Council of the Law Society of New South Wales v Panopoulos

APPLICANT Council of the Law Society of New South Wales

PARTIES: FIRST RESPONDENT Anthony Panopoulos

SECOND RESPONDENT Legal Services Commissioner

BEFORE: Chesterman M - Deputy President; Fairlie D - Judicial Member; Bubniuk L - Non-Judicial Member

CATCHWORDS: Solicitor - disciplinary application - failure to comply with undertaking to Law Society - failure to respond to correspondence from Law Society - instrument of consent

LEGISLATION CITED : Administrative Decisions Tribunal Act 1997 Legal Profession Act 2004

Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020 Council of the Law Society of New South Wales v Karam [2010] NSWADT 170 Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 Law Society of New South Wales v Hinde [2005] NSWADT 199 CASES CITED: Law Society of New South Wales v Waterhouse [2002] NSWADT 204 Legal Services Commissioner v Piper [2006] NSWADT 12 Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 New South Wales Bar Association v Howen [2008] NSWADT 148 Re Wakeling and the Legal Profession Act 1987, unreported, Legal Services Tribunal, No. 5 of 1998, 16 September 1998

APPLICANT L Pierotti, solicitor

REPRESENTATION: FIRST RESPONDENT In person

SECOND RESPONDENT L Muston, solicitor

1. The First Respondent is guilty of professional misconduct ORDERS: 2. The First Respondent is reprimanded 3. The First Respondent is to pay the costs of the Applicant, agreed at $1,750.

1 On 16 December 2009, the Council of the Law Society of New South Wales ('the Law Society') filed an Application alleging that the First Respondent, Anthony Panopoulos ('the Solicitor'), was guilty of professional misconduct on two Grounds: (1) that he 'failed to comply with his undertaking of 5 May 2006 to The Law Society of New South Wales'; and (2) that he 'failed to respond to correspondence'. Particulars of the alleged misconduct were supplied in a schedule to the Application.

2 In the Application, the Law Society sought the following orders:- 1. That the Solicitor be publicly reprimanded. 2. That the Solicitor pay the Society's costs.

3 On 16 December 2009, the Law Society also filed an affidavit in support of the Application, sworn by its solicitor, Mr Raymond Collins, on the previous day.

4 On 23 December 2009, the Application and this affidavit were served on the Solicitor. He did not file a Reply.

5 At a directions hearing on 7 July 2010, an Instrument of Consent, which included a document headed 'Agreed Statement of Facts', was handed up. It was executed by the Law Society, the Solicitor and the Legal Services Commissioner.

6 The Instrument of Consent stated that the signatories to it gave their consent to the Tribunal making (a) a finding that the conduct of the Solicitor described in Grounds 1 and 2 and particularised in the Agreed Statement of Facts amounted to professional misconduct and (b) the following orders, by consent:- 1. The Solicitor be reprimanded. 2. The Solicitor pay the costs of the Applicant agreed at $1,750.

7 At the hearing before us, which took place on 4 August 2010, Ms Muston represented the Legal Services Commissioner. Through so appearing, pursuant to an entitlement conferred by section 559(1)(c) of the Legal Profession Act 2004 ('the Act'), the Commissioner became a party to the proceedings (as the Second Respondent) under section 559(5).

8 Mr Pierotti, appearing for the Law Society, requested us to make orders in terms of those contained in the Instrument of Consent. He tendered unopposed the affidavit sworn by Mr Collins and the Instrument of Consent. The Solicitor, who represented himself, and Ms Muston supported this request.

9 The Agreed Statement of Facts was in the following terms:- In respect of the following grounds of complaint Anthony Panopoulos ["the Solicitor"] engaged in professional misconduct: 1. The practitioner failed to comply with his undertaking of 5 May 2006 to The Law Society of New South Wales.

