Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Donaghy v The Council of the Law Society of NSW (No 4) [2014] NSWCATOD 77 Hearing dates: Hearing on the papers Decision date: 21 July 2014 Jurisdiction: Occupational Division Before: Hon G Mullane, Senior member M Riordan, Senior member J Buttman, General member Decision: 1) The Applicant must pay the costs of the Respondent of and incidental to: 1.1) the interim proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185; 1.2) the interim proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 2) [2013] NSWADT 245; and 1.3) the substantive proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32 after November 2013; such costs to be as agreed or as assessed. 2) The Application of the Applicant for costs in respect of the substantive proceedings is refused and dismissed. Catchwords: Solicitor - proceedings reviewing decision of the Law Society under s.540 of the Legal Profession Act 2004 - Costs of interim proceedings and final hearing Legislation Cited: Legal Profession Act 2004 Administrative Decisions Review Act 1997 Civil & Administrative Tribunal Act, 2013 Cases Cited: Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185; Donaghy v The Council of the Law Society of NSW (No. 2) [2013] NSWADT 245; Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32; Category: Principal judgment Parties: Geoffrey James Donaghy (Applicant): The Council of the Law Society of NSW (Respondent) Representation: Ms C Webster S.C. provided the submissions for the Respondent. The Applicant provided his submissions. File Number(s): 132011 reasons for decision INTRODUCTION 1The Respondent sought an order for the Applicant to pay its costs in respect of Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185, and also in respect of the Interlocutory Application reported as Donaghy v The Council of the Law Society of NSW (No. 2) [2013] NSWADT 245, and the substantive decision (Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32). DIRECTIONS REGARDING SUBMISSIONS 2The substantive decision is dated 9 April 2014. No costs issue was dealt with there, but costs had been reserved previously. 3On 2 May 2014 the Law Society wrote to the Tribunal informing it that it wished to proceed with its costs application and requesting that directions be made. On 29 May 2014 the Tribunal made directions that by 13 June each party file and serve submissions or additional evidence the party relies upon in relation to costs issues and by 27 June 2014 each party file and serve any submissions or evidence in reply. 4The Law Society filed its submissions on 13 June. The Applicant did not file any evidence or submissions under Order 1 or any evidence or submissions in reply to the submissions by the Law Society. 5On 12 June, the Applicant filed an interim application seeking to have the panel disqualified from determining the issues of costs in relation to the proceedings that the panel had decided by the decision of 9 April 2014. That Application was supported by 2 Affidavits. The Application was dismissed without calling on the Law Society for any submissions or evidence. Senior Member Mullane, as a member with a judicial qualification decided the interim application alone in accordance with clause 18(2) of Schedule 5 to the Civil and Administrative Tribunal Act 2013. 6The decision included an order extending the time for Mr Donaghy to file the evidence or submissions in response to the Law Society material on costs. It extended the time till 3pm on Friday, 4 July, 2014. A member of the Tribunal contacted Mr Donaghy by telephone on 1 or 2 July to advise him of the orders. Mr Donaghy did not file any evidence, but he filed submissions by facsimile on 4 July. 7The Tribunal has determined the costs issues on the basis of the submissions of the parties and the findings in the 3 relevant judgments. COSTS - THE REQUIREMENTS OF THE LEGISLATION 8Because the hearing of the substantive proceedings and both interim applications commenced before commencement of the Civil and Administrative Tribunal Act 2013 on 1 January 2014, the provisions of section 566 of the Legal Profession Act 2004 ("the Act") apply on the costs issue. It provides: 566 Costs (1) The Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. (2) The Tribunal may make orders requiring an Australian legal practitioner whom it has not found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), if satisfied that: (a) the sole or principal reason why the proceedings were commenced in the Tribunal was a failure of the practitioner to co-operate with the Commissioner or a Council, or (b) the practitioner has contravened an order of the Tribunal made in the course of the proceedings concerned, or (c) there is some other reason warranting the making of an order in the particular circumstances. (3) The Tribunal may make orders requiring payment of an Australian legal practitioner's costs from the Public Purpose Fund (within the meaning of the Legal Profession Act 2004 ), but may do so only if satisfied that the practitioner did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders. The Tribunal is to have regard to the length and complexity