COUNCIL of the LAW SOCIETY of the ACT & the LEGAL PRACTITIONER G (Occupational Discipline)

[2011] ACAT 23

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

COUNCIL OF THE LAW SOCIETY OF THE ACT & THE LEGAL PRACTITIONER (Occupational Discipline) [2011]

ACAT 23

LP 1 of 2010

Catchwords:             OCCUPATIONAL DISCIPLINE – LEGAL PRACTITIONERS – delay in construction of house - deed of loan – financial pressure on client – arrangement to sell uncompleted property -  letter from client waiving rights to liquidated damages under construction contract – the practitioner acting for the client, construction company and prospective purchaser – standard of proof in Briginshaw v Briginshaw – dismissal of the application with consent of parties

List of legislation:    ACT Civil and Administrative Tribunal Act 2008 (ACT), s.56(b)

Legal Profession Act 2006 (ACT), s.419

List of cases:             Briginshaw v. Briginshaw (1938) 60 CLR 336

Tribunal:                  Mr C.G Chenoweth, Member

Date of Orders:  8 March 2011
Date of Reasons for Decision:         11 March 2011

AUSTRALIAN CAPITAL TERRITORY            )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          LP 1 of 2010

BETWEEN:

THE COUNCIL OF THE

LAW SOCIETY IN THE ACT

Applicant

AND:

THE LEGAL PRACTITIONER “G”

Respondent

TRIBUNAL:            Mr C.G Chenoweth, Member

DATE:  8 March 2011

ORDER

The Tribunal Orders that:

1. The Tribunal orders with the consent of the parties that pursuant to

   
   

   section 56(b) of the ACT Civil & Administrative Tribunal Act 2008, the application be dismissed.

2. Exhibits filed with the Tribunal by Moray & Agnew are to be returned to them.

The Tribunal notes that: the applicant has agreed to contribute $18,000 towards the legal costs of the Applicant.

The Tribunal makes no order as to costs.

………………………………..

Mr C.G Chenoweth

Member

REASONS FOR DECISION

1. An application for disciplinary action against the Practitioner was made by the Council of the Law Society of the ACT ("Council"). The application was dated 14 April 2010 and was made pursuant to section 419 of the Legal Profession Act 2006 (“LP Act”).

2. The application arose from the conduct of the Practitioner in acting for a client in a transaction for the purchase of a block of land. In addition, there was a separate construction contract for a house on the property, entered into by the client and a separate and unrelated company from the vendor of the land. The Practitioner acted for the construction company in relation to the contract, as well as for the client.

3. The construction of the residence was delayed beyond the anticipated time. The client was under financial pressure. The construction company offered to lend money to the client to enable the payment of money owing under the construction contract. A deed of loan was prepared by the Practitioner. This gave rights to the construction company to effect the sale of the property on specified terms in certain circumstances.

4. The financial pressure on the client continued. The residence was still not finished. A purchaser for the uncompleted property was found. The Practitioner accepted instructions from both the client and the purchaser of the property to act on the sale. The client was concerned that the sale may be lost unless a letter was signed by her waiving any rights to liquidated damages under the construction contract. The Practitioner advised the client about the terms of the letter. The Practitioner was at this time still acting for the construction company.

5. The client made a complaint to the Society about the conduct of the Practitioner. After discussion with the Practitioner the client withdrew the complaint. The letter withdrawing the complaint was delivered to the Society by the Practitioner.

1. The client took her complaints about the Practitioner to another firm of solicitors, who advised her in relation to what had happened. Documents from the solicitors were produced under subpoena, but as they were the subject of a claim for legal professional privilege they are not referred to in these reasons.

2. After the application was filed, the Practitioner filed an affidavit of his own and one from a director of the building company. These affidavits set out a different version of the events to that which had been given by the client, and they annexed a number of e-mails that had passed between the client and the director of the building company. It is not necessary for the purposes of these reasons to set out the contents in detail, but they do disclose that the client and the director were discussing and negotiating directly over a number of significant matters.

3. The complainant client is a person who has a postgraduate degree in economics, and in the emails displays a knowledge of the financial and taxation aspects of the purchase of the property. Having said that, this does not excuse any solicitor from ensuring that he or she is not in a position of conflict with the client, and that no relationship with another client prevents a solicitor from giving advice in the first client's best interests unaffected by the interests of others. It is for these reasons that the Society is not in favour of a solicitor acting for both parties to a transaction, and requires written disclosure of this to clients. It is a sound policy, based on many experiences and complaints where a solicitor acting for both parties has resulted in unsatisfactory relations with one or both clients.

4. Once the Practitioner’s material had been received by the Society, further investigations were made. The Society was concerned that the evidence from the complainant and as a whole would not support the proof of a case against the Practitioner. The standard of proof in such cases is higher than the balance of probabilities. If the application was to proceed to a hearing, the Society would need to satisfy the Tribunal to the degree of comfortable satisfaction, having regard seriousness of the matters. This standard of proof is required by the case of Briginshaw v. Briginshaw (1938) 60 CLR 336, and the later authorities in which that standard of proof has been applied many times.

1. The Council of the Society reviewed the allegations against the Practitioner, and also took the advice of experienced counsel concerning the prospects of the applications succeeding in the light of the later evidence. Having considered these matters, the Society determined that the matter should not proceed and that the application should be dismissed. Accordingly, when the matter came before me on 8 March 2011, it was a joint application pursuant to section 56 (b) of the ACT Civil and Administrative Tribunal Act 2008 that with the consent of both parties, the proceedings be dismissed.

2. The Tribunal has a discretion to exercise the power under section 56. That power must be exercised having regard to the public interest in ensuring proper standards of conduct by solicitors. The application to dismiss must be judged against this, as well at the prospect of whether an application for an order can be sustained. It is the Society that has the responsibility under the LP Act to conduct proceedings on such an application. As the Society has considered the matter further and determined that it is not appropriate to continue with the proceedings, the public interest has been considered. The appropriate and convenient course is for the proceedings to be dismissed with the consent of both parties, and I so order.

3. Counsel for the Practitioner and the Society confirmed that an agreement had been reached between the parties under which the Practitioner is to contribute $18,000 to the costs of the Society in bringing the application. As this is a matter which has been agreed between the parties, the Tribunal notes it but there is no order as to costs.

………………………………..

Mr C.G Chenoweth

Member

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A  FILE NO:      LP 10/01

APPLICANT:                The Council of the Law Society in the ACT
RESPONDENT:            The Legal Practitioner

COUNSEL APPEARING:       APPLICANT:          

RESPONDENT:      

SOLICITORS:  APPLICANT:           Mr Walker,   Chamberlains Law Firm

RESPONDENT:      Mr N Beaumont,
  Nichol & Co Lawyers

OTHER:  APPLICANT:          

RESPONDENT:      

TRIBUNAL MEMBER/S:        Mr C.G Chenoweth, Member

DATE/S OF HEARING:          8 March 2011             PLACE: CANBERRA

DATE/S OF DECISION:          11 March 2011           PLACE: CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( )        CASE NOTE ( )        UNREPORTED DECISION ( )

COMMENTS: