Legal Services Commissioner v Paric (correction) (Legal Practice) [2015] VCAT 703

1. Ms Paric is found guilty of unsatisfactory professional conduct in relation to 16 charges (being Charges 1 - 10 and 13 - 18), and professional misconduct in relation to one charge (being Charge 11).
2. Ms Paric is reprimanded.
3. Ms Paric is to pay a fine of $1,000 to the Legal Services Board.
4. Ms Paric is to complete five units of continuing professional development in addition to the requirements otherwise applicable. These are to be completed by 31 December 2016, at her expense, in the areas of ethics and professional responsibility.
5. Ms Paric is to pay the LSC's costs on standard basis on the County Court Scale, to be determined by the Costs Court in default of agreement.

1. In this case, a solicitor acting for two purchasers of apartments 'off the plan' became very frustrated with the way in which the solicitor for the vendor handled the transactions. She wrote eleven emails which were either sent to the other solicitor's clients direct or carbon copied ('cc'd') to them. She sent five emails to the solicitor which were discourteous, offensive and/or provocative. And she sent four emails to third parties which were critical of the solicitor. It is easy to 'cc' emails to other people. Amongst other things, this case illustrates the pitfalls of doing so.
2. Ms Linda Paric is the sole principal of her own firm, Boon Legal. She has two employee solicitors. She was admitted to practice in 2000. Property matters are a significant component of her practice.
3. In 2010, Ms Paric received instructions to act for two persons who had bought units in the same development in Footscray 'off the plan'. The transactions came to fruition in late 2012. During the period leading up to the settlements, Ms Paric was engaged in increasingly acrimonious correspondence with the solicitor for the vendor, Mr Gary Grace of Jansen Walsh and Grace Solicitors, Wantirna. This reached a crescendo in December 2012, with each solicitor accusing the other of being obstructive. Ultimately, the transactions did settle, under great pressure from Ms Paric's point of view, one on 20 December and the other on 24 December 2012.
4. This hearing relates to charges brought following a complaint to the applicant (LSC) by Mr Grace made on 19 December 2012. The LSC has brought the following charges of professional misconduct against Ms Paric:
   • Eleven charges (Charges 1 - 11) of breach of Rule 25 of the Law Institute of Victoria Limited's Professional Conduct and Practice Rules 2005 (the Rules). These relate to communicating with another solicitor's client.
   • Five charges (Charges 13 - 17) of breach of Rule 21 (using discourteous, offensive and/or provocative language) and
   • One charge of misconduct at common law for communicating with third parties in a discourteous or offensive manner about another practitioner (Charge 18).
5. There is some overlap between these charges. Charge 12 was withdrawn.
6. With one exception all the impugned communications by Ms Paric are emails. Mostly they are emails to Mr Grace which were cc'd to other persons. The main recipients were as follows: First, a representative of the vendor (in effect Mr Grace's client) Mr Robert Ducray. Second, the agent's representative, Ms Marija Newbold. And third, Ms Paric's two clients, Ms Zoe Lamaera and Ms Julie Ann Thomas.
7. The only communication not by email was a telephone call from Ms Paric to Mr Ducray on 21 December 2012, stating that Mr Grace had not provided a statement of adjustments.
8. All the evidence about the charges is contained within the correspondence which passed between the parties.
9. Ms Paric accepts she engaged in the conduct the subject of the 17 charges. However, she contends that her conduct in each case constitutes unsatisfactory professional conduct, not professional misconduct. She urges the Tribunal to make findings of unsatisfactory professional conduct in relation to all 17 charges under s 4.4.20 of the Legal Profession Act 2004 (the Act).
10. Mr Grace's conduct in relation to these transactions is the subject of a separate investigation by the LSC.

THE RULE 25 CHARGES - COMMUNICATING DIRECTLY WITH ANOTHER SOLICITOR'S CLIENT

Professional misconduct within the meaning of section 4.4.4(a) of the Act by contravening Rule 25 Professional Conduct & Practice Rules 2005, in that on 23 May 2011 the Respondent communicated directly with another party for whom, to the Respondent's knowledge, another practitioner was acting and in circumstances where none of the Rules 25.1.1, 25.1.2 or 25.1.3 applied.

