Law Society of New South Wales v Treanor
[2005] NSWADT 285
•12/05/2005
CITATION: Law Society of New South Wales v Treanor [2005] NSWADT 285 DIVISION: Legal Services Division PARTIES: APPLICANT
Council of the Law Society of New South Wales
RESPONDENT
John TreanorFILE NUMBER: 052023 HEARING DATES: 29/09/2005 SUBMISSIONS CLOSED: 09/29/2005 DATE OF DECISION:
12/05/2005BEFORE: Hale S - Judicial Member; Fox R - Judicial Member; O'Neill A - Non Judicial Member APPLICATION: Professional Misconduct - breach of s. 61 of the Legal Profession Act - Professional Misconduct - fail to comply with s. 152 Notice - Professional Misconduct - fail to comply with s. 175 of the Legal Profession Act - Professional Misconduct - fail to honour undertaking MATTER FOR DECISION: Principal matter LEGISLATION CITED: Legal Profession Act 1987 CASES CITED: Alanson v General Council of Medical Education and Registration 1894 QBD750 at 768,
In Re Hodgekiss [1962] SR(NSW)340 at 351
Kennedy v Council of Incorporated Law Institute of New South Wales 1940 13ALJ 563
Law Society of New South Wales v Hinde [2005] NSWADT 199
Law Society v Kekatos [2005] NSW ADT 79
Legal Services Commissioner v Browne [2004] NSW ADT 63REPRESENTATION: APPLICANT
P Boyd, Solicitor
RESPONDENT
D Raphael, BarristerORDERS: 1. That the Solicitor be publicly reprimanded; 2. That the Solicitor pay a fine of $7,000.00 within four (4) weeks; 3. Council to be at liberty to suspend any Practising Certificate held by the Solicitor if fine not paid on time; 4. That the Solicitor pay the costs of the Law Society
1 The Law Society, by Information filed 24 June 2005 alleges that the Solicitor:-
- 1. breached Section 61 of the Legal Profession Act 1987;
2. failed to comply with Section 175 of the Legal Profession Act 1987;
3. failed without reasonable excuse to comply with two (2) Notices issued in July 2001 and January 2003 under Section 152 of the Legal Profession Act;
4. failed to comply with an undertaking dated 5 July 1995 given to Keddies Solicitors; and
5. failed to comply with an undertaking dated 2 July 2002 given to the Law Society.
2 The Society relied on Affidavits of Service of the Section 152 Notices, and a long Affidavit of Raymond John Collins that annexed 49 items of correspondence to the Solicitor and his six (6) letters in reply.
3 The Solicitor filed a Reply on 2 August 2005, then, on the morning of the hearing, an Affidavit deposing to his state of health, and gave oral evidence that raised matters of fact not raised in the Reply.
4 The Reply admitted the failure to comply with the Section 152 Notices and alleged the failure to supply either the information sought or the files and materials specified in the Notice to have been caused by the fact that the Solicitor no longer had the relevant instruction files. The Reply had attached to it, presumably in a belated attempt at explaining the failure to comply with the Notice, a statutory declaration declaring that the Solicitor longer had the files.
5 In relation to the Section 61 matter, the Reply denied wilfulness, and stated that the funds in question could not have been paid into a trust account because the Solicitor did not conduct one.
6 The Reply further partly admitted the Section 75 matter and raised facts by way of part explanation and “pleaded” the Solicitor’s serious ill health. It also admitted the failure to comply with two (2) separate undertakings, with some aspects of explanation.
7 The Solicitor’s oral evidence was the first full indication of the facts surrounding the Section 175 matter (some of which appear later in these Reasons) and that resulted in the Society (properly in our view) electing not to proceed with that claim. However the Section 61 matter was pressed, and we now turn to that.
