Council of the Law Society of New South Wales v Kernaghan

NCAT Occupational|2022-05-09

trist to notify the Director, as soon as possible, of any: i. advice or recommendation by the Treating Psychiatrist regarding the Respondent's treatment and/or medication which differs from any previous advice or recommendation by the Treating Psychiatrist regarding the Respondent's treatment and/or medication; and ii. failure by the Respondent to comply with clinical advice as to treatment and/or medication or in the event there is any significant change or deterioration in the Respondent's mental state which may adversely affect the Respondent's capacity to practise as a legal practitioner. e. Within 28 days of the date of these orders the Respondent, at his own expense, is to provide to the Director a written acknowledgement from the Treating Psychiatrist that the Treating Psychiatrist is willing to make the notification contemplated by paragraph 4.d. f. Within three months of the date of these orders the Respondent, at his own expense, is to provide to the Director a report prepared by the Treating Psychiatrist regarding the Respondent's fitness to engage in legal practice, the details of the Respondent's prescribed or recommended treatment plan and the Respondent's compliance with any prescribed or recommended treatment plan (Treating Psychiatrist's Report). g. The Respondent is, at his own expense and on a 3-monthly basis, to notify the Director in writing of the dates on which he attended appointment(s) with the Treating Psychiatrist during the previous three month period and of the date(s) of the Respondent's next scheduled attendance(s). The Respondent is to provide those notifications on or before 30 March, 30 June, 30 September and 30 December each year unless and until: i. the Director is provided with confirmation in writing from the Treating Psychiatrist that the Treating Psychiatrist no longer recommends that the Respondent requires psychiatric treatment; and ii. the Applicant is satisfied that the Respondent no longer requires psychiatric treatment. h. If the Respondent establishes an ongoing therapeutic relationship with another treating psychiatrist (Substitute Treating Psychiatrist) other than the Treating Psychiatrist, the conditions in paragraphs 4.a to 4.f inclusive shall apply mutatis mutandis in respect of that Substitute Treating Psychiatrist, such obligations arising within 28 days after the nomination of the Substitute Treating Psychiatrist. i. If the Respondent fails to comply with paragraphs 4.e, 4.f and/or 4.g of these orders, his practising certificate is to be suspended and will remain suspended until such time that he complies with the relevant paragraph. 5. The following condition is imposed on the Respondent's current practising certificate and on each practising certificate held by the Respondent until such time as the Respondent completes a Practice Management Course provided by a provider approved by the Director: a. The holder must complete a Practice Management Course before being authorised to engage in legal practice as a principal of a law practice. 6. The Respondent pay the Applicant's costs of the proceedings. Catchwords: OCCUPATIONS - Solicitor - disciplinary proceedings - findings of professional misconduct and unsatisfactory professional conduct - orders Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Legal Profession Uniform Law (NSW) Legal Profession Uniform Law Application Act 2014 (NSW) Legal Profession Uniform General Rules 2015 Cases Cited: A Solicitor v The Council of the Law Society of New South Wales (2004) 216 CLR 253 Carr v Council of the Law Society of New South Wales [2020] NSWCA 276 Council of the Law Society of New South Wales v Abboud [2021] NSWCATOD 23 Council of the Law Society of New South Wales v Clifton [2021] NSWCATOD 101 Council of the Law Society of New South Wales v DXW [2019] NSWCATOD 101 Council of the Law Society of New South Wales v Diaz [2021] NSWCATOD 9 Council of the Law Society of New South Wales v Elina [2021] NSWCATOD 98 Council of the Law Society of New South Wales v Kernaghan [2022] NSWCATOD 111 Council of the Law Society of New South Wales v Koops [2021] NSWCATOD 38 Council of the Law Society of NSW v Orford (No 2)[2017] NSWCATOD 10 Council of the Law Society of New South Wales v Parente [2019] NSWCA 33 Council of the New South Wales Bar Association v EFA (a pseudonym) [2021] NSWCA 339 Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145 Law Society of New South Wales v Walsh [1997] NSWCA 185 Legal Services Commissioner v Baker [2006] QCA 154 New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 NSW Legal Services Commissioner v Zou [2021] NSWCATOD 139 The Prothonotary v Del Castillo [2001] NSWCA 75 Texts Cited: None cited Category: Principal judgment Parties: Council of the Law Society of New South Wales (Applicant) Aaron Noel Kernaghan (Respondent) Representation: Counsel: P A Maddigan (Applicant)

Solicitors: C Flax (Applicant) Moray & Agnew (Respondent) File Number(s): 2020/00028200 Publication restriction: The disclosure of the name of the former client of the Solicitor referred to as Client M is prohibited pursuant to s 64(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW)

REASONS FOR DECISION

On 6 August 2021 the Tribunal published reasons for decision in respect of 10 grounds of complaint brought by the Council of the Law Society of New South Wales (the Law Society) against Mr Aaron Noel Kernaghan (the Solicitor): Council of the Law Society of New South Wales v Kernaghan [2021] NSWCATOD 111 (the Stage 1 reasons).
The Tribunal found nine of the grounds established. The Tribunal concluded that the Solicitor was guilty of professional misconduct as defined in s 297(1) of the Legal Profession Uniform Law (the Uniform Law) in respect of the conduct alleged in grounds 2, 3, 4, 5, 6, 10 and 11: 1. In failing to honour an undertaking given on or around 27 July 2016 (Ground 2); 2. In committing various trust monies breaches concerning multiple clients and events between December 2015 and July 2016 (Grounds 3, 4, 5 and 6); 3. In failing to answer a s 370 Notice issued on 11 July 2016 (Ground 10); and 4. In failing over a lengthy period to meet his practice's fiscal obligations, namely with respect to superannuation and taxation (Ground 11).
The Tribunal found the Solicitor guilty of unsatisfactory professional conduct as defined in s 296 of the Uniform Law in respect of the conduct alleged in grounds 8 and 12: 1. For failing to comply with costs disclosure obligations concerning five clients over a period from August 2015 to April 2016 (Ground 8); and 2. For failing to pay a tax invoice of an expert dated 2 April 2017 (Ground 12).
The detail of each of the grounds of complaint and the Tribunal's findings in respect of those complaints is provided in the Stage 1 reasons. That detail is not repeated in these reasons, which should be read together with the earlier reasons.
The Tribunal made directions for the parties to file and serve evidence and submissions for a hearing to determine appropriate disciplinary orders (the penalty hearing, or Stage 1 hearing). The hearing was listed for 18 October 2021.
The Law Society filed and served its submissions on 27 August 2021, in which it sought orders recommending that the name of the Solicitor be removed from the roll pursuant to s 302(1)(t) of the Uniform Law, and requiring the Solicitor to pay the costs of the Law Society as agreed or assessed. The Law Society provided an affidavit affirmed by Anthony Lean on 27 August 2021, annexing documents from the Register of Disciplinary Action maintained by the Office of the Legal Services Commissioner (OLSC) and related correspondence.
The Solicitor had appeared for himself in the Stage 1 proceedings, and in an affidavit sworn on 30 September 2021 stated that it was not until August 2021, after delivery of the Stage 1 reasons, that he retained lawyers to assist him. In that affidavit the Solicitor acknowledged that the approach he had previously adopted had not assisted the Tribunal, or ultimately himself, and he provided background material to provide the relevant context.
As a result of the Solicitor's disclosures in that affidavit regarding the state of his mental health at the time of his misconduct and as at 30 September 2021, the Law Society, with the concurrence of the Solicitor, requested Dr Robert Fisher, Consultant Psychiatrist, to undertake an examination of the Solicitor and prepare a report for the purpose of the Stage 2 hearing. Dr Fisher provided a report on 5 November 2021, and an affidavit sworn on 3 February 2022.
On 23 February 2022 the Law Society filed and served a Second Amended Application for Disciplinary Findings and Orders (the Second Amended Application), and the affidavit of Dr Fisher sworn 3 February 2022. Leave was granted at the hearing for the Law Society to rely on the Second Amended Application.
The Law Society sought in the Second Amended Application orders: 1. issuing the Solicitor with a reprimand; 2. requiring the Solicitor to undertake further education; 3. imposing employment and medical conditions on the Solicitor's practising certificate; and 4. requiring the Solicitor to pay the Law Society's costs.
The Solicitor did not oppose those orders, agreeing to the substance of the orders sought while making submissions as to the mechanics of those orders. There was substantial agreement as to the applicable principles to be applied by the Tribunal.

