Somerville v Law Society of the Northern Territory D1/1995 [1995] HCATrans 225 (22 June 1995)

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry

Darwin No D1 of 1995

B e t w e e n -

WILLIAM ROBERT SOMERVILLE

Applicant

and

THE LAW SOCIETY OF THE NORTHERN TERRITORY

Respondent

Application for special leave to appeal

DAWSON J

TOOHEY J

McHUGH J

TRANSCRIPT OF PROCEEDINGS

AT BRISBANE ON THURSDAY 22 JUNE 1995, AT 11.37 AM

Copyright in the High Court of Australia

MR S.R. SOUTHWOOD: If your Honours please, I appear on behalf of the applicant in this matter. (instructed by De Silva Hebron)

MR G.E. HILEY, QC: If the Court pleases, I appear for the respondent. (instructed by Cridlands)

DAWSON J: Mr Southwood.

MR SOUTHWOOD: It is the submission on behalf of the applicant, your Honours, that there are essentially two broad questions which arise in this application which support the grant of special leave. They are, firstly, the administration of justice in this case and, secondly, the procedural irregularities in the hearing before the Full Court.

So far as each of those matters is concerned, we say that there are really two main points: firstly, that the way the matter proceeded before the Chief Justice, who was the sentencing justice in respect of the bankruptcy offence, there was a denial of natural justice and we will come to those circumstances shortly, and that that denial was effectively picked up and compounded in the hearing before the Full Court. In other words, that things bad begun make strong themselves by ill. It has simply been carried through.

The second point we would seek to make is that care in circumstances such as this should be exercised by a court to ensure that there is neither a cancellation or suspension of a practising certificate upon the basis that a practitioner has committed an offence for which he has not been convicted.

TOOHEY J: Mr Southwood, I must say, looking at your amended draft notice of appeal which is on page 65 and following, it seems to invite this Court, if leave were granted, to review all the findings of fact made below, not only in relation to the disciplinary proceedings but in relation to the sentencing.

MR SOUTHWOOD: Not all of - - -

TOOHEY J: All might be stating it a bit strongly, but that is what it seems to amount to.

MR SOUTHWOOD: We, with respect, would disagree with that, your Honour. There is essentially two primary findings which need to be assessed and it is not so much those findings themselves which are the issue, but the circumstances in which those findings came to be made. Those findings are, essentially, that finance was in place and that - - -

TOOHEY J: Can I just interrupt you. When you say "findings", you are speaking of findings by the Chief Justice, are you?

MR SOUTHWOOD: I am speaking of findings by the Chief Justice, firstly. They were the findings picked up by his Honour Acting Justice Gray in his reasons. But perhaps if I could take your Honour to the judgment of Justice Gray and in particular to page 46 of the application book, which is page 17 of the judgment itself. Starting with the second paragraph on that page, the first full paragraph, his Honour stated:

In my opinion, the Chief Justice was abundantly justified in making the finding he did. The finding amounts to the making by the applicant of a false statement, knowing it to be false. It is an inescapable inference that the vehicle would not have been released to the applicant in the absence of such an assurance. In my opinion, the knowingly false statement amounted to a fraudulent deception. It is true that the ingredients of the crime to which the applicant pleaded guilty do not include any element of fraud. But for the purposes of determining the applicant's fitness to practise law, the finding is, in my opinion, of major significance.

DAWSON J: What is your complaint about that passage?

MR SOUTHWOOD: In relation to that passage we say that conclusion is essentially based on two finding of fact: they are that finance was in place and that Mr Somerville would be back with a cheque that day. It is the conclusion that those findings equal fraudulent deception which is the major complaint.

DAWSON J: But the evidence was before this particular tribunal, was it not?

MR SOUTHWOOD: No, it was not, your Honour. What occurred before this tribunal was that the transcript of the proceedings before his Honour the Chief Justice were before the court, as were certain affidavits of Mr Somerville's, which were really to the effect that he believed the servant of the creditor knew that he was a bankrupt - - -

DAWSON J: What was before the Chief Justice was before this tribunal?

MR SOUTHWOOD: No, it was not, because the statement of Mr Crean, for instance, upon which the Chief Justice in the end heavily relied, was not before the Full Court.

DAWSON J: There was some of the material which was before the Chief Justice which was before this tribunal?

MR SOUTHWOOD: Very little. All that was before this court was the transcript of the submissions which were made by counsel before the Chief Justice in the criminal proceeding, three affidavits of Mr Somerville, which incorporated, for instance, the various character references, those sorts of things - - -

TOOHEY J: Mr Southwood, did not the tribunal have the Chief Justice's remarks on sentencing?

MR SOUTHWOOD: Yes, it did, your Honour.

TOOHEY J: Well what do you say, that they were not entitled to rely on that material?

MR SOUTHWOOD: They were not entitled to rely on that material in circumstances where those findings were sought to be made subject of an appeal.

McHUGH J: They were not made the subject of an appeal at that stage, were they?

MR SOUTHWOOD: No, they were not, your Honour, but what occurred during the submissions before the Full Court was that I handed up to the members of the Full Court the proposed grounds which were to be sought to be included in Mr Somerville's appeal. An appeal was on foot. As has been subsequently indicated in the appeal book, a subsequent affidavit of Mr Somerville has been filed in the Court of Criminal Appeal seeking to add the grounds which challenge the findings which the Full Court relied on.

TOOHEY J: Was the appeal against conviction, sentence or both?

MR SOUTHWOOD: The appeal was against sentence. Mr Somerville pleaded guilty to the offence of obtaining credit whilst a bankrupt with failing to disclose he was a bankrupt.

DAWSON J: What you are really complaining about is that the Chief Justice ought not to have made the finding which he did in sentencing?

MR SOUTHWOOD: Yes.

DAWSON J: And you complain about, I suppose, both the method and the standard of proof which he applied.

MR SOUTHWOOD: Yes, but more than the method and standard of proof. We say that the applicant was effectively precluded from calling evidence in relation to that issue. It became an issue as to whether there was an inducement made by Mr Somerville, some kind of insurance given, which induced the creditor to give him the vehicle, in effect, on credit.

DAWSON J: That is a question which it would be very difficult for this Court to consider in these proceedings. It is one step back. For it to be considering the appropriateness of the findings of the Chief Justice in proceedings in an appeal against a decision of a tribunal of this sort would involve great difficulties.

MR SOUTHWOOD: It would not necessarily - - -

DAWSON J: You are going to have your appeal and you are going to be able to question the conclusion of the Chief Justice in relation to sentence.

MR SOUTHWOOD: Yes. The difficulty is this, your Honour, that the effect of the authorities seem to be - that is in relation to legal practitioners being dealt with in these circumstances - that a court is entitled to have regard to the crime for which the legal practitioner has been convicted and to the circumstances involved in that crime - that is in effect the findings of fact in relation to the matter - and secondly, to the sentence itself. What was sought before the Law Society was that the matter be adjourned pending the resolution of the matter in the Court of Criminal Appeal. An adjournment application was subsequently made before the Full Court because of that very problem.

DAWSON J: But the Full Court saw no necessity for this. It did not accept blindly the findings of the Chief Justice; it said on the material before it, the Chief Justice was abundantly justified in making the finding he did.

MR SOUTHWOOD: Well, it was wrong in doing that, your Honour, because - - -

McHUGH J: Why could not your client have given evidence before the Full Court?

MR SOUTHWOOD: For two reasons: one is so far as those findings are concerned, they were findings which were effectively binding on him, he having been a party to the criminal proceeding. The appropriate way to challenge those findings - - -

McHUGH J: Why? That was an issue between the Crown and him. This was an issue between the Law Society and him. He could have given evidence. But he would have had a serious problem if he had given evidence before the Chief Justice or before the Full Court because he would have been in conflict with the salesman - or perhaps would have been in conflict with the salesman - on oath. That might have created further problems for him if he had been disbelieved. He had a very good run in front of the Chief Justice. His case was allowed to be put from the bar table.

MR SOUTHWOOD: No, with respect, your Honour, he did not have a very good run before the Chief Justice because there was some considerable confusion as to precisely what were the relevant issues and as to the basis on which the matter was in fact proceeded with. What effectively occurred in this matter is that at the beginning the Crown outlined, in effect, what it said were the facts of the case. It did not go into evidence on that point. It simply outlined what its position was in relation to sentence. Then the next thing that occurred is that, in effect, an agreement was reached to this effect, that counsel for the defence would then present the applicant's case and that, to the extent that there was any disagreement between counsel for the Crown and counsel for the applicant, those disagreements would in effect be highlighted.

