Council of the Law Society of New South Wales v Dennis

NCAT Occupational|2014-09-26

Introduction 1This decision relates to an interlocutory application filed on 10 September 2014 by the Respondent solicitor, Bruce Dennis, in disciplinary proceedings brought against him by the Applicant, the Council of the Law Society of New South Wales ('the Law Society'). 2In those proceedings, which were instituted on 4 March 2014 under Chapter 4 of the Legal Profession Act 2004 ('the LP Act'), the Law Society alleges that the Respondent has been guilty of professional misconduct on a number of grounds. 3On 4 March 2014, the Law Society filed an affidavit sworn on 10 February 2014 by Lucia Moliterno. On 21 May 2013, pursuant to section 267 of the LP Act, the Society had appointed Ms Moliterno as an investigator of the affairs of two law practices, Dennis & Co and DC Legal Pty Ltd ('DC Legal'), in which the Respondent had been involved. Her report of her investigation ('the Molitano Report') was exhibited to her affidavit. A copy of it had been provided to the Respondent on 14 October 2013. A copy of her affidavit was served on the Respondent on 13 March 2014 4In his Reply, filed on 4 June 2014, the Respondent contested a number of the matters alleged against him by the Law Society. 5In a letter dated 1 August 2014, DC Legal, who are the Respondent's solicitors in these proceedings, asked the Law Society to make available for inspection and copying (a) certain documents referred to in paragraphs 2 and 3 of the Moliterno Report and (b) any notes or other records of Ms Moliterno's attendances at the offices of DC Legal on four specified days during June 2013 and of her 'conversations' during those attendances. DC Legal made this request pursuant to sections 166 and 167 of the Evidence Act 1995. 6In a letter to DC Legal dated 28 August 2014, the Law Society advised that it was not willing to produce these documents. It maintained that the Respondent's application did not comply with certain requirements of the Evidence Act. It indicated that any application for production filed by the Respondent would be opposed, on the ground that sections 601 and 602 of the LP Act would be applicable. In addition, it contained the following passages:- For the avoidance of doubt, the documents relied upon by Ms Moliterno and which provide the basis of her report are those annexed to it. Consequently, you are already in possession of the documents you seek to enable you to complete your affidavit. The Society intends to rely on Ms Moliterno's affidavit in the proceedings and she will be available for cross-examination if required... In the case of your request for the documents made available to Ms Moliterno at each of her visits to DC Legal Pty Ltd, these are the copies of your files which were copied by you and provided to Ms Moliterno. 7The interlocutory application to which this decision relates was headed 'Application for Stay or Interim Order'. In it, the Respondent sought an order directing the Law Society to make available for inspection and copying the documents described in DC Legal's letter of 1 August 2014. 8The application was heard by me on 26 September 2014. Mr Maddigan of counsel appeared for the Law Society and Mr Johnson of counsel for the Respondent. 9An affidavit sworn on 2 September 2014 by Maria Papanicolau, who is a secretary employed by DC Legal, was tendered by the Respondent and admitted. Annexed to it were copies of DC Legal's letter of 1 August and the Law Society's reply dated 28 August, together with other correspondence between these parties. 10Having heard submissions from counsel, I reserved my decision.

The documents to which the Respondent's application relates 11The Respondent's application identified the documents of which production was sought by referring to three numbered paragraphs in DC Legal's letter of 1 August 2014 to the Law Society. These paragraphs were in the following terms:- 1. A copy of the notes or other record of conversations or of the attendance of by Lucia Moliterno at the offices of DC Legal Pty Ltd on 11 June 2013, 14 June 2013, 21 June 2013 and 26 June 2013. 2. A copy of any documents made available and collected by Lucia Moliterno at each of the visits to the premises of DC Legal Pty Ltd on 11 June 2013, 14 June 2013, 21 June 2013 and 26 June 2013. 3. In respect of the information and records from third parties identified in paragraph 3 of [the Moliterno] Report: (a) a copy of all documents evidencing or recording the information and records provided by Darren Weaver of Ferrier Hodgson; (b) a copy of all of the information and records provided by the Complainants in relation to the Sons of Gwalia investigation; and (c) a copy of the information and records of the parties named in item 3 of the Attachment A being the letter dated 11 June 2013. 12Paragraph 1 of the Moliterno Report recorded that Ms Moliterno's appointment as Investigator had been 'triggered' by a number of complaints made to the Office of the Legal Services Commissioner regarding the conduct of Dennis & Co and DC Legal in the context of the administration of three enterprises. One of these enterprises was referred to as the Group of Companies of Sons of Gwalia (hereafter 'Sons of Gwalia'). The complainants were former clients of these two law practices 13In paragraph 2 of this Report, it was indicated that 'the letter dated 11 June 2013' was a letter (constituting Attachment A to the Report) that Ms Moliterno had sent to Dennis & Co and DC Legal requesting them to make specified material available to her. This paragraph also described the four visits that she had made to DC Legal's offices during June 2013 and referred to difficulties that she had experienced in obtaining the material identified in her letter. 14In paragraph 3, Ms Moliterno stated that she had also obtained information and records from (i) Darren Weaver of Ferrier Hodgson, who was a joint administrator of Sons of Gwalia, (ii) the complainants in relation to Sons of Gwalia and (iii) 'some of the other parties named in item 3 of Attachment A'. 15In paragraph 4, she stated as follows: 'This report is based on the material and information I have obtained during my investigation from the above mentioned sources'.

