professional standards. However, the applicant's case was that the Commissioner's decisions were legally unreasonable. To establish an arguable case he had to identify why, in respect of any particular allegation, that was so. He had to establish that it was not open to the Commissioner not to be satisfied that the respondent lawyer had engaged in unsatisfactory professional conduct; or not to be satisfied that it was fair and reasonable to make none of the orders referred to in s 290(2). That was a high hurdle, which he failed to clear.
Two further matters should be mentioned. First, the applicant challenged the primary judge's reliance on Hastwell v Legal Services Commissioner [11] for the proposition that prerogative relief was not available. In Hastwell, Campbell J held that "the Commissioner's decision to close [the disciplinary] aspects of Mr Hastwell's complaint under s 277 … is not amenable to certiorari", [12] and made a similar finding with respect to a refusal to carry out a review under s 313. [13] However, Campbell J reserved the question of amenability with respect to a consumer matter, an issue which did not arise in Hastwell. [14] The application of this reasoning by the primary judge to a consumer complaint under s 290 [15] may be questioned. The judge may have adopted an overly broad submission that, in effect, a discretionary power imposing no duty was not amenable to review. [16] However, that does not affect the proposition that no arguable case of jurisdictional or legal error by the Commissioner was apparent.
Secondly, the applicant queried the direction that he limit his submissions on the leave application to 20 minutes. As it happened, he complied comfortably, but the direction is standard practice, as he was advised. As stated in Be Financial Pty Ltd v Das, [17] decided a decade ago, "[t]he general practice on leave only applications is to limit counsel to 20 minutes each."
Accordingly, the Court makes the following orders: 1. Dismiss the application for leave to appeal; 2. Order that the applicant pay the Commissioner's costs in this Court.

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