1. Charges 2 - 11 are the same, save that the dates of the communications are different:

1. Section 4.4.4(a) of the Act provides that a breach of the Rules may constitute professional misconduct or unsatisfactory professional conduct.
2. Both parties' submissions focussed on the inclusive definitions of unsatisfactory professional conduct and professional misconduct in s 4.4.2 and 4.4.3(1)(a) of the Act. These are as follows:

unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

(a) unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence;

1. Rule 25 relevantly states:
   1. Communicating with Another Practitioner's Client

25.1 A practitioner who is acting on behalf of a party in any matter other than in relation to a case in court (which matters are governed by rules 18.4 and 18.5) must not communicate directly with any other party for whom, to the practitioner's knowledge, another practitioner is currently acting, unless -

25.1.1 (a) notice of the practitioner's intention to communicate with the other party, in default of a reply from the other practitioner, has been given to that practitioner, who has failed, after a reasonable time, to reply;

(b) the communication is made for the sole purpose of informing the other party that the practitioner has been unable to obtain a reply from that party's practitioner and requests that party to contact the practitioner; and

(c) the practitioner, thereafter, notifies the other practitioner of the communication; or

25.1.3 (a) the circumstances are so urgent as to require the practitioner to do so; and

(b) the communication would not be unfair to the other party.

1. Mr Grace advised Ms Paric on five occasions that she should not communicate directly with his clients, as this was contrary to Rule 25. These 'warnings' given to Ms Paric not to breach Rule 25 occurred on:
   • 24 October 2010 (after the breaches of Rule 25 the subject of Charges 1 - 3 occurred)
   • 14 December 2012 (after the beaches of Rule 25 the subject of Charges 4 - 9 had occurred)
   • 18 December 2012 (after the breaches of Rule 25 the subject of Charges 10 had occurred)
   • 19 December 2012
   • 21 December 2012.
2. Ms Paric also received a telephone call from Mr Kevin Power of the LSC on 21 December 2012 in which she was told that she should not contact the vendor's representative Mr Ducray. Yet on that day, after the call from Mr Power, she nevertheless proceeded to telephone Mr Ducray.
3. Mr Gilbert, for the LSC, contended that all of the admitted breaches of Rule 25 satisfied both the 'substantial' and 'consistent' alternatives in the inclusive definition of professional misconduct in s 4.4.3(1)(a). In relation to the 'consistent' alternative, Mr Gilbert pointed to the repetition of the conduct, even after successive warnings had been given.
4. I have determined that one of the Rule 25 breaches constitutes professional misconduct (Charge 11) and the remaining ten charges constitute unsatisfactory professional conduct (Charges 1 - 10). It is true that the breaches relating to Charges 4 - 10 are more serious than the earlier breaches, since they occurred after Rule 25 had been drawn to Mr Paric's attention. It is also true that a practitioner, especially one of her 12 years experience, should have been aware of the prohibition on communicating directly with an opposing solicitor's clients. I note, however, that most of the communications were about mechanical matters, and did not contain criticisms of Mr Grace. An exception is Charge 4, but that conduct is also the subject of a charge under Rule 21 (Charge 13). I take into account that the communications were made in the course of off the plan purchases, where the conveyancing aspect had been dormant for two years, and Ms Paric had experienced difficulty contacting Mr Grace.
5. In terms of seriousness, I note the communications do not directly ask Mr Grace's client to take any action. As stated, most are cc's of emails to Mr Grace himself. Nor is there any evidence that the vendor's interests were adversely affected by them.
6. In relation to the 'consistent' element, I accept Mr Snow's submission on behalf of Ms Paric, that it is not applicable here, since each separate communication is the subject of a separate charge.
7. The email the subject of Charge 9 was addressed to Mr Grace and cc'd to Mr Ducray and Ms Newbold. It is more serious than the others because it contains a clear criticism of Mr Grace. Ms Paric suggested he had repeatedly been advised that the purchasers wanted to settle in January, that Mr Grace had previously indicated this was possible, that he could not now resile from this, and that this was supported by counsel's advice obtained by Ms Paric. On balance, however, I have determined it does not constitute professional misconduct.
8. However, I regard the conduct the subject of Charge 11 as a 'substantial' failure to reach a reasonable standard of competence and diligence. This relates to a telephone call Ms Paric made to Mr Ducray on 21 December 2012, in which she stated, amongst other things, that the vendor's solicitor had failed or refused to provide a statement of adjustments. This call was made after she had received a telephone call from Mr Kevin Power of the LSC earlier that day advising her that she should not do this because it was a breach of Rule 25.
9. It is clear Ms Paric was feeling very stressed at the time, and was very anxious to make arrangements for settlement of the second sale. Nevertheless this failure to comply with firm advice given by a representative of the LSC that same day is clearly serious. It is in a different category to the other matters. It is important for the protection of the public that practitioners co-operate with the regulator appointed under the Act and not flout its authority. This conduct constitutes a substantial failure to reach a reasonable standard of competence and diligence, and hence constitutes professional misconduct.

