SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES SUPREME COURT OF NEW SOUTH WALES COURT OF APPEAL KIRBY P 30 March 1993, 13 April 1993 [1993] NSWCA 245 LEGAL PRACTITIONERS — discipline — solicitor — name ordered to be removed from Roll — appeal to Supreme Court — stay of proceedings granted pending appeal — appeal by way of "new hearing" under s164(4) Legal Profession Act 1987 — management of hearing of appeal — determination of multiple factual disputes — desirability of such determination being conducted by a single Judge — whether may be assigned to a single Judge of Appeal — held: The determination of disputed factual questions should be remitted to the Common Law Division to be constituted for the remittal by a single Judge of Appeal sitting as a Judge of the Supreme Court. Need for legislative reform or enlargement of the Rules of Court referred to. PRACTICE and PROCEDURE — Court of Appeal — legal professional discipline — hearing of appeal by way of "new hearing undesirability of hearing before three Judges — desirability of hearing before single Judge — power to assign or remit proceedings to a single Judge — express provisions of legislation and apparent purpose thereof — held: As a matter of practice, to conserve the available time of the Judges of Appeal, disputed factual questions in appeals from the Disciplinary Tribunal under the Legal Profession Act 1987 should, in cases such as the present, be remitted to a single Judge for the determination of such disputes before the appeal to the Court of Appeal is heard. LAW REFORM — legal professional discipline — appeal from Disciplinary Tribunal — appeal by way of new hearing under s164(4) of Legal Profession Act 1987 — assignment of appeal to the Court of Appeal — disadvantages of hearings by three Judges of Appeal — disputed factual questions requiring hearing of more than four days — held: Consideration should be given by Parliament to reform of s164(4) Legal Profession Act 1987 to provide for such appeals to be conducted in accordance with s75A Supreme Court Act 1970 — alternatively, consideration should be given by the rule-maker to enlarging the Rules of the Supreme Court, pursuant to s51(8) Supreme Court Act 1970, so far as may be lawful, to provide for removal or remission of proceedings in such appeals to a single Judge of Appeal to resolve disputed factual questions. WORDS and PHRASES — "new hearing". Legal Profession Act 1987, s164. Medical Practitioners Act 1938, s32U. Supreme Court Act 1970, s39, s46, s48, s51. Supreme Court Rules, Pt12 R2. ORDERS 1. Order that there be remitted to the Common Law Division for the determination by trial or otherwise of any disputed questions of fact arising in the appeal to the Court of Appeal of Shaw McNeil Sedgwick; and 2. Order that, upon such determination being made and received by the Court of Appeal, the hearing of the appeal of the said Shaw McNeil Sedgwick be listed before the Court of Appeal for hearing and determination. Kirby P Before me is a motion for directions as to the hearing of an appeal concerning the discipline of a member of the legal profession. 2 UNREPORTED JUDGMENTS Solicitor's disciplinary appeal is assigned to the Court of Appeal The Disciplinary Tribunal constituted under s128 of the Legal Profession Act 1987 (the Tribunal) has ordered that the name of Mr Shaw McNeil Sedgwick (the solicitor), be removed from the Roll of Solicitors of this Court. The solicitor has appealed to the Court against that order. His appeal is listed for hearing before a Court of three Judges of Appeal in May 1993. The Law Society of New South Wales (the Society) is opposing the solicitor's appeal. It has also filed a Notice of Contention in which it seeks to uphold the orders of the Tribunal upon a number of grounds additional to those found by the Tribunal. It is unnecessary for these proceedings to recount in any detail the nature of the charges which were before the Tribunal. Suffice it to say that the Society alleged several professional complaints: 1. That the solicitor had received money into his solicitor's trust account and then disbursed the money for his own fees without properly accounting to clients; 2. That he permitted a person, not a solicitor, to share in the practice. The solicitor's practice was allegedly inherited from his father who, by his will, left it to his mother, not being a solicitor. Mr Sedgwick allegedly continued operating the practice in his mother s name over many years, contrary to law; 3. That the solicitor charged fees to clients although the clients were in receipt of legal aid; and 4. That in a particular conveyancing transaction, prior to settlement, the solicitor used the purchaser's deposited funds to discharge certain mortgages of the vendor, contrary to law. There is a further matter the subject of the Society's Notice of Contention. It is claimed that the solicitor reduced the value of his father s estate in an apparent attempt to