Council of the Law Society of New South Wales v DDQ

NCAT Occupational|2016-11-14

REASONS for decision

DDQ, a pseudonym, is and was at all times relevant to these proceedings, the holder of a practising certificate issued by the Council of the Law Society of New South Wales (the Society). He was first admitted to practise as an Australian lawyer on 15 February 2008.
On 25 May 2016, the Society made application to the Tribunal for disciplinary findings and orders against DDQ. The Society sought an order that DDQ be reprimanded and that he pay its costs of this application. These orders were sought on the sole ground that DDQ was guilty of professional misconduct in that he had contravened the provisions of s 67 of the Legal Profession Act 2004 (the 2004 Act).
DDQ accepts that he is guilty of professional misconduct by reason of the contravention alleged against him. He also agrees to the orders sought by the Society. Notwithstanding his acceptance and agreement, we must be satisfied that it is appropriate to make such a finding and, in the context of that finding, to make the orders sought.
Our reasons for accepting that the Respondent should only be known by the pseudonym DDQ are later explained. As will also appear, for those same reasons we also propose to make an order under s 581(1) of the 2004 Act that the disciplinary action taken against DDQ is not to be recorded in the Register maintained under Pt 4.10 or otherwise publicised under that Part of the 2004 Act.

Contravention of the 2004 Act

The facts relevant to the contravention of s 67 of the 2004 Act are within a very narrow compass. They are not controversial.
In January 2014, DDQ presented a debtor's petition for bankruptcy under s 55 of the Bankruptcy Act 1966 (Cth). Following presentation of that petition, he was declared bankrupt on 28 January 2014.
By notice dated 1 July 2014, DDQ notified the Society of the occurrence of a "show cause event", namely the fact that he had been declared bankrupt on 28 January 2014. His notice was received by the Society on 30 July 2014.
By s 4(1) of the 2004 Act, a "show cause event", in relation to a person, is defined to mean, amongst other matters, the presentation of a debtor's petition under s 55 of the Bankruptcy Act. Section 67 of the 2004 Act imposes an obligation upon the holder of a local practising certificate to disclose such an event. The section relevantly provides: "67 Holder of local practising certificate - show cause event (1) This section applies to a show cause event that happens in relation to a person (referred to in this Division as the holder) who is the holder of a local practising certificate. (2) The holder must provide to the appropriate Council both of the following: (a) within 7 days after the happening of the event - written notice that the event happened, (b) within 28 days after the happening of the event - a written statement explaining why, despite the show cause event, the person considers himself or herself to be a fit and proper person to hold a local practising certificate. (3) A contravention of subsection (2) is professional misconduct."
The practising certificate held by DDQ in 2014 was a local practising certificate. Although, on his own initiative, he notified the Society of his bankruptcy, he failed to do so within 7 days of that event occurring. Moreover, he did not, within 28 days of that event, provide a statement explaining why he considered himself to be a fit and proper person to hold a practising certificate.
By letter dated 21 November 2014, the Society notified DDQ of its resolution to make a complaint against him because of his failure to notify the Society of the presentation of his debtor's petition for bankruptcy within the time stipulated by s 67. He responded to that notice by letter dated 15 December 2014 in which he stated: "I failed to disclose the 'show cause' event in the appropriate time period because at the relevant time I was unable to due to illness. I have only worked approximately 10 days since April 2011. This has been due to illness. I have been slowly recovering this year, and this has allowed me to be able to attend to this matter on 30 July 2014. I intend to recommence fulltime employment early next year."
In his notice dated 1 July 2014 to the Society, DDQ explained that a major bank had obtained judgment against him for a sum in excess of $2,000,000. The judgment was obtained when the bank sued on a personal guarantee given by DDQ for a loan provided by the bank to a property developer. That guarantee had been provided in 2006, before DDQ was admitted to practise law in February 2008.
We have no hesitation in accepting the facts as we have recorded them. They accord with the documentary evidence tendered by the Society as well as the admissions candidly made by DDQ. They adequately demonstrate that DDQ did contravene s 67 by failing to report the presentation of his debtor's petition for bankruptcy within the requisite time and by failing to provide the statement required by s 67(2)(b) within the 28 day period there stipulated.
By operation of s 67(3) of the 2004 Act, that contravention constitutes professional misconduct. The question that remains for us to consider is whether it is appropriate to make the orders sought by the Society and consented to by DDQ. It is to that question that we now turn.

The subjective circumstances of the Respondent

The personal circumstances of DDQ offer a sad (but regrettably not uncommon) occurrence in contemporary professional life. Those circumstances are found in the affidavit evidence given by DDQ, the answers given by him at the hearing before us and in the documents that he tendered. None of that evidence was challenged by the Society.
Following his admission to practise as a solicitor in February 2008, DDQ was employed in one solicitors' firm for approximately 12 months before he joined a second firm, again as an employee, principally to work in the area of criminal law. His employment in that role was apparently successful as he quickly assumed a high workload in a busy practice. For some three years in that employment, he enjoyed both the nature of the work he was doing and the workload he was undertaking.
However, by February 2012 he states that he was finding the workload "difficult and arduous", with the feeling that he was "constantly under pressure". He sought medical advice, reciting these difficulties to his medical practitioner, as well as indicating that he was having difficulty in motivating himself to attend work. He was prescribed antidepressant medication.
In April of that same year he resigned from his employment. He did so because he felt that he "could no longer handle the pressure of the job". Moreover, he recognised that his alcohol use was increasing as he continued to struggle with the adequacy of the antidepressant medication to address his anxiety and depression.
Over the ensuing 16 month period, he did not practise as a solicitor. His mental health deteriorated to the point where he became estranged from his family and friends. He was homeless and became heavily dependent upon alcohol, amphetamines and cocaine.
Ultimately, with assistance, he came to the realisation that action on his part was required in an endeavour to regain his health and the life he once enjoyed. He travelled to Melbourne where initially he was admitted to a private hospital for a 4 week residential rehabilitation program. He was there treated by a medical practitioner specialising in addiction medicine.
Following discharge from that hospital in early October 2013 and with the assistance of his specialist doctor, DDQ was accepted to undertake an 11 week residential rehabilitation program at another facility in Melbourne. There he was advised by his counsellor that upon discharge from the facility, his recovery would be gradual and that he should not contemplate a return to work or be exposed to any stressful situation until he had been drug and alcohol free for approximately 12 months.
Although he was discharged from that facility during December 2013, he continued to reside in Melbourne, focusing upon his recovery. For that purpose, he attended meetings of Narcotics Anonymous twice per day and, as well, had regular consultations with his counsellor. Those measures were recommended to him by the addiction medicine specialist who had treated him when he first arrived in Melbourne.
One of the stressful situations that DDQ was confronting in January 2014 was the Supreme Court proceeding in which he was being sued on the guarantee he had provided for the property development loan to which we have earlier referred. With the encouragement and assistance of his father, he presented his debtor's petition for bankruptcy later in January 2014. He was also encouraged to take this course by his counsellor who expressed concern that the stress associated with the proceeding had the potential to impact upon his recovery. Having regard to his state of health at that time, DDQ says, and we accept, that it did not occur to him to notify the Society that he had presented a debtor's petition to the Official Receiver. As we have recorded, he was not practising as a solicitor at that time.
DDQ returned to reside with his father in this State in June 2014. By this time, his recovery from addiction had stabilised and he began to attend to his personal affairs and relationships. It was also at that time that he received from the Society his practising certificate renewal application form. In the process of completing that form and by reference to a question posed in it, he realised that he was required to notify the Society of his bankruptcy. Thus, his notice to the Society dated 1 July 2014. He said that he neither intended to mislead the Society as to his bankruptcy nor withhold that information from the Society. The obligation to give the requisite notice did not occur to him until that time, having regard to his state of health during the preceding six months.

