Burrows v Council for the Law Society of New South Wales (No 3)

By summons filed on 22 January 2018 Zali Burrows (the plaintiff) sought relief against the Council for the Law Society of New South Wales (the defendant) following the defendant’s resolution to suspend her practising certificate pursuant to s 77 of the Legal Profession Uniform Law (NSW) (Uniform Law). The proceedings came to an end when the defendant resolved on 2 February 2018 not to proceed with the suspension.

The only outstanding issues are whether a costs order should be made and, if so, which party should pay the costs of the proceedings. The respective submissions of the parties can be briefly summarised. The plaintiff submitted that, as the defendant capitulated soon after the summons was filed, her right to have the suspension set aside was vindicated and the defendant ought be ordered to pay her costs. The defendant submitted that the plaintiff brought the suspension on herself and that, had she provided the information the defendant sought earlier, it would not have suspended her practising certificate and the proceedings would have been unnecessary. Accordingly, it submitted that the plaintiff ought be ordered to pay its costs.

It is well established that, in a costs application where there has been no hearing on the merits, it is not appropriate for the court to conduct a hypothetical trial: Re Minister for Immigration and Ethnic Affairs; ex parte Lai Qin (1997) 186 CLR 622 at 624 (McHugh J); [1997] HCA 6. This does not exclude consideration of the parties’ conduct. As McHugh J said, also at 624:

Although it was the plaintiff who commenced the proceedings, the need for the proceedings was created by the defendant, which suspended the plaintiff’s right to practice. Thus, the defendant was, in effect, the party which precipitated the proceedings. For this reason it is relevant to have regard to the defendant’s conduct to ascertain, for example, whether it acted precipitately or reasonably in imposing the suspension. It is also relevant to consider the plaintiff’s conduct to ascertain whether she, in effect, left the defendant with little option but to suspend her right to practise.

The history of the matter is, accordingly, relevant to the question of costs. Although I am conscious that it is not appropriate in an application such as this to embark on a detailed consideration of the evidence, the evidence relied on by the parties in support of their respective costs applications is largely documentary and uncontroversial. In order to do justice to the submissions, it is, in my view, necessary to summarise the uncontroverted documentary evidence and to identify where the real factual dispute would have been, had the matter gone to hearing. Any such factual disputes cannot be determined in a hearing such as this: Nichols v NFS Agribusiness Pty Ltd [2018] NSWCA 84 at [8] (Basten JA, Meagher and Payne JJA agreeing).

On 19 September 2016 the defendant wrote to the plaintiff seeking her response to a complaint made by a senior counsel concerning her conduct (the Senior Counsel Complaint). No reply having been received by 20 October 2016, the defendant again wrote to the plaintiff seeking her response to the Senior Counsel Complaint. The defendant continued to contact the plaintiff by telephone to seek her response. At the plaintiff’s request, the defendant again emailed its letter of 20 October 2016 to her on 28 October 2016. It also attached a further letter dated 28 October 2016 which included the following paragraph:

On 4 November 2016 the plaintiff emailed a request for an extension of time to respond to the complaint. Later that day, the defendant emailed the plaintiff to inform her that she had been granted an extension to 11 November 2016 for that purpose. The plaintiff emailed the defendant on 11 November 2016 confirming that she had received the defendant’s email. On 18 November 2016, when the plaintiff had not yet responded to the complaint, the defendant wrote to the plaintiff again and sought her response by close of business on 18 November 2016. The defendant’s email concluded:

On 24 November 2016, Louis Pierotti, the defendant’s Litigation Manager in its Professional Standards Department, rang the plaintiff and left a voicemail message asking her to return his call. I infer from the absence of any record of a response from the plaintiff that she did not respond to his call.

On 14 March 2017 Mr Pierotti again telephoned the plaintiff. The plaintiff asserted that she had replied to these matters in the Senior Counsel Complaint. No record of any such response is contained on the defendant’s file and the plaintiff did not tender any such response. At the conclusion of the telephone call, Mr Pierotti checked the plaintiff’s contact details with her and noted an additional email address, which she provided to him. This was the third email address that she had provided to the defendant by way of contact details.

