| JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL STREAM : VOCATIONAL REGULATION ACT : LEGAL PROFESSION ACT 2008 (WA) CITATION : LEGAL PROFESSION COMPLAINTS COMMITTEE and FIDOCK [2011] WASAT 78 (S) MEMBER : JUDGE T SHARP (DEPUTY PRESIDENT) MR S ELLIS (SENIOR SESSIONAL MEMBER)
MS B HOLLAND (SESSIONAL MEMBER)
HEARD : 14 FEBRUARY 2011 AND DELIVERED : 13 MAY 2011 SUPPLEMENTARY
DECISION : 16 DECEMBER 2011 FILE NO/S : VR 103 of 2010 BETWEEN : LEGAL PROFESSION COMPLAINTS COMMITTEE Applicant
AND
STEVEN RAYMOND FIDOCK
Respondent
Catchwords: Legal practitioners Professional misconduct Unsatisfactory professional conduct - Misleading affidavits - Conflict of interest - Appropriate penalty
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Legislation: Inheritance (Family and Dependents Provision) Act 1972 (WA)
Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010
Legal Profession Act 2008 (WA), s 438, s 439(a), s 439(c), s 441(a)
State Administrative Tribunal Act 2004 (WA), s 87(1) Result: Practitioner suspended, a condition imposed on his local practicing certificate, fined and ordered to pay costs Category: B
Representation: Counsel:
Applicant : Mr H Jackson and Ms P Le Miere
Respondent : Mr D Williams AM QC and Mr G Dean
Solicitors:
Applicant : Law Complaints Officer
Respondent : Chris Stokes & Associates
Case(s) referred to in decision(s):
Barrister's Board v Darvenizia [2000] QCA 253; (2000) 112 A Crim R 438
Barristers Board v Young [2001] QCA 556
Coe v New South Wales Bar Association [2000] NSWCA 13
Law Society of New South Wales v McElvenny [2002] NSWDT 166
Law Society of New South Wales v Singh [2010] NSWADT 26
Legal Practitioners Complaints Committee and Benari [2005] WASAT 213(S)
Legal Practitioners Complaints Committee v Camp [2010] WASC 188
Legal Practitioners Complaints Committee v Dixon [2006] WASCA 27
Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129
Legal Profession Complaint Committee and Fidock [2011] WASAT 78
Legal Profession Complaints Committee v Bachmann [2011] WASC 309
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Re A Practitioner (1984) 36 SASR 590
Re a Practitioner; ex parte Legal Practitioners Disciplinary Tribunal (2004) 145 A Crim R 557
Re Maraj (a legal practitioner) (1995) 15 WAR 12
Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] 2 AC 378
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REASONS FOR DECISION OF THE TRIBUNAL:
Summary of Tribunal's decision 1 These supplementary reasons concern the appropriate orders to be made by the Tribunal under s 438 of the Legal Profession Act, 2008 (WA) in respect of the professional misconduct and unsatisfactory professional conduct of Mr Steven Raymond Fidock, a legal practitioner, found by the Tribunal in its decision of 13 May 2011. 2 The Tribunal found that the practitioner engaged in: (a) professional misconduct in that he: (i) swore misleading affidavits on 16 June2006, 23June 2006 and 3 July 2006. The affidavits each deposed that $116,257.73 held in a 'Telenet Account' with BankWest was the property of the estate of his client, MrArgentieri, when those funds were not the exclusive property of the estate. The respondent made those misleading statements recklessly whether they were true or not; (ii) treated monies used to purchase a property in ForrestStreet, South Perth as the property of the estate of MrArgentieri when there was a conflict between his personal interest as the beneficiary of MrArgentieri's estate and his fiduciary duties to his client, MrsArgentieri; and (iii) treated the funds deposited with BankWest in the Telenet Account of the estate of MrArgentieri when he purchased the Forrest Street property, South Perth and that he did so recklessly whether MrsArgentieri was or may have been the owner of those funds; and (b) unsatisfactory professional conduct when he required Mrs Argentieri's granddaughter, Mrs Darby, to withdraw her complaint to the Legal Profession Complaints Committee and not take any part in prosecution of that complaint, as a condition of a settlement of (Page 5)
Supreme Court proceedings brought by her (unsatisfactory conduct). 3 The Tribunal considers that the following orders should be made pursuant to s 439(a), s 439(c) and s 441(a) of the Legal Profession Act 2008 (WA): (a) in respect of the professional misconduct: (b) in respect of the unsatisfactory conduct, a fine of $3,000 should be imposed pursuant to s 441(a) of the Legal Profession Act 2008 (WA). 4 The suspension should operate from 13 May 2011. The period of supervised practice should commence on the date on which the practitioner resumes practice. 5 The practitioner should also make a contribution to the legal costs of the Legal Profession Complaints Committee assessed at $25,000.
General principles 6 Salient general principles were recently set out by the Full Court in Legal Profession Complaints Committee v Bachmann[2011] WASC 309 at [45] - [47]. (Martin CJ, Heenan and Jenkins JJ): 45 The relevant principles in an application of this kind are well established. The jurisdiction of the court to remove a practitioner from the Roll of Practitioners is not exercised for the purpose of punishing the practitioner concerned, but for the protection of the public and the maintenance of the reputation and standards of the legal profession: Re Maraj (a legal practitioner)(1995) 15 WAR 12, 25 (Malcolm CJ, Kennedy and Franklyn JJ agreeing); Ziems v Prothonotary of the Supreme Court of New South Wales[1957] HCA 46; (1957) 97 CLR 279, 286 (Dixon CJ, McTiernan, Fullagar and Kitto JJ agreeing); Legal Profession Complaints Committee v Brennan[2010] WASC 198 [10] (Martin CJ, Murray and Hall JJ agreeing); Legal Profession Complaints Committee v (Page 6)
Masten[2011] WASC 71 [16] (Martin CJ, Murray and EM Heenan JJ). Since the object is to protect the public and the reputation of the profession, the consequences for the practitioner may be either more or less severe than they would be if the only object of the proceedings was one of punishment: Legal Practitioners Complaints Committee v Lashansky [2007] WASC 211 [19]. 46 The critical question to be addressed by the court is whether the practitioner has been shown not to be a fit and proper person to be a legal practitioner: Ziems (297 - 298); A Solicitor v The Council of the Law Society of New South Wales [2004] HCA 1; (2004) 216 CLR 253 [15]; Legal Practitioners Complaints Committee v Thorpe [2008] WASC 9 [43]. Fitness to practise law requires that the practitioner must command the personal confidence of his or her clients, fellow practitioners and judges: In re Davis (1947) 75 CLR 409, 420 (Dixon J), Thorpe [43], and Brennan [11]. Fitness to practice [sic] is to be decided at the time of the hearing, not as at the time the relevant conduct was entered into: A Solicitor v The Council of the Law Society of New South Wales [21]. 47 Striking off is an order reserved for very serious cases, where the character and conduct of the practitioner is seen to be 'inconsistent with the privileges of further practice': Barristers' Board v Darveniza [2000] QCA 253; (2000) 112 A Crim R 439 [38]. In that case, Thomas JA observed that 'the quality most likely to result in striking off is conduct which undermines the trustworthiness of the practitioner, or which suggests a lack of integrity or that the practitioner cannot be trusted to deal fairly within the system which he or she practises': Darveniza [33]. It has also been observed elsewhere that honesty and integrity are essential characteristics required of legal practitioners, and the court has generally taken a very serious approach to cases in which a practitioner's conduct has involved dishonesty: see Brennan [15], Legal Practitioners Complaints Committee v Palumbo [2005] WASCA 129 [23]; Legal Practitioners Complaints Committee v De Pardo [2007] WASC 266 [14]. 7 The circumstances in which suspension, rather than striking off, is appropriate were considered in ReAPractitioner(1984) 36 SASR 590 at 593 (King CJ): The proper use of suspension is … for those cases in which a legal practitioner has fallen below the high standards to be expected of such a practitioner but not in such a way as to indicate that he lacks the qualities of character and trustworthiness which are the necessary attributes of a person entrusted with the responsibilities of a legal practitioner. (Page 7)
8 In Legal Practitioners Complaints Committee v Camp [2010] WASC 188, the Full Bench said at [80]: … A suspension indicates a seriousbreach of professional obligations reflecting to a significant degree, upon the practitioner's fitness to practice but where there are prospects that this may only be an occasional or transient failing and that the practitioner has or may soon regain the essential qualities of character and trustworthiness necessary to be a member of the profession.
