Council of the Law Society of the Act v LP 202103 (Occupational Discipline)
[2021] ACAT 105
•28 October 2021
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE ACT v LP 202103 (Jeffrey Silk) (Occupational Discipline) [2021] ACAT 105
OR 3/2021
Catchwords: OCCUPATIONAL DISCIPLINE – legal practitioner – unauthorised direction of a client’s settlement monies to the practitioner’s trust account – breaches of disclosure requirements – failure to inform client of rights – unsatisfactory professional conduct – professional misconduct – breaches of solicitors conduct rules – issues of competency – protectionary principle – orders sought by consent of the parties – public reprimand and fine
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 55
Legal Profession Act 2006 ss 6, 223, 291, 386, 387, 419, 425, 433, 481, 585
Subordinate
Legislation cited: Legal Profession Regulation 2007 ss 44, 45, 48, 62
Legal Profession (Solicitors) Conduct Rules 2015 rr 2, 4, 5, 12
Cases cited:Allinson v General Council of Medical Education and Registration [1894] 1 QB 750
Council of the Law Society of the Australian Capital Territory v A Legal Practitioner [2010] ACAT 26
Council of the Law Society of the Act v Legal Practitioner 201818 (Chandra Prasad) [2019] ACAT 12
Council of the Law Society of the Australian Capital Territory v Davey [2019] ACTSCFC 2
Council of the Law Society of the Australian Capital Territory v Legal Practitioner 201822 (Alveer Singh) [2019] ACAT 27
Legal Practitioner ‘S’ (Steven Gavagna) v Council of the Law Society of the ACT [2017] ACAT 58
Midwifery Board of Australia v Izzard [2016] ACAT 68
New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39
Wentworth v New South Wales Bar Association [1992] HCA 24
Tribunal:Presidential Member H Robinson
Date of Orders: 28 October 2021
Date of Reasons for Decision: 28 October 2021
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 3/2021
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE ACT
Applicant
AND:
LP 202103
Respondent
TRIBUNAL:Presidential Member H Robinson
DATE:28 October 2021
ORDER
The Tribunal is satisfied that:
The respondent is guilty of professional misconduct pursuant section 425(1) of the Legal Profession Act 2006 (LP Act).
The respondent is guilty of unsatisfactory professional conduct pursuant to section 425(1) of the LP Act.
The Tribunal orders that:
Pursuant to subsection 425(5)(a) of the LP Act the respondent pay a fine of $12,000 within six months of the date of the orders.
Pursuant to subsection 425(3)(e) of the LP Act that the respondent be publicly reprimanded.
Pursuant to subsection 425(5)(b) of the LP Act the respondent complete courses approved by the Law Society of the ACT in ethics, costs and trusts accounting within 12 months of the date of the Tribunal’s orders.
Pursuant to subsections 433(1) and 433(5)(a) of the LP Act the respondent pay the applicant’s costs fixed in the sum of $6,000 within six months of the date of the Tribunal’s orders.
………………………………..
Presidential Member H Robinson
REASONS FOR DECISION
By way of an application for disciplinary action dated 28 April 2021 (the application) the applicant brought proceedings against the respondent pursuant to section 419 of the Legal Profession Act 2006 (LP Act).[1] The parties, by agreement, seek findings of unsatisfactory professional misconduct and professional misconduct and orders for penalties, including a public reprimand and a fine.
Background
[1] This decision was previously anonymised and cited as Council of The Law Society of The Act v LP 202103 [2021] ACAT 105 pursuant to section 423A of the Legal Profession Act 2006. As the appeal period has ended, the practitioner has now been identified in the citation of this decision. The reasons for decision otherwise remain unchanged from the date of publication.
At all material times, the respondent was a local legal practitioner[2] practising as a sole practitioner with an unrestricted practising certificate.
[2] Within the meaning of that term per section 8 of the LP Act.
In the application the applicant set out a series of factual assertions, as well as seeking orders for professional discipline.
