In this matter, the applicant moved upon an amended application filed 24 January 2018, which alleged that the respondent had engaged in professional misconduct, or in the alternative, that she had engaged in unsatisfactory professional conduct. The applicant sought orders that the respondent be reprimanded and fined; that the respondent pay the applicant's costs as agreed or assessed; and such further or other orders as the Tribunal sees fit.
The applicant alleged that the respondent was guilty of professional misconduct or unsatisfactory professional conduct on the following grounds:
1. She breached Rule 10.1.1 of the Revised Professional Conduct & Practice Rules 1995 (the Solicitors' Rules) when she prepared fifteen (15) wills and codicils for her client between 23 August 2000 and 20 April 2009. It alleged that the respondent knew or ought to have known that her conduct was in breach of the Solicitors' Rules. Alternatively, the respondent was recklessly careless as to whether her conduct was in breach of the Rules;
2. She breached Rule 11.1 of the Solicitors' Rules when she failed to inform her client in writing of the matters set out in rule 11.1.1 to 11.1.3 before her late client signed seven (7) of the wills between 23 August 2000 and 4 May 2003. It alleged that the respondent knew or ought to have known that her conduct was in breach of the rules. Alternatively, the respondent was recklessly careless as to whether her conduct was in breach of the Rules; and
3. She breached Rule 11.2 and Rule 11.2.1 of the Solicitors' Rules when she prepared eleven (11) wills and codicils for her client between 12 February 2002 and 20 April 2009. It alleged that at all material times, the respondent knew or ought to have known that her conduct was in breach of this Rule. Alternatively, she should have declined to prepare the wills and codicils and should have referred Mrs Cooney to independent legal advice.
On 6 June 2018, the parties filed a Statement of Agreed Facts (marked MFI 1), which indicates that:
1. In relation to ground 1, the respondent admits that she breached Rule 10.1.1 of the Solicitors' Rules when she prepared twelve (12) wills and codicils for her client between 23 August 2000 and 16 April 2005. The respondent states that she did not know that her conduct was in breach of the Solicitors' Rules, but she admits that (a) she ought to have known that her conduct was in breach of the Rules; and (b) that she was recklessly careless as to whether her conduct was in breach of the Rules.
2. In relation to ground 2, the respondent admits that she breached Rule 11.1. of the Solicitors' Rules when she failed to inform her client in writing of the matters set out in Rules 11.1.1 to 11.1.3 before she signed seven (7) wills between 23 August 2000 and 4 May 2003. The respondent states that she did not know, but admits (a) that she ought to have known that her conduct was in breach of the Rules; and (b) that she was recklessly careless as to whether her conduct was in breach of the Rules.
3. In relation to ground 3, the respondent admits that she breached rule 11.2 and Rule 11.2.1 of the Solicitors' Rules when she prepared eleven (11) wills and codicils for her client between 21 February 2002 and 20 April 2009. The respondent stated that she did not know, but admits (a) that she ought to have known that her conduct was in breach of the Rules; (b) that she was recklessly careless as to whether her conduct was in breach of the Rules; (c) that the wills conferred a substantial benefit upon her; and (d) that in accordance with Rule 11.2.1, she should have declined to prepare the wills and should have referred her client to independent legal advice.
[2]
The Evidence
The applicant relied upon:
1. An affidavit of John McKenzie, who is the Legal Services Commissioner, affirmed on 8 November 2017 and the attached Exhibit JM1 to that Affidavit - Exhibit A1;
2. Complaint Details, which indicates that on 4 July 2012, the applicant issued the respondent with a caution for unsatisfactory professional conduct under s 540 (2) (a) of the Legal Profession Act 2004 (the 2004 Act), regarding an admitted breach of Rule 8 of the Solicitors' Rules; and Complaint details, which indicates that on 25 February 2013, the Law Society issued the respondent with a caution because of her failure to comply with the Legal Profession Act/Regulation. - Exhibit A2.
Counsel for the applicant confirmed that the applicant had commenced his investigation of these complaints after the conduct that is the subject of the current application.
The respondent relied upon her Affidavit affirmed on 18 January 2018 - Exhibit R1.
The respondent gave oral evidence. She was then cross-examined by Ms Webster and was asked some questions by the Tribunal.
In cross-examination, the respondent agreed that she had been in legal practice since 1987 and that she worked in Taree in 1989, where she did probate work. In 1996, she moved to Port Macquarie and her work included some wills and estate work. She agreed that from 2000 to 2009, she had an obligation to undertake continuing legal education and development and that she attended a variety of educational seminars for that purpose. She also accepted that as a solicitor she had an obligation to be aware of the relevant professional conduct rules. However, she did not familiarise herself with the subject matter of rules 10 and 11 about drafting wills at any time during the period from 2000 to 2009. She agreed that she drew wills for other clients and that she has an obligation to keep herself up to date about rules relating to her professional conduct.
