Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Groz Investments Pty Ltd v Williamson as Executor of the Estate of Winter [2020] NSWCATOD 82 Hearing dates: On the papers Date of orders: 27 July 2020 Decision date: 27 July 2020 Jurisdiction: Occupational Division Before: L Pearson, Principal Member P Moran, Senior Member Decision: (1) The Application is dismissed. (2) No order is made as to costs. Catchwords: PROFESSIONS AND TRADES - legal practitioner - compensation order - whether the Tribunal has jurisdiction to determine compensation application - whether complainant or aggrieved person suffered loss because of the conduct the subject of complaint Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Corporations Act 2001 (Cth) Legal Profession Act 1987 (NSW) Legal Profession Act 2004 (NSW) Legal Profession Uniform Law (NSW) Cases Cited: Council of the Law Society of New South Wales v Winter [2019] NSWCATOD 2 Council of the Law Society of New South Wales v Winter (No. 2) [2019] NSWCATODOD 57 Groz Investments Pty Ltd v Ronro Pty Ltd [2013] NSWSC 794 Law Society of New South Wales v Oliveri (No 2) [2008] NSWADT 157 Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38 Skiba v Serendipity (WA) Pty Ltd t/as Advanced Personal Management (No. 2) [2019] NSWCATAP 281 Xie v Wen [2016] NSWCATOD 110 Texts Cited: Nil Category: Principal judgment Parties: Groz Investments Pty Ltd (Applicant) Neil Williamson as Executor of the Estate of the Late Ronald William Winter (Respondent) Representation: Solicitors: Applicant (Self Represented) Reimers Legal (Respondent) File Number(s): 2019/00043584 Publication restriction: Nil REASONS FOR DECISION Background 1. On 30 September 2015 Rohan Cains complained to the Legal Services Commissioner (OLSC) by letter headed "Groz Investments Pty Ltd", concerning the conduct of a New South Wales Legal Practitioner, Ronald Winter. 2. Mr Cains informed the OLSC that he was the manager and company secretary of Groz, and that the shares in the company were held by Mr Cains' wife and sister. Mr Cains said that Mr Winter was the manager and company secretary of Ronro Pty Ltd (Ronro), and that Mr Winters' wife was the sole shareholder. He referred to proceedings determined in the NSW Supreme Court by Rein J in June 2013, which related to four joint ventures in which Groz and Ronro were involved (Groz Investments Pty Ltd v Ronro Pty Ltd [2013] NSWSC 794). The outcome of the proceedings was an order for Ronro to pay Groz $44,264.78 subject to offset of $34,097.62 and any amount to which Ronro was entitled to credit under two of the four joint ventures. Ronro had been awarded costs orders in the proceedings, and in September 2014 a costs determination was made in the Supreme Court proceedings in favour of Ronro. Groz had paid $40,000 into the Supreme Court as security for costs in those proceedings in the period 2010 to 2013. 3. Mr Cains stated that Ronro had been deregistered in November 2014. 4. The letter complained that Mr Winter purported to be the director of and solicitor for Ronro during the period December 2014 to April 2015; that Mr Winter enticed Mr Cains to enter into a settlement agreement in February 2015, the effect of which being that Mr Cains released $30,000 from the Supreme Court in favour of Ronro; and that Mr Winter made misrepresentations to him. 5. The letter sought that the OLSC require Mr Winter to pay to Groz $30,000 plus interest and that Mr Winter receive "…appropriate disciplinary measures …" commensurate with misrepresentations made to Mr Cains and to the court. 6. The complaint was referred to the Law Society on 1 October 2015, and led to disciplinary proceedings (NCAT Disciplinary Proceedings) being brought in the Tribunal by the Council of the Law Society of New South Wales against Mr Winter. On 2 January 2019 the Tribunal found Mr Winter guilty of unsatisfactory professional conduct and professional misconduct: Council of Law Society of New South Wales v Winter [2019] NSWCATOD 2. Disciplinary orders consequent on those findings were made on 18 April 2019: Council of the Law Society of NSW v Winter (No 2) [2019] NSWCATOD 57. NCAT Disciplinary Proceedings 1. In the NCAT Disciplinary Proceedings commenced on 20 December 2017 the Council of the Law Society of New South Wales (Law Society) asserted professional misconduct, and sought orders that the Respondent to the Application, Mr Winter, be removed from the Roll of local lawyers and pay the Law Society's costs of the Application. 2. Mr Winter had been sole director of Ronro until 4 February 2013, when he was automatically disqualified by reason of his then undischarged bankruptcy. Mrs Winter's appointment as a director ended on 19 January 2013. Ronro was deregistered by ASIC on 16 November 2014 under s 601AB(1A) of the Corporations Act 2001 (Cth) as a consequence of non payment of annual fees in 2013 and 2014. 