After this telephone discussion on 14 March 2017, that same day, Emma Essey, a solicitor in the defendant’s Professional Standards Department, wrote to the plaintiff about the Senior Counsel Complaint and a further complaint made by another person (the Second Complaint). In respect of the plaintiff’s failure to respond to the Senior Counsel Complaint, Ms Essey wrote:

I note, for completeness, that s 371 of the Uniform Law empowers an investigator (of the defendant or other local regulatory authority) to issue a notice to a lawyer requiring production of documents, provision of information, or other assistance for the purposes of carrying out a complaint investigation. Failure to comply with such a notice is capable of constituting unsatisfactory professional conduct or professional misconduct: s 466(6) of the Uniform Law.

Ms Essey also raised the question of the plaintiff’s business address and informed her that the defendant’s records still showed her address as being in King Street, Sydney. Ms Essey reminded the plaintiff of her obligations under cl 61 of the Legal Profession Uniform Law Application Regulation 2015 (NSW) (the Regulation) to update the particulars of her practice. Ms Essay warned the plaintiff that breach of the regulations was capable of amounting to unsatisfactory professional conduct or professional misconduct under s 298 of the Uniform Law. Ms Essey’s letter of 14 March 2017 concluded:

On 17 March 2017 the plaintiff emailed Ms Flynn, an Administration Assistant in the defendant’s Professional Standards Department, and said:

Mr Pierotti emailed the plaintiff on 20 March 2017 at 7.51am, acknowledging her email and saying:

The plaintiff acknowledged receipt of this email at 7.55am on 20 March 2017. Later that day, at 4.13pm, the plaintiff wrote to the defendant by email again and complained about her computer being “frozen”. She indicated that she would send a response to the defendant later that day and that further documents would be sent when her computer problems had been resolved.

The plaintiff sent two emails to the defendant on 21 March 2017 which together constituted her first substantive response to the Senior Counsel Complaint, approximately six months after the defendant sent her the complaint. In a response sent on 21 March 2017 the defendant sought that a signed, consolidated response be sent by hand delivery, post or facsimile. The defendant also sought information regarding the Second Complaint and confirmation of her practice address. The plaintiff responded briefly to the email at 1.50pm and foreshadowed that she would send “further detail” that evening.

The plaintiff’s signed letter was sent on 22 March 2017. No more details were forthcoming. On 24 March 2017 the Senior Counsel wrote to the defendant regarding his complaint. His letter was received on 28 March 2017. The defendant wrote to the plaintiff on 28 March 2017 confirming receipt of emails. On 7 April 2017 the defendant sent the plaintiff a letter (dated 6 April 2017) by email which attached the Senior Counsel’s reply to the plaintiff’s letter of 22 March 2017 and invited her to respond. The plaintiff purported to provide a response on 26 April 2017. However, there was no attachment to her email. She again purported to provide a response on 1 May 2017. However, as before, nothing was attached to the email. On 5 May 2017, the plaintiff sent a substantive response by email with an attachment (a further response dated 14 April 2017).

The defendant continued to hand deliver correspondence to the plaintiff.

On 28 June 2017 Ms Essey wrote to the plaintiff seeking her response by 12 July 2017 to a further letter from the Senior Counsel which in turn responded to the plaintiff’s response dated 14 April 2017. The defendant’s letter concluded:

On 29 June 2017 Mr Pierotti sent the plaintiff an email in the following terms:

On 30 June 2017 the plaintiff called Mr Pierotti and confirmed that she would come and see him on Monday (3 July 2017). On 3 July 2017 the plaintiff met with Mr Pierotti and Ms Essey. In the course of the meeting the defendant informed the plaintiff that she needed to nominate a physical location where her books (of account and, presumably, files) were located and a functioning email address so that the defendant could contact her. Later that day the plaintiff sent an email to Mr Pierotti confirming that she had entered her contact email on the defendant’s portal and provided a new office phone number and mailing address on Elizabeth Street.

