Naidu v Chief Registrar [2011] FJCA 17; ABU0038.2010 (2 March 2011)

IN THE COURT OF APPEAL, FIJI ISLANDS
(Appeal from the Independent Legal Services Commission)

Civil Appeal No.ABU 0038 of 2010
(LPU 005 of 2009)

BETWEEN:

DORSAMI NAIDU
Appellant

AND:

THE CHIEF REGISTRAR
Respondent

Date of Hearing: Tuesday, 25th January 2011

Counsel: Ms T Draunidalo for the Appellant
Ms V Lidise for the Respondent

Date of Ruling: Wednesday, 2nd March 2011

RULING

1. Mr Dorsami Naidu is a senior and respected member of the legal profession. But complaints against him relating to his actions in a number of matters handled by him or under his supervision were made to the regulator of legal services. None of them involved dishonesty. What they did involve were mistakes in procedure and in conveyancing which cost persons relying upon his performance monetary loss delays and great inconvenience.

2. The Chief Registrar (who is the regulatory authority) proceeded with 5 out of 7 complaints before the Independent Legal Services Commission. The Commissioner is Commissioner John Connors formerly Mr Justice Connors. I gratefully adopt some of the background from the submissions of Ms Lidise in the following paragraphs.

3. The Respondent during the hearing only proceeded with complaints 1, 3, 4, 5 and 6, having sought the withdrawal of complaints 2 and 7.

4. The hearing was conducted on the 20th, 21st of April, 5th, 6th and 9th of July 2010 due to the unavailability of some of the complainants, the unavailability of some of the Appellant's witnesses and also the Commission's limited sitting timetable.

5. On the 13th of August 2010, the Commissioner delivered his judgement in which he made the following findings:

(i) in respect of complaints 1B, 3A, 4A, 6C and 6D the Appellant was found guilty of unsatisfactory professional conduct.

(ii) in respect of complaints 3B and 6B, the Appellant was found guilty of professional misconduct.

(iii) Complaints 1A, 1C, 4B, 5A, 5B, 6A and 6B were dismissed.

(iv) Complaints 2 and 7 were withdrawn and dismissed.

6. On the 16th of August 2010, the Commissioner delivered his judgment on penalties, making the following orders:

1. The Respondent is to undertake not less than 10 hours of professional development or legal education in the disciplines of Conveyancing, Real Property and Practice Management in Fiji, New Zealand or Australia and the syllabus or programme is to be approved by the Chief Registrar.

2. Order 1 is to be complied with prior to the 30th of June 2011 failing which the Respondent's practising certificate is to be suspended without further order.

3. The Respondent is to pay the Commission by way of a fine the sum of $1500 within one month failing which the Respondent's practising certificate shall be suspended without further order.

4. The Respondent is to pay to the Commission for payment out to the Applicant witness expenses totalling $1,428.95 being Jagat Reddy $692.95, Indar Deo $68.00 and Hari Lal $668.00. Such payment is to be made within one month failing which the Respondent's practising certificate shall be suspended without further order.

5. By consent with respect to 3 the Respondent shall prepare all necessary documents, arrange their execution by all relevant parties and register the transfer with the Registrar of Titles to transfer one quarter acre of land from Siga Mani Naicker and Chin Sami Naicker to Hari Prasad Lal. The consideration is the sum of $9260.00 already held by the Respondent. Hari Prasad Lal shall meet all necessary survey costs and the costs of extraction of fresh title documents.

6. The Respondent shall complete the transaction referred to in 5 above within 3 months of completion of the necessary survey.

7. The Chief Registrar shall supervise the performance of orders 5 and 6.

7. Immediately thereafter, the Appellant sought to make an application for stay but given that he had not filed a Petition of Appeal, the application which was made orally, was dismissed. He subsequently filed a written application before the Commission which was heard on the 17th day of September 2010 and the Commissioner having considered submissions made by counsel for the Appellant and the Respondent, declined to impose a stay and dismissed the application.

8. Having set out the background I turn to the principles in civil appeals when a party losing the case at first instance files a Notice of Appeal and then applies for a stay of execution until his or her appeal succeeds or fails. The experience of the law is that if the appeal fails and a further final appeal is available, the two time loser will often seek a stay pending a final appeal. The appeals may have little or no merit and no chance of success.

9. In civil cases in contract or tort, there is a real danger that delaying payment to the Plaintiff is the name of the game. There is also the danger that the Plaintiff will be pressured into a prejudicial compromise by the continuing escalation of legal proceedings taking many years at great cost without results. So the policy of the law laid down by Lord Selborne LC in Barker v. Lavery [1885] UKLawRpKQB 32; (1885) 14 QBD 769, by Lord Esher MR in Atkins v. Great Western Railway (1885-86) 2 Times Law Reports 400, and by Lord Esher MR and Lord Justice Bowen in The Annott Lyle (1885-1887) 10 – 12 P.D. 114 is that in all money judgment cases there will be no stay except in special or exceptional circumstances. The successful Plaintiff must not be kept out of the fruits of the litigation. Exceptional and special circumstances are very restrictively defined. It is difficult or impossible to find an authoritative reported case where the special circumstances exception actually applied. And if it did apply in money judgment cases a condition of the stay should be that all the judgment monies are brought into court.

10. What about chances of success? The first principle in respect thereof comes from Atkins v. Great Western Railway (supra) at page 400. The Defendant's Counsel said that the Great Western Railway Company "had the strongest grounds of appeal". Lord Esher MR responded immediately:

"strong grounds of appeal is no reason for no one ought to appeal without strong grounds for doing so."

What follows from this is that strong grounds of appeal have no impact upon a stay being granted. It is not a special circumstance.

11. In the late twentieth century there are cases which show that if the chances of success on appeal are not good the application for a stay must be refused. I refer to the mostly Hong Kong cases mentioned in paragraph 24 of my ruling of 17th February 2011 in Civil Appeal No.ABU0022 of 2009 Attorney General v. Loraina Dre.
12. In so far as these cases include a statement such as:

"The most important consideration in respect of whether a stay of execution should be granted is whether there are strong grounds of the proposed appeal."

some care should be taken to interpret such words in the context of the whole set of legal rules governing the exercise of this discretion. The whole set of applicable rules principally derives from the three authorities of Barker v. Lavery (supra), Atkins v. Great Western Railway (supra) and The Annott Lyle (supra). From these cases there is the citation from Atkins at paragraph 10 with which the words under scrutiny might be thought to be inconsistent. There is also from the Annott Lyle at page 116:

"[the Court does not] make a practice of depriving a successful litigant of the fruits of his litigation, and locking up funds to which prima facie he is entitled."

13. I conclude this aspect by suggesting two propositions:

1. Consistent with paragraph 11 above the importance of the words under scrutiny is that without grounds which in terms of chances of success are exceptional there will be no basis for a stay being granted.
   
2. At the present time if there are exceptional chances of success, that may be a new "special circumstance" which subject to the application of the other principles, may justify a stay being granted.
   

14. But wherever a stay is granted in money judgment cases it will usually be in terms such as the payment of some or all of the money due into court.

15. I find the money judgment principles very applicable by analogy to the present situation where the regulator representing the public interest has succeeded at first instance. I accept that in cases of this kind the factor of a direct public interest is one that does not figure in the money judgment cases from which the basic principles derive.

The Australian cases on the importance of public interest
in regulatory decisions when a stay is sought pending appeal

16. A convenient starting point is the judgment of Justice Michael Kirby in the High Court of Australia in Bryant v. Commonwealth Bank of Australia [1996] HCA 3:

"In the exercise of the jurisdiction to provide a stay, it has often been emphasised that cases involving a stay of the operation of the criminal law or of laws designed to protect the public (e.g. deregistration of a professional lawyer or medical practitioner) are in a class different from [other] cases."

17. In three leading cases in Australia stay against regulatory sanctions taking effect pending appeal were set aside by superior courts. In each of these cases one of the factors against stays being granted by the appeal courts was:-

"the likely prejudice to public confidence both in the integrity of the disciplinary processes themselves and in the reputation of the profession if the practitioner is granted a stay."

[per Mr Justice Finn in Robb v. The Law Society of the Australian Capital Territory, unreported No. ACT G34 of 1996 (21st June 1996)

18. Robb is the first in time of the three cases. The second of the three cases in sequence of time is New South Wales Bar Association v. Stevens [2003] NSWCA 95 (24th April 2003) NSWCA 95 (24th April 2003). The third case is Legal Services Commissioner v. Baker (2005) QCA 482 (23 December 2005).