Relevant legislation 16In section 36(1) of the Civil and Administrative Tribunal Act 2013 ('the NCAT Act'), the 'guiding principle' for the Act and the Tribunal's procedural rules, in their application to proceedings in the Tribunal, is stated to be 'to facilitate the just, quick and cheap resolution of the real issues in the proceedings'. Section 38(2) states that the Tribunal 'is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice'. It was common ground between the parties, however, that in these disciplinary proceedings the Tribunal is obliged to observe the rules of evidence: see the NCAT Act, Schedule 5, clause 20. 17The Respondent's application was based in part on the following provisions within sections 167 to 169 of the Evidence Act 1995:- 167 Requests may be made about certain matters A party may make a reasonable request to another party for the purpose of determining a question that relates to:... (c) the authenticity, identity or admissibility of a document or thing. 168 Time limits for making certain requests (5) If a party has served on another party a copy of a document that it intends to tender in evidence, the other party may only make a request relating to the document if the request is made within 21 days after service of the copy. (7) Despite subsections (5) and (6), the court may give the other party leave to make a request relating to the document, or other document, after the end of the 21 day period if it is satisfied that there is good reason to do so. 169 Failure or refusal to comply with requests (1) If the party has, without reasonable cause, failed or refused to comply with a request, the court may, on application, make one or more of the following orders: (a) an order directing the party to comply with the request, (b) an order that the party produce a specified document or thing, or call as a witness a specified person, as mentioned in section 166, (c) an order that the evidence in relation to which the request was made is not to be admitted in evidence, (d) such order with respect to adjournment or costs as is just. (2) If the party had, within a reasonable time after receiving the request, informed the other party that it refuses to comply with the request, any application under subsection (1) by the other party must be made within a reasonable time after being so informed. (3) The court may, on application, direct that evidence in relation to which a request was made is not to be admitted in evidence if an order made by it under subsection (1) (a) or (b) is not complied with. (4) Without limiting the circumstances that may constitute reasonable cause for a party to fail to comply with a request, it is reasonable cause to fail to comply with a request if: (a) the document or thing to be produced is not available to the party, or (b) the existence and contents of the document are not in issue in the proceeding in which evidence of the document is proposed to be adduced, or (c) the person to be called as a witness is not available. 18At the hearing, reference was also made to sections 135 and 136. These state:- 135 General discretion to exclude evidence The court may refuse to admit evidence if its probative value is substantially outweighed by the danger that the evidence might: (a) be unfairly prejudicial to a party, or (b) be misleading or confusing, or (c) cause or result in undue waste of time. 136 General discretion to limit use of evidence The court may limit the use to be made of evidence if there is a danger that a particular use of the evidence might: (a) be unfairly prejudicial to a party, or (b) be misleading or confusing. 19The provisions of the LP Act on which the Law Society based its claim that it could not be ordered to produce the documents identified in the Respondent's application are sections 601 and 602. So far as directly relevant, these state:- 601 Protection from liability (1) A matter or thing done or omitted to be done by:... (b) the Bar Association or Law Society, or (c) a Council or any member of a Council, or (d) a committee or subcommittee of a Council or any member of a committee or subcommittee, or (e) any person involved in the conduct of an investigation under this Part, or... (j) any member of the staff of any of the above, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of the administration of this Chapter, subject a protected person personally to any action, liability, claim or demand. (2) In this section: protected person means any of the following natural persons:... (b) a member of a Council or committee or subcommittee of a Council, (c) a person involved in the conduct of an investigation under this Chapter,... (f) a member of the staff of the Commissioner, the Bar Association, the Law Society or the Tribunal. 602 Non-compellability of certain witnesses (1) A person referred to in section 601 (Protection from liability) is not compellable in any legal proceedings (including proceedings before the Tribunal) to give evidence or produce documents in respect of any matter in which the person was involved in the course of the administration of this Chapter. (2) This section does not apply to: (a) proceedings under Part 3 of the Royal Commissions Act 1923, or (b) proceedings before the Independent Commission Against Corruption, or (c) proceedings under Part 3 of the Special Commissions of Inquiry Act 1983, or (d) an inquiry under the Ombudsman Act 1974. 20It should be added that the phrase 'this Chapter' in section 602(1) refers to Chapter 4 of the LP Act. This is the Chapter under which the present proceedings have been instituted.

The Respondent's submissions 21Mr Johnson submitted that the order for production sought in the Respondent's application could be made by the Tribunal either (a) under section 169(1) of the Evidence Act or (b) in the discharge of its duty under sections 36(1) and 38(2) of the NCAT Act to bring about 'the just, quick and cheap resolution of the real issues in the proceedings' while also observing the rules of natural justice. 22With reference to the Tribunal's powers under section 169(1) of the Evidence Act, he cited the judgment of Basten JA (with whom Spigelman and Ipp JA agreed) in Trimcoll Pty Ltd v Deputy Commissioner of Taxation [2007] NSWCA 307. He argued that a dictum of Basten JA at [61] showed that a request for a document would be 'reasonable' for the purposes of section 167 of this Act if the documents was 'likely to be relied on' at the trial of the matter. This, he said, was undoubtedly the case with the Moliterno Report. 23Referring to a distinction drawn by Basten JA at [64] between questions of admissibility and questions of credibility or weight, Mr Johnson argued that because the documents being sought could well bear upon the admissibility of the Moliterno Report, the Respondent's request for their production clearly fell within paragraph (c) of section 167. He added that the documents sought could also bear upon the credibility or weight to be attributed to the Report and that Basten JA did not exclude such considerations from the operation of section 167. 24In his submissions in reply, Mr Johnson indicated that if the present application failed, the Respondent, relying on section 135 of the Evidence Act, would submit as follows at the substantive hearing of these proceedings: (a) the Law Society's denial of access to the documents sought had made it impossible for him to test the correctness of the conclusions stated in the Moliterno Report; and (b) by virtue of this denial of procedural fairness, the Report should not be admitted into evidence. If the Tribunal indicated that it was inclined to uphold these submissions, the Law Society might then decide that it should produce the documents in order to render the Report admissible. But the Respondent could then claim legitimately that the hearing should be adjourned to enable him to give proper consideration to them. The result would be that the Law Society's refusal to produce them at an earlier stage would prevent the 'just, quick and cheap' determination of its disciplinary application against the Respondent. 25Mr Johnson also cited Official Trustee in Bankruptcy v D'Jamirze & Ors [1999] NSWSC 986, in which Hodgson J rejected a claim under section 169(1)(c) that certain documents that a party had refused to produce following a request under section 167 should be declared inadmissible at the hearing of the matter. In relation to one of these documents, an unsigned receipt, he made an order under section 136 limiting the use to which it could be put. 26The principal ground of the Law Society's opposition to the Respondent's application was that section 602 of the LP Act rendered Ms Moliterno, the Society itself and its employees immune from any attempt by the Respondent to compel them to produce documents. As explained below, the Society's submissions placed considerable emphasis on the Hodgson JA's discussion of the predecessor to this provision (section 171R of the Legal Profession Act 1987) in Council of the New South Wales Bar Association v Archer [2008] NSWCA 164; 72 NSWLR 236. 27Mr Johnson endeavoured to distinguish Archer from the facts of the present case. He argued that the documents of which the respondent barrister in Archer sought production were 'internal' documents - i.e., records maintained by the applicant Council of its decision-making processes - whereas the documents sought in the present case related to the functions of an 'external' agency: i.e., Ms Moliterno, in her role as an investigator appointed by the Law Society. 28For the same reason, Mr Johnson submitted, two decisions of the Administrative Decisions Tribunal in which Archer was applied were also distinguishable. These are the decisions in Donaghy v Council of the Law Society of NSW (No 1) [2012] NSWADT 185 and Donaghy v Council of the Law Society of NSW (No 2) [2013] NSWADT 245. 29A further ground on which Mr Johnson sought to distinguish the Archer decision was that Ms Moliterno, by stating various conclusions in her report, had impliedly waived any protection conferred on her by section 602, at least to the extent that she impliedly consented to being cross-examined with regard to the basis of these conclusions. 30 A final point made by Mr Johnson was that although the Respondent's request under section 167 of the Evidence Act had been made outside the time limit imposed by subsection (5) of section 168, it was open to the Tribunal to grant an extension of time under subsection (7).

