Law Society of South Australia v Nicholson (No 2) No. Scciv-03-1727

LAW SOCIETY OF SOUTH AUSTRALIA v NICHOLSON (NO. 2)
[2004] SASC 148
Civil
GRAY J:
Introduction

On 19 March 2004 the Law Society of South Australia applied for an order suspending Gregory Charles Nicholson from practising as a public notary. In the alternative an order was sought that he be struck off the roll of public notaries. The Society sought to invoke the inherent jurisdiction of the Court.
On 5 December 2003 this Court made an order suspending Mr Nicholson’s legal practitioner’s practising certificate. The suspension was made in the exercise of the court’s inherent jurisdiction. The evidence before the court established a prima facie case that Mr Nicholson had engaged in conduct that constituted a marked departure from the proper professional standards of conduct required of the legal profession. This conduct included:
-       a misuse of trust monies;
-       a failure to keep proper trust account records;
-       practising without compulsory professional indemnity insurance; and
-practising after he had indicated to the Law Society that he would cease practising.
This conduct was addressed in published reasons of 14 January 2004. The following conclusions were reached: [1]
The evidence before the court established serious departures from proper professional standards. It was appropriate that an order for suspension be made immediately. The order was necessary to protect the public. In this way public confidence in the profession can be maintained. As the matter has proceeded on an interlocutory basis it was appropriate that the practitioner and the Society be granted liberty to apply on short notice to vary the orders made. The interlocutory order may need to be revisited following the resolution of the disciplinary proceedings that have more recently been commenced.
For these reasons the legal practitioner’s practising certificate of Gregory Charles Nicholson was suspended until further order.
[1] Law Society v Nicholson (2004) 232 LSJS 164 at 169-170
Inherent Jurisdiction of the Court
The Duties and Obligations of Public Notaries
Public notaries may be described as ‘officer’s of the law’.[2] The Court has the power to appoint public notaries pursuant to section 91 of the Legal Practitioners Act 1981 (SA). It is also given powers to discipline public notaries.[3]
[2] J Charlesworth, Brooke Treatise on the Office and Practice of a Notary in England (9^th ed, 1939)
[3] For example, section 93(3) of the Act requires the Court to strike off a notary public who is also legal practitioner who has been struck off.
The duties and obligations of public notaries and legal practitioners overlap, so much so that it is generally accepted that a person who is not a legal practitioner should not be appointed as a public notary except in exceptional circumstances.[4] It is imperative that public notaries maintain high standards in order to maintain public trust and confidence in the office.
[4] Re Application by Bos to be a Public Notary (2003) 230 LSJS 27
In Re Application by Bos to be a Public Notary[5] Debelle J provided a detailed account of the history of the position of public notary. In particular, he highlighted the existence of the parallel duties of legal practitioners and public notaries. Indeed, it has been suggested by both English and Australian authorities that a person applying to be a notary should be a legal practitioner of some years standing and experience.[6] Debelle J observed: [7]
As a general rule, [a public notary] should be a legal practitioner of several years standing at least. Even a cursory perusal of texts on the duties and functions of a public notary demonstrates that a number of those functions and duties require at the very least a sound working knowledge of Australian law and commercial practice. In other words, the preparation of a notarial act plainly requires a sound knowledge of law and practice in Australia especially of the due preparation and execution of commercial and contractual instruments. It is essential that notaries in this State have a sufficient level of training, qualification and status to enable them efficiently and effectively to discharge the functions of the office.
Jurisdiction of the Court
[5] Re Application by Bos to be a Public Notary (2003) 230 LSJS 27
[6] (2003) 230 LSJS 27 at 33
[7] (2003) 230 LSJS 27 at 33
The superior court in each state or territory has an inherent jurisdiction to exercise disciplinary powers over lawyers for the purpose of ensuring the honourable conduct of the profession. By admitting a person as a legal practitioner, the Court is declaring the person to be fit and proper to practise. The Court has a corresponding duty to protect the public and to safeguard the reputation of legal practitioners by disciplining or striking off those who are not fit to practise. [8] Just as the Court has the power to admit, discipline and strike off legal practitioners, it has the power to admit, discipline and strike off public notaries.