3. There were three grounds for complaint alleged in the disciplinary proceedings. The first concerned Mr Winter's conduct in purporting to act for Ronro during the period December 2014 to March 2015 in undertaking the steps which led to payment of $30,000 in costs from the funds paid by Groz as security for costs, in circumstances where Mr Winter knew or ought to have known that Ronro had ceased to exist as a legal entity by reason of its de-registration in November 2014, and that it did not validly instruct him to act. The second was that during the same period Mr Winter had misled Mr Cains by holding himself out as a director of Ronro when he was automatically disqualified as a director, and he knew or ought to have known that Ronro had ceased to exist as a legal entity. The third ground was that Mr Winter had during the same period misled the Supreme Court by purporting to act for Ronro in taking the steps which led to payment from the funds held in that court as security for costs, in circumstances where he knew or ought to have known that Ronro had ceased to exist as a legal entity and did not validly instruct him to act. 4. In Council of the Law Society of New South Wales v Winter [2019] NSWCATOD 2 the Tribunal considered the evidence as to the circumstances of the non-payment of annual fees for Ronro in 2013 and 2014, and Mr Winter's knowledge as to the notification by ASIC of its intention to deregister Ronro, and its deregistration in November 2014. The Tribunal did not find that Mr Winter had actual knowledge that Ronro had ceased to exist as a legal entity, however found at [43] that in undertaking the litigation steps for recovery of costs in the period December 2014 to March 2015 he should have taken reasonable steps to ensure that the company for which he was acting existed as a legal entity. The Tribunal found that in the circumstances Mr Winter ought to have known in June 2014 that there was at least a real prospect that Ronro's registration was in jeopardy, and he ought to have taken steps both to ensure that the annual fee was paid and to maintain the correct address with ASIC: and his failure to do so was recklessly careless. 5. The Tribunal found (at [48]) that in email correspondence with Mr Cains in February and March 2015 Mr Winter had made statements representing himself to be a director of Ronro, when he knew he could not have been a director and could not act in managing a corporation. The Tribunal further found (at [63]) that Mr Winter knew that Ronro had no formally appointed directors during the period December 2014 to March 2015, and that as an experienced practitioner who had been actively involved in the business activities and administration of Ronro, he ought to have known that Ronro could not and did not validly instruct him to act in the conduct of the litigation with Groz. 6. The Tribunal's findings on each of the three complaints were that: 1. On Ground 1, in purporting to act for Ronro when he ought to have known that Ronro's registration was in jeopardy and that he did not have valid instructions to act on behalf of Ronro, Mr Winter's conduct fell short of the standard of competence and diligence that a member of the public was entitled to expect of a reasonably competent lawyer, and as such was unsatisfactory professional conduct as defined in s 296 of the Legal Profession Uniform Law (NSW) (the Uniform Law); 2. On Ground 2, in holding himself out as a director of Ronro in circumstances where he was disqualified as a director by reason of being bankrupt, and when he knew that the misleading statements in communications with Mr Cains were false, Mr Winter was guilty of professional misconduct as defined in s 298 of the Uniform Law; and the making of those representations in circumstances where his failure to take steps to ensure that Ronro was still registered was recklessly careless was unsatisfactory professional conduct as defined in s 296 of the Uniform Law; and 3. On Ground 3, in misleading the Court by purporting to act for Ronro in circumstances where he failed to take steps to confirm Ronro's status or to ensure that he was validly instructed to act, Mr Winter's conduct was unsatisfactory professional conduct. 1. On 18 April 2019 the Tribunal made orders under s 302 of the Uniform Law: Council of the Law Society of New South Wales v Winter (No. 2) [2019] NSWCATOD 57. The Tribunal ordered that consequent upon the findings of unsatisfactory professional conduct and professional misconduct: 1. Mr Winter was reprimanded; 2. Mr Winter was to pay, within 28 days, a fine in the sum of $10,000; 3. Mr Winter was to undertake an education course in legal ethics; and 4. Mr Winter was to pay the costs of the Law Society. Compensation Application 1. On 7 February 2019 Mr Cains lodged with the Tribunal an Application seeking compensation. The Application describes it as having been made under s562 of the Legal Profession Act 2004 (the 2004 Act). Under "Grounds For Application" Mr Cains said "Ronald Winter was found guilty of professional misconduct" and referred to the Tribunal's January 2019 Reasons. He described himself as the Applicant and Mr Winter as the Respondent. 2. On 1 May 2019 Mr Cains was directed to provide an amended application for compensation. An application in the name of "Groz Investments Pty Ltd" was lodged on 30 May 2019. 