Procedural History

The following is a summary of the background to the present proceedings. The conduct the subject of the grounds of complaint occurred in the period 2014 to 2016. As noted at [31] in the Stage 1 reasons, the Solicitor, who had been admitted to the Supreme Court of NSW Roll on 15 December 2000, was during the periods 15 February 2010 to 30 June 2014 and 7 July 2014 to 10 March 2016 the sole principal of an incorporated legal practice known as Kernaghan and Associates Pty Ltd (KAPL). That practice operated a trust account and an office account, for which the Solicitor was the sole signatory. On 10 March 2016 a liquidator was appointed to KAPL on the petition of the Australian Taxation Office (ATO). From 15 March 2016 the Solicitor has operated a law practice known as Aaron Kernaghan as a sole practitioner (the Sole Practice); that practice operates two accounts in the name of Mr A N Kernaghan, for which the Solicitor is sole signatory, and no trust account.
The proceedings were commenced in the Tribunal on the filing of an Application for Disciplinary Findings and Orders on 14 September 2018, alleging that the Solicitor was guilty of professional misconduct, on 12 grounds (proceeding 2018/00282368). The Law Society filed an amended Application on 26 June 2019. On 2 October 2019 the initial Application, as amended, was dismissed by consent, as a result of procedural defects of the nature of those identified in Council of the Law Society of New South Wales v DXW [2019] NSWCATOD 101.
The present proceedings were commenced on 28 January 2020 by the Law Society filing an Application for Disciplinary Findings and Order in respect of a number of the same grounds and particulars as in the initial Application, recommenced pursuant to cl 23(6)(a) of Part 5 of Sch 9 to the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act). On 8 April 2020 orders were made that the material filed in proceedings 2018/00282368 was deemed to have been filed in these proceedings.
As at the date of that order, the Law Society had filed its affidavit evidence; the Solicitor had filed a Reply (dated 14 December 2018), but had filed no evidence. Directions were made on 8 April 2020 for the Solicitor to file and serve an amended Reply and any affidavit evidence on which he intended to rely by 20 May 2020. On 26 May 2020 the Solicitor filed an affidavit sworn 14 March 2019. On 3 June 2020 directions were made for the parties to file and serve written submissions and the matter was listed for hearing on 26 October 2020.
That hearing was vacated after the Solicitor stated in written submissions filed on 12 October 2020 that he accepted that the 10 grounds relied on by the Law Society (grounds 7 and 9 not being pressed by the Law Society) had been made out, and he sought an opportunity to address the question of appropriate consequential orders. In response to that change in position the Solicitor was directed to file and serve an amended Reply. On 28 October 2020 the Solicitor filed a Reply to the Application which he stated "supersedes and replaces any previous reply". The Solicitor stated that he "respectfully submit[s]" to the findings of the Tribunal with respect to each of grounds 1 to 6 inclusive, ground 8, and grounds 10 to 12.
Following the decision of the Court of Appeal in Carr v Council of the Law Society of New South Wales [2020] NSWCA 276 (Carr) delivered on 4 November 2020, the Law Society withdrew ground 1 of the Application which alleged that the Solicitor had dishonestly misappropriated trust monies. The Law Society's position was that the balance of the complaints were not affected by that decision, and it continued to plead the allegations of fact pleaded in relation to ground 1 to the extent relevant to the remaining grounds. The Solicitor took a different view, submitting that the decision in Carr required the Law Society to discharge its onus with respect to not only the underlying facts that tend to show relevant events occurred, but the relevant intention behind them, and that that potentially affected grounds 5 (causing a deficiency in a trust account) and 6 (intermixing trust monies).
At the request of the Tribunal the Law Society filed an Amended Application on 21 December 2020, which omitted three grounds (grounds 1, 7 and 9) and made other amendments. The Tribunal extended the date by which the Solicitor was to file and serve any reply to the amended Application to 5 February 2021; no such Reply was filed.
The evidence before the Tribunal on which the Law Society relied as at the date of the hearing on liability is detailed at [23] in the Stage 1 reasons. The Solicitor's evidence is discussed at [24]-[25], noting that while the Solicitor's affidavit was sworn on 14 March 2019, while proceedings 2018/00282368 were before the Tribunal, that affidavit was filed in the present proceedings. There were no objections made to the admission of the affidavit evidence of the Law Society or the Solicitor and no oral evidence. The Law Society relied on written submissions filed 21 September 2020 and the Solicitor on written submissions filed on 12 October 2020. At the hearing on 25 March 2021 the Tribunal heard oral submissions from both parties. In oral submissions the Solicitor stated that he had not filed a Reply to the Amended Application as it would "simply be repetition".

Stage 2 hearing

The Law Society relied on the affidavit of Mr Anthony Lean affirmed 27 August 2021, and the affidavit of Dr Robert Fisher sworn 3 February 2022.
The Solicitor relied on the following evidence: 1. Affidavits sworn by the Solicitor on 30 September 2021, 15 March 2022, and 17 March 2022; 2. Letter from Dennis Lagopodis dated 30 September 2021 and an affidavit sworn on 17 March 2022; 3. Affidavit of Leah Jean Rowan sworn 23 September 2021; 4. Letters from the following persons: 1. Penelope Purcell, 21 September 2021; 2. David Palmer 24 September 2021; 3. Leisha Boatswain 28 September 2021; 4. Professor Dianne Jolley 29 September 2021; 5. Professor Jennifer Beck 29 September 2021; 6. Amanda Brady 29 September 2021.
The Solicitor gave sworn oral evidence.