of the proceedings when making a determination under this subclause. (4) The Tribunal may make orders requiring an Australian legal practitioner in respect of whom proceedings are pending before the Tribunal to pay costs on an interlocutory or interim basis. (5) The Tribunal may make orders requiring a person to pay costs (including, as appropriate, the costs of the Commissioner, a Council, the complainant and the Australian legal practitioner against whom the complaint was made), if satisfied that: (a) the person, whether before or during the proceedings, failed to produce or delayed in producing any document required or requested to be produced, and (b) the failure or delay contributed to delay in commencing, conducting or concluding the proceedings in such a way as to warrant the making of the orders. (6) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under Part 3.2 of the Legal Profession Act 2004 . (7) An order for costs may specify the terms on which costs must be paid. SUMMONS MATTER (Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185) 9In the Summons the Applicant sought to have the Tribunal adduce: "2 All correspondence, reports, meeting minutes, memoranda, hand-written file notes, typed file notes, files, records and all other documents in relation to the complaint made by Ms Reg Greycar against Mr Geoffrey James Donaghy. 3 Including specifically, but not limited to: a) copies of all reports to the Professional Conduct Committee prepared by Ms Elizabeth Tomlinson; b) copy of all correspondence between Ms Elizabeth Tomlinson and the Professional Conduct Committee; c) copies of all reports to the Professional Conduct Department prepared by Ms Elizabeth Barnes; d) copies of all correspondence between Ms Elizabeth Barnes and the Professional Conduct Committee." 10The Law Society declined to produce any more documents. The dispute was referred to the Tribunal for determination. The decision by Senior Judicial Member D Fairley is dated 2 March 2012 and reported as Donaghy v the Council of the Law Society of NSW (No. 1) [2012] NSWADT 185. 11Section 602(1) of the Legal Profession Act 2004 provides: 1. A person referred to in section 601 (Protection from liability) is not compellable in legal proceedings (including proceedings before the Tribunal) to give evidence to or produce documents in respect of any matter in which the person was involved in the course of the administration of this Chapter. 12There are in ss 602(2) some exceptions, but none of them applied to the Law Society in relation to the dealings and proceedings involving the Applicant. 13Paragraph 601(2)(f) includes within the class of persons entitled to protection afforded by s.602(1) a member of the Law Society's staff. Sections 601 and 602 are located in Chapter 4 of the Legal Profession Act 2004 and this Chapter is headed "Complaints and Discipline" and deals generally with the handling of complaints against solicitors. 14None of the submissions made by the Applicant as to why the Law Society should be obliged to produce documents covered by the Summons were successful. His arguments were rejected. His Application was refused. The costs of the proceedings were reserved. 15Subsection 566(1) of the Act applies only where the Tribunal has found that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct. There are no such findings in the decision of 2 March 2012, or in the ultimate decision of the substantive matter of 9 April 2014 (Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32). 16Under subsection 566(2) paragraphs (a) and (b) do not apply. However, there is an issue as to whether the fact of the Applicant being unsuccessful in that Application is sufficient ground for him to pay the Law Society's costs of the Application. 17According to the decision of the Tribunal, the grounds relied upon by the Applicant were: "(l) "general principles of fairness", particularly in disciplinary proceedings of this nature, meant that the documents should be produced; (2) s.58(4) of the ADT Act, gave the Tribunal the ultimate say as to which documents should be produced by the Law Society; (3) the Law Society had waived its entitlement to rely on s.602 of the LP Act; (4) the Law Society could not simply make "a blanket claim for immunity", and had an obligation to identify the reasons why it did not produce each document or class of documents, and it had not done so; and (5) the Law Society had an obligation to list individually each of the documents which it said it was not compelled to produce and it had not done so." 18The Applicant sought to focus on arguments such as procedural unfairness and whether the Law Society's decision was wrong. 19The Submissions on behalf of the Applicant in response to the Law Society's application for costs Application of the Law Society for costs in this matter comprise two paragraphs: "6) It is submitted that there should be no order for costs. An important principal was agitated in this matter which can be categorised as does the Prosecutor have a right to silence? Can the regulatory body which makes a finding of a disciplinary nature and imposes a severe penalty upon a person be entitled when that decision is to be challenged to arbitrarily withhold documents that were used in the original decision-making process. The Applicant concedes that s.602 of the Legal Profession Act 2004 does grant a broad immunity. However, this immunity needs to be exercised with considerations of fairness. 