LAW SOCIETY of the AUSTRALIAN CAPITAL TERRITORY & the LEGAL PRACTITIONER (Occupational Discipline) - [2011] ACAT 51

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY & THE LEGAL PRACTITIONER (Occupational Discipline) [2011] ACAT 51

LP 5 of 2008
Catchwords: OCCUPATIONAL DISCIPLINE – LEGAL PRACTITIONERS – unsatisfactory professional conduct – penalty –Tribunal’s power to re-open and review its reasons for decision - reasons not reviewed in this case - protective aim of disciplinary proceedings - factors to be considered when deciding penalty - relevance of previous disciplinary proceedings – relevance of character references - private and public reprimand –purpose and effect of fines - relevance of costs order to determination of penalty – costs orders available under section 433 – exceptional or special circumstances - responsibility of regulatory authority to bring actions

List of Legislation: ACT Civil and Administrative Tribunal Act 2008
,

ss 48, 92, 56(c)(iii) and 63
Legal Profession Act 2006, ss. 386, 387, 425, 427 and 433

List of Regulations: Legal Profession (Solicitors) Rules 2007 (ACT), rule 39

List of cases: Autodesk Inc v Dyason (No 2)
(1993) 176 CLR 300

Council of the Law Society of NSW v Treanor
[2009] NSWADT 115

Law Society of the ACT and The Legal Practitioner
[2010] ACAT 47
Law Society of NSW v Cornwell (No 2) [2006] NSWADT 308

Law Society of NSW v Oliveri [2007] NSWADT 246
Law Society of NSW v Foreman (No 2)
1994 34 NSWLR 408

Legal Services Commissioner v O’Connor (No 2)
[2006] LPT 2
NSW Bar Association v Hart
[2006] NSWADT 97

NSW Bar Association v Howen (No 2) [2008] NSWADT 27
NSW Bar Association v Sahade (No 3)
[2006] NSWADT 39

Re Bridgman
[1934] St Qd R 1

Re Grosse
[1996] ACTSC 5

Re Nelson
(1991) 106 ACTR 1

The Law Society of the ACT v The Legal Practitioner (application to re-open) [2010] ACAT 45
The Law Society of the Australian Capital Territory and the Legal Practitioner
[2010] ACAT 69

The Council of the ACT Law Society and the Legal Practitioner
[2010] ACAT 73

List of Texts: Riley’s Solicitors Manual Lexis Nexis On Line at [33,065] to [33,105] and [34,175]

Tribunal: Ms L. Crebbin, General President
Mr G. Wright, Member

Date of Orders: 28 July 2011
Date of Reasons for Decision: 28 July 2011

AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) LP 5 of 2008

BETWEEN:

THE LAW SOCIETY OF THE
AUSTRALIAN CAPITAL TERRITORY
Applicant

AND:

THE LEGAL PRACTITIONER
Respondent

TRIBUNAL: Ms L. Crebbin, General President
Mr G. Wright, Member

DATE: 28 July 2011

ORDER

The Tribunal orders that:

The respondent be publicly reprimanded.

The respondent is to pay a fine of $3,000 to the applicant within 28 days of the date of this order.

The respondent is to pay the applicant’s costs relating to the amended application dated 6 March 2009 on a party/party basis at the Supreme Court scale in an amount to be agreed, or failing agreement to be determined in accordance with the procedure set out in paragraph 69 of these reasons for decision.

………………………………..

Ms L. Crebbin
General President

REASONS FOR DECISION

These reasons for decision relate to the penalty imposed by the Tribunal as a result of its findings that the respondent legal practitioner (the respondent) engaged in misleading and deceptive conduct, breached rule 39.1 of the Legal Profession (Solicitors) Rules 2007 (ACT), and is guilty of unsatisfactory professional conduct.
The proceedings are about the respondent’s actions in relation to what can be conveniently described as an altered letter and a reconstructed account. The findings and the reasons for them are set out in the Tribunal’s decision of

7 October 2010 published as The Law Society of the Australian Capital Territory and the Legal Practitioner [2010] ACAT 69.
Reconstitution of Tribunal
Originally, the tribunal hearing this application had three members. On the morning of the hearing relating to penalty, the General President was informed by one member that he was not available to participate in the hearing because of something that had happened in the few weeks before the hearing. The member was concerned that the event could reasonably be seen to conflict with the proper exercise of his functions in relation to the tribunal’s consideration of the application. The member’s advice that he was no longer available, enlivened the power to reconstitute the tribunal under section 92 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act). The parties were informed of the problem at the start of the hearing and invited to say how they thought that the power should be exercised. The respondent had no particular submission to make. Mr Beaumont, for the applicant, indicated that it was, in his view, undesirable to introduce another member to the tribunal or to constitute a new tribunal and that the preferable course was to proceed with two members. The General President was satisfied that that was an appropriate course of action and that there would be no prejudice to either party if it was adopted. She directed the remaining members allocated to the tribunal to continue to deal with the application in accordance with section 92(2)(a) of the ACAT Act. The hearing proceeded on 22 November 2010.

Application to re-open the decision

On 25 October 2010 the applicant filed an application seeking an order that the tribunal re-open the case “to review the order as to the finding of unsatisfactory professional conduct and the reasons for decision both dated 7 October 2010.” The order was sought under section 56(c)(iii) and section 63 of the ACAT Act.
The application was supported by an affidavit sworn by Michael James Phelps on 22 October 2010. A letter dated 27 October 2010 explained the basis of the application. The applicant asked the tribunal to substitute a finding of professional misconduct against the practitioner in lieu of its finding that the practitioner had engaged in unsatisfactory professional conduct. The applicant stressed that it did not challenge the Tribunal’s factual finding as to the fitness of the respondent to practise.
The respondent wrote to the tribunal on 4 November indicating that he also wanted the tribunal to correct some thirty-two “errors, mistakes, omissions and anomalies” he identified in the reasons for decision. The respondent was advised in a letter dated 5 November 2010 addressed to both parties, that if he intended to make an application to the tribunal he would need to file the appropriate form of application. He did not do so, but rather, included his letter as an attachment to his written submissions relating to penalty.
The application to re-open was heard at the start of the penalty hearing.

Tribunal’s power to re-open and review its reasons to correct an error

Mr Beaumont submitted for the applicant, that the tribunal has a power to re-open, hear further argument and then revise its reasons, to correct an error before orders are made finalising a matter. He described it as an implied power that arises from the nature of the functions performed by a court or tribunal; a consequence of the power to make decisions. He referred to the High Court decision of Autodesk Inc v Dyason (No 2) (1993) 176 CLR 300 in which the power was considered. In that case, the High Court was asked to vacate orders it had made so that it could hear, or re-hear, argument on a particular point. The Court acknowledged the existence of a power in limited circumstances, to reopen a judgment before finalization where a party can show that, without fault on their part, they have not been heard, or where a judgment has apparently miscarried for some other reason. Mason CJ said at page 303;
... the public interest in the finality of litigation will not preclude the exceptional step of reviewing or rehearing an issue when a court has good reason to consider that, in its earlier judgment, it has proceeded on a misapprehension as to the facts or the law. ... However, it must be emphasized that the jurisdiction is not to be exercised for the purpose of re-agitating arguments already considered by the Court; nor is it to be exercised simply because the party seeking a rehearing has failed to present the argument in all its aspects or as well as it might have been put. What must emerge, in order to enliven the exercise of the jurisdiction, is that the Court has apparently proceeded according to some misapprehension of the facts or the relevant law and that this misapprehension cannot be attributed solely to the neglect or default of the party seeking the rehearing. The purpose of the jurisdiction is not to provide a backdoor method by which unsuccessful litigants can seek to re-argue their cases.
Mr Beaumont also referred to an earlier tribunal decision of The Law Society of the ACT v The Legal Practitioner (application to re-open) [2010] ACAT 45 in which the tribunal considered and dismissed a request to re-open a hearing after it delivered its reasons for decision, but before imposing a penalty. The request in that case was that the Tribunal hear further evidence, rather than correct an error in its reasons. The tribunal proceeded on the basis that it had a power to re-open, hear further evidence and consequently review its decision and reasons, but declined to do so in the particular case.
Mr Beaumont submitted that the Tribunal could, in the alternative, amend or set aside its finding concerning the characterisation of the respondent’s conduct pursuant to the power given to it in section 56(c)(iii) of the ACAT Act. That section allows the tribunal to amend or to set aside an order if extraordinary circumstances make it appropriate to do so. He did not pursue an argument that section 63 of the ACAT Act provides the Tribunal with a power to re-open and review an order. It clearly does not.
The respondent did not address the question of whether the Tribunal has such a power.
For the reasons which are set out below, it is not necessary to determine the nature and extent of any power the tribunal has to re-open and review a decision, or reasons for decision before final judgment. However, we accept that the existence of such a power, exercised in the limited circumstances described by the court in Autodesk Inc v Dyason (No2), is consistent with the objects and principles set out in sections 6 and 7 respectively of the ACAT Act.
We also accept that the specific statutory power in section 56(c)(iii) of the ACAT Act to amend or set aside an order in exceptional circumstances, invites the tribunal to undertake an exercise of satisfying itself that the reasons that led to the making of the order were sound. Where an express statutory power is conferred on a tribunal, the tribunal also has, by implication, whatever power may be necessary to exercise the express power.[1]
Should the Tribunal Re-open and Review its reasons in this Case?
[1] Jackson v Sterling Industries Ltd (1986) 12 FCR 267 per Bowen CJ at 272 per
The application to re-open and review the orders made on 7 October 2010 is dismissed for the reasons set out below.
The applicant said that the reasoning in paragraph 100 of the decision dated 7 October 2010, suggested that the tribunal treated the statutory definition of professional misconduct in section 387 of the Legal Profession Act 2006 (the LP Act) as exhaustive rather than inclusive and that it had, as a result, misled itself about the findings open to it.
Paragraph 100 appears at the end of a section of the tribunal’s reasons relating to the allegations concerning the altered letter.
The findings about the characterisation of the respondent’s conduct are as follows:
97. The Tribunal finds that particular 3.2 is made out. The Respondent’s conduct in relation to the altered letter was both misleading and deceptive and a breach of rule 39.1.
98. The Tribunal is comfortably satisfied that the Respondent’s conduct should be characterised as being at the higher end of unsatisfactory professional conduct. It falls short of the standard of diligence that a member of the public is entitled to expect of a reasonably competent practitioner. The element of deception of both the client and the Law Society adds to the seriousness of the conduct.
99. The Tribunal acknowledges that the Respondent admitted that he had altered the letter but, the credit that should be given to him for that, is somewhat countered by the fact that his admission came once the alteration was obvious and was put to him by the applicant. It could not be described as a voluntary disclosure.
100. The Tribunal considered whether the deceit was so significant that it should be characterised as disgraceful conduct justifying a finding that the Respondent is not a fit and proper person to practice law. That is the most serious finding that should be reserved for the most serious of conduct. While there was deceit, and the Respondent’s apparent failure to recognise it is worryingly deficient, we are not satisfied that the deceit was of such a nature and perpetrated at such a level that it is a finding that could be made.

The applicant submitted that paragraph 100 indicated that the tribunal had restricted its consideration of whether the respondent’s conduct should be characterised as professional misconduct by looking only at whether he is a fit and proper person to practise law. This suggests that the tribunal incorrectly confined its attention to the statutory definition of professional misconduct.
The respondent’s submissions were predominantly directed to disagreeing with the Tribunal’s finding that his behaviour was misleading and deceptive rather than addressing the issue raised by the applicant.
Sections 386, 387 and 389 of the LP Act were set out in full in paragraphs 18 and 19 of the tribunal’s reasons for decision. The applicant pointed to sections of the transcript of the substantive hearing which show that Mr Beaumont drew the tribunal’s attention to the inclusive nature of the statutory definition and to the common law test for professional misconduct. The tribunal did not ignore those submissions.
We acknowledge that section 386 and section 387 of the LP Act contain non-exhaustive definitions of unsatisfactory professional conduct and of professional misconduct. We further acknowledge that the definition of professional misconduct elucidates or adds to the relevant common law – it does not replace it. The tribunal refers to and relies on the statement of the law set out at paragraphs 15 to 22 of its decision in the matter of The Council of the ACT Law Society and the Legal Practitioner [2010] ACAT 73.
The LP Act gives the Tribunal a broad discretion to make disciplinary orders according to the designation and seriousness of the conduct that is established by the evidence.
In this matter, before making its finding as to how the conduct of the respondent should be characterised, the members of the tribunal considered the provisions of all relevant sections of the LP Act, the relevant common law, the evidence that was before it, the submissions made by each party in relation to the evidence, and the factual findings made on the basis of the evidence.
The Tribunal was, after going through that exercise, comfortably satisfied that the Respondent’s conduct, in relation to the matters dealt with in the complaint and particular 3.2, should be characterised as being at the higher end of unsatisfactory professional conduct. That finding is set out in paragraph 98. Paragraph 100 should be read in the context of the whole of the Tribunal’s reasons rather than in isolation.
The Tribunal was not satisfied that the evidence established that the respondent’s conduct constituted professional misconduct either within the terms of the LP Act or within the scope of the common law formulation of professional misconduct. Paragraph 100 could have been more clearly worded and been more direct in its rejection of both the applicant’s submission that the respondent’s behaviour constituted professional misconduct and the respondent’s submission that his behaviour did not warrant a finding of either professional misconduct or unsatisfactory professional conduct. However, this is not a case in which the Tribunal proceeded on the basis of a misapprehension of the relevant law or in which there are exceptional circumstances that justify the exercise of the power given by section 56(c)(iii) of the ACAT Act.
The Tribunal also dismisses the respondent’s request to make corrections to its reasons for decision. The matters he raises all involve a rejection by him of findings made by the tribunal after its consideration of evidence and submissions. His request amounts to an attempt to re-argue his case. This is outside the scope of any power the tribunal has to re-open and review its decision.
The respondent raises one issue that the tribunal should address. He questions the basis for the Tribunal’s finding that his actions in relation to the altered letter breached rule 39 of the Legal Profession (Solicitors) Rules 2007 (ACT). He submits that he was not charged with a breach of rule 39 in relation to the altered letter, that he was denied natural justice in relation to that issue, and that the tribunal should correct its findings by omitting any reference to a breach of rule 39.
The complaint set out in the amended application dated 6 March 2009, was that the practitioner had engaged in conduct in breach of rule 39, as well as misleading and deceptive conduct. Particular 3.2 related to a deliberate alteration of a letter with the intent of concealing from the clients and their new solicitors, and misrepresenting, the terms of the letter actually sent. It is true that Particular 3.2 makes no mention of either rule 39 or the Law Society, but that was detailed in the complaint and was clearly raised and thoroughly aired at the hearing of the amended application. The respondent referred to his response to the Law Society during its investigation of the complaint about the altered letter in paragraph 13 of his affidavit sworn on 5 May 2009 (Exhibit R 1). The issue was the subject of extensive questioning and evidence from the practitioner during the hearing.[2] An extract of the evidence is set out in the tribunal’s reasons for decision at paragraph 30. The evidence is summarised at paragraphs 60 to 63 of the reasons for decision. It was, as Mr Beaumont said, a ‘live issue’ at all times in the hearing.

