Law Society of New South Wales v Rex

[2003] NSWADT 148

CITATION:	Law Society of New South Wales v Rex [2003] NSWADT 148
DIVISION:	Legal Services Division
PARTIES:	APPLICANT The Council of the Law Society of New South Wales RESPONDENT David Richmond Rex
FILE NUMBER:	012016
HEARING DATES:	4 April 2003
SUBMISSIONS CLOSED:	04/04/2003
DATE OF DECISION:	06/19/2003
BEFORE:	Brennan JWF - Judicial Member; Norton S SC - Judicial Member; Bennett C - Member
APPLICATION:	Penalty
MATTER FOR DECISION:	Penalty
LEGISLATION CITED:	Legal Profession Act 1987
CASES CITED:	Law Society of NSW –v- Bannister 1993 4 LPDR 24 Walsh –v- Law Society of NSW [1999] 164 ALR 405 Ziems –v- The Prothonotary (1957) 97CLR279 Ex parte Brounsall (1778) 2Cowp82 Incorporated Law Institute of New South Wales –v- Meagher (1909) 9CLR655 Ex parte Macaulay (1930) 30SR (NSW) 193
REPRESENTATION:	APPLICANT P Boyd, solicitor RESPONDENT J Blackman, barrister
ORDERS:	Orders made 4 April 2003:; 1 That the legal practitioner be publicly reprimanded; 2 That the legal practitioner pay a fine in the sum of Fifteen thousand dollars ($15,000.00) by six (6) instalments of Two thousand five hundred dollars ($2,500.00) each, the first of such payments to be made on or before 4 October 2003 and the remaining five payments to be made at six-monthly intervals from 4 October with the final payment to be made on or before 4 April 2006; 3 That the legal practitioner pay the costs of the Law Society of New South Wales assessed and determined in the sum of Ten thousand dollars ($10,000.00) such costs to be paid by four (4) annual instalments of Two thousand five hundred dollars ($2,500.00) each, the first of such payments to be made on 4 April 2004 and the remaining three payments to be made on 4 April 2005, 4 April 2006 and 4 April 2007; 4 In the event that the legal practitioner defaults in payment of any instalment of the fine or costs payable under these orders then all moneys due and owing, whether for costs or for fine as at the date of such default shall thereupon become due and payable in full

1 At the conclusion of the substantive hearing relating to the complaints in this matter the Tribunal acceded to the request of both parties that reasons for decision be published detailing the outcome of the findings of the Tribunal on the nineteen (19) complaints made by the Law Society of New South Wales (“the Society”) against David Richmond Rex (“the Solicitor”). Both parties requested that submissions in relation to any penalty to be imposed and/or costs be made on a date some time after the substantive decision was published.

2 Arrangements were then made for submissions to be made by both parties on the orders that might properly be made following publication of the findings on the complaints and those submissions were made on 4 April 2003.

3 At the request of the parties following those submissions the Tribunal deliberated for some hours on the terms of the appropriate orders to be made and by consent the orders were pronounced on the understanding that reasons for the determination of the appropriate orders would be published subsequently.

Original finding:

4 At the conclusion of the substantive hearing the Tribunal found that the legal practitioner was guilty of professional misconduct.

Orders of 4 April 2003:

5 Following the conclusion of submissions the Tribunal made the following orders:

1. That the legal practitioner be publicly reprimanded.

2. That the legal practitioner pay a fine in the sum of Fifteen thousand dollars ($15,000.00) by six (6) instalments of Two thousand five hundred dollars ($2,500.00) each, the first of such payments to be made on or before 4 October 2003 and the remaining five payments to be made at six-monthly intervals from 4 October 2003 with the final payment to be made on or before 4 April 2006.

3. That the legal practitioner pay the costs of the Law Society of New South Wales assessed and determined in the sum of Ten thousand dollars ($10,000.00) such costs to be paid by four (4) annual instalments of Two thousand five hundred dollars ($2,500.00) each, the first of such payments to be made on 4 April 2004 and the remaining three payments to be made on 4 April 2005, 4 April 2006 and 4 April 2007.

4. In the event that the legal practitioner defaults in payment of any instalment of the fine or costs payable under these orders then all moneys due and owing, whether for costs or for fine as at the date of such default shall thereupon become due and payable in full.

The Complaint:

6 The information filed by the Society complained that the legal practitioner had been guilty of gross negligence and that the gross negligence constituted professional misconduct. There were nineteen separate grounds and the Tribunal found that eleven of those grounds had been established and constituted gross negligence justifying an overall finding of professional misconduct. The eight remaining grounds were dismissed by the Tribunal.

The Conduct:

7 The Tribunal has already published a lengthy decision in which the grounds of complaint were considered in detail.

Consideration of Possible Outcomes:

8 Under Section 171(C)(1)of the Legal Profession Act 1987 the Tribunal has power to make a wide range of orders where a finding of professional misconduct has been made. These include:

(a) Order that the name of the legal practitioner be removed from the roll of legal practitioners;

(d) Order that the legal practitioner pay a fine … not exceeding $50,000;

(e) Publicly reprimand the legal practitioner or, if there are special circumstances, privately reprimand the legal practitioner;

(i) make any ancillary orders.
9 Indeed, it appears clear that the Tribunal is not bound to adopt the orders sought by the complainant nor, indeed, is the Tribunal limited in scope to such penalties as are sought in the information. In Law Society of NSW –v- Bannister 1993 4 LPDR 24 the complainant Society had not sought that the solicitor be struck off. The Court of Appeal found that the solicitor’s conduct showed he was unfit to practice and that the protection of the public required that his name be removed from the Roll. The Tribunal’s predecessor, the Legal Profession Dispute Tribunal, was found to have erred in imposing a fine after making a finding of professional misconduct.

10 This is to be contrasted with the situation that applies to the grounds of complaint. The High Court in Walsh –v- Law Society of NSW [1999] 164 ALR 405 dealt with an appeal by a practitioner against the findings of the Court of Appeal and certain cross-appeals by the Society. The lead Judgment of McHugh Kirby and Cullinan JJ contained a detailed analysis of the actual complaints before the Tribunal and refers in detail to the judgment of Powell JA in the Court of Appeal. In para. 52, the Judgment reads:

”…. However, in the extracted passage of his reasons, Powell JA accepted that the precise scope of the Appeal was that stated in Section 171F(4) of the Act. In this, unfortunately, he was in error. By the Courts Legislation Further Amendment Act 1995 (NSW) that subsection was repealed with effect from 8 March 1996. By coincidence that was the date upon which the information contained in the complaints against Mr Walsh was signed on behalf of the Law Society. However, the information was not lodged with the Tribunal until 11 March 1996. By this date Section 171F(4) had been deleted from the section. Accordingly the statutory provision requiring the appeal to the Court of Appeal to be ‘by way of a new hearing’ and allowing ‘fresh evidence, or evidence in addition to or in substitution for the evidence received at the original hearing’ to be given had been removed. All that was left was an ‘appeal so described’.”
Their Honours continued:
”56. More relevantly for present purposes, the repeal of the provisions which had previously fixed the character of the appeal as a “new hearing”, and which required that it henceforth be approached as an appeal under s75A of the Supreme Court Act, altered the function which the Court of Appeal had to perform. Its function was to decide whether the Law Society, as appellant, had shown error on the part of the Tribunal on any of the grounds by which it challenged the Tribunal’s decision.

57. The importance of this misapprehension can be seen at the threshold of Powell JA’s reasoning. Basing himself on an approach considered proper to an appeal ‘by way of a new hearing’ and encouraged by the assertions or silence of the parties, he proceeded to put aside the concern which he had acknowledged had troubled him ‘at first’. Instead, he conceived his function as one of considering for himself the ‘whole of the material’ which was before the Court of Appeal in the light of his own conclusions based on that material. This was an incorrect approach as his Honour would doubtless have agreed had the repeal of s171F(4) been drawn to his notice. The error explains the course which Powell JA’s reasoning then took which otherwise would have been quite different. This alone requires that the appeal to this Court be allowed.”

