Barwick v Law Society of New South Wales (LSD)

[2002] NSWADTAP 21

Appeal Panel

CITATION:	Barwick -v- Law Society of New South Wales (LSD) [2002] NSWADTAP 21
PARTIES:	APPELLANT Ross Garfield Barwick RESPONDENT Council of the Law Society of New South Wales
FILE NUMBER:	029023
HEARING DATES:	13/06/2002
SUBMISSIONS CLOSED:	06/13/2002
DATE OF DECISION:	06/20/2002
DECISION UNDER APPEAL:	Law Society of New South Wales -v- Barwick & Dechnicz [2002] NSWADT 66
BEFORE:	O'Connor K - DCJ (President); Staff C - Judicial Member; Bennett C - Member
CATCHWORDS:	interim order
MATTER FOR DECISION:	Preliminary matter
FILE NUMBER UNDER APPEAL:	002018
DATE OF DECISION UNDER APPEAL:	04/29/2002
LEGISLATION CITED:	Administrative Decisions Tribunal Act 1997 Legal Profession Act 1987
CASES CITED:	Council of the Law Society of New South Wales v Barwick & Dechnicz [2002] NSWADT 66 New South Wales Bar Association v Hamman [1999] NSWCA 404 (29 October 1999) The Southern Law Society v Westbrook (1910) 10 CLR 609 Incorporated Law Institute of NSW v Meagher (1909) 9 CLR 655 Sinha v Health Care Complaints Commission [2001] NSWCA 48 Robb and Rees v The Law Society of the Australian Capital Territory (unreported, Fed Ct, 21 June 1996 Finn J) McBride v Sandiland (1918) 25 CLR 369
REPRESENTATION:	APPELLANT P Brereton SC, barrister RESPONDENT D Barton, solicitor
ORDERS:	1. The application for a stay of the original order is refused.; 2. Costs of the application reserved.

1 On 29 April 2002 the Legal Services Division of the Tribunal (the Tribunal) ordered that the name of the appellant, then a solicitor, be removed from the roll of legal practitioners: Council of the Law Society of New South Wales v Barwick & Dechnicz [2002] NSWADT 66. The Tribunal had undertaken an inquiry into the conduct of two solicitors pursuant to the provisions of Part 10 of the Legal Profession Act 1987 following the filing of an information by the Council of the Law Society, alleging that each was guilty of professional misconduct. The charges and the particulars to which the appellant was required to reply are set out in the Amended Information filed 29 May 2001.

2 A notice of appeal was lodged on 24 May 2002. The appellant has exercised his right to appeal to an Appeal Panel of the Tribunal conferred by s 171F of the Legal Profession Act1987, and governed by ss 112 and following of the Administrative Decisions Tribunal Act 1997 (Tribunal Act).

3 Pending determination of the appeal, the appellant now applies to the Appeal Panel for a stay of the Tribunal’s order: see Tribunal Act s 116. The appellant’s primary application is that the order be stayed unconditionally, but is prepared to submit to conditions if that course is seen to be more appropriate. In the alternative, a conditional stay order is sought whereby the appellant might be permitted to practise under the supervision of Mr Boitano, with Mr Boitano to oversee the trust account and subject to any reasonable undertakings from the appellant. The respondent to the appeal and informant in the original proceedings, the Council of the Law Society, opposes the application.

4 As has often been stated, the primary purpose of professional discipline is the protection of the public not the punishment of practitioners: See for example per Davies AJA in New South Wales Bar Association v Hamman [1999] NSWCA 404 (29 October 1999) at 117:
‘The objective of disciplinary proceedings is the protection of the public and the maintenance of proper standards in the legal profession. In The Southern Law Society v Westbrook (1910) 10 CLR 609 at 619, O'Connor J said that:

"... the Court in maintaining a solicitor on the roll is holding out to the public that he is a fit and proper person to be entrusted by the public with those difficult and delicate duties and that absolute confidence which the public must repose in persons who fulfil the duties of solicitors."