The issue 9 The applicant, the Legal Profession Complaints Committee (Committee) asked that the Tribunal send a report to the Supreme Court with a recommendation that the respondent (practitioner) be struck off the roll of practitioners. The practitioner contended that a period of suspension, the imposition of a condition on the practitioner's practising certificate, a fine or a combination of these penalties was more appropriate. 10 The parties made submissions in relation to the following topics: (a) the nature and circumstances of the contraventions; (b) the conduct of the practitioner not forming part of the contraventions themselves including the practitioner's other 'record', dealings with the Committee and evidence of contrition; and: (c) the practitioner's personal circumstances. 11 It is convenient to deal with the issue by reference to these topics.
Nature and circumstances of the contraventions 12 The factual background is set out in the Tribunal's earlier reasons for decision (Legal Profession Complaint Committee and Fidock [2011] WASAT 78) (Reasons). In general terms, the facts are as follows. 13 The practitioner was a beneficiary of the wills of two of his clients, Mr Nazzareno Antonio Argentieri and Mrs Stanislawa Stephanie Argentieri. Mr and Mrs Argentieri were concerned to arrange their affairs to ensure that no claim could be made against Mrs Argentieri's estate by her daughter, Mrs Hoey or granddaughter, Mrs Darby, under the Inheritance (Family and Dependents Provision) Act 1972 (WA) (Inheritance Act). Mr Argentieri made his will on 29 March 2004. (Page 8)
Mrs Argentieri made her will on 6 April 2004. Mr Argentieri's will provided that, on his death, the whole of his estate would pass to the practitioner to hold on trust for Mrs Argentieri during her life. Upon Mrs Argentieri's death, the practitioner would be entitled to Mr Argentieri's property absolutely. Mrs Argentieri's will provided that the whole of her estate would pass to Mr Argentieri and, if he predeceased her, to the practitioner. The practitioner was the executor of Mr Argentieri's will. 14 Mr Argentieri became unwell in 2005. At the hearing, the practitioner gave evidence that Mr and Mrs Argentieri both wanted assets to be held in Mr Argentieri's name. Reducing the assets owned by Mrs Argentieri reduced the size of her estate against which a claim could be made under the Inheritance Act. The practitioner held powers of attorney for each of them and in early 2006 he assisted Mr and Mrs Argentieri in arranging their financial affairs. One of the steps which he took was to open a new bank account in the sole name of Mr Argentieri. The account was a particular product offered by BankWest, known as a 'Telenet Account'. The terms of that type of account stipulated that funds could not be directly deposited into or withdrawn from the Telenet Account. Funds had to be routed through another account linked to the Telenet Account. The account specified by the practitioner as the linked account was a 'BankWest Reward Saver Account' (Saver Account), which was in the joint names of Mr and Mrs Argentieri. The funds in the Saver Account were owned jointly by Mrs and Mrs Argentieri. $116,257.73 was transferred into the Telenet Account from the Saver Account. The Tribunal found that Mrs Argentieri retained a proprietary interest in the funds held in the Telenet Account, notwithstanding that the Telenet Account was in the sole name of Mr Argentieri. 15 Mr Argentieri died on 2 April 2006. At that time, the Telenet Account held $116,257.73. Mrs Argnetieri continued to have an interest in the Telenet Account funds. On 16 June 2006, the practitioner applied for probate of Mr Argentieri's estate and swore an affidavit in support of that application identifying the assets of Mr Argentieri's estate. In that affidavit the practitioner swore that the funds in the Telenet Account were the sole property of Mr Argentieri. The practitioner swore and filed two further affidavits, which were dated respectively 21 June 2006 and 28 June 2006. Those affidavits differed from the affidavit of 16 June 2006 in minor respects and repeated the statement that the funds in the Telenet Account were the sole property of Mr Argentieri. The Tribunal found that that each affidavit was (Page 9)
