Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL OF WESTERN AUSTRALIA

Citation : LEGAL PRACTITIONERS COMPLAINTS COMMITTEE and EDWARD [2006] WASAT 113

Practice and procedure - Legal practitioners - Decision of the State Administrative Tribunal to make and transmit a report to the Supreme Court

Legal Practice Act 2003 (WA), s 161, s 185, s 187, s 194

State Administrative Tribunal Act 2004 (WA), s 9

Respondent : Legal Practitioners Complaints Committee

D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198

Legal Practitioners Complaints Committee and Edward [2006] WASAT 113

Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) 25 WAR 209

Re Maraj (A Legal Practitioner) (1995) 15 WAR 12

Archer v Howell (1992) 7 WAR 33

Australian Broadcasting Tribunal v Bond [1990] HCA 33; (1990) 170 CLR 321

Bercove v The Barristers' Board [1986] WAR 50

Director-General of Social Services v Chaney [1980] FCA 87; (1980) 31 ALR 571

Hoffman v Howell (1992) 7 WAR 24

Legal Practitioners Complaints Committee and Cullen [2005] WASAT 211

Legal Practitioners Complaints Committee and Lim [2006] WASAT 90

Legal Practitioners Complaints Committee and Skea [2005] WASAT 196

Legal Practitioners Complaints Committee and Walton [2006] WASAT 155

Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355

R v Australian Broadcasting Tribunal; Ex parte 2HD Pty Ltd [1979] HCA 62; (1979) 144 CLR 45

Shire of Augusta-Margaret River v Gray [2005] WASCA 227; (2005) 143 LGERA 55

2 WHEELER JA: The appellant appeals the decision of the State Administrative Tribunal ("SAT") to make and transmit a report to the Supreme Court pursuant to the Legal Practice Act 2003 (WA) in relation to the appellant practitioner. SAT made certain other orders which I come to shortly.

3 The proceedings below followed a somewhat unfortunate course.

4 The background facts were that the practitioner had admitted borrowing substantial sums for her personal and business needs from a trust fund under her control. The fund was that of a former client who had died, the borrowings being from the estate. They were repaid with interest at a rate higher than the trust fund was earning, but at a rate lower than the practitioner was incurring on her own borrowings. No approval for the borrowings had been sought, or obtained, from her client while he was alive, or from any other person.

5 The proceedings were commenced by a reference from the Legal Practitioners Complaints Committee in October 2004 to the Legal Practitioners Disciplinary Tribunal. A complaint of unprofessional conduct was alleged by the committee, characterised as a breach of the duty to avoid a conflict between the practitioner's duty as a legal practitioner and her personal interests. The facts were not in issue at the original hearing, nor was the conclusion that there had been unprofessional conduct. The only matter at issue was the appropriate penalty.

6 At that original hearing, the Legal Practitioners Disciplinary Tribunal formed the view that the conduct, while serious, fell "just short" of conduct that required a referral to the Supreme Court. The Tribunal recorded its finding of unprofessional conduct, indicating that it was minded to make orders pursuant to s 187(1)(c) of the Legal Practice Act 2003, to the effect that the practitioner should "take advice in relation to the management and conduct of her practice", and indicated that fuller reasons would follow in due course. The mechanics of supervision of the practitioner's practice were to be the subject of further submissions after the parties had consulted on that question, and questions of whether there should be a fine, or other repayments, and the issue of costs, were also outstanding. The hearing was therefore adjourned. The Tribunal did, however, foreshadow a number of orders, involving supervision of the practitioner for a period of two years.

7 Less than a month after the hearing, the State Administrative Tribunal Act 2004 (WA) ("the SAT Act") came into operation, and as a consequence the disciplinary proceedings were transferred to SAT. There was a legislative gap, subsequently filled by regulation. Eventually, the result achieved was that SAT, when dealing with this matter, could be constituted by the persons who were members of the former Legal Practitioners Disciplinary Tribunal, and so the matter was able eventually to be finalised.

8 SAT convened on 20 December 2005 to finalise the matter. However, prior to that, further written submissions had been received from the practitioner and from the Complaints Committee. The essence of the submission of the Complaints Committee was that SAT should revisit the earlier conclusion in relation to the appropriate penalty, and that it was open for it to do so as the hearing had not been completed. Broadly, the thrust of the submission was that the original hearing had taken a wrong course by reason of the emphasis on the notion of "borrowing" of funds from the trust account. It was submitted that the original hearing should have focussed more on the concept of misappropriation of the funds. It was submitted that the misappropriation was "objective dishonesty", regardless of the practitioner's state of mind. It is not necessary for the purpose of the present appeal to express any view in relation to the course taken by SAT in revisiting that issue, or to consider what the notion of "objective dishonesty" may involve.

9 SAT accepted that it was appropriate to reopen the matter and to reconsider the question of the appropriate penalty. It gave detailed consideration to a number of issues bearing on the characterisation of the practitioner's conduct. The conclusions reached by SAT were as follows (Legal Practitioners Complaints Committee and Edward [2006] WASAT 113):

"71 At the time of the original hearing, the Tribunal recognised that the repeated personal usage by unauthorised borrowings from trust funds by a practitioner would, not only be regarded as serious impropriety but usually warrant a referral to the Supreme Court (full bench). However, the Tribunal did not perceive the Committee as putting the complaint on that footing. There was no apparent emphasis of any form of dishonesty or any illegality when the reference was first heard by the Tribunal. The actions were conducted openly and interest on the borrowings was paid.

72 It was in those circumstances that the Tribunal concluded that the appropriate disposition of the complaint fell just short of a referral to the Supreme Court (full bench). Regrettably, with the benefit of further argument, we are persuaded that we would not be discharging our duty to the public to not refer the matter to the Supreme Court (full bench). In doing so, the Tribunal does wish to record the unfortunate history of the resolution of this complaint from the practitioner's perspective. This relates to both timing (in terms of the unavoidable delay in being able to conclude the matter while there was a hiatus in the legislation) and also in the need for the Tribunal to reconsider the appropriate order to be made.

73 In all those circumstances, including the apparent absence of precedent in this State of a 'borrowing' type of contravention, the Tribunal would not make a recommendation to the Supreme Court (full bench) that the practitioner be struck off the roll. The Tribunal notes that senior counsel for the Committee did not, in written or oral submissions, request that the referral should include a recommendation that the practitioner be struck off the Roll of Practitioners. Rather, the relief sought was that the matter be referred to the Supreme Court (full bench). Implicitly, a report to the Supreme Court (full bench) is appropriate in those circumstances in which the Tribunal does not consider that the penalties it may impose pursuant to s 187 of the 2003 Act are necessarily adequate or appropriate to deal with the professional misconduct under consideration.

74 The Tribunal considers that the nature of the contravention warrants a report being transmitted which it will do so by forwarding these reasons. The Tribunal notes that there has been no allegation of illegality or dishonesty in the complaint (although the Committee now raises a notion of 'objective dishonesty') and that no client has suffered a loss of money as a result of the misconduct. In addition, and largely as a result of the focus of the presentation of the complaint and supporting submissions by the Committee a year after the matter had been originally dealt with on the major issue of referring the matter to the Supreme Court (full bench), the Tribunal has concluded that it should, regrettably, re-visit its earlier conclusion on that point and should so refer the matter.

75 The Committee sought costs in excess of $17,000. In the circumstances under which it was necessary to re-open the hearing through no fault of the practitioner, the Tribunal considers costs should be fixed at $8000.

76 The Tribunal will also make supervisory orders as foreshadowed."

10 Summarising the orders SAT made, they were as follows:

2. The making and transmitting of a report on the finding to the Supreme Court (Full Bench).

3. No later than 28 days after the date of the order, if not already paid, the practitioner was to pay $7156 to the estate.

4. "Pending the determination of the Supreme Court ... the following conditions shall be imposed on the right of the practitioner to practise for a period of two (2) years from the date of this Order". The conditions related to procedures to be followed in relation to the practitioner's trust account, including the making of provision for reconciliation of the trust account bank statement, and the provision of material relating to the trust account on a regular basis to an independent accountant or auditor.

