Council of the Law Society of New South Wales v Arraj

Relevant aspects of the evidence 10In his affidavit, the Solicitor outlined the following features of his professional career. He was admitted as a solicitor on 7 April 2000. He worked as an employed solicitor until September 2007 at a law firm of which his brother Danny was the principal solicitor. He then became a director of an incorporated legal practice (Blackstone Waterhouse) formed by the merger of this firm with another law firm. At Blackstone Waterhouse, MCLE requirements were satisfied 'for the most part' by attendance at in-house seminars. He completed all of these requirements for the period to 30 June 2010 and some of the requirements of the succeeding year. 11The Solicitor left Blackstone Waterhouse in December 2010 and pursued what he called 'other interests' until the end of 2011. He retained his practising certificate. At the beginning of 2012, he commenced practice on his own account. Because he did not engage any staff, he found it very difficult to perform the necessary administrative tasks while also endeavouring to build up a new practice. 12It was not until the Solicitor filled in his application for a practising certificate for the year 2012-2013 that he realised that he had not met the MCLE requirements for the previous year. He notified the Law Society of this by ticking the appropriate box on the form. 13Ms Craglietto stated in her affidavit that each of the practising certificates issued to the Solicitor for the years 2011-2012 and 2012-2013 contained a condition that he must complete MCLE requirements by 31 March of the year following their issue. On 1 August 2012, she wrote to him stating that if his indication of having failed to do this was correct he should sign and return an undertaking, set out in her letter, to complete the outstanding units of MCLE within 90 days. 14On 12 October 2012, the Solicitor signed and dated this undertaking and returned it to Ms Craglietto. He did not comply with it within the specified period of 90 days. 15During 2012, the Solicitor was under considerable stress in his personal life. The reasons included difficulties in his marriage (which led to periods of intermittent separation between him and his wife) and the sudden death of a close personal friend on 7 December 2012. In his affidavit, he referred to these matters as partial explanation of his failure to make the arrangements required to comply with his undertaking by the due date. 16On 26 June 2013, the Solicitor sent to the Law Society an application for renewal of his practising certificate for the year 2013-2014. In it, he disclosed that he had not fulfilled the MCLE requirements stipulated in the certificate for the year 2012-2013. In an e-mail message sent to Ms Craglietto on 7 August 2013, he admitted that he had not fulfilled these requirements for that year or for the preceding year. He mentioned not being able to find 'relevant seminars'. 17In the course of further correspondence with Ms Craglietto, the Solicitor submitted two versions, respectively dated 7 and 15 August 2013, of an 'MCLE Activities Plan' for her approval. Each of them contained an undertaking to complete the MCLE units listed in it within 90 days. In an e-mail sent to him on 15 August 2013, Ms Craglietto pointed out that he had still not advised her whether he had complied with his obligations relating to the year 2011-2012. 18On 20 November 2013, the Solicitor sent to Ms Craglietto a document headed 'Record of MCLE/CPD Activities for MCLE/CPD Year'. This document listed, with dates, five MCLE courses that he had attended in the period between 26 August 2013 and 6 November 2013. In an accompanying e-mail, he pointed out that they amounted to a total of 21 units and that this was sufficient for the two relevant years. This was correct, as the number of units required during each of the two years in question was 10. If one treats the earlier of these five courses as satisfying the requirements for 2011-2012 and the latter as applicable to 2012-2013, he would be deemed to have satisfied the former requirements on 5 September 2013 19The Solicitor testified that he was 'embarrassed' as to the position in which he now found himself and 'contrite' with respect to his failures to discharge his responsibilities. 20In their affidavits, Mr Harb and Mr Danny Arraj testified that they regarded the Solicitor as a competent and hardworking practitioner and as a person of integrity. Each of them stated that they were aware of the allegations made against him in the Application. 21Having regard to the Solicitor's admissions in his Reply and to relevant aspects of the evidence that we have just outlined, we are satisfied that the matters alleged and particularised in the Application have been made out.

The Law Society's submissions 22Mr Pierotti argued that the facts of this case warranted the finding of professional misconduct that had been claimed in the Application and admitted by the Solicitor in his Reply. He based this submission on the fact that the Solicitor had not only failed over two successive years to comply with the conditions relating to MCLE set out in his practising certificates, but had also failed over a period of more than a year to comply with his undertaking to the Law Society. 23It was acknowledged by Mr Pierotti that in some decisions involving similar facts, the respondent solicitor had been found guilty of unsatisfactory professional conduct, not professional misconduct. But he added that in disciplinary decisions made under the Act compliance by legal practitioners with MCLE requirements was regularly treated as a matter of great importance. To illustrate this, he cited the following passage in a decision of the Administrative Decisions Tribunal, Council of the Law Society of New South Wales v Kim [2012] NSWADT 45, at [39]:- 39 The clients, the public, other members of the profession and the courts are entitled to expect a solicitor to be a person of honesty and integrity and to comply with legal requirements in relation to her Practising Certificate and undertakings given by her to the Law Society. They are entitled to expect a solicitor will be committed to continuing legal education as part of achieving and maintaining competence... 24In this case, the respondent solicitor, having at the time an unrestricted practising certificate entitling her to practise as a non-principal, applied for an unrestricted principal certificate. She included in her application an undertaking to complete 'the next applicable Practice Management Course where there is a position available'. The Law Society issued an unrestricted practising certificate to her on condition that she complied with this undertaking. Two later certificates that it issued to her also contained this condition. She did not comply with her undertaking until approximately 32 months after she had given it. 25The grounds of the Law Society's disciplinary application in Kim included two in similar terms to those advanced in these proceedings: i.e., breach of undertaking to the Law Society and contravention of a condition attached to a practising certificate. A third ground was that the respondent had failed to respond to correspondence with the Law Society. 26The Tribunal held, in line with a concession made by the respondent, that each of the three grounds amounted to professional misconduct. Its reasoning, set out at [38 - 41], was that each of them demonstrated a failure by her to maintain a reasonable standard of competence or diligence and that under section 497(1) of the Legal Profession Act 2004 ('the Act'), professional misconduct is defined so as to include 'unsatisfactory professional conduct... where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence'. The Tribunal reprimanded the respondent, imposed a fine of $5,000 and ordered her to pay the Law Society's costs. 27Mr Pierotti pointed out that at [33] the Tribunal listed a number of prior decisions in which breaches of an undertaking given by a legal practitioner had constituted the grounds for a finding of professional misconduct. While submitting that the decisions in this area provided no precise guidance and that each case depended on its own facts, he suggested that in the present case we should make the same orders as were made in Kim, except that the fine imposed should be of a lesser amount, such as $3,000.

The Solicitor's submissions 28While acknowledging that it was open to us to make a finding of professional misconduct, Mr Williams argued that a finding of unsatisfactory professional conduct was more appropriate to the circumstances of the present case. He accepted that contravention of a condition attaching to a practising certificate relating to mandatory CLE was both an offence under section 58(1) of the Act and a breach of Rule 42 of the Revised Professional Conduct and Practice Rules 1995 (being the Rules in force at the relevant time). But he pointed out that under section 498(1)(a) the contravention of any provision of the Act or the Rules was designated as 'capable of being' either unsatisfactory professional conduct or professional misconduct. 29In Mr Williams' submission, the Tribunal's decision in Kim involved 'more egregious facts' than the present case. He referred to the following observation of the Tribunal at [30]:- 30 The breach of the condition was quite serious because without compliance, the Practising Certificate did not authorise the Respondent to be a sole practitioner and she practised as a sole practitioner dealing with the public for 32 months on that basis. It was a more serious breach than where a practitioner does not complete the required number of units of Mandatory Continuing Legal Education in a particular year and renews his or her certificate. 30Mr Williams argued that this important consideration did not arise in the present proceedings. Unlike the respondent in Kim, the Solicitor had not been made subject to a condition that he must undertake a specific component of MCLE in order to obtain a practising certificate calling for him to exercise greater skill and assume greater responsibility in his legal practice. 