Croton v Healy [2013] QCAT 547

CITATION: Croton v Healy [2013] QCAT 547 PARTIES: Sarah Croton (Applicant) v Hartley Healy (Respondent) APPLICATION NUMBER: OCL030-13 MATTER TYPE: Other civil dispute matters HEARING DATE: On the papers HEARD AT: Brisbane DECISION OF: Justice Alan Wilson, President DELIVERED ON: 10 October 2013 DELIVERED AT: Brisbane ORDERS MADE: 1. The matter is be set down for a hearing for one half day at a time and date to be advised by QCAT. CATCHWORDS: PROFESSIONS AND TRADES – LAWYERS – REMUNERATION – COSTS AGREEMENT – APPLICATION TO SET ASIDE – QCAT – CONSTITUTION OF TRIBUNAL – where s 328(1) of the Legal Profession Act 2007 (Qld) provides that the Supreme Court or QCAT may order that a costs agreement be set aside if the agreement is not fair or reasonable – where for a proceeding QCAT is empowered to deal with under the Legal Profession Act 2007, the Tribunal must be constituted by a judicial member – where judicial member is defined to include a Supreme Court judge or a former Supreme Court judge who is nominated by the President of QCAT to constitute the Tribunal – where the application to set aside the costs agreement was refused by a QCAT Adjudicator – whether decision by Adjudicator null or void – whether QCAT has power to make a fresh decision PRACTICE AND PROCEDURE – EVIDENCE – -- 1 of 5 -- 2 CREDIT – where applicant contends she was induced to enter the costs agreement because of misrepresentations made by employees of the respondent about the hourly rate – where the respondent denies the applicant’s contentions – where the Tribunal ordered that the matter be determined on the papers – where s 62(1) of the Queensland Civil and Administrative Tribunal Act 2009 (Qld) provides that the Tribunal may give a direction at any time in a proceeding and do whatever is necessary for the speedy and fair conduct of the proceeding – where the credit of the parties involved in the conversation regarding the hourly rate is an issue that must be determined by the Tribunal – whether it is necessary for the fair conduct of the proceedings to allow the parties to present oral evidence Legal Profession Act 2007 (Qld), s 322(1), s 328(1), s 328(2)(a), s 598 Queensland Civil and Administrative Tribunal Act 2009 (Qld), s 28, s 62(1) Minister for Immigration v Bhardwaj (2002) 209 CLR 597, applied APPEARANCES and REPRESENTATION (if any): This matter was heard and determined on the papers pursuant to s 32 of the Queensland Civil and Administrative Tribunal Act 2009. REASONS FOR DECISION [1] This matter has an unfortunate history. On 13 September 2013 the Tribunal, constituted by an Adjudicator, refused an application to set aside a costs agreement between a law practice, Hartley Healy, and its client, Sarah Croton. [2] Under s 322(1) of the Legal Profession Act 2007 (Qld) (‘LPA’) a costs agreement may be made between a client and a law practice retained by the client. Part 3.4 of the LPA sets out, amongst other matters, the requirements for the making and setting aside of costs agreements in relation to legal services. [3] Section 328(1) relevantly provides that either the Supreme Court or QCAT may order that a costs agreement be set aside if it is satisfied the agreement is not fair or reasonable. Where an application is made to QCAT for such an order, s 598 of the LPA states that the Tribunal is to be constituted by a ‘judicial member’, a term itself defined to include: -- 2 of 5 -- 3 (a) a Supreme Court judge; or (b) a former Supreme Court judge who is nominated by the President of QCAT to constitute the Tribunal. [4] The Tribunal, through an administrative error, failed to allocate the application to a member with the requisite authority to decide such matters. [5] With respect, it would appear the learned Adjudicator fell into error by failing to recognise the limits placed on the Tribunal’s jurisdiction to hear and determine matters it is empowered to deal with under the LPA. [6] The question for the Tribunal, then, is whether the law relating to jurisdictional error allows QCAT to, on its own initiative, set aside the decision of 13 September 2013 and substitute one made by a judicial member. [7] In Minister for Immigration v Bhardwaj1, Gaudron and Gummow JJ held: There is, in our view, no reason in principle why the general law should treat administrative decisions involving jurisdictional error as binding or having legal effect unless and until set aside.2 [8] Describing decisions involving jurisdiction error as lacking ‘legal foundation’ their Honours commented that such decisions should be properly regarded as ‘no decision at all’3. In their view: [I]f the duty of the decision-maker is to make a decision with respect to a person’s rights but, because of jurisdictional error, he or she proceeds to make what is, in law, no decision at all, then, in law, the duty to make a decision remains unperformed.4 [9] It follows that the learned Adjudicator’s decision of 13 September 2013 is void. In both legal and practical terms, with reference to the statutory regime in which this matter was originally brought, it must be looked upon as something which never happened. The Tribunal must now consider the application afresh. [10] That, regrettably, raises another aspect of the matter which is unsatisfactory. [11] In a letter from her present solicitors which accompanied her original application to QCAT to set aside the costs agreement, Ms Croton indicated that one of the grounds upon which she sought to do that was that she was induced to enter into the agreement by reason of misrepresentations made by two named employees of the respondent law practice. 