3. An attachment to the Application signed by Mr Cains: 1. referred to Mr Cains being a director of Groz Investments Pty Ltd; 2. referred to the agreement reached on 4 February 2015 between himself "… on behalf of Groz …" and Mr Winter concerning the payment of a judgment debt; 3. described the 4 February 2015 Consent Orders and Heads of Agreement being filed with the Supreme Court providing that: "… the sum of $30,000 would be paid to Ronro from the security that Groz had earlier provided in the proceedings"; 1. referred to Ronro having been de-registered in November 2014, and that during the period December 2014 to March 2015 Mr Winter misled Mr Cains by purporting to act for Ronro in the circumstances determined by the Tribunal in the disciplinary proceedings; 2. stated that had Mr Winter informed Mr Cains that Ronro had been de-registered in 2014 he would not have entered into negotiations with Mr Winter nor travelled to Sydney from Port Macquarie to sign the Heads of Agreement and Consent Orders; and 3. stated that Groz was entitled to be compensated $30,000 being the amount paid to Ronro from the security for costs held by the Supreme Court. Substitution of Mr Williamson as Respondent 1. Mr Winter died on 14 September 2019. Mr Cains was directed to advise the Tribunal if he intended to pursue the claim for compensation, and if so, to identify and inform the Tribunal of the appropriate representative of the Estate of the late Ronald Winter. At a directions hearing on 5 March 2020 the Tribunal was advised that Mr Neil Williamson is Executor of Mr Winter's Estate. 2. Probate was granted to Mr Williamson on 31 December 2019. The name of the respondent to the proceedings has been amended to be "Neil Williamson as Executor of the Estate of the Late Ronald William Winter". Proceeding without hearing 1. Directions made on 5 March 2020 for the filing and service of evidence included a direction that the parties include in their submissions whether a hearing on the compensation application could be dispensed with. Neither party considered that a hearing was required. The Tribunal was satisfied that the issues for determination could be adequately determined in the absence of the parties on the basis of the written submissions and documents provided, and on 4 May 2020 the Tribunal ordered pursuant to s 50(2) of the Civil and Administrative Tribunal Act 2013 (the NCAT Act) that a hearing is dispensed with. 2. On the same date the Tribunal advised the parties that the Tribunal would be constituted by two Division members with a professional qualification who are solicitors, in accordance with cl 18(2) of Sch 5 to the NCAT Act. Evidence and Submissions 1. Directions were made on 5 June 2019, 7 August 2019, and 20 January 2020 for Mr Cains to provide affidavit and other evidence in support of the compensation application, allowing time for him to obtain legal advice as he had foreshadowed. On 5 March 2020 further orders were made, to extend the time for Mr Cains to provide evidence and submissions to 13 March 2020, for Mr Williamson to provide evidence and material in reply by 3 April 2020, and for any reply material from Mr Cains by 9 April 2020. 2. On 17 March 2020 the Tribunal received from Mr Cains written submissions and an affidavit with annexures, dated 11 March 2020. The respondent provided submissions on 6 April 2020. Mr Cains requested an extension of time to provide material in reply, to 16 April 2020, indicating some difficulty in access to legal advice for that purpose. The respondent consented to an extension of time to overcome any difficulty arising from the delay in his provision of submissions and the Easter break. The Tribunal extended the date for compliance for any material in reply to 20 April 2020. 3. No further material has been received from Mr Cains. In circumstances where he has previously been provided with several extensions of time, and where the directions made on 5 March 2020 stated in that context that no further extensions of time would be granted in the absence of demonstrated exceptional circumstances, the Tribunal decided to proceed to determine the compensation application on the basis of the applicant's written submissions, Mr Cains' Affidavit of 11 March 2020, and the respondent's submissions dated 6 April 2020. 4. The Tribunal notes that while Mr Cains has stated during the interlocutory process that he had sought legal advice and was being assisted by a lawyer, the Tribunal has not been advised of any legal practitioner representing him in the proceeding. Applicant's evidence and submissions 1. In his Affidavit of 11 March 2020 Mr Cains states: 1. He is the applicant in the proceedings; 2. He is the Director and Secretary of Groz; a Director since 5 July 2013 and the Secretary since 17 June 2000; 3. The background to his complaint to the OLSC on 29 September 2015, arising out of proceedings 2010/363898 between Groz and Ronro; 4. He paid $40,000 into the Supreme Court of New South Wales as security for costs comprising two payments of $20,000 each on 16 November 2011 and 20 December 2012; 5. A costs determination was made in favour of Ronro on 30 September 2014, and a Certificate of Determination of Costs and a Certificate of Determination of Costs of Costs Assessment were issued; 6. Those documents were registered by Mr Winter, on Ronro's behalf, in the Local Court at Sydney as a Judgment in January 2015; 7. He exchanged number of emails with Mr Winter between December 2014 and February 2015, with a view to negotiating payment of the judgment debt; 8. Mr Winter emailed to him on 27 January 2015 a Notice of Motion and supporting affidavit seeking Orders, inter alia, for amounts of $29,330.25, $3,373.30, $172.00 and $862.00 be paid to Ronro from the security for costs given by Groz in the proceedings. The Affidavit of Mr Winter: 1. deposes to him being the solicitor for Ronro; 2. references the costs orders made in favour of Ronro against Groz in the proceedings; and 3. references the costs assessment and the entering of judgment for the amount of the assessed costs. 