misleading, because Mrs Argentieri retained an interest in the funds in the Telenet Account. The Tribunal also found that the practitioner acted recklessly in swearing the affidavits. This conduct was the first of the contraventions found against the practitioner. 16 On 6 July 2006, the practitioner entered into a contract to purchase a property in Forrest Street, South Perth (Forrest Street property). Settlement took place on 22 August 2006. In preparation for the settlement, the practitioner withdrew the funds from the Telenet Account. He used those funds to settle on the purchase of the Forrest Street property together with other funds which formed part of the estate of Mr Argentieri. The practitioner was registered as the proprietor of the Forrest Street property, initially, as executor of Mr Argentieri's estate. After the death of Mrs Argentieri, he was registered as the proprietor of that property in his own right. The Tribunal found that the use of funds from the Telenet Account in this fashion was reckless and that it occurred in circumstances where there was a conflict between the interests of the practitioner and Mrs Argentieri. This conduct constituted the second and third episodes of misconduct found by the Tribunal. 17 After Mrs Argentieri's death, Mrs Darby made a complaint to the Committee and commenced proceedings against the estate of Mrs Argentieri in the Supreme Court under the Inheritance Act. The Supreme Court proceedings were settled at a mediation conducted by a registrar of the Court. The practitioner required that the settlement contain a condition that Mrs Darby withdraw her complaint and not assist the Committee further. 18 The three counts of misconduct are related. Each arose from treating the Telenet Account funds in which Mrs Argentieri had an interest, as funds which belonged entirely to the estate of Mr Argentieri. The affidavits sworn on 16, 21 and 28 June 2006 misleadingly described ownership of the Telenet Account funds. The subsequent dealings with the Telenet Account funds were consistent with that view. The misconduct did, however, occur over a period of time, in which the practitioner could have taken steps to remedy the consequences of his conduct. 19 The practitioner argued that the Tribunal did not find that the conduct of the practitioner was 'recklessness coloured by dishonesty' (see practitioner's submissions at para 14.6). The Tribunal does not accept this proposition. The finding made by the Tribunal at [125] in the Reasons was in terms of the allegation made by the Committee, which was that the (Page 10)
practitioner's conduct was 'reckless'. However, the citation from Royal Brunei Airlines Sdn Bhd v Tan Kok Ming [1995] 2 AC 378 differentiates between mere carelessness, which does not support a conclusion of dishonesty, and recklessness, which the Privy Council said 'can be a telltale sign of dishonesty'. The circumstances which lead the Tribunal to conclude that there was a sufficient element of dishonesty are set out at [122] to [124] of the Reasons. The Tribunal also made an explicit finding of dishonesty at [147] of its Reasons. 20 Dishonest conduct strikes at the heart of the fitness of a practitioner to carry on practice. The Committee referred to a number of decisions where practitioners were struck off because the practitioner had deliberately or knowingly made false statements in an affidavit to a court or a tribunal (Coe v New South Wales Bar Association[2000] NSWCA 13, Barristers Board v Young [2001] QCA 556, Re a Practitioner; ex parte Legal Practitioners Disciplinary Tribunal(2004) 145 A Crim R 557, Barrister's Board v Darvenizia[2000] QCA 253; (2000) 112 A Crim R 438 (Darvenizia) at [33], Legal Practitioners Complaints Committee v Palumbo[2005] WASCA 129, Legal Practitioners Complaints Committee v Dixon[2006] WASCA 27 (Dixon)). It is noted that the conduct of the practitioner in Dixon and Daveniziawas part of a broader pattern of serious criminal behaviour. 21 There are, however, circumstances in the present case which mitigate the extent of the practitioner's dishonesty. Mr and Mrs Argentieri wanted the practitioner to benefit from their estates, at least at the time their wills were executed. The decision to transfer funds from the Saver Account into the Telenet Account was implemented without Mr and Mrs Argentieri receiving independent advice in relation to the transaction, so the Tribunal cannot speculate what would have occurred if independent advice had been obtained or conclude that their consent to the transaction was fully informed. However, the transfer of funds into the Telenet Account was consistent with their earlier conduct and it was, on the evidence of the practitioner, what they told him to do. This is not a case where the practitioner had actual knowledge that Mr and Mrs Argentieri did not want him to benefit from their estate and where they had made it plain to him that other persons were intended to benefit. Similarly, the Tribunal accepted that the practitioner did not make the affidavits knowing that they were false. The practitioner did not set out intentionally to mislead the Court, although that was the consequence of his conduct. (Page 11)
22 The unsatisfactory conduct of the practitioner was a sequel to the testamentary arrangements made by Mr and Mrs Argentieri and in which the practitioner participated. The conduct occurred at a mediation at which the practitioner and Mrs Darby were represented by experienced practitioners and which was facilitated by an experienced registrar.
Other conduct 23 The Committee submitted that the practitioner failed to acknowledge frankly, the nature and extent of his wrongdoing either in his dealings with the Committee or in his evidence to the Tribunal. The Committee submitted, correctly, that the practitioner's frank acknowledgement of wrongdoing was a significant factor in Law Society of New South Wales v McElvenny[2002] NSWDT 166 and Law Society of New South Wales v Singh[2010] NSWADT 26, where the practitioner was not struck off. Additionally, the Committee pointed out that the Tribunal did not accept elements of the practitioner's evidence before it. There is some force to these arguments. However, the Tribunal did not uphold all elements of the complaint brought to the Tribunal, so it can be said, with the benefit of hindsight, that the practitioner was justified in disputing at least part of the complaint brought against him. Also, this was not a case where the Tribunal found that there was deliberate falsehood on the part of the practitioner. Additionally, there was a degree of cooperation with the Committee's investigation: the practitioner responded to the Committee and provided information to it in response to its requests. 24 The practitioner's approach to the civil proceedings brought by Mrs Darby under the Inheritance Act is also relevant. While the conduct of the practitioner in settling the proceedings is to be commended, settlement only occurred after proceedings were commenced by Mrs Darby. The practitioner did not take steps to voluntarily pay Mrs Darby an amount reflecting the benefit he obtained from the estate of Mrs Argentieri. The practitioner submitted that he required Mrs Darby to withdraw the complaint so that he might finally resolve his dealings with her. While this may have been one objective of the respondent, the practitioner cannot have been unaware of the possibility that a lack of cooperation by Mrs Darby would impede prosecution of the complaint. 25 Nevertheless, it appears the practitioner has some awareness of his professional responsibilities. The practitioner conceded at the hearing that his conduct in settling Mrs Darby's claim was unsatisfactory professional conduct. The practitioner made arrangements for Mr and Mrs Argentieri to receive independent legal advice at the time they made their wills. (Page 12)
26 The practitioner has practised since 1996. There was one prior episode of disciplinary action against him in October 2008, which resulted in a reprimand and related to termination of a retainer. 27 Positive references were provided by Mr Haynes, a legal practitioner, and Mr Povey, a chartered accountant. Mr Povey states that he was the auditor of the practitioner's trust account for a number of years and that he had no concerns about the practitioner's trust account during that period.
Personal circumstances 28 To the extent that the practitioner's personal circumstances are relevant in light of Re Maraj (a legal practitioner) (1995) 15 WAR 12, the Tribunal notes that he has seven dependent children, of whom five are still at school. He owns his own home. At the time of the penalty hearing, he was unemployed. The practitioner had ceased practice at the time of the initial hearing in this matter on 14 February 2011.
Conclusion 29 Separate penalties should be imposed in respect of the unprofessional conduct and the unsatisfactory conduct. 30 In relation to the unprofessional conduct, although the conduct of the practitioner fell significantly below the standard required of legal practitioners, the practitioner's conduct was not deliberately and intentionally dishonest or misleading. The Tribunal is not satisfied, on the basis of the matters set out above that, the practitioner is so lacking in character or trustworthiness that he should be struck off. There are prospects that the practitioner has, or may regain, the essential qualities necessary for a legal practitioner. Therefore, the Tribunal considers that suspension from practice for a period of two years is appropriate. Because the practitioner had ceased to practise pending the outcome of the original hearing and subsequently, the period of suspension should run from the date of delivery of the Reasons, that is, 13 May 2011. The practitioner should also at the end of that period be subject to a period of supervised practice of one year before being able to resume practice in his own right. 31 In relation to the unsatisfactory conduct, the Tribunal considers that a fine of $3,000 appropriately reflects the seriousness of the practitioner's conduct and the context in which it occurred. (Page 13)
Costs 32 The practitioner should make a contribution to the costs of the Committee. Notwithstanding the general position set out in s 87(1) of the State Administrative Tribunal Act 2004 (WA), where disciplinary proceedings have been commenced in the public interest by a vocational regulatory body and the vocational regulatory body has been successful in the prosecution of those proceedings, the affected person should be ordered to contribute to the cost of the proceedings incurred by the vocational regulatory body; see Legal Practitioners Complaints Committee and Benari [2005] WASAT 213(S) at [25]. The contribution the affected person should be required to make lies in the discretion of the Tribunal, having regard to all of the circumstances of the case. 33 The practitioner argued that the Committee had only been successful in respect of some of the grounds included in the application and had been unsuccessful in respect of others. The Tribunal is not persuaded that this is the appropriate approach in this case, because the Committee has been substantially successful. 34 The Tribunal notes that one of the accounts rendered by counsel for the Committee appears to relate to work done in connection with two other practitioners associated with this matter. An allowance should be made in this regard. The Tribunal notes that counsel charged at a rate less than the maximum rate identified in the Legal Practitioners (Supreme Court) (Contentious Business) Determination 2010. The Tribunal considers that $25,000 is an appropriate amount.
Orders 1. In relation to the findings that the practitioner Steven Raymond Fidock: (Page 14)
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