Law Society of New South Wales v Ross
[2003] NSWADT 204
•08/28/2003
CITATION: Law Society of New South Wales v Ross [2003] NSWADT 204 DIVISION: Legal Services Division PARTIES: APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
Frances Anne RossFILE NUMBER: 022020 HEARING DATES: 18/03/2003 SUBMISSIONS CLOSED: 03/18/2003 DATE OF DECISION:
08/28/2003BEFORE: Barnes M - Judicial Member; Pheils J - Judicial Member; Hayes E - Member APPLICATION: Application for order prohibiting barrister or solicitor from employing specified person (s.48I) MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: The Law Society of NSW v ET [2002] NSWADT 41
Tracey Luker [1997] NSW LST 19
Law Society of NSW v Edmonds [1999] NSWADT 60
The Council of the Law Society of NSW v Wayne Leslie Mathew Condon (3 November 1997) (LST)REPRESENTATION: APPLICANT
D Barton, solicitor
RESPONDENT
No appearanceORDERS: Pursuant to s.48I the Tribunal prohibits any Barrister or Solicitor (without approval under s.48K of the Act) from employing or paying Frances Anne Ross, (the Respondent) in connection with the Barrister’s or Solicitor’s Practice.
1 The Council of the Law Society of NSW by Application filed on 19 September 2002 sought an order prohibiting any Barrister or Solicitor (without approval under Section 48K of the Act) from -
- Employing or paying Frances Anne Ross (the Respondent) in connection with the Barrister’s or Solicitor’s practice; upon the grounds that:
- The Respondent misappropriated client monies.
2 The Society relies on Section 48I of the Legal Profession Act 1987, which provides:
- (1) This section applies to a person who:
- (a) is not a legal practitioner or interstate legal practitioner, and
(b) is or was a clerk to a barrister or solicitor
- (a) the Tribunal is satisfied that the person is not a fit and proper person to be employed or paid in connection with a barrister’s or solicitor’s practice, or
(b) the Tribunal is satisfied that the person has been guilty of conduct which, if the person were a barrister or solicitor, would have constituted unsatisfactory professional conduct or professional misconduct within the meaning of Part 10.
(3) An order made under this section may be revoked by the Tribunal on application by a Council or by the person against whom the order was made.
(5) The death of a barrister or solicitor does not prevent an application being made for, or the making of, an order under this section in relation to a person who was a clerk to the barrister or solicitor.
3 This application was supported by a Schedule.
4 Relevantly by Reply filed 8 November 2002 the Respondent made certain damning admissions.
5 For convenience it is noted that the Schedule to the Application provided as follows:
- The Respondent misappropriated client moneys.
In these particulars:
1. At all material times Frances Anne Ross (“the Respondent”), was employed as a clerk by Richard Watson, a legal practitioner who held at all material times a current practising certificate as a solicitor and barrister and who practised as “Watson & Watson, Solicitors” (“the Firm”), at 300 George Street, Sydney.
2. While so employed the Respondent’s duties included day to day carriage of conveyancing files relating to the sale strata title units at 29-31 Marlene Crescent, Chullora, NSW, the vendor being a client of the firm named Daniel Culhaci (“the client”).
3. In relation to the conveyance of the units identified in the table below, the Respondent caused directions as to payment to be given to the respective purchasers’ solicitors which included directions, which were authorised by neither the legal practitioner nor by the client, to provide certain bank cheques (the “unauthorised cheques”) at settlement of the respective transactions.
4. Following receipt of the unauthorised cheques at settlement, the Respondent paid, or caused to be paid, the cheques to the accounts indicated respectively in the table below.
5. The moneys, being the proceeds of the cheques particularised in the table below, were the client’s moneys. (Text version of table follows)
| Conveyance Culhaci of Unit No. | Date of Unauthorised direction | Unauthorised direction | Unauthorised Cheque deposited To account name | Date of deposit (on or about) |
| No. 1 to Ishak | Facsimile dated 28/10/90 To Borak & Co | $2,750.00 in favour of St. George | “Frances Ross” St. George | 28/10/98 |
| No. 11 to Zammit | Facsimile dated 29/9/98 | $2,550.00 in favour of Westpac Banking Corporation $3,955.04 in favour of St. George Bank Limited | “Frances Black” Westpac Bank “Frances Ross” St. George | 1/10/98 1/10/98 |
| No. 13 to Cokeker | - | $6,518.14 $3,500.00 Commonwealth Bank | “Frances Ross” St. George Grace Brothers Credit card account “Betty Medhurst” | 9/10/98 9/10/98 |
[This is a text version of the table
Conveyance Culhaci of Unit No.:
No. 1 to Ishak
Date of Unauthorised direction:
Facsimile dated 28/10/90 to Borak & Co
Unauthorised direction:
$2750.00 in favour of St George
Unauthorised cheque deposited to account name:
“Frances Ross” St George
Date of deposit (on or about):
28/10/98
Conveyance Culhaci of Unit No.:
No. 11 to Zammit
Date of Unauthorised direction:
Facsimile dated 29/9/98
Unauthorised direction
: $2,550.00 in favour of Westpac Banking Corporation, $3,955.04 in favour of St. George Bank Limited
Unauthorised cheque deposited to account name
: “Frances Black” Westpac Bank, “Frances Ross” St. George
Date of deposit (on or about):
1/10/98, 1/10/98
Conveyance Culhaci of Unit No.:
No. 13 to Cokeker
Date of Unauthorised direction:
Unauthorised direction:
$6,518.14, $3,500.00 Commonwealth Bank
Unauthorised cheque deposited to account name:
“Frances Ross” St. George, Grace Brothers Credit card account “Betty Medhurst”
Date of deposit (on or about):
9/10/98, 9/10/98 ]
6 The Respondent’s Reply provided for unqualified agreement in relation to paragraphs 1 and 2 of the particulars set out in the Schedule. Further the Respondent in clause 8 of the Reply, admitted to the misappropriation of $14,498.60.
7 In summary in clauses 9 and 10 of the Reply the Respondent noted that the Applicant advised the Respondent by correspondence of 24 October 2001 that the Applicant was satisfied that the Respondent had misappropriated the aforesaid monies. Further the Respondent repaid the misappropriated monies in or around July or August of 2001 to Mr. Richard Watson, Solicitor.
8 Up until 16 January 2003 the position was one where the Respondent did not consent to the Orders sought in the Application, however as at 16 January 2003 the Solicitors for the Respondent (Turner Freeman) advised the Respondent did not oppose the orders sought.
9 For convenience the Tribunal notes the balance of the Reply being clauses 3, 4, 5, 6, 7, provides
- 3. The respondent agrees with the content of paragraph 4, but disagrees in part with the content of “The Table” referred to in paragraph 4 in the application.
4. The respondent agrees with the content in paragraph 5, but disagrees in part with “The Table” referred to in paragraph 5 in the application.
5. The respondent does not admit the amount of $2,550.00 to the account name of “Frances Black” at the Westpac Bank contained in “The Table”.
6. The respondent denies the amount of $3,500.00 to the Grace Brothers credit card account “Betty Medhurst” at the Commonwealth Bank, contained in “The Table”.
7. The respondent agrees with the content of “The Table”, except for those transactions detailed in paragraphs 5 and 6 of this reply.
10 When the matter proceeded to hearing on 18 March 2003 there was no appearance by or on behalf of the Respondent.
11 Enquiries that day made by Mr. Barton on behalf of the Applicant, of Turner Freeman, established, as best Mr. Barton could that the Respondent was not currently working for any Solicitor.
12 Enquiries also established that the investigations in relation to misappropriations of money had not yet led to any criminal proceedings being initiated against the Respondent and/or concluded. There was no evidence in the proceedings that the Respondent had been convicted of any indictable offence.
13 In the course of the proceedings a range of issues arose that required the Tribunal’s consideration. Such issues included:
- a) Was the Respondent a clerk within the meaning of the s.48I(1)(b).
b) Whether the further particulars alleged by the Applicant and at least not admitted by the Respondent had been made out
c) The nature of the Order sought and whether such an order should be made.
14 As to whether the Applicant was a clerk within the meaning of s.48I, the Tribunal has been referred to various Decisions of the Tribunal including The Law Society of NSW –v- ET [2002] NSWADT 41.
15 There the Tribunal had occasion to consider whether a person who was 16 years of age at the time of the alleged offence was a “Clerk” and relevantly the Tribunal drew a distinction between Legal Practitioner, an Interstate Legal Practitioner and a Clerk. Further the distinction was drawn between a Clerk and an Associate within Section 48K(7).
16 Various decisions of the Tribunal have accepted the distinction to be drawn between a “clerk” pursuant to s.48I and an “associate” within s.48K(7).
17 This approach was adopted in the matter of Tina Louise Lake in the Tribunal’s Decision of 23 October 1997 and similarly in the matter of Tracey Luker [1997] NSW LST 19.