THE RULE 21 CHARGES - DISCOURTEOUS/OFFENSIVE/PROVOCATIVE LANGUAGE

Professional misconduct within the meaning of section 4.4.4(a) of the Act by contravening Rule 21 Professional Conduct & Practice Rules 2005 on 29 October 2012, by failing to ensure that the Respondent's communications with another practitioner were courteous and by engaging in offensive and provocative language and conduct in dealings with another practitioner.

1. Charges 14 - 17 are the same, except that the dates of the communications are different:

A practitioner, in all of the practitioner's dealings with other practitioners, must take all reasonable care to maintain the integrity and reputation of the legal profession by ensuring that the practitioner's communications are courteous and that the practitioner avoids offensive or provocative language or conduct.

1. The five emails the subject of the Rule 21 charges contain numerous allegations that Mr Grace had been unconstructive, obstructionist and aggressive and had failed to communicate.
2. The first four emails were written as part of the process of seeking to resolve issues which had arisen in the transactions. The last, however, dated Saturday 22 December 2012, makes more broad ranging and personal allegations against him and comments about his character and fitness to practise. It is really in the nature of a rant at the conclusion of the transaction, in which Ms Paric gave full vent to her feelings about Mr Grace. It was clearly written with the bitterness of a person who feels they have been bullied and otherwise treated very poorly on a personal level.
3. As Mr Snow acknowledged, this correspondence was intemperate and ill-advised. But by the time the more serious aspersions in the correspondence at this late stage of the transaction came to be put, it had become more of a personal issue between Ms Paric and Mr Grace. I am satisfied that Ms Paric's language did breach Rule 21. I am satisfied it constitutes unsatisfactory professional conduct.
4. But in order for me to conclude that it constitutes professional misconduct, I would need to venture into the area of considering whether the allegations are false. I do not have the information relevant to that, nor do I believe it would be appropriate in a disciplinary enquiry to consider this any further. That would be moving into the realm of the personal dispute between Ms Paric and Mr Grace, as opposed to the concerns of the regulatory system upholding the public interest.
5. Accordingly I find Ms Paric guilty of unsatisfactory professional conduct in relation to Charges 13 - 17, but not professional misconduct.

Professional misconduct at common law and within the meaning of section 4.4.3(1)(a) of the Act by engaging in conduct between 23 October 2012 and 24 December 2012 that would be reasonably regarded as disgraceful and dishonourable by professional colleagues of good repute and competency, by communicating with others in a discourteous or offensive manner about another practitioner, alternatively in a manner likely to diminish public confidence in the legal profession or to bring the legal profession into disrepute.

The Particulars provided with this charge indicate that four emails from Ms Paric are relied on, dated 23 October, 21 December at 12.46 pm, 21 December at 2.23 pm and 24 December 2012. The first three of these are also the basis for charges 3, 15 and 16 respectively.

1. This charge focuses on Ms Paric's publishing statements critical of Mr Grace to third parties, as opposed to them being directed just to Mr Grace. The details of the four instances alleged are as follows:
   • 23 October 2012 - this was the first communication by Ms Paric which was seriously critical of Mr Grace. It was addressed to Ms Paric's client Ms Thomas. It was cc'd to Mr Ducray, Ms Newbold and Ms Paric's client Ms Lamaera. The second paragraph stated:

The vendor's solicitors are completely and totally unco-operative. I have asked them several times, by letter, email and telephone messages, to provide me with a copy of the off the plan statutory declaration - this specifies the amount of stamp duty that will be payable. To date they have not had the courtesy to acknowledge any of my correspondence or return my emails or my calls.

This was calculated to achieve some progress with the transaction. But it sought to do it by criticising the vendor's solicitors in a document sent to Ms Paric's two clients, and the vendor's representative and sales agent.

