Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 52

Legal Profession Act 2006 ss 416, 425, 433

Legal Profession (Solicitors) Rules 2007 r 1.1

Cases cited: Council of the Law Society of the ACT & Legal Practitioner RH [2015] ACAT 40

In the matter of DP and the Legal Practitioners Act 1970 [2005] ACTSC 78

The Appellants v Council of the Law Society of the ACT and the Legal Practitioner [2011] ACTSC 133

The Law Society of the Australian Capital Territory & The Legal Practitioner (Occupational Discipline) [2011] ACAT 51

Tribunal: Mr G. Lunney SC - Senior Member (Presiding)

TRIBUNAL: Mr G. Lunney SC - Senior Member (Presiding)

1. The Tribunal makes the following determination and order:

(a) It is inexpedient to make any order pursuant to Section 425 of the Act.

(b) The respondent practitioner is to pay the applicant's costs of this application calculated on a party/party basis in accordance with the Supreme Court scale, in an amount as agreed or, failing agreement, to be determined in accordance with the procedure set out below.

Procedure to determine costs: The parties should make an attempt to reach agreement on costs. If agreement is not reached within 28 days, the applicant may file and serve a Bill of Costs using Form 2.45 approved under the Court Procedures Rules. The respondent is to file and serve a document setting out any objections she has to the Bill within 14 days of its service. The Bill and the respondent's objections will be referred to a registrar of the tribunal for assessment. The registrar is to make a recommendation to the tribunal concerning the amount that should be paid by the respondent. The tribunal will consider the recommendation and make a decision on the papers without holding a hearing.

1. A decision was reached by the Tribunal on 12 June 2015[1] regarding the categorisation of the conduct of the respondent practitioner. Details of the conduct and the Tribunal's findings are set out in the reported decision.

2. Following that determination the matter was listed so that the parties could provide evidence and submissions regarding penalty. The decision was reserved. After careful and detailed joint consideration, the three members who formed the Tribunal for this application reached different conclusions about the orders that should be made. Section 52 of the ACT Civil and Administrative Tribunal Act 2008 provides that where a tribunal is constituted by more than one member, a question in the application is decided according to the decision of the majority of members. The decision that follows is that of members Graeme Lunney SC and Graham Wright and therefore, constitutes the decision of the Tribunal for this application. The reasons that led Senior Member Ferguson to reach a different conclusion are also set out below.

3. Counsel for the respondent, Mr Erskine SC, in his submissions on penalty, submitted that the most appropriate outcome would be for the Tribunal not to impose any sanction. This would result in the Tribunal not making any order at all except for the possibility of an order that the respondent pay the applicant's costs. However, there would be no order of a directly disciplinary nature.

4. The applicant opposed such an outcome and submitted that a public reprimand was the appropriate sanction.

5. It is section 425 of the Legal Professional Act 2006 (LPA) which sets out the powers of the ACAT for imposition of a sanction following a finding of either professional misconduct or unsatisfactory professional conduct.

425 ACAT orders - Australian legal practitioners

_(1) If, after the ACAT has finished considering an application under this part in relation to an Australian legal practitioner, the ACAT is satisfied that the practitioner is guilty of unsatisfactory professional conduct or professional misconduct, the ACAT may - _

(a) make 1 or more of the orders mentioned in subsections (3) to (5); or,

6. Mr Erskine SC suggested that use of the word 'may' in that sub-section established that the options available to the Tribunal were not confined to those set out later in the section. The discretion provided, he said, included the power not to make any order at all.

7. This submission is reinforced by the terms of sub-section 425(1)(b), above.

8. The use of this expansive type of section in legislation establishing jurisdiction of this Tribunal was considered by Refshauge J in The Appellants v Council of the Law Society of the ACT and the Legal Practitioner [2011] ACTSC 133. At paragraph 122 he referred to section 416 of the LPA which enables the Tribunal to deal with what are termed 'appeals' in certain circumstances, including an appeal by a complainant regarding a practitioner's conduct against the decision of the Council not to proceed with the complaint. One of the sub-sections permits the Tribunal to make any order it considers appropriate in the circumstances after hearing such an appeal. The relevant section of the Act is as follows:

416 Appeals to ACAT against decisions of relevant council

(3) The ACAT may make any order it considers appropriate on the appeal.

9. Dealing with this power His Honour said the following at paragraph 122:

In my view, the principle to apply then to the construction of s 416(3) is that it permits the ACAT to make any order that the ACAT otherwise has power to make. As a statutory tribunal, those powers must be found in the relevant statutes. Neither the Legal Profession Act nor the ACAT Act provide any statutory power, express or implied, to order costs in a case such as the one subject to this appeal.

10. The Tribunal agrees with the substance of the submission made by Mr Erskine SC. Section 425 clearly confers power to apply a sanction appropriate to the finding of professional misconduct or unsatisfactory professional conduct. It is our view that providing that the circumstances render it appropriate, the sanctioning power conferred by section 425 by virtue of sub-section 425(1)(b) is not limited to the listed sanctions, but includes the capacity not to apply any sanction after the finding of unsatisfactory professional conduct; or in the terms of the submission by Mr Erskine SC, not to make any order at all.

11. In coming to this decision regarding penalty, we bear in mind that the primary objective of disciplinary proceedings is the protection of the public rather than the punishment of the practitioner involved. In this case it is appropriate to bear in mind the educative function in providing guidance to practitioners as to appropriate or inappropriate conduct since the circumstances of this case involve relatively new methods of delivering legal services. However, in relation to the individual we have had regard mainly to the following matters:

a) the nature and gravity of the offence - at the liability hearing, Mr Erskine SC submitted that the error made by the respondent was within a tolerable range of human error. This submission was not accepted by the Tribunal. At the sanction hearing, the applicant agreed that the conduct was at the lower end of the continuum of gravity or seriousness. It seems to the Tribunal that this is correct;

b) there has been no suggestion that it was anything other than an innocent error;

1. the respondent moved to rectify the website within a reasonable time;

d) apart from some general inconvenience, the complainants did not sustain any loss, although the potential was there;

e) it is highly unlikely that there would be a repetition of this conduct;

f) The respondent's good character and previous professional conduct. Two written references were submitted by the respondent. One from a retired judicial officer, David Harper, and the other from a former client with a respected community profile. It is sufficient for the Tribunal's purposes to say that each speak highly of the respondent's character, reputation and work practices. Mr Harper says the Tribunal's findings are both out of character and unexpected. The Tribunal was not given great detail of the respondent's professional life, however it appears that she commenced as a government lawyer in 1984, and in 1995 moved to a large private firm in Canberra. She set up her own practice in 2000, commencing the online conveyancing business in 2003. She has therefore worked without disciplinary difficulty for about 30 years. Mr Harper considers that is likely to continue.

g) The timely alteration of the website indicates contrition in the Tribunal's view. There is a published decision to warn other practitioners of the need for accuracy in online advertising, and from that point of view we believe there is no significant need for the sanctioning of the respondent of itself to act as a deterrent to others.

12. While not making any concession, Mr Erskine SC did not argue against the making of an order for costs against the respondent under section 433 of the LPA, so there will likely be some deterrent effect from an order for costs being made.

13. Of the matters referred to above, in reaching this conclusion we have given heavy weighting to the respondent's previous unblemished record and professional reputation.

14. Having regard to these matters, it seems inexpedient that an order formally sanctioning the conduct of the respondent should be made. We therefore make no order other than an order under section 433 that the applicant's costs be paid by the respondent at the Supreme Court scale on a party/party basis. The parties should endeavour to reach an agreement about the amount of costs to be paid but if that is not possible within 28 days, the amount will be determined by the Tribunal following the procedure set out with the formal orders above.

15. On 12 June 2015, the tribunal made orders in relation to liability and gave reasons for its decision (the original decision). The reasons are reported as Council of the Law Society of the ACT & Legal Practitioner RH [2015] ACAT 40 (the reasons).

16. The tribunal found that the respondent was guilty of unsatisfactory professional conduct as defined in section 386 of the Legal Profession Act 2006 (the LPA), and in particular that she had breached rule 1.1 of the Legal Profession (Solicitors) Rules 2007 to treat her clients fairly and in good faith.

17. The tribunal ordered that the matter be listed for hearing of further submissions from the parties in relation to penalty and costs.

18. The further hearing was held on 5 August 2015. At the hearing the applicant was represented by Mr Phelps, solicitor of Phelps Reid Lawyers and the respondent by Mr Erskine SC of counsel.

19. The applicant sought an order publicly reprimanding the practitioner pursuant to section 425(3)(e) of the LPA.

20. The respondent asked the Tribunal to use its discretion to impose no penalty.

21. The applicant sought an order that the respondent pay its costs of the proceedings.

22. Mr Erskine SC contemplated that the tribunal might make a costs order against the respondent and submitted that any such order should be taken into account by the tribunal in determining penalty.

23. Section 425(3) of the Legal Profession Act 2006 (LPA) sets out the types of orders the tribunal may make if satisfied that the practitioner is guilty of unsatisfactory professional conduct.

24. A reprimand is the least severe of the penalties listed in section 425(3). If the tribunal decides that a reprimand is appropriate then, if there are special circumstances, it can choose to reprimand the practitioner privately, rather than publicly.

25. I accept the respondent's submission that it is open under section 425(1) to the Tribunal to exercise its discretion to not impose any penalty if it considers the contravention not sufficiently serious to warrant one.

26. Section 425(1)(b) also allows the tribunal to make any other order it considers appropriate.

27. The Law Society of the Australian Capital Territory & The Legal Practitioner (Occupational Discipline) [2011] ACAT 51 at [32]- [33] sets out the relevant factors for the tribunal in exercising its discretion under section 425:

It is well established that the primary objective of the legal profession disciplinary system is to protect the public rather than to punish the practitioner.

The tribunal has previously identified factors relevant to the determination of an appropriate sanction as including the nature of, and the circumstances surrounding, the acts found to constitute unsatisfactory conduct, the level of understanding demonstrated by the practitioner of the unsatisfactory nature of his conduct, the attitude of the practitioner especially whether he demonstrates any remorse or regret for the conduct, the likelihood of a future re-occurrence of unsatisfactory conduct, and any previous adverse findings in relation to the practitioner s professional conduct. We add to this list any loss suffered by others as a result of the unsatisfactory conduct and any benefit gained or loss suffered by the practitioner. The factors are to be considered in the context of the protective aim of these proceedings. The relevant authorities are discussed in detail in Riley's Solicitors' Manual at paragraphs [33,065] to [33,105].

28. The genesis of these proceedings was a complaint made to the applicant society against the respondent by two former clients.

29. The complainants had retained the respondent's online conveyancing firm to act for them in the purchase of a Torrens title property in NSW for a fixed fee advertised on the practice's website.

30. In its original decision the tribunal found that arranging registration of the transfer of ownership into the complainant's name was an integral and essential part of the respondent's retainer.

31. The tribunal further found at paragraph 48 that:

Not only did the respondent fail to perform this obligation, the complainants only discovered the change of ownership was not complete when they made enquiries of the respondent's practice after settlement at which point they were told they would have to either pay an additional fee or arrange for registration themselves. During this period the complainants were exposed to the risk described CCH NSW Conveyancing Law in Practice:

In order to receive maximum protection, a person who has received a registerable dealing, which until registration does not confer a statutory interest in the land... should protect his unregistered interest either by lodging the dealing promptly for registration... or by lodging a caveat. Failure to have the interest recorded in the register or its existence noted is likely to place that person at unnecessary risk.

32. The complainants were entitled to expect that the respondent would complete her retainer and arrange registration within her fixed fee. If they had known at the outset they would be asked to pay an extra fee for this essential element of the conveyance they may have taken their business elsewhere.

33. I accept the applicant's submission that neither during the Society's investigation nor subsequent tribunal proceedings did the respondent acknowledge the gravamen of the charge, namely that she had failed to perform a vital part of her retainer without payment of a further fee. Instead she maintained that the complainants had misunderstood the terms of her retainer.

34. Following the complaint to the Society the respondent amended her practice's website to disclose to prospective clients upfront that extra fees and disbursements were payable for arranging registration. Mr Erskine SC submitted that the respondent's action showed she accepted the need to clarify the website to avoid similar misunderstanding and was prepared to adapt and correct her practice in response to the complaint.

35. The respondent should be given credit for the amendment. Whilst in my view it does not indicate contrition, it at least demonstrates professional caution.

36. Although the respondent gave the complainants the wrong impression of the service her practice would provide, the applicant did not submit, and I do not find, that she intended to mislead them.

37. The respondent has practised law for approximately 30 years, first as a government lawyer, then in private practice and later as principal in her own firm. In 2003 she opened a separate online conveyancing practice. She has had no disciplinary orders made against her by either this tribunal or its predecessors.

38. The respondent provided two testimonials to her good character both of which referred to the current proceedings. The first was from Mr Harper, a lawyer of longstanding who recently retired from a judicial position. The author has the advantage of a detailed knowledge of professional standards. However, he appears to be not fully informed of the scope of the unsatisfactory conduct. He refers to the respondent's impugned conduct as being that her "fee quoted for purchase was exclusive of disbursements, and that this was not obvious from the quotation." The second testimonial came from a satisfied former client of the respondent's online conveyancing practice who was aware of the nature of the tribunal's findings against her. I am satisfied that both testimonials support the proposition that the respondent in general is a competent and diligent practitioner and a person of good character.

39. I also note that although exposed to risk the complainants did not suffer actual detriment as a result of the respondent's conduct. In the course of the Law Society investigation the complainants asked the respondent to reimburse them the sum of $9.30 being their costs of lodging the documents for registration by post and the increased lodgment fee caused by the delay. She paid them this amount without admission of liability and as a 'token of good will'.

40. In light of the circumstances set out above I am satisfied that the nature of the respondent's unsatisfactory professional conduct was at the lower end of the scale in terms of seriousness.

41. The purpose of a penalty is not just to act as a personal deterrent to the practitioner, but also to provide guidance to the profession and to give members of the public confidence that that the tribunal is serious about upholding professional standards. These purposes require that the penalty is proportionate to the offence and consistent with comparable decisions of the tribunal.

42. The applicant referred to the decision In the matter of DP and the Legal Practitioners Act 1970 [2005] ACTSC 78 in which the Full Court held under an earlier equivalent provision that a practitioner found guilty of unprofessional conduct should not be subject to further penalty where he had been previously suspended in circumstances where the suspension was unwarranted because as Higgins J said at [5], 'He has suffered sufficient sanction already.' I accept the applicant's submission that that case can be distinguished from the current proceedings because the respondent in this case has suffered no other sanction.

43. Whilst a cost order is not in the nature of a sanction it is a circumstance that can be taken into account by the tribunal when considering penalty. I accept the applicant's position that it would be inappropriate to impose a fine in this case where the respondent is facing a significant costs order.

44. The tribunal in comparable cases of unprofessional professional conduct has reprimanded the practitioners either publicly, or where there have been special circumstances, privately.

45. I am satisfied that the respondent's failure to perform a critical part of her retainer without additional payment is a significant contravention of her duty to the complainants and warrants an order reprimanding the practitioner under section 425(3)(e) of the LPA.

46. I must then consider whether there are special circumstances that warrant the issuing of a private reprimand.

47. Previously, the tribunal has found that the dual purposes of providing guidance to the ACT practitioners and maintaining public confidence in the regulation of the profession is best served by making reprimands public. This approach reflects the requirement in section 425(3)(e) for special circumstances.

48. It is axiomatic that special circumstances are unusual. There is only one reported instance of the tribunal finding special circumstances under section 425(3)(e).[2] In that case the practitioner was unaware of a time limit resulting in a delay in commencing proceedings for his client. He also allowed a conflict of interest to arise between himself and his client. The tribunal found him guilty of unsatisfactory professional conduct. Both the applicant and the respondent submitted that a private reprimand would be an appropriate penalty and the tribunal agreed. That case resembled the current proceedings in that the practitioner had a long unblemished career as a lawyer, there was no deceit involved and the complainant suffered no detriment. However, unlike the present case, the practitioner suffered from ill health, which the tribunal accepted, had contributed to the conduct and he took full responsibility for his conduct and showed contrition. In that case the tribunal considered that the publication of the reasons for its decision would serve as sufficient deterrent to other practitioners who might otherwise engage in similar conduct.

49. In The Council of the Law Society of the Australian Capital Territory v Legal Practitioner "D2" (Penalty and Costs) (Occupational Discipline) [2014] ACAT 45 the tribunal ordered that a practitioner found guilty of unsatisfactory professional conduct be publicly reprimanded as no special circumstances were established. His conduct was a failure to comply with his professional obligation under the Legal Profession (Solicitors) Rules 2007 to give a full account of his conduct when required by the applicant Law Society. The tribunal acknowledged the importance of the contravention at [15]:

There can be no question that the obligation to respond under the Rule is fundamental to the proper maintenance of the applicant's disciplinary powers, and through them, the protection of the public.

50. I am not satisfied that there are special circumstances warranting the reprimand be issued privately.

51. Section 433 of the LPA provides that if the tribunal finds a practitioner guilty of unsatisfactory professional conduct or professional misconduct it must order the practitioner to pay costs (including the costs of the relevant council and the complainant) unless satisfied that exceptional circumstances exist. The respondent did not submit that such circumstances applied in this case and therefore a costs order is required.

52. I note that the respondent has lodged an appeal against the original decision which is yet to be determined. I would make the following orders in this matter:

1. The respondent practitioner be publicly reprimanded.

2. The respondent practitioner is to pay the applicant's costs of this application calculated in accordance with the Supreme Court scale, in an amount to be agreed or, failing agreement, as assessed by the Registrar of the Tribunal.

[1] Council of the Law Society of the ACT v RH [2015] ACAT 40

[2] The Council of the Law Society of the Australian Capital Territory v Legal Practitioner W (Occupational Regulation) [2013] ACAT 1