circumvent the breach of law constituted by his mother's part in the practice. I have been informed that, at the new hearing before the Court of Appeal, all of these matters will be examined in detail. The solicitor plans to give evidence, to call at least one member of his family and a number of clients and staff - in all six witnesses. The Society also has witnesses. I regard the four days given as a conservative estimate in the circumstances. Pending the determination of the appeal or further order, this Court on 4 May 1992 granted the solicitor a stay of the operation of the Tribunal's order removing his name from the Roll. He continues to practise under conditions. It is obviously desirable, in the public interest, that the solicitor's appeal should be heard and determined as quickly as possible. Pursuant to the Legal Profession Act, 1987, s164, an appeal lies to the Supreme Court against the Tribunal's determination of a complaint. By s48(2)(f) of the Supreme Court Act 1970 there is assigned to the Court of Appeal proceedings in the Supreme Court on an appeal from a "specified tribunal". By s48(1)(a)(8) of the same Act the Disciplinary Tribunal is a "specified tribunal". It is in this way that Mr Sedgwick's appeal comes to the Supreme Court and is assigned to the Court of Appeal. I am dealing with the motion for directions pursuant to s46(1) of the Supreme Court Act 1970. The statute requires a "new hearing" in such appeals The Legal Profession Act makes provision for the mode of trial of the appeal in the Court of Appeal: "164(3)The Supreme Court shall hear and determine an appeal under this section; URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Kirby P) 3 (4)An appeal shall be by way of a new hearing and fresh evidence, or evidence in addition to or in substitution for the evidence received at the original hearing, may be given." It is worth observing that the provisions of s164(4) are unusual. Clearly they contemplate an appeal on factual questions. Appeals on facts are not at all uncommon in the Court of Appeal. But most of them, no special statutory provision being made in that regard, are conducted pursuant to the powers and duties laid down by s75A of the Supreme Court Act 1970. That section requires that the appeal "shall be by way of rehearing" (s75A(5)); that this Court shall have the powers and duties of the court appealed from in respect, relevantly, of drawing of inferences and the making of findings of fact' (s75A(6)); that this Court may receive further evidence (s75A(7)) subject to the special provisions of s75A(8); but see also s75A(9). The foregoing provisions of s75A give this Court a wide power to review factual findings by the primary court or tribunal. However, the procedure under s75A is not a retrial. Apart from the statutory power to receive fresh evidence, the rehearing is conducted on the transcript of evidence taken at the first trial and in the absence of oral witnesses. See Da Costa v Cockburn Salvage and Trading Pty Ltd (1970) 124 CLR 192, 208f; cf Quilter v Mapleson (1882) 9 QBD 672, 676. This is the compromise that has been established from the earliest times as the general facility of appeal by way of rehearing was developed in England and adopted in Australia. It is a compromise between the community's dual interests in, respectively: (1) The finality of litigation; and (2) A reconsideration of a first determination of a matter, including a review of factual findings where errors can certainly occur. If in such a rehearing the appellate court concludes that the primary decision maker has erred in fact, it must shoulder the responsibility of substituting its own findings on the facts. See Warren v Coombes (1979) 142 CLR 531, 551f. But in reviewing the primary decision maker's factual findings, the appellate court must keep in mind the advantages which that decision maker enjoyed. These include not only the advantage conventionally attributed to seeing witnesses give their evidence but also that of seeing the evidence unfold in its entirety and in the generally logical setting of the trial. See Lend Lease Development Pty Ltd v Zemlicka (1985) 3 NSWLR 207 (CA), 211. Where the primary decision maker's findings have been influenced by the demeanour of witnesses - even though unexpressed and though the influence may have been "subtle" - the appellate court may only intervene where the fact-finding, essential to the decision under appeal, is contradicted by uncontested or indisputable evidence or is otherwise glaringly improbable. See Abalos v Australian Postal Commission (1990) 171 CLR 167, 178; Chambers v Jobling (1986) 7 NSWLR 1 (CA). In the present case, Parliament was not, apparently, content to leave the appeal from the Disciplinary Tribunal to this Court to be conducted by way of a rehearing within the well established principles of s75A appeals as set out above. Instead, it provided that the appeal should be by way of a "new" hearing. The word "new" suggests a hearing commencing fresh. In case there was any doubt, Parliament made it plain that "fresh" evidence might be given. Cf In re A Solicitor and the Legal Practitioners Act [1971] 2 NSWLR 113 (CA), 115. Presumably, this was to remove any possibility that the appeal would be conducted under the rules which limit the receipt of "fresh" evidence, as in a rehearing conducted by this Court under s75A. See eg Warr v Santos [1973] 1 NSWLR 432 (CA), 437; Radnedge v Government Insurance Office (NSW) 4 UNREPORTED JUDGMENTS (1987) 9 NSWLR 235 (CA), 248. Cf J M Bennett, A History of Solicitors in New South Wales, Legal Books, Sydney, 1984, 348. The notion of evidence being "in addition to or in substitution for" the evidence received at the original hearing before the Tribunal seems to contemplate that such evidence would (at least in the normal case) be placed before this Court. But if the appeal is to be by way of a "new" hearing in this Court, the use of the evidence tendered before the Tribunal would only seem to be an available course where both parties consent to such tender. Otherwise, the appeal hearing would not be "new" as Parliament provided. It would be a "rehearing" of the kind for which s75A of the Supreme Court Act provided and which was apparently not considered sufficient, or appropriate, to an appeal from the Disciplinary Tribunal. This Court, to which such appeals are assigned, must therefore proceed, as the Act commands, by way of "a new hearing. The inconvenience of new hearings in the Court of Appeal It is worth drawing to notice the inconvenience which the foregoing requirements occasion and which an appeal under s75A of the Supreme Court Act would not cause: 1. The conduct of a trial by a bench of three judges is self evidently inconvenient. Rulings on evidence and decisions on procedure may be difficult to provide with the speed and assurance that is possible where a trial is conducted by a single judge; 2. From the trial, and its outcome in this Court, there is no right of appellate review. There is a privilege to seek special leave to appeal to the High Court. Given the pressure on that Court, the grant of special leave is comparatively rare, especially to review findings of fact on fresh evidence. At least, it is unlikely that it would do so unless some general principle was involved. Cf Smith v New South Wales Bar Association [No 2] (1992) 66 ALJR 605 (HC). Thus, for the new hearing, the legal practitioner or the professional body concerned will have lost a valuable right of appeal, particularly useful in the review of factual findings; 3. Devoting the time of three Judges of Appeal to a disciplinary appeal may not appear to be the most effective use of the scarce resources of the Court of Appeal. Unless hearings of proceedings in the Court are expedited (as frequently they are) such proceedings in the Court of Appeal wait their turn in the General List of the Court. The wait will ordinarily take up to thirteen months to gain a hearing. If judgment is reserved, the delay will be even longer. If, as seems likely in present circumstances, the number of appeals from the Disciplinary Tribunal increases, requiring this Court regularly to conduct appeals by way of new hearings" before three judges, the result would be a very considerable drain on the scarce available judicial resources of the Court. That would have its impact upon the availability of those resources to dispose of other matters; 4. The present appeal provides a good illustration. An estimate of four days for the hearing of the appeal has been given by the appellant. The Society has filed a Notice of Contention. It seeks to bring fresh evidence of the appellant's alleged breach of his professional obligations. The trial before the Disciplinary Tribunal took more than four days. It would therefore seem safe to assume that the hearing of the appeal in this Court would last as long or longer. In four days this Court can dispose of up to twenty appeals in a Running Damages or Compensation List. In the General List, the Court could dispose of an average of five to six appeals. Judges of Appeal sitting in the Court of Criminal Appeal could, in the same time, dispose of an average of 20 sentence appeals or a number of other appeals in which some appellants would be in custody. It is therefore necessary to call URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Kirby P) 5 attention to the questionable public utility of devoting the time of three judges to one appeal concerning one individual in what may essentially be a primary hearing, and the demands of justice in respect of the large number of other proceedings awaiting determination in the Court of Appeal. This is also a proper consideration to be taken into account when determining the way in which the new hearing will be conducted in the Court. Statutory provisions limiting remittal or assignment to a single judge When the proceedings were called