NSW Legal Services Commissioner v Lal - [2022] NSWCATOD 144 - NSWCATOD 2022 case summary — Zoe

NSWNSWCATOD

NSW Legal Services Commissioner v Lal

[2022] NSWCATOD 144

NCAT Occupational|2022-10-06|Before: Emeritus Professor P, Foreman AM

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At a glance

Source facts

Court

NCAT Occupational

Decision date

2022-10-06

Before

Emeritus Professor P, Foreman AM

Source

Original judgment source is linked above.

Judgment (7 paragraphs)

[1]

The applicant's argument about professional misconduct

It is the applicant's case that Ms Lal is guilty of professional misconduct as described in s 297(1)(b) of the Uniform Law; "conduct … occurring in connection with the practice of law that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice".
The applicant relied upon s 297(2) of the Uniform Law, which says: For the purpose of deciding whether a lawyer is or is not a fit and proper person to engage in legal practice as referred to in subsection (1)(b), regard may be had to the matters that would be considered if the lawyer were an applicant for admission to the Australian legal profession or for the grant or renewal of an Australian practising certificate and any other relevant matters.
The applicant submitted that s 297(2) of the Uniform Law allows regard to be had to the Legal Profession Uniform General Rules 2015 ('the General Rules') and the Legal Profession Uniform Admission Rules 2015 ('the Admission Rules').
The General Rules provide, in rule 13: 13 Consideration of application for grant or renewal of Australian practising certificate (1) For the purposes of section 45 of the Uniform Law, in considering whether an applicant is or is not a fit and proper person to hold an Australian practising certificate, the designated local regulatory authority may have regard to any of the following matters - (a) whether the applicant is currently of good fame and character,
The Admission Rules provide, in rule 10: 10 Determining whether someone is a fit and proper person (1) For the purposes of section 17 (2) (b) of the Uniform Law, the following matters are specified as matters to which the Board must have regard: … (f) whether the person is currently of good fame and character, …
The applicant argued that "any other relevant matters" in s 297(2) of the Uniform Law must include a willingness to make false representations.
In Council of the NSW Bar Association v EFA [2021] NSWCA 339 ('EFA'), the Court of Appeal discussed the history of 'professional misconduct' and the meaning of that term in the Uniform Law.

Further, at [155]-[160]: 156. The High Court's decision in A Solicitor (2004) post-dates the decision in Cummins. It signifies a return to the concept of fitness derived from the Charter of Justice as the benchmark by which legal professional misconduct (in the inherent jurisdiction of the Supreme Court) is judged. There is, in NSW, no category of professional misconduct constituted by conduct that would reasonably be regarded (by professional peers) as "disgraceful or dishonourable". 157. That is not to say that the Allinson formulation is irrelevant; as can be seen from the cases discussed above, it has been treated as a useful test in the determination of the fitness of a legal practitioner to remain on the roll. It does not, however, as the Council would have it, create or constitute a category of professional misconduct independent of, and different from, that class of conduct contemplated as rendering the legal practitioner "not a fit and proper person" to remain on the roll of legal practitioners. 158. There is also this to be considered: the Allinson formulation is directed solely to the conduct under consideration. As the judgment of Kitto J in Ziems demonstrates, the issue of fitness encompasses more than mere conduct. The "fit and proper person" test is directed to character, which may be determined by conduct alone, but which may also take into account other circumstances. 159. One of the statutory definitions (s 297(1)(b) of the Uniform Law) of "professional misconduct" is "conduct … that would, if established, justify a finding that the lawyer is not a fit and proper person to engage in legal practice". 160. "Professional misconduct" determined against the "critical criterion" of "a fit and proper person" is indistinguishable from "professional misconduct" as defined in s 297(1)(b) of the Uniform Law. There was therefore nothing to be achieved by the Tribunal approaching its determination on the basis that professional misconduct at common law is something different from professional misconduct as defined in s 297(1)(b).

