Mavrakis v The Law Society [2008] NSWSC 816 | Case summary

JUDGMENT ON COSTS 1 HIS HONOUR: On 12 June 2008 I allowed an appeal by the plaintiff, pursuant to s549 of the Legal Profession Act 2004, against the suspension of his practising certificate under s548 of the Act. I gave brief reasons on that occasion, with which the parties were content. On the following day I made formal orders, including the imposition of a number of conditions upon the plaintiff's practising certificate. I also heard argument on costs, and it is that matter which is outstanding. 2 Of course, no order for costs is sought against Mr Brown, who had been appointed the manager of the plaintiff's practice, and who had entered a submitting appearance. As between the plaintiff and the Law Society, the plaintiff seeks an order that each party should pay his or its own costs. The Law Society submits that the plaintiff should pay its costs, even though he succeeded in the appeal. 3 Counsel for the Law Society, Mr Barnes, argued that the case should be approached by analogy with the practice in applications by practitioners for re-admission. Normally, in cases where such an application is granted, the practitioner is still ordered to pay the costs of the Law Society or the Bar Association. The rationale of that approach is that the professional body's role is to assist the courts "in elucidating the facts and applying appropriate principles in the decision upon the …application", and that it would be inappropriate to require that body "to bear the cost of performing this duty to the public as well as to the legal profession": Ex parte Lenehan (1948) 77 CLR 403 at 425. 4 In Gersten v The Law Society of New South Wales [2003] NSWCA 39, at [5]-[6] of a joint judgment, the Court of Appeal saw that approach as relevant to the determination of costs in an application for an "otherwise order" lifting the automatic suspension of a practitioner under Part 65A, r3 of the Supreme Court Rules. The Court noted (at [4]) that the Law Society had appeared in the proceedings at first instance "to safeguard the standards of the profession in the public interest and for the protection of the public", and that those proceedings had not been adversarial litigation "in the ordinary sense". 5 Gersten was considered, and that approach was applied, by Studdert J in Doherty v The Law Society of New South Wales [2003] NSWSC 464. That was his Honour's judgment on costs following his earlier decision allowing an appeal, under the Legal Profession Act 1987, against the Law Society's refusal of the plaintiff's application for a practising certificate: [2003] NSWSC 105. Notwithstanding the plaintiff's success, his Honour ordered that he pay the Law Society's costs. The proceedings had had their origin in resolutions of the Law Society cancelling the practising certificate which the plaintiff held at the relevant time and refusing his application for renewal of his practising certificate for the following financial year. 6 In his judgment on costs, Studdert J said at [17] and [19]: My conclusion is that the Society acted in a responsible manner from the time that resolutions were first passed … until the time that the hearing concluded. It seems to me that in its conduct of these proceedings the Society has served the public interest. … … It is to be recognised that the nature of the proceedings before me differs from the nature of the proceedings in Gersten , but I am satisfied that the present proceedings were prompted by the responsible cancellation of a practising certificate and by the responsible refusal of an application for a practising certificate. It seems to me that what can be drawn from Gersten is that the Court should consider favourably an application such as has been made by the Society in the present case, provided that the Court is satisfied that in its conduct of the proceedings in which the application for costs is made the Society has been seen to have conducted itself in the public interest. 7 Mr Ireland QC, who appeared with Mr Lynch for the plaintiff, relied upon the undoubted breadth of my discretion as to costs, noting that the approach in these authorities is not set in stone. He questioned the reasonableness of the Law Society's conduct in all the circumstances of the case. He said that this is the only case of which he was aware in which the peremptory procedure under s548 of the Legal Profession Act had been invoked in the absence of the practitioner having sustained a criminal conviction. Mr Barnes did not contest that proposition. 8 Mr Ireland argued that, on any view of the facts, immediate suspension under that section was not called for and that the more measured procedure under s61 of the Act would have been appropriate. That procedure, as he put it, would have involved "a much more disciplined dialogue with the Law Society" before its consideration of a resolution to suspend the plaintiff's practising certificate. 9 This was part of the case which had been advanced for an administrative law remedy which, in the event, I found it unnecessary to decide. Complaint was also made about the circumstances of the meeting of the Council of the Law Society at which the decision to suspend the plaintiff's practising certificate was made. It was said that a memorandum about the matter which had been prepared for the Council's consideration contained some irrelevant and prejudicial material, and unfairly described the plaintiff's dealings with trust money as "misappropriation". 10 It was also said that, although the memorandum referred to correspondence between the Law Society and the plaintiff's solicitor about the matter, it was prepared without the benefit of final representations made on the plaintiff's behalf by his solicitor. Those representations were furnished on the day before the meeting, and were distributed to the members of the Council at the meeting. It emerged in evidence that the possible suspension of the plaintiff's practising certificate was one of a number of items on a lengthy agenda, and that not a great deal of time had been devoted to it. 11 This is not the occasion to determine those matters, in so far as there is contest about them. Neither individually nor in combination could they establish that the Law Society acted unreasonably or otherwise than in the public interest. Although suspension under s548 is peremptory and, no doubt, unusual, the plaintiff had been on notice for about a month that it was being contemplated and had been furnished with a copy of an investigator's report under s270 of the Act. He had the opportunity to put his case to the Law Society, and he engaged a solicitor to do so. There is nothing in the evidence to persuade me that at the meeting the Council did not give the matter adequate and appropriate consideration. 12 Nor was there anything unreasonable about the Law Society's conduct of the proceedings before me. As I have said, I allowed the plaintiff's appeal upon the basis that his continued right to practice be subject to appropriate conditions. The conditions imposed were for the most part the result of agreement between the parties. It may have been preferable if there had been negotiation about such conditions before the hearing, in an attempt at least to limit the issues which I had to decide. That, apparently, had occurred in Doherty v The Law Society. However, negotiation of that kind could have been initiated by the plaintiff as much as by the Law Society. 13 In any event, it is fair to say that my decision to allow the appeal was influenced by the plaintiff's presentation in the witness box. It is true that in representations made on his behalf by his solicitor he did not deny the conduct alleged, although he sought to some extent to excuse it. The same is true of an affidavit he furnished for the purpose of these proceedings, and in that affidavit he expressed his intention to undergo remedial training in trust accounts and ethics. Nevertheless, in the course of cross-examination by Mr Barnes at the hearing, he appeared to me to show a greater insight into the gravity of his conduct than was conveyed by the affidavit or his solicitor's correspondence. 14 All that said, I have not found the question of costs easy to determine. The usual approach, whereby the successful practitioner still pays the costs of the professional body, could be productive of significant hardship. That may well be true of the present case. Nevertheless, the public policy behind the usual approach is clear and I see no good reason to depart from it. I order the plaintiff to pay the Law Society's costs.

Mavrakis v The Law Society

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