Penalty

[2] See T81 to 101

The applicant submitted that regardless of how the respondent’s conduct was characterised, the tribunal should make orders that the respondent be publicly reprimanded, that he pay a fine in the sum of $3,000 and that he pay the applicant’s legal costs.
The respondent submitted that he should be privately reprimanded, that he should not be fined and not be required to pay all of the applicant’s costs. He sought an order that the applicant pay some of his costs. Their respective submissions are considered in greater detail below.
Section 425 of the LP Act sets out the orders that the Tribunal may make if it is satisfied that a practitioner is guilty of unsatisfactory professional conduct. It may make one or more of the specified orders, or any other order that it considers appropriate. The specified orders include a recommendation that the name of a practitioner be removed from the local roll, various orders relating to suspension or the placing of conditions on a practising certificate, a requirement for additional training, and orders relating to supervision, inspection and management of the legal practice.
Section 425(3)(e) of the LP Act allows the tribunal to make an order publicly reprimanding the practitioner or, if there are special circumstances, privately reprimanding the practitioner. Section 425(5)(a) allows the tribunal to impose a fine to be paid to the Law Society. Section 427 of the LP Act sets a maximum fine for a finding of unsatisfactory professional conduct of $10,000.
It is well established that the primary objective of the legal profession disciplinary system is to protect the public rather than to punish the practitioner.[3]
[3] See the discussion of this and the list of authorities in Riley’s Solicitors Manual at [33,010] to [33,025]