Recovery of health: return to practice

Since June 2014, DDQ has continued to reside with his father. He is reunited with his family and friends and has his sons residing with him.
Heeding the advice of his treating doctors and counsellor, he did not resume practice as a solicitor until January 2015. He did so as a sole practitioner, setting up practice in a New South Wales regional city. That course has apparently been successful, as he describes his practice as having become "very busy" by the end of 2015. He further states: "I now employ one solicitor and one support staff and feel as though everything is going really well. I have currently struck the right balance between work, family and my recovery. Whilst my practice is very busy, I have learnt to manage my stress levels ensuring that it will not negatively impact on my mental health."
DDQ states that he has been free from alcohol consumption and drug taking since September 2013. His evidence is that he enjoys good health and by the daily regime he imposes upon himself, no longer suffers depression or anxiety.
Further, DDQ remains active in Narcotics Anonymous and Alcoholics Anonymous, attending four to five meetings each week. He holds committee positions in Narcotics Anonymous at both the local and regional level. In addition, he undertakes regular presentations on drug and alcohol dependence to sufferers at both a regional acute mental health facility and also at a regional correctional centre.
Since December 2015, he has been consulting Dr Stephen Jurd, a psychiatrist specialising in the treatment of those suffering from drug and alcohol addiction. Those consultations have taken place approximately once every two months. Doctor Jurd has provided a report that is before us. In that report he describes DDQ as "a man who is utterly committed to recovery from the alcohol and drug dependence which had so thoroughly despoiled his life."
Doctor Jurd then continues to recount the fact of DDQ's treatment by a colleague in Melbourne at the end of 2013 and early 2014. His report continues: "To me it is unsurprising that [DDQ] neglected his duty to inform the Law Society of his bankruptcy at this turbulent time. His complete focus on recovery from addiction in early 2014 has born fruit. I see him as likely to have a long and stable recovery."

The appropriate sanction

We have earlier recorded that DDQ is guilty of professional misconduct. That finding is not the consequence of assessing a number of acts or omissions in order to determine whether they engage the provisions of s 497 of the 2004 Act defining, as that section does, the expression "professional misconduct". Rather, our determination is one mandated by s 67(3), consequent upon our accepting that DDQ failed to give notice of the presentation of his debtor's petition for bankruptcy within the time stipulated by s 67(2). The statutory characterisation of that failure by s 67(3) must be accepted.
In considering the appropriate disciplinary order, consequent upon the finding of professional misconduct, we embrace the well-established principle that disciplinary proceedings of the present kind are concerned with the protection of the public rather than punishment of the practitioner for its own sake.
The same principle requires that the Tribunal's role in protecting the public not be confined to protection against any further misconduct by the practitioner who is the subject of disciplinary proceedings. The Tribunal's role extends to protection of the public from similar defaults and misconduct by other practitioners. As a consequence, it is relevant to consider the effect that an order made by the Tribunal may have upon the understanding in the profession, as well as among members of the public, as to the standard of conduct required of legal practitioners (Law Society of New South Wales v Walsh [1998] NSWCA 185 per Beazley JA).
However, these important principles do not deny the weighing by the Tribunal of subjective considerations that bear upon the circumstances in which the impugned conduct of the practitioner occurred. Clearly, conduct directly impacting upon a client or clients, such as improper trust account dealing or other acts of dishonesty, will be distinguished from conduct that evidences an unintended, albeit inadvertent, breach of a statutory obligation that has no impact upon a client and involves conduct that, considered objectively, neither involves moral turpitude nor offends any community norm.
The conduct with which we are here concerned is within the latter category of conduct just described. The obligation imposed by s 67(2) is absolute in the sense that adherence to its requirements is unqualified. However, the circumstances in which DDQ failed to observe that obligation in the timely manner required by the section significantly mitigate the seriousness of the breach. Those circumstances include: 1. the state of his mental health in January 2014; 2. the fact that he did notify the Society of the "show cause event" once he recovered his health sufficiently to recognise his obligation to do so; 3. throughout 2014, he did not practice as a solicitor; and 4. the circumstance giving rise to the presentation of his debtor's petition for bankruptcy did not, itself, arise from any conduct involving failure to comply with any statutory obligation; it did not arise from conduct involving moral turpitude nor, in those same circumstances, is it conduct of a practitioner falling short of community expectations.
There are other aspects of DDQ's conduct, earlier described in some detail, that we identify as bearing upon the determination of an appropriate order. They include: 1. the fact that in April 2012 he was sufficiently self-aware of the need to cease practice as a solicitor because of his mental state; 2. his ultimate recognition in late 2013 that he required medical assistance to address his state of health, particularly his addiction; 3. his diligence in pursuing the process of recovery; 4. his acceptance of the fact that he needed and continues to need ongoing assistance in order to maintain his state of health, both physical and mental; 5. his apparently successful return to practice as a solicitor; and 6. his contribution to the community by active involvement in seeking to assist others suffering from drug and alcohol dependence.
As we have earlier recorded, the Society seeks an order that DDQ be reprimanded. Taking account of the matters that we have identified, we consider that order to be an appropriate sanction and propose to make an order in those terms.

