Council of the Law Society of NSW v Layton

The first transaction 6 On 25 June 2003 the defendant wrote a letter of demand on behalf of his son-in-law to the son-in-law's former employer. In it payment was sought of alleged retained salary. The letter was headed "B.J. Layton, Solicitor", commenced with the words "I act for …" and concluded with a signature above the words "B.J. Layton, Solicitor." 7 A complaint was made by the recipient of the letter asserting the defendant was representing he was a solicitor and was acting without a current practising certificate. Correspondence ensued between the plaintiff and the defendant resulting in the defendant providing an explanation for his actions and stating "my imprudent act is regretted" and advising that "Having regard to your concern, there will be no repetition of the use of the term solicitor when referring to myself; a letterhead was generated for a one-off situation on my wife's computer; no stocks of letterhead exist."

The committee of the plaintiff determined that the defendant's action was a single incident which occurred under extenuating circumstances. It dismissed the complaint. The committee took into account when dismissing the complaint that the defendant did not seek a fee for writing the letter, acted in circumstances where he felt compelled to assist a family member, accepted that he should not have described himself as a solicitor and undertook that there would be no repetition of the conduct complained of.

The second transaction 8 On 7 May 2004 a summons for probate of the will of the defendant's aunt was filed in this court. The document purported to be signed by the defendant as the "plaintiff's solicitor". It stated the plaintiff's address for service was "B.J. Layton, Solicitor" together with his address and included his name, address and telephone number under the printed words "Solicitor's name, address and telephone number." 9 The defendant witnessed an affidavit in the probate application and signed it as witness above the words "B.J. Layton, Solicitor". 10 He also signed an annexure note to another affidavit in the probate application, the written word "Solicitor" appearing under his signature.

The third transaction 11 The defendant acted for his cousins on the sale of a property at Jannali for $485,000. On 24 September 2004 under the letterhead of "B.J. Layton, Solicitor" he wrote: "I act for the Vendors and understand that you are acting on behalf of [MS] in the purchase of the above property. I enclose Contract and look forward to hearing from you regarding an arrangement for exchange of Agreements."

The contract for sale stated the vendor's solicitor was "B.J. Layton". There was correspondence from the conveyancing officer of the purchaser to the defendant. The correspondence was directed to "B.J. Layton, Solicitor" and the defendant's responses concluded "B.J. Layton, Solicitor" and were on the letterhead "B.J. Layton, Solicitor". The correspondence dealt with matters such as amendments to the contract, requisitions on title, exchange of contracts and settlement details. It included a purpose designed facsimile sheet on which he described himself as a solicitor.

The fourth transaction 12 The defendant acted for a purchaser on the purchase of real estate at Dulwich Hill for $510,000 plus GST. He was not related to the purchaser. Contracts were exchanged on 25 October 2004 and the matter settled on 25 November 2004. The purchaser subsequently complained that the defendant had neglected to collect the arrears on the maintenance levy due from the vendor and there was a problem with GST. 13 The contract for sale of land nominated the defendant as the purchaser's solicitor, correspondence was either headed or ended with the words "B.J. Layton, Solicitor". The transfer was signed by the defendant as a solicitor on behalf of the purchaser. 14 Subsequent correspondence in April 2005 as to the dispute about the maintenance levy was signed by the defendant above the words "B.J. Layton, Solicitor".

Subsequent correspondence 15 By letter dated 5 June 2007 the plaintiff informed the defendant it proposed to make a complaint against him pursuant to s 504 of the Legal Profession Act 2004 ("the 2004 Act"). The defendant, by letter dated 26 June 2007, responded as follows: "I refer to your letter of June 5, 2007 and advise as follows - Complaint 1 s I do not hold a practising certificate issued by the Law Society of N.S.W. s I do not practice law. s Ipso facto, I do not practice law without a practising certificate. Complaint 2 s [Re the third transaction] - [the vendors] are my cousins. In respect of my Aunt…I had prepared her will, assisted with the grant of Probate thereof, assisted with their administration of her Estate and assisted in the ultimate disposal of that Estate. Within my family I am regarded and referred to as a solicitor (as indeed I have been for nearly 35 years) and by my acting in that capacity in the above matters, certain family conflicts were defused. s [Re the purchaser in the fourth transaction] - At the request of its then accountant I assisted [the purchaser] it is [sic] purchase. Following settlement, it became apparent that, contrary to the assurance given by the vendors' solicitor at settlement that arrears of levies owed by the vendors were being paid that day, these arrears had not been paid. I wrote, using a letterhead to indicate to the vendors' solicitor that he was in fact dealing with a solicitor, and asked him to encourage his client to meet its legal commitment and obligations under the Contract. With respect to the letterhead, I regret that I found the need to use letterhead, but the circumstances were such that I felt its weight was required to resolve the matters at hand." 16 The defendant responded to a further letter from the plaintiff as follows: "… Background s Having reached 60 years of age in November 1998, I retired from work in January 1999. My last practising certificate issued by the Society expired on June 30, 1999. s In 2003 I wrote a letter on behalf of my then son-in-law who, as an employee, was involved in a wrongful dismissal and unlawful withholding of salary. My use of a letterhead identifying me as a solicitor was reported to and investigated by the Society. This resulted in no action apart from my giving an undertaking in terms required by the Society. s On June 5, 2007 I received a letter from the Society headed 'Complaint against you by the Law Society'. I addressed the matters therein in my letter to the Society of June 26, 2007. I believe that it is worthy of repeat mention that one of the matters raised by the Society, i.e. [the third transaction], related to my acting in a family matter. I now comment on my contact with [the solicitor who subsequently acted for the purchaser in the fourth transaction]. [His] communications with me were at his insistence and ex post facto the matter involving [the purchaser]. In accordance with [the solicitor's] request I provided him with all material held by me on this matter. I regret that [the solicitor] feels that he has been deceived, but he initiated all our communication and I responded to his request for documentation. I do not believe that any of my actions warrant an injunctive action, however, if I have caused any concern to the Society and its member, I extend my apologies."

The plaintiff's submissions 17 The plaintiff's submissions were as follows:

(a) Section 720 of the 2004 Act provides: " 720 Injunctions (1) Where a person has engaged, is engaging or is proposing to engage in conduct that constituted, constitutes or would constitute: (a) a contravention of this Act… (5) The power of the Supreme Court to grant an injunction restraining a person from engaging in conduct may be exercised: (a) whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind, and (b) whether or not the person has previously refused or failed to do that act or thing , and (c) whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person refuses or fails to do that act or thing."

(b) The 2004 Act commenced on 1 October 2005 and repealed the Legal Profession Act 1987 ("the 1987 Act);

(c) The 2004 Act contains transitional provisions, including Sch 9 Pt 2 cl 3(3), which provides: "(3) Without limiting subclauses (1) and (2), if a provision of the old Act that corresponds to a provision of this Act would, but for its repeal by this Act, have applied in relation to anything done or being done or in existence before the commencement day, the provision of the new Act applies in relation to that thing, and so applies with any necessary adaptations." That provision enables the court to make an order under s 720 of the 2004 Act, even though the conduct occurred at the time the 1987 Act was in force.

(d) The four transactions in which the defendant has engaged and which the plaintiff relied upon occurred whilst the 1987 Act was in force;

(e) The transactions involved contravention of the 1987 Act ss 48B(1) and 48C(2).

(f) The provisions of ss 48B(1) and 48C(2) correspond to ss 14(1) and 15(1) of the 2004 Act.

(h) There was ample evidence to establish the contraventions complained of. It was appropriate that the orders sought be made. In particular the fourth transaction highlighted the fact that the defendant was performing conveyancing work and if he did it negligently then the client would be without recourse to professional indemnity insurance which was mandatory for those holding practising certificates.

The defendant's submissions 18 The defendant's submissions were essentially as follows:

(a) He is a solicitor. He had been since 1973 when he was admitted and his name placed on the Roll. His name has not been removed from the Roll. There is nothing false in him describing himself as a solicitor for that is what he is. In his son-in-law's matter he had used the solicitor's letterhead for emphasis. There was no legal ban on using a letterhead.

(b) He does some things which a solicitor can do. He does not do anything requiring a practising certificate. He does not practise law, therefore he does not need a practising certificate. He certainly does not make any money.

(c) He does "a few things which are of a legal nature". He does not do anything that requires a practising certificate. As far as he knows, he knows the things that require a practising certificate and would avoid them anyway.

(d) He does some things which normally only a solicitor can do, but that is because he is a solicitor.

(e) The orders sought were inappropriate and unnecessary and were opposed.

Discussion 19 The 1987 Act drew a clear distinction between the admission of legal practitioners and legal practise by such persons. 20 Part 2 of the 1987 Act provided for the admission and enrolment of qualified persons as legal practitioners who on and from admission are officers of the Supreme Court. "Legal practitioner" was defined in the 1987 Act as "means a person enrolled in the Supreme Court as a legal practitioner". 21 Part 3 of the 1987 Act provided for the granting of a practising certificate to a legal practitioner authorising the practitioner to practise as a solicitor and barrister (s 28(1)). It provided that a legal practitioner or interstate legal practitioner who wilfully and without reasonable excuse practises without being the holder of a current practising certificate is guilty of professional misconduct. 22 Section 48B(1) of the 1987 Act provided: " 48B Unqualified person acting as barrister or solicitor and barrister (1) A natural person must not act as a barrister or solicitor and barrister unless the person holds a current practising certificate." 23 It is common ground that the defendant did not hold a current practising certificate at the time of any of the relevant transactions. Each of the second, third and fourth transactions involved the defendant performing services customarily provided by solicitors and he did so with the intention of so acting. He represented himself in each of those matters as a solicitor. In Law Society of NSW v Seymour [1999] NSWCA 117 [16] the Court of Appeal quoted with approval the following statement from Re Sanderson; ex parte Law Institute of Victoria (1927) VLR 394 at 397: "If a person does a thing usually done by a solicitor, and does it in such a way as to lead to the reasonable inference that he is a solicitor - if he combines professing to be a solicitor with action usually taken by a solicitor - I think he then does act as a solicitor."

In my opinion, a contravention of s 48B(1) has been established in respect of transactions 2, 3 and 4. 24 Section 48C(2) of the 1987 Act provided: "48C Unqualified person make false representation to be a barrister or solicitor and barrister (2) A natural person who does not hold a current practising certificate must not: (a) take or use a name, title, addition or description implying that the person is qualified to act as a barrister or solicitor and barrister, or (b) do anything or permit anything to be done that holds out, advertises or represents that the person is so qualified." 25 The defendant did not hold a current practising certificate and, clearly, on the evidence, by his use of letterhead, by his signing above statements that he was a solicitor, by him signing transfers and the like, he did things that held him out or represented that he was qualified to act as a solicitor in circumstances when he was not so qualified to act as he did not hold a current practising certificate. 26 In considering the breaches of ss 48B and 48C, I have not had regard to the circumstances of the first transaction as that has already been dealt with by the plaintiff. 27 As previously stated, Sch 9 Pt 2 cl 3(3) of the 2004 Act provides: "(3) Without limiting subclauses (1) and (2), if a provision of the old Act that corresponds to a provision of this Act would, but for its repeal by this Act, have applied in relation to anything done or being done or in existence before the commencement day, the provision of the new Act applies in relation to that thing, and so applies with any necessary adaptations." 28 The Macquarie Dictionary defines "correspond" as "to be similar or analogous". Section 14 of the 2004 Act provides: " 14 Prohibition on engaging in legal practice when not entitled (1) A person must not engage in legal practice in this jurisdiction unless the person is an Australian legal practitioner." 29 An "Australian legal practitioner" is defined in the 2004 Act, s 6, as: "(a) An Australian lawyer who holds a current local practising certificate or a current interstate practising certificate, and (b) A local legal practitioner is an Australian lawyer who holds a current local practising certificate, and (c) An interstate legal practitioner is an Australian lawyer who holds a current interstate practising certificate but not a local practising certificate."

"Solicitor" is defined in the 2004 Act, s 4, as meaning: "(a) A local legal practitioner who holds a current local practising certificate to practise as a solicitor and barrister, or (b) An interstate legal practitioner who holds a current interstate practising certificate that does not restrict the practitioner to engage in legal practice only as or in the manner of a barrister." 30 The difference between s 48B and s 14 is that s 48B can be breached by a single act as a solicitor whereas s 14 requires engagement in legal practice. 31 "Legal practice" is not defined in the 2004 Act. "Engage in legal practice" is defined as "includes practise law" - s 4. In Felman v Law Institute of Victoria (1997) 150 ALR 363 it was held: "…the expression to 'engage in legal practice' in s 314 and elsewhere signifies 'to carry on or exercise the profession of law'. Reference to the definitions of 'engage' and 'practice' in the Oxford English Dictionary support the view that this is the ordinary and natural meaning of the expression. The carrying on of the profession of law is done by none other than a 'legal practitioner'. Accordingly, in my view, the expression 'engage in legal practice' means 'engage in legal practice as a legal practitioner' , the italicised words being implicit in the notion of legal practice." 32 Whilst it may be arguable that the actions of the defendant, as disclosed by the evidence, do not establish that his involvement in those transactions amounted to engaging in legal practice, it is unnecessary to finally determine this question having regard to the application of s 15.

33 Section 15 provides: " 15 Prohibition on representing or advertising entitlement to engage in legal practice when not entitled (1) A person must not represent or advertise that the person is entitled to engage in legal practice unless the person is an Australian legal practitioner." 34 Section 16 of the 2004 Act provides: "(1) This section applies to the following names, titles and descriptions: …solicitor… (2) The regulations may specify the kind of persons who are entitled, and the circumstances in which they are entitled, to take or use the name, title or description to which this section applies. (3) For the purposes of section 15(1)…the taking or using of a name, title or description to which this section applies by a person who is not entitled to take or use that name, title or description gives rise to a rebuttable presumption that the person represented that they were entitled to engage in legal practice."

Regulation 8 of the Legal Profession Regulation 2005 provides that for the purposes of s 16(2) of the 2004 Act that the kinds of persons who are entitled to take or use the name, title or description "solicitor" is an Australian legal practitioner when he or she holds an Australian practising certificate and engages in legal practice in the manner of a solicitor. 35 This section would appear to correspond to s 48C(2), thus enlivening s 720 of the 2004 Act. 36 Alternatively, s 720 of the 2004 Act has application because the defendant "has engaged…in conduct that…would constitute (a) a contravention of [the 2004 Act],"

namely s 15, thus enlivening the power contained in s 720. 37 The remaining question is whether, as a matter of the proper exercise of discretion, a declaration should be made in the terms sought by the plaintiff. In my opinion, it should. Part of the purpose in requiring the holding of a current legal practising certificate is to ensure that practitioners' legal education is kept up to date and that there is protection by way of indemnity insurance in the event that loss is sustained by a client by reason of the negligence of the solicitor - see generally s 13 of the 2004 Act and Prothonotary of the Supreme Court of New South Wales v McCaffery [2004] NSWCA 470 at [37] and [38]. In the present case the defendant appears to have conducted himself without regard to the requirements of the 1987 Act, he has ignored the undertaking which he gave following the first transaction and he cannot be regarded as being unaware of the need to have a practising certificate. In all of the circumstances, I consider that orders should be made. 38 Accordingly, I make the following orders:

1. The defendant is restrained from engaging in legal practice in contravention of s 14(1) of the Legal Profession Act , 2004.

2. The defendant is restrained by himself, his servants or agents from representing or advertising that he is entitled to engage in legal practice, in contravention of s 15(1) of the Legal Profession Act , 2004.

3. The defendant is to pay the plaintiff's costs. **********

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