In response to our questions, the respondent:
1. Asserted that she had advised her client to seek other advice on many occasions while preparing her wills and codicils, but that she only obtained that other advice on three occasions;
2. Asserted that it would have been preferable for her client to consult someone "in a professional setting" to discuss the course of her instructions to the respondent about the wills and codicils and to ensure that the respondent was not influencing her, and that this would also have enabled the respondent to ensure, from her own point of view, that she was not seen as influencing her client; and
3. Disputed the proposition that the fact that she was a sole practitioner meant that she was more at risk of 'missing something' than if she had been working with other solicitors. However, she appeared to acknowledge that this meant that she had had fewer opportunities to discuss professional issues with other practitioners.
[3]
Relevant Legislation
The 2004 Act was repealed effective from 1 July 2015, as a result of the Legal Profession Uniform Law Application Act 2015 ("the Uniform Law"). However, by virtue of the Savings and Transitional Provisions of the Uniform Law, the Act continues to apply to this matter. We have therefore considered the Solicitor's conduct under the relevant provisions of the 2004 Act.
The relevant provisions of the 2004 Act are:
498 - Unsatisfactory professional conduct
For the purposes of this Act:
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.
497 - Professional misconduct
(1) For the purposes of this Act:
professional misconduct includes:
(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, and
(b) 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.
(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the matters that would be considered under section 25 or 42 if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate and any other relevant matters.
498 - Conduct capable of being unsatisfactory professional conduct or professional misconduct
(1) Without limiting section 496 or 497, the following conduct is capable of being unsatisfactory professional conduct or professional misconduct:
(a) conduct consisting of a contravention of this Act, the regulations or the legal profession rules,
(b) charging of excessive legal costs in connection with the practice of law,
(c) conduct in respect of which there is a conviction for:
(i) a serious offence, or
(ii) a tax offence, or
(iii) an offence involving dishonesty,
(d) conduct of an Australian legal practitioner as or in becoming an insolvent under administration,
(e) conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act 2001 of the Commonwealth,
(f) conduct consisting of a failure to comply with the requirements of a notice under this Act or the regulations (other than an information notice),
(g) conduct of an Australian legal practitioner in failing to comply with an order of the Disciplinary Tribunal made under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act or a corresponding law),
(h) conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law.
(2) Conduct of a person consisting of a contravention referred to in subsection (1) (a) is capable of being unsatisfactory professional conduct or professional misconduct whether or not the person is convicted of an offence in relation to the contravention.
The Solicitors' Rules provide relevantly:
9. Acting for more than one party
9.1 For the purposes of Rule 9.2 and 9.3 -
"proceedings or transaction" mean any action or claim at law or in equity, or any dealing between parties, which may affect, create, or be related to, any legal or equitable right or entitlement or interest in property of any kind.
"party" includes each one of the persons or corporations who, or which, is jointly a party to any proceedings or transaction.
"practitioner" includes a practitioner's partner or employee and a practitioner's firm.
10. Avoiding a conflict between a client's and a practitioner's own interest
10.1 A practitioner must not, in any dealings with a client -
10.1.1 allow the interests of the practitioner or an associate of the practitioner to conflict with those of the client;
10.1.2 exercise any undue influence intended to dispose the client to benefit the practitioner in excess of the practitioner's fair remuneration for the legal services provided to the client;
10.2 A practitioner must not accept instructions to act for a person in any proceedings or transaction affecting or related to any legal or equitable right or entitlement or interest in property, or continue to act for a person engaged in such proceedings or transaction when the practitioner is, or becomes, aware that the person's interest in the proceedings or transaction is, or would be, in conflict with the practitioner's own interest or the interest of an associate.
11. Receiving a benefit under a will or other instrument
11.1 A practitioner who receives instructions from a person to draw a Will appointing the practitioner an Executor must inform that person in writing before the client signs the Will -
11.1.1 of any entitlement of the practitioner or of a practitioner is the attorney of the nominated executor to claim commission;
11.1.2 of the inclusion in the Will of any provision entitling the practitioner or of a practitioner who is the attorney of the nominated executor, or the practitioner's firm, to charge professional fees in relation to the administration of the Estate, and;
11.1.3 if the practitioner has an entitlement to claim commission, that the person could appoint as Executor a person who might make no claim for commission.
11.2 A practitioner who receives instructions from a person to -
11.2.1 draw a will under which the practitioner or an associate will, or may, receive a substantial benefit other than any proper entitlement to commission (if the practitioner is also be appointed executor) and the reasonable professional fees of the practitioner or the practitioner's firm; or
11.2.2 draws any other instrument under which the practitioner or an associate will, or may, receive a substantial benefit in addition to the practitioner's reasonable remuneration, including that payable under a conditional costs agreement, must decline to act on those instructions and offer to refer the person, for advice, to another practitioner who is not an associate of the practitioner, unless the person instructing the solicitor is either:
11.2.3 a member of the practitioner's immediate family; or
11.2.4 a practitioner, or a member of the immediate family of a practitioner, who is a partner, employer, or employee, of the practitioner.
11.3 For the benefit of this rule:
"substantial benefit" means a benefit which has a substantial value relative to the financial resources and asserts of the person intending to bestow the benefit.
Schedule 5, cl 23 of the Civil and Administrative Tribunal Act 2013 (No. 2) (the CAT Act) provides:
Costs consequent of adverse conduct findings
(1) Despite section 60 of this Act, the Tribunal must make orders requiring a respondent lawyer 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.
(2) The Tribunal may make orders requiring a respondent lawyer whom it has not found to have engaged in unsatisfactory professional conduct or professional misconduct to pay costs (including costs of the Commissioner, a Council and the complainant), if satisfied that:
(a) the sole or principal reason why the proceedings were commenced in the Tribunal was a failure of the lawyer to co-operate with the Commissioner or a Council, or
(b) the lawyer has contravened an order of the Tribunal made in the course of the proceedings concerned, or
(c) there is some other reason warranting the making of an order in the particular circumstances.
(3) The Tribunal may make orders requiring payment of a respondent lawyer's costs from the Public Purpose Fund (within the meaning of the Legal Profession Uniform Law Application Act 2014), but may do so only if satisfied that the lawyer did not engage in unsatisfactory professional conduct or professional misconduct and the Tribunal considers that special circumstances warrant the making of the orders. The Tribunal is to have regard to the length and complexity of the proceedings when making a determination under this subclause.
(4) The Tribunal may make orders requiring a respondent lawyer in respect of whom proceedings are pending before the Tribunal to pay costs on an interlocutory or interim basis.
(5) The Tribunal may make orders requiring a person to pay costs (including, as appropriate, the costs of the Commissioner, a Council, the complainant and the respondent lawyer against whom the complaint was made), if satisfied that:
(a) the person, whether before or during the proceedings, failed to produce or delayed in producing any document required or requested to be produced, and
(b) the failure or delay contributed to delay in commencing, conducting or concluding the proceedings in such a way as to warrant the making of the orders.
(6) The Tribunal may fix the amount of costs itself or order that the amount of costs be assessed by a costs assessor under the legal costs legislation (as defined in section 3A of the Legal Profession Uniform Law Application Act 2014).
(7) An order for costs may specify the terms on which costs must be paid.
[4]
Professional Conduct or Unsatisfactory Professional Conduct?
The issue for determination by us at this stage is whether the Solicitor's conduct is properly characterised as professional misconduct or as unsatisfactory professional conduct.
The applicant submitted that the respondent's conduct should properly be categorised as professional misconduct. The respondent disputed that that was so.
The Tribunal must make its own judgment as to whether the conduct under notice amounts to professional misconduct or unsatisfactory professional conduct, and as to the appropriate disciplinary order. It is not bound by any agreed positions by the parties as to findings and orders.
[5]
Applicant's submissions
Ms Webster for the applicant submitted that conduct in relation to the drawing of wills is regulated by the Solicitors' Rules and in this matter, the respondent drew fifteen (15) separate wills and codicils for her client, who was clearly her close friend but also a person who knew the respondent as a solicitor. The wills conferred substantial benefits upon the respondent. The size of those benefits was considerably larger in later wills and codicils, so that a pattern of growing generosity by the client to the respondent was apparent.
In 2009, the client became friendly with another couple and she made a new will in which bequeathed her entire estate to them. In 2013, there were contested Probate proceedings, which resulted in the beneficiaries under that will making the current complaints against the respondent. Ultimately, probate was granted in relation to the will that was prepared in 2012.
The importance of the Solicitors' Rules is played out by the circumstances of this matter because if the respondent did not draw the wills for her client, there would have been very little basis for any complaint by the beneficiaries under the 2009 will. Only the 2004 will was prepared by another legal practitioner and two (2) others were witnessed by independent legal practitioners.
The Solicitors' Rules provide for independence between a legal practitioner and their client, to avoid any conflict of interest. Rule 10.1 requires the issue of written notice to a client and Rule 11 requires the provision of independent legal advice to a testator where the will confers a significant benefit upon the legal practitioner. The Rules therefore have clear protective purposes for both legal practitioners and their clients.
In our view, it is quite clear that the respondent should not have accepted instructions to act for her client in drawing the wills and codicils and should have referred her client for independent legal advice.
