Legal Practice Board v Taylor
[2005] WASC 242
•8 NOVEMBER 2005
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
IN CHAMBERS
CITATION: LEGAL PRACTICE BOARD -v- TAYLOR [2005] WASC 242
CORAM: HASLUCK J
HEARD: 18 OCTOBER 2005
DELIVERED : 8 NOVEMBER 2005
FILE NO/S: CIV 1851 of 2005
CIV 1855 of 2005
MATTER :Legal Practice Act 2003 (WA), s 123 and s 250
BETWEEN: LEGAL PRACTICE BOARD
Applicant
AND
FRANK WILLIAM TAYLOR
Respondent
Catchwords:
Legal practitioners - Motion for contempt - Work performed by a person other than a legal practitioner - Preparation of Will and trust deed - Application for probate - Drawing and preparing of loan documents - Imposition of penalty
Legislation:
Legal Practice Act 2003 (WA), s 123, s 250
Legal Practitioners Act 1893, s 76, s 77, s 81
Result:
Fines imposed
Category: B
Representation:
Counsel:
Applicant: Mr B J H Goetze
Respondent: In person
Solicitors:
Applicant: Minter Ellison
Respondent: In person
Case(s) referred to in judgment(s):
Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335
Barristers' Board v Palm Management Pty Ltd [1984] WAR 101
Cornall v Nagle [1995] 2 VR 188
D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191
Legal Practice Board v Adams [2001] WASC 78
Maxwell v Murphy [1957] 96 CLR 261
Rodway v The Queen (1990) 169 CLR 515
Case(s) also cited:
Legal Practice Board v Heedes [2004] WASC 260
Legal Practice Board v Mullally [2003] WASC 225
Legal Practice Board v Van der Zwaan [2002] WASC 133
HASLUCK J:
Introduction
The Legal Practice Board has applied for orders that the defendant, Frank William Taylor, be punished for contempt of this Honourable Court in that, not being a duly certificated legal practitioner, he engaged in legal business. It is alleged in originating motion 1855 of 2005 that the defendant took steps necessary to seek and obtain a grant of probate (the "probate matter"). It is alleged in originating motion 1851 of 2005 that the defendant took steps necessary to secure a commercial loan (the "loan matter").
The defendant appeared on his own behalf at the hearing of these applications and freely accepted that at all material times, in respect of each matter, he was not a certificated legal practitioner. I was informed that he obtained a law degree many years ago and has had some experience in the administration of the law in that he worked for an agency controlled by the Government of the Commonwealth of Australia. He acknowledged that in each case his actions amounted to a contempt of Court as alleged.
In essence, the defendant said that he was drawn into the matters complained of by degrees and did not set out to engage in legal business contrary to the requirements of the law. I will return to his submissions in due course.
It will be useful to begin by looking briefly at the statutory provisions bearing upon the matters in question.
Statutory provisions
At the time the events giving rise to the probate matter occurred s 76 of the Legal Practitioners Act 1893 (WA) provided that no person other than a certificated practitioner shall act as a solicitor or carry on legal proceedings. Section 77 provided that no person other than a certificated practitioner shall directly or indirectly perform or carry out or be engaged in any work in connection with the administration of the law, or draw or prepare any deed, instrument, or writing relating to or in any matter dealing with or affecting real or personal estate or any proceedings at law or in equity.
By s 81 of the Act any person who acted contrary to such provisions was guilty of a contempt of the Supreme Court and could be dealt with accordingly by the said Court on the motion of the Legal Practice Board, being a body constituted pursuant to provisions of the Act.
The Legal Practitioners Act was superseded by the Legal Practice Act 2003 (WA) which came into force on 1 January 2004. By s 123 of the Legal Practice Act a person must not engage in legal practice unless the person is a certificated practitioner. The penalty for such an offence is described as $10,000. By s 250 a person who contravenes the terms of the Legal Practice Act is guilty of a contempt of the Supreme Court and may be dealt with accordingly by the Supreme Court on the motion of the Legal Practice Board. The contempt penalty was at large under each of the Legal Practitioners Act and the Legal Practice Act.
I note in passing that by s 37(1) of the Interpretation Act 1984 (WA) where a written law repeals an enactment the repeal does not, unless the contrary intention appears, affect previous operation of the enactment repealed or affect obligations created prior to the appeal. Various provisions of the Criminal Procedure Act 2004 deal with the prosecution of offences. However, s 183 states that the Act does not effect the authority of a court to deal with and punish a person summarily for an act or omission that is a contempt of court.