In EFA, the Court said, at [169]-[173]: 169. There is something of a paradox in s 297(1)(b). On a literal interpretation the paragraph focuses on the objective circumstances of the conduct found ("conduct of a lawyer whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law"). Yet, as the majority judgments in Ziems, (particularly that of Kitto J), show, a finding of unfitness involves more than an objective analysis of the impugned conduct, absent other relevant (often extenuating) circumstances. The question of fitness to engage in legal practice focuses not only on the objective circumstances of the conduct in question but also on the personal qualities of the lawyer in question, and other circumstances that bear upon the conduct. Unfitness is ultimately a finding about character, although conduct plays an important role in the evaluation of character. 170. As noted earlier in these reasons, the issue in Ziems was whether a conviction for manslaughter (by driving whilst intoxicated) was of itself sufficient to establish unfitness. By majority, the High Court held that it was not. In the passage already quoted, Kitto J drew a distinction between conduct which, of itself, demonstrated unfitness and conduct that shows "a defect of character" demonstrating unfitness. 171. To justify a finding of unfitness the conduct in question must be seen in context. But, in the two-stage process by which disciplinary proceedings are ordinarily conducted in the Tribunal, much of that which properly informs a holistic assessment of the character of the lawyer concerned, and therefore his or her fitness to engage in legal practice, will not be known until Stage 2 - by which time the conduct has been characterised as unsatisfactory professional conduct or professional misconduct. It does not seem right to characterise conduct as professional misconduct merely because, objectively speaking, it would justify a finding of unfitness if, after consideration of other relevant factors, such a finding would not be justified or warranted. It is only necessary to look at the facts in Ziems and A Solicitor to see that unfitness is not measured by the objective circumstances of the conduct alone. 172. A finding that the impugned conduct would justify a finding of unfitness needs to be made in the context of all available evidence at the time of Stage 1 of the proceeding. It may be, in some cases, that the Commissioner or the relevant professional association has available to it evidence of other instances of conduct similar to, or equally discreditable as, that under consideration; clearly that would be a relevant factor in the determination of whether the conduct in question (not being isolated) was such as to justify a finding of unfitness. That is not this case: so far as the evidence (at the Stage 1 hearing) goes, this was indeed an isolated instance of appalling conduct on the part of the respondent. (At this point, the evidence given at the Stage 2 hearing that adds weight to that inference must be ignored). 173. "Poorly judged, vulgar, and inappropriate" as the Tribunal correctly found the conduct to be, we are not persuaded that the Tribunal was wrong to decline to characterise it as conduct that would (of itself) justify a finding of unfitness. There was nothing to add to that conduct to warrant a finding of unfitness.

[2]