This matter was listed for a directions hearing on 24 May 2021, at which date it was adjourned by consent to 7 June 2021 to allow the parties to discuss whether agreement could be reached on some or all issues.
On 7 June 2021 the parties advised that they had reached agreement and proposed to file a joint submission seeking orders by consent pursuant to section 55 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act), following which the Tribunal would advise whether it was prepared to make the orders in chambers.
On 28 June 2021 the parties filed a joint submission (Joint Submission).
The Joint Submission adopts as agreed between the facts set out in paragraphs 1 through 35 of the application. It also sets out an agreed position on the charges, the characterisation of the charges and an appropriate sanction. I accept the Joint Submission as to the facts and set the agreed matters out below.
The legislative framework
These disciplinary proceedings were brought against the practitioner under section 419 of the LP Act, alleging unsatisfactory professional conduct and professional misconduct. This section provides that the applicant, as the relevant authority for an Australian legal practitioner may apply to the ACAT for an order in relation to a complaint against an ACT practitioner, which includes the respondent.
Sections 386 and 387 of the LP Act define ‘unsatisfactory professional conduct’ and ‘professional misconduct’ as follows:
386 What is unsatisfactory professional conduct?
In this Act:
unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening 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 Australian legal practitioner.
NoteSee also section 389 (Conduct capable of being unsatisfactory professional conduct or professional misconduct).
387 What is professional misconduct?
(1) In this Act:
professional misconduct includes—
(a)unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and
(b)conduct of an Australian legal practitioner whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
(2) For finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate.
NoteSee also s 389.
Section 425 of the LP Act sets out the range of orders that the Tribunal may make where it is satisfied that the practitioner is guilty of unsatisfactory professional conduct or professional misconduct:
425 ACAT orders—Australian legal practitioners
(1) If, after the ACAT has finished considering an application under this part in relation to an Australian legal practitioner, the ACAT is satisfied that the practitioner is guilty of unsatisfactory professional conduct or professional misconduct, the ACAT may—
(a)make 1 or more of the orders mentioned in subsections (3) to (5); or
(b)any other order it considers appropriate.
…
(3) The ACAT may make the following orders in relation to the Australian legal practitioner:
(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.
…
(5) The ACAT may make the following orders in relation to the Australian legal practitioner:
(a)an order that the practitioner pay a fine of a stated amount of not more than the amount mentioned in section 427;
(b)an order that the practitioner undertake and complete a stated course of further legal education;
(c)an order that the practitioner undertake a stated period of practice under stated supervision;
(d)an order that the practitioner do or not do something in relation to the practice of law;
(e)an order that the practitioner cease to accept instructions as a public notary in relation to notarial services;
(f)an order that the practitioner’s practice be managed for a stated period in a stated way or subject to stated conditions;
(g)an order that the practitioner’s practice be subject to periodic inspection by a stated person for a stated period;
(h)an order that the practitioner seek advice in relation to the management of the practitioner’s practice from a stated person;
(i)an order that the practitioner not apply for a local practising certificate before the end of a stated period.
Section 425 of the LP Act does not identify the matters that guide the Tribunal in the exercise of its discretionary power. However, it is accepted that the discretion should be exercised by reference to the objects in section 6 of the LP Act and relevant jurisprudence. In this regard, section 6(a) of the LP Act provides that the purposes of the LP Act include:
(a) to provide for the regulation of legal practice in the ACT in the interests of the administration of justice and for the protection of consumers of the services of the legal profession and the public generally.
Additionally, section 585(1) of the LP Act provides that the ACT Legal Profession (Solicitors) Conduct Rules 2015 (the Rules) are binding on practitioners, and section 585(2) of the LP Act provides that a failure to comply with the Rules can constitute unsatisfactory professional conduct or professional misconduct.
The purpose and effect of the Rules is set out in rule 2:
The purpose of these Rules is to assist solicitors to act ethically and in accordance with the principles of professional conduct established by the common law and these Rules.
Relevantly for this matter, rule 4 provides that:
A solicitor must also:
4.1.1 act in the best interests of a client in any matter in which the solicitor represents the client;
4.1.2 be honest and courteous in all dealings in the course of legal practice;
4.1.3 deliver legal services competently, diligently and as promptly as reasonably possible;
4.1.4 avoid any compromise to their integrity and professional independence; and
4.1.5 comply with these Rules and the law.
And Rule 5 provides that:
5.1 A solicitor must not engage in conduct, in the course of practice or otherwise, which demonstrates that the solicitor is not a fit and proper person to practise law, or which is likely to a material degree to:
5.1.1 be prejudicial to, or diminish the public confidence in, the administration of justice; or
5.1.2 bring the profession into disrepute.
Additionally, Rule 12 provides:
12.1 A solicitor must not act for a client where there is a conflict between the duty to serve the best interests of a client and the interests of the solicitor or an associate of the solicitor, except as permitted by this Rule.
Charge 1 – Conflict of Interest
Between 26 June 2011 and 1 November 2018 the respondent made 64 advances to two associates (associates) to assist with their business and, later, for daily needs. Three of those advances were documented as loan agreements.
Between 10 May 2015 and 9 December 2018 the associates made repayments. These repayments were made by way of settlement monies, as set out below, and three additional payments as follows:
$200 on 10 May 2015;
$15,000 on 4 July 2017; and
$3,000 on 28 July 2017
On 15 July 2016 the respondent accepted instructions from one of the associates (Alan) to act for him in a motor vehicle accident matter. As at this date, the associates jointly owed him $101,890.
The respondent entered into a loan agreement with Alan which provided that:
9. The Client acknowledges that the loans have been made to him from the Principal of the Firm in a private and personal capacity before this agreement was signed and agrees that any monies received shall be first payable to the Principal in his sole discretion before any monies arc [sic] are paid to the Client.
The Client acknowledges that he/she/it has been advised to obtain independent legal advice in relation to the legal and practical consequences of entering this agreement and as to whether it is in his/her/it’s interests to enter into this agreement AND that the rate of charge may be more than another Firm would charge the Client to act on his/her/it’s behalf in this matter AND that the rate is more than the rate provided for in the Scale of Costs pursuant to the ACT Supreme Court Rules AND he/she/it has understood the terms and conditions herein and signs in acknowledgement to be bound by this Agreement.
In around November 2016 the respondent made a claim in relation to the accident with the relevant insurer, Allianz, on behalf of Alan (the Claim).
On 19 October 2018 the respondent and Alan had a conversation about settlement of the motor accident claim. Alan said $70,000 “would be nice”, and the respondent replied that he “can’t see that happening” and that “$40,000 would be a very good outcome”.[3] The respondent did not provide Alan with any further written or oral advice in relation to settlement of the claim.
[3] Application for disciplinary action at [12]
On 2 November 2018 Alan had a conversation with the respondent during which Alan instructed the respondent to make a settlement offer of $30,000 including costs. The respondent telephoned Allianz and made that offer on 7 November 2018. Allianz accepted the offer (the settlement).
In or around November 2018 the respondent was suffering financial pressure.
The respondent accepts that he breached Rules 4.1.4 and 12 by acting for Alan in circumstances where his own interests conflicted with his client’s interests in that:
(a)as at 16 July 2016, when he accepted instructions to act for Alan, Alan and the other associate owed the respondent the sum of $101,890 in relation to loans advanced to them by the respondent;
(b)as at 2 November 2018, when he took instructions to settle the claim, Alan owed the respondent the sum of $97,140 in relation to the loans advanced to the associates by the respondent;
(c)the respondent did not provide Alan with any advice in relation to whether the sum of $30,000 including costs was a reasonable settlement amount;
(d)in November 2018 the respondent was experiencing financial difficulties; and
(e)the respondent had a conflict of interest in settling Alan’s claim as he had a vested interest in the settlement funds.
Charge 2 – withdrawal of funds without authority
In or around November 2018 Alan and the respondent has a telephone conversation in which Alan expressed a wish to get some funds from the settlement. The respondent replied that he:
Can’t wait any longer. I need those monies. We can talk later. I might look at something to help you but not a huge settlement. Can talk later.
