Legal Practitioner 201823 v Council of the Law Society of the Australian Capital Territory (Occupational Regulation)
[2019] ACAT 97
•28 October 2019
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
LEGAL PRACTITIONER 201823 v COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY (Occupational Regulation) [2019] ACAT 97
OR 23/2018
Catchwords: OCCUPATIONAL REGULATION – legal practitioner – non-compliance with obligation to deposit trust money into trust account – meaning of trust money – non-compliance with costs disclosure obligations – non-compliance with a solicitor’s obligation under rule 43 of the Legal Profession (Solicitors) Conduct Rules 2015 regarding the solicitor’s conduct or professional behaviour – consideration of circumstances where a penalty should be imposed in respect of each breach – consideration of circumstances where a global penalty can be imposed – public reprimand – fine – professional training – costs
Legislation cited: ACTCivil and Administrative Tribunal Act 2008 ss 38, 39, 68, 79
Legal Profession Act 2006 ss 216, 222, 223, 269, 272, 278, 394, 412, 413, 415, 416, 419-435, 585
Legislation Act 2001 s 133
Subordinate
Legislation cited: Legal Profession (Solicitors) Conduct Rules 2015 r 43
Cases cited:Allesch v Maunz [2000] HCA 40
Commissioner for Social Housing v Hutchings & Gottschalk-Krutsky [2016] ACAT 88
Council of the Law Society of the ACT v Legal Practitioner M1 [2015] ACAT 78
Council of the Law Society of the ACT v Legal Practitioner P4 (No 2) [2015] ACAT 35
Council of The Law Society of The Australian Capital Territory v Legal Practitioner 201907 (Darren Carden) [2019] ACAT 76
Council of the Law Society of the ACT v Legal Practitioner (Rhondda Nicholas) [2016] ACAT 122
Council of the Law Society of the ACT v Legal Practitioner (Stephen Stubbs) [2010] ACAT 46
Council of the Law Society of the ACT v Legal Practitioner (Stephen Stubbs) [2014] ACAT 64Drake v Minister for Immigration and Ethnic Affairs
(1979)
2 ALD 60
Kioa v West [1985] HCA 81
Lander v Council of the Law Society [2009] ACTSC 117Legal Practitioner “M” v Council of the Law Society of the ACT [2015] ACTSC 312
Legal Services Board v Gillespie-Jones [2013] HCA 35
Malgorzata Urbaniak-Bak v Council of the Law Society of the ACT [2018] ACAT 14
O'Rourke v Miller [1985] HCA 24
Powley & Anor v Reynolds [2018] ACAT 103
Re DP and the Legal Practitioners Act 1970 [2005] ACTSC 78Re Foulger and Repatriation Commission (1980) 2 ALD 789
Re Minister for Immigration; Ex parte Lam [2003] HCA 6
Re Queensland Mines Ltd and Export Development Grants Board (1985) 7 ALD 357
Stirling v Legal Services Commissioner [2013] VSCA 374The Council of the Law Society of the ACT v LP12 [2018] ACTCA 60
The Legal Practitioner Council of the Law Society of the ACT (No 2) [2014] ACTSC 9
List of
Texts/Papers cited: Pearce, Administrative Appeals Tribunal (4th ed, 2015)
Tribunal:Presidential Member G McCarthy
Date of Orders: 28 October 2019
Date of Reasons for Decision: 28 October 2019
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) OR 23/2018
BETWEEN:
LEGAL PRACTITIONER 201823
Applicant
AND:
COUNCIL OF THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY
Respondent
TRIBUNAL:Presidential Member G McCarthy
DATE:28 October 2019
ORDER
The Tribunal orders that:
1.The decision under review made on 17 September 2018 is confirmed.
2.From the date of this order, the respondent not disclose to any third party, save for its legal advisers and the Law Society of the Australian Capital Territory:
(a)the applicant’s name;
(b)any document (or the content of any document) received by the Tribunal in this proceeding (save for any document that exists as a matter of public record); or
(c)the transcript of the proceeding
until further order, unless required to do so in accordance with a lawful direction or requirement.
3.Public access to the Tribunal’s file is prohibited until further order.
…………………………..
Presidential Member G McCarthy
REASONS FOR DECISION
Introduction
1.The applicant is a legal practitioner who I will refer to in my reasons as “the practitioner”. She was admitted to practise in the 1970s and, as best I can ascertain, has practised continually since then.
2.In November 2015, persons who I will refer to in these reasons as “Mr and Mrs A” asked the practitioner to act for them on the purchase of a parcel of vacant land in the ACT. On 4 December 2015, Mr and Mrs A met with the practitioner at her office. The opening page of the practitioner’s file states “Matter opened: 4 December 2015”.[1]
[1] Exhibit R3
3.The transaction proved to be complicated and time-consuming for the practitioner. As a result, according to Mrs A, the practitioner rendered fees totalling $7,356.70 which was significantly more than Mr and Mrs A expected.[2]
[2] The total bill for the practitioner's fees and disbursements is uncertain. In a letter to the Law Society in support of their complaint, Mrs A states that she paid $7,356.70. In a letter to the Law Society dated 24 June 2016, the practitioner states that her fees were “$12,413.32 without any disbursements or discounts”. I located tax invoices dated 15 December 2015, 24 December 2015 and 12 April 2016 totalling $6,987.70. The practitioner refers to a fourth tax invoice dated 31 March 2016 which, she says, did not charge for any professional costs and was for disbursements of $93.70.
4.In April 2016, Mrs A wrote to the Law Society of the ACT (the Law Society) by means of the Law Society’s “Complaints Form” requesting an investigation as to why the practitioner’s fees were so high.
5.Mrs A’s complaint became the subject of a protracted investigation. Finally, by 17 September 2018, the respondent Council of the Law Society of the ACT (the Council) had completed its investigation. On that day, the Council made a decision under section 413 of the Legal Profession Act 2006 (the Act), section 413(1) of which reads as follows:
(1)This section applies if the relevant council for an Australian legal practitioner—
(a)completes an investigation of a complaint against the practitioner; and
(b)is satisfied that there is a reasonable likelihood that the practitioner will be found guilty by the ACAT of unsatisfactory professional conduct (but not professional misconduct); and
(c)is satisfied that the practitioner is generally competent and diligent; and
(d)is satisfied that the unsatisfactory professional conduct can be adequately dealt with under this section.
6.Pursuant to section 413(1)(b), the Council was satisfied that “there is a reasonable likelihood that [the practitioner] will be found guilty by the [Tribunal] of unsatisfactory professional conduct” by reference to three breaches:
(a)The practitioner’s failure to deposit trust money of $770 into a general trust account, in breach of section 222 of the Act.
(b)The practitioner’s failure to comply with her costs disclosure obligations to Mr and Mrs A, in breach of section 269 of the Act.
(c)The practitioner’s failure to comply with rule 43.2 of the Legal Profession (Solicitors) Conduct Rules 2015 (ACT) (the Conduct Rules). The Conduct Rules are binding on the practitioner, pursuant to section 585(2) of the Act.
7.The Council was also satisfied of the matters referred to in sections 413(1)(c) and (d) of the Act. There was no suggestion otherwise in this proceeding.
8.Section 413(2) of the Act sets out the actions that the Council may take when section 413 applies. In this case, on 17 September 2018, the Council imposed a public reprimand under section 413(2)(b), a fine of $1,500 under section 413(2)(e) and a direction that the practitioner undertake the trust accounting and costs modules at the next available Practice Management Course under section 413(2)(d)(iii) (the decision under review). The Council gave reasons for its decision dated 3 October 2018 (the Council’s Reasons).
9.By application dated 1 November 2018, the practitioner applied to the Tribunal pursuant to section 416 of the Act for an order that all of the Council’s resolutions (which I treated as meaning the three actions) be set aside and that “the matter” (which I treated as meaning Mrs A’s complaint against her) be dismissed. At hearing, the practitioner appeared for herself and Mr Moujali of counsel, instructed by McInnes Wilson, Lawyers, appeared for the Council.
10.A proceeding under section 416 of the Act, despite its description as an “appeal”, is an administrative review of a decision of the Council made under section 413 of the Act.[3] The Tribunal is required to consider the matter de novo, or afresh.[4] It therefore ‘stands in the shoes’ of the Council and decides the matter on the evidence before it, which may include evidence not previously before the Council. In Legal Practitioner “M” v Council of the Law Society of the ACT,[5] the Supreme Court per Refshauge ACJ noted the manner in which an “appeal” to the Tribunal should be undertaken.
[3] Legal Practitioner “M” v Council of the Law Society of the ACT [2015] ACTSC 312 at [76]
[4] Legal Practitioner “M” v Council of the Law Society of the ACT [2015] ACTSC 312 at [94]
[5] Legal Practitioner “M” v Council of the Law Society of the ACT [2015] ACTSC 312 at [105]
11.The Tribunal’s function is to review the decision under review (my emphasis), not the Council’s reasons for its decision.[6]
[6] Drake v Minister for Immigration and Ethnic Affairs (1979) 2 ALD 60 at 77; Re Foulger and Repatriation Commission (1980) 2 ALD 789; Re Queensland Mines Ltd and Export Development Grants Board (1985) 7 ALD 357. See generally Pearce, Administrative Appeals Tribunal (4th edition, 2015) at pages 295 - 298
12.In the context of disciplinary action taken under section 413 of the Act, the Tribunal is required to ask and answer the same question or questions that were before the Council pursuant to section 413.[7]
[7] Legal Practitioner “M” v Council of the Law Society of the ACT [2015] ACTSC 312 at [146] – [156]
13.However, on appeal, the Tribunal’s powers are much wider and more significant than the powers exercisable by the Council under section 413(2). Pursuant to section 416(3), it “may make any order it considers appropriate on the appeal”. Pursuant to section 416(4), the Tribunal “may make 1 or more of the orders mentioned in section 425(3) – (5)” which list all the powers available to the Tribunal in response to an application for disciplinary action including an order recommending that the name of the practitioner be removed from the local roll, an order that the practitioner’s local practising certificate be suspended and an order that the practitioner pay a fine of up to $10,000 consequent upon a finding of unsatisfactory professional conduct rather than the maximum of $1,500 that the Council can impose pursuant to section 413.
14.In my view, where the appeal is a de novo review of the decision under review, the Tribunal’s powers under section 416 of the Act are in addition to its powers under section 68 of the ACT Civil and Administrative Tribunal Act 2008 (the ACAT Act) pursuant to which it may confirm, vary or set aside the decision. If it sets aside the decision, it may make a substitute decision or remit the matter to the Council.
15.The practitioner submitted, in effect, that disciplinary action could (or should) not have been taken against her under section 413 of the Act for three reasons.
16.First, presumably with reference to section 413(1)(a) of the Act, the practitioner submitted that the Council had not conducted or completed an investigation of a “complaint” against her because there was no complaint.
17.Second, with reference to section 413(1)(b) of the Act, the practitioner submitted that she had not breached section 222 or section 269 of the Act, or rule 43 of the Conduct Rules. On this basis, she submitted that the Tribunal could not be satisfied to the relevant standard that there is a reasonable likelihood that she would (or will) be found by the Tribunal to have engaged in unsatisfactory professional conduct.
18.Third, the practitioner submitted by reference to many grounds that she had been denied procedural fairness. The practitioner did not make any submission as to what should occur if that were so.
19.I deal with each issue in turn.
The complaint
20.The practitioner began by challenging the statement in the Council’s Reasons that Mrs A’s complaint was made on or about 25 May 2016. She said that she had not been provided with “any complaint dated 25 May 2016”, and that the Council “cannot rely upon a complaint … that does not exist or about which the identity of the document is not known.”[8]
[8] Final submissions dated 14 May 2019, paragraph 2
21.This submission was ambitious. It attempts to construe or treat “the date” of the complaint as being the date it was “made”, and from there contend that a complaint dated 25 May 2016 does not exist. I reject the submission. Mrs A’s Complaints Form is dated 19 April 2016, but it bears a stamp recording that it was “received” by the Law Society on 24 May 2016. The statement in the Council’s Reasons about when the complaint was “made” is correct despite it bearing an earlier date. I should also note that the practitioner knew about the complaint from the beginning: by letter dated 26 May 2016, the Law Society sent her a copy and requested a response.