The Law Society's submissions 31As already indicated, Mr Maddigan's submissions placed considerable emphasis on Hodgson JA's judgment in Archer (with which Campbell JA and Handley AJA expressed agreement). He drew attention to the fact that at [11] Hodgson JA described sections 601 and 602 of the LP Act as 'similar' to the sections of the Legal Profession Act 1987 (sections 171Q and 171R) that were applicable to the Archer proceedings. 32 Mr Maddigan made the following initial submissions: (a) the list of 'protected persons' in section 601(2) of the LP Act includes members of the Law Society Council, members of its committees and subcommittees and investigators, such as Ms Moliterno, whom the Law Society has appointed; and (b) the LP Act contains no provision (other than section 602(2), which is not relevant here) expressly qualifying the statement in section 602(1) that 'protected persons' are not compellable in any legal proceedings to give evidence or produce documents in respect of any matter in which they were involved in the course of the administration of Chapter 4 of the Act. 33With regard to Hodgson JA's judgment in Archer, he argued that his Honour ruled out any general principle that 'considerations of fairness' were sufficient to restrict the operation of section 602(1) and stated that it was only in three specific situations that the protection afforded by this provision would be displaced. 34The relevant passage in Hodgson JA's judgment is at [38 - 40]:- 38 It is clear that a person within the protection of s 171R can waive that protection, in the sense that that person can voluntarily give evidence or produce documents affected by s 171R, so long as this is consistent with s 171P. The question is whether, by some conduct other than actually giving the particular evidence in question or producing the particular documents in question, the person can become compellable to give that evidence or produce those documents, pursuant to powers of compulsion such as s 84 of the ADT Act. 39 In my opinion, Murray [i.e., Murray v Legal Services Commissioner [1999] NSWCA 70; 46 NSWLR 224] does not establish that a person can become so compellable. What it does establish is that s 171R does not displace the requirement that, in proceedings before the Tribunal, procedural fairness be afforded to respondents; and that in some circumstances, it would be a denial of procedural fairness to resist production of documents in reliance on s 171R. 40 However, Murray does not say what consequences would follow if the Tribunal reached the view that the Commissioner's reliance on s 171R did interfere with the just and fair hearing of proceedings instituted by the Commissioner. Remedies other than compulsion to produce the documents could be available. In particular: (1) If the Tribunal took the view that the Commissioner was seeking to rely on some evidence in circumstances where its true probative effect could not properly be assessed because the Commissioner was relying on s 171R to withhold other evidence, in my opinion it would be open to the Tribunal to refuse to admit that evidence under s 135 of the Evidence Act 1995, on the basis that its probative value was substantially outweighed by the danger that the evidence might be unfairly prejudicial or misleading or confusing. (2) If it were the case that the Commissioner's conduct was such that the hearing would not be fair, the proceedings could be stayed, certainly by the Supreme Court and possibly by the Tribunal itself... (3) The Tribunal could properly take the view that it should not find professional misconduct proved unless it was proved in proceedings in which procedural fairness was afforded; and so, particularly if the Tribunal could not itself stay the proceedings, the Tribunal should dismiss the complaint if the Commissioner's reliance on s 171R prevented a fair hearing. 35Mr Maddigan relied also on the following ruling in paragraph [43]) of Hodgson JA's judgment:- 43 Because there is no relevant qualification to the protection given by s 171R, in my opinion waiver of the kind referred to in Maurice [Attorney General (Northern Territory) v Maurice (1986) 161 CLR 475] does not apply so as to subject a person with the protection of s 171R to compulsion in giving evidence or production of documents: any remedy must be found in one or other of the three ways referred to above. 36It is useful to add here that while Hodgson JA (at [45 - 50]) went on to discuss the possibility that this ruling might be incorrect, Campbell JA expressed his agreement with it (at [70]) and Handley AJA said nothing to suggest that he disagreed with it. 37It followed, Mr Maddigan maintained, that in so far as the Respondent's application was based on section 169 of the Evidence Act, the immunity from any obligation to produce documents created by section 602(1) of the LP Act constituted 'reasonable cause' (within the meaning of section 169(4)) for the Law Society to fail to comply with the Respondent's request. He added that since the Respondent had provided no explanation for his failure to make his request under section 137 within the time limit of 21 days stipulated in section 168(5), the Tribunal should not exercise its discretion to extend this time under section 168(7). 