In Incorporated Law Institute of NSW v Meagher (1909) 9 CLR 655 at 681, Isaacs J said:

"There is therefore a serious responsibility on the Court - a duty to itself, to the rest of the profession, to its suitors, and to the whole of the community to be careful not to accredit any person as worthy of public confidence who cannot satisfactorily establish his right to that credential. It is not a question of what he has suffered in the past, it is a question of his worthiness and reliability for the future."’

5 The Tribunal found the practitioner guilty of professional misconduct in several respects and formed the view that the proven misconduct was so grave that the practitioner should be ordered to cease practice. The appellant now asks that he be permitted to practise pending the determination of the appeal.

6 The highest order that a disciplinary tribunal can impose is that of deregistration. The order reflects the degree of odium with which the profession and the community views the conduct in issue. It is a clear expression of the public interest as seen by a tribunal that includes eminent members of the profession and a community representative. It is not one to be lightly interfered with. A practitioner seeking the stay of such an order so as to permit his or her return to practice needs, we consider, to demonstrate countervailing public interest considerations that are exceptional.

7 The usual principles applicable to stay applications (as to which, see generally Ritchie’s Supreme Court Procedure, para [51.15.33]) mainly developed in the context of ordinary civil proceedings. They should be applied in a context such as the present, always having regard to the important public interest considerations involved in professional discipline.

8 Two recent cases illustrative of the way in which the stay discretion is exercised in the professional discipline context are Sinha v Health Care Complaints Commission [2001] NSWCA 48 and Robb and Rees v The Law Society of the Australian Capital Territory (unreported, Fed Ct, 21 June 1996 Finn J).

9 In Sinha, the Court of Appeal (Sheller JA) heard an application to stay a decision of the Medical Tribunal ordering that the appellant’s name be removed from the register of medical practitioners. The Medical Tribunal, exercising a statutory power, stayed its deregistration order for a fixed period on the condition that the medical practitioner did not practise in the meantime. The practitioner lodged an appeal, and then applied to the Court of Appeal for a new stay order extending the time period, and more importantly permitting him to return to practice. The Court of Appeal decided to extend the time period; the lifting of the practice restriction was refused. The original Tribunal had seen fit to grant a stay as to deregistration only. The Court in effect continued that order for a further period. There was no risk to the public interest involved, as the practitioner continued to be barred from practice. It is not in our view a case helpful to the appellant’s application in this case.

10 In Robb, a legal practitioner was suspended by the Supreme Court of the Australian Capital Territory for a finite period of eighteen months and another practitioner was ordered to pay a fine of twenty thousand dollars. Both practitioners sought a stay of the Supreme Court’s decision pending the outcome of an appeal. The appeal is to the Federal Court, Full Court. The stay application was heard by a single member of that Court, Finn J.

11 His Honour observed at [8]:

‘… the success or failure of the stay motion turns on the appropriate weight to be given here to protecting the public interest on the one hand and avoiding prejudice to Mr Robb on the other. By prejudice I mean the detriment he would suffer if his appeal in the event was successful in howsoever many month’s time, but his suspension had remained operative until the Full Court has so ruled in his favour.’
12 At [24] his Honour gave a helpful outline of the relevant discretionary criteria, which we have used as guidance:
‘There is a variety of factors of which account can or should properly be taken when considering a stay in such cases. Among these are (i) the seriousness of the misconduct found; (ii) the likely prejudice to public confidence both in the integrity of the disciplinary processes themselves and in the reputation of the profession if the practitioner is granted a stay; (iii) the means available to mitigate the prejudice alleged; and (iv) the expedition with which the appeal can be heard.’
13 In that case His Honour did not look closely at the arguability of the grounds of appeal in light of submissions by the parties. In the present case, we have considered the question of arguability.

14 The appellant has put in issue a number of the findings made by the Tribunal on the basis that the appellant was denied procedural fairness and that the Tribunal did not, sufficiently or at all, set out the reasoning process that led to a number of conclusions.