On 11 July 2017 Mr Pierotti asked the plaintiff whether the offices in King Street (which she had earlier nominated) would have someone in attendance.

There is no evidence that the plaintiff sent a response to the defendant’s letter of 28 June 2017 by 12 July 2017 as required. The defendant’s evidence indicates that no response was received within that period (as the defendant tendered all communications with the plaintiff, which did not include any document dated 12 July 2017 or received at about that time). The plaintiff did not refer in subsequent correspondence with the defendant to having sent anything by 12 July 2017.

On 24 July 2017 Mr Pierotti sought a response to his email of 11 July 2017. Also on 24 July 2017, Ms Essey sent a letter to the plaintiff referring to the defendant’s letter of 28 June 2017 and sought a response. At 7.24pm on 26 July 2017 the plaintiff provided to Mr Pierotti her practice details (and gave an address in Elizabeth Street) and confirmed telephone and email details. Later that evening, at 8.27pm, Mr Pierotti again emailed the plaintiff and sought a response to his enquiry as to whether there was anyone in attendance at the address she had nominated as her practice address. By email sent by Mr Pierotti on 8 September 2017 (sent to the plaintiff at three email addresses which she had provided to the defendant, or used in correspondence with the defendant) Mr Pierotti wrote to the plaintiff in the following terms:

According to the plaintiff’s evidence in her affidavit of 29 January 2018, “documents” (unspecified) were sent by her to the defendant on 3 September 2017 (and 4 December 2017, see below). The plaintiff has not exhibited to her affidavit evidence, or otherwise tendered, the documents she said that she sent. The defendant has no record of having received any documents from the plaintiff at either of those times.

On 8 September 2017 Ms Essey wrote to the plaintiff in the following terms:

I note, for completeness, that r 43 of the Legal Profession Uniform Law Australian Solicitors' Conduct Rules 2015 (NSW) (the Conduct Rules) provides:

On 13 September 2017 the plaintiff emailed Mr Pierotti in response to his email of 8 September 2017 and said:

As no response was sent to the defendant, Mr Pierotti sent an email to the plaintiff (to at least two email addresses which had been provided by the plaintiff) on 28 September 2017 which said:

He sent a further email on 29 September 2017 which said:

By letter dated 29 September 2017, the defendant notified the plaintiff of a new complaint made against her by a representative of Rapid Process Service (the Third Complaint). On the same day the defendant (through Gavin Connor, a trust account inspector) wrote to the plaintiff requesting information which had been previously requested from her in emails sent on 2 and 16 August 2017. The request was made pursuant to s 370 of the Uniform Law.

For completeness, I note that s 370 entitles an investigator of a regulatory authority to require the production of records or the provision of information relating to the affairs of a law practice. Like s 371 of the Uniform Law (referred to above) it is contained in Pt 7.2 of the Uniform Law, entitled “Requirements relating to documents, information and other assistance”.

On 3 October 2017 the plaintiff changed her email address on the defendant’s portal to an address which commenced “office”. Her gmail address was referred to as her “old” address. She did not notify Mr Pierotti directly of the change.

On 5 October 2017 Mr Pierotti rang the plaintiff’s mobile and asked her to call him urgently. He also left a message at the phone number she had given as her office number. The plaintiff responded in the following terms:

At 9.17am on 9 October 2017 Mr Pierotti called the plaintiff again and left a message to say that he had not received any response and was concerned that she had abandoned her practice. At 9.24am Mr Pierotti rang the serviced office number which the plaintiff had provided to the defendant. The person who answered the phone told him that she could get in touch with the plaintiff by text if required. Mr Pierotti gave his mobile and office numbers to the receptionist and requested that she ask the plaintiff to call him.