18 Here the Tribunal is satisfied this approach is correct and adopts it.
19 Clearly the Tribunal must determine whether in its opinion the Respondent was a clerk and in that regard as a question of fact the Tribunal is comfortably satisfied that she falls within that classification.
20 The Tribunal makes findings of fact that the Respondent commenced service on or about 21 July 1997 with Richard Anthony Watson, Solicitor practising as Watson & Watson and that she remained in service to in or about July of 2000.
21 During that period of service there was a very significant emphasis in relation to the Respondent’s duties relating to the day to day carriage of conveyancing matters. The Respondent was certainly not engaging in, using perhaps more traditional parlance the duties of an “office junior”.
22 The Respondent further in the course of her duties was described as a Conveyancing Clerk and had a direct involvement in a wide range of conveyancing transactions on a day to day basis.
23 Relevantly as part of her duties she would prepare requisitions for cheques in relation to settlements of conveyancing transactions and receive such cheques on behalf of clients.
24 The duties allocated to the Respondent specifically related to the firm’s conveyancing practice and included:
- a) Liaising with clients concerning their conveyances.
b) Corresponding with other firms and lending institutions.
c) Preparation of cheque payment directions.
d) The making of settlement calculations.
e) Attending at settlements.
25 Clearly the Respondent was participating in confidential discussions with clients and taking their instructions and developing an insight in to their financial position and financial affairs generally.
26 Further in applying for that position the Respondent clearly asserted that she had held the position as Managing Clerk with two Sydney based firms of Solicitors between approximately 1989 and 1997.
27 The fraudulent conduct admitted by the Respondent clearly occurred in circumstances where she was carrying out the role of a Clerk.
28 The Applicant was given leave to approach and advise the Registry should any information come into its possession in relation to:
- a) The status of any criminal prosecution against Ms. Ross.
b) Where if anywhere Ms. Ross may be working
29 The Registry has received no further application from the Applicant to put the Tribunal on further notice of developments. Accordingly the Tribunal will determine the matter on the basis of the evidence available at the hearing.
30 The Tribunal accordingly is satisfied that the Respondent was a clerk within the meaning of s.48I. It is now accordingly necessary to consider whether the Law Society had made out its contentions in relation to 48I(2)(a) and (b). Turning to sub-section (b), the Tribunal is satisfied that the conduct admitted by the Respondent would have constituted professional misconduct within the meaning of Part 10.
31 Specifically the Respondent has admitted a misappropriation of client monies and in particular admits that she created an unauthorised direction being a facsimile of 28 October 1998 such that monies were paid to her in the sum of $2,750.00.
32 Further she admits that she prepared an unauthorised direction of 29 September 1998 such that monies were paid to her in the sum $3,955.04 and finally admits she prepared an unauthorised direction in the sum of $6,518.14 which was again deposited to the credit of her account.
33 The conduct was calculated and planned. There is no doubt that no solicitor or barrister could engage in such conduct without securing the most serious censure from this Tribunal.
34 The Tribunal is accordingly satisfied to the requisite standard that Ms. Ross was guilty of conduct which would have constituted professional misconduct if engaged in by a solicitor or barrister.
35 As to whether Ms. Ross is a fit and proper person to be employed or paid in connection with a barrister or solicitor’s practice the Tribunal is mindful of the following:
- a) The Respondent did not appear at the proceedings nor was any Affidavit evidence filed in the proceedings on her behalf.
b) There is no pressing evidence as to extenuating circumstances associated at the time of the misappropriation.
c) There was no evidence which substantially addresses the issue of contrition and any aspects of a reformed character.
36 It could be argued in this matter that it is not necessary for the Tribunal to consider all the particulars provided by the Applicant given the admissions made by the Respondent. However the Tribunal is persuaded to the view that given the seriousness of the allegations, the public interest is best served by determining the balance of the particulars.
37 Further the Tribunal needs to be mindful of at least the possibility that the Respondent may prospectively make an application pursuant to Section 48K and if that were to occur it is important that the issues of controversy that can be determined at this stage be determined.
38 The Applicant broadly put that the Respondent had been less than candid and/or full and frank in dealing with the Tribunal by way of the Reply.
39 Relevantly in particular 3 the Applicant alleged that in relation to the conveyance of residential units the Respondent caused directions as to payment to be given to the respective purchasers solicitors, which included directions which were authorised by neither the legal practitioner nor by the client, to provide certain bank cheques at settlement of the respective transactions.
