LAW SOCIETY OF THE ACT & THE LEGAL PRACTITIONER ‘S’ (Stephen Stubbs) (Occupational Discipline)
[2011] ACAT 70
•1 December 2011
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
LAW SOCIETY OF THE ACT & THE LEGAL PRACTITIONER ‘S’ (Stephen Stubbs) (Occupational Discipline) [2011] ACAT 70
LP 4 of 2010
Catchwords: OCCUPATIONAL DISCIPLINE – LEGAL PRACTITIONER – unsatisfactory professional conduct – professional misconduct – credit listing of client of the legal practitioner for default – financial inducement to reverse credit listing entry – false representation – misleading or intimidatory conduct - Briginshaw standard of proof
List of legislation: Evidence Act 1995 (Cwlth), s.140
Legal Profession Act 2006 ss. 420, 421
List of Regulations: Legal Profession (Solicitors) Rules 2007, Rule 31.1
List of cases: Briginshaw v Briginshaw (1938) 60 CLR 336
Tribunal: Mr Graeme Lunney SC Member
Mr Ross Watch Member
Ms Jane Greagg Member
Date of Orders: 1 December 2011
Date of Reasons for Decision: 1 December 2011
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) LP 4 of 2010
RE:THE COUNCIL OF THE LAW SOCIETY OF THE ACT
Applicant
AND:THE LEGAL PRACTITIONER ‘S’
Respondent
Tribunal: Mr Graeme Lunney SC Member
Mr Ross Watch Member
Ms Jane Greagg Member
DATE: 1 December 2011
DECISION
The Tribunal is satisfied that:
(i)The respondent is guilty of unsatisfactory professional conduct in respect of grounds 1 and 2 of the Grounds of Complaint; and,
(ii)The respondent is guilty of professional misconduct in respect of ground 3 of the Grounds of Complaint.
ORDER
The Tribunal orders that the application be listed for directions concerning any orders to be made pursuant to s 425 and section 433 of the Legal Profession Act 2006 (ACT).
………………………………..
Mr G. Lunney SC, Member
on behalf of the Members of the Tribunal
REASONS FOR DECISION
An Application for Disciplinary Action was brought by the Law Society of the ACT, (the applicant), against a Legal Practitioner,[1] (the respondent) on
19 May 2010.[1] This decision was previously anonymised and cited as Council of the Law Society of the ACT & Legal Practitioner ‘S’ [2011] ACAT 70 pursuant to section 423A of the Legal Profession Act 2006. As the appeal period has ended, the practitioner has now been identified in the citation of this decision. The reasons for decision otherwise remain unchanged from the date of publication.
The formal part of the Application under the heading ‘Final Orders Sought’ listed the order sought as follows.
Findings of professional misconduct or unsatisfactory professional conduct.
Under the heading ‘Charge’, the formal part of the Application set out the following.
Breach of Rules 31.1(a) and (b) of the Legal Profession (Solicitors) Rules 2007 and the offer of Financial inducement.
The Application referred to a telephone conversation that the respondent had been involved in, and set out the nature and the circumstances of the conversation. The Application also referred to a written confirmation of the conversation sent by fax the same day as the conversation had taken place. The conversation and its confirmation are later referred to by the applicant in the Application as ‘the incident complained of’.
The Application set out Rule 31.1 is as follows.
31.1A practitioner must not, in any communication with another person on behalf of a client:
a.represent to that person that anything is true which the practitioner knows, or reasonably believes, is untrue; or
b.make any statement that is calculated to mislead or intimidate the other person, and which grossly exceeds the legitimate assertion of the rights or entitlement of the practitioner’s client;
The Application then sets out three Grounds of Complaint. The first of these alleges breach of Rule 31.1(a): False Representation. The second alleges breach of Rule 31.1(b): The making of a misleading or intimidatory statements (sic). The third alleged the making of a financial inducement.
Particulars of these accompanied each of the complaints. The applicant sought to amend the Application when the matter was called on for hearing on
10 February 2011. The purpose of the proposed amendments was said to align the wording of the offences alleged with the facts of the case.The amendments were allowed, however, the respondent was given leave to call further evidence, and to defer cross examination of witnesses where appropriate as a result of the amendments to the Application lest the respondent suffer any prejudice.
The matter proceeded as far as it could on that day, and was adjourned to allow the respondent to deal with the amended application.
The matter was further heard on 25 and 26 July, concluding on the 26th.
EVIDENCE
The substance of the applicant’s claim was that the respondent made certain representations to an employee of a company, First Netrader Pty Ltd (FNT), by telephone on 17 June 2009. This was followed by a letter sent by facsimile of the same date in which further representations were made.
The person that the respondent firstly spoke to was Ms Kate Bourne who at the time was a director of FNT. Two affidavits of hers were filed by the applicant.
In the first of these sworn 19 July 2010, she said that FNT conducted the business of internet advertising the sale of commercial businesses, plant, equipment and product for its customers.
FNT placed an internet advertisement at the request of Mr Tarik Jabal on about 7 February 2008 in respect of the sale of a Turkish restaurant in Dickson.
Mr Jabal was to become the client of the respondent. She said that FNT had previously acted in a similar manner in respect of a Turkish restaurant in Mawson with which Mr Jabal was associated in 2006. (In her affidavit, she refers to a restaurant in Dickson as being the subject of the advertisement in 2008. This is contrary to Mr Jabal’s later affidavit which refers to a restaurant in Dickson as being the first one advertised and sold. She appears to have confused the two restaurants in her evidence.)She said that an invoice for $165.00 had been sent to Mr Jabal in 2008 in respect of the Dickson restaurant, and when it was not paid, FNT sent reminders. The account remained unpaid and FNT notified the default in payment to a credit listing company, Veda Advantage, which listed the default in its internet listing. A copy of the listing was annexed to the affidavit.
The account was eventually paid on 1 December 2008.
She then deposes to a telephone conversation with Mr Jabal on
12 February 2009. She also annexed a copy of a fax she sent to Mr Jabal that day.She goes on to say that on 17 June 2009, she spoke to the respondent, who said:
I would be happy to drop $500.00 into your bank account to reverse the Veda file without telling the boss as it would save him from going to court over a fairly trivial matter.
He also said:
We will keep this to ourselves.
She then asked him to send confirmation of his details and proposals by fax.
She then spoke to her husband about the conversation.
Later the same day, she received a fax from the respondent which was annexed to the affidavit.
A further affidavit sworn by Ms Bourne on 20 November 2010 was filed. This took issue with affidavit material that had been deposed to by the respondent. However in the course of that affidavit, she repeated her recollection of the conversation with the respondent of 17 June 2009. She said he said as follows.
Since you know how the system works how about I drop $500.00 into your account and you clear this up for me. The boss doesn’t need to know and I won’t have to bill my client for going to the Supreme Court over a fairly trivial matter.
Oral Evidence of Ms Kate Bourne
In her oral evidence on 10 February 2011, she repeated the allegation she had previously made regarding her 17 June 2009 conversation with the respondent. She said the respondent had said: (T64)
Well I’d be happy to drop $500.00 into your bank account, reverse the Veda file and don’t tell the boss and it would save me from having to bill him to go to court.
Affidavit of Robert Reis 8 July 2010
This annexes the significant correspondence.
*There was the letter from Kate Bourne to the applicant making the complaint. This is dated 22 June 2009, but stamped received 25 June 2009. It refers to a conversation of 17 June 2009 with presumably Linda Mackay of the Law Society. 22 June was a Monday. It encloses a fax from the respondent of 17 June 2009.
*There was a letter of 6 July 2009 from the applicant to the respondent informing him of formal procedures relating to the complaint. This does not enclose a copy of the complaint. Oddly it refers to an earlier letter from the applicant of 24 June 2009 which is not annexed. This predates the date stamp on the letter received from Kate Bourne. That letter was not submitted by the applicant in evidence.
*The respondent wrote a letter of 21 July 2009 to the applicant referring to the letter of 6 July 2009 after having read the letter of complaint. He makes the following points.
*There was no client debt to FNT.
*His client was prepared to pay for correction, and to pay a premium.
*The alternative to cooperating was to litigate, and seek an injunction.
*He was simply carrying out instructions.
*He had been instructed to contact FNT and arrange for an erroneous listing to be removed.
*He repeats that his client was prepared to pay a premium.
*There was a letter from Kate Bourne, taking issue with the respondent’s letter.
*A letter from the respondent of 6 August 2009 responding to Kate Bourne’s letter was included. The respondent made the following points
*The client determined the figure of $2,000.00, and those were his instructions.
*The figure was determined by reference to the value of the client’s other commercial arrangements jeopardised by the Veda listing.
*Finally there was a handwritten file note by the respondent recording his instructions given in a telephone conversation annexed. This was sent by the respondent to the applicant on 26 October 2009 after apparently a number of requests. These notes recorded:
*The client’s instructions to offer $2,000.00.
*There had been incorrect placement with Veda.
Affidavit of the respondent affirmed 29 October 2010
In his affidavit, the respondent says that on 17 June 2009, he:
*left 3 messages for Peter Simons to ring him;
*then had a 4 minute telephone conversation with him;
*he then had a further conversation at 1.30 pm. He told
Mr Simons he needed to chase up Veda;*spoke to Ms Kate Bourne hoping ‘to obtain a copy of my client’s letter to (FNT) of 4 Feb 2009, a copy of the invoice for $165.00, evidence of the advertisement being actually run, and a copy of his client’s confirmation to run the advertisement or a signed confirmation of the arrangements between the parties’;
*said to her his client ‘is prepared to meet whatever expenses you incur in arranging for removal’. ‘He is not indebted to you. The listing was incorrect and improperly carried out’; and
*gives detail of conversation with Ms Bourne.
He annexes an ASIC search to his affidavit. This shows that FNT’s ACN ends in the numbers 515, and that Ms Kate Bourne was a director and secretary since 15 May 2009.
He also refers to a further conversation with Michael Bourne on 29 June 2009.
Affidavit of Tarik Jabal
In his affidavit, Mr Tarik Jabal says the following:
*He paid a 2006 account from FNT.
*He did not authorise FNT to advertise the Dickson store in 2008.
*He sent letter of 4 February 2009, but received no reply.
*On 28 April 2009 he met the respondent in his office and instructed him to offer $2,000.00.
*He attended the respondent’s office on 17 June 2009 and went through the letter the respondent was proposing to send and authorised it.
*There was no mention of $500.00.
Mr Jabal was cross examined.
Affidavit of Peter Simons, sworn 9 September 2010
In his affidavit dated 9 September 2010, Mr Peter Simons says the following:
*He told the respondent to offer $2,000.00.
*He spoke to the respondent on 17 June and advised him to chase up the Veda matter.
Mr Simons was cross examined. He said that he had worked with the respondent, and that they were friends.
Affidavit of Mr Michael Bourne sworn 26 November 2010
In his affidavit, sworn 26 November 2010, Mr Michael Bourne denied much of the respondent’s description of their conversation.
Michael Bourne was cross examined. The evidence he gave in cross examination by the respondent confirms that he was told by Kate Bourne immediately after the telephone conversation with the respondent took place that she was offered a financial inducement by the respondent to obtain reversal of the Veda listing on the basis that it had been made in error.
Affidavit of the respondent, affirmed 10 June 2011
In his affidavit, affirmed 10 June 2011, the respondent says that FNT was running an internet scam.
THE RESPONDENT’S CREDIT
During the course of his cross examination, the respondent was asked questions about an appearance he made before Magistrate Doogan, and a subsequent claim for payment of fees he made on the Legal Aid Commission subsequent to that appearance. The Tribunal found his answers and demeanour in cross examination on this topic to be very unsatisfactory.
That cross examination, together with his evidence and cross examination in relation to other issues, left the Tribunal with an adverse view of the respondent’s credibility.
STANDARD OF PROOF
Section 420 of the Legal Profession Act 2006 provides that this Tribunal is bound by the rules of evidence. Section 140 of Evidence Act 1995 (Cwlth) therefore applies to this proceeding. Thus the Tribunal must take into account the gravity for the respondent of the matters alleged.
Although it precedes the Evidence Act, the relevant principles are set out in the 1938 case of Briginshaw v Briginshaw, (1938) 60 CLR 336 at 361-362. The Tribunal takes those principles into account in coming to its decision. It rejects the submission by the respondent that proof beyond reasonable doubt is required.
GROUND 1
The Tribunal is unable to accept the respondent’s evidence that he thought that FNT’s operation was a scam. This alleged state of mind was not mentioned in early documentation filed with the Tribunal by the respondent, and runs contrary to the existence of the prior dealing of Mr Jabal and his partner with FNT.
On the other hand, the address to which FNT sent the invoice and reminders did have the correct postcode, but the incorrect destination State in it. Mr Jabal’s evidence was that he had not received the correspondence warning him of the debt from FNT and its intention to list with Veda. He was strong in his cross examination on this point. The notice of the debt therefore may not have come to the attention of Mr Jabal.
The Tribunal finds that the respondent had seen Mr Jabal’s letter of
4 February 2009 before he sent his letter of 17 June 2009. The letter of 4 February 2009 says that Mr Jabal had not received the invoice, but does not assert that the advertisement had not been placed.There was evidence from Mr Jabal that he had not authorized the advertising of his Mawson restaurant. This consisted of a one paragraph denial in his affidavit and was not supported by any other evidence. The denial takes the form of a pleading without any further explanation. The denial is unhelpful in explaining why Mr Jabal had been billed by FNT for advertising. The Tribunal is unable to accept that evidence that Mr Jabal had not authorized the placing of the advertisement for the Mawson restaurant. The respondent had a reason for asserting that the advertisement had not been placed, because in order for him to suggest that the listing had been made by FNT in error, it was also necessary to allege that the underlying debt had not been incurred.
The Tribunal concludes that the assertion made by the respondent that the listing was erroneous was fabricated by the respondent knowing it not to be true. It was fabricated in order to provide a reason to Veda Advantage by way of FNT for reversing the listing.
The Tribunal therefore finds that the first ground is made out.
GROUND 2
The Tribunal has referred to its assessment of the respondent’s state of mind regarding whether the listing was erroneous at the time of making the phone call to FNT above.
Because he had no basis for his assertion that the listing was erroneous, his threat of litigation was empty to his knowledge and amounted to an attempt to intimidate FNT.
The Tribunal finds that the second ground is made out.
GROUND 3
The respondent had no belief that the listing was in error. He had no instructions from his client to offer $500.00 to cover costs. Indeed, his instructions were to offer $2,000.00.
The Tribunal accepts Kate Bourne’s description of the conversation. In coming to that conclusion the Tribunal has taken into account the following matters.
* Her evidence was strong and its strength was not significantly diminished in cross examination.
* It was corroborated by the hearsay evidence of Michael Bourne elicited by the respondent in cross examination that she had made a complaint about the conversation immediately after it occurred in the same terms as her later evidence.
* The Tribunal’s assessment of the respondent’s credit.
* There was a very early complaint made to the Law Society.
* Offering $2,000.00 later by fax raises the probability that some financial incentive was offered earlier.
The Tribunal therefore finds that the respondent offered a financial inducement to Ms Bourne personally ’without the boss knowing’ in order to achieve reversal of the credit listing adverse to his client. Ground three is made out.
CONCLUSION
The Legal Profession Act 2006 defines unsatisfactory professional conduct and professional misconduct. The two concepts have been discussed in a number of recent Tribunal decisions, and the Tribunal as presently constituted has nothing to add.
Considered separately, the Tribunal considers that the breach of the Rules alleged in Grounds 1 and 2 each constitute unsatisfactory professional conduct. It considers Ground 3, the offer of a financial inducement to be professional misconduct.
Considered as one transaction consisting of an attempt to achieve a desired outcome for his client, it is a very dishonourable means of attempting to achieve an end.
There will be a further hearing to deal with matters of penalty and costs.
………………………………..
Mr G. Lunney SC, Member
For the Members of the Tribunal
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