Council of the Law Society of the Australian Capital Territory v Legal Practitioner W
[2013] ACAT 1
•11 January 2013
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY v LEGAL PRACTITIONER W (OCCUPATIONAL REGULATION) [2013] ACAT 1
OR 13 of 2011
Catchwords: OCCUPATIONAL REGULATION – legal practitioner – ignorance of limitation period and delay in commencing proceedings – competence and diligence – conflict of interest – unsatisfactory professional conduct – special circumstances warranting private reprimand
List of legislation: Legal Profession Act 2006 (ACT) ss 386, 425, 585
Legal Profession (Solicitors) Rules 2007 (ACT) Rules 1.2, 8.1, 8.2
Legal Profession Act 1987 (NSW) s 171C(1)(e)
Legal Profession Act 2004 (NSW) s 562(2)(e)
Property (Relationships) Act 1984 (NSW) s 18
List of cases: Barancewicz v Davies [2011] ACTSC 4
Beattie v Reid [2000] NSWSC 97
Commissioner for Fair Trading v MacLachlan [2005] NSWADT 88
Commissioner for Fair Trading v Walker [2004] NSWADT 139
Council of the Law Society of the Australian Capital Territory & A Legal Practitioner [2010] ACAT 26
Council of the ACT Law Society & The Legal Practitioner [2010] ACAT 73
Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209
Engert v Sydney Ferries Corporation [2009] NSWSC 1400
Forrest v Fiegler (1997) DFC 95-181
Hamilton v Madden [2007] ATSC 89
Hay v Belconnen Magpies Sports Club Ltd and Anor [2010] ACTSC 1
Law Society of New South Wales v Byrnes [2000] NSWADT 20
Law Society of New South Wales v Cornell No. 2 [2006] NSWADT 308
Law Society of New South Wales v Moulton [1981] 2 NSWLR 736
Law Society of the Australian Capital Territory & The Legal Practitioner [2011] ACAT 57
Morris v Canberra Irish Club Incorporated [2007] ACTSC 48
Morrison and Anor v Judd (1995) Supreme Court of New South Wales Court of Appeal, 10 October 1995, BC9507158
NSW Bar Association v Bland [2010] NSWADT 34
New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39
Pahoff v Canberra Institute of Technology [2010] ACTSC 69
Parker v McNair (1990) DFC 95-087
Rajic v Brighton Ceiling Pty Ltd [2009] ACTSC 68
List of Texts/Papers: Riley Solicitors Manual
Tribunal: Professor P. Spender – Presidential Member
Date of Orders: 11 January 2013
Date of Reasons for Decision: 11 January 2013
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 11/13
BETWEEN:
COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY
Applicant
AND:
LEGAL PRACTITIONER W
Respondent
TRIBUNAL: Professor P Spender – Presidential Member
DATE: 11 January 2013
ORDERS
- The respondent is to be privately reprimanded.
- The respondent is to pay the applicant’s costs on a solicitor and own client basis.
- The parties have liberty to apply in relation to Order 2.
………………………………..
Professor P. Spender
Presidential Member
REASONS FOR DECISION
1.An application was made to the ACT Civil and Administrative Tribunal (the tribunal) by the Law Society of the Australian Capital Territory on 26 May 2011 pursuant to section 419 of the Legal Profession Act 2006 (the Legal Profession Act). The application alleged breaches by the legal practitioner W (the respondent or the Practitioner) of Rules 1.2, 8.1, 8.2 and 11.1 of Legal Profession (Solicitors) Rules 2007 (the Solicitors Rules), sought findings of professional misconduct or unsatisfactory professional conduct and a penalty that the respondent be publicly reprimanded pursuant to section 425(3)(e) of the Legal Profession Act.
2.After a series of interlocutory events, the respondent indicated his intention to plead to specified charges in the application and the applicant indicated an intention to withdraw a number of charges. Subsequently, the application was particularised by the applicant, amended on 5 August 2011 and is set out below.
3.The parties filed a joint submission (the Agreed Submission) on 15 March 2012 to assist the tribunal in determining the matter. The Agreed Submission provided details of the parties’ agreed position in respect of:
a. the facts in support of the charges;
b. the characterisation of the charges;
c.any factors, including mitigating factors, to which the tribunal should have regard and accord due weight; and
d.the appropriate penalty which the parties submitted ought to be determined by the tribunal pursuant to section 425 of the Legal Profession Act.
4.A hearing was held in this matter on 22 March 2012. Ms Clifford represented the applicant and Mr Clynes of counsel represented the respondent. The respondent was the only witness. Several affidavits were filed by both parties in relation to the application. These affidavits were not admitted into evidence, however they provided background material for the Agreed Submission. Therefore, the evidentiary base relied upon by the tribunal that conducted the hearing (the Tribunal) was the Agreed Submission, the respondent’s evidence and the testimonials and other material tendered by the respondent. The respondent also provided a written outline of submissions to assist the Tribunal.