The general rule of the common law is that a statute changing the law ought not be understood as applying to facts or events that have already occurred in such a way as to confer or impose or otherwise affect rights or liabilities which the law had defined by reference to the past events. However, the law appointing or regulating the manner in which rights and liabilities are to be enforced or their enjoyment is to be secured by judicial remedy is not within the application of such a presumption. Changes made in practice and procedure are applied to proceedings to enforce rights and liabilities, notwithstanding that before the change in the law was made the accrual of the rights and liabilities was complete and rested on events or transactions that were otherwise past and closed: Maxwell v Murphy [1957] 96 CLR 261; Rodway v The Queen (1990) 169 CLR 515.
It emerges, then, that in determining the obligations of the defendant in respect of the events in question I am at liberty to refer to the relevant provisions of the Legal Practitioners Act, being the statute in force when the events occurred. However, I must refer to s 250 of the Legal Practice Act 2003 in dealing with the motions for contempt and giving consideration to matters of penalty. Section 53 of the Sentencing Act 1995 reflects the position at common law that if a court decides to fine an offender then, in deciding the amount of the fine the court must as far as practicable, take into account the means of the offender and the extent to which payment of the fine will burden the offender.
I will turn first to the probate matter.
The probate matter
The applicant alleges that the defendant carried on proceedings and acted as a solicitor in a cause, namely, a motion dated 21 January 2000 to obtain a grant of probate of the estate of Gordon Ryan Munn deceased, such motion being supported by the defendant's affidavit sworn 18 January 2000; alternatively, the defendant engaged in work in connection with the administration of law in obtaining a grant of probate.
It was said further that in the course of carrying out instructions relating to the obtaining of probate the defendant prepared instruments or writings relating to the estate and the obtaining of a grant of probate. Further, it was alleged, the defendant engaged in work in connection with the administration of law in obtaining and acting on instructions to prepare a Will executed by the deceased on 11 February 1999 and a trust deed executed by the deceased in or about February 1999.
The application was supported by the affidavit of Barbara Joan Hunt sworn 30 May 2005 who is the daughter of the deceased. She said that she met the defendant in 1991. She and her husband became friendly with the defendant and his wife and this led to her late father requesting the defendant to prepare a Will. The defendant attended at their home to obtain instructions and in due course produced a Will and trust deed to be signed by the deceased. The documents in question are exhibited to the affidavit.
The deponent said that after her father's death on 1 November 1999 she gathered what she believed to be all relevant documentary materials and delivered them to the defendant with a request that he look after everything for her. By this she meant that he should attend to the formalities required to give effect to her late father's Will. Exhibited to the affidavit are papers establishing that the motion for probate was moved by the defendant and was supported by an affidavit in which the defendant affirmed that if a grant of probate was made to him he would administer the estate of the deceased according to law.
Exhibited to the affidavit also are certain letters written by the defendant including a letter to Mrs Hunt dated 14 December 2000 in which he summarises the financial position of the estate and concludes that "whilst the estate is not yet completely finalised, I do not anticipate that either extra funds or extra expenses will be incurred and I am therefore confident that the amounts calculated above will not change". The letter details the expenses and includes an amount of $1250 in respect of administration of estate including filing fees and miscellaneous expenses. It is apparent from this item that the defendant had in mind to charge a fee for his services.
Mrs Hunt said in her affidavit that as at 30 May 2005 she had not received a final and formal accounting as foreshadowed by the 14 December 2000 letter. She said that she had not heard anything from the defendant since that time notwithstanding that she had made numerous requests for information regarding the finalisation of her late father's estate.
The application is supported also by the affidavit of the deceased's son, Gordon Frederick Munn, to which is exhibited various exchanges of correspondence concerning finalisation of the affairs of the estate. It is clear from those exchanges that the defendant had been active in the administration of the estate but was of the view that various matters had to be attended to before his administration of the estate could be finalised.
At the hearing of the application counsel for the applicant handed up a memorandum dated 18 October 2005 which had been passed to him by the defendant shortly before the hearing commenced. This purported to portray the final financial position of the estate. It indicated that the amount available for distribution to the beneficiaries was $66,154.50 with the balance owing to the beneficiaries (after bringing to account interim advances and outgoings) being an amount of $625 due to Mrs Hunt and an amount of $1077.25 due to the deceased's son. I was informed that inherent in the figures was a waiver of any claim for fees that might previously have been asserted by the defendant.
The defendant's plea
The defendant acknowledged that there had been infringements of the relevant provisions of the Legal Practitioners Act in the manner alleged by the applicant in respect of the probate matter. He did not dispute that this could be characterised as a contempt of the Supreme Court in the manner allowed for by s 250 of the Legal Practice Act 2003. However, in the course of making a plea of mitigation he said that he had never held himself out as being a solicitor.
