Council of the Law Society of New South Wales v Hancock (No 2)

[2009] NSWADT 327

CITATION:	Council of the Law Society of New South Wales v Hancock (No 2) [2009] NSWADT 327
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT John Leslie Hancock
FILE NUMBER:	092002
HEARING DATES:	19 October 2009
SUBMISSIONS CLOSED:	19 October 2009
EXTEMPORE DECISION DATE:	19 October 2009
BEFORE:	Chesterman M - Deputy President; Barnes M - Judicial Member; Tingle J - Non-Judicial Member
CATCHWORDS:	Professional misconduct – solicitor – gross delay in stamping and registering transfer documents – failure to comply with s 660 notice – consequential orders
LEGISLATION CITED:	Legal Profession Act 1987 Legal Profession Act 2004
CASES CITED:	Council of the Law Society of New South Wales v Hancock [2009] NSWADT 201
REPRESENTATION:	APPLICANT Council of the Law Society of New South Wales RESPONDENT John Leslie Hancock
ORDERS:	1.The Respondent is publicly reprimanded 2. The Respondent is to pay a fine of $12,000, which is to be paid within a period of six months 3. The Respondent is to pay the Applicant’s costs, as agreed or assessed under the Legal Profession Act 2004.

REASONS FOR DECISION

Introduction

1 This decision was handed down ex tempore on 19 October 2009. What follows is an edited transcript of reasons given orally.

2 This is a decision on the orders that we should make under sections 562 and 566 of the Legal Profession Act 2004, following our finding of professional misconduct made against the Respondent in our decision dated 30 July 2009 (Council of the Law Society of New South Wales v Hancock [2009] NSWADT 201). In that decision we found that professional misconduct had been committed on three separate grounds. They all arose out of a retainer of the Respondent as solicitor by two clients, Mr and Mrs Edwards, for the purchase of an investment property by them.

3 The three grounds were as follows. First, gross delay on the part of the Respondent in attending to stamping and registering the transfer documents in relation to this purchase, with the consequence that registration of the transfer was delayed for a period of more than five years. In relation to this ground we found that the conduct of the solicitor amounted to professional misconduct under section 497 of the Legal Profession Act and also at common law. In making the finding that this conduct was common law misconduct, we recorded our principal reasons in the judgment at paragraph [154].

4 The second ground that we found to be established was a failure on the part of the solicitor to communicate with these two clients during specified periods ranging over some three years. We concluded that this was professional misconduct under section 497 of the Act, but not at common law.

5 The third ground was failure without reasonable excuse on the part of the solicitor to comply with a notice from the Council of the Law Society (hereafter ‘the Law Society’) served on him under section 660 of the Legal Profession Act. This notice required him to provide specified information and produce certain documents. His failure to comply lasted over a period of some five weeks. We found this to amount to professional misconduct under section 676 of the Legal Profession Act.

6 We dismissed the further ground, expressed as wilful failure to deal appropriately with transit money. For reasons set out in the judgment we held that the element of wilfulness had not been sufficiently established to warrant a finding of professional misconduct on this count.

The Law Society’s submissions

7 The consequential orders sought by the Law Society in its application to the Tribunal are, first of all, a public reprimand under section 562 of the Act; secondly, what it described as ‘a substantial fine’ under this same provision; and thirdly, an order for the payment of its costs under section 566.

8 In an affidavit tendered and admitted today, sworn by Mr Collins, the solicitor for the Law Society, information as to three prior reprimands of the Respondent by professional conduct committees was set out as follows: first, on 18 March 2004, on account of a failure to communicate with the Law Society; secondly, on 22 September 2006, on account of failure on the part of the solicitor to pay fees to a barrister; and thirdly, on 15 May 2007, on account of a breach of clause 12 of the Professional Conduct and Practice Rules of the Law Society, which deals with the matter of borrowing transactions between a solicitor and a client.

9 Mr Collins' affidavit also disclosed to us that Tribunal proceedings against the solicitor have not yet been completed for a failure to comply with a notice under section 152 of the Legal Profession Act 1987, which is the equivalent to section 660 of the current Act. In this matter, it appears that the Respondent has admitted professional misconduct, but a decision on the orders to be made has been reserved by the Tribunal.

10 We agree with a submission put to us today by Ms Webster, counsel for the Law Society, that the most serious matter in this case was the Respondent's gross delay in failing to meet the legitimate expectations of Mr and Mrs Edwards that their transfer would be stamped and registered in the normal course of events. In ways set out in our decision, this delay on the part of the Respondent occurred despite many requests from Mr and Mrs Edwards and their legal representatives for steps to be taken and, indeed, even though the Respondent knew that they suffered significant damage through being unable to sell the property in order to assist them in their retirement.