15 The appellant also pointed to passages in the reasons for decision where, it was said, there was no adequate consideration of such matters as: character evidence (in particular, being unduly dismissive as to the extent of the character witnesses' knowledge of the misconduct alleged and admitted); and lack of weight given to the pleas of guilty. It was submitted that the Tribunal took into account irrelevant considerations on penalty. It was submitted that the test adopted by the Tribunal in determining whether to deregister the practitioner was misconceived. It was said that the Tribunal should have asked whether, having regard to the findings, the appellant's conduct since the events in issue and the character evidence, supported a conclusion that the appellant was 'presently' unfit to practise. Instead it was said that the Tribunal had applied a 'public interest' test, which was the wrong test. Counsel for the appellant acknowledged that past misconduct can support a finding of present unfitness.

16 Counsel for the appellant also acknowledged that the existence of arguable grounds of appeal is not itself a sufficient basis for the exercise of the discretion: McBride v Sandiland (1918) 25 CLR 369 at 374.

17 At this point it would, we consider, be undesirable for us to examine in great detail the appellant’s submissions in relation to the arguability of the grounds of appeal. It suffices, we consider, for us to express the view that we regard them as reasonably arguable in relation to the principal errors said to have occurred in the decision, i.e. the making of findings which in some instances exceed the scope of the particulars alleged; the absence of any warning to the appellant that such additional findings might be made; and the potential effect of those additional findings on the conclusion reached by the Tribunal as to penalty.

18 This assessment is made on the basis of the limited review undertaken at the stay hearing, confined to an examination of the Amended Information, correspondence admitting several of the charges and relevant particulars, and the reasons for decision. Importantly, there has been no examination at this stage of the full transcript of the proceedings below. Nor has any close consideration been given to the question of whether, if the Appeal Panel is satisfied that there are errors of law, the errors are of sufficient significance to warrant setting aside the decision as a whole or setting aside the penalty order.

19 The Amended Information contained 6 charges being Charges numbered 1, 2, 3, 4 (included five sub-charges numbered (a) to (e), 5 (included two sub-charges (A) and (B)) and 7(b). Each Charge was accompanied by detailed particulars. Charges 6 and 7(a) of the original Information were withdrawn. By letter dated 24 May 2001 (as amended on the first day of hearing, 28 May 2001) the practitioner admitted all charges ‘as particularised’ except for charge 5(B). Charge 5(B) was supported by one particular numbered (f). The hearing proceeded over 15 hearing days. All charges were found proven.

20 Despite the appellant’s admission to all but one of the charges ‘as particularised’, it is apparent from the final written submissions of the appellant (at the hearing below) that several of the particulars were disputed to some degree (for example: as to Charge 1, particular (e); as to Charge 3, particular (a) [which refers in turn to particulars (j)(ii)(B) and (D) of Charge 1]; as to Charge 7, particular (b)).

21 The charges found proven in summary were as follows:

Charge 1: Neglect delay and incompetence in administration of a Deceased Estate (the Wilkinson estate)

Charge 2: Breach of fiduciary duty towards a Beneficiary (Mrs Fulton) of the Wilkinson Estate

Charge 3: Misleading a Beneficiary (Mrs Fulton)

Charge 4: Various breaches of Solicitor’s Duties in respect of the Loan of Client and Deceased Estate funds to a borrower (Mrs Roberts, the appellant’s sister), itemised as (a) to (e)

Charge 5(A): Misleading the Law Society and the Tribunal in relation to Mrs Fulton’s affairs

Charge 5(B) Misleading the Law Society and the Tribunal on matters generally

Charge 7(b) Misleading the Trust Account Inspector about the Wilkinson Estate.

22 The alleged professional misconduct in the Amended Information centres around the appellant’s misapplication of trust account funds. The funds misappropriated were held in trust on behalf of a number of people, including a client, beneficiaries of a deceased estate (the Wilkinson estate) and trustees of another deceased estate (the Slepkowyz Estate) (collectively referred to as ‘clients’). The appellant was the executor and trustee of the Wilkinson estate.

23 The appellant arranged for a loan to be made to his sister, Mrs Roberts, subject to mortgage over her land. He used funds placed with him by clients for that purpose. The ‘contributory’ mortgage, as mortgages sourced in this way are known, was not registered. It transpired that the sister’s land was already encumbered by a first registered mortgage. The appellant claimed that he was not aware of that fact. The Tribunal made findings against the appellant in that regard. The sister’s evidence was that she thought that the moneys lent to her had come from the National Australia Bank, not from clients and estates connected with her brother’s practice; and only found out to the contrary in the course of the Law Society’s investigation.

24 The Tribunal was satisfied that the original loan transaction was a sham. The moneys lent were immediately on-lent by Mrs Roberts to the appellant. He used the funds to assist his then partner, Mr Dechnicz (who has also been found guilty of professional misconduct), to meet various debts including one owed to an outgoing partner in connection with the dissolution of a former practice.

25 The Tribunal found that the appellant breached a number of legal requirements affecting legal practitioners bearing on the handling of mortgage transactions. These included the appellant’s failure to inform the clients of the loan arrangement; and failing to obtain authorities from the clients and to advise the clients to obtain legal advice in respect of the loan. As a result of this latter failure, the requirement to obtain a certificate of independent legal advice was not complied with. As the appellant had not registered the mortgage or paid stamp duty, the appellant also failed to meet the legal requirements that arise when preparing and issuing a mortgage.

26 One of the beneficiaries of the first deceased estate (the Wilkinson Estate) was Mrs Fulton. The appellant failed to respond promptly to inquiries made by Mrs Fulton and failed to attend to the conduct and completion of the administration of the estate within a reasonable time.

27 At the time the appellant finally released Mrs Fulton’s inheritance to her (and after the loan had been made) the appellant obtained the beneficiary’s signature on a document titled “General Lending Authority”. The appellant failed to explain to Mrs Fulton that the document purported to be an authority for the investment of estate moneys which he proposed to produce to the Law Society as evidence that she had ratified his loan of estate moneys to his sister.

28 The conduct revealed clearly was grave, and affected several people who had placed their trust in the appellant. The appellant was a highly experienced practitioner, a factor which increases the gravity of the conduct.

(iii) The likely prejudice to public confidence both in the integrity of the disciplinary processes themselves and in the reputation of the profession if the practitioner is granted a stay
29 The appellant submits that the public interest would not be adversely affected by reinstatement to practice pending the determination of the appeal. The appellant has referred in his affidavit in support of the application to the impact financially on him of not continuing in practice. There is also an affidavit from his former partner, Mr Boitano, referring to the impact on clients and the practice caused by the appellant’s absence from the practice.

30 Removal from a profession inevitably carries that impact, one that would have been well understood by the primary Tribunal.

31 These are matters to which little weight can be given in light of the (presently uncontroverted) findings of the Tribunal.

32 The appellant also submits that no actual financial loss was caused to any person. This oversimplifies the situation. The present findings support the conclusion that heirs to an estate were deprived of access to their inheritances long past any reasonable time for administration of the estate. The clients had their funds misapplied contrary to instructions and with diminished security. Their risk of loss was thereby increased.

33 The appellant submits that he has continued to practise for the 9 years that have passed between first being investigated by the Law Society, and the making of the determination by the Tribunal. (The hearing as to liability was long delayed due to a successful appeal by the appellant in relation to compliance by the Law Society with procedural requirements affecting the original Information, the passage of curative legislation and the recommencement of the proceedings leading to the filing of a fresh Information.) He submits that the absence of any further misconduct in that period supports a conclusion that the protection of the public is not at risk pending determination of the appeal. He also submits that the conduct in issue was all connected with one set of circumstances.

