Gersten v The Law Society [2002] NSWCA 344 | Case summary

In 1998 the Supreme Court of Florida suspended the appellant in absentia from practising as an Attorney in that State on the ground that he had been found guilty of contempt of court and committed to prison until he answered questions by the State Attorney in an investigation into the theft of his motor vehicle. The appellant had been active in Florida politics and believed that the questions he refused to answer were directed to collateral issues and that the State Attorney was acting in bad faith with the intention of damaging him politically. He had moved to New South Wales in 1993 and was admitted here as a solicitor in 1996. He applied under the rule for an order lifting his automatic suspension in New South Wales.

Judgment 1 HANDLEY JA: Joseph Morris Gersten (the appellant) is a United States citizen who formerly resided in the State of Florida. He was admitted to practice there as an attorney in December 1975, but on 5 March 1998 the Supreme Court of Florida suspended him from practising in that State until he had complied with an order made on 18 March 1993 by Judge Dean, a Judge of its Eleventh Judicial Circuit, and for one year thereafter. 2 The appellant came to Australia in 1993 and in 1996 he was admitted to practice as a legal practitioner in this State. On 7 January 1999 the Law Society wrote to him referring to the order of the Supreme Court of Florida and drawing attention to SCR Pt 65A r 3 (the rule) which provides, so far as relevant: "(1) Any legal practitioner: … (c) who is: (i) suspended from practising; … as a lawyer … outside the State by reason of misconduct, is suspended from practice: … (e) … - during the period of suspension … unless the Court otherwise orders". 3 On 20 January 1999 the appellant applied by summons for an "otherwise order". On the same day Abadee J made an interlocutory order permitting him to continue to practise in New South Wales, notwithstanding his suspension in Florida, until the determination of the proceedings. An order to this effect remains in force. 4 The proceedings were heard by James J in the Common Law Division over 16 days between February and July 2001, and his reserved judgment was delivered on 7 September. Orders were made on 16 November dismissing the summons with costs, but the interlocutory order permitting the appellant to continue to practise was extended until the determination of a projected appeal, or the further order of the Court. 5 The appellant attempted to appeal as of right, but under s 101(2)(r) of the Supreme Court Act an appeal was incompetent without leave. See Clyne v The New South Wales Bar Association (1960) 104 CLR 186. Leave to appeal was sought, and at the hearing the parties agreed that, subject to the grant of leave, the Court could dispose of the proceedings without a further hearing. 6 There was extensive evidence as to the circumstances which led up to the order of the Supreme Court of Florida on 5 March 1998. The summary of the facts which follows is based on findings made by the trial Judge, which were not challenged. 7 The appellant had a long political career in Florida. Between 1974 and 1981 he was a Member of its House of Representatives and between 1981 and 1986 he was a Member of its Senate. In 1986 he was an unsuccessful candidate for the office of Attorney-General. Between 1988 and April 1993 he was a Commissioner of Dade County, which includes the City of Miami. In 1992 he announced his candidature for the position of Mayor, but ultimately did not stand. In April 1993 he was defeated in an election for Commissioners of Dade County. 8 These proceedings had their origin in events in Florida on the night of 29 April 1992. The appellant's Mercedes-Benz motor vehicle was stolen, but there were two sharply conflicting versions of the circumstances in which that occurred, one by the appellant and another by the car thieves and their associates. 9 According to the others the appellant drove a prostitute to a house described as "the crack house", where he smoked cocaine and engaged in sexual acts with the prostitute. While this was going on another prostitute and her male associate stole his car. 10 According to the appellant he returned home in his car from work, early in the evening, having consumed alcohol. He parked in front of his house and went inside leaving the keys in the car and went to sleep. When he awoke his car was missing. He telephoned his attorney and then reported the theft to the police. 11 The police recovered the car the following day when the male associate was observed driving the vehicle. 12 The Dade County State Attorney's Office began investigations into these allegations. The allegations against the appellant, if proved, would establish that he had committed the offences of solicitation for prostitution, use and distribution of cocaine, and making a false report to police (the relevant offences). The appellant decided not to speak to the prosecution. On 5 June 1992, the State Attorney obtained a search warrant authorising the taking of samples of the appellant's hair to determine whether they contained cocaine. 13 Samples taken pursuant to the warrant were sent to the Federal Bureau of Investigation in Washington for analysis. The laboratory reported that the samples were "negative for cocaine", but added that this "does not preclude the possibility that this individual may have used cocaine one time or at very infrequent intervals in the past". 