22.The practitioner next contended that Mrs A’s ‘complaint’ was not a complaint at all. She relied on Mrs A’s statement on the Complaints Form, in answer to the question “Have you tried to resolve the complaint”:
It is not a complaint against our solicitor, it is a request for an investigation.
23.The practitioner also relied on Mrs A’s statement on the Complaints Form, in answer to the question “By making this complaint I am hoping to”:
Discover why our conveyancing fees were triple what we were quoted and how other parties may have influenced that. We would also like to have a penalty and any unfair overpayment returned.
24.The practitioner also referred to correspondence from Mrs A in which Mrs A expressed her approval and gratitude for the practitioner’s work.
25.The practitioner submitted that where there was not a complaint against her, the Council could not and should not have taken disciplinary action against her. She also submitted (quite improperly in my view) that the Council had “taken the opportunity to seek out and act against [her] not upon ‘the complaint’ [but] upon the advice of John Buxton and McInnes Wilson.” [9] [10]
[9] The practitioner's final submissions dated 14 May 2019, paragraph 4
[10] Mr Buxton is a Principal with McInnes Wilson, Lawyers. The Council of the ACT Law Society engaged McInnes Wilson to act on its behalf to investigate Mrs A’s complaint.
26.Two issues arose: whether there was a ‘complaint’, and (if so) whether the Council could take disciplinary action against the practitioner by reference to matters that were not the subject of the complaint.
27.In relation to the first issue, the practitioner relied on the content of Ms A’s Complaints Form, and submitted that the subsequent statements from Mrs A were not admissible under the Evidence Act 2011 or, if the Tribunal does admit them, they should be given little weight and should not be used to contradict sworn evidence.
28.There were at least two difficulties with this submission. First, the practitioner did not object to the tender of Mrs A’s subsequent correspondence and statements as part of what became exhibit R2. Second, the practitioner’s objection after the event with reference to the Evidence Act 2011 was misconceived. The Tribunal is not bound to apply the rules of evidence when conducting an application for review of a decision made pursuant to section 413 of the Act, which is in Part 4.5 of the Act. The rules of evidence apply only in relation to an application for disciplinary action under Part 4.7 of the Act comprised of sections 419-435.[11]
[11] Legal Profession Act 2006, section 420
29.What weight should be given to evidence is a matter for the Tribunal, although I accept that sworn evidence going to a question of fact should, as a general rule, be given greater weight than an unsworn statement going to the question. However, on the question of what Mrs A’s views and opinions were about what occurred, there was no material contradictory evidence. Mrs A’s statements on that question ‘are what they are’, irrespective of their accuracy or what others including the practitioner may think or say about them.
30.Last, it is apparent from Mrs A’s correspondence and statements to the Law Society that the practitioner’s characterisation of Mrs A’s ‘complaint’ as not being a ‘complaint’ is selective. In response to the Law Society’s request to Mrs A for further detail about her ‘complaint’, Mrs A wrote what she described as a “tome” detailing what she said:
has been a really difficult situation fraught with troubles and leaving me terribly anxious at many points in the process.[12]
[12] Mrs A’s Complaint, page 20
31.Regarding the practitioner’s fees, Mrs A wrote among other things:
At around 7:30am on the 12th [13] [the practitioner] rang and we had a conversation when she asked for money. … It was the first time I knew that [the practitioner] wanted any more money from us. We had already paid her $385 plus $770 plus $2100 = $3255 which was well above the “difficult case” fee of $2500 that she had quoted. She said that she would take it out of our mortgage. … It wasn’t until the day after settlement that we received an invoice from [the practitioner] which showed she had added a further $4101.70 to our mortgage for her fees. … The frightening part of the invoice isn’t just the knowledge that we paid $7356.70 for our conveyancing (five times what the average person buying in Moncrieff has paid, and three times what the most difficult cases had to pay), but that [the practitioner] states it would have been around the $15,000 mark if she hadn’t discounted it heavily.[14] [15]
[13] 12 April 2016 was the proposed date for settlement of the conveyance.
[14] Exhibit R2, page 22
[15] In her letter dated 24 June 2016, to the Law Society, at page 2, the practitioner stated that “the total amount billed by [the firm] without any discounts or disbursements was $12,413.32 and not $15,000 as alleged.”
32.By letter dated 26 May 2016, the Law Society wrote to the practitioner about Mrs A’s complaint and attached a copy of Mrs A’s ‘tome’. In its letter, the Law Society stated:
The complaint
It appears from the correspondence that the complainant has raised the following alleged grounds of complaint:
1. Excessive charging of legal costs.
2. Failure to comply with section 269 of the Legal Profession Act 2006.
3. Failure to comply with section 276 of the Legal Profession Act 2006.
4. Failure to act on instructions to proceed to settlement under the Land Rent Scheme to the financial detriment of the complainants.
5. Inappropriate refusal to finalise the purchase without agreement of the client to pay the balance of the excessive fees charged, inappropriate assertion of the right to charge $15,000 for legal costs but for the benefit of a significant discount applied.
33.By letter dated 24 June 2016, the practitioner sent a lengthy reply to the Law Society, which it forwarded to Mrs A for comment. It is clear from Mrs A’s response to the practitioner’s letter that Mrs A wanted her complaint to be treated as a complaint, rather than an ‘investigation’, in order for the Law Society to investigate it.[16]
[16] Exhibit R2, page 81
34.In my view, Mrs A’s initial characterisation of her complaint as an ‘investigation’ arose from nothing more than her (respectful) uncertainty about why the practitioner’s fees were so much higher than the sum, Mrs A said, that the practitioner had led her to believe they would pay at the time they engaged the practitioner to act for them.
35.Aside from the finding that the practitioner’s conduct in the course of the Council’s investigation of the complaint breached conduct rule 43.2, the matter outside the ambit Mrs A’s complaint is the finding that the practitioner breached section 222 of the Act regarding deposit of trust money. I expect that this was not the subject of a complaint because Mrs A had no way of knowing that the account into which she was asked to pay the deposit was the practitioner’s office account, and so no way of knowing about the apparent breach of section 222.
36.I reject, however, the proposition that the Council is precluded from investigating a breach of the Act and/or making a finding of a breach simply because it was not the subject of a complaint from a third party. The Council’s power to investigate a breach of the Act is at large. That is clear from section 394 of the Act, which permits complaints from the Council. The roles of the Council and the Bar Council, as the regulators of the ACT legal profession, would be severely hampered were it otherwise.
37.I am satisfied that Mrs A made a complaint against the practitioner for the purposes of section 394 of the Act and that the Council has completed its investigation of it. Section 413(1)(a) of the Act is therefore met.
38.I pause here to address the practitioner’s complaint about the role of Mr Buxton and McInnes Wilson. I have quoted from the correspondence from Mrs A to the Law Society and from the Law Society to the practitioner in order to demonstrate the factual error in the practitioner’s submission that the Council did not act upon the complaint, but rather upon the advice of Mr Buxton. The correspondence records the Law Society’s understanding of five grounds of complaint, as put to the practitioner in its letter dated 26 May 2016. At this time, the Law Society was corresponding directly with the practitioner. There is no evidence that Mr Buxton and/or McInnes Wilson were engaged at this time. In any event, even if Mr Buxton and/or McInnes Wilson were providing advice to the Law Society at this time, in my view the Law Society’s letter properly formulates grounds of complaint derived from Mrs A’s correspondence.
39.I also reject the practitioner’s submission that the Council should not have acted on advice, or later advice from Mr Buxton or McInnes Wilson. Upon being engaged, in my view it was incumbent on Mr Buxton and McInnes Wilson to advise the Council about apparent breaches of the Act that they discovered in the course of their investigation of Mrs A’s complaint. There was nothing improper about the Council acting on their professional advice.
Trust money – section 222
40.The practitioner’s file created for the purpose of acting for Mr and Mrs A on the conveyance was tendered in evidence.[17] Chronologically, the first entry is a short handwritten file note (which I understood to have been made by the practitioner) of a telephone call from Mrs A on 11 November 2015 regarding the proposed conveyance. It concludes with the following words:
$1500 + costs & disbursements
- advise if extra
[17] Exhibit R3
41.A file note records that the practitioner met with Mrs A in the practitioner’s office on Friday, 4 December 2015. At the meeting, Mrs A filled in a form entitled “Client Details” giving her (and her husband’s) names, address and dates of birth. The form also stated the following:
We/I wish to provide instructions for [the firm] to act on our/my behalf.
42.Mrs A signed the form and dated it “4-12-15”. This accords with the opening page of the file stating “Matter Opened: 4 December 2015”.
43.I am satisfied that at the meeting on 4 December 2015, the practitioner asked Mr and Mrs A to pay $770. They did so by electronic transfer later that day. At 6:10pm that day, Mr and Mrs A’s bank sent an “online banking receipt” by email to the practitioner advising of the transfer of $770 into an account that the practitioner accepts is her office account.[18] The practitioner’s bank statement records receipt of the payment into her office account on 7 December 2015.[19] There is no suggestion that the practitioner transferred the money to her trust account.
[18] Exhibit R3, page 21
[19] Affidavit of the practitioner, sworn 11 February 2019, annexure “H”
44.The manner by which the practitioner asked Mr and Mrs A to pay the money is unclear. Mrs A stated that the payment was made in accordance with a “scrap of paper”[20] that the practitioner gave her at the meeting on 4 December 2015 on which the practitioner had written the amount and the bank account details. The payment was consistent with a tax invoice dated 12 November 2015 directed to Mr and Mrs A which refers to “professional fees” in the sum of $700 plus $70 GST. The tax invoice required payment into a stated account that the practitioner accepts was her office account, not a trust account, for her firm. Mrs A says that she received the tax invoice sometime after making the payment on 4 December 2015. There is no suggestion that Mrs A made a further payment of $770.
[20] Statement of Mrs A, paragraph 12
45.The Council contended that the $770 was requested and paid as a deposit for work to be done, and was therefore “trust money”, as defined in the Dictionary to the Act. The Council contended that the practitioner contravened section 222 of the Act by not depositing the money into her trust account as soon as practicable after receiving it.
46.The practitioner contended that the money was not ‘trust money’ for two, what seemed to be, inconsistent reasons. First, she said it was not trust money because, by the time she received it, she had done “$700 worth of work”.[21] On this basis, she said, the money was properly received into her office account and therefore she had not breached section 222 of the Act. Second, she said that the payment of her tax invoice dated 12 November 2015 was for work that was different from the work billed pursuant to her tax invoice dated 24 December 2015. I deal with each submission in turn.
[21] Transcript of proceedings, 19 March 2019, page 49, line 1 and page 65, lines 28-44; final submissions dated 14 May 2019, paragraph 28
47.Section 222(1) of the Act states:
As soon as practicable after receiving trust money, a law practice must deposit the money in a general trust account of the practice kept in the ACT.
48.Subject to some exceptions set out in section 222(2), none of which is applicable in this case, contravention of section 222(1) attracts a maximum penalty of 50 penalty units (meaning $8,000)[22] and is a strict liability offence.
[22] A penalty unit is, at present, $160 for an individual: Legislation Act 2001, section 133(2)(a)
49.Under section 223 of the Act, a law practice must hold trust money deposited in a general trust account exclusively for the person on whose behalf it is received and “disburse the trust money only in accordance with a direction given by the person.”
50.‘Trust money’ is defined in the Dictionary to the Act as follows:
trust money means money entrusted to a law practice in the course of or in connection with the provision of legal services by the practice, and includes –
(a) money received by the practice on account of legal costs in advance of providing the services; and
..
51.The definition of ‘trust money’ is common to all State and Territory legislation governing the legal profession following adoption in 2004 by the Standing Committee of Commonwealth, State and Territory Attorneys-General of a national model law for the regulation of the legal profession.