40 Here of concern were the sale of 3 units and the Respondent admitted to the wrongful conduct in relation to the following cheques:
- a) Unauthorised direction in relation to the sale of Unit No.1 to Ishak by direction was given for $2,750.00 in favour of St. George and the unauthorised cheque was deposited to the account name “Frances Ross” St. George 28 October 1998.
b) Unauthorised direction in relation to the sale of Unit No.11 to Zammit by direction was given for $3,955.04 in favour of St. George Bank Ltd. and the unauthorised cheque was deposited to the account name “Frances Ross” St. George 1 October 1998.
c) Unauthorised direction in relation to the sale of Unit No.12 to Cokeker by direction was given for $6,518.14 in favour of St. George Bank Ltd. and the unauthorised cheque was deposited to the account name “Frances Ross” St. George 9 October 1998.
41 What was relevantly not admitted were the transactions of:
- a) Unit 11 Sale to Zammit with an unauthorised direction of 29 September 1998 for $2,550.00 in favour of Westpac Banking Corporation which was deposited into account name “Frances Black” Westpac Bank on 1 October 1998.
b) Unit 13 sale to Cokeker with an unauthorised direction of $3,500.00 to the Commonwealth Bank and it was deposited to the Grace Bros Credit Card Account of “Betty Medhurst” on 9 October 1998.
42 As to “Frances Black” the Tribunal is comfortably satisfied that the Respondent and Frances Black is one and the same person. Black was clearly the Respondent’s maiden name. The Tribunal accepts the correspondence from the Registry of Births, Deaths and Marriages Queensland that Frances Anne Ross married Ronald James Black in 1957 and children born of this marriage and registered with the Queensland Registry of Births, Deaths and Marriages were Malcolm Ronald Black, Oliver Clare Black and Ross Arthur Black.
43 Further the Tribunal finds that the residential address for the Westpac Banking Corporation account in the name of Frances Black is 2 Wernicke Close, Prariewood. This is the same residential address as Frances Ross.
44 Further on the evidence there is no suggestion that any other person other than the Respondent had any opportunity in the course of employment with Watson & Watson to make the alterations to the cheque requisition and the Tribunal finds as a matter of fact the Respondent made the alterations and banked the money. This cheque requisition is the same requisition in relation to which the Respondent admitted the misappropriation of $3,955.04.
45 As to the cheque for $3,500.00 the Tribunal accepts the Law Society’s submission and makes a finding of fact that the only person who was in a position to vary the Directions as to Payment was the Respondent. Here the Society does not contend that the Respondent and “Betty Medhurst” are one and the same person and it is sufficient that it was the Respondent who engaged in the misappropriation, even if she was not the person who received the direct benefit thereof.
46 The Tribunal finds that the Watson & Watson file copy of the settlement cheque directions in the sale to Cokeker do not include requests for cheques for $6,518.14 payable to St. George Bank Ltd nor $3,500.00 payable to the Commonwealth Bank of Australia.
47 The Tribunal finds as a matter of fact that Colonial State Bank in relation to this conveyancing transaction on behalf of their client Mr. Cokeker disbursed monies as follows:
- a) St. George Bank Ltd. $6,518.14
b) Commonwealth Bank of Australia $3,500.00
48 It is also clear that the cheque for $6,518.14 was credited to the account of Frances Anne Ross and further find that the cheque of $3,500.00 was credited to what was more fully described as The GE Capital Finance Grace Bros Card in the name of “Betty Medhurst”.
49 The Society as stated does not say that the Tribunal must determine that the Respondent is Betty Medhurst however it does contend the only inference the Tribunal can properly draw is that the Respondent engaged in the misappropriation of $3,500.00 and this is the only properly drawn conclusion we can reach.
50 The Tribunal concurs with that approach and finds accordingly. It is a properly drawn inference from the evidence that it was the Respondent who engaged in the misappropriation of these monies.
51 The Tribunal again must consider s.48I(2) and in relation to these additional particulars and finds based upon the admissions and the additional findings that the Respondent is not a fit and proper person to be engaged in, and employed or paid in connection with a barrister or solicitor’s practice. The Respondent’s conduct was outrageous.
52 The Tribunal would have made such a finding, irrespective of the further findings of fact dealing with the sums of $2,550.00 (sale to Zammit) and $3,500.00 (sale to Cokeker).
53 The Tribunal certainly finds in relation to these two particulars that the Respondent has engaged in conduct which would have constituted professional misconduct and warrants the most serious censure.
