Council of the Law Society of New South Wales v Graham - [2005] NSWCA 127

NEW SOUTH WALES COURT OF APPEAL

CITATION: THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES v GRAHAM [2005] NSWCA 127

FILE NUMBER(S):
CA 40937/04

HEARING DATE(S): 25 March 2005

JUDGMENT DATE: 25/03/2005

PARTIES:
THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES
(Appellant)

IAN DOUGLAS GRAHAM
(Respondent)

JUDGMENT OF: Mason P Handley JA Pearlman AJA

LOWER COURT JURISDICTION: Administrative Desisions Tribunal (Legal Services Division)

LOWER COURT FILE NUMBER(S): 032032

LOWER COURT JUDICIAL OFFICER:

COUNSEL:
Appellant: G C Lindsay SC

Respondent: R F Wilkins

SOLICITORS:
Appellant: R J Collins

Respondent: Rob Makin & Associates

CATCHWORDS:
ADMINISTRATIVE LAW - professional misconduct - Legal Profession Act 1987 s 127 - Legal Profession Regulation 2002 cl 94

LEGISLATION CITED:
Legal Profession Act 1987
Legal Profession Regulation 2002

DECISION:
Appeal dismissed with costs.

JUDGMENT:

IN THE SUPREME COURT
OF NEW SOUTH WALES
COURT OF APPEAL

CA 40937/04
MASON P
HANDLEY JA
PEARLMAN AJA
Wednesday 25 March 2005

THE COUNCIL OF THE LAW SOCIETY OF NEW SOUTH WALES v IAN DOUGLAS GRAHAM

Judgment

MASON P: This appeal comes to this Court as an appeal by way of rehearing. Amendments to the Legal Profession Act 1987 (the Act) that were made in 2004 preclude an appeal to the Appeal Panel of the Administrative Decisions Tribunal and direct any such appeal to this Court indicating the nature of the appeal as one by way of rehearing (see s 171F of the Act. See also s 48(2)(f) of the Supreme Court Act and Sch 5 cl 6(4) of the Administrative Decisions Tribunal Act 1997).
On 24 December 2003 the Council of the Law Society filed an information in the Administrative Decisions Tribunal Legal Services Division. It charged the respondent, a legal practitioner, with professional misconduct on the ground that:
“The solicitor has wilfully failed to comply with the requirements of Clause 94(1) of the Legal Profession Regulation 2002.”
The Law Society sought orders in the nature of a public reprimand, a fine, payment of costs and such further ancillary orders as the Tribunal saw fit.
Schedule 1 to the Information stated particulars of the professional misconduct that was alleged. Cl 94(1) of the Legal Profession Regulation 2002 provides:
94(1)If a solicitor received, held or disbursed money to which section 61 (1) of the Act applies at any time during the year ending on 31 March that last preceded an application by the solicitor for the issue or renewal of a practising certificate, the solicitor must ensure that, on or before the making of the application, there is lodged with the Law Society an accountant’s report in respect of:
(a) each practice conducted by the solicitor as a sole practitioner, and
(b) each firm of which the solicitor was a partner, at any time during that year, and
(c) each incorporated legal practice of which the solicitor was a solicitor director, at any time during that year.
The core facts were not in dispute, although there are issues about the direct relevance of the conduct in 2002 and the conduct post 5 May 2003 to which some reference will be made below. The respondent had held or dispersed money in his trust account during the year ended 31 March 2003. He held a practising certificate throughout 2003-2004. He was accordingly bound by cl 94. He lodged his application for a practising certificate for the year ending 30 June 2004 shortly before 5 May 2003, the date of its receipt by the Law Society. The due date for lodgement of such an application was in fact 15 May 2003. The application was not accompanied by the accountant’s report, this omission being readily acknowledged by the fact that the solicitor ticked the “no” box provided in the requisite form.
On 23 June 2003, Mr Collins the Chief Trust Account Inspector and Manager of Professional Standards of the Law Society wrote to the solicitor as follows (AB 3):
“The Society’s records disclose that for the period 1 April 2002 to 31 March 2003, your firm maintained a trust account and/or controlled money account. As a consequence and Account’s (sic) Report is required to be lodged with your application for renewal of your practicing certificate for 2003/2004. An Accountant’s Report has not been received for the firm.
The Accountant’s Report is required to be lodged in accordance with clause 94(1) of the Legal Profession Regulation 2002. The Law Society Council in accordance with Section 30 of the Legal Profession Act is unable to issue a practicing certificate until the required information as prescribed by the regulation has been received.
Will you please forward the Accountant’s Report as a matter of urgency. In the event that the report is not received, the matter will be considered by the Law Society Council at the Council meeting to be held on 17 July 2003.
…”
A further letter from Mr Collins dated 8 July 2003 stated (AB 18):
“I refer to the Chief Trust Account Inspector’s letter dated 23 June 2003 regarding the necessity to lodge an Accountant’s Report as required by Clause 94 of the Legal Profession Regulation 2002. The Accountant’s Report is required as part of the process for renewal of your practicing certificate.
Section 30 of the Legal Profession Act 1987 provides, inter alia, that the Council of the Law Society must refuse to issue a practicing certificate in the event of either a failure to lodge an Accountant’s Report or such a Report not containing the prescribed information.
The Chief Trust Account Inspector has advised that you have not complied with your obligation in regard to the lodgement of an Accountant’s Report. I also note that your 2002 Accountant’s Report was received after 30 June 2002 and I attach a copy of my letter dated 2 August 2002 for your information.
The Council of the Law Society will be asked to consider your entitlement to renew your practicing certificate and the need to appoint a manager to your practice pursuant to Section 114B of the Act at its meeting of 17 July 2003.
Would you please comply with one of the following options prior to 5 pm Thursday 16 July 2003.
In the event of you having already forwarded the report please send me a copy so that further action is stayed; OR
Submit a properly completed Accountant’s Report together with a full and frank explanation for its delay; OR
Provide such written submissions as you may wish as to why the application for renewal of your practicing certificate should not be refused and a manager appointed to your practice.
In the event that you lodge the Accountant’s Report prior to 5pm 16 July 2003, please provide such written submissions as you may wish as to why the Council should not appoint an investigator to your affairs, pursuant to Section 55 Legal Profession Act.
Please note that the Regulation does not provide for an extension of time in which an Accountant’s Report is to be lodged”.
There was some discussion this morning about the correctness of par 2 of that letter. It has no bearing on the issues in this case. Here the Law Society issued a practising certificate to the solicitor on 17 July 2003.
On 11 July 2003, Mr Collins wrote to the solicitor as follows (AB 20):
“I refer to my previous correspondence in relation to your failure to provide an Accountant’s Report as prescribed by Clause 94(1) of the Legal Profession Regulation 2002.
Your failure to provide the above report will be considered by the Council of the Society when it meets on Thursday 17 July 2003.
Aside from having to consider whether it should take any further action in relation to your failure it will also have to consider any subsequent issuing to you of a Practicing Certificate for the year ending 30 June 2004.
I am writing to advise you that when it meets, Council will have recommended to it that, in the event of a Practicing Certificate being issued, it be subject to the following conditions:
the Solicitor, within twenty-eight days after the end of each calendar month, is to provide to the Inspection and Investigation Department of the Law Society of New South Wales [“the Society”] and to the Manager of the Professional Standards Department of the Society [“the Manager”] for scrutiny a copy of his trial balance statement disclosing each account in his trust ledger effective as at the end of such month to which that trial balance relates, together with copies of those trust account records upon which such trial balance statement has been prepared including, but not limited to, bank reconciliation, bank statements, bank control accounts or cash book balance.
the Solicitor’s practice is to be subject to quarterly inspection by a Solicitor nominated by the Manager. That Solicitor so appointed shall report to the Manager after each of the inspections the cost of which is to be borne by the Solicitor.
As the above conditions are not of the kind referred to in the Legal Profession Act, Section 33(1)(d) of the Act requires that your agreement to the placing of such conditions on any Practicing Certificate issued to you be obtained.
In order that the Council can be informed of your consent or otherwise [and thus determine its position] please sign and date the enclosed copy of this letter, making the appropriate notation on the note at the foot thereof.
Your reply no later than 5pm on Tuesday 15 July is required”.
On 15 July the solicitor wrote to Mr Collins at the Law Society stating (AB 22):
“I apologise for the delay in forwarding the 2003 Accountant’s Report. At the time the report should have been being prepared I was in the process of having a regular trust account inspection.
When I contacted the accountant who prepared last year’s report he was unavailable during June.
I contacted David Green who has prepared the reports which will be delivered to my office at 9am tomorrow morning when I will fax them immediately to you.
With respect to the question of whether my practising certificate should be renewed, I submit that the accountant’s reports have now been prepared and that I should be allowed to continue practise.
…”
The accountant’s report was faxed to the Law Society on 16 July. At the meeting on 17 July, a practising certificate was issued to the solicitor subject to various conditions.
S 36 of the Act provided in effect that the practising certificate issued to the solicitor in 2002 remained in force during the pendency of his application for a certificate for the following year. As indicated, it was on 17 July 2003 that the Council did issue a fresh practising certificate. Accordingly there was no question or threat of practising without a certificate. On 17 July, the Council also resolved to make a complaint against the solicitor pursuant to s 174 of the Act. The text of the complaint that was resolved to be made was identical to that presented in the Information referred to above. There was no resolution and no complaint with respect to unsatisfactory professional conduct.
The particulars in the evidence also make reference to the solicitor’s failure to comply timeously with the corresponding regulation, ie cl 48 of the Legal Profession Regulation 1994 applicable in early 2002. That breach, which was later “remedied” to the apparent satisfaction of the Council had resulted in the solicitor being advised as follows:
“At the meeting of the Council of The Law Society held on Thursday 18 July 2002 it was resolved inter alia that you be advised that the Council considered your failure to be serious and that you be warned against similar failure in the future. Council further determined to record the fact that this warning has been given.
No further action is to be taken regarding your failure to provide the 2002 accountant’s report, but any failure to provide the same in accordance with the Act and Regulation in future may lead to the refusal to issue you with a practising certificate.”
The solicitor filed a reply in the Tribunal which effectively admitted the facts, made no admission on the issue of wilfulness, and made various acknowledgements as to non-objection to penalties that had been foreshadowed.
During the hearing before the Tribunal the Council led no evidence beyond the correspondence. Its advocate told the Tribunal (AB 38):
“We can’t say that he failed to lodge his accountant’s report deliberately. What we can tell you is he failed to take the steps on his own material to do so, and using the words…”
Here the transcript is confused.
The effect of what was put clearly was a reference to the decision in Re Hodgekiss [1962] SR (NSW) 340, and an assertion that the conduct of the solicitor was wilful within the context of the charge that had been proffered.
The solicitor gave evidence by way of explanation of his admitted default in 2003. He readily conceded a degree of slackness on his part, but was at pains to show that the breach had not been contumelious. There had been a trust account inspection taking place over a couple of months in early 2003, completed in about May. This had delayed the solicitor sending his books to his accountant for the preparation of the requisite certificate. I should add that the certificate, which is in Form 6 of the Regulation is a document of some complexity.
There had been a change in the constitution of his practice, and this had delayed the accumulation of the necessary papers. The former accountant had charged a substantial fee and quoted a substantial fee to continue working for the solicitor.
In the solicitor’s words (AB 45):
“The main reason was that the accountant...(not transcribable)... had quoted me $2,000, and I thought that that was too much. I didn’t have that money at the time to - to spend. Here, I had to pay the – the - the fee for when your - my practising certificate. I searched around and found another accountant who actually charged me $750 in the end, but I readily admit that I was too slow. That - that, you know, given the previous warning it was - was stupid of me. But, that’s what happened.”
It appears that the new accountant was unable to do the work in June, hence the delay that continued into July 2003.
In the final submissions before the Tribunal the advocate for The Law Society argued that the solicitor’s conduct represented professional misconduct, alternatively unsatisfactory professional conduct.
The latter submission may have been with an eye to s 127(1)(a) of the Act. However, senior counsel for the appellant accepted before us that no submission was pressed in the Tribunal below to the effect that there was professional misconduct in the sense of:
“Unsatisfactory professional conduct where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence.” (s127(1)(a)).
In view of that, I do not think it would be fair to permit the decision below to be justified by reference to that paragraph of the definition.
As indicated below, the Tribunal considered itself at liberty to consider a fallback position advanced by The Law Society, namely that there was unsatisfactory professional conduct within the definition of s 127(2) of the Act.
The Tribunal ordered that the Information be dismissed with no order as to costs. See Law Society of New South Wales v Graham (2004) NSWADT 213. The Tribunal recorded the facts, including observing that the failure to lodge the report before lodging the renewal application was admitted by the solicitor. The Tribunal described the terms of the letter from The Law Society of 11 July 2003 as “most significant in the proper determination of the information”.
I read this as the foreshadowing of the statements to be found in pars [31] to [35] of the Tribunal’s reasonings where there was use of a label of “administrative” and “licensing” by reference to the obligation imposed by
cl 94.
The letter from the Manager, Professional Standards dated 11 July 2003 noted the continuing failure to provide the accountant’s report in accordance with cl 94 and foreshadowed that that would be considered by the Council of the Law Society when it met on 17 July 2003. The letter in effect preserved the Society’s right to take action along the lines of that which it did take. However, it also flagged the fact that the Council would have recommended to it that in the event of a practising certificate being issued in the particular circumstances it would be subject to particular conditions of more onerous inspection with regard to the practice of this particular solicitor.
“Professional misconduct” and “unsatisfactory professional conduct” are defined in a non-exclusive way in s 127(1) and (2) of the Act as follows:
127(1)For the purposes of this Part, "professional misconduct" includes:
(a) unsatisfactory professional conduct, where the conduct is such that it involves a substantial or consistent failure to reach reasonable standards of competence and diligence, or
(b) conduct (whether consisting of an act or omission) occurring otherwise than in connection with the practice of law which, if established, would justify a finding that a legal practitioner is not of good fame and character or is not a fit and proper person to remain on the roll of legal practitioners, or
(b1) (Repealed)
(c) conduct that is declared to be professional misconduct by any provision of this Act, or
(d) a contravention of a provision of this Act or the regulations, being a contravention that is declared by the regulations to be professional misconduct.
(2)For the purposes of this Part, "unsatisfactory professional conduct" includes conduct (whether consisting of an act or omission) occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner.
I have already indicated why this Court should not have any regard to par (1)(a). I must say that the facts fall very far short of those engaged in par (1)(a) in any event on my reading of the findings.
There is no suggestion that pars (1)(b), (c) or (d) of the statutory definition were engaged on the facts. The Tribunal had correctly observed that pars (1)(c) and (d) were not engaged in contrast to ss 61(8), 62(4), 152(4) and 207(6) of the Act.
The Tribunal in its reasons then addressed the common law situation. It cited the well-known tests in the judgment of Lopes LJ in Allinson v General Council of Medical Education & Registration [1894] 1 QB 750 and of Rich J in Kennedy v The Council of the Incorporated Law Institute of New South Wales (1939) 13 ALJ 563.
Turning to the particular facts the Tribunal said this:
27 The conduct complained of in relation to the Solicitor in this matter is properly in the view of this Tribunal regarded as administrative failure by the Solicitor. The Tribunal does not mean in any way to treat the failure as trivial but considers the “administration” designation helpful in examining the quality of the conduct. The provision of a proper Accountant’s Certificate was a pre-condition of the renewal of the Solicitor’s Practising Certificate. The Solicitor had a duty to supply that Certificate, just as the Society had a duty to require provision of that Certificate in satisfactory form before renewing the Solicitor’s Practising Certificate.
28 The Society in its submissions placed weight upon the words of Clark JA in Carver v The Legal Profession Disciplinary Tribunal & Anor (Unreported 27 September 1991) where His Honour said:
“The Law Society are very good judges of what is professional misconduct by a Solicitor, just as the General Medical Council are very good judges of what are (sic) misconduct as a medical man.”
29 Clearly, His Honour’s comments reflect that the decision of the Society to lodge an information is the result of careful consideration, but the determination of the nature of the conduct remains a matter for the Tribunal or the Court in the light of the evidence brought in support of and in opposition to the complaint. The Tribunal notes and has carefully considered the Society’s claim as detailed in the information but ultimately the Tribunal, of course, has to make its own determination of the nature of the conduct referred to in the complaint.
30 It was agreed in submissions that no complaint similar to the complaint in this matter had previously been determined by the Tribunal, though we were referred to decisions in four different matters of the Solicitor’s Disciplinary Tribunal in England and five decisions of the Queensland Tribunal. All of these matters either involved or included complaints relating to the failure to lodge with the regulatory authority an Accountant’s Report in relation to the practitioner’s Trust Account. The Tribunal found it worthwhile to consider these decisions. Ultimately the Tribunal has concluded that these decisions are based on different legislation and deal with different facts and circumstances, and do not ultimately assist the Tribunal in its determination of this matter.
31 The Tribunal has concluded that the Solicitor’s failure to comply with the Regulation does not amount to professional misconduct. The conduct complained of is a failure to comply with an administrative obligation. The Tribunal finds that in the absence of a declaration in the Regulations pursuant to s127 (1)(d) the Solicitor’s omission is not of the grave nature that could come within the serious professional misconduct level of the two-tiered level of misconduct introduced in the Legal Profession Act 1987. There is no all-embracing definition of professional misconduct but clearly from the two descriptions quoted above from Allinson and Kennedy, professional misconduct involves gravity which is absent in this matter where part of an administrative obligation has been breached. …

