Law Society of NSW v Markovski

[2009] NSWADT 92

CITATION:	Law Society of NSW v Markovski [2009] NSWADT 92
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Law Society of New South Wales RESPONDENT Norma Markovski
FILE NUMBER:	082027
HEARING DATES:	6 March 2009
SUBMISSIONS CLOSED:	6 March 2009
DATE OF DECISION:	4 May 2009
BEFORE:	Molloy G - Judicial Member; Currie J - Judicial Member; Tingle J - Non-Judicial Member
CATCHWORDS:	Solicitor – Disciplinary application
CASES CITED:	Law Society of NSW v Paling [2008] NSWADT 344
REPRESENTATION:	APPLICANT P Boyd, solicitor RESPONDENT B Levet, barrister
ORDERS:	1.The Solicitor is reprimanded 2.The Solicitor shall, within 8 months of being granted a Practising Certificate, [“the specified period”] undertake and pass [with a mark of not less than 50%] a course in ethics as approved by the Manager of the Professional Standards Department of the Law Society of New South Wales [“the Manager”] and as then conducted by the College of Law. In the absence of a suitable course being conducted by the College of Law, the Manager shall nominate a similar course to be undertaken. Such course must be undertaken personally 3.Should the solicitor fail to comply with Order 2 within the specified period, any Practising Certificate then issued to the solicitor shall be cancelled forthwith upon the expiration of the specified period, and no further Practising Certificate may be issued until such time as the said course has been completed and passed 4.For a period of five (5) years from the date of this Order and during which the Solicitor again holds a Practising Certificate [“the period”], a Practising Certificate be issued to the Solicitor which shall be endorsed with the following conditions: a)The Solicitor’s right to practice is restricted to that of an employee of a Solicitor holding an Unconditional Practising Certificate b)The Solicitor is not to have access to or be signatory to or operate any account conducted by her employer or client of her employer with any financial institution c)The Solicitor is to bring to the attention of her then employer the Tribunal’s Determination in these proceedings and permit the Manager, in his discretion, to confirm with the Solicitor’s then employer that he or she is fully conversant with such Determination.

1 By Application for Original Decision filed 30 October 2008 the Applicant Law Society sought the following Orders be made against the Respondent Legal Practitioner:

1. That the name of the solicitor (Respondent) be removed from the Roll of Local Lawyers.

2. That the solicitor play the Applicant’s costs of the proceedings.

3. Such further or other Orders as the Tribunal deems appropriate.

2 The gravamen of the application was that the Respondent was guilty of professional misconduct in that she:

1. Acted for Argyrios Tsantilis and Aspasie Tsantilis (together called “Tsantilis”) on a loan made to them of which they had no knowledge.

2. Purporting to witness the signatures of Argyrios Tsantilis (Mr Tsantilis) and Aspasie Tsantilis (Mrs Tsantilis) on a Statutory Declaration dated 6 September 2005 when such persons did not sign in her presence.

3. Purporting to witness their signatures as applicants for a new Certificate of Title when such persons did not sign in her presence.

4. Purporting to witness the signature of Mr Tsantilis on a Statutory Declaration dated 8 September 2005 when the Respondent did not so do.

5. Signing Certificates of Independent Legal Advice dated 8 September 2005 knowing them to be false.

6. Purporting to witness the signatures of Mr & Mrs Tsantilis on a Statutory Declaration dated 8 September 2005 when she did not so do.

The Facts

3 The Respondent did not file any Reply or Response by way of defence or confession and avoidance or admission. Rather, the Respondent appeared at the hearing date 6 March 2009 with her counsel and announced, through her counsel, that she “concedes all allegations of fact made by the Society and she concedes that her conduct amounts to professional misconduct (and that the) only issue is the issue of dispositive orders”.

