Law Institute of Victoria Ltd v Maric & Anor [2008] VSCA 46

Court of Appeal (Vic)|2008-03-19|Before: WARREN CJ, NEAVE and KELLAM JJA

LEGAL PRACTITIONERS - Meaning of 'engaging in legal practice' - Whether preparation of statements under s 32 of the Sale of Land Act 1962 necessarily involves giving of legal advice contrary to s 314 of the Legal Practice Act 1996 - Whether judge erred by refusing to grant a permanent injunction restraining the respondents from preparing s 32 statements - Consideration of standing of the Law Institute of Victoria to maintain proceedings following the repeal of the Legal Practice Act 1996 by the Legal Profession Act 2004 - Appeal dismissed.

2 The appellant, the Law Institute of Victoria Ltd ('LIV'), is the peak professional association representing solicitors in Victoria. It was a 'recognised professional association' accredited under the Legal Practice Act 1996 ('1996 Act'). The first respondent, Lydia Maric, is the sole director of the second respondent, Home Conveyancing Reservoir Pty Ltd, which she uses to conduct her conveyancing business.

3 During the course of her conveyancing business, the first respondent prepared vendor statements pursuant to s 32 of Sale of Land Act 1962 ('s 32 statements'). That section requires a vendor of land to sign a statement providing information about various matters affecting the land, before a purchaser signs a contract of sale. The LIV claims that in preparing these s 32 statements, the respondent breached s 314 of the 1996 Act, which prohibited a person who is not a legal practitioner from 'engaging in legal practice'.[1]

4 The matter first came to the attention of the LIV when it received a complaint from a legal practitioner about the first respondent preparing a s 32 statement. The LIV referred the matter to the Legal Practice Board, the body which then had power to prosecute offences under the 1996 Act.[2] The Board reviewed the complaint and decided it would not prosecute the respondents.**

**5 In September 2005 the LIV filed an originating motion seeking an injunction under s 316 of the 1996 Act restraining the respondents from engaging in legal practice in Victoria, and in particular from preparing s 32 statements. Section 316 gave the Supreme Court power to grant an injunction to restrain a person from 'engaging in legal practice' in breach of s 314 of the 1996 Act. The application for an injunction could then be made by a recognised professional association or the Legal Practice Board. As I explain below, one of the issues raised in the respondents' notice of contention is whether the LIV had standing to seek the injunction, following the repeal of the 1996 Act by the Legal Profession Act 2004 ('2004 Act')

6 On 16 September 2005 a judge of the Supreme Court of Victoria granted an interlocutory injunction in the terms sought. In late 2005 the matter proceeded to a trial in the Supreme Court of Victoria and on 3 October 2006 the judge delivered his reasons for refusing to grant the injunction sought by the appellant. It is from that judgment that the LIV now appeals.**

7 The trial was conducted on affidavit and there was no cross-examination of the deponents by either party. The learned trial judge summarised the facts as follows:

The first [respondent] has both practical background and academic training in conveyancing. She has undertaken several initial extended periods of work involving participation in conveyancing transactions in the capacity of a legal secretary. She has also undertaken studies at RMIT University with respect to conveyancing practice, property law, and land contracts as part of a Business Studies (Law) course.

In 1995 she commenced full time employment as a conveyancer for a firm of solicitors and a related conveyancing business known as "AAA1 Conveyancing Services". Since that time she has carried on the occupation of conveyancer.

The second [respondent] was initially incorporated by a firm of solicitors in 1997 to conduct a conveyancing business with legal assistance being provided by the solicitors firm. The business utilised precedent documents supplied by a solicitor of that firm.

The business was acquired by the first [respondent] together with another person and since 2001 has been conducted by the first [respondent] alone. The business has utilised a computer software program and precedents approved by solicitors.

The s.32 statement forming the basis of this proceeding first aroused interest upon its receipt by the solicitor acting for another party to the transaction, because it contained extraneous matters, namely contractual terms. In so doing however, I am satisfied it did not evidence a practice which is likely to continue.

The first [respondent] has further deposed to the circumstances in which she completed the s.32 statement giving rise to this proceeding. She says that she completed some parts only of the statement which was otherwise completed by the client. She says she was personally aware of the relevant planning controls and completed information in the statement relating to such controls from her own knowledge.

She says further that she completed information with respect to the provision of services to the property partly from information provided by the client's son and partly from documents obtained from Yarra Valley Water.

She was advised by the client's son that there were no building approvals, guarantees or insurance. She made the necessary deletions to the s.32 statement accordingly.

This evidence demonstrates that the extent to which a conveyancer may exercise judgment with respect to a s.32 statement may vary materially with the facts of a transaction.

It is further the first [respondent]'s evidence that she does not give legal advice and there is no suggestion that she has failed to comply with s.330(2) of the [1996 Act] or purported to act as a solicitor or legal adviser. She deposes that her clients are well aware and informed that she is not a solicitor and only operates a conveyancing company. She notified her client in the present case that a legal practitioner was retained to perform legal work in connection with the transaction.

She deposes that if she were required to refer every s.32 statement to a solicitor on an individual basis, the costs involved would severely affect her business.[3]

8 To these facts, it should be added that by the time the appeal was heard, the first respondent had completed the required courses to graduate with a Diploma of Financial Services (Conveyancing) from RMIT. This is relevant because the Conveyancers Act 2006 will come into operation no later than 1 July 2008.[4] That Act will regulate 'the carrying out of conveyancing work by persons other than Australian legal practitioners'[5] and will make it an offence to carry on a conveyancing business without a licence.[6] A person who has completed a course in prescribed areas of competency and has at least 12 months prescribed experience is eligible for a licence.[7] It was common ground that Ms Maric has now satisfied both those requirements. Further, in an affidavit filed after the appeal, Ms Maric deposed that she intended to apply for a licence under that Act 'as soon as it is possible to do so'.

**9 His Honour initially considered, and rejected, the respondents' submission that the repeal of the 1996 Act by the 2004 Act had deprived the LIV of standing to seek an injunction under s 316 of the former Act. That view was challenged in a notice of contention filed by the respondents. I set out his Honour's reasons for his view in more detail below.

10 The learned judge held that although the preparation of a s 32 statement may involve the giving of legal advice, it did not necessarily do so. He said that:**

[T]he Institute could not be entitled to an injunction restraining the defendants from the preparation of s.32 statements unless it can demonstrate that the preparation of such statements will always involve the giving of legal advice or at the very least there is a real and substantial probability that the defendants will in fact engage in the preparation of s.32 statements in circumstances involving the giving of legal advice.[8]

11 He found that he had 'no reason to reject the [respondents'] position that the first [respondent] will at all times seek legal advice with respect to matters requiring such advice'.[9] Further, even if there was a possibility that she would give legal advice, 'the injunction sought would occasion disproportionate hardship to the risk in issue'.[10] Finally, his Honour was not satisfied that if this risk eventuated, the remedy of prosecuting the respondents for breach of the relevant legislation would be inadequate.

**12 Originally, the notice of appeal set out eight separate grounds of appeal. However, following a question from the Master at a directions hearing in relation to this matter, an application was made to amend the notice of appeal to include two new grounds.[11] In an affidavit sworn by the solicitor for the appellant, it was said that these new grounds of appeal were added 'for the sake of clarity and out of an abundance of caution'.[12] It appears that the application to amend the notice of appeal was adjourned, by consent, until the hearing of the appeal. Although both parties written submissions addressed the grounds as stated in the amended notice of appeal, the application to amend the notice of appeal was not raised at the hearing of the appeal.

13 In my opinion, the proposed amendments were unnecessary as the two proposed grounds were covered by the existing grounds of appeal.[13] Accordingly, I will refer to the grounds of appeal as they were set out in the original notice of appeal, the substance of which were addressed in oral argument.

14 In essence, the notice of appeal raised three key issues:[14]

Whether his Honour erred in finding that the preparation of a s 32 statement does not necessarily amount to 'engaging in legal practice' (grounds 1, 3 and 4).

Whether his Honour erred in finding that the preparation of the particular statement did not involve 'engaging in legal practice' and that the first respondent would not give legal advice relating to s 32 statements in the future (grounds 2, 5, 7 and 8).

Whether his Honour erred in the exercise of his discretion in refusing to grant an injunction (ground 6).

15 As I have said, the respondent filed a notice of contention under Rule 64.17(5) of the Supreme Court (General Civil Procedure) Rules 2005. In essence, grounds 1-3 alleged that his Honour had erred in finding that the appellant had standing to continue its application for a permanent injunction, following the repeal of the 1996 Act. Ground 4 challenged his Honour's finding that the Act prohibited conveyancers from giving advice about legal matters incidental to their conveyancing work.**

Does the preparation of a s 32 statement necessarily involve the giving of legal advice? (Grounds 1, 3 and 4)

The learned judge erred in law in holding that completion of a vendor's statement to comply with s 32 of the Sale of Land Act 1962 did not necessarily involve the giving of legal advice.
The learned judge erred in law in holding that a s 32 statement does not purport to effect a change in legal relationships.
The learned judge erred in law in failing to follow and apply the principles explained in Attorney-General (WA) v Quill Wills Ltd (1990) 3 WAR 500 and ACCC v Murray [2002] FCA 1252; (2002) 121 FCR 428.

17 Section 314(1) of the 1996 Act provides as follows:

(1) A person must not engage in legal practice in Victoria unless the person -

(b) is an incorporated practitioner that holds a practising certificate; or

(c) is an interstate practitioner (other than an interstate practitioner who is suspended or prohibited from engaging in legal practice in Victoria).

18 The 1996 Act does not define the expression 'engage in legal practice.' Under s 35(b)(iii) of the Interpretation of Legislation Act 1984 explanatory memoranda may be taken into account in interpreting legislation. The explanatory memorandum accompanying the Legal Practice Bill said that:

The concept of "engaging in legal practice" is used throughout the Bill. This concept is the same as "acting or practising as a legal practitioner" and other similar phrases used in other jurisdictions and is intended to invoke the common law learning on what defines the practice of a lawyer.[15]

**19 It follows that decisions about the meaning of this and similar phrases in previous legislation regulating the legal profession in Victoria and in other jurisdictions can be taken into account in deciding whether the preparation of a s 32 statement amounts to 'engaging in legal practice.' However, as the learned trial judge recognised, it is also necessary to take account of relevant differences between legislative provisions in applying the 'common law learning' on the meaning of acting or practising as a legal practitioner or 'engaging in legal practice'.[16]

20 Since 1958, legal practice in Victoria has been successively regulated by three main Acts - the Legal Profession Practice Act 1958, the 1996 Act and the 2004 Act. Like the 2004 Act, the Legal Profession Practice Act 1958 and 1996 Act prohibited persons who were not solicitors from performing certain activities, although these prohibitions were differently expressed.

21 For example, the Legal Profession Practice Act 1958 contained a general prohibition on unqualified persons 'acting or practising as a solicitor'.[17] However, it also specifically prohibited an unqualified person 'acting as a solicitor' by doing various things associated with the conduct of litigation,[18] and from drawing, filling up or preparing any instrument creating or regulating rights between parties or relating to real or personal property, or any legal proceedings, for fee or reward.[19]

22 The 1996 Act marked the beginning of a different approach which has continued in the 2004 Act. Both Acts prohibit unqualified persons from 'engaging in legal practice',[20] but do not contain the specific prohibitions formerly found in the Legal Profession Practice Act 1958.

23 In Cornall v Nagle[21] J D Phillips J analysed the meaning of the words 'act or practice as a solicitor' in s 90 of the Legal Profession Practice Act 1958. His Honour said that:**

In my opinion, the giving of legal advice, at least as part of a course of conduct and for reward, can properly be said to lie at or near the very centre of the practice of the law, and hence of the notion of acting or practising as a solicitor, which is itself central to s90. If the public is to be adequately protected from those lacking relevant qualifications, then, in the context of a regulated legal profession, the giving of legal advice professionally is, I think, to be regarded as exclusively the province of those properly trained in the law and having the necessary expertise. It is thus something required to be undertaken only by the legally qualified, and not by those not properly qualified. [22]

24 He went on to identify three ways in which a person who was not admitted to practice might 'act or practice as a solicitor'. These were:

(1) by doing something which, though not required to be done exclusively by a solicitor, is usually done by a solicitor and by doing it in such a way as to justify the reasonable inference that the person doing it is a solicitor. This is the test in Sanderson.[23]

(2) by doing something that is positively proscribed by the Act or by Rules of Court unless done by a duly qualified legal practitioner. Examples of such prohibitions in a statute are ss 93 and 111[24] of the [Legal Profession Practice Act 1958].

(3) by doing something which, in order that the public may be adequately protected, is required to be done only by those who have the necessary training and expertise in the law. For present purposes, it is unnecessary to go beyond the example of the giving of legal advice as part of a course of conduct and for reward. [25]

25 In Felman v Law Institute of Victoria[26] Kenny JA, who delivered the main judgment, applied the analysis of J D Phillips J with some clarification and qualifications. One qualification related to the situation where a non-lawyer with expertise in another area, for example a tax agent or an architect, provides legal advice, incidentally to providing advice in his or her field of expertise. Kenny JA, with whom the other members of the Court agreed, said that:

his Honour was not saying that any person who, in the lawful pursuit of an occupation other than law, gives advice (for reward) on matters lying within his or her area of occupational expertise necessarily acts as a solicitor or a legal practitioner simply because the advice involves the expression of an opinion about the requirements of relevant legislation, statutory rules or the like.[27]

26 Later in this judgment I discuss whether that qualification applies to advice about legal matters which is given by conveyancers.

The obligations imposed by section 32 of the Sale of Land Act 1962

**27 The appellant submits that the preparation of a s 32 statement necessarily amounts to 'engaging in legal practice'.

28 The purpose of s 32 is to substantially modify the caveat emptor principle by requiring the vendor to provide a written statement disclosing matters affecting title to the land or the enjoyment of the land. Sub-sections 32(1), (1A), (2) and (3) of the Sale of Land Act 1962 provide as follows:**

(1) A vendor under a contract for the sale of land shall -

(a) give to the purchaser before he signs the contract a statement signed by the vendor; and

containing the matters specified in subsection (2).

(1A) A vendor under a contract for the sale of land on which there is a residence must give to the purchaser before the purchaser signs the contract, a statement signed by the vendor giving particulars of -

(a) any building permit under the Building Act 1993 in the preceding 7 years in relation to a building on the land; and

(b) in the case of a residence to which Part 2 of the House Contracts Guarantee Act 1987 applies which was constructed by an owner-builder within the meaning of that Act within the preceding 7 years, any guarantee under that Act applying to that residence; and

(c) in the case of a residence to which section 137B of the Building Act 1993 applies which was constructed within the preceding 6 years, any required insurance under that Act applying to that residence.

(2) The statements required by subsection (1) shall contain the following matters -

(a) particulars of any mortgage (whether registered or unregistered) over the land, which is not to be discharged before the purchaser becomes entitled to possession or to the receipt of rents and profits, including the particulars specified in Schedule 1;

(aa) particulars of any charge (whether registered or not) over the land imposed by or under an Act to secure an amount due under that Act, including the amount owing under the charge;

(b) a description of any easement, covenant or other similar restriction affecting the land (whether registered or unregistered) and particulars of any existing failure to comply with the terms of that easement, covenant or restriction;

(iii) the zoning of the land under that instrument or, in a case where the land is reserved under that instrument, the purpose for which it is reserved;

(iv) where a planning instrument prohibits the construction of a dwelling house on land outside the metropolitan area, notice of such prohibition;

The use to which you propose to put the property may be prohibited by planning or building controls applying to the locality or may require the consent or permit of the municipal council or other responsible authority. It is in your interest to undertake a proper investigation of permitted land use before you commit yourself to buy;

The property may be located in an area where commercial agricultural production activity may affect your enjoyment of the property. It is therefore in your interest to undertake an investigation of the possible amenity and other impacts from nearby properties and the agricultural practices and processes conducted there.';

(i) the amount of any rates, taxes, charges or other similar outgoings affecting the land and any interest payable on any part of those rates, taxes, charges or outgoings which is unpaid including any rates, taxes, charges or outgoings for which the purchaser may become liable in consequence of the sale and which the vendor might reasonably be expected to have knowledge of; or

(ii) a statement that the total amount of those rates, taxes, charges or other similar outgoings and interest does not exceed the sum specified;

(e) particulars of any notice, order, declaration, report or recommendation of a public authority or government department or approved proposal affecting the land, including any notice of intention to acquire served under section 6 of the Land Acquisition and Compensation Act 1986, being a notice, order, declaration, report, recommendation or approved proposal of which the vendor might reasonably be expected to have knowledge;

(ea) a list of the following services, indicating in respect of each whether the service is connected to the land and, in the case of any service connected, the name of the authority supplying the service:

(eaa) in the case of any water supply or sewerage service connected to the land that is not of the standard level available in the locality, particulars of the level of service provided;

(eb) a warning to the effect that purchasers should check with the appropriate authorities as to the availability of, and the cost of providing, any essential services not connected to the land;

(ec) if there is no access to the property by road, a statement that there is no such access;

(f) in the case of a terms contract where the purchaser is obliged to make two or more payments to the vendor after the execution of the contract and before the purchaser is entitled to a conveyance or transfer of the land, the information set out in Schedule 2; and

(g) where the contract does not provide for the land to remain at the risk of the vendor until the purchaser becomes entitled to possession or receipt of rents and profits particulars of any policy of insurance maintained by the vendor in respect of any damage to or destruction of the land;

(h) in the case of land in a subdivision containing a body corporate particulars of any payment or non payment of any sum by the registered proprietor in respect of the maintenance fund or the undertaking of any repairs on the lot by the body corporate and particulars of the liabilities and contingent liabilities of the body corporate, including any liabilities or contingent liabilities arising from legal proceedings, and expenditure or proposed expenditure by the body corporate known to the vendor which may result in an increased liability of the lot owner;

(i) particulars of any current land use restriction notice given in relation to the land under the Agricultural and Veterinary Chemicals (Control of Use) Act 1992 due to contamination.

(3) The vendor shall attach to the statement required by paragraph (a) of subsection (1) and to the contract -

(a) a copy of (or, in the case of land under the Transfer of Land Act 1958, a reproduction of, or statement of information as to, being a reproduction or statement provided by the Registrar) either -

(i) in the case of land under the Transfer of Land Act 1958 the Certificate of Title; or

(A) the last conveyance in the chain of title to the land; or

(B) any other document which gives evidence of the vendor's title to the land;

(b) where the vendor is not the registered proprietor of the land or the owner of the estate in fee simple in the land, evidence of his right or power to sell the land;

(ba) in the case of land which is the subject of a subdivision other than a subdivision referred to in paragraphs (c), (d) or (e), a copy of (or a reproduction provided by the Registrar of or a statement provided by the Registrar as to the information in) the plan of subdivision which has been approved by the Registrar under section 97 of the Transfer of Land Act 1958 or registered under the Subdivision Act 1988, or where the plan has not been approved or registered, a copy of the plan of subdivision which has been sealed or certified by the council of the municipality concerned or, where the plan has not yet been sealed or certified, a copy of the latest version of the plan, together with details of any amendments proposed to the plan and, in the case of a staged subdivision within the meaning of section 37 of the Subdivision Act 1988 -

(i) if the land is in the second or a subsequent stage, a copy of (or a reproduction provided by the Registrar of or a statement provided by the Registrar as to the information in) the plan for the first stage; and

(ii) details of any requirements in a statement of compliance relating to the stage in which the land is included that have not been complied with; and

(iii) details of any proposals relating to subsequent stages that are known to the vendor; and

(iv) a statement of the contents of any permit under the Planning and Environment Act 1987 authorising the staged subdivision;

(c) in the case of land which is the subject of a strata subdivision, a copy of (or a reproduction provided by the Registrar of or a statement provided by the Registrar as to the information in) the plan of strata subdivision which has been registered under the Strata Titles Act 1967, or where the plan has not been registered or a proposed plan of redevelopment has not been approved, a copy of the plan which is proposed to be registered or approved;

(d) in the case of land which is the subject of a cluster subdivision, a copy of (or a reproduction provided by the Registrar of or a statement provided by the Registrar as to the information in) the plan of cluster subdivision which has been registered under the Cluster Titles Act 1974 or where the plan has not been registered or a proposed plan of redevelopment has not been approved, a copy of the plan which is proposed to be registered or approved; and

(e) in the case of a building or building and land which has been subdivided under section 97 of the Transfer of Land Act 1958, a copy of (or a reproduction provided by the Registrar of or a statement provided by the Registrar as to the information in) the plan of subdivision which has been approved by the Registrar.

(3A) If the land is affected by an owners corporation within the meaning of the Owners Corporations Act 2006, the vendor must attach to the statement required by subsection (1)(a) and to the contract -

(a) a copy of the current owners corporation certificate issued in respect of the land under the Owners Corporations Act 2006; and

(b) a copy of the documents required to accompany the owners corporation certificate under section 151(4)(b) of the Owners Corporations Act 2006.

29 Under s 32(5), the purchaser may rescind the contract of sale if the vendor supplies false information or fails to supply required information 'in the statements or certificates required to be given by this section.'

**30 Counsel for the appellant submitted that the preparation of a s 32 statement necessarily involved the respondents giving legal advice, so that the respondent had therefore engaged in legal practice. Further, in saying that she would continue to prepare s 32 statements the first respondent had expressed an intention to continue breaching the relevant legislation.

31 Counsel said that the preparation of a vendor statement was not simply a mechanical or clerical task. In order to complete the statement it was necessary to consider each sub-section in s 32, to ask the vendor relevant questions about the matters required to be disclosed, to reach conclusions on the vendor's legal position, to advise the vendor about the matters which were required to be included and those which could be omitted from the statement and to explain the consequences of non-compliance. In performing these tasks the first respondent was impliedly advising vendors on their legal obligations.[28]

32 Counsel said that many of the issues required to be considered in completing a vendor's statement were extremely complex. For example, a vendor might be required to disclose issues relating to adverse possession, easements and restrictive covenants. In advising a person on these matters, the person responsible for preparation of a vendor's statement would have to know what questions to ask of their client, and have the legal skills and knowledge required to tailor the statement to the particular circumstances of the vendor. They would also have to understand the effect of a large number of Acts of parliament, for example the Building Act 1993 (see s 32(1A)), the Land Acquisition and Compensation Act 1986 (see s 32(2)(e)) and the Cluster Titles Act 1974 (see s 32(3)(d)). Counsel said that the first respondent's statement in her affidavit that the 'process of preparing a s 32 Vendor's Statement is quick and easy and only involves recording of simple information relating to the owner and property' simply revealed her ignorance of the extent of the obligations imposed by the section.

33 Counsel for the appellant further submitted that the consequences of non-compliance with s 32 could be 'drastic' and needed to be carefully explained to the vendor. Counsel relied on a number of reported cases which have considered the extent of the obligations imposed by particular sub-paragraphs in s 32, and whether or not the purchaser was entitled to rescind the contract because of non-disclosure of particular matters covered by the section.[29] It was submitted that the 'the length and detail of court reasoning in cases regarding alleged breaches of s 32' showed that only a person with the 'judgment, skill and experience demonstrative of legal practice' could give the advice necessary for completion of the statement. Further, if a vendor did not comply with the requirements imposed by s 32, legal analysis was required to determine whether the purchaser had the right to rescind, or the whether the court could exercise its discretion under s 32(7) because the purchaser was in substantially as good a position as if the section had been complied with.

34 In support of these submissions counsel relied on two decisions holding that businesses providing 'do-it-yourself' will kits were 'engaging in legal practice'.

35 In the first case, Attorney-General v Quill Wills Ltd,[30] the defendant attempted to set up a business to sell 'will making franchises', which gave purchasers of the franchise the right to use the 'Quill Wills' system. The standard form franchise agreement and the agreement between the franchisee and their representatives said that the service was an administrative one and that franchisees and representatives could not give legal advice.

36 It was contemplated that clients would receive a brochure describing the 'Quill Wills' system. A representative of the franchisee would then visit clients, inform them that they were not legal advisers and tell clients that they could write their own wills by selecting clauses from a computer program which incorporated a bank of clauses drafted by legal practitioners. The representatives were to take clients through a pamphlet which contained brief descriptions of clauses in the bank of clauses. If the client was uncertain about selecting between alternative clauses designed for a particular purpose, the representative was to go through clauses in the computer memory bank to enable the client to select the appropriate clause. If the client was still in doubt a legal practitioner would provide legal advice through a telephone help line. After the will was prepared from the instructions provided by the client the representative was to take the will to the client and to supervise its execution.

37 Ipp J held that the franchisees providing these services were engaging in 'work in connection with the administration of law' in breach of s 77 of the Legal Practitioners Act 1893 (WA).[31] His Honour followed previous decisions holding that the expression 'administration of law' meant the 'practice of law.'[32] He rejected the defendant's contention that the franchisees were simply carrying out work of an administrative or clerical kind and held that the publications issued by the defendant gave assurances that wills prepared under the Quill Wills system would be valid and therefore amounted to legal advice. Even if that were not the case, the system under which the wills were produced implicitly represented that they were valid. The defendant was in breach of the Act because:**

The Quill Will Maker attempts to apply the clauses to the particular circumstances concerning each particular client. Moreover, the client is told that the use of the bank of clauses will result in a valid will. The overall effect of the system is an attempt to apply the facts (that is, the wording of the particular clauses concerned, and the particular combinations thereof) to the law of wills, followed by the formation of a conclusion, namely that the will will be valid. That is, in essence the process by which legal advice is given.[33]

38 A similar conclusion was reached in Australian Competition and Consumer Commission v Murray.[34] In that case it was held that the defendants had breached s 59(2) of the Trade Practices Act 1974 (Cth) by selling licences to carry on a business which could not be lawfully carried on. The business involved providing will kits to members of the public. Customers were to be given various documents and explanatory material and the licensee was to be present when the customer prepared and executed their will. As in the Quill Wills Case, Heerey J rejected the defendant's argument that the business was lawful because customers wrote out their own wills and were not given legal advice by the licensees. He said:

It was an essential element of the modus operandi that the licensee be physically present at the customer's home or other convenient location. The object of the licensee's attendance on that occasion was not just the giving of abstract information as to legal rules, or the handing over of documents or forms, but the production of a valid will appropriate to the individual circumstances of the customer. This is the essence of legal practice, the advising of a particular person in a particular situation and the production of a document which affects legal rights and which is tailored to the particular needs of that person.[35]

**39 Counsel for the appellant contended that by analogy the preparation of s 32 statements necessarily involved the advising of vendors as to their obligations and the production of a document which affected their legal rights. The respondents had gone beyond the 'giving of abstract information as to legal rules.' Ms Maric had given advice tailored to the individual circumstances of the vendor which implicitly indicated that the vendor's statement would be valid under s 32. Hence she had provided legal advice.

40 Further, the appellant's counsel contended that his Honour had erred in saying that:**

a s.32 statement is essentially an information statement, preliminary to a conveyance. It does not purport to effect a change in legal relationships, it states information concerning the property which a vendor wishes to sell. [36]

**41 Counsel for the LIV said that because s 32 allows a purchaser to rescind a contract for the sale of land if the statement omits required information or supplies false information, its effect is to change legal relationships. In that context counsel relied on s 326 of the 1996 Act, which defined 'conveyancing work' as 'work, other than legal work, carried out in connection with the transfer or conveyance of a freehold or leasehold interest in land.'

(a) the preparation of any document that creates, varies, transfers or extinguishes an interest in land; or

**43 Counsel for the appellant said that the preparation of a s 32 statement came within the definition of legal work because it involved provision of legal advice within that definition.

44 Counsel for the respondents submitted that in order to succeed on these grounds of appeal the appellant was required to show that the preparation of a s 32 statement always required provision of legal advice. While the preparation of s 32 statements may involve the giving of legal advice in some circumstances, his Honour had correctly found that it did not necessarily do so.

45 Counsel said that in reality the preparation of a s 32 statement does not require the exercise of legal judgment in most situations, but simply the provision of factual information. An experienced conveyancer would have little difficulty in differentiating between information of this kind and information which required the exercise of legal skill, which would then be referred to a solicitor.

46 Counsel for the respondents also contended that the concept of 'engaging in legal practice' in s 314 was implicitly qualified by Part 13 of the 1996 Act which permitted a conveyancer to do conveyancing work, as defined. It was said that a decision that the preparation of a s 32 statement amounted to the provision of legal advice would deprive Part 13 of the 1996 Act of much of its effect. It was not necessary to take a broad view of the meaning of legal advice in s 326 in order to protect clients from unqualified conveyancers, because Part 13 contained consumer protection provisions.[37]

47 Counsel submitted that a s 32 statement was not a document which created, varied, transferred or extinguished an interest in land within the definition of 'legal advice' within s 326 of the 1996 Act. The fact that the inclusion of false information in a s 32 statement could permit a purchaser to rescind the contract did not mean that the statement itself 'created, varied, transferred or extinguished an interest in land'.

48 In my opinion grounds 1, 3 and 4 are not made out. While there is no doubt that the preparation of a s 32 statement may, in some circumstances, require the provision of legal advice, this is not invariably the case.

49 The appellant's counsel relied upon sub-paragraphs in the section which may require the person completing the statement to determine whether particular interests exist over the property and to advise the vendor accordingly. Examples included the requirement in s 32(2)(a) to provide particulars of any mortgage (whether registered or unregistered) over the land, which is not to be discharged before the purchaser becomes entitled to possession and the requirement in s 32(2)(b) to disclose easements and covenants.

50 In some circumstances the vendor will require legal advice to determine the nature or extent of such interests. For example, if there is doubt as to the enforceability of an unregistered mortgage, legal advice may be required to clarify the position. Similarly, a vendor may need to obtain legal advice about whether an easement has arisen without formal documentation, for example by long user,[38] as such easements are enforceable as an exception to indefeasibility of title under s 42(2) of the Transfer of Land Act 1958.

51 However, it does not follow that because legal advice will sometimes be required in order to satisfy the requirements of s 32, the preparation of a vendor's statement inevitably requires the giving of legal advice. The provision of particulars of mortgages affecting the land will often require only a description of the mortgage parties and terms, supply of a copy of the mortgage and provision of information about the outstanding amount of the loan. Similarly, in many cases, there will be no unregistered easements over the land.

52 The information which must be provided under s 32 includes factual information known to the vendor (for example the services connected to the land), copies of documents issued from other sources (for example a copy of any plan of subdivision information relating to planning matters which is obtained from the responsible authority under the Planning and Environment Act 1987), and information relating to rates, land tax and other statutory charges available from the council and other relevant authorities. In many, if not most, transfers of residential properties, the process of obtaining this information is a routine one which does not require the provision of legal advice. In law firms this work is typically undertaken by conveyancing clerks, who refer legal questions to a solicitor in the firm. As his Honour said: [39]**

It may be objected that the information provided involves questions of mixed fact and law. Thus a statement as to the zoning of land or as to rates owing with respect to the property, although commonly answered by reference to certificates provided by the relevant authority, ultimately involves questions of mixed fact and law.

In my view, however, it would be entirely artificial to regard the making of such statements as necessarily involving the giving of legal advice. Questions of zoning are ascertainable by reference to the relevant planning scheme provisions. Interpretation of the relevant ordinance and maps is not essentially the work of a lawyer. Indeed it may well be that in cases of difficulty it is better undertaken by a town planner or a surveyor. Likewise, the quantum of rates owing with respect to a property is fundamentally a question of accounting.

53 I also agree with his Honour that the preparation of a s 32 statement is not analogous to the making of a will by the process considered in the Quill Wills Case and Australian Competition and Consumer Commission v Murray. His Honour said: [40]

The Institute submits that assistance with the creation of a will is analogous to a s.32 statement as both involve the use of pre-prepared forms or systems to create legal documents.

In my view, however, there is a fundamental difference between the completion of a s.32 statement and the making of a will. A will is intended to effect a change in legal relationships. The preparation of a will necessarily carries with it implied advice that the document is effective to realise the intentions of the testator in this regard. Significantly a central part of Ipp J's reasoning in Quill's Wills was that the use of the will kit would result in a valid will be being brought into existence.

Conversely, a s.32 statement is essentially an information statement, preliminary to a conveyance. It does not purport to effect a change in legal relationships, it states information concerning the property which a vendor wishes to sell.

**54 A valid do-it-yourself will made under the Quill Will's system would, if it was not amended or revoked, operate on the death of the testator to transfer property to the executor and determine the distribution of property to the beneficiaries. By contrast, a s 32 statement does not bring about any change in interests in the land. The fact that a s 32 statement is required before a binding contract comes into existence between the vendor and purchaser does not mean that the statement itself changes the parties' property interests. The vendor or the purchaser may decide not to enter into a contract of sale after the statement is provided. The s 32 statement is simply a preparatory step towards the coming into operation of any contract of sale which the parties may decide to make.

55 The appellant also relied upon the fact that if a vendor fails to comply with s 32, by supplying false or incomplete information, legal analysis is required in order to determine whether the purchaser has the right to rescind. While that is certainly true, it does not mean that the preparation of the statement necessarily involves the provision of legal advice.

56 I therefore agree with the learned trial judge's view that:**

if a conveyancer asks his or her clients simple questions such as: "Is the land subject to a mortgage?", then the conveyancer will either identify facts giving rise to a live question of law or not. Acceptance of and response to the information provided by a client will not necessarily involve the giving of legal advice. Like reasoning applies to the requirements of s.32(2)(aa) and (b). In any particular case questions may or may not arise as to the existence of statutory charges, or easements, covenants or other restrictions affecting the land. In turn, the completion of the s.32 statement may or may not involve the giving of legal advice in response to such questions, but in many cases it will not because the facts presented to a conveyancer will not raise the possibility of such issues.[41]

57 Because the appellant relied on the third limb of J D Phillips J's description of 'acting or practising as a solicitor' it is probably unnecessary to consider whether it was caught by the first or second limb. However, I would also agree with his Honour that neither of those limbs apply because:

The completion of the statement does not "justify a reasonable inference that the person doing it is a solicitor", as conveyancers regularly perform such tasks and expressly disclaim being solicitors. Further, it does not involve the performance of an act that is positively proscribed by legislation unless done by a duly qualified solicitor. [42]

The particular s 32 statement and the first respondent's intention as to future conduct (grounds 2, 5, 7 and 8)

The learned judge erred in law in not holding that completion of the particular s 32 statement prepared by [the] first respondent ... involved engaging in legal practice as it included contractual terms.
The learned judge erred in law in failing to hold that [the] first respondent had given legal advice, had engaged in legal practice, and had expressed an intention to continue to do so.
The learned judge erred in finding that:

(a) the first respondent did not give legal advice;

(b) the first respondent will at all times seek legal advice with respect to matters requiring legal advice; and

(c) there was not a real and substantial risk that the respondents would give legal advice, and consequently engage in legal practice, in the future.

The judgment was against the evidence and the weight of the evidence.

59 For the sake of completeness, grounds 5A and 6A of the proposed amended notice of appeal (see paragraphs [12]-[13] above) were that:

5A. The learned judge's finding that the s.32 statement 'did not evidence a practice which is likely to continue' (para 79 of judgment reasons) was against the evidence and the weight of the evidence, and inconsistent with the finding (paragraph 27 of judgment reasons) that 'the defendants clearly intend to continue the conduct complained of'.

6A. The learned judge's finding that 'the first defendant will at all times seek legal advice with respect to matters requiring such advice' (paragraph 103 of judgment reasons) was against the evidence and the weight of the evidence.

**60 The learned trial judge said that the vendor's statement which led to the complaint to the LIV contained extraneous matters, namely contractual terms, but that he was satisfied this 'did not evidence a practice which is likely to continue'.[43] He also said that 'I have no reason to reject the defendants' position that the first defendant will at all times seek legal advice with respect to matters requiring such advice'.[44]

61 Counsel for the appellant contended that his Honour should have addressed the question whether the particular s 32 statement which led to the complaint about Ms Maric involved the giving of legal advice, because the respondent had engaged in legal practice by including contractual terms in the document.

62 Counsel also submitted that there was no evidentiary basis for his Honour's finding that Ms Maric would not give legal advice in the future. He referred to Ms Maric's initial denial that the preparation of a s 32 statement amounted to 'engaging in legal practice' and the statement in her affidavit dated 11 November 2005 that '[t]he process of preparing a Section 32 Vendors Statement is quick and easy and only involves the recording of simple information relating to the owner and property.' He said that this 'naïve statement' demonstrated that Ms Maric was unable to determine what matters she would need to refer to a solicitor and might therefore provide legal advice without being aware that she was doing so. Further, counsel submitted, there was no evidence that Ms Maric had referred s 32 matters requiring legal advice to solicitors in the past. Because of her persistence in denying that she had breached the 1996 Act in drafting a statement containing contractual terms and her failure to acknowledge that the preparation of a statement could involve the provision of legal advice it was not open to his Honour to find that she would not breach the relevant legislation in the future.

63 Counsel for the respondent said Ms Maric did not give any legal advice to the particular vendor, because the relevant s 32 statement was not provided to the vendor, but sent to his estate agent. The estate agent sent the unsigned s 32 statement to the son of the vendor. The vendor then signed it and returned it to the estate agent. Under 53A(1) of the Estate Agents Act 1980 an agent is permitted to fill in a standard form contract approved by the Legal Services Board or a professional association or prepared by a lawyer.

64 The respondents submitted that his Honour's finding that Ms Maric would not provide legal advice when she prepared s 32 statements was based on the first respondent's stated intention contained in her affidavit of 11 November 2005. The respondent had not been challenged in cross-examination and it was not open to re-open the question on appeal.

I have recently joined the Australian Institute of Conveyancers (Vic Division) Inc and now seek to use the Section 32 Vendor Statement approved by that Institution and its solicitors, Michael Benjamin & Associates... Subject to the outcome of these proceedings, I intend to use that precedent in the conduct of the Second [Respondent's] practice for the foreseeable future. This precedent has been approved by a solicitor and requires only basic owner and property information to be inserted.

**This precedent is attached to her affidavit as exhibit LM9. It does not contain contractual terms.

66 Counsel for the respondents submitted that his Honour had 'expressly accepted the respondents' position that legal advice will be obtained from the solicitor retained to undertake legal work.' That finding was based on the unchallenged evidence of the respondents and their witnesses and was open to his Honour.

67 I accept the respondents' submission that the question whether Ms Maric engaged in legal practice by preparing a s 32 statement containing contractual conditions has limited relevance to the decision whether or not an injunction should be granted to prevent her from preparing such statements in the future. This is because she had stated that she would in the future use the Australian Institute of Conveyancers precedent, which did not contain contractual terms.

68 The appellant contended that there was no evidence supporting the judge's conclusion that Ms Maric would not prepare s 32 statements which required legal advice. However, in my view this was implicit in her reference to the Australian Institute of Conveyancers precedent. Ms Maric also said that she was aware of the guidance to conveyancers published on the Board's website, which set out what conveyancers could and could not do. She was not cross-examined on these matters. Further, Mr Sammasino, a legal practitioner, whose wife held an equal share in Home Conveyancing Reservoir Pty Ltd for a time, deposed 'I recall giving advice on a number of occasions. The First Defendant referred some probate and sale of business matters to me.' Although he did not specifically refer to legal advice relating to s 32 statements, this showed that Ms Maric was prepared to obtain legal advice where necessary.

69 The onus was on the LIV to persuade his Honour that there was a real and substantial probability that in the future Ms Maric would prepare s 32 statements, requiring the provision of legal advice, rather than referring them to a solicitor. In my view, it was open to his Honour to find that this onus had not been discharged. It follows that grounds 2, 5, 7 and 8 were not made out.

70 Although it is not necessary to decide the matter, I wish to express my view that a breach of the relevant legislation could not be avoided simply by giving a s 32 statement to a real estate agent rather than to a vendor. If Ms Maric gave legal advice when she prepared the statement, s 316 was breached whether she advised the vendor's agent, or the vendor directly.**

The exercise of the trial judge's discretion (ground 6)

**71 Even if his Honour should have held that there was a real and substantial risk that Ms Maric would, on some occasions, give legal advice in preparing such statements, his Honour retained a discretion to decline to grant an injunction because of other factors. This is relevant in considering the sixth ground of appeal.

The learned judge erred in law in his assessment of the factors to be taken into account in determining whether or not an injunction should be granted, both generally and under the Legal Practice Act 1996.

73 In declining to grant an injunction his Honour said that:

The ultimate issue for this Court is whether the defendants will engage in legal practice having regard to their disclosed intentions.

Accordingly, although I accept the submission of counsel for the Institute that the completion of a s.32 statement may well give rise to the giving of legal advice in particular circumstances, I do not accept that it will necessarily do so. Nor am I satisfied that the evidence before the Court establishes that a real and substantial risk exists that completion of such statements by the defendants will do so, such as to justify an order precluding the defendants from preparing s.32 statements.

In this regard it is relevant that the Act provides a remedy by way of criminal prosecution for individual breaches of the relevant provisions. There is no reason to suppose this remedy will be ineffective to suppress individual instances of legal work by conveyancers.

Unless there is a real and substantial risk that the conveyancer will give legal advice, the plaintiff must fail. First, the injunction sought would in terms restrain conduct which is lawful, namely the making of s.32 statements in circumstances not involving the giving of legal advice. Secondly, the plaintiff has not established on the balance of probabilities that the defendants will in fact engage in legal practice in the future. Thirdly, insofar as the plaintiff has identified the possibility that the defendants may give legal advice, the injunction sought would occasion disproportionate hardship to the risk in issue. Fourthly, I am not satisfied the remedy of prosecution is inadequate in the event such risk eventuates.[45]

**74 The decision to grant or refuse an injunction is a discretionary one, to which the principle in House v R[46] applies.[47] This court will not interfere with his Honour's exercise of discretion, unless it is satisfied that he applied the wrong legal principle, took account of irrelevant matters, or decided the case on the wrong factual basis, or that the decision was so plainly wrong that his Honour must have erred in the exercise of his discretion.[48]

75 Counsel for the appellant contended that because his Honour had erred in assessing the nature of the work performed by the respondents, his assessment of the criteria relevant to the question of whether or not to grant an injunction was also flawed.

76 For the reasons I have already given, I do not consider that his Honour erred in finding that the preparation of a s 32 statement did not necessarily involve 'engaging in legal practice'. As I have said, it was also open to the learned judge to make the factual finding that there was no real and substantial probability that the respondent would provide legal advice in the future.

77 Counsel for the appellant also submitted that his Honour had erred in taking account of the fact that there was another remedy - that is, a criminal sanction - for unqualified practise. Because the purpose of the s 316 was to protect vendors against errors made by conveyancers who lacked legal qualifications, the existence of a criminal remedy did not preclude the grant of an injunction.

78 Although that proposition is correct, his Honour did not say that he could not grant an injunction because the respondent would be criminally liable if she breached s 316. In his reasons, the learned judge specifically referred to the power of a court to grant an injunction to restrain 'continuing conduct involving ongoing commission of summary offences.'[49]

79 It was clearly open to his Honour to conclude that it was inappropriate to grant injunctive relief to restrain the respondents from preparing s 32 statements, because the first respondent would have known that if she gave legal advice in a particular case she risked criminal prosecution.[50] Further, his Honour found that if legal advice was required the respondent would refer the matter to a solicitor.

80 In the Quill Wills Case Ipp J said that although the court has power to grant an injunction to restrain criminal conduct, that jurisdiction should be exercised cautiously. His Honour said that 'a deliberate and flagrant flouting of the law is usually regarded as a necessary requirement.'[51] In my opinion, there is no basis for impugning the exercise of his Honour's discretion.

81 Further, as outlined above, the Conveyancers Act 2006 will come into operation no later than 1 July 2008. That Act prohibits a person who does not hold a conveyancer's licence (or who is not an Australian legal practitioner) from carrying on a conveyancing business.[52] A conveyancing business is a business in the course of which conveyancing work is carried out for fee or reward.

82 Section 4 of the Act defines conveyancing work. It states:**

(1) In this Act, "conveyancing work" means legal work carried out in connection with any transaction that creates, varies, transfers, conveys or extinguishes a legal or equitable interest in any real or personal property, such as, for example, any of the following transactions -

(b) the creation, sale or assignment of a leasehold interest in land;

(2) Without limiting sub-section (1), "conveyancing work" includes -

(a) legal work involved in preparing any document (such as an agreement, conveyance, transfer, lease or mortgage) that is necessary to give effect to a transaction of a kind referred to in sub-section 1; and

(b) legal work (such as the giving of advice or the preparation, perusal, exchange or registration of documents), that is consequential or ancillary to a transaction of a kind referred to in sub-section (1); and

(c) any other legal work that is prescribed by the regulations as constituting conveyancing work for the purposes of this Act.

**83 As I have said, Ms Maric has completed the competency qualifications required for the grant of a licence and also has satisfied the requirements of experience necessary for the grant of a licence.[53]

84 Apart from the other matters to which his Honour refers in his reasons for refusing the injunction, the fact that s 4(2)(b) will permit the respondent to provide legal advice in the context of conveyancing transactions within the next six months,[54] is relevant in considering whether or not an injunction should be granted to prevent her from preparing s 32 statements. In my opinion, it would be an exercise in futility to grant an injunction in these circumstances, even if the appellant were to make out its other grounds of appeal.**

85 Grounds 1-3 of the notice of contention were as follows:

The learned Judge should have found, had it been necessary to decide the issue, that the Appellant had no standing to continue the proceedings following the coming into force of the Legal Profession Act 2004.
The learned Judge should have held, had it been necessary to decide the issue, that the proceedings being proceedings for prospective injunctive relief under section 316 of the [1996 Act] were not saved by section 14(2) of the Interpretation of Legislation Act 1984 after the coming into force of the [2004 Act].
The learned Judge should have held, had it been necessary to decide the issue, that the [2004 Act] exhibited an intention not to preserve the proceedings in that the [2004 Act] removed the Appellant's power to seek an injunction.

**86 Because I have concluded that the court should not interfere with his Honour's exercise of discretion, it is not strictly necessary to determine the questions raised in grounds 1-3 of the notice of contention. However, in my opinion, his Honour correctly decided that the appellant had standing to seek a permanent injunction against the respondents.

87 An interlocutory injunction was granted against the respondents on 16 September 2005. At that time the appellant had standing to seek an injunction under s 316(1) of the 1996 Act which provides:**

On application by an RPA or the Board, the Supreme Court, if it thinks fit, may grant an injunction restraining a person from engaging in legal practice...

**88 The respondent contends that the repeal of the 1996 Act by the 2004 Act, which came into full operation on 12 December 2005,[55] removed the Law Institute of Victoria's power to apply for an injunction. Under s 7.2.13 of the 2004 Act, the power to apply for an injunction to restrain a person from engaging in conduct contravening the Act, the regulations or the legal profession rules is now exercised by the new Legal Services Board or its delegate. The LIV's status as a recognised professional association accredited under s 299 of the former legislation no longer gives it power to seek an injunction.

89 The appellant's counsel relies on three arguments in support of its standing to bring these proceedings. First, it is said that the interlocutory injunction granted by Hansen J continued in force until the determination of the trial proceedings, under the transitional provisions in Schedule 2 of the 2004 Act. Clause 2.3 of the Schedule to that Act provides that:**

An order made under 316 of the old Act in force immediately before the commencement day continues in force on and after that day according to its tenor as if it were an injunction under section 7.2.13 of that Act.

**90 Secondly, it is said that the appellant's standing to seek an injunction under the 1996 Act was maintained by section 14(2) of the Interpretation of Legislation Act 1984, which preserves rights and remedies conferred by legislation after it is repealed, in the absence of a contrary intention in the repealing legislation. It was submitted that there was no contrary intention in this case. In fact, cl 2.3 of Schedule 2, combined with s 14(2) of the Interpretation of Legislation Act 1984 was intended to provide a 'seamless continuity between the old and the new Act'. The appellant relied on the decision of this Court in Felman v Law Institute of Victoria[56] which reached a similar conclusion, following repeal of the Legal Profession Practice Act 1958, by the 1996 Act.

91 Sub-sections 14(2)(e) and (g) of the Interpretation of Legislation Act 1984 provide as follows:**

Provision as to effect of repeal etc. of Acts

(b) expires, lapses or otherwise ceases to have effect -

the repeal, amendment, expiry, lapsing or ceasing to have effect of that Act or provision shall not, unless the contrary intention expressly appears -

(e) affect any right, privilege, obligation or liability acquired, accrued or incurred under that Act or provision;

(g) affect any investigation, legal proceeding or remedy in respect of any such right, privilege, obligation, liability, penalty, forfeiture or punishment as is mentioned in paragraphs (e) and (f) -

and any such investigation, legal proceeding or remedy may be instituted, continued or enforced, and any such penalty, forfeiture or punishment may be imposed, as if that Act or provision had not been repealed or amended or had not expired, lapsed or otherwise ceased to have effect.

**92 Although he did not finally resolve the issue, in my opinion, his Honour was correct when he said that these provisions preserved the appellant's right to institute and continue proceedings under the 1996 Act.

At a glance

Court

Decision date

Before

Source

Judgment (279 paragraphs)

Parties

Legislation Cited (38)

Cases Cited (7)