Ms Webster referred the Tribunal to the decision in Council of the NSW Law Society v McEncroe [2015] NSWCATOD 109 (McEncroe). At [14], the Tribunal considered the sections 496, 497 and 498 of the 2004 Act and the categorisation of conduct. That was a case in which the legal practitioner borrowed funds from a client. The Tribunal stated, relevantly:
62. At the time of the loan the solicitor had been a practising solicitor for more than 47 years. The decision of the Court of Appeal in Harvey's case was in 1975. The publication of that decision by the law society to solicitors has been referred to earlier. The Rule was included in the 1987 Solicitors Rules, the 1994 Rules and the 1995 Revised Rules. There have been numerous disciplinary decisions of the Court of Appeal, the Solicitors Statutory Committee, the Administrative Decisions tribunal, and this Tribunal where there was an issue about a solicitor borrowing from a client.
63. Having regard to the authorities referred to, the tribunal finds that the conduct of the Solicitor entering to loan was professional misconduct within the common law definition of professional misconduct as 'conduct which would be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency" and also under section 497 of the Act as conduct that involved "a substantial failure to maintain a reasonable standard of competence and diligence."
In reliance on McEncroe, Ms Webster submitted that the respondent's conduct in this matter should properly be categorised as being either statutory professional misconduct under s 497 (1) (a) of the 2004 Act,or as professional misconduct at common law.
In relation to statutory professional misconduct Ms Webster contended that the respondent's conduct involved a substantial and consistent failure to reach or maintain a reasonable standard of competence and diligence. The respondent should have familiarised herself with the relevant Solicitors' Rules, but she did not do so. Although she recognised that she should send her client to see other solicitors, she was nevertheless still involved in drawing fourteen (14) of a total of fifteen (15) wills and codicils on behalf of her client during the period from 2000 to 2009. Accordingly, her conduct more than fell short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.
Ms Webster further contended that it is open to us to find that the respondent's conduct satisfies the common law test of professional misconduct, in that it would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency: Allinson v General Council of Medical Education and Registration [1894] 1 QB 750.
To the extent that the respondent asserts that she was ignorant of the relevant Solicitors' Rules, Ms Webster relied upon the decision of the Court of Appeal in Law Society of New South Wales v Moulton [1981] 2 NSWLR 736. in which Hope JA stated, at pp 740 -741:
…In so far as Mr Moulton's ignorance should be treated as a lack of knowledge rather than a lack of standards, it was not ignorance of some esoteric or difficult corner of the law; it was an ignorance of general principles applicable to common activities of a solicitor in which, for the most part, Mr Moulton was regularly engaged, and it was an ignorance which he took no steps to remedy…
Further, in that case Hutley JA stated at p 754:
…It is not, in my understanding of what is the minimum standard required of a solicitor, that such ignorance, coupled with an unwillingness or incapacity to take the elementary steps necessary to equip himself with the requisite knowledge, should be tolerated. The respondent was at the time of hearing a practitioner of some eighteen years standing, and he was no mere tyro emerging from a law school…
Ms Webster also referred the Tribunal to the decision of the Court of Appeal in Bolster v Law Society of New South Wales (Moffitt P, Hope JA & Samuels JA - unreported decision dated 20 September 1982) in which the Court stated, relevantly (at page 8):
…A solicitor cannot justify failure to perform his duty to his clients, including that not to intermingle his affairs with theirs, by a claim that he was ignorant of Harvey's decision or the elementary principles there stated or that he misunderstood or was unaware of the many warnings to solicitors by the Law Society in its publications since Harvey's case. A claim such as the solicitor makes, even if fully accepted, is a confession of ignorance of his fundamental duty as a solicitor and hence of his unfitness to be a solicitor. Any solicitor should acquaint himself concerning his duty as a solicitor. There is no excuse at all for not doing so for a solicitor so long in practice as the solicitor in the present case, who has had such extensive financial dealings. A breach of duty does not cease to be such because the solicitor is ignorant of his duty. Lack of awareness that what he does is misconduct does not make it otherwise…
In Council of the Law Society of New South Wales v Haseldine (No. 2) [2018] NSWCATOD 41, the Tribunal emphasised the importance of its protective role in the following terms:
38. …The Tribunal's role is aimed at protecting members of the public from harm that could be caused by dishonest, incompetent or non-diligent legal practitioners. It is not punitive. The disciplinary jurisdiction is directed to ensuring the maintenance of high standards within the profession; Council of the Law Society of NSW v Weller [2017] NSWCATOD 38 at [40].