[8] Re Guild (1979) 32 ACTR 13 at 29, Re a Barrister and Solicitor (1979) 40 FLR 1 at 17. See also Butterworths Laws of Australia, (1999) [250-1400]
The inherent jurisdiction of this court to discipline legal practitioners was considered in Re Practitioners. Mitchell ACJ observed: [9]
[Counsel] submitted that the jurisdiction of the Court in relation to disciplining practitioners was circumscribed by the provisions of the Legal Practitioners Act and that the Court had no inherent jurisdiction to discipline practitioners. The argument is clearly wrong. The Court has always retained the inherent power to regulate the conduct of practitioners whom it holds out as being fit and proper persons to practise the profession of the law.
…
I have no doubt that the Supreme Court of South Australia retains its inherent jurisdiction to discipline practitioners and that the power includes the power of suspension which the Court has exercised on a number of occasions: see, for example, In re a Practitioner [[1942] SASR 124].
[9] In Re Practitioners (1980) 26 SASR 275 at 279 -280
The power to suspend a legal practitioner is incidental to that of admitting to practise. In Ziems v The Prothonotary of the Supreme Court of New South Wales[10] Fullagar J observed:
I have no doubt that suspension as distinct from disbarment could be ordered. Admission to the Bar of New South Wales is governed by Pt. II of the Legal Practitioners Act 1898-1954. A candidate is admitted by order of the court under s. 10. There is no express statutory power either to disbar or to suspend, but it was held by the Privy Council in In re Justices of the Court Common Pleas at Antigua, that “The power of suspending from practice must be incidental to that of admitting to practise. … The Court confers … may for just cause take away.” In In re Davis, Starke J said: “The power of removal or suspension is incidental to that of admitting to the roll of barristers”. In the same case Latham CJ said: “ In the unreported case of In re White (August 1930) the Supreme Court held on the authority of the Antigua Case that the court had a power of suspending barristers from practice and disbarring them in a proper case”.
The Courts’ inherent power to discipline legal practitioners was recently affirmed by the High Court in A Solicitor v The Council of the Law Society of New South Wales.[11]
[10] (1957) 97 CLR 279 at 290
[11] (2004) 204 ALR 8
The Court has a parallel duty to protect the public from public notaries who are not fit to practise and has an inherent jurisdiction to suspend public notaries in appropriate cases. By virtue of section 92 of the Legal PractitionersAct, this court is the custodian of the Roll of Notaries in South Australia.
The inherent jurisdiction to suspend public notaries was recognised in In re Champion where the Master of Faculties concluded: [12]
… I have as Master of Faculties an inherent power to deal with the roll of public notaries of which I am the custodian, and that for a proper cause – a cause likely to interfere with the proper discharge of the functions of a public notary – it is competent for me as Master of the Faculties to remove the name of a public notary from the roll.
The following comments were also made: [13]
Trustworthiness being thus the basis of the position of a public notary, I feel that to allow to remain on the roll of public notaries a notary who has been guilty of misconduct such as that of Mr. Champion in the present case – misconduct in relation to property of which he had been appointed administrator – and in whose trustworthiness it is impossible any longer to believe, would, when I have the power to strike him off the roll, not be right on my part.
There is also an implied statutory power to suspend a public notary. It is a necessary incident of the court’s statutory power to admit public notaries contained in section 91 of the Legal Practitioners Act. It is a well established principle of statutory construction that a statutory power will be construed as impliedly authorising those acts which can be fairly described as incidental or consequential to the power itself.
[12] Re Champion [1906] Probate Reports 86 at 93
[13] Re Champion [1906] Probate Reports 86 at 93-94
Further, the Court has the injunctive power to restrain a person from acting as a public notary. Section 29(1) of the Supreme Court Act 1935 (SA) authorises the Court to grant an injunction ‘in all cases in which it appears to the Court to be just or convenient to do so.’
The Law Society’s Case
Counsel for the Society submitted that given the similarity between the duties of a legal practitioner and a public notary, and the similarity of the court’s supervisory jurisdiction over each, it is desirable that an order be made suspending Mr Nicholson from practising as a public notary. Suspension rather than striking off was seen as a more appropriate measure given the power of the court to reinstate the practitioner’s name to the roll of public notaries pursuant to section 93(2) of the Legal Practitioners Act.
In support of its application, the Society relied on the affidavit material before the court on 5 December 2003 as well as two further affidavits.[14]
[14] Affidavits of Gregory Charles Nicholson sworn 25 March 2004 and 15 April 2004.
Counsel for the Society further submitted that as Mr Nicholson had been suspended as a legal practitioner, he should also be suspended from practising as a public notary. It was said that:
The conduct which justified the practitioner’s suspension as a solicitor had two aspects which were interrelated, unprofessional conduct and ill health. He has admitted this conduct and his ill health. In the circumstances, it is submitted that the practitioner carries the evidential onus at least to satisfy the Court that he should not be suspended or that his name should remain on the Roll of Public Notaries.
It is submitted that neither of his affidavits does so. As regards the report of Dr Kelly, it is submitted that it is insufficient to persuade the court that the practitioner is able to fulfil his duties either as a solicitor or a public notary.
Quite apart from whether the practitioner’s health has improved, there remains his unprofessional conduct. Great reliance is placed upon notarial acts. They should be unimpeachable given the authenticity and public faith accorded to his instruments.
The evidence previously before the court established that Mr Nicholson had experienced periods of mental ill health contributed to or exacerbated by alcohol abuse. He had suffered mental breakdowns and depression requiring hospitalisation. Mr Nicholson accepted that reasons for the conduct leading to his suspension as a legal practitioner included alcohol dependence and mental breakdown.
Dr Kelly, a psychiatrist, recently provided treatment to Mr Nicholson for depression and alcohol dependence disorder. On 14 April 2004 Dr Kelly noted a significant improvement in the practitioner’s alcohol dependence disorder. Mr Nicholson responded to medication and his depressive condition was ‘under control’. Dr Kelly considered:
At this point in time, given control of his depression and control of his abuse of alcohol, it is my opinion that there is not an acute psychiatric reason for his not practising law on a part-time basis. However, given the nature of his personality, it is my opinion that he would benefit from being involved in a non-solo practitioner-type setting, initially on a part-time basis.
It is likely that if Mr Nicholson is able to accept professional support in a non-solo practitioner setting, that his participation in the practice of the law will be beneficial to his emotional health.
Mr Nicholson is currently receiving psychiatric treatment for his health problems. He has taken positive steps to attempt to overcome his mental ill health and alcohol abuse. Mr Nicholson submitted that in light of these developments, the situation leading to the alleged misconduct is very unlikely to reoccur.
Conclusion
At the outset of these proceedings Mr Nicholson was unrepresented. He challenged the jurisdiction of the court to suspend a public public. At that time he declined to provide an undertaking that he would not practise as a public notary.
Later, when represented, he changed his position. Jurisdiction was no longer challenged and Mr Nicholson gave an undertaking that he would not perform any of the duties of a public notary. It was submitted that in these circumstances an order for suspension should not be made. This submission should be rejected.
The affidavit evidence established a prima facie case that Mr Nicholson dealt dishonestly with trust account monies. It also established a prima facie case of Mr Nicholson misleading the Law Society about his future conduct. These represent serious departures from proper standards required of both a legal practitioner and a public notary. These matters when considered with his admitted alcoholism and depressive illness require that an order for suspension be made in the public interest. Such an order is necessary to protect the public. In this way public confidence in the office of public notary can be maintained.
For these reasons Gregory Charles Nicholson is suspended from practising as a public notary until further order.
JUDGMENT CITATIONS LISTED IN ORDER OF APPEARANCE IN JUDGMENT
1     Law Society v Nicholson (2004) 232 LSJS 164 at 169-170
2 J Charlesworth, Brooke Treatise on the Office and Practice of a Notary in England (9^th ed, 1939)
3 For example, section 93(3) of the Act requires the Court to strike off a public notary who is also legal practitioner who has been struck off.
4      Re Application by Bos to be a Public Notary (2003) 230 LSJS 27
5      Re Application by Bos to be a Public Notary (2003) 230 LSJS 27
6 (2003) 230 LSJS 27 at 33
7 (2003) 230 LSJS 27 at 33
8 Re Guild (1979) 32 ACTR 13 at 29, Re a Barrister and Solicitor (1979) 40 FLR 1 at 17. See also Butterworths Laws of Australia, (1999) [250-1400]
9      In Re Practitioners (1980) 26 SASR 275 at 279 –280
10 (1957) 97 CLR 279 at 290
11 (2004) 204 ALR 8
12     Re Champion [1906] Probate Reports 86 at 93
13     Re Champion [1906] Probate Reports 86 at 93-94
14Affidavits of Gregory Charles Nicholson sworn 25 March 2004 and 15 April 2004.

[2004] SASC 148

28 May 2004