Law Society of New South Wales v Madden - [2008] NSWADT 210

No judgment structure available for this case.

CITATION: Law Society of New South Wales v Madden [2008] NSWADT 210

DIVISION: Legal Services Division

PARTIES:
APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
Philip MacDonald Madden

FILE NUMBER: 072004

HEARING DATES: 27-28 March 2008 , 28 May 2008

SUBMISSIONS CLOSED: 28 May 2008

DATE OF DECISION:
31 July 2008

BEFORE: Currie JS - Judicial Member; Riordan M - Judicial Member; Bubniuk L - Non Judicial Member

CATCHWORDS: Solicitor – disciplinary application - professional misconduct - misappropriation

MATTER FOR DECISION: Principal matter

LEGISLATION CITED: Legal Profession Act 1987
Legal Profession Act 2004

CASES CITED: Allinson v General Council of Medical Education and Registration (1894) 1 QB 750
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Law Society of New South Wales v Bannister (1983) 4 LPDR 24
Law Society of New South Wales v Foreman (No. 2) (1994) 34 NSWLR 408
Law Society of New South Wales v Walsh [unreported decision in December 1997]
Law Society of New South Wales v Jones [unreported NSW Court of Appeal, 27 July 1978]
Harvey v The Law Society of New South Wales (1975) 49 ALJR 362 at 364
Ex Parte Macaulay (1930) 30 SR NSW) 193
Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279
Dupal v Law Society of New South Wales [unreported, NSW Court of Appeal, 26 April 1990]
Law Society of New South Wales v McNamara [2007] NSWADT 162
Law Society of New South Wales v McCarthy [2003] NSWADT 198
Law Society of NSW v Goold [2001] NSWADT 171
Law Society of New South Wales v Davidson [2007] NSWADT 264
Law Society of New South Wales v Green [2001] NSWADT 142

REPRESENTATION:
APPLICANT
L Pierotti, solicitor
RESPONDENT
R Bellamy, barrister

ORDERS: 1. Philip MacDonald Madden be publicly reprimanded
2. Philip MacDonald Madden shall be suspended from practise for a period of twelve (12) months
3. When Philip MacDonald Madden, after the expiry of 12 months suspension, applies to the Society for re-issue of his Practising Certificate, he shall accompany that application with a medical report from a psychiatrist nominated by the Manager of the Professional Standards Department of the Society. The costs of the assessment and report are to be met by Mr Madden and no practising certificate is to be issued to him unless [and until] such medical report indicates that the examining doctor is of the opinion that he is fit to resume the practise of law
4. Further, when Philip MacDonald Madden makes that application to the Society for the re-issue of his Practising Certificate, his application is to be accompanied by the following written undertakings:
a) That he will not in future accept instructions to act in any capacity in matters beyond the practise of a specialist in commercial law;
b) That he will carefully and diligently examine correspondence (including emails) before he signs and dispatches it;
c) That he will attend and participate in a program of psychiatric treatment of such frequency and duration as the psychiatrist nominated by the Society (see: Order 3 above) deems appropriate. The costs of that treatment program are to be borne by the Solicitor; and
d) That he agrees to participate in the Senior Solicitors Program and to accept mentoring by a Senior Solicitor nominated by the Society for a period of no less than 3 years from the date of re-issue of his Practising Certificate and to confer frequently and co-operate with that senior Solicitor in the conduct of his program. The costs of this program are to be borne by the Solicitor
5. Philip MacDonald Madden shall be fined $7,500, plus GST. In imposing this fine the Tribunal has taken into account the financial consequences that are expected to flow from Orders 2, 3 and 4 above
6. Philip MacDonald Madden shall pay the Applicant’s costs of and incidental to these proceedings, as agreed or assessed.

REASONS FOR DECISION
Introduction

1 In this matter the Applicant, the Council of the Law Society of New South Wales (“the Society”) made an Application against the Respondent, Philip MacDonald Madden (the “Solicitor”) alleging that he was a Solicitor within the meaning of the Legal Profession Act 1987 (“the Act”) and that while practising as a Solicitor he was guilty of professional misconduct and misappropriation.

2 In addition to its own complaints, the Society also adopted a complaint of professional misconduct that was made against the Solicitor by Mr R W Hood of Counsel (“Hood”). The Tribunal notes that the grounds of this complaint arise from the pleadings and supporting documentation filed by the Solicitor in relation to debt recovery proceedings that Hood commenced against him in the Local Court and his evidence during those proceedings.

3 The Society requested that the Tribunal make the following orders:

“1. That the Solicitor’s name be removed from the Roll;
2. That the Solicitor pay the costs of the Society; and

3. Such other order as the Tribunal sees fit.”

4 The Solicitor’s date of birth is not in evidence but he is 52 years of age. He was admitted as a Solicitor on 22 December 1983 and commenced practice as a Sole Principal as Maddens Commercial Lawyers (“Maddens”) on 1 February 1996. He incorporated his legal practice in 2003 and he continues to practise as a Director.
5 The conduct of the Solicitor on which the Society relies in these proceedings occurred between 14 July 2000 and July 2007. While the Tribunal notes that in his opening, Mr Pierotti (for the Society) stated that the Solicitor’s relevant conduct began in July 2001, the Tribunal considers that his conduct prior to that date, which has been properly and fully particularised in the Application, is also relevant to the determination of the current Application.

6 The grounds of complaint in the Application are as follows.

“1. Complaint by Hood
Professional Misconduct

1. Failure to account for amount set out in complainant’s memorandum of fees paid in full to the Solicitor for payment to the complainant.

2. Making a false statement in an Affidavit that $5,720 were fees incurred by Maddens Commercial Lawyers.

3. Falsely claiming in a cross-claim that the Solicitor had paid $5,720 to a competent barrister on Appeal.

4 Commencing a cross-claim knowing that he was unable to establish that claim.

5. Falsely asserting in correspondence that the Solicitor had not received the complainant’s fee agreement.

6. Falsely claiming in paragraph 2 of a Notice of Grounds of Defence that at no time did the complainant provide a copy of the contract and at no relevant time was a copy of the contract delivered to the Solicitor.

7. Falsely stating in correspondence that AKA (the Australian Karting Association) had taken independent legal advice in respect of lodging a complaint with the Legal Services Commissioner with regard to the manner in which the complainant conducted the hearing in the Local Court.

8. Falsely claiming in cross-claim (at paragraph 2) and amended cross-claim (at paragraph 3) that the loss to the Solicitor was $9,255 when the Solicitor had received $6,700 towards the costs by payment into the Solicitor’s bank account on 17 May 2001 and as accounted as paid to the Solicitor on 5 July 2001.

9. False statements in Solicitor’s 30 July 2002 statement tendered and admitted into evidence in the Local Court on 11/09/02.

(a) …
(b) In paragraph 9, by claiming the Solicitor entered into an agreement with his client AKA when AKA had not done so”.

10. Attempting to mislead the Court …
2. Complaint by Law Society

Professional Misconduct

1. Wilful breach of Section 61 of the Legal Profession Act 1987.

2. Misappropriation.”

7 In addition to the matters set out in paragraph 4 above, the Application particularised the Grounds of Complaint as follows:

“…
2. In 1999 Mr Ross Hill (“Hill”), President of the Australian Karting Association (“AKA”), commenced Apprehended Violence proceedings (“the proceedings”) against two other members of AKA. Hill instructed Madden to act on his behalf in the proceedings.

3. Mr David Singh (“Singh”) was admitted as a Solicitor on 17 December 1999. He commenced employment with Maddens on 18 October 1999 as a clerk and on 1 January 2000 as a Solicitor. Singh assumed the day to day carriage of the proceedings.

4. The AKA agreed to fund the proceedings.

5. Hill resigned as President of the AKA on 9 May 2000.

6. On 11 July 2000 Singh telephoned Mr Raymond Hood of Counsel (“Hood”), requesting him to appear, on behalf of Hill, in the proceedings which had been set down for hearing on Friday 14 July 2000 at the Parramatta Local Court (“the hearing”).

7. On 12 July 2000 a brief was faxed to Hood to advise and appear at the hearing.

8. On 13 July 2000 Hood conferred with Singh and Hill.

9. On 14 July 2000 Hood appeared at the hearing instructed by Singh. On that date Hood handed Singh a copy of his Fee Agreement, which Singh read and signed. Hood gave Singh a copy of the agreement signed by Hood. The proceedings were adjourned part heard.

10. On 14 July 2000 Singh, after returning from Parramatta Local Court, attended on the Solicitor and informed him of the hearing and also brought to his attention Hood’s fee agreement which he had signed. Singh informed the Solicitor that Hood’s fee was $1,500 plus GST rather than the $1,500 discussed with Hood previously over the telephone and that Hill had agreed to Hood’s fees.

11. By letter, signed by Singh, to AKA dated 24 July 2000 the Solicitor, in part, advised:

“…
We enclose the costs agreement of Mr Ray Hood. Please organise payment of Mr Hood directly for his appearance of 14 July.

…”

12. By letter to Hood dated 15 August 2000 and signed by the Solicitor, Madden noted:

“Following your costs agreement sent to us we advised our client by facsimile that your fees will be $1,650 (including GST) per day for further court attendances and conferences. If the hearing is vacated for any reason you reserve the right to change (sic) the amount of $800 per day for the days reserved.”

13. The hearing of the proceedings resumed on 18 October 2000.
14. On 23 October 2000 Mr Hugh Johnson, the treasurer of AKA (NSW) sent an email to Maddens advising of his concern at escalating costs and the fact that they were in excess of previous advice. He also stated that all costs had to be approved by the State Karting Council and that Hill did not have authority to approve costs.

15. Judgment in the proceedings was delivered on 23 November 2000. Hill’s application was unsuccessful. Costs were awarded against Hill.

16. By facsimile on 27 November 2000 Hood submitted to Maddens his memorandum of fees in the amount of $7,370.

17. By letter dated 29 November 2000 AKA informed the Solicitor that they understood Hill intended to Appeal and that they could not accept responsibility for any further legal costs or charges.

18. By letter dated 30 November 2000 the Solicitor wrote to AKA, in part, enclosing his account of that date in the sum of $9,808.11 (and which account included, as a disbursement, Hood’s fees) and requested payment by AKA as soon as possible. A copy of Hood’s account was enclosed.

19. Hill instructed the Solicitor to Appeal against the magistrate’s decision in the proceedings (“the Appeal”). The Solicitor agreed to handle the Appeal at no charge provided Hill paid Counsel’s fees and disbursements on the Appeal.

