Legal Services Commissioner v Kelly

THE AGREED STATEMENT OF FACTS 7The Agreed Statement of Facts contained in the Instrument of Consent precisely mirrored the grounds that were contained within the Application and were in the following terms: Ground 1 The solicitor has engaged in false and misleading conduct. A. To Mr. Dunn, CEO of NSW Maritime on 18 August 2009, in relation to the extent of her secondary employment. Particulars: (i) The solicitor had claimed in her 2003 Secondary Employment Application that she was undertaking a limited amount of conveyancing work from home; (ii) However, by December 2004, the solicitor was conducting a private practice by the name of "Tonette Kelly Conveyancing" and had approximately 100 clients per year; (iii) By August 2009 and for some years prior to that, the solicitor spent several hours a week undertaking her private conveyancing work in NSW Maritime Offices; (iv) By letter dated 18 August 2009, the solicitor applied to Mr. Dunn for renewal of her approval for secondary employment. In this letter, she did not inform Mr. Dunn that the volume of the work greatly exceeded that which she declared in her 2003 application, a copy of which was attached to that letter. B.To Mr. Oxenbould, CEO of NSW Maritime in 2004, in relation to the extent of her secondary employment. Particulars: (i) In late 2004, the solicitor falsely told Mr. Oxenbould that she was only doing a 'handful' of conveyancing matters per year; (ii) Particular A(ii) above is repeated. C. To Mr. Clark, a barrister appointed by NSW Maritime to investigate a complaint about the solicitor relating to the extent of her secondary employment. Particulars: (i) In about December 2004, the solicitor represented to Mr. Clark that she undertook about 10 matters per year; (ii) That representation was made, inter alia, by letter dated 22 December 2004. The correct date of this letter as noted by the Tribunal is 21 December, 2004; (iii) Particular A(ii) above is repeated. D. To ICAC in April 2010, in relation to the investigation into the misuse of resources by a NSW Maritime Legal Services Branch Officer and the evidence given at the public hearing of Operation Vargas. Particulars: (i) In April 2010, the solicitor gave evidence at the public ICAC hearing. (ii) That evidence included statements that she did no more than three to four hours per week at work on the solicitor's conveyancing business and that she did no more than take phone calls. (iii) In truth, a total of 4,658 faxes, sent from NSW Maritime Offices were located in files seized from the home of the solicitor. Those facsimiles were sent in relation to the solicitor's conveyancing business and related to files created between 2001 and 2009. E. To Law Cover in September 1999 and in each year thereafter in relation to her declarations of annual income. Particulars: (i) In seeking renewal of her PII Insurance from LawCover, the solicitor declared an annual gross fee income of between $8,000 and $11,000 when her fee income greatly exceeded the amounts declared by at least: a)For financial years 2001 - 2002 through to 2008 - 2009, the following amounts: Years Total gross earnings 2001-2002 $22,250 2002-2003 $46,720 2003-2004 $50,695 2004-2005 $49,100 2005-2006 $39,495 2006-2007 $63,495 2007-2008 $43,675 2008-2009 $97,554

(ii) The solicitor thereby improperly understated the level of premiums payable by her, and this assisted her in concealing from NSW Maritime the extent of her secondary employment. F.To the Legal Practitioners Administration Board ("Board") in 2009 in relation to the registration as a law student of Nicholai Dacombe. Particulars: (i) The solicitor provided a false reference to the Board, by stating that Mr. Dacombe had undertaken tasks and had experience which, to the knowledge of the solicitor, he did not undertake and did not have. Ground 2 The solicitor has engaged in deceptive activity. Particulars: A. The solicitor, without consent or approval and for her own purposes, excessively used NSW Maritime resources, including: a. Telephone; b. Staff; c. Fax machines; d. Online search accounts LegalCo and Espreon (in the order of at least 824 searches, at a cost to NSW Maritime of at least $10,269); and e. Photocopy equipment. Ground 3 The solicitor has failed in her fiscal obligations. Particulars: A. By failing to declare, in her tax returns, earnings of Tonette Kelly Conveyancing to the Australian Taxation Office for the years 1999 to 2010; B.By failing to pay GST on behalf of Tonette Kelly Conveyancing; C. The solicitor disclosed her failures, as at the time of disclosure, to the Tax Office in a letter written by her to the Tax Office dated 24 September, 2009. Ground 4 The solicitor committed larceny and at, or prior to, her sentencing for this offence, submitted false statements to the Police, her psychologist and the Court. Particulars: A. On 6 July 2000 at Castle Hill, the solicitor stole property from K-Mart Australia Pty Limited, Lowes Pty Limited, Crossroads Pty Limited, Katies Pty Limited, Kliens Pty Limited and Wrapt. B. The solicitor was charged with six counts of breaches of section 117 of the Crimes Act. C. Ms. Samantha Parbery, Intern Psychologist, assessed the solicitor and produced a report dated 18 July 2000. The report stated "Behaviour that is out of the ordinary for her can be said to be due to depression surrounding the birth of her child, change of circumstances and lack of feeling of control over her life at present". D. On 27 July 2000, the solicitor was sentenced to a 12 month bond pursuant to subsection 10(1)(b) of the Crimes (Sentencing Procedure) Act 1999 (NSW) without proceeding to conviction. E. The solicitor told the charging Police and told the Court, or permitted the Court to be told, that she was at the time of sentencing (6 July 2000): a. unemployed; and b. In receipt of $200 per week in unemployment benefits when trying to support a seven month old baby. F. As at 6 July 2000, the solicitor was in paid full time employment as the Legal Services Manager of the then NSW Waterways Authority. Her gross income in this position was $80,435 per annum. G. The solicitor further made the following written submission to the Court: "I live alone with my seven-month old baby whom I support and currently get approximately $420 per week." H. Particular 4F above is repeated. I. Attached to her written submission was a psychology report upon which the solicitor relied at sentencing from Samantha Parbery, Intern Psychologist and Nichole Lavidis, Psychologist. That report recorded the following facts, which were falsely conveyed to them by the solicitor, and which the solicitor knew to be false: a. The solicitor currently lives with her seven-month old daughter Jade and has been involved with her fiancé Shane for two years and that they were hoping to marry in the coming year. In truth, the solicitor was married at the time. b. The solicitor has worked as a contracts manager for AMP for the last two and a half years in the insurance contracts department, prior to which she worked in clerical/administration role for six years. In truth, the solicitor commenced employment with the then Maritime Services Board on 6 January 1988. She continued to work in various legal roles for that organisation (and its successor organisations) until 14 October 2010. Particular 4F above is repeated. c. The solicitor gave up work after her baby was born. Particular 4F above is repeated.

RELEVANT PROVISIONS OF THE ACT 81. Section 497(1)(b) of the Legal Profession Act 2004 states that professional misconduct includes conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice. 9Under Section 562 of the said Act, the Tribunal, after finding that a legal practitioner is guilty of professional misconduct may make one or more of a number of orders including that the name of the practitioner be removed from the local roll. 10Under the heading 'Consent Orders', section 564(10) of the said Act states: '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.' 11Under the heading 'Costs', section 566(1) states: ' the Tribunal must make orders requiring an Australian legal practitioner whom it has found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant) unless the Tribunal is satisfied that exceptional circumstances exist.'

PRINCIPLES GOVERNING CONSENT ORDERS 12The following passage from the Tribunal's decision in Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 (at [29 - 31], [33] and [35]) is a useful guide as to the matters to be taken into account in deciding whether to make the consent orders suggested in the Instrument of Consent:- '29 Section 564(1) and (10) of the Legal Profession Act 2004 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 consents 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 partiers (sic) 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. ... 32 This approach was subsequently adopted by Brereton J in Australian Securities and Investments Commission v Maxwell (2006) 59 ACSR 373, [2006] NSW SC 1052. 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."