BACKGROUND
5.As stated above, the parties filed an Agreed Submission which contained the relevant agreed facts. The background to the proceedings which is set out hereunder is substantially based upon the Agreed Submission, as amplified by the unchallenged material in the affidavits that was referred to in the Agreed Submission or in oral or written submissions.
6.The respondent is an Australian legal practitioner, holds an Unrestricted Practising Certificate and practises as a Principal of a small firm which provides services to clients in the Australian Capital Territory and New South Wales.
7.In January 2005 the respondent was consulted by IL, to act for him in relation to a property settlement matter between himself and his former long term de facto partner, HB.
8.On 10 January 2005 the respondent wrote to HB’s solicitor and states that he sent a copy of that letter to IL. However, IL claims he did not receive that letter.
9.HB’s solicitor replied on 15 February 2005. The respondent states that he sent the reply to IL on 16 February 2005 and sought his further instructions, but IL claims that he did not receive this second letter.
10.Importantly, the respondent did not advise IL about the time limit for commencement of proceedings under section 18 of the Property (Relationships) Act 1984 (NSW) (the NSW Property Act), which is two years from the date of separation. Because IL and HB separated in August 2003, the time limit for commencement of proceedings under the NSW Property Act expired in August 2005.
11.The respondent states that he was not aware at the time of the limitation period that is stipulated in section 18 of the NSW Property Act. This limitation period would apply if and when proceedings were commenced by IL to seek adjustment of the interests of IL and HB in the property of the de facto relationship.
12.The respondent recalls opening a file when he saw IL in January 2005 but the file was subsequently misplaced. The respondent has been unable to locate the relevant file since that time.
13.The respondent claims that he was next consulted by IL in April 2008,[1] however, IL claims that he attended upon the respondent a number of times in 2005 to 2007 to check progress of his matter.[2] IL’s assertions have not been verified because the file cannot be found.
[1] Agreed Submission 15 March 2012 paragraph 10
[2] Agreed Submission 15 March 2012 paragraph 10
14.It is agreed that in about April 2008 IL attended the respondent’s office and informed the respondent that HB had sold the property that was the subject of the 2005 correspondence. The respondent spoke by telephone with HB’s lawyer who confirmed that the property had been sold. At this time, the respondent states that he remained unaware of any time limits that applied to the commencement of proceedings.
15.The respondent claims that soon after this meeting he consulted with WA of counsel and in June 2008 a conference was held at WA’s chambers in Canberra attended by the respondent and IL. WA has no recollection of having any formal conference with IL and the respondent in his chambers at this time. Rather, he recalls that he had an informal conversation with IL and the respondent in the reception area of the respondent’s Canberra office “in about the middle of 2008”. WA states that the informal conversation took place due to the proximity of the respondent’s Canberra office to WA’s chambers. [3]
[3] Agreed Submission 15 March 2012 paragraph 12
16.During the course of that meeting (or conference as claimed by the respondent), WA stated that there were proposed changes to the Family Law Act 1975 (Cth) that would have made it easier to commence proceedings in the Federal Magistrates Court or Family Court in Canberra rather than in the Supreme Court of Sydney.[4] The respondent claims that WA advised him that IL should wait until the legislative changes had come into effect.
[4] Agreed Submission 15 March 2012 paragraph 12
17.There is no evidence that WA was informed of the date of IL’s separation from HB at this time. However, the respondent now recalls that he was advised by WA in December 2008 that a limitation period applied. Attached to the Agreed Submission was a copy of an undated document entitled “Observations to the Brief” which is agreed to have been prepared in December 2008.
18.WA and the respondent agree that a discussion took place about IL’s matter on 19 December 2008.[5]
[5] Agreed Submission 15 March 2012 paragraph 16
19.Although the parties agree that the respondent became aware of limitation period in December 2008, IL was not informed of the limitation period until May 2009. The circumstances of the revelation are discussed below.
20.On 26 January 2009 the respondent was injured in a serious accident that occurred at his home. He suffered two broken wrists and a serious cut to his knee. The wounds became infected by golden staph and he ultimately suffered a blockage of his sub-clavian artery. The respondent was hospitalised for extended periods early in 2009.[6]
[6] Agreed Submission 15 March 2012 paragraph 18
21.The respondent argued that due to his illness he was unable to assist IL in progressing his claim, however, the applicant does not concede that the respondent could not have progressed IL’s claim during this period and submitted that the respondent could have referred IL to another firm of solicitors or instructed WA to attend to preparation of the relevant documents in light of the urgency of the matter.[7]
[7] Agreed Submission 15 March 2012 paragraph 18
22.On 26 March 2009 WA sent an email to the respondent advising that proceedings would need to commence in the District or Supreme Court of NSW and that IL was already out of time. The respondent says he did not receive that email and that it was sent to an old email address he was no longer using.
