Gersten v the Law Society [2003] NSWCA 39 (21 March 2003)

Last Updated: 24 March 2003

NEW SOUTH WALES COURT OF APPEAL

CITATION: GERSTEN v THE LAW SOCIETY [2003] NSWCA 39

FILE NUMBER(S):

41007/01

HEARING DATE(S): Written submissions

JUDGMENT DATE: 21/03/2003

PARTIES:

JOSEPH MORRIS GERSTEN v THE LAW SOCIETY OF NEW SOUTH WALES

JUDGMENT OF: Handley JA Stein JA Davies AJA

LOWER COURT JURISDICTION: Supreme Court - Common Law Division

LOWER COURT FILE NUMBER(S): CLD 10125/99

LOWER COURT JUDICIAL OFFICER: James J

COUNSEL:

Appellant - Paul Brereton SC

Respondent - John Griffiths SC/

Nicholas Beaumont

SOLICITORS:

Appellant - Oliveri Attorneys

Respondent - Raymond John Collins

CATCHWORDS:

LEGISLATION CITED:

DECISION:

Written submissions. Orders for costs made

JUDGMENT:

IN THE SUPREME COURT

OF NEW SOUTH WALES

COURT OF APPEAL

41007/01

CLD 10125/99

HANDLEY JA

STEIN JA

DAVIES AJA

21 March 2003

JOSEPH MORRIS GERSTEN v THE LAW SOCIETY OF NEW SOUTH WALES

Judgment on Costs

(written submissions)

1 THE COURT: On 22 November 2002 this Court published its reasons for judgment and made orders, other than orders for costs, disposing of the appeal. During argument on the appeal the parties had joined in asking this Court to defer making orders as to costs until they had had an opportunity to consider our reasons and orders.

2 Following the publication of reasons for judgment directions were given for the filing of written submissions and the last of these was received on 6 February.

3 James J, who dismissed the appellant's application under SCR Pt 65A r 3, ordered the appellant to pay the Law Society's costs of the proceedings. Since the substantive decision at first instance has been set aside, and an order granting the appellant's application has been substituted, this Court must now re-exercise the discretion of the primary Judge as to costs.

4 The proceedings at first instance took 19 days between February and July 2001 and the appellant's application was strongly contested. The Law Society however appeared in the proceedings to safeguard the standards of the profession in the public interest and for the protection of the public. See paras 51-4 of this Court's reasons of 22 November 2002. We have not been persuaded that the Law Society stepped outside this role. It follows that this was not adverse litigation in the ordinary sense.

5 Counsel for the Law Society submit that an application under SCR Pt 65A r 3 for an "otherwise order" lifting the automatic suspension under the rule is analogous to an application for re-admission by a former practitioner who has been struck off for misconduct. In such a case the Court will ordinarily order the applicant for re-admission to pay the costs of the Law Society or Bar Association. See Ex parte Lenehan [1948] HCA 45; (1948) 77 CLR 403, 425; Johns v Law Society (CA NSW u/r 6/6/91) and Ex parte Davis (1962) 63 SR (NSW) 54, not affected on this point by the reversal of the substantive decision [1963] HCA 31; ((1963) 109 CLR 428).

6 The analogy is not complete, as counsel for the appellant pointed out, because, where a practitioner has been automatically suspended under the rule, there has been no judicial finding in this State of unfitness to practise. Nevertheless the automatic suspension creates something akin to a presumption of unfitness for the period of suspension which the solicitor is required to displace. In our judgment therefore the analogy with applications for re-admission is sufficiently close to make the normal order for costs in re-admission cases relevant in the present context.

7 The proceedings at first instance were substantially lengthened by the appellant's attempts to have the primary Judge pass judgment on the criminal investigations and judicial proceedings in Florida. These attempts raised false issues and were doomed to failure for several reasons quite apart from their underlying factual merits which the Court was in no position to properly investigate. The appellant persisted with these attempts in this Court but leave to appeal was refused, without calling on senior counsel for the Law Society, on grounds 1, 2 and 6 in his provisional notice of appeal which were directed to those issues [par 39].