52.In Legal Services Board v Gillespie-Jones (Gillespie-Jones), the High Court said in relation to the definition of ‘trust money’:
The general explanation that the term “means” money “entrusted” to a law practice in the course of or in connection with the provision of legal services by the practice cannot be read narrowly or technically so as to cover only circumstances which would give rise to a relationship of trust independently of the operation of the Act. The word “entrusted” is rather to be read according to its ordinary meaning in such a context. The general explanation is therefore to be read as covering any money confided to the care or disposal of the law practice in circumstances which indicate that the money has been earmarked for purposes not being purposes of the practice itself. The further explanation that the term “includes” money received by the law practice within four specified categories indicates that money within those categories is always trust money, whether or not it would otherwise fall within the general conception of money entrusted to the law practice. (footnotes omitted and emphasis added).[23]
[23] Legal Services Board v Gillespie-Jones [2013] HCA 35 at [96]
53.In this case, Mr and Mrs A transferred the money ($770) to the practitioner’s office account on 4 December 2015, being the date upon which the practitioner opened the matter. In my view, it was therefore “entrusted” to the practitioner for the purpose of professional services to be provided. Applying the High Court’s decision in Gillespie-Jones, it was therefore trust money and should have been paid into the practitioner’s trust account. Whether the practitioner had done work, regardless of its value, by the time she received the money is irrelevant. There is no suggestion that Mr or Mrs A gave a direction under section 223(1)(b) authorising disbursement of the money to the practitioner’s office account.
54.I should add comment about paragraph (a) of the definition of ‘trust money’ quoted above. Under section 216 of the Act, speaking generally, a law practice receives money for the purposes of the Act when it obtains possession or control of it directly, or indirectly. I accept that section 216 must be applied for the purposes of paragraph (a) of the definition of ‘trust money’. The practitioner’s submission therefore seemed to be that because she had done $700 ‘worth of work’ at the time she received the money, it was not received “in advance of providing the services” (referring to paragraph (a) of the definition of trust money) and was therefore not trust money.
55.The apparent submission misconstrues the definition of trust money. Money of the kind described in paragraphs (a) – (d) of the definition is trust money, but those kinds of money are not exhaustive of the definition – hence the word “includes” in the definition. As the High Court explained in Gillespie-Jones, the question is whether the money was entrusted to the practitioner. Money of the kind described in paragraphs (a) – (d) of the definition is always trust money, “whether or not it would otherwise fall within the general conception of money entrusted to the law practice”, but it is the “general conception” (i.e. money entrusted) that constitutes and governs the definition of trust money, not the kinds of money described in paragraphs (a) – (d) of the definition.
56.The practitioner’s first submission about why the money was not trust money is also inconsistent with the facts.
57.The practitioner’s office account bank statement records receipt of $770 from Mr and Mrs A on 7 December 2015. The practitioner relied however on her office receipt which recorded the “transaction date” of 9 December 2015 (albeit printed on 10 October 2018). She contended that she was not aware until 9 December 2015 that the money had been received, and that “9 December 2015” should therefore be treated as the date she received the money. I disagree. In my view, the date upon which the practitioner received the money is the date recorded on her bank statement, not a date upon which she created an official receipt for it.
58.However, whether 7 or 9 December 2015 is applied, the evidence does not support the practitioner’s claim that she had done $700 ‘worth of work’ as at either date.
59.The practitioner rendered a second tax invoice dated 24 December 2015 for $2,186. This invoice included a table under the heading “Professional Fees” identifying the dates upon which work was done, a description of the work done, the time spent performing the work (in six minute units) and the amount payable for each line entry of work. Each unit was valued at $31.67 plus GST. The table commences with line entries for work done on 17 October 2015 (one unit), 11 November 2015 (one unit) and 1 December 2015 (two units).
60.The basis upon which the practitioner charged for work done prior to opening the matter on 4 December 2015 is unclear. The basis on which she charged for work done on 17 October 2015, prior to the first record of a communication with Mrs A on 11 November 2015, is also unclear.
61.The description of work on the second invoice records, as at 7 December 2015, time spent and fees rendered[24] of $221.68 – well short of $700. Even if additional work done on 9 December 2015 is included, the total is only $538.35.
[24] The total fees rendered under the invoice allowed for a ‘discount’ of $634.85 for reasons that are unclear.
62.The practitioner submitted in reply that these time and cost entries on her second tax invoice are not applicable because, at the time she received the money, the matter was not being time costed. That $700 represented the portion of work done up to the date when she received that money. I am not persuaded by that submission. The best evidence of the value of work done as at 7 (or 9) December 2015 is the time cost record, and that shows a value of less than $700.
63.I turn to the practitioner’s submission that her first tax invoice dated 12 November 2015 referred to different work.
64.On 11 February 2019, the practitioner swore an affidavit in this matter. Paragraph 2 stated:
An invoice was issued for the sum of $770.00 being invoice number 14543 dated 12 November 2015. It was not itemised. The work was performed or was in progress being done according to instructions of the clients upon a continuing matter (sic). At the time that this invoice was issued the total cost of the matter was not known.
65.Paragraph 3 of the practitioner’s affidavit is headed “Particulars of the work undertaken” and then lists 10 items of work dated from 11 November 2015 to 4 December 2015. At the hearing on 19 March 2019, the practitioner gave evidence that the un-itemised work that she billed by means of her invoice dated 12 November 2015 for $700 plus GST “is not the same work” as the work that was billed pursuant to the itemised invoice dated 24 December 2015.[25]
[25] Transcript of proceedings, 19 March 2019, page 61, line 35; page 62, line 31
66.This explanation was inconsistent with the practitioner’s letter to the Law Society dated 24 June 2016, in which the practitioner states with reference to the tax invoice dated 12 November 2015:
This was an interim invoice rendered to the clients which was specifically to be part of the total costs.
67.At the hearing on 19 March 2019, the practitioner said that the oral evidence she was giving at the hearing about the work billed in her tax invoice dated 12 November 2015 being “not the same work” as that billed in her tax invoice dated 24 December 2015 was the first time she had said that to anyone.[26] She said:
I didn’t pick it up and I’m sorry.[27]
[26] Transcript of proceedings, 19 March 2019, page 61, line 44; page 62, line 5
[27] Transcript of proceedings, 19 March 2019, page 63, lines 4 - 5
68.The practitioner’s evidence quickly became problematic. The practitioner agreed that the tax invoice dated 12 November 2015 related to work done up to the date of the invoice[28] but, when asked to identify the work, she said “some of the work had been done up to that date and that’s items 1, 2 and 3 on the list.”[29] “The list” was a reference to the “particulars of the work undertaken” as listed in paragraph 3 of the practitioner’s affidavit sworn 11 February 2019. The first three items on the list refer to perusal of correspondence from different third parties sent to Mr and Mrs A, dated 11, 2 and 11 November 2015, respectively.
[28] Transcript of proceedings, page 63, lines 45-46
[29] Transcript of proceedings, 19 March 2019, page 66, lines 18 - 19
69.The other seven items of work “undertaken” post-date 12 November 2015. I struggled to understand how the practitioner could maintain a right to render a tax invoice on 12 November 2015 for the seven items of specified work that were yet to be done.
70.Referring to the first three items, there was no evidence as to when the practitioner perused the correspondence addressed to Mr and Mrs A, and (as best I could find) the earliest record of the practitioner having any contact with Mr or Mrs A is Mrs A’s telephone call to the practitioner on 11 November 2015. Mrs A met with the practitioner for the first time on 4 December 2015.
71.I also struggled to understand why, in her affidavit, the practitioner characterises her invoice dated 12 November 2015 as referring to work done upon a “continuing matter”. At that date, as best I can ascertain from perusal of her file, no work at all had been done: the file was opened on 4 December 2015
72.The submission that the 12 November 2015 tax invoice referred to different work also begged the question as to why the 24 December 2015 tax invoice noted a deduction of “- $770” as an “adjustment”. There is no suggestion that Mr or Mrs A made a second payment of $770 by way of a deposit. The practitioner described this as a “mistake”.[30] She said that she “didn’t do the bill. It wasn’t my work”, and that it gave the client a “double discount”.[31]
[30] Transcript of proceedings, 19 March 2019, page 62, line 45
[31] Transcript of proceedings, 19 March 2019, page 59, lines 5 - 44
73.In her final submissions provided on 14 May 2019, the practitioner recast her argument, stating that “not all of the work was undertaken at the time the invoice was issued but all of the work set out in paragraph 3 of [her] Affidavit was performed when the monies were received and receipted on 9 December 2015.”[32] This appears to revert to or at least refer to the first submission. For the reasons given, I reject that argument.
[32] Final submissions dated 14 May 2019, paragraph 26
74.In my view, the practitioner’s different arguments were nothing more than legally and factually flawed attempts to justify after the event why the $770 was paid directly into her office account. In my view, the money was a deposit paid for work to be done, and should have been paid into her trust account. That is consistent with the tax invoice dated 24 December 2015, which records under a heading “Adjustments”, “Less Interim Account - $700” and less GST of “- $70”.
75.For these reasons, I am satisfied that the $770 paid by Mrs A on 4 December 2015 was trust money, as defined, and that the practitioner breached section 222 of the Act by causing the payment to be deposited into her office account and/or not transferring the money to her general trust account as soon as practicable after receiving it.
76.It is well settled that compliance with trust money obligations is fundamental to the conduct of a law practice. Compliance with section 222 is a strict liability offence. A breach of trust money obligations can be characterised as unsatisfactory professional conduct or professional misconduct, depending on the severity of the breach.[33] This was not a severe breach.
[33] Council of the Law Society of the ACT v Legal Practitioner RN (Rhondda Nicholas) [2016] ACAT 12 at [46]
77.For the purposes of section 413(1)(b) of the Act, I am satisfied that there is a reasonable likelihood that the Tribunal would find the practitioner guilty of unsatisfactory professional conduct (but not professional misconduct) arising from her breach of section 222 of the Act.
Costs disclosure – section 269
78.Pursuant to section 269(1) of the Act, a law practice is required to disclose to a client the information described in paragraphs 269(1)(a) – (m) regarding costs. This includes:
(b)the client’s right to—
(i) negotiate a costs agreement with the law practice; and
(ii) receive a bill from the law practice; and
(iii) request an itemised bill if the client receives a lump sum bill for more than the threshold amount; and
(iv) be notified under section 276 (Ongoing obligation to disclose etc) of any substantial change to the matters disclosed under this section;
...
(d)an estimate of the total legal costs, if reasonably practicable or, if it is not reasonably practicable to estimate the total legal costs, a range of estimates of the total legal costs and an explanation of the major variables that will affect the working out of the costs; and
(e)details of the intervals (if any) at which the client will be billed; and
(h)the client’s right to progress reports in accordance with section 278 (Progress reports)
79.Under section 272(1)(a) of the Act, section 269 does not apply if “the total legal costs in the matter, excluding disbursements, are not likely to exceed $1,500 (exclusive of GST)”. This is not a fixed position. Section 272 contemplates that circumstances can change. Under section 272(2), if a law practice “becomes aware that the total legal costs are likely to exceed $1,500 (exclusive of GST)”, the law practice must disclose the matters in section 269 to the client “as soon as practicable”.
80.In her complaint, Mrs A stated that she and her husband wished to “discover why our conveyancing fees were triple what we were quoted”. In a later statement giving details about her complaint, Mrs A stated that in her first conversation with the practitioner, when considering whether to engage the practitioner to act for them on their conveyance, she asked how much the conveyance would cost. Mrs A states that the practitioner said:
$1,500 but rising to $2,500 if it becomes difficult, but that rarely happens.
81.This is consistent, to some degree, with the practitioner’s file note of her telephone conversation with Mrs A on 11 November 2015 referred to in paragraph 40 above. I am satisfied that on the basis of the practitioner’s oral representation, Mrs A decided to engage the practitioner to act for them on the conveyance.
82.The practitioner contended that she, or more accurately a staff member in her firm, provided Mr and Mrs A with two ‘costs disclosure’ letters dated 15 and 24 December 2015, respectively, setting out the basis upon which Mr and Mrs A would be charged for the conveyance.
83.The letter dated 15 December 2015 addressed to Mr and Mrs A states the practitioner’s estimated costs of acting for them on the purchase. The letter states “the estimate of our professional costs is $1,500 plus GST”. The letter also details an estimate of disbursements “in the range of $500 - $700”, including fees for an electrical and plumbing certificate, an asbestos search and a building search compliance. These factors were obviously irrelevant, given that the subject property was vacant land.
84.At the hearing on 19 March 2019, the practitioner said that the letter dated 15 December 2015 was a standard or precedent letter used when acting for a client on a proposed purchase. She said that the file number, the client name and the heading of the letter were changed, but that the content of the letter is “exactly the same as [for] everybody else”.[34] The practitioner said that the estimate of professional costs of $1,500 plus GST, the estimated range of disbursement costs and the request to contribute the sum of $770 to the firm’s trust account was common to every letter sent to every purchaser for whom the practitioner took instructions to act on a purchase of land.
[34] Transcript of proceedings, 19 March 2019, page 27, lines 27 - 30
85.Regarding the $770 payment, the 15 December 2015 letter states:
We ask you to contribute the sum of $770.00 to our trust account at the commencement of the matter. This money is used for disbursements in the first instance and any money that is not used for disbursements is transferred in payment of our account for our professional costs. The sum of $770.00 forms part of the total bill.
86.The letter dated 15 December 2015 concludes with the statement “Please confirm your agreement by signing the attached copy of this letter and returning it to our office at your appointment with us.” The practitioner did not produce a copy of the letter signed by her or by Mrs A or Mr A.
87.The letter dated 24 December 2015 addressed to Mr and Mrs A states:
We refer to our letter dated 15 December 2015 and in accordance with that letter we are notifying you that this matter will now be time costed.
We confirm that this purchase has not been a straightforward sale. The fee that was included in our letter dated 15 December 2015 was the fee for the professional costs if the matter was a straightforward sale. Our professional costs will now be time costed at the rate of $380.00 per hour plus GST for work undertaken by a barrister and solicitor and $168.00 per hour plus GST for work undertaken by a legal assistant. This does not include any required disbursements.
88.By letter dated 24 June 2016, the practitioner sent a detailed letter to the Law Society responding to Mrs A’s complaint. In response to questions about whether she had complied with her obligations under section 269 of the Act, the practitioner relied on her letters dated 15 and 24 December 2015. The Law Society reviewed the materials she had provided with her letter dated 24 June 2016 (which appeared to be her file or most of her file regarding the conveyance), and could not find either letter on the file.
89.By letter dated 20 September 2016, the Law Society requested copies of the letters. On 28 September 2016, the practitioner provided copies of the letters. On 6 October 2016, the Law Society showed the letters to Mr and Mrs A, who emphatically denied they had ever previously seen them. Mrs A sets out various actions and questions she would have taken had they seen the letters, including consideration of seeking another legal practitioner to act for them on the conveyance.
90.The provenance of the letters dated 15 and 24 December 2015 was the subject of enquiry by the Law Society and the Council for at least two years. Evidence trickled out from the practitioner, bit by bit, that in total only added to doubt about the provenance of the letters. I note some of the saga.
91.On 20 October 2016, on request, the practitioner provided the Law Society with “Word” versions of the letters dated 15 and 24 December 2015. An IT analysis of the documents showed that the letter dated 15 December 2015 was last printed on 9 March 2011, created on 10 March 2011 and last modified on 15 June 2016. It showed that the letter dated 24 December 2015 was created on 13 April 2012, last printed on 13 April 2012 and last modified on 19 June 2016.
92.In answer to this analysis, the practitioner provided a statutory declaration sworn on 22 January 2017 by her daughter, who I shall refer to as Ms D,[35] regarding creation of the letters among other things. Ms D states that at this time she assisted the practitioner in her legal practice “on an ad hoc basis”.
[35] The initial "D” bears no resemblance to her name or the name of the practitioner
93.Ms D gave a complex explanation about copying the letters in the firm’s office network from earlier duplicates, saving them in incorrect locations that were not properly networked, not realising that copying and pasting the documents to different folders would change the ‘electronic fingerprint’ of each document and not recalling the location in which the documents were saved. She said that she moved the letters from another non-network location on 15 June 2016, presumably in answer to the IT analysis about when the documents were last modified, but did not change their content.
94.In her statutory declaration, Ms D said that “both letters were created on 15 December 2015”. She attached computer “screenshots” in support of this statement.[36]
[36] Statutory declaration, paragraph 16
95.The practitioner also provided an affidavit from an IT consultant, Angela Cotter, affirmed on 28 February 2019 in which she too stated that both letters were created on 15 December 2015 and “moved” onto the firm’s system on 15 June 2016.
96.The evidence of Ms Cotter and Ms D only added to the mystery. Why would Ms D, on 15 December 2015, draft the letter dated 24 December 2015 purporting to refer back to the letter dated 15 December 2015 and stating that the matter would need to be time costed by reference to events that were yet to occur?
97.In an affidavit affirmed on 17 March 2019, two days before the hearing –– contrary to the Tribunal’s ‘timetable’ directions made on 17 December 2018 –– Ms D provided a different explanation for creation of the letter dated 24 December 2015.
98.Ms D stated in her affidavit that she drafted the letter on her laptop. She attached to her affidavit “a true copy of the metadata from my laptop showing the date that the letter was created.”[37] The attached printout of the metadata records that the letter was created on “Wednesday, December 23, 2015 at 4:24 PM” and modified on “Wednesday, December 23, 2015 at 4:37 PM”. This too added to the mystery.
[37] Affidavit of Ms D, affirmed 17 March 2019, paragraph 17
99.Ms D states in her statutory declaration that she lives in Denver, Colorado, in the USA. Ms D states, and I accept, that in December 2015 she came to Australia for Christmas. Ms D’s flight details, attached to her affidavit, record her flight from Denver on 22 December 2015 on the first of three flights before landing in Canberra at 11:40am on 24 December 2015. It is nonsensical to suggest that Ms D created the letter on 23 December 2015 in the course of travelling from Denver to Canberra.
100.In her affidavit sworn 11 February 2019, the practitioner – not Ms D – said “the time set on [Ms D]’s laptop was US time for the creation of the extra costs letter dated 24 December 2015”, but that too raised questions. Denver, Colorado, is between 15 and 17 hours behind Eastern Standard (Canberra) Time, depending on the impact of daylight saving, meaning that at 4:30pm on 23 December 2015, Denver time, it was somewhere between 7:30am or 9:30am on 24 December 2015, Canberra time. According to her flight records, Ms D’s flight from Los Angeles was scheduled to land at Sydney at 8:30am following which she caught a connecting flight to Canberra departing at 10:45am. It is improbable that Ms D wrote a costs disclosure letter in Mrs A’s matter, on behalf of her mother, whilst in transit from Sydney to Canberra.
101.Another concern is that the practitioner’s contemporaneous file note of her meeting with Mrs A,[38] confirmed by the practitioner on page 8 of her letter dated 24 June 2016 to the Law Society,[39] records that her meeting with Mrs A occurred between 11:30am and 1:00pm on 24 December 2015.
[38] Exhibit R3, page 62
[39] Exhibit R2, page 39
102.The flight details attached to Ms D’s affidavit schedule her arrival into Canberra on 24 December 2015 at 11:40am. According to a Hertz record attached to Ms D’s affidavit, she then hired a car at Canberra Airport at 11:54am. The evidence therefore appears to be that Ms D drove from the airport to the practitioner’s office, arriving at say 12:30pm, at least an hour after the practitioner’s meeting with Mrs A commenced at 11:30am and, in the remaining 30 minutes or so of the meeting when Ms D “had my children with me in preparation for the holidays”,[40] took out her laptop and typed a letter giving details about Mr and Mrs A’s conveyance and why the matter needed to be time costed.
[40] Affidavit of Ms D, affirmed on 17 March 2019, paragraph 10
103.In her statutory declaration dated 22 January 2017, Ms D claimed that she typed the letter “in front of Mrs A”,[41] discussed with Mrs A “the additional work that was being undertaken on this matter” [42] and “personally handed the letter”[43] to Mrs A. In reply, Mrs A “absolutely refute[s] that assertion”, and says that Ms D “was not in the office”.[44] On the other hand, Mrs A recalls an occasion when Ms D’s children were already in the practitioner’s office and were eagerly awaiting the return of Ms D from the US that day.[45]
[41] Statutory declaration of Ms D, made 22 January 2017, paragraph 5
[42] Statutory declaration of Ms D, made 22 January 2017, paragraph 5
[43] Statutory declaration of Ms D, made 22 January 2017, paragraph 7
[44] Statement of Mr and Mrs A, dated 19 September 2017, paragraphs 23, 24 and 30
[45] Letter dated 20 February 2017 from Mr and Mrs A, page 1; Transcript of proceedings, 19 March 2019, page 117 lines [38]-[46]
104.Another concern is that the letter dated 15 December 2015 asked Mr and Mrs A to sign and return a copy of the letter acknowledging their agreement with the proposed cost arrangements, but there is no evidence that that ever occurred. Why would the practitioner proceed with the conveyance without that acknowledgement?
105.Another concern is the absence of both letters in the materials sent to the Law Society on 24 June 2016. In answer, Ms D gave a lengthy account about reviewing the file, taking out documents from the file relevant to the complaint including the two costs disclosure letters, difficulties reassembling the file on a metal pin, running out of time to copy the file, leaving it for a paralegal to copy the relevant documents, and the paralegal (apparently) not copying and including the two costs disclosure letters.[46] Why would the practitioner leave it to a paralegal to assemble documents to be provided in her response to a complaint about her, personally, from the Law Society?
[46] Statutory declaration of Ms D, made 22 January 2017, paragraphs 21 - 27
106.Ms D was not cross-examined. On this basis, the practitioner submitted that the Council “now accepted that the cost letters dated 15 and 24 December 2015 were provided to [Mrs A].[47] That is incorrect. Mr Moujali asked only that the Tribunal proceed on the assumption that the letters were provided. Irrespective of the fact that Ms D was not cross-examined, on the whole of the evidence I was not persuaded one way or the other about when the letters dated 15 and/or 24 December 2015 were created or whether they were provided to Mr or Mrs A prior to 6 October 2016. However, in the context of disciplinary action it is for the Council to prove. Where I am not persuaded on the balance of probabilities that the letters were not provided to Mr or Mrs A, I accept the Council’s submission that I should proceed on the assumption that they were.
[47] Final submissions dated 14 May 2019, paragraph 70
107.The Council contended that even if the practitioner provided the two disclosure letters to Mr and Mrs A, they were still deficient by not disclosing the matters set out in section 269(b), (d), (e) and (h) of the Act.
108.The practitioner submitted in reply, with reliance on section 272 of the Act, that she was not required to provide a cost disclosure statement because her estimated fees were below the threshold amount of $1,500. That may have been true on 4 or 15 December 2015, but it was certainly not true (as the practitioner properly admitted)[48] by 24 December 2015 when the practitioner issued her second tax invoice. At that time, at least, she was obliged to disclose the information required under section 269 “as soon as practicable”. The question, therefore, is whether she did so. The practitioner submitted that the “combined cost disclosure in the letters, invoices and discussions” discloses the items “required by the legislation and natural justice”.[49]
[48] Affidavit of the practitioner affirmed 11 February 2019, paragraph 5
[49] Affidavit of the practitioner affirmed 11 February 2019, paragraph 12
109.The practitioner states in her affidavit sworn 11 February 2019, and I accept, that Mrs A “was extremely focused upon costs and entitlements” and that Mrs A and her husband “were well aware that the amount of work in this matter was extensive”.[50] However, the practitioner nowhere refers to the content of any “discussions” she had with Mr or Mrs A about costs. In any event, discussions would not achieve compliance with section 271(1) of the Act which requires the disclosures to be “in writing”.
[50] Affidavit of the practitioner affirmed 11 February 2019, paragraph 13
110.I also reject the proposition that a tax invoice for work already done can constitute disclosure about prospective costs or disclosure of a client’s rights about those prospective costs.