54 The Tribunal was alerted to a potential area of controversy in several decisions of the Tribunal and in particular to a decision of Law Society of NSW –v- Edmonds [1999] NSWADT 60.
55 There the Tribunal declined to make orders pursuant to s.48I arising out of the Law Society application and the reasoning of the Tribunal in that instance is to be found in the following paragraphs:
- 8 We are not persuaded that we should make the order sought. The Council has put forward only one reason for making the order. It submits that the order should be granted so that it may be entered in the Society’s Register of Former Clerks and Associates, which is apparently a Register recording the names of persons who have been the subject of orders under ss.48I and 48K of the Act. The Register, we are told, is available at the Law Society for inspection so that legal practitioners may be informed of the names of such persons, should they seek employment in a legal practice.
No register is maintained for persons convicted of indictable offences generally, however, the Tribunal has not been given any reason why it would not be possible to do so, at least in relation to persons formally employed as clerks or associates in a legal practice. In effect, the same names might appear in that register as currently appear in the register of orders made in relation to such persons.
9 The Council also submits that the publication of an order, once made, in the Legal Profession Disciplinary Reports of the Law Society , has the effect of notifying solicitors throughout the State of the conviction of Mr. Edmonds and to warn them against employing him in their practices, without prior approval of the Tribunal.
We are not persuaded by this submission either. Certainly, a legal practitioner reading a report of the order made, would become aware of Mr. Edmonds’ name and for so long as that name remained in his or her memory, would no doubt benefit from that notice. That benefit would disappear with the passage of time, we would think.
10 The Tribunal’s concern is that to make an order in the terms sought would prohibit any barrister or solicitor in this State from employing Mr. Edmonds in connection with his or her practice, irrespective of whether the practitioner had actual notice of his conviction at the time that he had applied for employment, or whether the practitioner had in fact read and recalled the making of an order prohibiting his employment by reading the Disciplinary Reports or reading this Tribunal’s decision in its published decisions on the Internet.
Further, we see a practical difficulty in that an order which is not directed to any named legal practitioner or practitioners cannot be served upon those who are affected by the order.
A further concern arises from the terms of the order which would not only prohibit a legal practitioner from employment Mr. Edmonds, but would prohibit him from “paying” him in connection with his or her practice. If it happened that Mr. Edmonds had been employed, before the date of the Tribunal’s order and in ignorance of his prior conviction, there would be an existing employment contract on foot which would require that his salary be paid and we are not clear of the legislative intention in prohibiting payment of his salary in possible breach of contract.
11 This Tribunal is of the opinion that there are sufficient other deterrents contained in the Act which will achieve this purpose sought to be achieved by the making of such an order.
56 In these proceedings it must be noted that Mr. Edmonds had pleaded guilty and had been convicted of an indictable offence. This in our view is a relevant point of distinction between these proceedings and the decision in Edmonds.
57 In the Edmonds decision no reasoning was advanced for the Tribunal’s decision making process which relied upon any relevant decision or express consideration of the rules of statutory construction.
58 By way of contrast the Tribunal was referred to a decision of The Council of the Law Society of NSW –v- Wayne Leslie Mathew Condon of 3 November 1997 and again it was an application pursuant to s.48I(2). Again in those proceedings evidence was tendered and accepted that Mr. Condon had been convicted in defrauding the Commonwealth by evading payments of sales tax. Accordingly Mr. Condon had been convicted of an indictable offence.
59 The Tribunal in those proceedings was concerned to understand the utility of the application having regard to the operation of s.48K, as it was appreciated given the conviction of an indictable, s.48K(i) ensures that no barrister or solicitor could employ him or otherwise have Mr. Condon as an associate without being by statutory prescription, guilty of professional misconduct unless an approval was given under s.48K(ii) by the Tribunal.
60 An order under s.48I would invoke the application of the provisions of s.48K but would not increase the employment embargo already imposed on Mr. Condon by s.48K. When asked if the s.48I application was a futility, Mr. Wales on behalf of the Law Society submitted:
- “Certainly it would be in appropriate to make this application for every person convicted of an indictable offence who had at some stage in his life some fleeting association with a law firm. This is not, in my submission, such a case.
Mr. Condon was employed as a clerk for a significant period and on his own admission, which I will come to in due course, he, it would seem, entertains a desire at some future stage perhaps to reinstate a connection with the practice of law. That is particularly, in my submissions, what makes it appropriate in this case, if the Tribunal is so minded, that there should be an order and why there is utility in such an order.”