Publicity of proceedings and recording of their result

DDQ seeks an order that, having regard to his state of health at the time of beaching s 67 of the 2004 Act, the disciplinary action taken against him and the result, reflected in the orders we propose to make, should not be recorded in the Register identified in s 577 of that Act. In support of his application, he relies upon s 581 of the 2004 Act that provides: "581 Disciplinary action taken where infirmity, injury or illness is involved (1) Disciplinary action taken against a person is not to be recorded in the Register or otherwise publicised under this Part if the action was taken because of the person's inability properly to carry out the requirements of legal practice and the inability arises wholly or principally from infirmity, injury or mental or physical illness. (2) Subsection (1) does not apply where the disciplinary action involves, (a) the suspension or cancellation of the persons Australian practising certificate, or (b) a refusal to grant or renew an Australian practising certificate applied for by the person, or (c) a restriction or prohibition on the person's right to engage in legal practice, but in that case the reason for the disciplinary action, and any other information relating to the infirmity, injury or mental or physical illness, is not o to be recorded in the Register or otherwise publicised under this Division without the persons consent."
We consider that the circumstances attending DDQ's breach of s 67, as earlier described, do engage the provisions of s 581. We are fortified in reaching that decision from the fact that the Society did not oppose DDQ's application to apply the section.
The medical evidence provided to us, both in the notes prepared by Doctor Naham Warhaft, the medical practitioner specialising in addiction treatment who was responsible for DDQ's medical supervision in Melbourne, and the report of Doctor Jurd, supports a finding that from late 2013 until, at least, June 2014, DDQ was unable properly to carry out the requirements of legal practice as a solicitor, a circumstance recognised by DDQ himself. Further, the medical evidence supports a finding that such inability principally arose from the state of his mental health over that period. After experiencing the acute consequences of drug and alcohol addiction, DDQ was then in the early stage of his recovery, necessitating daily involvement in his prescribed recovery program.
Ordinarily, it must be expected that the conduct of proceedings for disciplinary orders, together with the orders made in those proceedings, be open to public scrutiny. By allowing that scrutiny, including publication of the name of the practitioner involved, at least one of the purposes of disciplinary proceedings, as earlier identified, is fulfilled. However, s 581 serves the purpose of allowing, in an appropriate case, the withholding of publicity identifying the practitioner, including the recording of his or her name in the Register, where the breach is wholly or principally attributed to the practitioner's state of health at the time of breach. This is an appropriate case in which to apply the provisions of s 581, having regard to the circumstances earlier described and the conclusions we have drawn from those circumstances.
Related to the application under s 581 of the 2004 Act is DDQ's request that we also apply the provisions of s 64(1) of Civil and Administrative Tribunal Act 2013 (the Tribunal Act). That section relevantly provides: "64 Tribunal may restrict disclosures concerning proceedings (1) If the Tribunal is satisfied that it is desirable to do so by reason of the confidential nature of any evidence or matter or for any other reason, it may (of its own motion or on the application of a party) make any one or more of the following orders: (a) an order prohibiting or restricting the disclosure of the name of any person (whether or not a party to proceedings in the Tribunal or a witness summoned by, or appearing before, the Tribunal) (b) an order prohibiting or restricting the publication or broadcast of any report of the proceedings in the Tribunal, (c) an order prohibiting or restricting the publication of evidence given before the Tribunal, whether in public or in private, or of matter contained in documents lodged with the Tribunal or received in evidence by the Tribunal, (d) an order prohibiting or restricting the disclosure to some or all of the parties to the proceedings of evidence given before the Tribunal, or the contents of a document lodged with the Tribunal or received in evidence by the Tribunal, in relation to the proceedings … (3) The Tribunal may from time to time vary or revoke an order made under subsection (1). (4) For the purposes of this section, a reference to the name of a person includes a reference to any information, picture or other material that identifies the person or is likely to lead to the identification of the person."
For the same reasons earlier identified, we consider that the provisions of s 64 of the Tribunal Act are engaged in the circumstances attending DDQ's breach. He has clearly demonstrated that he has re-established himself, both personally and professionally, as a responsible practitioner. He has done so in a regional city where publicity of the present proceedings and orders made has the potential to undermine his recovery and continued service to his community. As the Appeal Panel observed in Law Society of New South Wales v CQS at [5]: "…there remains a real risk that stereotypical negative attitudes may hinder the employment by firms or engagement by clients of lawyers who have mental health conditions such as depression or bipolar disorder." The Panel observed that the public protection function of proceedings, served by publication of the name of the practitioner involved, was outweighed in the circumstances of that case "by the public interest in supporting the rehabilitation and future career of the respondent." That observation is apt to be applied in the present case.
There is nothing in the evidence before us indicating that the conduct or omission that founds the present proceedings is likely to recur. The circumstance that our Reasons and orders may still be published, albeit framed so as to avoid the practitioner being identified, enables our decision to serve the educative role that is one of the important purposes served by proceedings for disciplinary orders.
We propose to make orders under both s 64(1) of the Tribunal Act and s 581 of the 2004 Act.

ORDERS

Having found that DDQ is guilty of professional misconduct by reason of his breach of s 67(2) of the 2004 Act, we make the following orders: 1. The Respondent is reprimanded. 2. The Respondent must pay the Applicant's costs of these proceedings in such sum as is agreed or assessed. 3. Pursuant to s 64 of the Civil and Administrative Tribunal Act 2013: 1. The name of the Respondent is given the pseudonym DDQ. 2. The disclosure of the Respondent's true name or of any evidence or document associating the Respondent, by his true name, with these proceedings is prohibited. 3. Subject to any further or other order of the Tribunal, access to and disclosure of evidence and documents filed with the Tribunal beyond that evidence disclosed in these Reasons is restricted to the Legal Services Commissioner, the parties and their respective legal representatives. 1. Pursuant to s 581 of the Legal Profession Act 2004, as rendered operative by the provisions of the Legal Profession Uniform Law (NSW) No.16a, the disciplinary action taken against the Respondent is not to be recorded in the Register pursuant to s 577 of the 2004 Act or otherwise publicised under Pt 4.10 of that Act.

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: 14 August 2017

Legal Profession Act 2004(NSW)

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Judgment (9 paragraphs)

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