In or around November 2018 Alan and the respondent had a further telephone conversation. Alan again expressed a wish to get some funds from settlement. The respondent replied that:
These loans have to be paid. I don’t think you can pay me if I release the funds to you. We agreed when we commenced this matter.
In November 2018, Alan signed a Deed of Release and Indemnity and Authority to Receive that authorised Allianz to release the settlement funds to the respondent.
On 1 November 2018 the respondent rendered a tax invoice in the sum of $4,200 and an accompanying cover letter to Alan, but he did not send the invoice or the cover letter to Alan.
On 19 November 2018 the respondent received a cheque for $27,000 from Allianz. This was the settlement sum, less $3,000 paid to Medicare as a prepayment against health benefits covered. Medicare paid to Alan $2,814.75 of that $3,000, following payment of $185.25 for health benefits covered.
On 27 November 2018 the respondent deposited the cheque of $27,000 into his trust account and disbursed the proceeds to various of his accounts. Three payments ($10,000, $5,000 and $7,800) were stated to be for the reduction of the loan. A fourth payment of $4,200 was paid to his office account “in settlement of costs and disbursements” (the costs payment).
Alan did not authorise the costs payment.
On or around 31 October 2019 Alan telephoned Allianz to ask about the whereabouts of the proceeds of the settlement. By email dated 31 October 2019 Allianz confirmed to Alan that they had paid the settlement funds of $27,000 to the respondent on 15 November 2018.
On 1 November 2019 Alan filed a complaint with the applicant.
On 18 February 2020 the applicant appointed a trust account supervisor to the respondent’s practice pursuant to section 481 of the LP Act.
The respondent frequently acts for clients in conveyancing matters. It was identified that in eight of these matters with invoices dating from 26 April 2019 to 9 January 2020, the respondent issued tax invoices to clients for conveyancing matters that did not include any notification of client’s rights as required by the provisions of section 291 of the LP Act.
In six of these cases the respondent withdrew trust money (in the sum of $1,176, $1,569.04, $1,344, $542, $1,200 and $475) for the payment of his conveyancing fees where he was not authorised to do so because he:
(a)Was not directed by each client;
(b)did not give properly written notice of the payment; and/or
(c)did not make a request for payment or issue an invoice or wait for 7 days before withdrawal as required by regulation 62 of the Legal Profession Regulation 2007 (the Regulations).
Section 223(1) of the LP Act provides that:
Holding, disbursing and accounting for trust money
(1) A law practice must—
(a)hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received; and
(b)disburse the trust money only in accordance with a direction given by the person.
Regulation 62 provides:
62 Withdrawing trust money for legal costs—Act, s 229 (1) (b)
(1)This section prescribes, for the Act, section 229 (1) (b) the procedure for the withdrawal of trust money held in a general trust account or controlled money account of a law practice for payment of legal costs owing to the practice by the person for whom the trust money was paid into the account.
(2)The trust money may be withdrawn as set out in subsection (3) or (4).
(3)The law practice may withdraw the trust money—
(a)if—
(i)the money is withdrawn in accordance with a costs agreement that complies with the legislation under which it is made and that authorises the withdrawal; or
(ii)the money is withdrawn in accordance with instructions that have been received by the practice and that authorise the withdrawal; or
(iii)the money is owed to the practice by way of reimbursement of money already paid by the practice on behalf of the person; and
(b)if, before effecting the withdrawal, the practice gives or sends to the person—
(i)a request for payment, referring to the proposed withdrawal; or
(ii)written notice of the proposed withdrawal and when it will occur.
(4)The law practice may withdraw the trust money—
(a)if the practice has given the person a bill relating to the money; and
(b)if—
(i)the person has not objected to withdrawal of the money not later than 7 days after being given the bill; or
(ii)the person has objected not later than 7 days after being given the bill but has not applied for a review of the legal costs under the Act not later than 60 days after being given the bill; or
(iii)the money otherwise becomes legally payable.