11 Their Honours then went on to find that the mode of conduct of the hearing by the Court of Appeal involved procedural unfairness and went on to say:
”Connected with the foregoing conclusion are the complaints which Mr Walsh made, and which are also justified, concerning a number of the findings recorded in the reasons both of Powell JA and of Beazley JA. These have already been indicated. We will not repeat all of them. Suffice it to say that there was no warrant, in the proper conduct of the appeal as one confined to a review of the Tribunal’s ‘determination of a complaint’, to make critical findings on issues which, by an analysis of the outstanding issues, were either never properly before the Court of Appeal or no longer before it having regard to the earlier determination made by the Tribunal and the grounds raised by the Law Society’s appeal. In particular, there was no justification for adverse findings, or comments (if that they be), concerning Mr Walsh’s sisters. Powell JA misdirected himself, in our respectful opinion, in stating that the sisters ‘were prepared so to act as to obtain an improper advantage for themselves’ [81] and in criticising the sisters on the basis that they were not revealed ‘in any favourable light’ [82] for their action in dividing the personal assets of their mother with Mr Walsh. They were not parties and were not before the Court. The Court was not called upon by any of the issues before it on any of the complaints to hear and determine the propriety of their conduct or, for that matter, Mr Walsh’s conduct in making the arrangement to clear out and renovate the mother’s residence when she departed to a nursing home with no prospect of return.”
12 Their Honours quoted at 47 from the reasons given by Beasley JA as follows:
”[T]he wrongful conduct was engaged in over a period of several years. It touched nearly all, if not all, aspects of the arrangements relating to the estate. ….[h]e failed to comprehend or ignored the fiduciary duty to which he was subject as grantee of the Power of Attorney. This failure was compounded by his evidence before the Tribunal as to the use of the Power of Attorney, which was false and either made with knowledge of the falsity, or recklessly, not caring whether it be true or not. His lack of honesty on that occasion was not an isolated instance of dishonesty. The respondent drafted three different Affidavits of Assets and Liabilities in support of the application for probate…[H]e has failed or neglected to give [Mrs Brain] notice of his intention to apply for probate as he was required to do. Not only was the second affidavit false, its contents demonstrated a sophisticated knowledge of the legal and equitable principles of property law as well as of the fiscal consequences which flowed from characterising the interests in the properties as he did. The only possible conclusion is that he sought to benefit himself by his dishonesty.

In my opinion, the solicitor’s conduct was of such a serious nature as to require that his name be removed from the Roll of Solicitors.”

13 Their Honours commented at 48:
”It is possible that Beazley JA, like Powell JA, was led into these remarks by the comments of the Tribunal in disposing of complaint (5) adversely to Mr Walsh. But that complaint, from first to last, was confined to one of unsatisfactory professional conduct. Neither in its terms, nor in the particulars which supported it, was an allegation of dishonesty and self-interested conduct alleged against Mr Walsh. This should have been clear to the Court of Appeal from the terms of Mr Walsh’s cross-appeal. It challenged the findings of the Tribunal on complaint (5). Hence, it challenged the terms in which those findings were recorded. Be that as it may, the nature of the complaint, which refrained from charging professional misconduct, made findings of deliberate dishonesty, pursued for Mr Walsh’s own benefit, outside the complaint before the Court. Because Clarke AJA agreed in Beazley JA’s reasons on this point, it cannot be concluded that this was a mere slip which did not affect the ultimate disposition of the appeal by the Court of Appeal. So much was ultimately conceded by the Law Society.”
14 The Tribunal finds that from consideration of these passages from the decision of the High Court in relation to the views expressed below by Powell and Beazley JJA that it is clear that the Tribunal is confined in its deliberations to the complaints as formulated before it. In the course of its Reasons for Decision the Tribunal indicated that in relation to a number of matters there were facts and circumstances which could have justified in themselves a complaint of professional misconduct. The Tribunal holds the view that had it made such a finding it would have been in error as the issue before the Tribunal was whether the evidence on the individual complaints which were established constituted gross negligence and the totality of that gross negligence in turn constituted professional misconduct. The Tribunal concluded from the eleven instances in which it made findings of gross negligence that the complaint of professional misconduct had been made out.