over before me I raised the possibility of remitting the hearing of the factual disputes to a single judge, whether in a Division of the Supreme Court or in the Court of Appeal. Cf Law Society of New South Wales v Weaver [1974] 1 NSWLR 271 (CA), 273. Both parties indicated that they would consent to the course proposed in the hope of having the appeal disposed of more quickly than otherwise it would if it had to wait its turn in the General List in competition with other appeals and proceedings in the Court. However convenient it might be, there is a difficulty in remitting disputed matters of fact to be decided by a single Judge of Appeal. Removal and remission of business within the Supreme Court are governed by s51 of the Supreme Court Act. By s51(2) where proceedings are commenced in the Court of Appeal (as this appeal was) they may (among other things) be remitted to a Division. But this can only be done, under the subsection, where the proceedings ought to have been commenced in a Division. There is no statutory provision for the further assignment of the business assigned to the Court of Appeal to a single Judge of Appeal. Nor is there such provision in s51(4), which comes closest to the present circumstances: "51(4)Where any proceedings are pending before the Court of Appeal, the Court of Appeal may, on application by a party or of its own motion, order that the whole or any part of the proceedings be remitted to a Division for the determination by trial or otherwise of the proceedings or any question arising in the proceedings. By s51(8) Parliament has provided that the section does not limit the provision which may be made by the Rules for removal or remission of proceedings. Under Pt12 R2 SCR, provision is made for removal of certain matters to the Court of Appeal as there provided. No provision is made for the Court to assign part of proceedings, in turn assigned to it by the Act, to a single Judge of Appeal (if that be permissible) for the determination by trial or otherwise of any question arising in the proceedings. Of course, the Court of Appeal, as part of the Supreme Court, retains an inherent power to organise its own business in a way that best attains the purposes of the assignment of business to it. In exercising the inherent power, the Court would be obliged to conform to any specific requirements of the Act or Rules. The relevant provision is s46 of the Supreme Court Act under which I am hearing the present motion. Relevantly, that section reads: "46(1)A Judge of Appeal may exercise the powers of the Court of Appeal: (a) to give any judgment by consent or make any order by consent; (b) to dismiss an appeal or other proceedings for want of prosecution or for other cause specified in the rules; (c) to dismiss an appeal or other proceedings on the application of the appellant or plaintiff; or (d) to deal with costs and other matters incidental to the matters mentioned in paras(a), (b) and (c). 6 UNREPORTED JUDGMENTS (2) A Judge of Appeal may exercise the powers of the Court of Appeal: (a) to make an order or give any direction concerning the institution of an appeal or other proceedings in the Court of Appeal; or (b) 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." Provision is made by s46(4) for the Court of Appeal to discharge or vary a judgment given by a Judge of Appeal. Because Parliament has troubled to provide expressly for the powers of a single Judge of Appeal and because no Rules of the Court have been made (pursuant to the power reserved by s51(8) of the same Act or otherwise) to provide for the removal or remission of proceedings assigned to the Court of Appeal to a single Judge of Appeal, it does not seem to me that the inherent power could, or should, be used to assign to a single Judge of Appeal the finding of facts which are disputed in an appeal brought pursuant to s164 of the Legal Profession Act. Such an assignment even of part of an appeal, which by law must be heard and determined by the Supreme Court and is assigned to the Court of Appeal, would seem to me to contradict both the requirements of s164 of the Legal Profession Act and the limited assignment of powers to a single Judge of Appeal as provided by s46 of the Supreme Court Act. Three options for new hearings in legal disciplinary appeals How then can the Court, in appeals from the Disciplinary Tribunal established by the Legal Profession Act, fulfil its duty to hear and determine the appeal consonant with its equal duty to marshal its scarce judicial resources paying attention to the demands of justice of the other litigants awaiting hearing of their proceedings in the Court? Three solutions present themselves: 1. The first is for the Court of three Judges to hear the appeal when time permits. This is what the legislation appears primarily to have contemplated. It is a scheme that seems to have arisen from a report of the Law Reform Commission. See New South Wales Law Reform Commission, Second