8 It is also clear that counsel for the Law Society were of considerable assistance to the primary Judge in elucidating important factual issues relevant to the events in Florida as the Judge expressly acknowledged [paras 442, 483].

9 Unfortunately counsel for the Law Society did not clearly direct the attention of the primary Judge to the real issues for determination in the proceedings, but counsel then appearing for the appellant (not Mr Brereton SC), is just as, if not more, responsible. By focusing on the false issues which took up such a large proportion of the evidence, the appellant's then counsel succeeded in diverting the attention of everyone, including himself, from the real issues.

10 The appellant submitted that there was no need for the Law Society to become involved as the Prothonotary, who also has a role in disciplinary proceedings involving legal practitioners, could have intervened instead in order to assist the Court.

11 However the role of the Prothonotary is a limited one, defined by Jordan CJ, which is to move the Court in its inherent jurisdiction where a legal practitioner on its roll has been convicted of a criminal offence thought to demonstrate unfitness. Ziems v The Prothonotary [1957] HCA 46; (1957) 97 CLR 279 is a well known example.

12 The Prothonotary does not normally move the Court in other cases and does not assume the burden of establishing professional misconduct by evidence other than proof of a conviction. Nor does he become involved in applications for re-admission by former practitioners who have been struck off the roll for misconduct. Thus it was entirely appropriate for the Law Society to intervene in the present case and undertake the burden of assisting the Court.

13 The point is of doubtful validity in any event since, if the Prothonotary had become involved, there is no reason for thinking that the proceedings at first instance would have been any shorter, or the costs incurred any less.

14 In these circumstances we would not disturb, in substance, the order made by the primary Judge that the appellant pay the Law Society's costs at first instance. However we would make that order subject to the condition that there be a stay of execution on any costs certificate for 6 weeks after it has become enforceable subject to the appellant, if so advised, applying within 2 weeks of service of the certificate to a Master of the Common Law Division to continue the stay.

15 We would impose this condition because the assessed costs of the proceedings at first instance are likely to run to a six figure sum. In our view the Law Society should not be able to make the appellant bankrupt for non payment of the costs if he proves that he cannot afford to pay immediately but can afford to pay by realistic instalments within a reasonable time.

16 These considerations do not determine the proper order for the costs incurred in this Court. We have held that the appellant should have succeeded at first instance, but it was necessary for him to appeal to this Court to secure the relief to which he was properly entitled. The Law Society actively opposed the appeal, which was not at all improper, but it could also have adopted the more neutral role of defending the trial Judge's primary findings and assisting the Court as to the law.

17 In our judgment therefore the appellant is entitled to some order for the costs in this Court but that order must take into account the substantial costs incurred on the false issues on which he failed. These include voluminous appeal books, extensive written submissions and some part of the hearing time. The appeal could have been argued on legal grounds based on the Judge's primary findings of fact and in substance this is what happened after we refused leave to appeal on grounds 1, 2 and 6. We would therefore not allow the appellant his costs of reproducing the evidence or the written submissions in so far as the latter were directed to grounds 1, 2 and 6.

18 Subject to that qualification we would order the Law Society to pay three quarters of the other costs incurred by the appellant in the appeal up to and including 22 November 2002. Since both parties have been partially successful in their submissions on costs we would make no order as to the costs incurred in the appeal since that date.

19 The following orders should be made:

(1) Appellant to pay the costs of the Law Society of the proceedings in the Common Law Division;

(2) Order that execution on the costs certificate, when issued in respect of the costs in the Common Law Division, be stayed for six weeks after the certificate becomes enforceable, subject to the appellant, if so advised, applying to a Master in the Division within 14 days of the certificate becoming enforceable to continue the stay and prosecuting that application with due diligence;

(3) Order the respondent Law Society to pay three quarters of the appellant's costs in this Court excluding the costs of reproducing the evidence in the appeal books and the costs of the written submissions directed to grounds 1, 2, and 6 in the provisional notice of appeal;

(4) Costs to be set off;

(5) The respondent to have a certificate under the Suitors Fund Act in respect of the costs in this Court.

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LAST UPDATED: 21/03/2003