61 This decision ultimately did not involve the issuing of a s.48I Certificate, however in our view the reasoning relied upon did not support the notion of any lack of jurisdiction as an individual solicitor had not been named as a Respondent to the proceedings or any suggestion that the proceedings were inherently flawed, such as to preclude the exercise of any discretion as to whether any order would be granted.
62 The Law Society prepared written submissions dealing with what the Tribunal will characterise as jurisdiction and the exercise of the jurisdiction. It is convenient to extract those submissions comprehensively. The Law Society submitted:
- “ 4 The purposes or objects of the Act – Protection of the Public
4.1 Section 48I is to be construed in the light of the guidance provided by the Interpretation Act 1987, s.33 of which obliges the Tribunal to have regard to the purposes or objects of the Act whether or not that purpose or object is expressly stated in the Act and to prefer a construction that would promote the purpose or object underlying the Act to a construction which would not promote that purpose or object.
4.2 The Legal Profession Act does not provide any explicit overarching statement of purposes or objects. Review of the Act as a whole reveals a consistent concern to protect the public whose affairs may be entrusted to the hands of members of a privileged body of professionals to manage on behalf of those members of the public who require legal services from time to time.
4.3 This is evident in the provision of a process for selecting members of the profession (Part 2 of the Act), rules for issue of practising certificates, including disclosure provisions and various controls and limitations on practising (Part 3), prohibitions on unqualified practitioners (Part 3A), Regulation of Interstate Practitioners (Part 3B) and Foreign Lawyers (Part 3C), the powers and functions of the Law Society Council (s.54) and s.55, safeguarding clients’ moneys (Parts 6, 7, 8 & 9), additional protection of clients’ affairs in the event of some failing by a practitioner (Part 8A; Appointment of Managers), dealing with complaints against and discipline of the profession (Part 10), and regulation of the manner in which fees may be charged (Part 11).
4.4 It is trite law that the primary concern of discipline of members of the profession is protection of the public. See, in no particular order, Law Society of NSW v Foreman (1994) 34 NSWLR 408 at 438, Ziems v. The Prothonotary of the Supreme Court of N.S.W. (1957) 97 CLR 279, at pp 286, 28; Clyne v. N.S.W. Bar Association (1960) 104 CLR 186, at pp 201-202; Wentworth v NSW Bar Association (1992) 176 CLR 239 per Deane, Dawson, Toohey and Garudron JJ at 251; Clyne v New South Wales Bar Association (1960) 104 CLR at 201-2; New South Wales Bar Association v Evatt (1986) 117 CLR at 183-4; Weaver v Law Society of New South Wales (1979) 142 CLR 201 at 207.
4.5 It is noteworthy that elements of s.48I echo these concerns. The conduct of a clerk is called in question to the extent that it may demonstrate that the clerk is “not a fit and proper person” to be employed or paid in connection with a barrister’s or solicitor’s practice. Notions of fitness and propriety are to be found in virtually all cases dealing with the question as to whether a practitioner’s name should remain on the Roll (or have their name restored to the Roll after having it removed other than at their own request) and the terms “fit and proper” are used in provisions such as ss.37 and 38FB in connection with the refusal or cancellation of Practising Certificates.
4.6 The first alternative finding in sub-section 48I(2) invites comparison of the clerk’s conduct with that of a barrister or solicitor; it invokes the concern of the court and the legislature to ensure that persons involved in the practise of law are fit and proper persons to manage the affairs of the public.
4.7 The alternative criteria for founding an order against a clerk provides an even more explicit analogy with a practitioner, since the quest becomes whether “the person has been guilty of conduct which, if the person were a barrister or solicitor, would have constituted unsatisfactory professional conduct or professional misconduct within the meaning of Part 10”.
4.8 It is noteworthy that, of an Act divided into some 17 Parts, 6 of those Parts deal with the protection of client moneys; without doubt a major object of the Act is the protection of such moneys.
Protection of the Profession.
4.9 A dishonest clerk may cost his employer a great deal, in both money and reputation; the reputation of a legal firm for honesty is a question of major commercial significance, since client moneys are held severally, and any defalcation will represent the taking of moneys the property of an individual client.
4.10 Practitioners who may be at risk of employing an unfit person (and so become vulnerable to loss of both money and reputation) are entitled to a construction of s.48I which will make available the protection clearly intended by the Legislature. In protecting the Practitioner, the clients are also protected.
