COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER RN [2016] ACAT 122 | Case summary

COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER RN [2016] ACAT 122 | Case summary | Zoe

[5]

The applicant relied on the following affidavits and documents:
- (a) The affidavit dated 18 January 2016 of Robert Reis, the Professional Standards Director of the applicant. He exhibits two large folders of documents identified as RAR 1. As this folder is referred to throughout the hearing and this decision it is helpful to explain the contents as Mr Reis has done in his affidavit. He was not cross examined and there were no objections to his affidavit. RAR 1 contains the following documents:
  - (i) The respondent's file in respect of complainant DK is in volume 1 at pages 1-120. From other material it is apparent that the respondent provided this file to the applicant during an investigation. The events therein took place between May 2011 and 10 November 2011.
  - (ii) The respondent's file in respect of complainants N1 and N2 is at pages 121-282 and concerns events that occurred between 22 December 2010 and 18 January 2012. This was also obtained from the respondent.
  - (iii) The respondent's file concerning complainant AS is at pages 283-441. These events occurred between May 2011 and September 2011. This was also obtained from the respondent.
  - (iv) The respondent's file in respect of complainant ST is at pages 442-552 in volume 2. From information learned during the hearing this was the hard copy of the file given by the respondent's firm to ST and in turn given by her to the applicant. These events occurred between July 2009 and October 2009.
  - (v) The balance of volume 2 contains correspondence between the respondent and the Law Society or its lawyers. It is divided according to complaint and by reference to correspondence with Phelps Reid who currently act for the applicant, having taken over in January 2014.
- (b) Affidavits of complainant CD dated 8 March and 3 August 2016. CD was not cross examined. She is a former employee of the respondent. The respondent objected to some parts of the affidavit mainly concerned with trust account matters. These matters were dealt with by concession on both sides. CD's evidence was also tangentially relevant to the complaint of DK and to the question of adequate supervision by the respondent.
- (c) An affidavit of ST dated 19 January 2016. This relates to a complaint by ST as a client of the respondent. Some parts of her affidavit were objected to and not admitted. She was cross examined on the phone. There was no suggestion of her credit being in issue and we accept her evidence as far as it goes.
- (d) An affidavit of DK of 19 January 2016. He is a former client of the respondent and was not cross examined. His evidence was not controversial and is accepted.
- (e) An affidavit of AS of 16 January 2016. He is also a former client and complainant. He was not cross examined. Some parts of his affidavit were rejected or not pressed, because they set out the effect of documents that spoke for themselves. Again, we accept his evidence.
- (f) An affidavit dated 29 July 2016 of Kathryn Riley, a solicitor employed by the solicitors for the applicant. She was not cross examined and her evidence is accepted. It attached screen shots of the respondent's web pages at various times. It related to the trust account allegations described below.
- (g) Affidavits of Stephen Jones of 14 April 2016 and 3 August 2016. He is an expert Queensland conveyancing solicitor. He was not cross examined. His evidence was about the standards expected of lawyers engaged in Queensland conveyances and relates to the complaints of ST and DK.
- (h) Affidavits of Michael James of 15 March 2016 and 1 August 2016. He is an expert ACT and NSW conveyancing solicitor. He gave evidence about the standards that ought to apply in relation to the matters that are the subject of the complaints of AS, N1 and N2. He was not cross examined.
- (i) An affidavit of N1 dated 22 August 2016. He is a complainant and former client of the respondent. He attended and was cross examined in person. We had some reservations about his evidence.
- (j) An affidavit of N2 dated 22 August 2016. She also attended and was cross examined. Again, we had some reservations about her evidence.
- (k) A tender bundle which became Exhibit A1. It contained correspondence between solicitors for the parties; documents obtained on subpoena from solicitors for the other party in conveyances for N1 and N2, ST, AS and DK; from the Bank of Queensland (BOQ) in respect of ST; some sample files and spreadsheets relevant to the trust account allegations and other miscellaneous documents.
- (l) A sample folder, Exhibit A2. This related to the trust account allegations and was supplemented by a helpful explanation by Mr M Kalyk, junior counsel for the applicant led by Mr N Beaumont SC. Mr C Erskine SC, counsel for the respondent, added explanations from his client's perspective. As will be seen, the facts necessary to establish these counts were conceded. We treated the explanations as evidence only to the extent that they amount to an agreement about the system, or are admissions against interest. Otherwise they are submissions. As will be seen, this became academic because of the concessions made.
The respondent relied on the following material.
- (a) Her affidavits of 12 July 2016; 13 July 2016 and 11 August 2016. Mr Erskine SC did not read parts of the 12 July affidavit which dealt with matters the subject of concessions made afterwards. The paragraphs read were 1 - 41, 16 - 49 (first sentence), 52 - 53, 57 - 64, 65 -76, 77 - 84, 89 - 114. The respondent was cross examined in person.
- (b) An affidavit of EC, a solicitor formerly employed by the respondent and who handled the ST conveyance. He was not cross examined.
- (c) An affidavit of Stephen Gibson an expert Queensland conveyancing solicitor whose evidence related to the ST matter.
- (d) Tender Bundle Exhibit R1 consisting of two volumes. Volume 2 was not pressed. The material in volume 1 that was not pressed after objection was at pages 1 - 5, 8 - 13, 47, 53 - 146 and 150 - 151. The material that remained included documents from BOQ and a ruling of the NSW Law Society concerning receipt of fees in advance.

[13]

