Council of the New South Wales Bar Association v Hanrahan

NCAT Occupational|2017-12-14

REASONS FOR DECISION

On 16 March 2017 the Council of the New South Wales Bar Association (the applicant) filed in the Tribunal an application for disciplinary findings and orders against Ross Gerard Hanrahan (the respondent).
The applicant sought seven orders, two of which were as follows: 1. Findings that the respondent has been guilty of professional misconduct within the meaning of s 297 of the Legal Profession Uniform Law (NSW) 2015 ("Uniform Law") with respect to the conduct contained in each of the grounds for application below. Further, or in the alternative to 1, 2. Findings that the respondent has been guilty of unsatisfactory professional conduct within the meaning of s 296 of the Uniform Law with respect to the conduct contained in each of the grounds for application below.
There were five grounds in the application. Each alleged that the respondent's conduct, identified for each ground, was contrary to one or more of the New South Wales Barristers' Rules then in force.
The hearing of the application was fixed by the Tribunal for 13 and 14 December 2017.
On 12 December 2017, the solicitor for the applicant, with the consent of the solicitor for the respondent, sent an email and four documents to the Tribunal. The four documents were described as follows: proposed amended application for disciplinary findings and orders (marked up version) dated 12 December 2017; proposed amended application for disciplinary findings and orders (clean version) dated 12 December 2017; instrument of consent and statement of agreed facts; and letter dated 11 December 2017 from the Legal Services Commissioner to Hicksons.

Relevant law

The conduct giving rise to the proceedings occurred in the period on or about 25 June to 30 June 2015.
The complaint was signed on 4 August 2015 and apparently submitted to the Office of the Legal Services Commissioner on 6 August 2015.
Chapter 5, Part 5.4 of the Legal Profession Uniform Law (NSW) (Uniform Law) deals with disciplinary matters. Chapter 5 commenced on 1 July 2015.
Thus the conduct complained of occurred before Chapter 5 of the Uniform Law commencing, but the complaint was made after the commencement of that Chapter.
Schedule 4, Part 3, Division 6 to the Uniform Law makes savings and transitional provisions for the investigation of certain matters. At Clause 27 it relevantly provides for complaints and investigations to proceed under the Uniform Law where the conduct happened, or is alleged to have happened, before the commencement day and could have been, but was not, the subject of a complaint under old Chapter 4.
This Clause applies to the present complaint and thus the matter proceeds under the provisions of the Uniform Law. Both parties agree with this position.

Brief background to the application

In 2013 Mr Michael Donato (the complainant) was the plaintiff in personal injury proceedings in the District Court of New South Wales. He alleged that he slipped and injured his knee when riding on a travelator at Westfield Chatswood where he worked as a security guard. The proceedings were taken against Westfield Shopping Centre Management Pty Ltd and Reflections Cleaning Pty Ltd (Reflections). Reflections was subsequently replaced by CGU Insurance Ltd (CGU) as the second defendant. The proceedings against the first defendant were settled on or about 15 April 2014.
Some time after the proceedings commenced the complainant instructed Ms Erlinda Geronimo (the instructing solicitor) to take over carriage of the matter. The instructing solicitor briefed the respondent on or about 20 February 2014 to act on behalf of the complainant.
According to the respondent in his reply filed in the Tribunal, he accepted the brief on a speculative basis. According to the respondent in his affidavit filed in the Tribunal, the terms of the retainer was never established, no costs agreement was entered into and he was initially asked to advise on a pro bono basis.
McCabes Lawyers Pty Ltd appeared for CGU. Following the injury the complainant received worker's compensation payments and if successful in the personal injury proceedings was liable to repay those payments. The respondent put those payments at initially in excess of $137,000, later reduced to in excess of $122,000 and later reduced to $100,000.
On about 8 October 2014 the proceedings were listed for hearing for four days commencing on 30 June 2015. The respondent marked his diary accordingly.
On about 19 June 2015 the respondent met with the instructing solicitor and the complainant at which time the complainant indicated he would be willing to accept an amount "clear" of all outgoings. The respondent's evidence is that the amount was $100,000 "clear". The complainant's evidence is that the amount he required "clear" was higher.
On about 19 June the respondent initiated informal settlement negotiations with the solicitor for CGU. On the morning of 25 June, in the course of those negotiations, the respondent (without instructions) put an offer of $180,000, inclusive of costs, and inclusive of the amount which the complainant would be required to repay for worker's compensation benefits he had received. The solicitor for CGU accepted the offer. This settlement delivered less money "clear" to the complainant than either he or the respondent recall discussing on or about 19 June 2015.
At about 1:15 PM on 25 June, the respondent disclosed to the solicitor for CGU that he did not have instructions to make the offer of $180,000 but that the worker's compensation recovery amount remained uncertain. The solicitor for CGU did not release the respondent from the settlement. The fact and terms of that settlement were communicated to the instructing solicitor and the complainant thereafter.
On 30 June, at court and on the first day of the hearing, the respondent signed terms of settlement, in the amount of $180,000 inclusive of costs, and handed them up in court, obtaining consent orders giving effect to the settlement.
On 4 August 2015 the complainant completed and signed a complaint form used in the office of the Legal Services Commissioner, making a complaint against the respondent. With that complaint form the complainant also lodged a five page letter to the office of the Legal Services Commissioner which set out numerous complaints against the respondent.

The five grounds in the application

We set out below these five grounds.

Ground 1 On or about 25 June 2015 the respondent agreed to a settlement of $180,000 for the client's matter ("the settlement") such settlement being made either without, or against, the client's instructions.

Ground 2 The respondent agreed to the settlement because he preferred his own interests over the client's interests, including because it would be more remunerative for the respondent if the hearing of the client's matter did not proceed.

Ground 3 On or about 25 June 2015 the respondent brought improper pressure to bear on the client, to settle the matter, including by accusing him of making a fraudulent claim.

Ground 4 On or about 30 June 2015 the respondent brought improper pressure to bear on the client to settle his matter by giving advice as to whether the settlement could be rescinded that preferred the respondent's interests over the client's interests. The advice preferred the respondent's interests over the client's interests because it would be more remunerative for the respondent if the hearing did not proceed and/or because the respondent perceived it to be in the interests of the respondent's reputation if the respondent's agreement to the settlement without instructions was not made known to the court and others.

Ground 5 On or about 30 June 2015 the respondent misled the court to believe that the client had given the client's consent for the consent orders to be made, when the respondent signed the consent orders on the client's behalf and was a party to them being handed up to the court, when the respondent knew that there was a real question as to whether the client had genuinely and freely given his consent.

The respondent's reply

We set out below the substance of the relevant parts of the respondent's reply filed in the Tribunal: 1. Order 1 was opposed. 2. So far as order 2 was concerned, a finding of unsatisfactory professional conduct was not opposed but a finding of unsatisfactory professional conduct in respect of each of the grounds, was opposed. 3. The allegation in par 19 (a) of the application which alleged the respondent said words to the complainant to the effect "I want to settle for whatever amount we get before the hearing" was denied. 4. The allegation in par 19 (b) of the application which alleged the respondent said words to the complainant to the effect "I have four other cases at the same time that I would rather spend time on and if I go to court for your case I will lose money for the other cases" was denied. 5. So far as the particulars for ground 1 were concerned, he denied a breach of Rule 12 (a). As to Rule 12 (b) and (c) the respondent said that he was guilty of an error of judgement but did not intentionally act in a manner which was likely to be prejudicial to the administration of justice or likely to diminish public confidence in the legal profession or the administration of justice or otherwise bring the legal profession into disrepute. 6. He denied grounds 2 - 5.

The respondent's affidavit

The respondent swore a detailed 93 paragraph affidavit dated 30 August 2017 which included his disputations of grounds 2 - 5.
Paragraph 63 of the application was as follows: At no time did the Respondent advise the Court that there was a real question as to whether the client had genuinely and freely given his consent in circumstances where the Respondent had settled the matter without or against instructions and had failed to advise the client of the possibility of resisting any later application to specifically enforce the agreement.
The respondent responded in his affidavit to that paragraph as follows: As to Paragraph 63 of the application, I agree that I had settled the matter without instructions (but not against instructions). I say that I did not fail to advise the client of the possibility of resisting any later application to specifically enforce the agreement.

The two grounds in the proposed amended application

These grounds are:

Ground 1 On or about 25 June 2015 the barrister settled the Complainant's matter for $180,000 inclusive of costs and repayments ("the Settlement") such settlement being made without, or against, the Complainant's instructions.

Ground 2 The barrister did not promptly inform the Complainant or the Solicitor that he had settled the proceedings on the Complainant's behalf, thereby denying the Complainant the opportunity to promptly seek independent advice and with the effect that the Complainant was placed under improper pressure to acquiesce in the Settlement.

The proposed amended application only contains two grounds. It also contains detailed particulars in respect of each ground.
The instrument of consent provided to the Tribunal states that it is an instrument of consent under s.144 of the Legal Profession Uniform Law Application Act 2014 (Application Act). That section enables the Tribunal with the consent of the respondent lawyer contained in a written instrument, to make orders without conducting or completing a hearing in relation to the complaint.

Variation of the application

Subsections 140 (1) and (2) of the Application Act are in the following terms: 140 (1) The Tribunal may vary a disciplinary application, on the application of the person who made the disciplinary application or on its own motion, so as to omit allegations or to include additional allegations, if satisfied that it is reasonable to do so having regard to all the circumstances. (2) Without limiting subsection (1), when considering whether or not it is reasonable to vary a disciplinary application, the tribunal is to have regard to whether varying the disciplinary application will affect the fairness of the proceedings.
It was made clear by counsel for the applicant during the hearing on 13 and 14 December 2017, that the applicant was making an application for the Tribunal to vary the application "so as to omit some allegations and reframe others." Counsel for the respondent supported the application.
The parties relied upon s.140 of the Application Act as the source of the power of the Tribunal to vary the application. In our view they were right to do so. It is clear from subsections 140 (1) and (2) of the Application Act that in this case if the application is to be varied, the Tribunal must be satisfied that it is reasonable to vary the application in the terms sought by the parties, having regard to all the circumstances.
As required by s. 140 (2) of the Application Act, we have had regard to whether varying the application will affect the fairness of the proceedings and have concluded that the proceedings will be fairer. The variations and the instrument of consent will mean that there will be no need for a contested hearing. It will not be necessary to deal with the existing grounds 2, 3 and 4 and their difficulty of proof. We conclude that the parties have agreed that the proposed ground 2 better expressed (than did ground 5) the case which the applicant considers is open on the evidence.

Analysis of the proposed changes to the application

In par 23 of the respondent's outline of submissions dated 14 December 2017, it is stated that in the present proceedings the s.140 amendment application is engendered by the proposed s.144 instrument and that the amended application has been drafted with reference to the agreed facts set out in the instrument.
There are considerable differences between the application with its present grounds 2 - 5 and the proposed application with those grounds deleted and replaced by the proposed new ground 2. The differences include removing grounds which contain serious allegations of misconduct. Furthermore, ground 5 came about because on 11 August 2016 the applicant decided to make an additional complaint about the respondent pursuant to the Uniform Law. The additional complaint was, in effect, in the terms of ground 5. Grounds 1, 2, 3 and 4 in the application were grounds based upon the complainant's complaints.
In those circumstances we are of the view that in this case the circumstances referred to in s. 140 (1) include the circumstances in which the parties now intend that the proposed application will not include the present grounds 2, 3, 4 or 5 and will include the proposed ground 2.
There is no significant difference between ground 1 in the application and ground 1 in the proposed application.
In par 68 of the applicant's outline of written submissions dated 14 November 2017 it was stated in relation to the present ground 2 that a factual dispute as to the respondent's alleged motivations in settling the matter would need to be resolved at a hearing as relevant to any breach of rule 12 or rule 37 and the determination of ground 2.
In the applicant's submissions dated 14 December 2017 pars 20 - 38 refer to matters relevant to ground 2. In paragraph 38 it was stated that the omission of original ground 2 in the proposed amendment was based upon the fact of allegation and denial with little corroborating evidence to assist in resolution of conflicting accounts of the conversation. More importantly, it recognised the history of negotiations set out in the McCabe file notes and concessions made within the instrument of consent, including the concession of a finding of professional misconduct.
Paragraph 27 referred to evidence produced upon summons from the defendant's solicitor which demonstrated that the respondent conducted settlement negotiations from 18 June through until 25 June 2015. The submission was made that the impugned conduct took place in the course of negotiations over days and with an apparently bona fide attempt by the respondent to explore the limits of settlement possibilities.
In par 34 reference was made to an email from the respondent to the defendant's solicitor seeking to explain the previous settlement negotiations by saying "it is my recollection that our discussions concerned proposals for settlement and were subject to the Plaintiff's ability to negotiate a waiver or reduction in the amount of the Workers Compensation recovery. As such, we do not consider that a binding settlement has occurred, but rather a canvassing of views as to the value of the claim while discussions were taking place with the Workers Compensation insurer, in relation to their recovery."
In par 36 it was stated that these attempts to qualify the offer ("we do not consider that a binding settlement has occurred") are inconsistent with the respondent having settled the matter because he preferred his own interests.
In par 74 of the applicant's outline of written submissions dated 14 November 2017, it was said that the complainant alleged and the respondent denied that during their conversation on 25 June 2015, the respondent accused the complainant of making a fraudulent claim (see ground 3). The submission went on to say that the applicant was not "in a position to know whether the accusation was made (sic) or not, pending cross examination."
However, in pars 75 and 76 of those submissions, it was submitted that by the time of this conversation the respondent would have been aware that it was in his own interests for the client to instruct the respondent to settle the matter on the terms already agreed by the respondent. Such instructions would mean that the respondent's action in negotiating a settlement without instructions might never come to light. This would be relevant to a consideration of any breach of rule 37 and the resolution of this ground.
The applicant's submissions dated 14 December 2017 do not make reference to ground 3.
Paragraphs 77 - 87 of the 14 November 2017 submissions refer to ground 4. Those pars made reference to the complainant and the respondent giving conflicting accounts of what was discussed in the conference held on 30 June 2015 and noted that the respondent had not advanced any contemporaneous record of the conversation.
Paragraph 80 referred to the fact that the respondent maintained his opinion that the client's best interests would be served by handing up consent orders giving effect to the settlement which he had reached earlier. The paragraph went on to say that the respondent further said that when discussing this in conference neither the instructing solicitor nor the complainant said anything in response which he took "to mean acceptance or acquiescence."
In par 81 the submission was made that even on this version, the complainant's consent was not freely given but was signified by silence in the face of advice that there was no certain way to avoid the settlement that he had never sought in the first place.
In par 87 it was submitted that the respondent's conduct involved a substantial failure to maintain a reasonable standard of competence and diligence. Thus the respondent engaged in professional misconduct.
Paragraphs 39 - 44 of the applicant's submissions dated 14 December 2017 refer to the omission of ground 4.
In par 39 it was submitted that ground 4 "alleged that the Respondent preferred his own interests in giving advice as to whether the settlement could be rescinded. This in turn referred to similar reasons set out in ground 2 (because it would be more remunerative for him) but also referred to the Respondent perceiving it to be in his own interests to settle so as to protect his own reputation."
Paragraph 41 notes that the complainant asserts and the respondent denies that the desire not to tarnish his reputation was something that the respondent raised on 30 June 2015.
In par 44 it was said that the omission of ground 4 in the proposed amended application was again, made in the context of an agreed position on an instrument of consent, a concession of professional misconduct and the potential difficulty in resolving conflicting evidence between complainant and respondent.
Ground 5 was the subject of submissions in pars 88 - 96 of the applicant's 14 November 2017 submissions. In par 89 it was said that the complainant gave an account of his discussion with the respondent which, if true, demonstrated that the complainant felt that he had no choice but to accept the offer. This was at least in part because of the respondent's advice that the outcome would be the same even if the respondent told the court that he had settled the matter without the complainant's knowledge or consent.
It was submitted in pars 92 and 93 of those submissions that this must have been a time of great stress and distress for the complainant and that the cumulative effect of these matters, known to the respondent, meant that he must have known it was a real question as to whether the complainant had genuinely and freely given his consent. In par 95 it was submitted that the complainant had eventually acquiesced in the settlement through his silence. But, it was submitted, his acquiescence was obtained because his will was overborne by the respondent and in those circumstances there was a real question whether the complainant had genuinely and freely given his consent.
The omitting of ground 5 was dealt with in pars 45 - 50 of the applicant's 14 December 2017 submissions. It was submitted that the complainant had been advised by his solicitor of the possibility of refusing the offer based upon the fact that it had been made without his consent and of continuing with the case with another barrister. The complainant thought the latter was impossible with such short notice.
In par 48 it was submitted that the complainant received some information from his mother which she asserted came from telephone enquiries to the Bar Association. It was submitted that this information apparently recognised the impropriety of the respondent's actions and the possibility of pursuing the respondent in negligence proceedings and/or putting a report in against the respondent.
In par 49 it was submitted that the complainant ultimately agreed to the settlement for a mix of reasons. One of those was because he felt he had no choice: he did not want to defend potential Supreme Court proceedings. The other reasons included that the best option was to take the settlement because he needed the money (he was in debt) and he listened to information relayed from his mother about possibly taking action against the respondent in the future.
In par 50 it was submitted that by the time the document was handed up in court the complainant had heard some advice about alternatives but elected to receive some money up front, avoid the risk of specific performance proceedings and later consider action against the respondent.

Respondent's outline submissions dated 14 December 2017

These submissions referred to certain statutory provisions, Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336, Jones v Dunkel [1959] HCA 8; (1959) 101 CLR 298 and Bar rule 64 and submitted that in the light of these laws and principles it would be unfair for the applicant to maintain and proceed to the hearing of the complaint and that it would be appropriate for the applicant and the Tribunal to withdraw serious allegations that were: (a) not supported by probative evidence; (b) contradicted by evidence that was difficult or impossible to rebut; (c) not fairly susceptible of the level of persuasion required by Briginshaw (see pars 6 - 12). The respondent further submitted that the evidence of all parties was highly unsatisfactory (see par 26) and that quite apart from inconsistencies between the evidence of the respondent and the applicant, the evidence of the witnesses for both parties was replete with internal inconsistencies. The submissions then gave illustrations of those inconsistencies (see par 28) and made submissions which were critical of the instructing solicitor.
In pars 31 - 33 it was submitted that the complainant, while otherwise credible, was also interested in the outcome of the proceedings because he has made a related compensation claim. It was submitted that his affidavit evidence was not in admissible form and was unclear and difficult to comprehend. The respondent therefore submitted that none of the witnesses was of unimpeachable credit and that the best evidence available to the Tribunal was that produced by persons the subject of summonses issued in October 2017 (subject to the earlier comments about the instructing solicitor's evidence). It was submitted that in this regard most of the agreed facts set out in the instrument of consent were supported by the records produced under summons.
In pars 37 - 43 the respondent made submissions in relation to the existing ground 2 to the effect that the inference that the settlement was entered into in preference of the respondent's interests was not supported by any evidence that the respondent preferred his own interests. Rather, the evidence was that the respondent acted in an unguarded manner. It was submitted that it was unfair to maintain the allegation and that the Tribunal would be satisfied that it is reasonable to withdraw this aspect of the complaint.
In relation to the existing ground 4 it was submitted in pars 46 - 47 that the allegation that the advice about rescission was given to facilitate settlement was not disputed and it was submitted that advice given for that reason was not, of itself, improper. The respondent also advised the complainant that he was entitled to sue the respondent.
It was submitted that the only evidence capable of supporting the allegation that the respondent gave the advice to the complainant to protect his reputation was that given by the complainant. It was submitted that even that evidence was not directly to that effect. It was the complainant's evidence that the respondent refused to tell the court that he had accepted the offer without instructions. It was submitted that if proved, that conduct may be capable of supporting an inference that the respondent refused to tell the court certain information to protect his reputation, not that the rescission advice was given for that reason (see pars 49 - 50).
It was submitted that the only evidence to support that allegation was that provided by the complainant. That evidence was denied by the respondent and that it was unknown whether the instructing solicitor witnessed the alleged statement. The respondent submitted that there was no proper basis for maintaining the allegation and that it was unfair to do so. It was submitted that the Tribunal should be satisfied that it is reasonable to withdraw this aspect of the complaint (see par 51).
In relation to the existing ground 5 it was submitted that it was the complainant's evidence that on 30 June 2015, he did consent to the settlement, having obtained advice from the instructing solicitor, the respondent, his mother and the Bar Association. His consent was, in the respondent's submission "genuine and free" and that at the time the respondent understood it to be genuine and free (see par 57).
The respondent submitted that analogy between undue pressure and the equitable doctrine of undue influence was of limited utility in the disciplinary context. It was noted that the agreed facts concede undue pressure and do not concede undue influence or any of its elements, including that the respondent unconscionably took advantage of his relationship with the complainant to benefit himself. The respondent conceded that the pressure was in part due to his conduct in not disclosing to the client on 25 June. However he did disclose his conduct to the instructing solicitor within 24 hours of making the settlement (see par 60).
The respondent submitted that the evidence did not support the allegations amounting to a case that he deliberately contrived circumstances in his own interests by: (a) settling proceedings, then (b) not disclosing the settlement and (c) creating intolerable pressure on the complainant. Those features of the application should be amended (see pars 61 - 62).
It was submitted that the instrument of consent accepted the respondent's liability for settling the proceedings, and his liability for creating circumstances where the complainant required independent advice but did not get it (see par 63).

The proposed instrument of consent

In this instrument the consent of the parties was described as follows: The NSW Civil & Administrative Tribunal having found that the conduct of Ross Gerard Hanrahan described in the grounds for application and particularised in the annexed Agreed Statement of Facts amounts to professional misconduct makes, by consent, the following orders: 1. The Respondent is reprimanded. 2. The Respondent is to pay the Applicant's costs as agreed or assessed. 3. The application to be listed on a date to be fixed after publication of reasons for decision, for directions as to further proceedings in relation to the complainant's claim for compensation.
The instrument then set out a statement of agreed facts, some agreed meanings and interpretation, the relevant law and a history.
The statement of agreed facts was in the following terms: The Respondent engaged in professional misconduct in that: a. He settled Court proceedings without the client's instructions five days before the scheduled commencement of the hearing of the proceedings; b. He did not immediately inform the client of the fact that he had settled the proceedings on the client's behalf; c. The client was not informed that the Respondent had settled the proceedings without instructions until the day before the hearing; d. On the first day of the hearing, the Respondent advised the client that it would be difficult to withdraw from the settlement and the client would otherwise have to meet the costs of commencing proceedings to set aside, or defending proceedings to enforce, the settlement, e. As a consequence of this conduct: (i) the client did not have an opportunity to obtain independent legal advice in relation to the settlement or the proceedings or retain alternative counsel in the intervening period; (ii) the client was under improper pressure to acquiesce in the settlement on the day of the hearing.
The history described relevant events from 20 February 2014 when the respondent was briefed by the instructing solicitor to act on behalf of the complainant. For present purposes pars 1 - 3 of the history do not require restatement and pars 4 - 8 are recorded in pars 12 - 15 above. As par 21 of the history makes a reference to "the circumstances set out above" we record here pars 9 - 22: 9. The Barrister had arranged a meeting at his chambers with the Complainant and the Solicitor to commence at 4:00pm on 25 June 2015. The Solicitor did not arrive for the meeting until after the Complainant had left, and the conference proceeded between the Barrister and the Complainant, in her absence (Hanrahan affidavit [49], Donato affidavit pages 9 & 10). 10. The Barrister met with the Complainant and, first, advised him as to prospects and risks of proceeding and, secondly, that an offer (only) had been made of $180,000 inclusive (Hanrahan affidavit [50-54], Donato affidavit pages 9 & 10). The Complainant rejected that offer (Hanrahan affidavit [54], Donato affidavit page 10). The Barrister did not inform the Complainant that the matter had already settled for that amount (Hanrahan affidavit [50]). 11. On the evening of 25 June 2015 the Barrister met with the Solicitor and advised her as to the content of the conference with the Complainant and that an offer (only) had been made of $180,000 inclusive. The Barrister did not inform the Solicitor that the matter had already settled for that amount (Geronimo affidavit page 9). 12. Later on the evening of 25 June 2015 the Solicitor received an email from the Complainant rejecting the offer of $180,000, which she forwarded to the Barrister. (Applicant's book 228) 13. On 26 June 2015: a. The Solicitor met with the Complainant and obtained written instructions to reject the offer of settlement of $180,000 (Applicant's book 228). b. The Solicitor for the Defendant wrote to the Barrister and the Solicitor confirming the terms of settlement and notifying them that the Defendant would enforce the agreement by way of proceedings in the Supreme Court for specific performance (Hanrahan affidavit [Annexure "B"],Applicant's book 282-283 and 284-286). c. The Solicitor denies receiving "the email" from the solicitor for the Defendant (Applicant's book 188). d. The Solicitor advised the Barrister of the complainant's instructions to reject the offer and the barrister said it was too late as the solicitors for the Defendant would not change their position (Applicant's book 227). e. The Respondent emailed the Solicitor with a written advice as to prospects and evidence and forwarded to her the email from the solicitor for the Defendant confirming the terms of settlement (Applicant's book 188 and 297-300). 14. On 29 June 2015 the Barrister spoke to the Solicitor, confirmed that the proceedings had settled, and told her accurately and fully what had occurred in relation to the settlement negotiations (Hanrahan affidavit [58]). 15. On 29 June 2015 the Solicitor informed the Complainant that the matter had been settled for $180,000 (Hanrahan affidavit [58-60], Donato page 11, Geronimo affidavit page 11, Geronimo affidavit page 9, Applicant's book p 188). 16. Later on 29 June 2015, the Complainant called the Barrister on his mobile phone. In the course of that conversation the Barrister said to the Complainant that he had settled the matter for $180,000 without instructions, and said words to the effect that he had made a mistake and that the Complainant could sue him for it (Hanrahan affidavit [59]). The Complainant refused to accept the settlement (Hanrahan affidavit [59], Donato affidavit page 11). 17. At about 9:00 am on 30 June 2015 the Barrister advised the Complainant of his options in relation to the settlement and advised him to accept the settlement both because it was in the Barrister's opinion the best result he was likely to achieve if the matter did proceed to hearing and because the costs of a specific performance suit would erode that amount regardless of whether he won or lost (Hanrahan affidavit [60, 62-64). 18. At about 11 am on 30 June 2015 the Barrister, the Solicitor and the Complainant discussed the settlement and the proceedings again after the Barrister negotiated a reduction of the workers compensation payback to $100,000. The Barrister said to the Solicitor and the Complainant "I admit I made a mistake. I'm sorry but we need to act now as I have to go back into the court room" (Reply [55(a)]). The Barrister reiterated his advice that it was in the Complainant's best interests to accept the settlement rather than seek to vacate the hearing date or to take other action which would lead to him being involved in a contested specific performance suit. Neither the Complainant nor the Solicitor said anything in response, which the Barrister took to be their acquiescence (Hanrahan affidavit [61,67-68]), Applicant's book 272-273). 19 The Complainant consented to the settlement (Donato affidavit page 12; Applicant's book 205). 20. The Barrister then signed the terms of settlement, in the amount of $180,000 inclusive, and handed them up in Court, obtaining consent orders giving effect to the settlement (Hanrahan affidavit [68], Applicant's book 272 - 273). The effect of the Barrister's actions 21. The Barrister accepts and agrees that: a. On 25 June 2015 there was a want of due care and diligence on his part in framing a proposal for settlement as an offer capable of acceptance; b. That by his failure to inform the Complainant on 25 June 2015 and, in the circumstances, his failure to ensure, between 25 and 29 June 2015, that the Complainant was informed of the settlement, the Complainant was not provided with a reasonable and adequate opportunity to consider his position and take independent advice, based on the full knowledge of the facts; and c. The acquiescence of the Complainant occurred under the undue pressure of the hearing being about to commence and in the circumstances set out above. 22. The Barrister acknowledges and agrees that: a. The manner in which he framed the proposal for settlement constitutes unsatisfactory professional conduct, and b. That taken in its entirety, the unsatisfactory professional conduct, aggravated by the delay in making a timely disclosure to the Complainant, created undue pressure on the Complainant to adopt the settlement, involved a substantial failure to maintain a reasonable standard of competence and diligence for the purpose of s 297 (1) (a) of the Legal Profession Uniform Law and therefore amounts to professional misconduct.

History of s 140 of the Application Act

In 1993 the Legal Profession Reform Act 1993 inserted s. 167 into the Legal Profession Act 1987. Section 167 made provision for the institution of proceedings and hearings in the Legal Services Tribunal but no provision was made for variation of the information which instituted the proceedings. On 24 October 1996, the Attorney General the Honourable J W Shaw made the following statement during the Second Reading Speech for the Legal Profession Amendment Bill (No.2): It was also suggested by the tribunal that the Act be amended to allow the Legal Services Tribunal to amend a complaint so as to enable the formal complaint to be varied or a fresh matter to be added having regard to the developments in the course of a hearing. An example where such a power would be desirable would be in cases in which evidence before the Tribunal raises the suggestion that the respondent practitioner may have misled the investigating Council, the Commissioner, or the Tribunal itself. Proposed new s. 167A deals with this issue. The power to vary the complaint will be at the application of the Commissioner or relevant Council, and proposed new s 167 A(2) will require the Tribunal to have regard to issues of fairness when determining whether to allow the variation.
The bill was passed and s. 167 (A) was inserted in the Legal Profession Act 1987. Section 167 (A) was in the following terms: 167A Tribunal may vary an information (1) The Tribunal may, on the application of a Council or the Commissioner who laid an information, vary the information laid so as to omit allegations or to include additional allegations if the Tribunal is satisfied, having regard to all the circumstances, that it is reasonable to do so. (2) Without limiting subsection (1), when considering whether or not it is reasonable to vary an information, the Tribunal is to have regard to whether varying the information will affect the fairness of the proceedings.
The Legal Profession Amendment (Complaints and Discipline) Act 2000 inserted s. 167A (3) into the Legal Profession Act 1987. That subsection was in the following terms: (3) The variation of an information by the Tribunal to include an additional allegation is not precluded because the alleged conduct concerned occurred more than 3 years before the variation is made.
The Legal Profession Act 1987 was repealed by the Legal Profession Act 2004. Section 555 of that Act relevantly provided: (1) The Tribunal may vary a disciplinary application, on the application of the person who made the disciplinary application or on its own motion, so as to omit allegations or to include additional allegations, if satisfied that it is reasonable to do so having regard to all the circumstances. ………… (3) Without limiting subsection (a), when considering whether or not it is reasonable to vary a disciplinary application, the Tribunal is to have regard to whether varying the disciplinary application will affect the fairness of the proceedings. (4) The inclusion of an additional allegation is not precluded because the additional allegation has not been the subject of a complaint or an investigation. (5) The variation of a disciplinary application by the Tribunal to include an additional allegation is not precluded because the alleged conduct concerned occurred more than three years before the variation is made.
The Legal Profession Act 2004 was repealed by s. 167 (a) of the Application Act with effect from 1 July 2015.
It appears reasonably clear from the 1996 Second Reading Speech and s. 167A inserted in the Legal Profession Act 1987, that the reason why the Tribunal was given the power to amend the initiating information, was to ensure that the Tribunal was able to deal with developments in the course of the hearing. The same reasoning appears to apply to the current s. 140 of the Application Act.

Should the application be varied

In pars 12 - 14 of the applicant's submissions dated 14 December 2017 it was stated: (12) What is "reasonable" must take into account what is proposed upon amendment being permitted. What is proposed here is that the matter resolve on the basis set out in the Instrument of Consent. This represents a pragmatic approach to the resolution of the proceedings: the Respondent is to be held to account for the conduct that he has come to concede during the course of the proceedings. (13) This is not to suggest that a pragmatic approach to resolution should be determinative as and of itself. The Tribunal will also have regard to the state of the evidence and the original pleadings. (14) This is in light of the fact that the Uniform Law 2015 permits the Applicant to initiate proceedings if of the opinion that the alleged conduct "may" amount to unsatisfactory professional conduct (in circumstances set out in s. 300 (1)) or professional misconduct. As set out in submissions of 14 November 2017, this is in contrast to the position under the Legal Profession Act 2004 and the s.552 (6) (a) requirement of a reasonable likelihood that the Respondent would be found to have engaged in unsatisfactory professional conduct or professional misconduct.
The respondent submitted that where, as here, the availability and probity of evidence is an issue, and the applicant is not a lay litigator but is specialised in assessing the strength of its case, the views of the applicant (and the consent of the OLSC) carry particular weight.
In Council of the New South Wales Bar Association v Breeze [2015] NSWCATOD 152 at [20] the Tribunal concluded that the approach of the predecessor of this Tribunal in Council of the New South Wales Bar Association v Butland [2009] NSW ADT 177 remains applicable. In Butland the Tribunal stated at [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 "rubberstamp" - 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.
Prior to the parties reaching the agreement recorded in the instrument of consent, they were at issue on the following questions: 1. Had the respondent engaged in professional misconduct. 2. Did the respondent agree to the settlement because he preferred his own interests over the complainant's interests. In particular did the respondent tell the complainant that he wanted to settle for whatever amount they could get before the hearing as he had four other cases at the same time that he would rather spend time on and if the respondent went to court for the complainant's matter he would lose money. 3. Did the respondent accuse the complainant of making a fraudulent claim. (The applicant acknowledged that it was not in a position to know whether the accusation was made out or not pending cross examination). 4. On 30 June 2015 did the respondent give the complainant advice as to whether the settlement could be rescinded which preferred the respondent's interests over the complainant's interests because it would be more remunerative for the respondent if the hearing did not proceed. (The applicant acknowledged that the omission of ground 4 was made in the context of an agreed position on the instrument of consent, a concession of professional misconduct and the potential difficulty in resolving conflicting evidence between the complainant and the respondent.) 5. Did the respondent mislead the court on 30 June 2015 as alleged in ground 5.
As is made clear by the applicant's submissions dated 14 December 2017, the agreement reached between the parties resolves in favour of the applicant disputed questions of fact and brings about a situation where the respondent accepts now that his conduct amounts to professional misconduct. The reaching of that agreement is a matter that deserves considerable weight.
The complainant was under pressure from 29 June 2015 because the respondent had not told him he had settled the case and the complainant only learned of that fact on 29 June when informed of it by the instructing solicitor.
Despite that pressure we are of the view that if the Tribunal conducted a hearing into the complaint the evidence might well support a finding that the complainant had genuinely and freely given his consent to the settlement - see the transcript of evidence referred to below of the conversations which the complainant had at court on 30 June 2015 with the respondent and with his mother. However, more importantly, we are of the view that having regard to all the circumstances, it is reasonable to vary the application in the manner sought by the applicant.
In particular we have had regard to the oral evidence given to the Tribunal by the complainant and to the circumstances that the instrument of consent and the variation of the application will result in a finding that the respondent engaged in professional misconduct.

Transcript of complainant's evidence

The complainant gave evidence that during a conversation with the instructing solicitor on the evening of 29 June 2015, she gave him three options namely he could refuse the offer based on the principle that the respondent accepted without his consent. Secondly the instructing solicitor told him about an option of trying to get the insurance company to agree on a counter offer before the hearing and thirdly that he proceed with the case but try to get another barrister to take over (T2/15 - 40).
The complainant gave evidence that at court on 30 June, he had various discussions with the respondent during the course of the morning (T2/45 - 47). He gave evidence that he asked the instructing solicitor what she thought he should do and she replied that if he was not sure of what to do, he should contact his family (T3/11 - 20). The respondent then contacted his mother by telephone and at first she was not too sure what the complainant might do and because he was a mess and she was stressing, she called the Bar Association. His mother called him soon thereafter and passed on information she had received from the Bar Association which included that he could put in a report against the respondent and take further action (T3/26 - 4/24).
He gave evidence that he then had a discussion with his mother about what he should do in light of the information that she received from someone at the Bar Association. He was asked: "Did you have a conversation with your mum about the possibility of taking a settlement offer, of settling the matter for $180,000 inclusive as the respondent had negotiated." The complainant replied: "Yes we discussed it and agreed" (T 4/30 - 38). He was asked what did he agree and he replied: "Well based on what Ross had advised me that morning that the best option was to take the money because we had no other choice as we didn't want to have a court case sued up against us from the opposition and that we could continue the report against Ross later on if we wanted to." He was asked: "Did your mum say something to you to the effect that if you need the money now, maybe you should take it?" The complainant replied: "Yes because I was in debt, she'd help me through the five years of being injured and obviously as a son I felt bad" (T 4/40 - 49).
The complainant gave evidence that there were in effect three reasons why he wanted to accept the settlement. One was because he was in debt and needed money. A second was that his mother had given him some advice that she had received from the Bar Association, which included that he could take some action in the future if he wanted to. The third reason was because he had no choice (T 6/35 - T 7/7).
Counsel for the applicant questioned the complainant about part of the letter written by the complainant to the office of the Legal Services Commissioner (T2/49 - 3/6). That part was in the following terms: "The Barrister then told me that if I refuse this offer that the judge would enforce the order as he had accepted this offer on my behalf, which means that it would then have to be heard in the Supreme Court. The barrister also told me that I should accept this offer so at least have something because no matter what happens they would enforce the order, so it's better for me to have something in my hand now, rather than the insurance company keep it in the meantime whilst they enforce the order." The complainant was asked by counsel for the applicant did that remain his recollection of the advice that the respondent gave and complainant answered: "That is correct" (T3/ 8 - 9).

Should a reprimand be ordered

The main purpose served by disciplinary proceedings is protective. Disciplinary proceedings aim to protect members of the public from misconduct by lawyers (Lawyers' Professional Responsibility - Dal Pont, 5th Edn [23.20]). The protection of the public is not confined to the protection of the public against similar default by the lawyer in question. It extends also to the protection of the public against similar defaults by other lawyers and has, in this sense, the purpose of publicly marking the seriousness of what the instant lawyer has done (Law Society of New South Wales v Foreman [1994] NSWCA 69; (1994) 34 NSWLR 408 at 441 per Mahoney JA).
Here the respondent made a serious mistake in making the offer to McCabes. He did not expect it to be accepted. He further acted contrary to his duty to the complainant when he did not immediately tell him and the instructing solicitor that the offer had been accepted.
The Legal Services Commissioner indicated that he had no objection to the matter being finalised on the basis of the proposed Instrument of Consent. The Commissioner also indicated (and as was submitted by the applicant) in circumstances where the respondent had admitted his mistake, the conduct appeared to be an isolated incident, there was no record of any previous disciplinary action having been taken against the respondent and a recurrence of the conduct seemed unlikely, a reprimand seemed in order.
A reprimand is a serious matter. It marks the disgrace of a member of an honourable profession inherent in the misconduct (Solicitors Manual - The College of Law - Vol 1 [33060, F/N 3 and 4]). In our view a reprimand is an appropriate order to be made.

Exhibits

The proposed instrument of consent provided by the applicant to the Tribunal will be exhibit D. The proposed amended application for disciplinary findings and orders provided by the applicant to the Tribunal will be exhibit E.

Orders

The Tribunal makes the following finding and orders: 1. Upon the applicant filing a signed instrument of consent in the terms of exhibit D, the Tribunal grants leave to the appellant to file an amended application for disciplinary findings and orders in terms of exhibit E. 2. Upon the applicant filing an amended application for disciplinary findings and orders in terms of exhibit E, the Tribunal finds that the respondent engaged in professional misconduct within the meaning of s. 297 of the Legal Profession Uniform Law (NSW) by his conduct set out in the statement of agreed facts recorded in the filed and signed instrument of consent. 3. An order pursuant to s. 299 of the Legal Profession Uniform Law (NSW) that the respondent be reprimanded. 4. An order that the respondent pay the applicant's costs as agreed or assessed. 5. An order that the claim for compensation by the complainant Mr Michael Donato be listed before the Tribunal for directions. 6. Liberty to apply.

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: 23 March 2018

Legal Profession Act 1987(NSW)

Legal Profession Reform Act 1993(NSW)

Legal Profession Amendment (Complaints and Discipline) Act 2000(NSW)

Legal Profession Act 2004(NSW)

[2015] NSWCATOD 1521

At a glance

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Judgment (25 paragraphs)

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Legislation Cited (5)

Cases Cited (10)

Cited By (3)