7) It is submitted that such an extraordinary privilege should be exercised with care and with responsibility, in the instance the Respondent provided no reasons, no justification and indeed refused to even confirm what documents were being suppressed when invoking the immunity under s.602. In such circumstances the Applicant was obliged to challenge such behaviour and should not be penalised for doing so." 20The submissions that the Applicant made are surprising in that even now he appears to misconceive the role of the Tribunal in conducting a Review of the decision of the Law Society. 21At that time of this application, the relevant provision setting out the role of the Tribunal was s.63 of the Administrative Decisions Tribunal Act, 1997, which required the Tribunal to decide what the correct and preferable decision is, based on the material available to it (not what was available to the Law Society when it made its decision). The submissions and arguments by the Applicant that various errors were made by the Law Society, were irrelevant to the task that the Tribunal was required to undertake - namely deciding what the correct and preferable decision was. The same can be said of his attempts to attack the Law Society's decision by seeking to compel production of further documents. 22In its decision in the summons matter the Tribunal referred to decisions of the High Court of Australia, the NSW Court of Appeal and the Administrative Decisions Tribunal and it rejected all of the Applicant's arguments. The summons that was issued to the Law Society , requiring production of specific documents was set aside. 23The tribunal concludes that the facts that the Applicant misconceived the role of the Tribunal in the review and what was or was not relevant to that review and that his application was so lacking in merit that it was wholly unsuccessful on all grounds, warrant that the Applicant should pay the Law Society's costs of the application. He failed to establish any prospect of the application succeeding or any reasonable legal basis for making the application or issuing the summons. COSTS OF THE INTERLOCUTORY APPLICATION (Donaghy v The Council of the Law Society of NSW (No.2) [2013] NSWADT 245) 24This Application was decided on 31 October 2013 by Judicial Member G Mullane. It was an interlocutory application. The application sought the following orders: "1) That the Respondent within 7 days identify the documents in these proceedings over which it claims immunity from production under s.602 of the Legal Profession Act 2004. 2) The Respondent provide the reasons why it says that each document is protected by the s.602 immunity. 3a) The Respondent identifies [sic] the persons who comprise the Professional Conduct Committee (PCC) of the Respondent who made the decision on 1 September 2011 in relation to the Applicant. b) The Respondent identify the persons who comprise the Professional Conduct Committee of the Respondent who made the decision of 15 September 2011. c) The Respondent identify the person who comprise the Professional Conduct Committee of the Respondent who made the decision of 3 February 2011. 4) The Tribunal order that the decision of Council of the Law Society of NSW (No.2) [2012] NSWADT 185 be removed from the Administrative Decisions Tribunal marked 'Overturned on appeal'." 25It was held the Tribunal had no power to make an order such as Order 4. The Applicant argued that the order should be made on the basis of "procedural fairness". That argument was rejected. He submitted that in the alternative the decision should be made "in an appropriate manner reflecting the orders made by the Court of Appeal on 6 June 2013". The Court of Appeal set aside the orders of the Tribunal of 17 August 2013. 26The Applicant's submission in support of paragraph 3 of the orders sought was to the effect that it was a denial of procedural fairness not to identify the persons who "sat in judgment upon the appellant". However, the tribunal held that the identity of members of the Professional Conduct Committee is irrelevant to the Tribunal's role in the review, namely to make the decision that is the correct and preferable decision based upon the evidence available to it. 27The Applicant's submission in support of paragraph 3 of the orders sought was to the effect that it was a denial of procedural fairness not to identify the persons who "sat in judgment upon the appellant". However, the Tribunal held that the identity of the members of the committee is irrelevant to the Tribunal's role in the review, namely to make the decision that is the correct and preferable decision based upon the evidence available to it. 28In relation to orders 1 and 2 of the orders sought, the Law Society relied upon s.601 and 602 of the Act and submitted that because of such provisions it could not be compelled to produce or identify such