Conclusions:

15 In determining an appropriate outcome the Tribunal has taken into consideration the nature of the conduct involved in each of the findings of gross negligence that it has made. The findings are consistent with incompetence, neglect and a reprehensibly casual approach to the professional obligations of the practitioner. These are most serious matters.

16 In this context, it is convenient to refer to the Law Society of NSW –v- Bannister (supra) as it is necessary to balance the range of penalties that may be imposed. The Lead Judgment of Shellar JA with whom Gleeson CJ and Handy JJ agreed contains the following at p10:

”It is sometimes said that the jurisdiction of the Tribunal and of this Court invoked by complaint against a solicitor is not to punish the Solicitor but to protect the public… However the distinction between the two stated objectives of protection and punishment is blurred and can be misleading. Obviously, where a barrister or a solicitor has been convicted and punished for a serious offence the jurisdiction of the court to disbar the barrister or remove the name of the solicitor from the roll can be said to have nothing to do with punishment; see Ziems –v- the Prothonotary (1957) 97CLR279 at 286. In Ex parte Brounsall (1778) 2 Cowp829; 98 ER 1385 a solicitor had been convicted of stealing a guinea and had suffered imprisonment for nine months and also branding of the hand. On an application to strike him off the roll and in answer to an argument advanced on the solicitor’s behalf that he had already received sufficient punishment, Lord Mansfield at 830 and 1385 said that the defendant’s having been burnt in the hand was no objection to his being struck off the roll. ‘And it is on this principle; that he is an unfit person to practise as an attorney. It is not by way of punishment; but the Court on such cases exercise their discretion, whether a man whom they have formally admitted, is a proper person to be continued on the roll or not.’ See also Incorporated Law Institute of New South Wales –v- Meagher (1909) 9CLR655 at 680. Such cases illustrate that the supervisory jurisdiction of the Court and of statutory bodies such as the Tribunal is directed in part to ensuring that the requirement enshrined in the Charter of Justice that persons admitted to practise as solicitors be fit and proper persons or, in the language of s16 of the Legal Profession Act 1987 , of good fame and character is maintained. It follows that if a solicitor is shown not to be a fit and proper person he or she should be removed from the roll. The order for removal is not punitive but protective. Accordingly it is no answer for the solicitor to say that he or she has already been punished for the conduct which shows unfitness.

Subsequently His Honour continued:

’In Ex parte Macaulay (1930) 30SR (NSW) 193 at 193-4 Street CJ speaking for himself and the other members of the Full Court said:

”….. unless the Court insists on a high standard of conduct on the part of solicitors – unless the Court punishes severely any lapse from the proper standard – the public will never be properly safeguarded and the profession will never retain the respect which is ought to have in the community.” ’
Later His Honour said:-

’The exercise of the power to remove from the roll, suspend or fine a solicitor is directed to protecting the public by ensuring that those unfit to practise do not continue to hold themselves out as fit to practise and that high standards are maintained. The maintenance of such standards involves deterring the offender from repeating the offence and deterring others who might be tempted to offend.’ “

17 Clearly, the duty of the Tribunal is protective not punitive. This has been said time and again. Although the findings are serious and very adverse to the practitioner, the Tribunal has no doubt as to the contrition of the practitioner and that what he did in relation to these matters was inconsistent with the professional reputation he had established and the standards he had followed over many years. He avoided carefully conflict of interest and the Tribunal has found no dishonesty or unfaithful conduct by the practitioner. He has made quite frank admissions, although at times the Tribunal has found it difficult to understand why the practitioner lacked insight into his conduct and could not as he asserts “ properly explain and justify his conduct” .