THE CONDUCT COMPLAINED OF 13The Respondent had been in the employment of NSW Maritime (previously known as Waterways) on a full time basis since 1988. She started her life there as a Legal Officer and rose to the position of General Legal Counsel. She conducted her own private conveyancing practice known as Tonette Kelly Conveyancing. On 7 March 2003 the Respondent applied for secondary employment approval to enable her to conduct that conveyancing business. In her Application at paragraphs 2 and 3, Miss Kelly stated: "2. I note that last year I undertook seven conveyancing matters, four of which were unpaid for family members and friends and three of which were paid. 3. I estimate that this year I will undertake a maximum of ten matters". 14At the time the Respondent made the statements referred to above in her Application, she knew they were false. 15The approval was given by Mathew Taylor the then Chief Executive of Waterways on 18 March 2003. In granting that approval Mr Taylor understood the Respondent was involved in doing a small amount of conveyancing work for members of her family and some staff of Waterways. The Respondent led Mr Taylor to understand that she would be making a few phone calls a week and perhaps receiving or sending a few documents. At no time did the Respondent inform Mr. Taylor nor anyone else working for Waterways that she would be using the Authority's Espreon account at the expense of the Authority for the purpose of her conducting her private business. 16In 2004 the Respondent advised Chris Oxenbould, the CEO with Waterways that she was doing only a "handful" of private conveyancing matters and using no resources apart from occasional phone calls. In fact, that was not correct as the quantity of the conveyancing that the Respondent was conducting at that time had substantially increased and the work included not only conveyancing but wills, probate, family law and other matters. 17On 21 December 2004 the Respondent advised John Clark, barrister and independent investigator (appointed by Mr. Oxenbould to direct an enquiry as to the extent of the Respondent's secondary employment) that she had undertaken a limited amount of conveyancing work (in 2003 - 6 paid and 2 unpaid and in 2004 - 9 paid and 1 unpaid) and did not use Waterways resources other than a small number of phone calls. That advice was not truthful and the Respondent was aware of that fact. Documents produced to the Tribunal show that for the calendar year January to December 2004 the Respondent conducted approximately 99 conveyances or related matters. 18On 4 February 2008 the Respondent became Acting General Counsel with NSW Maritime (formerly Waterways). 19On 27 February 2009 the Respondent wrote a reference to the Legal Practitioners Admission Board for a Nicholai Dacombe. In that reference the Resondent asserted that Mr Dacombe had been employed as a paralegal by Tonette Kelly Conveyancing on a part time basis to assist primarily with conveyancing work, settlements, document registration, filing and accounts from November 2005 to 19 September 2008. The reference also provided 16 specific descriptions of areas of practice which Mr. Dacombe was said to be experienced in. The reference provided by the Respondent to the Legal Profession Admission Board was not truthful in that Mr Dacombe had not undertaken the experience set out in that reference. 20In August 2009 the Respondent was charged with computer offences against a colleague. 21On 18 August 2009 the Respondent applied to Stephen Dunn, CEO of NSW Maritime for renewal of her secondary employment approval and on 24 August 2009 Mr Dunn advised the Respondent that secondary employment approval had been granted on a modified basis. In her Application for renewal of her approval for secondary employment, the Respondent did not inform Mr Dunn that the volume of work greatly exceeded that which she declared in her 2003 Application. 22On 24 September 2009 the Respondent wrote to the Australian Taxation Office advising of "overdue returns". At the time of writing this letter, the Respondent had failed to declare in her tax returns earnings of Tonette Kelly Conveyancing for the years 1999 to 2010. The Respondent had also failed to pay GST on behalf of Tonette Kelly Conveyancing. 23On 19 April 2010 public hearings in Operation Vargas commenced before ICAC. In that month the Respondent gave evidence at the public ICAC hearing. That evidence included statements that she did no more than three to four hours per week at work on the solicitor's conveyancing business and that she did no more than take phone calls. In truth, a total of 4,658 faxes sent from NSW Maritime offices were located in files seized from the home of the solicitor. Those faxes were sent in relation to the solicitor's conveyancing business and related to files created between 2001 and 2009. 24In September 2010 the ICAC report was released. The Respondent was subsequently charged and convicted in the local court of giving false evidence to ICAC in relation to her assertion that she was granted approval by Mr. Taylor in March 2003 to use the Legalco account in order to conduct searches for private purposes and regarding Mr. Dacombe's employment within her own legal practice. 25The Respondent subsequently appealed her convictions to the District Court of New South Wales and on 9 December, 2013, Judge Finnane found the offences proved and dismissed the appeal.

Discussions and Conclusions 26On reviewing the evidence tendered and admitted at the hearing, we find that it adequately substantiates the matters outlined in the Instrument of Consent Orders and establishes each of the four (4) grounds to have been made out. The conduct complained of, and proven, was intentional, deceptive and occurred over a considerable period of time and falls squarely within conduct 'which would be reasonably regarded as disgraceful and dishonourable' by fellow practitioners who are 'of good repute and competency' as established in the case of Allinson v General Council of Medical Education and Registration [1894] 1 QB 750 at 761, 763. 27Accordingly, the Tribunal finds that the Respondent is not a fit and proper person to engage in legal practice.

Orders 28The Tribunal makes the following orders: (1)The Respondent is guilty of professional misconduct. (2)The Respondent's name be removed from the roll of local lawyers. (3)The Respondent is to pay the Applicant's costs of the proceedings as agreed or assessed.

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: 27 November 2014