1. He reached agreement with Mr Winter on 3 February 2015 for payment of the judgment debt. Mr Winter emailed draft Consent Orders to give effect of the agreement. He signed the Consent Orders, and the Consent Orders and Heads of Agreement were then filed with the Supreme Court, providing for the sum of $30,000 to be paid to Ronro "… from funds that Groz provided as security for costs in the Proceedings"; and 2. After further email exchanges with Mr Winter he conducted an ASIC search of Ronro on 3 March 2015 and discovered that it was deregistered on 16 November 2014. 1. Mr Cains states at para [26] that he suffered loss because of Mr Winter's conduct the subject of the complaint. He says: "In particular, I have suffered loss in having agreed with Mr Winter in February 2015 that $30,000 be paid to Ronro out of payments made into court by Groz, in circumstances where, at that time, Ronro had been de-registered". He states that had Mr Winter not been recklessly careless in continuing to act as its solicitor following Ronro's de-registration, he would not have entered into the Heads of Agreement and Consent Orders. He has not received, and believes that he is not entitled to receive, any compensation under an order that has been made by a Court, or any compensation paid or payable from a fidelity fund of any jurisdiction. 1. In his written submissions dated 11 March 2020, again identifying himself as the applicant, Mr Cains states that he seeks a compensation order under Part 5.5 of the Uniform Law, for "loss he has suffered because of conduct of the Respondent that was the subject of a complaint made by the applicant to the Legal Services Commissioner". 2. Mr Cains submits that he is "an aggrieved person" as defined in s307(2) of the Uniform Law and that the loss suffered by him arose because of the conduct the subject of the complaint. He says that that conduct is set out in his Affidavit and was "otherwise referred to" in the two decisions of the Tribunal referred to above. He seeks to rely upon his Affidavit as the evidence in support of the compensation order. 3. Mr Cains refers to the Tribunal's findings in the 2 January 2019 Reasons at [43], [48] and [63], and submits that in reliance on the representations made by Mr Winter during the Supreme Court proceedings he placed funds into court amounting to $30,000, which funds were ultimately divested to Mr Winter's company by agreement between the parties in the proceedings. He submits that had Mr Winter not engaged in the conduct that was found to be established by the Tribunal, he would not have agreed with Mr Winter "… that Groz's funds held in Court be paid to Ronro", and as a consequence he has suffered loss. He says that by reason of Mr Winter's conduct he: 1. agreed with Mr Winter in February 2015 that $30,000 be paid to Ronro out of payments made to Court by Mr Groz; and 2. would not have entered into Heads of Agreement and Consent Orders if the conduct had not been engaged in. 1. He further notes the statutory maximum for the quantum of a compensation order under s308(2)(a) of the Uniform Law, and seeks an order for compensation in the amount of $25,000; further, that that amount be "… made payable to him personally". Respondent's submissions 1. The Respondent submits that: 1. Mr Cains does not have standing to seek a compensation order; 2. the Tribunal does not have jurisdiction to deal with Mr Cains' claim; 3. Mr Cains has not suffered compensable loss; 4. it would not be in the interests of justice for a an order to be made; 5. the claim for compensation was not made in time; and 6. the Tribunal has decided the Disciplinary Proceedings and is "functus officio". Legislation 1. Relevant provisions in Part 5.5 of Chapter 5 of the Uniform Law are: 306 Making of compensation orders (1) For the purposes of section 290, the designated local regulatory authority may make a compensation order against a respondent lawyer or law practice in accordance with this Part. (2) For the purposes of section 302, the designated tribunal may make a compensation order against a respondent lawyer in accordance with this Part. 307 Request by complainant for compensation order (1) A complainant may request— (a) the designated local regulatory authority; or (b) the designated tribunal in proceedings under Division 3 of Part 5.4— to make a compensation order. (2) A compensation order may be requested in respect of loss suffered by— (a) the complainant; or (b) another person who is a client of the respondent— (or both) because of the conduct the subject of the complaint. The complainant, or other person, suffering the loss is referred to in this Part as an aggrieved person. (3) A complainant who makes such a request must describe the loss suffered by the aggrieved person and the relevant circumstances. (4) A request may be made in the complaint or to the designated local regulatory authority at any time after the complaint is made and before it is disposed of. (5) However, a request may not be made after proceedings have been initiated in the designated tribunal with respect to the complaint unless the designated tribunal grants the complainant leave to make the request. 