Law Society of NSW v Martin
[2010] NSWADT 245
•15 October 2010
CITATION: Law Society of NSW v Martin [2010] NSWADT 245 DIVISION: Legal Services Division PARTIES: APPLICANT
RESPONDENT
The Council of the Law Society of New South Wales
Cameron David Charles MartinFILE NUMBER: 102012 HEARING DATES: 12 October 2010
DATE OF DECISION:
15 October 2010BEFORE: Haylen W - J (Deputy President); Currie J - Judicial Member; Hayes E - Non-Judicial Member CATCHWORDS: Solicitor - disciplinary application - professional misconduct - witnessed signatures when not present - Instrument of Consent LEGISLATION CITED: Legal Profession Act 2004 CASES CITED: The Council of the Law Society of NSW v Beverly [2008] NSWADT 251 REPRESENTATION: APPLICANT
P Boyd, solicitorINTERVENOR
RESPONDENT
Ms L Muston, Legal Services Commissioner
In personORDERS: 1.That the legal practitioner be reprimanded
2.That the legal practitioner pay a fine of $6,000 within six months from the Tribunal's findings and Orders
3.That the legal practitioner pay the Applicant's costs of the proceedings agreed in the sum of $2,500 within six months from the Tribunal's findings and Orders
4.In default of compliance by the legal practitioner with either of the preceding Orders, the Applicant be at liberty to suspend the legal practitioner's practising certificate or take such other action against him as permitted by the Legal Profession Act 2004
REASONS FOR DECISION
1 Cameron David Charles Martin ("the respondent practitioner") was admitted to practice as a solicitor in December 1995 and has held a Practising Certificate since that date.
2 In late June 2009, the Legal Services Commissioner determined to initiate a complaint against the respondent practitioner pursuant to the provisions of 504 of the Legal Profession Act 2004. The complaint was that the practitioner had falsely witnessed the execution of documents. The particulars of that complaint were as follows:
A. In the first half of 2006 the practitioner acted as a solicitor for Jill Therese Woulfe in the purchase of a property ("the Woulfe property").
B. On 15 December 2006 the practitioner purported to witness the signature of Jill Therese Woulfe on each of the following documents (collectively "the Woulfe mortgage documents"):
-a mortgage of the Woulfe property granted by Jill Therese Woulfe in favour of Oakland Investments (Aus) Ltd;
-a document entitled "Declaration by Borrower (Schedule 1 to the Solicitor's Rules)";
-A document entitled "Loan Repayment Declaration by Borrower";
-a document entitled "Acknowledgement, Authority, Directions and Undertaking";
-a document entitled "Acknowledgement of Legal Advice by Borrower (Schedule 4 Part 1 to the Solicitor's Rules)".
C. The signatures on the Woulfe mortgage documents purporting to be those of Jill Therese Woulfe are forgeries. Ms Woulfe did not execute these documents. The practitioner did not witness her signatures.
3 The Legal Services Commissioner duly referred the complaint to the Council of the Law Society of New South Wales ("the Council") to investigate. In April 2010, as a result of the Society's investigation of the complaint, the Council resolved to refer the matter to the Tribunal. The Application for Original Decision filed in June 2010 alleged professional misconduct in that the respondent practitioner had falsely witnessed the execution of documents and the following orders were sought:
1.That the name of the legal practitioner be removed from the Roll.
2.That the legal practitioner be fined.
3.That the legal practitioner pay the costs of the Society as agreed or assessed.
4.Such further and other orders as the Tribunal deemed appropriate.
4 The respondent practitioner's Reply to this Application admitted that he had falsely witnessed the execution of the documents but stated that conduct had occurred against the background where he had acted for Ms Woulfe in relation to an earlier proposed mortgage to be secured over her property. His actions in falsely witnessing the execution of documents occurred with the intention of assisting, rather than deceiving, Mrs Woulfe and he was unaware that the signatures purporting to be those of Ms Woulfe were in fact forgeries. At all times he firmly believed that Ms Woulfe had in fact executed the documents. The respondent practitioner also sought an opportunity to present evidence and submissions in mitigation of the matters and orders sought by the Council.
5 Shortly before the Application was listed for hearing, the Tribunal was notified that an Instrument of Consent had been executed in accordance with the provisions of s 564 of the Legal Profession Act. At the commencement of the hearing before the Tribunal that Instrument of Consent was tendered. The Instrument of Consent proceeded on the basis that the Tribunal, by consent, would make a finding that the conduct of the respondent practitioner amounted to professional misconduct and that the following orders should be made:
1.That the legal practitioner be reprimanded.