39. The extent of the protective duty was explained by Beazley JA in Law Society of New South Wales v Walsh [1997] NSWCA 185 at [40]:
40. The Court's duty to protect the public is not confined to the protection of the public against further misconduct by the particular practitioner who is the subject of the disciplinary proceedings. It extends to protecting the public from similar defaults by other practitioners. Thus, it is relevant to take into account the effect the orders will have upon the understanding in the profession and amongst the public of the standard of behaviour required of solicitors; see also New South Wales Bar Association v Meakes [2006] NSWCA 340 per Basten JA at [114].
Ms Webster submitted that there is no dispute between the parties that a reprimand is appropriate. In relation to the question of a fine, she referred the Tribunal to the decision of the Court of Appeal in Russo v Legal Services Commissioner [2016] NSWCA 306, in which the Court looked at the range of fines that had been imposed upon legal practitioners between 2005 and 2016, as follows:
68. In summary, over the period referred to in the Commissioner's submissions, fines ranging from $2,000 in a range of matters to $48,000 in Legal Services Commissioner v Bryden and Hagipantelis (No. 3) [2012] NSWADT 225 have been imposed for a variety of misconduct - the highest fine relating to a breach of advertising regulations. The Commissioner notes that, earlier, in 2002, a fine of $35,000 was imposed (Law Society of New South Wales v Shad [2002] NSWADT 236) for the false witnessing of signatures on mortgage documents and attempts to mislead the Law Society, the Court and a bank…
82. The fine to be imposed must convey to the legal profession and to the community in general that such conduct is unacceptable.
Otherwise, Ms Webster sought an order that the respondent pay the applicant's costs under sch 5 cl 23 (5) of the Civil and Administrative Tribunal Act 2013 (No. 2).
[6]
Respondent's submissions
Mr Rich handed up an outline of submissions and made further oral submissions. He confirmed that the only proposed order that the respondent contests is an order finding her guilty of professional misconduct and that she does not dispute that she is guilty of unsatisfactory professional conduct. We have summarised his submissions as follows.
1. The respondent is 62 years old and has practiced as a solicitor since 6 November 1987. Her practice is a very small one, comprising herself, a part-time conveyancer and her daughter (who acts as her secretary and casual bookkeeper);
2. The respondent's practice is located in regional NSW and comprises mostly family law work, conveyancing and some Estate work. In general, she periodically prepares straight forward wills;
3. The relevant client of the respondent died in 2012, aged 94 years. She was a close friend of the respondent and the respondent regarded her as a member of the family. They shared weekly coffees, dinners, outings and important anniversaries. She was an independent and determined woman;
4. At the request, and usually at the insistence of her client, the respondent prepared many wills. The client either made a new will or amended her previous will by way of codicil very frequently and between 2000 and 2005 she changed her will at least 3 times per year;
5. The wills were prepared in accordance with the client's instructions and the client frequently made hand written wills or handwritten amendments to a previous will before seeing the respondent and presented them for preparation by the respondent. The client never suggested or complained that the wills or codicils were other than in accordance with her instructions;
6. The respondent 'frequently suggested' to the client that she should consult another solicitor.
7. The respondent was unfamiliar with the Solicitors' Rules, but continually tried and, on three occasions, succeeded in referring her client to another solicitor because she thought that it was prudent to do so and the other solicitors witnessed the wills independently. This course was consistently opposed by the client;
8. The respondent now recognises and understands that she should have refused to act for her client in these circumstances and concedes that she should have been aware of the Rules.
9. The respondent acknowledges that her conduct, in acting on the preparation of the wills and codicils without ensuring that the client obtained independent legal advice, was recklessly careless as to whether there was a conflict of interest;
10. The respondent acknowledges that she ought to have known that her conduct was in breach of 11.1.1 to 11.1.3 of the Solicitors' Rules. However, she was unaware of the Rules and had never made an application for commission in respect to any estate. She did not intend to make any such claim in respect of the wills prepared for her client;
11. In Council of the Law Society of NSW v Heseldine (sic) the solicitor had been found guilty of professional misconduct for breaches of fiduciary duty as a trustee by reason of having paid to himself executors' commission where he had neither filed or passed accounts nor obtained informed consent of the beneficiaries to the will of the deceased. However, that result should not obtain in the present matter, because the respondent had not sought or obtained commission, and had no intention to claim commission. She had never made a claim for commission in any matter she had ever had;
12. Whilst the respondent admitted that she had prepared several wills and codicils at the request of the client, her conduct may and should reasonably be viewed in the context of the particular facts and relationship in which she acted and not as 15 separate breaches (although obviously on a formal construction they may be so described) but rather as a continuing, single course of conduct in unusual repetitive circumstances;