Grounds 3 and 4 were withdrawn by the applicant on the first day of the hearing. Grounds 1 and 2 were conceded by the respondent also on the first day of the hearing. The concessions were to the fact of breach, not to how it should be categorised in terms of conduct. The underlying facts in support of Ground 1 are set out in paragraphs 1.1-1.11 of the application. The facts supporting Ground 2 are set out in paragraphs 1.12-1.14. The applicant amended paragraph 1.14 by deleting subparagraphs (a) and (b) and, in (c), deleting the words 'in any event'.
Ground 11(a), which arises from the complaint of AS, is in the same terms as Ground 1, as is the second Ground 13 which arises from the complaint of N1 and N2.
The parties agreed that it is appropriate that these later grounds be treated as part of Ground 1 because they are examples of the general allegation made in Ground 1. This seems to us to be appropriate.
The references to the $350 payments are dealt with in paragraph 1.1 of the amended application. It is there alleged that during the relevant time the Practitioner's usual and almost invariable practice had been to require clients of the online conveyancing service to make an upfront payment of $350 at the time of registering via the website. The reference to 'registering via the website' is explained in paragraph 1.2. It was also explained at length by Mr Kalyk, junior counsel for the applicant, by reference to a folder of documents that was tendered and is Exhibit A2. The explanation occurs at pages 38 to 105 of the transcript of proceedings dated 23 August 2016. Mr Erskine SC explained the process from his client's perspective at pages 105 to 111 on the same day. There followed a discussion about what were the agreed facts that supported the concession set out at pages 111-114 of the transcript.
There was some disagreement about details that were irrelevant. The parties agreed that the Tribunal should act on agreed facts and not make findings about the irrelevant matters.
Also, because the respondent was concerned about her intellectual property, the Tribunal was asked to omit detail in its reasons that might unnecessarily reveal commercial in confidence matters.
Apart from the agreement, the Tribunal is satisfied of the basic process from evidence including Exhibit A2, the affidavit of Kathryn Riley where she deposes that she had done web searches and captured screen shots as to what transpired, and RAR 1.
The respondent's website for the online conveyancing service has a page for prospective clients. They obtain a quote by providing basic details such as name, address, property details and the like. The quote is given as a lump sum inclusive of GST. It includes some disbursements that are identified, but not otherwise. If the client wants to accept the quote, he or she must register by approving a fees agreement. They are also asked to make an initial payment. The payment during the relevant period was $350.
The client in a typical case provides credit card details and clicks on a link to a bank portal. A payment to the practitioner's firm is processed. In due course the practitioner's account shows the sum as having been paid and the amount is debited to the client's credit card. The practitioner issues a tax invoice. An example of one is in RAR 1 at page 555. It says it is, "part payment of professional costs and disbursements of and incidental to acting on your behalf." This was the form of invoice for a period until mid-April 2012 after the CD complaint was made. During this period the fees agreement usually contained a clause 4a that provided, "We require a payment of $350 of our fees and disbursements when you register for our conveyancing services. We will provide you with a tax invoice for this amount upon payment."
All money was paid into an office account not a trust account.
After the complaint in about November 2011 and February 2012, the word 'retainer' was inserted in the fees agreement so that 4a read, "We require payment of $350 as a retainer for our services when you register on our website. We will provide you with a tax invoice for the retainer upon payment". Clause 4b then provided, "We will deduct the balance of your fees .... (i.e. less the retainer payment)... on settlement."
The tax invoice then said, "Retainer payment for your behalf."
The fees agreement provided for part payment if the agreement was terminated early.[4]
There was a special provision in a vendor's auction transaction that provided for a refund from the $350 payment if the auction was not successful.
Mr Erskine SC, on instructions from his client, said that when there was a conflict the practitioner refunded the $350 amount.
It had been argued on behalf of the respondent that the $350 payment was not trust money because some work had been done by the time the money was received and the definition of trust money was not satisfied. This argument was later conceded to be incorrect.
The use of the word 'retainer' was intended to create a debt so that the payment was not trust money. The true position was that, whatever it was called, there was still an obligation on the respondent to account for the money if a sale did not proceed and to deduct it from the cost of future work. As senior counsel for the applicant submitted, a non-refundable up-front payment of a debt to retain the services of the practitioner would be uncommercial and this payment was not truly a debt because it was refundable in a number of circumstances.
Also, after the complaint in April 2012, the respondent arranged for the initial payment to be deposited to her trust account. It is common ground that payments were later transferred to the respondent's office account before a final bill was rendered and without written direction from the client.
Section 222(1) of the LPA[5] provides:

[58]

We agree with the applicant that trust obligations must be strictly complied with. The case relied on of Legal Services Commissioner v McGregor [2012] VCAT 1742 is distinguishable as submitted by the respondent. In any event ultimately each case turns on its own facts.
Whilst we agree that it is appropriate to make a single finding in respect of the conduct described in Grounds 1 and 2, we do not see the repetition of the conduct as adding to its seriousness per se. Unlike the case of P4,[8] the respondent did not engage in a number of discreditable acts motivated by a wish to avoid repaying a debt owed. Rather, she engaged in a continuous course of incorrect conduct based on a mischaracterisation of money. The fact that the Society delayed action to stop the conduct does not change its quality, but may be seen as reflecting the reality of the degree of risk and seriousness of the conduct. The issue of whether the initial payment was trust money is not as obvious as the applicant submitted. The applicant did not, as did the NSW Law Society, issue a direction explaining the potential confusion and how it should be answered.
The conduct in our view is unsatisfactory as it is ultimately the responsibility of the practitioner to know what trust money is and to comply with the legislative requirements about its treatment. The risk is that the practitioner may become personally financially embarrassed and, notwithstanding best intentions, the money could be lost. Whilst there were reasons to be confused about the correct categorisation of the money, when the full picture is understood, it is clear that the money is trust money. In any event, if there was a doubt it would have been prudent to treat it as trust money.
It is true that the respondent's breach was systemic and thus occurred repeatedly and also true that the breach is capable of being treated as either professional misconduct or unsatisfactory conduct.
The money was used as the tax invoice might suggest, as though it was a payment for a debt, and that is what clients are likely to have assumed. However, as is clear, it was for a future debt - it was part payment of work to be done and refundable in certain circumstances.
It seems that no one other than a former employee complained about it. This may be explained by the likelihood that the client got a tax invoice which has the character of a debt, but also because, it seems, no client was in fact disadvantaged. There was no suggestion that the respondent acted to obtain money she shouldn't have, or that where refunds were to be provided, they were not. An inference can be drawn that the respondent acted as she should in handling her responsibilities, but offended the legislation because the money went into the office account prematurely.
Ultimately, it is a matter of judgment as to whether such conduct is dishonourable. In our view, taking into account the above submissions, the conduct is unsatisfactory professional conduct because it breaches the legislative requirements and creates a potential but unrealised risk to clients. Whilst the continued mischaracterisation of the money after the complaint and the incorrect transfer from the trust account after April 2012 reflects a continued stubborn adherence to what is now conceded to be an incorrect view, it was not a secret and did not involve dishonest or sharp dealing. Thus, it is not professional misconduct because in our view it involves no actual loss or dishonesty. The purpose was made known to the clients before they paid. The fact that it was systemic does not change its character so as to compound the fault exponentially when repeated but rather, the conduct involved one fault of the same degree of seriousness being repeated. It is to the credit of the respondent that, with good legal advice, she finally conceded the point. It is regrettable that she did not get that advice earlier. It would have saved her considerable stress and expense.

[60]

Ground 5 is an allegation of "Negligent conduct of a conveyance". It says that in breach of Rule 1.2 the practitioner failed to conduct ST's matter with competence and diligence.
The rule is in the Legal Profession (Solicitors) Rules 2007, which have since been replaced. A breach of a rule is not necessarily a disciplinary offence but may be evidence of it. In any event, in order to make the findings sought, the Tribunal must have regard to the Act and the definitions of unsatisfactory professional conduct and professional misconduct.
The undisputed facts are set out below.
ST retained the respondent's firm in July 2009 to act on the sale of a property in Queensland. An employee of the firm, EC, had the conduct of the matter.
EC was an admitted solicitor with a restricted practising certificate.
The contract of sale provided that time was of the essence. This means that if a party is not ready on the date for completion the other party may terminate. It should be noted here that in the ACT and NSW this is not usually the case.
The contract was entered into on 3 August 2009. Settlement under the contract was due to take place on 14 September 2009. On 13 September the solicitors for the parties agreed to defer settlement to Monday 21 September 2009.
To effect settlement the buyer's solicitor must prepare transfer papers and send them to the vendor's solicitor who has them signed and sent back in time for them to be stamped so that a registrable transfer of title is available at the settlement date.
ST complained that the required work was not done in proper time by EC and there was a real risk that the settlement might fall though because of this delay.
It is common ground that in fact, the work was attended to in time and that the settlement was not affected by such events.
ST wished to buy a property in Tasmania and needed the funds from the sale of the Queensland property to do so.
There is a degree of uncertainty about when the transfer was received by EC and whether it was sent by him in time, but the post did not arrive. It is important to try to ascertain from the evidence what the true facts were and not what they were said to be by ST, EC or the respondent, after the event. This has some bearing on Ground 6 which complains that the respondent was not frank and attempted to mislead the Society about this and about another issue with the sale.
The other issue arises from the fact that the sale fell through because ST's mortgagee, the Bank of Queensland (BOQ) was not ready to settle on 21 September 2009 and the buyer terminated. The complaint is that EC did not give BOQ the time it needed to be ready.
BOQ needed two clear business days to arrange to settle, assuming that the client had authorised it. It is alleged that EC did not notify BOQ until 17 September which was the Thursday before the settlement date (a Monday) and that was too late. The respondent says that this is not clear.
It is trite and common ground that the relevant standard of proof in disciplinary proceedings is that referred to in Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336. The usual extract referred to is from the judgment of Rich J at 350 as follows:

[62]

Mr Beaumont SC drew our attention to the distinction made by Dixon J at 362[9] between establishing on what date an act occurred that may be part of the conduct that may be of a serious nature and the ultimate conclusion that it was.
It is alleged that the buyer's solicitor (JCJ) sent the transfer to the respondent's firm on 20 August 2009. There does not appear to be a letter of that date with the transfer document on the file[10] of the respondent, but there is a copy of one on the buyer's solicitors' file at Exhibit A1 page 120. There is, at RAR 1 page 534, a different letter dated 20 August 2009 that is about settlement figures with no transfer enclosed. There does not appear to be a copy of that letter on the JCJ file. On 1 September 2009, however, JCJ asks for the transfer.[11] On 16 September 2009, JCJ refers back to its 20 August 2009 letter and says it sent the transfer with a letter of 20 August 2009 and it needs to be returned as a matter of urgency.[12]
At page 130 of Exhibit A1 there is a phone record of EC saying on 2 September 2009 that he doesn't have the signed transfer yet. It is not clear whether he is referring to the transfer sent by JCJ which may have been signed by the buyer. There is reference to it being signed by the buyer in the applicant's chronology, but that would not have then been necessary. It may be JCJ are being told that EC hasn't got the document from them, which is consistent with the 20 August letter not being on the hard copy of the file. It may mean he had received the transfer and sent it on to ST, but was yet to get it back signed by ST. He is again reminded on 4 September 2009.[13]
The applicant, in its written submissions asserts that EC lost the 20 August letter as the respondent asked for another in 2012, but it is possible that EC never had it.
What is clear is that the signing of the transfer documents was delayed past a time that was comfortable and this made ST panic. In any event, that was remedied in time.
There is no clear proof that EC did get the letter of 20 August at that time, or at all. Having said that, it is admitted by the respondent in her response at 2.7. It is evident that EC was asked to get the signed transfer back on a few occasions and was alerted to the problem on 2 September by phone. It is possible he had got the transfer and sent it and that it got lost, but he still was being reminded to follow it up by JCJ.
Apart from the contemporaneous letters, there have been attempts to reconstruct the events by EC and the respondent. To the extent that there are no contemporaneous documents to establish that their description or admissions are correct, it is difficult to be sure they are. That is because, assuming that they are doing their best, they may mis-remember or may assume events from other established events.
In her response to the complaint of ST, the respondent assumed that the transfer had been received and sent to the client by post in August. This is what she says at 2.10 of the response. She was first involved in reconstructing events when responding to the Queensland Law Society (QLS) to whom ST had first complained. In cross examination she said she relied on what EC had told her. Her response to QLS is at RAR 1 page 706 and is dated 21 December 2009. QLS dismissed the complaint. It was revived in the ACT and she next sought to explain the events after speaking to EC in January 2012.[14]
In paragraph 2.10 of her response, the respondent says that EC had on 3 September placed the scanned transfer on ST's e-file that she could access online. It is said that later, ST told EC that she was having difficulty downloading from her computer and before then, EC didn't know ST hadn't got the document.
In her affidavit of 13 July 2016, the respondent corrects what she previously said and attaches an email dated 2 September 2009 from EC to ST that shows that the transfer had not been received by EC as at that date and so, could not have been sent to ST in August.
EC does not shed any light on this in his affidavit as he now cannot recall.
The respondent was cross examined on this topic. Her evidence is set out at page 145 and following of the transcript of 24 August 2016.
Submissions were made about the credibility of the respondent generally, and specifically in respect of this and other matters. We deal with the submission concerning this matter when dealing with the Ground relating to lack of candour. In any event, even assuming some doubt about the credit of the respondent, she was not handling this matter and is in the same position as the tribunal in trying to reconstruct what happened.
From the above, it is probable that by 2 September EC had the transfer from JCJ as he posted it on the e-file. There is no evidence that he chased its return by ST until 17 September.
Stephen Jones, a Queensland solicitor asked to give expert evidence by the applicant, opines in his affidavit that EC should not have been so tardy and should have followed it up with his client earlier. We agree.
It is clear that EC knew he should have done this as he had emailed ST well beforehand on 7 August 2009[15]and then on 2 September[16]. He indicates that action should proceed once the contract became unconditional on notification by the buyer that her property had sold before 4 September in accordance with special conditions 2 and 3 of the contract.[17] This happened when JCJ sent a letter of 4 September.[18] EC had adverted to the need to get the transfer signed in his email on 2 September to ST. In both emails he adverts also to the release of the mortgage. He uploaded the transfer to the e-file on 2 September.[19] It is not clear whether what he uploaded was a transfer prepared by JCJ or one he did, but one that appears to have been prepared by JCJ is at RAR 1 page 477.
What follows from this is that he knew what was required but did not follow through.
When the emergency arose on 16 or 17 September he got the problem fixed. He should have not let the problem arise.
This mistake seems to us to fall within the description of human error that on its own would not be elevated to unsatisfactory professional conduct as explained in Legal Practitioner RH v Council Of The Law Society of the ACT [2016] ACAT 94 at [119] and the extract from Riley there quoted, namely,:

[64]

We have taken into account the opinion of Mr Jones on this issue and while we agree with him that it is an error, in our judgment it is not outside a tolerable range of human error.
Even if it were unsatisfactory professional conduct by EC, we still have to determine whether the respondent herself was at fault. If EC did not know better and it was evident that he was in need of greater supervision, then she might be. However, that he did know better is evident from what he told ST in his earlier emails. Mr Jones argues that EC must have been too inexperienced, but that ignores what he told ST about what was required and ignores his competence in getting it fixed. There is evidence from EC, who was not cross examined, in his affidavit of 12 July 2016 about his experience at paragraphs 4-7 and 10. Also the respondent in her affidavit of 12 July 2016 gives evidence of training at paragraphs 17-26 and of supervision at paragraphs 27-32. She also confirms EC's experience at paragraph 70. The respondent's credit is in issue generally but we have accepted it in general terms and have noted that we found her demeanour to be impressive. In any event, we are satisfied that in this matter EC did know what to do but did not do it.
This is more important in relation to the other complaint by ST namely that the sale fell through because EC did not arrange for BOQ to be ready to release its mortgage.
Obviously, the loss of the sale was a significant adverse event for ST. There is an issue as to when EC first asked BOQ to attend. There is no evidence on the BOQ file of when EC contacted BOQ[20]. It is evident that ST had arranged for the release and signed the form on 3 September,[21] which had been sent to its Buderim branch. A limit was removed by BOQ and it was ready to settle on 23 September (two days too late). It required two clear days' notice.[22]
There is no evidence to suggest EC did anything to arrange for the bank before 17 September less than two clear business days before settlement was due. Even then BOQ was not ready until 23 September. BOQ had a loans officer that they had difficulty with during this time.[23]
When asked, the respondent aided by EC, replied to QLS in December of that year asserting that notice had been given on 17 September. In her complaint ST said that BOQ told her it was first contacted on 17 September. This assertion was not questioned by the respondent and it was consistent with what she had said when first asked. EC, in his affidavit, now can't recall.
Mr Gibson, a Queensland expert conveyancer asked to comment by the respondent, raised the problem that the date was not clear and if it was before 17 September, EC had not done anything wrong. Thus the respondent's counsel submitted that we couldn't be sure and in such circumstances should not conclude that there was unsatisfactory professional conduct by EC.
It seems to us that more probably than not, EC did not give notice until 17 September. The fact that BOQ was not ready until later, the activity on the file on that date and not before, and the first recollection in December of that year, all lead to this conclusion.
In any event, as the tardiness of BOQ shows, there was no good reason not to have done it much earlier. By 4 September EC knew the contract was unconditional and knew in plenty of time that settlement was to be on 21 September. He knew he had to do it, as he said in two emails at RAR 1 pages 463 and 464.
It seems to us that the failure to contact the bank until 17 September or earlier was unsatisfactory conduct by him. But we refrain from making an adverse finding about his conduct because he is not a party and has not been heard about such a conclusion. It would be unfair to now ask him to justify his conduct bearing in mind the time that has elapsed. For the purpose of this matter, as against the respondent we assume that it was unsatisfactory
The question remains whether the respondent is guilty of such conduct because of EC'S lapse. Mr Jones concludes that she is, based on her subsequent attempts to justify the events. We do not accept that either the respondent or EC thought it was good practice to allow this to occur. Clearly EC had planned to get it done in plenty of time. As explained in respect of the delay in having the transfer signed, EC was generally competent and knew what to do but failed to do it on this occasion. The subsequent arguments to shift blame to BOQ and away from the respondent are not inconsistent with this and we are unpersuaded by Mr Jones' argument in this regard. Mr Erskine SC submitted that the expression in the Jones affidavit is unpersuasive as it was quite sweeping and overstated. Mr Jones was not cross examined, nor was Mr Gibson. We agree that the opinions of Mr Jones are expressed in unequivocal terms and may be contrasted with the report of Mr James whose evidence was relied on by the applicant in respect of a NSW and an ACT conveyance. Mr James appeared to be more even handed in his report and was thus persuasive. In any event we accept the basic contentions of Mr Jones in respect of the ST complaint and only differ from him in his conclusion based solely on the subsequent justification by the respondent as to her understanding of what is required and what she would regard as good practice.

[65]

The applicant also seeks to establish that there were inadequate systems for quality control. This submission was made in the context of the ST complaint.
First, there is a general proposition that given the number and types of errors in all four matters this must be inferred.[24] Mr Erskine responds by pointing out that these matters represent less than 1 in 1000 of the conveyances in the practice. This is in paragraph 10 of the respondent's affidavit. We don't know how that number was calculated but accept that in the absence of evidence to the contrary, it cannot be inferred that such failures are common. Each alleged failure is different and involves different employees. The complaints, apart from that of ST, all relate to incidents in 2011. During part of that time we know that CD came and went and we were told that MS, an employed solicitor, suddenly left. We are unpersuaded by the general submission. In the case of EC, on the face of it, he knew what was required and for whatever reason on this occasion, did not do it. It is not established that this should have been foreseen by the respondent.
In its written submissions the applicant asks the tribunal to draw a negative inference because no document was produced to show that the on-line system had embedded prompts, or step by step instructions, or that there were manuals setting out steps or that spot checks were conducted as was deposed in the respondent's affidavit. She was asked by the Society to produce files showing these systems and did not do so. When cross examined[25] as to why she had not, she explained that she was concerned to protect her intellectual property. We understood her to be referring to manuals and similar 'how to' instructions. Her response was described in submissions as 'incredible'. We can see that there would be intellectual property in manuals and the like. Also, we can see from the files in this matter that explanations are given to clients of the conveyancing steps and timing which appear to be of a common type. Whilst we cannot be certain how this occurs, it appears that there are auto prompts for standard letters which in turn explain correctly what is to happen next. We do not think the respondent's explanation that there is intellectual property in her systems which she wishes to protect, is incredible. It is then complained that she changed her story to say there was no documentary evidence of spot checks. We do not agree that this is a fair reading of what the respondent said. It is likely that spot checks are not documented and that is what she was dealing with in her answer. It is not a change of story, but a change of question from systems generally to spot checks.
The only positive evidence of inadequate supervision was in the affidavit of CD, who was not cross examined. She said she saw no instance of the respondent supervising in the short time she was employed there. The evidence is of limited assistance as it is expressed as a negative conclusion and is based on a short period of observation with no certainty that the opportunities to observe exclude it as having happened during that period. As we do not generally see the respondent as a discredited witness we accept that she did have systems in place. The errors, occurring here, were by a trusted employee who appears to have known what he was supposed to do and when, but just did not do it.
In the circumstances we are not comfortably satisfied that the failure of EC occurred because of a corresponding failure by the respondent.

[67]

This asserts that the respondent breached her obligation under Rule 39.1 of the Solicitor's Conduct Rules to be open and frank because in her letter of 17 January 2012 to the applicant, she represented that she had to hand the full file for ST's matter and had a proper basis for submitting that the full file did not support the complaints of ST.
It is now common ground that EC gave ST the hard copy of her file soon after the sale fell through in 2009. It is also said that the hard copy file was given to the applicant and is in RAR 1 as discussed above.
Reading the letter shows that the respondent did not, in words, say she had the full file. It may be inferred that she thought she had the documents needed to support the statements she made in the letter. In fact, there does not appear to be much more that has come to light, even though based on Mr Gibson's report, the possibility of there being more material was later raised.
It is common ground that the respondent was looking at a soft copy file when she wrote the letter. She gave evidence that she did not then know that the hard copy of the file had been handed to ST and said she thought the file was still in the office somewhere, but in the wrong place. She had again spoken with EC and was answering the complaint two years after the complaint to the QLS had been made and dismissed.
We have been referred to the transcript of the respondent's cross examination at pages 149-151. Her answer - that it might be too much information as to why she hadn't explained that she was looking at the soft copy file - taken out of context, may seem flippant. Mr Erskine SC in his submissions explains that she was operating a computer based business and she was seeing this through the eyes of a computer savvy person speaking to less technologically focussed people.
It is useful to explain briefly the reason for the rule and the nature of the obligation on practitioners to assist the Society when a complaint is made. There is a short summary in Riley at [35,045] - [35.045.20]. There it is said that the duty does not mean a practitioner must disregard their own interests. The need for such cooperation is obvious. The Society has an onerous and difficult task and without being able to rely on a practitioner to help, would struggle to know what occurred when investigating a complaint. In any event, in any context it would normally be dishonourable to intentionally or recklessly mislead. The nature of the duty has been compared to the duty that a lawyer owes to a Court to be candid.[26] There is a tension between defending one's actions and cooperating with the Society. It is human nature to defend oneself from accusations of misdeeds. The case law is full of examples where the self defence was overstated and led to further grief.
It would be fair to say that the respondent did seek to defend herself. Her conclusion that there was no negligence was incorrect. She is not criticised for this, but for saying she knew this from having read the file, meaning the whole file.
The only basis we can see that could make this complaint arguable is if it could be shown that the respondent was impliedly saying that she reasonably believed on proper grounds that there was no negligence, when she did not in fact believe this, or was reckless about saying so.
It might be thought to be unduly optimistic to assert that there was no negligence, but given the tardiness of BOQ even when they were notified, the contrary was not unarguable. Indeed at the hearing, Mr Erskine SC submitted that we couldn't say that there had not been adequate notice to BOQ.
The criticism of her for using the word 'file' without qualification is of itself without any force. If it was shown that her version of the file showed that she was not negligent and the 'full' version showed she was and she knew this, then it would be deceptive. It was not sought to show anyone was misled and the complaint can only be that irrespective of the context, she intended to be misleading or was recklessly so. This complaint is not made out on the evidence.

[71]

The undisputed facts here are that in May 2011 DK retained the respondent by her website to act for him and his wife in relation to the purchase of a property in Pelican Waters Queensland.
The retainer was for a set fee which was to include work involved in changing ownership of the property, but did not include the registration fees for the transfer and any other necessary documents such as a release of mortgage.
The retainer agreement did not specify that the respondent would attend to registration.
The conveyance settled in June 2011 and DK and his wife provided the whole of the purchase price of $750,000 in cash with no incoming mortgagee.
In Council of the Law Society of the ACT v Legal Practitioner RH [2015] ACAT 40, upheld in Legal Practitioner RH v Council of the Law Society of the ACT [2016] ACAT 94 it was held that the respondent's retainer included the duty of getting the title registered. That involved a cash purchaser as well, and the respondent sought to impose an extra charge for it. This was said to be unsatisfactory professional conduct. Here, the respondent has conceded Ground 9(b) which is said to be a breach of the obligation to treat the client fairly and in good faith. Ground 9a is not pressed by the applicant.
The problem that arose in this case seems to stem from the approach that it was not the firm's job to attend to registration.
Because the settlement took place on the Sunshine Coast, the respondent's firm arranged for agents to attend the settlement. Settlement instructions were given. A copy is at page 72 of RAR 1. The document is hard to understand. It seems the respondent's firm already had the transfer. No reference is made to the release of mortgage which would be required as the vendor had a mortgage. This is obvious from the settlement statement as the main cheque was payable to Westpac. No mention is made of the title deed, but later[28] there is reference to records being electronic rather than paper, so there may not be a physical document handed over. It was suggested in cross examination that the release of mortgage was not obtained that day. There is no evidence that it was not. There is no correspondence afterwards trying to recover it.[29] According to the respondent, the agent sent the documents to Canberra and registration would occur thereafter. If a purchaser has an incoming mortgage, the mortgagee attends to registration. This is the case for most purchases. But this case involved a cash purchase. During the hearing, the respondent said the agents were based in Brisbane. They appear to have an office there and also in Maroochydore. If it was intended to arrange registration it would have made sense to have the agents attend to it rather than send the documents to Canberra only to have them sent back again. If registration was to be left to the client, the documents might be sent back to Canberra, but it would be expected that the client would be told they had arrived and needed to be acted on. Instead, the respondent's firm belatedly asked the client for the filing fee for the transfer, asked for the wrong money and then later again, arranged for the release to be lodged.
In responding to the complaint that the release had not been lodged for some months, the respondent said that there was no real risk to the client. Mr Jones in his report draws attention to the dangers posed by indefeasibility of title under the Torrens system. He is right, although here it seems the respondent had the transfer and the release and the mortgagee, whose mortgage remained on title, was not a person of straw but a bank against which the client had a personal equity. Although it was undesirable to allow the title to remain uncorrected for so long, the respondent is right in saying that in this case, there was no great risk.
The uncontested facts are that the settlement occurred on 14 June 2011. At this time MS, a solicitor employed by the respondent, had the conduct of the purchase. However another employee, ME who was a paralegal, became involved on 10 June as her email to the client dated 10 June at page 28 of RAR 1, indicates. At some time after that MS left. CD became an employee after the settlement but left after five weeks. She started on 27 June and left on 8 August 2011.[30]
DK was not cross examined. He said he got a letter, Annexure B to his affidavit dated 14 June 2011, reporting on settlement. It was possibly placed on his web file as promised in the earlier email telling him the matter was settled. The letter says "We are attending to registration of your purchase with the Queensland Department of Lands."
Nothing further occurred until 26 July 2011 when the respondent's firm wrote apologising for delay in registration of the transfer without mentioning the mortgage. This is at RAR 1, page 31. DK was asked to pay $50 for this and a registration fee which was wrongly calculated. He sent the registration fee soon afterwards and heard nothing, so he rang and emailed in the week of 25 August 2011.[31] He was told that more money was needed for the filing fee by AW, another paralegal working for the respondent.[32] He sent the further money and the transfer was registered, but the mortgage remained.[33] He heard nothing further so sent an email on 12 October 2011 and drew attention to his name being misspelt.[34] He had no reply and so complained on 17 October.[35] The release and name correction were done on 18 October 2011.
Mr Jones says this is unsatisfactory. The respondent has explanations for why things did not go as planned. We will refer to them in more detail in dealing with the lack of candour complaint. They could theoretically relieve her of direct responsibility, if they were good excuses and are correct. Assuming they are, in our view, that does not assist her in this case. The system, whereby the documents were sent back to Canberra and not acted upon, is at fault. It may be because registration was not seen as part of the retainer, although here the respondent's firm promised it would be done, albeit for a further small fee, and seemed to accept that it should take that responsibility. The delay, the lack of explanation, the mistakes and the overlooking of the mortgage are all indicative of incompetence. We accept that this is not the usual standard and that there are countless uneventful conveyances carried out by the respondent competently. In a complaint about which Mr James reports, he concludes that the number of errors must make the respondent responsible. In this transaction we come to the same conclusion. Eventually the problems were fixed without loss to DK.

[73]

There are two complaints. The respondent's first response to the complaint of DK was dated 10 November 2011. It is at RAR 1, page 622. It is a short letter and addresses the things that needed to be done and asserts they have been done. The assertion is confirmed by a letter from DK which is at RAR 1, page 623, thanking the Society for getting it done. The applicant says that the respondent's letter to it is misleading because it skates over the delay, which is part of DK's complaint.
There was cross examination about this issue. It could be said that the letter implies prompt action by saying that we have attended to registration.[36] Mr Erskine submitted that such an implication is a long stretch. It is a true statement, but does not assert anything about the length of time taken to attend to registration. The complaint already set this out and the response did not challenge it. We agree with Mr Erskine's submission. The applicant seeks to read too much into the response. We are not satisfied this was a breach of the respondent's obligation.
The same letter was criticised for misstating the time it took to correct the name change. In fact, the evidence bears out that this was acted on immediately, but not finalised for a time. Thus the letter is not misleading.
Implication of promptness is alleged in the way the letter dealt with the registration of the release of mortgage. We don't agree the letter is misleading when read in context. The word 'once' may be capable of being seen as implying no delay, but in the context of a response to the complaint, it is not misleading. We listened carefully to the cross examination of the respondent on this issue and although criticism is made of the respondent in respect of her answers, we believe she was doing her best and accept her explanations in this regard. We have considered whether she could have given more information in her initial response so as to meet the obligation to be frank. If a more detailed letter was sought, as happened later, we can see how there could have been more material provided. Here, the response is directed to showing that the failures complained of had been addressed, rather than when or how they occurred. We do not see that there is a failure in respect of frankness in the context.
In a later response letter dated 9 July 2015, there is reference to CD being in part to blame. Clearly, she was not with the firm at the time of settlement. She could well have taken over from MS and been involved for a short time during the period that registration was not attended to. However, the respondent now says she was wrong about this and CD was not involved. She explained that she went through a difficult time with MS gone without much notice and CD starting but leaving after five weeks. The Society's application says that this letter incorrectly asserts that CD was handling the matter at the time of settlement. The letter could be interpreted to mean that, but it could also be interpreted to be less specific, saying that CD was involved during the time when registration was not being affected. This is troubling. The respondent was not cross examined specifically about one explanation for this statement namely, that she was angry with CD for complaining to the Society about the trust payments and wanted to get back at her. It would be unfair to ascribe that motivation to the respondent in the absence of cross examination about it. During addresses, Mr Beaumont SC submitted that if the Tribunal thought the statements were not intentionally misleading, then we should find them to be recklessly so. By this we understand that it is submitted that the respondent turned her mind to the question of whether what she was saying was true and decided to say it anyway, without caring whether it was. We listened carefully to the cross examination of the respondent and did not form the impression, that she was intentionally trying to mislead the applicant or the tribunal, or that she was being reckless. With the benefit of hindsight, it can be seen that the letter should have been more carefully expressed. The point that it was making does no more than provide an explanation, and as we have found above, does not excuse her. Whilst in relation to the second letter we have had some reservations, bearing in mind the Briginshaw test we are not comfortably satisfied that in this response, the respondent breached the obligation of frankness and candour.

[77]

The facts below are taken from the application and are verified by an affidavit of AS of 25 January 2016. AS was not cross examined and we accept the facts as stated by him. Whilst the respondent adds some comments regarding them in her response and affidavit, she accepts that were many shortcomings in the handling of this conveyance. Her responses do not challenge the matters of fact but seek to demonstrate the experience of her staff and the steps she had taken to train and supervise them.
AS retained the respondent's conveyancing firm in May 2011 to act for him in relation to a purchase of property in Mortdale NSW. The property was a strata unit.
On 3 May the firm sent an email to AS saying it would do various things including obtaining a strata search, explaining the contract and advising about it. In the email he was told that various grants and concessions were available to him as a first home buyer.
The contract was exchanged on 6 May 2011 and it contained a cooling off period of five days. No advice about that, or the contract, was given to AS in that period.
No strata title search was done before exchange, during the cooling off period, or at all.
The employed solicitor, MS, handling the matter arranged for draft advice to be obtained from a paralegal contractor based in the Philippines and that was provided to the firm on 10 May. The advice suggested that the firm should check various matters that could have affected AS adversely. They were to check whether tenants were in occupation and whether AS required vacant possession; to ask AS whether the cooling off period might be waived; amend a deposit clause that favoured the vendor and check whether there was an agent involved and if not to delete a special condition dealing with it. It can be seen that these matters needed to be checked before the contract cooling off period expired.
A strata search would have revealed that there was a separate title for the garage which was not provided for in the contract. This was later pointed out by the vendor's solicitor and was remedied.
No advice was given that there was no stamp duty payable or that AS, who was a first home buyer, was entitled to a grant from the NSW Government and how to obtain it.
No advice was ever given to AS about the terms of the contract.
AS then sought advice about paperwork concerning his finance, but received no response.
On 3 June MS emailed AS and told him he had to pay stamp duty of $9235 and asked him whether he had adequate insurance for the unit. The email was wrong as there was no duty payable and the unit was covered by the Owners Corporation insurance.
The mistake was repeated in an email to AS of 14 June 2011 sent by ME, a paralegal employed by the respondent.
Fortunately AS knew the correct position and told the firm by email dated 14 June 2011. He also asked for the strata report and certificates so he could apply for the first home buyers grant.
AW, another employee employed by the respondent, sent him a First Home Grant Plus Form.
Settlement occurred on 17 June 2011. He was sent a report and a bill for $785 (after credit for an initial payment of $350). Unknown to AS at the time, the invoice included $240 for the non-existent strata report and purported to be for services that included advice about the contract. He says he then paid it. In fact it was paid at settlement.[37]
He asked again for the strata report and certificates by email dated 3 July 2011.
On 4 July he was told by email by AW that there was no strata report and asked whether he still wanted it, or instead wanted a refund of $240.
On 5 July, AS emailed the firm and complained about delays, lack of advice, incorrect advice and asked for the $240 to be repaid.
He did not receive a reply and complained on 25 July 2011 to the NSW Legal Services Commission. It was forwarded to the applicant on 27 July. It was sent to the respondent by the applicant on 3 August. AS says he understood from RAR 1 pages 684-687 that it had been sent by email. However page 684 shows the complaint was addressed to a DX box and was not sent by email. In her evidence, the respondent explained that she did not have a DX box and did get the letter, but not for at least two days after 3 August 2011.
AS received a refund of the $240 on 5 August and also got a certified front page of the contract that he had complained about not having received.[38]
On 6 September 2011 the respondent wrote to AS, apologised and paid him another $242 because he had not been given the contract advice.[39]
The admitted shortcomings by her staff were considered by Michael James, a Canberra solicitor, with extensive conveyancing experience in ACT and NSW. In a report attached to his affidavit dated 15 March 2016 he explains in even handed and persuasive terms that these errors were below the standard expected. He was not cross examined. He says that, while he accepted the need to use paralegals and employed solicitors, the failure to obtain the strata report, the failure to provide any contractual advice and not picking up the separate title for the garage, individually and collectively, raise a concern as to competence and diligence of the respondent. He then concludes that whether it is lack of supervision, lack of protocols, or training, or a quality control system, there was a failure by the practitioner to meet the requisite standard. Whilst we accept as a general matter that the respondent did attend to training and supervision and had triggers for staff to follow, for whatever reason the number of errors of such potential significance must, in respect of the AS complaint, lead to the conclusion that she is responsible for such errors and she is guilty of unsatisfactory professional conduct in respect of this complaint.

[82]

This ground relies on two matters. The first complains that the first substantive response by the respondent to the complaint, being an email dated 22 August 2011, was misleading in saying that the $242 amount had been repaid to AS weeks ago. It was refunded on 5 August, which is more than two weeks before, and whilst it implied that this was before the complaint was received, as we have found in paragraph 157 we accept that this is correct. Thus, we do not agree with this aspect of the ground.
The second issue relates to a letter of 6 September 2011 about the lack of advice about the contract. By this time MS had left the firm. The respondent says she searched the work station of MS and found that he drafted legal advice on 10 May, but for reasons unknown, had not sent it. This is said to contain two misrepresentations, namely, that MS had drafted it and not the off-shore paralegal, and that it had been finalised by MS. This is said to be incorrect because MS had not drafted the advice and the advice had not been finalised. The respondent in cross examination said she thought MS had looked at it, and that in the normal course, he would settle it before it was sent. We have not seen the work station and cannot tell from its appearance whether it could be said that the document found was an unamended draft from the paralegal, or whether MS had been making changes, or had done something to adopt it in whole or in part. The advice is in RAR 1 at pages 429-431. It has MS's name at the bottom of it. There is an email from the paralegal at page 432 enclosing an advice. It may be that it is the document at pages 429 -431, or it may be that those pages were added to by MS by inter alia, placing his name on it. We cannot tell. The respondent was cross examined about it. She said she had assumed he had done it when she looked. She was not clear now whether he drafted it, but he may have settled it.
The point seems to be whether she said it because it was to her advantage as was put to her in cross-examination.[40] We do not believe it can be so described fairly. The complaint the respondent was addressing was the lack of advice. She admitted none had been given and she could not see why not.
Whether MS had drafted, settled, or not applied himself to either task, made no difference to the admission that the advice should have been given and was not.
We have accepted the evidence of the respondent in general and here, we are not satisfied that there was any attempt to deceive, or that to the extent that the statement is inaccurate, that it was material. In fact we are not satisfied that it is necessarily inaccurate other than that the word 'settled' would be a more accurate description of the process than 'drafted'.

[87]

The facts set out here are taken from the application and the documents, particularly RAR 1, and are not in issue except where we draw attention to any contested matter.
In December 2010, N1 and N2 retained the respondent to act on the sale of an ACT property. Two potential sales had fallen through but by 4 August 2011, the respondent received instructions from the clients' real estate agent.
On 18 August 2011[41] the buyers' solicitor by email asked for early possession[42] for $550 per week from 1 September with completion to be on 16 September 2011. The letter said that there was no compliance certificate[43] and that the buyers would not pay rent if settlement was delayed by not being able to provide a compliance certificate on completion.
The respondent's firm sent a copy of that email to N1 and N2[44] seeking instructions. N1 confirmed that they had the compliance certificate.[45] He appears to have agreed to these matters. The respondent had sent special conditions by email on 18 August at 2.35 pm to the buyer's solicitor, Exhibit A1 p 211.
AW a paralegal, employed by the respondent, sent a draft licence agreement by fax at 3.47 pm on 19 August.[46] It was also sent by email at 4.09 pm (Exhibit A1 p 213). It required the buyer to pay a fee of $175 for drafting the agreement.
There is a further copy of the Licence Agreement at RAR1 p 209-210[47] which has an unsigned handwritten amendment saying "The buyer is not required to pay the licence fee for any period in which the completion is delayed other than for the sole default of the buyer." Also $175 is crossed out and $87.50 is handwritten in its place.
At some point, thought to be shortly after 18 August 2011 by N1, he and N2 attended the office of the respondent and signed the contract. The contract is thought to have had annexed the licence agreement. N1 says it was in the form that did not have the amendment. In any event he and N2 deny in their affidavits dated 22 August 2016 that they agreed to the amendment about delay.
AW sent an email to N1 and N2[48] saying that the buyers won't pay the $175 fee. N1 responded on 23 August telling her to pay half of it being $87.50.[49] It was not made clear during the hearing, but the request by the buyers' solicitor concerning the fee of $175 was made by an email dated 22 August at 2.56 pm [see Exhibit A1 page 214]. It included the request to change the licence agreement to add words about no licence fee being payable if the settlement were delayed. A good reason is given for such a change, namely, the buyer would be at the mercy of the seller if they chose to delay and the occupation fee was above market. AW sent the email at RAR1 197 on 22 August at 3.27 pm to N1 and N2 asking about the $175 fee but not the amendment. N1's response also at RAR197 was sent at 9.31 am on 23 August 2011. The buyers' solicitor agreed by email
Contracts were exchanged on 23 August 2011. The amendment concerning the sum of $87.50 must have been inserted on that day as no instructions were given until then. The email from N1 on that day says nothing about the other amendment.
From the file, which is part of RAR 1, it is not possible to tell how this happened, or who wrote on the amendment, or when. It would not even be clear it happened then, except that correspondence after settlement between the respondent's firm and the buyers' lawyer makes it clear that it was so amended and then exchanged with that amendment.
Settlement was due on 16 September 2011. Unexpectedly, the client's mortgagee was not ready to settle then, so completion was delayed.
The sale finally settled on 26 September 2011.
The adjustments on settlement prepared by AW, allowed for rent until 16 September, but not until 26 September.
N1 protested this with the respondent and went to the buyers' house to demand the shortfall (roughly $785) from the buyer and had to be told not to do it.
There is in evidence, as an annexure to the respondent's affidavit, a file note and a draft statutory declaration by AW. The file note is an answer to a question posed by the respondent as prepared for her by a consultant with the firm BW, a senior and extremely experienced retired solicitor[50]. The draft and unsworn declaration is at RAR 1 page 823. The note is RH28 of the respondent's affidavit of 12 July 2016. The information provided by AW is given in December 2012.
In her note which is in answer to a leading question, she says that she remembers speaking to N1 on the phone and that he agreed to the change regarding the occupation fee at the same time as he agreed to the change to the $175 fee. In her draft statutory declaration she says the request about the $175 was on 22 August and it was agreed and that on 23 August she had the phone discussion with N1 about the licence fee amendment. She does not say she gave him any advice, nor does she say she didn't.
She wasn't called and her explanation is not deposed to by her in an affidavit. N1 and N2 were cross examined.
They were asked to recall the events for their affidavits earlier this year. There is no indication that they had done so before that and after their initial complaints.
N1 was in our opinion an unconvincing witness. He answered questions with questions and parried with the questioner in a manner that appeared evasive, even if there was nothing to evade. English was not his first language and he may well have been at a disadvantage because of that. In fairness to him, we do not go so far as to make adverse findings about his credit, but if the only evidence was what he remembers now and was based on his affidavit and his oral evidence, we could not be comfortably satisfied that what he says is right. N2 was more responsive in her answers, but she clearly remembered little and she was not involved in the crucial communications about the issue. It was put to her that they were seeking to get from the respondent the sum of $5000 they did not get because earlier sales fell through. It was no doubt to be implied that was their motivation in making the complaint. There certainly was a claim of this at RAR 1, page 626. N2 did not agree.[51] It was not expressly put to her that this was their motivation or that she and N1 were not being truthful because of this.
A copy of the license agreement as exchanged was sent to the agent on 31 August 2011 and was uploaded to the website that N1 and N2 had as their e-file. It was not explored as to whether they looked at it. Presumably if they did, they would have known of the amendment earlier. There is no evidence on the file of them being told expressly before or after exchange until after settlement
AW says that in her email she remembers being told the bank was ready so there would not be any delay by the sellers. RH 31 is an email dated 8 September saying that the firm had been told there was no mortgagee. However, the bank communications start well before that. One such communication occurred on 22 August 2011.[52] RH 31 seems to be an example of the left hand not knowing what the right hand had done already.
N1 says the alteration to the licence agreement was clearly against his interest and he would not have consented to it. In the abstract, it was not as good as the original clause and so was against his interest to that extent. He had no reason to think the sale would not proceed on time and he had already lost two buyers. The amount of delay, if any, would not have resulted in any significant loss. We cannot conclude that he did not consent just because the amendment was capable of being against his interest. Nor could we conclude that he would not have consented if he had been told and advised about it (assuming that he had not been told or advised). We do not accept his statement now that he would not have consented if he had known of the proposed amendment then. But clearly he should have been given the opportunity.
There was no explanation for AW not giving evidence, and there is an inference that can be drawn that she would not have assisted the respondent if called.
The strongest evidence that N1 and N2 had not been told of the amendment is their immediate reaction when they found out. They said that the agreement was in the form of the unaltered licence agreement. They disagreed with the explanation given to them and N1 went to the buyers' house to collect the shortfall in rent. He seems to have convinced the respondent's firm as she, or someone on her behalf, wrote to the buyers' solicitor asking for it after settlement.[53]
It could be argued that N1 was told but did not take it in, or did not understand it. All his communications, however, show he was sharp and had not misunderstood anything else. Also, it would have been logical for AW to have asked him at the same time as she asked about the $175 fee, but inexplicably she appears to have overlooked it.
We have to be comfortably satisfied that he was not told and did not agree to, or get advice about, the amendment.
Whilst there are reasons to refrain from making a positive finding, the fact that N1 and N2 complained immediately and took steps that showed they believed they had not agreed, as well as the absence of any evidence to the contrary, including the failure to call AW and AW's omission to ask about the amendment when she asked about the $175 fee, persuade us that instructions were not sought to amend the agreement.
Mr James in his report makes it clear that this is below the requisite standard.
He says that the respondent is responsible for this failure for the same reasons as he said so in respect of the AS complaint. However, the two cases are quite different and Mr James does not advert to the fact that in this case, there is one failure rather than several failures and the unusual nature of the conduct. It is one thing to fail to do a number of basic things, such as get a strata report or advise about the contract before it is exchanged, or before the cooling off period. It is a much less foreseeable event that a paralegal would amend a contractual document without instructions. Moreover, the fact that AW asked for instructions about the $175, but overlooked the clause regarding the licence fee, shows that she knew to get instructions, but for no good reason failed to do so on this occasion.
There is no evidence that the respondent knew this had happened, or might have anticipated such an unusual event.
We accept that failing to get instructions to amend a contractual document, particularly if it could be adverse to the interest of the client, would be a breach of the obligation of fidelity if done knowingly, and would also be incompetent, but we are not persuaded that in this case this is the fault of the respondent.
This ground also involves Ground 16 which says it is not competent to do this without advice. Clearly the same position applies. If N1 was told, which we have found he was not, then he still should have been given advice. He was not given advice because he was not told at all. The assumption that he was told at all is not made out, so the occasion for advice does not arise. In any event, the responsibility issue still arises.

[89]

The first complaint is that the respondent misled the applicant by not revealing that there were no instructions to amend.
The letter from the respondent is dated 18 January 2012. It is at RAR 1 pages 649-651.
The letter needs to be read as a whole. The respondent's firm did explain what the reasoning was on several occasions after the problem arose. When they did, they did not advert to the possibility that the licence had been amended without instructions. The letter accurately sets out what the file revealed in some detail. It explained the reason why the settlement was delayed. In order for us to be satisfied that the respondent's response lacked candour we have to find that the respondent, when writing the letter, knew or believed that there had been no instructions or advice. As can be seen from the discussion relating to the finding that there were no instructions, there is reason to think otherwise. We accept the evidence of the respondent that she believed there was consent and it is clear that she did not advert to the possibility that there was not when she wrote the letter.
We are not satisfied that the complaint in paragraph 5.21 of the application is made out.
The second complaint is that the letter represents that the explanations referred to occurred before exchange. We do not read it as saying that. It certainly does not do so expressly, and when read in conjunction with the file, it is clear that the respondent is doing no more than she could, unless she positively knew something that was not on the file, namely, that there were no instructions. We do not find that the representations alleged in 5.23 of the application are made out at all. If we are wrong and they could be inferred, we find that it has not been established that the respondent knew, or believed, that there were no instructions. This complaint is not established.
The next complaint relates to letters from the respondent and her solicitor dealing with the AW notes and draft statutory declaration referred to in paragraph 5.25. The letters complained of are a letter of 6 August 2015 and a letter of 21 August from the respondent's solicitor. They are at RAR 1 pages 775-800C and 812-813.
Essentially, the respondent was responding to a draft application to the tribunal. The matter had got to the stage where it was clear that an application was going to proceed. The investigation phase had been exhaustive and continued over many years. The circumstances that the respondent was dealing with were not the usual first response where the applicant knows nothing and relies on the respondent to give it as much information as she can. It is clear that she did do that in the letter of 18 January 2012. She was then at an advanced pleading stage and was responding to the whole application. The applicant knew what was on the file and what was not. In this context the respondent proffers the statement that she has documentary evidence. She does not say she has contemporaneous documentary evidence, but the applicant argues it should be read that way even though it had the chronology and documents from the file since 2012.
Whilst there may be excuses for the delay of over five years and the unusual course of asking the respondent to give the applicant an advance pleading, it needs to be taken into account in considering the complaint.
The complaint relates to part of a very long letter which escapes complaint otherwise.
Mr Erskine SC submitted that the reference to documentary evidence would never have misled anyone and certainly not at the stage that the matter had reached. In order to ascribe intent to deceive we have to conclude that it might have done so. It did not in fact deceive and inevitably prompted more information which was provided.
We agree with Mr Erskine SC. This complaint is not made out.
It is also complained that the omission of the leading question by the respondent's solicitor was an attempt to mislead as the leading question might be seen as improper in seeking to influence the answer. Whilst the question could have been better expressed so that it was not leading, it is a long bow to conclude that it was an attempt to influence the answer. The respondent said she does not know why her solicitor cut bits out. She was challenged about this in cross-examination but we accept her evidence. It is unlikely that her solicitor was seeking to mislead. We are not satisfied that the response was in fact deceptive, or was so intended to be.
The last complaint relates to the explanation given about miscalculating the payment of commission to the agent.
The agent had written a letter saying it had no funds and then that it had $1000 and asking for the balance. The letter was obviously misread by the respondent's office and the client was told about it in a reporting letter. How anyone could be misled by the respondent's clumsy explanation of these events is hard to understand. The claim is not established. We are not satisfied in the context that this is misleading in fact, or that it was intended to be.

COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER RN

At a glance

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Decision date

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Judgment (118 paragraphs)

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Legislation Cited (4)

Cases Cited (3)

COUNCIL OF THE LAW SOCIETY OF THE ACT v LEGAL PRACTITIONER RN (Rhondda Nicholas) (Occupational Discipline) [2016] ACAT 122 (8 November 2016)