11 The appellant's sole ground of appeal rests upon one proposition of law and one of fact. The propositions are concisely expressed in the appellant's submissions as follows:

"The [appellant's] proposition of law is that, on the proper construction of s 185(2)(a) of the Legal Practice Act, the Tribunal may not make and transmit a report to the Full Bench of the Supreme Court unless the Tribunal forms the view that it is unable to deal with the practitioner under s 185(2)(b) by making one or more of the orders as specified in s 187 of the Legal Practice Act. That is, it is an error for the Tribunal to make and transmit a report to the Full Bench of the Supreme Court unless it first forms the view that the powers available to it to deal with the practitioner are inadequate ...

In this case, the Tribunal decided to make and transmit a report to the Full Bench of the Supreme Court in circumstances in which it held, either expressly or by inference, that the powers available to it to deal with the [appellant] practitioner were adequate."

12 It can be seen that the proposition of fact can be characterised in one of two ways. It may be that, as the latter part of the quoted portion suggests, it is submitted that SAT held that the powers available to it were adequate; alternatively, it may be that it is submitted that SAT did not form the view that the powers available to it were inadequate. In my view, the first of these two characterisations would be incorrect. That is, it does not appear to me that SAT held, either expressly or by inference, that the powers available to it were adequate. Rather, in my view, a fair reading of the paragraphs which I have quoted, particularly [73], makes it clear that SAT was of the view that the penalties available to it might be inadequate or inappropriate. However, I would accept that SAT did not make a positive finding that the powers available to it were inadequate; rather, it was a view that they may not be adequate. The legal proposition, then, which the appellant must make good is that it is an error for SAT to make and transmit a report to the Full Bench unless it first forms the view that the powers available to deal with a matter are positively inadequate.

13 The answer to that question turns on the construction of s 185 and s 187 of the Legal Practice Act 2003, understood in their common law and statutory context.

14 Section 185 of the Legal Practice Act 2003 provides as follows:

"Powers of the State Administrative Tribunal in relation to individual legal practitioner

(1) The State Administrative Tribunal has jurisdiction to make a finding that a legal practitioner is guilty of unsatisfactory conduct.

(2) On making a finding in respect of a legal practitioner under subsection (1) the State Administrative Tribunal may -

(a) make and transmit a report on the finding to the Supreme Court (full bench); or

(b) deal with the legal practitioner as specified in section 187.

(3) If the State Administrative Tribunal transmits a report in respect of a legal practitioner to the Supreme Court (full bench) under subsection (2)(a), the Tribunal may, pending the determination of the Supreme Court (full bench) -

(a) suspend the legal practitioner from practice; or

(b) restrict the entitlement of the legal practitioner to practise.

(4) Where appropriate, a report forwarded under subsection (2)(a) may include a record of the evidence taken at the hearing."

15 Section 187 provides that SAT may, pursuant to s 185(2)(b), make any one or more of a number of possible orders, including suspension of the legal practitioner from practice for a period not exceeding two years, suspension of the practitioner until the Board is satisfied that any injury, or mental or physical illness, has been overcome, the imposition of conditions or restrictions on the right to practise for a period not exceeding two years, that the legal practitioner take advice in relation to the management and conduct of the practice, payment of fines, reprimand, payment of compensation and other matters.

16 It can be seen from s 185(2) that the two possibilities there set out are in the alternative; that is, SAT may either transmit a report to the Supreme Court or deal with the legal practitioner as specified in s 187, but not both. If it determines to make a report to the Supreme Court, it may, pending the Supreme Court's determination, make orders of an interim kind which may be of similar effect to some of the orders which can be made pursuant to s 187, but the two functions are distinct.