34 The public would expect to be protected from any practitioner found guilty of the conduct proven. The public, we consider, would be concerned if a practitioner found guilty of such conduct, were to be allowed to continue in practice. The conduct proven against the appellant was grave. It involved serious failures on the part of an experienced solicitor in relation to the management of trust funds and the timely administration of a deceased estate. The conduct extended over a long period of time.

35 One of the purposes of a deregistration order is to signify to other members of the profession what are the most unacceptable types of unprofessional conduct; and thereby to deter them from engaging in those types of conduct. If anything, the scope of what is seen as unacceptable conduct warranting deregistration is widening. In recent times, for example, we have seen the Supreme Court in the exercise of its inherent jurisdiction in respect of legal practitioners, adopt a stricter attitude than may once have prevailed in relation to breaches of law not directly connected with the day to day conduct of practices (i.e. significant failures on the part of practitioners to meet their general obligations to pay income tax).

36 There is also a public interest in according orders of a disciplinary tribunal respect, and giving them effect, unless and until they are shown to be in error.

37 These points were acknowledged by the appellant. However he contends that there are mitigating factors in his case which should be taken into account.

38 The appellant draws attention to his having made several admissions. His counsel submitted that this conduct counts in his favour. The Law Society noted that the admissions were made 8 years after the charges in their first version were placed before the appellant.

39 We have not at this stage perused the transcript (except for the first day), but expect that this consideration would have been placed before the original Tribunal and taken into account by the Tribunal in reaching its conclusion on penalty. We are disinclined on a stay application to give any great weight to such a submission. To do so would, we consider, tend to bring forward into the stay hearing a matter (the soundness of the penalty imposed by the Tribunal) which is more properly dealt with at a point where it has been established that there was a defect in the Tribunal’s reasons sufficient to justify reopening the penalty decision.

40 These possibly-exculpatory matters, in our view, are better addressed in the context of the consideration of penalty; and ought not to be given significant weight on a stay application. As to the long period during which the appellant has practised free of further adverse findings, this is also a matter, to be taken into account if the appeal is successful and there is a reopening of the question of penalty.

41 We are not satisfied that the considerations advanced by the appellant are of sufficient significance to outweigh the damage to public confidence both in the integrity of the disciplinary processes themselves and in the reputation of the profession if the application is granted.

42 Finally in this regard, the appellant referred to the abrupt way in which he became aware that he had been the subject of an order that he cease practice. The decision and order were published through the Registry the day after notice of publication was given to the parties. He was appearing in Court on behalf of a client when he was informed of the order. That order was expressed in a form which made it immediately operative. The situation that arose is to be regretted, especially in terms of its impact on the client for whom the appellant was appearing. A practice and procedure issue has been identified which will be considered by the Rule Committee of the Tribunal.

43 The Law Society noted that it was open to the appellant’s former partner, Mr Boitano, to apply under s 48K of the Legal Profession Act to the Law Society for the appellant’s reinvolvement in practice on conditions. There may be a case for the appellant to be given some restricted right to return to the offices of the continuing practice so as to undertake an orderly closure. That is a matter which it is open to the Law Society to consider under the Act upon application from Mr Boitano. The appellant has not been inclined to press Mr Boitano to pursue such an option. Instead the appellant presses the present application.

44 Mr Boitano has indicated that he is prepared to give undertakings in relation to any role that the appellant may be permitted in connection with the practice. This is a matter which is best addressed in the first place by the Law Society. Any decision made by the Law Society under s 48K is appealable to this Tribunal.

45 We note in this regard that the appellant's partner, Mr Dechnicz, ultimately discontinued a similar application, instead pursuing the course of seeking permission to attend his practice under the supervision of the manager appointed by the Law Society under Part 8A of the Legal Profession Act.

46 Another factor which is relevant is whether there is likely to be undue delay in having the appeal heard. In this case directions have been made, and the Appeal Panel is available at any convenient time to the parties from the end of July. This is not a significant factor in this case.

47 For the reasons given, the application is refused.

ORDERS

1. The application for a stay of the original order is refused.

2. Costs of the application reserved.