23.In May 2009 the respondent and IL attended a conference with WA at WA’s Chambers in Canberra. During the meeting WA advised IL that he was out of time to bring proceedings under the NSW Property Act. WA took notes of the conference which recorded that IL said that this was the first time that IL had become aware that proceedings were out of time.[8]
[8] Agreed Submission 15 March 2012 paragraph 20
24.Both WA and the respondent recall that IL was advised during the May 2009 conference that he had “good”[9] prospects of obtaining requisite extension of time.
[9] Agreed Submission 15 March 2012 paragraph 21
25.The respondent claims that at no time in the meeting of May 2009 did WA raise with him the possibility that he might be facing a conflict of interest with IL.[10]
[10] Agreed Submission 15 March 2012 paragraph 21
26.WA then prepared an affidavit in support of an application under the NSW Property Act. The affidavit was sworn by IL on 29 June 2009. Proceedings were ultimately filed in the NSW Supreme Court in August 2009. Leave to proceed out of time was sought in the Statement of Claim.[11]
[11] Exhibit R1
27.After WA left the Canberra Bar, the respondent briefed DM of the Sydney Bar in early February 2010 to represent IL in the proceedings.
28.Between 23 February 2010 and 19 July 2010 there were delays in the progress of the matter in the Supreme Court apparently due to the ill-health of HB. Most of the communications between DM and the respondent were by emails during this time.
29.In the course of preparing documents on behalf of IL, DM read a signed statement prepared by IL which referred to the advice that IL had received from the respondent in connection with his claim. On 7 October 2010 DM communicated by email with the respondent that the respondent should withdraw from the proceedings as his interests were in conflict with those of IL.[12]
[12] Agreed Submission 15 March 2012 paragraph 25
30.On 18 October 2010 a teleconference took place between DM, IL and the respondent. In the course of the telephone conference DM discussed with IL the signed version of facts that had been prepared by IL explaining why proceedings had not been commenced in 2005. DM also discussed how the respondent’s version of events differed from those of IL concerning the issue. In the course of that telephone conference DM advised IL that, on the facts as asserted by IL, there was conflict between himself and the respondent.
31.Soon after that telephone conference the respondent terminated his retainer with IL. Shortly thereafter IL consulted new solicitors.
32.The property dispute between IL and HB was ultimately settled. It is not known if the proceedings brought out of time had any impact on the quantum of settlement.
The Legal Framework
Legal Profession Act and Legal Profession Rules
33.Pursuant to section 585(2) of the Legal Profession Act, a failure to comply with the Solicitors Rules may amount to unsatisfactory professional conduct.
34.Unsatisfactory professional conduct is defined in section 386 of the Legal Profession Act to include:
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.
35.If the Tribunal is satisfied that a practitioner is guilty of unsatisfactory professional conduct, it may make the orders set out in section 425(3) of the Legal Profession Act, including (as stated in section 425(3)(e)) an order:
publicly reprimanding the practitioner or, if there are special circumstances, privately reprimanding the practitioner.
36.Rules 1.2, 8.1 and 8.2 of the Solicitors Rules state as follows:
1.2A practitioner must act honestly, fairly, and with competence and diligence in the service of a client, and should accept instructions, and a retainer to act for a client, only when the practitioner can reasonably expect to serve the client in that manner and attend to the work required with reasonable promptness.
8.1 A practitioner must not, in any dealings with a client:
(a) allow the interests of the practitioner or an associate of the practitioner to conflict with those of the client.
(b) exercise any undue influence intended to dispose the client to benefit the practitioner in excess of the practitioner's fair remuneration for the legal services provided to the client.8.2A practitioner must not accept instructions to act for a person in any proceedings or transaction affecting or related to any legal or equitable right or entitlement or interest in property, or continue to act for a person engaged in such proceedings or transaction when the practitioner is, or becomes, aware that the person's interest in the proceedings or transaction is, or would be, in conflict with the practitioner's own interest or the interest of an associate.
NSW Property Act
37.Section 18 of the NSW Property Act states:
18 Time limit for making applications
(1)If a domestic relationship has ceased, an application to a court for an order under this Part can only be made within the period of 2 years after the date on which the relationship ceased, except as otherwise provided by this section.
(2)A court may, at any time after the expiration of the period referred to in subsection (1), grant leave to a party to a domestic relationship to apply to the court for an order under this Part (other than an order under section 27 (1) made where the court is satisfied as to the matters specified in section 27 (1) (b)) where the court is satisfied, having regard to such matters as it considers relevant, that greater hardship would be caused to the applicant if that leave were not granted than would be caused to the respondent if that leave were granted.
(3)Where, under subsection (2), a court grants a party to a domestic relationship leave to apply to the court for an order under this Part, the party may apply accordingly.
Characterisation of the Conduct by the Applicant
38.The amended complaint made by the applicant is as follows.
