DAVID ANTHONY McCARTHY v LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL SAMUELS, MAHONEY and CLARKE JJA 25 May 1990, 25 May 1990 [1990] NSWCA 122 Court of Appeal — Application for prerogative relief — To stay proceeding before Statutory Committee — Because of alleged wrongful admission of report pursuant to s306 of Companies Code — Application refused on facts and as matter of discretion — Application dismissed with costs. Mahoney JA The plaintiff, a solicitor of the Court, was a director of Balanced Property Trusts a group which ceased to function, as the chronology has it, in December 1983. In January 1985 he received a letter indicating that the Law Society was conducting an investigation into certain of his property dealings and in April 1986 Mr George Palmer was appointed Inspector for the purposes of certain matters under the New South Wales Companies Code. In the same month the Law Society appointed Mr R McGeoch to make a report under s82(a) of the Legal Practitioners Act 1898 which is the provision which governs these proceedings. In August 1986 the claimant was examined under provisions of s541 of the Code and in August 1987 Mr McGeoch presented his report. On 3 December 1987 the Council of the Law Society resolved to refer questions of the claimant's alleged professional misconduct to the Statutory Committee and on 10 December the appropriate notices were given that those matters had been referred for enquiry and investigation under s76 of the Legal Practitioners Act. The reference was supported by the statutory declaration of Mr JR Hunt to which were exhibited Mr McGeoch's report and Mr Palmer's report. The schedule to the reference, which sets out the questions, is divided into two sections. S1 relates to certain property transactions in which the claimant's conduct was alleged to have been disgraceful or dishonourable. These allegations were supported by the McGeoch report. When the matter came on before the Statutory Committee Mr McGeoch gave evidence in respect of them. S2 deals with the claimant's alleged participation in the makiny of false or misleading statements in certain prospectuses and other documents concerning the promotion of various property trusts four of them apparently being sponsored by Balanced Property Trust. These allegations are supported, on the face of it, by findings of, admissions by the claimant to, and assessments of the claimant's credibility made by Mr Palmer and set out in his report. Mr Palmer did not give evidence before the Statutory Committee. Indeed, Mr Garling of counsel for the Law Society expressly made it clear that he did not propose to call Mr Palmer to "normally verify" his report. There were a number of delays - I do not use the term necessarily in a pejorative sense - before the proceeding came on before the Statutory Committee which it effectively did on 30 April 1990. 2 UNREPORTED JUDGMENTS On the second day of the heaLing Mr Garling tendered the Palmer report as I have called it. It was objected to. A lengthy argument about its admissibility ensued the claimant at that point being represented by senior counsel: he had otherwise appeared in person. The Statutory Committee decided to admit the report. They appear to have done so on the footing that the proceedings before them were a form of civil. proceedings and that the admission of the report was therefore authorised by the terms of s306(12) of the Code. That section so far as is relevant provides that a copy of the report by an inspector is admissible in civil proceedings as evidence of "any facts or matters stated in the report to have been found to exist by the inspector". It is evident from the transcript that Mr Garling argued that that subsection applied. The Committee in its reasons said that it believed. That the proceedings before it constituted "a form of civil proceeding and accordingly" they "were prepared to admit the report into evidence". At that point Mr Garling indicated that subject to one matter he proposed to call no further evidence. The argument before us has proceeded on the basis that there was no further relevant evidence to which the Committee would have had regard to the Law Society's Code. At that point in the proceedings the Committee acceded to the claimant's application to adjourn the matter to enable him to apply for relief to this Court against the admission of the Palmer report. In doing so I think I should quote in full the immediately material remarks by the Committee upon the question of discretion upon which Mr Sackville of counsel for the claimant places his main reliance. The Committee said: "Having considered the matter the Committee grants the application for a stay of proceedings in order to enable the solicitor to make application to the Court of Appeal. The Committee supports the view that the matter is one of public importance. The matter is therefore adjourned for further hearing after a decision shall have been given by the Court of Appeal". By his amended summons the claimant seeks orders in the nature of prerogative relief in the form of prohibition and a declaration. It has been submitted, in substance, that the Committee's decision to admit the Palmer report constitutes an error of law, that it should be quashed and that any further proceedings in reliance upon it should be restrained. We have now had the full argument of the claimant. It has been set out in the carefully written submissions with which Mr Sackville has provided us. The essence of the question raised by them may be examined by applying the claimant's arguments to certain assumptions which I will indicate. Let it be assumed that the admission of the evidence constituted an error in law on the face of the record. The claimant submits that if that was a jurisdictional error he is entitled to have prohibition as a matter of right and not conditioned by the exercise of this Court's discretion. The argument is expanded in this way: If the Statutory Committee is bown by the rules of evidence this