As to how those disagreements should be resolved was not initially the subject of any detailed discussion. The matter then proceeded in such a way that it became apparent that there was considerable disagreement in relation to certain matters that may go either to aggravation or to mitigation. When it was realised that there was a significant dispute between the parties, and initially the Chief Justice was under an apprehension that the only dispute was in relation to the record of interview, it was then said, "Well, how am I to resolve these issues?" What was canvassed by counsel for the Crown - there were three ways of resolving those sorts of factual disputes: firstly, by going into evidence; secondly, by his Honour indicating whether those factual disputes would be relevant to the factors he would take into account on sentence; and thirdly, by agreement.

His Honour then, bearing that in mind, and the Crown in effect acknowledged at that point that it had not gone into evidence, indicated a number of questions that he thought were of key importance. The matter was then adjourned for a short period of time and the matter then came on and Mr McDonald on behalf of the defendant essentially outlined what was the applicant's position. There was then some further debate and again, neither of the parties were going into evidence, and as a result of that further debate Mr McDonald was questioned by the Chief Justice as to what his position was.

So that, effectively, what was the Crown's position - if I may just take some short time on this point, your Honours, because it is an important point. What effectively was the Crown case was this in summary. The Crown essentially said that the applicant had obtained credit in circumstances where there was a real risk of non-payment. There was a real risk of non-payment because no arrangements had been actually made with the North Australian Aboriginal Legal Aid Service, his employer. That is the first point.

Secondly, that Mr Somerville had, in effect, induced the creditor to enter into the transaction by making a false statement to the effect that finance was in place. The third proposition was that Mr Somerville was slow to make arrangements and, indeed, never made arrangements for payment. It effectively submitted that those elements were circumstances amounting to aggravation, so far as sentence was concerned.

TOOHEY J: That is coming perilously close to saying that he was not guilty of the offence.

MR SOUTHWOOD: It, in certain respects, comes close to it except that it is an absolute offence and that a benefit was forborne.

TOOHEY J: It may be that on that approach he was not obtaining credit, that the money was going to be provided by his employer.

MR SOUTHWOOD: The Crown's proposition was that those elements indicated that, in effect, the proposition was a sham because of the representation that finance was in fact in place. He never said that, was his position. The only factor that they acknowledged as being a mitigating circumstance was that the applicant honestly believed that the creditor would be paid and that he had grounds for that belief.

TOOHEY J: What did the Chief Justice make by way of a finding in that respect, if he made any?

MR SOUTHWOOD: What the Chief Justice appears to do is to come to the resolution made at pages 51 and 52 of the transcript which is set out in the applicant's outline of argument, your Honour, at pages 5 and 6. Perhaps if I could take your Honours to about line 5 of thereabouts on page 5. There is a paragraph which starts:

That is, as you put it to me, there was a basis for his belief and you told me three things: that he believed, either through his arrangements with NAALAS, either they'd buy it or through his arrangements with them he'd be able to come to some deal whereby the creditor, Bridge Autos, would not lose out on that money; and that there was some prospect of his wife being able to assist, also which he had in mind, and that is demonstrated by the fact that in fact later she did in fact purchase a vehicle; that there was a sum of $1100 available a fortnight which could've been used as the source for whatever arrangements it may've been lawful and proper to come to, to assist with the acquisition of the vehicle; and that he told Mr Crean on the 26th that finance was in place and he would be back with the cheque.

Now, throughout the proceedings that issue had been hotly debated and strenuously opposed by Mr McDonald.

TOOHEY J: Before you go and read any more of this, Mr Southwood, what did the Chief Justice say in sentencing the applicant? This is a debate, as it were, that goes on in the course of sentencing of an offender where the court is having submissions put to it and discussing with counsel, but I understood that you were complaining of certain findings made by the Chief Justice in the course of sentencing - or rather, you were complaining about the reliance by the tribunal upon those findings.

MR SOUTHWOOD: Yes, the findings we complain of, your Honour, are these - because of the pagination of the transcript it is somewhat difficult to - - -

TOOHEY J: Is it in the application book?