1 (2002) 209 CLR 597. 2 Ibid 614 [51]. 3 Ibid 616 [53]. 4 Ibid. -- 3 of 5 -- 4 [12] On 4 June 2013 a Senior Member of the Tribunal ordered that, unless otherwise objected to by either party by 4:00 pm on 30 June 2013, the application would be determined on the papers by written submissions from the parties, and without oral hearing. [13] So far as the QCAT file indicates, neither party has objected. [14] Both parties have, however, filed written submissions. Although Ms Croton’s submissions are short, nothing in them suggests that she resiles from the allegation that in conversations with two named employees of the respondent firm it was represented to her that she would be charged fees at a specified hourly rate, and that the fees actually charged to her under the costs agreement upon which the law practice relies were higher. Nor does she, apparently, resile from the allegation that she was induced to enter the agreement as a consequence of misrepresentations about the hourly rate. [15] That matter is dealt with in considerable length in the 32 page written submission referred from the respondent law practice. It is denied, in strong terms. [16] As Ms Croton’s submissions point out, one of the matters to be considered by QCAT when deciding whether or not a costs agreement is fair or reasonable is whether the client was induced to enter into the agreement by misrepresentation on the part of the law practice, or of any of its representatives.5 [17] Where both parties are giving quite different versions of what was said, and one is alleging misrepresentation, credit is plainly a vivid issue. It cannot be, in my respectful view, adequately or sufficiently addressed and determined by the Tribunal by any method other than one which would allow the Tribunal to form a confident view about where credit, and the truth, lie in the face of conflicting versions about what was said in an oral conversation. [18] Traditionally, credit issues of that kind are determined in the Courts, and each party is entitled to cross-examine the other. As the author of a learned text on ‘Justice in Tribunals’6 says, it is trite law that in the Court cross-examination is a fundamental right. [19] While that author, Dr John Forbes, goes on to conclude that the present balance of authority is against a common law right of cross-examination in Tribunal’s, QCAT operates within certain statutory parameters under the Queensland Civil and Administrative Tribunal Act 2009 (‘QCAT Act’). It has a broad discretion as to how it conducts proceedings, and is not bound by the rules of evidence, or any practices or procedures applying to 5 LPA s 328(2)(a). 6 Dr J R S Forbes (2010, 3rd Edition, Federation Press) at [12.76]. -- 4 of 5 -- 5 Courts of record, but it must observe the rules of natural justice and must act fairly and according to the substantial merits of the case.7 [20] This is a case in which a matter going to the substantial merits may hinge to a greater or lesser degree upon the Tribunal’s ability to form views about the credit of the parties who were involved in the conversation now in dispute. The proper determination of that issue requires that the Tribunal, at least, allow the parties the opportunity to present oral evidence, and to be cross-examined on that issue. That is not to say, of course, that the parties are compelled to give evidence-in-chief, or to cross-examine. But, for present purposes, I am driven to the conclusion that for the Tribunal to attempt to determine the issue on the basis of written submissions – indeed, neither party has actually sworn an affidavit or statutory declaration providing its version of the conversation – would be unsatisfactory and inappropriate in light of the terms of the QCAT Act. [21] Under s 62(1) of the QCAT Act the Tribunal may give a direction at any time in a proceeding and do ‘… whatever is necessary for the speedy and fair conduct of the proceeding’ (emphasis added). I have come to the view that, with respect to the learned Senior Member’s earlier order, a direction requiring that this matter be heard and determined on the papers does not meet the necessary demands arising from the circumstances of the case. For that reason, it will be ordered that the matter be set down for a hearing for one half day at a time and date to be advised by QCAT. For the reasons mentioned earlier in [3], the hearing will be before the President (a Supreme Court Judge) or another Judicial Member of the Tribunal (who may be a former Supreme Court Judge). 7 QCAT Act s 28(1)(2), (3). -- 5 of 5 --