308 Nature of compensation orders (1) A compensation order is an order to compensate the aggrieved person for loss suffered because of conduct that is the subject of a complaint and consists of one or more of the orders referred to in subsections (2), (3) and (4). (2) A compensation order may include an order that the respondent lawyer or law practice pay to the aggrieved person, by way of monetary compensation for the loss, a specified amount not exceeding— (a) where the compensation order is made by the designated local regulatory authority—$25 000; or (b) where the compensation order is made by the designated tribunal—$25 000 or a greater amount agreed to with the consent of both the complainant and the respondent lawyer or law practice. … 309 Prerequisites for making of compensation orders (1) Unless the complainant and the respondent lawyer or law practice concerned agree, a compensation order is not to be made unless the designated local regulatory authority or designated tribunal (as the case requires) is satisfied that— (a) the aggrieved person has suffered loss because of the conduct concerned; and (b) it is in the interests of justice that the order be made. (2) A compensation order is not to be made in respect of any loss for which the aggrieved person has received or is entitled to receive— (a) compensation under an order that has been made by a court; or (b) compensation paid or payable from a fidelity fund of any jurisdiction, where a relevant claim for payment from that fund has been made or determined. (3) Subsection (2) does not apply where a fidelity authority is seeking a compensation order under its subrogation to the rights and remedies of a claimant (see section 246). Discussion and findings The Tribunal's jurisdiction 1. The Respondent contends that s306(2) of the Uniform Law enables the Tribunal to make a compensation order but only in disciplinary proceedings, and the Tribunal does not have unfettered power to consider a request for compensation; its powers being limited by the phrase "in proceeding under Division 3 of Part 5.4". He submits that Act does not give the Tribunal power to make a compensation order in separate proceedings commenced by a complainant. Rather, the Respondent submits, a claim for a compensation order must be begun and prosecuted in the Tribunal by the OLSC or the Law Society. As Mr Cains seeks an order for compensation the Tribunal, the Respondent submits, does not have jurisdiction. 2. We reject the submission. 3. Part 5.4 of Chapter 5 of the Uniform Law (ss 295 to 305) deals with disciplinary matters. Part 5.5 (ss 306 to 311) deals with the making of compensation orders. Section 306(2) provides that the Tribunal may make a compensation order in accordance with Part 5.5. The opening words of sub-section (2) of s306 "for the purposes of s302" do not, we find, have the effect contended for by the Respondent. Section 302 provides a range of orders that may be made by the Tribunal after it has completed a hearing under Part 5.4 into the conduct of a respondent lawyer and having done so finds the lawyer guilty of unsatisfactory professional misconduct or professional misconduct. 4. The section provides that, in those circumstances, the Tribunal may make any order that it thinks fit including a compensation in accordance with Part 5.5 (per s302(k)). Section 302 authorises the Tribunal to make a compensation order in accordance with Part 5.5 after it has completed a hearing of a disciplinary action brought under Part 5.4 by a local regulatory authority (here, the Law Society). Section 306 does not require that a compensation order may be made only in professional disciplinary proceedings under Part 5.4. 5. The effect of s306 (2) is to empower the Tribunal to make a compensation order against a respondent lawyer in accordance with Part 5.5. 6. Although dealing with earlier, but relevantly similar provisions of the Legal Profession Act 1987 and the Legal Profession Act 2004 the then Administrative Decisions Tribunal of New South Wales in Law Society of New South Wales v Oliveri (No 2) [2008] NSWADT 157 said: 12. It is important to observe that the Legal Profession Act 1987 and the Legal Profession Act 2004 make it plain that this Tribunal cannot make a compensation order unless and until it is found the legal practitioner had 'engaged in unsatisfactory professional conduct or professional misconduct in relation to a complaint …" (s573 of the 2004 Act). So, it is a prerequisite to the making of the compensation order that there be an adverse finding against the practitioner in one of the categories mentioned. 13. The practice of the Tribunal is that a compensation claimant may not be heard on the compensation claim until the Tribunal has made a finding against the practitioner under s573. There is good reason for this: the principal proceedings are generally between either the Law Society or the Legal Services Commissioner on the one hand the practitioner on the other relating to asserted professional misconduct or unsatisfactory professional conduct. Thus it follows that the proper parties to the principal determination do not include the compensation claimant but rather the Society or the Commissioner in order to have found proper jurisdiction under s573(1). 