MR SOUTHWOOD: Yes, it is. If your Honour would just bear with me for a short moment. If I could take your Honours firstly to page 8 of the application book. At the bottom of that page at the final paragraph on that page:

Against all this information which, to some extent ameliorates the seriousness of the particular offence, in that you expected the creditor would be paid. It must be set of the fact that you led Bridge Autos to believe, when you took possession of the vehicle, the finance was in place and you would be back with a cheque.

That is the first finding which is complained of. The second finding is then on page 10 of the application book in the last sentence of the penultimate paragraph. This sentence appears:

Furthermore, the credit was obtained by an assurance which to your knowledge was not true although it is accepted that you had a basis for believing that you could make good your undertaking.

TOOHEY J: If the Law Society was to urge those matters, as it were, as going to the seriousness or otherwise of the offence, as Justice McHugh put to you earlier on, was it not open to the applicant to give evidence before the tribunal with a view to showing that anything said by the Chief Justice adverse to him was not borne out by the facts?

MR SOUTHWOOD: Not in circumstances, we would submit, your Honour, where he was subject to the findings of the criminal court, and also in circumstances where the authorities seem to suggest that the court is entitled to take into account those findings.

McHUGH J: Why? They are not binding on the Full Court? The Full Court was not bound by them. They are just findings in a judgment between the Crown and the accused. He could have gone into the witness box and denied it or put some gloss on it.

MR SOUTHWOOD: The effect of the decision of this Court in Ziems v The Prothonotary of New South Wales appears to be to the effect that the Full Court in matters such as this is entitled to take account of the crime and of those circumstances.

TOOHEY J: But that is not your proposition. You are not saying they were not entitled to, as I understand it. If there were no evidence to the contrary, why should they not rely upon it if they thought it had some value. But it is a different question again to say it was not open to your client, in the proceedings before the tribunal, to challenge any matters that he thought were unduly adverse to him.

MR SOUTHWOOD: It is our submission that it is not open in those circumstances where, in effect, those findings remain in place so far as the crime is concerned.

McHUGH J: Why? They are not binding between the parties. They do not create any res judicata between the Law Society and your client and, for what it is worth, you will recall that in Ziems' Case Mr Justice Fullagar reinterpreted the evidence to a view favourable to Ziems, notwithstanding the jury's conviction in that case of manslaughter. In fact he rather suggested he should not have been convicted at all.

MR SOUTHWOOD: But so far as that was concerned, it was my understanding, your Honours, that the court essentially acknowledged that they remained the findings of fact but that in all of the circumstances - in other words, the court did not overturn - - -

McHUGH J: This is just an action between the Law Society and your client. Now, ordinarily it is proved by the ordinary rules of evidence, put in a judgment, evidence of the facts, that is all it is; evidence of the facts, not conclusive evidence of the facts.

MR SOUTHWOOD: So far as the facts of the elements of the crime, your Honours, it is our submission that what remained binding were the findings made in the Court of Criminal Appeal because of the effect of section 27 - - -

DAWSON J: I see your time has expired, Mr Southwood.

MR SOUTHWOOD: If the your Honour pleases.

DAWSON J: We have your written submissions.

DAWSON J: We need not trouble you, Mr Hiley.

In this application the applicant seeks to call in question the method and standard of proof employed by the sentencing judge in the finding of facts for the purpose of sentencing the applicant following his plea of guilty to a charge under section 269(1)(a) of the Bankruptcy Act. Those findings were relied upon by the Full Court in considering the applicant's appeal against the suspension of his practicing certificate. This case is not a suitable vehicle in which to consider that question, particularly as an appeal against sentence raising that question is pending and the applicant had an opportunity of challenging those findings in the disciplinary proceedings. Otherwise the application does not raise any point of general principle and, in any event, would not enjoy sufficient prospects of success to warrant a grant of special leave. Special leave is refused.

MR HILEY: If the Court pleases, I seek an order for costs.

DAWSON J: What do you say about that?

MR SOUTHWOOD: I cannot oppose that, if your Honour pleases.

DAWSON J: Very well, with costs.

AT 12.03 AM THE MATTER WAS CONCLUDED