Council of the Law Society of NSW v Beazley

The Factual Background 5Before we deal with this issue, we first set out of the factual background to the complaint. In September 2012 a complaint against the Solicitor was made to the Office of the Legal Services Commissioner which was referred to the Law Society for investigation. The Solicitor had taken over from another solicitor the administration of a deceased estate which included a Family Provision claim. The former solicitor complained that the Solicitor had breached the terms of a deed entered into between the solicitors and their client executrix in November 2010, in that, he had failed to keep the former solicitor informed of the progress of the matter, and that at the conclusion of the matter in February 2012, he had failed to pay the former solicitor's unpaid costs. These matters were also said to constitute breaches of the Revised Professional Conduct and Practice Rules 1995. 6The Law Society wrote to the Solicitor in November and December 2012 and again in February 2013 seeking his response to the complaint. No response was received. On 8 May 2013 the Law Society issued a notice pursuant to section 660 of the Act against the Solicitor ("the Notice"). It was personally served on him on 14 May and required him to provide certain information, verified by a statutory declaration and to produce specified documents to the Law Society within 21 days. 7The Solicitor again failed to respond within the 21 day period. On 6 June the Law Society wrote informing him that his response to the Notice remained outstanding. On 19 June the Solicitor wrote to the Law Society providing some information in relation to the complaint, but did not respond in terms to the information required by the Notice, nor produce all the documentation specified. The same day the Law Society wrote back to the effect that his letter did not constitute a proper response to the Notice, and that his failure to respond was to be referred to the Law Society's Professional Conduct Department. 8On 1 July 2013 the Solicitor was informed that the Law Society had resolved to make its own complaint against him in relation to his failure to respond, and on 23 July he was provided with the terms of its resolution, essentially in the same terms as that contained in the Application filed with the Tribunal this year. A minor amendment to the terms of the resolution was communicated to him by letter dated 1 August 2013. Both the 23 July and 1 August letters invited the Solicitor to make submissions, but again he did not respond. 9Finally on 14 August the Solicitor provided a statutory declaration with a detailed response to the Notice together with some further documents. He said that he did not operate a trust account, and therefore was not in a position to produce the trust account records requested in the Notice. His covering letter to the Law Society also said that the Notice was invalid and an abuse of process. The Law Society replied in November 2013, to the effect that it was of the view that the Solicitor still had not complied fully with the Notice. The Solicitor responded that he nothing further to add or to produce and repeated that he did not operate a trust account or a controlled money account for this client. 10In July and August this year, that is after these proceedings had been commenced, there was further correspondence between the Solicitor and the Law Society in relation to what additional material, if anything, remained outstanding in relation to the Solicitor's obligation to answer the Notice. The Solicitor then filed an affidavit which, in the Solicitor's opinion, clarified or alternatively, in the Law Society's opinion, expanded upon the answers given by the Solicitor in his August 2013 response. 11Whether there was full compliance with the Notice in August 2013, as the Solicitor asserts, or only in August this year, we were not required to determine in these proceedings. However the fact remains, as was conceded by his counsel, that the Solicitor failed to respond to the Notice within the 21 day period specified, and did not provide his substantive response until three months had passed. Prior to the issue of the Notice he had also failed to respond at all to the Law Society's correspondence for almost 5 months, without any explanation or justification. 12We add that section 660 is quite clear in its terms that compliance with a notice issued under the section is mandatory, and that under subsection (3), failure to comply can attract a penalty of up to 50 penalty units.

Findings 13We agree therefore that the first ground alleged the Solicitor in the Application, that he failed to comply with the requirements of the Notice, is made out and we find accordingly. We also find that the second ground, that he failed to assist the Law Society with the investigation of a complaint, is established by the initial failure to respond to the Law Society for this 5 month period, and that, as was conceded by him, taken together, these matters amount to professional misconduct, within the wording contained in section 498 of the Act, on the part of the Solicitor. We also agree that it is appropriate that he at least receive a public reprimand and pay the Law Society's costs.

Should the Solicitor be fined? 14We now turn to the question of a fine. Mr Pierotti for the Law Society submitted that a fine, in addition to a reprimand was appropriate. He said whilst the purpose of orders made by the Tribunal under section 562 of the Act, should always be of a protective and educative nature and not punitive, it remained appropriate for the Tribunal to note disapproval of the Solicitor's conduct by imposing a fine. This also had the effect of sending a strong message to the profession generally that such conduct is not acceptable. He referred the Tribunal to the statements of Beazley JA, as she then was, to this effect in a decision of the NSW Court of Appeal, Law Society of New South Wales v Walsh [1997] NSWCA 185. 15For the Solicitor, his counsel, Mr Johnson, emphasised the very public nature of a reprimand. The reprimanded solicitor's name is included in permanent Register kept by the Office of the Legal Services Commissioner, which is available for public inspection and on the OLSC's website. These Reasons for Decision and orders will be published on the Tribunal's public data base of its decisions, and the Law Society may also publicise the decision, as it is entitled to, in its weekly Monday Briefs email to the profession. We did not understand Mr Johnson to disagree with Mr Pierotti's general formulation of the test to be applied. Rather his submission was that a reprimand, coupled with the Solicitor's willingness to pay the Law Society's costs, was a sufficient mark of disapproval in the circumstances. 16Section 562 of the Act specifies the orders that this Tribunal is entitle to make if it is satisfied that a legal practitioner has engaged in professional misconduct, or unsatisfactory professional conduct. Subsection (2) commences with the words "Orders requiring official implementation in this jurisdiction." The first order specified (a) is that the name of the practitioner be removed from the local roll. The fifth alternative (e), is that the practitioner be reprimanded. 17The Tribunal's power to impose a fine on a practitioner is found in the later subsection (4)(a), which commences with the words "Orders requiring compliance by practitioner" and includes, amongst other matters, orders that the practitioner undertake a specified period of practice under supervision -subsection (4)(c). Subsection (9) specifies that the maximum fine, where there has been a finding of professional misconduct, that can be ordered, is $75,000. 18Following the hearing of a complaint against a legal practitioner, the Tribunal can make an order under subsection (2) (though probably one only from the alternatives available), and in addition can make one or more of the orders under subsection (4). Also it can make ancillary orders under subsection (5), such as cost orders. In other words the Tribunal is able to order that the Solicitor pay a fine and costs as well as reprimanding him, as the Law Society has submitted should be the outcome here. 19There have been many cases before the NSW Administrative Appeals Tribunal involving the appropriate orders to be made against practitioners who failed to answer notices issued pursuant to section 660 of the Act, or the equivalent section under the Legal Profession Act 1987. A number of these are discussed in Law Society of NSW v Cunningham [2003] NSWADT 138 at paragraph 13, and more recently, in Council of the Law Society of NSW v Tsalidis (No 2) [2010] NSWADT 297 at paragraphs The 44 - 51. 20However while these decisions canvas, often in detail, the amount that should be imposed, none that we could find discuss the underlying rationale for imposing a fine, in addition to a reprimand, except in the general terms outlined by Mr Pierotti. Perhaps the unstated premise is, as noted above in these Reasons, that section 660(3) itself provides for the imposition of a fine for failure to comply with a notice issued pursuant to the section. 21Where the notice had not been answered by the time of the hearing, the cases show that an order suspending the practitioner's practising certificate and/or ordering that a further certificate not be issued until compliance, (as was initially sought by the Law Society in this matter), is the most appropriate order. Where there has been compliance, even though in some instances not until just before the commencement of the hearing, the usual order is that the practitioner receives both a public reprimand and a fine. 22In this instance we can find no reason to depart from the usual order made in those circumstances - that is we intend to impose a fine as well as order that the Solicitor be reprimanded. We were influenced by the lengthy period that the Society's correspondence went unanswered without explanation before the Notice, in addition to the three months taken by the Solicitor to answer the Notice itself. 23Secondly, whilst his counsel withdrew the initial allegations about the invalidity of the Notice and that the proceedings constituted an abuse of process, neither in his affidavit, nor in his counsel's submissions was there any real evidence of contrition shown by the Solicitor for his conduct. In his affidavit all he said was that it was an oversight on his part that he did not prepare a statutory declaration when responding initially to the Notice. 24Lastly we turn to the amount of the fine. Mr Pierotti suggested that the range should be between $1,500 and $5,000 and suggested that an amount of $2,000 may be appropriate. Tsalidis (No 2), cited above, also contains, at paragraph 46, a discussion of some of the matters to be considered when the Tribunal fixes the amount of a fine. Most relevant here is whether there have been previous findings made against the Solicitor in this Tribunal or its predecessors, particularly findings of a similar nature. We accept that this is not the case here, and in the only other matter before the Tribunal involving this Solicitor, which was very different to this matter, the Tribunal found in his favour. 25 We intend to impose a fine of $1,000 which is at the low end of the range be believe open to us to impose in these circumstances. We therefore make the following orders: (1) The Solicitor is guilty of professional misconduct. (2)The Solicitor is reprimanded. (3)The Solicitor is fined an amount of $1,000. (4)The Solicitor is to pay the costs of the Law Society, agreed at $2,000.

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

Amendments 21 January 2016 - Typographical Errors 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: 21 January 2016