Council of the Law Society of NSW v Helby - [2018] NSWCATOD 182 - NSWCATOD 2017 case summary — Zoe

NSWNSWCATOD

Council of the Law Society of NSW v Helby

[2018] NSWCATOD 182

NCAT Occupational|2017-08-01

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NCAT Occupational

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2017-08-01

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Judgment (26 paragraphs)

[1]

REASONS FOR DECISION

Christopher Vincent Helby was admitted as a solicitor on 11 May 1979. From 1 July 1981 he was a sole practitioner in a country practice. Following a trust account audit, the Council of the Law Society (the Law Society) resolved, on 21 November 2013, to suspend Mr Helby's practising certificate. He immediately commenced proceedings in the Supreme Court of NSW which resulted in an order on 20 December 2013 setting aside that decision of the Law Society: Helby v Council for the Law Society of New South Wales [2013] NSWSC 1938 (the Supreme Court proceedings). He remained in practice from that time until his retirement on 1 July 2016. He no longer holds a practising certificate.
By Application for disciplinary findings and orders filed on 22 December 2016, the Law Society seeks findings that Mr Helby is guilty of both professional misconduct and unsatisfactory professional conduct, arising from the events that gave rise to its decision to suspend his practising certificate in 2013, being the decision set aside in the Supreme Court proceedings. The Law Society seeks orders that Mr Helby be reprimanded, fined a substantial sum, pay its costs "together with such other order as the Tribunal deems fit to make".
It is contended that Mr Helby is guilty of unsatisfactory professional conduct on two grounds, namely, failure to disclose costs (Ground Ai) and failure to provide trust account statements (Ground Aii). It is also contended that Mr Helby is guilty of professional misconduct on two grounds, namely, "grossly" overcharging (Ground Bi) and transfer of trust money without authority (Ground Bii).
The facts relevant to the Application are largely undisputed. As will be seen, the only particular contention by the Law Society that is disputed by Mr Helby is that he "grossly overcharged" the client whose matter is the subject of that contention. Further, he does not accept that his admitted conduct constitutes professional misconduct.
The parties co-operated by settling between them and tendering a Statement of Agreed Facts (Ex A5). In addition, the Law Society relied on the affidavits of Frederick Albert House, a Law Society trust account inspector, sworn 24 March 2014 (Ex A1), Anne-Marie Foord sworn 9 December 2016 (Ex A2), and John Leonard Poole sworn 19 December 2016 (Ex A4). Included in documents exhibited to the affidavit of Ms Foord (Ex A3) were copies of affidavits filed in the Supreme Court proceedings. Both Mr House and Mr Poole were cross-examined.

[3]