20. Mr Wetmore of Counsel was briefed to appear on the Appeal. The Appeal was ultimately settled.

21. On 8 March 2001 Mr Wetmore rendered to Maddens a Tax Invoice in the sum of $5,720 being his fees in relation to the Appeal. This amount was paid to Mr Wetmore directly by Hill.

22. By letter to the Solicitor dated 27 March 2001 Mr Roberts of AKA stated, in part, that the AKA had received advice on the making of a formal complaint about the Solicitor to the Legal Services Commissioner.

23. On 30 March 2001 Singh ceased to be employed by Maddens.

24. On 8 May 2001 the Solicitor rendered to Hill a Tax Invoice for his costs and disbursements in relation to the Appeal. Professional fees were expressed as follows:

“… $9,255 but reduced to No Charge”

and disbursements, including GST, amounted to $265.32.
25. On 17 May 2001 the Solicitor deposited to his office account a cheque from AKA in the sum of $9,808.11 which included the sum of $7,370.00 being Hood’s fees as per Hood’s memorandum of fees dated 20 November 2000.

26. The Solicitor did not pay Hood.

27. On 20 June 2001 Hood telephoned Maddens to enquire about payment of his fees. He was asked to provide a further copy of his memo of fees, which he did that day by facsimile.

28.On 5 July 2001 the Solicitor issued an amended Tax Invoice (“the amended Tax Invoice”) to Hill in respect of the Appeal. Professional fees were expressed as follows:

“Subtotal $9,255 but reduced to $6,700 $6,700.00

Goods and Services Tax (GST) at 10% $670.00

Total Amount $7,370.00

AKA Amount paid to Appeal $7,370.00

BALANCE DUE NIL

29. The amended Tax Invoice makes no reference to the disbursements set out in the Tax Invoice of 8 May 2001. Hill did not receive the amended Tax Invoice.

30. By letter to Hood dated 12 July 2001 the Solicitor asked, in part, that Hood forward a copy of his costs disclosure letter as a copy did not appear on file. That letter added:

“We had acted generally for the AKA in their commercial and administrative matters prior to these proceedings (Mr Hill’s matter) however as a consequence of the result in the Local Court and counsel’s consent to costs orders, without instructions of the client or authorisation of the AKA or this firm, the AKA legal work has been withdrawn from this firm. The AKA has taken independent legal advice in respect of lodging a complaint with the Legal Services Commissioner in respect of the conduct of the matter in the Local Court. We await further developments in this regard.”

31. By letter dated 7 September 2001 to Hood’s Solicitors the Solicitor stated, in part, that Singh did not bring the costs agreement of Mr Hood to the attention of the Solicitor.
32. On 1 November 2001 Hood commenced proceedings against the Solicitor for recovery of his outstanding fees (“the recovery proceedings”).

33. By facsimile on 6 December 2001 the Solicitor forwarded to Hood’s Solicitors a copy of a Notice of Grounds of Defence in the recovery proceedings dated 6 December 2001 which had been signed and verified by him, paragraph 2 of which stated, in part:

“… the plaintiff did not provide or enter into a contract to provide legal services with the Defendant but instead issued a contract and relied upon execution of that contract to an unauthorised, unqualified person. At no time did the Plaintiff provide a copy of the contract to the relevant persons within the legal practice of the Defendant and at no relevant time in the duration of the alleged legal services was a copy of the alleged contract delivered to the Defendant and/or made available for the relevant legal file of the Defendant.”

34. On 17 December 2001 the Solicitor signed a Notice of Cross-Claim in the recovery proceedings in which he particularised the cross-claim at paragraphs 1 and 2 as follows:

“1. Loss and damage caused by the plaintiff’s negligence quantified by the legal fees paid by the defendant to a competent barrister on Appeal from the verdict in the Local Court caused by the plaintiff’s negligence. The loss and damages claimed is $5,720.00 in respect of fees paid to a “competent barrister” emphasis added.
2. Loss and damage caused to the defendant by the plaintiff’s negligence in the defendant’s preparation and conduct of the Appeal from the verdict in the Local Court caused by the Plaintiff’s negligence. The loss and damage claimed by the defendant is $9,255.00 in respect of professional fees at the Solicitor’s hourly charge out rate incurred in conduct of the Appeal from the Local Court verdict in order to rectify the plaintiff’s negligence.”

35. On 27 May 2002 the Solicitor executed a Notice of Amended Grounds of Defence in the recovery proceedings (which was verified by him by Affidavit sworn 28 May 2002). Paragraph 5 of the Notice of Amended Grounds of Defence states in part:

“5. … the Plaintiff’s Bill of Costs is not a proper Bill of Costs under the Legal Profession Act as it does not derive from a valid fee disclosure and/or contract with the Defendant …”

36. On 28 May 2002 the Solicitor executed a Notice of Amended Cross-Claim in the recovery proceedings. In his Affidavit in support, the Solicitor deposed at paragraph 3, in part, as follows:

“3. Annexed hereto and marked with the letter “B” is a true copy of the tax invoice of David A. Wetmore, barrister dated 8 March 2001 … in evidence of fees incurred by Maddens Commercial Lawyers to rectify work earlier performed by the Plaintiff in the Local Court …”

37. On 30 July 2002 the Solicitor signed a Statement in the recovery proceedings (“the Statement”). Paragraphs 1 and 9 of the Statement are as follows:

“… 3. The defendant/cross-claimant did no receive any written or oral updated estimate or advice of costs beyond the amount of a total of $1,650 from the plaintiff/cross-defendant, stated in the contract at any time.
… 9. The Defendant/cross-claimant has entered an agreement with his client to reimburse the client for an amount paid by the client in respect of part payment of the legal costs of the Appeal proceedings.

…”

38. At no time was there any agreement between the Solicitor and Hill or between the Solicitor and the AKA to apply any amount paid by either Hill or the AKA towards the legal costs of the Appeal.
39. The Statement was admitted into evidence at the hearing of the recovery proceedings on 11 September 2002.

40. During the hearing of the recovery proceedings, on re-examination, the Solicitor gave evidence as follows:

“When the Appeal was filed, there was a dispute as to whether we would be paid any money at all in respect of the final account, and we were not paid eventually until after the result of the Appeal, and we had been told by our client that they regarded these proceedings as one proceedings, local court and Appeal court, and they wouldn’t pay any more, and we must bear the cost of the Appeal, which we did, and fund it from moneys that they had agreed to pay. So we were given that direction by the client. We also had an arrangement that if there was an award for the cross-claim, we would refund any money that was reasonably – the client was entitled to. That’s it.”

and
“BENCH: Where does that leave the cross-claim? Anything at all on the cross-claim?

DEFENDANT: Your Honour, much of that – well the cross-claim has really been dealt with fairly thoroughly in cross-examination. Paragraphs 4 and 5 and paragraph 3 document the costs of the cross-claim.

BENCH: That’s your statement?

DEFENDANT: The costs we suffered are in my affidavit, and the point is that our case is – I’ll go into that in submission - but

BENCH: Well, I’d have to have some evidence, and this is your opportunity. Is there any evidence you wish to put to us as to the claim for failure to perform the contract?

DEFENDANT: We say it speaks for itself. We sustained the costs order -

BENCH: No this is your opportunity; is there any evidence you wish to – any further evidence you wish to place before the Court on the cross-claim?

DEFENDANT: Yes, well it’s in the transcript of the local court proceedings, we suffered a costs order of $16,000 against the client, and there has been - there was evidence that it could have been dealt with but it wasn’t dealt with. I think it’s all in evidence.”

41. On 21 October 2002 Judgment in the recovery proceedings was entered in favour of Hood. The cross-claim failed and the Solicitor was ordered to pay Hood’s costs.

42. The Solicitor did not pay the Judgment debt.

43. Hood made a complaint to the Legal Services Commissioner on 13 December 2002 and on 20 December 2002 Hood’s Solicitors caused to be issued to the Solicitor a Bankruptcy notice claiming $8,683.41.

44. Under cover of a letter dated 6 January 2003 the Solicitor paid the sum of $8,683.41 to Hood’s Solicitors.”

The Relevant Conduct of the Solicitor
8 The Society relied upon the following evidence:

a) Affidavit of Raymond John Collins sworn 8 February 2007 – Exhibit “B”;
b) Affidavit of David Govinder Singh sworn 7 February 2007 – Exhibit “C”;

c) Affidavit of Ross Anthony Hill sworn 1 February 2007 – Exhibit “D”;

d) Affidavit of Graeme Roberts sworn 30 January 2007 – Exhibit “E”.

e) Letter to the Solicitor from Hood dated 20 March 2008.

These Affidavits and documents were admitted into evidence and the Solicitor did not require any deponents or authors to attend for cross-examination.

9 Mr Collins’ affidavit comprises 419 pages. He deposed that by letter date 7 January 2003 the Legal Services Commission referred complaints by Hood to the Society for investigation [these being the complaints comprised in paragraph 1.1 of the Application].

10 The Tribunal notes that by letter dated 13 January 2003, the Solicitor made his own complaint to the Legal Services Commission regarding Hood’s conduct of the AVO proceedings [see: Collins pp 211–2]. By letter dated 28 January 2003 [see: Collins p210] the Legal Services Commissioner referred that complaint to the Bar Association of NSW for investigation. The Bar Council dismissed it on 27 March 2003 and a copy of its report is annexed to Mr Collins’ affidavit [see: pp 217-227].

11 The Society referred Hood’s complaints to the Solicitor by letter dated 11 July 2003 and subsequently made its own complaints about the Solicitor. A large volume of correspondence was exchanged with the Solicitor between 11 July 2003 and 15 August 2006. The complaints that are before the Tribunal were investigated by Mr Sinclair and Mrs Barnes of the Society’s Professional Standards Department.

12 By letter dated 14 August 2008 to Mr Sinclair of the Society [see: page 202 Collins affidavit], the Solicitor denied Hood’s complaints and maintained his complaints about Hood – notwithstanding that his complaints had been dismissed by the Bar Council. The tone of his letter was aggressive and belligerent and highly defensive and included comments such as:

The complainant should advise his reasons why a Solicitor is not entitled to have recourse to the Bar Association in relevant circumstances in respect of a complaint about the conduct of a relevant matter by a barrister received from the Solicitor’s client.

