Legal Profession Act 2004 s.4.4.19(b); neglect of duties owed by legal practitioner to Court; imposition of fines; matters to be considered.

Mr. M. Howell (Senior Member) & Mr. R. Batrouney and Ms H. Campbell (Members)

Legal Services Commissioner v Shulsinger (Legal Practice) [2010] VCAT 1497

1. The respondent is reprimanded for neglecting to comply with duties owed by him to the Family Court.
2. In respect of the finding of professional misconduct or alternatively misconduct, being misconduct at common law (Charge 1), the respondent is to pay a fine of $5,000 to the Legal Services Board by 1 November 2010.
3. In respect of the finding of unsatisfactory professional conduct or alternatively unsatisfactory conduct (Charge 2), the respondent is to pay a fine of $1,000 to the Legal Services Board by 1 November 2010.
4. In respect of the finding of unsatisfactory professional conduct or alternatively unsatisfactory conduct (Charge 3), the respondent is to pay a fine of $1,000 to the Legal Services Board by 1 November 2010.
5. With the consent of the applicant and the consent of the respondent, the respondent is to pay $36,000 to the applicant as the applicant's costs of the proceedings. Payment is to be made by monthly instalments of $3,000 payable by the first day of each month, the first instalment to be paid by 1 September 2010.

1. Mr. Shulsinger is a legal practitioner. On 31 May 2010, the Tribunal found Mr. Shulsinger guilty of three disciplinary charges[1].
2. First, the Tribunal found Mr. Shulsinger guilty of professional misconduct, or alternatively misconduct, being misconduct at common law.[2] The Tribunal found that Mr. Shulsinger grossly neglected duties owed by him to the Family Court in relation to a First Affidavit of Documents sworn by his client Mr. Yu in family law proceedings.
3. Secondly, the Tribunal found Mr. Shulsinger guilty of unsatisfactory professional conduct, or alternatively unsatisfactory conduct. The Tribunal found that Mr. Shulsinger neglected duties owed by him to the Family Court in relation to a Second Affidavit of Documents sworn by Mr. Yu in the same family law proceedings.
4. Thirdly, the Tribunal found Mr. Shulsinger guilty of unsatisfactory professional conduct, or alternatively unsatisfactory conduct. The Tribunal found that correspondence sent by Mr. Shulsinger to the solicitors for Mr. Yu's former wife was liable to mislead those solicitors and Mr. Yu's former wife, and fell 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.
5. The Tribunal heard submissions on 25 August 2010 as to the orders to be made consequent upon those findings. The Tribunal made final orders on that date, and gave brief oral reasons for the making of those orders. The Tribunal stated that it would provide detailed written reasons in due course. These are those reasons.

TRANSITIONAL PROVISIONS IN SCHEDULE 2 TO THE LEGAL PROFESSION ACT 2004:

1. The conduct of Mr. Shulsinger that was the subject matter of the findings occurred in 2004.
2. The relevant legislation in 2004 was the Legal Practice Act 1996, which came into operation on 1 January 1997. That Act was repealed by the Legal Profession Act 2004, which came into operation on 12 December 2005.
3. The present proceedings arose out of a complaint made by the solicitors for Mr. Yu's former wife. The complaint was lodged with the Legal Services Commissioner on 10 March 2006. The application by the Legal Services Commissioner that led to the disciplinary findings was lodged at VCAT on 12 March 2009. Because the relevant conduct of Mr. Shulsinger occurred in 2004, it is necessary to consider the transitional provisions set out in Schedule 2 to the 2004 Act ("Schedule 2").
4. The complaint was lodged under the 2004 Act, which was appropriate despite the fact that the conduct the subject matter of the complaint occurred prior to the commencement of that Act[3]. Similarly, the Commissioner's investigation of the complaint took place under the 2004 Act[4].
5. Under the 1996 Act, disciplinary charges were heard and determined by the Legal Profession Tribunal[5]. The Legal Profession Tribunal was abolished by the 2004 Act[6]. Since 12 December 2005, disciplinary charges have been heard by VCAT[7].
6. In the present proceedings, the Commissioner accepts that an order should not be made against Mr. Shulsinger unless the order is provided for in the 2004 Act and could have been made under the 1996 Act when the relevant conduct occurred in 2004. The Commissioner sought three orders; a reprimand, the imposition of a fine and payment of the Commissioner's costs.
7. An order reprimanding Mr. Shulsinger does not give rise to any problem of a transitional nature. The 1996 Act provided, and the 2004 Act provides, for the making of reprimands[8]. An order requiring Mr. Shulsinger to pay the Commissioner's costs also is not contentious, because Mr. Shulsinger has agreed to pay the Commissioner's costs of $36,000.00.
8. On the other hand, the imposition of a fine raises an issue of a transitional nature, namely an issue as to the maximum amount of the fine that could be imposed by the presently constituted Tribunal for misconduct.
9. Under the 1996 Act, the amount of a fine that could be imposed by the Legal Profession Tribunal depended upon the constitution of the Tribunal. A Full Tribunal of the Legal Profession Tribunal could impose a fine not exceeding $50,000 for misconduct, and a fine not exceeding $1,000 for unsatisfactory conduct[9]. A Tribunal constituted by the registrar or a deputy-registrar could impose a fine not exceeding $5,000 for misconduct, and a fine not exceeding $1,000 for unsatisfactory conduct[10].
10. Under the 2004 Act, VCAT can impose a fine not exceeding $50,000 for professional misconduct, and a fine not exceeding $10,000 for unsatisfactory professional conduct[11].
11. A Full Tribunal of the Legal Profession Tribunal was comprised of three or five members[12]. One member needed to the chairperson or a deputy chairperson of the Tribunal[13]. The chairperson needed to be a retired judge of one of the courts specified in the relevant section, or a reserve judge of the Supreme Court or the County Court[14]. The deputy chairperson could be a retired or reserve judge of that description, but also could be a person who "has engaged in legal practice for a period of at least 7 years"[15]. The fact that the deputy chairperson did not need to be a retired or reserve judge plays a part in the transitional issue that has arisen in the present proceedings.
12. The Legal Profession Tribunal had members of different kinds, namely the chairperson, deputy chairpersons, registrar, deputy registrars, non-advocate members, advocate members and lay members[16]. The Legal Profession Tribunal was abolished, and all of its members went out of office, on 12 December 2005[17].
13. The transitional provisions in Schedule 2 have the effect that a reference to the Legal Profession Tribunal in the 1996 Act is to be construed after 12 December 2005 as a reference to VCAT[18]. However, there is nothing in the transitional provisions as to how a reference in the 1996 Act to the Full Tribunal, or a reference to a Tribunal constituted by the registrar or a deputy registrar, is to be construed after 12 December 2005.
14. The constitution of the Tribunal sitting in the present proceedings was determined by the President of VCAT, pursuant to s.64 of the Victorian Civil & Administrative Tribunal Act 1998. There are three members, none of whom is a retired or reserve judge, which was a requirement for appointment as the chairperson of the Legal Profession Tribunal. On the other hand, the chairperson of the presently constituted Tribunal "has engaged in legal practice for a period of at least 7 years", which would have qualified him for appointment as a deputy chairperson of the Legal Profession Tribunal.
15. There is a persuasive argument that the presently constituted Tribunal of three members is the equivalent of a Full Tribunal of three members under the 1996 Act, and that the presently constituted Tribunal could impose a fine not exceeding $50,000 for Mr. Shulsinger's professional misconduct or misconduct, and fines not exceeding $1,000 for each finding of unsatisfactory professional conduct or unsatisfactory conduct on his part.
16. There is a less persuasive argument that every deputy chairperson appointed under the 1996 Act was in fact (although not of necessity) a retired or reserve judge, and that the presently constituted Tribunal not being chaired by a retired or reserve judge could impose a fine not exceeding $5,000 for Mr. Shulsinger's professional misconduct or misconduct, and fines not exceeding $1,000 for each finding of unsatisfactory professional conduct or unsatisfactory conduct on his part. One weakness in this argument is that the presently constituted Tribunal of three members is treated as the equivalent of a one member Tribunal of the Legal Profession Tribunal constituted by the registrar or a deputy registrar.
17. Counsel for the Commissioner addressed this transitional problem, and indicated that the Commissioner was prepared to overcome the problem by not seeking a fine in excess of $5,000 for professional misconduct or misconduct.[19]
18. The fact that the Commissioner does not seek a fine in excess of $5,000 for misconduct, standing alone, does not bind the Tribunal to limit any fine to a maximum of $5,000_[20]_. On the other hand, the Tribunal should not impose a fine greater than $5,000 if $5,000 is "within the permissible range"[21].
19. The Tribunal considered the matters set out in the remainder of these reasons. If the Tribunal had power to impose a fine not exceeding $50,000 for Mr. Shulsinger's misconduct, those matters would have led the Tribunal to conclude that a fine not exceeding $5,000 was well below the permissible range that should be imposed for his misconduct.
20. On the other hand, deficiencies in the transitional provisions cause doubt as to the power of the Tribunal to impose a fine in excess of $5,000 for Mr. Shulsinger's misconduct. If the Commissioner sought a fine in excess of $5,000, the Tribunal would have decided whether it could impose a fine in excess of that amount. Such a decision could not be based upon relevant transitional provisions, which do not exist, and probably would have needed to be based upon analogy. The Tribunal decided to give Mr. Shulsinger the benefit of the doubt, a decision greatly influenced by the nature of the proceedings (namely, disciplinary proceedings brought against a legal practitioner, where the imposition of a fine well in excess of $5,000 might do greater damage to Mr. Shulsinger's reputation and his practice), and the fact that the Commissioner did not seek a fine in excess of $5,000.

MATTERS CONSIDERED BY THE TRIBUNAL BEFORE MAKING THE ORDERS:

1. The Tribunal considered the following matters before making further orders.
2. Delay: The investigation carried out by the Legal Services Commissioner was protracted. The complaint in respect of Mr. Shulsinger's conduct was lodged with the Commissioner on 10 March 2006, but the present application by the Commissioner to the Tribunal was not lodged until 12 March 2009.
3. Counsel for the Commissioner acknowledged that there was delay in conducting the investigation from March 2007 to May 2008. Delay on the part of the Commissioner is a mitigating factor[22]. The delay was caused in part by the decision of the Court of Appeal in Byrne v Marles[23]. The decision was to the effect that a practitioner had a right to make submissions to the Commissioner as to whether a complaint should be treated as a disciplinary complaint, and as to whether the complaint should be summarily dismissed. The decision caused the Commissioner to re-commence the investigation of the complaint, to afford an opportunity to Mr. Shulsinger to exercise those rights.
4. The fact that Mr. Shulsinger contested the charges did not cause delay, as no charge was made out in all respects, and one charge of professional misconduct was found to be unsatisfactory professional conduct.
5. Previous disciplinary matters: Three disciplinary matters have been recorded since Mr. Shulsinger was admitted to practice in 1973.
6. On 21 June 2004, the Law Institute was satisfied that there was a reasonable likelihood that the Legal Profession Tribunal would find Mr. Shulsinger guilty of unsatisfactory conduct, because of a failure to provide information to a client, but decided to take no further action against him.[24]
7. On 23 June 2004, the Law Institute was satisfied that there was a reasonable likelihood that the Legal Profession Tribunal would find Mr. Shulsinger guilty of unsatisfactory conduct, because of delay on his part in handling a client's matter, but decided to take no further action against him.[25]
8. On 10 May 2005, the Law Institute was satisfied that there was a reasonable likelihood that the Legal Profession Tribunal would find Mr. Shulsinger guilty of unsatisfactory conduct, because of a conflict of interests, but decided to reprimand Mr. Shulsinger.[26]
9. Because the Law Institute was satisfied that there was a reasonable likelihood that the Legal Profession Tribunal would find Mr. Shulsinger guilty of unsatisfactory conduct, each of the three matters was a "substantiated complaint" for the purposes of s.151(3)(c)(ii) of the Legal Practice Act 1996[27], and can be taken into account when making orders in a subsequent disciplinary matter involving the same practitioner.
10. Specific deterrence: There was little need for specific deterrence in this case. Mr. Shulsinger acknowledged that he made "errors" in Mr. Yu's matter. They were expensive errors. Counsel for Mr. Shulsinger stated that Mr. Shulsinger had spent about $60,000 defending the present proceedings, and has agreed to pay $36,000 to the Commissioner as the Commissioner's costs of the proceedings. The Tribunal accepts the plea made on behalf of Mr. Shulsinger that he is unlikely to re-offend.
11. General deterrence: General deterrence was of considerable importance in the present matter. It is essential to the administration of justice that legal practitioners comply with obligations owed by them to the Court.
12. The Tribunal found that Mr. Shulsinger acted in gross neglect of his duty as an officer of the Court by failing to include relevant documents in the First Affidavit of Documents sworn by his client Mr. Yu, and that he neglected (although not grossly neglected) his duty as an officer of the Court by failing to include relevant documents in the Second Affidavit of Documents sworn by Mr. Yu.
13. Mr. Shulsinger's neglect led to further applications to the Family Court by Mr. Yu's former wife, and probably caused Mr. Yu's former wife to endure frustration and to incur additional expense. Members of the public need to be protected from neglect of that kind.
14. The Tribunal accepts that Mr. Shulsinger acted in accordance with his client's instructions, but his obligations to the court required him to exercise care before acting on those instructions. It is essential that practitioners, through the exercise of care, ensure that their obligations to the Court prevail over their obligations to their clients.
15. Punishment: The fines imposed upon Mr. Shulsinger involve a small element of punishment, but punishment is not an important factor in this matter.
16. The plea made on behalf of Mr. Shulsinger: Counsel for Mr. Shulsinger said that Mr. Shulsinger has practised as a sole practitioner for 30 years. He has four staff members. His work is mainly conveyancing, Wills, and business transactions. Mr. Shulsinger handles less complex family law matters. He regrets acting for Mr. Yu in what was a very complex family law matter. Mr. Shulsinger had not previously acted for a client in a family law matter where the client apparently gave inadequate instructions in an attempt to hide assets, or where there was a significant dispute as to the discovery of documents. He eventually referred Mr. Yu to another solicitor.
17. Counsel also pointed out, as was apparent from the documents tendered during the course of the hearing, that other solicitors also acted for Mr. Yu during the period 2000 to 2004 when Mr. Shulsinger acted for Mr. Yu. Counsel mentioned, as also was apparent from the tendered documents, that Mr. Yu regularly acquired and disposed of real properties and businesses during that period.
18. Counsel pointed out, and the Tribunal acknowledges, that the findings of the Tribunal concern neglect on the part of Mr. Shulsinger, not dishonesty.
19. Character evidence: Two witnesses gave character evidence on behalf of Mr. Shulsinger. Mr. Ralph Glezer, a legal practitioner, said that he had known Mr. Shulsinger for 40 years, and that they moved in the same social circles. He said that Mr. Shulsinger had a reputation for honesty and fairness, and that he had not heard anything adverse said about Mr. Shulsinger. Mr. Marcel Alter, a legal practitioner and mediator, said that he had known Mr. Shulsinger for 40 years, and that they moved in the same legal circles. He said that he had not heard anyone say anything adverse about Mr. Shulsinger, and that Mr. Shulsinger's conduct in the present matter was an "aberration".
20. Two written character references were tendered. Professor David Cooper AO, Professor of Medicine and Director of the National Centre in HIV Epidemiology and Clinical Research at the University of NSW, said that he had known Mr. Shulsinger for 40 years. Professor Cooper said that he remains in regular contact with Mr. Shulsinger. He said that he holds Mr. Shulsinger in the highest esteem and considers him a decent and upright person of integrity and honesty. He said that Mr. Shulsinger's friends and colleagues hold Mr. Shulsinger in the same high esteem. Mr. Joseph Rose, a legal practitioner, said that he has known Mr. Shulsinger for 40 years. Mr. Rose and Mr. Shulsinger have legal practices in neighbouring areas. Mr. Rose said that he had trust in Mr. Shulsinger, and would rely upon his word. Mr. Rose said that Mr. Shulsinger has a good reputation both with local practitioners and the community.