8 The Solicitor had acted for Mrs Vidler and her husband for a very long time. They were elderly, lived near to the Solicitor’s home, and the Solicitor usually called on them at those times when personal instructions were necessary. In accordance with this custom, by appointment, on 30 August 2000, the Solicitor met with the Vidlers to resolve the completion of several conveyancing matters and to take formal instructions in a probate application, Mrs Vidler having been appointed executor of her late brother’s Will. The detail of the estate was known, and the Solicitor had been told that he would be paid in advance for the probate work when the parties met. The Solicitor took with him to the appointment a full “recital” account claiming fees in accordance with the scale, and claiming the various disbursements for advertisement, Supreme Court filing fee, real property search etc.
9 When the Solicitor met with the Vidlers he was given several cheques, in settlement of the conveyancing matters, and one specifically in payment of the probate account for which none of the work had been done.
10 It was the Solicitor’s oral evidence that he asked for the separate cheque so that he could leave it on the file and bank it when he had the work done. This is the way in which the Solicitor sought to overcome the difficulty of not having a trust account. The Solicitor appeared to accept that, had he had a trust account, it would have been proper in these circumstances to pay the funds into the trust account, and then to draw upon them as and when the work was done.
11 Subsequently, by oversight, and before the work was done, the Solicitor banked the cheque into his general account.
12 To complete the tale, the Solicitor, presumably because of his failing health, did not attend to any of the work and he was eventually asked to forward the file to another solicitor, and subsequently thereafter refunded all the funds received to the Vidlers.
13 In view of the Solicitor’s evidence relating to his then undiscovered ill health, and the effect it had upon him, we accept the Solicitor’s assertion that the cheque was banked “early” by oversight. It follows that, this being the only instance of such a failing, and being by inadvertence, the Solicitor’s actions were not wilful and so not in contravention of Section 61.
14 We heard this matter in the dying days of the 1987 Act, and so do not need to explore the detail of Section 61. We comment however that we do not make any ruling on the propriety of the proposal of simply “pinning” the cheque to the file to wait until the work was done and then to bank it. Nor do we indicate that the funds received, earmarked as they were for identified costs and identified disbursements, were in fact bound to be paid into a general trust account. The finding that the Solicitor’s actions were not wilful is sufficient to dispose of this aspect.
15 The Solicitor’s evidence was that for some years prior to 1999, and so at the time of the matters which brought him before us, he had been feeling generally unwell, and lethargic, to the point where he would rise late on weekends, and return to bed again mid afternoon. The situation got worse, not better, when he gave up smoking, and in early 2002 his GP referred him to Dr Dev Samarasinghe, a consultant hepatologist. This doctor established that the Solicitor suffered from a genetic disorder – hemochromatosis – an inability of the body to process iron which, by the time of diagnosis, had resulted in advanced liver disease, and (shortly after) Type II Diabetes. There is no cure, but, the iron retention (and so the symptoms) can be reduced by regular blood letting. The Solicitor commenced treatment, which was successful, and has returned to satisfactory energy levels. It appears that this situation will continue so long as the Solicitor continues treatment.
16 We accept the Solicitor’s evidence that he is now well enough to fully attend to his practice and accept that his previous symptoms go a long way towards explaining his conduct, so there is no need for us to consider a protective order.
17 However, the fact remains that the Solicitor by his failure to respond to the Section 152 Notices is guilty of two (2) separate counts of the statutory misconduct created by Section 152 (4).
- 152(1) For the purposes of investigating a complaint, a Council or the Commissioner may, by notice in writing served on any legal practitioner, require the legal practitioner to do any one or more of the following:
(a) to provide written information, by a date specified in the notice, and to verify the information by statutory declaration,
(b) to produce, at a time and place specified in the notice, any document (or a copy of any document) specified in the notice,
(c) to otherwise assist in, or cooperate with, the investigation of the complaint in a specified manner.
…
(4) A legal practitioner who, without reasonable excuse, fails to comply with such a requirement is guilty of professional misconduct.
18 This Tribunal has previously stated its view that the Legislature intended solicitors to fully and speedily respond to requests for information in the complaint investigation process, and underscored the seriousness of the failure to do that by creating the statutory offence. Legal Services Commissioner v Browne [2004] NSW ADT 63 and Law Society v Kekatos [2005] NSW ADT 79.
19 The Solicitor’s general ill health may have amounted to a reasonable excuse for a belated (or even an extremely belated) compliance with the Notice, but we say that those are concepts which measure in weeks or months, not years. We are satisfied that the Solicitor’s ill health did not, in all the circumstances, amount to a reasonable excuse within Section 152(4).
20 We note that, although not specifically raised as defence, but raised by way of explanation, the Solicitor indicated that by the time of receipt of the Notices he held neither of the relevant instruction files, and so could not fully and properly answer. Although, at first blush, that response may appear to give an indication of the reasonable excuse that Section 152(4) establishes, close consideration indicates otherwise. In circumstances where the Solicitor has lost control of the file, the statutory notice is complied with by the Solicitor declaring that which he does personally recall about the matter (if anything), what he is able to glean from his retained office and general records, and the fact that he cannot now refer to the file. Similarly, any demand for files or paperwork is appropriately responded to by setting out the facts that resulted in the file leaving the Solicitor’s control.
21 Had the Solicitor so responded, the Notices would have been complied with, and the statutory professional misconduct would not have been committed.
22 Incidentally, in the face of such a response, in order to properly continue its investigation, the Society could have obtained appropriate copies of the relevant papers, submitted those to the Solicitor, with a further statutory notice (perhaps almost by way of interrogatories) seeking information about that which was within those copies submitted to the Solicitor. We stress our view, that the only purpose of a Section 152 Notice is to gain information to allow an investigation to proceed, and that it is complied with by a solicitor answering as best he or she is able in view of the information available at the time of the Notice.
23 Both Notices remain unanswered to this day – the Vidler Notice dates from 26 July 2001, and the Leskovic Notice dates from 30 January 2003. It may well be the case that the information sought in the Vidler Notice was given, although not formally, in a letter of the Solicitor’s dated 29 April 2005, or alternatively, perhaps by his answers on oath in the witness box before us.
24 We were given nothing to indicate that there has been any information given in relation to the Leskovic matter.
25 We note, however, the Solicitor’s undertaking given in Court, that he would respond to the Notices within fourteen (14) days, he having been given copies of the files before the end of the hearing. We deal with the matter on the basis that the Solicitor has complied with that undertaking.
26 We note that the Solicitor has once previously appeared before this Tribunal in respect of a failure to comply with a statutory notice.
27 We note the Solicitor’s present failures to be very serious. Had it not been for the excuse of his acknowledged ill health, we would have classified those failures as extremely serious.
28 We make the same classificatory observation in relation to the Solicitor’s admitted failure to honour undertakings.
29 The Solicitor received instructions from a Ms Geaney to take over the conduct of a personal injury matter arising out of a June 1989 motor vehicle collision. Ms Geaney had originally instructed Keddies and, in accordance with the usual practice in that regard, on 14 March 1995 the Solicitor undertook to Keddies as follows:-
- “As instructed we hereby undertake on behalf of our client to pay your costs in the sum of $8,500.00 together with any unpaid disbursements at the completion of the matter”.
The disbursements appear to have been paid shortly after this undertaking, and so the only outstanding issue between the Solicitor and Keddies was the professional costs of $8,500.00.
30 The litigation was resolved in the District Court in June of 1995, but the Solicitor did not make the payment to Keddies. We were not given the full background, but it seems clear that the funds found their way to Ms Geaney before arrangements could be made for the payment of either the Solicitor’s costs, or the amount undertaken to be paid to Keddies.
31 There was correspondence from Keddies to the Solicitor in 1996, to which, the Solicitor did not respond, and then the matter “rested” for some years until October 1999 when Keddies made complaint to the Legal Services Commissioner, who in turn referred the matter to the Society. The matter was first raised with the Solicitor by correspondence of 7 December 1999. Subsequent communications resulted in a meeting at the Law Society between Mr Barraket of Keddies, Ray Collins on behalf of the Law Society and the Solicitor. An agreement was reached and reduced to writing in the following terms:-
- “To Messrs Keddies
I agree to pay $8,800.00 as follows-
$1,000.00 today (receipt is acknowledged)
$1,500.00 a month payment on 1 Tuesday of each month (first payment 18/2000)
Balance 10/11/2000
This is by way of an undertaking – I am aware that Keddies (Tony Barakat) relies on this undertaking and that it is also given by me personally to the Law Society in consideration of it taking no further action regarding complaint which shall be withdrawn by Mr Barraket upon final payment in accordance with the above schedule of payment.
Dated 5 July 2000
32 Keddies again raised the matter with the Law Society on 28 August 2001, and the matter was raised with the Solicitor on 28 February 2002. This resulted in another meeting at the Law Society on 25 July 2002 and another undertaking, this time in rather less than precise terms:-
- “I will speak to Barraket and will confirm with RJC in writing this afternoon or as soon as able to speak with Barraket”.
33 There is nothing further to indicate what happened in respect of this undertaking, but it is clear that the payment to resolve the undertaking was only made some two and a half (2 ½) years later, on 26 November 2004.
34 Another part of the 28 February 2002 undertaking read in relation to the Lescovic Section 152 Notice:
- “I will supply answers by next Wed and the full explanation as to why not previous replied to Law Society correspondence”.
35 The Solicitor’s Reply did not respond to the Section 152 aspect of the undertaking, but he did, at the hearing as above indicated, undertake to comply.
36 We again say, even making allowance for the Solicitor’s regrettable illness, there is a very serious pattern of persistent failure to honour undertakings. Mr Raphael, on behalf of the Solicitor did not seek to raise (other than the Solicitor’s state of health) any matter by way of purported explanation and acknowledged the seriousness of the conduct.
37 We view the Solicitor’s conduct in relation to the undertakings as even more serious than his conduct in relation to the Section 152 Notices.
38 Specifically, in relation to the first undertaking, we see some similarity between the Solicitor’s situation and that described in detail by this Tribunal (differently constituted) in the matter of Law Society of New South Wales v Hinde [2005] NSWADT 199. We would make, in relation to the Solicitor, the same comment as the Tribunal made:- That the failure to honour the undertakings fits comfortably within the long accepted definitions of common law professional misconduct – Alanson v General Council of Medical Education and Registration 1894 QBD750 at 768, in re Hodgekiss [1962] SR(NSW) 340 at 351 and Kennedy v Council of Incorporated Law Institute of New South Wales 1940 13ALJ 563.
39 Further there is the long established Rule of Practice 26:-
- “A practitioner who, in the course of the practitioner’s practice, communicates with another practitioner orally, or in writing, in terms which expressly, or by necessary implication, constitute an undertaking on the part of the practitioner, to ensure the performance of some action or obligation, in circumstances where it might reasonably be expected that the other practitioner will rely on it, must honour the undertaking so given strictly in accordance with its terms, and within the time promised, or, if no precise time limit is specified, within a reasonable time”.
40 Although not raised by Mr Raphael, we indicate that we see some difference between the first undertaking given Keddies, made as a simple commercial decision in the course of practice, and the two (2) later undertakings, which were, on any view of the matter, given by the Solicitor under some pressure from his professional Association. That pressure might well have excused some minor delays in compliance, but certainly could not ever excuse the persistent failures that in fact occurred.
41 Sight should not be lost of the fact, in this particular matter, that Rule of Conduct 29 obliged Keddies to hand over the instruction file to the Solicitor upon costs being secured or otherwise agreed. Seen in this light (matters of health apart) the Solicitor’s failure (in relation to the first undertaking) which was the initial agreement to pay Keddies’ costs, is even more heinous than Hind’s. The failure to honour the second and third undertakings in a timely fashion, given as they were to remedy the failure to honour the first undertaking, were just as serious, despite the pressure under which they may have been given.
42 We make it clear that, were it not for the Solicitor’s acknowledged ill health, we would have been inclined to much more strongly indicate our disapproval of his inaction.
43 Our Orders are as follows:-
- 1. That the Solicitor be publicly reprimanded.
2. That the Solicitor pay a fine of $7,000.00 within four (4) weeks.
3. Council to be at liberty to suspend any Practising Certificate held by the Solicitor if fine not paid on time.
4. That the Solicitor pay the costs of the Law Society.
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