documents and it declined to do so. The Applicant argued that such refusal was: "denying the Appellant a fair hearing upon his Application before the Tribunal. It is submitted that the Tribunal is in the position of having to review the decision of 1 September 2010 and determine that if it was the correct and preferable decision without having all the Respondent's material before it." 29This misconceived the role of the Tribunal in a review, which is not focussed on what mistakes, if any, were made by the decision maker, but on deciding what is the correct and preferable decision. The Tribunal held that s.602 prevented it from compelling a witness to provide information of the type sought by the Applicant and, in any event, the information was irrelevant to the task of the Tribunal under s.63 of the Administrative Decisions Tribunal Act, 1997. The Tribunal found that it was prohibited in making the orders requested in paragraphs 1 and 2 of the orders sought. 30In that decision the Tribunal drew attention to the similarities between the orders sought by the Applicant in the previous interim proceedings in Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185. It is concerning that Mr Donaghy did not accept the reasons in the first decision and endeavoured to raise some of the grounds again in these later interim proceedings. 31The Respondent's submissions in relation to this Application for costs is a single paragraph as follows: "9) This Judgment concerned the Applicant's attempt to have the Law Society identify the documents under which it claimed the s.602 privilege. This was opposed by the Respondent again with no justification as to why the immunity was being invoked. It is true that the Tribunal composed of Senior Member Mullane found in favour of the Respondent. It is submitted that it was a finding based upon an arguable point of law, namely, that to identify documents would be to breach the privilege/immunity of s.602. The submission raised in relation to Judgment 1 also pressed here in the circumstances of where the Respondent has abused its privileges under s.602 that the Respondent should not receive its costs for such behaviour." 32There are three reasons that warrant the making of an order for costs against the Applicant in respect of this interim application, namely: 32.1 the submissions he raised in support of the Application were of little, if any, merit: 32.2 many of the submissions he made were irrelevant to the isues to be determined; 32.3 as with the submission in relation to the costs, were irrelevant; and 32.3 The Application was, to a considerable extent, a repeat of his previous Interim Application that was refused and dismissed in March 2012. 33Those reasons warrant an order for the Applicant to pay the costs of the Respondent in respect of that Application. THE SUBSTANTIVE HEARING 34This was hearing determined on 9 April 2014 as Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32. 35For the power under s.540 of the Act to be exercised, paragraph 540(1)(b) requires that the Council be satisfied that there is a reasonable likelihood that the practitioner would be found by the Tribunal to have: i) engaged in unsatisfactory professional conduct (but not professional misconduct), and ii) is satisfied that the practitioner is generally competent and diligent, and iii) that the taking of action under this section is justified having regard to all the circumstances of the case (including the seriousness of the conduct concerned) and to whether any other substantiated complaints have been made against the practitioner. 36The Tribunal in its decision found that if the grounds established had been raised in disciplinary proceedings there was a reasonable likelihood that the Applicant would be found to have engaged in unsatisfactory professional conduct; but not professional misconduct. 37However, the Tribunal found though that it was not satisfied on the evidence, including findings of substantiated complaints against the Applicant in Donaghy v The Legal Services Commissioner [2013] NSWADT 261, that Mr Donaghy is "generally competent" and it was not satisfied that he is "generally diligent". Accordingly, it was found that s.540(1)(b)(ii) had not been satisfied and s.540 did not apply. 38The Law Society's decision, purported to have been made under the section, was therefore set aside and the matter was remitted to the Law Society for reconsideration in relation to possible disciplinary proceedings. In this regard the Applicant might be seen to have been successful in his review application, because the decision was set aside. However, the Tribunal also confirmed that there was a reasonable likelihood that the Tribunal would in disciplinary proceedings find the conduct complained of to be unsatisfactory professional conduct. 39The Tribunal therefore recommended that the Law Society consider commencing disciplinary proceedings against the Applicant. He may (if found guilty of unsatisfactory professional conduct) be faced with the imposition of: (1) A fine; or (2)A requirement that he undertake further legal education; or some other outcome that is more onerous upon him than the reprimand the Law Society decided to impose. For these reasons the Tribunal does not regard the applicant's application as "successful". 