As the sequence progresses the earlier decisions are cited and the reasoning in them is discussed and approved.

19. In Stevens the leading judgment in the New South Wales Appeal Court is that of Spigelman CJ with whom Meagher JA and Sheller JA agreed.

20. Criticising the reasoning of the learned justice in the court below Spigelman CJ said at paragraphs 114 and 115:

"114. His Honour referred to the 'balance of convenience'. The injury to the public arising from the continuation in practice of a person unfit to do so is not comparable to the detriment to the practitioner from being prevented from practising. These matters are not measurable on the same scale, although they are both entitled to weight. Terminology such as 'balance of convenience' is not apt. It is likely to lead to failure to consider the public interest.

115. Similarly, his Honour's reference to preserving the status quo suggests an approach applicable to balancing private interests. Where the public interest is engaged, the status quo has no particular significance. There is no presumption in favour of the continuation of the status quo in such a context."

In my view the principles here expressed by Spigelman CJ are also the law of Fiji, although I have a caveat with regard to balancing the detriment to the practitioner. It is to be noted that in Baker, Chesterman J with whom President McMurdo and Helman J agreed, approved Robb and Stevens and after quoting them extensively concluded:

"The cases contain strong statements but I respectfully think they are right. This Court should follow them."

Public interest in stay application in judicial review and similar situations

21. In judicial review cases where the administrative decision is claimed to be unlawful because of a mistake of law by the decision maker, the application may be dismissed at first instance. An appeal may be lodged and it may be said the issue of law is a matter of public interest and public importance. A stay may be applied for on the basis of this legal issue being one of public interest and importance.

22. Ms Draunidalo for the Appellant Dorsami Naidu in her oral and written argument relies upon Reddy's Enterprises Ltd v. Governor of the Reserve Bank of Fiji [1991] 37 FLR. This was an application for judicial review as described above. But, and this is important, what was sought to be stayed and what was stayed pending appeal was not the first instance judgment discussing the application but the underlying administrative decision. Seldom if ever in judicial review will the first instance decision against the applicant be relevant for a stay because it is no more than an adjudication that the administrative decision making process was not unlawful.

23. This is not a situation where it is necessary to decide if Tikaram RJA (as he then was) was right or wrong either on the applicable principles or on their application to the facts. There may well be situations where, whether by way of judicial review, or of test cases in civil actions, legislation is brought to the courts for interpretation with regard to its true meaning and proper interpretation. In such cases it will often be urged that a stay of execution should be granted in the public interest pending appeal. Particularly where test cases can be dealt with expeditiously by the Courts. The public interest in this sense is quite different from a "public interest". Plaintiff such as the regulator is in the present case. The kind of cases exemplified in this paragraph and by Reddy's Enterprises Limited have no relevance to the rules governing a stay of execution whether it be a in a money judgment case or a regulatory judgment which the regulator has brought at first instance in the public interest of protecting the public who use legal services from the errors of legal practitioners.

24. As I have explained from the most authoritative decisions from the mainstreams common law countries, the rules governing the exercise of the discretion to order a stay pending appeal are few in number, simple and easy of application. It is a discretion governed by a strict legal rules which must be applied. There is no real difference when it comes to the Plaintiff who is the regulator in professional discipline cases. The public interest represented by the regulator in professional discipline cases makes the regulator as a plaintiff at least as important as the Plaintiff who must not be kept out of the fruits of his judgment in money judgment cases. Essentially the same rules apply.

25. In paragraph 19 above I said I had a caveat with regard to Spigelman CJ's qualification in Stevens to the correct statement, at least in my view, that "balance of convenience" is irrelevant and inappropriate in disciplinary stay pending appeal cases. My caveat is to the proposition seemingly espoused by Spigelman CJ in Stevens, that "detriment to the practitioner from being prevented from practising" is a matter relevant to the stay application and a matter which is entitled to weight.

26. Stevens and the two other disciplinary cases had to be decided by stressing the public interest of the Plaintiff / regulator in the first instance proceedings and no ruling obtained in the regulator's favour. That arose because some cases cited in Stevens as precedents on when stays should be granted, strayed from the fair and simple principles laid down in Barker v. Lavery, Atkins v. Great Western Railway and The Annott Lyle. There is borrowing from the public interest cases discussed at paragraphs 21 through 23 above where there is public interest in the final result as it may affect new or important legislation and the correct interpretation of it. There is also borrowing from Lord Diplock in American Cyanamid v. Ethicon Ltd [1975] UKHL 1; [1975] AC 396 where the phrases "balance of convenience" and "serious issue to be tried" were introduced but only into the legal framework of quia timet interim injunctions where the plaintiff was seeking protection in respect of a threatened continuing breach of a proprietary or other established legal right.

27. Spigelman CJ sees "balance of convenience" as of no relevance within the legal framework of stays of execution pending appeals where they involve regulatory proceedings brought to protect the public interest. But weighing up of detriments and prejudices to the losing practitioner is no part of the Barker v. Lavery rules. This is not a case where there is a public interest in the outcome of challenges to the proper interpretation of new or important legislation. What Spigelman CJ probably believed was that he could not depart from the authorities adverted to in paragraph 26 above that stray from Barker v. Lavery principles.

28. I have no doubt that the simple rules that govern the application in this case come down to two. These are:-

(1) Is there proven a special circumstance which stands in the way of the regulator successful at first instance, whose position is strengthened by representing an important public interest, from enforcing the fruits of his judgment?

(2) Are there special or exceptional chances of success with regard to the practitioners appeal?

29. The special circumstances both in respect of possible non-repayment by an impoverished Plaintiff should the Defendant's appeal succeed or where the Plaintiff is a foreigner living overseas apply only to money judgments. Therefore the answer to the first point is that there are no special circumstances proved. Therefore this Court should refuse the stay pending appeal application. In these circumstances the legal rules intend that the Plaintiff, here the Chief Registrar should enjoy the fruits of litigation at first instance.

30. Before turning to the second point I must again mention Miss Draunidalo's principal argument. It was that there is a public interest in granting a stay where Commissioner Connors had entertained and applied a principle that extended duties of solicitors to complainants other than those who were their clients. That, I understood Miss Draunidalo to argue, extended disciplinary proceedings into a new area where the profession, if it realised the implications of Commissioner Connors' judgment, would rightly campaign long and hard against it. Implicit in this is the proposition that the Court of Appeal will allow the appeal.

31. This not being a judicial review application or similar, any proposition based upon Reddy's Enterprises Limited (supra) and public interest in that sense is not applicable and is therefore bound to fail. I can however consider the same point under special or exceptional chances of success.

32. The argument centres upon Complaint number 3 which is discussed in the judgment of Commissioner Connors at pages 5 through 8. It was a purchase of land that was in co-ownership at the time of the sale. The vendor was one of the co-owners. The complainant was the purchaser. He paid out a deposit and for a survey. The vendor paid Pillai Naidu & Associates for the conveyance. The vendor was the client. But both vendor and purchaser were relying upon a competent conveyancing job from the applicant Dorsami Naidu. There was in the document actually produced no obligation on the vendor to secure the signature of the other tenant in common. It was an incompetent conveyance which failed to effect the intended transaction. The complainant was left with no land, no deposit and wasted expenses. There was an arrangement for the complainant to take the agreement to a neighbouring law firm for "independent" advice. The Commissioner found that this arrangement (which failed) was not enough when the conveyance was incapable of producing the intended outcome.

33. What are the chances of success of Dorsami Naidu's appeal?

34. I accept that in most cases if the solicitor is negligent or not conducting himself properly it will only affect and damage the client. But I am sure that vendor and purchaser is an area where conveyancing incompetence can affect all persons relying on proper and effective performance of the solicitor regardless of who pays the fees. Joint ownership of property is an area that requires special care and skill. When one considers trusts and trust property in my view there are likely to be persons other than the client who are directly and adversely affected if the documents are not competently drawn up so that they are effective.

35. The safeguard of "independent advice" failed and the chances are that on this appeal the safeguard will not be found to absolve the solicitor drawing up an incompetent and ineffective document.

37. I conclude that the chances of success of the Court of Appeal interfering with the findings and conclusions of the Commissioner are at best "arguable". They are well short of the special or exceptional chances required for a stay. In my opinion this application for a stay must be dismissed.

Order

38. I make the following orders:

(1) The application by Dorsami Naidu for stay of execution of the orders of Commissioner John Connors of 16th August 2010 pending appeal be dismissed.

(2) The applicant Dorsami Naidu do pay the costs of Chief Registrar in respect of this application assessed at $1,000.

William R. Marshall
Resident Justice of Appeal