The tribunal has previously identified factors relevant to the determination of an appropriate sanction as including the nature of, and the circumstances surrounding, the acts found to constitute unsatisfactory conduct, the level of understanding demonstrated by the practitioner of the unsatisfactory nature of his conduct, the attitude of the practitioner especially whether he demonstrates any remorse or regret for the conduct, the likelihood of a future re-occurrence of unsatisfactory conduct, and any previous adverse findings in relation to the practitioner’s professional conduct.[4] We add to this list any loss suffered by others as a result of the unsatisfactory conduct and any benefit gained or loss suffered by the practitioner. The factors are to be considered in the context of the protective aim of these proceedings. The relevant authorities are discussed in detail in Riley’s Solicitors Manual at paragraphs [33,065] to [33,105].
[4] Law Society of the ACT and The Legal Practitioner [2010] ACAT 47 at 21
The applicant submitted that, notwithstanding that the respondent had not benefitted from his actions and that his client had not suffered any detriment, the findings of the tribunal are inherently serious because they include a finding that the respondent intentionally misled his client and the Law Society, that his actions involved deceit and that the respondent does not appear to understand that his actions involved deceit. The applicant also referred to the Tribunal’s comments concerning the manner in which the respondent gave evidence as illustrating he lacks insight as to the seriousness of his conduct.
The applicant submitted that these factors should lead the tribunal to publicly reprimand the practitioner in order to deter him and others from similar conduct in the future. The public reprimand is a protective mechanism. The applicant noted that there were no special circumstances to justify a private reprimand.
The applicant submitted that the tribunal should also impose a fine because a reprimand, by itself, would not be a sufficient deterrent. In support of this submission, the applicant referred to a previous disciplinary action against the respondent in 2006 in which the former Professional Conduct Board found him guilty of unsatisfactory professional conduct. In the earlier case, the respondent filed documents in the Federal Magistrates Court in a manner which implied that the documents were filed by the respondent’s client personally, when he was in fact represented by the respondent. The actions had the potential to mislead the Federal Magistrates Court. The Board was not satisfied that the respondent deliberately intended to mislead the Court, but did make a finding of unsatisfactory professional conduct. The respondent was reprimanded, directed to complete a course in ethics and ordered to pay the applicant’s legal costs. Mr. Beaumont submitted that the orders made in the previous case had not deterred the respondent from engaging in misleading conduct which is the subject of the current proceeding and, that because the conduct in this case was found to involve deliberate misleading conduct, the sanction imposed should be more serious both in quantity and quality than on the previous occasion. A fine was an appropriate additional sanction in those circumstances. He proposed a fine in the order of $3,000 because the applicant also sought a costs order and because the respondent produced some evidence at the hearing suggesting that he has a modest annual assessable income.
The respondent made a number of submissions, some of which related to the tribunal’s findings and the way in which the hearing proceeded. He was particularly concerned with the tribunal’s findings that his actions involved deceit and deception. He did not agree that his actions involved deceit, deception or deceptive conduct. The respondent asked the tribunal to change or modify its findings. He submitted that he should not be punished in relation to findings that he challenges. This is not an occasion for the tribunal to re-visit its findings.
In so far as the submissions were relevant to sanctions based on the tribunal’s findings, the respondent asked that the tribunal issue a private reprimand, taking into account the following:
a)the alteration he made to the letter was minor and no one suffered a detriment;
b)he accepts that he was incorrect to think that he could alter the letter because it was his document;
c)he admitted that he had altered the letter the moment that that allegation was put to him – he did not shy away from it;
d)he did not know that he had a positive duty to tell the Law Society about the alteration. He thought that his duty to be open and frank in dealings with the Law Society was confined to specific allegations put to him. He now accepts that he should have disclosed the alteration. He regrets his conduct and will abide by this principle in future;
e)he should not be punished for the manner in which he gave evidence because this was affected by his cultural background, his lack of understanding of the complex questions put to him by Mr Beaumont, and the way in which people of different cultural backgrounds respond under extreme pressure;
f)the conduct was one-off;
g)no harm was done to the client and he (that is, the respondent) did not get any personal benefit from the alteration;
h)the Tribunal should not give any consideration to the earlier disciplinary matter and use it to impose a higher penalty, because he was punished adequately for that matter then. The earlier matter is not relevant to this matter. It involved a different charge, under different legislation and should be distinguished from this matter. It should not be brought up again and again. He should just be allowed to move on;
i)he is a small-scale practitioner with a very small profit margin. His office rent is very high. It is a long term obligation as are other expenses such as wages, electricity, computing costs and costs associated with the general running of the business. His business will suffer if a fine is imposed on him as well as an order for costs.
The respondent also provided a large number of references and testimonials. Two were from other legal practitioners. Several letters were from clients attesting to their satisfaction with his professional services. One was from a politician. There were several newspaper articles relating to the respondent’s work with detainees and a number of notes and cards expressing gratitude for the respondent’s work. None of the references indicated that the author was aware of the details of the current proceedings. One of the references from a legal practitioner specified, “I am not privy to the factual details of what occurred...in the matter leading to the complaint to the Law Society.” Another reference from a barrister listed many cases in which the two have worked together without reference to the facts of this matter and concluded;
My general opinion – dedicated to obtaining legal redress for clients. Dogged in seeking it. You put up with some very difficult clients over months and sometimes years. ...I have not known you to miss a court deadline, or fail to appear in court, or fail to brief counsel in time...Like many lawyers in private practice, you work long hours to get the work done.
We re-iterate that the primary objective of the disciplinary system is to protect the public rather than to punish the practitioner. Of course, the outcome of any sanction will have a punitive effect on the practitioner, but in determining an appropriate sanction the Tribunal’s focus should be on the protective aim.
This is not a matter that justifies a sanction affecting the respondent’s right to practice. Nor do the issues raised necessitate orders relating to the supervision, inspection or management of the respondent’s practice.
The findings of the Tribunal as to the deliberately misleading and deceptive nature of the respondent’s conduct in relation to the altered letter are, nevertheless, serious. In this case, the Tribunal has found that the respondent’s actions were intended to give his client a false impression, to mislead and to deceive the client. Likewise, a false impression was given to the Law Society. Even though no-one was actually misled in the long term, the mere making of the intentional false representation falls short of the standard of competence and diligence that a client is entitled to expect from their lawyer.
We acknowledge the respondent’s submissions as to the minor nature of the alteration and the absence of any detriment to the client or benefit to the practitioner. These things do not change the underlying seriousness of the respondent’s intentional misrepresentation and the need to ensure that he is deterred from similar actions in the future.
We also acknowledge that the respondent has expressed regret for his actions and that he admitted that he had altered the letter when the allegation was put to him.
The Tribunal expressed concern in its reasons that the respondent did not appear to understand that his behavior involved deceit. His submissions as to penalty confirm that concern and detract from the respondent’s expressions of regret and his admission. We cannot be confident that he fully appreciates the nature of the wrongdoing in this matter. This raises a doubt about his ability to recognise what he needs to do, or to refrain from doing, in order to satisfy the standards of competence and diligence required of him in the future.
Previous disciplinary proceedings are clearly relevant in a protective context.[5] The earlier matter involved a misrepresentation. So does this matter. The nature of the misrepresentation is different, but in both cases the practitioner took action that created a false impression. The earlier matter is not so different that the Tribunal should regard it as completely irrelevant. We conclude that the respondent has not learnt from the earlier matter. By taking the earlier matter into account in this way, we are not continuing to discipline the respondent for it. It is considered because it casts doubt on the ability of the respondent to recognise when his actions fall short of the standard of competence and diligence expected of a practitioner and raises a likelihood that, in the absence of an appropriate deterrence, he may take similar actions in the future.
[5] see the discussion and authorities detailed in Riley’s at [33,070.10]
In those circumstances, we accept Mr. Beaumont’s submission that a public reprimand is an appropriate sanction. The Tribunal can only privately reprimand a practitioner where special circumstances are shown. The respondent did not demonstrate any special circumstances that would justify a private reprimand. A private reprimand, of its nature, does not provide any protection for the public.
The various references and testimonials provided by the respondent are of little assistance to the Tribunal because they do not address the issues in this matter. There is no indication that the authors know about the facts of this matter and the findings of the Tribunal. The views that they express about the practitioner and his work relate to quite different circumstances. The testimonials tell us that he is a hard working practitioner and that a number of his clients are grateful for his efforts on their behalf. Evidence of this sort is only of assistance when it is given by referees who are fully informed about the facts of the case and whose view specifically addresses the behaviour being considered by the Tribunal.[6]
[6] See for example the discussions of the value of character references in Re Bridgman [1934] St Qd R 1, Re Nelson (1991) 106 ACTR 1 at 24 per Higgins and Foster J, Re Grosse [1996] ACTSC 5, LawSociety of NSW v Foreman (No 2) 1994 34 NSWLR 408 at 444
The applicant submits that the Tribunal should fine the respondent as a further deterrent both for the practitioner himself and for others because of the seriousness of this matter, the lack of insight of the practitioner, and the previous disciplinary action. The imposition of a fine clearly has a punitive effect, but various authorities have recognised that it may also have a protective benefit by operating as a disincentive to practitioners[7] and that it can be appropriate to both fine and reprimand a practitioner.
[7] NSW Bar Association v Sahade (No 3) [2006] NSWADT 39, Law Society of NSW v Cornwell (No 2) [2006] NSWADT 308 at 72, Council of the Law Society of NSW v Treanor [2009] NSWADT 115 at 17, NSW Bar Association v Hart [2006] NSWADT 97 at 111
In NSW Bar Association v Sahade (No 3)[2006] NSWADT 39 the members of the NSW Administrative Decisions Tribunal said about fines:
...although they may be perceived by the offender to be punitive, they play a role in protecting the community, including the community of legal practitioners.
A monetary fine would normally be regarded as a penalty or punishment. Indeed, in years past a fine was one of the few alternatives to a sentence of imprisonment...If a fine operates to deter an offender from offending again, or to deter a like-minded person not to offend for fear of being fined, it may fairly be looked at, not as punitive, but for the protection of the public and therefore as being consistent with the purpose of the jurisdiction of the Tribunal. Indeed, this must be the case, otherwise there could be no justification for ... including a power to fine.
The same reasoning may be applied to a public reprimand...A public reprimand may operate as a warning to the offender and also to others who may be contemplating similar wrongful conduct.
There is a basis for the submission that it is appropriate to add a fine to the sanctions imposed on the practitioner in this case because of the previous disciplinary proceedings. The Tribunal should also consider the practitioner’s demonstrated ability to pay any fine and the likely amount of the legal costs he will be required to pay.
Unfortunately, the practitioner provided no evidence about his capacity to pay a fine. He told us that he had significant costs relating to his business and that he has a small profit margin. He did not provide any information verifying his overall financial circumstances. The only information available was a 2007-2008 income tax assessment notice showing a taxable income of $42,025. That was provided because the applicant served a Notice to Produce. It was not volunteered. Given that the respondent sought to rely on his inability to pay a fine as a reason why the Tribunal should not impose one, it is surprising that he did not provide appropriate evidence to verify his submission. We accept that the costs of running a legal practice are high but that, by itself, does not demonstrate an inability to pay a fine.
The Tribunal has made an order that the respondent pay the legal costs of the applicant. We do not know what the amount of the costs will be but we can anticipate that they will be greater than the maximum fine allowed by section 427 of the LP Act. The costs order will have a deterrent effect on the respondent. However, the public reprimand, further training in ethics and costs ordered in the earlier matter do not appear to have had the desired effect of deterring the respondent. The addition of a fine in this case is therefore appropriate. The sum suggested by the applicant is also, in our view, appropriate.