The Solicitor's evidence

In his affidavit of 30 September 2021 the Solicitor acknowledged that he had provided little information regarding his misconduct, explaining that he had approached the Stage 1 hearing on the basis that once he had acknowledged that the complaints would be established, akin to entering a plea of guilty, evidence seeking to mitigate the conduct should await the Stage 2 hearing. He intended the evidence now provided in that affidavit as material to provide the relevant context, and not to challenge the Stage 1 findings.
The Solicitor summarised his career since admission in 2000, at the NSW Office of the Director of Public Prosecutions until 2009, working extensively on child sexual assault matters, and from 2009-2010 in practice with a criminal defence lawyer in an incorporated company which later became known as KAPL. From October 2010 he traded as Kernaghan and Associates, employing James Howell who became an employed solicitor of KAPL from February 2011, and employing Ms Boatswain as a receptionist in early 2012.
The Solicitor stated that he now realises he was out of his depth when he started trading as Kernaghan & Associates in 2010, as he did not have the required business or administration skills. He came to the view in 2011 that the financial aspects of the practice were becoming overwhelming for him, and engaged the services of a bookkeeper in late 2011, who worked one day a week processing transactions on the KAPL general account, and who prepared and lodged BAS statements, until he stopped coming to work in mid-2014. During 2012-2014 the practice was very busy with around 60-70 matters per year and the legal work being done by himself and Mr Howell. He took responsibility for issuing costs disclosures with a pro forma template, estimating the fees. He did not always check that the costs disclosures were sent, which he acknowledges was his responsibility as principal of the practice.
During the first couple of years the firm did not deal with significant amounts of trust monies, and as the practice developed he began to be more insistent that clients pay funds up front. There were instances where funds were paid into the office account when they should have been paid into trust. He cannot explain how that occurred in every instance, and knows that in some instances the client used the banking details from an old invoice to pay money up front for further work. He would see this had occurred when he did reconciliations and it was his practice to transfer the money back into trust; and he accepts that this did not occur with clients Kirkland, Matako, Russell and Watson, as found in the Stage 1 decision. There were also instances where funds were paid into trust and then transferred into the general account with a notation that the funds had been paid into trust in error: generally, that would occur when he had asked a client initially to put funds into trust but they did not do so, and when they received the invoice and paid it they used the account details earlier provided. While he had Ms Boatswain and the bookkeeper, he was the only person in a position to reconcile the bank statements to identify these errors, as it was only him who had a real idea of the work that was being done, for what clients, at what time, and what invoices were being issued. He acknowledges that it always was and remained his responsibility.
The Solicitor stated that with the pressures of running a busy practice and his lack of accounting skills he allowed KAPL to fall behind in making statutory payments to the ATO. That situation became more desperate in 2014 when the bookkeeper ceased working for the practice. He became aware that KAPL's BAS statements for 2011 and following had not been lodged. In mid to late 2014 he contacted the ATO, and worked to get all the documents filed with the ATO. From July to December 2015 the outstanding tax returns for KAPL were lodged and the debt KAPL owed to the ATO was then crystallised.
In mid-2014 he accepted work representing an organisation the subject of a specific case study in the Royal Commission into Institutional Responses to Child Sexual Abuse. The involvement with the Royal Commission was extremely challenging. The instruction relationship was protracted and complex as the organisation was a commune of 16 people, and required frequent travel between Wollongong, Mangrove Mountain and Sydney. In hindsight he can see that that work reduced the amount of training and supervision he was able to give to his two employees. He was involved in 14 other Royal Commission case studies, many of which involved a large degree of interstate travel. During one case study in May 2015 heard in the Ballarat Royal Commission hearings, in order to ensure an appearance in a court attendance in Kiama on that day that had been misrecorded in the diary, he travelled by car from Ballarat to Melbourne, flew to Sydney and drove to Kiama, then returned to Ballarat in time for the afternoon session of the Royal Commission hearing. During that episode he suffered the first of what he now knows were panic attacks. He continued to have panic attacks from May 2015 until approximately July 2016.
Throughout 2015 his work with the Royal Commission and the required travel caused him to fall behind in attending to the formal obligations of his practice. He again fell behind in payments with the ATO and had not been preparing quarterly BAS statements. He made sure that Ms Boatswain and Mr Howell were paid their wages on time, and he would also pay for additional expenses such as continuing legal education courses. He did not cause KAPL to pay himself a regular salary, and would pay himself $2,000 net when there was sufficient money to do so. The KAPL office was a modest office in Wollongong.
In late 2015 he reached agreement with the ATO as to what amounts were outstanding and how they could be paid down, and reached an instalment agreement towards the end of 2015, for payments from December 2015 and each following month to July 2016. The total amount due under the instalment plan from December 2015 to March 2016 was $250,000 and he paid $209,589.50, mistakenly thinking that he had paid the entire amount due. He sourced a loan from a friend, Mr Lagopodis, to enable him to make the payments in January and March 2016. By February 2016 things came to a head: the cash flow issues for the practice were dire, and he was late meeting the ATO instalments. He was unable to prevent the winding up of KAPL on 10 March 2016.
Approximately two weeks after liquidators were appointed to KAPL he was struggling mentally. He moved to his parents' house and saw a doctor, and was referred for anxiety and severe depression. He continued to work as a lawyer, and received a lot of adverse publicity. He had to move business premises, and from March 2016 to the end of 2016 was engaged in attempts to negotiate a settlement of monies owed to the landlord. After publication of a report in the local newspaper in July 2016 about KAPL being placed in external administration leaving large debts, which caused him further distress, he was given notice to vacate his rented home.
The transition from KAPL to trading as a sole practitioner was difficult as in addition to working as a lawyer he was dealing with the liquidator of KAPL, an investigator appointed by the Law Society (Ms Moliterno), and a trust account inspector (Mr Dunlop). It was difficult to meet the demands of those people for documents and information. At the same time he was continuing to pay off debt. The ATO had garnisheed his income from Legal Aid, and he was removed from the Legal Aid panel. He now sees his move to sole practice at that time as a mistake.
The practitioner stated that he continues to be under a large amount of personal stress dealing with practising, his mental health issues, and "cleaning up the financial and procedural mess which was KAPL". He realises in hindsight that in his professional work he had become belligerent at times, and he regrets that the same sentiment of belligerence appears to have affected his conduct of these proceedings, and in particular the affidavit and submissions he prepared when representing himself. He continues to operate as a sole practitioner working from home. The practice in its present form is simpler and more sustainable: he has no employees, does not operate a trust account, ensures that counsel or experts retained in a matter are retained by the client so the responsibility for fees remains with the client, and limits the amount of work he does so he has only 10 clients at a time. Following the Tribunal Stage 1 decision he sent a copy of the decision to all of his current clients and others for whom he is not currently acting but with whom he has a relationship.
The practitioner stated that throughout his legal career he has been engaged in pro bono work, both advice and litigation work, most recently for Aboriginal and Torres Strait Islander people in the Nowra community. He is a member of community musical organisations. He does community work as a volunteer, including playing the piano at different organisations or centres offering music therapy services. He has taught evidence law, and legal research and writing at University of Wollongong as a casual tutor from 2007 to 2012.
In his affidavit of 30 September 2021 the Solicitor addressed each of the matters the subject of complaint, acknowledging the Tribunal references in the Stage 1 decision to a lack of evidence to explain the conduct or provide context. In relation to Ground 2, that he failed to comply with an undertaking given to the OLSC in the course of telephone conversations with an OLSC officer on 26 July 2016 that he would refund the amount of $3,500 to his client Ms Watson (Stage 1 reasons at [33]-[41]), he stated that at the time of those conversations he did not understand and appreciate that the comment he made was an undertaking. He thought that the officer was merely conveying an offer made by Ms Watson to resolve her complaint and that he had communicated his acceptance. At that time he was under intense personal stress, as it occurred days after publication of the local newspaper article, and he was suffering from pneumonia. He lost track of his promise to pay Ms Watson and he overlooked the payment. He accepts the finding that he breached an undertaking and is prepared to refund Ms Watson.
In relation to Grounds 3, 4, 5 and 6, the trust account breaches (discussed at [163]-[177] Stage 1 reasons), he accepts that he failed in his obligations to ensure that trust account obligations were met by KAPL, and that the failures continued even when the sole practice did not have a trust account. The breaches occurred in the period August 2015 to July 2016, for a number of reasons including, fundamentally, that he lacked the skills to manage that aspect of legal practice.
In relation to Ground 8, the failure to comply with costs disclosure obligations concerning five clients over a period from August 2015 to April 2016 (Stage 1 reasons [182]-[192]), he accepts that there was inadequate physical file maintenance in that there were a number of physical files that did not have costs agreements on them and that he was unable to demonstrate that he had sent costs disclosure letters where required.
In relation to Ground 10, he accepts that he did not comply with the section 370 Notice issued by the Law Society trust accounts investigator on 11 July 2016 (Stage 1 reasons [94]-[98]). He did attempt to comply. In early August 2016 he sent documents to Mr Dunlop, by express post, as set out in his emails with Ms Moliterno, who had been appointed by the Law Society to investigate KAPL and the Sole Practice. He was informed by Ms Moliterno that Mr Dunlop had not received the documents, and he made inquiries of Australia Post but was unable to trace the documents because he did not have the tracking number; he had moved house and the address on the back of the Express Post envelope was his former address, and as far as he is aware the documents were not returned to that address. He sent such documents as he had left concerning KAPL that complied with Ms Moliterno's request and any spare copies of the documents he had sent to Mr Dunlop pursuant to the section 370 notice to Ms Moliterno. His comments in para 50 of his earlier affidavit were that the material he gave to Ms Moliterno he believed covered everything that she wanted as well as everything that Mr Dunlop wanted and that he had sent to him. He did not mention in his submissions or his earlier affidavit that he had sent documents to Mr Dunlop because he could not prove it. He understood that a section 370 notice obliged him to provide documents to Mr Dunlop; he tried to comply but thought that when the documents were lost there was nothing more he could do. He accepts that thinking was incorrect and misguided, and believes that the stress and illness he was suffering at the time caused him to have those misguided views. He accepts his professional responsibility was not discharged.
In relation to Ground 11, his failure to meet his fiscal obligations, namely failure to ensure that KAPL made payments of compulsory superannuation on behalf of Mr Howell, and company income tax, GST and PAYG withholding tax to the ATO (Stage 1 reasons [99]-[109]), the Solicitor stated that he was not living an extravagant lifestyle, and while in private practice paid himself an income to meet his rent and otherwise met his commitment to pay his staff. He accepts that he had a professional and legal obligation to cause KAPL to pay superannuation, and he regrets his default in failing to do so.
In relation to ground 12, failure to pay the invoice of an expert engaged to provide a report (Stage 1 reasons [110]-[115]), he was confused regarding what had been paid to Dr Colquhoun, and he cannot explain how the payment that he intended to make to her was paid to his personal account. He accepts that his professional responsibility is to ensure experts and others engaged by a solicitor are paid for their work, and regrets his default.
The Solicitor stated that he deeply regrets the event the subject of the proceedings, which were borne from a combination of his lack of skills, ignorance regarding some of his professional obligations, and being overwhelmed by the volume of work experienced at the relevant times. He has been publicly humiliated by his conduct and accepts unequivocally that it fell well below the standards required of a legal practitioner. His whole life revolves around being able to practise criminal law and help vulnerable people. He is sorry for everyone he let down, for everything he did wrong, and that he made for such a bad example of the profession he loves. He now has a real understanding of his limitations, that the practice of law is something he cannot do alone and there is help and meaning to be had by working in the practice of a Solicitor who has skills and knowledge that he does not have. He does not wish to continue to have, or at some stage in the future to have, his own legal practice, nor does he wish to ever be in partnership in a legal practice. He wants to continue to practise as a supervised employed solicitor in a firm.
In his affidavit sworn on 15 March 2022 the Solicitor states that he continues to operate as a sole practitioner working from home. In November 2021 he relocated to Sydney. He continues to limit his practice to about 10 clients, and tries to limit his working day to between 9.00am to 4.00pm. He feels well and is not experiencing the stress or anxiety he was at the time of the conduct of the proceedings or at the time he swore his earlier affidavit. Mr Lagopodis has made him a verbal offer of employment as a solicitor in his firm and has agreed to supervise him in practice; he will accept that offer if the Law Society approves Mr Lagopodis' appointment as his supervising solicitor. He has completed a number of training courses offered by the Law Society.
In that affidavit the Solicitor also provides copies of documents evidencing the transfer on 11 October 2021 of $3,500 previously deposited into the trust account of his solicitors, to Ms Watson.
In a further affidavit sworn on 17 March 2022 the Solicitor stated that he agrees to have regular practice review meetings on a weekly basis with Mr Lagopodis, in which he will flag any areas of concern and will ask Mr Lagopodis to approve any expert witness proposed to be retained in his matters.
In oral evidence the Solicitor told the Tribunal that he still has Wollongong based clients and some Sydney clients. He is doing the same work as before, however no Royal Commission work and no child sexual assault matters. He moved to Sydney for proximity to colleagues and to be closer to the courts. He is working remotely for interlocutory matters, and goes to Wollongong if he needs to appear in person. He recognises now that at the time he was driven by a constant state of trying to be in all places at all times. It took time to realise that the situation was deleterious to his health. He found it hard to accept failure, and that took time. He was professionally in a dark place. The process of repairing what he had done has been a comprehensive process of reflection and coming to terms with the reasons why. He recognises that things were out of control at the time he was trying to organise the last payment to the ATO before liquidation of KAPL and appearing in the Royal Commission.
The Solicitor stated that he does not want to be a principal in a legal practice. He recognises that his skills are limited, helping in criminal matters but not running a business. He wants to work with colleagues to represent people in criminal matters and not to be in sole practice. In response to having notified his clients and others of the Stage 1 findings, all except one, a fellow lawyer, was supportive. He limits his practice using software that has flexible capacity to open up to 14 files, with 10 as the limit. He does one to two pro bono cases, which tend to be short. The software assigns how much time is allocated to each type of matter and blocks out time. He refers out to a list of three practitioners if he is at capacity. Asked how he knows when he is overloaded, the Solicitor said that he knows there is a problem if he finds himself working past 5.00pm. In all but two matters now he has briefed counsel rather than appearing as an advocate.

Dr Fisher's evidence

Dr Fisher is a senior consultant psychiatrist. He has practised as a psychiatrist since 1981, and was Head of the Department of Psychiatry at St Vincents Clinic and St Vincents Private Hospital from 1994 to 2000 and is currently Chief Executive Officer of Psychiatry Advisory Services Australia. He has extensive experience in assessing and providing reports on impaired medical professionals for the NSW Medical Council and more recently for AHPRA on all medical and paramedical disciplines. In his curriculum vitae Dr Fisher states that he has had a long-term interest in the mental health and well-being of doctors and lawyers and is a consultant to the NSW Bar Association, the Law Society, and the Federal Circuit Court and Family Court of Australia.
Dr Fisher assessed the Solicitor on 28 October 2021. In his report dated 5 November 2021 Dr Fisher noted the Solicitor's general medical health and current medication, and on assessment reported that his mood was then euthymic and stable. On the basis of the history provided by the Solicitor, the documents, and how he found him at consultation, Dr Fisher's diagnostic conclusions were that he believed that the Solicitor did develop an Adjustment Disorder with Anxious and Depressed Mood, the anxiety being so severe that it amounted to a panic attack; he appeared to have responded well to treatment with an antidepressant and by engaging with the process of the Tribunal hearing and his dealings with the Law Society; he has not been suicidal, and was currently reporting being free of any major psychiatric symptoms while taking antidepressant medication. Dr Fisher noted that the Solicitor has some obsessional perfectionistic personality traits; his major problems leading to the infractions to his legal practice requirements appeared to have been his excessive focus on processing the matters brought to him by clients and ignoring the financial side of the business.
Dr Fisher's opinion was that the Solicitor had developed an Adjustment Disorder with Depressed and Anxious Mood (DSM-V); other possible explanations for his symptoms being Major Depressive Disorder, Depressive Phase of Bipolar Affective Disorder, or depression secondary to an underactive thyroid gland. He believed that the problems started with the Solicitor working excessively long hours and focusing on the legal aspects of the practice, and he then became anxious and then depressed, in which state he developed a state of "learned helplessness" in which he felt incapable of managing the complications that had arisen in his life. The Solicitor appeared to be currently in remission from his Adjustment Disorder with Depressed and Anxious Mood, now working in a far more reasonable manner. His other medical conditions appeared to be well managed at present and do not impair his capacity to practise law from the point of view of impairment due to cognitive or psychiatric impairment.
In Dr Fisher's opinion, the improvement in the Solicitor's mental health can be attributed to his having ceased working the excessive hours he was working at the time he engaged in the misconduct; that he appears to have benefitted from treatment with an antidepressant and psychological assistance; and that he is now trying to exercise and get out of the house.
Dr Fisher stated that in his opinion the Solicitor carries a vulnerability to decompensate emotionally and psychologically if subject to extreme stress. If faced with a similar set of circumstances of grossly hours of excessive work and avoidance of attending to his financial affairs, he may well decompensate again. If he follows the advice given by his treating psychologist and is under the supervision and has access to a psychologist or psychiatrist to whom he can turn if feeling stressed, then that plus continuation of antidepressant medication is likely to increase his resilience in the face of stress. Dr Fisher reinforced the importance of the Solicitor not being a sole practitioner and that he exercise due regard to not working excessively long hours.
Dr Fisher was asked to provide an opinion on what restrictions should be placed on any practising certificate issued to the Solicitor, and stated that he should have access to a psychiatrist who knows of his history and is able to advise on his antidepressant and provide him with Cognitive Behavioural techniques to manage stress. The duration of active treatment should be determined by the treating psychiatrist. Dr Fisher does not believe that the Solicitor's current medication is interfering with his capacity to practise as a solicitor on a day-to-day basis. It would be appropriate for an independent psychiatrist to review the Solicitor three months after he engages in employed work as a solicitor, and if free of psychiatric symptoms and not suffering any side effects of medication it would be useful for him to submit a plan of management in the event of any relapse.

Other evidence

In his letter dated 30 September 2021 Mr Lagopodis states that he is principal of an incorporated legal practice in Wollongong. He confirms that he has known the Solicitor since he started working as a prosecutor with the DPP in Wollongong. Having read the Stage 1 reasons he was shocked and surprised, and believes that the actions are very uncharacteristic of the Solicitor. He has referred clients to the Solicitor when unable to act for them, and has entrusted his clients to him to appear as agent. The Solicitor built up a substantial criminal practice with limited assistance. Mr Lagopodis comments that the Solicitor was and remains an exemplary lawyer, but it is plain he is no business man. The Solicitor has learned a valuable lesson from his actions and has reflected on his actions, and it would be a great loss if he were to lose his capacity to practise as a solicitor. He would welcome the opportunity to supervise the Solicitor in practice.
In his affidavit sworn 17 March 2022 Mr Lagopodis states that he has made a verbal offer of employment and agrees to supervise the Solicitor.
In her letter of 28 September 2021, Ms Boatswain confirms her employment by KAPL from 2012, and states that during her employment she found the Solicitor to be a dedicated, honest and trustworthy person. She believes he is an undeniable asset to the legal profession.
Other references are provided by legal practitioners, Amanda Brady, solicitor (29 September 2021); David Palmer, barrister (24 September 2021); Penelope Purcell, solicitor (21 September 2021); Leah Rowan, barrister (affidavit sworn 23 September 2021). All have known the Solicitor for some time, and confirm a high regard for his ability as a lawyer, his contribution to the legal profession, and that he practises as a reliable and trustworthy member of the profession.
Professor Beck is the parent of a person living with autism spectrum disorder for whom the Solicitor acted in 2010 and later years. She states in her letter of 29 September 2021 that she and her family have observed the Solicitor's conduct over a long period of time, as a lawyer who has demonstrated the highest of professional standards in his representation of her son, and as a decent and humble human being. She states that while she understands that the outfall from the failings of the Solicitor's business in 2016 were not trivial, it is clear that he has accepted full responsibility as would be expected of a person with integrity and has never failed in his efforts to support his clients.
Professor Jolley, also a client since 2019, states in her letter of 28 September 2021 that the Solicitor has always maintained exceptional professional behaviour, and consistently demonstrated a high level of integrity and honesty in all his dealings with her. She has no hesitation in retaining his services as her solicitor and believes it would be a disservice to the profession and the community should he no longer be able to practise law.

Law Society's evidence

In his affidavit affirmed on 27 August 2021 Mr Anthony Lean, Solicitor for the Law Society and Director, Legal Regulation, of the Law Society, states that he has reviewed the Law Society's records regarding complaints made against the Solicitor. He identified that on 6 June 2019 the Professional Conduct Committee considered a complaint relating to a request made in 2017 for provision of an itemised account, and resolved to find the Solicitor guilty of unsatisfactory professional conduct, and that the Solicitor should be reprimanded.

Protective Orders

Having found that the Solicitor is guilty of unsatisfactory professional conduct, and professional misconduct, the Tribunal may make any orders it thinks fit, including orders under s 299 and s 302 of the Uniform Law. The applicable legal principles for determining what protective orders are appropriate and should be made by the Tribunal were not in dispute.
Disciplinary proceedings are concerned with the protection of the public. In Law Society of New South Wales v Walsh [1997] NSWCA 185 (Walsh) Beazley JA held, at 40: The court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the order will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors.
Honesty and integrity are central. In New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 Spigelman CJ stated: 19. Honesty and integrity are important in many spheres of conduct. However, in some spheres significant public interests are involved in the conduct of particular persons and the state regulates and restricts those who are entitled to engage in those activities and acquire the privileges associated with a particular status. The legal profession has long required the highest standards of integrity. 20. There are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and the behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people.
The question for the Tribunal is present fitness, that is, whether it can be satisfied now that the Solicitor is a person who may properly be held out to the public as a fit and proper person to be entrusted with the duties and responsibilities of a solicitor: The Prothonotary v Del Castillo [2001] NSWCA 75 at [71]. In making that assessment, the Tribunal is entitled to take into account the persistence with which the conduct was pursued and the degree of candour displayed by the solicitor in the course of the disciplinary proceedings: Legal Services Commissioner v Baker [2006] QCA 154 at [46]. The Tribunal is also entitled to take into account, where, as here, there is a time lag between the conduct and the hearing on penalty, whether the solicitor is able to demonstrate a genuine personal and professional change in the intervening period: Council of the Law Society of New South Wales v Clifton [2021] NSWCATOD 101 at [66]; Council of the New South Wales Bar Association v Sahade [2007] NSWCA 145. As noted by Beazley JA in Walsh, the effect that an order will have on the understanding in the profession and the public of the standard of behaviour required is also a relevant factor.
A finding of professional misconduct does not necessarily justify or require a conclusion that the name of the practitioner be removed from the roll, and the ultimate issue is whether the practitioner is not shown to be a fit and proper person to be an officer of the Supreme Court on whose roll the practitioner's name appears: A Solicitor v The Council of the Law Society of New South Wales (2004) 216 CLR 253, at [15] per Gleeson CJ. A practitioner's name should only be recommended to be removed from the roll if the Tribunal is satisfied that the reason for disqualification is permanent or at least of indefinite duration: Council of the Law Society of New South Wales v Parente [2019] NSWCA 33.

Tribunal findings

The Tribunal's Stage 1 findings, including the findings of professional misconduct, were made in the context of all the available evidence at the time of those proceedings: see Council of the Law Society of New South Wales Bar Association v EFA (a pseudonym) [2021] NSWCA 339 at [169]-[172]. As noted in the Stage 1 reasons, the Solicitor admitted that he had failed to comply with an undertaking to the OLSC, and while he stated in December 2017 that he had directed that payment be made to Ms Watson, there was no evidence provided to the Tribunal as to why that money had not been repaid. The trust account breaches occurred on multiple occasions, and related to multiple clients, demonstrating a consistency of failure to maintain the required standard, and while the Solicitor accepted that he was principal at all relevant times and that the relevant acts occurred, he provided no evidence to the Tribunal as to how or why the breaches occurred. The Solicitor agreed with the Law Society's submissions that he had failed to comply with the section 370 notice, and other than a medical certificate addressing the period after that specified for compliance, offered no other explanation for the failure to comply. The Solicitor provided no explanation to the Tribunal for KAPL's failure to make superannuation contributions in respect of Mr Howell, and provided no evidence as to the management systems in place for compliance with KAPL's taxation and superannuation obligations, and offered no explanation as to how those contraventions occurred while he was principal.
The Solicitor has now adduced evidence to explain the misconduct and the surrounding circumstances and context. That evidence includes his affidavit evidence of the steps he took to meet the statutory fiscal obligations of KAPL before its liquidation, and his acknowledgment of responsibility for his failures. That evidence also includes the character references provided by longstanding professional colleagues and clients, all of whom acknowledge having read the Stage 1 findings, and all of whom speak highly of the Solicitor's honesty and diligence as a lawyer.
The Law Society submits that while an objective analysis of the Solicitor's impugned conduct is capable of justifying a finding that he is not a fit and proper person to engage in legal practice, in light of his further evidence, in particular regarding his personal qualities supported by the character evidence, and that of Dr Fisher, concerning the other circumstances that bear on his conduct, a holistic assessment of the Solicitor's character and therefore his fitness to engage in legal practice does not support a finding that the Solicitor is not a fit an proper person to engage in legal practice. The Solicitor agrees with those submissions.
The Solicitor's affidavit and oral evidence in the Stage 2 hearing were not disputed. The Tribunal accepts that evidence, and finds: 1. At the time of giving the undertaking to the OLSC the Solicitor was under intense personal stress and suffering from pneumonia. While he had not, as at the time of the Stage 1 hearing and decision, repaid Ms Watson, he has now done so; 2. At the time of the breaches of ss 137, 138, 146 and 174 of the Uniform Law and of causing a deficiency in KAPL's trust account, between August 2015 and July 2016, the Solicitor's workload including for the Royal Commission caused him to fall behind in attending to the formal obligations of practice; 3. The Solicitor has provided an explanation for non-compliance with the section 370 notice, and has accepted that his professional responsibility to the regulatory authority was not discharged; 4. The Solicitor attempted to address KAPL's debt to the ATO, entering into a repayment plan in December 2015 which he attempted to meet, including by borrowing funds from Mr Lagopodis to make the January and March 2016 payments; 5. The Solicitor experienced panic attacks during the period May 2015 to July 2016, and, as confirmed in documents annexed to his affidavit sworn 30 September 2021, in the period following appointment of a liquidator to KAPL in March 2016 the Solicitor consulted his GP in March 2016 for anxiety/depression, was assessed (DASS 21) as being in the extremely severe ranges for depression, anxiety and stress, and was referred for psychotherapy under a mental health referral plan; 6. The Solicitor has demonstrated insight into his misconduct, which the Tribunal accepts was attributable to his lack of experience in private practice, poor administrative systems and practices, and excessive workload, rather than being a deliberate or dishonest attempt to avoid his responsibilities by preferring his own interests to those of others; 7. The Solicitor has expressed contrition and remorse for his conduct, acknowledging that it was his responsibility as principal of the practice to ensure that costs disclosures were made; that superannuation and BAS, GST and company tax payments were made; and that experts engaged by a solicitor are paid for their work.
Dr Fisher was not required for cross examination. The Tribunal accepts his evidence that the Solicitor developed an Adjustment Disorder with Anxious and Depressed Mood at the time he engaged in the conduct the subject of the complaint, and that there is a connection between the Solicitor's medical condition and his engaging in that conduct. The Tribunal accepts Dr Fisher's evidence that the Solicitor appears to be in remission and that his other medical conditions are reasonably well managed and do not impair his capacity to practise law. The Tribunal accepts the evidence of Dr Fisher that the improvement in the Solicitor's mental health is attributable to the reduction in working hours, treatment with an antidepressant and psychological assistance, and exercise. That evidence is supported by the oral evidence of the Solicitor concerning the changes he has made to his working arrangements. The Tribunal accepts Dr Fisher's evidence that the Solicitor remains vulnerable to decompensate emotionally and psychologically if subject to extreme stress, the likelihood of which is reduced if the Solicitor continues to have support of a psychologist or psychiatrist, continues his antidepressant medication, and limits his hours of work and practises as an employed solicitor only.

What protective orders should be made

The Solicitor's misconduct was extremely serious. As he concedes, it was and is a significant departure from expected professional standards. The misconduct occurred over an extended period, and affected not only the Solicitor's clients, but his employed solicitor, and the expert retained to provide an expert report. The Solicitor failed to honour his obligations to the OLSC and to the Law Society, and he failed to comply with his fiscal obligations.
Without diminishing the seriousness of the Solicitor's misconduct, or detracting from the findings of professional misconduct and unsatisfactory professional conduct, the Tribunal accepts that the Solicitor is genuinely remorseful for his failings. It is to his credit that he informed his clients of the Stage 1 findings, and that he has now repaid Ms Watson. The conduct the subject of the complaint and the Tribunal's findings occurred some five to seven years ago. There has been one established complaint since then, relating to a failure to provide an itemised account requested in June 2017, which resulted in a finding of unsatisfactory professional conduct and a reprimand. The Solicitor has, in his evidence in the Stage 2 hearing, demonstrated a genuine personal and professional change in the intervening period since 2017, including his acknowledgement that he made a mistake in engaging in sole practice without the necessary experience and skills.
The Tribunal is satisfied that the Solicitor could not now be regarded as unfit to engage in legal practice, of either permanent or indefinite duration, such that the protection of the public requires that his name be removed from the roll. The Tribunal is satisfied that the Solicitor is a person who may properly be held out to the public as a fit and proper person to be entrusted with the duties and responsibilities of a Solicitor, while recognising that the protection of the public requires measures including: 1. Rectification of any deficiencies in the Solicitor's knowledge concerning the issues arising in the proceedings, namely the giving of undertakings, dealing with trust money, compliance with costs disclosure obligations, compliance with the regulatory authority's requirements under s 370 of the Uniform Law, compliance with fiscal obligations, and obligations to third parties; and 2. Taking preventive measures in light of the Solicitor's vulnerability to decompensate emotionally and psychologically if subject to extreme stress, including that he practise as an employed solicitor only, and be under supervision and following the advice of his treating psychologist or psychiatrist together with the continuation of antidepressant medication.
In the Second Amended Application for Disciplinary Orders, the Law Society seeks an order reprimanding the Solicitor, submitting that such an order has the effect of marking disapproval of the Solicitor's conduct and identifying appropriate professional standards. A reprimand is a "disciplinary action" within the meaning of s 148(1)(e) of the Application Act and is recorded on the Register of Disciplinary Action maintained by the OLSC. The Solicitor accepts that the imposition of a reprimand is a serious and lasting matter. The Tribunal agrees that a reprimand is an appropriate recognition of disapproval of the Solicitor's serious misconduct.
The Law Society's proposed Order 2 requires the Solicitor to complete an ethics tutorial with the Law Society's Ethics Unit which addresses the issues arising in these proceedings, and within 7 days of completing that tutorial, that he provide a report which demonstrates his understanding of the matters dealt with in the tutorial. The Solicitor notes that he has voluntarily undertaken much of the education that would be subject of the order. The Tribunal agrees with the Law Society that the tutorial proposed by the Law Society, coupled with the requirement to provide a report demonstrating his understanding of the matters dealt with in the tutorial, will protect the public by ensuring that the specific deficiencies in the Solicitor's knowledge are rectified to the appropriate standard, and concludes that the order is appropriate.
Proposed Order 3 imposes conditions restricting the Solicitor's right to practise other than as an employee of a legal practice, as a corporate or government lawyer or as a volunteer at a community legal service. Those conditions would require that the Solicitor be supervised by a practitioner holding a practising certificate as a principal of a law practice or a government or corporate legal practitioner, and which is not subject to a condition that would prevent the supervision of others; that the Solicitor not supervise any other legal practitioner; and that he is prohibited from handling trust money. The Law Society proposes that those restrictions apply for a period of four years commencing from the date of the Solicitor's next practising certificate.
The Law Society submits that those restrictions protect the public by addressing the Solicitor's poor administrative systems including file maintenance, given that he has received little or no mentoring or supervision as to the practicalities required in the conduct of private practice. The prohibition from handling trust money will address the concern of Dr Fisher that one of the Solicitor's stressors was his virtually phobic avoidance of attending to financial affairs in the running of his legal practice. The conditions also take into account Dr Fisher's opinion that the Solicitor should not practice as a sole practitioner, and should take care not to work excessively long hours. The Solicitor agrees that it is appropriate that he be supervised for a period as a condition of any practising certificate, and that he work in an environment where as an employed Solicitor he has ready access to assistance and support if required. He had proposed the period of four years in his earlier written submissions on Stage 2. Those restrictions would send a powerful message to the profession as to the conduct expected of a principal in legal practice.
The Tribunal agrees that the restrictions on the practitioner's employment as proposed by the Law Society are appropriate.
Proposed Order 4 would impose conditions on the Solicitor's practising certificate held for the next four years requiring (a) that he establish a therapeutic relationship with a treating psychiatrist for treatment as regularly and for such period as recommended by the treating psychiatrist; (b) provide the treating psychiatrist with a copy of the Tribunal's Stage 1 and Stage 2 reasons and Dr Fisher's report; (c) comply with medical treatment recommended by the treating psychiatrist; (d) authorise the treating psychiatrist to notify the Director of any change in treatment and/or medication and any failure by the Solicitor to comply with clinical advice as to treatment or if there is significant change or deterioration in the Solicitor's mental health; (e) provide a written acknowledgement from the treating psychiatrist that the treating psychiatrist is willing to make the notification contemplated in (d); (f) provide a report by the treating psychiatrist regarding the Solicitor's fitness to engage in legal practice; (g) notify the Director on a three monthly basis of the dates he attended appointments and next scheduled attendance with the treating psychiatrist, unless and until the treating psychiatrist confirms that psychiatric treatment is no longer recommended and the Law Society is satisfied that the Solicitor no longer requires psychiatric treatment; and (h) continue those conditions if the Solicitor establishes an ongoing therapeutic relationship with another treating psychiatrist.
The Solicitor does not oppose the substance of the medical conditions and agrees that the conditions (a)-(h) are appropriate. The Solicitor opposes proposed condition 4(i), which provides for an automatic suspension of the Solicitor's practising certificate if he fails to comply with the conditions contemplated in 4(e), (f) or (g). The Solicitor submits that it is not clear that s 302(1)(h) of the Uniform Law provides power for the Tribunal to order a contingent suspension of a practising certificate, noting that the Law Society has power to suspend a practising certificate under ss 76 and 77 of the Uniform Law. The Solicitor intends to comply with the conditions and if he did not the conduct would risk constituting an offence under s 68 of the Uniform Law as well as grounds for a fresh complaint. The Solicitor submits that provision of an automatic suspension could lead to unintended consequences, if he unwittingly failed to comply, for example by misaddressing a letter, and thereby risk engaging in legal practice while his practising certificate was (unbeknownst to him) suspended.
The Law Society submits that proposed order 4(i) can be imposed pursuant to s 302(1)(g) of the Uniform Law, which confers power on the Tribunal to make an order "directing that a specified condition be imposed on an Australian practising certificate …of the lawyer", that the orders listed in s 302 are an inclusive list of the orders the Tribunal may make, and that the Tribunal may make "any orders that it thinks fit". The Law Society submits that proposed order 4(i) specifies the period of suspension and that the suspension and lifting of such suspension is contingent on the Solicitor rectifying his non-compliance with any or all of the conditions at paragraphs (e), (f) or (g). The Law Society notes that the Tribunal has made similar orders in other matters: Council of the Law Society of NSW v Orford (No 2)[2017] NSWCATOD 10; Council of the Law Society of New South Wales v Diaz [2021] NSWCATOD 9; Council of the Law Society of New South Wales v Abboud [2021] NSWCATOD 23; Council of the Law Society of New South Wales v Koops [2021] NSWCATOD 38; Council of the Law Society of New South Wales v Elina [2021] NSWCATOD 98; and NSW Legal Services Commissioner v Zou [2021] NSWCATOD 139.
