Law Society of South Australia v Nicholson No. Scciv-03-1727
[2004] SASC 2
•14 January 2004
LAW SOCIETY OF SOUTH AUSTRALIA v NICHOLSON
[2004] SASC 2
Civil
GRAY J: On 2 December 2003 the Law Society of South Australia applied for an order suspending the legal practitioner’s practising certificate of Gregory Charles Nicholson. At the time of the hearing of the application disciplinary action had not been taken against the practitioner. In these circumstances the Society sought to invoke the inherent jurisdiction of the Court. The Society relied on affidavit evidence to support its application.
On 5 December 2003 an interlocutory order was made suspending the practitioner’s practising certificate. These are the reasons for the making of the order.
The Law Society’s Case
The Affidavit Evidence
The practitioner did not attend the hearing of the application. Notice of the application, affidavit material and the hearing date were given to the practitioner. The practitioner indicated that he was unable to attend the hearing of the application due to a serious leg injury. It would appear that there may have been other reasons. The practitioner had suffered a mental breakdown associated with or exacerbated by alcohol dependence. His condition had necessitated hospitalisation on several occasions.
On 16 December 2003 the practitioner notified the Society that he was prepared to consent to the orders made on 5 December continuing in force and that he would like the matter adjourned.
The affidavit evidence established a prima facie case that the practitioner engaged in conduct that constituted a marked departure from the 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.
The practitioner appeared to have acknowledged the misconduct.
Trust Account Issues
The misuse of trust monies and the failure to maintain accurate trust records are serious breaches of the professional standards required of practitioners. In Legal Practitioners Board v Hannaford[1] it was observed:
The need for practitioners to keep their client’s money separate from their own has been consistently recognised by legislation and the courts over many years. Observations in Cordery on Solicitors are apposite:
“Any dishonesty, whether or not leading to a conviction, is also extremely likely to result in an order that a solicitor be struck off, the most grave example being the deliberate misuse of client’s money.
Dishonesty does not always take the form of theft, there is dishonesty implicit in statements which deliberately mislead others, whether clients or not.
Any actions on the part of a solicitor preferring his own interests to those of his client will be regarded seriously, as in cases of culpable over-charging (including seeking to obtain fees on a private basis from a legally aided client), or obtaining a loan from a client without the client being independently represented.”[2]
[1] Legal Practitioners Board v Hannaford (2002) 83 SASR 277 at 284
[2] Legal Practitioners Board v Hannaford (2002) 83 SASR 277 at 284
The misuse of trust monies included an occasion on 9 March 2003. The affidavit evidence established that on this date the practitioner in three separate transactions electronically transferred a total of $19,000.00 from his trust account to his personal bank account and applied the monies, or at least a portion of them, without authority for his own personal benefit. Admissions made by the practitioner acknowledged this conduct. The practitioner suggested that the reasons for his conduct were alcohol dependence and mental breakdown.
On 10 March 2003 the practitioner telephoned the Society’s Professional Standards Section and advised that he had suffered a “complete nervous breakdown” and was admitting himself to hospital. He stated that he may have misused monies in his trust account. As a consequence Susan Remfry Bishop, a solicitor employed by the Society in its Professional Standards Section, attended the practitioner’s office, secured the practitioner’s records and examined the trust account records. Ms Bishop conducted enquiries into the practitioner’s files and trust account records.
On 11 March 2003 the Council of the Law Society appointed Ms Bishop as manager of the practitioner’s practice. Ms Bishop attempted to address the deficiencies in the trust account. However she encountered difficulty due to the practitioner’s failure to keep proper trust records.
Practising without Compulsory Insurance
On 14 May 2003 the practitioner wrote to the Registrar of Practitioners, advising that as of 10 March 2003 he had ceased practising as a practitioner. He sought a refund of his insurance premiums. In the letter the practitioner stated:
I advise that as and from 10th March 2003 I ceased to practice as a Barrister and Solicitor of the Supreme Court of South Australia for medical reasons and in fact have been a hospital patient for a total of about seven weeks since that date.
I therefore request that my Practising Certificate be cancelled with effect from 10th March 2003 and that Hunter Premium Finance be notified accordingly.
The Law Society acted on this advice. By letter dated 21 May 2003 the Registrar as requested refunded a portion of the practitioner’s professional indemnity insurance premium. The refund was calculated on the basis that the practitioner had ceased to practise from 10 March 2003.
Notwithstanding the practitioner’s advice, he continued to act as a practitioner. In a letter to the Society from the practitioner dated 13 November 2003, the practitioner admitted to practising during the period following 10 March 2003.
Having been served with the application and the supporting affidavits the practitioner wrote to the Society and gave an undertaking not to practice. Given the practitioner’s conduct, alcohol dependence and mental ill heath, it is not appropriate to accept that undertaking.
Ill health
The evidence before the court established that the practitioner has experienced periods of mental ill health contributed to or exacerbated by alcohol abuse. As earlier discussed he has suffered mental breakdowns and depression requiring hospitalisation
Inherent Jurisdiction of the Court
Counsel for the Society drew particular attention to section 89(3) of the Legal Practitioners Act 1981 (SA) and the inherent jurisdiction of this court to discipline legal practitioners. However the powers of the court in sections 89 and 89A of the Act are dependant on the institution of disciplinary proceedings. As earlier observed at the time of the hearing of the application disciplinary proceedings has not been commenced.
Sections 89 and 89A of the Legal Practitioners Act 1981 (SA) relevantly provide:
89. (1) Where the Tribunal after conducting an inquiry into the conduct of a legal practitioner recommends that disciplinary proceedings be commenced against the legal practitioner in the Supreme Court, the Board, the Attorney-General or the Society may institute disciplinary proceedings in the Supreme Court against the legal practitioner.
(2) In any disciplinary proceedings against a legal practitioner (whether instituted under this section or not) the Supreme Court may exercise any one or more of the following powers:
(a) it may reprimand the legal practitioner;
(b) it may make an order imposing conditions on the legal practitioner's practising certificate (whether a practising certificate under this Act or an interstate practising certificate)-
(i) relating to the practitioner's legal practice; or
(ii) requiring that the legal practitioner, within a specified time, complete further education or training, or receive counselling, of a specified type;
(c) it may make an order suspending the legal practitioner's practising certificate (whether a practising certificate under this Act or an interstate practising certificate) until the end of the period specified in the order or until further order;
(d) it may order that the name of the legal practitioner be struck off the roll of legal practitioners maintained under this Act or the roll kept in a participating State that corresponds to the roll maintained under this Act;
(e) it may make any other order (including an order as to the costs of proceedings before the Court and the Tribunal) that it considers just.
(3) This Part does not derogate from the inherent jurisdiction of the Supreme Court to discipline legal practitioners.
…
89A. If-
(a) disciplinary proceedings have been instituted against a legal practitioner before the Tribunal or the Supreme Court or a legal practitioner has been charged with or convicted of a criminal offence; and
(b) the Supreme Court is satisfied that the circumstances are such as to justify invoking the provisions of this section,
the Supreme Court may, of its own motion or on the application of the Board, the Attorney-General or the Society, make an interim order-
(c) imposing conditions on the legal practitioner's practising certificate (whether a practising certificate under this Act or an interstate practising certificate) relating to the practitioner's legal practice; or
(d) suspending the legal practitioner's practising certificate (whether a practising certificate under this Act or an interstate practising certificate),
until disciplinary proceedings against the practitioner have been finalised or until further order.
It is to be observed that the inherent jurisdiction of this court has been preserved.
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.[3] The power of the court to discipline lawyers correlates to its authority to admit lawyers to practice.[4]
[3] Legal Practitioner’s Act 1981 (SA) s89(3), In Re Practitioners of the Supreme Court (1980) 26 SASR 275 at 280 per Mitchell J. See also Butterworths Laws of Australia, (1999) [250-1400]
[4] 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 In Re Practitioners.[5] Although that case dealt with legislation that has subsequently been repealed, the observations of Mitchell ACJ are apposite:
[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].[6]
[5] In re Practitioners (1980) 26 SASR 275
[6] In re Practitioners (1980) 26 SASR 275 at 279 -280
In Law Society of South Australia v Jordan[7] Doyle CJ considered the inherent jurisdiction and the statutory jurisdiction of the court to suspend a practitioner’s right to practice. Proceedings had been brought by the Society seeking an order that the practitioner’s name be removed from the role of practitioners. In that case the practitioner did not oppose a suspension order being made. Doyle CJ referred to In re Practitioners as authority for the court’s power to make suspension orders and observed:
Assuming, as I am prepared to do for the present, that the court has the power to make the order sought, I consider that I can make the orders sitting as a single judge. In that respect I rely upon the r95.12 and the fact that in this particular case the practitioner does not oppose the making of the order.
As to the merits of the matter, in view of the fact that the respondent does not oppose the making of the order, I am prepared to do so. I merely record that I have not had to decide whether such an order should be made if it were opposed by the respondent. In broad terms, the basis for the making of the order rests on the disarray in which the practitioner’s practice is, and his unfitness to practise for the time being, for medical reasons.
Should the respondent apply to have the suspension lifted, the matter would have to be considered afresh.[8]
[7] Law Society of South Australia v Jordan (Doyle CJ, 12 February 1998, unreported)
[8] Law Society of South Australia v Jordan (Doyle CJ, 12 February 1998, unreported) See also Law Society of South Australia v Truman [2000] SASC 359
As earlier observed the inherent jurisdiction of this Court to discipline practitioners has been expressly preserved by statute. This jurisdiction includes the power to suspend a practitioner’s practising certificate. In appropriate cases an interlocutory order may be made to suspend a practitioner. The jurisdiction may be exercised by a single judge. In this case the inherent jurisdiction of the court has been properly invoked.
Trust and Confidence of the Public in the Legal Profession
It is imperative that practitioners maintain high professional standards in order to maintain public trust and confidence in the legal profession. In Legal Practitioners Conduct Board v Boylen[9] it was observed:
It is of the utmost importance that public confidence in the legal profession be maintained. Legal practitioners play an integral part in the administration of justice. The obligations which accompany their position are commensurate with the responsibility involved. The duties of legal practitioners include the duty to uphold the law, the duty to the court, the duty to their clients and the more general duty to members of the public. The court and the public demand high standards from practitioners. This is reflected in the legislative processes that regulate the admission of practitioners and govern their conduct.
[9] Legal Practitioners Conduct Board v Boylen [2003] SASC 241 at [110]-[111]
In Legal Practitioners Board v Phillips[10] the court was asked to consider the conduct of a practitioner who was suffering from a mental illness. Although a practitioner’s personal antecedents may assist the court in understanding the reasons behind the practitioner’s conduct, they do not constitute an excuse for unprofessional conduct. It was observed:
Medical and other expert reports were placed before the Tribunal in an attempt to explain the practitioner’s conduct. This material established that the practitioner suffered from a permanent borderline personality disorder. The effects of this disorder have been ameliorated by treatment.
Such a disorder may explain but does not excuse the practitioner’s inappropriate attitude toward his client. The evidence provided did nothing to explain other aspects of the practitioner’s misconduct, namely, his dishonesty and lack of candour and frankness with the tribunal and the court. It does not explain his manipulation of the court process to obtain a personal advantage. It does little to explain why he retained a charge over his client’s property when he was not entitled to do so. The practitioner’s conduct at best results from a fundamental misunderstanding of his obligations as a practitioner and at worst a deliberate breach of those obligations.[11]
[10] Legal Practitioners Board v Phillips (2002) 83 SASR 467
[11] Legal Practitioners Board v Phillips (2002) 83 SASR 467 at 475
In Legal Practitioners Board v Hannaford[12] the following observations were made:
While the medical condition of the practitioner’s partner may go some way to explaining his conduct it can provide no excuse. Many practitioners are subjected to stress in their working lives. This is part of professional life. Practitioners must understand that personal stressors cannot ameliorate the seriousness with which professional obligations are viewed and the need for strict compliance at all times. A practitioner’s professional standards must not be compromised or eroded.
[12] Legal Practitioners Board v Hannaford (2002) 83 SASR 277 at 281
When exercising its inherent jurisdiction the function of the court is to examine the relevant material to determine whether the practitioner has failed to maintain his or her conduct to the standards required of a member of the legal profession.[13] In cases involving breaches of professional standards, the guiding principle is the protection of the public and the standing of the profession, rather than punishment of the practitioner.[14]
[13] Harvey v Law Society of New South Wales (1975) 7 ALR 227 at 230 per Barwick CJ. See also Butterworths Laws of Australia, (1999) [250-1400]
[14] Ziems v Prothonotary of the Supreme Court of New South Wales (1957) 97 CLR 279 at 286 per Dixon J. See also Butterworths Laws of Australia, (1999) [250-1400]
Conclusion
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.
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