Items 10, 11 & 12 of complaint are misconceived and are currently matters before the Supreme Court appointed costs assessors to determine as subject to a present Appeal as to costs. It was Mr Hood’s Solicitors and legal representatives who amended and signed the relevant “accord and satisfaction” in consideration of early payment and receipt of an additional amount claimed by Hood. I and my firm are entitled to assume that Mr Hood relied on his Solicitor’s advice in that respect …

and

“… My reasonable submission is that mere assertion should not sustain a misconceived or vexatious complaint, particularly in the context of civil contractual proceedings completed in the Local Court which have dealt with the relevant issues and where the complainant had ample opportunity to ventilate his grievances.”

13 The evidence indicates that the Solicitor maintained that attitude in his numerous letters to the Society and particularly those dated 20 July 2006 and 15 August 2006. In his first affidavit (sworn on 31 July 2007) he sought to explain his conduct as follows:

122. Mr Hood’s complaint to the Law Society caused me to become indignant that he should take such a step. He was the one, in my view, who should be subject to an investigation, not me. My responses to the Law Society were ill advised and extremely unhelpful but this was not my intention. I think by then I had developed a “siege mentality”, the more the Law Society corresponded with me, the more I became defensively and unreasonably aggressive to defend my actions (,) which is out of character and not the way I conduct myself in practice in any other respect.”

14 The Tribunal’s view is that the Solicitor’s correspondence with the Law Society demonstrates his unwillingness to cooperate with the Society’s investigation and his unwillingness and/or inability to consider his own conduct towards Hood and its implications. As a consequence, the investigation took more than 3 years to complete and he was not prepared to make any admissions or concessions regarding his actions until he filed a reply in these proceedings on 4 July 2007.

15 However, while making some admissions and concessions in his reply, the Solicitor also made a number of submissions by which he sought to explain or contextualise his conduct. He admitted Grounds 2 and 3 of the Application, namely the Society’s allegations of Wilful breach of Section 61 of the Legal Profession Act 1987 and misappropriation, also but stated that he “… repeats his answers in paragraph 1” His “answers” in paragraph 1 of his Reply are discussed below.

“Ground 1.1 Failure to account for amount set out in complainant’s memorandum of fees paid in full to the Solicitor for payment to the complainant.”

16 The Solicitor admitted this ground of professional misconduct. However, he said that between the conclusion of the AVO proceedings on 27 November 2000 and 4 May 2001 (when Hood telephoned him and enquired about payment of his fees), he formed the view that he would not pay Hood. His reasons were basically that Hill had told him that he did not think that Hood had done a very good job in the AVO proceedings.

17 Further, the Solicitor stated that he also believed that Hood had breached his retainer “by not acting competently”, which he set out in his letter to Hood dated 12 July 2001 and particularised in his letter to Hood’s Solicitors dated 22 April 2002. Also, on 4 May 2001 he had a conversation with Mr Hill, in which Mr Hill agreed that Hood should not be paid and that if AKA did pay his account dated 30 November 2000 (which included Hood’s memo of fees dated 27 November 2000) then he could apply such payment to his own professional costs of the AVO Appeal proceedings. However, he conceded that Hill was not authorised to make this agreement with him, that he should not have sought it, that he could not rely upon it and that he “… does not now rely upon it.” He also conceded that he should have obtained approval from the AKA about disposing of the sum of $7,370 for a purpose other than for which it was paid to him. He also submitted that he had paid Hood’s fees, although the evidence indicates that he only did so after a Bankruptcy Notice was issued and that he had paid Hood’s costs of the debt recovery proceedings.

18 The Solicitor’s explanation is disputed, in part, by Hill. In his Affidavit, Mr Hill deposed, in part, as follows:

10. At no time was there any agreement between the Solicitor and me or, to my knowledge, between the Solicitor and the AKA to apply any amount paid by either me or the AKA towards the legal costs of the Appeal.”

19 There is an obvious factual dispute as to whether or not the Solicitor sought and/or obtained Hill’s agreement to apply the monies paid to him by the AKA towards the costs of the AVO Appeal. While the Solicitor had the opportunity to challenge Hill’s contradictory evidence in these proceedings, he did not do so and Hill’s evidence stands. Accordingly, the Tribunal’s view is that Hill’s evidence on this issue should be preferred to that of the Solicitor and Ground 1.1 is made out.

“Ground 1.2 Making a false statement in an Affidavit that $5,720 were fees incurred by Maddens Commercial Lawyers.”

20 The Solicitor disputes this allegation and stated:

“1.2.1 That these fees were incurred by his firm in that he retained Mr Wetmore of Counsel to Appeal for Mr Hill in the AVO Appeal proceedings and Mr Wetmore issued his fee agreement to the Solicitor on 5 March 2001 and as varied by him on 7 March 2001 by which the Solicitor was bound and says that Mr Wetmore by his letter dated 5 March 2001 sent to the Solicitor, whilst agreeing to await payment by Mr Hill of his fees did so on the basis that the Solicitor remained “responsible” to pay them.”

21 In relation to this issue, Hill deposed, in part, that on 27 November 2000 Judgment was entered against him in the AVO proceedings and he was ordered to pay the other party’s costs. He stated:

6. Mr Wetmore of Counsel was briefed to appear on the Appeal. In due course the Appeal was settled.

7. On 8 March 2001 Mr Wetmore rendered a Tax Invoice in the sum of $8,720 being his fees in relation to the Appeal. The amount was paid to Mr Wetmore directly by me.

8. On 8 May 2001 the Solicitor rendered to me a Tax Invoice for his costs and disbursements in relation to the Appeal. A true copy of the said Invoice is annexed hereto and marked with the letter “A”.”

22 The Solicitor’s Tax Invoice dated 8 May 2001 was issued in relation to time incurred by the Solicitor (between 20 February 2001 and 4 May 2001) and David Singh (14 February 2001 and 30 March 2001) and indicated total professional costs of $9,255 in relation to the Appeal. However, it stated:

“The cost of legal services at no charge for services in accordance with our current costs agreement …”

23 Professional costs were reduced to “no charge” and disbursements totalling $265.32 (inclusive of GST) was rendered to Mr Hill.

24 However, the Tribunal notes that on 5 July 2001, being a date after Hood telephoned the Solicitor to enquire about the payment of his fees, the Solicitor caused a further Tax Invoice to be issued with respect to the Appeal. While this Tax Invoice again referred to “The cost of legal services at no charge for services in accordance with our current fee agreement with you”, it now purported to reduce the previous total of professional costs from $9,255 to $6,700 plus GST (emphasis added), and claimed total fees of $7,370. However, it then indicated:

“AKA amount paid to Appeal $7,370.00

Balance due $NIL”

25 Hill disputes that he received this Tax Invoice from the Solicitor. In any event, the Tribunal notes that the Solicitor agreed to act for Hill in relation to the Appeal on the basis that he would not charge professional costs – provided that Hill agreed to pay Counsel’s fees of the Appeal. Accordingly, the Tribunal does not accept that the Invoice on 5 July 2001 was properly rendered.

26 Further evidence in relation to this issue is found in the affidavit of David Govinder Singh. He deposed that he had the carriage of the AVO proceedings under the Solicitor’s supervision from 2000 until their conclusion in November 2000 and that the AKA agreed to fund the proceedings. In relation to professional costs and disbursements of the AVO proceedings, he stated:

18. Hill instructed Maddens to Appeal against the Magistrate’s decision in the proceedings (the “Appeal”). Maddens agreed to handle the Appeal. It is my present recollection that the arrangement was that Maddens would not charge professional costs for the Appeal provided Hill paid Counsel’s fees on the Appeal. The reason for Maddens charging no professional costs for the Appeal was because of the result of the hearing …”

27 In his Affidavit and oral evidence, the Solicitor argued that Maddens not only “incurred” Mr Wetmore’s fees, but that he remained “responsible to pay them”. He was extensively cross-examined regarding this argument. This largely focussed on the fact that Hill had physically paid Mr Wetmore’s fees directly by cheque in July 2001, some months before the Solicitor’s statement was filed in the recovery proceedings. He gave evidence as follows [See: Transcript dated 28 March 2008 at Page 6]:

A. Yes.

Q. That’s not true is it?

A. It had been paid by Mr Hill to a competent barrister and I accept that is misleading but I believed that I was – and I wrongly believed and it’s not properly structured to entitle me to believe that. I know – I accept I’m legally wrong in that respect that I believed as attorney for Mr Hill I could put that frame on his behalf …”

28 The Tribunal heard arguments from both legal representatives on voir dire, mainly regarding ground 1.3 although the arguments were also relevant to this ground. On voir dire, Mr Pierotti stated:

“Thank you for that Mr Chairman, the particulars don’t refer to the contractual obligations, it’s no part of the Society’s case, the documents will speak for themselves. As you’re (sic) rightly pointed out the initial fee note refers to two but there’s no doubt that Mr Wetmore, at a particular stage, saw Mr Madden as responsible for his fees. We don’t shy away from that, it doesn’t for one moment, concern the Society’s case. Mr Madden himself gave evidence to the effect that he accepted that at a point Mr Wetmore would look to Mr Hill. Now that only goes to how one then qualifies or how one accepts the wording of the pleadings by Mr Madden with that knowledge. There’s no doubt that that Mr Madden briefed Mr Wetmore. Mr Hill didn’t brief Mr Wetmore, he didn’t direct briefing. The evidence points clearly to that, if there needs to be a concession and I’m not quite sure why, Mr Madden briefed Mr Wetmore. Mr Wetmore was entitled to seek his costs from Mr Madden, what happened was that Mr Wetmore, according to Mr Madden, accepted that he would be paid direct by Mr Hill. And he was, that’s Mr Madden’s evidence. So, if you need that concession, Mr Chairman, I give it, I’m not sure the value of it.”

29 The Tribunal notes that “incur” is defined in the Macquarie Dictionary as:

“To become liable or subject to one’s own action”

30 The Solicitor admitted this allegation. However, he stated:

1.3.2 That Mr Hill agreed to accept any such reimbursement in his conversation with the Solicitor on 6 February 2002.

1.3.3 That he expressed his intention in his statement dated 30 July 2002 filed in Mr Hood’s proceedings and in his evidence in those proceedings and that by so doing he was seeking to clarify his position.

1.3.4 He accepts that the cross-claim was misleading but at the time he knew of no other way that he could obtain some recompense for Mr Hill who had been put to the expense of paying Mr Wetmore’s fees and in the belief that Mr Hill was so entitled.

1.3.5 That he did not intend and did not think at the time that his pleading was misleading.”

31 As with Ground 1.2, the Tribunal heard argument from both legal representatives on voir dire on 28 March 2008, mainly regarding the construction of the words “pay” and “paid”. This exchange and the concession made by the Society are discussed in relation to Ground 1.2 above.