material, that is the Palmer report, is so fundamental to the determination of the case which the Law Society seeks to make, and of so critical a character, that its admission goes beyond a were misreception of evidence and amounts to a denial of natural justice and therefore to jurisdictional error. In the alternative, if the Committee is not bound by the rules of evidence, it is nevertheless required by the nature of its task to observe high standards of WRWID ANTHONY McCARTHY v LAW SOCIETY OF NEW SOUTH WALES (Mahoney JAB procedural fairness from which the admission of this evidence represented so gross a departure as, again, to constitute a denial of natural justice and to amount to a jurisdictional error. In order to establish that such an error is a jurisdictional error attracting such relief, reliance is placed upon Anisminic Ltd v Foreign Compensation Commission (1969) 2 AC 147 and in particular upon the celebrated passage in the speech of word Reid at 171. In the way in which we have approached the matter, it is unnecessary to considered those statements or to debate the question whether they are consistent with other authority particularly authority in the High Court of Australia, upon the nature and necessity for jurisdictional error in this area of the law. I do not consider that the admission of this evidence amounts to a denial of natural justice or is otherwise of such a character as to constitute the kind of fundamental error for which Mr Sackville contends. I shall assume that the case for the Law Society is closed so that it may be assumed that the Palmer report is the only material before it which is capable of sustaining s2 of the reference. However, the Committee has not yet pronounced upon the cogency, the plausibility or the weight which it will accord to the material. It is not proper to endeavour to categorise or analyse the force of the evidence for the purpose in question before the tribunal without having any idea of the way in which it will be treated by it as the tribunal of fact. Despite the fact that it isr as I have assumed, the sole basis for s2 of the reference, I would hesitate to apply to it the kind of jurisdictional test proposed by Mr Sackville. He concedes that it is not every misreception of evidence by a tribunal of this kind which will amount to a jurisdictional error of law of the kind on which he relies. But, if this he so, it is difficult to formulate the criteria which would provide a plausible or helpful test by which tribunals or subsequently courts could test whether material wrongly admitted was of such a character or of such weight against the party whose adversary has tendered it, that it would have the serious consequences against him upon which the claimant's case here depends. Therefore, making the assumptions to which I have referred and assuming the law to be as Mr Sackville has submitted, I conclude that nothing has been shown which would justify our granting the relief sought as of right without considering whether, as a matter of discretion, it should be granted. I turn then to whether we should exercise our discretion to grant such relief in this proceeding. As I earlier indicated, Mr Sackville has relied upon two matters in particular: first, that the Statutory Committee itself took the view that this was a matter of importance and was apparently ready to grant an adjourmnent to enable it to be determined in this Court; and, second, he points to the fact that there is reason to suppose that the Committee will rely upon s306(12) and will hold that the plaintiff has a case to answer whereas, if the admission of the Palmer report is not authorised, it would dismiss the proceeding against him so far as it is based upon it. accept that these matters are relevant to the exercise of the Court's discretion. But I do not think that the Court should grant such relief at this stage. The proceeding is at or near the halfway mark. The Law Society has, I shall assume, completed its case. We do not know what view the Statutory Committee will take of the material before it. It may or may not conclude that the material is sufficient to make a prima facie case against the plaintiff under either section of the reference. So far as I know this section has not yet been determined. 4 UNREPORTED JUDGMENTS What the Committee will do remains to be determined. It may take such a course in relation to the Palmer report - it may say that, without conoboration or further evidence it will not find particular facts against the plaintiff: - that the admission of it would not constitute a failure of natural justice or otherwise such a ground of relief, prerogative or otherwise, as Mr Sackville relies on. The reasons why this Court should not intervene in the course of proceedings before an inferior court or tribunal have been canvassed frequently and need not be reiterated. It may be accepted, as Mr Sackville submits, that there are differences between proceedings before the Committee and committal proceedings and that the cases upon the latter do not in terms apply here. Nonetheless as a general practice this Court will be reluctant to intervene in the running of proceedings at a point when the tribunal whose transactions are impugned may well come to a conclusion which will render intervention by this Court unnecessary or inappropriate. I do not think that the balance of the relevant considerations favours intervention in this case. I would therefore not be in favour of exercising our discretion to intervene. That being so in my judgment the summons should be dismissed with costs. Samuels JA I agree. Clarke JA I also agree. Therefore the order of the Court will be summons dismissed with costs. Counsel for the Applicant: Mr R Sackville / Mr T Morahan Solicitors for the Applicant: Behm Anderson Counsel for the 1st Opponent: Mr P Garling Solicitors for the 1st Opponent: Law Society of New South Wales Counsel for the 2nd Opponent: Ms T Jordan (Solicitor) Solicitors for the 2nd Opponent: Murphy and Moloney