4.11 A major defalcation by an employee may result in a claim upon the Fidelity Fund, attracting greater contributions from all solicitors to make up the loss. All Practitioners liable to contribute to make up losses to the Fidelity Fund are entitled to be protected from employment within the legal sector of persons who are demonstrably unfit to be so employed.
4.12 For these reasons, one finds the provision in sub-section 48L(3):
- A Council must:
(a) retain in its office an order made under section 48I or 48J on its application, and
(b) permit any such order to be inspected during office hours and without charge, but only if the inspection is made by a barrister or solicitor.
4.14 Protecting the profession is not inconsistent with, and is in fact coextensive with protecting the public.
5. The Proper Respondent
5.1 Owing to certain amendments to the terms of the relevant legislation from time to time, there may be a question as to the proper Respondent in applications such as the present application. Section 48I was preceded by section 120 Legal Profession Act which had been repealed by the Legal Profession Reform Act 1993 which substituted s.48I in virtually identical terms to s.120 (as far as the issue of the subject of the order is concerned). Section 40K of the Legal Practitioners Act, 1898 preceded s.120 Legal profession Act and relevantly provided:
- “(2) On the hearing of any application... the Statutory Committee may make an order that as from such date as may be specified in the order no solicitor shall in connection with his practice as a solicitor take into or retain in his employment, or remunerate, the person with respect to whom the application is made except in accordance with the permission in writing granted by the Society for such period and subject to such conditions ...(etc)”(emphasis added)
5.3 The critical change in the terms of the equivalent section occurred with commencement of the 1987 Act. Section 120 (equivalent to s.40K Legal Practitioners Act) thereof provided in sub-section (4) “... for an order prohibiting any solicitor from employing...(etc)” (emphasis added).
5.4 For some time following the commencement of the 1987 Act the Tribunal continued to make prohibition orders with respect to clerks as orders directed to the profession at large, not being directed to any particular solicitor. See, for example, in relation to s.120, the decision in the matter of Ellen Leahy, NSWLPDT no. 11 of 1993 (page 49 of the bundle), Adrian Dennis Nation (1993) 4 LPDR 1 (page 52), (1993) 4 LPDR 1 (page 52), Lesley Elizabeth Mayo (1993) 2 LPDR 1 (page 58), Pauline Sheila Johns (1992) 2LPDR 1 (page 61), Vincent John Dellosta (1991) 4 LPDR 1 (page 63) and Patricia Hill NSWLPDT No. 15 of 1989 (unreported) (page 67, and (copies to be handed up) Tracey Luker NSWLST 19., and Wilson David Cregan [1995] NSWLST 1.
5.5 In relation to s.48I see Arthur Limbo NSWLST No 24 of 1997 (page 26 of the bundle), Wayne Leslie Matthew Condon NSWLST No. 23 of 1997 (page 30) and Danielle Murphy [1997] NSWLST 4 (page 46).
5.6 With Edmonds the Tribunal expressed a view during the course of the proceedings to the effect that, in seeking “any order prohibiting any solicitor from employing...(etc)”, the Society was obliged to seek such an order against a specific barrister or solicitor, and could no longer seek an order at large, because of the change in the terms of the legislation, as noted above. This concern was reflected in paragraph 10 of the decision in Edmonds.
- “10... Further, we see a practical difficulty in that an order which is not directed to any named legal practitioner or practitioners cannot be served upon those who are affected by the order.”
6. The Legislature intended no change
6.1 Hansard reveals that the legislature, in enacting s.120 Legal Profession Act, in fact intended no change compared to the provisions of s.40K Legal Practitioners Act; as the minister’s comment during the second reading speech indicates that no significant change was intended.
6.2 In remarking on the provisions which are now to be found in Part 3A, but were incorporated in the bill which became the Legal Profession Act 1987 as Part 9, being provisions relating to clerks, and to disqualified and unqualified persons, the Minister, in his second reading speech, remarked that the provisions of sections 40C and 40D of the Legal Practitioners Act were combined in clause 117 of the Bill, and said further with respect to Part 9 generally “The remaining provisions in Part 9 are drawn from the existing Act.” There could be no clearer indication that the legislature did not intend any change to the law as found in the provisions of Part 9, including s.120. (See page 17 of the Bundle, proceedings of the Legislative Assembly on 29 April 1987, paragraph commencing “Sections 40C...”, third sentence, “The remaining provisions...”.).