The Tribunal agrees with the Law Society that condition 4(i) should be imposed. The automatic suspension provided in that condition relates to non-compliance with obligations on the Solicitor that arise within 28 days (condition 4(e)) and three months (condition 4(f)) of the date of the Tribunal's orders, rather than ongoing obligations; and the obligation on a quarterly basis (condition 4(g)), that he notify dates of appointments attended and scheduled. The Tribunal is conscious that while the Solicitor has stated that he intends to comply with conditions, he has previously failed to comply with requirements imposed under the Uniform Law, namely the section 370 notice, and he failed to comply with Tribunal directions in the course of these proceedings. The Tribunal is satisfied that proposed condition 4(i) is within power, and that its imposition provides an important incentive for the Solicitor to comply so that he can remain in legal practice.
Proposed Orders 5 and 6 relate to restrictions on the Solicitor applying for a principal's practising certificate. As proposed in the Second Amended Application for Disciplinary Findings and Orders, under Order 5 the Solicitor would not be permitted to apply for a practising certificate authorising him to engage in practice as a principal of a legal practice until (a) he had held a practising certificate and been in practice for four years; (b) completed a Practice Management Course; and (c) provided a report from a treating psychiatrist confirming that that psychiatrist had been provided with a copy of the Tribunal decisions, Dr Fisher's report and the treating psychiatrist's report, and certifying that the Solicitor had complied with any clinical advice of the treating psychiatrist and that in the opinion of the treating psychiatrist the Solicitor is fit to engage in legal practice as a principal. Proposed Order 6 provided that if the Solicitor made an application for a practising certificate in accordance with these orders the Law Society has no obligation to issue a practising certificate otherwise than as required by law.
The Solicitor opposes proposed Orders 5 and 6, submitting that they concern a contingency which may never come to pass, which cannot occur before May 2026, and for which existing laws already provide adequate protection of the public. The Solicitor has no intention of seeking a principal's practising certificate at this time; the conditions would not be operative for at least four years given the operation of the employment conditions; and the conditions are unnecessary because the Law Society already has the ability to require a Solicitor to satisfy it of certain matters through the operation of s 45 of the Uniform Law and rule 13 of the Legal Profession Uniform General Rules 2015 (the General Rules). The Solicitor submits that the additional conditions would risk unnecessarily fettering the decision makers who would ultimately consider an application if it were ever to be made.
In reply, the Law Society submits in relation to proposed condition 5(b) that the Law Society may, pursuant to s 53 of the Uniform Law and rule 16(b)(ii) of the General Rules, impose a condition requiring a person to complete a Practice Management Course before being authorised to engage in practice as a principal, and it regularly imposes such a condition on practising certificates which are not principal's practising certificates and which are held by persons who have not completed a Practice Management Course. The Solicitor presently holds a principal's practising certificate and unless order 5(b) is made the Tribunal cannot be certain that the Solicitor will be required to undertake and complete a practice management course before making any application for a principal's practising certificate. The Law Society submits that in light of the Solicitor's conduct, which arose in part from his poor administrative systems and lack of business and administration skills, it would be appropriate for him to undertake and complete a practice management course. The Law Society proposes an alternative order 5(b), to require the Solicitor to complete a practice management course before being authorised to engage in legal practice as a principal of a legal practice.
In relation to proposed condition 5(a), the Law Society submits that the restrictions imposed by proposed order 3 provide sufficient time for him to develop the skills required to operate a legal practice as well as manage his mental health. The Law Society submits that proposed order 5(c) is supported by Dr Fisher's evidence as to the apparent connection between the Solicitor's medical condition and his misconduct, and his belief that the likelihood of relapse depends at least in part on whether the Solicitor practises as an employed solicitor only.
The Tribunal notes the restriction sought to be imposed under proposed Order 3 for practice as an employed solicitor for four years, and considers that imposition of condition 5(a) is unnecessary. In relation to proposed Order 5(b), the Tribunal agrees with the Law Society that given the nature of the Solicitor's misconduct and the demonstrated, and acknowledged, lack of business and administration skills in contributing to that misconduct, the protection of the public would be served by the imposition of a requirement that he complete a practice management course before being authorised to practise as a principal. That would not occur for at least four years, and completion of such a course, reflecting the demands and requirements of legal practice at that time, together with the period of supervised practice would provide reassurance that the Solicitor was then in a position to manage those demands. Condition 5(b) should be imposed in the form proposed in the Law Society's reply submissions. The Tribunal is not persuaded that proposed order 5(c) is required. Assuming compliance with the treatment of the frequency and duration recommended by the Solicitor's treating psychiatrist, and with the other obligations imposed under proposed Order 4, even if that treatment has ceased at the time the Solicitor applies for a principal's practising certificate the Law Society would have the notifications required by condition 4(g), and the ability to assess the Solicitor's fitness at the time of the application in accordance with the Uniform Law and the General Rules.
The Tribunal agrees with the Solicitor that proposed Order 6 is redundant. Section 45 of the Uniform Law makes clear that the Law Society has no obligation to grant or renew a practising certificate, and that it must not grant or renew a practising certificate if it considers that an applicant is not a fit and proper person to hold the certificate. That requires under rule 13 of the General Rules consideration, inter alia, of whether the applicant has been the subject of disciplinary action or has engaged in legal practice in contravention of a practising certificate condition, and whether the applicant is currently unable to carry out satisfactorily the inherent requirements of practice as an Australian legal practitioner.
Proposed Order 7 provides that the Law Society is not liable to pay any costs associated with the Solicitor complying or attempting to comply with the orders. The Tribunal agrees with the Solicitor that this order is redundant: proposed Orders 4(a) - (g) expressly state that the cost of compliance is at the Solicitor's expense; and the Tribunal is not imposing the conditions proposed in Order 5(c). The Law Society notes that there are no costs associated with the provision and completion of the ethics tutorial referred to in proposed Order 2(a), and that the costs of the Law Society associated with its receipt of medical reports and consideration of applications for practising certificates from year to year are met by payments from the Public Purpose Fund, pursuant to s 53(1)(b) of the Application Act.
The parties agree that an order should be made for the Solicitor to pay the Law Society's costs. Clause 23(1) of Schedule 5 to the Civil and Administrative Tribunal Act 2013 (CAT Act) provides that the Tribunal must make orders requiring a respondent lawyer 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. No such circumstances are put forward.
The Law Society's proposed Order 8 is that the Solicitor pay the Law Society's "costs of and incidental to the proceedings as agreed or assessed". The Solicitor opposes the inclusion of the words "and incidental to", submitting that that is not the language used in cl 23(1), and it is sufficient for the Tribunal to order costs "of" the proceedings; and that while the Tribunal can make an order that the costs be assessed, pursuant to cl 23(6), such an order is not necessary as any costs order would involve "ordered costs" as that term is defined in the Application Act and accordingly would be the subject of assessment under Part 7 of that Act.
In reply the Law Society submits that the usual form of costs order made by the Tribunal in Occupational Division proceedings involving lawyers in which a finding of unsatisfactory conduct or professional misconduct is made is for the respondent lawyer to pay the designated local regulatory authority's costs as agreed or assessed. The Law Society accepts that a costs order made by the Tribunal could be subject of a costs assessment under the Application Act, and refers to Council of the Law Society of New South Wales v Parente [2019] NSWCA 33 in which Brereton JA opined at [70] that it was unnecessary to express costs orders "as agreed or assessed" as in every case where the costs are not fixed by the court they will be assessed unless agreed. The Tribunal agrees with the parties that the appropriate form of a costs order is that the Solicitor pay the Law Society's costs.
In the Second Amended Application the Law Society noted that Ms Jacqueline Watson seeks compensation in the sum of $3,500.00. The Tribunal notes that that sum has now been repaid by the Solicitor, and accordingly makes no order in that regard.

Conclusion

The Tribunal acknowledges that in the context where the conduct the subject of the complaint occurred between 2015 to 2017, these proceedings have been protracted. As the Tribunal commented in Council of the Law Society of New South Wales v Orford (No 2) [2017] NSWCATOD 10 at [19], where findings of professional misconduct are made, orders which protect the public, act as a deterrent, and uphold the standards of the relevant profession, should be made in a timely manner, consistent with the objectives of the Uniform Law as stated in s 3(b) and (c), of ensuring lawyers are competent and maintain high ethical and professional standards, and enhancing the protection of clients of law practices and protection of the public generally, and also the objects in s 3(1) of the CAT Act of enabling the Tribunal to resolve the real issues in proceedings justly, quickly, cheaply and with as little formality as possible.
The contributing factors included the need for the Law Society to recommence the proceedings in 2020, and also the Solicitor's approach to Stage 1 of the proceedings, which, as he acknowledged in his affidavit of 30 September 2021 did not assist the Tribunal, or ultimately himself. The Tribunal acknowledges the assistance provided by both parties and their representatives in the conduct of Stage 2 of the proceedings.
The orders of the Tribunal are: 1. The Respondent is reprimanded. 2. The Respondent is, within three months of the date of these orders: 1. to complete an ethics tutorial with the Applicant's Ethics Unit which addresses the issues arising in these proceedings; and 2. within seven days of completing that tutorial, to provide to the Applicant's Director, Legal Regulation (Director) a report which demonstrates, to the reasonable satisfaction of the Director, the Respondent's understanding of matters dealt with in the tutorial. 1. The following employment conditions are imposed upon the Respondent's current practising certificate and on each practising certificate that the Respondent holds for a period of four years commencing on the date that the Respondent is issued with a practising certificate in a practising certificate year post-dating the current practising certificate year: 1. The Respondent is restricted to practising the law only as an employee of a law practice, as a corporate or government legal practitioner, or as a volunteer at a community legal service. 2. The Respondent is to be supervised by a solicitor (Supervising Solicitor) who holds a practising certificate: 1. as a Principal of a Law Practice, a government legal practitioner or a corporate legal practitioner; and 2. which is not subject to a condition requiring the Supervising Solicitor to engage in supervised legal practice only under section 49 of the Legal Profession Uniform Law (NSW) or a discretionary condition that they not supervise others. 1. The Respondent must notify the Director of the name of the Supervising Solicitor within 14 days of the grant of any practising certificate and within 14 days of a change in Supervising Solicitor. 2. The Respondent must not supervise any other legal practitioner. 3. The Respondent is prohibited from handling trust money. 1. The following medical conditions are imposed upon the Respondent's current practising certificate and upon each practising certificate that the Respondent holds for a period of four years commencing on the date that the Respondent is issued with a practising certificate in a practising certificate year post-dating the current practising certificate year: 1. Within 28 days of the date of these orders the Respondent, at his own expense, is to establish a therapeutic relationship with a psychiatrist (Treating Psychiatrist) of his choice (subject to the approval of the Director) for treatment as regularly and for such period as recommended by the Treating Psychiatrist. 2. Within 28 days of the date of these orders the Respondent, at his own expense, is to provide to the Treating Psychiatrist a copy of these orders, a copy of the Tribunal's reasons for these orders, a copy of the decision in The Council of the Law Society of New South Wales v Kernaghan [2021] NSWCATOD 111 and a copy of the report of Dr Robert Fisher dated 5 November 2021. 3. The Respondent must, at his own expense, continue and comply with such medical treatment as the Treating Psychiatrist may recommend. 4. The Respondent is to authorise the Treating Psychiatrist to notify the Director, as soon as possible, of any: 1. advice or recommendation by the Treating Psychiatrist regarding the Respondent's treatment and/or medication which differs from any previous advice or recommendation by the Treating Psychiatrist regarding the Respondent's treatment and/or medication; and 2. failure by the Respondent to comply with clinical advice as to treatment and/or medication or in the event there is any significant change or deterioration in the Respondent's mental state which may adversely affect the Respondent's capacity to practise as a legal practitioner. 1. Within 28 days of the date of these orders the Respondent, at his own expense, is to provide to the Director a written acknowledgement from the Treating Psychiatrist that the Treating Psychiatrist is willing to make the notification contemplated by paragraph 4.d. 2. Within three months of the date of these orders the Respondent, at his own expense, is to provide to the Director a report prepared by the Treating Psychiatrist regarding the Respondent's fitness to engage in legal practice, the details of the Respondent's prescribed or recommended treatment plan and the Respondent's compliance with any prescribed or recommended treatment plan (Treating Psychiatrist's Report). 3. The Respondent is, at his own expense and on a 3-monthly basis, to notify the Director in writing of the dates on which he attended appointment(s) with the Treating Psychiatrist during the previous three month period and of the date(s) of the Respondent's next scheduled attendance(s). The Respondent is to provide those notifications on or before 30 March, 30 June, 30 September and 30 December each year unless and until: 1. the Director is provided with confirmation in writing from the Treating Psychiatrist that the Treating Psychiatrist no longer recommends that the Respondent requires psychiatric treatment; and 2. the Applicant is satisfied that the Respondent no longer requires psychiatric treatment. 1. If the Respondent establishes an ongoing therapeutic relationship with another treating psychiatrist (Substitute Treating Psychiatrist) other than the Treating Psychiatrist, the conditions in paragraphs 4.a to 4.f inclusive shall apply mutatis mutandis in respect of that Substitute Treating Psychiatrist, such obligations arising within 28 days after the nomination of the Substitute Treating Psychiatrist. 2. If the Respondent fails to comply with paragraphs 4.e, 4.f and/or 4.g of these orders, his practising certificate is to be suspended and will remain suspended until such time that he complies with the relevant paragraph. 1. The following condition is imposed on the Respondent's current practising certificate and on each practising certificate held by the Respondent until such time as the Respondent completes a Practice Management Course provided by a provider approved by the Director: 1. The holder must complete a Practice Management Course before being authorised to engage in legal practice as a principal of a law practice. 1. The Respondent pay the Applicant's costs of the proceedings.

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: 20 June 2022

At a glance

Court

Decision date

Source

Judgment (14 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (19)

Cited By (1)