BACKGROUND

On 22 November 1994 Veronica May Toohey made a will in which she appointed Catherine Mary Tuckerman, Mark Patrick Toohey and Noeline Patricia Toohey as Executors of her Will and Trustees of her Estate (the Trustees). Ms Tuckerman, Mrs Toohey and Millicent Hailstone were appointed as guardians of her invalid daughter, Janice Mary Toohey (Janice). After various gifts, the remainder of the Estate, together with any income it earned, was to be held by the Trustees in trust for Janice for life, with the Trustees given the discretion to expend funds as they saw fit for the benefit of Janice who was a long-term resident in a nursing home. Following the death of Janice and after payment of certain legacies, the balance of the Estate was to pass to Ms Tuckerman, Mr Toohey, Ann Veronica Murphy, Patricia Therese Maclachlan and Terrence Aloysius Toohey in equal shares.
Veronica Toohey died on 31 July 1996. Mr Helby was subsequently instructed by the Trustees to obtain Probate of the Will of the late Mrs Toohey. Mark and Noeline Toohey, two of the three Trustees, were long-time clients of Mr Helby and remained so until his retirement from practice.
Probate of the will of the late Mrs Toohey was granted on 11 February 1997. The assets of the Estate at that time comprised money totalling $248,505.28 disbursed among four different accounts held with the National Australia Bank. Following the grant of Probate, the Trustees instructed Mr Helby that they wished to have the proceeds of the bank accounts realised and invested partly in funds on deposit and partly in "blue chip shares". The funds on deposit were to be placed with the Westpac Bank and AGC, with responsibility making those deposits undertaken by Ms Tuckerman. The responsibility for share purchases was given to Mr Helby and he was requested to take responsibility for the general management and administration of the Estate. Indeed, it is not disputed that the Trustees had stated to Mr Helby that they wanted him to undertake all tasks in connection with the Estate so that they had "as little day-to-day involvement as possible".
Thereafter, Mr Helby received company dividends from share purchases he made in the name of the Estate that were paid into his Trust account and recorded in the ledger for the Estate. He received and considered all letters and reports received from companies whose shares had been purchased, researched an appropriate investment strategy for shares and, upon receiving approval from the Trustees, bought and sold shares. In so doing, he liased with sharebrokers, prepared Business Activity Statements, prepared the Estate's income tax returns (he was a registered tax agent), liaised with Ms Tuckerman concerning the Estate money on deposit, including interest to be included in the income tax returns, met some four or five times per year with Mr and Mrs Toohey to discuss the Estate administration and to have the income tax return for each year signed by them. He also made payments for the benefit of Janice when instructed to do so by the Trustees.
Following the grant of Probate, realising the bank deposits held by the deceased, attending to payment of debts, funeral and testamentary expenses and paying the legacies given under the Will, Mr Helby rendered his initial fee note. That was duly paid, leaving an initial fund of $211,038 for investment in the manner earlier described. As at December 2013, the capital sum invested in the name of the Estate had grown to a figure in excess of $1,100,000.
Between the time that shares were first purchased by Mr Helby at the request of the Trustees and July 1999, he did not charge the Estate any fees. However, in that month he had a conversation with Mark Toohey, indicating that he wished to commence charging for his work "as there has been a lot involved" in the two years that had passed since assuming responsibility for administering the Estate funds. Mr Toohey agreed that Mr Helby should do so by deducting his fees from Estate money held in trust from time to time. Thereafter, Mr Helby prepared a number of accounts throughout each year, placed his accounts on the Estate file and deducted the amount of those fees from trust funds held on behalf of the Estate. The amount of those fees was recorded as a deduction in the Income tax return prepared by Mr Helby each year and discussed with the Trustees at the time at which that return was signed by them. At no time did any of the Trustees take issue with the fees that Mr Helby charged to the Estate.
Mr Helby did not make any charge for his services between the time of the commencement of the Supreme Court proceedings in 2013 and his retirement from practice in July 2016.
These are the background events from which the present proceedings arise.

[7]

What work was Mr Helby retained by the Trustees to undertake?

On or about 18 November 1996 Mr Helby created a trust ledger for the Estate. When Probate was granted in February 1997 the assets of the Estate comprised cash totalling a little over $248,000, held in several bank accounts. As we have earlier recorded, after collecting the assets of the Estate, paying debts and a Supreme Court filing fee (presumably for the Probate application) and effecting bequests under the will, $211,038 of Estate funds remained in trust.
Because of the life interest of Janice in the Estate and her age, Mr Helby said, he anticipated that the administration of the Estate would extend over many years. He was retained by the Trustees to act on behalf of the Estate during this administration period. Such retainer was oral and, he said, evolved over the time that he was administrating the affairs of the Estate.
As we have also recorded, Mr and Mrs Toohey provided evidence in the Supreme Court proceedings and which is before us to the effect that Mr Helby was engaged to complete all tasks associated with the administration of the Estate. Each said the third Trustee, Ms Tuckerman, was a party to such agreement.
Mr Poole acknowledged in cross-examination that he was aware Mr Toohey had sworn that Mr Helby was retained to carry out all tasks needed for the administration of the Estate, to provide the Trustees with advice and to implement all investment strategies. Mrs Toohey, too, had sworn that she, her husband and Ms Tuckerman agreed that Mr Helby was to carry out the day-to-day running of the Trust.
Ms Tuckerman reportedly told Mr House that she had not participated in the management of the Estate beyond looking after the term deposits. She gave Mr Helby updates as to the interest earned from those deposits, that he then used for the preparation of the income tax returns. In 2003 she, together with Mr and Mrs Toohey, attended his office where they reviewed the performance and assets of the Trust. Subsequently, Ms Tuckerman closed one of the term deposits and in August 2003 provided Mr Helby with the proceeds of that term deposit to purchase additional shares. That was the last contact Mr Helby had with Ms Tuckerman and, he believed, the only meeting he had with her after the grant of Probate.
In cross-examination Mr Poole agreed that Mr Helby had been retained to do whatever was required in and for the proper administration of the Estate.
In summary, we accept Mr Helby's evidence that he was engaged by the Trustees to carry out all administrative tasks in respect of the Estate so that they had as little day-to-day involvement as possible. His evidence was that Mr and Mrs Toohey told him, in effect, that they wanted him to do everything because they did not want to be actively involved. He said he was told to do what he thought was best and provide updates as needed.

[8]

What work was performed by Mr Helby pursuant to the retainer?

Mr Helby set out in his affidavit the nature of the legal services he provided pursuant to his retainer. As listed, those services involved discussions with the Trustees regarding their investment strategy; purchase of shares in accordance with such investment strategy; liaising with stockbrokers; collection of dividends and ensuring they were correctly paid; reviews of annual and interim reports from the share companies and provision of advice to Mr and Mrs Toohey on those reports; preparation of taxation returns each year and payment of tax; preparation of quarterly Business Activity Statements; making payments on behalf of Janice when directed to do so by the Trustees; review of correspondence, share offers and capital raising documentation from the share companies and recommendations to Mr and Mrs Toohey as to whether they should participate in such offerings; purchase of additional shares for the Estate when cash was available after, discussing the options with Mr and Mrs Toohey and gaining their approval, including research into the ongoing share performance and reviews of annual and interim statements; meetings held with Mr and Mrs Toohey on a formal basis once or twice a year for the execution of taxation returns, at which time he provided summaries of the share performances, dividends earned, any matters raised in the annual or interim reports that he believed were relevant; details of his costs that had been charged to the Estate; telephone conversations or more informal meetings with Mr and Mrs Toohey to discuss capital raisings or other matters that required their input; and provision of additional updates on the Estate when he had meetings with Mr and Mrs Toohey regarding their personal legal matters.
Both Mr and Mrs Toohey in their affidavits gave evidence broadly consistent with Mr Helby's account of what work he had undertaken. They would meet three to four times a year where they were updated as to the status of the Trust; once a year to sign taxation returns; and they communicated with Mr Helby via telephone calls in the interim as to investment strategies.
With the authority of the Trustees, between March 1997 and December 2011 Mr Helby invested the Estate funds, including "blue chip" shares, in amounts ranging from $1000 up to about $120,000.
A major point of contention raised by both Mr House and Mr Poole was Mr Helby's belief was that he was entitled to charge his time for performing tasks such as reading annual and financial reports for the companies in which shares were held. In cross examination Mr Helby said that he spent a "vast amount of time" looking at the material that came from various companies. He took the material home and had piles of reports on his desk and on the floor in his flat. In the course of his evidence Mr Helby demonstrated, with respect to at least one such company what was, in our view, a detailed knowledge of its corporate performance, including changes to key personnel. Bellew J, in the Supreme Court proceedings at [88], made more detailed observations to similar effect.
Mr Helby said he held in-depth discussions of that kind with the Trustees. He said that he never advised whether to buy or not buy shares, but passed on the information he received from the companies, making recommendations based on his research. From time to time the shareholding would be supplemented, such as when there were bonus shares available for purchase. He said that he reviewed the Estate shareholding every week. In 2008 (during the GFC) he reviewed it daily. There was no evidence before us to suggest Mr Helby did not perform the services that he claimed to have performed and for which he charged.
The view of Messrs House and Poole was, simply put, that much of this work was unnecessary. They sought to limit Mr Helby to only charging for some of the services he provided and not other services, such as the reading of interim and annual reports of the publicly-listed companies in which the Estate held shares. There was evidence that these are large, complex documents. Section 299A of the Corporations Act 2001 (Cth) requires a publicly-listed entity to provide a report containing information to allow shareholders to make an informed assessment of the operations of the company, the financial position of the company, and the business strategies and prospects for future financial years of the entity.
In cross-examination, Mr Poole said that he did not think evaluation of financial reports of a small investment was worthwhile. Larger investments might include annual and interim reports, share offers, buyback schemes, reinvestment schemes, notices of changes in company direction or profit warnings. In his report to the Law Society dated 31 March 2016 (the Report) which was attached to his affidavit, Mr Poole wrote that he considered there should be a proper relationship between the gross income and the costs charged for the work to generate that income.
In the Report, Mr Poole expressed surprise that Mr Helby had created a USB stick with all the financial statements for 2004 to 2012 in respect of each company in which shares were held; he did not consider there to have been any 'value' in doing that. Mr Helby said that he read and studied each of the documents referred to on the USB stick and charged for his time for doing so. He understood that each document was important and required his perusal. The Trustees did not receive these documents, let alone read them, he said, and it was his belief that it was his duty to them, as his clients, to peruse the documents and advise them if there were matters that needed to be bought to their attention.
Mr House said the listed investments of the Estate were what he would call "set and forget" because they were all essentially "blue chip" investments. In cross-examination he said he did not allow for reading these reports as there was "no argument" that these were "good investments"; it was, in his view, "more or less unnecessary" to read the reports. Trustees, he thought should "glance" at an annual report. He said he made some allowance for that work but looking at those financial reports would not consume very much time.
We accept that from the commencement of the administration of the Estate, Mr Helby understood that part of his retainer was to assist the Trustees to maintain and grow the trust funds in accordance with the investment strategy that they had chosen. While the decision to read financial reports would normally be undertaken by trustees, we were satisfied that the Trustees had delegated this function and decision to Mr Helby. We agree with the submission on Mr Helby's behalf that, given the tasks that he was required to perform, it is arguable he would have been negligent had he not undertaken this task. We consider that the services provided by Mr Helby fall squarely within the terms of his retainer, namely to perform all tasks for the administration of the Trust. Many of those tasks would normally be carried out by trustees but, in this case, they were undertaken by Mr Helby as part of his retainer.

[9]

What was a reasonable sum to be charged for the work performed?

We have found that it was reasonable, having regard to the terms of his retainer, for Mr Helby to undertake the day-to-day running of the Estate, including evaluating the information he received from the companies in which shares were held. As we have earlier stated, Mr Helby did not charge anything for the work he did for the Estate for about the first two years. We have also recounted the conversation between Mr Helby and Mr Toohey that resulted in his subsequent charging for the work that he continued to undertake. In that context, Mr Helby told Mr Toohey that his fees would be tax deductible. He said he told Mr Toohey that the Estate had a of tax imputation credits from the shares and no other deductions. He said he told him he expected that either there would be a reduction in the additional tax payable or a refund of some of the credits. He said that Mr Toohey told him he could charge up to the point that the Trust did not have to pay tax so that it was tax neutral. He was told, he said, to take his costs from money held in trust. However, he did not calculate his fees by reference to the tax otherwise payable on the earnings of the Estate.
The tax invoices prepared by Mr Helby were exhibited to the affidavit of Ms Foord. Other than the initial invoices rendered in 1997, the work description on the invoices is extremely brief. Further, where the amount charged is said to be pursuant to an hourly rate, there is no itemisation of the work undertaken by reference to the time charged. In addition, there are also entries in the trust ledger totalling $10,153 for which no tax invoices are available.
Mr Helby said that it had not been his usual practice to time-cost his matters, but rather to agree upon a lump sum fee with the client. With conveyancing, probate, wills and most Local Court matters, it was his usual practice to give a quote at the commencement of the matter, and charge on that basis. That clearly was not going to be the case in the ongoing management of the Estate. In this matter he did not keep time sheets; instead, he said, he made a genuine estimate of the time he had spent. In some years the time he spent was standard, and at other times it was not, for example during the GFC, when he spent considerably more time. At that time, the amount of correspondence, advice, and capital raising documents that he received was substantially more than in other years. He discounted his fees for simple tasks such as receipting dividends, while fees for other tasks, such as perusing prospectuses for capital raising or share offers were not discounted. He also discounted his fees where investments had performed poorly. Mr Helby stated that he generally prepared his tax invoices for work undertaken for the Estate shortly after a block of work was done so that he had a good recollection of the time devoted to that particular work.
Mr Poole considered that reasonable costs for the work done by Mr Helby was in relation to the collection and management of dividends, purchase of shares and payments of other expenses together with the reasonable costs of income tax returns. Mr Poole conceded that he had allowed nothing for perusal of documents from companies and that he had allowed fees only in relation to administrative work done in connection with accounting and the tax returns. He conceded he had allowed nothing for considering and recommending investment strategies.
Similarly, in calculating the reasonable sum, Mr House allowed 1 hour per annum for the general administration of the Estate, 2 hours per annum to prepare the Estate tax return, and 1.5 hours per share transaction/reinvestment decision.
At no stage did the Trustees object to or raise any concern with the charges made by Mr Helby, albeit that they learned of his charges after deduction from the Estate funds held in the trust account. The Law Society contended that Mr Helby needed to consider the interests of the beneficiaries of the Estate, rather than merely the Trustees. This argument falls away, it seems to us, having regard to the conceded significant growth in the Trust assets.
The Law Society submitted that it may well be that Mr Helby believed that all of the work that he did was appropriate, and that the time he spent on the Estate is reasonably reflected in the fees charged. It submitted, however, that the fees that he charged were not apparently determined with reference to any appropriate, quantifiable measure. Fundamentally, it submitted, whatever Mr Helby may have believed to be appropriate is irrelevant to the exercise at hand. Nonetheless, there was no contention of any element akin to fraud (cf Veghelyi v The Law Society of New South Wales [1995] NSWCA 483).
In their affidavits filed in the Supreme Court proceedings, Mr and Mrs Toohey both stated that they were happy with the service provided by Mr Helby and with the fees that he charged. They approved Mr Helby's fees each year, albeit retrospectively.
There was no evidence that at any time Ms Tuckerman was unaware of the fees charged by Mr Helby as reflected in the annual income tax returns or that she raised any objection to those fees. It is apparent to us that Ms Tuckerman was satisfied to leave the general administration of the Estate to the other Trustees and approved the delegation of tasks, and the consequential costs, to Mr Helby.
We find that Mr Helby was engaged by the Trustees to carry out all administrative tasks for the Estate that he described so that they had "as little day to day involvement as possible". We also find that those tasks included reading material upon which investment decisions were made by the Trustees. As such, Mr Helby was entitled to charge fees in doing so.

[12]

Difficulty, novelty and complexity of work

Mr Helby gave evidence that he studied each of those documents he received on behalf of the Estate and charged for doing so. However, the Law Society contended that even if it was appropriate to study those documents, that task cannot make up for the shortfall in fees between the maximum possible estimate of Mr Poole of $59,325.89 (being fees, plus tax agents' fees, plus a commission), and that charged, being $160,605. The reading of those reports, it submitted, could not possibly amount to costs in excess of $100,000.
Mr Poole's assessment of the work undertaken by Mr Helby led him to conclude that the work done "had not been very difficult". Mr Poole further opined that "by any yardstick the work is straightforward and the same from year to year." Mr Poole noted that the documents provided to him included annual reports and financial statements for the years 2004 to 2012 in respect of each company in which the Estate held shares. For the purposes of his estimates, Mr Poole did not ascribe any time to reviewing those statements, as there would not be any value in doing so, but conceded that Mr Helby may have charged for doing so. We consider Mr Poole to have adopted a simplistic approach. We prefer Mr Helby's account that the effort involved in considering the statements varied from year to year.
Mr House noted that the trust records were kept by a bookeeper and that most of the dividends were received by direct deposit into the trust bank account, which implied minimal recording time. In calculating the reasonable sum, Mr House allowed 1 hour per annum for the general administration of the Estate, 2 hours per annum to prepare the Estate tax return, and 1.5 hours per share transaction/reinvestment decision. Thus, for the period 1 July 2008 to 30 June 2013, Mr House estimated that the work undertaken by the Solicitor would total 25.5 hours, which the Law Society submitted is indicative of the complexity (or otherwise) of the work undertaken. However, as discussed above, this did not allow for all the work that was, in fact, undertaken by Mr Helby.

[21]

Ground B(ii): transferring trust monies without authority

Mr Helby conceded that that between February 1997 and May 2013, on 73 occasions, he had raised tax invoices for his costs but the invoices were not provided to the Trustees prior to monies being debited from the Estate ledger in his trust account.
The Law Society submitted that transferring trust monies without authority would be regarded as disgraceful and dishonourable by reputable members of the legal profession: per Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 (Allinson) and, as such, constituted professional misconduct at common law. Professional misconduct at common law includes conduct in the pursuit of professional activities that would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency: see for example, Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [46].
During a period of about sixteen years, Mr Helby transferred funds to pay costs and disbursements incurred by the Trustees from his trust account without observing the requirements of the applicable Legal Profession legislation and the regulations made under that legislation. This is not a matter of a single instance of a breach of the LPA and so cannot be discounted as oversight or inadvertence. However, we accept that Mr Helby believed it had been agreed by the Trustees that he could do so on an ongoing basis. That belief is consistent with the evidence of Mr and Mrs Toohey and also consistent with the absence of complaint, at any time, from any of the Trustees about his method of charging and the payment of those charges from the trust account.
In that context we consider that Mr Helby's professional colleagues of good repute and competency would not go so far as to regard his conduct as disgraceful or dishonourable. In coming to this view, we considered his genuinely-held belief that it was agreed he could transfer trust monies for the work he had done. Further, because of the frequent telephone communications between Mr Helby and the Trustees, together with their scheduled meetings, we are satisfied that there was no design to conceal from them either the quantum of his fees or the activities to which those fees related. .
For these reasons, we conclude that Mr Helby's conduct would not be regarded as either disgraceful or dishonourable by professional colleagues of good repute and competency. Nevertheless, we do accept that those same colleagues, apprised of the circumstances to which we have adverted, would almost certainly regard his conduct as unacceptable, as failing to meet the standards required of a competent and diligent practitioner. Such a practitioner would be expected to know and apply the current law as it pertains to the regulation of trust account use.
While the Tribunal is satisfied that Mr Helby's conduct does not amount to professional misconduct at common law, it remains for us to consider whether that conduct is professional misconduct as defined in s 497 of the LPA or whether it amounts to unsatisfactory professional conduct by reference to s 496.
The Law Society submitted that Mr Helby's conduct constitutes professional misconduct pursuant to s.497 LPA. Professional misconduct is relevantly defined by s.497 LPA as follows: "497 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 (b) conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. (2) … ".
Mr Helby said that he is aware that the correct procedure required him to issue an account and obtain authority before making payments from the trust account. He conceded that, due to the expressed request of the Trustees to have minimal involvement in the administration of the Estate, he took shortcuts. He said that due to the informal way his role had developed and the lack of interest from the Trustees, he simply relied on annual updates where the Trustees saw and retrospectively approved what he had charged and what he had transferred from his trust account. The Law Society submitted that this was not enough to relieve him of the statutory obligation to notify the Trustees and, for example, by sending an invoice and stating his intention to take this step. Mr Helby has acknowledged as much.
The Law Society submitted that a significant effect of this conduct was to deprive the Trustees of the opportunity to consider and possibly raise questions about the costs proposed to be charged: Council of the Law Society of New South Wales v Clapin [2011] NSWADT 83 at [209]. That submission must be accepted as being correct. Against that, there is to be considered the fact that in giving their retrospective approval, the Trustees did not raise any issue as to the course of conduct; they did suggest that they were disadvantaged by not receiving tax invoices in advance of payment being transferred from the trust account nor did they challenge the basis for or quantum of fees charged.
As to whether there been a failure of a "substantial or consistent nature" to reach or maintain an acceptable standard in accordance with s 497(1)(a), we observe that there is no statutory definition of "substantial" in the LPA. We consider that "substantial" in s 497(1)(a) should be taken as referring to a failure to meet the requisite standard in a way that is meaningful or relevant to the legal practitioner's ability to practise law. The Tribunal is not persuaded that Mr Helby's conduct which is the subject of this ground constitutes a failure to meet the requisite standard in a way that is meaningful or relevant to his ability to practise law.
As to "consistent" conduct, a plain reading of the section, in our view, would require repeated or persistent failure resulting from the legal practitioner making the same error of principle or acting in the same inappropriate way in a variety of situations. We note that at the time of the audit conducted on behalf of the Law Society, Mr House selected 12 files and trust account records for them when conducting his audit. The present matter was the only one that attracted any adverse finding by him.
We are not persuaded that Mr Helby's conduct constitutes a "consistent" failure to reach or maintain a reasonable standard within the meaning of s 497(1)(a). That phrase requires, it seems to us, a clearly definable series of acts or omissions, sometimes in the nature of "repeat offences". We observe that the Tribunal will sometimes be reluctant to characterise repeat offences as involving a consistent failure, where the offences are effectively a repetition of the same error: see for example, Law Society of NSW v Webb [2012] NSWADT 114 (Webb). In this matter however, the conduct related to the same clients in the same matter, albeit on multiple occasions, and in the belief, which we find to be reasonably held, that he was authorised to do so.
For these reasons, the Tribunal is not persuaded to the requisite standard that Mr Helby is guilty of professional misconduct within the meaning of s 497 of the LPA. We not satisfied that his conduct did involve a substantial and consistent failure to reach or maintain a reasonable standard of competence and diligence.
However, arising from the observations earlier made when addressing s 496 0f the LPA, we do regard Mr Helby's conduct as falling 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. The conduct to which we refer includes that last addressed, namely the failure to provide the Trustees with tax invoices for fees prior to transferring funds held in trust in payment of those invoices.
For these reasons, we find that Mr Helby is guilty of unsatisfactory professional conduct.

[22]

What Orders should the Tribunal make?

The Law Society sought orders that Mr Helby be reprimanded, and that he be fined a substantial sum. Mr Helby consented to an order for a reprimand, but did not consent to the imposition of a fine.
Disciplinary proceedings are concerned with the protection of the public, rather than being punitive in nature. As stated by Beazley JA in Law Society of New South Wales v Walsh [1997] NSWCA 185 (Walsh) 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.
As noted above, Mr Helby was admitted to practise in 1979, and was principal of his practice almost continuously from 1 July 1981 to 1 July 2016. He has now retired. The Law Society submitted that due to Mr Helby's substantial and significant experience he should have known better and so deserves a severe sanction. It conceded, however, that no dishonesty was involved.in his conduct.
The Law Society further submitted that Mr Helby's conduct caused significant loss to his clients, but, balanced against this, is his thoroughness in reviewing the investments which ultimately led to the significant growth of the funds of the Estate. Once the overcharging ground fell away, this contention, so it seems to us, is without substance.
Alternatively, the Law Society submitted that Mr Helby cannot escape responsibility for breaches of his duties to his clients by showing that they did not suffer any loss: Law Society of New South Wales v Carvan (unreported, NSWCA, 14 May 1981); Bolster v Law Society of New South Wales (unreported, NSWCA, 20 September 1982) applied in Council of the Law Society of NSW v Clapin [2011] NSWADT 83 at [212]. We observe that in Clapin there were serious allegations of misappropriation. However, we accept at a level of generality, the proposition for which those cases stand. Importantly, Mr Helby does contend that he should escape responsibility.
Mr Helby contended that, as a sole practitioner in the country, he undertook a variety of matters, with his main areas of practice including wills, probate, criminal law, civil litigation, conveyancing and family law. He said he had a busy practice and, due to his age and commitments to clients, he found it difficult to keep up with changes to technology and the correct practice and procedures required under the LPA. He conceded that, on occasions, he did things the way that he had when he first started practice, rather than what he knew was the correct practice.
The Tribunal acknowledges that the role of a country solicitor, especially as sole practitioner, can be difficult. However, we do not accept this as an excuse for failure to follow correct procedures; the rules in relation to costs agreements, providing trust account statements and transferring trust money without authority are not new. For the same reason, age is also not an excuse for failure to follow correct procedures. Being a technophobe is similarly not a valid excuse.
Mr Helby conceded that his actions were foolish, although, as we have accepted, they were not calculated to deceive. Mr Helby believed that, had he submitted his accounts for approval when they were issued, the Trustees would have approved the transfer of monies from trust on each occasion. The affidavit evidence from Mr and Mrs Toohey from the Supreme Court proceedings which was before us would tend to confirm that belief as would the absence of complaint from them as to the quantum of his fees.
In relation to the failure to provide statements of funds held in his trust account, Mr Helby agreed he should simply have handed a copy of the trust ledger to the Trustees when they attended his office to sign the tax returns for the Estate. This would have been better than verbally explaining the transactions to them.
The Tribunal is entitled to take into account both the persistence with which the impugned conduct has been pursued and the degree of candour displayed by the solicitor in the course of the disciplinary hearing: Legal Services Commissioner v Baker [2006] QCA 145 at [46]. In that context, it was submitted on Mr Helby's behalf that he had made immediate and frank admissions of his breaches of the LPA to Mr House, the Trust Account inspector. That proposition was not disputed by Mr House. Further, by letter dated 18 November 2013 to the Law Society, Mr Helby made full and frank admissions, and gave a number of undertakings which were repeated in the Supreme Court proceedings. Mr House agreed that Mr Helby had been completely frank at all times in his dealings with him. We regard Mr Helby as having been completely candid with the Law Society throughout this matter, and, completely co-operative with Mr House, the Trust Account inspector.

[23]

Should a fine be imposed?

The imposition of a fine is not necessary in order to fulfil the Tribunal's function of protecting the public, particularly in light of the circumstance that Mr Helby is no longer practising and has stated his intention to remain in retirement. However, fellow members of the profession need to understand in clear terms that the regime in relation to disclosing costs, providing trust account statements and transfer of trust funds only with authority, are regimes that must be strictly observed. In this context, the Tribunal has an educative function when imposing an appropriate sanction for breach (Walsh at 40). For this reason, and having regard to nature of the breaches that underly our finding of unsatisfactory professional conduct, we consider that the imposition of a fine in this matter is appropriate.
As to quantum, the Law Society submitted that the seriousness with which the Tribunal views a solicitor's conduct will impact on the quantum of the fine. The quantum of any fine ordered, it was submitted, should be a credible reflection of the seriousness of the misconduct so as to leave no doubt as to the standards to be observed by practitioners: Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 450-451 per Mahoney JA.. The purpose of imposing a fine, it was submitted, is to mark the Tribunal's disapproval of the Solicitor's conduct: Law Society of New South Wales v Walsh [1997] NSWCA 185 at 40 per Beazley JA, Law Society of New South Wales v Shad [2002] NSWADT 236 at [70].
We have already recorded the evidence directed to the satisfaction of the Trustees both with the services provided by Mr Helby and the amount he charged for those services. This remains the case notwithstanding their awareness of the Law Society's actions in seeking to have Mr Helby disciplined for conduct that relates to the manner of his charging fees for work in administering the funds of the Estate. They have not sought to have his fees reviewed. Those circumstances make evident their satisfaction with the professional services provided which, in our opinion, is also an important consideration when considering the terms of disciplinary orders, including the quantum of any fine.
In his affidavit filed in the Supreme Court proceedings Mr Helby showed complete contrition, co-operation with the Law Society and adheried to full and frank admissions previously made. Subsequent to 2013, until his retirement in 2016, Mr Helby worked, unpaid, for the Estate.
There was no dispute that the complaints of the Law Society relate to only one file in Mr Helby's practice. That complaint was not instigated by the Trustees, nor did they support such complaint.
Mr Helby has limited financial resources, including a half share in a house, $400,000.00 in the bank, and $200,000.00 secured by way of mortgage on his former premises in Parkes. He does not receive any pension. Mr Helby is already out of pocket a significant sum arising from his Supreme Court Proceeding against the Law Society to set aside the Society's decision to suspend his practicing certificate notwithstanding his success in those proceedings, including an order for costs in his favour.
We were informed that Mr Helby suffers significant health issues, being chronic obesity, diabetes, high blood pressure, arrhythmic tachycardia and multiple allergies. Due to his age and state of health, in 2016 he sold the practice for the value of work in progress and retired to the New South Wales south coast. As we have stated, Mr Helby does not hold a current practising certificate and we accept that he does not intend to make application for one in the future. It was submitted by Mr Helby that he will not be in a position to earn future income. We accept that he does not propose to work as a solicitor again.
There is no evidence that Mr Helby is in a straitened financial situation, but his circumstances could not be described as particularly comfortable after having worked for many years as a legal practitioner. Although the Law Society submitted, Mr Helby has profited from his misconduct, we do not accept this contention, having regard to our findings in relation to the allegation of gross overcharging.
Mr Helby was, justifiably in our view, proud of the work that he did in assisting the Trustees to increase substantially the capital value of the Estate to the sum previously identified. That he had been successful in so doing was not gainsaid by any evidence to the contrary..
We take into account his genuine remorse and contrition for what has occurred as well as his appreciation that he failed to meet the standard expected of a legal practitioner. Evidence of this is his preparedness to accept a reprimand for his conduct. We also take into account of the fact that he continued to be supported by the Trustees and the fact that there was no attempt on his part to conceal information from them nor mislead or deceive them.
Mr Helby was in private practice for over 35 years with an unblemished record until the present proceedings arose. In light of all these factors we order that Mr Helby pay a fine of $5,000.

[24]

Costs

The Law Society sought an order that Mr Helby pay its costs as agreed or assessed. Mr Helby submitted that, as costs remain at the discretion of the Tribunal, subject to the LPA, any costs order should not be for any costs incurred prior to 20 December 2013 as that would effectively overturn the existing Supreme Court costs order in his favour against the Law Society.
Clause 23(1) of Schedule 5 of the Civil and Administrative Tribunal Act 2013 requires the Tribunal to 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. Relevantly, a costs order may be made against a solicitor notwithstanding that that he has ceased to practise: Council of the Law Society of New South Wales v Braham [2015] NSWCATOD 97
Mr Helby has cooperated fully with Law Society at all times, and, again we observe, was not the subject of any complaint by the relevant clients. For about 2 years at the commencement of his retainer, he charged the Estate nothing and for the last 2 or 3 years he again charged nothing for his services. He was obliged to seek injunctive relief from the Supreme Court in order to be able to continue servicing all of his clients before he disposed of his practice. In the Supreme Court proceedings there were allegations of dishonesty which were not sustained by Bellew J (see particularly at [79] - [85]. No such allegations were agitated before us.
Of present significance is the fact that the Law Society failed to sustain its allegation before us that Mr Helby was guilty of professional misconduct because he had "grossly overcharged" the Estate. The entirety of the evidence of Mr Poole which comprised an expert report with text of 17 pages and financial annexures running to another 19 pages was directed to that allegation. The same allegation was a substantial focus of the evidence of Mr House. From the time of the audit carried out by Mr House in 2013, Mr Helby had acknowledged his failure to comply with the statutory requirements in relation to the matters he has admitted in response to the present Application. The forensic contest to which the proceedings have principally been directed is the "gross overcharging" claim upon which the Law Society has been unsuccessful. The evidence and submissions upon which Mr Helby has succeeded defeating that claim was known to the Law Society at the time at which the present Application was filed.
In Council of the Law Society of New South Wales v Hinde [2011] NSWADT 20, notwithstanding that the solicitor was found guilty of (the more serious) professional misconduct under a similar statutory provision, the Tribunal did not make a costs order against a solicitor. We note that in that case, not all of the redeeming features identified in this case existed. We are satisfied that "exceptional circumstances" have been established in this instance, and consequently make no order as to costs.

Council of the Law Society of NSW v Helby

At a glance

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Judgment (26 paragraphs)

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Legislation Cited (4)

Cases Cited (9)