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[2007] WASAT 86
General information, not legal advice.
State Administrative Tribunal (WA)
2007-04-13
Original judgment source is linked above.
ACT : LEGAL PRACTITIONERS ACT 1893 (WA)
CITATION : LEGAL PRACTITIONERS COMPLAINTS COMMITTEE and CHANG [2007] WASAT 86
BETWEEN : LEGAL PRACTITIONERS COMPLAINTS COMMITTEE
Professions Legal practitioner - Legal practice Unsatisfactory conduct Deposit of client's cheques into personal bank account Failure to make adequate record of client's cheques Cashing of client's cheques and retention of cash in personal safe
Applicant : Legal Practitioners Complaints Committee
1 The Legal Practitioners Complaints Committee made three allegations against Ms Christina Maria Chang, a legal practitioner (the practitioner), each of which arose out of the practitioner's dealings with two cheques a client made payable to the practitioner personally.
2 The Committee and the practitioner reached agreement on the facts relating to the allegations and the practitioner accepted that certain findings should be made against her.
3 The Tribunal found the practitioner guilty of unprofessional conduct by receiving cheques from a client and depositing them in her personal account, by failing to make an adequate record of the receipt of the cheques and by setting aside the funds from the cheques while failing to take steps to ensure that the cash was promptly dealt with. The Tribunal also found the practitioner guilty of unprofessional conduct by failing to make an adequate record of the receipt or disposition of the client's funds.
4 The Tribunal reprimanded the practitioner, imposed a fine of $6000 and ordered that she pay the Committee's costs, agreed at $25 000.
5 This proceeding commenced as one involving three allegations, the first of which was an allegation of stealing, where a client of Ms Christina Maria Chang (the practitioner) had provided her with two cheques to be used in particular ways, together with an authority as to how those cheques or moneys were to be used. Soon after the hearing of the proceeding commenced, the parties resolved between them the factual basis upon which the practitioner accepted that certain findings should be made against her. A statement of agreed facts was given to the Tribunal, as a result of which the allegation of stealing was withdrawn. The Tribunal then indicated it was prepared to act on that statement of agreed facts.
6 The statement of agreed facts provides as follows.
7 The practitioner is, and has at all material times been, a certified legal practitioner.
was employed between approximately July 1990 and 30 June 2001 by the law firm Murie & Edward;
upon the dissolution of Murie & Edward, was employed between approximately 1 July 2001 and 1 March 2002 by the law firm Verschuer Edward; andhas been employed by the law firm Wojtowicz Kelly since approximately 5 March 2002.
9 From about March 2001, and in the course of her employment with Murie & Edward, the practitioner commenced to act for a client in relation to proposed Family Court proceedings and related property issues.
10 On about 24 April 2001 the practitioner by letter requested the client to forward to the practitioner:
a bank cheque for $750 payable to TP, a law firm in Malaysia; and
11 The practitioner sought from the client the cheque payable to TP for the purpose of an initial deposit to that firm to conduct searches in Malaysia to ascertain the real estate and other assets held by the client's husband.
12 The practitioner sought from the client the cheque payable to the Family Court for filing fees.
13 On about 30 April 2001, TP faxed to the practitioner an invoice for the professional fees incurred by that firm for the period 3-30 April 2001 in the sum of US$853.33 in respect of searches conducted on behalf of the client.
14 On or shortly after 1 May 2001 the client handed to the practitioner:
a cheque dated 1 May 2001 in the sum of $750 made payable to the practitioner; and
a cheque dated 1 May 2001 in the sum of $156 made payable to the practitioner.
15 On about 4 May 2001 the practitioner deposited the cheques which the client had given her into the practitioner's personal bank account. This was in accordance with written instructions from the client dated 1 May 2001.
16 The practitioner put cash of $750 and $158 into two separate envelopes and placed them in one envelope which she put in a safe for the purpose of being dealt with as she had been instructed by the client, the $158 being for an anticipated court filing fee, and the $750 being for the payment of disbursements for professional fees to another law firm, S & Co in Perth.
17 On about 17 May 2001, the practitioner received from TP a statement of account in relation to the invoice or invoices it had previously rendered to Murie & Edward.
18 On about 25 May 2001, the practitioner paid into Murie & Edward's trust account $158 in cash on behalf of the client.
19 The practitioner did not at any time pay $750, or any other amount other than $158, into Murie & Edward's trust account on behalf of the client.
20 On about 10 September 2002 the practitioner paid to the law firm S & Co $750 in cash, in payment of an invoice rendered by that firm to the client on or about that date.
21 The practitioner accepts that it was unprofessional conduct for her to:
Receive cheques from her client, which the client made payable to her, and deposit them into her account (albeit on the client's instructions and authority).
