In these two matters, disciplinary proceedings are brought by the Council of the New South Wales Bar Association (the Bar Council) against two barristers, Mr Breeze and Ms Graves. They are now husband and wife.
The proceedings do not concern any conduct by Mr Breeze and Ms Graves in the course of their practices as barristers. They concern statements made by them in a loan application to the Commonwealth Bank for finance to purchase what is now their matrimonial home, as well as evidence given by each of them on related subjects in family law proceedings brought by Mr Breeze in relation to his previous marriage.
The proceedings result from a referral by the Court in those family law proceedings to the Legal Services Commissioner arising from aspects of the evidence that each gave in those proceedings. The Commissioner initiated complaints that led to an investigation by the Bar Council. As a result of that investigation, a number of the complaints concerning evidence given in the family law proceedings were dismissed. These proceedings concern the balance of the complaints.
The proceedings were listed for a three day hearing before the Tribunal commencing on 23 November 2015. At the commencement of the hearing, we were informed that the parties had reached an agreement upon a compromise of the proceedings, subject to the agreement of the Legal Services Commissioner and the making of consent orders by the Tribunal pursuant to s 564(4) of the now repealed Legal Profession Act 2004 (2004 LPA). We are satisfied that the 2004 LPA is applicable to the disposition of these proceedings for the reasons set out the last section of these reasons.
Following an adjournment, the agreement of the Legal Services Commissioner to the proposed consent orders was obtained and on 25 November 2015 we heard the application for the making of consent orders. The orders sought were the subject of a written instrument recording the consent of Mr Breeze, Ms Graves, the Bar Council and the Legal Services Commissioner and an agreed statement of facts, as required by s 564 of the 2004 LPA.
The instruments of consent include consent to findings of professional misconduct, on the basis that the Tribunal does make the consent orders sought. Those consent orders include orders for reprimands and orders that Mr Breeze and Ms Graves pay an agreed amount of the costs of the Bar Council.
We received written submissions from each of the parties relating to the making of the consent orders and heard oral submissions from such parties on 25 November 2015.
The Tribunal considers that the proposed consent orders should be made. In the circumstances of this case, we consider that such orders are within the permissible range. Overall, and having regard to the terms of s 564(10), we are not of the opinion that it is in the public interest that we conduct and complete a hearing.
[2]
The grounds of complaint
Four grounds of complaint were made against Mr Breeze. The first three grounds of complaint all concern statements made in the loan application to which we have already referred. It was a loan application to the Commonwealth Bank. The loan application was prepared by a mortgage broker on the instructions of Mr Breeze and Ms Graves. It was submitted to the bank on 2 August 2012.
Two of the complaints against Mr Breeze concern statements in the loan application about funds in the amounts of $400,000 and $122,000 which were supplied by the parents of Ms Graves to assist with the purchase of the property. The relevant statements about these funds arise from answers to questions in the loan application form. As emerges from the agreed statement of facts, at the time of the loan application, the arrangements with the parents in respect of these funds were informal and their true character was not plain. Shortly after the time of the loan application, on the day of settlement of the purchase of the property, formal documents were signed identifying each of these amounts as loans.
The complaints against Mr Breeze can be summarised as follows. First, that he engaged in misleading conduct by knowingly making a false or misleading statement that the primary purpose of the loan was "Investment" and that on settlement the property would be leased. Secondly, that he engaged in misleading conduct by knowingly or recklessly making a false or misleading statement that, of the funds to be supplied by the buyers, an amount of $400,000 was a gift, when it was a loan or a repayable amount. Thirdly, that he engaged in misleading conduct by knowingly or recklessly making a false or misleading statement in the loan application that the deposit paid of $122,000 was not a loan, in circumstances where $112,000 of that amount was a loan. Fourthly, and in the alternative to these three grounds, that he was not truthful in evidence he gave in October 2012, in the family law proceedings, to the effect that the $400,000 and $112,000 were loans.
Three grounds of complaint were made against Ms Graves. These mirror the grounds of complaint made against Mr Breeze, except that no complaint is made against Ms Graves in relation to the $122,000 deposit.
In seeking the consent orders, the parties are agreed that findings should be made, in respect of the first ground of complaint, that the statements made were knowingly false and were made with the intention of improving the prospects that the loan monies would be advanced by the bank. In respect of the second ground of complaint, the parties are agreed that a finding should be made that the statement about the $400,000 was made recklessly. So far as the statement in the loan application about the $122,000 is concerned, which only concerns Mr Breeze, the parties are agreed that a finding should be made that such statement was made recklessly.
The parties are agreed that the alternative grounds of complaint concerning untruthful evidence in the family law proceedings should be dismissed.
The background and context to the making of these statements in the loan application is explained in considerable detail in the agreed statement of facts, the full terms of which are set out below.
[3]
The position of the parties in general
The final paragraphs of the agreed statement of facts are in the following terms:
[59] The parties agree that the proposed orders are appropriate having regard to the nature of the impugned conduct of Mr Breeze and Ms Graves and the following mitigating factors:
a. at the time of submitting the Loan Application, Mr Breeze was in the midst of a difficult divorce, the stress of which was impacting heavily on Mr Breeze and Ms Graves; and
b. the Loan Application was made to secure a home which would allow Mr Breeze and Ms Graves to start a new life for their combined family.
[60] In light of this Agreed Statement of Facts and parties' submissions as to appropriate orders, the Applicant and Mr Breeze and Ms Graves submit that the public interest is adequately served by the reprimand and the conduct of a hearing is not required.
[4]
The Tribunal's power concerning consent orders
The 2004 LPA Act contains a specific regime for making consent orders in disciplinary proceedings as follows:
564 Consent orders
(1) The Tribunal may, with the consent of the Australian legal practitioner concerned contained in a written instrument, make orders under this Part without conducting or completing a hearing in relation to the complaint.
(2) Consent may be given before or after the proceedings were commenced in the Tribunal with respect to the complaint.
(3) If consent is given before the proceedings were commenced, the requirement to conduct an investigation of the complaint (whether commenced or not) may be dispensed with, and any investigation of the complaint already being conducted may be suspended or terminated.
(4) This section does not apply to consent given by the practitioner unless the practitioner, the Commissioner and (if applicable) the relevant Council have agreed on the terms of an instrument of consent.
(5) Without limiting what may be included in the instrument of consent, the instrument is to contain an agreed statement of facts (including as to the grounds of complaint) and may contain undertakings on the part of the practitioner.
(6) The instrument of consent must be filed with the Tribunal.
(7) Nothing in this section affects the procedures regarding the commencement of proceedings in the Tribunal where consent was given before the proceedings are commenced.
(8) If consent was given before the proceedings are commenced, the proceedings are nevertheless to be commenced with respect to the complaint in the same way as if the consent had not yet been given.
(9) The Tribunal is to be constituted in the same way as for the conduct of a hearing into the complaint.
(10) In deciding whether to make orders under this Part pursuant to an instrument of consent, the Tribunal may make such inquiries of the parties as it thinks fit and may, despite any such consent, conduct or complete a hearing in relation to the complaint if it considers it to be in the public interest to do so.
That provision was contained in Part 4.8 of the 2004 LPA. Also within Part 4.8, was s 562 which was in terms:
562 Determinations of Tribunal
(1) Orders generally
If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section.
(2) Orders requiring official implementation in this jurisdiction
The Tribunal may make the following orders under this subsection:
(a) an order that the name of the practitioner be removed from the local roll,
(b) an order that the practitioner's local practising certificate be suspended for a specified period or cancelled,
(c) an order that a local practising certificate not be issued to the practitioner before the end of a specified period,
(d) an order that:
(i) specified conditions be imposed on the practitioner's practising certificate issued or to be issued under this Act, and
(ii) the conditions be imposed for a specified period, and
(iii) specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed,
(e) an order reprimanding the practitioner,
(f) an order that the name of the practitioner be removed from the roll of public notaries maintained under the Public Notaries Act 1997.
As was submitted by Senior Counsel for Ms Graves, such specific regulation in s 564 of the 2004 LPA of consent orders, including the express authority to make them, with the agreement of the Legal Services Commissioner, distinguishes this matter from what has occurred in recent times in respect of criminal sentencing and the imposition of pecuniary penalties, where the agreed-orders process has been rejected: see Barbaro v The Queen (2014) 253 CLR 58 and Director, Fair Work Building Industry Inspectorate v CFMEU (2015) 229 FCR 331. Moreover, since the hearing of the applications in these matters for consent orders, the High Court has overruled the decision of the Full Federal Court in the CFMEU case finding that the approach taken by the plurality in Barbaro does not apply to civil penalty proceedings: Commonwealth of Australia v Director, Fair Work Building Inspecorate & Ors [2015] HCA 46. In so finding, the plurality said (at [57]):
More generally, it is entirely consistent with the nature of civil proceedings for a court to make orders by consent and to approve a compromise of proceedings on terms proposed by the parties, provided the court is persuaded that what is proposed is appropriate.
Accordingly, in our opinion, the approach of the predecessor of this Tribunal in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 remains applicable. None of the parties contended otherwise. In that case the Tribunal stated:
[15] The making of orders by the Tribunal under Part 4.8, and in particular, s 562, of the Legal Profession Act serve primarily to protect the public - Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 250-1. Further, however, these orders may be used to mark the community's disapproval of lapses from the high standard legitimately expected by the public of legal practitioners. Moreover, it will usually follow that orders under Part 4.8 also act as a specific deterrent to the legal practitioner involved as well as a general deterrent to all other practitioners. Thus, orders under Part 4.8 also assist to maintain proper standards in the legal profession - Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441, New South Wales Bar Association v Hamman [1999] NSWCA 404 at [21].
[16] Having regard to these matters, where the conduct found to have been engaged in by a legal practitioner is serious, for example because it involves dishonesty and it is not a single, isolated incident, orders under s 562(2)(a) that the name of the practitioner be removed from the local roll and s.562(2)(b) that the practitioner's local practicing certificate be cancelled may be appropriate. We take into account that this disciplinary jurisdiction remains concerned with whether the legal practitioner is a fit and proper person to be held out as such to the public - Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 444 and see generally at 440 - 446.
…
[29] Section 564(1) and (10) of the Legal Profession Act makes plain that the Tribunal has a discretion whether or not to make orders consented to in an instrument of consent under that section. The Tribunal does not act, nor should it be seen, as merely a 'rubber stamp' - see the comments of the Federal Court in a similar context in Australian Communications and Media Authority v WE.NET.AU Pty Ltd [2008] FCA 1530 at [8]. Nonetheless, the consent of the parties and the Legal Services Commissioner are matters that deserve significant weight.
[30] These circumstances are similar to, and some guidance can be derived from, cases where Courts exercising regulatory or disciplinary powers are presented with joint submissions by the parties (often including the relevant regulator) as to the appropriate civil penalties and consent orders which they request the Court to make. These often occur in matters under the civil penalty regimes such as those established by the Trade Practices Act 1974 (Cth) or the Corporations Act 2001 (Cth) and involving, respectively, the Australian Competition and Consumer Commission or the Australian Securities and Investments Commission.
[31] Barrett J set out the Supreme Court's approach to consent orders in regulatory matters (including orders in relation to disqualification from management) under the Corporations Act and related legislation in Australian Securities and Investments Commission v Elm Financial Services Pty Ltd (2005) 55 ACSR 411; [2005] NSWSC 1020, as follows:-
9 The parties have, in each case, agreed the duration of the disqualification. That, however, does not absolve the court of its duty to consider the appropriateness of the penalty in the light of the agreed facts and the surrounding circumstances. This is made clear by the decisions of the Full Federal Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; (1996) 71 FCR 285 and, more recently, Minister for Industry Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 (and see, in the present statutory context, Australian Securities and Investments Commission v Vizard (2005) 54 ACSR 395). In the Mobil Oil case (at [51]) the following propositions were seen as emerging from the reasoning in NW Frozen Foods:
(i) It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.
(ii) Determining the quantum of a penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
(iii) There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.
(iv) The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC's views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more "subjective" matters.
(v) In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.
(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.
10 There has been some criticism of this approach as involving "platitudes": see per Weinberg J in Australian Prudential Regulation Authority v Derstepanian [2005] FCA 1121. And in Vizard (above), the court imposed a higher penalty than that agreed by the parties and sought by the regulator.
11 It is clear that the court is in no way constrained by the parties' agreement and that, having made the declaration of contravention, it must exercise its discretion as to penalty. In the present case, the factual background does not, to my mind, indicate that the respective periods of disqualification proposed by the parties are inadequate.
…
[33] If the necessary adjustments to these principles are made to take into account the express statutory regime under s 564 of the Legal Profession Act and the particular nature of the disciplinary powers being exercised by the Tribunal, we believe they provide useful guidance as to the exercise of the Tribunal's discretion in cases such as the present.
[34] We note that, by reaching agreement with the Bar Association and obtaining the consent of the Legal Services Commissioner well before the hearing date, the Barrister had contributed to a saving of most of the two days set aside for the hearing of the appropriate orders. Agreed resolution of disciplinary proceedings utilising the regime established under s 564 of the Legal Profession Act is to be encouraged, where appropriate. This consideration favoured making the orders sought by the parties.
…
[36] In all the circumstances, we considers orders (a) and (b), consented to by the parties and by the Legal Services Commissioner were appropriate and within the permissible range of orders that could legitimately have been made.
In Butland, the tribunal referred to various reasons why it considered the orders sought to be appropriate in the circumstances: at [14]. These included the nature and extent of the conduct in issue and other relevant circumstances.
Presumably, s 564(10) is part of the adjustments to the principles set out in the above passages from the Elm Financial Services decision, to which the Tribunal was referring in Butland: at [33]. Whilst s 564(10) refers to the public interest in the context of declining to make the orders sought, it seems to us that this and the discretion in s 564(1) necessitates that consideration be given to public interest factors both favouring refusal and acceptance of the consent orders sought.
What practical difference s 564(10) makes to the approach described in the Elm Financial Services case is not clear. For example, if proposed consent orders are not regarded as within the permissible range, whether due to inadequacy or because they are too severe, it would seem likely to follow, particularly when dealing with the possibility of an order for removal from the roll, that it would be in the public interest to decline to make the orders sought and that a hearing be conducted.
Nevertheless, in view of the terms of s 564(10), we have not only considered the question whether the proposed consent orders are within the permissible range, but also, despite our conclusion that they are within the permissible range, whether there are any public interest factors that would cause us to conduct and complete a hearing.
[5]
Law concerning orders in relation to professional misconduct
We were referred to a number of authorities concerning the making of orders in professional misconduct cases. Pertinent aspects of those authorities are:
1. A finding of professional misconduct does not require a conclusion that the practitioner is unfit to practice and removal of their name from the roll: A Solicitor v Council of the Law Society of New South Wales [2004] HCA 1 at [15] and [21]; Council of New South Wales Bar Association v Sahade [2006] NSWCA 145 at [7], [9], [73], [88]. In respect of a finding of professional misconduct, illustrations of cases in which orders for a reprimand have been made, are Prothonotary of the Supreme Court of New South Wales v Chapman [1992] NSWCA 292 and New South Wales Bar Association v Mitry [2002] NSWADT 185.
2. The question of fitness to practice is to be decided at the time of the hearing: A Solicitor at [21].
3. Many kinds of conduct, deserving of disapproval, and occurring outside the practice of law, do not spell unfitness to engage in legal practice. The dividing line between such conduct and conduct which is incompatible with fitness to practice is by no means always an easy task to draw: Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 per Kitto J at p 298.8.
4. Honest dealing is fundamental to fitness to practice law and it is commonly thought that people who have indulged in deceit to their own advantage are likely to be deceitful again, when it suits them: see Sahade at [59], referring with approval to the tribunal decision at first instance in New South Wales Bar Association v Sahade [2005] NSWADT 159. Nevertheless, it may be accepted that individuals behave differently in different circumstances. It may be wrong to assume that a reasonably brief period of deceptive conduct in a non-practice context is of weighty significance in relation to the practice of law. Weight may be placed on the context in which the conduct occurred: Sahade at [86]. The fact that an isolated incident was involved will be relevant: Sahade at [73].
5. The onus is on the claimant to show that the practitioner is not a fit and proper person. That must be established according to the Briginshaw standard: Prothonotary of the Supreme Court of New South Wales v P at [17(1)].
6. An order for removal from the roll should only be made when the probability is that the practitioner is permanently unfit to practice: Prothonotary of the Supreme Court of New South Wales v Richard (Court of Appeal, 31 July 1987) per McHugh JA at 1-2; New South Wales Bar Association v Cummins (2001) 52 NSWLR 279 per Spigelman CJ at [26]; Prothonotary of the Supreme Court of New South Wales v P [2003] NSWCA 320 at [17(2)].
[6]
Instruments of consent
In compliance with s 564 of the 2004 LPA, in each matter, written instruments of consent concerning the orders sought, signed by the parties and on behalf of the Legal Services Commission, were filed with the Tribunal. As required by s 564(5), each contained an agreed statement of facts.
Each of those instruments contain the consent of the relevant Respondent to the making of the findings of having engaged in professional misconduct set out in paragraphs [52] and [54] below and to the making of the orders to similar effect to those set out in paragraphs [53] and [55] below.
[7]
Agreed statement of facts
The agreed statement of facts, annexed to the instruments of consent, is in the following terms (we have deleted identification of the particular property purchased so as to comply with privacy requirements):
AGREED STATEMENT OF FACTS
The Council of the New South Wales Bar Association ("the Applicant"), Matthew Christopher Breeze ("Mr Breeze") and Heather Margaret Graves (now known as Heather Margaret Breeze, "Ms Graves") (together, "the Respondents") agree to the following facts in the proceedings no. 1420313 and no. 1420314 ("Proceedings") subject to the Tribunal making the orders sought by the parties in the Instrument of Consent to which this Agreed Statement of Facts is attached.
If the Tribunal determines that it will not make the orders sought by the parties in the Instrument of Consent to which this Agreed Statement of Facts is attached, which give effect to the compromise reached between them, the Applicant and the Respondents reserve their rights to maintain their respective positions both generally and as stated in:
a. the Amended Application for Disciplinary Findings and Orders filed in proceedings no. 1420313 on 1 May 2015;
b, the Amended Reply to the Amended Application filed by Mr Breeze on 5 November 2015;
c. the Amended Application for Disciplinary Findings and Orders filed in proceedings no. 1420314 on 1 May 2015; and
d. the Reply to the Amended Application filed by Ms Graves on 18 June 2015.
These agreed facts are for the purposes of the Proceedings only and filed in accordance with s 564 of the Legal Profession Act 2004 (NSW) ("the Act") [1] . The Applicant, Mr Breeze and Ms Graves do not, by agreeing to the following facts or consenting to the filing of this statement, agree any facts with or make any admission in favour of any other person.
The Applicant has not considered whether it suspects that Mr Breeze or Ms Graves has committed an offence against any statute or law and there is at present no intention of remitting the matter to the Applicant.
PART A - BACKGROUND
1. At all material times, the Respondents: [2]
a. were, and continue to be, Australian legal practitioners within the meaning of the Act, Mr Breeze being admitted to the Roll of Local Lawyers (as it then was) in the Supreme Court of New South Wales on 2 December 2005 and Ms Graves being admitted to Roll of Legal Practitioners (as it then was) in the Supreme Court of New South Wales on 29 June 1999;
b. each held and continue to hold a Practising Certificate entitling them to practise as a Barrister in New South Wales;
c. each practised as a Barrister at 8th Floor, Garfield Barwick Chambers, 53 Martin Place, Sydney.
2. In about May 2010, the Respondents entered into a relationship. [3] Mr Breeze has two children with his former wife [4] and Ms Graves has three children with her former husband. [5]
3. On or about 3 March 2012, the Respondents entered into a contract at auction to purchase a house at XXXX, Sydney NSW ("XXXX"), for a sum of $2,440,000. [6] At the time of entering into a contract to purchase XXXX, the Respondents did not have any pre-approved finance and had limited funds for a deposit. [7] The Respondents each had outstanding financial and child support issues involving their former spouses, including jointly-held properties.
4. A (part) deposit of $10,000 was paid by the Respondents at the time of auction on 3 March 2012. [8] The contract of sale for XXXX provided that a 5% deposit bond was required to be paid by 9 March 2012 and settlement would occur on 3 August 2012. [9]
5. On or about 9 March 2012, an amount of $112,000 was paid (being the balance of the 5% purchase deposit) to the agent of the vendor of XXXX by a cheque drawn in the name of Dr George Bridger, or in the names of Dr George Bridger and Mrs Joan Bridger (the parents of Ms Graves, "the Parents"). [10]
6. Subsequent to 3 March 2012, an arrangement was reached whereby the Parents would provide a further $400,000 to be applied towards the purchase of XXXX. [11]
7. In or about July 2012, Mr John Ruddick, mortgage broker, made enquiries of lending institutions on behalf of the Respondents for the financing of the purchase of XXXX. Mr Ruddick, on the instruction of the Respondents, prepared an application to the Commonwealth Bank of Australia ("the Bank"). The application was submitted on 2 August 2012 ("Loan Application"), with the Bank approval being notified to the Respondents on or about 8 August 2012.
8. On 15 August 2012, the purchase of XXXX was completed, including with $400,000 paid by the Parents. [12]
9. Additionally, on 15 August 2012, Mr Breeze signed a loan agreement with the Parents in respect of the $112,000 [13] and Ms Graves and the Parents signed a loan agreement in respect of the $400,000. [14]
10. On 4 October 2012, Mr Breeze and Ms Graves each filed an affidavit in Mr Breeze's family law proceedings number ZZZZ ("family law proceedings"). Mr Breeze filed a sworn Financial Statement on 30 October 2012. [15] The characterisation of the $112,000 and $400,000 loans were the subject of the sworn evidence in the family law proceedings.
11. The complaints the subject of the Proceedings arose out of evidence given by the Respondents in the family law proceedings. By letter dated 27 March 2013 to the Office of the Legal Services Commissioner (OLSC) the Principal Registrar of the Federal Magistrate's Court (as it was then known) referred Mr Breeze and Ms Graves for investigation and on or about 22 April 2013, the Legal Services Commissioner initiated complaints in relation to the conduct of Mr Breeze and Ms Graves as referred by the Principal Registrar of the Federal Magistrates Court, and referred those complaints to the NSW Bar Association for investigation. [16]
12. On 10 April 2014, the Bar Council resolved pursuant to s 537(1)(a) of the Act to commence proceedings in the New South Wales Civil and Administrative Tribunal in respect of part of the complaint by the Legal Services Commissioner and to dismiss the balance. [17]
13. The Proceedings first concern information provided by or on behalf of each of the Respondents to the Bank in respect of the primary purpose of the loan for the purchase of XXXX and the characterisation of the amounts of $112,000 and $400,000 provided by the Parents. Secondly, the Proceedings concern the evidence given by each of the Respondents in Mr Breeze's family law proceedings involving his former wife. [18]
PART B - $112,000
14. On or about 2 March 2012, the Respondents retained Sydney Property Conveyancing to act on the negotiations with the vendor's agent for XXXX and subsequently on the purchase/sale of XXXX. [19] The terms of the contract of sale required that a 5% deposit bond be paid by 9 March 2012. [20]
15. On or about 7 March 2012, Ms Graves requested advice from Sydney Property Conveyancing on the ramifications of being late with the deposit bond [21] and subsequently on or about 8 March 2012 requested advice on whether the contract of sale could be rescinded and the consequences of doing so. [22]
16. On or about 7 March 2012, Ms Graves met with the Parents and informed them that the Respondents intended to obtain bridging finance. [23]
17. Shortly after that, on or about 8 March 2012, Mr Breeze met the Parents for the first time. [24] The Respondents and the Parents discussed the funding of the purchase of XXXX and the Respondents' respective financial positions. [25]
18. The Parents agreed to lend the balance of the deposit for XXXX being $112,000. [26] Mr Breeze agreed to repay the $112,000 to the Parents from Mr Breeze's expected property settlement with his former wife. [27]
19. Mr Breeze understood that the monies were to benefit Ms Graves and the Parents would not call upon the amount advanced or seek interest or have it cause any financial burden on the Respondents, but if the relationship failed then the money was for the benefit of Ms Graves. [28]
20. On or about 6 August 2012, Mr Breeze and/or Ms Graves, at the request of the Parents, instructed a solicitor to prepare loan agreements including a loan agreement in respect of the $112,000. [29]
21. On or about 15 August 2012, Mr Breeze and the Parents entered into a written loan agreement in relation to the $112,000. [30] The terms of that agreement included a repayment obligation on Mr Breeze that he:
"will repay to the Lender [the Parents] the principal sum immediately on finalisation of his Federal Magistrates Court proceedings for settlement of matrimonial property between the Borrower [Mr Breeze] and Heidi Elizabeth Breeze in proceedings number ZZZZ or on 30 June 2014, whichever shall first occur."
PART C - $400,000
22. In about late 2006, the Parents agreed to sell their home at 41 Kenneth Street Longueville ("Kenneth Street") to Ms Graves and her then husband for $1,000,000, of which $400,000 would be paid with a loan from the Parents to Ms Graves and her then husband, such loan to be secured by an unregistered second mortgage and to be forgiven in the event of the Parents' deaths. [31]
23. Shortly after purchasing XXXX, Ms Graves and her former husband placed Kenneth Street on the market. [32] At that time, the Respondents moved into XXXX pursuant to a licence agreement with the vendor. [33]
24. In or about 11 July 2012, Ms Graves and her former husband accepted an offer to sell Kenneth Street for $2,100,000, at which time the division of the proceeds of the sale between Ms Graves and her former husband remained unresolved. [34] The Parents subsequently lodged a caveat on the title of Kenneth Street on or about 12 July 2012, citing the unregistered mortgage as a caveatable interest. [35]
25. On or about 20 July 2012, Ms Graves and her former husband exchanged contracts to sell Kenneth Street with settlement to occur on 10 August 2012. [36]
26. In or about July 2012, Ms Graves proposed to the Parents that the $400,000 referred to in paragraph 22 be used to contribute to the acquisition of XXXX. [37]
27. On or about 15 August 2012, the Parents provided $400,000 towards the purchase of XXXX. [38]
28. The $400,000 provided to Mr Breeze and/or Ms Graves was only repayable upon the sale of XXXX and/or upon the relationship between the Mr Breeze and Ms Graves coming to an end. [39] The Applicant therefore asserts that the $400,000 represented a repayable amount to Mr Breeze and/or Ms Graves. [40]
29. In about July 2012 and early August 2012, the Respondents understood that the $400,000 would be a gift to Ms Graves, secured in a manner similar to that described in paragraph 24 so as to secure the benefit of the $400,000 for Ms Graves in the event that Ms Graves' relationship with Mr Breeze failed. [41]
30. On or about 6 August 2012, Mr Breeze and/or Ms Graves, at the request of the Parents, instructed a solicitor to prepare agreements including a loan agreement in respect of the $400,000. [42]
31. On or about 15 August 2012, the Parents and Ms Graves entered into a written loan agreement in respect of the $400,000 in order to secure the funds for the Parents. [43] The terms of that agreement included a repayment obligation on Ms Graves that she: [44]
"…repay to the Lender the principal sum plus interest in accordance with clause 3 herein immediately on sale of XXXX"
PART D - THE LOAN APPLICATION
32. On or about 2 August 2012, the Loan Application was submitted to the Bank in the names of, and on behalf of the Respondents. [45]
33. The Loan Application sought from the Bank loans in the total amount of $1,550,000 to assist in the purchase of XXXX. [46]
34. The Loan Application required the Respondents to provide information to assist the Bank in deciding whether to approve the loans, including information as to:
a. the primary purpose of the loan; and
b. the proposed source of funds to finance the purchase of the house. [47]
The 'residence question'/primary purpose of the loan
35. The Bank, through the Loan Application, required information to be provided in relation to the "Primary Purpose" for which the loans were required. [48]
36. The information provided by or on behalf of the Respondents was that the "Primary Purpose" of the loans was "Investment". [49]
37. The statement that the "Primary Purpose" of the loans was "Investment" was a false statement [50] , because at all material times, the Respondents planned to live at XXXX. However, in the event that they were unable to service the proposed loan from the Bank, the Respondents intended to lease XXXX and themselves rent a house elsewhere at lower cost [51] or otherwise live with either of their parents. [52]
38. The information provided by or on behalf of the Respondents also included the representation that - "The borrowers are currently living in the property that they are about to settle on. On settlement however they will live with Matthews parents rent free and lease the security property…". [53]
39. The statement that "On settlement however they will live with Matthews parents rent free and lease the security property" was a false statement for the reasons given above at 37. [54]
40. The Respondents made the statements with the intention of improving the prospects that loan monies would be advanced by the Bank [55] . In particular the Loan Application represented that the Respondents' income available to service the loan would be $1,800 per week higher by reason of leasing out XXXX.
The description and disclosure of nature of funds: $400,000
41. The Bank, through the Loan Application, required information to be provided in relation to the source of funds intended to be used in the purchase of XXXX. [56]
42. The Respondents provided information in the Loan Application in relation to "Deposits and Contributions" which stated that the amount of $400,000 was a "Gift" and a "Gift from Heathers parents". [57]
43. The Applicant asserts that the statement that the amount of $400,000 was a gift was false or misleading because the amount of $400,000 represented an amount that was repayable upon the sale of XXXX and/or upon the relationship between the Respondents coming to an end. [58]
44. The Respondents did not disclose to the Bank in the Loan Application that the amount of $400,000 was repayable in the circumstances referred to in paragraph 43 above. [59] At the time that the Loan Application was submitted, no written loan agreement was in existence in relation to the $400,000.
45. In addition, on or about 5 August 2012, the Respondents engaged in a discussion in which it was acknowledged that the amount of $400,000 advanced by the Parents would attract bank rate compound interest, and would be the subject of written loan or other agreements for the purpose of securing the money. On 6 August 2012, Mr Breeze gave instructions to a solicitor to prepare a Financial Agreement which was to provide that the $400,000 would attract bank rate compound interest and be deducted from any distribution that might otherwise come to Ms Graves out of the estate of the Parents. On 10 August 2012, the Respondents executed a Financial Agreement under the Family Law Act 1975, which stated in part that the Parents were "providing $400,000 which monies will be secured by way of caveat on the title". In addition, on or about 15 August 2012, to the knowledge of Mr Breeze, Ms Graves and the Parents executed a loan agreement in which the $400,000 was described as a loan, attracting compound interest, and which gave the Parents the right to lodge a caveat against the title of XXXX. That loan agreement also provided that Ms Graves would repay the principal sum, plus interest, immediately on the sale of XXXX.
46. These financial arrangements, and agreements in relation to the $400,000 were not disclosed to the Bank, either in the Loan Application or at any other time.
47. There was no express requirement in the Loan Application documents that any such financial arrangements brought into existence after lodgement of the Loan Application must be brought to the Bank's attention. However, in the circumstances, the Respondents agree that they should have informed the Bank of these financial arrangements, given that they differed from the information disclosed to the Bank in the Loan Application.
The description and disclosure of nature of funds: $112,000
48. Mr Breeze and the Applicant agree that he provided information in the Loan Application in relation to "Deposits and Contributions" which stated - "5% Deposit Paid" - "$122,000". [60]
49. Mr Breeze provided information in the Loan Application in relation to "Deposits and Contributions" which stated that the $122,000 was not a loan. [61]
50. The statement that the $122,000 was not a loan was false or misleading, because $112,000 of that sum comprised a loan to Mr Breeze by the Parents [62] , repayable in the circumstances described in paragraphs 18 and 19, above.
51. At the time that the Loan Application was submitted, no executed loan agreement was in existence in relation to the $112,000.
52. In addition, on or about 5 August 2012, the Respondents engaged in a discussion in which it was acknowledged that the amount of $112,000 advanced by the Parents was repayable, and would be the subject of a written loan or other agreements for the purposes of securing the money. On 6 August 2012, Mr Breeze gave instructions to a solicitor to prepare a Financial Agreement which was to provide that the $112,000 was to be repaid in full to Dr Bridger. On 10 August 2012, the Respondents executed a Financial Agreement under the Family Law Act 1975, which stated in part that Mr Breeze had borrowed $112,000 from the Parents, and had "entered into a separate loan agreement whereby this loan will be repaid by Matthew out of his expected share of his property settlement…" Furthermore, on or about 15 August 2012, Mr Breeze and the Parents executed a loan agreement in which the $112,000 was described as a loan, and by which Mr Breeze was required to repay the principal sum immediately on finalisation of his Federal Magistrates Court proceedings, or on 30 June 2014, whichever shall first occur. Under that loan agreement, the Parents were given the right to lodge a caveat against the title of XXXX.
53. These financial arrangements, and agreements in relation to the $112,000 were not disclosed to the Bank, either in the Loan Application or at any other time.
PART E - THE FAMILY LAW PROCEEDINGS
54. In or around July 2012, Mr Breeze commenced the family law proceedings against his former wife Heidi Breeze in the Federal Magistrate's Court of Australia, seeking orders in relation to property, and in relation to the children of the marriage. [63]
55. Chief Federal Magistrate Pascoe through the Principal Registrar referred the Respondents to the OLSC for consideration of whether any breach of the Act or its regulations had been committed by them.
PART F - SUBMISSIONS AS TO ORDERS
56. In proceedings no. 1420313, the Applicant and Mr Breeze submit that the following orders should be made by consent:
a. find that Mr Breeze has engaged in professional misconduct as particularised in Grounds 1, 2(b) and 3(a) of the Amended Application;
b. Grounds 2(a), 2(c), 2(d), 3(b), 3(c) and 4 be dismissed;
c. reprimand Mr Breeze, pursuant to subsection 562(2)(e) of the Legal Profession Act 2004 (NSW); and
d. Mr Breeze pay the Applicant's costs of the proceedings, agreed at $80,000.
57. In proceedings no. 1420314, the Applicant and Ms Graves submit that the following orders should be made by consent:
a. find that Ms Graves has engaged in professional misconduct as particularised in Grounds 1 and 2(b) of the Amended Application;
b. Grounds 2(a), 2(c), 2(d), and 3 be dismissed;
c. reprimand Ms Graves, pursuant to subsection 562(2)(e) of the Legal Profession Act 2004 (NSW); and
d. Mr Graves pay the Applicant's costs of the proceedings, agreed at $[TBA].
58. Pursuant to s 564 of the Act, Mr Breeze and Ms Graves consent to the Tribunal making the above orders under Part 4.8 of the Act, without conducting or completing a hearing in relation to the complaints.
59. The parties agree that the proposed orders are appropriate having regard to the nature of the impugned conduct of Mr Breeze and Ms Graves and the following mitigating factors:
a. at the time of submitting the Loan Application, Mr Breeze was in the midst of a difficult divorce, the stress of which was impacting heavily on Mr Breeze; and
b. The Loan Application was made to secure a home which would allow Mr Breeze and Ms Graves to start a new life for their combined family.
60. In light of this Agreed Statement of Facts and parties' submissions as to appropriate orders, the Applicant and Mr Breeze and Ms Graves submit that the public interest is adequately served by the reprimand and the conduct of a hearing is not required. [64]
[8]
The Tribunal's acceptance of the orders sought
We have no reason to doubt the accuracy and sufficiency of the agreed statement of facts or the appropriateness of the admissions of professional misconduct based on such facts. No doubt they have been prepared and agreed upon with the assistance of the experienced solicitors and Senior Counsel representing the parties in these matters.
Those admissions of professional misconduct only concern the statements in the loan application. No such admissions are made in relation to the evidence connected to the same subject in the family law proceedings. In our opinion, that is appropriate, in view of the agreed statement of facts which provides support for the accuracy of the relevant evidence that each gave in those proceedings. In this respect, it is notable that subsequent to the submission of the loan application, and before the relevant evidence was given in the family law proceedings, the familial arrangements about both the $400,000 and the $112,000 amounts became the subject of formal loan documentation and refinement: at [21] and [31] of the agreed facts. There has been no suggestion that this was artificial. It is also notable that, at the time of the loan application, the respondents understanding as to the gift nature of the $400,000 was supported by a letter from the parents to the bank which spoke in terms of a gift: agreed fact [29], including the cross-reference to [4.10] of the Amended Reply of Mr Breeze.
As we have previously mentioned, the complaints against each of Mr Breeze and Ms Graves concerning evidence they gave in the family law proceedings were made in the alternative to the claims made in relation to the loan application. In the circumstances, it is appropriate that the complaints made concerning their evidence be dismissed, as is provided for in the proposed consent orders.
Bearing in mind the pertinent aspects of the law concerning orders in relation to professional misconduct to which we have referred above, in our opinion the orders sought are within the permissible range. In our opinion, they deal sufficiently with the general and specific deterrent needs of these matters, the protection of the public and the maintenance of the high standards of the profession.
In so concluding, we have had regard to the following aspects concerning the nature of the conduct in issue:
1. Plainly, in assessing the gravity of the misconduct, the statements about the purpose of the loan and the leasing out of the property were the most serious. That has been acknowledged by the admissions made in relation to it.
2. The characterisation of the conduct concerning the $400,000 as reckless arises because of the presence of circumstances, at the time when the statements were made, raising doubt, at least, as to its status as a gift. We regard this conduct as being at the lower end of the scale of professional misconduct.
3. We regard the degree of recklessness in relation to the $122,000 amount in the loan application, which concerns only Mr Breeze, as being of a higher order than that involved with the $400,000. At the time when the statement was made there was no formality in relation to it and Mr Breeze had the understanding about the likely reality of the situation referred to at [19] of the agreed facts. Nevertheless, he had orally expressed to Ms Graves parents an agreement to repay the $112,000 amount from his expected property settlement with his former wife: at [18] of the agreed facts.
4. All of the conduct occurred on one occasion, namely the making of the loan application. It was an isolated incident.
5. The conduct occurred at a time of heavy and unique stress for both Mr Breeze and Ms Graves, during which time it is reasonable to infer that their judgment was impaired.
6. Explanations concerning the conduct have been supplied by Mr Breeze and Ms Graves in affidavits filed in these proceedings and read on the application for the consent orders.
7. The admissions now made of engaging in professional misconduct reveal recognition by the Respondents of the seriousness of the departures of the standards expected of them.
8. Although we see limited utility in making comparisons with outcomes in other cases, involving different circumstances, there are number of aspects that distinguish the present circumstances from those in the case of Law Society of Tasmania v Matthews [2010] TASSC 60, to which the parties referred in submissions. In that case, the name of the practitioner was removed from the roll after making clearly false statements, on two separate occasions, in applications for a first home owners grant. First, in Matthews there had been a conviction for dishonestly acquiring a financial advantage. Secondly, harm had resulted. Thirdly, there had been deceit on two separate occasions. Fourthly, no explanation, including mitigating circumstances for the conduct, had been supplied.
In view of our conclusion that the orders sought are within the permissible range, in our opinion, the orders should be made. We have not identified any countervailing public interest factor that might lead us to decline to make these orders. In this latter regard, we note that there is no cause to think that the facts have not been fully investigated and ventilated.
In oral submissions, both Senior Counsel for Mr Breeze and Senior Counsel for Ms Graves referred to aspects of the evidence read on the hearing of the applications for consent orders in support of submissions that each had been candid about their conduct and shown remorse, as well as submissions concerning the context of the conduct. This included references to documents in the exhibit to the affidavit of Mr Selth that was filed on behalf of the Bar Council in each matter.
In support of her submissions of candour, Senior Counsel for Mr Breeze referred us to passages of the cross-examination of Mr Breeze in the family law proceedings, when he was first confronted with the statements in the loan application, in which it can be seen that Mr Breeze frankly acknowledged that the statements about the proposed leasing out of the property were deliberately misleading.
We were also referred to Mr Breeze's letter to the Bar Association in October 2013, in which he expressed considerable regret about the statements in the loan application, most forcefully about the statement concerning the leasing out of the property.
Amongst other material, Senior Counsel for Ms Graves referred us to Ms Graves' letter to the Bar Association of 30 September 2013, in which she frankly acknowledged as untruthful the statement in the loan application about where they would live. He also referred us to passages in Ms Graves' affidavit about her health issues and the stress that she was under.
Whilst the evidence to which we were referred was read on the applications for consent orders, Senior Counsel for the Bar Council did not accept that we should pay any regard to material that went beyond the agreed statement of facts and the supporting material to which those facts referred. To the extent that such material might be controversial, we agree.
In view of the reasons we have earlier expressed for our conclusion that we should make the orders sought, it is unnecessary for us to deal with these additional submissions of the Respondents about candour, remorse and context, and we do not do so. In arriving at our conclusion, we have confined ourselves to the facts and matters referred to in the instruments of consent, including the agreed statement of facts, along with our evaluation of the conduct based solely upon that material.
[9]
The applicability of the repealed 2004 LPA
Before we proceed to make the consent findings and orders sought, briefly, we set out our reasons for concluding that the pertinent provisions of the now repealed 2004 LPA govern the disposition of these matters. The parties do not contend otherwise. In this regard, we were greatly assisted by submissions from Senior Counsel for Ms Graves.
The proceedings in each of these matters were commenced in October 2014, at which time the 2004 LPA was in force. The complaints the subject of the proceedings were made under Chapter 4 of that Act.
With effect from 1 July 2015, the 2004 LPA was repealed and replaced by the Legal Profession Uniform Law (NSW) (the Uniform Law). Savings and transitional provisions are contained in both Schedule 4 of the Uniform Law and Schedule 9 of the Legal Profession Uniform Law Application Act 2014 (NSW) (the Application Act 2014), by which the Uniform Law was introduced as part of the law of New South Wales.
Clause 26 of Schedule 4 of the Uniform Law addresses the present situation reasonably precisely. It provides in part as follows:
Division 7 Dispute resolution and professional discipline
26 Current complaints and investigations
(1) This clause applies to -
(a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or
(b) an investigation referred to in old Chapter 4 that had begun but had not been completed before the commencement day.
(2) On and after the commencement day -
(a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; and
(b) for that purpose, the complaint or investigation is to continue to be dealt with by the entity responsible for dealing with it under those provisions (the current entity).
(3) Subclause (2)(b) does not apply if a local regulation or other legislation of this jurisdiction directs that another entity referred to in this Law (the substituted entity) is to deal with the complaint or investigation instead of the current entity.
The definitions of "commencement date", "Chapter 4" and "old legislation" in Clause 1 of Schedule 4 make it clear that on and after 1 July 2015 these proceedings are to continue to be dealt with in accordance with the provisions the 2004 LPA.
In view of the specific coverage of the issue in Clause 26, the general savings provisions in clause 2(2) of Schedule 4 and Clause 3(3) of Schedule 9 of the Application Act do not apply. Each is, in effect, expressly subjugated to other more specific provisions: see clause 2(6) of Schedule 4 of the Uniform Law and clause 3(1) of Schedule 9 of the Application Act. On their face, these general savings provisions, otherwise appear to mean that the new Uniform Law would govern the situation.
Further, in our opinion, because specific provisions have been made for savings and transitional issues in the Uniform Law and the Application Act, the sections dealing with the effect of repeal of an Act in the relevant Interpretation Act do not apply, assuming that they otherwise did, as to which we express no opinion; see, for example, Adco Constructions Pty Ltd v Goudappel (2004) CLR 1; see plurality at [27]-[29] and Gageler J at [52]. That is because of the principle that a specific provision will take precedence over a general provision, and because of the term in the relevant Interpretation legislation providing that the legislation applies except in so far as a contrary intention appears in the other legislation.
Probably, if they had been applicable, the effect of the pertinent provisions of the relevant Interpretation Act would be that these proceedings brought under the 2004 LPA remained unaffected by the repeal of that Act and the Tribunal continued to have the powers of determination set out in s 562 of the 2004 LPA. However, in view of our conclusion that the savings and transitional provisions take precedence, it is unnecessary for us to express a final view on this point.
For the same reason, it is also unnecessary that we resolve the question as to which Interpretation Act is applicable. It is possible that it is the Victorian Interpretation of Legislation Act (1984) that applies for present purposes. This possibility arises because it is the new Victorian legislation concerning the legal profession that is made a law of New South Wales by the Application Act (s 4(a)) and the New South Wales Interpretation Act 1987 (NSW) is expressly excluded from applying to the Uniform Law; s 5(1)(a). However, it is the Application Act (a law of New South Wales) that repealed the 2004 LPA (by s 167, now itself repealed because its operation is spent) and the Interpretation Act 1987 (NSW) applies to that Act: s 5(2)(a). In any event, similar provisions exist in both the New South Wales and Victorian legislation concerning the effect of repeal, most pertinently, s 14(2)(g) of the Victorian Act and s 30(1)(e) of the New South Wales Act.
For the above reasons, in these two matters, we make the findings and orders set out below. Partly, at the Tribunal's instigation, with the consent of all parties and the Legal Services Commissioner, some variation of the proposed orders set out in the instruments of consent has occurred since the hearing. These varied orders were supplied to the Tribunal on 3 December 2015, and it is these varied orders that the Tribunal now makes.
The varied consent orders now sought include orders restricting access to and disclosure of documents and evidence filed in the Tribunal in the manner appearing below. We are prepared to make those orders because they are now part of the consent terms agreed upon, they are qualified in the sense that they are subject to any further order of the Tribunal, the basis of the findings and orders made appears from the reasons and we can perceive that there are considerations of privacy involved.
[10]
Findings in proceedings number 1420313 against Mr Breeze
Based upon his admissions and the agreed statement of facts, in proceedings number 1423013, the Tribunal makes the following findings against the Respondent, Mr Breeze:
1. That the Respondent engaged in professional misconduct by engaging in misleading conduct by knowingly making false statements to the Commonwealth Bank of Australia in a loan application made on 2 August 2012 (the Loan Application) that:
1. the primary purpose of the loan/s was "Investment"; and
2. on settlement the property would be leased.
1. That the Respondent engaged in professional misconduct by engaging in misleading conduct by recklessly making a false or misleading statement in the Loan Application that an amount of $400,000 was a gift, when it was a repayable amount.
2. That the Respondent engaged in professional misconduct by engaging in misleading conduct by recklessly making a false or misleading statement in the Loan Application that an amount of $122,000 was not a loan when it was.
[11]
Orders in proceedings number 1420313 against Mr Breeze
In proceedings number 1420313 against the Respondent, Mr Breeze the Tribunal orders that:
1. The Respondent be reprimanded pursuant to subsection 562(2)(e) of the Legal Profession Act 2004, (NSW).
2. The Respondent pay the Applicant's costs of the proceedings, agreed at $80,000 within 28 days of the making of these orders.
3. The application as amended is otherwise dismissed.
4. Pursuant to s 64 of the Civil and Administrative Tribunal Act 2013, and subject to any further order of the Tribunal, access to and disclosure of documents and evidence filed with the Tribunal in this application (other than the Agreed Statement of Facts and the Instrument of Consent) be restricted to any designated local regulatory authority under the Legal Profession Uniform Law and its delegates, the parties and their respective legal representatives.
5. the family law proceedings matter number in paragraphs 10 and 21 of the Agreed Statement of Facts be redacted.
[12]
Findings in proceedings number 1420314 against Ms Graves
Based upon her admissions and the agreed statement of facts, in proceedings number 1420314, the Tribunal makes the following findings against the Respondent, Ms Graves (now known as Heather Margaret Breeze):
1. That the Respondent engaged in professional misconduct by engaging in misleading conduct by knowingly making false statements to the Commonwealth Bank of Australia in a loan application made on 2 August 2012 (the Loan Application) that:
1. the primary purpose of the loan/s was "Investment"; and
2. on settlement the property would be leased.
1. That the Respondent engaged in professional misconduct by engaging in misleading conduct by recklessly making a false or misleading statement in the Loan Application that an amount of $400,000 was a gift, when it was a repayable amount
[13]
Orders in proceedings number 1420314 against Ms Graves
In proceedings number 1420314 against the Respondent, Ms Graves (now known as Heather Margaret Breeze) the Tribunal orders that:
1. The Respondent be reprimanded pursuant to subsection 562(2)(e) of the Legal Profession Act 2004, (NSW).
2. The Respondent pay the Applicant's costs of the proceedings, agreed at $80,000 within 28 days of the making of these orders.
3. The application as amended is otherwise dismissed.
4. Pursuant to s 64 of the Civil and Administrative Tribunal Act 2013, and subject to any further order of the Tribunal, access to and disclosure of documents and evidence filed with the Tribunal in this application (other than the Agreed Statement of Facts and the Instrument of Consent) be restricted to any designated local regulatory authority under the Legal Profession Uniform Law and its delegates, the parties and their respective legal representatives.
5. the family law proceedings matter number in paragraphs 10 and 21 of the Agreed Statement of Facts be redacted.
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
[14]
Endnotes
Legal Profession Uniform Law (NSW) Schedule 4 - cl 26: complaint made under old Chapter 4 of the LPA but not disposed of before the commencement day of the Legal Profession Uniform Law is to continue to be dealt with in accordance with the provisions of the old legislation.
Brief summary of the grounds contained in the Amended Applications.
Affidavit of Matthew Breeze [22].
Affidavit of Matthew Breeze [23].
Affidavit of Matthew Breeze [25].
Affidavit of Matthew Breeze [25], [27].
Affidavit of Matthew Breeze [26] (on the timing of the meeting); Affidavit of Heather Graves [80] (on the bridging loan).
Affidavit of Heather Graves [81]; Affidavit of Matthew Breeze [28] ff.
Affidavit of Heather Graves [81]; Affidavit of Matthew Breeze [28] ff.
Affidavit of Matthew Breeze [30]; Affidavit of Heather Graves [81]; Affidavit of George Patrick Bridger dated 17 March 2015.
Amended Reply (Breeze) [3]; Note, Reply (Graves) [4] adds "or as soon as he was otherwise able" and admits paragraphs [12] - [13] of the Amended Application (Graves) [in the same terms as Amended Application (Breeze) [12] - [13]]. Amended Reply (Breeze) [3.1(c)].
Amended Reply [3.1(c)(ii)].
Amended Reply (Breeze) [14]; Particulars to Amended Reply (Breeze) [14].
Amended Reply (Breeze) [3.2].
Amended Reply (Breeze) [4.1] and particulars to [4.1].
Amended Application (Breeze) [25]; Admitted in Amended Reply (Breeze) [5] subject to the qualifiers that follow and are reproduced here; Reply (Graves) [10(d)] subject to the qualifiers in [10], largely reproduced here.
Note s 564(10): In deciding whether to make orders under this Part pursuant to an instrument of consent, the Tribunal may make such inquiries of the parties as it thinks fit and may, despite any such consent, conduct or complete a hearing in relation to the complaint if it considers it to be in the public interest to do so.
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 18 December 2015