The Solicitor:

18 The practitioner was admitted to practice in 1965. He worked in his father’s firm where he subsequently became a Partner. Significant character evidence given in the knowledge of the matters complained of was provided to the Tribunal by practitioners and professional people who had contact with this practitioner virtually from the time of his commencement of articles of clerkship in his father’s firm. He commenced practice on his own account at Katoomba in 1990 and the substantial volume of character evidence is clearly informed and considered. It is most supportive of the legal practitioner and there is clearly dismay on behalf of many of his long-term associates and professional colleagues at his conduct leading to his being before the Tribunal. There is no doubt whatever that the humiliation and distress experienced by the practitioner in the later years of what has hitherto been a most honourable professional character was devastating. That is recognised but the Tribunal’s task is not to punish. Pertinent to the Tribunal’s deliberation is the support for this man as a practitioner in ongoing practice from his fellow practitioners, from his clients and from those who have been associated with him from his earliest professional days. The respect and regard still held for the practitioner and the faith of his fellows in his professional abilities when viewed with his contrition and the recognition of the error of his misconduct are supportive of a view that the practitioner is fit to continue to practise. This is not an easy decision for his cavalier conduct of his practice in the matters which lead to him being before the Tribunal was disgraceful. He has in general practice in other matters established an excellent reputation and has maintained high standards. The changes that have occurred since his misconduct occurred in the management of his practice and indeed in the conduct of mortgage practices and of conveyancing generally leads the Tribunal to the view that a deterrent in the form of a striking off order is not necessary to deter others and, that the changed mortgage procedures of the practitioner give confidence to the view that such an order it not necessary to protect the public interest.

Conclusion:

19 In the circumstances the Tribunal has found that it is not appropriate to make a striking off order. The Society does not seek that order. The practitioner is unlikely to offend again. He has had an honourable career and he has the strong support of his professional peers and his clients. The appropriate Order weighing all these matters up is for a public reprimand and for the imposition of a substantial fine which reflects the serious nature of the practitioner’s behaviour.

20 The practitioner is still in practice, but his means are limited. In those circumstances, payment of the fine by instalments over a period of years appears the appropriate way to resolve with the matter and this is reflected in the orders made. In reaching this decision the Tribunal has endeavoured to take into account the practitioner’s professional history and his contributions to society and the law. The Tribunal is confident that his future conduct will reflect the reputation attributed to him by his associates and clients whose references have been of great assistance to the Tribunal.

21 In relation to costs it is appropriate for an order to be made for costs, although in the absence of concessions that were made by the Society at the conclusion of the hearing the Tribunal was concerned that there would have been substantial issues that would have had to be argued on many of the items of costs incurred by the Society. Obviously, not all costs could properly be the subject of an order where eight of the nineteen complaints were dismissed. The concession by the Society of its willingness to assess costs in the sum of $10,000.00 has led the Tribunal to quantify the costs order. The Tribunal has relied on the professional experience of the two practitioner members of the Tribunal in relation to costs and the sum proposed by the Society of $10,000.00 is, in the Tribunal’s view, clearly a minimum figure that might properly be assessed had a detailed assessment been required. The Tribunal is comfortable in adopting that figure, secure in the knowledge that Counsel for the practitioner, although unable to consent to such an order, did not seek to be heard in opposition to it. The Tribunal finds that it is able to make this costs determination in exercise of its powers under Section 171(E)(1) of the Act.

22 Accordingly, the orders which have been detailed above were made by the Tribunal.

23 To assist in reducing the volume of paper held in the Administrative Decisions Tribunal the Tribunal also directs as follows:

That at the expiration of one month documents produced under subpoena and/or tendered in evidence are to be collected from the Registry by the party or legal representative by whom the document was produced or subpoenaed and that all such documents be then forthwith returned to the person or institution that produced that document.