111.The practitioner’s compliance with section 269 therefore turns upon her letters dated 15 and 24 December 2015, even (as the practitioner contended) when read together.
112.Regarding section 269(1)(b), the practitioner did not make a submission as to how or whether she had complied. She referred to section 272 of the Act, but the practitioner accepts that by 24 December 2015 “it was clear that the costs would exceed the estimate of $1500 provided”. The practitioner referred to her costs letter dated 24 December 2015, but nowhere suggests (nor could she have done) that it or the earlier letter dated 15 December 2015, separately or together, demonstrate/s compliance with section 269(1)(b).
113.In oral evidence, the practitioner agreed that her letter dated 24 December 2015 did not inform Mr and Mrs A of their right to negotiate a costs agreement, but referred to the notice of rights on her tax invoices that informed Mr and Mrs A of their right to a costs assessment.[51] It was troubling to think that the practitioner would regard a statement of that right as having any bearing upon her statutory obligation to inform Mr and Mrs A of their right to negotiate a costs agreement, in advance of incurring costs.
[51] Transcript of proceedings, 19 March 2019, page 37, line 43; page 38, lines 42-44
114.I can find nothing in either letter that states, implies or makes any mention of Mr and Mrs A’s right to any of the four matters listed in section 269(1)(b). I am satisfied that the practitioner did not disclose those rights to Mr and Mrs A, contrary to section 269(1)(b).
115.Regarding section 269(1)(d), the letter dated 15 December 2015 gave an estimate of the practitioner’s total costs of $1,500 but that was overtaken by the 24 December letter advising that the matter would be time costed. The second letter states two rates, depending on the person who would be doing the work, but gives no estimate or range of estimates of what the total cost would be. The absence of any estimate of what the (revised) total cost would be is, in substance, consistent with Mrs A’s complaint about the fees charged being three times what she and her husband expected.
116.The practitioner relied upon Mr and Mrs A not complaining about her fees per se, and asking only for an investigation as to how or why they were so high, but that is to miss the point. Section 269(1)(d) is directed to the avoidance of surprise when a client receives a bill, not an investigation after the event about the quantum of fees charged.
117.The practitioner submitted that the “variables” affecting her total costs “were discussed with [the clients] and contained in the correspondence with the clients”. The practitioner then referred to some of those “variables”.[52] The submission is misconceived. The statements in the practitioner’s correspondence on which she relied are about work that had been done in the course of the conveyance, not statements about the variables of future work that would affect “the working out of the costs”.
[52] Final submissions dated 14 May 2019, paragraph 35
118.The practitioner’s submission also demonstrates her lack of understanding about what is required under section 269(1)(d). The whole point of the required disclosures is to inform a client – in writing – about their rights in advance of the practitioner acting in the matter so that the client is aware of the cost arrangements that will ensue. The practitioner’s letter dated 24 December 2015 does not do that. It tells Mr and Mrs A about additional work that “we have been required to undertake” (emphasis added) and that “the additional cost reflects the additional work that is necessary”. It also states intended hourly charge rates, but nowhere gives a statement or estimate or range of estimates of what the additional or total cost will be. I accept that the practitioner sent correspondence to Mr and Mrs A describing work done, but I was not referred to any correspondence that gave an estimate of total costs that would arise from that work.
119.I am satisfied that the practitioner did not disclose to Mr and Mrs A an estimate of the practitioner’s total costs, or a range of estimates of her total costs with an explanation of the variables that will “affect the working out of the costs”, contrary to section 269(1)(d).
120.Regarding section 269(1)(e), the practitioner contended that her letter dated 15 December 2015 stated intervals which the client would be billed, and “that the intervals are $770 at the commencement, balance at the end.”[53] With respect, the letter states no such thing. It asks Mr and Mrs A to contribute “the sum of $770 to our trust account at the commencement of the matter” and states that “the sum of $770 forms part of the total bill.” The practitioner’s characterisation of the requested $770 payment displays a worrying confusion between trust money and payment of a bill. Also, when the practitioner changed her manner of costing to time costing on 24 December 2015, there was no suggestion of any intervals at which Mr and Mrs A would be billed or whether there would be one final bill, yet (it appears) the practitioner sent bills dated 12 November 2015, 24 December 2015, 31 March 2016 and 12 April 2016.
[53] Final submissions dated 14 May 2019, paragraph 37
121.I am satisfied that the practitioner did not disclose to Mr and Mrs A details of the intervals (if any) at which they would be billed, contrary to section 269(1)(e).
122.Regarding section 269(1)(h), the practitioner contended that she had complied with her clients’ right to progress reports by providing a “Notice of Rights” on the last page of each tax invoice. She also relied upon the statement in her letter dated 24 December 2015, she said, “we will inform you”[54] in relation to “protracted negotiations” and “disputes between the parties”. She also referred to written progress reports provided to Mr and Mrs A between January and April 2016. I take the issues in turn.
[54] Final submissions dated 14 May 2019, paragraph 38
123.Nothing in the “Notice of Rights” on each tax invoice says anything about a right to progress reports, and it is illogical that information on a tax invoice would do so. Disclosure of a right to progress reports in accordance with section 278 of the Act is about disclosure of a right to obtain information about future events and costs. The fact that the practitioner provided progress reports regarding the conveyance from time to time has no bearing upon her obligation to disclose to Mr and Mrs A, in advance of doing work, their right to obtain progress reports or that they may be charged for them.[55]
[55] Legal Profession Act 2006 section 278(2)
124.The practitioner’s letter dated 24 December 2015 nowhere states “we will inform you” about anything.
125.I can find nothing that states, implies or makes any mention of Mr and Mrs A’s right to obtain progress reports in accordance with section 278 of the Act. I am satisfied that the practitioner did not disclose that right, contrary to section 269(1)(h).
126.In Council of the Law Society of the ACT v Legal Practitioner M1,[56] the Tribunal determined that a breach of the costs disclosure requirements in that case constituted unsatisfactory professional conduct. I am satisfied that in this case also, there is a reasonable likelihood that the Tribunal would regard the practitioner’s breaches of section 269(1)(b), (d), (e) and (h) of the Act, together, as unsatisfactory professional conduct, but not professional misconduct. Section 413(1)(b) is therefore met in relation to the practitioner’s breach of section 269.
Failure to respond – conduct rule 43.2
[56] Council of the Law Society of the ACT v Legal Practitioner M1 [2015] ACAT 78
127.For the purpose of investigating the practitioner’s apparent breach of section 269 of the Act, the Council understandably wished to investigate her claim that she (or someone on her behalf) gave Mr and Mrs A the costs disclosure letters dated 15 and 24 December 2015.
128.By letter dated 20 January 2017, the Council’s solicitor, Mr Buxton, therefore wrote to the practitioner as follows:
We have been instructed to advise the Council in respect to the proposed appointment of an IT investigator pursuant to section 407 of the Legal Profession Act 2006 (ACT) (the Act) to determine the provenance of the two letters dated 15 December 2015 and 24 December 2015 respectively which were submitted to the Law Society in response to the complaint.
To enable us to provide our advice to the Council, can you please advise:
1. whether you manage your IT system or you contract an IT service provider and, if so, which firm;
2. details of your IT environment, namely the electronic document management system used by your office; and
3. the hardware used by your office, namely the location and number of servers, backups and computers (desktops and laptops) used by yourself and [Ms D].
129.In his letter, Mr Buxton added that during the investigation “the investigator will require unrestricted access to the [practitioner’s IT] system during business hours, namely usernames and passwords for all operating accounts” and that the investigator may also require “your IT service provider to provide any information or assistance that is reasonably necessary to allow the investigator to complete their investigation.”
130.Pursuant to rule 43.2 of the Conduct Rules, Mr Buxton requested the information “within a reasonable time and in any event no later than 1pm on Friday, 27 January 2017.” I will refer to this letter from Mr Buxton as ‘Mr Buxton’s First Letter’.
131.In a second letter also dated 20 January 2017, Mr Buxton asked the practitioner several questions arising from her letters dated 15 and 24 December 2015. In summary, the questions were as follows:
(a)Where your file shows that she accepted instructions to act for Mr and Mrs A on 4 December 2015, how were you able to render your tax invoice dated 12 November 2015 prior to accepting instructions?
(b)By what means did you provide Mr and Mrs A with your tax invoice dated 12 November 2015?
(c)By what means did you provide or send your letter dated 15 December 2015 to Mr and Mrs A?
(d)Why did your letter dated 15 December 2015 requesting $770 to be deposited into your trust account not refer to your earlier tax invoice for the same amount?
(e)Did you follow up on the provision of trust funds and on Mr and Mrs A signing and returning a copy of your letter dated 15 December 2015 acknowledging their agreement with the proposed costing arrangements? If not, why not?
(f)Why, in your letter dated 15 December 2015, do you give an estimate of your professional costs of $1,500 plus GST for acting for the whole transaction where your ‘time costing records’ as at 10 December 2015 already recorded costs of $1,700 plus GST?
(g)By what means did you provide or send your letter dated 24 December 2015 to Mr and Mrs A?
(h)Why, in your letter dated 24 December 2015, did you thank Mr and Mrs A for instructions when there instructions were received two months earlier?
(i)Why, in the description of fees charged in your tax invoice dated 24 December 2015, is there no record of drafting the letters dated 15 and 24 December 2015?
(j)Why, in your cover letter dated 29 January 2016 to Mr and Mrs A enclosing your tax invoice dated 24 December 2015, is there no reference to your letter dated 24 December 2015 setting out the time costed basis upon which your professional fees would be charged?
(k)In circumstances where you claim that the letters dated 15 and 24 December 2015 were drafted by Ms D, why do both letters contain the code references “15/181 KK:KK”[57] and make no mention of Ms D?
(l)In circumstances where you claim that the letters were drafted on or around 15 and 24 December 2015, why do the IT “document properties” of the letters indicate that they were created on 10 March 2011 and 13 April 2012, respectively, last printed on 9 March 2011 and 13 April 2012, respectively, and last modified on 15 June 2016 and 19 June 2016, respectively?
(m)In light of the document properties, please explain how you say that letters were drafted on or around 15 December 2015 and 24 December 2015.
[57] The initials “KK” are substituted for the initials of the practitioner to preserve her anonymity
132.Mr Buxton informed the practitioner that, pursuant to rule 43.2 of the Conduct Rules, her responses were required within 14 days and not later than 3 February 2017. I will refer to this letter as ‘Mr Buxton’s Second Letter’.
133.Rule 43.1 provides that “subject only to his or her duty to the client, a solicitor must be open and frank in his or her dealings with a regulatory authority”. The Council is a regulatory authority.[58]
[58] See Glossary to the Conduct Rules and the definition of “regulatory authority” in the Dictionary to the Legal Profession Act 2006
134.Rule 43.2 provides:
A solicitor must respond within a reasonable time and in any event within 14 days (or such extended time as the regulatory authority may allow) to any requirement of the regulatory authority for comments or information in relation to the solicitor’s conduct or professional behaviour in the course of the regulatory authority investigating conduct which may be unsatisfactory professional conduct or professional, misconduct and in doing so the solicitor must furnish in writing a full and accurate account of his or her conduct in relation to the matter.
135.By letter dated 23 January 2017, the practitioner replied to (as best I can tell) Mr Buxton’s First Letter by requesting an extension of time to 10 February 2017.
136.By letter dated 24 January 2017, Mr Buxton agreed to an extension to 3 February 2017, notwithstanding his view (which in my opinion was reasonable) that seven days was an appropriate amount of time for the practitioner to respond to the three precise questions asked in Mr Buxton’s First Letter. The practitioner did not respond by 3 February 2017.
137.By letter dated 7 February 2017, the practitioner wrote to Mr Donohue, the Deputy President of the Law Society, but at his own law practice not c/- the Law Society, referring to the correspondence she had received from Mr Buxton. She complained that to give the Council’s IT investigator “complete access” to her electronic document management system would give the investigator access to all the documents relating to a proceeding in the Supreme Court in which Mr Buxton’s firm, McInnes Wilson, was acting against her “in her personal capacity”. She offered to attend the Society with her laptop and her IT consultant to demonstrate the manner in which the letters dated 15 and 24 December 2015 were created. She also referred to the statutory declaration from Ms D, sworn on 22 January 2017, in which Ms D answered some of the questions that Mr Buxton had asked and explained how and when she created the letters.