38With reference to the Respondent's argument that the Tribunal had a power and a duty to compel production of the documents sought on account of its obligation to arrive at a 'just, quick and cheap' determination of the Law Society's disciplinary application, Mr Maddigan made two submissions. First, the Respondent should have utilised the standard procedure for compelling production through the issue of a summons under section 48 of the NCAT Act, but had failed to do so. Secondly, the effect of section 602(1) was that the recipient of any such summons could not have been compelled to comply with it. 39In opposing the Respondent's claim that if the Law Society did not produce the documents sought, this would result in a denial of procedural fairness, Mr Maddigan drew attention to the two passages from the Society's letter of 28 August 2014 to DC Legal that I have reproduced above at [6]. In view of these considerations, he said, the Respondent could not maintain that he was treated unfairly. He added that the identity and source of the information referred to in paragraph 3 of DC Legal's letter of 1 August 2014 were set out in the Moliterno Report. 40Finally, Mr Maddigan indicated that the Society would not be relying on the conclusions stated by Ms Moliterno in her Report, but only on the factual allegations contained in the documents annexed to it. It remained entirely open, he said, for the Respondent to adduce evidence challenging the accuracy of these allegations.

Discussion and conclusions 41In my opinion, the order sought in the Respondent's application is precluded by section 602(1) of the LP Act, as explained by the Court of Appeal in the Archer decision. 42In his submissions, Mr Johnson relied to a substantial extent on the proposition that section 602(1) was applicable only to documents that were 'internal' to the applicant in the proceedings (i.e., the Legal Services Commissioner, the Council of the NSW Bar Association or the Council of the Law Society). But this proposition is not sustainable, for at least four reasons. 43First, nothing in the terms of section 602 supports it. As Mr Maddigan emphasised, the protection afforded by section 602(1) contains no express qualification, other than the exceptions stated in section 602(2). 44Secondly, the Court of Appeal in Archer said nothing to suggest that a court or tribunal, in applying section 602, should draw a distinction between 'internal' and 'external' documents. 45Thirdly, while one of the two categories of document that the Court held to be within the scope of section 602(1) could properly be described as 'internal' (they comprised the minutes of every meeting, within a specified time frame, of the applicant Council, any committee of the Council and its Profession Conduct Committee that contained any reference to the respondent barrister), the same could not be said of the other category. This was defined in the respondent's summons for production as 'all correspondence passing between the [NSW] Bar Association... and the Barristers Board of Western Australia... between 1 July 1987 and 9 October 2004 concerning or referring to the Respondent'. It is difficult to see how such correspondence could be regarded as 'internal' to the Bar Association. If the Court of Appeal had believed that section 602(1) was only applicable to 'internal' documents, one would expect that it would have given reasons for classifying this correspondence as 'internal'. 46Fourth and finally, if section 602(1) applies only to 'internal' documents, it is difficult to see why investigators appointed under the LP Act, such as Ms Moliterno, would have been included as one of the categories of persons designated as not compellable to give evidence or produce documents. A substantial proportion, if not all, of the documents created or received by an investigator in the course of exercising his or her functions under Chapter 4 of the Act would be expected to be 'external' documents. 47These conclusions about the claimed distinction between internal and external documents are sufficient to justify dismissal of the Respondent's application. It follows from them that there was 'reasonable cause' under section 169 of the Evidence Act for the Law Society to refuse his request for production of documents and that the Tribunal's duty to 'facilitate the just, cheap and quick resolution of the real issues' in these proceedings does not provide grounds for any order overriding the 'immunity' from production conferred by section 602(1). 48One additional comment should be made. It remains possible that undesirable consequences such as Mr Johnson identified (see [25] above) could flow from the Law Society's continued reliance on section 602(1). His submission on this matter receives general support from the dicta of Hodgson JA at [40] (see [35] above). 49In its submissions, the Law Society sought an order for costs. But because this matter was not addressed by counsel at the hearing, it is preferable that the costs of the Respondent's application be reserved. 50The matter is set down for further directions at 9.30 a.m. on 3 December 2014.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 November 2014

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