(a) The respondent failed to act with competence and diligence in the service of his client, IL, in breach of Rule 1.2 in that:
(i)The respondent failed to advise IL when he consulted him in 2005 of the limitation period for commencement of proceedings under the NSW Property Act and that failure led to the client becoming out of time to commence proceedings;
(iii)The respondent failed to advise IL in or about April 2008 that his prospects of obtaining leave out of time to commence property proceedings under the NSW Property Act could be prejudiced by any further delay.
(c)In breach of Rule 1.2 the respondent failed to attend to the work on behalf of IL with reasonable promptness in that he failed to commence proceedings to seek leave out of time on behalf of IL until August 2009 when he should have known that the proceedings were out of time in or about April 2008.
(d)The respondent acted for IL from April 2008 until October 2010 in circumstances where the respondent's interests were in conflict with those of the client in breach of Rules 8.1 and 8.2 in that:
(i)The respondent's failure to advise IL in January or February 2005 or subsequently of the time limit for commencement of proceedings under the NSW Property Act led to IL having a potential claim against the respondent when the limitation period expired. Notwithstanding the potential claim the respondent continued to act on behalf of the client between April 2008 and October 2010.
39.It was alleged by the applicant, and conceded by the respondent, that it is open to the Tribunal to find that the respondent’s conduct, as detailed above, amounts to:
(a)breaches of the following rules of the Legal Profession Act (that is the Solicitors Rules);
(i) Rule 1.2;
(ii) Rule 8.1; and
(iii) Rule 8.2; and
(b)unsatisfactory professional conduct.
40.In the amended complaint the applicant withdrew certain allegations and amended others. As a consequence of these amendments, the allegation that the respondent had breached Rule 11 of the Solicitors Rules was no longer relied upon by the applicant.
CONSIDERATION OF THE ISSUES
Breach of Rule 1.2 - Ignorance of the limitation period and delay
41.Rule 1.2 requires the practitioner to act with competence and diligence in the service of a client and mandates that a practitioner should accept instructions only when he or she can reasonably expect to serve the client with reasonable promptness.
42.As discussed below, there are two periods of delay. The first delay, which is the if subject of charges (a)(i) and (ii), occurred between January 2005 and December 2008 and might be properly characterised as arising from the practitioner’s lack of knowledge. There was a second period of delay, the subject of charge (c), which ran from December 2008 after the respondent believes he was advised by WA that there was a limitation period applicable to the proceedings.
43.As noted by Mr Clynes on behalf of the respondent, the first delay and the consequential charges derived from a single source or error, that is, the Practitioner’s ignorance of section 18 of the NSW Property Act. Mr Clynes invited the Tribunal to draw an inference that IL and HB and their representatives had in mind at this stage that the matter would be dealt by way of private treaty rather than requiring litigation.
44.In relation to the second delay and charge (c), it was argued that time simply got away from the Practitioner because of illness. The respondent submitted that a substantial part of the second delay (i.e. 3 months out of the 8 month period) was due to the Practitioner’s illness which he suffered in the early part of 2009. The Tribunal notes that the applicant argued that the respondent could have made alternative arrangements to progress IL’s claim during this period by, for example, referring him to another firm of solicitors or instructing WA to attend to the preparation of documents in light of the urgency of matter. In this respect, the Tribunal agrees with the reasoning of the applicant.
45.The Tribunal notes the submission by the respondent that he was not idle during the period between 8 May and 19 August 2009 and undertook the following activities to progress IL’s claim:
a. on 11 May the respondent wrote to IL seeking comments on a draft affidavit;
b. the respondent conducted certain title searches set out in his letter to Counsel of 15 June 2009;
c. the respondent sent the relevant materials to Counsel under cover of a letter dated 15 June 2009;
d. Counsel then apparently had to revise the draft affidavit;
e. IL swore the affidavit on 29 June 2009;
f. on 19 August 2009, the respondent sent copies of the Statement of Claim and a cheque for the filing fee to the respondent’s Sydney agents.[13]
[13] Respondent’s Submissions 22 March 2012 paragraph 2.5
46.The Tribunal takes into account the following submissions made by the respondent in determining whether this second period of delay contributed to a breach of Rule 1.2 and/or the charge of unsatisfactory professional conduct. The respondent was advised by WA that the application for an extension of time had good prospects.[14] It was argued by Mr Clynes on behalf of the respondent that this advice was reasonably based in the circumstances, because, inter alia, HB had not pleaded the time bar[15] and because IL had a sound case for relief under the legislation and on ordinary equitable principles.[16] Further, WA gave no advice about the urgency in filing the application.
[14] Agreed Submission 15 March 2012 paragraph 21
[15] Forrest v Fiegler (1997) DFC 95-181
[16] Parker v McNair (1990) DFC 95-087
47.The respondent also argued that HB, by her solicitor’s letter of 15 February 2005, had implicitly agreed to the terms of the letter sent by the Practitioner on behalf of IL on 10 January 2005. The respondent argued that this amounts to “promise” which is a relevant factor on an extension of time application.[17] The Tribunal does not accept the latter submission since there is insufficient evidence to determine whether the letter of 15 February 2005 amounted to a promise.