The defendant said that he prepared the Will and trust deed and documents relating to the administration of the estate in an endeavour to be of assistance to the deceased and members of the deceased's family as an extension of the friendly relationship between the parties. The estate had now been wound up in the manner portrayed on his memorandum dated 18 October 2005. In the end, no fees had been charged for his services.
The loan matter
In this matter the Legal Practice Board in this matter sought an order that the defendant be punished for contempt in that during the period from in or about March 2003 to in or about May 2003 at Perth, directly or indirectly, he carried out work in connection with the administration of law in obtaining and acting on instructions from Matthew de Pledge, Managing Director of Moulding Industries Pty Ltd, to evidence a loan agreement between Moulding Industries Pty Ltd and Redifix Technologies Pty Ltd.
Further, it was alleged that in the course of carrying out the instructions the defendant drew or caused to be drawn or prepared instruments dealing with or affecting personal estate being a loan agreement dated 19 May 2003 and a deed of charge dated 19 May 2003.
This application was supported by the affidavits of Ignazio Peter Ricciardi sworn 11 July 2005 and of Sandro Donatelli sworn 27 May 2005.
Mr Donatelli commenced work as a Production Managing with Moulding Industries in late June 2002. The Managing Director, Matthew de Pledge, introduced the defendant to him as the company's lawyer and the latter appeared to be acting in that capacity.
The company encountered financial difficulties and a proposal was raised with Mr Donatelli that he should invest in the company. In the course of various discussions aimed at resolving the company's difficulties, Mr Donatelli recalled being present on 19 May 2003 at the signing of a loan agreement and deed of charge, being documents prepared by the defendant. The loan agreement was between Moulding Industries and Mr de Pledge's company, Redifix Technologies Pty Ltd. The deed of charge was registered over Moulding Industries.
Documents exhibited to the affidavit indicate that the defendant charged for his services with an account dated 17 March 2003 referring to preparation of the de Pledge loan agreement. The defendant's letterhead describes the defendant's firm as being "Business, Legal and Management Consultants".
Mr Ricciardi said in his affidavit that from about August 2001 to July 2004 Moulding Industries traded under the business name of Redifix and carried on business in the development and sale of lightweight concrete products for use in housing and commercial building applications. He referred to meeting the defendant at a meeting with Mr de Pledge on 30 May 2002 on which occasion the defendant was introduced as "the company lawyer and management advisor". Mr Ricciardi went on to describe various events and exchanges which suggested that the defendant was providing legal advice to the company. Exhibited to the affidavit are copies of accounts rendered by the defendant for preparing the subject loan agreement and deed of charge. Moulding Industries was placed in voluntary liquidation on 8 July 2004.
I note in passing that the coversheets of the documents in question provide details of the defendant's firm including (as to the loan agreement) a description of the firm as "Business, Legal and Management Consultants". The address of the defendant's firm is given as the address of Redifix Technologies on the Notification of Details of a Charge form lodged at the Australian Securities and Investments Commission with the defendant being described as the lodging party.
The defendant's submission
As to this matter also, the defendant did not contest the allegations comprising the alleged contempt of court but presented a plea in mitigation. He said that the Managing Director of Moulding Industries consulted the defendant because of a previous association with another company for which the defendant was company secretary. The defendant said that over a number of months together with an accountant and a computer expert, attempts were made to solve the financial difficulties of Moulding Industries. A decision was made to set up a separate company with moneys advanced by investors. According to the defendant, he became concerned that the proposed advances were not properly secured and it was in these circumstances that the documents in question were brought into existence.
The defendant acknowledged that he had acted foolishly in preparing the documents but the pressure of the surrounding circumstances caused him to act in that manner. He was semi‑retired at the time but had been acting as a consultant in regard to corporate governance matters.
I note in passing that I was subsequently informed by counsel for the Legal Practice Board that whatever the intent of the loan and security document they were in fact registered against the company as a floating charge.
Findings
The purpose of the relevant legislation is to protect the public to ensure that legal work is only carried on by certificated practitioners who are properly trained and who are subject to the professional standards and ethics of the legal profession and compulsorily insured: D'Alessandro & D'Angelo v Bouloudas (1994) 10 WAR 191.
In Barristers' Board v Palm Management Pty Ltd [1984] WAR 101 Brinsden J was of the view that the expression "administration of law" is to be read as meaning "the practice of law" and this meaning should be given to the phrase in s 77 of the Legal Practitioners Act. He went on to suggest that the practice of law includes also the giving of legal advice and counsel to others as to their rights and obligations under the law and the preparation of legal instruments, including contracts, by which legal rights are either obtained, secured or given away, although such matters may not then or ever be the subject of proceedings in a court.