14 Towards the end of June 1992 what was referred to as a "Chinese Wall" was set up within the Dade County State Attorney's Office to separate the investigation into the relevant offences and the parallel investigation into the theft of the car. 15 On 8 July 1992 the Dade County Circuit Court, on the application of the State Attorney's Office, issued a witness subpoena requiring the appellant to appear before the State Attorney to answer questions relating to the theft of his car. The appellant's attorney brought a motion for what was described as a protective order on the grounds that the subpoena had been issued in bad faith, and that the State Attorney's Office was seeking to set "a perjury trap" for the appellant. The prosecutor said that he intended to question the appellant about the events of the evening of 29 April and not just about his ownership of the car and the lack of any permission for it to be driven by anyone else. On 20 July the motion was denied by Judge Knight without giving reasons. 16 A motion for reconsideration was heard by Judge Swartz on 7 August. He held that he did not have jurisdiction to reconsider the decision of Judge Knight, but added that "the Court has no authority whatsoever to interfere with the prosecutorial function in the present stage". 17 There were further proceedings on 11 August before Judge Dean, of the Eleventh Judicial Circuit, who ordered the appellant to attend at the State Attorney's Office on 14 August and answer questions by the prosecutor. The appellant attended but at an early stage declined to answer further questions on the advice of his counsel. That afternoon the parties again appeared before Judge Dean. 18 Judge Dean ordered the appellant to appear at the State Attorney's Office to give his sworn statement and he was directed to answer the questions. Judge Dean granted a limited stay to enable her ruling to be challenged. On 18 December 1992 the District Court of Appeal denied certiorari. 19 A motion to disqualify the Dade County State Attorney's Office came before Judge Dean on 14 January 1993. Its object was to compel the transfer of the investigations into the relevant offences to the State Attorney for another Judicial Circuit. The motion was denied and the Judge ordered the appellant to report to the State Attorney's Office the following day to give his sworn testimony but she granted a limited stay. On 15 March 1993 the Court of Appeal denied the appellant's petition for a review of Judge Dean's orders of 14 January and on 16 March she ordered him to appear at the State Attorney's Office the following day. Further motions to quash and disqualify were dismissed the following day. Later that afternoon the appellant appeared in the State Attorney's Office. 20 The prosecutor said that he planned on asking the appellant "questions concerning the events surrounding the 29th April 1992". The attorney for the appellant tendered a letter from his client stating that he did not want the persons who had allegedly stolen his car prosecuted. The prosecutor informed the appellant that he would have immunity "as to answers you give to questions I ask … in so far as they relate to the events surrounding 29 April 1992" and that "the only possible penalty you may incur would be perjury". He then began his examination but after a number of questions had been answered the appellant declined to answer further on the advice of his counsel. Shortly afterwards the matter again came before Judge Dean. 21 The Judge reviewed the questions which the appellant had declined to answer and the objections that had been taken and gave rulings directing that some questions be answered and that others, appropriately rephrased, be also answered. The examination of the appellant then resumed in the State Attorney's Office where the appellant answered some questions but then declined to answer others which had been allowed by Judge Dean, stating that he did so on the advice of counsel. 22 Judge Dean granted a rule to show cause why the appellant should not be held in contempt of court and that proceeding came on for hearing before her on 18 March. Counsel for the appellant, in showing cause, relied on the issues of bad faith investigation, perjury trap, and the need for the State Attorney's Office for the Eleventh Circuit to be disqualified, as reasons why the appellant should not be held in contempt. 23 The Judge found that the appellant was in contempt and ordered that he be committed to prison until he purged his contempt. He was in custody from 19 March until released on 12 April pursuant to an order of the District Court of Appeal. On 2 June 1993 the Court of Appeal affirmed Judge Dean's order and on 25 June it denied a motion for rehearing, but the appellant remained at liberty. 24 The appellant then commenced proceedings in the United States District Court for the Southern District of Florida. On 14 September Judge King of that Court refused to grant an injunction restraining the State Attorney from enforcing the orders of the Florida courts because the threat of a bad faith prosecution for perjury could not be actual and imminent until the appellant had testified. 25 On 15 May 1995 the United States Court of Appeals for the Eleventh Circuit affirmed Judge King's decision and on 20 February 1996 the Supreme Court of the United States refused certiorari. 26 The appellant left Florida in August 1993 and arrived in Australia on 6 September. 