1. The orders made must be proportionate to the seriousness of the findings made by the Tribunal.
2. The Tribunal having resolved that it would not impose a fine greater than $5,000 in respect of Charge 1, the Tribunal did impose a fine of $5,000 in respect of that charge. Imposition of the maximum fine is proportionate to the seriousness of Mr. Shulsinger's professional misconduct or alternatively misconduct, because loss of his right to practise, rather than a fine, would have been an appropriate order if his misconduct had been of a more serious nature.
3. The Tribunal imposed two fines of $1,000 in respect of Charge 1 and Charge 2. The imposition of the maximum fine for unsatisfactory professional conduct, or alternatively unsatisfactory conduct, is proportionate to the seriousness of Mr. Shulsinger's conduct because charges and findings of misconduct would have been appropriate if his unsatisfactory conduct had been of a more serious nature.
4. Mr. Shulsinger also is reprimanded for neglecting to comply with duties owed by him to the Family Court.
5. As far as the costs of the Commissioner are concerned, the Tribunal will make an order by consent for payment of those costs.

[1] Legal Services Commissioner v Shulsinger [2010] VCAT 965.

[2] With the consent of the parties, all charges came before the Tribunal in the alternative, and findings were made by the Tribunal in the alternative, to avoid difficulties that arise in interpreting some of the transitional provisions in Schedule 2 to the Legal Profession Act 2004.

[8] Sections 159(1)(c) & 160(1)(a) of the 1996 Act, and s.4.4.19(k) of the 2004 Act.

[9] Sections 160(1)(c)(i) and 159(1)(b) respectively.

[10] Sections 160(1)(b) and 159(1)(b) respectively.

[19] There is no transitional problem in relation to a fine for unsatisfactory professional conduct or unsatisfactory conduct, as the maximum fine under the 1996 Act was $1,000, whether imposed by a Full Tribunal of three or five members or by a Tribunal comprising one member.

[20] Law Institute of Victoria v Brott [2008] VCAT 1998 @ [52-58.

[22] Legal Services Commissioner v Rallis [2009] VCAT 1445.

[23] [2008] VSCA 78.

[24] The decision was made pursuant to s.151(3)(c) of the Legal Practice Act 1996.

[25] The decision was made pursuant to s.151(3)(c) of the Legal Practice Act 1996.

[26] The reprimand, which required the consent of Mr. Shulsinger, was made pursuant to s.151(3)(b) of the Legal Practice Act 1996.

[27] Styant-Browne v Legal Ombudsman [2001] VSC 164; (2001) 3 VR 132.