Legal Practitioners Act 1893, s 15, s 20(b), s 29A(2)(a), s 77, s 81

1 JOHNSON J: In this matter the Legal Practice Board seeks orders that the respondent be punished for contempt of this Honourable Court in that, not being a duly certificated legal practitioner during the period from September 1998 to September 2000, he did carry out work in connection with the administration of law. More particularly, he obtained and acted on instructions from Michael Murray on behalf of Australian Kiosk Enterprises Pty Ltd to make a claim for damages for breach of contract and breach of warranty arising out of the purchase by that company of a motor vehicle from Allan Batterham trading as Maddington Motors. It is further alleged against the respondent that in the course of carrying out Mr Murray's instructions, he drew and prepared correspondence relating to Australian Kiosk's interest in the motor vehicle. At the hearing of this action, the respondent admitted the allegations made against him.

2 The complaint against the respondent is laid pursuant to s 77 and s 81 of the Legal Practitioner Act 1893. Section 77 of the Act relevantly provides that only certificated legal practitioners are entitled to carry out work in connection with the administration of the law. The expression "administration of the law" means the practice of law: The Barristers Board v Palm Management Pty Ltd [1984] WAR 101 at 107; The Legal Practice Board v Said [2002] WASC 35 at [12]. Carrying out work in connection with the administration of the law includes advising others in relation to legal and contractual obligations, rights and powers, whether it be as to the creation, exercise or effect thereof, and the preparation of documents to give effect to, or pursuant to, such advice: The Barristers Board v Central Tax Services Pty Ltd & Anor (1984) 16 ATR 115 at 117; Kwa v The Barristers Board [1994] ANZ ConvR 331 at 333. Section 81 of the Act relevantly provides that every person who acts contrary to the terms of s 77 shall be guilty of a contempt of the Supreme Court and may be dealt with accordingly.

3 Whilst sometimes referred to as the monopoly provisions, these and related provisions of the Act exist for the protection of the public and not for the protection of legal practitioners. They are designed to ensure that the public receives legal advice and representation only from those who are properly qualified, are fit and proper and in every respect a person of good fame and character as required by s 15 and s 20(b) of the Act. The public are entitled to be assured that those who undertake the important task of advising and representing them in relation to their legal affairs not only have sufficient knowledge to do so, but are also bound by ethical restraints and standards of responsible conduct. It is also important to keep in mind that, where a certificated practitioner acts on behalf of a person, he or she is liable in negligence if damage results from any failure on the practitioner's part to meet objective standards of competency. That is a further protection to the public in having their legal needs met only by certificated practitioners.

4 The facts of this matter are relatively straightforward. In approximately May 1995 the respondent and his wife registered the business name "Civil Claims Australia". The nature of the business is said to involve arbitration and mediation services. I note from the outset that the title of the business is, in my view, problematic and should have been seen as such by the respondent. In its terms it is likely to lead to clients making assumptions as to the type of service to be provided and also to create the potential to infringe the Legal Practitioners Act because of the often close connection between attempting to achieve a mediated solution to a legal problem and identifying and assisting a person to deal with that legal problem. I am advised that the name of the business has now changed to "Work Claims Australia" and that the respondent is now a registered industrial agent.

5 In March 1998 Mr Murray, through his company, purchased a car which was said to have had a reconditioned engine, but which broke down shortly after sale. Mr Murray wanted assistance in dealing with the car yard, Maddington Motor Homes, from which he had purchased the car. On 1 September 1998, Mr Murray attended on the respondent and gave to him details of the purchase of the car and its use after purchase and other relevant information. In a letter dated 15 September 1998 addressed to Mr Murray the respondent set out the instructions received, advised Mr Murray:

"... that you have a good claim against Maddington Motors and we can offer our expertise in mediation and negotiation to reach a speedy settlement of such claim".

6 He sought further instructions and requested "a deposit of $1,000 to enable us to get started on your case".

7 On behalf of Mr Murray, the respondent wrote to Maddington Motor Homes describing himself as the claims consultant and indicating that Mr Murray was making a claim against the business for breach of contract and breach of warranty. In the letter the respondent identified what he considered to be "just compensation", including Civil Claims Australia's fees in the matter of $1000. In the subsequent correspondence repeated requests were made for a meeting to attempt to resolve the claim. In later letters reference was made to court proceedings should the claim not be resolved. On 23 December 1998 the respondent, on Mr Murray's behalf, met with a representative of Maddington Motor Homes. The matter was not resolved and a summons issued. That aspect of Mr Murray's claim was dealt with by the respondent's former wife and daughter, both of whom are certificated practitioners. No adverse conclusion is drawn against the respondent in relation to this aspect of Mr Murray's case.

8 It can be seen from this brief summary that not only did the respondent provide legal advice to Mr Murray, including identifying his cause of action and the quantum sought to be recovered, the respondent acted on Mr Murray's behalf in attempting to enforce the legal right of which he had advised. For that service he was paid a total of $3000.

9 At all material times the respondent was suspended from legal practice. In 1988 the respondent was convicted of false pretences in relation to the sale of equipment under hire purchase. He was convicted after trial and sentenced to 18 months' imprisonment. On 18 April 1994 the Legal Practitioners Disciplinary Tribunal suspended him from practice and made a report to the Full Court under s 29A(2)(a) of the Act. In October 1999 the respondent was convicted, after trial, of stealing funds from his trust account over a period from December 1992 to December 1993. On 2 May 2001 he was struck off the Roll of Practitioners. It can be seen from this summary that the contempt, which the respondent has admitted, occurred after he had been suspended from practice, but before his name was removed form the Roll of Practitioners.

10 I am advised by counsel for the applicant that this is the first case brought by the Legal Practice Board against a suspended legal practitioner for performing legal work contrary to the Act. It is said that the penalty imposed should be real and substantial so as to deter others by sending a clear message that such conduct will not be tolerated. The penalties imposed upon those who engage in legal work that are not, and have never been, legal practitioners are usually by way of a relatively small fine. The low level of the fine is often a recognition of the fact that the contemnor is unaware that the law has been breached and that the contempt arose out of a desire to assist another: see, for example, Legal Practice Board v Rogers [1999] WASC 106. Counsel for the applicant submitted that a fine in the range of $7500 to $10,000 would be appropriate in circumstances such as this, particularly where the contemnor has acted for commercial gain. The applicant did not suggest that a term of imprisonment would be justified in this case.

11 The respondent is 58 years old. He is married with eight children; two adult children and six children between the ages the ages of five to 17 years with his current wife. He presently earns $30,000 per annum and Mrs Mullally currently works two hours per week as a teacher. His assets are the family home in Joondalup and a home unit. However, each property is fully mortgaged. There is no equity upon which to base further borrowings.

12 It is said on his behalf that the respondent has had a succession of crises and has led a knife-edged existence. In 1984 he was both in practice and involved in a commercial business venture in the Northern Territory. His brother and sister-in-law were killed in a traffic accident, as a result of which the respondent took responsibility for their two children. Over time his marriage deteriorated, as a result of which his business in the Northern Territory was neglected and the first criminal charges arose from that time. In 1988 he was divorced and was also declared bankrupt. In 1991 he was charged with the false pretence. In 1992 and 1993 he was in practice on his own account when he paid fees from the trust account without authorisation. There was also no proper rendering of accounts. In 1994 he was imprisoned and served six months.

13 On his release he was encouraged by the parole authorities to re-establish himself and a LEADR course in alternative dispute resolution was suggested. In May 1996 he completed that course and commenced working for Civil Claims Australia. It was submitted, and I accept it to be the case, that the clear focus of the letters prepared and sent by the respondent was to achieve a mediated outcome to Mr Murray's complaint and not to resort to litigation.

14 I have greater difficulty with the proposition that the respondent was extremely conscious of drawing the line between that which he was entitled to do to assist Mr Murray and that which he was not. There is no admissible evidence before the Court to support a conclusion that the respondent deliberately set out to practise as a lawyer in breach of the Act. Further, at one point in the correspondence with Maddington Motor Homes the respondent made a clear reference to "sending this matter off to our client's solicitors". However, as a former practitioner, he should have been aware of the constraints upon him and the risks he was running in approaching his work for Mr Murray in the way that he did.

15 I also have a little difficulty with the assertion that the respondent is remorseful for his actions. Insofar as remorse is evidenced by acceptance of wrongdoing, I note that the respondent did not admit the allegations against him until the hearing had commenced and some preliminary matters addressed. Nevertheless, he has admitted his contempt without the need for the applicant to prove the allegations made against him and I take that into account in fixing the penalty to be imposed upon him.

16 Finally, it is submitted that this combination of the name change of the firm and the respondent's registration as an industrial agent should allay the Court's concerns about the likelihood of a repeat of the offending conduct because the respondent now has a source of employment which puts his skills to use, but is not in breach of the Legal Practitioners Act.

17 Counsel for the applicant submitted that the penalty imposed should reflect the fact that the matter before the Court was not a "one-off" event. I am unable to accept that submission. The respondent has not been found to have committed other contempts and has made no such admission. To treat this act of contempt as other than a single event would be to deprive the respondent of the opportunity of a fair hearing in relation to other allegations. Accordingly, the penalty imposed will reflect only the conduct currently before this Court.

18 I have mentioned the purpose of the provisions of the Legal Practitioners Act which, in my view, is a clear indicator of the seriousness with which the respondent's conduct should be viewed. As I have said, a lay person who acts in breach of the relevant provisions of the Act is often unaware of how seriously such conduct is viewed or, indeed, that it is a breach of the law. The same cannot be said of someone who was once a legal practitioner. The respondent knew that he was not entitled to perform legal work and should have been well aware of the reasons behind the statutory requirement for only certificated practitioners to represent people in their legal affairs. The level of his caution when dealing with Mr Murray should have been high indeed.

19 I accept the applicant's submission that the key issue in determining penalty in this case is deterrence. Protection of the public is both a component of that issue and a separate and essential consideration. Accordingly, the fine imposed must be sufficiently high to achieve those aims. One difficulty facing the Court is the fact of the respondent's poor financial position. It would appear that he has no significant assets or savings from which a find could be paid. I am also advised by counsel for the applicant that there are a number of outstanding sums which the respondent is paying by instalments, but is either unwilling or unable to regularly meet that commitment. Following the hearing, I was advised by the respondent's solicitors, with the consent of counsel for the applicant, that members of the respondent's family were willing to lend him up to $10,000 to pay any fine which may be imposed by this Court. Although I have some reservations about whether imposing a fine in such circumstances will indeed have the desired deterrent effect, the penalty options in contempt proceedings are somewhat limited.

20 In my view, a fine of $10,000 would be appropriate where there is no history of breaching the Act, the conduct is deliberate and has resulted in financial gain. In this case I consider there are a number of mitigating factors, in particular that the conduct, although somewhat reckless and definitely careless, was not deliberate, the fact that the respondent admitted the allegations without putting the applicant to proof and that he has changed his circumstances so as to minimise the risk of a repeat of the conduct. For these reasons I would reduce the penalty in this case to $8000.