The respondent's argument about professional misconduct

The respondent rejected the applicant's contention that her conduct constitutes professional misconduct under s 297(1)(b) of the Uniform Law, and submitted that the appropriate foundation for a finding of professional misconduct is s 297(1)(a) of the Uniform Law.
The respondent argued that the conduct in question is sufficiently serious to warrant a finding of professional misconduct, but does not, in all of the circumstances, justify a finding that the respondent is, or was at the time of sending the correspondence in issue, not a fit and proper person to engage in legal practice.
The respondent agreed that the test set out in Allison is not a separate basis for a finding of professional misconduct on the current applicable law.
The respondent relied upon the decision of the Court of Appeal with respect to s 297(1)(a) of the Uniform Law in Council of the Law Society of NSW v Webb [2013] NSWCA 423 ('Webb') at [22]: 22. The distinction made by that definition is between conduct which involves a "substantial" failure to reach or maintain the required standard and conduct which involves a "consistent" failure to do so. The former directs attention to the nature and consequences of the failure, which may be sufficiently serious to raise questions as to the lawyer's competence and diligence and thereby warrant the description "substantial". The reference to a "consistent failure" is to ongoing or persisting acts of failing on different occasions to reach or maintain the required standard. The same or similar failures which occur on a series of related occasions and are 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 complaint) do not involve a "consistent failure" in the sense in which that expression is used in this definition.
The respondent relied upon a number of cases in which the conduct complained of involved dishonesty in the performance of legal work. The difference between a substantial failure to maintain a reasonable standard of competence and diligence and a consistent failure to maintain a reasonable standard of competence and diligence was explored. It was submitted that the respondent's conduct in sending the three pieces of correspondence described in the Instrument of Consent should be characterised as a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence under s 297(1)(a).
The respondent argued that unfitness under s 297(1)(b) was to be judged in all of the circumstances, including: 1. the nature and seriousness of the misconduct, 2. the remorse and insight into the misconduct, 3. any prior disciplinary record of the practitioner, 4. other matters following the misconduct, such as honesty and co-operation in the investigation and conduct of the proceedings, any time lag between the conduct and the penalty hearing and any suspension of the practitioner prior to the penalty hearing, and 5. any character references.
The respondent, in its written submissions, said: 26 … having regard to the approach set out in EFA summarised above, it is similarly submitted that the Tribunal would not follow the unqualified contention that subjective mitigating factors are not relevant to the characterisation of the conduct… The approach endorsed by EFA is a more nuanced one: the question remains whether the conduct would justify a conclusion that the person is not a fit and proper person but that conclusion is to be drawn in light of all the information known to the Tribunal. That will depend upon the particular circumstances of the case, including where in a case like the present the determination is not being made in stage one of a two stage hearing but in considering whether to make orders without conducting or completing a hearing under s 144 of the LPUL Application Act. 27 In the present case, what is most critical is that both parties are in agreement that the conduct in question, presently and in all the circumstances known to the Tribunal, does not justify a finding that the Respondent is not a fit and proper person to engage in legal practice. In the circumstances, s 297(1)(a) appears to be the more appropriate foundation for a finding of professional misconduct and it is difficult to see how a finding of professional misconduct under s 297(1)(b) is available.

[3]