At 9.26am that day Mr Pierotti sent the plaintiff a text as follows:

At 9.48am the plaintiff sent Mr Pierotti an email repeating her earlier message set out above. At 9.57am on 9 October 2017 Mr Pierotti sent the plaintiff an email saying that he had just received her email of 5 October 2017 and asked her to call him “URGENTLY”. The delay in emails sent by the plaintiff being received by their recipients is referred to by the plaintiff in emails set out below. At 10.14am the plaintiff sent Mr Pierotti two text messages which said:

Mr Pierotti responded at 10.15am:

At 10.13am on 9 October 2017 the plaintiff wrote a lengthy email to Mr Pierotti setting out her various professional commitments in trials and sentencing hearings. She also referred to difficulties she was having with her computer as follows:

At 10.25am the plaintiff emailed Mr Pierotti in the following terms:

At 11.09am the plaintiff sent a further text to Mr Pierotti:

The plaintiff subsequently agreed to come to the defendant’s offices on 11 October 2017. This was confirmed by Mr Pierotti by email at 5.24pm on 10 October 2017 in the following terms:

At 9.37am on 11 October 2017 Mr Pierotti sent the plaintiff an email asking her to make arrangements to call Ms Lai as the plaintiff had not yet attended the defendant’s offices. The email concluded:

It was common ground that, eventually, on 11 October 2017, the plaintiff attended the defendant’s office to collect documents.

On 21 November 2017 Mr Pierotti emailed the plaintiff at three of her email addresses (although not the new email address beginning “office” which was added to the defendant’s portal on 3 October 2017) in the following terms:

On 27 November 2017 the plaintiff emailed Mr Pierotti (from her gmail address which was referred to as her “old email” on the portal on 3 October 2017 as well as her “new” (“office”) email) in the following terms:

On 28 November 2017 Mr Pierotti emailed the plaintiff as follows:

On 1 December 2017 Mr Pierotti emailed the plaintiff as follows:

On 4 December 2017 at 8.22am the plaintiff emailed Mr Pierotti as follows:

On 4 December 2017 at 8.51am Mr Pierotti wrote to the plaintiff as follows:

As referred to above, the plaintiff’s evidence is that she provided a response to this email. She has tendered an email which was apparently sent to the defendant at 11.39pm on 4 December 2017 to which was attached a pdf document. She has not adduced any evidence of what was actually attached to the email. I made several requests to Mr Newton in the course of the hearing for the documents said to be attached to the plaintiff’s email of 4 December 2017, but was informed that no such documents were available to be tendered. The defendant’s evidence is that it did not receive the email or the attachment. The defendant, which usually acknowledged receipt of correspondence with the plaintiff, did not acknowledge receipt. The plaintiff did not make any enquiries of the defendant whether her email had been received although she received no acknowledgement of receipt.

At 10.30am on 13 December 2017 Mr Pierotti sent an email to the plaintiff (at three email addresses that she had previously provided, including the gmail address which she had used for the email of 27 November 2017). He did not send it to the email address commencing “office” which she had notified to the defendant’s portal on 3 October 2017. The covering email said:

The letter attached to the email of 13 December 2017 said:

At 1.55pm Genesis Offices (Genesis), a serviced officer provider used by the plaintiff, sent her an email with the subject line: “Mail received from the Law Society. Thanks.” I infer that this email notified the plaintiff that the hard copy of the defendant’s letter to her of 13 December 2017 (attached to the email referred to above) had been delivered to her practice address and that she was notified of its arrival by Genesis. After the email of 13 December 2017, Genesis and the plaintiff communicated on several occasions using at least one of the email addresses to which the defendant had sent its letter of 13 December 2017.

The plaintiff did not respond to the letter of 13 December 2017.

On 18 January 2018 the defendant resolved, pursuant to s 77 of the Uniform Law, to suspend the plaintiff’s practising certificate and appoint a manager to the plaintiff’s practice.