Costs

Section 433 of the LP Act details the Tribunal’s powers in relation to orders for the payment of costs in legal practitioner disciplinary matters. It is inconsistent with, and prevails over, the provisions of section 48 of the ACAT Act. It is also quite different from the familiar power to order that costs should “follow the event”. The provisions of section 433 reflect the nature of the applicant’s role as a regulatory authority with responsibility for the protection of the public. Regulatory authorities should be able to bring disciplinary actions, where there is a reasonable foundation for doing so, without the risk of a costs order if the action is ultimately unsuccessful.
Section 433(1) provides that if the Tribunal finds that a legal practitioner is guilty of unsatisfactory professional conduct it must order the practitioner to pay costs, including the costs of the Law Society unless the Tribunal is satisfied that exceptional circumstances exist. Section 433(2) gives the Tribunal discretion to order that a practitioner pay costs even if no finding has been made against the practitioner in some circumstances.
Section 433(3) relevantly gives the Tribunal a discretion to order that the applicant pay the practitioner’s costs, but only if the Tribunal is satisfied that the practitioner is not guilty of unsatisfactory professional conduct and there are special circumstances that justify the making of the orders.
In this case, the Tribunal has found that the respondent is guilty of unsatisfactory professional conduct in relation to some of the matters contained in the complaint. The respondent submitted that there are exceptional circumstances that justify the making of a limited order for costs in favour of the applicant in relation to ground 3.2 of the application. Further, he submitted that there are special circumstances that justify the making of an order for costs in his favour in relation to the grounds in respect of which no finding was made against him and in particular, in respect of ground 3.3(c) which was not pursued by the applicant. He relied on the way in which the application proceeded before the Tribunal as constituting exceptional and special circumstances that justify the orders he seeks.
The hearing proceeded on the basis of an amended application dated
6 March 2009 which was different from the original application lodged on 5 August 2008. At the commencement of the hearing, the applicant indicated that it would not pursue ground 3.3(c) of the application. The history of the application is set out in greater detail at paragraphs 11 to 17 of the reasons for decision of 7 October 2010.
The respondent said that he had spent time preparing his response to the original application and in particular, had incurred significant costs in order to obtain an expert’s opinion about the matters raised in ground 3.3(c). He regarded
ground 3.3(c) and the grounds that had been dropped when the application was amended as “bogus charges”. He sought compensation through a costs order for having to face the bogus charges. He said that he believed that people associated with the applicant had personal animosity towards him and that they were determined to inhibit him from continuing to practise. He described the applicant as using the proceedings to “test the waters” and acting in the hope that if they threw enough stones at him, some of them might hit. He also noted that the applicant had not succeeded in respect of the allegations concerning the reconstructed account and that, on his calculation, more than 90% of the original application was dropped or was unsuccessful.
Mr Beaumont submitted that the applicant had acted appropriately and in accordance with its regulatory responsibilities. Neither the abandonment of ground 3.3(c), nor the fact that the Tribunal did not make a finding against the practitioner as to ground 3.3(a) and (b), are special circumstances that justify the making of a costs order in favour of the applicant.
Riley’s Solicitors Manual at [34,175] details a number of cases in which the existence of special or exceptional circumstances has been considered. Riley’s refers to a decision of the Queensland Legal Practice Tribunal in Legal Services Commissioner v O’Connor (No 2) [2006] LPT 2. We have been unable to locate a copy of the decision and so, rely on the description given of it in Riley’s. The Tribunal in that matter is reported to have found exceptional circumstances where the charge that the respondent ultimately had to meet at the hearing was different both in its terms, in the particulars of the charge, and the gravity of the offence, from the charge set out in the application that commenced the proceeding. The practitioner was ordered to pay only two thirds of the Commissioner’s costs. Some similarities may exist between that case and this.