It is apparent from Cornall v Nagle [1995] 2 VR 188 that where a person in bringing documents into existence exercises his mind as to what is the appropriate form of words to accommodate the particular case, then this can be regarded as drawing or preparing a legal document.
It is apparent from the circumstances comprising the probate matter and the loan matter that the defendant has infringed the provisions of the Legal Practitioners Act mentioned earlier (being the law governing the circumstances at the material time in each case) in the manner alleged by the Legal Practice Board. As indicated in earlier discussion, the essence of the factual allegations was not contested and the defendant accepted that the infringements complained of amounted to a contempt of court for which relief could be obtained pursuant to s 250 of the Legal Practice Act.
In the course of making submissions directed to the matter of penalty, counsel for the Legal Practice Board referred not only to the circumstances of each case, which were said to reveal clear transgressions by the defendant, but also to some additional matters which were said to bear upon the defendant's plea in mitigation in respect of the loan matter. It was said that in 2001 the defendant was convicted of a similar matter under the Legal Practitioners Act in that he was acting on instructions from the Department of Commerce and Trade on behalf of the Southern Aboriginal Corporation and the Aboriginal and Torres Strait Islander Commission and Great Southern Marine Hatcheries Pty Ltd to negotiate and conclude an asset sale and purchase agreement between Marri Culture Holdings Pty Ltd and Great Southern Marine Hatcheries Pty Ltd. There was also a shareholders' agreement between Southern Aboriginal Corporation and Marri Culture Holdings Pty Ltd.
It was said the defendant did all things necessary on that occasion to secure the execution of the relevant documents including the drawing of them and the providing of them to the parties for their use.
The defendant did not dispute the information provided to me concerning the prior conviction. It was a matter of common ground between the parties before me that the conviction on that occasion was recorded in February 2001 and gave rise to a fine of $400. The defendant acknowledged his error in being drawn into the loan matter the subject of the present proceedings when he had been convicted of a prior offence and was aware of the prohibition against legal business being transacted by persons other than certificated practitioners.
The defendant provided me with a full description of his personal circumstances. He made it clear that he is now living in retirement and has ceased to act as a consultant. He assured the Court that he would not be involved in any further infringements. He was 67 years of age and had limited financial resources. He owned a residential property which was subject to a mortgage of $90,000. He and his wife each owned a motor vehicle. He had a small portfolio of shares and his major asset was the regular receipt of a pension from the Commonwealth of Australia.
It follows from my findings of infringement that the applicant is entitled to the relief sought in the originating motions alleging contempt of court in respect of each matter and that the defendant must be punished in the manner allowed for by s 250 of the Legal Practice Act 2003.
When I turn to the matter of penalties I take account of what has been put to me by counsel for the Legal Practice Board concerning the defendant's prior conviction. I take account also of what has been put to me by the defendant in mitigation and of his financial circumstances. I note that counsel for the Legal Practice Board was instructed to press for a substantial fine in respect of each matter.
In Barristers' Board v Palm Management Pty Ltd [1984] WAR 101 the defendant company and its in‑house legal adviser were held to be in contempt in having prepared various deeds in the course of their tax minimisation service. Brinsden J viewed the contempts as serious and imposed fines of $500 for each offence, making $1000 in all.
In Barristers' Board v Marbellup Nominees Pty Ltd [1984] WAR 335 a company carrying on business as a business consultant accepted instructions to establish a unit trust in circumstances that were held to infringe s 77 of the Legal Practitioners Act. Brinsden J imposed a fine of $750 in relation to the principal contempt, $250 for a related matter and $50 for each of various subsidiary contempts.
I note that the maximum penalty provision was removed by s 22 of the Legal Practitioners Amendment (Disciplinary and Miscellaneous Provisions) Act 1992 (WA). Section 81 of the Legal Practitioners Act was amended to provide that a person guilty of contempt "may be dealt with accordingly". That phrase is now repeated in s 250 of the Legal Practice Act.
In Legal Practice Board v Adams [2001] WASC 78, being a ruling that was made after removal of the limit, the defendant in that case assisted a family to commence proceedings in respect of a dispute over farming land. The defendant prepared and subsequently sued out two writs on behalf of the family and negotiated a fee for his services. The case against the defendant was presented on the basis that there was one contempt, albeit involving the issue of two writs. I was persuaded to impose a fine of $800.
In the circumstances of the present case I consider that a fine of $2000 should be imposed upon the defendant in respect of the probate matter and a fine of $4000 should be imposed upon him in respect of the loan matter. I will hear from the parties as to whether any further orders are required.
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