13. Not every breach of the Rules/Law amounts to professional misconduct. Moulton was a decision that was determined on its facts and did not deal with the current Rules or the applicability of an alternate determination of unprofessional conduct. Hutley JA considered that the test was not whether there was purely deliberate breach of trust but whether it was to be treated as an entirely exceptional aberration. In Mr Rich's contention, in the present circumstances not only was there no deliberate breach of Rule but the aberration was entirely exceptional. The respondent had never been a beneficiary and drawn a will for any party in that capacity other than in the present matter and has never acted since;
14. Similarly, Bolster was determined on its facts. The Court did not accept his evidence and in dismissing the solicitor's appeal also took into account the ongoing aggravation by failing to terminate the conflict of interest until 2 years after allegedly becoming aware of the breach of duty and in the meantime, taking continuing advantage of the clients' money;
15. Law Society of NSW v Harvey was also a lending case determined on its facts. It involved a continuing cause of action involving loans from clients to 3 companies associated with the solicitor;
16. The Tribunal should take a broad view of the circumstances in determining whether each will that was made for the client should be treated separately or whether they should be considered as part of an ongoing chain of events;
17. There has been no consistent failure to reach or maintain a reasonable standard of competence and diligence for the purpose of s 497 (1) of the 2004 Act. There has been a repetitive chain of conduct for the same person in the same circumstances. In support of this, the Tribunal should consider that:
1. The conduct arose out of the close friendship and family relationship with the client;
2. The respondent mistakenly as a result of that relationship, misguidedly and wrongly acceded to the demands of the client arising from the continuing regular requests to amend it;
3. The wills and bequest to the solicitor were in accordance with instructions independently written and presented by the client;
4. There was no intention to breach the rules;
5. The respondent sought to obtain no unintended advantage and there was no dishonesty;
6. The circumstances where the respondent was a beneficiary in a will that was drawn by her have never otherwise arisen in her practice;
7. The respondent while failing to provide written notice of the right to make a claim for commission, has never made or intended to make any claim for commission in this or any other matter;
8. She has acknowledged fully her breach and been full and frank in dealing with it and the Tribunal could be confident that there is no likelihood of any repetition; and
9. The wills were prepared between 2000 and 2009 and the respondent is now fully aware of her responsibilities under the Rules.
1. Mr Rich submitted that the appropriate finding in the circumstances of this matter would be one of unsatisfactory professional conduct. That, is, conduct occurring in connection with the practice of law which 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.
Interestingly, Mr Rich submitted that for the Tribunal to make a finding of professional misconduct pursuant to s 497 (1) of the 2004 Act, the requirements of both paras (a) and (b) must be satisfied as the statutory definition is "inclusive". However, he conceded that there is no authority that supports this submission.
Mr Rich also referred to the types of conduct described in s 498 of the 2004 Act and he described that conduct as "serious". He contended that in this matter, the conduct is "less serious" in its nature and it was unintentional. As a result, the conduct should be categorised as unsatisfactory professional conduct and not as professional misconduct.
[7]
Applicant's submissions in reply
In reply, Ms Wester referred to the decision of the Court of Appeal in Council of the Law Society of New South Wales v Webb [2013] NSWCA 423, in which Meagher JA (Leeming JA and Simpson J agreeing) stated:
27. The repeated failure of the respondent to seek confirmatory instructions from his clients in ten transactions in which he was taking instructions from the same person was explained by the fact that he believed and trusted Mr Lee and considered, at least partly in reliance on his earlier telephone inquiry to the Law Society, that he was justified in acting on Mr Lee's instructions without having any direct contact with the clients. The Tribunal was justified in concluding that "the repetition of the same error by the Solicitor should not be treated as a 'consistent' course of unsatisfactory professional conduct"; and is not shown to have erred in not characterising that conduct as professional misconduct.
Ms Webster also contended that the current matter is distinguishable upon its facts from the decision in Webb, because:
1. the respondent's conduct continued over a period of 9 years;
2. there was ample opportunity for the respondent to become aware of the Rules and to comply with them, but she did not do so and her ignorance continued for a period of 9 years;
3. the categorisation of conduct as professional misconduct or unsatisfactory professional conduct involves an evaluative judgment based upon the facts concerned; and
Ms Webster also rejected Mr Rich's submission that for a finding of professional misconduct to be made under s 497 (1) of the 2004 Act both paras (a) and (b) must be satisfied. The section defines professional misconduct as including conduct of the types described in sub-paras (a) and (b), but it does not state that both of those sub-paras must be satisfied for a finding of professional misconduct to be made. S 498 (1) then sets out types of conduct that is capable of being either unsatisfactory professional conduct or professional misconduct, and s 498 (1) (a) describes "conduct consisting of a contravention of this Act, the regulations or the legal profession rules."
Ms Webster submitted that s 497 (1) of the 2004 Act is disjunctive in nature and that the definition of professional misconduct can be satisfied where the relevant conduct satisfies the requirements or sub paras (a) or (b) or otherwise satisfies the common law test described in Allinson.