4 All facts having been conceded it is appropriate to set them out, in encapsulated form, but observing that notwithstanding the concession by the Respondent practitioner the ultimate decision on whether the facts as conceded/proved constitute professional misconduct is that of the Tribunal. Indeed, it is now trite law that a plea of “guilty” does not absolve a court or tribunal of actually being satisfied that the facts as proven are in fact sufficient to ground the plea; such that, for example, a practitioner may well come before the Tribunal and concede all the facts and concede that his/her conduct amounts to professional misconduct but the Tribunal may well be of a different view having heard and considered the facts and all the material put before it. That all having been said, however, the facts in this matter, as proven and considered, do indeed amount to professional misconduct.

5 In encapsulated form the facts are as follows:

1. The Respondent was consulted by a Helen Tsantilis, the daughter of Mr & Mrs Tsantilis, with a view to obtaining a loan from Liberty Funding Pty Limited to be secured by a mortgage over property (“the property”) owned by Helen Tsantilis and Mr & Mrs Tsantilis. It appears that Helen Tsantilis had been referred to the Respondent by a finance broker.

2. Helen Tsantilis said to the Respondent: “I want you to act for me. I am borrowing $215,000.00 from a company called Liberty Finance. I have arranged it through a broker. It is going to be secured against a property I own as tenants-in-common with my parents …. I need you to give my parents independent legal advice about the mortgage. I will be getting the mortgage from the brokers over the next few days”. The Respondent responded: “When you have the mortgage bring you parents in to see me and I will explain it to them and they can sign it in front of me after I have explained it to them.” Helen Tsantilis then said: “I have another problem too. We can’t find the Certificate of Title. It is at home somewhere and we have looked for it and we can’t find it. I need to get a new original title from the Land Titles Office. Can you help me with that?” Thus far, nothing particularly remarkable.

3. The Respondent then prepared an application for a new Certificate of Title. She handed that document to Helen Tsantilis and said: “You will need to get your parents to sign it and you will need to sign it and you will need all your signatures witnessed by a Justice of the Peace.” Helen Tsantilis then took that Application with her.

4. The Application for a new Certificate of Title is in the normal form, shows the registered proprietor as Mr & Mrs Tsantilis and Helen Tsantilis; the Applicant as Mr & Mrs Tsantilis and Helen Tsantilis and was accompanied by a form of Statutory Declaration to be declared by all applicants who would declare, on oath, that they had “made a thorough search … and have been unable to find the Certificate of Title”; that they were “the only persons in possession of the land”; that the title document was “not held by any person or corporation as security for a loan or for any other purpose whatsoever”; that they had “never been bankrupt or insolvent and (had) not assigned (their) estate for the benefit of creditors” and so on. Again, fairly unremarkable.

5. On or about the following day 6 September 2005 Helen Tsantilis came back to see the Respondent. She handed to the Respondent the Application for a new Certificate of Title – on that document there were two signatures which purported to be those of Mr & Mrs Tsantilis, such signatures being not witnessed. The Respondent said: “I cannot accept these documents. You have to bring your parents here” and Helen Tsantilis replied: “They can’t come. They are about to go on a trip to Greece. They are running around doing their final preparations” or words to that effect. Helen Tsantilis then said: “I have brought lots of documents with their signatures on them. I have their old passports and drivers licences with their signatures and you may compare them”. The Respondent said: “No, I can’t. They have to be here.” Then Helen Tsantilis started crying and said: “I am in big trouble if I can’t get the finance immediately. I owe a lot of money and if I can’t get this signed today they are going to bankrupt me”. Pausing at this point the use of the first person should perhaps put the Respondent on notice that the loan was not a loan to all three owners but rather to Helen Tsantilis only. It is easy to be wise after the event but, looking at the matter dispassionately and having regard to all the facts then before the Respondent, that conclusion should have been self-evident.

6. The Respondent then looked at the Application form and the specimen signatures, formed the opinion that they “appeared to be identical”, and believed Helen Tsantilis what she had told her that the signatures were those of her parents. Because Helen Tsantilis “appeared very distressed” the Respondent “weakened” and said: “I shouldn’t do this. OK. You sign the documents and I will witness your signature. The Respondent admits that she knew she “should not be doing it” but because Helen Tsantilis “appeared very distressed” she wanted to help her.

7. The Respondent then observed Helen Tsantilis sign the Application for New Certificate of Title (prepared by her) and a number of other documents in relation to the loan from Liberty Finance. These other documents had also been apparently signed by Mr & Mrs Tsantilis, including, for example, a Clients’ Certificate to the effect that the client had been handed a copy of a Certificate of Independent Legal Advice, that the client had “read this Certificate” and that the information contained in it was true; an acknowledgement of legal advice of the proposed borrowers Mr & Mrs Tsantilis, all duly completed and apparently signed; an acknowledgment by Mr & Mrs Tsantilis to the Respondent as “Certifying Solicitor”; a Declaration by Borrower in the form of a Statutory Declaration which, importantly, declared that Mr & Mrs Tsantilis had “received independent legal advice regarding the loan and security documents” and that they had “freely and voluntarily” signed the mortgage, a Direct Debit Request and a Consumer Loan Agreement.

8. The important point is this: the Respondent as solicitor:

a) witnessed the signatures purporting to be those of Mr Tsantilis and Mrs Tsantilis on the Application for New Certificate of Title;

b) witnessed the signatures of Mr and Mrs Tsantilis on the Statutory Declaration in support of the Application for the New Certificate of Title;

c) witnessed the signatures of Mr and Mrs Tsantilis on the mortgage over the property;

d) provided a signed Certificate of Independent Legal Advice certifying that she, the Respondent, had interviewed Mr and Mrs Tsantilis (respectively), had explained to each of them the documentation and the default provisions, certified (in each case) that the co-borrower “was not present during my interview with the borrower”;

e) completed the Form of Acknowledgement by Debtor to the Certifying Solicitor;

f) witnessed the signatures of Mr & Mrs Tsantilis to the Statutory Declaration by borrower;

all in circumstances where at no point of time was the Respondent instructed by Mr or Mrs Tsantilis, saw Mr or Mrs Tsantilis, ever witnessed their signatures, ever took their oath under the various statutory declarations, nor gave them independent legal advice.

6 It is plain to us, and the authorities on the point are quite clear, that the actions taken by the Respondent constitute professional misconduct.

Subsequent Action

7 The Respondent gave evidence to the effect that after Helen Tsantilis took all the “witnessed” documents, she “became very concerned about what I had done. Over the next few days I was very worried. I could not sleep and could not think anything else. I telephoned Liberty Finance twice, intending to tell them what I had done and stopping the transaction, but on each occasion my courage failed me and I could not bring myself to tell them what I had done. I accept that I should have done so and I am ashamed that I did not”.

The Hearing

8 All facts having been conceded and it being plain that the conduct amounted to professional misconduct, the Tribunal drew to the attention of the parties that it was usual, in matters of this nature, if a practitioner pleads to a complaint which unarguably amounts to professional misconduct, and seeks leniency in respect of that (ie an order not requiring his or her name to be removed from the Roll), that practitioner normally gives oral evidence. The Tribunal observed that “it would be … inappropriate, and the Tribunal may well fall into error, in not encouraging that to happen”.

9 Although there was not the slightest indication in this case that the Respondent did not wish to give oral evidence the Tribunal wishes to observe that it has been the experience of this Tribunal, in the past, that sometimes the bald facts as asserted by the Law Society are sometimes not as grave and serious when one looks at it from the point of view of the practitioner, the surrounding circumstances, mitigating factors and the like; such that the failure by a practitioner to give oral evidence may well result in more severe dispositive orders than might otherwise be the case had the practitioner given oral evidence. Consequently, the Tribunal encourages  strongly encourages  practitioners to give oral evidence even when they think it is all quite hopeless. Practitioners should not be discouraged but rather encouraged to give oral evidence, and thus the Tribunal will be more than au fait with all the circumstances surrounding the matters in issue and will be able to present a more considered decision which, in the wash up, may be more advantageous to the practitioner than had the practitioner sat silent.

10 The Respondent here voluntarily and willingly gave oral evidence and was subject to quite robust cross-examination.

11 Her oral evidence however was quite clear: at T19 she stated: “What I (did) is morally wrong. It’s legally wrong and it’s wrong. It’s unethical and I accept that from the very beginning and the moment I phoned the Liberty Finance I knew this is the end of my career”. She accepted that she could have consulted somebody, sought advice and she “was alone” and the only thing she could think of was that she was “finished, I am done”.

12 When asked why she did not tell Liberty Finance she accepted (at T13) that she “had a failure of courage … I did not have the courage to say it because I know I have done it and I thought at the time there was no more remedy for my actions. I knew then that it was very wrong”.

13 It was put to her by the Presiding Judicial Member (T25) that she could have made enquiry of one of the solicitors on the Senior Solicitor’s Scheme, or someone from the Law Society, but she stated, “I was too scared … I couldn’t think … I knew I’ve done a gross misconduct and I could not discuss it (with) anyone, not (with) anyone … I just keep it to myself …”.

Consequences

14 The consequences for this Respondent practitioner have been devastating. There is absolutely no doubt on the evidence that she is, not only totally mortified and contrite and clearly recognises the seriousness of what she had done, but the consequences for her life have been catastrophic. Not only did she have “a failure of courage” but she became “isolated and … ashamed of what I’ve done especially in the legal profession and the bar, my friends (and) my colleagues”. She agreed that her friends and colleagues had not shunned her but that she had “been too ashamed and embarrassed to find (herself) in their company”. She was frightened to open mail, often did not answer the telephone, “basically just try to ignore it and hope it would go away for a while”, “found the whole experience, extremely embarrassing and humiliating” such that she “saw no way out of the predicament that (she was) in”; and said “I feel a deep sense of shame as a result of my conduct and a sense of worthlessness”. She “discussed the possibility of killing (herself) such that a mental health intervention team came and saw her from St Vincent’s Hospital and she was referred to the Canterbury Area Health Service – that intervention and professional assistance was successful and she now no longer feels like wanting to kill herself.

15 However, as a result of her conduct, she was sued by Mr & Mrs Tsantilis, a Judgment as entered against her in a sum in the order of $225,000.00; the Law Society Fidelity Fund has apparently paid out a substantial sum and she has been declared bankrupt. In addition, her Practicing Certificate was suspended on 23 November 2006, she has not worked since then (other than an odd job or two), lives in rented accommodation and is in receipt of a Centerlink benefit and a sickness benefit.

Dispositive Orders

16 There is no doubt that the personal and professional life of this Respondent have been severely negatively impacted as a result of her unprofessional conduct. It would not be unfair to hazard that she was close to resignation that her Practicing Certificate would be taken away from her. Clearly, however, her mental position has taken a turn for the better. She appeared with counsel; she gave oral evidence; she was cross examined; and in the view of this Tribunal performed in giving evidence in a more than adequate way. The Tribunal is of the opinion that she has shown appropriate contrition, is genuine and, but subject to what follows, has learned her lesson. This is not a case where her Practicing Certificate should be taken from her.

17 The Respondent is aged 59. She was born in 1949 in the Philippines, the sixth of nine children. She studied commerce at the College of Commerce in the Philippines and graduated in 1969 with a Bachelor of Science in Commerce. She worked as a clerk in the Budget Commission in Manila and in 1974 was promoted to the position of Junior Budget Analyst. On 17 February 1975 she migrated to Australia and thereafter had a number of jobs, in particular a clerical job with the NSW Department of Labour and Industry, remaining with that Department until 1989 and finally occupying the position as the Senior Legal Clerk in the Prosecution Branch.

18 The Respondent married on 23 January 1977 and has two children. On 13 November 1989 WorkCover took over the prosecutory functions of the Department of Labour and Industry and the Respondent became a Senior Legal Clerk in the WorkCover Legal Services Branch, where she remained until 31 March 1999.

19 She wanted to better herself. In 1993 she commenced law studies at the University of Technology Sydney on a part-time basis, transferring to the University of New England in 1995 where she graduated with a Bachelor of Laws in March 1999. Thereafter she attended the College of Law and was admitted as a solicitor on 27 August 1999.

20 Thereafter she obtained a number of employed solicitor positions until September 2002 when she commenced practice on her own account as a sole practitioner. The practice was not that financially successful. However the Respondent undertook a “considerable amount of pro-bono legal work”, refugee advocacy and was involved in a number of charitable and community activities. She continued to practice as a sole practitioner until the events in question which took place in early September 2005.

21 Before proceeding further it is important to remember that this Respondent did not come to notice in any respect until this single event arising out of her contact with Helen Tsantilis. There is absolutely no doubt in our mind that Helen Tsantilis was a fraudster and conned (if that is the right word) or duped the Respondent by totally misleading her in circumstances where it can be clearly inferred that the signatures of Mr and Mrs Tsantilis on the documentation were forged by Helen Tsantilis. It is odd, to say the least, that Helen Tsantilis has apparently not been charged with any criminal offence. The evidence is absolutely overwhelming in or to the effect that Mr and Mrs Tsantilis did not sign the documents in question, that Helen Tsantilis put the documents forward as being signatures of her parents and thereby persuaded the Respondent to, not only witness the signatures, but also to fraudulently provide the Certificates and the Statutory Declarations. In this regard, and on the evidence before us, the Respondent was gullible and put aside her commonsense and her professional duties but in circumstances where she was clearly misled by an expert. Gullibility is not a crime – the financial world would be bereft of players if it were – but putting aside one’s professional ethics and responsibility, even in highly persuasive situations, only results in disaster, as this Respondent has found out.

22 The Law Society has strongly advocated that the Respondent’s name be removed from the Roll. The Society has, and quite correctly, been very critical of the Respondent, noting that in the whole transaction the Respondent never met Mr or Mrs Tsantilis, never had their instructions, could not possibly have been satisfied as to the content of the documentation or their knowledge of it; but, importantly, submitted that the Respondent could perhaps, “be given the benefit of the doubt so far as the mortgage documentation is concerned, but when you look at the whole transaction, over a series of days, surely it tips it over to (the) orders as sought. Nothing short of the practitioner’s name being removed from the Roll is appropriate”. The Society strongly submitted that (as we understood it) the Respondent was less than honest in not declaring upfront that she had prepared the Statutory Declaration in support of the Application for new Certificate of Title. Quite frankly, we do not put much store in that simply because we would have regarded that document as part of the process for obtaining a new Certificate of Title. The Law Society submitted that the Respondent’s failure to refer to the Statutory Declaration was not a “complete and truthful account as to what occurred from the moment instructions were given in relation to a mortgage, the sham application for a Certificate of Title …”. But we are rather of the contrary view and accept that the Respondent has in fact been honest and truthful in her account for the reasons we have indicated.

23 Counsel for the Respondent submitted that “the ultimate purpose of all punishment is the protection of society and the ultimate purpose of anything (the Tribunal does) today has to be for the protection of society …”; that the Respondent was naive and gullible but that the evidence demonstrated that “it is most unlikely ever to happen again”. There is no doubt that the Respondent has been declared bankrupt, humiliated, embarrassed, financially ruined and there was some suggestion that the Respondent wished somehow to make financial amends.

24 Counsel proposed:

1. That the Respondent be suspended from practice, that the suspension be backdated to the date of her original suspension and finish on a date either now or not too far hence.

2. That she thereafter be entitled to apply for a Practicing Certificate under certain conditions.

3. That those conditions entitle her to hold any a restricted Practicing Certificate, and that she be not permitted to make an application for an unrestricted Practicing Certificate without an order of the Court.

4. That prior to issue of a restricted Practicing Certificate she supply to the Law Society a medical report from a qualified psychiatrist indicating that her mental health “was sufficient” for her to practise.

5. Finally, that she be “not permitted to witness any document”.

25 This Tribunal is of the opinion, having considered all the evidence and seen the Respondent in the witness box and listened carefully to what she said, and the submissions of counsel for both parties, that this is not a case where the name of the Respondent should be removed from the Roll. Rather, it is a case of fashioning some orders and directions that will enable this Respondent to re-enter the ranks of practicing solicitors in comfortable satisfaction that she has seen the error of her ways and that she will become, once again, a useful member of the legal profession. After all, had it not been for the events in question, this Respondent, having been in practice since 1999 would, on probabilities, have continued in practice without coming to notice. In our view what happened here is an aberration but does demonstrate a degree of gullibility which we feel has been cured by the suspension of her Practicing Certificate, what has happened to her subsequent to the events in question, and these proceedings. Furthermore, the unchallenged medical/psychiatric evidence demonstrates that the Respondent has overcome her initial, and understandable, problems such that no orders are necessary in that respect.

26 The Tribunal adopts, with respect, the principles enunciated in Law Society of NSW v. Paling [2008] NSWADT 344 at [92]-[98].

27 The following Orders will, we think, serve to protect the public and, at the same time, allow this Respondent to re-enter the ranks of practicing legal practitioners:

1. The Solicitor is reprimanded.

2. The Solicitor shall, within 8 months of being granted a Practising Certificate, [“the specified period”] undertake and pass [with a mark of not less than 50%] a course in ethics as approved by the Manager of the Professional Standards Department of the Law Society of New South Wales [“the Manager”] and as then conducted by the College of Law. In the absence of a suitable course being conducted by the College of Law, the Manager shall nominate a similar course to be undertaken. Such course must be undertaken personally.

3. Should the solicitor fail to comply with Order 2 within the specified period, any Practising Certificate then issued to the solicitor shall be cancelled forthwith upon the expiration of the specified period, and no further Practising Certificate may be issued until such time as the said course has been completed and passed.

4. For a period of five (5) years from the date of this Order and during which the Solicitor again holds a Practising Certificate [“the period”], any Practising Certificate so held, a Practising Certificate be issued to the Solicitor which shall be endorsed with the following conditions:

a) The Solicitor’s right to practice is restricted to that of an employee of a Solicitor holding an Unconditional Practising Certificate.

b) The Solicitor is not to have access to or be signatory to or operate any account conducted by her employer or client of her employer with any financial institution.

(c) The Solicitor is to bring to the attention of her then employer the Tribunal’s Determination in these proceedings and permit the Manager, in his discretion, to confirm with the Solicitor’s then employer that he or she is fully conversant with such Determination.

28 The Tribunal is not minded to make an Order that the Respondent pay the costs of the Law Society as agreed or assessed, not because the Law Society is not so entitled but rather because, if this Respondent, at her age, is to re-enter the ranks of practising solicitors and make a fist of her employment she needs to have the opportunity to somehow dig herself out of the personal and financial hole in which she now finds herself and a costs order would only serve to dig a deeper financial hole from which she would be unlikely to ever emerge.

Orders:

1. The Solicitor is reprimanded.

2. The Solicitor shall, within 8 months of being granted a Practising Certificate, [“the specified period”] undertake and pass [with a mark of not less than 50%] a course in ethics as approved by the Manager of the Professional Standards Department of the Law Society of New South Wales [“the Manager”] and as then conducted by the College of Law. In the absence of a suitable course being conducted by the College of Law, the Manager shall nominate a similar course to be undertaken. Such course must be undertaken personally.

3. Should the solicitor fail to comply with Order 2 within the specified period, any Practising Certificate then issued to the solicitor shall be cancelled forthwith upon the expiration of the specified period, and no further Practising Certificate may be issued until such time as the said course has been completed and passed.

4. For a period of five (5) years from the date of this Order and during which the Solicitor again holds a Practising Certificate [“the period”], a Practising Certificate be issued to the Solicitor which shall be endorsed with the following conditions:

a) The Solicitor’s right to practice is restricted to that of an employee of a Solicitor holding an Unconditional Practising Certificate.

b) The Solicitor is not to have access to or be signatory to or operate any account conducted by her employer or client of her employer with any financial institution.

c) The Solicitor is to bring to the attention of her then employer the Tribunal’s Determination in these proceedings and permit the Manager, in his discretion, to confirm with the Solicitor’s then employer that he or she is fully conversant with such Determination.