27 After the judgment of Judge King the State Attorney took steps to enforce the order of 18 March 1993 committing the appellant to prison until he had purged his contempt. When he did not surrender at the Dade County Jail on 4 October 1993 a Writ of Bodily Attachment was issued by Judge Brown of the Eleventh Judicial Circuit addressed to all the Sheriffs of the State commanding them to take the appellant into custody pursuant to the order of Judge Dean. 28 Although the five year limitation period for the prosecution of the car thieves expired in April 1997 Judges of the Eleventh Judicial Circuit refused motions by the appellant to discharge the orders committing him to prison for contempt. 29 Late in 1993 the Florida Bar commenced disciplinary action against the appellant for his failure to comply with Judge Dean's order. A formal complaint of professional misconduct was filed in a Florida Supreme Court in December 1995 or January 1996. The proceedings were sent to a referee who reported back on 31 October 1996. On 5 March 1998 the Supreme Court ordered that the appellant be suspended from practice until he complied with the order of Judge Dean and for one year thereafter. 30 The appellant said in evidence that he disobeyed the order of Judge Dean because he believed that the prosecutorial process was politically motivated and corrupt. This was a peculiar, probably unique, situation which applied to him at that time in Florida. He referred to the role he had played as a reformer in Dade County, which he said had antagonised many people. 31 Mr Richey, the appellant's original attorney in Florida, explained the perjury trap which the appellant faced. If he answered the prosecutor's questions in accordance with his own version of the facts he could be charged with perjury, if he answered in accordance with the other version he could be prosecuted for the relevant offences, in either case on the evidence of the prostitutes and their associates, and if he gave evidence denying those offences he could be charged with perjury. The only alternative was to refuse to answer questions. 32 Under the Florida Constitution s 7(a) and Statute 112 s 51 the Governor could suspend a municipal official, such as the appellant, who was indicted or arrested for a State felony. Perjury and possession of any quantity of cocaine were felonies (Black 360). 33 Turning to the position in New South Wales the trial Judge said the rule does not indicate the considerations which are relevant to the exercise of the discretion it confers. The relevant principles are stated in The Queen v Australian Broadcasting Tribunal Ex parte 2HD Pty Limited (1979) 144 CLR 45, 49: "The problem lies in ascertaining what are the proper limits of the discretion. In the absence of some positive indication of the [relevant] considerations … the discretion is 'unconfined except [by] the subject matter and the scope and purpose of the statutory enactments'." 34 The High Court was considering an administrative discretion, but the same principles apply. Counsel for the appellant invited the trial Judge and this Court to find on the evidence that the appellant had not committed the relevant offences, that the State Attorney's Office in Florida conducted an investigation in bad faith for the purpose of harming Mr Gersten, that he could not obtain full justice in Florida, that the Florida Bar had taken an unduly narrow view of the relevant factors in the disciplinary proceedings, and that the appellant disobeyed Judge Dean's order because he believed in good faith on reasonable grounds that the investigation by the State Attorney's Office was undertaken in bad faith. 35 Counsel appearing for the Law Society submitted to the trial Judge and to this Court that international comity required a New South Wales court to exercise restraint before making any findings against public officials in Florida. Florida was the only appropriate forum for a review of the prosecution or the orders of the courts of Florida, in the light of new evidence that had become available. The question whether the appellant believed on reasonable grounds or otherwise that the State Attorney's Office was conducting an investigation in bad faith for the purpose of harming him was said to be an irrelevant consideration. 36 The Judge held that international comity did not preclude him from considering the conduct of the State Attorney's Office and the decisions of the Florida courts but that he should exercise caution and restraint in doing so. However in his opinion the Law Society was not a suitable opponent to contest these issues. 37 The Judge was not satisfied that the appellant had not committed the relevant offences, that the State Attorney's Office had set a perjury trap for him, or that its investigation was undertaken in bad faith to harm him. However he did accept that there were some grounds for the appellant's belief that the State Attorney's Office was carrying on an investigation in bad faith to harm him. He held that he should exercise restraint before differing from the Supreme Court of Florida and concluded that the penalty it imposed was appropriate and such as might have been imposed in New South Wales for similar conduct. He said: "I could not otherwise order under [the rule of Court] unless I order that Mr Gersten should be permitted to practise in New South Wales, without having to comply with Judge Dean's order, for the non compliance with which he has been held in contempt of court in Florida". 38 He said that if he did this: "I would, in a practical sense, be derogating from the authority of the courts in Florida". He thought that only limited weight should be given to the appellant's beliefs and the grounds therefore having regard to his obligation to obey Judge Dean's order and the judgment of the Supreme Court of Florida. Florida was the appropriate forum for the determination of the issues raised by the appellant but he had frustrated the enforcement of the Florida court orders by remaining outside the State. He concluded that the appellant's application should be dismissed because the sanction imposed by the Supreme Court of Florida was well within the range that would be imposed here for similar conduct. 39 The grounds in the appellant's provisional notice of appeal included errors by the trial Judge in failing to make findings in favour of the appellant as to the events in Florida. After Mr Brereton SC, who appeared for the appellant, had completed his submissions the Court refused leave to appeal on grounds 1, 2 and 6 without calling on Mr Griffiths SC for the Law Society. This Court could not properly entertain what were in effect proceedings for declaratory relief relating to the criminality of conduct in Florida and the purposes of a criminal investigation in that State, even if the Florida authorities had submitted to the jurisdiction, let alone when they were not even parties. 40 Mr Brereton's principal submission was that the fundamental issue on the application for an otherwise order was the appellant's fitness to practise in New South Wales. His disobedience of a court order in Florida in extraordinary circumstances which were unlikely to be repeated here did not affect his otherwise good character, or his fitness to practise. In these circumstances considerations of comity and concern for the authority of the Florida courts were either irrelevant or of little weight. 41 In my judgment this Court should first consider the effect that the Florida orders would have in this State without the rule. 42 The orders of Judge Dean directing the appellant to answer the prosecutor's questions and holding him in contempt of court are not directly enforceable in this State and do not appear to be directly enforceable elsewhere in the United States. She ordered that he be committed to prison to enforce compliance with her order that he answer the prosecutor's questions. 43 Criminal and penal laws and court orders under such laws are not internationally enforceable under our rules of private international law. As the Privy Council said in Huntington v Attrill [1893] AC 150, 156: "The rule has its foundation in the well-recognised principle that crimes … punishable … at the instance of the State Government or of someone representing the public, are local in this sense, that they are only cognizable and punishable in the country where they were committed. Accordingly no proceeding, even in the shape of a civil suit, which has for its object the enforcement by the State, whether directly or indirectly , of punishment imposed for such breaches by the lex fori, ought to be admitted in the courts of any other country". (emphasis supplied) 44 Although, as Judge Dean said, her order committing the appellant to prison for contempt of court was coercive or remedial rather than punitive, the proceedings and the order for committal are regarded in Australia as essentially criminal in nature. See Witham v Holloway (1995) 183 CLR 525, 534. Questions of classification such as this are governed by the law of New South Wales as the relevant forum. See Huntington v Attrill at 155. 45 In any event the proceedings before Judge Dean were essentially criminal in nature. They arose out of a criminal investigation by the State Attorney's Office, the order directing the appellant to answer questions was obtained by the State Attorney for the purposes of that investigation, and so was the order committing the appellant to prison for contempt of court. It follows therefore that the order for committal is not enforceable, directly or indirectly, in New South Wales. 46 The order of the Florida Supreme Court was only enforceable in Florida. It did not purport to affect the appellant's right, if any, to practise outside that State. Moreover the order, on its face, was intended to enforce the orders of Judge Dean indirectly, including her order committing the appellant to prison and therefore was itself partly penal or criminal in nature. Accordingly that order, as such, had no legal force or effect in this State. 47 Even if the order of the Supreme Court of Florida had been purely disciplinary in character it would still have had only local effect. In re Welsh ex parte the Law Institute of Victoria (1896) 22 VLR 473 Hodges J refused to treat an order of our Supreme Court striking a solicitor off for misconduct as a sufficient ground for striking him off in Victoria. Likewise in re A Solicitor ex parte Incorporated Law Society [1898] 1 QB 331 the Divisional Court refused to act on an order of the Supreme Court of the Cape of Good Hope striking the solicitor off the Roll of Solicitors maintained by that Court. The situation is otherwise where the disciplinary tribunal is not bound by the rules of evidence. See re A Solicitor [1993] QB 69. 48 Section 118 of The Constitution, which requires full faith and credit to be given throughout the Commonwealth to the judicial proceedings of every State, may well have affected the continuing authority of re Welsh, but prior to 1989 these decisions continued to apply here in relation to disciplinary orders of courts in the United States. 49 At least since 1952 rules of court have given effect in this State to orders made by Supreme Courts elsewhere in Australia or in the British Empire striking off or suspending barristers or solicitors for misconduct (disciplinary orders). See r 3 of the Barristers' Seniority and Suspension from Practice Rules and r 15 of the Solicitors' Practices Rules. 50 These rules were rescinded on 11 September 1989 and replaced by SCR Pt 65A which applied to disciplinary orders made outside the State. Thus for the first time such orders made by a court in the United States were given automatic effect in this State unless the Court otherwise ordered. Later amendments have not affected this position. 51 The jurisdiction of superior courts in Australia to discipline legal practitioners is protective in nature and not punitive. In New South Wales Bar Association v Evatt (1968) 117 CLR 177, 183-4 the Court said: "The power of the Court to discipline a barrister is … entirely protective, and notwithstanding that its exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved". 52 This principle was applied to solicitors in Harvey v The Law Society of New South Wales (1975) 49 ALJR 362, 364 where Barwick CJ, speaking with the concurrence of the other Justices, said: "The function of a court called upon to consider an application to remove the name of a practitioner from a roll of practitioners is … to determine whether … the solicitor has failed, by action or inaction, to maintain in his conduct the standards required of him as a member of the profession. The court's duty is to ensure that those standards … are fully maintained in relation to the proper relationship of practitioner with practitioner, practitioner with the Court and practitioner with … members of the public …. It is no part of that function to punish the solicitor whose conduct the court finds to be in breach of those professional standards". 53 This jurisdiction is exercisable in the public interest and for the protection of the public. See Weaver v Law Society of New South Wales (1979) 142 CLR 201, 207, and Wentworth v NSW Bar Association (1992) 176 CLR 239, 250-1; Smith v NSW Bar Association (1992) 176 CLR 256, 270. These principles have been consistently applied by this Court. See McCarthy v Law Society of New South Wales (1997) 43 NSWLR 42, 58. 54 In my judgment the rule should be treated as part of the Court's general disciplinary jurisdiction over its legal practitioners. Its purpose therefore is to protect the standards of the profession for the benefit of the public, the Court and the profession. The rule gives automatic effect to foreign disciplinary orders unless and until the court otherwise orders on an application in which the legal practitioner will bear the onus of proof. The legal practitioner will have to establish that it is not reasonably necessary for the protection of the public, the Court or the profession, that the foreign disciplinary order should continue to have effect in this State. 55 The rule does not extend the effect of the foreign disciplinary order in the interests of the foreign jurisdiction or the foreign court. Indeed in my judgment these considerations are not even relevant when the court is called upon to consider whether it should otherwise order. No question of international comity or derogation from the authority of the foreign court properly arises. However the Court will give faith and credit to the primary and ultimate findings of the foreign court when it considers the fitness of the legal practitioner to practise in this State. It must also be remembered that there have been occasions in modern history when defiance of the orders of a foreign court (not of course a court in the United States) would demonstrate a legal practitioner's fitness to practise in this State. 56 It is clear therefore that the trial Judge exercised his discretion under the rule on incorrect principles and this Court must re-exercise the discretion. 57 The appellant is of generally good character and apart from an incident in the course of proceedings in the Federal Court, which is no longer relied upon, it has not been suggested that he has misconducted himself since arriving here in 1993, or since his admission to practise in 1996. 58 The only misconduct relied upon is that found by the Supreme Court of Florida. Although unpurged contempt and absconding to evade court orders can be serious misconduct by a practitioner, the circumstances and their context in this case are of a most unusual character. In my judgment this otherwise isolated, although prolonged and deliberate, conduct should not be viewed as rendering the appellant unfit to practise in this State. Although he had been admitted in Florida for 18 years before he left there in 1993 nothing else was alleged or found against him in the disciplinary proceedings in that State. 59 The misconduct found by the Supreme Court of Florida can fairly be seen as arising in extraordinary circumstances, entirely local in character, which are not likely to occur in New South Wales. Moreover the gravity of that misconduct is substantially mitigated by the appellant's genuine, and rational, belief that the investigation by the State Attorney's Office and his proposed interrogation were being conducted in bad faith to damage him for political reasons. The appeal should therefore be allowed. 60 The parties joined in asking this Court to defer ruling on the question of costs until after they had had an opportunity to consider this Court's reasons for judgment. 61 The Court should make the following orders: (1) Leave to appeal granted limited to grounds 3, 4, 5 and 7 of the notice of appeal filed on 13 December 2001; (2) Dispense with the filing and service of any further notice of appeal;

Gersten v The Law Society

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