(5)Instructions mentioned in subsection (3) (a) (ii)—
(a)if given in writing—must be kept as a permanent record; or
(b)if not given in writing—either before, or not later than 5 working days after, the law practice effects the withdrawal, must be confirmed in writing and a copy kept as a permanent record.
(6)For subsection (3) (a) (iii), money is taken to have been paid by the law practice on behalf of someone if the relevant account of the practice has been debited.
The respondent accepts that he breached section 223(1) of the LP Act by causing the withdrawal of trust money in the sum of $4,200 from the trust account in payment of his fees rendered on Alan’s matter in circumstances where he was not authorised to do so for the reasons that:
(a)the respondent held trust money in the general trust account in the sum of $27,000 exclusively for Alan;
(b)the respondent did not issue a tax invoice to Alan;
(c)on 28 November 2018 the respondent withdrew the sum of $4,200 from his trust account and deposited it into his office account in payment of the tax invoice;
(d)Alan did not direct, instruct or authorise the respondent to disburse the trust money;
(e)the respondent’s costs agreement did not authorise him to disburse the trust money;
(f)the respondent did not send a request for payment to Alan referring to the proposed withdrawal;
(g)the respondent did not give written notice of the proposed withdrawal to Alan.
The respondent also accepts that he breached section 223(1) of the LP Act by causing the withdrawal of trust money in the sums of 1,176, $1,569.04, $1,344, $542, $1,200 and $475 from the trust accounts associated with conveyancing matters in circumstances where he was not authorised to do so because he was not directed by each client; he did not give properly written notice of the payment; and/or he did not make a request for payment or issue an invoice and withdraw after 7 days as required by regulation 62 of the Regulation.
The parties contend that the withdrawal of trust money from the trust account without authority in each case was not performed dishonestly, but recklessly.
Charge 3 – Failure to provide sufficient notification of client’s rights
Section 291 of the LP Act relevantly provides that:
Notification of client’s rights
(1) A bill must include or be accompanied by a written statement setting out—
(a)the following avenues that are open to the client if there is a dispute in relation to legal costs:
(i)costs assessment under division 3.2.7;
(ii)the setting aside of a costs agreement under section 288 (Setting aside costs agreements); and
(b)any time limits that apply to the taking of any action mentioned in paragraph (a).
The respondent accepts that he breached section 291 of the LP Act by:
(a)failing to provide a written statement to Alan setting out the avenues that were open to him if there is a dispute in relation to the legal costs and any time limits that apply to taking action; and
(b)failing to provide a written statement to eight of his clients setting out the avenues that were open to them if there were any disputes in relation to the legal costs and any time limits that apply to taking action.
Charge 4 – Trust receipts cash book
Regulation 44 of the Regulations provides:
44 Trust account receipts cash book
(1) The following particulars must be recorded in a law practice’s trust account receipts cash book in relation to each receipt of trust money:
(a) the date a receipt was made out for the money and, if different, the date of receipt of the money;
(b) the receipt number;
(c) the amount of money received;
(d) the form in which the money was received;
(e) the name of the person from whom the money was received;
(f) details clearly identifying the name of the client in relation to whom the money was received and the matter description and matter reference;
(g) particulars sufficient to identify the purpose for which the money was received;
(h) details clearly identifying the ledger account to be credited.
(2) The date and amount of each deposit in the general trust account must be recorded in the trust account receipts cash book.
(3) The particulars in relation to receipts must be recorded in the order in which the receipts are made out.
(4) The particulars in relation to a receipt must be recorded not later than 4 working days after the day the receipt was made out.
Example
If the receipt is made out on Monday, that day is not counted in working out the day by when the particulars in relation to the receipt must be recorded. To comply with s (4), the particulars in relation to the receipt must be recorded not later than Friday.
NoteSee the Legislation Act, s 151 (Working out periods of time generally).
As at February 2000, the respondent’s trust receipts cash book had only been prepared to the end of June 2019.
The respondent accepts that he breached Regulation 44 by failing to record particulars in his trust account receipt cash book for the period between 30 June 2019 and 18 February 2020.
Charge 5 – trust payments cash book
Regulation 45 of the Regulations provides:
45 Trust account payments cash book
(1) The following particulars must be recorded in a law practice’s trust account payments cash book in relation to each payment of trust money by cheque:
(a) the date and number of the cheque;
(b) the amount ordered to be paid by the cheque;
(c) the name of the person to whom the payment is to be made or, in the case of a cheque made payable to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment;
(d) details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;
(e) details clearly identifying the ledger account to be debited;
(f) particulars sufficient to identify the purpose for which the payment was made.
(2) The following particulars must be recorded in a law practice’s trust accounts payments cash book in relation to each payment of trust money by electronic funds transfer:
(a)the date and number of the transaction;
(b)the amount transferred;
(c)the name and number of the account to which the amount was transferred and the relevant BSB number;
(d)the name of the person to whom the payment was made or, in the case of a payment to an ADI, the name or BSB number of the ADI and the name of the person receiving the benefit of the payment;
(e)details clearly identifying the name of the person on whose behalf the payment was made and the matter reference;
(f)details clearly identifying the ledger account to be debited;
(g)particulars sufficient to identify the purpose for which the payment was made.
(3) The particulars in relation to payments must be recorded in the order in which the payments are made.
(4) The particulars in relation to a payment must be recorded not later than 4 working days after the day the payment was made.
Example
If the payment is made on Monday, that day is not counted in working out the day by when the particulars in relation to the receipt must be recorded. To comply with s (4), the particulars in relation to the receipt must be recorded not later than Friday.
NoteSee the Legislation Act, s 151 (Working out periods of time generally).
As at February 2020, the respondent’s trust receipts cash book had only been prepared to the end of June 2019.
The respondent accepts that he breached Regulation 45 by failing to record particulars in his trust account payments book for the period between 30 June 2019 and 18 February 2020.
Charge 6 – monthly bank reconciliations
Regulation 48 of the Regulations provides:
48 Reconciliation of trust records
(1) A law practice that keeps 1 or more general trust accounts must reconcile the trust records relating to each account.
(2) The trust records relating to a general trust account must be reconciled as at the end of each named month by preparing—
(a)a statement—
(i)reconciling the general trust account balance as shown in ADI records with the balance of the practice’s trust account cash books; and
(ii)showing the date the statement was prepared; and
(b)a statement—
(i)reconciling the balance of the trust ledger accounts with the balance of the practice’s trust account cash books; and
(ii)containing a list of the practice’s trust ledger accounts showing the name, identifying reference and balance of each and a short description of the matter to which each relates; and
(iii)showing the date the statement was prepared.
(3) The statements must be prepared no later than 15 working days after the end of the month to which the statements relate.
(4) The statements must be kept by the law practice.
As at February 2020, the respondent has only prepared monthly bank reconciliations to the end of July 2019.
The respondent accepts that he breached Regulation 48 by failing to reconcile the trust records for August 2019 to January 2020.
Agreed sanction
The parties submit that the following sanction is appropriate:
(a)A finding pursuant to section 425(1) of the LP Act that the respondent is guilty of professional misconduct in relation to charges 1 and 2.
(b)A finding pursuant to section 425(1) of the LP Act that the respondent is guilty of unsatisfactory professional conduct in relation to charges 3, 4, 5 and 6.
(c)An order pursuant to subsection 425(5)(a) of the LP Act that the respondent pay a fine of $12,000 within six months of the date of the orders.
(d)An order pursuant to subsection 425(3)(e) of the LP Act that the respondent be publicly reprimanded.
(e)An order pursuant to subsection 425(5)(b) of the LP Act that the respondent complete courses approved by the Law Society of the ACT in ethics, costs and trusts accounting within 12 months of the date of the Tribunal’s orders.
(f)An order pursuant to subsections 433(1) and 433(5)(a) of the LP Act that the respondent pay the applicant’s costs fixed in the sum of $6,000 within six months of the date of the Tribunal’s orders.
Consideration
This application was bought by the applicant seeking orders pursuant to section 419 of LP Act. This section provides that the relevant Council for an Australian legal practitioner may apply to the tribunal for an order in relation to a complaint against the practitioner.
In this case a complaint was made to the Council by Alan. It appears from the agreement submission that the additional issues to do with trust account compliance were identified by the Council following a review of the respondent’s trust account.
It is of some significance in this case that the practitioner cooperated in those inquiries and with the disciplinary process more generally and that he and the applicant have agreed to findings and sanctions.
Section 55 of the ACAT Act provides that if the parties to an application reach agreement about the terms of a tribunal decision and the tribunal is satisfied that an order or decision in, or consistent with the agreed terms would be within the powers of the tribunal and would be appropriate for the tribunal to make, it may make a decision in accordance with the agreement. However even where the parties are in agreement, the tribunal does not simply issue consent orders. As the tribunal stated in another occupational discipline decision, Nursing and Midwifery Board of Australia v Izzard:[4]
As identified in Medical Board of Australia v Martin [2013] QCAT 376 there is a public interest in parties to an occupational discipline matter being able to identify areas of agreement, and seeking to resolve the matter by way of consent orders. However the role of the Tribunal is not to simply issue orders as requested by the parties. In making an order for occupational discipline, even where by consent, the Tribunal must actively consider the facts that are agreed, the characterisation of those facts and the orders proposed as an appropriate response to the matter.
[4] [2016] ACAT 68
The parties’ Joint Submission largely adopts the application, albeit with a submission that, at least in relation to charge 2, the respondent was reckless rather than dishonest. I have no reason to doubt the agreed statement of facts and adopt it. I accept that the respondent acted recklessly in relation to charge 2.
The applicant contends that the respondent’s conduct in relation to charges 1 and 2 separately or together constitute professional misconduct at common law, being conduct that would reasonably be regarded as disgraceful or dishonourable by professional colleagues of good repute and competency and is otherwise capable of bringing the legal professional into disrepute.[5]
[5] Allinson v General Council of Medical Education and Registration [1894] 1 QB 750
The definition of professional misconduct in section 387 of the LP Act is the inclusive, not exclusive, and the Tribunal frequently has regard to the common law meaning of the term.[6] In this case, I am satisfied that the conflict of interest identified in charge 1 individually and charges 1 and 2 together are conduct that would meet the common law definition of professional misconduct. The respondent had a clear conflict of interest in that he had a financial interest in obtaining settlement of the case, and hence the expedient part payment of the debt owed to him by Alan. A practitioner is expected to identify when their interests conflict with their client’s and extricate themselves from those arrangements. The respondent did not do this.
[6] For example see discussion in Legal Practitioner ‘S’ (Steven Gavagna) v Council of the Law Society of the ACT [2017] ACAT 58 at [83]
Moreover, the conduct in charges 1 and 2 is clearly conduct that is prejudicial to, or diminishes the public confidence in, the administration of justice, and is conduct that could bring the profession into disrepute in breach of rules 5.1.1 and 5.1.2 of the Rules.
Charge 2 is also capable of meeting the common law definition of professional misconduct, being well short of the level of competency expected of practitioners of good repute. That the practitioner was reckless, rather than dishonest, is a matter that goes mainly to penalty.
I am satisfied that the other charges, certainly when reviewed cumulatively, amount to unsatisfactory professional conduct, being conduct happening 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 Australian legal practitioner. The public should be entitled to expect that trust obligations are strictly complied with.
Turning to penalty, the respondent has provided little in the way of explanation or elaboration to the Tribunal and nothing by means of mitigation, other than the submission that charge 2 was a consequence of recklessness rather than negligence. Likely, the practitioner’s concessions and minimal involvement was influenced by the respondent’s desire to cooperate and minimise costs consideration of the context, but it limits any ameliorative discretion available to the Tribunal.