17 Although it is not a ground of appeal, and the orders made by SAT other than the making of the report to the Supreme Court are not challenged, I would note that it seems to me that to the extent that the orders made appear to include orders which are not expressed to be purely interim (for example, the order for payment of money), and to the extent that order (4) of the orders is expressed to be made "in accordance with ... section 187(1) of the Legal Practice Act 2003 (WA)", SAT purported to make orders which it was not open to it to make once it had determined to make a report to the Supreme Court. However, for the most part, it was accepted by counsel for the appellant that the orders made, which were expressed to be pending the determination of the Supreme Court, were orders of a kind which could have been made pursuant to s 185(3), and no issue is taken with them.

18 Although s 185(2) in terms confers an unfettered discretion on SAT, it may, I think, be accepted that if SAT had positively reached the view that the practitioner's conduct was not such as to warrant a report to the Supreme Court, and was capable of being adequately dealt with by orders pursuant to s 187, it would not be a proper exercise of that discretion for SAT then to make a report to the Supreme Court. Section 9 of the SAT Act provides that the main objectives of SAT are, inter alia, "to achieve the resolution of questions", and "to act as speedily ... as is practicable, and minimise the costs to parties". Both of those objectives would be achieved by the use of s 187, rather than by a report, where SAT was clearly of the view that that course was appropriate.

19 Finally, to fill out the statutory and common law context, three things should be noted. The first is that SAT, constituted as it was in this case, was in the nature of a professional disciplinary tribunal. Such a Tribunal " ... is eminently fitted to decide whether the conduct of a [practitioner] in any given set of circumstances amounts to professional misconduct and to determine what is the proper penalty to be imposed in any particular case" (Re Hodgekiss (1959) 62 SR (NSW) 340, cited in D'Alessandro v Legal Practitioners Complaints Committee (1995) 15 WAR 198, at 205 - 206, per Ipp J, with whom Pidgeon and Franklyn JJ agreed).

20 Second, notwithstanding that SAT has such expertise, the Supreme Court has an inherent power to discipline lawyers as an adjunct to its powers in respect of their admission, a supervisory power which is of considerable importance for the maintenance of standards and enforcement of discipline in relation to legal practitioners (see, eg, Murcia & Associates (a firm) v Grey [2001] WASCA 240; (2001) 25 WAR 209, at [15], per Steytler J). The inherent jurisdiction of the Supreme Court is expressly preserved unaffected by s 161 of the Legal Practice Act 2003. In addition, s 194 of the Legal Practice Act 2003 expressly confers powers upon the Supreme Court where a report is transmitted pursuant to s 185(2)(a); the powers of the Supreme Court in that case include fining (without limit as to amount), suspension from

practice (without limit as to time), striking off the roll of practitioners, or the making of any order which SAT may have made pursuant to s 185(2)(b) (ie, the making of any orders open pursuant to s 187).

21 Third and finally, although proceedings of this nature are often described as "disciplinary", the purpose of the conferral of powers on SAT under s 185 and s 187, and the function of the Supreme Court in supervising practitioners is, in each case, to ensure the protection of the public: see Re Maraj (A Legal Practitioner) (1995) 15 WAR 12, at 24 - 25, per Franklyn J, and cases there cited.

22 Against that background, the conclusion, in my view, follows that it must be open to SAT, as the respondent submits, to make a report to the Supreme Court, not only where SAT is positively satisfied that its powers are inadequate to deal with the conduct which it finds to have occurred, but also where, for example, SAT finds that, arguably, the conduct might warrant the imposition of more severe penalties than those available to it. Circumstances such as the novelty of the conduct, or the unusual circumstances in which it occurred, or perhaps the existence of conflicting authority, may make it desirable for the Supreme Court to determine penalty in a particular case, even if SAT is tentatively of the view that orders of the kind provided by s 187 could be an adequate response.

23 That conclusion is consistent with the statutory language, which expresses in a broad, unqualified language the power to report to the Supreme Court, and appears to condition it only upon a finding of "unsatisfactory conduct". It is also consistent, in my view, with the underlying statutory purpose, which is directed at the protection of the public and which recognises the importance of the ultimate inherent supervisory jurisdiction of the Supreme Court in ensuring that protection.