2.That the legal practitioner pay a fine of $6,000 within six months from the Tribunal's findings and Orders.
3.That the legal practitioner pay the Applicant's costs of the proceedings agreed in the sum of $2,500 within six months from the Tribunal's findings and Orders.
4.In default of compliance by the legal practitioner with either of the preceding Orders, the Applicant be at liberty to suspend the legal practitioner's Practising Certificate or take such other action against as permitted by the Legal Profession Act 2004.
6 In submissions to the Tribunal the respondent practitioner accepted full responsibility for his actions, expressing both his contrition and his firm intention not to conduct himself in a similar manner in the future. The respondent practitioner submitted an affidavit dealing with the circumstances in which he had acted for Ms Woulfe and how he had come to execute the mortgage documents that were the subject of the complaint. The affidavit, by and large, set out matters that had been disclosed to the Police during their investigation of the fraudulent activities of a mortgage broker known to both the respondent practitioner and Ms Woulfe.
7 In his affidavit the respondent practitioner explained the contact he had made with a mortgage broker, a person who had dealings with his firm and clients of the firm as well as being a client of the firm herself. The respondent practitioner also had the mortgage broker perform personal mortgage arrangements for him and his wife and she had also personally advanced money to the respondent practitioner in circumstances where building products needed to be purchased and paid for when funds were otherwise unavailable. It was in these circumstances that the respondent practitioner became acquainted with the mortgage broker.
8 In approximately February 2006, the respondent practitioner was engaged by Ms Woulfe to act on her behalf in relation to the purchase of a property. At the same time Ms Woulfe had proposed to obtain mortgage finance in case money from her mother's estate did not become available in time to cover the purchase of the property. The respondent practitioner persuaded Ms Woulfe not to take that course in view of unnecessary costs that may be incurred and convinced her that there were other means of obtaining smaller amounts of money if, indeed, they were required. Apparently, Ms Woulfe accepted that advice. Ultimately, the property was purchased without the need for mortgage or other loan assistance.
9 In 2006, just prior to Christmas, the mortgage broker attended the respondent practitioner's office and informed him that Ms Woulfe was borrowing some money against her house and that she had some loan documents for Ms Woulfe to be completed. She explained to the respondent practitioner that Ms Woulfe could not attend his practice because of work commitments but needed the documents to be completed quickly. There was said to be some embarrassment experienced by Ms Woulfe in seeking these mortgage funds when she had earlier been persuaded by the respondent practitioner not to proceed with mortgage arrangements. Although the respondent practitioner asked when he could see Ms Woulfe in relation to executing the documents, the mortgage broker informed him that Ms Woulfe had already signed the documents and she merely needed him to witness them. This had occurred because of the short time available to complete the arrangements and the unavailability of Ms Woulfe. The respondent practitioner looked at the documents and was satisfied that Ms Woulfe had signed them and because he wished to assist Ms Woulfe, he witnessed her signatures on the documents. Within the next few days further arrangements were made by the mortgage broker concerning these documents. It later became apparent that these arrangements were all designed to facilitate the mortgage monies being paid into the mortgage broker's personal account and not to Ms Woulfe.
10 Shortly after Christmas the mortgage broker contacted the respondent practitioner and indicated that she was under investigation by the Fraud Squad, that her accounts had been frozen and the mortgage money advanced in relation to Ms Woulfe's property had been diverted to the personal account of the mortgage broker. The respondent practitioner denied any knowledge or involvement in the fraud perpetrated by the mortgage broker and now understanding the seriousness of his own conduct in witnessing Ms Woulfe's signature in her absence, contacted the Police and duly provided investigating Police with a full statement.
11 The Police ultimately charged the mortgage broker with fraud in relation to a number of mortgage transactions and investigating Police accused the respondent practitioner of knowingly taking part in that fraud. He explained to the Police that Ms Woulfe's signatures on the mortgage documents were not known to him to be forgeries. Following a referral by the Director of Public Prosecutions, the respondent practitioner then became the subject of ongoing Police investigations. The Police and the Council conducted investigations in relation to the respondent practitioner and his law firm. At the end of the Police investigation, the Police referred the matter to the Council to conduct a full audit of the respondent practitioner's firm, books and records. An audit was conducted on behalf of the Council resulting in no evidence being uncovered that the respondent practitioner had personally benefited from a fraud nor was knowingly complicit in the fraudulent activities of the mortgage broker. The Council's auditor stated that the respondent practitioner was induced, by deception, to falsely witness forged signatures in circumstances where the person who was to sign the mortgage documents was not present.
12 As a result of the fraud of the mortgage broker, the mortgagee had paid over $151,000 into her account but that amount was repaid to the mortgagee following Supreme Court proceedings to recover that sum. The respondent practitioner paid the mortgagee's costs of those proceedings in the sum of more than $19,000. He expressed the view that, had the mortgagee been unable to recover the funds from the mortgage broker, he had no doubt that the mortgagee would have looked to him for more than just the costs of the proceedings.
13 The respondent practitioner asserted on a number of occasions that he was never part of the fraud and had received no benefit from its perpetration against Ms Woulfe or any other parties. While he had never claimed that his hands were clean in the matter, his actions were to witness signatures that, unbeknown to him, had been forged by the mortgage broker and he had not taken any further part in the matter. He had not known that they were forged documents and he had made proper enquiries as to why Ms Woulfe was unable to see him but then had failed in his judgment and trust of the mortgage broker by proceeding with the matter. He spoke of learning his lesson in this matter and how his trust in the mortgage broker had been misplaced even though, at the time, he had considered her a friend and a working colleague. His desire to assist Ms Woulfe was poorly judged and he asserted that he would never again witness a signature to documents unless he was in the presence of the person signing them and only then, if he was confident of their identity. During the last twelve months he had been asked by a client to witness a signature in their absence and had firmly but politely declined to do so. He understood that his actions could have caused substantial upset and damage to Ms Woulfe and the financial damage could have been far more extensive had the Police not stepped in when they did. By providing these explanations he did not seek to belittle the seriousness of the matter or be dismissive of its importance but wished to emphasise he had learned a very expensive lesson, both financially and emotionally.
14 The respondent practitioner asked for the following matters to be taken into account in mitigation:
(a)Ms Woulfe did not suffer any loss or damage;
(b)he had previously acted for Ms Woulfe, to her satisfaction, and had actively dissuaded her from taking up the loan through the mortgage broker at a time when it was obviously unnecessary;
(c)the Council's audit of his firm concluded that his actions were induced by deception;
(d)he was honest and forthcoming with the Police as part of their investigation;
(e)his actions were based on a wish to assist his client, Ms Woulfe, in circumstances where he thought his previous action in dissuading her from taking a mortgage had embarrassed her and had led her not to be present when signing the new mortgage documents;
(f)he had already paid $19,000 to ensure that nobody else had suffered from his actions and he did not benefit from his actions or from the fraud;
(g)there was no evidence that he had taken part in the fraud and there could be no such evidence and he asserted that he had not knowingly taken part in the fraud;
(h)he was more than willing to apologise to Ms Woulfe either in writing or in person.
15 The Tribunal has given close consideration to the circumstances of this matter. The respondent practitioner appeared in person and made further submissions based on his affidavit. Consideration of the appropriateness of the Orders was assisted by submissions made on behalf of the Council and the Legal Services Commissioner and by reference to recent reports regarding practitioners dealt with for similar conduct, resulting in fines being imposed. In the matter of Beverley [2008] NSWADT 251, where the respondent practitioner had witnessed a signature in the absence of the person, the Tribunal stated:
The solicitor's role in this process is highly significant, with parties and Courts relying upon such attestations. While there was an attempt to categorise Mr Beverly's action as a result of doing a good client a favour, it must be stated that his action strikes at the very core of the role of a solicitor and his conduct would be regarded within the profession as disgraceful or dishonourable.
16 The Tribunal regards the conduct of the respondent practitioner as constituting professional misconduct. Although there are mitigating circumstances, the conduct represents a serious breach of the standards demanded and expected of a legal practitioner. While the Tribunal has accepted the level of fine proposed by the parties, it clearly represents a penalty at the lower end of the range. Having regard to those matters, the Tribunal concludes that no further inquiry is required in relation to the matter and that the Consent Orders are appropriate.
17 For the reasons referred to above, the Tribunal makes the following orders:
1.That the legal practitioner be reprimanded.
2.That the legal practitioner pay a fine of $6,000 within six months from the Tribunal's findings and Orders.
3.That the legal practitioner pay the Applicant's costs of the proceedings agreed in the sum of $2,500 within six months from the Tribunal's findings and Orders.
4.In default of compliance by the legal practitioner with either of the preceding Orders, the Applicant be at liberty to suspend the legal practitioner's practising certificate or take such other action against him as permitted by the Legal Profession Act2004.
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