On 27 October 2015, the Legal Services Commissioner, John McKenzie ('the Commissioner'), filed an Application for Disciplinary Findings and Orders against the Respondent, Deborah Jane Searle ("the Respondent").
In this Application, the Commissioner sought the following orders: (a) a finding that the Respondent is guilty of professional misconduct; (b) In the alternative, a finding that the Respondent is guilty of unsatisfactory professional conduct; (c) A recommendation that the Respondent's name is removed from the roll of lawyers; (d) In the alternative, the Respondent is publicly reprimanded; (e) Further, and in the alternative, the Respondent is fined; (f) The Respondent is to pay the costs of and incidental to the filing and hearing of the Application; (g) Such orders as the Tribunal sees fit.
On 27 October 2015, the Commissioner also filed an affidavit affirmed by him on 21 October 2015 and an affidavit of James Sofiak sworn on 19 October 2015.
The Respondent did not file a Reply or any affidavit evidence in response to the Application.
On 21 December 2015, an Instrument of Consent, bearing the signatures of the Commissioner, and the Solicitor, was filed pursuant to section 564 of the Legal Profession Act 2004 ('the Act'). This Instrument included a Statement of Agreed Facts, which differed in only a few minor respects from the Grounds and Particulars contained in the Commissioner's Application. However, the orders sought by consent differed from those sought in the Application.
The hearing of the matter took place before us on 15 January 2016. Ms Muston appeared for the Commissioner and the Respondent appeared in person. At the hearing, the affidavits of Mr McKenzie and Mr Sofiak were tendered and admitted without objection.
[2]
Amendment to The Instrument of Consent and the name of the Respondent.
At the hearing of the matter, Ms Muston sought leave to amend Order 1 set out in the Instrument. Leave was granted and the order was amended. As a result, the following consent orders were sought:
1. The Respondent is guilty of professional misconduct in relation to Grounds 1 and 2 and unsatisfactory professional conduct in relation to ground 3.
2. The Respondent is publicly reprimanded.
3. The Respondent is to pay the costs of and incidental to the hearing of the Application, agreed at $1,000.
Ms Muston also sought leave to amend the Application by correcting the second name of the Respondent. Leave was granted to amend the Application by changing the name "Jane" to "Jean".
The Statement of Agreed Facts was in the following terms:
[3]
Ground 1: The Solicitor breached Rule 12.3 of the Solicitors Rules borrowing funds from her clients, Mark and Susan Huffman
[4]
Agreed facts
1.1 In or about May 2013 Mark and Susan Huffman ("the Huffmans") retained the respondent to sell a property owned by them at 25/237 Miller Street, North Sydney in the state of New South Wales ("the property").
1.2 On or about 25 July 2013 the sale of the property settled. On or about 16 August 2013 the respondent opened an investment account with National Australia Bank Ltd ("the investment account") to which she transferred funds of $99,816.50 from the proceeds of sale of the property from her trust account. The respondent held the funds on behalf of the Huffmans in the investment account which had been opened in the name "Deborah Jean Searle" and did not contain a reference to the Huffmans.
1.3 On or about 3 June 2014 the respondent electronically transferred an amount of $3,000 from the investment account to herself and repaid the amount to the investment account on or about 4 June 2014.
1.4 The respondent did not request or obtain the authority of the Huffmans to borrow the amount referred to in 1.3 above.
1.5 On or about 30 June 2014 the respondent sent an email to Mrs Huffman in which she made a request to borrow the amount of $10,000 from the funds held in the investment account and repay it with interest. On or about 2 July 2014 the respondent received an email from Mrs Huffman in which Mrs Huffman gave her approval to borrow the amount.
1.6 On or about 2 July 2014 the respondent electronically transferred the amount of $10,000 from the investment account to Searle & Associates.
1.7 On or about 3 September 2014 the respondent electronically transferred the amount of $18,000 from the investment account to herself.