138.The practitioner also objected to McInnes Wilson acting for the Council (or the Law Society) in its investigation of her conduct in circumstances where it was already acting against her in proceedings in the Supreme Court. She also made what I regard as a completely unwarranted allegation that “the system favours the larger firms … and creates an elite status. They have an interest in moving small practitioners out of practice.”
139.By letter dated 9 February 2017, the practitioner sent a copy of Ms D’s statutory declaration to Mr Donohue at his law practice.
140.By letter dated 9 February 2017, McInnes Wilson wrote to the practitioner with reference to Mr Buxton’s First and Second Letters. They noted the date by which they required a response, and that they were yet to receive a response to either letter. McInnes Wilson sought confirmation that all of the practitioner’s IT computing equipment remains “operative and in situ” and confirmation that she had not replaced or adjusted any part of it since December 2015.
141.By letter dated 9 February 2017, the practitioner wrote to Mr Buxton referring to his “correspondence in this issue”. She said that she had not responded to him further “because there is a preliminary issue which we have raised with the Law Society in relation to this matter.” The practitioner did not identify what the “preliminary issue” was. The practitioner concluded by stating “we will not be responding to you in the timeframe that you have requested. That is not to say that we have not responded to the Law Society in accordance with our responsibilities.” The practitioner did not say anything in relation to her computing equipment.
142.On 14 February 2017, Ms Binstock, a solicitor with McInnes Wilson, sent an email to the practitioner stating that (on her instructions) no preliminary issue had been raised with the Law Society and asked the practitioner to clarify what the issue was. The practitioner never responded. Instead, on the same day, she corresponded with the Law Society and with the Council. Her actions, in my view, were belligerent and obstructive. It is also difficult to understand what she hoped to achieve: the Law Society and/or the Council would plainly be able to refer her correspondence to their solicitor, McInnes Wilson, and were likely to do so.
143.By letter dated 16 February 2017, the practitioner wrote to the Council proposing that she attend a Council meeting with her IT consultant to conduct an “electronic session” in relation to the creation of the letters dated 15 and 24 December 2015.
144.By letter dated 6 March 2017, the practitioner wrote to the Council to advise the availability of the firm’s IT consultant to attend the “electronic session”.
145.In a letter also dated 6 March 2017, the practitioner wrote to Mr Donohue detailing some concerns she had in relation to the participants of the proposed electronic session. She advised that she would not be able “to proceed with the meeting as now proposed.”
146.By letter dated 9 March 2017, the practitioner wrote to the Council, copied to Mr Donohue, with five pages of concerns she had in relation to Mrs A’s complaint. The practitioner detailed her concerns relating to the attendance of certain people at the proposed “electronic session”; the manner in which an officer of the Law Society, Mr Reis, had addressed a separate, unrelated complaint against her; and the manner in which the current complaint was being handled.
147.After a lengthy exchange of correspondence regarding the practitioner’s demands as to who should and should not attend, the practitioner attended a meeting at the Law Society’s office on 20 March 2017 to conduct the proposed electronic session. The practitioner attended with Angela Cotter and Michael Cotter who, as I understood it, were IT consultants from a private firm. Ms Dianne O’Hara, the Chief Executive Officer of the Law Society, also attended the meeting.
148.In her affidavit, Ms Cotter said that at the end of the meeting Ms O’Hara said “we will confer with our own IT people. We will get back to you with the result after we have had time to consider what you have presented.” Ms Cotter’s affidavit was tendered without objection, and Ms Cotter was not required for cross examination.[59]
[59] Transcript of proceedings 19 March 2019, page 8, lines 27 - 37
149.Ms O’Hara gave evidence[60] that at the meeting the practitioner provided two printed screenshots that, the practitioner said, proved that the costs disclosure letters were created on 15 December 2015 and 24 December 2015. Ms O’Hara said that she was not satisfied that the screenshots proved what the practitioner said they proved, and that she was “none the wiser” after the meeting. Ms O’Hara said that she could not recall whether she told the practitioner that she would “get back to her” following the meeting. In cross examination, Ms O’Hara denied agreeing that she would “get back” to the practitioner after the meeting, and said it was not her place to do so. Rather, it was a matter for the “complaints process”.[61]
[60] Affidavit of Mrs O'Hara affirmed 28 February 2019.
[61] Transcript of proceedings 19 March 2019, page 97, lines 34-45
150.By letter dated 17 March 2017, Mr Buxton again sought a response from the practitioner to his First and Second Letters. He also confirmed his instructions that “no preliminary issues have been raised with the Law Society” and noted that the practitioner had not “clarified what preliminary issue has been raised”. Mr Buxton also sent the practitioner a copy of a letter dated 20 February 2017 from Mr and Mrs A in response to Ms D’s statutory declaration, and sought a response to it by 31 March 2017. Mr Buxton again reminded the practitioner of her obligation under rule 43 of the Conduct Rules to provide a response.
151.The practitioner did not respond by 31 March 2017. By letter dated 4 April 2017 she responded only to request an extension until 7 April 2017, which was granted. The practitioner did not respond by 7 April 2017.
152.By letter dated 30 May 2017, Ms Binstock wrote to the practitioner noting the absence of a response to McInnes Wilson’s letters dated 9 February 2017 and 17 March 2017 (which in turn picked up the absence of a response to Mr Buxton’s First and Second Letters) and requested an immediate response. The practitioner did not respond.
153.By letter dated 22 February 2018, Mr Buxton again wrote to the practitioner noting the absence of any response to McInnes Wilson’s letters dated 9 February 2017, 17 March 2017 and 30 May 2017. He enclosed a copy of Mrs A’s statement dated 19 September 2017 and requested a response to it within 14 days. The practitioner did not respond.
154.By letter dated 24 April 2018, Mr Buxton and Ms Binstock wrote to the practitioner referring to their earlier correspondence to which they had not received a response. They informed the practitioner that the Law Society “intends to complete its investigation of the complaint”. They provided the practitioner with a draft application to the Tribunal pursuant to section 419 of the Act concerning her professional conduct and requested any comments she wished to make about it. The draft application included a contention that the practitioner had failed to respond to Mr Buxton’s First and Second Letters. In their letter dated 24 April 2018, Mr Buxton and Ms Binstock requested a response by no later than 9 May 2018 pursuant to rule 43.2 of the Conduct Rules. The practitioner did not respond.
155.It appears from Mr Buxton’s later letter dated 4 June 2018 that the practitioner, by some means, had instead asked the Law Society for an extension to 23 May 2018, which she was given. The practitioner did not respond by that date.
190.The schedule then lists, over three pages, several events between May 2018 and June 2018, and a request on 13 March 2019 from McInnes Wilson to the practitioner for the practitioner’s response to an unrelated complaint made against her. The events between May and June 2018 refer to correspondence from McInnes Wilson to the practitioner seeking responses from her in relation to four other unrelated complaints against her. The schedule included a reference to correspondence that the practitioner wrote to a solicitor, Mr Phelps, about her husband’s illness “because he also acts for the Law Society and [I] asked him to keep it confidential”.[70]
[70] Transcript of proceedings, 19 March 2019, page 92 lines 1-2
191.The submission seemed to be that the practitioner had not responded to the investigation of Mrs A’s complaint in a timely manner because she was overwhelmed by the need to respond to other complaints against her and to her husband’s health needs. The practitioner (it appears) also submitted that McInnes Wilson deliberately made their requests for her responses to other complaints in order to “promote non-compliance and grounds for disciplinary proceedings.” On this basis, it seemed to be said, she should not be found to have breached rule 43 of the Conduct Rules.
192.I reject the proposition that McInnes Wilson’s correspondence to the practitioner in relation to other complaints was “calculated to apply pressure and promote non-compliance and grounds for disciplinary proceedings”. It was an improper submission, and should never have been put. I also reject the (apparent) submission that the practitioner needed more time to respond to correspondence regarding Mrs A’s complaint because she was overwhelmed with the need to respond to other complaints. If the practitioner was in that predicament, she should have said so. She never did. Also, I did not have any detail about the other complaints, or a copy of her correspondence to Mr Phelps, or any basis to conclude that these other tasks precluded her from being able to comply with rule 43 of the Conduct Rules in relation to the investigation of Mrs A’s complaint.
193.For the purposes of section 413(1)(b) of the Act, I am satisfied that there is a reasonable likelihood that the Tribunal would find the practitioner guilty of unsatisfactory professional conduct (but not professional misconduct) arising from her breach of rule 43 of the Conduct Rules.
Procedural fairness
194.The practitioner contended on the following grounds, many of which revisited her earlier objections, that she had been denied procedural fairness:
(a)By the Council instructing Mr Buxton and McInnes Wilson at the same time that they were proceeding against her in another matter.
(b)By Mr Buxton and McInnes Wilson seeking unrestricted access to her computer system when acting against her in another matter.
(c)By the Council failing to respond to the “preliminary issue” which was discussed at a conference with the IT consultant on 20 March 2017, and by making orders without addressing or resolving the “preliminary issue”.
(d)By the Council “taking almost 3 years” or “in excess of two years” to investigate the matter, such that the staff involved had left their employment.
(e)By the Council disregarding the evidence of Ms D without giving her an opportunity to respond.
(f)By the Council requiring her to provide expert IT evidence, but proceeding to make findings which appear to be based on IT decisions taken without expert evidence and without the practitioner having an opportunity to respond.
(g)By the Council involving two named officers of the Law Society “in both sides of my matters for the Law Society and upon the opposite side to myself”.
(h)By her not receiving any response to the electronic session meeting on 20 March 2017.
195.The practitioner did not refer to any authority in support of any of the alleged grounds of procedural unfairness or explain why the acts or omissions were unfair. In my view, all the grounds lacked substance.
196.In Re Minister for Immigration; Ex parte Lam, the High Court, per Gleeson CJ, noted:
Fairness is not an abstract concept. It is essentially practical. Whether one talks in terms of procedural fairness or natural justice, the concern of the law is to avoid practical injustice.[71]
[71] Re Minister for Immigration; Ex parte Lam [2003] HCA 6 at [37]
197.Once the High Court’s statement in Lam is appreciated and applied, the practitioner’s claimed denials of procedural fairness fall away. I address them in turn.
198.Mr Buxton and/or McInnes Wilson may well have been acting directly, or indirectly, in another matter against the practitioner. They might also have an adverse disposition towards her. I also accept that the practitioner had a right to a decision by an impartial decision-maker. None of these factors amount to a denial of procedural fairness. The Council made the decision now under review, not Mr Buxton or McInnes Wilson. Also, any adverse disposition that Mr Buxton, McInnes Wilson or even the Council may have held towards the practitioner that may (subconsciously or otherwise) have affected their ability to act impartially (none of which I accept) has any bearing on this proceeding. As mentioned, I was required to consider the decision under review de novo, or afresh, and to decide what the correct or preferable decision should be on the evidence before me. The Council’s decision is, in substance, no more than a point of reference when determining the practitioner’s application.
199.There is also no suggestion that Mr Buxton or McInnes Wilson obtained information relevant to the investigation of the practitioner’s conduct in this matter in the course of acting against her in another matter. In short, there was no conflict of interest on their part.
200.The complaint about Mr Buxton or McInnes Wilson seeking unrestricted access to the practitioner’s computer systems is factually flawed. They asked for an investigator, not themselves, to have access and only for the purpose of investigating the provenance of the two costs disclosure letters. Arrangements to ensure the investigator confined his or her investigation to that purpose could have been proposed and agreed. In any event, the access never happened. The practitioner point blank refused access, and never gave it. The electronic session on 20 March 2017 was not access. On that occasion, the practitioner showed only the electronic information that she wished the Law Society to see and only to the representatives from the Law Society that she wished to see it.