Report on the Legal Profession: Complaints, Discipline and Professional Standards, Sydney, LRC 32, 1982, 94f. It is the least satisfactory solution from the standpoint of the Court's list. Yet in issue in appeals of this kind are not simply the private interests of the legal practitioner concerned but also the public interest and superintendence of officers of the Court which disciplinary proceedings conventionally defend. See Law Society of New South Wales v Weaver [1977] 1 NSWLR 67 (CA), 76; 2. The second solution is, pursuant to s51(4) of the Supreme Court Act, to remit to the Common Law Division for determination by it all disputed factual questions arising in the proceedings. This has a disadvantage of bifurcating the appeal and would seem to divide the "new hearing" contemplated by s164(4). It has the further disadvantage that the delays in the Common Law Division are themselves such that an early hearing of the matter remitted could not ordinarily be guaranteed, particularly if four days or more of a Judge s time had to be set aside. But the procedure would have the advantage that the parties to the appeal would have a substantive review, as of right, of possibly crucial factual findings. It would avoid the general inconvenience of a three Judge trial of all issues. It would save scarce judicial resources from use in a single proceeding involving no particular apparent importance or principle; URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Kirby P) 7 3. The third possibility would be to remit the proceedings to the Common Law Division but to make available a Judge of Appeal to the Chief Judge of that Division so that the determination of the questions arising in the proceedings would, in fact, be made by a single Judge of Appeal, although nominally sitting in the Common Law Division. It is the third procedure which I would propose to follow. By s41(1)(a) of the Supreme Court Act the jurisdiction of the Supreme Court is to be exercised in the Common Law Division by the Chief Judge at Common Law and such other Judges as may be nominated by the Chief Justice to act in that Division. In the circumstances of this case, I will propose, with the concurrence of the Chief Judge at Common Law, that the Chief Justice nominate a Judge of Appeal to act in that Division for the purpose of the remittal. Remittal of factual disputes to the Common Law Division I see no conflict between such an intracurial arrangement and the provisions of s46 of the Supreme Court Act. Indeed, such arrangements are contemplated by s39(1) of that Act. This procedure would have the advantage of ensuring that the Court of Appeal retains effective control of the hearing of appeals pursuant to s164 of the Legal Profession Act. It would also save scarce judicial time within the Court of Appeal. It would permit a review, as of right, of the Judge s determination of any question arising in the proceedings. It would mean, of course, that the Judges of Appeal conducting the appeal by way of a "new hearing" would not have the advantage of seeing all - or perhaps any - of the witnesses give their evidence as, arguably, s164(4) contemplates. But the facility of review being present and the necessities of harnessing the scarce resources of the Court being great, I consider that this is a procedural arrangement that should be adopted. Neither party objected to the course which I have proposed. Each seemed anxious to preserve hearing dates in the Court of Appeal which would otherwise be vacated. The hearing of the matter by a single Judge of Appeal will ensure that the whole proceeding is disposed of without undue delay. That is what most legal practitioners involved in such an appeal would wish. It is certainly the desire of the present parties. It is what the public interest, which the Court defends, requires in this case. Need for reform of the legislation on the Rules of Court Before pronouncing orders, it is appropriate to return once again to the scheme of the legislation. It is not immediately apparent why appeals from the Disciplinary Tribunal established by the Legal Profession Act should have such a special and exceptional statutory arrangement, ie an appeal by way of a "new hearing" before the Court of Appeal. No such arrangement is made in respect of other professions. Thus, in the case of the Medical Tribunal of New South Wales, appeals to this Court against a decision of that Tribunal are limited to appeals with respect to a point of law, or with respect to the exercise of the powers of the Tribunal. See Medical Practitioners Act 1938, s32U. This provides a most circumscribed jurisdiction to the Court, appeals on points of law being so stringently limited by legal authority. See Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139 (CA). It is not self evident that the legal profession should be in a different category. Disciplinary appeals by dentists are even more circumscribed. Under the Dentists Act 1989 s51, they lie from the Dental Board to the District Court. The parties could not point to any given reason for the special position of the legal profession, particularly in the Second Reading Speech which accompanied the passage of the Legal Profession Bill through Parliament. I have studied the 8 UNREPORTED JUDGMENTS speeches and I agree. See eg New South Wales Parliamentary Debates, Legislative Assembly, 29 April 1987, 10752, 10760. It is true that members of the legal profession have a special relationship with the Supreme Court. This dates back, in New South Wales, to the Charter of Justices, CL10. They owe personal duties to it. Members of both branches are officers of the Court. See Legal Profession Act, s4(3) and s11(3). It is also true that this Court has traditionally exercised the functions of the Supreme Court in relation to the legal profession which were formerly exercised by the Court sitting in banc. See Weaver, above. But these are scarcely reasons for obliging the Court of Appeal, with its very limited judicial and other resources, to devote a substantial, and probably growing, amounts of available judicial time to the conduct of trials affecting often minute factual disputes, of importance to individual practitioners and sometimes to their professional organisations; but of no other large general significance. In my respectful view, s164(4) of the Legal Profession Act deserves reconsideration by Parliament. Alternatively appeals should be assigned by the Supreme Court Act to a single Judge of the Common Law Division and not to the Court of Appeal. This would require an amendment of s48(1)(a)(8) of the Supreme Court Act. Such an amendment would delete from the catalogue of "specified tribunals" a body which, unlike others named, does not have amongst its number a Judge. Originally the Tribunal included Judges and had the Chief Justice as its President (see s128(3) of the Act as originally enacted. The references to the Chief Justice and the Judges were deleted by Act No 138 of 1989, Sch 4). For understandable reasons, Parliament normally provides for appeals from bodies constituted by Judges to come to the Court of Appeal. In the case of the Disciplinary Tribunal it is not self evident that this should any longer be so. In other States of Australia disciplinary matters involving the legal profession are ordinarily dealt with, in the first instance, by single Judges of the Supreme Court. No impediment of principle exists now to adopting this course in the case of the Disciplinary Tribunal as it is now constituted. Such an arrangement would avoid the necessity of this Court's adopting the round about procedure, set out above, to conserve judicial time. It would also afford the parties, if still disaffected with the Judge's decision, the right to bring an appeal to this Court under the Supreme Court Act, s75A. It would maintain the general superintendence of this Court over disciplinary matters involving the legal profession. But it would keep such superintendence effectively to cases of error or injustice or important legal principle. A final possible reform to meet the problem would be to provide that appeals to the Court of Appeal should be by leave. Cf New South Wales Law Reform Commission report, ibid, 95. If such amendments do not commend themselves to Parliament, thought might be given by the rule maker to enhancing and clarifying the powers of the Court of Appeal, under Rules of Court made pursuant to the powers reserved by s51(8) of the Supreme Court Act, to assign to single Judges of Appeal (so far as may validly be done) the determination of disputed questions of fact arising in appeals by way of a new hearing under s164 of the Legal Profession Act, where the Court so orders. Orders In addition to the orders which were pronounced on 30 March 1993 (providing for the clarification of evidence; the filing of affidavits and submissions; and costs) I make the following orders: 1. Order that there be remitted to the Common Law Division for the determination by trial or otherwise of any disputed questions of fact arising in the appeal to the Court of Appeal of Shaw McNeil Sedgwick; and URJ SEDGWICK v LAW SOCIETY OF NEW SOUTH WALES (Kirby P) 9 2. Order that, upon such determination being made and received by the Court of Appeal, the hearing of the appeal of the said Shaw McNeil Sedgwick be listed before the Court of Appeal for hearing and determination. 5 I will make arrangements with the Chief Justice and the Chief Judge of the Common Law Division to make available to that Division, on the days previousLy reserved (17-20 May 1993), a Judge of Appeal to sit as a Judge of the Supreme Court in the Common Law Division for the purpose of determining the proceedings so remitted. Counsel for the Appellant: S Basten (Solicitor) Solicitors for the Appellant: Cope Norton and Sedgwick Counsel for the Respondent: B Donovan QCSolicitors for the Respondent: Frederick Smith253545