1.8 On or about 29 September 2014 the respondent repaid an amount of $28,000 to the investment account. The respondent also paid an amount of $165 to the investment account being interest.
1.9 On or about 23 October 2014 the respondent electronically transferred an amount of $15,000 from the investment account to Searle & Associates. On or about 24 February 2015 the respondent repaid the amount to the investment account.
[5]
Ground 2: The solicitor breached section 255 of the Legal Profession Act 2004
[6]
Agreed facts
2.1 Paragraphs 1.1 and 1.2 above are repeated.
2.2 The funds in the investment account were controlled money and trust money within the meaning of section 243 of the Legal Profession Act 2004 ("the Act").
2.3 The respondent breached section 255 of the Act by borrowing the amount of $3,000 from the Huffmans without their authority. Paragraphs 1.3 and 1.4 above are repeated.
[7]
Ground 3: The solicitor breached section 256 of the Legal Profession Act 2004
[8]
Agreed facts
3.1 Paragraphs 1.1 and 1.2 above are repeated.
3.2 The respondent breached section 256 of the Act by failing to identify the investment account as a controlled money account, and by failing to identify and distinguish the purpose of the account.
[9]
Evidence and submissions
Annexed to Mr McKenzie's affidavit was a copy of a certificate of admission showing that the Respondent was admitted as a solicitor of the Supreme Court on 3 July 1987. Mr Sofiak's affidavit contained evidence and documentation relevant to the circumstances in which the loans were discovered upon a trust account inspection and/or disclosed by the respondent to the trust account inspector.
The Commissioner's Submissions
On behalf of the Commissioner, Ms Muston advised the Tribunal that since being admitted, the Respondent had received one caution. The respondent did not dispute this.
Ms Muston referred the Tribunal to her written Submissions filed on 7 January 2016, in which she invited the Tribunal to make findings of professional misconduct in relation to grounds 1 and 2 of the Application and a finding of unsatisfactory professional conduct in relation to ground 3 of the Application, and also made oral submissions. We have summarised her submissions as follows:
Ground 1
Rule 12.3 of the Professional conduct and Practice Rules ("the Rules") provides (relevantly):
12.3 A solicitor must not borrow any money, nor assist an associate to borrow money, from:
12.3.1 a client of the solicitor or of the solicitor's law practice; or
12.3.2 a former client of the solicitor or of the solicitor's law practice who has indicated a continuing reliance upon the advice of the solicitor or of the solicitor's law practice in relation to the investment of money.
There are exceptions to the Rule but the respondent did not fall within one of these;
The rationale for this Rule is the avoidance of a potential conflict of interest between a lender (whose interests are to advance finance on terms most favourable to them) and the borrower (who has a personal interest in those terms). It is also intended to avoid the scenario where a solicitor (as the borrower) may bring undue influence to bear upon the client owing to the nature of the solicitor/client relationship, which is one of trust and confidence. It reflects the general law applicable to fiduciaries;
The law in relation to solicitors borrowing from clients was most clearly stated in Law Society of New South Wales v Harvey [1976] 2 NSWLR 154 ("Harvey"), in which the Court of Appeal (Street CJ, Moffit P and Hutley JA) held:
1. It is an essential feature of the relationship between solicitor and client that the client is entitled to the full benefit of the best exertions of the solicitor and that the solicitor shall not be permitted to make a gain for himself at the expense of his client beyond the amount of the just and fair professional remuneration to which he is entitled.
2. Where there is found to be any conflict, however fortuitous, between the interest of the solicitor and that of the client, it is the duty of the solicitor acting in perfect good faith to make complete disclosure of his interest. A less than complete disclosure may positively mislead.
3. In such a case, the solicitor should, in addition, at the very least, advise the client to take independent legal advice, and should, except in the most exceptional cases, cease to act for the client.
4. A solicitor should not expressly propose that his client deal with him, or with a company in which he has an interest, even upon the basis the client will seek independent legal advice.
The solicitor's name was removed from the roll.