[17] Beattie v Reid [2000] NSWSC 97
48.Importantly, the applicant did not lead evidence to establish that the delay in filing the application had any prejudicial effect either upon that interim application or upon the settlement ultimately achieved in the proceedings.
49.The position of the applicant is that the Practitioner should have known that the proceedings were out of time in or about April 2008. This position is reflected in the wording of charge (c). Therefore, although the applicant was unable to provide evidence that IL was prejudiced in a substantial way by the acts of the Practitioner, the view of the applicant Law Society is that the knowledge should be deemed from around April 2008. In other words, the focus should be upon what the Practitioner ought to have known.
50.In order to establish a breach of Rule 1.2 is not necessary in order to attain the requisite standard of competence and diligence that the practitioner is correct in all advice given. It will be sufficient if the practitioner has exercised the diligence and competence that a member of the public is entitled to expect from reasonably competent practitioner in giving the advice.[18] As discussed in Riley Solicitors Manual [19]and cited by the tribunal in The Council of the ACT Law Society & The Legal Practitioner,[20] the standards are:
... not to be determined by reference to lawyers who are without fault, but of the reasonably competent lawyer. As such, the standard of reasonableness invoked by the definition aims to distinguish between conduct that falls within a tolerable range of human error and bad professional work which falls below reasonable standards of competence and diligence.
[18] Council of the New South Wales Bar Association v Asuzu [2011] NSWADT 209, at [51]
[19] Riley Solicitors Manual at 33,040-10
[20] [2010] ACAT 73 at [20]
51.However, it is clear that delay and negligence can constitute a breach of the professional standards. The definition of “unsatisfactory professional conduct” included in the reforms of the legal profession acts passed in New South Wales in 2004 and in ACT in 2006 was intended to encompass conduct of lawyers, such as delay and negligence, that fell short of serious professional misconduct but nevertheless was intended to be subject to disciplinary action.[21]
[21] NSW Bar Association v Bland [2010] NSWADT 34 at [185] – [190]
52.The authorities indicate that basic legal knowledge and keeping abreast of developments in the legal practitioner’s field of practice is to be reasonably expected of legal practitioners.[22] Although the Tribunal agrees at the outset that the respondent was entitled to act upon the notion that the arrangements involving IL and HB might result in a consensual agreement rather than a contested matter, being alert to limitation periods is part of the basic legal knowledge that a client would reasonably expect of a legal practitioner. Although legal practitioners will not be aware of every relevant statutory provision, in this case (applying the Riley test cited in TheCouncil of the ACT Law Society & The Legal Practitioner[23]) the delay that occurred after IL’s initial contact with the respondent in January 2005 until proceedings were commenced in August 2009, transformed the original lack of knowledge of section 18 of the NSW Property Act (which may originally have constituted behaviour that falls within a tolerable range of human error) into bad professional work which falls below reasonable standards of competence and diligence.
[22] Law Society of New South Wales v Moulton [1981] 2 NSWLR 736 at [751]
[23] [2010] ACAT 73 at [20]
53.There are two relevant periods of delay. The first delay occurred between January 2005 and December 2008 and might be properly characterised as arising from the Practitioner’s lack of knowledge. However there is no evidence that the Practitioner considered or checked the relevant limitation period during this period. It is significant that the limitation period expired in August 2005, which was relatively early in this period.
54.It is not necessary to adopt the approach suggested by the applicant that the respondent should have known that the proceedings were out of time in or about April 2008. At this stage three years had elapsed between IL first consulting the respondent and this follow-up by the client. However was no evidence led or submissions made by the applicant to support April 2008 as being the relevant date when the respondent should have constructive knowledge of the limitation period. The Tribunal may infer that this is the relevant date by which the Practitioner should have considered or checked the relevant limitation period because he had been advised by his client by that time that the property had been sold by HB and therefore the need to act urgently (and if necessary commence litigation) to protect his client’s interests had escalated.
55.In any case, it is not necessary to decide whether the first delay (caused by a lack of knowledge) would be sufficient to amount to a breach of Rule 1.2 or unsatisfactory professional conduct because the second period of delay running from December 2008 (after the respondent believes he was advised by WA that there was a limitation period applicable to the proceedings) is also related to the alleged breach of Rule 1.2.
56.The respondent did not act with the alacrity that one might expect of a reasonable practitioner who becomes aware that a limitation period expired over 3 years ago. Although the aforementioned factors, particularly the Practitioner’s illness and his view about the prospects of success of the extension of time, must be weighed up with the lapse of time, the Tribunal is comfortably satisfied that this subsequent delay compounded the first delay and they cumulatively fell short of the standard of diligence and competence that a member of the public is entitled to expect from reasonably competent practitioner in giving advice.
57.The respondent’s illness is an important consideration that goes to mitigation of penalty and the Tribunal will consider the issue in that context below.
58.The Tribunal finds that the respondent breached Rule 1.2 of the Solicitors Rules.
Breach of Rules 8.1 and 8.2 – Conflict of Interest
59.Rule 8.1 and 8.2 of the Solicitors Rules as applied in the present case require that a practitioner must not allow his interests to conflict with those of the client and the practitioner must not continue to act for a person in relation to proceedings when the practitioner becomes aware that the person’s interest in the proceedings conflicts with the practitioner's own interests.
60.The applicant alleges that the respondent failed to advise IL in January or February 2005 or subsequently of the time limit for the commencement of proceedings under the NSW Property Act, which led to IL having a potential claim against the respondent when the limitation period expired. Notwithstanding the potential claim, the respondent continued to act on behalf of the client between April 2008 and October 2010.
61.It is plain enough that a conflict of interest arose from December 2008, when the respondent had actual knowledge that the proceedings were statute-barred. The applicant says that the conflict arose in April 2008 when that the applicant says that constructive knowledge of the limitation period arose. For the reasons stated above, the Tribunal is not satisfied that the applicant has proved that constructive knowledge arose from April 2008, therefore the Tribunal relies upon the date of actual knowledge, which is December 2008. In any case, the respondent continued to act for IL between December 2008 and October 2010 in circumstances where the client had a potential claim against the respondent in negligence for failing to commence proceedings within the limitation period.[24]
[24] Engert v Sydney Ferries Corporation [2009] NSWSC 1400 at [33]
62.The respondent conceded that he did not disclose the conflict of interest to IL, so as to allow IL an opportunity to terminate the retainer or give permission for the respondent to continue to act in the face of a disclosed conflict of interest in order to prosecute the extension of time application and the substantive proceedings.
63.The respondent indicated that he did not turn his mind to the conflict of interest. Mr Clynes, on behalf of the respondent, properly conceded that ignorance of the law is no excuse; however he indicated that this is the first time that a practitioner has been sanctioned by the Law Society in the ACT for a conflict of interest occasioned by the lapsing of a limitation period. Factually, it is significant that WA, who first alerted the respondent to the expiry of the limitation period, did not mention the potential conflict of interest to the respondent. It was also submitted by the respondent that when the issue was subsequently raised by DM, the Practitioner acted promptly in terminating the retainer.
64.Mr Clynes indicated that the standard of practice whereby a practitioner, upon discovery of the expiry of a relevant limitation period, will disclose both the fact of the expiry of the limitation period to the client and the consequential conflict of interest, is not well-established in the ACT. Although it is clear that such disclosures may be routinely made in lawyers’ offices across the Territory, such a practice has not been expressed judicially. Mr Clynes referred to several cases dealing with extensions of time under section 36 of the Limitation Act 1985 (ACT)[25] and Rule 75 of the Court Procedures Rules 2006 (ACT)[26] where practitioners had disclosed that an oversight had led to the expiry of the relevant limitation period, yet a conflict of interest had not been discussed by the judicial officer when deciding whether an extension of time should be granted. Although from time to time a judicial officer may comment that the practitioner’s explanation for allowing the limitation period to expire is unsatisfactory,[27] it is only one of many factors that must be taken into account when deciding an extension of time. Judicial comments about professional responsibility in this context are likely to be obiter dicta.
[25] Morris v Canberra Irish Club Incorporated [2007] ACTSC 48; Hamilton v Madden [2007] ATSC 89; Rajic v Brighton Ceiling Pty Ltd [2009] ACTSC 68; Barancewicz v Davies [2011] ACTSC 4
[26] Hay v Belconnen Magpies Sports Club Ltd and Anor [2010] ACTSC 1; Pahoff v Canberra Institute of Technology [2010] ACTSC 69
[27] Rajic v Brighton Ceiling Pty Ltd [2009] ACTSC 68 at [12]
65.Therefore the respondent argues that, whilst it took him a long time to recognise the conflict of interest, to terminate the retainer and to make arrangements for IL to be represented by another firm, the practice surrounding this obligation is not crystal clear in the ACT.
66.However, the issue has been the subject of express judicial statement in New South Wales, where Kirby P (as he then was) of the New South Wales Court of Appeal made the following comments:
In parting with the appeal, I call attention to the desirability, where a potential claim against legal practitioners for negligence hangs contingently on the outcome of [extension of time] proceedings, that such legal practitioners should withdraw from representing the party at risk because of the obvious potential for a conflict of interest and duty which can arise. …
When default of the kind that has apparently occurred here is revealed, it is the duty of the legal practitioners involved to draw it frankly to the attention of the client and, in my view, to suggest to the client that he or she should secure different legal representation. At the very least, the client should be aware of the fact that one possibility which must be contemplated is the prosecution of a claim against the legal practitioners who are in default.[28]
[28] Morrison and Anor v Judd (1995) Supreme Court of New South Wales Court of Appeal 10 October 1995, BC9507158 at pages 16-17
67.The Tribunal adopts the comments made by President Kirby, and reiterates the point made above that, upon discovering that the limitation period has expired upon his or her watch, the practitioner should disclose to the client the fact of its expiry and the potential conflict of interest that has thereby arisen due to the client having a potential claim against the practitioner. The client may terminate the retainer or give permission for the practitioner to continue to act in the face of a disclosed conflict of interest in order to prosecute the extension of time application and/or the substantive proceedings.
68.As stated above, the facts set out in the Agreed Submission make it clear that the respondent was in a situation of conflict of interest from at least December 2008.
69.The Tribunal finds that the respondent has breached Rules 8.1 and 8.2 of the Solicitors Rules.
Unsatisfactory Professional Conduct
70.The Tribunal concludes that the conduct of the Practitioner, including the breaches of Rules 1.2, 8.1 and 8.2, as discussed above, amounts to unsatisfactory professional conduct because the Practitioner has failed to attain the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner as stipulated by section 386 of the Legal Profession Act.
Matters in Mitigation
71.The applicant submitted that the Practitioner’s admission of wrongdoing ought to be given weight by the Tribunal. The parties agreed that it saved considerable time and expense because the matter proceeded by way of admission to the charges.
72.The respondent fully cooperated with the applicant in attempting to resolve all factual difficulties that arose as a consequence of the respondent being unable to locate any file or diary notes for 2008 and some gaps in the recollection of IL, who is now an elderly man. For example, the respondent arranged for computer forensic testing to determine the date of certain documents in order to assist the preparation of the matter for hearing.
73.The applicant also conceded, and the Tribunal agrees with this concession, that the respondent suffered from extremely poor health in the early part of 2009 and this significantly impacted on his ability to progress the claim.
74.The respondent tendered two testimonials from lawyers practising in the ACT and New South Wales and both of these make reference to the current proceedings. Both of the lawyers practice in a similar manner to the respondent, have had many dealings with him and know him very well. The testimonials indicate that the respondent is a person of significant integrity who takes his professional obligations seriously and who practices with respect, integrity, courtesy and honesty.
75.The respondent gave evidence frankly and the qualities of respect, courtesy and honesty were demonstrated by his oral testimony. He has practised law for in excess of 20 years and has contributed both professionally, for example through pro bono work, and in the community through his involvement in sporting organisations. He took full responsibility for his actions and showed contrition.
Should a Private Reprimand be Ordered?
76.Upon this Tribunal being satisfied that breaches of Rules 1.2, 8.1, 8.2 of the Solicitors Rules and unsatisfactory professional conduct have been established by the applicant in these proceedings, the question arises as to the appropriate penalty.
77.The respondent has had no prior disciplinary order made against him in this tribunal or its predecessors.
78.It was suggested by both the applicant and the respondent that the appropriate penalty would be a private reprimand of the respondent pursuant to section 425(3)(e) of the Legal Profession Act. As stated above, this provision states if the tribunal is satisfied that a practitioner is guilty of unsatisfactory professional conduct, it may make an order “publicly reprimanding the practitioner or, if there are special circumstances, privately reprimanding the practitioner”.
79.Therefore, in order to conclude that a private reprimand is appropriate, it is necessary for the Tribunal to find special circumstances which warrant the making a private, as opposed to a public, reprimand.
80.The Tribunal finds that special circumstances have been established by the respondent. The Practitioner has a 20 year unblemished record in practising law and the breaches are at the lower end of the scale in terms of their seriousness. As stated above, the applicant did not establish that the client suffered prejudice as a result of the undoubted errors and delay that have been admitted by the Practitioner.
