[2015] ACTSC 90

Practitioner to pay 80% of the Council's costs of the appeal.

PROFESSIONS AND TRADES - Lawyers - duties and liabilities - liability for costs of proceedings - Court discretion to make order for costs in relation to particular issue or part of proceedings - offsetting approach adopted

ACT Civil and Administrative Tribunal Act 2008 (ACT) ss 56(c)(iii), 83(1)

Legal Profession Act 2006 (ACT) s 433

Legal Profession Regulation 2007 reg 57

Court/Tribunal: ACT Civil & Administrative Tribunal

Before: J Gallop (Senior Member Presiding), J Lennard (Senior Member) and G Wright (Member)

Case Title: Council of the Law Society of the ACT v The Legal Practitioner E

Citation: [2013] ACAT 7

1. This matter is an appeal against the decision of the ACT Civil and Administrative Tribunal (the tribunal) finding the practitioner guilty of professional misconduct under the Legal Profession Act 2006 (ACT) (the Act) and recommending that his name be removed from the local roll and that he be publicly reprimanded.

2. The tribunal proceedings arose from complaints by three former clients of the practitioner. The complaints concerned trust fund dealings and associated conduct in the period 2007 to 2010, and included allegations that trust funds had been misappropriated, that the practitioner had made demands for cash payment, and that the practitioner had failed to render invoices and issue trust account statements.

3. On 24 January 2013, the tribunal found that the Council of the Law Society of the ACT (the Council) had established 17 of the 20 grounds of complaint. It found the practitioner guilty of professional misconduct.

4. Without receiving submissions on penalty, the tribunal recommended that the practitioner's name be removed from the local roll and that he be publicly reprimanded.

5. The practitioner appealed, raising many grounds that challenged the bases upon which he had been found guilty of professional misconduct.

6. After the appeal was filed, at the invitation of the Council, the tribunal reopened the penalty proceedings for the purpose of affording procedural fairness to the practitioner in relation to penalty. However, the practitioner contended that the tribunal was functus officio and he declined to present submissions on penalty. The tribunal rejected the argument that it was functus officio and reimposed the original penalty.

7. The appeal was removed to this Court by the tribunal pursuant to s 83(1) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (ACAT Act) and heard on 20 and 21 October 2014.

8. On the appeal, I was required to consider both the findings of the tribunal that supported its conclusion of professional misconduct and the tribunal's approach to the penalty reopening.

9. As the practitioner conceded at the hearing of the appeal, as to the first matter (the finding of professional misconduct) most of his grounds of appeal challenged factual findings that turned on an assessment of the witnesses and the documentary exhibits. The tribunal had found that the complainants were credible witnesses who gave truthful answers, whereas the practitioner was an evasive and contradictory witness with an "unsatisfactory attitude towards the proceedings".

10. I found that the tribunal's factual findings were justified.

11. Grounds of appeal 1.15 and 3.6 did not turn on factual findings. These grounds alleged that the practitioner had breached reg 57 of the Legal Profession Regulation 2007 (ACT) by failing to issue trust account statements. I rejected the practitioner's arguments about the proper approach to reg 57.

12. Consequently, the practitioner failed to establish that the tribunal had erred in its approach to any of the grounds of complaint, which were the basis for its finding of professional misconduct.

13. In relation to the second matter (the tribunal's approach to reopening the penalty proceedings), the first substantial question was whether the tribunal had power to reopen the penalty proceedings and whether that power had been exercised properly.

14. I determined that the tribunal erred in finding, under s 56(c)(iii) of the ACAT Act, that there were "extraordinary circumstances" that "(made) it appropriate" to set aside the penalty order made on 24 January 2013 and reconsider the penalty question. The proceedings should not have been reopened on that basis.

15. The second substantial question in relation to the procedural fairness/ reopening argument was whether the questions of penalty and costs should be remitted to a differently constituted tribunal.

16. I rejected the practitioner's contention that considerations of bias required that the matter be remitted to a differently constituted tribunal.

17. I ordered that the penalty orders made or purportedly made by the tribunal be set aside and the proceedings be remitted to the tribunal for further hearing and decision on what, if any, orders should be made consequential on the tribunal's findings concerning professional misconduct published on 24 January 2013.

18. The practitioner submitted that he had succeeded on the appeal and that, in accordance with the ordinary practice, the respondent should be ordered to pay his costs on a party/party basis.

19. The Council submitted that, as the practitioner had failed in relation to all but one of the grounds of appeal and the vast bulk of the appeal had been concerned with grounds upon which the practitioner had failed, the time spent on the failed grounds (estimated at 90%) should be offset against the time spent on the successful ground (estimated at 10%), with the result that the practitioner should pay 80% of the Council's costs of the appeal.

20. The proceedings in the tribunal were brought under Part 4.7 of the Act. Section 433 of the Act restricts the circumstances in which the tribunal may make an award for costs in favour of a legal practitioner. Section 433 provides:

(1) If the ACAT finds an Australian legal practitioner guilty of unsatisfactory professional conduct or professional misconduct, the ACAT must order the practitioner to pay costs (including costs of the relevant council and the complainant), unless the ACAT is satisfied that exceptional circumstances exist.

...

(3) The ACAT may make orders requiring the relevant council for an Australian legal practitioner to pay costs, but may do so only if satisfied that the practitioner is not guilty of unsatisfactory professional conduct or professional misconduct and the ACAT considers that special circumstances justify the making of the orders.

21. Although the Supreme Court is not bound by s 433 of the Act, it is appropriate to take into account the scheme under that section.

22. The Court has a general discretion in relation to awarding costs: r 1721 of the Court Procedure Rules 2006 (ACT). In the ordinary course, the general discretion is exercised in favour of the successful party, regardless of whether that party has failed on some issues. The Court is hesitant to deprive the successful party of its costs. However, r 1705 does enable the Court to make an order for costs in relation to a particular issue or part of proceedings, and to declare what percentage of the costs of the proceedings is attributable to that issue or part. Ultimately, the Court must make a discretionary determination about the interests of justice in the circumstances of the particular case.

23. In this case, the vast bulk of the appeal grounds, the written argument and the oral argument addressed whether the grounds of complaint that supported the finding of professional misconduct had been made out. The appeal books comprised 15 volumes, of which only a handful of documents related to the ground upon which the practitioner succeeded. The hearing of the appeal occupied 1.5 days, with the successful ground occupying very little of that time. The grounds upon which the practitioner failed not only consumed most of the appeal hearing; they were also the grounds that concerned the central issue of whether the practitioner was guilty of professional misconduct.

24. Having regard to the nature of the grounds upon which the practitioner succeeded and failed, the time occupied by the issues upon which he succeeded and failed and the policy behind s 433 of the Act, I consider that the interests of justice favour adopting the offsetting approach proposed by the Council. I agree with the assessments of the Council concerning the time and resources devoted to the successful and unsuccessful arguments. Indeed, the assessments are probably generous to the practitioner.

25. The practitioner should pay 80% of the Council's costs of the appeal.

I certify that the preceding twenty-five [25] numbered paragraphs are a true copy of the Reasons for Judgment of her Honour Chief Justice Murrell.