2. The practitioner failed to respond to correspondence. PARTICULARS 1. On 5 May 2006 the Solicitor applied to the Law Society of New South Wales ["the Society"] for an Unrestricted Principal Practising Certificate ["the Principal Certificate"]. For that purpose, the Solicitor signed an undertaking of the same date to "… complete the next applicable Practice Management Course where there is a position available". 2. The Solicitor was granted the Principal Certificate on 1 July 2006 after the Licensing Committee had resolved on 19 June 2006, in part, to issue the Principal Certificate subject to the completion of an approved Practice Management Course. 3. By letter dated 19 June 2006 the Society informed the Solicitor of the resolution of the Licensing Committee on that day. 4. By letter dated 18 November 2008 the Society wrote to the Solicitor seeking confirmation that the Solicitor had either completed the Practice Management Course or had enrolled in same. No response was received form the Solicitor. 5. By letter dated 6 January 2009 the Society wrote to the Solicitor noting that the Solicitor's response to the letter of 18 November 2008 had not been received. No response was received from the Solicitor. 6. On 25 February 2009 an Information Notice was forwarded to the Solicitor seeking, in part, confirmation from the Solicitor of his compliance with the undertaking or explanation for any failure to so comply. The Solicitor was also provided with a copy of the letters referred to in paragraphs 4 and 5 above. 6 ( sic ). By letter dated 27 February 2009 to the Society, the Solicitor advised: " With respect to your letter of 25 February 2009 I apologise for all the trouble I have caused. I have made arrangements to do the course next Thursday the 12 th of March 2009 (I have enclosed the application and will also forward a confirmation that the course has been completed). I have always had plans to do the course not only because of the undertaking but also to comply with my requirement for 10 MCLE points. The reason for the delay has always been time and money. Ever since taking over the practice I have been trying to get on top of the administrative side of the business. While it was easy prior to taking over the practice to have a few days off in a row to attend courses now that I am self-employed it is much harder. The only time I have had off since taking over the practice is over Christmas. The only other staff member is my secretary whose hours of employment vary week to week as she has a small child. Also, while for a lot of people the financial crises ( sic ) has just begun, unfortunately for the firm it started when I took over the practice and was one of the reasons my former employer sold the practice. While we have noticed in the last 4 months a turnaround with a lot of the firm's established clients using us again the turnaround is slow (for example while some of our developers have begun developing again most projects are not due to be finalised for 6+ months). I am however hoping to use this turnaround (with the work in progress) to organise an overdraft facility. The bank has so far been unwilling to provide us with such a facility and I have to continually top up the firm's bank account. Given one last chance I will get things on track starting with doing the course on March the 12 th . 7. On 2 April 2009 the Society received a letter of the same date form the Solicitor stating, in part: "With respect to your letter of 9 March 2009 I have enclosed the following documents: 1. FMRC letter enclosing the Certificate [of attendance at the Unrestricted Practising Certificate Program for Sole Practitioners, held on 12-14 March 2009];

10 Section 496 of the Act states that unsatisfactory professional conduct 'includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner'.

11 So far as relevant, section 497 states, under the heading 'Professional misconduct':-

(1) For the purposes of this Act: professional misconduct includes: (a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence, and…

12 Under section 562, the Tribunal, after finding that a legal practitioner is guilty of professional misconduct or unsatisfactory professional conduct, may make one or more of a number of orders. These include an order under section 562(2)(e) reprimanding the practitioner and an order under section 562(4)(a) requiring the practitioner to pay a fine of a specified amount.

13 Under the heading 'Consent orders', section 564 states:- (1) The Tribunal may, with the consent of the Australian legal practitioner concerned contained in a written instrument, make orders under this Part without conducting or completing a hearing in relation to the complaint.

(2) Consent may be given before or after the proceedings were commenced in the Tribunal with respect to the complaint.

(3) If consent is given before the proceedings were commenced, the requirement to conduct an investigation of the complaint (whether commenced or not) may be dispensed with, and any investigation of the complaint already being conducted may be suspended or terminated.

(4) This section does not apply to consent given by the practitioner unless the practitioner, the Commissioner and (if applicable) the relevant Council have agreed on the terms of an instrument of consent.

(5) Without limiting what may be included in the instrument of consent, the instrument is to contain an agreed statement of facts (including as to the grounds of complaint) and may contain undertakings on the part of the practitioner.

(6) The instrument of consent must be filed with the Tribunal.

(7) Nothing in this section affects the procedures regarding the commencement of proceedings in the Tribunal where consent was given before the proceedings are commenced.

(8) If consent was given before the proceedings are commenced, the proceedings are nevertheless to be commenced with respect to the complaint in the same way as if the consent had not yet been given.

(9) The Tribunal is to be constituted in the same way as for the conduct of a hearing into the complaint.

(10) In deciding whether to make orders under this Part pursuant to an instrument of consent, the Tribunal may make such inquiries of the parties as it thinks fit and may, despite any such consent, conduct or complete a hearing in relation to the complaint if it considers it to be in the public interest to do so.

14 Under the heading 'Costs', section 566(1) states:- The Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), unless the Tribunal is satisfied that exceptional circumstances exist.

15 Section 608 is headed 'Undertakings by practitioner'. It states:-

(1) This section applies if an Australian legal practitioner gives an undertaking to the Commissioner, a Council or the Tribunal in the course of:

(a) the Commissioner or a Council investigating or dealing with a complaint against the practitioner, or

(b) a mediation conducted in connection with a complaint against or a consumer dispute with the practitioner, or

(c) proceedings before the Tribunal. (2) A breach of the undertaking is capable of being unsatisfactory professional conduct or professional misconduct.

(3) Nothing in this section implies that breaches of other undertakings are not capable of being unsatisfactory professional conduct or professional misconduct.

16 The following passage from the Tribunal's decision in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 (at [29 - 31], [33] and [35]) provides useful guidance as to the matters to be taken into account in deciding whether to make the consent orders suggested in the Instrument of Consent:- 29 Section 564(1) and (10) of the Legal Profession Act makes plain that the Tribunal has a discretion whether or not to make orders consented to in an instrument of consent under that section. The Tribunal does not act, nor should it be seen, as merely a "rubber stamp" - see the comments of the Federal Court in a similar context in Australian Communications and Media Authority v WE.NET.AU Pty Ltd [2008] FCA 1530 at [8]. Nonetheless, the consents of the parties and the Legal Services Commissioner are matters that deserve significant weight.

30 These circumstances are similar to, and some guidance can be derived from, cases where Courts exercising regulatory or disciplinary powers are presented with joint submissions by the parties (often including the relevant regulator) as to the appropriate civil penalties and consent orders which they request the Court to make. These often occur in matters under the civil penalty regimes such as those established by the Trade Practices Act 1974 (Cth) or the Corporations Act 2001 (Cth) and involving, respectively, the Australian Competition and Consumer Commission or the Australian Securities and Investments Commission.

31 Barrett J set out the Supreme Court's approach to consent orders in regulatory matters (including orders in relation to disqualification from management) under the Corporations Act and related legislation in Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020, as follows:- 9 The parties have, in each case, agreed the duration of the disqualification. That, however, does not absolve the court of its duty to consider the appropriateness of the penalty in the light of the agreed facts and the surrounding circumstances. This is made clear by the decisions of the Full Federal Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134 ; (1996) 71 FCR 285 and, more recently, Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 (and see, in the present statutory context, Australian Securities and Investments Commission v Vizard (2005) 54 ACSR 395). In the Mobil Oil case (at [51]) the following propositions were seen as emerging from the reasoning in NW Frozen Foods : "(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.

(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.

(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.

(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters.

(v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.

(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range." 10 There has been some criticism of this approach as involving "platitudes": see per Weinberg J in Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121. And in Vizard (above), the court imposed a higher penalty than that agreed by the partiers and sought by the regulator.

11 It is clear that the court is in no way constrained by the parties' agreement and that, having made the declaration of contravention, it must exercise its discretion as to penalty. In the present case, the factual background does not, to my mind, indicate that the respective periods of disqualification proposed by the parties are inadequate. ...

33 If the necessary adjustments to these principles are made to take into account the express statutory regime under s. 564 of the Legal Profession Act and the particular nature of the disciplinary powers being exercised by the Tribunal, we believe they provide useful guidance as to the exercise of the Tribunal's discretion in cases such as the present….

35 Having regard to all the facts and findings made by us in our previous reasons for decision, the Instrument of Consent and the submissions made by the parties, we did not and do not perceive that there was any additional material which should have been before the Tribunal before it could reach a decision on whether it was appropriate to make orders (a) and (b) referred to above.

17 At the hearing, we indicated to the parties that in our opinion the sole order by way of 'penalty' proposed in the Instrument of Consent - that of a reprimand - might not sufficiently promote the purposes of such orders. We said that we were concerned in particular about the following features of the Solicitor's behaviour:- (a) The substantial period of time - more than two years and nine months - during which he was in breach of his undertaking to the Law Society. (b) The fact that at the time of giving the undertaking he was aware of both the duration (three days) and the cost of the Practice Management Course that he undertook to take at the next available opportunity. (c) The fact that, so far as the evidence disclosed, such courses were offered about once every two months. (d) An admission by the Solicitor that during most of the period of non-compliance he made no attempt to enrol in an appropriate course. (e) The fact that during the period of non-compliance he held himself out to the public to be qualified to practise as a sole practitioner.

18 We suggested to the parties that a fine in addition to a reprimand might constitute a more appropriate penalty. We also raised with them the idea of an order requiring the Solicitor to attend an appropriate course of further education (for example, in ethics).

19 During further discussion at the hearing, Mr Pierotti and Ms Muston repeated the contention of their respective clients that the orders proposed in the Instrument of Consent were adequate to the occasion. They cited various decisions of the Tribunal which, in their submission, provided support for this view.

20 We advised the parties that, while we were inclined to withdraw our suggestion that the Solicitor should be required to attend a course of further education, we wished to consider further whether the penalty imposed should include a fine as well as a reprimand. We reserved our decision on the matter, requesting the parties to send to the Registry within seven days the names and citations of any further decisions that might provide guidance to us.

21 Both Mr Pierotti and Ms Muston responded to this request. We have derived assistance from the authorities to which they drew our attention.

22 On reviewing the evidence tendered and admitted at the hearing, we find that it adequately substantiates the matters outlined in the Agreed Statement of Facts.

23 The conduct of the Solicitor outlined in this Statement does not fall within the range of breaches of undertaking defined in subsection (1) of section 608 of the Act, in relation to which subsection (2) states that they are capable of being unsatisfactory professional conduct or professional misconduct. But subsection (3) of this section confirms that breaches outside this range may attract the same characterisation. In a number of the decisions, discussed below, which have provided guidance to us on the question of penalty, breaches of undertakings to the Law Society (or to the Bar Association or the Legal Services Commissioner) have been held to constitute professional misconduct: see for example Law Society of New South Wales v Hinde [2005] NSWADT 199 at [37 - 41] and New South Wales Bar Association v Howen [2008] NSWADT 148 at [59 - 62].

24 Having regard to the features of the Solicitor's behaviour outlined above at [17], we endorse the characterisation of it as professional misconduct in the Instrument of Consent.

25 On the question of the appropriate penalty, we have found it particularly useful to consider cases in which (a) one or more breaches of undertaking by a legal practitioner (whether to the Law Society, the Bar Association, the Legal Services Commissioner, another practitioner or indeed any third party) have been established by evidence or admitted by the practitioner, and (b) these either represent the sole instances of misconduct or unsatisfactory conduct dealt with or are accompanied by other relatively low-level instances of such conduct. We have paid particular attention to the question whether a reprimand - which has been the 'typical' penalty imposed - has been considered sufficient or whether some additional penalty, such as a fine, has been thought necessary. The cases from which we have derived the most assistance are as follows.

26 In Re Wakeling and the Legal Profession Act 1987, unreported, Legal Services Tribunal, No. 5 of 1998, 16 September 1998, a solicitor failed to comply with an undertaking to the Law Society to furnish requisitions relating to a probate application. There was reason to believe that after about one week the requisitions were no longer required. The Tribunal outlined some mitigating factors arising out of the solicitor's personal situation, but also referred to an earlier private reprimand for unsatisfactory professional conduct, relating to the probate application. The solicitor freely acknowledged his failure to comply. Although the Tribunal made a finding of professional misconduct, it did not consider that a fine was called for and ordered only that the solicitor be reprimanded. 27 In Law Society of New South Wales v Waterhouse [2002] NSWADT 204, the undertaking breached by the respondent solicitor was to deliver a certificate of title to another solicitor. The Tribunal noted some mitigating circumstances relating to the undertaking itself, in view of which it made a finding of unsatisfactory professional misconduct and imposed a fine of $2,000. It did not refer to the alternative penalty of a reprimand. 28 In Law Society of New South Wales v Hinde [2005] NSWADT 199, the respondent solicitor failed over a period of three years to comply with an undertaking given at the settlement of a sale of land to pay the commission owing to the estate agent involved in the sale. The Tribunal made a finding of professional misconduct and imposed as penalty both a reprimand and a fine of $3,000. In so doing, it took into account the following matters, set out in its decision at [32]:- 32 The practitioner also wrote on 11 March 2003 to the complainant. That letter is important in the Tribunal's assessment of the practitioner's conduct. It is consistent with a clear trend in the practitioner's approach to this matter, an approach which in the view of the Tribunal reflects poorly on the practitioner and could fairly be described as bringing an honourable profession potentially into disrepute. The practitioner with his accusations, threats and failure until shortly before the hearing of this matter to honour his undertaking has in the Tribunal's view effectively sought to portray himself as "the victim". The problem is, and has been, the undertaking by the Solicitor and his failure to promptly honour it. Rather than be acknowledged as the "victim" the practitioner is clearly by his conduct the "villain " because of his failure to honour the undertaking at settlement which default was a continuing one from 13 May 2002 to 7 April 2005. 29 In Legal Services Commissioner v Piper [2006] NSWADT 12, the respondent solicitor gave an undertaking to the Legal Services Commissioner to give 'highest priority' to responding to correspondence from the Commissioner. He in fact delayed over eleven months, despite receiving five reminder letters, to reply as required to a particular letter. Having made a finding of unsatisfactory professional conduct, the Tribunal ordered that he be reprimanded and that he pay a fine of $1,000. The Tribunal noted at [58] his apparent failure to acknowledge at any time that he had been in breach of his undertaking. It also referred, at [61], to the circumstances in which he had previously been reprimanded for failure to comply with an undertaking to send a file to a solicitor. At [62], it explained its decision on penalty as follows:- 62 On account of these matters, we consider that a reprimand, such as was administered in February 2002 for a similar instance of unsatisfactory professional conduct, would be an insufficient penalty standing alone. We think that a fine is also warranted, though in view of the Practitioner's personal circumstances at the relevant time it should not be a heavy one. 30 In Legal Services Commissioner v McCarthy, unreported, Administrative Decisions Tribunal, 2 June 2008, the Tribunal dealt ex parte with a breach of an undertaking by solicitor to reply within 28 days to correspondence from Commissioner. There was a relatively brief delay before he finally replied. In previous proceedings, he had consented to a finding of professional misconduct, a reprimand and a fine of $2,000, on account of having failed to comply with a notice under section 660 of the Act (requiring information to be furnished to the Commissioner) and with an earlier undertaking to the Commissioner. The Tribunal again found professional misconduct, and imposed a reprimand and a fine of $2,500.

31 We will draw attention to one more case, although it did not involve a breach of an undertaking. Its relevance is that it concerned a respondent who practised in a manner that was inappropriate having regard to the terms of his practising certificate. In Council of the Law Society of New South Wales v Karam [2010] NSWADT 170, the respondent solicitor held a 'restricted corporate' practising certificate, which limited his entitlement to practise to acting for his employer corporation only. In breach of this restriction, he acted in legal proceedings for other clients. The Tribunal, approving the terms of an Instrument of Consent, made a finding of professional misconduct and ordered that he be reprimanded.

32 In the present case, it is important that the Solicitor made no attempt to deny his failure to comply with his undertaking or to deny the seriousness of this failure. Both in his letter of 27 February 2009 to the Law Society and at the hearing, he displayed contrition. He has been in practice for about 12 years without any complaint against him being recorded.

33 In these circumstances, despite the concerns outlined above at [17], we have decided after careful consideration, that the orders set out in the Instrument of Consent are 'within the permissible range' (to quote the phrase used in the passage from Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 that the Tribunal cited in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 - see [16] above).

34 We accordingly order as follows:- 1. The First Respondent is guilty of professional misconduct. 2. The First Respondent is reprimanded. 3. The First Respondent is to pay the costs of the Applicant, agreed at $1,750. 35 We wish finally to express our concern about two further aspects of this case.

36 The first is that the Law Society apparently took no steps, between the giving of the undertaking on 5 May 2006 and its letter of 18 November 2008, to ascertain whether the Solicitor had complied with the undertaking. Nothing was said to him, for instance, on the occasions when he applied for renewal of his practising certificate. This does not in any way excuse his failure to comply. But the Law Society should consider whether more frequent monitoring of undertakings such as these is desirable.

37 Secondly, in the Law Society's letter of 18 November 2008 to the Solicitor (which was headed 'Practice Management Course Undertaking Audit 2008') and its follow-up letter of 6 January 2009 (which had a similar heading), it was implied that if the Solicitor had enrolled in the next available course he would have satisfied his obligation to the Society and no further action would have been taken against him. The later letter, for instance, concluded with the following paragraph, in bold type:- Please respond as soon as possible. If no response is received by 2 February 2009, the matter will be referred to the next Licensing Committee for referral to the Professional Standards Department for failure to comply with a solicitor's undertaking.

38 As Mr Pierotti conceded at the hearing, however, the Solicitor breached the undertaking during 2006 through failing to attend the first available practice management course. In this significant respect, the first step taken by the Law Society in response to the Solicitor's breach of undertaking was not appropriate to the occasion.

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