Make no record of the receipt of the cheques other than to retain a copy of the cheques, and the client's written authority.Set aside the $750 in cash, as she did, and not to take steps to ensure that the $750 cash was dealt with promptly by obtaining an invoice from S & Co and paying it, and failing that to seek the client's instructions as to the disposal of the money.
22 Further, the practitioner accepts that she breached s 37(1)(c) of the Legal Practitioners Act 1893 (WA) in that she did not make an adequate record of the receipt or the disposition of the $750 from the client.
23 In light of the agreed facts, the parties also agreed and the Tribunal proceeded to find:
(a) received cheques from her client, which the client made payable to her, and deposited them into her account, albeit on the client's instructions and authority;
(b) made no record of the receipt of the cheques other than to retain a copy of the cheques and the client's written authority; and
(c) set aside the $750 in cash, as she did, and did not take steps to ensure that the $750 cash was dealt with promptly by obtaining an invoice from another firm of solicitors and paying it and, failing that, to seek the client's instructions as to the disposal of the money.
24 At the hearing on 21 and 22 March 2007, following the agreement of facts and the making of the findings, the Tribunal heard submissions on penalty and delivered its decision on penalty. The following remarks are an edited version of what the President said orally on behalf of the Tribunal when penalty was imposed by the Tribunal.
25 The agreed facts go through the circumstances in a very general way. We have heard today in pleas concerning penalty and in mitigation, and particularly from Mr McCusker for the practitioner, a little more detail concerning the facts, including how, along the way, as alluded to in the statement of agreed facts, the cheques were reduced to two cash bundles which were placed in two envelopes and put in a safe for the purpose of being dealt with.
26 We learnt during the course of the submissions this morning something which was not apparent earlier from the practitioner's statements in the proceedings or in her proofs of evidence, that at one point before she left the firm of Verschuer Edward she caused the moneys being held in the safe of the firm to be transferred to her own personal safe at her home.
27 The result of the proceeding is that the Committee accepts that the allegation of stealing initially made should be withdrawn but the other findings of unprofessional conduct are, clearly, properly made. The Tribunal is satisfied that those findings should be made.
28 The question now is what penalty should be imposed in the circumstances. Ms Cahill for the Committee has drawn attention to the significant departures from professional practice that are involved in the conduct of the practitioner. The Tribunal confirms the Committee's view that the conduct here does involve a serious departure from usual standards of professional practice.
29 Mr McCusker in his submissions on behalf of the practitioner acknowledges on her behalf that what happened here in the handling of these cheques was not something that happened through her ignorance of the usual requirements concerning the handling of money by a practitioner, but is to be explained by reference to the fact that the practitioner was acting for a person who was a friend of her family, who had requested her to handle the moneys in a certain way - principally so that there would be less likelihood of her client's husband discovering that she was taking advice in relation to a family law matter. That, at least, is the explanation for that conduct that the Tribunal has been given.
30 In the Tribunal's view, however, none of that in a practical sense excuses the conduct complained of. The reasons these professional standards are imposed is to ensure that clients are always fully protected and that the highest standards of professional conduct are maintained. The situation is no different when one is acting for a friend. Indeed, as Mr McCusker observed, when acting for a friend, by reason of the friendship sometimes the relationship can cause a deviation from the usual requirements. It might even be said that acting for a friend accentuates the need to comply more rigorously with professional standards because, if one does not and the relationship is muddied, the fallout and the consequences of the breach of the ethical relationship can be worse than in other cases. There simply is no separate rule when one acts for a friend.
31 The Tribunal's hope is in this case that the practitioner, who was first admitted to practice in February 1985, some 22 years ago, will have learnt an important lesson. She is no longer to be called a junior practitioner, she is a practitioner, as I say, with over 20 years' experience. She has through that period been an employed solicitor and has not had to act on her own account. However, as we have been told, she was always aware of her obligations in respect of the handling of funds.
32 The Tribunal, on the agreed facts and from what we have been told by Mr McCusker today, is left puzzled in a number of respects in relation to the handling of the cheques and the funds by the practitioner. We are not impressed with the way the funds were moved from the firm's safe to the personal safe of the practitioner. We have been given some explanation about that but all we really need to say, as I have just said, is that we are not impressed with the explanation. We do hope that the practitioner will learn from this that there is no alternative but to strictly comply with standards of professional practice. All standards of professional practice are important but the handling of money is always accentuated. The reason is that if money is mishandled there usually is a suggestion of dishonesty or fraud or the like on the part of the practitioner and this can bring the profession into disrepute.