40The Applicant's submissions in relation to the costs of the substantive application comprise 3 paragraphs: "10) It is submitted that the Applicant should have his costs of these proceedings. A consideration of the Judgment discloses that the Respondent's finding that there was a reasonable likelihood that the Tribunal would find the Applicant guilty of unsatisfactory conduct (the conviction) was undisturbed by the Tribunal. Whereas the penalty imposed by the Respondent namely a reprimand (the penalty) has been set aside by the Tribunal. It is beside the point that the Tribunal has made some vague and indeterminate recommendation for "further disciplinary proceedings to be considered" by the Respondent. What may happen in the future is not germane to the question being considered here namely the costs of Judgment of No. 4 proceedings. It is submitted that the Tribunal's confabulation of this matter with an unrelated matter involving the Legal Services Commissioner in determining the complaint made by Reg Greycar should not be allowed to distract the Tribunal from addressing the costs question here. 11) It is submitted that in the No. 4 Judgment proceedings the Applicant should have his costs because it was on matters that were not raised by the parties, namely the competence and diligence of the Applicant that the Tribunal has made its findings. It cannot be in dispute that on the pleadings and submissions filed by both that the Tribunal's ultimate findings were on matters that neither party had had an opportunity to address. In those circumstances it is only fair that the Applicant receive his costs of these proceedings. 12) The Applicant seeks that the questions of costs be determined by the Full Tribunal." 41The clear requirements for the application of Section 540 of the Act include being satisfied that the solicitor is "generally competent and diligent" so those matters were always an issue in the proceedings. The evidence available to the Tribunal on those issues was more extensive than what was before the Law Society. 42This decision in relation to costs has been made by the full panel of the Tribunal in chambers. In the Tribunal's view the submissions of the Applicant further illustrate his tendency to rely upon irrelevant arguments. The Tribunal has decided that the following matters warrant that the Applicant should pay the Law society's costs of the substantive proceedings since November 2013: (1)The Application has not been successful; (2)The application for members of the panel to disqualify themselves failed; (3)The Tribunal found that if the Applicant's conduct was the subject of disciplinary proceedings, there was a reasonable likelihood that it would be found to be unsatisfactory conduct; (4)The Tribunal found on the evidence that it was not satisfied that the Applicant was generally competent; (5)The Tribunal found on the evidence that it was not satisfied that the Applicant was generally diligent; and (6)The Respondent's conduct in failing to comply with the Tribunal's directions for filing submissions regarding costs and for filing submissions in response to submissions in reply. 43To some extent the submissions of the Applicant in relation to costs on this issue again illustrate his tendency to rely on arguments that are not relevant to the issues to be determined. 44Despite the Tribunal's order of 2 May 2014 allowing the Applicant additional time to file any additional evidence or submissions in relation to costs issues by 13 June 2014, he did not file any submissions or evidence or make any application for costs or give any notice of an application for costs until 4 July 2014. He then sought orders for costs in relation to the substantive proceedings and in relation to an earlier hearing in 2013 45However, the members of this Panel did not hear the earlier hearing. 46The Applicant submitted that the decision of the (previously constituted) Administrative Decisions Tribunal was "over-turned" by the NSW Court of Appeal on the hearing of his Appeal and he refers to the decision that was reported as Donaghy v The Council of the Law Society of NSW [2013] NSWCA 154. 47This panel is not willing to entertain that application for costs and observes that the proper course of action would have been for the Applicant to make any such application in the NSW Court of Appeal. ORDERS 48The Orders of the Tribunal therefore are: (1)The Applicant must pay the costs of the Respondent of and incidental to: 1.1) the interim proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 1) [2012] NSWADT 185; 1.2) the interim proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 2) [2013] NSWADT 245; and 1.3) the substantive proceedings reported as Donaghy v The Council of the Law Society of NSW (No. 3) [2014] NSWCATOD 32 after November 2013; such costs to be as agreed or as assessed. (2)The Application of the Applicant for costs in respect of the substantive proceedings is refused and dismissed. ********** 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: 21 July 2014