In this matter, there is no dispute that the solicitor directly sought to borrow funds from her clients (the Huffmans) as in her email to Mrs Huffman sent at 8:18pm on 30 June 2014, the respondent stated (relevantly):
In the meantime, I have a financial crisis. Could I please borrow $10K of your money and repay it with interest?
Mrs Huffman replied to the respondent's email, apparently on behalf of herself and her husband, as follows:
Absolutely, take as much as u need.
The undisputed evidence in this matter is that the respondent borrowed the following sums from the Huffmans:
Date Borrowed Sum Status Date
3/06/2014 $3,000 Repaid 4/06/2014
2/07/2014 $10,000 Repaid 29/09/2014
3/09/2014 $18,000 Repaid 29/09/2014
23/10/2014 $15,000 Repaid 24/02/2015
Total $46,000
[10]
In addition, on 29 September 2014, the respondent paid interest totalling $165 on the second and third loans.
Ms Muston also relied upon the decision of the Court of Appeal in Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 ("Moulton"), in which the Court ordered that the solicitor's name be removed from the Roll. In particular, she relied upon the decision of Hutley JA, who stated (relevantly):
The conditions under which he would not have breached his fiduciary duties to his client by doing so are almost impossible to comply with where the borrowing solicitor is the sole advisor of the client, i.e. there is not independent advice.
What this solicitor would have had to do, it seems to me, was to:
(a) Make a full disclosure of his interests in the enterprises;
(b) Make full disclosure of all prior securities to those which the lender was to receive;
(c) As he stressed the fact that his personal covenant was important to the security of the borrower, make a full disclosure of his own personal financial position.
(d) Because he was married and his own financial position might at any time be radically altered by any matrimonial dispute which could involve the property of both members of the family, make a full disclosure of his wife's financial position;
(e) Provide a proper independent valuation of the security;
(f) Provide an explanation, intelligible to the lender, of the disadvantages which flowed from being a second or third mortgagee;
(g) Provide an explanation, intelligible to the lender in those cases, which were numerous, in which the borrower was merely a contributory mortgagee, of the disadvantage which flowed from the position of being a contributory mortgagee;
(h) Provide an explanation of the disadvantages to the lender which flowed from the non-registration of the mortgage;
(i) Make known to the client the comparable rates of interest obtainable in the market by lenders who were prepared to lend money on comparable security to that which was being offered.
In this matter, the respondent sought a loan directly from her clients by way of an email request and the client also consented by email. The matters discussed by Hutley JA in Moulton were not addressed as there was: no security; no documentation; no receipt; no disclosure of the respondent's financial position (beyond a reference to a "financial crisis"); no disclosure of the potential disadvantages of such a loan; and no request to the client to obtain independent legal advice.
The facts in this matter are analogous to those in of Council of the NSW Law Society v McEncroe [2015] NSWCATOD 109 ("McEncroe"). In McEncroe this Tribunal found the solicitor guilty of professional misconduct for borrowing from a client, reprimanded the solicitor and ordered him to pay the Applicant's costs. The sum that the solicitor borrowed from the client was relatively small; the client was a friend of the Solicitor; and the money was repaid shortly afterwards. The Solicitor did not advise his client to obtain independent legal advice; he did not provide any proper documentation for the loan; and there was no documentation to protect the client's interests. The Tribunal stated (relevantly):
42. There have been various decisions recently where findings have been made where solicitor has borrowed from the client without the client having independent legal advice, that the solicitor's conduct constitutes professional misconduct (Law Society of NSW v Barwick and Deshnicz [2002] NSWADT 66, Council of the Law Society of NSW v Mavrakis [2010] NSWADT 103, Council of the Law Society of NSW v Stormer [2010] NSWADT 240, Council of the Law Society of NSW v White [2011] NSWADT 11, Council of the Law Society of NSW v Lyons [2012] NSWADT 166 and Council of the Law Society of NSW v Laftsidis [2010] NSWADT 317)…
61. The lack of reasonable documentation, the absence of independent legal advice for his client, the absence of any provision for interest to be paid to his client, and the absence of any security being provided to his client for the loan all involved the solicitor preferring his interests to those of his client...
66. There was no loss of the client's principal. But that does not excuse breach of the rule and of his fiduciary obligations.
67. The Solicitor says that his relationship with the client has been close and has lasted more than 50 years. Prior to this loan they had from time to time lent each other money. Relatives and close friends of a solicitor are likely place more reliance on their trust of the solicitor, and therefore they especially need to obtain independent legal advice if lending money to the solicitor…
71. The Tribunal recognises that taking into account his record, his general good character and the experience of these proceedings, the solicitor is unlikely to repeat such conduct. However, the Tribunal is concerned that an outcome less serious than a reprimand for such professional misconduct would not serve the interests of the public in discouraging such conduct by other practitioners and may be damaging to the reputation of the profession, particularly in terms of trustworthiness and protection of the interests of clients.
[11]
Ground 2 - breach of s 255 of the Act
s 255 of the Act provides:
255 Holding, disbursing and accounting for trust money
(1) A law practice must:
(a) hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received, and
(b) disburse the trust money only in accordance with a direction given by the person…
In this matter, the respondent admitted that she electronically transferred the sum of $3,000 from the Huffman's investment account to herself on 3 June 2014 and that she repaid that sum to the investment account the following day. She also admitted that at the time she transferred the funds to herself, she did not seek her clients' authority to do so. The investment account was a controlled money account held by an ADI and was therefore trust money as defined in s 243 of the Act.
As a result, the respondent breached s255 of the Act and a long line of authority establishes that this is professional misconduct.
[12]
Ground 3 - Breach of s256 (4) of the Act
Cl 75 of the Legal Profession Regulation 2005 ("the Regulation") states:
75 Maintenance of controlled money accounts - section 256 (4) of the Act
(1) For the purposes of section 256 (4) of the Act, a controlled money account must be maintained under an account name that includes the following particulars:
(a) the name of the law practice concerned,
(b) the expression "controlled money account" or the abbreviation "CMA" or "CMA/c",
(c) such particulars as are sufficient to identify the purpose of the account and to distinguish the account from any other account maintained by the law practice.
S 256 (4) of the Act provides:
(4) The law practice must maintain the controlled money account, and account for the controlled money, as required by the regulations.
In this matter, the controlled money account that the respondent held on behalf of her clients following the sale of their property in North Sydney (details provided) was held in the name of DJ Searle. However, the styling of this account did not comply with cl 75 of the regulation.
This conduct was less grave than the conduct described in Grounds 1 and 2 of the Application. For this reason, the Tribunal should find the respondent guilty of unsatisfactory professional conduct in relation to this ground.
[13]
Generally
The Commissioner initiated the complaint in this matter following receipt of a report dated 8 April 2015 from Mr Sofiak, a trust account inspector employed by the Law Society of NSW. The complaint was put to the respondent on 19 May 2015 and she replied promptly and with full admissions on 25 May 2015. On 3 July 2015, the Commissioner formed his preliminary view in relation to the alleged conduct and sought submissions from the respondent. She replied by way of a letter dated 12 August 2015. Further, in her letter dated 10 November 2014 to the Trust Account Department of the Law Society, the respondent stated that she is now aware of her error of judgment and that she does not intend to make the same mistake again. There was no misappropriation of funds by the respondent.
The respondent co-operated fully with the regulator and with the Tribunal (the matter being listed for hearing after only 1 directions hearing) and for this reason, the amount agreed for the Commissioner's costs was minimal.
[14]
Respondent's submissions
The respondent stated that she did not wish to make any submissions.
[15]
Jurisdiction
Although the current Application was filed after the commencement of the Legal Profession Uniform Law ("the Uniform Law"), we are satisfied that the provisions of the Act properly apply to this matter. This is because clause 26 of the Uniform Law (which is set out below) provides that a complaint or investigation begun but not, completed before the commencement of the Uniform Law is to continue to be dealt with in accordance with the old legislation.
Cl 26 of Sch 4 of the Uniform Law provides (relevantly):
26 Current complaints and investigations
(1) This clause applies to-
(a) a complaint made under old Chapter 4 but not disposed of before the commencement day; or
(b) an investigation referred to in old Chapter 4 that had begun but had not been completed before the commencement day.
(2) On and after the commencement day-
(a) the complaint or investigation is to continue to be dealt with in accordance with the provisions of the old legislation; and
(b) for that purpose, the complaint or investigation is to continue to be dealt with by the entity responsible for dealing with it under those provisions (the current entity)…
S 564 of the Act provides a specific regime for making consent orders in disciplinary proceedings, as follows:
564 Consent orders
(1) The Tribunal may, with the consent of the Australian legal practitioner concerned contained in a written instrument, make orders under this Part without conducting or completing a hearing in relation to the complaint.
(2) Consent may be given before or after the proceedings were commenced in the Tribunal with respect to the complaint.
(3) If consent is given before the proceedings were commenced, the requirement to conduct an investigation of the complaint (whether commenced or not) may be dispensed with, and any investigation of the complaint already being conducted may be suspended or terminated.
(4) This section does not apply to consent given by the practitioner unless the practitioner, the Commissioner and (if applicable) the relevant Council have agreed on the terms of an instrument of consent.
(5) Without limiting what may be included in the instrument of consent, the instrument is to contain an agreed statement of facts (including as to the grounds of complaint) and may contain undertakings on the part of the practitioner.
(6) The instrument of consent must be filed with the Tribunal.
(7) Nothing in this section affects the procedures regarding the commencement of proceedings in the Tribunal where consent was given before the proceedings are commenced.
(8) If consent was given before the proceedings are commenced, the proceedings are nevertheless to be commenced with respect to the complaint in the same way as if the consent had not yet been given.
(9) The Tribunal is to be constituted in the same way as for the conduct of a hearing into the complaint.
(10) 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.
S 562 of the Act provides:
562 Determinations of Tribunal
(1) Orders generally
If, after it has completed a hearing under this Part in relation to a complaint against an Australian legal practitioner, the Tribunal is satisfied that the practitioner has engaged in unsatisfactory professional conduct or professional misconduct, the Tribunal may make such orders as it thinks fit, including any one or more of the orders specified in this section.
(2) Orders requiring official implementation in this jurisdiction
The Tribunal may make the following orders under this subsection:
(a) an order that the name of the practitioner be removed from the local roll,
(b) an order that the practitioner's local practising certificate be suspended for a specified period or cancelled,
(c) an order that a local practising certificate not be issued to the practitioner before the end of a specified period,
(d) an order that:
(i) specified conditions be imposed on the practitioner's practising certificate issued or to be issued under this Act, and
(ii) the conditions be imposed for a specified period, and
(iii) specifies the time (if any) after which the practitioner may apply to the Tribunal for the conditions to be amended or removed,
(e) an order reprimanding the practitioner,
(f) an order that the name of the practitioner be removed from the roll of public notaries maintained under the Public Notaries Act 1997.
[16]
Consideration
In Council of the New South Wales Bar Association v Butland [2009] NSWADT 177 ("Butland"), this Tribunal's antecedent discussed the Tribunal's approach to the making of consent orders:
[15] The making of orders by the Tribunal under Part 4.8, and in particular, s 562, of the Legal Profession Act serve primarily to protect the public - Wentworth v New South Wales Bar Association (1992) 176 CLR 239 at 250-1. Further, however, these orders may be used to mark the community's disapproval of lapses from the high standard legitimately expected by the public of legal practitioners. Moreover, it will usually follow that orders under Part 4.8 also act as a specific deterrent to the legal practitioner involved as well as a general deterrent to all other practitioners. Thus, orders under Part 4.8 also assist to maintain proper standards in the legal profession - Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 441, New South Wales Bar Association v Hamman [1999] NSWCA 404 at [21].
[16] Having regard to these matters, where the conduct found to have been engaged in by a legal practitioner is serious, for example because it involves dishonesty and it is not a single, isolated incident, orders under s 562(2)(a) that the name of the practitioner be removed from the local roll and s.562(2)(b) that the practitioner's local practicing certificate be cancelled may be appropriate. We take into account that this disciplinary jurisdiction remains concerned with whether the legal practitioner is a fit and proper person to be held out as such to the public - Law Society of New South Wales v Foreman (1994) 34 NSWLR 408 at 444 and see generally at 440 - 446.
…
[29] Section 564(1) and (10) of the Legal Profession Act 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 consent 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 parties 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.
…
[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.
[34] We note that, by reaching agreement with the Bar Association and obtaining the consent of the Legal Services Commissioner well before the hearing date, the Barrister had contributed to a saving of most of the two days set aside for the hearing of the appropriate orders. Agreed resolution of disciplinary proceedings utilising the regime established under s 564 of the Legal Profession Act is to be encouraged, where appropriate. This consideration favoured making the orders sought by the parties.
…
[36] In all the circumstances, we considers orders (a) and (b), consented to by the parties and by the Legal Services Commissioner were appropriate and within the permissible range of orders that could legitimately have been made.
In Butland, the Tribunal referred to various reasons why it considered the orders sought to be appropriate in the circumstances: at [14]. These included the nature and extent of the conduct in issue and other relevant circumstances. Whilst s 564 (10) of the Act refers to the public interest in the context of declining to make the orders sought, we consider that this and the discretion contained in s 564 (1) of the Act requires us to consider public interest factors that both favour and argue against the making of the consent orders that are sought.
The approach in Butland has been followed by this Tribunal in subsequent decisions, including its decision in Council of the New South Wales Bar Association v Breeze [2015] NSWCATOD 152 (decision dated 18 December 2015). We have therefore not only considered the question of whether the proposed consent orders are within the permissible range, but also whether there are any public interest factors that would cause us to conduct and complete a hearing.
Having done so, the Tribunal considered that as the respondent failed to make full disclosure to her clients regarding the first loan in circumstances in which she sought their consent to later loans, her conduct was more serious in nature than that of Mr McEncroe. We therefore decided that there were public interest factors against making the consent order that were sought by the parties and that the imposition of a fine was warranted if we were to properly discharge our roles of protecting the public and educating the profession.
We advised the parties of these matters and expressed a preliminary view that a fine in the sum of $5,000 would be appropriate in the circumstances of this matter. We provided the parties with an opportunity to have further discussions with a view to the possible amendment of the Instrument of Consent to include that fine, failing which we proposed that the matter be set down for a contested hearing solely in relation to the imposition of a fine.
However, after a short adjournment, the parties advised the Tribunal that they had reached agreement and, they sought leave to further amend the Instrument of Consent to include the following order:
4. The respondent is to pay a fine of $5,000 within three (3) calendar months of the date of these orders (15 April 2016).
The Instrument of Consent was amended accordingly and the parties resigned it and returned it to the Tribunal.
[17]
Findings and Orders
Based upon a consideration of all of the evidence that is before us, which supports the statement of agreed facts, we are satisfied that the grounds of the Application have been made out.
We are satisfied that the orders sought in the Instrument of Consent, as amended on 15 January 2016, are appropriate and we therefore make the following orders by consent:
1. The respondent is guilty of professional misconduct in relation to grounds 1 and 2 of the Application and unsatisfactory professional conduct in relation to ground 3.
2. The respondent is publicly reprimanded.
3. The respondent is to pay the costs of and incidental to the filing and hearing of the Application, agreed at $1,000.
4. The respondent is to pay a fine of $5,000 within three (3) calendar months of the date of these orders.
I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal.
Registrar
[18]
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: 26 February 2016