Mr Rich then sought leave to file and serve further submissions in relation to the decision of the Court of Appeal in Webb. The Tribunal ordered that the respondent file and serve any further submissions within 7 days and directed the applicant to file and serve any further submissions in reply within a further 7 days.
[8]
Respondent's supplementary submissions
On 19 June 2018, the respondent filed supplementary submissions that were signed by Mr Rich, in which he submitted that there are factual similarities between this matter and Webb, as follows:
2…
a. that the solicitor in Webb acted negligently/unprofessionally in 10 transactions over 12-month period (although unlike the present it resulted in significant client loss).
b. the same unprofessional conduct in relation to each of the conveyancing transactions was repeated because of the same error of judgement (although occurring in relation to different clients);
c. there was no dishonesty in that the solicitor was not involved in or aware of the fraudulent scheme underlying the conduct;
d. the solicitor was unaware that he was not acting without proper client authority.
3. The underlying factor in classifying conduct as either professional misconduct or unprofessional conduct (sic) is a question of degree or as previously submitted, measured on a spectrum of seriousness in terms of fitness to act as a solicitor.
4. The tribunal accepted and the Court of Appeal agreed that the solicitor should not be treated as engaging a "consistent" course of unsatisfactory professional conduct when nothing was done to draw his attention as to the nature and scale of the consequences of his error.
5. Meagher JA in considering the distinction between unprofessional conduct or professional misconduct noted that the latter which included the former, involves "a substantial or consistent failure" to maintain the required standard of competence and diligence particularly having regard to s 497 (b) (sic). His Honour, after considering the definition of "substantial" and "consistent" said in respect of the facts in that matter (at [22]):
The same or similar features which occur in a series of related occasions and explained by an overarching error of judgment on the part of the lawyer (which is not itself the or a relevant failure which is the subject of a complaint) do not involve a "consistent failure" in the sense which that expression is used in this definition" (sic).
6. The Court of Appeal upheld the determination of the Tribunal, accepting that "the Tribunal was justified in concluding that "the repetition of the same error by the solicitor should not be treated as "consistent" course of unsatisfactory professional conduct", and was not shown to have erred in not characterising that conduct as professional misconduct…
The respondent also sought to make submissions regarding the quantum of any proposed fine, but these exceeded the grant of leave dated 6 June 2018.
[9]
Consideration
There is no factual dispute between the parties and the only matters that require formal determination are:
1. Whether the solicitor's admitted conduct should properly be categorised as professional misconduct or unsatisfactory professional conduct; and
2. The nature of the orders that we should make.
We found the respondent's submissions (through her Counsel), to the effect that the admitted conduct cannot be characterised as professional misconduct unless the requirements of both s 497 (1) (a) and s 497 (1) (b) of the 2004 Act are satisfied, to be completely unpersuasive.
Section 497 (1) of the 2004 Act provides that professional misconduct includes:
(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, and
(b) 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.
On any reasonable and proper application of the rules of statutory interpretation, on a proper construction of s 497 and concomitant provisions of the 2004 Act (including the fact that ss (1) is stated to be inclusive not exclusionary) and having regard to the underlying purpose or object of the 2004 Act, as required by s 33 of the Interpretation Act 1987, it simply cannot be that paragraphs (a) and (b) of s 497 (1) are conjunctive in nature. We reject the respondent's submissions regarding this issue and find that they are disjunctive instances of the possible operation of ss (1) and that they provide two separate examples (not definitions) of instances where conduct will be professional misconduct.
If the respondent's approach were correct, the Tribunal would be prevented from making a finding of statutory professional misconduct except in circumstances where it is satisfied that the conduct under consideration would at the same time involve a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence and would justify a finding that the practitioner is not a fit and proper person to engage in legal practice. If the Tribunal could not be satisfied that the practitioner was not fit and proper to continue in practice, it could make no finding of professional misconduct.
That interpretation would make no allowance for cases where a practitioner is found to have consistently failed to maintain the required standard but in which there is no finding that he or she is unfit to remain in practice. The most serious statutory finding that could be found in those circumstances would be one of unsatisfactory professional conduct. In our view that cannot be correct.
In the current matter, the evidence indicates that the respondent commenced legal practice in 1987 and that she was continuously engaged in legal practice for a period of approximately 13 years prior to the conduct that is the subject of this application. Applying the decision of Hutley JA in Moulton to the facts in this matter, we note that the respondent was 'no mere tyro emerging from a law school' when the relevant conduct commenced and her conduct continued over a period of nine years.
The respondent's evidence is to the effect that prior to the conduct complained of, and until the current complaint was made against her, she was unaware of the contents of the Solicitors' Rules. However, we note that the relevant version of those Rules had been in effect since 1995.
The Tribunal considers that knowledge of the Solicitors' Rules 1995 to be fundamental to the practice of law in New South Wales and our view in this regard is consistent with s 498 (1) (a) of the 2004 Act, which expressly provides that conduct consisting of a contravention of those Rules is capable of being unsatisfactory professional conduct or professional misconduct.
However, the evidence also indicates that the respondent did not take any steps to educate herself regarding the Rules during the period from 2000 to 2009, during which she engaged in conduct that contravened rules 10 and 11 on multiple occasions.
We agree with and adopt the comments of Hope JA in Moulton (at pp 740 -741):
In so far as Mr Moulton's ignorance should be treated as a lack of knowledge rather than a lack of standards, it was not ignorance of some esoteric or difficult corner of the law; it was an ignorance of general principles applicable to common activities of a solicitor in which, for the most part, Mr Moulton was regularly engaged, and it was an ignorance which he took no steps to remedy…
We also agree with and adopt the comments of Hutley JA in Moulton (at p 754):
It is not, in my understanding of what is the minimum standard required of a solicitor, that such ignorance, coupled with an unwillingness or incapacity to take the elementary steps necessary to equip himself with the requisite knowledge, should be tolerated…
The respondent submits the Tribunal should not find that she contravened the Solicitors' Rules on 15 occasions, but rather that she engaged in a single course of conduct involving a breach of the Rules and that we should therefore find that the conduct is unsatisfactory professional conduct and not professional misconduct.
The respondent also argues that the authorities relied upon by the applicant are distinguishable on their facts from this matter, as they are essentially cases in which the legal practitioners borrowed money from their clients. She submits that the facts in this matter are more consistent with those in Webb and that the decision of the Court of Appeal supports her argument that her conduct is properly characterised as unsatisfactory professional conduct.
While this is not a case in which the respondent borrowed money from her client, she nevertheless engaged in conduct that contravened the Rules that required her to avoid conflicts of interest and she received a substantial benefit under her client's will, without providing the client with written notice of the matters set out in Rule 11.1 to 11.3 (inclusive) before the will was signed. We do not regard her conduct as being less serious in nature as there was clearly a conflict between her own interests and those of her client.
In our view, this matter can also be distinguished on its facts from Webb as there is no evidence that the respondent acted negligently. Rather, the respondent has conceded, and in our view properly so, that she was recklessly careless in failing to inform herself the contents of the Solicitors' Rules prior to and during the period of 9 years in which she accepted repeated instructions from her client to draw the multiple wills and codicils.
We accept that the solicitor's conduct involved an involved an error of judgment on her part, but this error would not have occurred in the first place if the solicitor had achieved the required standard of competence and diligence and expected of a legal practitioner by informing herself of the fundamental obligations required of her under the Solicitors' Rules.
We do not accept the submission to the effect that the fact that the conduct related to a single client means that the conduct is less serious and should therefore be characterised as unsatisfactory professional conduct.
For these reasons, we are satisfied that the respondent's conduct is properly characterised as professional misconduct pursuant to s 497 (1) (a) of the 2004 Act.
[10]
Appropriate Orders
In our view, based on our findings and particular our conclusions as to the respondent's conduct summarised at [56] - [58] above, she should be reprimanded.
We also consider that a fine is appropriate for educative purposes and it is therefore relevant to consider the extent of the fine that should be imposed.
We are satisfied that the respondent did not act dishonestly. However, she was a legal practitioner of many years standing, who had practised as a sole practitioner for most of those years. It is also apparent that she fully complied with the investigation of the complaint and that she did not cavil with the facts alleged in the application, which considerably simplified the determination of the application.
In determining the amount of the fine, we take note of the fact that the respondent is a sole practitioner who practices in regional New South Wales and that her practice is not a large one.
As we have determined that the respondent is guilty of professional misconduct, and there is no evidence before us that establishes any exceptional circumstances, we are required to order that the respondent should pay the applicant's costs of the proceedings under sch 5 cl 23 (1) of the CAT Act.
[11]
Orders
The respondent is guilty of professional misconduct on grounds that she breached rules 10.1, 11.1 and 11.2 Revised Professional Conduct & Practice Rules 1995 in circumstances where she ought to have known that her conduct was in breach of the rules or she was recklessly careless as to whether her conduct was in breach of the rules.
The Tribunal orders that:
1. The respondent is reprimanded.
2. The respondent is fined $2,500.
3. The respondent is to pay the applicant's costs, as agreed or assessed.
[12]
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: 24 September 2018
Parties
Applicant/Plaintiff:
Legal Services Commissioner
Respondent/Defendant:
Pierpoint
Legislation Cited (3)
2) Corporations Act 2001(Cth)
Legal Profession Uniform Law Application Act 2015(NSW)