The Tribunal then held that a finding of unsatisfactory professional conduct remained open to it. The matter has not been fully argued, but I must state that it is not clear to me why this was so in that the Law Society Council resolutions and the Information confined themselves to an opinion and a charge of professional misconduct. Furthermore, there was no particular evidence led with reference to the type of conduct embraced within the statutory definition of unsatisfactory professional conduct. That is a concept which does not exist at common law and the statute, while not an exclusive one, provides the principal guidance as to the scope of the statutory norm.
As to unsatisfactory professional conduct, it would appear that the Law Society relied solely upon the inferences to be drawn from the objective facts in the correspondence supplemented perhaps by the oral evidence of the solicitor. The Tribunal nevertheless acquitted the solicitor of this alternative uncharged allegation also.
It observed that substantial reliance appears to have been placed by the Society on the fact that the solicitor had been late in the lodgement of his 2002 accountant’s report. As indicated, a letter of 2 August 2002 had warned that a similar failure in the future may lead to the refusal to issue a practising certificate. In this context the Tribunal observed:
32 … The procedure is then clearly viewed as administrative and, while the consequences of the failure to issue a certificate result, inter alia, in the Solicitor not being able to practise until a certificate is issued, there is no mention or reference to disciplinary action and, indeed, the Tribunal finds it is proper to conclude that the decision to take no further action in 2002 and give a warning was within the realm of administration rather than discipline.
33 The Society’s further letter of 23 June 2003 continued to deal with this matter as one of compliance within the realm of the administration of the Society’s regulatory or licensing function, rather than within its disciplinary function. The Report was requested “as a matter of urgency” and if the Report was not received by the Society, the matter “will be considered by the Law Society Council at the Council meeting to be held on 17 July 2003”. It is common ground that the report was indeed lodged before 17 July 2003.
34 The letter of 8 July said nothing of any disciplinary action. It provides three options to the Solicitor:
“1. In the event of you having already forwarded the report please sent me a copy so that further action is stayed; OR
2. Submit a properly completed Accountant’s Report together with a full and frank explanation for its delay; OR
3. Provide such written submissions as you may wish as to why the application for renewal of your practising certificate should not be refused and a manager appointed to your practice.”
The letter further provides:
4. “In the event that you lodge the Accountant’s Report prior to 5pm 16 July 2003, please provide such written submissions as you may wish as to why the Council should not appoint an investigator to your affairs, pursuant to Section 55 Legal Profession Act.”
35 The letter of 11 July detailed conditions that would be recommended to the Council if a Practising Certificate was issued. A reply was sought by 15 July and this was provided by the Solicitor with an acceptance of the conditions that had been proposed and some explanation of the delay. By the time of the meeting on 17 July the Solicitor had complied with the Society’s requirements. These letters from the Society should be seen in the context of the Society being the regulatory authority for compliance with the licensing provisions of the Act in the context where its requirements, as detailed in the correspondence, were requirements of an administrative nature.
These references to “administrative” as distinct from “disciplinary” consequences appear to be one of the triggers for this appeal.
In my view the Law Society’s concerns are unnecessary and exaggerated. If the Tribunal were saying that breach of the regulation could never be a trigger for disciplinary action including a charge of professional misconduct this would be clearly wrong. Furthermore, the Society could not estop itself from making a proper response to past conduct by having adopted an allegedly generous or inadequate system of prior warnings.
However, I read these paragraphs of the Tribunal’s reasons as saying no more than that the particular correspondence in this particular case was evidence of the Law Society adopting an attitude as to the practical remediability of the breach in question. This confirmed the Tribunal’s own thinking that the present case was far removed from one of unsatisfactory professional conduct and its finding acquitting the solicitor of the charge of professional misconduct as proffered.
It is not appropriate to explore the outer limits of the statutory concept of unsatisfactory professional conduct. The submissions of the Society before the Tribunal as recorded in par [22] of the Tribunal’s reasons suggested a concept that unsatisfactory professional conduct had a “consumer component” with the definition in s 127(2) referring mainly to the relationship of legal practitioner and client. Without expressing or even hinting at a view either way on that matter, I see no error in the Tribunal’s conclusion that there was no unsatisfactory professional conduct, assuming that it was open to the Tribunal to have made such a finding in the circumstances of this particular case.
The written and oral submissions on behalf of the Law Society contend that this appeal raises a question of general principle, namely, whether a “wilful failure” by a solicitor to comply with cl 94(1) is “capable, of itself, of constituting” professional misconduct or unsatisfactory professional conduct within the meaning of s 127 of the Act.
I do not accept this characterisation of the issue. Wilfulness is not the touchstone of misconduct of either variety. Unlike s 43 of the Legal Practitioners Act 1898 that was considered in Re Hodgekiss especially at 352 and 353, and unlike ss 61(8) and 62(4) of the current Act, “wilful” is not part of the statutory definitions of misconduct of either variety. Nor is it a necessary element of the common law concept of professional misconduct. This is not to suggest that a wilful or contumelious breach of a clear obligation is incapable of being a strong pointer to that level of unfitness to practise that would engage the notion of professional misconduct.
It is true that the charge proffered in the particular case was one of wilful failure to comply with the requirements of cl 94(1). The informant chose for its own reasons, about which I imply no criticism, to take upon itself the need to establish a breach of that nature. But merely because the Law Society resolved to treat wilful failure to comply with the requirements of cl 94(1) of the regulation as professional misconduct does not make it such. At times the submission on behalf of the Law Society appeared to flirt with such a proposition.
Absent any statement in the Act or Regulations that incorporates the notion of wilfulness and applies it to the particular statutory provision said to have been contravened, there is a danger that attention may be diverted from the proper focus on the statutory and common law concept of professional misconduct.
The appellant contends that the Tribunal has taken a view that non-compliance with cl 94(1) is generally to be regarded as an “administrative” or “licensing” failure, not, of itself, capable of constituting professional misconduct.
We were referred to a passage in the reasons of the Tribunal in Law Society of New South Wales v Cass [2004] NSWADT 259 at par [6] where the Tribunal said:
6 This Tribunal in the matter of Graham has already decided that such a first failure (after a warning in the preceding year) is neither professional misconduct nor is it unsatisfactory professional conduct.
It is far from clear to me that this statement is an accurate summary in that it justifies the proposition that the Tribunal has taken a fixed and a wrong view in relation to the intersection of cl 94 and the concept of professional misconduct.
The written submissions on behalf of the appellant also drew attention to passages in the reasons of the Tribunal in Law Society of New South Wales v Lucas [2004] NSWADT 231 at pars [16] and [17] and [21] – [25] and Law Society of New South Wales v Cunningham [2004] NSWADT 236 at paras [16] and [17], [21] and [24]. Perusal of those reasons shows the Tribunal focusing clearly and sharply upon the evidence in the particular case before it. In each of those two decisions the particular evidence of the solicitor as to why it came about that the regulation was breached was examined. There were findings of breach of the regulation, but nevertheless findings that the breach in the particular case did not amount to professional misconduct.
Returning to the approach of the Tribunal in the present case, the passage at pars [27] to [31] set out above shows that the Tribunal did look at the specific with an eye to considering whether the proven breach of the regulation engaged the general principles in Allinson and Kennedy. The Tribunal correctly recognised the evidentiary role of the Council’s opinion, while equally correctly recognising its own duty to make up its own mind (see par [29]). The Tribunal correctly recognised that a general principle favouring a finding of professional misconduct could not be drawn from the earlier precedents and equally correctly recognised that it had to make its own determination based on the particular facts and circumstances of the present case (see par [30]).
I recognise that in par [31] of the Tribunal’s reasons there was reference to a failure to comply with “an administrative obligation”. As with the Tribunal’s approach to the issue of unsatisfactory professional conduct, it seems pretty clear that the Tribunal was taking some of its cues from the attitude of the Law Society itself as revealed by the correspondence in the present matter.
Reading the reasons as a whole, I reject the submission that the Tribunal in this case formed a fixed view that breach of the clause could never constitute professional misconduct because it was necessarily and exclusively an administrative obligation. I have already indicated what in my opinion is the correct approach to the clause.
In my view, the reasoning in the present case in its application to the facts and the reasoning in the other cases of Lucas and Cunningham to which we were referred, contrary to the submissions of the appellant in the present appeal, recognises the need to examine the conduct of the particular solicitor in the particular context. It would in my view be quite wrong to treat a breach of the clause “of itself” as professional misconduct.
Like the Tribunal I am entirely unpersuaded that the matters proved in this particular case amounted to a wilful failure to comply with the requirements of cl 94. In any event, as I have already indicated, the true touchstone is whether the conduct as proved constituted professional misconduct and, like the Tribunal, I am quite satisfied that that allegation was not established against the solicitor.
Some reliance was placed upon the decision of this Court in Mee Ling v The Law Society of New South Wales (1974) 1 NSWLR 490. There are statements in that case, with which I entirely agree, to the effect that the issue of an annual practising certificate to solicitors is not a mere formality, nor is it only a device for raising revenue. The content of the certificate, the fact that it is the prescribed obligation and the fact that the obligation prescribes a particular timing for its lodgement amply demonstrate, if demonstration were needed, the significant function that provision of that certificate performs in the statutory regulation of legal practitioners.
There does, however, seem to be some misconception in the submissions of the Law Society and, perhaps, reflected in the approach of the Tribunal, as to the scope and function of the particular regulation. The critical terms of the regulation are, “The solicitor must ensure that, on or before the making of the application, there is lodged with the Law Society an accountant’s report”. On the fair and in my view only reading of that clause the obligation is breached once and for all when the application is lodged unaccompanied with the accountant’s report. This type of breach seems to be something that does not take the Law Society with surprise, witnessed by the very form of the application with the “yes/no” box to be ticked with reference to the question whether the accountant’s report has been lodged.
This observation is not intended in any way to diminish the importance of the regulation. It does, however, appear to me that the proceedings in the present case went off at something of a tangent when the conduct after 5 May 2003 was examined for purposes other than casting proper light upon the attitude of the solicitor on 5 May 2003. I emphasise that I am not suggesting that those who breach the regulation innocently are necessarily in the same boat as those who do so as a matter of planning. Nor am I suggesting that those who comply late but not too late are in the same category as those who do not produce their practising certificates until the eve of or even after the date of the Law Society Council meeting in about mid July.
It does, however, appear to me that a charge of wilful breach of cl 94(1) is somewhat missing the point as regards the gravamen of the conduct which generated the Information in the present case. Like the Tribunal, if one takes the cues from the correspondence from the Law Society, the general attitude is taken that it is better late than never and I entirely understand and support that attitude. But I do see some difficulty in using a charge of wilful breach of cl 94(1) as the trigger for disciplining a broader problem. There may, of course, be those solicitors whose breach of cl 94(1), as I have construed it, is wilful or, even if not wilful, is of such a nature as to constitute professional misconduct. That is a matter for evidence and proof if that is the way the disciplinary allegation continues to be brought.
As Pearlman AJA pointed out in the course of argument, the Law Society has an ultimate sanction in cases such this, namely, to refuse to issue a practising certificate. The matter has not been argued but it may well be that that refusal could be based upon the fact that the accountant’s certificate arrives late, certainly arrives on the eve of the Council meeting in mid July.
How the Council deals with that matter will obviously depend upon its own processes, how widespread a problem this is and what sort of an issue the Council wishes to makes of it. But the sanction remains of refusing to issue a practising certificate. I think there is some difficulty that has been brought out in the course of this case in trying to have cl 94(1) do more work than it is directly intended to do. Obviously, a breach of cl 94(1) is a factor, and obviously if that breach translates into a situation of a solicitor practising without a certificate, consequent upon the Law Society refusing to renew the existing certificate then it is a different question altogether.
The facts of Mee Ling’s case are really quite distinguishable from the present. There the charge against the solicitor was in substance that he continued to practise without a renewed practising certificate where he had wilfully brought about the failure to renew that practising certificate by wilfully failing to provide the accountant’s report. From recollection, the report only came in about September of the new fiscal year. The solicitor continued practising throughout all of that time and he did so in a statutory context that did not include a counterpart of s 36 of the current Act.
For those reasons I propose that the appeal be dismissed with costs.
HANDLEY JA: I agree.
PEARLMAN AJA: I agree.
MASON P: That is the order of the Court.

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LAST UPDATED: 29/04/2005