Gye v Laughton

Supreme Court of NSW|2018-07-02|Before: Campbell J, Adams J

Extempore Judgment (revised)

HIS HONOUR: The genesis of the dispute I am asked to resolve today is a disagreement between a solicitor and Senior Counsel about the fees charged by Senior Counsel in relation to work done pursuant to a written retainer.
The situation is a little complicated by the consideration that the solicitor was also the controlling director of the corporate client who was the ultimate consumer of the Senior Counsel's legal services.
The subject matter of the work related to water rights the client wished to obtain, or have reinstated, from or by the relevant statutory authority. Apparently the efforts to do so were unsuccessful. The steps taken in the pursuit of those rights did not involve the commencement of court proceedings, at least court proceedings involving Senior Counsel.
The actual application before me is for a stay of a judgment in this Court obtained on 29 January 2018 by Senior Counsel upon the registration of a certificate of determination by a costs review panel constituted under s 374 legal profession Act 2004 (NSW), now repealed, ("the former Act") resolving the costs dispute upon the solicitor's "appeal" from an assessment under s 367 of the former Act. It is important to bear in mind that the total amount of unpaid fees to be enforced by way of judgment of this Court as at the date of registration of the certificate is $19,620.07, which includes the review panel costs of $3,137.75.

The decision of Adams J

I should also say that in dismissing Senior Counsel's application for summary dismissal Adams J proceeded on the basis, which is no longer in dispute, that any statutory appeal from the review panel's decision, should have been instituted in the District Court under s 384 or s 385 of the former Act rather than in this Court under the provisions of the Legal Profession Uniform Law Application Act 2014 (NSW).
Her Honour, however, declined to dismiss the proceedings commenced in this Court on the basis that, notwithstanding the statutory right of appeal to the District Court, this Court retained its constitutional supervisory jurisdiction over the review panel. Notwithstanding the discretionary nature of relief under s 69 Supreme Court Act 1970 (NSW) and the significance of the availability of a statutory appeal to the exercise of that discretion, the proceedings had not been shown to be relevantly untenable.

Subsequent developments

In accordance with her Honour's orders, an amended summons was filed on 14 May 2018, its purpose being to make clear that the proceedings were in fact for judicial review and the proper enunciation of the relevantly limited grounds of relief in that jurisdiction. I interpolate that my reading of the document does not immediately make obvious that her Honour's object has been achieved.
On 4 June 2018 Senior Counsel filed the response required under the Rules. It may be that my impression was shared by him in as much as in his response he addresses the possible alternatives of judicial review and statutory appeal.
When the matter came before the Registrar this morning for further directions pursuant to Adams J's orders, it was referred to me because Mr Gray of Counsel, who now appears for the solicitor, indicated that he wished to file a notice of motion seeking a stay of the statutory judgment obtained on 29 January 2018.
Clearly, the necessity from the solicitor's point of view of obtaining a stay now relates to the return of the Federal Court proceedings to the Registrar's list on 4 July 2018.
I permitted the filing of the notice of motion in Court together with the affidavit of the Solicitor sworn yesterday in support of it. Mr Wyner of Counsel, who appears for Senior Counsel, had no objection to that occurring and was in a position to meet the application.

Relevant principles

I think it is important to bear clearly in mind that the only proceedings before me of course arise in the Court's original, not appellate, jurisdiction. Having said that, I am of the view, as Mr Wyner argues, that the principles informing when an appellate Court will grant a stay provide a useful, but incomplete, analogy.
Mr Wyner referred me to McLean Tecnic v Digi-Tech; Kalifair v Digi-Tech [2002] NSWCA 383 where a unanimous Court said (at [18]): " ... [t]he relevant principles are analogous to those which govern the grant of interlocutory relief before trial to protect the status quo. The appellant must show that the appeal raises serious issues for the determination of the appellate court, and that there is a real risk that he will suffer prejudice or damage, if a stay is not granted, which will not be redressed by a successful appeal. This requirement will be satisfied if the appeal will be rendered abortive or nugatory unless a stay is granted. If these pre-conditions are established the Court will then consider the balance of convenience."
I interpolate, Mr Wyner accepted that the second question identified by the Court itself feeds into a consideration of the balance of convenience.
Mr Wyner also referred me to the decision of Gleeson JA in DJ Singh v DH Singh & Others [2017] NSWCA 234 where his Honour summarised the principles (at [29]) in the following terms: "The successful party is prima facie entitled to the benefit of a judgment, but a stay may be granted where an applicant demonstrates an appropriate case to warrant the exercise of discretion in its favour. The mere filing of the appeal is insufficient, of itself, to demonstrate such a case. Usually it is demonstrated by showing that there are arguable grounds of appeal, and that there is a significant risk that if money is paid it will be unable to be recovered if the appeal succeeds; or by demonstrating that unless a stay is granted the appeal will be rendered nugatory." (Citations omitted.)
As I have just said, there are limits to the usefulness of this analogy. They include the consideration that the judgment in this case is a statutory judgment not given after the exercise of judicial power; rather the judgment is a convenient statutory means of enforcing the decision of the review panel which, of course, is not a court.
Moreover had a statutory appeal to the District Court been commenced within time, there would have been no real question about the grant of a stay: s 386 of the former Act. Of course, that did not happen and it is apparent from the chronology that I have set out that Senior Counsel did not file the certificate until the time fixed under Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") 50.3 for commencing an appeal and, under UCPR 59.10 for commencing judicial review proceedings had both expired.

Delay

There is a significant difficulty in the solicitor's case: the 6 months delay that occurred before the commencement of the proceedings in this Court. That delay is sought to be explained by the affidavit of the solicitor. Part of that explanation relates to serious questions of ill-health. One is always sympathetic to such matters. However, it is also apparent that it was only after the expiration of the Bankruptcy Notice, a conventional step taken in enforcement of a judgment, and the filing of the Creditor's Petition in the Federal Court seeking a sequestration order, that any step was taken in any court to challenge the decision of the review panel.
Moreover, Mr Wyner argues, with some strength if I may say so, that the solicitor has not demonstrated the relevant fairly arguable case. Even accepting, as I have said, that the analogy with an appeal is incomplete, given that Senior Counsel followed the legal mechanism for seeking redress in relation to his unpaid fees, it needs to be shown that there is a proper basis for supposing that the proceedings for judicial review are not themselves hopeless.
Despite the force of what Mr Wyner has submitted, I think it can be said that Mr Gray has demonstrated that the various grounds of review relate to two matters which, if made good on a full hearing, may prima facie entitle the solicitor to the relief sought, subject to the exercise of the Court's discretion. The first matter is the proper construction of the costs retainer. To that extent, I accept that that matter is capable of being characterised as an error of law on the face of the record, even if it does not seem, with great respect, that Counsel's argument about where the Appeal Panel erred in that regard is compelling.
The second matter relates to the exercise of the review panel's powers in accordance with the provisions of s 363 of the former Act. That is to say, the argument is that the Appeal Panel's approach to the assessment of the matter, even assuming that its interpretation of the retainer is correct, did not conform to its statutory obligations. Again, with respect, I do not find the argument compelling but I acknowledge that the argument is one which may be capable of demonstrating jurisdictional error at the hearing.

Determination

Accordingly, I accept that, relevantly, the solicitor has a case which is fairly arguable, even if I would not rate its prospects as high. It also seems to me, that if no stay is granted it is likely that the case would be stultified. Given non-payment of the judgment and the commencement of the bankruptcy proceedings, absent a stay of the judgment, it is highly likely that Senior Counsel will obtain a sequestration order in respect of this relatively small debt. That would have the effect of stultifying these proceedings. It seems to me, drawing upon my own experience of legal practice, that the Official Trustee in bankruptcy would hardly be inclined to authorise the continuation of Supreme Court proceedings such as those commenced by the solicitor in respect of a relatively small amount of money.
Moreover, the making of a bankruptcy order would have serious ramifications for the solicitor's right to practise, or at least his right to practise as a principal of his own firm. That would have flow on effects in terms of the legitemate interests of employees and other clients.
Finally, as I have said, he is a director of the client company and perhaps the director of other companies and he would be disqualified from those positions by the making of a sequestration order which may affect the rights of other third parties unfairly.
These matters, I think, demonstrate that the conditions identified in the cases to which I was referred are more or less satisfied. However, that is not the end of the matter. There still remains the balance of convenience. There are also two aspects to this.
I am concerned not only about the solicitor's right to propound the proceedings but the rights of third parties that might otherwise be affected by the making of a bankruptcy order. The other aspect is that notwithstanding the health issues to which I have referred, it cannot possibly be said that the solicitor has proceeded with appropriate celerity in propounding his statutory and other rights to challenge the decision of the review panel. Nor can it be said that Senior Counsel would not be "good for the money" and any interest that might be payable by way of restitution should the proceedings ultimately be successful.
There is a judgment regularly obtained, and given what I have said about Senior Counsel's financial viability and the relatively small amount involved, in view of the delay especially, I do not think it appropriate that there should be no security for the amount of the judgment in the event that the proceedings are either not prosecuted diligently or are in due course unsuccessful. On that basis, I think it appropriate that there ought to be a payment into Court of the whole amount of the judgment as a condition of a stay of Senior Counsel's prima facie legal entitlement.

Orders 1. In matter number 2018/30238, the judgment obtained by registration of the certificate of the review panel's decision on 29 January 2018 is stayed until the disposition of the proceedings in matter number 2018/99960 on condition that the amount of $19,620.07 is paid into the Registry on or before Friday, 13 July 2018. 2. Liberty to apply on short notice given to my Associate. 3. Costs are costs in proceedings number 2018/99960. 4. Both proceedings listed for directions before the Registrar at 9:00 am on Monday, 16 July 2018.

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: 04 July 2018

Legal Profession Act 2004(NSW)

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