The defendant also resolved, pursuant to s 266 of the Uniform Law to make the following complaint against the plaintiff:

On 18 January 2018 the defendant issued a notice to the plaintiff pursuant to s 83 of the Uniform Law as well as a notice pursuant to ss 77, 81 and 464 of the Uniform Law which set out the resolutions made. The defendant provided the following reasons for the suspension:

Following the meeting, Mr Pierotti called the plaintiff to inform her of the suspension. By email sent at 1pm on 19 January 2018, the plaintiff wrote to Mr Pierotti as follows:

On Monday 22 January 2018 the plaintiff filed a summons seeking to have her suspension set aside. It came before Lonergan J as duty judge. Her Honour listed the matter for final hearing on 2 February 2018 and made directions, including that the plaintiff’s evidence be served by 24 January 2018. At 4.57pm on Thursday 25 January 2018 the plaintiff served an affidavit out of time. It exhibited 229 pages.

On Monday 29 January 2018 (following the Australia Day long weekend) the plaintiff served a notice of motion seeking a stay of the suspension together with an affidavit in support.

On 30 January 2018 the defendant’s President instructed Anne-Marie Foord, the defendant’s Director of Professional Standards, to seek a resolution from the defendant to revoke the resolutions for the suspension of the plaintiff’s practising certificate and the appointment of a manager to her practice. At 9.29am on 30 January 2018 the defendant informed the plaintiff by email that the defendant would shortly revoke the suspension of her practising certificate and its decision to appoint a manager to her practice. Directions were proposed regarding costs. When the matter came before the duty judge that day, consent orders were made as well as directions for service of evidence to be relied on at the costs hearing.

On 31 January 2018 the defendant made the resolutions which had been proposed. The Registrar made orders that day for the service of submissions for the costs application.

As referred to above the plaintiff’s evidence was that she provided responses to the defendant on dates which included 12 July 2017 and 4 December 2017. The defendant’s evidence was that no such responses had been received by the defendant.

The plaintiff’s evidence was that she did not receive the letter of 13 December 2017. The defendant’s evidence was that it emailed the letter to three email addresses of the plaintiff, at least one of which had been used by her on 27 November 2017; that it had hand delivered the letter to her practice address; and that the plaintiff had been notified of its delivery on 13 December 2017 by Genesis.

It is not appropriate that I embark on the task of resolving these issues of fact for the purposes of determining the costs applications.

Mr Newton, who appeared for the plaintiff, submitted that the defendant’s conduct was “discourteous”, “unreasonable” and “unhelpful”, in that it moved to suspend the plaintiff’s practising certificate in circumstances where it had sent the letter of 13 December 2017 to an email address which was not the one she had registered at the portal (commencing “office”). He also submitted that it is a matter of convention that practitioners are on leave in the court vacation and that the defendant acted precipitately when it resolved to suspend the plaintiff’s practising certificate on 18 January 2018 on the basis of not obtaining a response to the letter it had sent on 13 December 2017. He contended that the defendant was in breach of the statutory requirement in s 316 of the Uniform Law that it “act in a fair manner”. Mr Newton summarised the grounds for the plaintiff’s application for costs as follows:

Mr Newton submitted further that the defendant ought to have telephoned the plaintiff on 4 December 2017 and 13 December 2017 to inform her of its correspondence. He said:

I reject these submissions. The letter of 13 December 2017 was sent after a period of well over a year in which the plaintiff had failed to respond adequately, or at all, to complaints that the defendant had a statutory obligation “to deal with . . . as efficiently and expeditiously as practicable”: s 317 of the Uniform Law. It was sent by email to three known addresses as well as being hand-delivered to the address the plaintiff nominated as her practice address. The plaintiff had repeatedly given priority to other matters in preference to answering the defendant’s correspondence or meeting its deadlines. The systems she had put in place to receive correspondence from the defendant were, on her evidence, flawed. The mailboxes on her phone and her email were, on occasion, said to be full, such that she apparently could not receive communications from the defendant. Nonetheless, the hard copy of the letter was received and Genesis had told her of the delivery of a letter from the defendant on 13 December 2017 in accordance with their arrangement to alert her to incoming mail. However, it does not appear that she accorded it any priority. Indeed, it was the plaintiff’s evidence that she had not received it at all. It does not appear that the plaintiff did anything to collect the mail from Genesis and deal with it, although she had been informed of its delivery and the identity of the sender. Although the plaintiff said she sent documents to the defendant on 21 August 2017 and 4 December 2017 there is no evidence of what documents were actually sent by her 4 December 2017 and, in the case of 21 August 2017, no evidence, apart from her general statement to that effect, that anything at all was sent.

The defendant’s conduct could not fairly be described as either precipitate, discourteous or unreasonable. The chronology set out above shows, in my view, that the plaintiff’s conduct had a tendency to thwart the discharge of the defendant’s duty. The defendant had an obligation to use the means at its disposal to obtain a response from the plaintiff. When all prior warnings appeared to have gone unheeded, the defendant resorted to taking action under s 77 of the Uniform Law to suspend the plaintiff’s practising certificate.

I do not accept the plaintiff’s submission that her conduct was not sufficiently serious to warrant suspension as it did not involve any risk to the public. The defendant, as the regulatory authority, had an obligation to investigate complaints against the plaintiff. Her repeated disregard of correspondence left the defendant in the situation where it was not sure whether she had abandoned her practice, to the detriment of her clients, or whether she was just ignoring the defendant’s correspondence.

Although the plaintiff’s evidence was that she did not receive the letter of 13 December 2017, the uncontroverted evidence was that she was informed that it had been received by her service provider, Genesis. Had the plaintiff taken the time to read the letter, which she knew had been received at her practice address, she would, presumably, have taken the steps which she took after the suspension and thereby avoided the suspension and obviated the need for the proceedings. Ultimately, she was the author of the suspension since her conduct left the defendant with little alternative than to act as it did.

The effect of the plaintiff’s becoming aware of the defendant’s resolution to suspend her practising certificate was almost immediate. She responded relatively quickly to the complaint and replied in what I infer to have been a comprehensive manner to the defendant’s correspondence, which had been outstanding for a significant period. Such was the detail and quantity of her response that the defendant, at the earliest reasonable opportunity, resolved to lift the interim suspension. I understand that the defendant has since proceeded to continue its complaint processes in accordance with its usual procedures. The defendant’s preparedness to revoke the suspension once the long-awaited material had been received (with the result that the proceedings came to an end) evidences the reasonableness of the defendant’s conduct throughout.

Lawyers have an obligation to communicate honestly and in a timely fashion to the relevant regulatory authority with respect to complaints made about the lawyer. As was said by Smart J in Veghelyi v The Council of the Law Society of New South Wales (Unreported, Supreme Court of New South Wales, Smart J, 6 September 1989) at p6:

Rule 43.2 of the Solicitors Rules has enshrined this obligation which was recognised by the common law. Further, it is of significance that Parliament has provided that failure to comply with a notice from a regulatory authority (given pursuant to s 371) is capable of constituting unsatisfactory professional conduct or professional misconduct: s 466(6) of the Uniform Law. The definition of “professional misconduct” is, relevantly, conduct “that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice”. These provisions, and the consequences of breach, emphasise the importance placed by Parliament on the duty of a lawyer, such as the plaintiff, to communicate with a regulatory authorities, such as the defendant.

The narrative set out above indicates that the plaintiff accorded no particular priority to communications from the defendant. But for her repeated silence, non-responsiveness and tardiness, the defendant would not have had to resort to the tool of immediate suspension.

In these circumstances, I am satisfied that it is appropriate to order the plaintiff to pay the defendant’s costs. The parties did not suggest that there was any reason why the costs of this application ought not follow the event. Accordingly the costs will include the costs of this application.

It is desirable that the payment of costs not be delayed further. Having regard to the relatively short duration of the proceedings it may be appropriate to specify a gross sum for the costs of the proceedings pursuant to s 98(4) of the Civil Procedure Act 2005 (NSW), if agreement cannot be reached as to the appropriate sum. Provision will be made in the orders for such an application.

For the reasons given above, I make the following orders: