COUNCIL OF THE LAW SOCIETY OF THE ACT & THE LEGAL PRACTITIONER E (Mamdouh Elmaraazey) (Occupational Regulation)
[2013] ACAT 57
•28 August 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT & THE LEGAL PRACTITIONER E (Mamdouh Elmaraazey) (Occupational Regulation) [2013] ACAT 57
LP 8 of 2010
Catchwords: OCCUPATIONAL REGULATION – legal practitioner – professional misconduct – penalty order – costs – reopening case in relation to penalty and costs: considerations – allegation of apprehended bias in relation to the later constituted tribunal – purposes of imposing penalties: protection of the public and proper regulation of the conduct of legal practitioners
List of Legislation: ACT Civil and Administrative Tribunal Act 2008 (ACT), ss 23 & 56
Legal Profession Act 2006 (ACT), ss 387, 425 & 433
Legislation Act 2001, s 104
List of Cases: A Solicitor v Law Society (NSW) (2004) 216 CLR 253
Allinson v General Council of Medical Education and Registration [1894] 1 QB 750
Bennett v Tasmania (2005) 15 TasR 41
Clyne v NSW Bar Association [1960] HCA 40; (1960) 104 CLR 186
Cox v Department of Health and Human Services and Others [2010] TASADT 2
Concrete Pty Limited v Parramatta Design & Developments Pty Ltd [2006] 229 CLR 577
Council of the Law Society of the ACT v the Legal
Practitioner E (Occupational Regulation) [2013] ACAT 7Council of the Law Society of New South Wales v Bharati [2010] NSWADT 159
Council of the Law Society of New South Wales v Fitzsimons [2012] NSWADT 242
DJL v Central Authority (2000) 201 CLR 226
Dunstan v Comcare [2011] FCAFC 108
Ebner v The Official Trustee in Bankruptcy (2000)
205 CLR 337In the matter of the application of William Dudley Kavanagh to be admitted as a Barrister and Solicitor of the Supreme Court of the Australian Capital Territory [1995] ACTSC 175
Law Society of the ACT v The Legal Practitioner [2011] ACAT 51
Law Society of NSW v Foreman (1994) 34 NSWLR 408
Livesey v New South Wales Bar Association (1983)
151 CLR 288
Malone v Marr [1981] 2 NSWLR 894
Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597
NSW Bar Association v Cummins (2001) 52 NSWLR 279
New South Wales Bar Association v Evatt [1968] HCA 20; (1968) 117 CLR 177
Northern New South Wales FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39
Re J.R.L. Ex parte C.J.L. [1986] 161 CLR 342
Re Polites: ex parte The Hoyts Corporation Pty Ltd (1991)
173 CLR 78SZMJA v Minister for Immigration and Citizenship [2008] FCA 1773
Terence John Chamberlain v the Law Society of the Australian Capital Territory [1993] FCA 527; (1993) 43 FCR 148
The Council of the Law Society of the ACT v The Legal Practitioner [2010] ACAT 45
List of Texts/Papers: Dal Pont, Riley's Solicitors Manual 2005
Tribunal: Ms J. Lennard – Senior Member
Mr G. Wright - Member
Date of Orders: 8 July 2013
Date of Reasons for Decision: 28 August 2013AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) LP 8 of 2010
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT
Applicant
AND:
THE LEGAL PRACTITIONER ‘E’
Respondent
TRIBUNAL: Ms J. Lennard, Senior Member
Mr G. Wright, Member
DATE: 8 July 2013
The tribunal is satisfied that the respondent is guilty of professional misconduct in respect of grounds 2.1, 2.2, 2.3, 4, 5.2, 5.3, 5.4, 6, 7, 7A, 8, 9, 10, 11, 12, 13, 16, 17 of the Second Further Amended Application dated 6 December 2011
ORDER
Pursuant to the Legal Profession Act 2006 (ACT), the tribunal makes the following orders:
1. The tribunal recommends that the name of the respondent be removed from the local roll.
2. That the practitioner be publicly reprimanded.
3. The respondent is to pay the costs of the Council of the Law Society of the ACT relating to the Second Further Amended Application dated 6 December 2011 on a party/party basis at the scale applicable to matters in the Supreme Court in an amount to be agreed, or failing agreement to be determined in accordance with the procedure set out below.