In the matter of Law Society of NSW v Oliveri [2007] NSWADT 246, the Administrative Decisions Tribunal (ADT) made no order for costs following a finding that a practitioner was guilty of unsatisfactory professional conduct. The Tribunal in that matter said that it did not regard the matter as serious and that it could have been resolved had the complainant accepted a reasonable offer from the practitioner to resolve their dispute (which concerned the payment of a sum of money). The circumstances of that case are quite different from this one. This does involve a serious matter and it is not a matter that could have been appropriately resolved by any offer made by the respondent before the hearing.
In NSW Bar Association v Howen (No 2) [2008] NSWADT 27 the ADT made an order that some of the respondent barrister’s costs be paid from the NSW Public Purpose Fund where the case brought against him was dismissed. Costs were awarded in relation to grounds that the Tribunal found clearly lacked merit. The members of the Tribunal said:
We view the present case as one in which there are indeed special circumstances which ‘warrant’ the making of a partial costs order. While one important component of the case brought by the Bar Association against the Barrister could not be regarded as clearly lacking in merit...our conclusion regarding the remaining components–including the particularised allegations that the Association withdrew after two days of hearing–was that they lacked merit. This should have been realised by the Association before it resolved to institute proceedings. In consequence, the Association brought a distinctly more substantial case against the Barrister than was at all justifiable... this constitutes ‘special circumstances’ within the meaning of section 566(3) of the LP Act.
Again, the circumstances of that case are different from this one. Grounds 3.3(a) and (b) did not clearly lack merit. There were serious issues to be considered. The Tribunal accepted that the respondent had reconstructed his account and that he had not adequately explained why he had done so. In the end, the Tribunal was not persuaded that the respondent had remembered the reconstruction or that it was reckless of him not to check his soft copy records before responding to the Law Society. This is not a case in which those grounds were unreasonably pursued.
The applicant did not pursue ground 3.3(c). If there was evidence before the Tribunal that indicated that there was no reasonable foundation for the ground, or that the ground lacked merit from the outset, there may be a basis for making an order in favour of the respondent in relation to the costs he incurred to respond to that ground. But there is no such evidence. The applicant had a report from an independent expert that supported the ground. The respondent’s own affidavit sworn on 5 May 2009[8] and the affidavit of the forensic expert he engaged, Gary Coulthart, sworn 4 May 2009[9], support a conclusion that this was a complex issue that required expert consideration. We cannot be satisfied that the ground was without merit or that it was unreasonable for the applicant to have included the ground in the amended application on the basis of the expert report it had obtained.
[8] Exhibit R1
[9] Exhibit R2
We are not satisfied for the reasons set out above, that there are special circumstances that justify the making of a costs order in favour of the respondent under section 433(3) of the LP Act. Nor are we satisfied that there are exceptional circumstances that should lead the Tribunal to depart from the requirement that it order that the respondent pay that part of the applicant’s legal costs that relate to the amended application dated 6 March 2009. We are, however, satisfied that the significant changes made to the application are exceptional and that the practitioner should not be required to pay costs of the applicant that relate to the original grounds 1 and 2 that were abandoned.
Section 433(4) of the LP Act provides that the Tribunal may make an order for a stated amount of costs or for an unstated amount. If an order is made for an unstated amount, the Tribunal must state the basis on which the amount is to be decided.
The respondent asked the Tribunal to fix an amount for costs and not order that costs be paid as agreed or as assessed. We have no information that would enable us to fix an amount for costs now so we must state the basis on which the amount is to be decided.
Costs should be paid on a party/party basis on the scale applicable to matters proceeding in the Supreme Court. The parties should make an attempt to reach agreement on costs. If agreement is not reached within 28 days, the applicant may file and serve a Bill of Costs using Form 2.45 approved under the Court Procedures Rules. The respondent is to file and serve a document setting out the objections he has to the Bill within 14 days of its service. The Bill and the respondent’s objections will be referred to a Registrar of the tribunal. The Registrar is to assess the costs and make a recommendation to the Tribunal concerning the amount that it should state be paid by the respondent.

………………………………..

Ms L. Crebbin
General President

PUBLICATION DETAILS

TO BE PUBLISHED

To be completed by Tribunal Staff

PART A

FILE NUMBER:	LP 5 of 2008
PARTIES, APPLICANT:	THE LAW SOCIETY OF THE ACT
PARTIES, RESPONDENT:	THE LEGAL PRACTITIONER
COUNCEL APPEARING, APPLICANT	Mr N. Beaumont
COUNCEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Phelps Reid
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	MS CREBBIN, GENERAL PRESIDENT MR G. WRIGHT, MEMBER
DATES OF HEARING:	22 November 2010
PLACE OF HEARING:	CANBERRA

PART B

RECOMMENDATION:

FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )

COMMENTS: