Citation : LEGAL PRACTICE BOARD -v- LASHANSKY [No 2] [2009] WASC 78

Practice and procedure - Undertaking as to damages for a freezing order relating to bank accounts - Freezing order discharged by consent - Whether undertaking as to damages should be made retrospectively - Turns on own facts

Supreme Court (Court of Appeal) Rules 2005 (WA)

Legal Practice Board v Lashansky [No 2] [2009] WASCA 78

University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481

1 JUDGMENT OF THE COURT: The matter came before the Court on 5 February 2010 on a registrar's notice for the appellant to show cause why the appeal should not be dismissed under r 43(2)(g) of the Supreme Court (Court of Appeal) Rules 2005 because none of the grounds of appeal have a reasonable prospect of succeeding and (or) due to the appellant's failure to comply with the requirements of the rules and in particular r 32.

2 At the conclusion of the hearing we announced that the appeal would be dismissed and orders to that effect and dealing with the costs of the appeal were made. We said we would publish reasons for decision at a later date. These are those reasons.

3 On 30 March 2009 Templeman J dismissed the appellant's application that the respondent provide an undertaking as to damages in respect of a freezing order that McKechnie J had granted on 29 November 2000: see Legal Practice Board v Lashansky [No 2] [2009] WASCA 78. It is necessary to recite some of the history of the proceedings that eventually came before Templeman J. We do so by reference to [1] to [13] of his Honour's reasons.

4 In November 2000, the Legal Practitioners Disciplinary Tribunal suspended the appellant from legal practice and proposed to make and transmit a report to the Full Court.

5 On 29 November 2000, the respondent applied by originating motion to McKechnie J, ex parte, and without notice to the appellant, for orders freezing his trust and general office bank accounts. The application was made under s 58B of the Legal Practitioners Act 1893 (WA) which provides:

(1) Where a Judge, on the application of the Board, is satisfied -

(a) that there are reasonable grounds for believing -

(i) that there is, or may be, a deficiency in any trust account of a practitioner; or

(ii) that there has been undue delay on the part of a practitioner in properly paying or applying trust moneys to or on behalf of a person or persons for whose use or benefit they have been received;

(b) that a practitioner is suspended from practising,

the Judge may make an order directed to the practitioner and to the bankers of that practitioner and their respective servants and agents restraining dealings in all or any of the bank accounts of the practitioner, subject to such terms and conditions as the Judge thinks fit.

6 McKechnie J made orders in those terms on that day. Also on that day, the respondent exercised its powers to appoint a supervising solicitor of the appellant's practice. The appointment was made under s 58D of the Act which provides, relevantly:

(1) If an order other than an order for revocation is made under [s 58B], the Board, during the currency of the order -

(a) may, on such terms and conditions as to remuneration and indemnity as the Board thinks fit, appoint a certificated practitioner to be supervising solicitor of the practice

7 On 13 December 2000, the supervising solicitor and the respondent's law complaints officer effected a forcible entry into appellant's premises in his absence. They removed his client files and personal papers.

8 On 25 May 2001, McKechnie J varied his original order so as to permit the balance of the appellant's trust account to be paid to the supervising solicitor.

9 On 20 December 2001, Hasluck J made an order by consent discharging the order made by McKechnie J and granting the parties liberty to apply.

10 On 26 October 2006, the appellant (in reliance on a then recent High Court decision) made an application by chamber summons, under the liberty to apply contained in the order made by Hasluck J on 20 December 2001. The crux of the argument was that under the High Court decision it would have been open to McKechnie J to require the respondent to provide an undertaking as to damages on 29 November 2000. Further, the respondent should now be required to provide an undertaking; and that the undertaking could be used as a means of obtaining redress for the losses he claimed to have suffered as a result of activities of the supervising solicitor appointed by the respondent consequent on the order made by McKechnie J.

11 On 23 January 2009, the appellant filed a minute of proposed directions under his chamber summons. He sought a direction that the respondent show cause as to why it should have been excused from the requirement to file an undertaking as to damages when it made its application to McKechnie J on 27 November 2000. He then sought directions relating to the assessment of compensation he claims to be recoverable under an undertaking as to damages.

12 On 2 February 2009, the respondent filed submissions opposing the appellant's application on the ground that it should not have been brought under the liberty to apply. The appellant's application and the respondent's contention were heard together on 16 March 2009. The decision rejecting the appellant's application was delivered on 30 March 2009. The essence of Templeman J's reasoning is as follows.

13 First, his Honour assumed, in favour of the appellant but without deciding, that McKechnie J could have required the respondent to provide an undertaking as to damages as a condition of making the order freezing the bank accounts. However, his Honour concluded that no such requirement could now be imposed on the respondent because McKechnie J's order had been dissolved by Hasluck J (by consent) on 20 December 2001. In addition, it was a moot point whether a court could order a beneficiary of a freezing order to give an undertaking as to damages as opposed to making the giving of an undertaking a condition of the order.

14 Secondly, even if he were wrong in that conclusion it was not open to the appellant to apply for the relief sought under the liberty to apply.

15 Thirdly, even if he were wrong in both of these conclusions it would still not avail the appellant. The appellant did not assert in the application that the loss and damage he claimed to have suffered, flowed from the freezing of his bank accounts. His complaint was about the subsequent conduct of the respondent and the supervising solicitor who, he alleged, had destroyed his liens and removed (and not returned) valuable personal papers. Accordingly, in his Honour's view, even if the court could order a retrospective undertaking under the liberty to apply provision such an undertaking would not provide a basis for obtaining the compensation the appellant was then seeking from the respondent.

16 On 3 April 2009 the appellant filed an appeal notice challenging Templeman J's decision. On 8 May 2009 the appellant filed a document purporting to be the appellant's case but a registrar formed the view it had serious deficiencies. On 28 May 2009 the appellant attended before the registrar who outlined the perceived deficiencies. The registrar gave the appellant leave to file any amended appellant's case by 1 July 2009. It is important to note that the appellant was not ordered to file an amended case - he was given leave to do so if he wished.

17 The appellant did not file an amended case and has taken no further step in the appeal since the appointment on 28 May 2009. On 8 January 2010 the registrar sent a notice to the appellant at his address for service in West Perth advising that the appeal had been listed before the Court of Appeal on 22 January 2010 to show cause why the appeal should not be dismissed.

18 On 21 January 2010 the court received, by facsimile transmission apparently emanating from South Africa, an application from the appellant to vacate the listing on 22 January 2010 as he was still in South Africa. The court acceded to that request and adjourned the listing to 5 February 2010.

19 In our view the document entitled 'appellant's case' is seriously deficient, so much so that it does not constitute an appellant's case at all. Without attempting to list all of the deficiencies, we mention the following:

(a) the grounds of appeal are not succinct statements of the areas of challenge and do not identify whether the impugned findings are errors of law or fact;

(b) many of the paragraphs in the grounds of appeal are argumentative submissions - they are not grounds of appeal at all;

(c) the grounds and the submission go well beyond matters raised in the chamber summons and decision in the primary proceedings the subject of this appeal; and

(d) the 'orders wanted' include setting aside orders made in a separate application and seeking declarations that relate to other causes of action the appellant says he has but which are not the subject of the primary proceedings.

20 It is unnecessary to set out in these reasons the various paragraphs of the grounds of appeal and the orders wanted that demonstrate these deficiencies. They were canvassed in some detail at the hearing on 5 February 2010.

21 It is fundamental to the proper and efficient functioning of the appellate system that rules are complied with. The appellant has been advised of the perceived deficiencies and has taken no steps to remedy them or (if he felt the material was in order) to convince the court of that fact and to prosecute the appeal accordingly. It is not possible to glean from the grounds (as drafted) what errors of law or fact are said to invalidate the process of reasoning leading to his Honour's ultimate conclusion. In [3] and [4] the appellant says that the trial judge should not have confined his attention to the 'liberty to apply' point. That aside, we have not been able to identify in any of [5] to [41] succinct descriptions of errors of law and (or) fact said to have infected the findings in [21] and [22] or in [27] and [28] of his Honour's reasons for decision.

22 Although it is not to be found anywhere in the appellant's case, in his oral submissions before this Court the appellant argued that the Legal Practice Board was estopped from arguing the 'liberty to apply' point due to delay. His chamber summons was filed in October 2006. It was not until February 2009 that the respondent raised the issue. There is, we think, a problem with this argument. It was not raised in the hearing before Templeman J and there are difficulties in agitating an issue for the first time on appeal: see University of Wollongong v Metwally [No 2] (1985) 59 ALJR 481, 483. We say this because there will often be factual elements to an estoppel claim, such as establishing detriment and reliance. If such matters are raised squarely at first instance, the parties have the opportunity to consider whether or not evidence should be called in relation to them.

23 There is a further problem which, in our view, is fatal to the appeal as it stands. In the primary proceedings the appellant sought an order that the respondent be required, retrospectively, to give an undertaking as to damages in relation to the freezing order made by McKechnie J on 29 November 2000. But the freezing order is no longer in existence. It was discharged with the appellant's consent by Hasluck J on 20 December 2001. There is, therefore, nothing to which the retrospective undertaking as to damages could attach. No application was made, for example, to set aside the consent order made by Hasluck J and to reinstate the freezing order. There would be enormous procedural and substantive difficulties standing in the way of the appellant obtaining such orders. Be that as it may, without that step having been taken the application made to Templeman J was fatally flawed.

24 We will assume, in favour of the appellant but without deciding, four things. First, that the court has power to require the beneficiary of a freezing order to give an undertaking as to damages (as opposed to making the order conditional on an undertaking being given). Secondly, that the court could do so retrospectively. Thirdly, that such an order could be made under a liberty to apply provision in a consent order dissolving an earlier order or under the court's inherent jurisdiction. Fourthly, that the loss and damage the appellant says he suffered was referable to the freezing order rather than to later alleged conduct of the respondent and the supervising solicitor. We repeat that they are assumptions and we should not be taken as indicating that the appellant could make any of them good. But even on the basis of those assumptions and even if a proper challenge could be identified from the grounds of appeal as they are drafted, the appeal still could not succeed. This is because, without an extant freezing order, there is nothing to which an undertaking as to damages, as claimed in par 1.1 of the 'orders wanted' in the appellant's case, could attach.

25 There are four other matters that we wish to mention. First, it was apparent from the appellant's oral submissions at the hearing on 5 February 2010 that the appellant carries a deep grievance about what he alleges to be mistreatment at the hands of the Legal Practice Board and the effect those alleged actions have had on his practice and, in particular, on his work in relation to salinity problems affecting agriculture. He is also aggrieved at the way the court has handled aspects of his litigation. But the oral submissions (which mirror the affidavit material he has filed) reinforce the view that the genesis of his complaints lies in the actions of the Legal Practice Board in appointing a supervising solicitor and in the alleged acts and omissions of the Board, its staff, its legal representatives and the supervising solicitor (and perhaps others) following the appointment. That view also arises from a reading of the submissions and orders in the appellant's case. This may explain why many of the paragraphs in the grounds of appeal and in the orders wanted go well beyond the subject matter of Templeman J's decision and, accordingly, beyond the competence of this Court to rule on them in this appeal.

26 Secondly, it is one thing to allege wrongdoing by a party. But such allegations ought to be aired in a forum that is appropriate for their fair resolution. The appellant submitted that the imposition of an undertaking for damages would solve all the problems by providing a convenient mechanism by which he could explain what damages he had suffered and why the respondent was liable to compensate him. It would avoid multiplicity of proceedings. The containment of legal proceedings is highly desirable. But the matters which the appellant raises are complex and grave and we do not think they could fairly and expeditiously be resolved in proceedings of the kind reflected in his chamber summons.

27 Thirdly, the appellant submitted that the supervising solicitor was appointed pursuant to the order of McKechnie J. As a matter of law that is not correct. We have set out the terms of s 58B and s 58D(1) of the Act. While the order of McKechnie J satisfied a precondition for the appointment of the supervising solicitor that appointment was made by the Board of its own motion and not pursuant to his Honour's order. McKechnie J's order was in accordance with s 58B and it was limited to the appellant's trust and general bank accounts. The appointment, role and powers of the supervising solicitor went well beyond dealing with the bank accounts. The issues that the appellant now raises relate to alleged acts or omissions of the Board, the supervising solicitor and the other persons or entities we have mentioned. While there is the statutory nexus between the freezing order and the appointment of the supervising solicitor it is difficult to see how it could be said that the appellant's loss and damage (again assuming he could establish loss) was causally related to the former rather than the latter. It seems to us that the issues that are at the heart of the appellant's grievances could only be identified and fairly dealt with in separate and properly constituted proceedings. As we understand the matter, there are already on foot other proceedings between the appellant and those whom he alleges are responsible for the position in which he finds himself.

28 Finally, the appellant argued that even if the 'liberty to apply' provision were not available to him the court had an inherent jurisdiction to control its own proceedings and to avoid (or remedy) abuses of process. We do not doubt the existence of an inherent jurisdiction relating to abuse of process. But once again, it is a jurisdiction that ought to be engaged only in properly constituted proceedings. The problems that we have discussed in the preceding paragraphs apply equally to the appellant's reliance on the inherent jurisdiction.

29 In our view there has been non-compliance with r 32 of the Supreme Court (Court of Appeal) Rules 2005. The non-compliance is material. In addition, it is not possible to identify proper grounds of appeal that would have a reasonable prospect of success in a substantive hearing of this appeal. The appellant could not obtain, in this appeal, the relief that he seeks. Courts are reluctant to bring litigation to a summary end and this is not a decision to which we have come lightly. But for all of these reasons, we believe the proper course is to dismiss this appeal.