1. We find that the application the subject of this decision is made under Part 5.5 of the Uniform Law and that the Tribunal has jurisdiction to hear and determine it. 2. For the same reasons, we reject the respondent's submission that having determined the disciplinary proceedings in the orders made in April 2019 the Tribunal had completed the functions of the Uniform Law vested in it and is functus officio. Part 5.5 of the Uniform Law empowers the Tribunal to hear and determine an application for a compensation order following the making of unsatisfactory professional conduct or professional misconduct findings in disciplinary proceedings: Law Society of New South Wales v Oliveri (No. 2) [2008] NSWADT 157. Whether the Tribunal has jurisdiction in relation to acts or matters occurring before 1 July 2015 1. The Respondent refers to the payment of $40,000 into the Supreme Court as security for costs and the 3 February 2015 Agreement between Mr Cains and Mr Winter that $30,000 of the monies paid into court as security would be paid to Ronro. The Respondent contends that: 1. the 2004 Act was repealed on 1 July 2015 and replaced by the Uniform Law; 2. unless there is an applicable savings or transitional provision in the Uniform Law, nothing in Part 5.5 of the Uniform Law suggests the legislation applies to acts and matters occurring before 1 July 2015; 3. Clause 27 in Schedule 2 of the Uniform Law permits complaints and investigations of matters that occurred before 1 July 2015 to be made under the Uniform Law, however; and 4. nothing in that provision give the Tribunal power to consider discreet claims for compensation of matters occurring before 1 July 2015. 1. For those reasons, the Respondent submits that the compensation application is incompetent and ought to be dismissed. We reject that submission. 2. The application for compensation was made to the Tribunal by Mr Cains on 7 February 2019. It was later amended on 30 May 2019. The complaint that preceded the February 2019 compensation application was made by Mr Cains to the OLSC on 30 September 2015, and in that complaint Mr Cains stated that he was requesting the OLSC to require Mr Winter to pay Groz $30,000 plus interest from 4 February 2015, in addition to "appropriate disciplinary measures". 3. Section 309 of the Uniform Law concerns prerequisites for making of compensation orders under Part 5.5. Relevantly, no provision of Part 5.5 bars or prohibits the making of a compensation order in circumstances where the conduct of the respondent lawyer the subject of the complaint occurred prior to the commencement of the Uniform Law on 1 July 2015. 4. Here, both the complaint and the hearing of the disciplinary proceedings relating to that complaint, and the compensation application, were made after the commencement of the Uniform Law. Whether the applicant suffered compensable loss 1. The Respondent submits that in neither the Affidavit of 11 March 2020 nor the written submissions does Mr Cains contend that he is seeking a compensation order for any other party. He seeks an order as "complainant" and says that he is an "aggrieved person" per s307(2) of the Uniform Law. 2. The Respondent relies on s309(1)(a) which provides that a compensation order is not to be made unless the Tribunal is satisfied that an aggrieved person has suffered loss because of "the conduct concerned"; and further, that the term "conduct concerned" must refer the loss set out in a request for a compensation order. 3. The Respondent relies on Xie v Wen [2016] NSWCATOD 110 where the Tribunal there expressed the view that the expression "conduct concerned" does not embrace the entirety of the matters traversed in the original letter of complaint, but was to be construed as the conduct that was the subject of adverse findings in the disciplinary proceedings. 4. The Respondent refers to paragraph [26] of the Affidavit of 11 march 2020 where Mr Cains deposes to having suffered loss in having reached agreement with Mr Winter in February 2015 that $30,000 be paid to Ronro. The Respondent submits that the affidavit establishes that: 1. on 2 November 2010 Groz commenced proceedings against Ronro; 2. Ronro had a security for costs order made in its favour in the amount of $40,000 against Groz, Groz paying that sum into the Supreme Court in two instalments in November 2011 and December 2012; 3. on 30 September 2014 a costs determination was made in favour of Ronro in the sum of $32,875.55; 4. Ronro was deregistered on 16 November 2014; 5. on 9 January 2015 Mr Winter caused a costs determination be entered as a judgment in the Local Court for $32,875.55; 6. on 27 January 2015 Mr Winter filed a Notice of Motion and Affidavit in support in the Supreme Court that sought to have the monies held in that court paid out to discharge the Local Court judgment; 7. on 3 February 2015 Mr Winter and Mr Cains agreed that $30,000 would be paid to Ronro from the monies in court and they reduced the terms of their agreement to writing and Short Minutes of Order; and 8. on 4 February 2015 the Short Minutes of Order were filed in the Supreme Court. 