81.During the hearing, the Tribunal expressed some concern about the role of a private reprimand in a system of occupational regulation which is dispensed in a tribunal that has the responsibility to observe the principle of open justice. However, it is clear that the private reprimand is an option that has been included in the legislation as an element of a hierarchy of sanctions which is contained in section 425 of the Legal Profession Act. It used to be available in New South Wales under a previous version of its legal profession act.[29] However it was abolished in New South Wales in 2004 and the relevant legislation now only provides for a public reprimand.[30]
[29] Legal Profession Act 1987 (NSW) s 171C(1)(e)
[30] Legal Profession Act 2004 (NSW) s 562(2)(e)
82.However the ACT legislature has not followed the path of New South Wales, therefore the private reprimand is still available in the legislation and, as a consequence, it may be imposed by the tribunal when it is satisfied that the breaches are at the low end of seriousness. In this respect, it is worth observing the types of breaches where the courts and tribunals have elected to impose a public reprimand in the ACT and under the repealed legislation in New South Wales when the private reprimand remedy was available. In the cases examined by the Tribunal, the court or tribunal opted for a public reprimand in circumstances where the breaches were considerably more serious than the present one. For example a public reprimand has been ordered where tribunals have found that:
- the practitioner had altered a letter in a deliberately misleading and deceptive way,[31]
- the practitioner was slow to comprehend the error or express contrition,[32]
- the breach involved serious dishonesty i.e. forgery, [33]
- professional misconduct was established by wilful breaches of the trust account rules and recklessness,[34] and
- professional misconduct had occurred when the practitioner applied for multiple shareholdings using fictitious names.[35]
[31] The Law Society of the Australian Capital Territory & The Legal Practitioner [2011] ACAT 57
[32] Commissioner for Fair Trading v MacLachlan [2005] NSWADT 88 at [27]
[33] Law Society of New South Wales v Byrnes [2000] NSWADT 20
[34] Law Society of New South Wales v Cornell No. 2 [2006] NSWADT 308
[35] New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39
83.Conversely, a private reprimand was issued by the New South Wales Administrative Decisions Tribunal to a conveyancer in circumstances where she had made an error by not putting funds immediately into a trust account. Although there was a finding of professional misconduct, the practitioner had been involved in legal practice for 30 years without any prior formal complaints and was very contrite.[36]
[36] Commissioner for Fair Trading v Walker [2004] NSWADT 139
84.However, it is axiomatic that the purpose of occupational regulation is to protect the public. An important consideration is whether a private reprimand provides such protection to the public,[37] including the community of legal practitioners.[38] In the Tribunal’s view, the respondent does not present any continuing risk to the public. Related to this, however, is the issue of deterrence. Deterrence is a particularly important consideration in the present case because, as stated above, this is the first time the applicant Law Society has brought a case based on possible negligence and the public has a particular interest in ensuring that the claims of individual right-holders are not barred by inadvertence or slothfulness on the part of members of the legal profession.
[37] The Law Society of the Australian Capital Territory & The Legal Practitioner [2011] ACAT 57 at [38]
[38] New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 at [123]
85.It has been held that a private reprimand can really only act as a personal deterrent whereas a public reprimand should be issued where there is a reasonable possibility that one or more legal practitioners might act in the same way as the legal practitioner under consideration.[39] This issue was raised with the parties during the hearing and they replied that the proceedings themselves are a deterrent to the practitioner personally but in addition, the publication of the reasons will act as an important conduit of information and a deterrent to ACT practitioners. This can occur without the further need for a public reprimand. The Tribunal agrees with this approach.
[39] New South Wales Bar Association v Sahade (No 3) [2006] NSWADT 39 at [128]
86.Finally, the question was raised about the efficacy of a private reprimand in circumstances where a finding of unsatisfactory professional conduct has been made by the Tribunal. Pursuant to section 447 of the Legal Profession Act, this finding constitutes “disciplinary action” which must be included on the register of disciplinary action maintained by the applicant. The register, which is on the applicant’s internet site, contains details of any disciplinary action taken against an Australian legal practitioner and must include particulars of the disciplinary action taken. Previously, in Council of the Law Society of the Australian Capital Territory v A Legal Practitioner, the tribunal took the register into account when declining to order that the reprimand be delivered privately, expressing the view that little would be served by having the reprimand delivered in private as the requirements of section 448 of the Legal Profession Act result in the identity of the respondent and the details of the disciplinary action forming part of the register of disciplinary action.[40]
[40] Council of the Law Society of the Australian Capital Territory v A Legal Practitioner [2010] ACAT 26 at [62]
87.The Tribunal acknowledges that there is some tension between the publicity required by sections 447 and 448 of the Legal Profession Act and an order for a private reprimand. However, the private reprimand remains a sanction that is available to the Tribunal under section 425(3)(e) of the Legal Profession Act and Council of the Law Society of the Australian Capital Territory v A Legal Practitioner is distinguishable from present case because in that case there was a finding of professional misconduct due to, inter alia, the practitioner signing a document when a witness was not present. Therefore the breach was more serious than those presently under consideration.
88.The present Tribunal considers that the disclosure of information on the register of disciplinary action is a matter for the applicant to consider in discharging its responsibility under the Legal Profession Act. Presently, the Tribunal is concerned with the imposition of a penalty and the power to impose a private reprimand remains in the ACT Legal Profession Act where special circumstances are established. As stated above, the Tribunal finds that special circumstances have been established and therefore a private reprimand will be ordered.
Costs
89.The parties agreed that the respondent will submit to an order that he pay the applicant’s costs on a solicitor and own client basis, with the parties having liberty to apply.
………………………………..
Professor P. Spender
Presidential Member
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER:
OR 11/13
PARTIES, APPLICANT:
Council of the Law Society of the Australian Capital Territory
PARTIES, RESPONDENT:
Legal Practitioner W
COUNSEL APPEARING, APPLICANT
COUNSEL APPEARING, RESPONDENT
Mr R Clynes
SOLICITORS FOR APPLICANT
Ms L Clifford
Dobinson Davey Clifford Simpson
SOLICITORS FOR RESPONDENT
Mr B Baker
Baker Deane and Nutt
TRIBUNAL MEMBERS:
Professor P Spender
DATES OF HEARING:
22 March 2012
PLACE OF HEARING:
Canberra
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
7
0
0