Previous decisions provide guidance about how the Tribunal should exercise its powers under section 425 of the LP Act. Amongst the most important of these is that principle that disciplinary proceedings are protective, not punitive. As the Full Court of the Supreme Court stated in Council of the Law Society of the Australian Capital Territory v Davey:[7]
The Court is very mindful that subjective circumstances may be taken into account and, perhaps more importantly, that the Court’s decision should not include “any notion of punishing the practitioner” (Legal Profession Complaints Committee v Bower [2019] WASC 281, at [38] (Bower)). The “protection of the public and the maintenance of the reputation and standards of the legal profession” exceed any mitigatory element that arises from the subjective features (Bower at [38]).
[7] [2019] ACTSCFC 2 at [22]
See also the High Court decision of Wentworth v New South Wales Bar Association,[8] where disciplinary proceedings have been described as “proceedings concerned with the protection of the public”.[9]
[8] [1992] HCA 24
[9] Wentworth v New South Wales Bar Association [1992] HCA 24 at [13]
It is against this background that I must consider whether the proposed penalties are appropriate. Do the proposed penalties offer sufficient disincentive to conduct of this kind, while not straying into the territory of penalising the respondent?
Having regard to the previous decisions of the tribunal, I am broadly satisfied that the penalties are not inappropriate, particularly having regard to the respondent’s prompt cooperation and acceptance of the charges. A public reprimand, in particular, represents a significant penalty to the respondent, having a detrimental effect on his reputation and business interests. This is a serious penalty. The practitioner has conceded wrongdoing and there is nothing to suggest that he requires further deterrence. However, a public reprimand may be justified as warning to other practitioners not to offend in a similar way.[10] I am satisfied that a public reprimand is justified in this case because of the seriousness of the conflict identified in charges 1 and 2 and the potential for actions of that kind to undermine public confidence in the profession.
[10] Council of the Law Society of the Australian Capital Territory v A Legal Practitioner [2010] ACAT 26; New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 at [128]; Council of the Law Society of the Australian Capital Territory v Legal Practitioner 201822 (Alveer Singh) [2019] ACAT 27 at [66]-[74].
I also note, in relation to the proposed penalties, the observations of the tribunal in the case of Council of the Law Society of the Act v Legal Practitioner 201818 (Chandra Prasad) [2019] ACAT 12) at [15]:
… the Council of the Law Society is comprised of elected members of the ACT legal community and has extensive powers and functions under the Act. It has broad experience in the area of occupational discipline and due regard should be given to that knowledge and experience in this area. A public reprimand, a fine and an order to pay the Council’s costs are common sanctions which aim to protect the public and deter other practitioners from engaging in similar activity.
Having regard to the agreed facts, the Joint Submissions, and previous cases, I am satisfied that the proposed orders and sanctions are appropriate.
Accordingly, I find:
1.Pursuant to section 425(1) of LP Act the respondent is guilty of professional misconduct in relation to charges 1 and 2.
2.Pursuant to section 425(1) of the LP Act that the respondent is guilty of unsatisfactory professional conduct in relation to charges 3, 4, 5 and 6.
And order that:
1.Pursuant to subsection 425(5)(a) of the LP Act that the respondent pay a fine of $12,000 within 6 months of the date of the orders.
2.Pursuant to subsection 425(3)(e) of the LP Act that the respondent be publicly reprimanded.
3.Pursuant to subsection 425(5)(b) of the LP Act that the respondent complete courses approved by the Law Society of the ACT in ethics, costs and trusts accounting within 12 months of the date of the Tribunal’s orders.
4.Pursuant to subsections 433(1) and 433(50(a) of the LP Act that the respondent pay the applicant’s costs fixed in the sum of $6,000 within six months of the date of the Tribunal’s orders.
………………………………..
Presidential Member H Robinson
| Date(s) of hearing | On the papers |
| Solicitors for the Applicant: | Ms K Binstock, McInnes Wilson Lawyers |
| Solicitors for the Respondent: | In person |
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