Procedure to determine costs: The parties should make an attempt to reach agreement on costs. If agreement is not reached within 28 days, the applicant may file and serve a Bill of Costs using Form 2.45 approved under the Court Procedures Rules. The respondent is to file and serve a document setting out any objections he has to the Bill within 14 days of its service. The Bill and the respondent’s objections will be referred to a registrar of the tribunal for assessment. The registrar is to make a recommendation to the tribunal concerning the amount that should be paid by the respondent.
………………………………..
Ms J. Lennard, Senior Member
For and on behalf of the Tribunal
REASONS FOR DECISION
1. On 24 January 2013 the tribunal found that the respondent legal practitioner had engaged in conduct that amounts to professional misconduct in relation to a number of matters and made orders recommending that he be removed from the roll of legal practitioners, that he be publicly reprimanded and that he pay the legal costs of the applicant Law Society. A detailed written statement of the tribunal’s reasons for its findings and orders was provided.
2. On 20 May 2013, the tribunal decided to set aside those orders and re-open the hearing so that it could receive evidence and submissions about the penalty that it should impose and the costs order it should make in light of its findings.
3. On 8 July 2013 the tribunal continued with the hearing. At the conclusion of the hearing the tribunal adjourned for a short period to consider the further submissions it received. The tribunal then made the orders that are set out above.
4. This statement of reasons explains why the tribunal decided to set aside its initial orders and re-open its hearing and why, at the conclusion of the resumed hearing, it made the orders set out above.
5. Professional misconduct is defined in section 387 of the Legal Profession Act 2006 (ACT) as including unsatisfactory professional conduct that involves a substantial or consistent failure to reach or to maintain a reasonable standard of competence and diligence. It also includes conduct that justifies a finding that the practitioner is not a fit and proper person to engage in legal practice. Section 389 of the Act contains a list of conduct that is capable of being unsatisfactory professional conduct or professional misconduct: paragraph (a) provides that conduct consisting of a contravention of the Act can be professional misconduct.
6. The common law definition of professional misconduct is drawn from a test formulated in Allinson v General Council of Medical Education and Registration [1894] 1 QB 750. That test provides that a professional person engages in professional misconduct if his, or her, behaviour would reasonably be regarded as disgraceful or dishonourable by professional colleagues who are of good repute and competency. This test has been applied to Australian legal practitioners on numerous occasions. In Council of the Law Society of New South Wales v Fitzsimons [2012] NSWADT 242 the tribunal noted that there were no fixed categories of professional misconduct and that much depended on whether the conduct in question falls outside generally accepted standards of common decency and common fairness. The tribunal listed the following as examples of professional misconduct: wilfully misleading the court; removing documents in contravention of a court order; permitting conflicts of interest to arise; failing to account for money received; misleading a client; gross neglect and delay; failing to adequately supervise an unqualified clerk; breaching an undertaking given to another lawyer; and, in certain circumstances, criminal and/or personal misconduct.
7. The statutory definition of unsatisfactory professional conduct set out in section 386 of the Act includes conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent practitioner. It comprehends behaviour that is not so significant that it can be described as disgraceful, but is, nevertheless of a standard less than the standard that a member of the public is entitled to expect from a professional person. It is a standard not to be determined by reference to lawyers who are without fault, but by reference to the reasonably competent lawyer.
8. Section 104 of the Legislation Act 2001 provides that a reference to an Act includes a reference to any statutory instruments made, or in force under the Act. For the purposes of the Act, this includes the Legal Profession (Solicitors) Rules 2007. A contravention of a rule may constitute either unsatisfactory professional conduct or professional misconduct.
9. The findings of fact by the tribunal are set out in detail in Council of the Law Society of the ACT v the Legal Practitioner E(Occupational Regulation) [2013] ACAT 7 (ACAT matter no. LP 8 of 2010).
10. The tribunal, taking into account the definition of professional misconduct as set out in both section 387 of the Act and at common law, found the practitioner guilty of professional misconduct. The tribunal stated:
116. The tribunal concludes that the conduct of the practitioner in failing to
keep proper trust account records, that the conduct of the practitioner in
paying money from his trust account to himself without the proper and
appropriate written authority was a substantial or consistent failure to
reach or maintain a reasonable standard of competence and diligence.117. The tribunal further finds that the practitioner’s conduct in demanding
and receiving cash payments, failing to issue receipts for those cash
payments, failing to deposit those payments into trust, failing to produce
appropriate and proper invoices, paying amounts to himself from trust in
excess of invoices rendered is conduct that would reasonably be regarded
as disgraceful or dishonourable by professional colleagues who are of
good repute and competency.118. The tribunal also finds that the practitioner’s approach to the original
complaints and his conduct during the hearing would justify a finding
that the practitioner is not a fit and proper person to engage in legal
practice.119. The tribunal finds that the conduct of taking amounts of money from the
trust account of clients and paying it to himself; the practitioner’s clear
lack of understanding of his obligations in relation to trust accounting;
his lack of credit and his cavalier attitude towards the conduct of these
proceedings, results in the practitioner not being a fit and proper person
to engage in legal practice and ought to be taken into account in relation
to any future application to the legal profession for the granting of a
practising certificate.
11. The tribunal made the following orders pursuant to the Legal Profession Act 2006:
1. The tribunal recommends that the name of the respondent be removed from the local roll.
2. That the practitioner be publicly reprimanded.
3. The respondent is to pay the costs of the Council of the Law Society of the ACT relating to the Second Further Amended Application dated 6 December 2011 on a party/party basis at the scale applicable to matters in the Supreme Court in an amount to be agreed, or failing agreement to be determined in accordance with the procedure set out below.
12. On 20 May 2013 the tribunal heard an application for interim orders brought by the Law Society of the Australian Capital Territory. The orders sought were for the tribunal to reopen so much of the case as relates to the decision of the tribunal in relation to penalty and costs.
13. The applicant Law Society was represented by Mr Beaumont and the respondent legal practitioner was represented by Mr Crispin. Mr Crispin informed the tribunal that he was instructed by a third party appointed by the legal practitioner for that purpose pursuant to a Power of Attorney. The tribunal is in receipt of a Power of Attorney from the legal practitioner appointing Ms LG as his attorney in relation to proceedings before ACAT.
14. The applicant Law Society submitted as follows:
a. the practitioner has filed an appeal in relation to the tribunal’s findings and orders and that included a ground asserting that the tribunal erred by ruling on penalty without giving the practitioner an opportunity to be heard, and therefore failed to afford the practitioner procedural fairness;
b. the tribunal has erred in law by failing to afford the practitioner an opportunity to make submissions in relation to penalty and costs. The transcript of the five-day hearing indicated that the practitioner expected to be afforded such an opportunity;
c. the preferable course is for the tribunal to reopen so much of the case that relates to penalty and costs because a court of appeal is likely to remit the proceedings on those issues for the tribunal to determine in accordance with law. Reopening the matter now will avoid a multiplicity of hearings;
d. the tribunal has the power to reopen matters. The tribunal has twice accepted that the statutory power in s 56 (c) (iii) of the ACT Civil and Administrative Tribunal Act 2008 (ACT) (the ACAT Act) to amend or set aside an order extends to the reopening of a matter.
15. The applicant Law Society drew the tribunal’s attention to Malone v Marr [1981] 2 NSWLR 894 where the court stated: if the tribunal, after making a finding of guilt, fails in its duty with regard to a hearing on penalty… the decision on penalty is invalid, the tribunal may, if it chooses, rectify its error by reopening the question of penalty, inviting the accused to tender evidence and/or address on the question of penalty and thereafter reconsider and decide that matter.
16. The applicant law society also relied on the decision in Minister for Immigration and Multicultural Affairs v Bhardwaj (2002) 209 CLR 597 for the proposition that not only was there a power to remake a decision, but there was in fact a duty to do so.
17. The respondent made the following submissions:
a. the tribunal is functus officio, and its decision on penalty and costs is final. The hearing cannot now be re-opened;
b. should either the appeal court remit this matter to the tribunal, or the tribunal decide to reopen the matter in order to deal with the issues of penalty and costs prior to the appeal, those issues ought to be considered by a differently constituted tribunal. The respondent legal practitioner cited Northern New South Wales FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 at 42 in which it was said: if a decision has been set aside for error and remitted for rehearing, it will generally seem fairer to the parties that the matter be heard and decided again by a differently constituted tribunal. This is because the member constituting the Tribunal in the original enquiry or hearing will already have expressed a view upon facts which will have to be determined in the rehearing. The aggrieved party may think that a rehearing before the Tribunal as originally constituted could be worthless, for the member’s views have been stated…;
c. the tribunal has already made findings of fact in determining that the conduct of the legal practitioner amounts to professional misconduct. These findings of fact are sufficient to give rise to a reasonable apprehension of bias on the part of the tribunal.
Decision as to whether the matter should be reopened
18. Courts and tribunals have powers which are necessary for the administration of justice. In a statutorily created court or tribunal it is arguable, following the High Court’s decision in DJL v Central Authority that Tribunals do not have inherent powers except as created by implication from statute. Pursuant to sections 23 and section 56(d)(i) of the ACAT Act this Tribunal has the power to determine its own procedures and to set aside or vary orders. In Bennett v Tasmania Evans J stated that “a tribunal would have the power to prevent misuse of its procedure that would result in manifest unfairness, or would otherwise bring the administration of justice into disrepute”.
19. In determining whether orders such as those sought by the applicant Law Society should be made, the tribunal considered the following factors:
a. the applicant did not delay in bringing its application to set aside the orders made;
b. there can be no detriment flowing to either party from having those issues revisited prior to the hearing of the pending appeal;
c. it would not be futile to allow each party to file evidence and submissions on the issues of costs and penalty;
d. no third parties would be adversely affected if the tribunal was to make substituted orders;
e. that the interests of justice arguably require that the matter be reopened to determine whether substituted orders should be made;
f. this circumstance has arisen through the fault of neither party;
g. the alternate process to reopening this matter is an appeal: this may involve a number of appeals, and certainly would delay finality – a matter extremely important to the practitioner; and incur greater costs for each party. The object of ACAT proceedings and the principles that it must apply are set out in section 6 of the ACAT Act and, particularly in section 7 of the ACAT Act. The tribunal is required to ensure that its procedures are as simple, quick, inexpensive and informal as is consistent with achieving justice and observe natural justice and procedural fairness. Reopening this matter to receive submissions on the issues of penalty and costs is consistent with the ACAT objects and principles;
h. the nature of the costs order made by ACAT may be said to indicate that the matter is not finalised;
i. the question of penalty, while considered by the fully constituted tribunal, was not decided on the basis of any submissions made by either party.
j. In Cox v Department of Health and Human Services and Others [2010] TASADT 2 (19 May 2010) the notion of functus officio was examined. It was noted that the principle of functus officio, the Latin term for ‘having performed his office’, expresses a policy of the law that there should be finality in litigation. It was noted however, that that doctrine is always subservient to the fundamental requirement that a litigant is to receive a fair hearing and is to have a determination by the court of the case on its merits. A person against whom a charge is made ought to be given a reasonable opportunity of appearing and presenting his case if that principle is not observed, the person affected is entitled to have any determination which affects him set aside; and
k. the proposed substituted orders would not require a revisiting of the substantive issues or findings of fact already made by ACAT.
20. In addition, the tribunal noted that this matter was heard over a period of five days, there were many boxes of subpoenaed documents and the evidence handed up was contained in some seven or eight large folders. Members of the presently constituted tribunal had the advantage of having received and read the written evidence, heard the oral evidence and observed the demeanour of witnesses including the respondent. There is a grave risk of injustice should a decision on penalty be made by a panel of members who did not receive the evidence at first hand, nor have the benefit of observing and hearing the witnesses and the practitioner.
21. The tribunal sits as a two-member, rather than a three-member, panel. The appointment of the senior member formerly presiding expired immediately after the handing down of the decision in January 2013. The two members considering this matter were members of the original panel and were directed to continue to deal with it by the general president pursuant to section 92(2)(c) of the ACAT Act.
22. The tribunal carefully considered Mr Crispin’s thorough and helpful submissions in relation to apprehended bias. The respondent argued that because the tribunal has made a decision on penalty, a fair-minded lay observer might reasonably apprehend that the presently constituted tribunal may not bring impartial minds to the questions of costs and penalty.
23. In Concrete Pty Limited v Parramatta Design & Developments Pty Ltd [2006] 229 CLR 577 at 609- 611 the High Court of Australia noted the Ebner test is as follows: where, in the absence of any suggestion of actual bias, a question arises as to the independence or impartiality of a judge…. A judge is disqualified if a fair-minded lay observer might reasonably apprehend that the judge might not bring an impartial mind to the resolution of the question the judge is required to decide. That principle gives effect to the requirement that justice should be both done and be seen to be done, a requirement which reflects the fundamental importance of the principle that the tribunal be independent and impartial. It is convenient to refer to it as the apprehension of bias principle… Its application requires two steps. First, it requires the identification of what it is said it might lead a judge… to decide a case other than on its legal and factual merits. The second step is no less important. There must be an articulation of the logical connection between the matter and the feared deviation from the course of deciding the case on its merits.
24. The Court went on to note that decision-makers are not expected to wait until the end of a case before they start thinking about the issues, or to sit mute while evidence is advanced and arguments are presented. Decision-makers will often form tentative opinions on matters in issue and counsel are usually assisted by hearing those opinions and being given an opportunity to deal with them. The tribunal notes that the findings of fact and the decision that those facts are evidence of conduct that amounts to professional misconduct are not to be reopened.
25. In a professional disciplinary matter part one of the procedure is to make findings of fact and to determine whether they amount to misconduct. This matter was always before the parties in the present application and neither party made submissions on this issue, but had the opportunity to do so in final written submissions. A finding adverse to the practitioner at this first stage of the proceedings cannot be said to give rise to a reasonable apprehension of bias, nor in any sense to a lack of procedural fairness.
26. The second stage of the proceedings is to consider whether any penalty should be imposed, and if so what it should be. There is nothing before the tribunal that has identified any factor that might lead the tribunal to make a decision other than on its legal or factual merits. There is no logical connection between the findings of fact, the finding that those facts revealed conduct of the practitioner that amounted to professional misconduct and any feared deviation from independent and appropriate decision-making on the law and the facts in relation to penalty.
27. A denial of procedural fairness does not of itself amount to bias, nor should it give rise to a reasonable apprehension of bias.
28. The following points should be noted:
a. A member is not automatically obliged to stand down where objection is taken.
b. The fact that one or more of the parties has an actual suspicion that the member is biased does not satisfy the test for apprehended bias. The test is an objective one, requiring consideration of what a fair-minded observer would reasonably apprehend.
c. The member should consider all the circumstances, including the stage of proceedings at which objection is taken, and any costs and delays that might result.
29. Courts have cautioned judges and tribunal members not to acquiesce too readily to applications for them to stand down, since this can cause hardship to parties, particularly if the matter is part heard. To stand down when there are no legal grounds for disqualification may even amount to an abdication of the member's duty.
30. The member may also consider whether standing down without sufficient grounds would encourage tactical objections and abuse of process in other cases.
31. In Re J.R.L. Ex parte C.J.L. [1986] 161 CLR 342 the High Court stated it needs to be said loudly and clearly that the ground of disqualification is a reasonable apprehension that the judicial officer will not decide the case impartially or without prejudice, rather than that he will decide the case adversely to one party. There may be many situations in which previous decisions of a judicial officer on issues of fact and law may generate an expectation that he is likely to decide issues in a particular case adversely to one of the parties. But this does not mean either that he will approach the issues in that case otherwise than with an impartial and unprejudiced mind in the sense in which that expression is used in the authorities or that his previous decisions provide an acceptable basis for inferring that there is a reasonable apprehension that he will approach the issues in this way. In cases of this kind, disqualification is only made out by showing that there is a reasonable apprehension of bias by reason of pre-judgement and this must be “firmly established”… Although it is important that justice must be seen to be done, it is equally important that judicial officers discharge their duty to sit and do not, by acceding too readily to suggestions of appearance of bias, encourage parties to believe that by seeking the disqualification of the judge they will have their case tried by someone thought to be more likely to decide the case in their favour [at 352]
32. Tribunal members should not be overly ready to recuse themselves on the ground of bias. See Flick J stated in SZMJA v Minister for Immigration and Citizenship [2008] FCA 1773.
33. The legal practitioner ought as a matter of procedural fairness to be afforded the opportunity to present evidence and make submissions in relation to penalty and costs. ACAT therefore set aside the orders made in relation to penalty and costs on 24 January 2013.
34. The parties were directed to file and serve submissions on the issues of penalties and costs by 4 PM on 4 July 2013 and the hearing was adjourned to 8 July 2013 so that the submissions could be considered.
The Hearing on Penalty and Costs.
35. At the hearing on 8 July 2013 the applicant Law Society was represented by Mr Beaumont of counsel. Submissions as to penalty and costs had been filed and served by the applicant as directed. ACAT received no submissions from or on behalf of the respondent legal practitioner. Enquiries made by the tribunal confirmed that Mr Crispin was not instructed to appear at this hearing. Further enquiries made by the tribunal ascertained that Ms LG was aware that the matter was proceeding on 8 July 2013 and that she did not intend to attend that hearing. ACAT received correspondence from Ms LG indicating that she had received its orders and was aware of the hearing.
36. The tribunal, being satisfied that the legal practitioner had been served, via his representative, with the orders providing for the reopening of the matter, as well as the directions for the filing and serving of evidence and submissions in relation to penalty and costs, and being satisfied that a decision had been made by the legal practitioner, either independently or in consultation with his representatives not to attend the hearing, proceeded with the matter in the absence of the legal practitioner.
37. The applicant law society made the following submissions:
a. The issue for the tribunal is whether, taking into account the finding of professional misconduct the practitioner is presently fit to hold a practising certificate;
b. The ultimate question for the tribunal is whether it is any longer “justified in holding out the legal practitioner as a fit and proper person to be entrusted with the duties and responsibilities of a solicitor” ;
c. In NSW Bar Association v Cummins Spigelman CJ explained why the highest standards of integrity are required of legal practitioners thus: there are four interrelated interests involved. Clients must feel secure in confiding their secrets and entrusting their most personal affairs to lawyers. Fellow practitioners must be able to depend implicitly on the word and behaviour of their colleagues. The judiciary must have confidence in those who appear before the courts. The public must have confidence in the legal profession by reason of the central role the profession plays in the administration of justice. Many aspects of the administration of justice depend on the trust by the judiciary and/or the public in the performance of professional obligations by professional people.
d. The conduct which the tribunal found amounted to professional misconduct is summarised as follows:
i. withdrawing $12,746 from his trust account in excess of costs billed;
ii. paying $3500 to his client SS on 28 April 2009 from the trust money of his client FB when his client FB had not authorised this;
iii. transferring $10,000 from his trust account on 31 August 2009, and specifically money held on trust on behalf of his client FB, to his office account without the authority of his client;
iv. withdrawing amounts totalling $33,215 for legal costs from his trust account, without giving his client FB written notice or a tax invoice;
v. in breach of the Rules, borrowing the sum of $10,000 from his client FB on 10 March 2009;
vi. in breach of the Rules, failing to release all documents and files to FB’s new solicitors following termination by FB of the practitioner’s retainer;
vii. in breach of the regulations failing to issue a trust account statement as to the disbursement of monies held beyond 30 June 2008;
viii. in breach of section 222 of the Act, failing to deposit into his trust account monies totalling $18,605 received by him from BB on behalf of his client MB;
ix. in breach of section 223 of the Act, failing to hold money deposited into his trust account exclusively for the person on whose behalf it was received and disbursing that money in breach of the direction given by the client;
x. in breach of section 230 of the Act, failing to account to his client MB for the sums of $26,000 paid on 1 July 2008, $5805 paid on 16 July 2007, $5800 paid on 30 June 2008 and additional amounts totalling $17,880 paid in cash to the practitioner by BB;
xi. in breach of the regulations, failing to issue a receipt for trust moneys received by the practitioner from his client MB;
xii. in breach of the regulations, failing to issue trust account statements beyond 26 October 2008 in respect of disbursements in the amount of $26,000 paid to the practitioner on 1 July 2008 and $5000 on 1 July 2009;
xiii. in breach of the regulations, withdrawing trust money in payment of legal costs for which no tax invoice had been issued to his client MB and no authority had been given to withdraw the monies;
xiv. in breach of section 222 of Act, failing to deposit into his trust account any of the amounts of $6000 or the weekly payments of $1000 (with the apparent exception of $1000 on 5 October 2008) and then $500 received from his client SS;
xv. in breach of the regulations, failing to issue a receipt for the payments detailed in xiv above, being trust monies received by the practitioner, to his client SS.
e. The tribunal also made adverse findings about the practitioner’s credibility and his absence of appreciation of his duty to his clients or of his obligations in relation to trust moneys.
f. Findings to the effect that a practitioner has misappropriated trust money almost invariably leads to orders for the removal of the name of that practitioner from the roll of legal practitioners.
g. The practitioner bears the burden of demonstrating that, notwithstanding the finding of unfitness at least at the time he engaged in the relevant conduct, he is nevertheless now, at the time of the hearing on penalty, fit and proper to remain on the roll.
Decision as to penalty
38. The power to discipline legal practitioners is entirely protective of the public and notwithstanding that this exercise may involve a great deprivation to the person disciplined, there is no element of punishment involved. The tribunal must examine the practitioner’s conduct at the time the offences were committed, and upon a finding that the conduct amounted to professional misconduct, determine whether the practitioner is presently fit to practice the profession.
39. In Council of the Law Society of New South Wales v Bharati [2010] NSWADT 159 (25 June 2010) the tribunal noted that the underlying proposition that must be borne in mind is, …‘an order striking off the Roll should only be made when the probability is that the solicitor is permanently unfit to practice’. This question of fitness is to be determined at the present time, not at the time of the relevant misconduct [at 17].
40. In Bharati the tribunal considered a number of authorities which demonstrate that the appropriate penalty for sustained conduct which involves misappropriation of trust funds and deception of clients as to dealings with the trust fund is usually the removal of the name of the solicitor from the roll of legal practitioners.
41. The practitioner has chosen not to address the tribunal on the issue of penalty. The tribunal notes that the practitioner has in his appeal in relation to the findings of fact made by the tribunal and handed down in January 2013 challenged each finding which was adverse to him. In the peculiar circumstances of submissions on penalty being made after the appeal has been filed, the tribunal gives little weight to the issue of lack of contrition by the practitioner.
42. In making an assessment of whether the practitioner is presently fit to hold a practising certificate the tribunal examines the following matters:
a. During the hearing some aspects of the evidence given by the practitioner were the cause of grave concern to the tribunal. His evidence demonstrated little understanding of, or indeed regard for, the rules of professional practice. For example, when asked whether he understood that it was necessary to obtain written instructions from a client to pay money from that client’s trust account, he indicated that he did not believe it was necessary if one trusted the client. Further, he gave evidence that he was too busy, or not sufficiently computer literate, to produce a simple written authority for his client to sign.
b. The practitioner offered no explanation in relation to the evidence of poor accounting. There was no attempt to explain or elucidate his trust accounting procedures. The forensic accounting analysis of his invoices and trust account showed that the client FB paid an invoice for counsel fees and that the same fees had been withdrawn from funds held in the client’s trust account. The practitioner acknowledged that this was an error, but offered no explanation as to what steps he took to avoid such an error in the future, nor the steps he had taken to refund the amount of $18,400 to the client, nor what steps he had taken to correct his accounts.
c. Correspondence between the practitioner and the firm of Ray Swift Moutrage & Associates in relation to the handing over by the practitioner of the client’s files was before the tribunal. Both the correspondence and the practitioner’s evidence about it showed that he had little understanding of the relationship between a practitioner and a client. He asserted a right to a lien over the client’s files in circumstances where he admitted that the matter had been completed some months previously and where he made no claim for outstanding invoices. The tribunal notes that there ought to have been trust funds available to the client but the practitioner offered no explanation as to what steps he had taken to pay the remaining funds to the client nor indeed any explanation as to where the trust funds were now located.
d. The matters outlined in the above paragraphs, combined with the cavalier attitude that the practitioner demonstrated in the giving of his evidence during the five-day hearing reveals a lack of insight that is very concerning. The practitioner did not seem to appreciate the gravity of the case and the accusations against him. For instance when asked whether he had re-read his affidavits filed some twelve months earlier the practitioner replied that he had not and stated that it was not his practice to advise a client to read an affidavit prior to giving evidence.
e. The practitioner has been the subject of disciplinary proceedings in this tribunal previously. On that occasion he was found guilty of professional misconduct and his practising certificate was suspended on condition that he attend and complete the trust accounting course at the Legal Workshop. That suspension was stayed pending an appeal which was dismissed for want of prosecution. During the stay period, the practitioner received support from a senior practitioner mentor and was required to undergo regular periodic trust account audits. The applicant law society has informed the tribunal that the practitioner has not informed the law society that he has completed the trust accounting course. The law society refused to renew the practitioner’s unrestricted practising certificate on or about 1 July 2010.
43. The tribunal found that the practitioner was not a credible or satisfactory witness. The tribunal formed the view that the practitioner was not truthful. The following two paragraphs summarise two areas of the practitioner’s evidence which contributed to this view.
• The practitioner denied in his affidavits and in sworn oral evidence any romantic affair with his client SS. The transcript of the text messages sent by the practitioner to SS was admitted into evidence without qualification or objection following the inspection of SS’s phone by the practitioner’s legal representatives. The transcript is incontrovertible evidence of a romantic affair between the practitioner and SS.
• In relation to the complaint made by FB, the practitioner produced in his affidavit of 10 August 2011, handwritten notes by him which he described as file notes on which he relied to substantiate his assertion that FB had authorised payments of $3500 and $10,000 from her trust monies. The practitioner asserted that he had received and made phone calls to FB. The phone records for the relevant dates and times did not support his assertion. The practitioner did not produce these file notes to the applicant when replying to the original complaints, nor did he refer to their existence in his responses. If they were contemporaneous file notes and therefore existed at the time of the original complaints, the practitioner has failed in his duty of full and frank disclosure to the applicant. On this issue the practitioner gave oral evidence which contradicted his affidavit.
44. Section 425 of the Act provides that if ACAT is satisfied that the practitioner is guilty of professional misconduct, ACAT may make any or all of the orders set out in paragraph 3. Section 425 (3) contains the following range of orders:
a. an order recommending that the name of the practitioner be removed from the local roll;
b. an order that the practitioner's local practising certificate be suspended for a stated period or cancelled;
c. an order that a local practising certificate not be granted to the practitioner before the end of a stated period;
d. an order that—
i. stated conditions be imposed on the practitioner's practising certificate granted or to be granted under this Act; and
ii. the conditions be imposed for a stated period; and
iii. states the time (if any) after which the practitioner may apply to the ACAT for the conditions to be amended or removed;
e. an order publicly reprimanding the practitioner or, if there are special circumstances, privately reprimanding the practitioner.
45. A reading of the whole of the Act indicates that its purpose is, broadly speaking, to control and regulate in the public interest the exercise of the privileges and the undertaking of the responsibilities attached to the carrying out within the ACT of the professional practice of a barrister and solicitor.
46. A number of common themes underlie the complaints brought by each of the complainants in these proceedings, and these are relevant to the sanction to be imposed because common themes go to the serious, substantial and consistent failure by the legal practitioner to conduct his practice in a manner consistent with appropriate diligence and competence. Each of the complainants was in a position of financial vulnerability; each gave evidence of having to incur debt and obtain loans from banks and family or friends to meet the financial commitment of the payment of the practitioner’s legal fees over a period of years. Each complainant gave evidence that the practitioner required regular and large cash payments to be made to him, often otherwise than pursuant to invoices; and each of the complainants gave evidence that the practitioner did not issue receipts for most of the cash payments received. Each of the complainants gave evidence that they had received very few if any invoices from the practitioner; and SS gave evidence that she had never received a receipt or an invoice from the practitioner.
47. The forensic accounting evidence showed a haphazard and irregular approach to general office accounting and trust accounting.
48. The legal practitioner has, in breach of the Rules, borrowed money from his clients and failed to repay the amounts borrowed.
49. In general, the practitioner conducted his practice in an unsatisfactory manner, which would reasonably be regarded as disgraceful or dishonourable by professional colleagues who are of good repute and competency. The tribunal is of the opinion that the practitioner is not presently fit to hold a practising certificate.
50. The legal practitioner’s failure to understand the error of his ways of itself demonstrates his unfitness to belong to a profession where, in practice, the client must depend upon the standards as well as skill of his professional adviser.
51. In determining what sanction, if any, is to be imposed upon the practitioner, the tribunal must consider the seriousness of the conduct, the need to protect the public from such conduct, and, whether the conduct of the practitioner would tend to bring the legal profession into disrepute.
52. Conduct of such a nature tends to bring the legal profession into disrepute in a general sense. That is a bad thing for which the appellant must bear appropriate blame. The public interest requires the prevention of such conduct. Therefore it is appropriate for the tribunal to recommend that the practitioner’s name be removed from the local roll.
53. The tribunal recognises the need not only for the protection of the public, but that the public be satisfied that there is adequate and proper regulation of the conduct of legal practitioners. The tribunal therefore considers it proper and appropriate that the legal practitioner should be publicly reprimanded.
54. Section 433 of the Legal Profession Act 2006 provides that if the ACAT finds an Australian legal practitioner guilty of unsatisfactory professional conduct or professional misconduct, the ACAT must order the practitioner to pay costs (including costs of the relevant council and the complainant) unless the ACAT is satisfied that exceptional circumstances exist. There is no evidence before the tribunal of any such exceptional circumstances. ACAT therefore orders the legal practitioner to pay the costs of the applicant law society in an amount to be determined in accordance with order 3.
………………………………..
Ms J. Lennard, Senior Member
For and on behalf of the Tribunal
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER:
LP 8 of 2010
PARTIES, APPLICANT:
Council of the Law Society of the ACT
PARTIES, RESPONDENT:
The Legal Practitioner ‘E’
COUNSEL APPEARING, APPLICANT
Mr Beaumont
COUNSEL APPEARING, RESPONDENT
Mr Crispin
SOLICITORS FOR APPLICANT
Phelps Reid Lawyers
SOLICITORS FOR RESPONDENT
Capital Lawyers
TRIBUNAL MEMBERS:
Ms J. Lennard, Senior Member
Mr G. Wright, Member
DATES OF HEARING:
20 May 2013 & 8 July 2013
PLACE OF HEARING:
CANBERRA
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
3