Russo v Legal Services Commissioner

Judgment

1. HIS HONOUR: On 12 April 2016, the Civil and Administrative Appeals Tribunal ordered that the name of Salvatore Russo, a solicitor admitted to practice in 1986, be removed for the local roll of practitioners. The order was made in proceedings instituted by the Legal Services Commissioner alleging unsatisfactory professional conduct or professional misconduct in the handling of money received from a client.
2. On 21 April 2016, Mr Russo filed a notice of appeal by which he asks that the Court of Appeal set aside the order removing his name from the roll and substitute orders that he be reprimanded and fined. Implicit in this are two things: first, that Mr Russo accepts that some sanction is warranted; and, second, that the ultimate result of the appeal should be restoration to the roll of the name removed in accordance with the order of the Tribunal.
3. Now before me as a single Judge of Appeal is a notice of motion by which Mr Russo seeks an order maintaining (or restoring), pending determination of the appeal, the position that prevailed before the Tribunal's order was made. Specifically, he seeks to have that order stayed if it has not already been executed; and, if it has been executed, he seeks an order that his name be restored. The matter has thus been approached on the basis that it is not possible or, at least meaningful, to order a stay in respect of an order that has been executed. That is, to my mind, the correct approach despite any contrary indication that may be thought to emerge from Raphael v The Law Society of New South Wales [1991] NSWCA 234: see AVS Group of Companies Pty Ltd v Commissioner of Police [2010] NSWCA 81; (2010) 78 NSWLR 302.
4. In making the claims I have described in the alternative, Mr Russo proffers to the court the usual undertaking as to damages and, in the event that the alternative approach turns out to be the operative one, an undertaking that, if the Court so requests, he will surrender any practising certificate and ask that the Prothonotary again remove his name from the roll.
5. I should mention that the grounds of appeal raise a question about whether the Tribunal was correct to proceed, as it did, under the former Legal Profession Act 2004 (NSW) or whether the matter should have been determined pursuant to the Legal Profession Uniform Law (NSW).
6. It is not in dispute, however, that, in either case, the appeal properly lies to the Court of Appeal and that it will fall to be determined by a court of three judges. The avenue of appeal is that created by Item 29(4) of Schedule 5 to the Civil and Administrative Tribunal Act 2013 (NSW) and assignment to the Court of Appeal is dealt with by s 48 of the Supreme Court Act 1970 (NSW).
7. It is necessary to determine, as a preliminary matter, whether a single Judge of Appeal has power to make the orders sought in the notice of motion. The only possible source of power is s 46(2)(b) of the Supreme Court Act which allows a single Judge of Appeal to exercise the powers of the Court of Appeal "to make any order or give any direction in any appeal or other proceedings, but not an order or direction involving the determination or decision of the appeal or other proceedings".
8. The first alternative order involves the commonplace case in which a Judge of Appeal orders that the operation or execution of an order of the court below be stayed pending determination of an appeal. This is an example of the exercise of the s 46(2)(b) power. In those cases, of course, the stay does not overturn the order below. It leaves the order intact but temporarily neutralises or suspends its effect. It has long been accepted that the power under s 46(2)(b) applies in such a case.
9. Under the alternative approach, by contrast, the order sought, if made, will have the effect of countermanding the Tribunal's order and of putting in place rights and privileges that the Tribunal's order has caused to be removed. Indeed, the interlocutory order sought in the alternative is in substance the equivalent of the principal relief sought in the notice of appeal - although there is a difference in context in that the interlocutory order, if made at all, would be made upon Mr Russo's undertaking to the Court to request removal of his name again if the Tribunal's order were not overturned on appeal.
10. I was at first troubled that an order in the alternative form might, for the reason just stated, be an order "involving the determination or decision of the appeal" but on reflection I am of the opinion that it is not of that quality. In reality, it is similar to an order of dismissal for want of prosecution or because no viable cause of action is shown. In those cases which are uncontroversially within the power of a single Judge of Appeal, the effect of the order is the same as that which would be made if the appeal were fully argued and was unsuccessful.
11. Also if the alternative order turns out to be the operative order, it will be open to the Court of Appeal, having heard the appeal on its merits, to make a new order for removal from the roll. Both the Legal Profession Act (s 590) and the Uniform Law (s 264) preserve the inherent jurisdiction and power of the Court with respect to the control and discipline of local legal practitioners. Thus, the making of the alternative order would in no way pre-empt the determination or decision of the appeal after full argument of the merits.
12. Turning to the merits of the interlocutory application, I must first consider the grounds of appeal and the general question whether an arguable case is shown, or whether there is a serious question to be tried.
13. There are two parts to the proposed appeal. The first concentrates on a question I have already mentioned, that is, whether the Tribunal proceeded under the incorrect legislation. Mr Russo contends that it was the Uniform Law that applied and that that legislation, unlike the Legal Profession Act, did not allow the making of an order for removal from the roll. It allowed only a recommendation that the Supreme Court effect removal.
14. The question of which legislation was applicable turns on the interpretation of transitional provisions referred to in paragraphs 2 and 3 of the Tribunal's decision - in particular, the words "a complaint made under the old Chapter 4 and not disposed of before the commencement date" in clause 26(1) of Schedule 4 to the Legal Profession Uniform Law. The reference to "the old Chapter 4" is a reference to Chapter 4 of the 2004 Act. The point taken by counsel for Mr Russo is that, because the Tribunal proceedings were commenced on 11 December 2014 (being before commencement of the Uniform Law on 1 July 2015), the "complaint" that led to the proceedings was, as it were, spent and no longer extant when the new legislation commenced. The opposing view, taken by the Commissioner, is that the "complaint" made before 11 December 2014 continued in existence as a complaint even after the commencement of the Tribunal proceedings.