31Six more Tribunal decisions on comparable facts were also the subject of comment by Mr Williams. The thrust of his argument was that the conduct held in some of them to amount to professional misconduct was more blameworthy than that of the Solicitor in this case and that in the remaining cases, conduct similar to that of the Solicitor had been characterised as unsatisfactory professional conduct. 32We will briefly review these decisions, in chronological order. In all of them, the respondent was a solicitor, and the orders made included an order that the respondent pay the applicant's costs. 33In Law Society of New South Wales v Waterhouse [2002] NSWADT 204, the respondent breached an undertaking given to another solicitor. He claimed that the undertaking had been induced by deceit. In making a finding of unsatisfactory professional conduct, the Tribunal took into account the fact that the Law Society had not advised him that he could apply to the Supreme Court for an order releasing him from his undertaking. He was ordered to pay a fine of $3,000. 34In Law Society of New South Wales v Hinde [2005] NSWADT 199, the respondent failed over a period of three years to comply with an undertaking (which the Tribunal described as 'foolish') to pay the commission owed to an estate agent on a sale of real property. He gave unconvincing excuses for his failure. The Tribunal made a finding of professional misconduct and ordered that he be reprimanded and fined $3,000. 35In Legal Services Commissioner v Piper [2006] NSWADT 12, the respondent breached an undertaking given to the Legal Services Commissioner to 'give the highest priority' to correspondence from the Commissioner and to reply to such correspondence 'within a reasonable time'. He provided no reply over a period of eleven months to correspondence on a particular matter, despite receiving several reminders from the Commissioner. His wife was suffering from cancer during this period. The Commissioner sought a finding of unsatisfactory professional conduct only. The Tribunal made this finding and imposed by way of penalty a reprimand and a fine of $1,000. 36In Law Society of New South Wales v Ling [2010] NSWADT 48, the respondent failed over a period of three years to comply with an undertaking given to the Law Society to obtain quarterly reports from an expert accountant on his GST returns and forward the reports to the Society. He also failed to answer correspondence from the Society. He was found guilty of professional misconduct, reprimanded and fined $2,500. In addition, the Tribunal imposed conditions on his practising certificate requiring him to complete certain courses of education and submit to mentoring by a senior solicitor. 37In the proceedings in Council of the Law Society of New South Wales v Panopoulos [2010] NSWADT 208, an Instrument of Consent was placed before the Tribunal pursuant to section 564 of the Act. According to the Agreed Statement of Facts, an unrestricted principal practising certificate was issued to the respondent on the basis of an undertaking by him to complete a course in Practice Management. He failed over a period of more than 33 months to comply with this undertaking. He also failed to reply to correspondence from the Law Society. The Tribunal made the finding and order proposed in the Instrument of Consent - namely, that the respondent was guilty of professional misconduct and that he be reprimanded - on the basis that they were 'within the permissible range'. 38In the last of the decisions cited by Mr Williams, Council of the Law Society of New South Wales v Sandroussi [2012] NSWADT 40, the respondent contravened conditions attaching to three successive practising certificates stipulating that he must comply with certain MCLE requirements. He also failed to honour two undertakings that he had given to the Law Society to comply with these requirements. The period during which he failed to fulfil the earlier of these two undertakings was nearly three years. In addition, he failed to respond to correspondence from the Society. Employing the same reasoning as had been adopted in Kim (see [26] above), the Tribunal made a finding of professional misconduct. It ordered that the respondent be reprimanded and fined $6,000. 39Mr Williams placed significant emphasis on the following aspects of the Solicitor's behaviour in the present case: (a) he had made full disclosure to the Law Society of his failures to complete MCLE courses; (b) he had co-operated fully with the Society's investigation of the matter; (c) he had not attempted in his Reply (which he filed promptly) or at the hearing of these proceedings to 'contest the incontestable'; and (d) he had shown remorse throughout both the investigation and the proceedings in the Tribunal. 40In view of what Mr Williams described as the 'very strong' testimonials provided by Mr Harb and Mr Danny Arraj, he submitted that in considering the matter of penalty we should not treat specific deterrence or protection of the public as necessary aims. This, he said, was because the Solicitor was clearly a person of integrity, who could be relied on not to reoffend. The accompanying aims of general deterrence and education of the legal profession would, he suggested, be sufficiently achieved by a reprimand. Because an order of this kind was given wide publicity through the internet, it had to be regarded as a significant penalty.

Discussion and conclusions 41The Tribunal decisions that we have just outlined illustrate the proposition, on which Mr Williams relied, that while breach of an undertaking and/or contravention of a condition attaching to a practising certificate have on a number of occasions provided the basis for a finding of professional misconduct, the lesser finding of unsatisfactory professional conduct may be appropriate in certain circumstances. 42We will mention a further decision illustrating this proposition, to which reference was made in some of the cases outlined above. In Council of the Law Society of New South Wales v Karam [2010] NSWADT 170, the respondent solicitor held a 'restricted corporate' practising certificate which limited his entitlement to practise to acting for his employer corporation only. In breach of this restriction, he acted for other clients in instituting Supreme Court proceedings. His retainer from them lasted for about 10 months. In an Instrument of Consent, it was proposed to the Tribunal that he be found guilty of unsatisfactory professional conduct and reprimanded. The Tribunal ordered accordingly, on the ground that these measures were 'within the permissible range'. 43We will add here that in three of the decisions outlined earlier - see Panopoulos at [31], Kim at [34] and Sandroussi at [29] - it is incorrectly stated that the finding made in Karam was one of professional misconduct. 44It is noteworthy, in our opinion, that in two of the three foregoing cases in which the finding was of unsatisfactory professional conduct - namely, Piper and Karam - the prosecuting authority did not press for the more serious finding of professional misconduct. In Waterhouse, which is the third of these cases, the Tribunal noted as a mitigating consideration the fact that the respondent did not realise (and the Law Society did not point out to him) that he could have applied to the Supreme Court for an order releasing him from his undertaking, on the ground that it has been induced by deceit. 45The conduct characterised as professional misconduct in at least two of the above cases - Kim and Ling - was evidently more 'egregious' (as Mr Williams submitted) than the Solicitor's conduct in the present case. But in two important respects, the Solicitor's conduct resembled that of the respondents in these two cases. 46First, the Solicitor's failure to comply with his undertaking subsisted over a significant period. He gave the undertaking, with which he promised to comply within 90 days, on 12 October 2012. But he did not comply with it until 5 September 2013, nearly eleven months later. 47Secondly, the Solicitor can properly be described as a 'repeat offender' with respect to the ground of contravening a condition of a practising certificate. Two successive practising certificates issued to him contained a condition requiring completion of MCLE units. He failed to comply with either of these conditions. 48We consider it relevant also (although this point was not made in submissions) that the period stipulated in the first of these certificates for compliance with MCLE requirements overlapped with a period of about one year when he had not been in practice. This factor made it particularly important, in our opinion, that he should not ignore these requirements. 49On account particularly of the factors that we have just outlined, our conclusion after careful consideration is that the Solicitor's conduct amounted to professional misconduct. 50In determining the question of penalty, we take account of Mr Williams' submissions regarding the aims to be pursued and the significance of a reprimand (see [40] above). We also take account of the considerations in the Solicitor's favour (outlined above at [39-40]) that Mr Williams drew to our attention. Mr Pierotti did not contest any of them. 51In our judgment, the appropriate penalties are a reprimand and a fine of $2,000. 52Subclause (1) of clause 23 of Schedule 5 of the Civil and Administrative Tribunal Act 2013 (which has replaced section 566 of the Legal Profession Act 2004) states:- ... the Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist. 53No exceptional circumstances have been alleged or proved. We therefore order that the Solicitor pay the Law Society's costs, as agreed or assessed. I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 16 October 2014