1. This chronology, the Respondent submits, indicates that the September 2014 Costs Determination was obtained before Ronro was deregistered in November the same year. It was therefore validly obtained and there remained an obligation in Groz to satisfy it until the time it was discharged. Those matters, the Respondent submits, had nothing to do with the adverse findings made against Mr Winter in the disciplinary proceedings; those findings relating to Mr Winter purporting to act for Ronro when it was deregistered and claiming to be a director of the company when he was not. These activities of Mr Winter, the Respondent submits, did not change Groz's obligation to pay the costs determination, and that obligation was not discharged because of Ronro's deregistration. 2. The Respondent submits that: 1. Groz has suffered no loss because of the conduct of the lawyer the subject of the complaint; and 2. Mr Cains has not suffered loss because the money paid into court and then paid to Ronro following the February 2015 Agreement was the property of Groz, not Mr Cains. 1. We agree with the Respondent on this issue. 2. Section 307(2) permits a compensation order to be made by: 1. the complainant; or 2. another person who is the client of the Respondent (or both), because of the conduct the subject of the complaint. The section provides that the complainant, or the other person suffering the loss, is referred to in Part 5.5 as an "aggrieved person". 1. Neither Mr Cains nor Groz were clients of Mr Winter. Accordingly, here a compensation order can only be requested in respect of loss suffered by the complainant. For reasons earlier explained, the applicant for compensation, namely the person or entity that has applied to the Tribunal for a compensation order, is Groz. 2. The only evidence on the Application is the Affidavit of Mr Cains of 11 March 2020. That evidence is not that the compensation applicant, Groz, suffered loss because of the conduct of the lawyer the subject of the complaint; rather, that Mr Cains had suffered loss. He deposes to his loss being the $30,000 paid out by reason of the agreement that he reached with Mr Winter in February 2015. At [26] of the affidavit of 11 March 2020 Mr Cains states that the money paid into court, and hence paid out to Ronro, was property of Groz. 3. Section 307(3) of the Uniform Law provides that a complainant who makes a request that a Tribunal make a compensation order is to describe the loss suffered by the aggrieved person and the relevant circumstances. On the evidence before the Tribunal: 1. the "aggrieved person" requesting the Tribunal make the compensation order, namely Groz, has not satisfied the s309(1) prerequisite of demonstrated loss being suffered because of the conduct concerned, as Groz was liable to pay in accordance with the Costs Determination of September 2014; and 2. to the extent that Mr Cains describes himself in the submissions of 11 March 2020 as the applicant for compensation and as the aggrieved person as defined in s307(2) of the Uniform Law, we are not satisfied that he has suffered loss because of the conduct concerned, as the money paid into court was the property of Groz. Whether it is in the interests of justice that a compensation order be made 1. The Respondent refers to s309(1)(b) of the Uniform Law providing that a compensation order is not to be made unless it is in the interests of justice that the order be made, and submits that there are five reasons why it is not is in the interests of justice for the orders sought to be made. 2. First, the Respondent submits that the events the subject of complaint occurred between 2011 and 2015; s260 of the Uniform Law providing that one of the objectives of the complaint regime was to provide a framework for the timely and effective resolution of disputes or issues between clients and lawyers. Accordingly, if an order is made in 2020 that would not achieve that objective. 3. We do not agree with the submission. The conduct the subject of complaint and disciplinary action was conduct occurring between December 2014 to February 2015, conduct that was first reported by Mr Cains to the OLSC in September 2015. Mr Winter responded to and participated in the NCAT Disciplinary Proceedings, responding to the conduct allegations made against him which are the subject of the complaint and the application for compensation. 4. We reject the second submission raised, namely the contention that Mr Winter was "penalised" by the orders made by the Tribunal in the disciplinary proceedings and that the effect of an order for compensation would be to "penalise Mr Winter again for the same misconduct". The submission misconceives the nature of disciplinary orders as compared to compensation orders. A compensation order under Part 5.5, if made, is to compensate an aggrieved person for loss suffered by that person because of the conduct that is the subject of a complaint. The applicant for disciplinary orders is not Mr Cains or Groz; rather, the Law Society. Orders made consequent upon findings of professional misconduct or unsatisfactory professional conduct are by their nature protective, and not punitive. They are imposed so as to mark the Tribunal's disapproval of the found conduct and to endeavour, as far as possible by the orders that it makes, to ensure that the public can have confidence that legal practitioners will be dissuaded from engaging in unsatisfactory professional conduct or professional misconduct. The orders are also to mark the disapproval of the conduct not only for the benefit of the practitioner the subject of disciplinary action but for the benefit of other practitioners who might otherwise think to engage in similar conduct. 