15. The second part of the appeal raises an issue of procedural fairness. The allegation is that the Tribunal made the order for removal from the roll even though written submissions did not address the question of penalty. The written submissions of the Legal Services Commissioner did not go beyond the proposition that submissions as to dispositive orders should follow any finding of unsatisfactory professional conduct or professional misconduct. Furthermore, the material before me referring to the course of the hearing (there being no transcript) refers to two significant facts: first, that counsel for the Legal Services Commissioner indicated to the Tribunal that the application for an order of removal was not pressed and submitted that the appropriate penalty was reprimand and a fine; and, second, that exchanges between Tribunal members and legal representatives did not at any time canvass the possibility of an order for removal. As a result, Mr Russo says, his counsel did not at any point have an opportunity to make submissions against the making of such an order and Mr Russo accordingly had no opportunity to tender evidence as to character that might have been relevant to the issue.
16. On the facts as they seem at this point, I am satisfied that there is a serious question to be tried on both matters raised by the grounds of appeal. Indeed the case sought to be advanced in relation to the second aspect seems to me to be strongly arguable and the Commissioner's counsel conceded before me that that ground of appeal is arguable.
17. That leads to questions of prejudice and the balance of convenience. The prejudice to Mr Russo in continuation of the situation produced by the Tribunal's order is obvious. He cannot practise his chosen profession. Against that prejudice, in a case such of this of regulatory proceedings taken in the public interest, must be weighed the prejudice in the form of danger to the public that may eventuate if Mr Russo is allowed to practise his chosen profession pending determination of his appeal: New South Wales Bar Association v Stevens [2003] NSWCA 95; (2003) 52 ATR 602.
18. The conduct before the Tribunal involved, in essence, collecting money from a client for counsel's fees rendered to the solicitor, depositing those moneys to the office account rather than the trust account and, in some cases, not paying counsel, either for a long time or at all (or, at least, until compelled). The conduct in not paying counsel was said by the Tribunal to be either intentional or the product of reckless indifference to obligations. Also, the Tribunal said, Mr Russo showed "rigidity and arrogance" in not responding promptly and constructively to client inquiries and complaints and those made by other solicitors on the former client's behalf. Some of his correspondence with such solicitors amounted to mere obfuscation. There were adverse findings about competence and diligence. The Tribunal's decision refers in several places to parts of Mr Russo's testimony in which he was reluctant to accept obvious points and had to be dragged, as it were, to acknowledging realities that any competent solicitor would readily recognise. In these circumstances, there is a clear possibility that restoration of the ability to practice may rebound unfavourably upon the public interest.
19. When it comes to the exercise of the discretion to be exercised on the present application, I have decided that it should be exercised favourably to Mr Russo.
20. I am influenced particularly by eight factors: first, the possibility that the Tribunal mistook the effect of the transitional provisions and therefore may not have had power to make the order it did make; second, the very distinct possibility, conceded by the Commissioner, that Mr Russo was denied procedural fairness and that that alone will be sufficient to cause the Tribunal's order to be set aside; third, the fact that the order has deprived Mr Russo of his means of livelihood; fourth, the fact that the Tribunal's reasons make it clear that Mr Russo ultimately accepted that he had done wrong; fifth, the salutary lesson that must have been learned by Mr Russo from the exchanges referred to in the Tribunal's reasons; sixth, the fact that Mr Russo has given an undertaking to consent to removal of his name again upon request by the Court; seventh, the disruption that will be occasioned to clients of the practice if Mr Russo cannot have some involvement in the pursuit of their matters; and, eighth, the fact that the Commissioner did not press at the Tribunal hearing any application for an order of removal and thereby accepted that the conduct in respect of which proceedings were brought was not perceived to be of such seriousness as to warrant removal of the right to practise.
21. I should say something more about the seventh matter. Mr Russo gave evidence that he has been the sole principal in a practice in which three other solicitors are employed. It was predominantly a litigation practice. Immediately after the Tribunal's order was made, he took steps to cause one of the other solicitors, Ms Nati, to become the principal (including by assigning to her the whole of his interest in the practice). She promptly assumed that role. She now holds the relevant professional indemnity insurance and is the operator of the trust account. Mr Russo himself immediately stepped back from all involvement in client matters, save informing clients that Ms Nati had taken his place. Mr Russo gives details of several such matters. He is content for Ms Nati to occupy the position he formerly occupied, at least pending determination of the appeal. In the interests of continuity, there is a need, in the interests of some clients, for Mr Russo's knowledge to be brought to bear and for him to have some involvement under Ms Nati.
22. I make the following orders:
23. Upon the appellant Salvatore Russo by his counsel giving to the Court the usual undertaking as to damages 1. Pending further order of the Court, if Order 2 of the orders of the New South Wales Civil and Administrative Tribunal made on 12 April 2016 in the proceedings before it number 1420356 has not been executed, that order be stayed. 2. Pending further order and upon the appellant by his counsel giving the further undertaking set out in the Schedule hereto, if the said Order 2 has been executed, the appellant's name is to be forthwith reinstated to the Supreme Court Roll of legal practitioners. 3. Costs reserved. Schedule The appellant undertakes that upon being requested by the Court to do so, he will forthwith surrender any practising certificate then held by him and request the Prothonotary to remove his name from the Supreme Court Roll.
24. Direct that the appeal be expedited and that it be placed in the Registrar's list on 9 May 2016 for directions.