7.Construction of the section which deprives the section of any real utility
7.1 Apart from the question of the Legislature’s intention, expressed in the second reading speech in the Legislative Assembly, to preserve the law as regards clerks in enacting the Legal Profession Act, if the view that an order under 48I must be sought against a named solicitor were accepted, that would represent a preference for a construction of the section such as to effectively deprive the section of any real utility.
7.2 It is necessary to contemplate how the section would operate given such a construction. First, since an order has to be made against a named solicitor, the solicitor is necessarily a party to the action. Leaving aside the circumstance where the employer retains the services of a clerk who has demonstrated unfitness, the typical outcome would be dismissal of a clerk for conduct such as may ground an application under s.48I. The Society would not be able to make an application under s.48I until the Society received information that another solicitor intended to employ the person in question.
7.3 Yet there is no foreseeable way in which the Society could gather such information, since there is no obligation on solicitors to provide the Society with the names of prospective employees for vetting.
7.4 Of course, there being no order in place under s.48I with respect to the clerk, the solicitor would not be aware of her previous conduct, unless the clerk happened to have provided, against all self interest, the name of the previous employee, who suffered the conduct, as a referee. Obviously, a person who had engaged in conduct such as could ground an application under s.48I would attempt to conceal the fact of that part of their employment history. There being no order under s.48I, there would be no offence under s.48K(5) of failure on the clerk’s part to disclose anything.
7.5 Furthermore, an order under s.48I not yet being made, the clerk’s name would not be found in the register kept pursuant to s.48L(3), and the prospective employer would have no notice from that quarter.
7.6 Assuming, against all odds, the Society eventually became aware of a solicitor’s intention to employ the clerk, it would be unreasonable to commence proceedings without first providing the solicitor with an opportunity to desist voluntarily from his intention. For a host of reasons, legitimate self-interest not least among them, the practitioner could be expected to desist and provide an undertaking not to make further attempt to employ the clerk. In those circumstances, the Society would be deprived of any grounds for an application directed against the solicitor.
7.7 Such a cycle could be expected to recur indefinitely, with no proceedings being commenced under s.48I; the clerk never becoming a disqualified person, within the meaning of s.48K(7); the clerk’s name never becoming subject to s.48L(3), and the clerk having no obligation to disclose anything the clerk would otherwise be obliged to disclose under s.48K(5). (Of course, if the clerk had been convicted of an indictable offence, s.48K(5) would apply, but that is not the case with the present Respondent.)
7.8 In short, to construe s.48I as requiring an order directed to any named legal practitioner or practitioners, is to render this section nugatory, having regard to the practical consequences of adopting such a construction. In reality, such a construction represents a preference for a construction which fails to serve the objects of the Legal Profession Act over a construction which serves those objectives. Further, to construe s.48I as requiring an order to be made against a specified practitioner rather than at large, flies in the face of the extrinsic evidence in Hansard that the Legislature had no intention to change the effect of the relevant provisions of s.48I as formerly found in s.120 compared to s.40K Legal Practitioners Act, 1898.”
63 The Tribunal appreciates the detail of the Law Society’s submissions on this aspect of the proceedings and is comfortably satisfied that s.48I does have utility and as a matter of statutory construction The Tribunal is obliged to give wherever possible the section room to operate.
64 In that context the Tribunal is satisfied that the decisions on Condon and Edmonds are distinguishable on the facts as there clearly both the persons concerned had already been convicted of an indictable offence and the focus was really upon the exercise of discretion by the Tribunal in granting the relief sought.
65 Here there is no evidence of the Respondent having been convicted of a criminal offence. The section is clearly designed to be protective of the broader public interest and the Tribunal is not at all convinced that the use of the phrase “any solicitor” as distinct from “no solicitor” in terms of the current s.48I(2) operates to read the provision down such that it must be a specifically named solicitor or barrister. The word “any in context is wide enough to incorporate a general or a specific prohibition.
66 The community interest is best served by making an order in accordance with the application.
67 Further the Tribunal directs the applicant to serve copies of this decision upon Turner Freeman, as the solicitors last on the record for the respondent.
68 The Tribunal requests that copies of the decision also be made available to the various legal practitioners who have previously employed the respondent and the barrister who accepted a direct referral brief at any early stage of these proceedings.
69 The Tribunal strongly recommends bearing in mind the finding made as to the respondent also utilising the name “Frances Black” that the records of the Law Society be appropriately noted to reflect that Frances Anne Ross is also known as Frances Black.
70 There is no application for costs and no costs order is made.
11
1