• 21 December 2012 - Ms Paric sent two emails to Mr Grace 18 minutes apart on 21 December 2012 in relation to the Lamaera transaction. Both were cc'd to Ms Lamaera. They refer to Mr Grace's 'unhelpful obstructionist attitude' and say that he had 'totally ignored my repeated request for settlement dates in January 2013'. I regard these as less serious, in that they were copied not to Mr Grace's client, but to Ms Paric's client.
• 24 December 2012 - similarly to the email of 22 December 2012 which is the subject of a charge under Rule 21 (Charge 17) this email is not so much about the transaction itself, but is a wide ranging complaint about how Mr Grace has conducted himself. The email concludes:

I do not want a reply to this email. I am just glad it will be over after 2 pm today and I do not have to deal with anyone apart from my clients thereafter.

1. I am satisfied these communications were unprofessional and ill-advised. They have a tendency to reduce public confidence in the profession. They comprise unsatisfactory professional conduct. Once again, however, in order to make a finding going beyond unsatisfactory professional conduct, I feel I would need to enter into the field of the personal dealings between Ms Paric and Mr Grace, and the rights and wrongs of the allegations between them. Similarly to the position with the Rule 21 charges, I believe that would be moving beyond the realm of disciplinary proceedings aimed at protecting the public.
2. I find Ms Paric guilty of unsatisfactory professional conduct in relation to Charge 18.

1. In my view, a global penalty relating to all 17 charges proved against Ms Paric is appropriate in this case. The charges all arise out of a single course of conduct - a series of emails (plus one telephone call) sent in the course of handling two related conveyances between 23 October and 24 December 2012.[*] I note that there is some overlap between the emails which give rise to the charges of breach of Rule 25, Rule 21 and the publication to third parties.
2. It is clear this episode has had a profound effect on Ms Paric. At the hearing, she made a sincere oral statement of regret, and gave an assurance that this conduct would not occur again. I accept she has learnt from these events.
3. In January this year, she wrote a gracious letter of apology to Mr Grace. This was in stark contrast to the tone of her correspondence in 2012, and her attitude during the LSC's investigation in 2013 and the first part of 2014. To some extent, the adverse affect of the stress of the prolonged investigation was due to her delays and lack of fully responsive answers to the LSC's enquiries. However, from September 2014 she adopted a more constructive approach.
4. Ms Paric has a long record of community service. She estimates she has given 10 - 20 hours per week over a period of 25 years to Australian Croatian Community Services, a not for profit community support organisation. This is a very substantial contribution. No doubt partly as a result of her extensive community involvement, she does not earn a substantial income from her practice.
5. In addition, she has been involved in the Western Suburbs Law Association, serving as president between 2008 and 2011. Her work reinvigorating that organisation, and in particular, providing mentoring for young lawyers, male and female, has earned her the respect of her colleagues.
6. Ms Paric produced no less than 13 written personal references. They are from her professional colleagues, clients, senior Law Institute of Victoria officeholders and persons involved in community organisations. The picture painted by the plea material overall, is of an individual from a migrant background who has not had it easy. Her achievements are described as being due in part to her passionate approach to her vocation. In this instance, it appears that aspect has led her into trouble. In my view, it is clearly appropriate that Ms Paric complete some additional CPD, to reinforce her understanding of her ethical responsibilities. I say this partly in the light of her delay in recognising that she was in breach of Rule 25, despite it being pointed out to her a number of times.
7. Mr Snow suggested that a reprimand would be a sufficient penalty in this case. Certainly, Ms Paric's plea of guilty, recent insight and community contributions are significant factors in her favour. However, in my view, the seriousness of her conduct in sending such intemperate correspondence, and copying it to her opposing solicitor's client, in particular, requires that a fine be imposed, albeit of a reduced amount. I find, balancing the particular factors applicable in this case, that a fine of $1,000 is appropriate.
8. A reprimand is also appropriate. This will remain on her record permanently as a reflection of the seriousness of her unsatisfactory professional conduct and professional misconduct in this instance.
9. Finally, there being no exceptional circumstances, under Clause 46D of the Victorian Civil and Administrative Tribunal Act 1998, Ms Paric is ordered to pay the LSC's costs of this application.

[*] Save for Charges 1 and 2 which relate to emails sent on 23 May 2011 and 17 September 2012 respectively.