11 Ms Webster drew our attention to a number of authorities dealing with penalties imposed by the Tribunal on one of the forms of professional misconduct that we have to deal with today: that is to say, failure to comply with a notice under section 152 of the Legal Profession Act 1987 or section 660 of the current Act. It appears from these decisions that the range of penalties that have been imposed in recent years in cases such as this have ranged from a reprimand alone, at the lower end of the scale, through to a reprimand and a fine as high as $8,000. We note that in that case the delay and non-compliance lasted through a period as long as five or six months. But as Ms Webster emphasised, the section 660 notice in the present case is not the most serious matter with which we have to deal.

The Respondent’s submissions

12 Mr Allen, who appeared as counsel for the Respondent, tendered six testimonials for our consideration. Two of them were from legal professional colleagues of the Respondent; two more were from professional people in what we would describe as allied fields of professional activity; and two specifically testified to the Respondent's voluntary work over a period of years for a charitable cause. In all of these testimonials the matters emphasised were the capability, diligence, honesty and integrity of the Respondent. All the witnesses expressed the opinion that according to their knowledge of the Respondent the transgressions that we are dealing with were out of character. What is not clear from some of them, as Ms Webster pointed out, is the extent to which they had a detailed knowledge of what was alleged against the Respondent in the Law Society's application. All of them stated that they were aware of what was alleged against the Respondent, but they did not indicate the extent to which they knew it in detail, or indeed the outcome of our decision on the matter.

13 Mr Allen also tendered a medical certificate showing that the Respondent had been ill and unfit for work during a period in August 2007, which formed part of the period during which he should have complied, but did not comply, with the section 660 notice. We observe at this point that it seemed to us that the certificate added little to what was already in evidence with regard to difficulties being experienced by the Respondent at that time.

14 Mr Allen also submitted that we should take into account in the Respondent's favour the fact that he admitted the facts alleged against him, making it therefore unnecessary for a detailed hearing to take place with regard to those allegations. Mr Allen also pointed out that the Respondent did not contest the grounds of gross delay and failure to communicate with clients. He pointed out indeed that the phrase ‘gross delay’ had been introduced by him during the earlier hearing before us and that he had done this on the express instructions of the Respondent.

Our conclusions

15 We accept that in general terms the Respondent has admitted his failures appropriately and has shown proper recognition of their scale and importance. We accept also the general tenor of the testimonials regarding his honesty, capability and integrity. We note also in his favour that in one of these testimonials, by Mr Chris Haristy, there is an indication that in January 2008 the Respondent sought and obtained professional help from Mr Haristy's organisation, Haristy Consulting, with a view to improving the practices that he adopts in running his practice as a solicitor.

16 Ms Webster submitted to us that we should impose a separate fine for each of the three grounds of professional misconduct which have been established. We have given careful consideration to this submission, but have decided that it is preferable simply to impose a single fine without differentiating between the three grounds. Our principal reason for this is that these three grounds all derive from one factual substratum and, indeed, stem from a series of failures on the part of the Respondent to deal properly with his responsibilities under one single retainer. There are other cases in which it would appear individual fines would be appropriate, where the matters charged against a practitioner are totally independent of each other, but that is not the case here.

17 We have decided that the appropriate orders to be made are as follows. First, the Respondent should be publicly reprimanded under section 562 of the Legal Profession Act 2004. Secondly, the Respondent should pay a fine of $12,000, which is to be paid within a period of six months. This is also an order made under section 562.

18 That leaves only the matter of costs. Mr Allen submitted that, having regard to the text of section 566, there are ‘exceptional circumstances’ in this case warranting departure from the normal rule that in any case where professional misconduct is found the Respondent should pay the Applicant's costs. The grounds that he put forward in support of the submission were firstly, that the Respondent admitted the facts alleged against him and, indeed, the main grounds on which professional misconduct should be found, and secondly, that he successfully defended another ground of professional misconduct claimed against him.

19 We do not agree with the submission that these matter constitute ‘exceptional circumstances’ under section 566. The appropriate order in our judgment is that the Respondent should indeed pay the costs of the Applicant, the Law Society, as agreed or assessed.

20 Further, in response to an observation by Ms Webster, we will state in addition that if Mr and/or Mrs Edwards, the original complainants in this case, wish to pursue a compensation claim they should do so by filing appropriate documentation in the Tribunal within twenty-eight days of the decision today. We understand that the Law Society is happy to relay this direction to them.