5. The further submission by the Respondent that the Tribunal might have imposed a different penalty if a compensation order was sought at the same time as the disciplinary proceedings were determined, is speculation and rejected. 6. The fourth reason, namely Mr Winter's death and the fact that any compensation order would be payable from Mr Winter's estate, is rejected. An order under Part 5.5 of the Uniform Law is for compensation for loss suffered because of the practitioner's conduct. While there may be circumstances in which it is not in the interests of justice for an order to be made where it is not that practitioner, but someone else, who would be required to meet that order, it is not clear why the fact that by the time the order is made the practitioner whose conduct has caused the loss to be suffered is deceased and any order presumably satisfied by the estate would of itself mean that it is not in the interests of justice that the order be made. Whether the compensation claim was made within time 1. The Respondent contends that a complaint is to be made within 3 years of alleged conduct occurring, applying s 272 of the Uniform Law. 2. The submission is misconceived, and rejected. The present proceedings are made under Part 5.5 of the Uniform Law. Section 272 concerns the time limits for the making of complaints in disciplinary matters under Part 5.2. Conclusion 1. Section 309(1) of the Uniform Law provides that a compensation order is not to be made, in the absence of agreement between the complainant and the respondent practitioner, unless the Tribunal is satisfied that: 1. The aggrieved person has suffered loss because of the conduct concerned; and 2. It is in the interests of justice that the order be made. 1. For the reasons above, the Tribunal is not satisfied that either precondition is established, and the application for compensation should be dismissed. 2. Section 309(2) would preclude an order for compensation being made in respect of any loss for which the aggrieved person has received or is entitled to receive from an order of a court or compensation paid or payable from a fidelity fund. While Mr Cains states that neither applies, and while the Tribunal received some assistance on an amicus basis from the Law Society at the directions hearing on 6 November 2019 on that issue, the conclusion that the requirements of s 309(1) are not met makes it unnecessary to determine that issue. Costs 1. The respondent seeks an order that Mr Cains pay Mr Williamson's costs of these proceedings. The Respondent submits that the compensation claim was misconceived and ought not to have been made. 2. Section 60(1) of the NCAT Act provides that each party to proceedings in the Tribunal is to pay the party's own costs. Subsection (2) provides that the Tribunal may award costs only if it is satisfied if there are special circumstances warranting an award of costs. Subsection (3) provides that in determining whether there are special circumstances warranting an award of costs the Tribunal may have regard to the matters listed in (a) to (g) of that subsection. The Respondent relies on paragraph (c): The relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law. 1. In Obieta v Australian College of Professionals Pty Ltd [2014] NSWCATAP 38, the Appeal Panel held that it does not follow that where one or more of the factors in s 60(3) are made out, a costs order should be made. It noted that where one or more of the s 60(3) factors is made out, the Tribunal must nevertheless weigh whether those factors are sufficient to amount to "special circumstances" such as to justify the departing from the ordinary law where each party bear their own costs. The Appeal Panel in Skiba v Serendipity (WA) Pty Ltd trading as Advanced Personal Management (No. 2) [2019] NSWCATAP 281 said at [15] that ultimately it is a question of fact having regard to the circumstances of the matter before the Tribunal as to whether there are special circumstances warranting a departure from the ordinary rule. 2. Special circumstances are circumstances that are out of the ordinary, but need not be those which are exceptional or extraordinary: Megerditchian v Kurmond Homes Pty Ltd [2014] NSWCATAP 120 at [11]; Commissioner for Fair Trading v Edward Lees Imports Pty Ltd (No 2) [2019] NSWCATAP 222 at [8]; Edwards v Commissioner for Fair Trading, Department of Customer Service (Costs) [2019] NSWCATAP 249 at [9]. 3. Whilst we have held that the Applicant's compensation claim fails, we are not satisfied that it had no tenable basis in fact or law. We are not satisfied that there are special circumstances that warrant a departure from the general rule. Orders 1. The Application is dismissed. 2. No order is made as to costs. ********** I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 27 July 2020