32 Following voir dire, the Solicitor conceded in cross-examination that paragraph 1 of that notice of cross-claim did not say what he intended it to say. He stated:

“A. I meant that my client, Ross Hill, had suffered loss and damage of $5,720 in respect of fees which he paid to a competent barrister and that I was claiming this on his behalf, was my intention”.

However, he did not indicate that he was claiming as Hill’s attorney. Further:

A. That the damage or the expense caused to our firm in running the cross-claim was $9,255 and my intention with the cross-claim was that if Mr Hood was entitled to his fee, which I had misappropriated and applied to a – the costs of the Appeal and if he was entitled to that fee and I must pay it then my cross-claim was for the actual costs of conducting the Appeal.”

He conceded, albeit reluctantly, that while Hood’s Solicitors had asked him how he came to make those claims, he had not specifically responded to their request for information.

33 As the Solicitor admitted that he falsely claimed in the cross-claim that he had paid $5,720 to a competent barrister on Appeal, the Tribunal is not required to determine this issue. As to his explanation for this conduct, the Tribunal notes his reasons for making that claim but does not accept that those reasons excuse the conduct. Accordingly, Ground 1.3 is made out.

“Ground 1.4 Commencing a cross-claim knowing unable (sic) to establish that claim”

34 In his Reply, the Solicitor denied this allegation and stated:

1.4.2 At the time of commencing the cross-claim he considered that he could recover by that claim the costs of putting right the unsatisfactory result caused by what he believed was Mr Hood’s breach of contract.”

35 In his first Affidavit the Solicitor deposed as follows:

“106. My cross-claim was filed on 17 December 2001. It pleaded my claim in negligence. This is what I believed at the time and which I had expressed in my letter to Mr Hood dated 12 July 2001. It was prepared in haste and anger and I was determined to defend Mr Hood’s proceedings rather than pay him the full amount claimed because of my costs, time and frustration incurred in the AVO Appeal proceedings. I had previously made an offer of $2,000 to settle Mr Hood’s claim on the basis that he should bear some responsibility and contribute to the costs incurred in the Appeal but it was rejected. I have very brief consideration to the recent decision in Heydon v NRMA Ltd that counsel’s immunity did not extend to negligence in failing to advise, which I believed was the major cause of the problems in the case.”

He stated that on 7 February 2002 Hill sent him a fax confirming a conversation that they had the previous night. Hill had been served with a statement of claim by the respondent to the AVO proceedings claiming damages in the sum of $750,000 for abuse of process and malicious prosecution in first taking out the AVO and then pursuing the AVO proceedings. He alleged that during that conversation Hill agreed that he should pursue the cross-claim and that if it succeeded, he would reimburse Hill for the amount of fees that he had paid Mr Wetmore.

36 In relation to the issue of evidence in support of the cross-claim, the Solicitor deposed:

“109. I thought about the need for evidence to support the cross-claim at about the time of preparing the amended cross-claim and considered that a statement from a barrister who was expert in the relevant area of law would be needed and hoped that Mr Wetmore, barrister in the AVO Appeal proceedings, would be willing to give a statement to the effect of his critical comments made in conferences during the preparation for the AVO Appeal proceedings and in his correspondence to me referred to in paragraphs 67 and 74 herein. However, I was disappointed to find that he did not wish to become involved as an expert and to assist and that he was only prepared to provide a more detailed description of the work he did. He provided that information in another memorandum of fees dated 8 March 2001. I annexed that copy to my affidavit sworn in Mr Hood’s proceedings to which I refer in the next paragraph.”

37 In cross-examination on 28 March 2008, the Solicitor disagreed that he had no evidence to support the cross-claim when he filed it on 17 December 2001. He stated [see; Transcript at page 18]:

Q. You’re not suggesting are you, Mr Madden that any of that material is evidence of any negligence on the part of Mr Hood, in the conduct of the initial proceedings?

A. No, in the absence of a statement from Mr Wetmore as an expert witness I had no evidence of negligence …”

And [see: Transcript at page 20]:

“Q. Can you tell the Tribunal why, if you failed to obtain the services of an expert, you persisted with a claim of negligence against Mr Hood?

A. I was hoping that I could find an expert to provide a statement to that effect but I – I realise that was extremely improbable in the circumstances once Mr Wetmore said he would not and I believe I didn’t turn my mind to it. I didn’t address it, I ducked the issue.

Currie: Sorry, Mr Madden, are you saying that you realised that at that time.

A. I realised it was difficult and I did not act decisively to withdraw the cross-claim and I should’ve …”

And [see: Transcript at page 21]:

“Q. And sir, you would agree with me, would you not, that in the absence of any evidence from an expert your claim had no foundation?

A. It was doomed to failure.”

38 The Solicitor’s oral evidence indicates that by some time during the first half of 2002, when he received Mr Wetmore’s “more-detailed account” (which bore the same date as his original invoice), he telephoned Mr Wetmore and ascertained that Mr Wetmore did not wish to become involved in the recovery proceedings as his expert regarding his allegations of negligence against Hood. There is no evidence before the Tribunal as to when this conversation took place and it is not possible to determine whether it occurred before or after the amended cross-claim was filed on 28 May 2002. However, based on the Solicitor’s evidence, it occurred after the original cross-claim was filed.

39 The relevant date for determination of this issue is 17 December 2001 and the Application makes no complaint in relation to the amended cross-claim. Based on the evidence, the Tribunal is not persuaded that when the Solicitor filed the original cross-claim he did so knowing that he was unable to establish it. We find accordingly. Accordingly, Ground 1.4 is made out.

“Ground 1.5 Falsely asserting in correspondence that the Solicitor had not received the complainant’s fee agreement.”

40 In his Reply the Solicitor denied this allegation and stated:

1.5.2 He asserted and continues to assert that upon the inspection of the file for the matter referred to above by him in July 2001, the file did not contain a copy of the fee agreement prepared under the letterhead of Mr Hood and dated 12 July 2000.

1.5.3 He did not recall and does not recall seeing a copy of the said document until about 28 August 2001.

1.5.4 That he first saw a copy of the fee agreement under the letterhead of Mr Hood on or about 28 August 2001 after it was provided to him by legal representatives of Mr Hood. The document was identical to the version of the document annexed to Mr Collins’ affidavit (annexure page 20).”

41 In his first Affidavit, the Solicitor deposed that the “Costs Agreement and Disclosure” dated 14 July 2000 was signed by Mr Singh “purporting to constitute his acceptance of Mr Hood’s agreement on my behalf”. He disputed that Mr Singh was authorised to enter into this agreement. He also asserted that Mr Singh had not attached any annexures to the final letters that he signed “despite my repeated requests that he do so, nor to the final letter otherwise I would have noticed the barrister’s costs agreement at the time”. He stated that while a letter dated 24 July 2000 asked Mr Hill to pay Mr Hood directly for his fees and forwarded a copy of Hood’s fee disclosure “which I did not see at the time”. He further denied that he saw the fee agreement despite a letter dated 15 August 2000 containing an acknowledgement that it had been received. In relation to this letter, he asserted:

“45. I would have signed this letter late in the day when it was presented to me by Mr Singh along with a bundle of other letters and documents for signature. I failed to take a note of the reference to Mr Hood’s fee agreement and although I may have asked to see a copy of it, Mr Singh did not produce it to me or draw my attention to it at that time.”

42 The Solicitor’s evidence on this issue is contradicted by David Singh, whose evidence was not challenged under cross-examination in these proceedings. Mr Singh deposed:

9. On 14 July 2000, after returning from Parramatta Local Court, I attended on the Solicitor in his office and informed him of the events of the day at the hearing including bringing to his attention Hood’s fee agreement which I had signed after Hill had instructed that the AKA would pay Hood’s fees.

I spoke to the Solicitor including saying words to the effect, “I’ve made notes of the events of the day and I’ve signed the Fee Agreement between Mr Hood and Maddens and I did show and explain it to Mr Hill. Mr Hill instructed that the AKA agreed to pay Mr Hood’s fees to Maddens.”

The Solicitor did not make any adverse comment on the fact that I had signed the Fee Agreement. The Solicitor said words to the effect, “Put the notes and the Fee Agreement on the file”. I did so immediately after attending on the Solicitor.

10. Annexed hereto and marked with the letter “A” is a document that I believe to be a true copy of a letter dated 24 July 2000 which was signed by me and sent with its enclosures to the AKA after it had been approved by the Solicitor to whom I had briefed this letter and all enclosures. Annexure “A” to this affidavit includes the letter only and not the annexures to this letter.

11. Annexed hereto and marked with the letter “B” is a document that I believe to be a true copy of a letter dated 15 August 2000 to Hood which was prepared by me and signed by the Solicitor. Annexure “B” to this affidavit includes the letter only and not the enclosures to this letter.”

43 While in cross-examination, the Solicitor persisted in his assertion that he had not been able to locate a copy of Hood’s fee agreement and that he first saw this when a copy was provided to him by Hood’s Solicitors in late August 2001, it is the opinion of this Tribunal that the Solicitor’s own correspondence to the AKA and Hill contradicts his evidence on this matter. In his letters dated 24 July 2000, 18 September 2000 and 17 October 2000 the Solicitor stated:

“We have advised you of Counsel’s fees and provided you with a copy of the costs agreement of Counsel.”

44 The Solicitor’s evidence to the Tribunal was also to the effect that his practice before signing letters produced by his staff [noting that the reference on these letters indicated that they were authored by Mr Singh but that the Solicitor was the signatory to them] was that he would approve draft letters which, after his approval, would be engrossed for final signature by him.

45 In any event, the evidence indicates that when the Solicitor rendered his own Tax Invoice on 30 November 2000, in relation to the AVO proceedings, this included Hood’s fees as a disbursement and that Hood’s fees were not challenged by the Solicitor.

46 In its Submissions filed in this matter, the Society submits:

The Solicitor’s statements in his letter of 12 July 2001 to Mr Hood and in the Notice of Grounds of Defence cannot, it is respectfully submitted, stand in the face of the available evidence.”

The Tribunal agrees with these submissions and finds accordingly. Therefore, Ground 1.5 is made out.

“Ground 1.6 Falsely claiming in paragraph 2 of a Notice of Grounds of Defence that at no time did the complainant provide a copy of the contract and at no relevant time was a copy of the contract delivered to the Solicitor.”

47 In his Reply, the Solicitor disputed this allegation and stated that he “… repeats paragraph 1.5 in its entirety, and further says:

“By a contract made on or about 14 July 2000 between the plaintiff (Mr Hood) and the defendant (the Solicitor) the plaintiff agreed to provide legal services to the defendant and the defendant agreed to pay the plaintiff the sum of $1,650 (inclusive of Goods and Services Tax) for each day that he was engaged in providing the legal services”.

1.6.2 In paragraph 2 of his notice of grounds of defence dated 6 December 2001 in answer to paragraph 2 of the statement of claim the following was said:

“Paragraph 2 of the statement of claim is denied and the defendant says instead that the defendant did not enter into a contract to provide legal services with the defendant but instead issued a contract and relied upon execution of that contract to an unauthorised, unqualified person. At no time did the plaintiff provide a copy of the contract to the relevant persons within the legal practice of the defendant and at no relevant time in the duration of the alleged legal services was a copy of the alleged contract delivered to the defendant and/or made available for the relevant legal file of the defendant. The plaintiff has provided a copy of the alleged contract signed by an unauthorised person with no authority on behalf of the defendant in or about August 2001 on the request of the defendant some 12 months after the plaintiff had failed to provide competent legal services or any relevant legal services at all to the client of the defendant.

(b) the reference to “material times” was a reference to the period in which Mr Hood provided legal services, namely July 2000 to November 2000

(c) as a matter of practice Mr Hood had an obligation to forward his fee agreement to him as a principal of the firm; and

(d) Mr Singh as a junior Solicitor had not been given the authority to sign the fee agreement on his behalf.

“Paragraph 2 of the statement of claim is denied and the defendant says that the pleaded contract states that “the total estimate of costs” is the amount of $1,650 (inclusive of Goods and Services Tax) for performing work in the Local Court proceedings number 3622/00/3 to obtain a (sic) apprehended violence order for a client of the defendant.

1.6.6 The statement of agreed facts and issues dated 2 September 2002 included in paragraph 2 under the heading “facts” the following:

“A contract was made between the plaintiff and the defendant on about 14 July 2000 pursuant to which the plaintiff agreed to provide legal services to the defendant”.

48 The evidence discussed in relation to Ground 1.5 above is also relevant to this Ground. It is the opinion of the Tribunal that this claim cannot be sustained in the face of the available evidence, which includes the contents of the Statement of Agreed Facts and Issues dated 2 September 2002. The tribunal is satisfied that this claim was false. Accordingly, this Ground is made out.

“Ground 1.7 Falsely stating in correspondence that AKA, in effect, had taken independent legal advice in respect of lodging a complaint with the Legal Service (sic) Commissioner with regard to the manner in which the complainant conducted the hearing in the Local Court.”

49 In his Reply, the Solicitor denied this allegation and, after repeating paragraphs 1.1.1 and 1.1.2, he stated:

1.7.2 He had relied on a letter from the AKA dated 27 March 2001 which expressed concern about the way the charges in the AVO proceedings had escalated and advised him that the AKA was taking legal advice on the question of costs and associated matters including making a formal complaint about his actions to the Legal Services Commissioner. He interpreted the letter to mean that a complaint was to be made about the legal practitioners involved in acting for Mr Hill, including Mr Hood.

1.7.3 The said belief was based upon the following facts:

(b) The adverse outcome in the AVO proceedings.

(c) The absence of any costs order that might defray the cost impact on the AKA.

(d) The fact that the costs of the AVO proceedings were in part comprised by Mr Hood’s fees.

1.7.5 When answering this allegation during the Law Society’s investigation in his letter dated 28 October 2003 he forwarded to it a copy of the letter from the AKA dated 27 March 2001 and in so doing was putting the evidence upon which he relied before the Law Society.”

50 The letter from the AKA to the Solicitor dated 27 March 2001 responded to the Solicitor’s letter dated 26 March 2001 and its demand for payment and stated, in part:

One of the matters on which we have received advice is on making a formal complaint about your actions to the Legal Services Commissioner

”

51 In cross-examination, the Solicitor agreed that the sentence in that letter from the AKA (emphasised above) was clear and unambiguous [see: Transcript 28 March 2008 at page 24]:

A. Yes.”

52 In his letter to Mr Hood dated 12 July 2001, the Solicitor stated:

“The AKA has taken independent legal advice in respect of lodging a complaint with the Legal Services Commission in respect of the conduct of the matter in the Local Court.”

He conceded that when he wrote that letter, he was contesting Hood’s claim for fees and was suggesting that the reason the initial proceedings failed was because of Hood’s incompetence. He conceded that the letter from the AKA did not say that it had taken independent legal advice about making a complaint to the Legal Services Commissioner in respect of the conduct of the matter in the Local Court, but argued:

“A. It is what I took them to mean to me. It’s not what they stated in the letter. It is what I understood it to mean.”

He refused to concede that the purpose of the sentence was to entice Hood to withdraw his claim for fees and argued that even though the AVO had been finalised by then, he still “… had an apprehension there could be claims about the conduct of the matter. I had taken it on in an area in which I did not usually act and I was anxious, I was distraught and I felt, as I said, under some pressure from my cousin because of his attitude and I – everything I did was an attempt to mollify him. Well, in my – my relationship with him.”

53 The Tribunal’s view is that the AKA’s advice to the Solicitor must be interpreted by reference to its context within the letter. In this regard, we note that this “advice” immediately follows concerns expressed by the AKA about “… the way that you charges have escalated from your initial advice when the action was commenced and the poor manner in which you have communicated proceedings to the AKA, as opposed to Mr Hill”. In that context, the Tribunal is of the view that a reasonable person would have interpreted the “advice” as meaning that the AKA was considering making a formal complaint about the Solicitor in relation to the escalation of his fees from those indicated in his initial advice and his alleged poor manner of communication with it in relation to the AVO proceedings and they would not have inferred that the AKA was considering making a formal complaint about Hood’s conduct of the AVO proceedings.

54 Against this background the Tribunal is satisfied that the Solicitor’s statement to Hood in his letter dated 12 July 2001 was false and was made while he was disputing payment of Hood’s fees. He maintained this position during Hood’s subsequent debt recovery proceedings and even in his letter to the Society dated 14 August 2003, in which he referred to “their [AKA’s] complaint to the Legal Services Commissioner about the conduct of these proceedings involving issues of Mr Hood’s conduct of the matter. Accordingly, this Ground is made out.

“Ground 1.8 Falsely claiming in Cross-claim (at paragraph 2) and Amended Cross-Claim (at paragraph 3) that the loss to the Solicitor was $9,255.00 when the Solicitor had received $6,700.00 towards those costs as payment into the Solicitor’s bank account on 17 May 2001 and as accounted as paid to the Solicitor on 5 July 2001.”

55 In his Reply, the Solicitor admitted this allegation and stated:

“1.8.1 At the time he made his cross-claim and amended cross-claim he believed that if the Court found that a valid fee agreement had been entered into between him and Mr Hood, thus requiring the Solicitor to pay him $6,700 (plus GST), then the Solicitor was entitled to his time based costs of putting right the unsatisfactory result which Mr Hood’s failure to observe the terms of his retainer had caused.”

56 Evidence relevant to this “explanation” has been discussed previously in this decision. However, it is the opinion of the Tribunal that the Solicitor’s “explanation” is neither logical nor credible, particularly considering that he entered into a fee agreement with Hill to the effect that he would not charge any professional costs in relation to the AVO Appeal and the fact that he subsequently rendered to Hill a Tax Invoice for disbursements only. In any event, the explanation is inconsistent with the Solicitor’s admission that he misappropriated the monies that were paid to him on account of Hood’s fees ($6,700 plus GST) for his own purposes. Accordingly, this Ground is made out.

“Ground 1.9 False statements in Solicitor’s 30 July 2002 statement tendered and admitted into evidence in the Local Court on 11/9/02.

(a) …

(b) In paragraph 9, by claiming the Solicitor entered an agreement with his client AKA when AKA had not done so.”

57 In his Reply, the Solicitor denied this allegation, in the following terms:

1.9.1 The statement sets out the agreement that he believed he had with his client Mr Hill.”

58 The Society has conceded in its Submissions that that the Solicitor’s client was Mr Hill and that it was Mr Hill who had paid Counsel’s fees in respect of the AVO Appeal proceedings and that “… as framed, the Tribunal will not find this ground substantiated”. The Tribunal notes this concession and finds that Ground 1.9 of the Application has not been proven. Accordingly, this Ground is not made out.

“Ground 1.10 Attempting to Mislead the Court.”

59 In his Reply, the Solicitor denied this allegation “as pleaded” and stated:

(b) Mr Hood gave an estimate of his costs of the work he would be required to do pursuant to his retainer in the amount of one day’s fee, and such estimate should have been updated.

(c) Although by his letter dated 15 August 2000 to Mr Hood he acknowledged that the original fee agreement dated 14 July 2000 Mr Hood had quoted a daily rate he did not consider that this fulfilled Mr Hood’s obligations under Part 11 of the Legal Profession Act.”

60 This ground is based on the general manner in which the Solicitor conducted his defence of Hood’s recovery proceedings and his cross-claim in the Local Court. Much of the evidence in relation to this ground of complaint has been discussed in relation to the earlier numbered grounds of Hood’s complaint against the Solicitor and the Tribunal does not intend to repeat that evidence in relation to this Ground.

61 However, the Tribunal is of the view that the Solicitor engaged in the following conduct in an attempt to mislead the Court:

1. Prosecuting to determination at hearing a cross-claim which, by the Solicitor’s own admission was ultimately “doomed to failure.”

62 Much of the evidence relevant to this conduct has been discussed in relation to Ground 1.4 above. While the Tribunal was not satisfied that the Solicitor filed the initial cross-claim in December 2001 knowing that he was unable to establish it, this is clearly not the case by the middle of 2002 when, on the Solicitor’s own evidence, he ascertained that Mr Wetmore was not prepared to provide him with expert evidence in support of his allegation of negligence against Hood.

63 The Tribunal notes that having failed to secure Mr Wetmore as an expert witness the Solicitor did little to engage another expert. In this regard, the Solicitor gave evidence that while he made enquiries of a number of colleagues within the general litigation area about how he might obtain that evidence, the general consensus was that if Mr Wetmore failed to provide evidence it would be more difficult to obtain that expert evidence from anyone else. He did not approach anyone or brief anyone to give him an advice about Hood’s conduct of the AVO proceedings. However, despite this, he persisted with the cross-claim and even attempted to revive it, although he agreed that he had no evidence to produce. He gave the following evidence:

A. I did intend to withdraw it and I made notes to the effect but I did nothing about it and I found myself in court this day having not withdrawn it. I was representing myself which was a foolish thing to do and I found that after cross-examination I was – I had the opportunity to withdraw the cross-claim and I should’ve but didn’t. And I did not make that clear.

Q. What do you mean, Mr Madden, I did not make that clear?

A. Well, I certainly – if you read the transcript I am certainly uncertain about what I’m doing and I should’ve withdraw (sic) the cross-claim. I had written notes intending to do so, I did not. I did not act decisively and I did not act properly or professionally in my approach to it and I should’ve withdrawn that cross-claim but I didn’t.

Q. Indeed, at page 147 the learned Magistrate asks you. “This is your opportunity, is there any further evidence you wish to place before the Court on the cross-claim” Answer, “Yes”, well it’s in the transcript of the Local Court proceedings before the learned Magistrate you pursued the cross-claim, didn’t you?

A. I – I agree that I said – I made comments which were not professional and don’t make a lot of sense and I should’ve – I should not have made them and they appear to be – not – not sensible or commonsense comment at all.

Q. Mr Madden, the learned Magistrate asked you, did you have any evidence and your answer was yes, correct?

A. The answer was --

Q. Yes or no, Mr Madden.

A. Yes.

Q. Thank you. It’s not a comment by you is it? It’s a statement by you as to your evidence, line 12/13 onwards on page 147, isn’t that the case?

A. Well. This --

Q. Yes or no, Mr Madden?

A. In this particular proceedings it was very confused because --

Q. Would you please answer the question Mr Madden?

A. -- I acted for – for myself and it was unclear whether – what I was doing was making submissions or submitting evidence on oath and it was a particularly – well, unpleasant situation to be in and when I said, “Yes,” I fully accept that it – the roles in which I was responding were confused and I was confused about what to do at that point in time and I said yes.

Q. Mr Madden you’re not suggesting that your duty to the learned magistrate changed at all did it whether you were making submissions or still on oath?

A. No, I --

Q. Thank you.

A. -- didn’t handle it well at all.

Q. Mr Madden, please listed to this very carefully, I’m putting to you , sir, that as you’re answering my questions you’re just trying to reconstruct as best you can some explanation and nothing more, is that the case, sir?

A. No, I – I’m trying to say what – what happened in that case.”

64 Evidence on this issue is found in the Transcript of the recovery proceedings [at page 147 of Mr Collins’ Affidavit], as follows:

DEFENDANT: Yes, well it’s in the transcript of the Local Court proceedings, we suffered a costs order of $16,000 against the client, and there has been - there was evidence that it could have been dealt with but it wasn’t dealt with. I think it’s all in the evidence.”

65 The Tribunal notes that the AVO Appeal was ultimately resolved on terms that involved each party paying its own costs. Accordingly, at the time that the Solicitor gave this evidence to the learned Magistrate in the recovery proceedings, the costs order of $16,000 had been set aside. Accordingly, we are satisfied that the Solicitor’s evidence to the contrary was misleading.

3. Asserting that the AVO Appeal proceedings resulted in an Apprehended Violence Order being obtained.

66 The Tribunal notes that the Solicitor made this statement in paragraph 2 of his Notice of Amended Cross-claim dated 28 May 2002. The Solicitor was cross-examined on this issue and he gave evidence as follows: [see: Transcript 28 March 2008 at page 25]

A. It was conducted agreed by consent but it was made a court order by the District Court and filed in the Court.

Q. It was merely an undertaking by Mr Walsh’s client, wasn’t it?

A. We requested the – the Judge on the occasion to annexe it to the file and note it as an order in his judgment and it was handed up for that purpose.

Q. There was an undertaking wasn’t there and nothing more?

A. And we requested that have the force of an order when handed up.”

67 The Tribunal takes notice that as a matter of law an undertaking of the type contained in the Consent Orders in the AVO Appeal proceedings do not have the same force and effect as an Apprehended Violence Order. While the undertakings are noted by the Court, the Consent Orders could not be enforced as an AVO in the event of a breach and, in that event, a further AVO application would have to be made by the aggrieved party.

68 The Tribunal is satisfied that the statement was misleading. While it appears from the evidence that the Solicitor misunderstood the force and effect of the undertakings contained in the Consent Orders, and to the extent that the statement resulted from that misunderstanding he may not necessarily have intended to mislead the Court, ignorance of the law does not excuse his conduct.

4. Asserting in paragraph 9 of his statement dated 30 July 2002 filed in the recovery proceedings that he “… had entered into an agreement with his client to reimburse the client for an amount paid by the client in respect of part payment of the legal costs of the Appeal proceedings.”

69 Evidence in relation to this issue is contained in the transcript of the recovery proceedings [see: Collins’ affidavit at page 146], namely:

A. There’s only one matter. I will wait for my friend, Mr Conomos, to get back to the bar table.

When the Appeal was filed, there was a dispute as to whether we would be paid any money at all in respect of the final account, and were not paid eventually till after the result of the Appeal, and we had been told by our client that they regarded these proceedings as one proceedings, local court and Appeal court, and they wouldn’t pay any more, and we must bear the cost of the Appeal, which we did, and fund it from moneys that they had agreed to pay. So we were given that direction by the client. We also had an arrangement that if there was an award for the cross-claim, we would refund any money that was reasonably – the client was entitled to. That’s it.”

70 In cross-examination the Solicitor stated that the client that he was referring to was “Mr Hill” and that when he used the word “they” he was referring to “Mr Hill and his family.” However, he conceded that when he said “… they wouldn’t pay any more” he was referring to the AKA. He gave the following evidence:

A. I – yes, Mr Hill – I believed I had that agreement with Mr Hill and I admit it was wrong and I understand Mr Hill has no authority to make that agreement at the time.

Q. That’s not what you told the Magistrate, is it, Mr Madden?

A. No, I didn’t – I didn’t consider those issues.

Q. You told him the opposite.

A. My intention was not to mislead but to state that I had an agreement with Mr Hill. It was agreed, by all parties, that Mr Hill was my client, the AKA agreed – had agreed that Mr Hill was my client and I couldn’t act in any other way he had to be my client.”

71 The Tribunal is satisfied that the Solicitor’s statement in the amended notice of cross-claim was misleading, bearing in mind his concession that Mr Hill was not authorised to give that direction.

5. The Solicitor’s pleadings in the recovery proceedings were drafted in such a manner as to be deliberately misleading or, at least, so reckless as to their content to be misleading.

72 In cross-examination regarding the pleadings and supporting documents that he filed in the recovery proceedings, the Solicitor gave evidence as follows [see: Transcript 28 March 2008 at page 27]:

A. I admit they are poorly drafted and I should’ve been more particular and I should not have handled the matter myself and I admit it was unprofessional in the whole process on my part.

Q. To the extent that where they’re misleading, do you accept that summation, Mr Madden?

A. They can be misleading according to certain interpretations but I don’t believe they were intended to mislead and I don’t believe they actually misled …”

[and at page 28]:

“Q. And you had the opportunity of going through all that material and ultimately determined, in any event, that regardless of all this material I will press on and defend Mr Hood’s claim, correct?

A. Yes.

Q. And that sir, with due respect was an act of simple stubbornness on your part, wasn’t it?

A. It was.

Q. There was no prospect of the pleadings by you being accepted in defence was there?

A. No, but I was incapable of realising that.”

73 Despite the Solicitor’s assertion that while those documents could be misleading “according to certain interpretations”, he did not believe that they were intended to mislead or actually misled, the Tribunal is satisfied that the said documents were so reckless as to their contents as to be misleading. Accordingly, this Ground is made out.

The Solicitor’s other admitted conduct

74 As previously indicated, the Solicitor admitted Grounds 2.1 and 2.2 of the Application. In his evidence, he stated that he dealt with the funds paid to him by the AKA on account of Hood’s fees in a manner contrary to Section 61 of the then Legal Profession Act 1987.

75 Ground 2.1

76 The relevant provisions of Section 61 of the Legal Profession Act 1987, are:

(b) if the person on whose behalf the money is received directs that it be paid or delivered to a third party free of the Solicitor’s control, must ensure that the money is paid or delivered:

(i) before the end of the next working day or, if that is not practicable, as soon as practicable after the next working day, or

(ii) no later that the day allowed by the Solicitor’s authority or instructions (if that day is later than the day allowed under subparagraph (i), or

(c) if the person on whose behalf the money is received directs that it be paid otherwise than into a general trust account or to a third party, must pay the money as directed and (if the money is to be held under the direct or indirect control of the Solicitor) must hold the money in accordance with the regulations relating to controlled money.

…

(8) It is professional misconduct for a Solicitor to wilfully contravene subsection (1) or (2).”

77 The evidence discussed in relation to Ground 1.1 above is also relevant to this Ground. Further, the Solicitor was cross-examined about his state of mind on 17 May 2001 (when he deposited the AKA’s cheque into his general account – as he did not run a trust account). His evidence was that he “… didn’t think carefully about the situation, I was – I think I was still angry about the whole thing that I found myself in a situation acting from my cousin and I hadn’t handled things well.” He was aware that the AKA was paying his fee note which included Hood’s fees. He stated:

Q. So you took a quite deliberate decision to take those parts of the monies from the AKA for your own purposes?

A. Yes.

Q. Did it play on your conscious mind after 17 May that you might have done something wrong?

A. I believe it did and I chose not to face it.

Q. Not to?

A. Not to face it or deal with it and I became defensive about the whole matter.”

78 The Solicitor admitted the allegation of misappropriation and in oral evidence conceded that this was “an act of stubbornness” and “a form of punishment” towards Hood.

79 It is the opinion of the Tribunal that the Solicitor engaged in conduct that is contrary to his fundamental obligations of honesty and fair dealings towards another practitioner. As Street CJ held in Law Society of New South Wales v Jones [unreported decision of the NSW Court of Appeal dated 27 July 1978]:

“Reliability and integrity in the handling of trust funds are fundamental prerequisites in determining whether an individual is a fit and proper person to be entrusted with the responsibilities belonging to a Solicitor.

…

Q. If I put to you, sir, that by September 2006 Ms MacDougal had instructions in the matter would that refresh your memory?