201.The practitioner’s complaint about the Council (or the Law Society) not responding to her “preliminary issue” is also flawed. The so-called preliminary issue appears to be twofold: the practitioner’s objection to Mr Buxton and/or McInnes Wilson acting for the Council in its investigation of Mrs A’s complaint and her objection to an investigator having unrestricted access to her computer system to investigate the provenance of the two costs disclosure letters. As mentioned above, both objections were baseless. Also, in my view, the so-called preliminary issue further demonstrated the practitioner’s obstructive behaviour in response to the investigation. For example, by letters dated 14 February and 17 March 2017, McInnes Wilson wrote to the practitioner twice informing her that “we are instructed that no preliminary issues had been raised with the Law Society” and that “you have not to date clarified what preliminary issue has been raised.” In her reply to McInnes Wilson’s letter dated 17 March 2017, by letter dated 4 April 2017, the practitioner made no comment about what the preliminary issue was, and wrote only to request an extension of time to complete her response.
202.The practitioner’s complaint about the time taken to complete the investigation, and staff who were involved having left her employment, is also flawed. The practitioner’s correspondence, as detailed above, demonstrates that the investigation took as long as it did primarily because of the practitioner’s obstructive conduct. She adopted a sustained approach of refusing to provide the information requested and by requesting extensions to provide a response by way of submission, which she then did not provide.
203.I say ‘primarily’ because, in my view, McInnes Wilson and the Council granted extensions of time for the practitioner to respond to Mrs A’s complaint and McInnes Wilson’s correspondence beyond what was necessary or reasonable. The Council has an overarching responsibility to the profession to investigate and determine complaints of this kind in an expeditious manner. In Stirling, the Victorian Court of Appeal said:
127 In our view, for a regulator to protect the public interest, it is unacceptable that it took almost four years from the time the investigation started to the end of the Tribunal hearing. The offending was disclosed to the Bar Ethics Committee in March 2008, but the Tribunal application was not initiated until March 2011. Matters of this sort should be brought to justice quickly. The failure to prosecute expeditiously is not satisfactorily explained by the appellant’s failures or delay in responding to the allegations. The respondent had sufficient facts for prosecution of the appellant long before the time at which he made its application to the Tribunal. All that was required was to give the appellant a reasonable opportunity to respond, which in fact had been provided by October 2008. The respondent’s explanation that it was delayed by the appellant’s failure to respond until March 2011 is inadequate.
204.This Tribunal has also repeatedly stated, with reference to higher authority, that procedural fairness requires only that a person be given an opportunity to respond, regardless of whether the person takes that opportunity.[72] In Allesch v Maunz, Kirby J said:
... Sometimes, through stubbornness, confusion, misunderstanding, fear or other emotions, a party may not take advantage of the opportunity to be heard, although such opportunity is provided. Affording the opportunity is all that the law and principle require.[73]
[72] Powley & Anor v Reynolds [2018] ACAT 103 at [31]; Commissioner for Social Housing v Hutchings & Gottschalk-Krutsky [2016] ACAT 88 at [52]
[73] Allesch v Maunz [2000] HCA 40 at [38]
205.I accept that what constitutes a reasonable opportunity to respond is a question of fact and degree, and that views can differ, but it should not have taken two years to investigate what was a relatively simple complaint. Conduct Rule 43.2 sets, for a reason, a default period of 14 days within which a solicitor must respond to requests for comments or information in relation to a solicitor’s conduct.
206.In any event, I am not persuaded that the practitioner was prejudiced by the time taken to carry out the investigation. She does not identify any staff that were employed in 2015 or 2016 who then left her employ or why their departure caused her any disadvantage. The only person who seems to have provided the practitioner with any relevant assistance is her daughter, Ms D, who was obviously contactable despite her moving to the United States.
207.The complaint of procedural unfairness because Ms D was not given an opportunity to respond to the Council is also flawed. I can see no reason in this case for why Ms D should have been given that opportunity. Ms D gave evidence by way of her statutory declaration, but was not the subject of the investigation. The Council controls its own process. Natural justice does not require the application of fixed or technical rules: “it requires fairness in all the circumstances”.[74] Fairness required it to inform the practitioner of the complaint against her and to give her a reasonable opportunity to respond to it including providing documents relevant to the complaint. Fairness required the Council to consider the documents put forward insofar as they were relevant. The practitioner put forward Ms D’s statutory declaration, and it was taken into account. The Council’s statement of reasons dated 3 October 2018 quotes from it extensively. In my view, in the context of the Council’s function, to take Ms D’s statutory declaration into account is all that procedural fairness required.
[74] O'Rourke v Miller [1985] HCA 24; Kioa v West [1985] HCA 81
208.The complaint about requiring the practitioner to provide expert IT evidence is also flawed. No one required the practitioner to do so. McInnes Wilson asked for access to her computer system, which the practitioner refused to give. The practitioner chose to provide expert IT evidence in an endeavour to establish the provenance of the costs disclosure letters, rather than permitting an IT investigator engaged by McInnes Wilson to conduct its own assessment. As best I can ascertain, the only IT assessment of its own that the Council took into account was its analysis of the document properties of the Word versions of the costs disclosure letters which showed their creation in March 2011 and April 2012, that they were last printed in March 2011 and April 2012, and that they were last modified in June 2016. The practitioner was plainly given an opportunity to respond to that IT analysis: it was the basis of two of the questions in Mr Buxton’s Second Letter, and caused the practitioner to request the “electronic session” that occurred on 20 March 2017.
209.The complaint about the Law Society involving two of its officers was difficult to understand. As best I could understand it, the practitioner objected to the attendance of the Law Society’s Professional Standards Manager, Mr Rob Reis, at the ‘electronic session’ proposed for 20 March 2017 without Ms O’Hara also being present on the basis of Mr Reis’ adverse disposition towards the practitioner. She relied upon Mr Reis’ comment that that there had been “a swag of complaints” against her and his view (said by the practitioner to have been expressed by him to her) that her objections to the complaints were “baseless, disappointing and calculated to delay.” The practitioner contended that “there is no air of impartiality as there should be in the professional body for the legal profession. Rather you have an agenda with respect to the writer that can be seen in the pattern (she said) of existing incidents.” [75]
[75] The practitioner's letter dated 9 March 2017 to Mr Reis, pages 4 and 5, forming part of exhibit R1
210.The practitioner’s complaint about Mr Reis’ involvement in the investigation of Mrs A’s complaint appears to be materially the same as her complaint about Mr Buxton’s involvement. For the same reason, the complaint lacks substance. First, it is nonsensical to think that the Law Society’s Professional Standards Manager should not participate in an investigation of Mrs A’s complaint simply because there had been other complaints against the practitioner: to participate in the investigation was Mr Reis’ job. The practitioner did not advance any evidence to support her submission that Mr Reis did not perform his role in an impartial manner. Second, I am not persuaded that any procedural unfairness arose even if Mr Reis held an adverse disposition towards the practitioner because Mr Reis did not decide anything: the Council did.
211.I have already dealt with the practitioner’s complaint about the alleged lack of response to the electronic session. In the context of procedural fairness, it also lacks substance. The practitioner was told about the absence of any ‘results’ from the electronic session on 28 June 2018, before the decision was made on 17 September 2018, and was given an opportunity to make any further submission after being told about the absence of any results.
212.I am not persuaded that any procedural unfairness occurred during the investigation of Ms A’s complaint.
Penalty
213.Where the Tribunal is required to ‘stand in the shoes’ of the Council and determine the practitioner’s application de novo, I feel obliged to comment on penalty despite the practitioner not making any submission on the topic, save for (as I understood it) a general submission that the Council failed to take into account that she is a practitioner of longstanding and has never previously been the subject of disciplinary action. I have acknowledged or assumed those factors to be true, and taken them into account.
214.The practitioner’s submission might have assisted in the context of an admission of error, and demonstrated regret, but the opposite was the case: the practitioner denied any wrongdoing. Also, the fact that the practitioner is a very experienced solicitor adds to the proposition that she should have understood her professional responsibilities, and so should not receive a lighter penalty on the grounds of inexperience.
215.The Council found three separate breaches, but made a ‘rolled up’ finding that there is a reasonable likelihood that the practitioner will be found guilty by the Tribunal of unsatisfactory professional conduct and imposed a ‘rolled up’ sanction or sanctions by reference to that finding. It did not attribute the reasonable likelihood or the sanction (or any of the three different sanctions) to any particular breach.
216.In my view, it was not correct or appropriate to decide the matter in that manner. It created uncertainty as to whether the Council’s finding of a reasonable likelihood that the practitioner would be found guilty of unsatisfactory professional conduct arose from one breach, or another or a combination of two or more of the breaches. It also created uncertainty as to whether one breach, particularly the breach of conduct rule 43.2, was treated as an aggravating factor in relation to the practitioner’s breach of another.
217.In Stirling, the Victorian Court of Appeal commented on penalty as follows:
71It is clear from the authorities that where there are elements or factors common between counts they cannot be used together to punish an accused twice. While on the first aspect of this ground there was no common element, in relation to the two charges relevant to this part of the appeal, there is a common factual element. Specifically, the Tribunal used the letter to the Victorian Bar to aggravate the penalty in relation to the tax matters under Charge 1. Effectively the Tribunal used a global approach to penalise the appellant, but at the same time separated out the charges and used one as an aggravating factor for the other. In our opinion, that approach constituted double punishment, and in line with the appropriate authorities, the discretion of the Tribunal miscarried in doing so.
72Secondly, as was raised in the argument, the Tribunal’s global approach to penalty appears to not abide by the general common law rule that ensures that a court or tribunal stipulates a penalty for each count or charged conduct. In R H McL v R, Gleeson CJ, Gaudron and Callinan JJ held:
although general or global sentences in the case of multiple offences have, in the past, been common in England, they are virtually unknown in Victoria, and may not be permissible.
73In Ryan v R, which dealt with similar provisions in the Crimes Act 1958, Brennan J held:
When an accused person is convicted on two or more counts regularly joined, the trial judge is entitled to assess an appropriate overall sentence having regard to the entire course of criminal conduct which constitutes the several elements of the offences of which the accused is convicted. If the offences are founded on the same facts, it is necessary to ensure that the appropriate penalty for the same act or omission is not imposed twice; if the offences are part of a series, the entirety of the criminal conduct of the same or similar character, rather than the several acts or omissions constituting the separate offences, may determine the appropriate overall sentence to be imposed. In pronouncing sentence, however, the trial judge imposes separate sentences in respect of the several offences of which the accused has been convicted, effecting the appropriate overall sentence by adjusting the severity of the separate sentences and, when custodial sentences are imposed, by ordering that they be served either concurrently or cumulatively.
74The rule is an important one and should be applied, where applicable, in disciplinary proceedings. First, as Brennan J noted in Ryan, it allows for a sentence on one count to stand where a conviction for another count is quashed. Secondly, it is easier to assess whether a penalty is manifestly excessive or inadequate when each sentence is clearly pronounced on each count. Thirdly, by sentencing for separate offences, the court makes it clear to the public what the penalty for each offence is, thus assisting in the process of general deterrence. Finally, as in this case, adherence to this rule prevents conduct from one charge being used as an aggravating factor in assessing the penalty for another charge.
75However, this rule may not apply in all disciplinary proceedings. There are some cases, where the charged conduct is constituted by a course of behaviour as opposed to a set of separate events. In these circumstances where the facts of the case are so inextricably interwoven as to make it difficult to meet a clear standard of prescription, a global penalty may be applied (footnotes omitted).
218.I recognise that in many cases the facts of the case are inextricably interwoven so that a rolled up penalty is appropriate. The Tribunal’s decisions in Council of the Law Society of the ACT v Legal Practitioner P4 (P4),[76] Council of the Law Society of the ACT v Legal Practitioner P4 (No 2)[77] and Council of the Law Society of the ACT v The Legal Practitioner (Stephen Stubbs) (Stephen Stubbs)[78] are good examples.
[76] Council of the Law Society of the ACT v Legal Practitioner (Stephen Stubbs) [2014] ACAT 64
[77] Council of the Law Society of the ACT v Legal Practitioner P4 (No 2) [2015] ACAT 35
[78] Council of the Law Society of the ACT v Legal Practitioner (Stephen Stubbs) [2010] ACAT 46 upheld on appeal in The Legal Practitioner v Council of the Law Society of the ACT (No 2) [2014] ACTSC 9 at [338] – [339] and [522]
219.In P4, the Tribunal considered three separate categories of conduct, namely the practitioner’s dealings with a former client, his dealings with the Court and his dealings with another practitioner, but all three categories involved “one continuing course of improper conduct”, namely the practitioner’s avoidance of his obligation to pay money to his former client. The Tribunal found therefore that “when considering the culpability of the behaviour, there was no utility in breaking the conduct up into sub-categories”.[79]
[79] Council of the Law Society of the ACT v Legal Practitioner P4 (No 2) [2015] ACAT 35 at [4] – [9]
220.In Stephen Stubbs,[80] in its separate decision on penalty, the Tribunal accepted a submission in relation to the many proven charges “that the conduct cannot be compartmentalised or viewed in a vacuum and that is particularly so in this case when the facts and circumstances relating to all the charges are so closely interrelated or have some common factual connections.”[81] The Tribunal earlier noted that “that is not the same thing, as [counsel for the practitioner] suggested as [aggregating] a whole series of diverse events in coming to a particular conclusion.[82] The events were not disparate or diverse. They shared a common factual thread, namely dishonesty and lack of integrity demonstrating that Mr Stubbs could not be trusted.”[83]
[80] Council of the Law Society of the ACT v Legal Practitioner (Stephen Stubbs) [2010] ACAT 46, upheld on appeal in The Legal Practitioner Council of the Law Society of the ACT (No 2) [2014] ACTSC 9 at [338] – [339] and [522]
[81] At [15]
[82] At [14]
[83] At [14]
221.I do not consider that the practitioner’s breaches of the Act and the Conduct Rules can be seen as part of a course of conduct or having a common factual thread. In my view, there were three separate breaches. Following Stirling, separate determinations about a reasonable likelihood of the Tribunal finding unsatisfactory professional conduct and a separate sanction in relation to each breach should therefore have been made and imposed. To illustrate, it may have been problematic for me to determine whether the fine was appropriate if I had not been satisfied about one or more of the breaches.
222.However, for the following reasons, I am satisfied that the outcome should be the same.
223.As the Council acknowledges, the practitioner’s breach of section 222 was minor. It involved a small sum of money that was appropriately requested as a deposit towards fees and costs to be incurred. Upon rendering her tax invoice dated 24 December 2015, less than three weeks after the deposit was paid, the practitioner would have been entitled to transfer the $770 to her office account after receiving authorisation from Mr and Mrs A to do so. Nevertheless, Courts and Tribunals have repeatedly stressed the importance of a legal practitioner’s strict adherence to their trust account responsibilities. I am satisfied that there is a reasonable likelihood that the Tribunal would find the practitioner guilty of unsatisfactory professional conduct, but not professional misconduct, arising from the breach particularly where she, as an experienced legal practitioner, should have known that a deposit paid by a client on account of a conveyance to be conducted must be deposited into her trust account until it can be transferred to her office account in accordance with a tax invoice rendered for work done.
224.Nevertheless, I would not have been satisfied that this breach warranted for the practitioner, at this stage of her career, a public reprimand. In my view, but for her submissions in defence of the breach, a caution would have sufficed.
225.I say ‘but for her submissions’ because they demonstrated that the practitioner has a poor understanding of what constitutes trust money and of her obligations about how trust money must be managed. I am satisfied, therefore, that the direction that she undertake the trust accounting module at the next available Practice Management Course was properly made. I will confirm that sanction in relation to the practitioner’s breach of section 222.
226.Regarding the practitioner’s non-compliance with section 269 of the Act, central to Mrs A’s complaint was the surprise and resulting stress caused to her and her husband by the practitioner’s fees being so much more than they anticipated. Even assuming the practitioner sent the costs disclosure letters dated 15 and 24 December 2015 to Mr and Mrs A, the letters would still not have given them an understanding of the likely or estimated fees that they would have to pay. On her own case, the practitioner was very aware that Mr and Mrs A were extremely “costs conscious”, yet there is no indication in either letter of what the practitioner’s likely total costs would be or a “range of estimates” of what the total costs would be arising from variables affecting the conveyance.
227.All of this would have been avoided had the practitioner complied with section 269. Compliance would have enabled Mr and Mrs A either to engage the practitioner with their ‘eyes open’ regarding likely fees or to look elsewhere for someone to act for them on the conveyance. I am satisfied that a fine of $1,500 was appropriate. The practitioner’s breach of section 269 was the direct cause of the significant distress suffered by her clients as a consequence of them receiving tax invoices for fees well beyond what they were expecting. I will confirm that sanction in response to the practitioner’s breach of section 269.
228.The most concerning aspect of the practitioner’s breach of section 269 is her lack of insight or understanding of the breach. Her submissions as to why she had not breached the applicable provisions of section 269 only highlighted her lack of understanding of her obligations under the section. In my view, that lack of understanding fully justifies the Council’s conclusion, and sanction, that she undertake the costs module at the next available Practice Management Course. I will confirm that sanction also in response to the practitioner’s breach of section 269.
229.In my view, the practitioner’s breach of rule 43 of the Conduct Rules was the most serious breach and it calls for a public reprimand. As Mr Moujali pointed out, Courts and Tribunals have repeatedly stated that a legal practitioner has a positive obligation to “inform and assist” in respect of an enquiry into the legal practitioner’s conduct. Rule 43 of the Conduct Rules confirms this obligation of frankness, candour and co-operation. The practitioner’s conduct was completely contrary to what should have occurred.
230.This is not to suggest that a practitioner acts improperly by electing to defend disciplinary charges. It is a matter of how the defence is conducted. I refer to the decision of the Court of Appeal in LP12 quoted at paragraph 178 above.
231.My concern was not so much with the practitioner’s submissions, but with her actions of avoidance and delay and with her indifference, at least, to the role of the Council and its solicitors. The practitioner was under a duty to answer the questions asked in Mr Buxton’s First and Second Letters with frankness and candour: she never answered the questions. She disregarded the manner in which the Council wished to conduct its investigation, and instead gave them the information that she wanted them to have and in the form she wished them to have it. Much of the evidence on which she relied in this application, as evidenced by her oral evidence, her affidavit sworn 11 February 2019 and Ms D’s affidavit affirmed on 17 March 2019, was produced almost three years after receiving Mrs A’s complaint and after the decision under review was made. It is these actions and her actions of that kind that demonstrate the practitioner’s breach of conduct rule 43.2.
232.This should have been a straightforward investigation into the circumstances giving rise to the practitioner’s fees on a conveyance, and it should have been concluded in a timely manner. Instead, the investigation extended for approximately two years and, I expect, cost the Law Society and therefore the legal practitioners of the ACT many thousands of dollars in legal fees and the costs of other administrative resources. None of that should have occurred.
233.Whilst I had power under section 416(4) of the Act to impose more severe penalties than the Council was able to impose, and was minded to impose an additional significant fine to reflect the substantial costs that the practitioner unjustifiably caused the Council to incur, I elected not to do so for reasons of procedural fairness and having regard to the Council’s submission that the decision under review be confirmed.
234.The Tribunal does not have power to make a costs order arising from an application for review under section 416 of the Act, but this case gives cause for that limitation to be revisited.
Anonymity
235.I have confirmed the Council’s sanction of a public reprimand. The apparent action is therefore to publish my orders and reasons with disclosure of the practitioner’s name. To do otherwise contradicts the sanction of a public reprimand.[84]
[84] Council of The Law Society of The Australian Capital Territory v Legal Practitioner 201907 (Darren Carden) [2019] ACAT 76 at [7]
236.The practitioner did not make any submission to the contrary, but the question was not addressed by either party.
237.Litigants would invariably prefer not to be named in published reasons for decision of courts or tribunals, especially where adverse comments are made about them, but are named to reflect the public interest in open justice. Exceptions usually occur only in cases where publication would entail significant and unnecessary disclosure of highly personal information, for example in applications involving mental health, guardianship or child welfare. That is not this case.
238.However, in disciplinary proceedings against a person, regardless of the trade or profession in which they work, disclosure of the person’s name must be approached with care. Professional reputations can be significantly damaged by a finding of wrongdoing, and that damage can be difficult to repair if, on review or appeal, different conclusions are reached about the finding of wrongdoing.
239.That is recognised in the case of an application for disciplinary action against a legal practitioner under Part 4.7 of the Act. Section 423A of the Act provides that a person must not “publish an account or report of an application under [Part 4.7]” if it discloses the identity of the person who is the subject of the complaint or allows the identity of the person concerned to be worked out. That prohibition applies until a final decision has been made and the appeal period has ended and no appeal has been made, or any appeal has been decided against the person concerned.
240.However, section 423A of the Act does not apply to this proceeding. The application before the Tribunal is not an application for disciplinary action, and the decision under review was made under section 413 of the Act which forms part of Part 4.5, not Part 4.7, of the Act.
241.Nevertheless, I have concluded on balance that section 423A of the Act reflects a statutory policy regarding disciplinary action against a legal practitioner, and that I should observe that policy in relation to this proceeding. I am mindful, for example, that the practitioner has a right to appeal from my first order on (alleged) grounds that I have erred in fact or law in a way that has affected the result.[85] If a decision were made on appeal that she should not be publicly reprimanded, her success on appeal might be substantially frustrated if my published orders and reasons have already disclosed her name.
[85] ACT Civil and Administrative Tribunal Act 2008 section 79. See generally Giusida Pty Ltd v Commissioner for ACT Revenue [2016] ACTSC 275 at [29]–[39]; Excel Intelligent Pty Ltd v Thomson [2018] ACAT 4 at [46]–[55] cited with approval in In the Matter of AB [2018] ACAT 18 at [41]. See also Faull v Commissioner for Social Housing [2013] ACTSC 121 on the principles affecting an appeal on a question of law.
242.My conclusion is also consistent with the reasoning of the Tribunal in Malgorzata Urbaniak-Bak v Council of the Law Society of the ACT,[86] albeit in a different context, where the Tribunal determined that disclosure of the name of the legal practitioner at a preliminary stage of the proceeding might undermine the ability of the Tribunal to conduct any future disciplinary proceedings and therefore prejudice the interests of justice.
[86] Malgorzata Urbaniak-Bak v Council of the Law Society of the ACT [2018] ACAT 14 at [35] – [36]
243.For these reasons, I have decided that the practitioner’s name should not be disclosed prior to the expiry of the appeal period, or until further order, whichever occurs first. My orders and reasons for decision are written accordingly. If no further order is made prior to the expiry of the appeal period, the Tribunal will republish my orders and reasons for decision with disclosure of the practitioner’s name.
244.I have concluded, for the same reason, that orders should be made to protect the privacy of the practitioner until further order in relation to the proceeding.
245.Section 38 of the ACAT Act provides that the hearing of an application by the Tribunal “must be in public”. However section 39 permits the Tribunal to make orders to protect the privacy of the hearing or information given at the hearing, where the Tribunal if satisfied that the right to a public hearing is outweighed by competing interests. To date, no order has been made under section 39 and, as best I can ascertain, no one applied for such an order. However, pursuant to section 39(3) of the ACAT Act, the Tribunal may make an order under section 39 on its own initiative.
246.Pursuant to section 39(5)(c) of the ACAT Act, the right to a public hearing is outweighed by competing interests if the Tribunal is satisfied that the application or part of it should be kept private “to the extent privacy is strictly necessary, in special circumstances of the application, because publicity would otherwise prejudice the interests of justice.” I will make orders 2 and 3 to preserve the privacy of the practitioner until further order.
……………………………
Presidential Member G McCarthy
HEARING DETAILS
FILE NUMBER:
OR 23/2018
PARTIES, APPLICANT:
Legal Practitioner 201823
PARTIES, RESPONDENT:
The Council of the Law Society of the Australian Capital Territory
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
Mr D Moujalli
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
McInnes Wilson
TRIBUNAL MEMBERS:
Presidential Member G McCarthy
DATE OF HEARING:
19 March 2019
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