Berger v Council of the Law Society of NSW

EX TEMPORE Judgment 1On 14 August 2013, I published my principal judgment in these proceedings, Berger v Council of the Law Society of New South Wales [2013] NSWSC 1080. 2In summary, I upheld a decision of the Law Society to suspend Mr Berger's practising certificate. In the course of doing so, I made a number of serious findings adverse to Mr Berger and his trustworthiness as a solicitor (see [118] to [120] and [138]). 3When judgment was handed down I was about to resume the hearing of another proceeding. Junior counsel for Mr Berger, Mr Reynolds, immediately sought a stay of my orders for a period of seven days to enable Mr Berger to consider his rights of appeal. 4As the Law Society's decision to cancel Mr Berger's practising certificate had previously been stayed by Schmidt J (see A Solicitor v Council of the Law Society of New South Wales [2013] NSWSC 921), a stay of my orders would have had the effect of reinstating the stay on the suspension of the practising solicitor's certificate ordered by Schmidt J. I did not grant Mr Reynolds' application in full. Instead, I ordered a stay of my orders for a period of two days. At the time I indicated that, subject to receiving further argument, I might be prepared to order a stay for a period of weeks on strict conditions so as to enable Mr Berger to appeal to the Court of Appeal and apply for a further stay from that Court. 5The ensuing discussions between the Law Society and the legal representatives of Mr Berger have not resulted in any agreement as to the staying of my orders for that period. Mr Berger has now applied to extend the stay and has proffered certain conditions. In the course of argument Mr Berger also made an application to re-open a part of my judgment. It is appropriate that I deal with that application at the outset. 6The application to re-open turned upon what is set out in the principal judgment at [137] to [138]. At [137] I noted that Mr Berger had proffered certain undertakings at the time he obtained a stay from Schmidt J. I also noted that, at the hearing before me, he had by his counsel expressed a willingness to accept such further conditions as the Court considered might be appropriate to impose as an alternative to the suspension of his practising certificate. In [138] I stated as follows: "These matters have caused me to hesitate notwithstanding the severity of the findings that I have made. I considered whether to impose a condition that Mr Berger not deduct amounts from a trust account on account of legal fees unless advance notice and supporting material is provided to the Law Society and the external accountant. However it is to be recalled that the first payment did not involve a transfer of moneys from the trust account but the diversion of the proceeds of sale of Mrs Domabyl's unit in the retirement village. I have also considered whether to impose conditions that he not act under a power of attorney or as executor or the like. However the imposition of such conditions would probably only exclude him from acting on behalf of one category of vulnerable person, namely the elderly and infirm. What about other categories of persons who are vulnerable? Properly analysed, all clients of a solicitor are vulnerable if the solicitor acts improperly. Mr Berger's acknowledgement of the unauthorised taking of the funds does not undo the concerns that the Court has that he would continue to act improperly, at least in the immediate future. No conditions that could be imposed on his practice can overcome that (see Litchfield (Health Care Complaints Commission v Litchfield (1997) 41 NSWLR 630) at [639]). He represents an unacceptable risk. I am satisfied that it is necessary in the public interest to immediately suspend Mr Berger's practising certificate." 7The basis for the application to re-open is said to involve some breach of procedural fairness in the reasoning in this paragraph insofar as it involves a rejection of the statement of a willingness to accept whatever further conditions are necessary in order to avoid suspension. In effect, it was submitted that I did not consider a sufficient range of conditions falling short of suspension which might meet the concerns arising from the findings in relation to Mr Berger's conduct. 8For example, the first part of the paragraph sets out reasons for rejecting the imposition of a condition that Mr Berger not deduct amounts from a trust account without giving advance notice to the Law Society by pointing to the circumstances of the first payment which did not involve a transfer of monies from the trust account but instead involved the diversion of the proceeds of sale of property. In effect it was submitted that I should have, but did not, consider whether some further condition addressing the circumstance of the first payment should be imposed as an alternative to suspension. 9At the outset, it is not clear to me how this amounts to a breach of procedural fairness, but I pass over that. There is also a residual concern on my part that I am, in effect, being asked to sit on appeal of my own judgment. However, in any event the balance of [138] in my view either did, or sought to, address this very contention. In effect I concluded that the concerns that had been raised in respect of Mr Berger's trustworthiness by reason of my findings were such that no level of conditions could be imposed which would avoid the necessity for the suspension. Such conditions inherently involved a degree of trust being placed in the solicitor, however the findings made destroyed the basis for that trust. 10Accordingly, I decline the application to re-open. 11These observations then have resonance in terms of the application for a stay pending appeal. Senior Counsel for the Law Society, Ms Gleeson SC, in effect contends that, having made the findings that I have concerning Mr Berger and bearing in mind that the public interest is the principal, if not determinative, consideration in this area of discourse, a stay should not be granted. In effect, Ms Gleeson's submission embraces the observations I made at [138] and have just reiterated. She submits that, having concluded that no conditions could be imposed to meet the unacceptable risk that I found Mr Berger posed, I could not then by way of a stay allow him even a short period to practice on conditions. 12There is considerable force in those submissions. However, it needs to be borne in mind the precise point at which I am considering this application. I have made it clear that the only basis upon which I will consider a stay is for a relatively short period so as to enable Mr Berger to make an appropriate application to the Court of Appeal. The judgment that was published yesterday was reasonably detailed in terms of factual material. It would be unrealistic to expect a litigant in Mr Berger's position within a day or two to be able to put together proper grounds to attack it, so as to then seek to convince the Court of Appeal that his appeal is sufficiently strong so as to warrant a stay. Thus the context in which an application for a stay pending appeal arises for me is that I at least consider the matter upon the hypothetical basis that Mr Berger may ultimately be successful in overturning either the serious factual findings that I made against him or the conclusion that I drew in [138] set out above. 13The limited period for which I am considering a stay reflects the difficulty that I have in determining Mr Berger's prospects of successfully appealing. In short, it is not really appropriate for me to sit here and speculate as to what his prospects of successfully overturning my judgment are. Nevertheless, in considering whether to grant a stay pending appeal I must accept the possibility that he may do so. 14Ms Gleeson SC referred me to the decision of the Court of Appeal in New South Wales Bar Association v Stevens [2003] NSWCA 95. I discussed Stevens in the principal judgment at [10] ff. It is to be borne in mind that the stay that was granted by the judge at first instance in Stevens, that was overturned on appeal, was a stay pending a final hearing at first instance. It was thus a stay that contemplated the practitioner having the benefit of a practising certificate for a longer period than that with which I am concerned. 15The overturning of the stay granted in Stevens also occurred in circumstances where the contravention of the relevant tax legislation by the practitioner was not seriously in doubt. However, in this case, as I have stated, I must consider the application for a stay on the basis that at least what is sought to be preserved is Mr Berger's ability to argue that the finding that has been made against him should be set aside. 16Ms Gleeson SC also referred to the factors identified in the judgment of Finn J in the decision in Robb & Rees v The Law Society of the Australian Capital Territory (Federal Court of Australia, Finn J, 21 June 1996, unreported), especially at page 5 where his Honour stated: "There is a variety of factors of which account can or should properly be taken when considering a stay in such cases. Among these are (i) the seriousness of the misconduct found; (ii) 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; (iii) the means available to mitigate the prejudice alleged; and (iv) the expedition with which the appeal can be heard." 17Factors 1 and 2 have already been discussed. At the risk of repetition, I repeat that the stay sought has been considered in the context of preserving Mr Berger's ability to argue on appeal that the misconduct found against him did not occur. The prejudice to public confidence occasioned by him continuing to act will not arise if he is successful in overturning the findings. 18In relation to the fourth point, I am not in a position to gauge when the Court of Appeal might conduct the hearing. However, as I have stated, the proposed period for which I am considering granting a stay is only a matter of weeks. This in turn has a relationship to the public confidence element in that the granting of a stay for a limited period to allow a person to approach the Court of Appeal is in my view less likely to prejudice public confidence in the regulation of the legal profession than the granting of a stay for an extended period. 19There is then the question of prejudice. In the principal judgment at [28] and [29] I set out some aspects of Mr Berger's professional background and his current plans. It is in my view not irrelevant that he has been in practice since 1969, in the sense that one is weighing up two further weeks of practice against his continuous practice of 44 years. 20There is also the fact that in his evidence he described that he is currently acting on behalf of clients, some of whom are from a non English speaking background. Also at the time of the hearing he stated that he was expecting to employ two solicitors. 21On the limited material available, I could not be satisfied that if he immediately ceased practice there would be any solicitor who could assume the conduct of the affairs of his clients. Thus, it can be expected that if no stay was granted there would certainly be some dislocation and inconvenience caused to his clients as they would immediately find themselves without a solicitor. 22No doubt the Law Society contends that that inconvenience is far outweighed by the risk my findings mean that Mr Berger poses to their interests. However, as I have indicated, this application for limited stay is treated on the basis that Mr Berger has at least some prospect of overturning the findings against him. 23Bearing in mind those matters, I am minded to grant a stay up to and including 5.00pm on 28 August 2013. This will be a period of two weeks from the date of judgment. In my view it will allow a sufficient period for Mr Berger, acting with expedition, to formulate a notice of appeal and apply to the Court of Appeal for an extension of the stay if he is so minded. 24However, as indicated yesterday, I will only do so on certain conditions. Senior counsel for Mr Berger, Mr Davidson SC, has provided a document which specifies various conditions upon Mr Berger continuing to have a stay of the decision to suspend his practising certificate. Those conditions will be embraced in the orders that I am about to make. In addition, I will impose two further conditions. 25The first is that Mr Berger notify his existing clients of the outcome of the principal judgment within seven days of today. It is to be understood that Mr Berger can, at the time he notifies them of the outcome, also indicate whether he will be challenging the outcome of the judgment on appeal. 26The second is that by close of business tomorrow Mr Berger notify the Law Society of the balance of any trust account maintained by him and the balance outstanding to each of his clients. 27Accordingly, I will order that, up to and including 5.00pm on 28 August 2013, orders 2 and 3 made on 14 August 2013 in these proceedings be stayed on the following conditions: (1)That the plaintiff, during that period, not act under any power of attorney or as an executor. (2)That the plaintiff will not deduct any amount from his practice's trust account on account of his legal fees unless he has provided two working days' notice together with supporting material to the Law Society and to any external accountant of his practice. (3)That the plaintiff will deposit all proceeds of sale of any property, or any other funds that come within his control for the benefit of a client, into his practice's trust account. (4)That the plaintiff will not accept any payment from any client on account of his legal fees unless either the payment originates from funds held in his practice trust account and is paid out in a manner that complies with condition (2) or is a direct payment of legal fees in respect of an invoice and the payer is his client. (5)That on or before 5pm on 16 August 2013 the plaintiff will notify the Law Society of the balance of the trust account of his firm and the amounts outstanding to the benefit of each of his clients. (6)That on or before 21 August 2013 the plaintiff will notify his clients of the outcome of the principal proceedings. 28Further, I note the plaintiff by his counsel continues the undertakings given to Schmidt J on 9 July 2013.