Consideration of professional misconduct

The application before us relates to the conduct set out in the agreed statement of facts which form part of the instrument of consent, which is set out above at [3].
The relevant conduct is the false, implicit and explicit representations, contained in the letter of 15 December 2020 and the emails of 5 January 2021 and 19 February 2021, that the law practice which employed Ms Lal was, as at the dates of that letter and those emails, acting for Ms Lal's partner in relation to the dispute the subject of the letter and emails. Ms Lal knew that those false implicit and explicit representations were false at the time that she made them.
In Xu v Council of the Law Society of NSW [2009] NSWCA 430 ('Xu'), Mr Xu, a solicitor, explained a draft contract for the sale of a unit off the plan to his client, Mr Zhang. Mr Zhang signed the contract, and Mr Xu witnessed Mr Zhang's signature. Mr Zhang took the contract away to think it over. A few days later, Mr Zhang returned to Mr Xu's office with the contract, which now had his wife's name, as a joint purchaser, and a signature purporting to be her signature in Chinese characters, on it. It now appeared from the face of the contract that Mr Xu had witnessed both of the signatures on the contract, but he had not done so. It later emerged that the signature purporting to be the wife's signature was a forgery. Mr Xu also signed a s 66W certificate (Conveyancing Act 1919), certifying that he had explained to the purchaser the effect of the contract, the nature of the certificate and the effect of giving the certificate to the vendor. The names of both Mr Zhang and his wife had been typed onto that form, although they had not signed it. It was provided to the vendor's solicitor in that form, and accepted. Mr Xu had not, in fact, explained anything to Mr Zhang's wife.
In Xu, Handley JA, with whom Tobias JA agreed, said, at [40]-[43]: 40 In this state of the evidence the Tribunal was entitled to find, as it did in substance (Red 18), that the solicitor's failure to check the contract after he had learned that the client's wife had signed it and her name had been added as a purchaser, reinforced by his signature of the incomplete s.66W certificate, was a representation (holding out) to the vendor and its solicitors. This representation, on which they were entitled to rely, was that the wife was also a purchaser and, after being properly advised, had knowingly waived her right to a cooling off period. The solicitor would have been liable for negligent misrepresentation and misleading and deceptive conduct if the vendor had suffered significant loss and brought proceedings. To that extent he has been let off lightly. 41 The findings of the Tribunal, so understood, do not establish "a substantial", let alone "a consistent" failure to reach or maintain a reasonable standard of competence and diligence. However that conduct was within the definition of unsatisfactory professional conduct in s.496 ("conduct … that falls short of the standard of competence and diligence that a member of the public is entitled to expect"). 42 As a result of the solicitor's acts and omissions an exchange of contracts between solicitors with a s.66W certificate failed to create a clearly enforceable contract for this simple transaction. However regardless of their consequences, these were momentary and isolated lapses. 43 A finding of unsatisfactory professional conduct, though not charged, was available to the Tribunal under s 562(6), and this Court has power to substitute that finding under ss.75A(6) and (10) of the Supreme Court Act and this should be done.
It is clear from [41] of Xu that dishonest conduct by a solicitor is capable of characterisation as "conduct … that falls short of the standard of competence and diligence that a member of the public is entitled to expect." In other words, the concept of a standard of competence and diligence has, as one of its many elements, the expectation that such conduct will not be dishonest conduct.
Ms Lal's dishonest explicit and implicit representations were made on three occasions; 15 December 2020, 5 January 2021 and 19 February 2021.
Ms Lal's conduct falls within the definition of unsatisfactory professional conduct under s 296 of the Uniform Law because it is below the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent lawyer. In saying that, we acknowledge that there has been no criticism of Ms Lal's technical skill as a lawyer. However, her conduct in misleading the vendor to think that the legal practice which employed her was acting for her partner was below the applicable standard of competence and diligence which the public is entitled to expect of a reasonably competent lawyer, on the basis of Handley JA's words in Xu.
The question, then, is whether the conduct involved a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence so that it constitutes 'professional misconduct' under s 297(1)(a) of the Uniform Law.
The conduct took place over two months and four days. It comprised three pieces of correspondence in relation to the same legal matter. In context, we do not consider that it was a 'consistent' failure within the meaning of s 297(1)(a) of the Uniform Law. It was, however, as the respondent has readily conceded, a 'substantial' failure. This is consistent with the reasoning in Webb.
Having determined that Ms Lal's conduct constituted professional misconduct under s 297(1)(a) of the Uniform Law, it is unnecessary to decide whether it also falls within s 297(1)(b) of the Uniform Law.

[4]

Disciplinary Orders

Disciplinary orders should provide specific deterrence and general deterrence among the profession at large to preserve the high standards of the profession. Disciplinary orders protect the public.
The applicant, very properly, submitted that Ms Lal's conduct amounted to an error of judgment on her part and resulted from a lack of objectivity and detachment in a stressful situation. The applicant further noted that Ms Lal has no other adverse disciplinary findings recorded against her. She has expressed contrition, remorse and insight. The favourable evidence of her good character was acknowledged.
The respondent submitted that the conduct was confined to one matter and three pieces of correspondence over a short period of time. The matter was a stressful matter in which Ms Lal was seeking to assist her partner. Ms Lal realised that her conduct was wrong after sending the second email. The conduct was an error of judgment on Ms Lal's part, confined to one specific set of circumstances.
There is no doubt that Ms Lal has demonstrated insight into her conduct and remorse. She is deeply ashamed and embarrassed. In her affidavit, she acknowledged the impact of her actions on the vendor and on the legal profession. She demonstrated an understanding of the importance of honesty in the practice of the law. Ms Lal has sent a letter of apology to the vendor. She has co-operated fully with the investigation of the matter. Her character references are very supportive. We accept that Ms Lal is a person of good character, and that the conduct the subject of this matter was out of character.
We note that Ms Lal has attended a legal ethics course at the behest of her employer.
We consider that the orders set out in the instrument of consent are appropriate, although order 1 in the instrument of consent is a finding, not an order. We will reword the order in relation to the further education requirement to make it clearer. We foreshadowed this course to the parties at the hearing, and there were no objections.