33 In this case, ultimately the allegation of dishonesty was withdrawn. Rather, what we appear to have is a very serious lapse of judgment by the practitioner in relation to her professional obligations on behalf of her principal to account for and handle the moneys that she received from the firm's client in the appropriate fashion. It is important to register the considerable disquiet of the Tribunal in that regard.
34 In the course of submissions made by counsel the Tribunal remarked upon the importance of protecting the interests of the public in their dealings with practitioners. If the public lose confidence in the legal profession then an important part of society is undermined. Sometimes the unprofessional conduct requires a tribunal like ours to recommend that a practitioner's name be struck from the role of practitioners; on other occasions, it is necessary to suspend a practitioner from practice in order to let the public know how importantly the profession takes these standards of professional behaviour and to remind the profession of the importance of meeting the standards and maintaining their high regulation for honest dealing. Sometimes the Tribunal has to make those sorts of orders in order to protect the public in a very direct way against the concern that a practitioner might reoffend or, in some cases, simply be so incompetent as not to appreciate what their obligations are.
35 In this case, we do not think that it is necessary to take the more drastic step of recommending that the practitioner's name be removed from the rolls. Indeed, the Committee has not made a submission that that step is required. The Committee has submitted that a period, a short period, of suspension though would be an appropriate way to deal with this matter. We do not think that is necessary. In a very direct sense, we do not think that the practitioner is incapable of properly providing quality services to the public. We do not think the public is at risk in a practical sense in dealing with her. The question is whether, if something less than suspension is ordered by the Tribunal, the public might think that the highest possible standards are not being upheld by the profession.
36 Certainly, some of the authorities that we have been referred to by counsel for the Committee suggest that the starting out point for penalty often is at least some period of suspension when a practitioner does not handle funds on behalf of a client properly. In this case, the way the practitioner handled the funds, as I said earlier, leaves us with a sense of considerable disquiet. In the end, though, we think that an appropriate penalty is the imposition of a fine of a sufficient quantum to make the practitioner realise the importance and significance of her departure from the usual professional standards. We think that a fine in those terms will also send a message to the legal profession that one cannot treat clients' funds with any sense of flexibility and that the requirements of the Legal Practice Act 2003 (WA) and usual professional standards must be met strictly at all times. It will also let the public know the profession upholds high standards.
37 There are in this case some additional factors which are different from those which appear in other cases. The agreed facts are, and as supplemented by submissions made by Mr McCusker, that the practitioner did not in any sense at all use the funds for her own or any other person's uses. She placed the moneys in a safe. I have commented on the unusual aspect of the transfer of those funds from the firm's safe to the personal safe of the practitioner. That is puzzling and adds puzzling features to the facts of the case as we had initially understood them. Nonetheless, the facts are and we accept this that at all times the funds were awaiting despatch on behalf of the client. There is no other aspect, as I say, of dishonesty or fraudulent behaviour or other misapplication of the client's funds received by the practitioner.
38 The result is that we think a fine in a sufficient quantum should be imposed. In that regard, we impose a fine of $6000.
39 We also think it is appropriate to reprimand the practitioner for her unprofessional behaviour so that there is a very precise note made of the unprofessional behaviour and our censure of it.
40 I understand costs have now been agreed in the sum of $25 000 and there will be an order that the practitioner pay those costs.
41 I should also add something that is extremely important to the proper oversight of the legal profession by a body such as the Legal Practitioners Complaints Committee, and that is the need for all practitioners to act openly and in a timely fashion when called upon by the Committee to respond to queries and complaints made in respect of them. In this case we are far from impressed with the way the practitioner responded to the initial complaints. We have been told that there were difficulties, after she had left the firm of Verschuer Edward, between her and her former principal. However, none of that really can justify the failure of the practitioner to respond in a timely fashion and as openly as she could have and should have in relation to the matters raised by the Committee with her.
42 The question of the money being held in the safe did not come out at an early stage. Rather, it came out at a late stage in the proceeding in the Tribunal and at an earlier stage the proceeding had to be delayed so that the Committee could further investigate those matters. Even then it really has only been during the course of Mr McCusker's submissions today that the Tribunal became aware for the first time that the funds had not remained in the firm's safe but had been transferred to the practitioner's personal safe at her home. These are matters that the practitioner should have fully disclosed at a very early date in the proceeding and we take all of that into account in assessing the penalty in this case.
(a) Received cheques from her client, which the client made payable to her, and deposited them into her account (albeit on the client's instructions and authority).
(b) Made no record of the receipt of the cheques other than to retain a copy of the cheques, and the client's written authority.
(c) Set aside the $750 in cash, as she did, and did not take steps to ensure that the $750 cash was dealt with promptly by obtaining an invoice from S & Co and paying it, and failing that to seek the client's instructions as to the disposal of the money.
I certify that this and the preceding [43] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
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