A. Yes, that’s the case, yes, the correct date.

…

Q. … Can you tell the Tribunal when did you receive the advice to which you have just referred?

A. I believe in early 2007 that Rosemary MacDougal was suggesting to that I - I should consider that - that course.

Q. Is there a reason you tell the Tribunal why that course was not followed for some months?

A. Yes, I - I have always thought of myself as someone who can cope and I had also foolishly, in the past, assumed that if one was consulting a therapist a psychologist and a psychiatrist that it was evidence that one was not coping and I didn’t take the therapeutic view that it could be a positive and a life enhancing course of conduct, which I discovered when Dr Phillips recommended that I - I attend Dr Zuessman’s consultations regularly and I - I found it - like scales falling from eyes and I could see, not only in this matter but other things of a personal nature and other things within my life that I could understand my motivations and the - some of the irrational threats I felt.”

101 The Solicitor also stated that he felt that it was actually beneficial for him to “go through this process,” because “… it ex exorcises the demons that this matter contained for me and it also, through the apology process and through explaining my conduct brings home - you know, the appalling, unprofessional nature of it in this particular matter.” He also said that he felt that his professional acumen and judgement was much better as “… I fully understand my weaknesses where family - extended family are involved and also I understand some of the psychological well springs of why certain kinds of customers, certain kinds of client I have a risk that they will get around me professionally in that the discipline - professional discipline and structure of a matter will not be as tight and the relationship will not be what it should be. I have - I can recognise now danger signs, much more quickly than I could before …”

Evidence of Professor Zuessman

102 Professor Ronny Zuessman, clinical psychologist, gave sworn evidence. He stated that he had prepared a report dated 20 October 2007 and had seen the Solicitor on a total of fifteen (15) occasions, ten (10) of which were subsequent to the date of his report. However, he stated that he did not wish to add anything to his report.

… He could not express anger about what he believed ought to be coming to him because that was not appropriate within the family context. So he began to inwardly chastise himself for not being good enough and he set about living a life where he would strive to achieve to make up for a sense of not being good enough and also not being validated from the source that he sought it to be validated from.

I think along the way Mr Madden developed some sense of righteousness in his approach to things and possibly an element of entitlement based on his good behaviour, the good things that he was doing - achieving and doing for other people.”

103 Professor Zuessman expressed the view that when Mr Hill appealed to the Solicitor’s sense of responsibility to family, that:

When things went awry in the representation of Mr Hill that elevated the inner dynamics of humiliation and anger and Mr Madden began to displace that anger onto all of those who were involved in the process … And here it became displaced on various individuals who were involved in the process of the hearings and cases that were brought all the way through, I believe, to the Law Society. Driving that was underneath was an experience of anger with self for being inadequate in the process for not doing what it is that ought to be done either heroically or otherwise.”

104 Professor Zuessman felt that the Solicitor was then caught in a bind where he was not fulfilling his expectations for himself and he was in all likelihood “not aware of any of the anger towards himself, he certainly focused on anger towards everyone else, and that was reasonably intractable over a long period of time. He was still seeking approval to succeed in this endeavour on behalf of the family.” He described this as follows:

A. That would be a reasonable, yeah …”

105 When asked how this impacted on the Solicitor’s ability to undertake “the fundamental ethical obligations of a legal practitioner”, noting that at the time of these events, he was a practitioner of many, many years experience, Professor Zuessman stated:

“A. … (This) set into motion yet another dynamic, which is about a fear of not being good enough, which goes back to the early developmental years. But I would say that when powerful emotions are in play it can blind a practitioner to what they would in their ordinary right mind know and do. One's perception of oneself when such processes are activated can be completely askew and can be encapsulated to things related to that. Now, it would be very different if they were generalised to other matters.”

106 In relation to the Solicitor’s conduct in relation to the recovery proceedings and the Society’s investigation of the complaints, Professor Zuessman stated [see: Transcript 27 March 2008 at p32]:

“… The only way that I can explain that is to say that these psychological processes that I have been describing were so powerful and so all consuming that for every push that came towards him of confrontation it would either cause his entire defensive structure - psychological defensive structure to crumble or his response would be to revalidate his world views from previously. So I think what his response was, was very narrow if you will involving this case, but he responded by verification in his own mind that he was right and he was doing the right thing.”

107 As to the Solicitor’s capacity to express an apology or his understanding of his conduct towards Hood as at 19 March 2008, Professor Zuessman felt that he had a reasonable understanding of his misconduct towards Mr Hood. He did not have “any particular concern” at the words that the Solicitor had used in his apology to Hood and he did not feel that this indicated the Solicitor’s inability to deal with the fact that he took the money. He felt that the Solicitor needed to apologise to particular individuals or entities and stated that this could very well be a part of the further treatment or consultations that needed to take place. He felt that the events involving the Solicitor were “very unlikely” to occur again in the future. He agreed that the Solicitor was not yet “cured,” but felt that he was “on the road to recovery.” He recommended professional supervision of the Solicitor’s legal practice and stated:

“… Frequently I have been involved with members of various professions and there are varying degrees, if you will, you used the term "supervision," there are varying degrees of consultation or supervision that might be part of a package of support or monitoring of a continued practise of an individual, and that is the nature of what I was referring to there, not a psychotherapeutic process but actually perhaps because of that question of: Is this something that is unique to the circumstance or are there any generalised - anything that is generalisable to other areas of practice, other cases. That suggestion is meant to say, well, the possibility of the tribunal considering making consultation with a senior practitioner at some level of structure part of a plan for a particular period of time to give some assurance and confidence in the practice and to provide Mr Madden with expert technical feedback on the way that he is conceptualising, approaching and handling matters that are coming to him.”

108 Dr Jonathan Phillips, consultant psychiatrist, gave oral evidence. He stated that he had provided two (2) reports dated 26 October 2007 and 28 February 2008. During his evidence in chief he was not asked whether he wished to add anything to his reports.

109 In cross-examination, Dr Phillips stated that he saw the Solicitor in September 2007 on a medico-legal basis and that as this was not a normal clinical situation, he did not invite him to “get into a therapeutical-quasi-therapeutical relationship”. He stated that in September 2007, the Solicitor had very little understanding or insight as to why this sequence of behaviour had occurred and he lacked contrition for his behaviour. However on 21 February 2008 he felt that the Solicitor “expressed genuine contrition about his actions, a point which he could not have reached at an earlier time.” He stated that the Solicitor was “properly contrite” but in “very special circumstances,” which he described as follows:

“A. Well, he’d entered therapy with Dr Zuessman, a clinical psychologist … pretty much on a weekly basis. Dr Zuessman, is known to me and he’s - he’s a very good therapist and I imagine that five months of intense - five months or thereabout of intense therapy offered Mr Madden a - a chance to gain insight and gain far greater understanding of other things in his life than would’ve been the case if he’d been on his own. Or if he’d attended his GP or someone else.”

110 Dr Phillips strongly recommended that the Solicitor’s therapy with Professor Zuessman should continue and said that to stop therapy now “… would be a silly decision really.” He thought that given what he knows of the Solicitor, “… to continue with weekly therapy, at least for another three or six months would be - would be wise and then to have a decease in frequency. Perhaps, and I’m - I’m not entirely sure because I’m not there to witness it but maybe to - to think to conclude therapy in a couple of years. But by then it would be much more spaced out. But I wouldn’t at all support any early termination.”

111 In relation to the Solicitor’s apology to Hood, Dr Phillips noted that it was “written in a somewhat around about manner, he could’ve said for the money I took and used,” but he felt that the Solicitor understood and appreciated that what he did was wrong. He would have liked to see it “… in blunter form but everyone has - writes a letter differently”. As to whether or not the apology was self-serving, Dr Phillips stated:

Q. Was it solely - was he thinking only about Mr Hood or was he thinking of anybody else?

A. No, he - he - he was - I mean clearly Mr Hood stood in his mind but it - in a way he’d let numerous people down and, as he put it, from Mr Hill to the Law Society.”

112 The Solicitor referred to the decisions in which the Legal Practitioner’s name was not removed from the Roll and submitted that the Tribunal should adopt that course of action in this matter. These decisions were:

b) Law Society of New South Wales v McCarthy [2003] NSWADT 198;

c) Law Society of NSW v Goold [2001] NSWADT 171;

d) Law Society of New South Wales v Davidson [2007] NSWADT 264; and

e) Law Society of New South Wales v Green [2001] NSWADT 142.

McNamara

However, in the current matter, Dr Phillips’ reported that the Solicitor initially consulted him in 2006, “… suffering principally to difficulties he was experiencing in grieving his mother, a woman who was apparently unable to show him normal levels of affection. I considered Mr Madden’s depression to have been circumstantial in type, rather than representing a biological based disorder.”

Dr Phillips stated that when he reviewed the Solicitor in September 2007, he found no evidence of any diagnosable psychiatric disorder or overt psychological symptoms “beyond understandable concern regarding the matter which will be adjudicated in the near future”.

In other words, the Tribunal notes that there is no contemporaneous medical evidence of any psychological or psychiatric condition at the time of the Solicitor’s conduct and that all of the available medical evidence is retrospective in nature;

b) In McNamara, the Solicitor promptly expressed contrition for his actions acknowledged that his conduct was wrong, illegal, improper and dishonourable. He made no attempt to justify his conduct. He also authorised the restitution of misappropriated funds from his accrued Long Service Leave entitlements, such that restitution was effected within a matter of 12 days after the misappropriation was discovered.

This is clearly not the case in the current matter as:

(ii) The Solicitor did not co-operate with the Society in its investigation of Hood’s complaint and its own complaints against the Solicitor. Rather, he adopted an entrenched position, which he described as “a siege mentality,” as evidenced by his repeatedly aggressive and belligerent letters to the Society, and lodged his own complaint against Hood with the Legal Services Commissioner. He repeated the matters that he raised in that complaint in his letters to the Society even after his complaint was dismissed by the Bar Council and he was not prepared to make any admissions and concessions in relation to the complaints about him until July 2007; and

(iii) It was not until 19 March 2008, only 8 days before the hearing, that the Solicitor issued a written Apology to Hood. However, he stated that he was “withheld his fees” and did not admit that he had misappropriated those monies. The Solicitor stated that this was not a deliberate choice of words on his part and that his apology was genuine.

c) In McNamara, the Solicitor had left the legal profession and had obtained alternate employment where he did not handle any monies. He gave evidence that he was determined not to resume the practise of law and said that if he was offered a job within the legal profession he would not accept it.

However, in the current matter, the Solicitor wants to continue practising in his current capacity as Director of an incorporated legal practice, although he indicated that he is prepared to accept supervision in the form of mentoring; and

d) In McNamara, the treating psychiatrist likened the Solicitor’s behaviour of misappropriating trust funds and then not closing the relevant files so that they were left available for people to peruse, as those of “the person out in the surf with his hand up”. In other words, his actions were a type of cry for help.

However, there is no such evidence in this matter. On the contrary, it appears that the Solicitor’s epiphany regarding his conduct did not occur until some time after he consulted Dr Phillips in September 2007 and has continued following psychological therapy with from Professor Zuessman, but has not yet been fully realised.

114 In McCarthy, the Tribunal was not satisfied from the Solicitor’s appearance before it that he had any real appreciation of the gravity of his conduct, or any contrition or remorse for what had occurred. It stated:

“We are not confident that if he were to find himself back in a situation where he was doing plaintiff’s work, or found himself in receipt of substantial trust monies while personally short of money, that he would not be tempted to place the money in a personal account and use it to meet short term personal necessities …”

115 Further, in McCarthy, the Solicitor had engaged in like practices (by breaching Section 61 of the Act) two (2) years apart. It stated:

“We recognise that the practitioner’s career was for 23 years from 1973 to 1996 an unblemished one, and that the financial problems that have beset him in recent years may well offer some explanation for the recent misconduct. We accept that he continues to hold the respect of a number of practitioners, and that they have been prepared to engage him subject to the restrictions contained in the last order … Nonetheless we consider that a sanction that more strongly marks the community’s disapproval of his conduct than occurred previously is warranted … In our view a short period of suspension from practice is warranted. The practising certificate should remain subject to the conditions imposed on the last occasion. The period of suspension will itself affect the practitioner’s ability to earn income. A fine, in addition, would not be appropriate. The usual order for costs will be made …”

The Solicitor’s practising certificate was suspended for a period of three (3) months.

However, in the current matter, the Solicitor’s misconduct was not restricted to a breach of Section 61, but also included misappropriation, making false statements and misleading the Court.

116 In Goold, the Tribunal was concerned with a Solicitor who, in circumstances of significant personal stress, misappropriated moneys totalling $1,500 that he received from a client on account of costs due to the firm that employed him. The Tribunal determined that this single instance of professional misconduct, which the Solicitor admitted, did not necessitate the making of a striking off order. It accepted that the Solicitor had been contrite and ashamed and noted that his employer spoke highly of his competence and integrity. It ordered that his practising certificate should be restricted for a period of three years, preventing him from practising as a principal, and that he pay a fine of $10,000.

However, in the current matter, the Solicitor’s misconduct was not restricted to misappropriation, but also included a breach of Section 61, making false statements and misleading the Court.

117 In Davidson, the Tribunal was concerned with four (4) separate alleged breaches of Section 61 of the Act and unethical conduct constituted by failure to pay third parties within a reasonable time. It found the Solicitor guilty of professional misconduct on all 5 matters alleged but determined that these breaches warranted public reprimand and the imposition of a fine in respect of each of the breaches and put in place a procedure to ensure that the Solicitor complied with his obligations in relation to trust monies. If the Solicitor failed to comply with those orders, his practising certificate would be suspended until the order was complied with.

However, in the current matter, the Solicitor’s misconduct was not restricted to a breach of Section 61, but also included misappropriation, making false statements and misleading the Court.

118 In Green, the Solicitor decided to not to renew his practising certificate in 2000 [One (1) year before the complaints against him were heard] and he was employed part-time as a conveyancing clerk. In those circumstances, and having found the Solicitor guilty of professional misconduct in failing to provide information to a Trust Account Inspector (Section 55(3) of the Act), failing without reasonable excuse to comply with a Notice under Section 152 of the Act, wilfully breaching section 61 of the Act and failing to pay counsel’s fees despite being put in funds for that purpose, the Tribunal ordered that the Solicitor be publicly reprimanded and fined. It ordered that no further practising certificate should be issued to the Solicitor until he had fully complied with the Section 152 Notice and paid the full amount of the fine. It directed that if the Solicitor again commenced practice on his own account, his practice would be subject to 3 monthly inspections by a suitably qualified Solicitor appointed by the Law Society for that purpose, and at the Solicitor’s expense, for a period of one (1) year and that the Solicitor must, at his own expense, complete the Best Practice Management Court or its equivalent (to be determined by the Manager of the Professional Standards Department of the Society) before making an application for a practising certificate.

However, in the current matter, the Solicitor’s misconduct also included misappropriation, making false statements and misleading the Court.

Character Evidence

119 The Tribunal has taken account of the character evidence tendered by the Solicitor, but has made its decision based on all of the evidence. This includes evidence of the Solicitor’s contrition which, although coming very late in the day, makes us comfortably satisfied that he is probably not permanently unfit to practise as a Solicitor.

120 The Tribunal does not condone the Solicitor’s acts of dishonesty and he is properly held up before his peers for castigation. This is part of his punishment. However, we are of the view that the protection of the public does not require that he be struck off the Roll as, based on the evidence of the Solicitor and particularly that of Professor Zuessman, we are satisfied that the Solicitor would take a very different course if he was faced with the same professional difficulty in the future.

121 In other words, the Solicitor’s character is not so flawed that he cannot be trusted again. In our view, the protection of the public is achieved by a substantial period of suspension and the placement of conditions thereafter.

122 We make the following orders:

2. Philip MacDonald Madden shall be suspended from practise for a period of twelve (12) months

3. When Philip MacDonald Madden, after the expiry of a period of twelve (12) months’ suspension, applies to the Society for re-issue of his Practising Certificate, he shall accompany that application with a medical report from a psychiatrist nominated by the Manager of the Professional Standards Department of the Society. The costs of the assessment and report are to be met by Mr Madden and no practising certificate is to be issued to him unless [and until] such medical report indicates that the examining doctor is of the opinion that he is fit to resume the practise of law.

4. Further, when Philip MacDonald Madden makes an application to the Society for re-issue of his Practising Certificate, his application is to be accompanied by the following written undertakings to the Society:

b) That he will carefully and diligently examine all correspondence (including emails) before he signs and dispatches it;

c) That he will attend and participate in a program of psychiatric treatment of such frequency and duration as the psychiatrist nominated by the Society (see: Order 3 above) deems appropriate. The costs of that treatment are to be borne by Mr Madden; and

d) That he agrees to participate in the Senior Solicitors Program and to accept mentoring by a Senior Solicitor nominated by the Society for a period of no less than three (3) years from the date of re-issue of his Practising Certificate and to confer frequently and co-operate with that Senior Solicitor in the conduct of his program. The costs of this program are to be borne by the Solicitor.

6. Philip MacDonald Madden shall pay the Applicant’s costs of and incidental to these proceedings, as agreed or assessed.

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Citations

Law Society of New South Wales v Madden [2008] NSWADT 210

Cases Citing This Decision

0

Cases Cited

11

Statutory Material Cited

2

Law Society of New South Wales v McCarthy [2003] NSWADT 198

Law Society of New South Wales v Goold [2001] NSWADT 171

Law Society of New South Wales v Davidson [2007] NSWADT 264

CITATION:	Law Society of New South Wales v Madden [2008] NSWADT 210
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Council of the Law Society of New South Wales RESPONDENT Philip MacDonald Madden
FILE NUMBER:	072004
HEARING DATES:	27-28 March 2008 , 28 May 2008
SUBMISSIONS CLOSED:	28 May 2008
DATE OF DECISION:	31 July 2008
BEFORE:	Currie JS - Judicial Member; Riordan M - Judicial Member; Bubniuk L - Non Judicial Member
CATCHWORDS:	Solicitor – disciplinary application - professional misconduct - misappropriation
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 1987 Legal Profession Act 2004
CASES CITED:	Allinson v General Council of Medical Education and Registration (1894) 1 QB 750 Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 Law Society of New South Wales v Bannister (1983) 4 LPDR 24 Law Society of New South Wales v Foreman (No. 2) (1994) 34 NSWLR 408 Law Society of New South Wales v Walsh [unreported decision in December 1997] Law Society of New South Wales v Jones [unreported NSW Court of Appeal, 27 July 1978] Harvey v The Law Society of New South Wales (1975) 49 ALJR 362 at 364 Ex Parte Macaulay (1930) 30 SR NSW) 193 Ziems v The Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 Dupal v Law Society of New South Wales [unreported, NSW Court of Appeal, 26 April 1990] Law Society of New South Wales v McNamara [2007] NSWADT 162 Law Society of New South Wales v McCarthy [2003] NSWADT 198 Law Society of NSW v Goold [2001] NSWADT 171 Law Society of New South Wales v Davidson [2007] NSWADT 264 Law Society of New South Wales v Green [2001] NSWADT 142
REPRESENTATION:	APPLICANT L Pierotti, solicitor RESPONDENT R Bellamy, barrister
ORDERS:	1. Philip MacDonald Madden be publicly reprimanded 2. Philip MacDonald Madden shall be suspended from practise for a period of twelve (12) months 3. When Philip MacDonald Madden, after the expiry of 12 months suspension, applies to the Society for re-issue of his Practising Certificate, he shall accompany that application with a medical report from a psychiatrist nominated by the Manager of the Professional Standards Department of the Society. The costs of the assessment and report are to be met by Mr Madden and no practising certificate is to be issued to him unless [and until] such medical report indicates that the examining doctor is of the opinion that he is fit to resume the practise of law 4. Further, when Philip MacDonald Madden makes that application to the Society for the re-issue of his Practising Certificate, his application is to be accompanied by the following written undertakings: a) That he will not in future accept instructions to act in any capacity in matters beyond the practise of a specialist in commercial law; b) That he will carefully and diligently examine correspondence (including emails) before he signs and dispatches it; c) That he will attend and participate in a program of psychiatric treatment of such frequency and duration as the psychiatrist nominated by the Society (see: Order 3 above) deems appropriate. The costs of that treatment program are to be borne by the Solicitor; and d) That he agrees to participate in the Senior Solicitors Program and to accept mentoring by a Senior Solicitor nominated by the Society for a period of no less than 3 years from the date of re-issue of his Practising Certificate and to confer frequently and co-operate with that senior Solicitor in the conduct of his program. The costs of this program are to be borne by the Solicitor 5. Philip MacDonald Madden shall be fined $7,500, plus GST. In imposing this fine the Tribunal has taken into account the financial consequences that are expected to flow from Orders 2, 3 and 4 above 6. Philip MacDonald Madden shall pay the Applicant’s costs of and incidental to these proceedings, as agreed or assessed.

“Subtotal $9,255 but reduced to $6,700	$6,700.00
Goods and Services Tax (GST) at 10%	$670.00
Total Amount	$7,370.00
AKA Amount paid to Appeal	$7,370.00
BALANCE DUE	NIL