LEGAL PROFESSION COMPLAINTS COMMITTEE and FIDOCK

[2011] WASAT 78

JURISDICTION     :   STATE ADMINISTRATIVE TRIBUNAL

STREAM:   VOCATIONAL REGULATION

ACT: LEGAL PROFESSION ACT 2008 (WA)

CITATION:   LEGAL PROFESSION COMPLAINTS COMMITTEE and FIDOCK [2011] WASAT 78

MEMBER:   JUDGE T SHARP (DEPUTY PRESIDENT)

MR S ELLIS (SENIOR SESSIONAL MEMBER)
MS B HOLLAND (SESSIONAL MEMBER)

HEARD:   14 FEBRUARY 2011

DELIVERED          :   13 MAY 2011

FILE NO/S:   VR 103 of 2010

BETWEEN:   LEGAL PROFESSION COMPLAINTS COMMITTEE

Applicant

AND

STEVEN RAYMOND FIDOCK
Respondent

Catchwords:

Legal practitioner - Disciplinary proceedings under Legal Profession Act 2008 (WA) - Unsatisfactory professional misconduct - Professional misconduct - Misleading affidavits - Fiduciary duties to client - Practitioner beneficiary under clients' will - Conflict of interest - Negotiations relating to settlement of legal proceedings

Legislation:

Inheritance (Family and Dependants Provision) Act 1972 (WA)
Legal Practitioners Act 2003 (WA), s 622, Pt 13
Legal Profession Act 2008 (WA), s 402, s 403, s 438, s 438(2), s 442

Result:

The respondent is guilty of professional misconduct and unsatisfactory professional conduct

Category:    B

Representation:

Counsel:

Applicant:     Mr MD Cuerden and Ms P Le Miere

Respondent:     Mr D Williams AM QC

Solicitors:

Applicant:     Law Complaints Officer

Respondent:     Chris Stokes & Associates

Case(s) referred to in decision(s):

Briginshaw v Briginshaw (1938) 60 CLR 336

Croton v R (1967) 117 CLR 326

In Re Young (1885) 28 Ch. D 705

International Alpaca Management Pty Ltd and Others v Ensor and Another (1995) 133 ALR 561

Kyle v Legal Practitioners Committee (1999) 21 WAR 56

Legal Profession Complaints Committee and Caine [2010] WASAT 178

Longstaff and Another v Birtles and Others [2002] 1 WLR 470

Maguire & Tansey v Makaronis (1997) 188 CLR 449

Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170

Phipps v Boardman [1967] 2 AC 46

Re Bishop [1965] Ch 450

Royal Brunei Airlines Bhd v Tan [1995] 2 AC 378

Settlement Agents Supervisory Board v Property Settlement Services Ltd [2009] WASCA 143

Vogt v Legal Practitioners Complaints Committee [2009] WASCA 202

Yerkey v Jones (1938) 63 CLR 649

REASONS FOR DECISION OF THE TRIBUNAL:   

Summary of Tribunal's decision

1. The Legal Profession Complaints Committee sought a finding that the practitioner, Mr Stephen Raymond Fidock, engaged in professional misconduct, as defined by s 403 of the Legal Profession Act 2008 (WA) and orders consequential upon that finding.

2. The practitioner was the residuary beneficiary of the wills of two of his clients, Mr Nazzareno Antonio Argentieri and Mrs Stansislawa Stephanie Argentieri.  No complaint is made by the Committee in respect of the preparation of the wills because the wills were prepared by another legal practitioner, Mr Rodney Tatchell.  However, the respondent continued to have dealings with Mr and Mrs Argentieri after the wills were signed and subsequently while he was the executor of Mr Argentieri's estate.  This complaint arises out of those dealings.

3. The Tribunal found that the respondent:

   a)engaged in professional misconduct in that he swore misleading affidavits on 16 June 2006, 23 June 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 Mr Argentieri, when those funds were not the exclusive property of the estate.  The respondent made those misleading statements recklessly whether they were true or not;

   b)engaged in professional misconduct in that he treated monies used to purchase a property in Forrest Street, South Perth as the property of the estate of Mr Argentieri when there was a conflict between his personal interest as the beneficiary of Mr Argentieri's estate and his fiduciary duties to Mrs Argentieri; and

   c)engaged in professional misconduct in that he treated the funds deposited with BankWest in the Telenet Account of the estate of Mr Argentieri when he purchased the Forrest Street property, South Perth and that he did so recklessly whether Mrs Argentieri was or may have been the owner of those funds.

4. The Tribunal also found that the respondent engaged in unsatisfactory professional conduct when he required Mrs Argentieri's granddaughter, Mrs Darby, to withdraw her complaint to the Committee and not take any part in prosecution of that complaint, as a condition of a settlement of Supreme Court proceedings brought by her.

5. The Committee also alleged that the respondent engaged in professional misconduct when his firm prepared and lodged a transfer of land form severing the joint ownership of the property jointly owned by Mr and Mrs Argentieri.  However the Tribunal found that this ground was not made out.

Introduction

1. The Committee alleged that the respondent engaged in professional misconduct within s 438 of the Legal Profession Act 2008 (WA) (LPAct). It sought that the Tribunal make a finding to this effect and make consequential orders pursuant to s 438(2) of the LP Act. Under s 442 of the LP Act, the Tribunal can make a finding of unsatisfactory conduct where an allegation of professional misconduct is made.

2. The Committee relied upon five grounds in support of its complaint.  The first relates to work done to sever the joint tenancy of 5 Roseberry Avenue, South Perth (the Property).  This work was done by the respondent's firm after he had been made aware that Mr and Mrs Argentieri intended to make him a beneficiary under their wills.  The second, third and fourth grounds all relate to three parcels of money.  As part of his application for the grant of probate of Mr Argentieri's estate, the practitioner swore three affidavits stating these monies belonged only to Mr Argentieri.  In the second ground, the Committee contends the affidavits were misleading because the monies belonged, or may have belonged, in part to Mrs Argentieri.  The third and fourth grounds relate to the respondent's dealings with those funds.  The Committee alleges that the respondent improperly dealt with them as the sole property of Mr Argentieri when, as executor of Mr Argentieri's deceased estate, he bought a house in the name of the estate.

3. The fifth ground relates to negotiations that took place between the respondent and Mrs Darby about settling legal proceedings she had commenced.

4. The conduct of which complaint is made occurred during the period from February 2005 to early in February 2009.  During this period the Legal Practitioners Act 2003 (WA) (2003 Act) was in force. However, s 622 of the LP Act provides that Pt 13 of the LP Act applies to conduct of Australian legal practitioners, such as the respondent, whether the conduct occurred before or after the commencement date of the LP Act. The LP Act is, therefore, applicable.

5. The Tribunal is mindful that it is required to apply the principles enunciated by the High Court in Briginshaw v Briginshaw (1938) 60 CLR 336 and Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 67 ALJR 170 in determining this matter generally and, in particular, in concluding that a practitioner acted dishonestly.

6. It is convenient to deal with each of the grounds in turn.

Ground 1:  severance of the joint tenancy

1. The Committee alleges, as the first ground, that the respondent, or alternatively, a practitioner employed in his practice, Jane Kathleen Ensor, carried out work in circumstances where there was a real and sensible possibility of a conflict of interest between his personal pecuniary interest as a residuary beneficiary under the wills and his fiduciary duties to Mrs Argentieri.  The work was preparing and lodging a transfer of land form which severed the joint tenancy between Mr and Mrs Argentieri of the Property.  This conduct occurred during the period 6 April 2004 to 16 April 2004.

2. The practitioner did not dispute that he was in a fiduciary relationship with Mr and Mrs Argentieri at all material times.  The practitioner accepted that his interest under the wills was such as to give rise to a real and sensible possibility of conflict: see Settlement Agents Supervisory Board v Property Settlement Services Ltd [2009] WASCA 143 at [5], [71] ­ [72]. The Tribunal is satisfied that the practitioner's interest under the wills did give rise to a real and sensible possibility of conflict.

3. The parties also agreed that where a conflict of interest arises between the interests of the client and the practitioner, the practitioner may only continue to act where it is shown that the client gave fully informed consent to the practitioner acting.  A client of a legal practitioner may be taken as having given his or her fully informed consent to a conflict of interest if the client agrees to the practitioner acting after receiving independent and expert advice.

4. In the present case, the respondent pointed to the fact that advice had been given by another legal practitioner, Mr Tatchell, to Mr and Mrs Argentieri.  The respondent argued, in effect, that he was entitled to rely upon the advice given to Mr and Mrs Argentieri in relation to the severance of the joint tenancy to show that they had given their fully informed consent.  This contention was not accepted by the Committee.

5. The following issues arise in connection with this ground:

   (a)what was the nature and extent of the advice given to Mr and Mrs Argentieri by Mr Tatchell?  In particular did that advice extend to severing the joint tenancy?

   (b)was the respondent entitled to rely upon Mr Tatchell's advice to assert that Mr and Mrs Argentieri had given informed consent to the severance of the joint tenancy?

   (c)in light of the answers to these questions, was the respondent guilty of professional misconduct?

Factual background

1. Before dealing with the issues identified above, it is necessary to outline in more detail the factual background relevant to this ground.  Most of the facts of these proceedings were agreed.

2. The respondent carried on practice in his own right as 'Fidock Legal'.  He employed Jane Ensor in his practice.  Ms Ensor was a legal practitioner.  At all material times, she and the respondent were in a de facto relationship.

3. Mr and Mrs Argentieri were an elderly couple.  They had married in 1985.  They owned the Property as joint tenants.  Mrs Argentieri was born in Poland.  Mr Argentieri was Italian.  English was not the first language for either of them.  They were not commercially sophisticated.

4. Mrs Argentieri had been married before.  That marriage had been an unhappy one.  She had a single daughter from that marriage, Irene Hoey (née Wlodarczyk).  Mrs Hoey died on 10 June 2006.  Mrs Hoey had two children, Fiona Darby and Adrian Hoey.  Mrs Hoey, Mrs Darby and Mr Hoey were all persons who might bring a claim under the Inheritance (Family and Dependants Provision) Act 1972(WA) (Inheritance Act) in respect of the estate of Mrs Argentieri.

5. Mr Argentieri had not previously been married and had no children or relatives who might have been able to bring a claim under the Inheritance Act.

6. Mr and Mrs Argentieri first approached the respondent to prepare wills for them in or about July 2000, which he did.  Mrs Argentieri's will dated 29 July 2000 left her estate to her husband and, if he did not survive her for 28 days, to a neighbour.  Mr Argentieri left his estate to Mrs Argentieri, and, in default to the same neighbour.

7. The respondent prepared further wills in July 2002.  Mrs Argentieri's will dated 24 July 2002 left her estate to her husband, but identified Mrs Hoey as the default beneficiary.  The primary beneficiary of Mr Argentieri's will of 24 July 2002 was again Mrs Argentieri.  He too identified Mrs Hoey as the residuary beneficiary of his estate.

8. In about October 2003, Mr and Mrs Argentieri consulted a firm of solicitors, Godfrey Virtue & Co, primarily about recovering from Mrs Argentieri's former husband contributions made by her to a property in her former husband's name.  There were discussions about a claim against Mrs Hoey.  The consultation also dealt with their wills.  Mr and Mrs Argentieri subsequently provided copies of their wills to Godfrey Virtue & Co.  Godfrey Virtue wrote to Mr and Mrs Argentieri suggesting that her will was inappropriate in light of their instructions to issue demands to Mrs Hoey for payment of money.

9. After seeing Godfrey Virtue & Co, Mr and Mrs Argentieri consulted the respondent, who prepared further wills for them. In Mrs Argentieri's will dated 4 December 2003, she appointed the respondent as the executor of her estate, identified Mr Argentieri as the primary beneficiary of her estate and, in the event that he predeceased her, left the balance of the estate to the Benedictine Community of New Norcia. The will expressed an intention that Mrs Hoey should not benefit at all. The operative provisions of Mr Argentieri's will reflected the provisions of Mrs Argentieri's will.

10. The respondent gave evidence that Mr and Mrs Argentieri consulted him in December 2003 about enforcing a debt owed to Mrs Argentieri by Mrs Argentieri's first husband.  The debt was founded on a Family Court judgment from the 1970s.  They also consulted the respondent about recovering $14,000 from Mrs Hoey.

11. The respondent stated in his witness statement that a social relationship developed between Mr and Mrs Argentieri and his partner, Ms Ensor, and their sons, commencing in late February 2004.  The Tribunal accepts that the social relationship continued and deepened thereafter.

12. In or about February 2004, Mr and Mrs Argentieri told the respondent that they wished him to prepare new wills for them and that he was to be a beneficiary.  The respondent gave evidence that, at this stage, he did not know the extent of the bequest.  The respondent declined these instructions.  He suggested that they return to Godfrey Virtue & Co.  They expressed reluctance to go into that firm's offices, which were in the city.  The respondent then said that he would give their contact details to another lawyer, Mr Tatchell.  Mr Tatchell was previously known to the respondent.  He operated a 'mobile lawyer' service and was prepared to make house calls.

13. Mr Tatchell visited Mr and Mrs Argentieri on 29 March 2004.  Mr Tatchell gave Mr and Mrs Argentieri some advice.  The nature and extent of that advice will be discussed later.  Mr Tatchell prepared wills for both of them, which he printed out for them using a portable printer.  Mr and Mrs Argentieri executed their wills on 29 March 2004 in Mr Tatchell's presence.

14. The wills executed on 29 March 2004 were mutual wills.  Mr Argentieri left the whole of his estate to Mrs Argentieri.  Mrs Argentieri left the whole of her estate to Mr Argentieri.  The respondent was identified as the residuary beneficiary in both wills.  The respondent was also appointed the executor of both estates.  Ms Ensor was identified as the alternate executor, if the respondent was unable or unwilling to act.

15. Mrs Argentieri's will did not make provision for her daughter, Mrs Hoey.  Clause 6 of the will states that her reasons for excluding her daughter are set out in a letter dated 29 March 2004 addressed to her trustee, but no such letter was prepared.  The will goes on to state that no provision had been made for Mrs Hoey because she was an adult in good health and financially independent.  The will also asserts that Mrs Argentieri had become alienated from Mrs Hoey and that Mrs Argentieri considered that she had made adequate provision of approximately $27,000 in about 1983.  The will made no reference to Mrs Argentieri's grandchildren, Mrs Darby and Mr Hoey.  It was not disputed that, as a matter of fact, Mrs Hoey was not in good health at that time.  Mrs Darby asserted as part of her complaint to the Committee, and the Tribunal accepts, that Mrs Argentieri was aware of Mrs Hoey's illness because she (Mrs Darby) had discussed the topic with Mrs Argentieri.

16. Mr Tatchell also prepared enduring powers of attorney for each of Mr and Mrs Argentieri.  Mr Argentieri's power of attorney was in favour of Mrs Argentieri and the respondent, jointly and severally.  Mrs Argentieri's power of attorney was in favour of Mr Argentieri and the respondent, jointly and severally.  Both powers of attorney were dated 29 March 2004.  The powers of attorney were accepted by the donees.  The acceptances were dated 29 March 2004.  It is unlikely that the respondent actually signed on that date because Mr Tatchell had to provide the powers of attorney to the respondent before he could sign them.  There was no suggestion that the respondent and Mr Tatchell met on 29 March 2004.

17. After seeing Mr and Mrs Argentieri, Mr Tatchell rang the respondent and discussed the meeting with the respondent.

18. Mr Tatchell gave evidence that, at the end of this initial consultation, after the wills had been prepared and executed, the question of ownership of the Property arose.  It was not clear whether the property was owned jointly or as tenants in common.  As a consequence, it was necessary to ascertain how the Property was owned and to consider the consequences.

19. It appears that inquiries were made which revealed that the Property was owned jointly.  Mr Tatchell prepared another will for Mr Argentieri who signed it on 6 April 2004.  The new will provided that, on Mr Argentieri's death, the whole of Mr Argentieri's estate passed to the respondent to hold on trust for Mrs Argentieri during her life.  Upon her death, the respondent became entitled to the whole of the estate, for his own benefit.  The respondent and Ms Ensor were named executor and alternative executor respectively.  Mr Tatchell witnessed Mr Argentieri's will of 6 April 2004.

20. At this time, Mr and Mrs Argentieri did not want to leave any part of their joint estate to Mrs Hoey and wanted to prevent her making a successful claim against Mrs Argentieri's estate under the provisions of the Inheritance Act. This is evident from the bequests made by them and the language of cl 6 of Mrs Argentieri's will. It was confirmed by a statement made by Mr Tatchell dated 5 April 2007 to the Committee (Tatchell statement).  At para 9 of the Tatchell's statement he says, 'Mr and Mrs Argentieri were very clear in their instructions to me that they wanted to exclude Irene from any benefit under their will'.  At para 12 he states, 'Mr and Mrs Argentieri were adamant that they did not wish Irene to inherit as they felt completely alienated from her'.  In response to a question from the Tribunal during his oral evidence, Mr Tatchell referred to 'the level of intensity of their feeling for not making any provision'.  He said '[t]hey really didn't want to make any provision for her at all'.

21. Mr Tatchell does not appear to have discussed with Mr and Mrs Argentieri the position of Mrs Darby and Mr Hoey.  In his witness statement, the respondent stated that Mr and Mrs Argentieri told him that they had become alienated from Mrs Hoey, Mrs Darby and Mr Hoey.

22. At some time between 29 March 2004 and 6 April 2004, a transfer of land form was prepared.  The transfer was prepared in Mr Fidock's offices.  It is not clear who actually prepared the document.  The respondent contended that it was prepared by a law clerk in his office.  The identity of the author is not significant.  The respondent conceded that he was aware of the document, and was responsible for its preparation as the principal of the practice.

23. The transfer was sent to Mr and Mrs Argentieri.  Mr and Mrs Argentieri met with Ms Ensor to execute the transfer.  The transfer is dated 14 April 2004 and witnessed by Ms Ensor.  The transfer was lodged for registration with the Department of Land Administration on 16 August 2004.  A new certificate of title was issued for the Property on 19 May 2004.

What was the scope of Mr Tatchell's advice?

1. Two factual issues arise about Mr Tatchell's advice:

   (a)did Mr Tatchell advise about the adverse impact that severing the joint tenancy in respect of the Property might have on Mrs Argentieri ability to deal with her interest and, in particular, subsequently to make a bequest to Mrs Hoey; and

   (b)were Mr and Mrs Argentieri advised about dealings with other assets, particularly money in joint accounts?

1. It is convenient to deal with both these issues at this point, although only the first issue is directly relevant to this ground.  The second issue is relevant to Ground 3 and Ground 4.

2. The Tribunal is persuaded that Mr Tatchell did give Mr and Mrs Argentieri advice about the effect of severing joint ownership of the Property.  This conclusion is supported by the following:

3. At para 10 and para 11 of the Tatchell statement, he said:

   Mr and Mrs Argentieri were aware that if the estate passed to Mr Argentieri by survivorship in the event that Mrs Argentieri predeceased Mr Argentieri there would be problems occurring in relation to claims on the estate under the Inheritance Act …

   Having listened to their concerns I advised them that the title to their house at 5 Roseberry Avenue, South Perth could be severed so that they no longer held it as joint tenants but could hold it as tenants in common. By severing the joint tenancy it would enable Mr Argentieri's half interest in the property and other jointly owned assets to be provided to Mrs Argentieri on trust during her life and on her death to flow to the residuary beneficiaries thereby excluding the half interest of Mr Argentieri from the estate of Mrs Argentieri. Therefore this would reduce the size of the estate subject to a potential claim under the Inheritance Act. I raised this as an issue with them. They had not raised it with me.

4. On 20 August 2009 the Committee wrote to Mr Tatchell asking, amongst other things:

   In relation to the tenancy advice and in light of what was proposed to be the working of Mr Argentieri's will once that advice had been followed, did you speak to Mr and Mrs Argentieri separately to give them advice, if not, why not.  In particular, did you explain to Mrs Argentieri the disadvantage to her of agreeing to the severance of the joint tenancy in light of the proposed wording of Mr Argentieri's will?  If not, why not?

5. Mr Tatchell replied on 24 September 2009:

   I did not advise Mr and Mrs Argentieri separately as their intentions to exclude [Mrs Argentieri's daughter] were shared and expressed by both in most adamant terms.  I did advise Mrs Argentieri as to the effect the tenancy severance would have on her interest in the property.

6. The Tribunal is also satisfied that Mr Tatchell gave advice about dealing with 'other jointly owned assets'.  In addition to the reference to 'other jointly owned assets' in the extracts from the Tatchell statement set out above, there exists the following evidence to support this conclusion:

   (a)Mr Tatchell gave a statement dated 15 February 2011. In that statement he asserted that he 'would also' have communicated with them about their other assets and that it was his practice to give advice of this nature in circumstances where there was the prospect of an unwelcome claim under the Inheritance Act;

   (b)In his witness statement, the respondent gave evidence about a conversation he had with Mr Tatchell after he had seen Mr and Mrs Argentieri on 29 July 2004:

   [Mr Tatchell] told me that he had advised Reno and Stephanie that in order to minimise the size of Stephanie's estate in case it was contended to convey all joint assets including the family home to Reno's sole name.  Rod said to me words to the effect "clearly there is no problem transferring bank accounts but the conveyance of the property would cost about $20,000.00 in stamp duty".  Rod went on to say that because of the stamp duty he ultimately advised them simply to change the tenancy to tenancy in common.

   Rod told me that Reno and Stephanie accepted his advice and that he (Rod) would be preparing a further will for Reno that would operate to hold all assets in Reno's name on trust for Stephanie for her lifetime.

   Rod asked me to ensure that the tenancy was changed to tenants in common and that all other joint assets be transferred to Reno's sole name otherwise the will he intended to draft would not be effective.

   (c)The respondent also gave evidence that Mr and Mrs Argentieri referred to advice from Mr Tatchell about funds being in Mr Argentieri's name.  The respondent stated that this occurred when a large parcel of cash was found in the wardrobe at their house in about December 2005 and when a payment was made as an accommodation bond, in January 2006.

7. Further, one of Mr and Mrs Argentieri's objectives preparing their new wills and consulting Mr Tatchell was to defeat a potential Inheritance Act claim by Mrs Hoey. This objective makes it likely that tactics to exclude a claim by Mrs Hoey would have been discussed. Transferring ownership of assets to Mr Argentieri is an obvious tactic.

8. There were, however, matters which suggested that Mr Tatchell did not give advice about 'other jointly owned assets':

   (a)On 7 January 2010, the Committee wrote to Mr Tatchell asking:

   Did you give Mr and Mrs Argentieri any advice regarding how their assets should be held, in particular, did you advise them that all assets (such as bank funds) should be held in Mr Argentieri's sole name.  If so, please provide details of the advice given and when it was given.

9. Mr Tatchell responded to this question by letter dated 14 January 2010.  His response to this question was no.

10. In cross­examination, Mr Tatchell was asked about the inconsistency.  He said that, on reflection, he thought that the original question was directed to whether he had become involved in the 'micromanagement' of their affairs.  This is not a convincing explanation.  He also conceded that his statement of 15 February 2011 was a 'reconstruction' of events in discussions with the respondent's solicitor, that he had no specific recollection of the conversation and that there was no file note of the conversation.  The witness statement of 15 February 2011 resulted from contact with the respondent's solicitor on 14 February 2011.  The language of Mr Tatchell's statement of 15 February 2011 was not expressed in the language of actual recollection, but a general statement of what Mr Tatchell's usual practice was.  Mr Tatchell's file note of the conversation was brief and general.  It did not deal with the issue.

    (b)Mr Tatchell's statement on this point was self serving.  Clearly it was in his interest for his advice to have dealt with all relevant topics.

    (c)The question of the non­land assets of Mr and Mrs Argentieri probably assumed greater importance at a later stage of events, when a large amount of cash was found.

    (d)Although the respondent said that Mr Tatchell told him about the need to transfer the joint assets during their conversation on 29 March 2004, nothing was done to put this advice into effect until January 2005.

11. The Tribunal is satisfied that advice was given to Mr and Mrs Argentieri about the effect of severance and that the advice extended to assets other than the Property.  The difficulties with the evidence are not such as cause us to completely discount that evidence.

12. In summary, the Tribunal considers that:

    (a)Mr Tatchell did give advice about the effect of severing the joint tenancy of the property; and

    (b)he gave advice about dealing with the other jointly owned assets.

Was the respondent entitled to rely on Mr Tatchell's advice?

1. A practitioner may be excused for acting in a situation where there is a conflict between his interests and those of his clients if he establishes that the client has given fully informed consent.  What is required for fully informed consent is a question of fact in all the circumstances of the case.  Fully informed consent may be established if the client has had the benefit of 'independent and skilled advice from a third party' (Maguire & Tansey v Makaronis (1997) 188 CLR 449) In this case, the respondent points to the advice given by Mr Tatchell.

2. The Committee argued that the respondent could not rely upon Mr Tatchell's advice because Mr Tatchell did not see Mrs Argentieri separately from Mr Argentieri.  The Committee suggested her will could have been overborne by Mr Argentieri.

3. The Tribunal does not accept this argument.  The relationship of husband and wife does not, automatically, give rise to a presumption of undue influence by the husband (Yerkey v Jones (1938) 63 CLR 649). There must be some evidence that the will of the wife was overborne before undue influence can be raised. In the present case, there was no evidence that Mrs Argentieri's will was actually overborne. The evidence of Mr Tatchell was to the contrary. Further, severance of the joint tenancy did not clearly advantage Mr Argentieri compared to, say, an outright transfer of Mrs Argentieri's interest to Mr Argentieri. Also, it is fair to consider the severance of the joint tenancy in the context that Mr and Mrs Argentieri were making their wills. The wills were executed and witnessed by two independent witnesses.

4. The Committee also argued that the conflict between the interests of the respondent and Mr and Mrs Argentieri arose as a separate incident when the joint tenancy was actually severed, with the result that the respondent was again required to obtain separate informed consent at this stage of the transaction.

5. The Tribunal does not accept the Committee's position of this point.  In the present case, the Tribunal considers that Mr Tatchell's advice dealt with the question of the severance of the joint tenancy.  The work carried out by the respondent was 'mechanical' in nature and did not involve substantial legal expertise of skill.  It involved completion of a form.  Many members of the public complete transfer forms and lodge them with the Department of Land Administration without the benefit of legal advice.  Importantly, preparation of the transfer form did not involve substantial discretion.  The transfer form is not in the nature of a guarantee or complicated commercial agreement, where there is significant scope for variation in the terms and effectiveness of the particular document prepared.

6. Of course, the form had a significant impact on Mr and Mrs Argentieri's affairs, despite its uncomplicated qualities.  However, Mr Tatchell's advice had been given only a few days before the transfer form was completed, so the advice would have been tolerably fresh in the minds of Mr and Mrs Argentieri.  In these circumstances, it was not necessary for the respondent to ensure that further independent advice was provided which dealt specifically with the completion of the transfer of land form.  The respondent is entitled to say, in respect of preparing the transfer of land form, that Mr and Mrs Argentieri received independent advice.

Ground 1:  was the respondent guilty of professional misconduct?

1. The Tribunal is satisfied that Mr and Mrs Argentieri gave informed to consent to the severance of the joint tenancy because they had received independent advice that dealt with the effect of severing the joint tenancy.  Because preparation of the transfer form involved little or no discretion, it was not necessary for Mr and Mrs Argentieri to receive further independent expert advice when the transfer of land form was actually prepared and lodged.

Ground 2:  the affidavits

1. The second ground arises from affidavits sworn by the respondent on 16 June 2006, 23 June 2006 and 3 July 2006 in support of the respondent's application to be appointed the executor of the estate of Mr Argentieri.  In each of those affidavits the respondent deposed that the following monies were the property of Mr Argentieri:

   (a)$116,257.73 held in an account described as BankWest Term Deposit Account No 092 042491­8 (Telenet Account);

   (b)$248,570.00 held in an account described as Cash Management Investor Account with Challenge Bank No 036308 207782 (Challenge Account); and

   (c)$69,203.50 described as 'Greenfields Aged Care Bond Refund' (Bond Refund).

2. The Committee alleges that the affidavits were misleading in that Mrs Argentieri was, or may have been the owner of those monies.  It also alleges that the respondent knew the affidavits were misleading at the time he swore them or, alternatively, that he was reckless whether they were misleading or not.

3. It is an element of this ground that the affidavits were misleading.  If the affidavits were not in fact misleading, then the respondent did not engage in professional misconduct, however slipshod the process by which the truth was arrived at and the affidavit prepared.  A statement may be misleading, although literally true.

4. The following issues arise in connection with this ground:

   (a)as at the date of each of the affidavits, was Mr Argentieri's estate the sole owner of each of the parcels of money referred to in the ground?

   (b)if the answer to the previous question is 'no' then, in respect of each such parcel:

   (i)did the respondent know that Mr Argentieri's estate was not the owner of that money; and

   (ii)alternatively, was he reckless as to the ownership of the money?

Factual background

1. The relevant factual background to this ground is as follows.

2. During the period after the wills were executed, Mrs Argentieri pursued her daughter for recovery of monies claimed by her.  The proceedings took place in Melbourne and were conducted by a firm of Victorian solicitors.  It appears from an invoice rendered by the respondent dated 5 July 2006, that the respondent instructed the Victorian solicitors and that the proceedings continued until about November 2005.

3. Between December 2002 and March 2003 withdrawals totalling $190,000 were made from the Argentieri's joint account with BankWest.  In or about September 2004, Mr and Mrs Argentieri told the respondent about those withdrawals and said they were not authorised.  The respondent informed BankWest on behalf of Mr and Mrs Argentieri and made some inquiries about the withdrawals.  The issue was not pursued by Mr and Mrs Argentieri.

4. Mr Argentieri became unwell.  He had an operation to amputate a leg.  By December 2005, arrangements were made for Mr and Mrs Argentieri to move into a nursing home.  Those arrangements included engaging removalists to pack and store their personal effects.  The respondent was contacted by the removalists, who informed him that a large sum of money (wardrobe money) had been found in a false bottom of one of the Argentieris' wardrobes.  The respondent discussed the money with Mr and Mrs Argentieri.  In general terms, they told him that the wardrobe money belonged to Mr Argentieri.  The respondent took the wardrobe money and placed it in a safe in his office.  He subsequently obtained instructions to place the money in a safe deposit box at a bank.  At that time the money was counted.  It came to $248,670.

5. The Tribunal heard evidence from Jillian Lister, who managed the bank branch at which the money was counted.  She said that the money was comprised largely of 'old' $100 dollar notes, that is to say, $100 notes made of paper, rather than plastic, as is currently the case.

6. There was a suggestion that the wardrobe money was made up, in part, from the allegedly unauthorised withdrawals.  There was no evidence to support or conclusively refute this suggestion.

7. By 12 January 2006, a decision had been made that Mr Argentieri would move into the Greenfields Nursing Facility (Greenfields).  Greenfields required payment of a bond of $70,000.

8. At that time, Mr and Mrs Argentieri had the following accounts:

   (a)BankWest Term Deposit Account containing $150,000 (Term Deposit); and

   (b)a BankWest Reward Saver Account containing $28,000 (Saver Account).

9. Both were in the joint names of Mr and Mrs Argentieri.

10. The respondent helped Mr and Mrs Argentieri pay the Greenfields bond.

11. On 12 January 2006, the respondent became a signatory to the Term Deposit.  The Greenfields bond was paid with money from the Term Deposit.

12. In March 2006, the respondent became a signatory of the Saver Account.  He closed the Term Deposit and transferred the balance to the Saver Account.  He then opened a new account, being the Telenet Account and transferred the balance of the funds into the Telenet Account.

13. The Telenet Account was in the name of Mr Argentieri only.

14. The respondent was authorised to operate the Telenet Account.  The Product Disclosure Statement (PDS) issued by BankWest for the Telenet Account sets out the terms of the account and was tendered in evidence.  The effect of the PDS is that a Telenet account could only be operated over the internet and that funds could not be withdrawn directly from the Telenet Account.  In order to access a Telenet account, monies had to be transferred to another specified account, known as the linked account, and then withdrawn from the linked account.  The account with which the Telenet account was linked was the Saver Account.  BankWest paid interest on the Telenet Account.  Interest earned on the Telenet Account was credited to the Saver Account.

15. The PDS indicates that funds could be withdrawn from the Telenet Account.  The PDS also indicates that the account holder can change the linked account.  The PDS would have permitted Mr Argentieri (or the respondent as his attorney) to sever the link between the Telenet Account and the Saver Account and to link the Telenet Account to another, new account, in the name of Mr Argentieri only.

16. Mr Argentieri died on 2 April 2006.

17. On 6 June 2006, the respondent deposited the wardrobe money into the Challenge Account.  The deposit was for the credit of the 'Estate of the late Nazzareno Argentieri'.

18. On 16 June 2006, the respondent applied for probate of Mr Argentieri's estate.  Three affidavits were filed in support of the application.  The first affidavit was sworn on 16 June 2006.  The effect of that affidavit was that Mr Argentieri's estate included the $116,257.73 in the Telenet Account and $248,670 in the Challenge Account.  The respondent also deposed in the affidavit of 16 June 2006 that Mr Argentieri's estate included $69,203.50 which was described as 'Greenfield Aged Care Bond Refund'.  It appears that the Bond Refund may not actually been received by the estate by 16 June 2006.  If the funds had not been received when the affidavit of 16 June 2006 was sworn, the effect of the affidavit is that the estate was solely entitled to the Bond Refund.

19. The respondent's affidavits of 21 June 2006 and 28 June 2006 each corrected the first affidavit.  The affidavit of 21 June 2006 added an old car worth $1,500 to the list of assets.  The affidavit of 28 June 2006 corrected the date given in the first affidavit for Mr Argentieri's will from 24 March 2004 to 6 April 2006.  The affidavits of 21 June 2006 and 28 June 2006 each otherwise affirmed the statements made in the first affidavit, including the statements about ownership of the monies.

Ownership of funds:  the wardrobe money

1. The first issue in relation to this ground is the ownership of the funds.  The respondent contended that each parcel of money referred to in the affidavits was the property of Mr Argentieri at the time the affidavit was sworn.  The Committee contended that each parcel was, or may have been, the property of Mrs Argentieri.  It is convenient to deal with each of the parcels of money in turn, starting with the wardrobe money.

2. In his statement, the respondent gave evidence that:

   (a)after the wardrobe money was found, he spoke to Mr Argentieri about the money.  Mr Argentieri informed him that the money was his.  Mr Argentieri said that the money came from redundancies from KEMH and danger money paid to him by Dampier Salt and Rio Tinto;

   (b)he had another discussion about the money a few days later, this time with both Mr and Mrs Argentieri.  They both said that the money belonged to Mr Argentieri.  During that conversation Mr Argentieri repeated that the money was from redundancies and danger money.

3. The Committee did not invite the Tribunal to find that these conversations did not occur.  Rather, the Committee argued that the respondent should not simply have adopted what Mr and Mrs Argentieri told him in swearing the affidavit.

1. The Committee pointed to the unusual circumstances in which the wardrobe money was found.  The Committee also relied on the fact that the respondent did not speak to Mrs Argentieri about ownership of the money separately from her husband.  The Committee raised the possibility that Mrs Argentieri might have been pressured by her husband so that she said the wardrobe money belonged to Mr Argentieri when in fact it did not.  Another possibility is that Mrs Argentieri might have falsely stated that she did not own the wardrobe money in order to transfer the money into Mr Argentieri's estate as part of the 'estate planning arrangements' discussed with Mr Tatchell.  However, these possibilities are speculation.  There was no positive evidence that her will was overborne.

2. There is material before the Tribunal that Mr and Mrs Argentieri said the wardrobe money belonged to Mr Argentieri.  The evidence is not inherently incredible.  The facts that it was a lot of money and that Mr and Mrs Argentieri had joint bank accounts are consistent with joint ownership, but they are not inconsistent with Mr Argentieri owning the money.  In any event, the respondent's evidence of his conversations with Mr and Mrs Argentieri explains how it was that Mr Argentieri had money that belonged to him, rather than both him and Mrs Argentieri.  The Tribunal accepts therefore that the money belonged only to Mr Argentieri.  It follows, therefore, that the affidavit of the respondent about ownership of the wardrobe money was accurate and was not misleading.

3. Alternatively, the Tribunal considers that the respondent was entitled to act on what he was told by Mr and Mrs Argentieri about ownership of the wardrobe money when he subsequently deposed to ownership of that money.

4. This ground was formulated on the alternative basis that Mrs Argentieri may (emphasis added) have been the owner of the funds.  An affidavit may be misleading if it makes statements which although true are misleading in that the affidavit does not contain appropriate qualifications or explanations.  The Tribunal considers that the affidavit was not misleading in this way in relation to ownership of the wardrobe money.

Ownership of funds:  the Telenet Account

1. It is an element of this part of Ground 2 that the Telenet Account funds were not, or may not have been, the exclusive property of Mr Argentieri.  If those funds were the exclusive property of Mr Argentieri, the respondent's affidavits were not misleading on this score.  The Committee argued that the money in the Telenet Account was not the exclusive property of Mr Argentieri and that Mrs Argentieri had, or may have had, an interest in those funds.

2. Funds were transferred into the Saver Account.  It is not disputed that both Mr and Mrs Argentieri were identified as the account holders of the Saver Account and that they owned the funds in that account jointly.  It is not disputed that the Telenet Account was in the sole name of Mr Argentieri.  What is in dispute is whether Mrs Argentieri retained a prioprietary interest in the Telenet Account.

3. It is necessary to recall that a bank account is a debt owed by a bank to one or more persons, it is not money as such:  see Croton v R (1967) 117 CLR 326 at 330 (Barwick CJ) (Croton)).  The name in which the account is held identifies the person or persons to whom the debt is owed by the bank.  Where the account is identified as a trust account, the bank has notice of the beneficiary's equitable interest in the account, but the legal owner of the debt, so far as the bank is concerned, remains the account holder.  The bank can discharge its debt by making payment to the account holder or the account holder's authorised representative.

4. As between the account holder and third parties or as between account holders, the 'name' in which the account is held does not determine ownership of the debt owed by the bank.  As between the account holder and third parties or as between account holders, ownership of the debt owed by the bank depends on all the circumstances of the case, including the person identified as the account holder and the dealings between the parties.  Where money is transferred from one account to another, the intention of the parties to the transfer will be relevant.  In many cases, of course, the person identified by the bank as the holder of the account will be the absolute owner of the bank account and persons transferring money from one account to another will transfer ownership of it.

5. In the present case, the respondent argued that the Telenet Account funds belonged exclusively to Mr Argentieri during his life, and to his estate after his death.  The respondent stressed that the account was in his name.  He stated that he called BankWest a few days after the funds were transferred to ensure that the 'capital was held in the sole name of Reno'.  He was told by the operator that it was.  The bank's response merely reflects its formal record and sets out the bank's obligations, rather than dealing with underlying interests between the account holder and third parties.  Further, the bank's response was based entirely on information provided to it by the respondent who had opened the account.

6. The respondent also relied upon the fact that the bank required a grant of probate in order to give access to the Telenet Account.  He gave evidence that banks are content with production of a death certificate in the case of jointly owned accounts.  This difference does not assist the respondent.  It merely reflects the importance of the identity of the account holder in determining to whom the bank owes it obligations.  If an account is in joint names, the bank is entitled to proceed on the basis that the survivor is the only person to whom its debt is owed.  When an account is not in joint names, the bank can only obtain a binding discharge of its debt by making payment to a person who is in fact the authorised representative of the deceased account holder.  This is established by the grant of probate.

7. The Committee pointed to the fact that the funds deposited in the Telenet Account came from the Saver Account, which was jointly owned, to show that the funds in the Telenet Account were jointly owned,.  However, in Croton Menzies J said:

   At this point it is necessary to refer to a line of cases dealing with joint bank accounts in the names of spouses.  These are authority for the proposition that, in the absence of express agreement or facts or circumstances which indicate that the account was kept for some limited purpose, either spouse can draw on it, not only for the benefit of both spouses, but, for his or her own benefit, In re Young; Trye v Sullivan; Gage v King; Re Bishop (deceased; National Provincial Bank Ltd v Bishop.

8. Stamp J dealt with the point at greater length in Re Bishop [1965] Ch 450 at 456:

   Each spouse, in drawing money out of the account, is to be treated as doing so with the authority of the other and, in my judgment, if one of the spouses purchases a chattel for his own benefit or an investment in his or her own name, that chattel or investment belongs to the person in whose name it is purchased or invested: for in such a case there is, in my judgment, no equity in the other spouse to displace the legal ownership of the one in whose name the investment is purchased.  What is purchased is not to be regarded as purchased out of a fund belonging to the spouses in the proportions in which they contribute to the account or in equal proportions, but out of a pool or fund of which they were, at law and in equity, joint tenants.

9. This general approach, or presumption, is subject to the particular circumstances of the case and may be displaced by evidence about the purposes for which the joint account was established or for which particular withdrawals were made: see for example, InRe Young (1885) 28 Ch. D 705. It is necessary therefore, to look at the particular circumstances of this case.

10. The fact that the funds in the Telenet Account came from a joint account does not of itself establish that the funds were jointly owned in the Telenet Account because there does not appear to have been any limitation on the uses to which money in the Saver Account could be put by either Mr or Mrs Argentieri.

11. The Tribunal did not derive much assistance from the specific terms of the PDS.  The Committee pointed out that funds in the Telenet Account could only be accessed through the Saver Account, which was held in joint names and appears to have been jointly owned.  This does suggests that the funds in the Telenet Account were intended to be jointly owned.  This fact is not, however, conclusive.  The parties may have intended that funds represented by the Telenet Account would be the absolute property of Mr Argentieri while they were held in the Telenet Account.  Also, cl 9 of the PDS permits the account holder to alter the account with which the Telenet Account is linked.  This would have permitted Mr Argentieri or the respondent as his attorney to alter the linked account from the Saver Account to another account in Mr Argentieri's name.

12. The circumstances relating to the creation of the Telenet Account were dealt with by the respondent in his witness statement.  After discussing the bond required for Greenfields, the respondent said:

    Reno and Stephanie also asked me to ensure that after the $70,000 accommodation bond was paid, to ensure that all of the surplus of the term deposit and the surplus of the joint savings account at Bankwest be transferred to a new term deposit in the sole name of Reno.  They both said Mr Tatchell had advised them to ensure that all assets be in the sole name of Reno and I know this advice had been given.

    I inquired at Bankwest about various term deposits and was informed of a telenet term deposit.

    I preferred this product over a conventional term deposit because it could be linked to the existing joint savings account and all of the interest earned was paid to the existing joint account.

    Additionally, if either Reno or Stephanie wanted to terminate the telenet term deposit all of the capital would be returned to the existing joint account.

    I did consider that this was a preferable product over a conventional term deposit as Stephanie's interest in the capital and interest of the term deposit remained unchanged unless Reno died.

    Under a conventional term deposit in Reno's sole name Stephanie would have no rights to the interest or return of capital.

    Under the telenet produce, if Reno died the capital formed part of his deceased estate and would be held by the terms of his will on trust for her.  I knew that Reno and Stephanie had received independent advice from Rod Tatchell about transferring joint asset's (sic) into Reno's sole name[.]

    I printed out a one or two page brochure of the telenet term deposit and gave it to Reno and Stephanie.  The brochure spoke nothing (sic) about death.  I told them how the term deposit worked as it had been described to me.  Their chief concern was to ensure that the capital of the term deposit would not fall into Mrs Argentieri's estate if Reno predeceased her.  They were very clear about the legal advice Mr Tatchell had given them and it was clear to me that they understood his advice that all joint assets should be transferred and held in Reno (sic) sole name.  I told Reno and Stephanie:  "Reno if you were to kick the bucket the capital will form part of your estate."  They both said: "Good that is what we want.  That's what Mr Tatchell told us to do[.]"

13. There are two salient aspects to this evidence:

    (a)Mrs Argentieri would retain an 'interest' and certain powers or rights in respect of funds in the Telenet Account, including a right to a return of capital; and

    (b)those powers or rights would cease upon the death of Mr Argentieri, so that the capital formed part of the estate of Mr Argentieri.

14. The subject of Mrs Argentieri's interest was dealt with by the respondent in his evidence in chief at the hearing.  He said:

    It was said that if you had put the funds from the joint account into Reno's sole name, there wouldn't have been a problem.  Do you have any comment on that?---Yes.  Mr and Mrs Argentieri asked me to put the term deposit or the surplus of the term deposit after the accommodation bond had been paid.  They asked me to put any surplus funds in Reno's sole name in another term deposit.  When I started looking at various term deposits, I was introduced to this TeleNet term deposit and I preferred it because it appeared to protect Mrs Argentieri's interests in that the capital could be held in one name, that is the name of Mr Argentieri, but that any interest earned, and if the term deposit was broken while they were alive, the capital necessarily had to go back to the linked joint account and I thought that that protected Mrs Argentieri's interests and that's why I preferred it over simply moving the money to a regular or conventional term deposit.  That's why I preferred that account over a normal one because it seemed to not only line up with what Mr and Mrs Argentieri wanted; it seemed to line up with what Mr Tatchell had advised them to do, but it also seemed to protect Mrs Argentieri's interest because if they had have gone to a general normal conventional term deposit, Mrs Argentieri would have no rights in respect of that term deposit.

15. During cross­examination, the respondent qualified this part of his statement to say that both Mr and Mrs Argentieri would need to have wanted to bring the money back into the Saver Account.  No reason was given for this qualification.

16. The respondent gave further evidence in cross-examination that Mrs Argentieri had an 'interest' in the funds in the Telenet Account:

    And you adopted this convoluted approach because of the importance you placed upon Mrs Argentieri continuing to have an interest in the moneys at least until her husband's death, as you put it?---Well, yes.

    …

    … And in fact the reason for you choosing the TeleNet account was because you've consciously made a decision that you thought Mrs Argentieri's interest in the money should be protected?---Yes.

    You made the observation in your evidence yesterday that in an ordinary term deposit she would have no rights to the money?---Correct.

    But under this arrangement she would have rights to the money?---While they were alive, yes.

    I know you add that qualification.  I'll come back to that. 

    But while she was alive, at least, she had an interest in the money?---She had more rights than she would otherwise have had under a conventional term deposit, yes.

    Can you try and make the point of my question, she had an interest in the money?---Yes.

    That was something that was conscious to you at the time and the very reason for choosing this arrangement?---Yes.

17. He gave evidence to similar effect again at a later point in his cross­examination:

    At the time you swore each of [the] affidavits [of 16, 21 and 28 June 2006], you were aware that the TeleNet account had been created in the way it was so as to preserve an interest in the moneys for Mrs Argentieri?---Yes.

18. The evidence given by the respondent leads to the conclusion that Mrs Argentieri had an ongoing proprietary interest in the Telenet Account because it was not intended that she would lose all rights upon transfer of funds to the Telenet Account.  It was intended that she could call for the return of Telenet Account funds.  Once funds had been returned from the Telenet Account, they could be directly and independently accessed by her.  The evidence in the respondent's statement is confirmed by the evidence given in cross­examination set out above.

19. The Tribunal notes that 'interests' can sometimes refer to matters which concern or affect a person and that the expression 'interest' was sometimes used in the evidence in this sense.  'Interest' can also be used to refer to the monies paid by banks on some bank deposits.  Interest, in this sense, was paid on the Telenet Account and 'interest' was also used in this sense during the course of the evidence.  The Tribunal is satisfied that these were not the sense in which 'interest' was used in the passages set out above.

20. The Tribunal is satisfied that Mrs Argentieri had an 'interest' in the Telenet Account funds and that this interest amounted to partial ownership of it.

21. The respondent argued that Mrs Argentieri's interest in the Telenet Account Funds came to an end when Mr Argentieri died.  If this contention is correct, the respondent's affidavits were true and correct.  However, the Tribunal considers that this contention is not correct.  In cross­examination, the respondent was unclear about why Mrs Argentieri's interest should be extinguished on Mr Argentieri's death.  His explanations in cross­examination were not in accordance with established legal principle.  He appears to have placed great importance on the Telenet Account being in the 'name' of Mr Argentieri.  For the reasons stated above, the name in which an account is held is not conclusive, at law, as between the parties.

22. The respondent also said that both Mr and Mrs Argentieri wanted the funds to form part of his estate on his death, not Mrs Argentieri's.  However, simply opening an account in the name of Mr Argentieri would not have this effect if, as the Tribunal has found, the relevant intention was that Mrs Argentieri would continue to have an interest in the Telenet Account while she was alive.

23. In summary, the Tribunal considers that Mrs Argentieri had an interest in the funds in the Telenet Account at the time of Mr Argentieri's death and that her interest continued after Mr Argentieri's death.  The affidavits were, therefore, misleading in relation to the Telenet Account.

Ownership of funds:  the Bond Refund

1. The Committee argued that the Bond Refund was jointly owned by Mrs Argentieri and the estate of Mr Argentieri.  The Committee relied primarily on the fact that the bond was originally paid with funds from the joint account. 

2. The Tribunal rejects this argument.  Applying the principle enunciated by Menzies J in Croton and Stamp J in Re Bishop, there is no reason why a payment from a joint account could not have been made for the sole benefit of Mr Argentieri.  There is nothing to suggest that there were limitations on the use to which funds from the Saver Account could be put.  The bond was paid in connection with the provision of facilities for Mr Argentieri alone, which suggests that the payment was for his benefit alone.  It is reasonable to conclude that Bond Refund was for the sole benefit of Mr Argentieri as well and that he (alone) owned it.  The Tribunal considers that the affidavits were true in relation to the Bond Refund.

3. The Committee argued that the affidavits were misleading because they did not disclose that Mrs Argentieri 'may' have had an interest in the Bond Refund.  The Tribunal has found that she did not have an interest, as a matter of fact.  In these circumstances, the respondent need not have dealt with counterfactual possibilities or to have outlined evidence or material which might have lead to a conclusion different from that arrived at by the Tribunal.  The respondent was not obliged to depose firstly that Mr Argentieri was the owner but follow up that assertion with evidence that maybe he was not the owner.

4. The Tribunal concludes that the affidavits were not misleading in relation to the Bond Refund.

Dishonesty and recklessness

1. It is now necessary to consider whether the misleading statements about the Telenet Account funds were made by the respondent knowing that Mr Argentieri's estate was not the owner of that money or alternatively, reckless as to the ownership of the Telenet Account funds.

2. Although the Tribunal has concluded that Mrs Argentieri had an interest in the Telenet Account funds, the respondent gave evidence that he believed that she had no interest in the Telenet Account funds and that he believed that the affidavits were accurate.  Having regard to the respondent's demeanour when giving oral evidence, the Tribunal is not satisfied, to the requisite degree, that this part of the respondent's evidence was false.  The Tribunal is not satisfied, therefore, that the respondent made the affidavits knowing that they were false.

1. The Committee also alleged that the respondent made the affidavit recklessly whether the affidavit was true or not.

2. The nature of dishonesty and recklessness in the context of accessorial liability for breach of trust was considered by the Privy Council in Royal Brunei Airlines Bhd v Tan [1995] 2 AC 378 (Royal Brunei). Lord Nicholls said at [389] ­ [391]:

   ... in the context of the accessory liability principle acting dishonestly, or with a lack of probity, which is synonymous, means simply not acting as an honest person would in the circumstances.  This is an objective standard.  At first sight this may seem surprising.  Honesty has a connotation of subjectivity, as distinct from the objectivity of negligence. Honesty, indeed, does have a strong subjective element in that it is a description of a type of conduct assessed in the light of what a person actually knew at the time, as distinct from what a reasonable person would have known or appreciated.  Further, honesty and its counterpart dishonesty are mostly concerned with advertent conduct, not inadvertent conduct.  Carelessness is not dishonesty.  Thus for the most part dishonesty is to be equated with conscious impropriety.  However, these subjective characteristics of honesty do not mean that individuals are free to set their own standards of honesty in particular circumstances.  The standard of what constitutes honest conduct is not subjective.  Honesty is not an optional scale, with higher or lower values according to the moral standards of each individual.  If a person knowingly appropriates another's property, he will not escape a finding of dishonesty simply because he sees nothing wrong in such behaviour.

   ...

   In most situations there is little difficulty in identifying how an honest person would behave.  Honest people do not intentionally deceive others to their detriment.  Honest people do not knowingly take others' property. Unless there is a very good and compelling reason, an honest person does not participate in a transaction if he knows it involves a misapplication of trust assets to the detriment of the beneficiaries.  Nor does an honest person in such a case deliberately close his eyes and ears, or deliberately not ask questions, lest he learn something he would rather not know, and then proceed regardless.

   ...

   Acting in reckless disregard of others' rights or possible rights can be a tell­tale sign of dishonesty.  An honest person would have regard to the circumstances known to him, including the nature and importance of the proposed transaction, the nature and importance of his role, the ordinary course of business, the degree of doubt, the practicability of the trustee or the third party proceeding otherwise and the seriousness of the adverse consequences to the beneficiaries.  The circumstances will dictate which one or more of the possible courses should be taken by an honest person. He might, for instance, flatly decline to become involved.  He might ask further questions.  He might seek advice, or insist on further advice being obtained.  He might advise the trustee of the risks but then proceed with his role in the transaction.  He might do many things.  Ultimately, in most cases, an honest person should have little difficulty in knowing whether a proposed transaction, or his participation in it, would offend the normally accepted standards of honest conduct.

   Likewise, when called upon to decide whether a person was acting honestly, a court will look at all the circumstances known to the third party at the time.  The court will also have regard to personal attributes of the third party, such as his experience and intelligence, and the reason why he acted as he did.

3. In International Alpaca Management Pty Ltd and Others v Ensor and Another (1995) 133 ALR 561 at [597], Beaumont and Carr JJ said that these observations were capable of general application in civil matters where good faith and honesty are in issue.

4. In the present case, the Tribunal has concluded that Mrs Argentieri retained an interest in the Telenet Account funds although the 'name' in which the Telenet Account was opened did not accurately reflect this fact. On the respondent's evidence, the Telenet Account was opened in the name of Mr Argentieri for the purpose of defeating a potential claim by Mrs Hoey under the Inheritance Act. The disparity between the reality of ownership of the Telenet Account funds and the name in which the account was opened was an essential component of the plan to defeat Mrs Hoey's claim. In a practical sense, it would be difficult for Mrs Hoey to claim part of the Telenet Account funds if both Mr and Mrs Argentieri were dead and the account was in the sole name of Mr Argentieri. The Tribunal accepts that the respondent established the Telenet Account in furtherance of and in accordance with the instructions or wishes of Mr and Mrs Argentieri. However, this does not alter the fact that the arrangements themselves were artificial and misleading.

5. The respondent asserted that Mrs Argentieri's interest in the Telenet Account funds was extinguished upon the death of Mr Argentieri.  This conclusion was not correct and was not in accordance with established principle.  While mere carelessness is not the same thing as recklessness, the respondent did not make any real inquiries about whether his understanding of the effect of Mr Argentieri's death was correct.  The respondent gave evidence that he inquired of the bank about the identity of the person in whose name the account was kept.  This inquiry did not relate to the effect of Mr Argentieri's death.  It was not directed to a person whose answer could be given any weight and was not a genuine attempt to ascertain ownership of the Telenet Account funds.

6. In addition, the respondent was the residuary beneficiary of Mrs Argentieri's estate.  It was in his interest that the Telenet Account funds belonged exclusively to Mr Argentieri and that Mrs Argentieri had no interest in the Telenet Account funds.  There was a conflict between the respondent's commercial interests, if the Telenet Account funds were not part of Mrs Argentieri's estate, and Mrs Argentieri's interests in owning the Telenet Account funds.  This conflict existed at the time he was making the arrangements setting up the Telenet Account.  The Committee did not assert that setting up the Telenet Account while this conflict subsisted was itself professional misconduct.  However, the existence of a conflict may be a factor in deciding whether conduct is reckless.  The respondent denied that it was in his interest that the Telenet Account funds belonged to Mr Argentieri only.  The respondent was cross­examined on this issue.  The respondent asserted that the benefit stemmed from the terms of the wills prepared by Mr Tatchell, and that the ownership of the Telenet Account played no part.  The Tribunal does not accept that the respondent failed to appreciate the impact that ownership of the money in the Telenet Account might have upon his position.  He was an experienced solicitor who practiced in the field of probate and estates.

7. The combination of these matters persuades us, to the Briginshaw standard, that the respondent made the false statements in the affidavits in relation to the Telenet Account funds recklessly.

Ground 2:  was the respondent guilty of 'professional misconduct'?

1. The Tribunal considers that Ground 2 of the complaint has been made out in so far as it relates to the Telenet Account.  The respondent swore affidavits on 16 June 2006, 23 June 2006 and 3 July 2006 which were misleading as to the ownership of the Telenet Account funds and he did so reckless as to whether or not the affidavits were misleading.

2. 'Professional misconduct' is defined in s 403 of the LP Act as follows:

   'professional misconduct' includes ­ 

   (a)unsatisfactory professional conduct of an Australian legal practitioner, where the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and

   (b)conduct of an Australian legal practitioner whether occurring in connection with the practice of law or occurring otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.

3. The duty of legal practitioners to not mislead the Court is at the heart of a practitioner's duty as an officer of the Court ­ see: Vogt v Legal Practitioners Complaints Committee [2009] WASCA 202 at [61]. Swearing an affidavit recklessly as to whether or not it is misleading is conduct which would reasonably be regarded as disgraceful or dishonourable by practitioners of good repute and competence and as falling substantially short of the standard of professional conduct observed or approved by members of the profession of good repute ­ see: Kyle v Legal Practitioners Committee (1999) 21 WAR 56 (Kyle) at [61] (Parker J), Legal Profession Complaints Committee and Caine [2010] WASAT 178 (Caine) at [15]).

4. The Tribunal finds that the respondent engaged in professional misconduct within s 403 of the LP Act in connection with the affidavits.

Grounds 3 and 4:  dealing with the estate

1. It is convenient to deal with these two grounds together because the factual circumstances giving rise to these grounds is largely the same.

2. The third ground alleges that the respondent acted in a position of conflict of interest during the period 6 July 2006, when he purchased property in the name of the estate of Mr Argentieri's estate, and 26 October 2006, when Mrs Argentieri died.  The Committee alleges that he treated the monies referred to in para [58] as the property of the estate of Mr Argentieri when there was a conflict between his personal pecuniary interests and his fiduciary duties to Mrs Argentieri.  The Committee also made the further or additional allegation that the respondent profited from the use of his fiduciary position.

3. The fourth ground alleges that the respondent engaged in the conduct identified in Ground 3 in circumstances where the respondent knew that Mrs Argentieri was or may have been the owner of the monies.  The Committee also makes the alternative allegation that the respondent so acted in reckless disregard of the fact that Mrs Argentieri was or may have been the owner of the monies.

Factual background

1. The relevant factual background is as follows.

2. On 6 July 2006, the respondent as trustee of the estate of Mr Argentieri, and in anticipation of being granted probate, entered into a contract to buy a property in Forrest Street, South Perth (Forrest Street Property) in the name of Mr Argentieri's estate.

3. Settlement of the purchase took place on 22 August 2006.  In preparation for the settlement, $116,257.73 was transferred from the Telenet Account to the Savings Account (which was still in the joint names of Mr and Mrs Argentieri).  $116,257.73 was all the money in the Telenet Account at the time.  $2,847.51 was also paid into the Savings Account by way of interest of the funds in the Telenet Account.  Principal and interest from the Telenet Account totalled $119,105.24.  This sum was used to pay the purchase price, together with $304,795.24 from the Challenge Account. 

4. The respondent became registered as the owner of Mr Argentieri's interest as tenant in common in the Forrest Street Property on 22 August 2006.

5. Mrs Argentieri died on 26 October 2006.  The respondent renounced his right to apply for probate of her will.  Ms Ensor applied for probate in her capacity as an employee of the respondent.  She was granted probate on 16 November 2006.

Analysis

1. The respondent did not dispute the factual matters set out above.  The respondent also accepted that, at all material times, he was under a fiduciary duty to Mrs Argentieri.  Although he contended that the solicitor­client relationship had come to an end during 2004, this does not prevent a fiduciary relationship subsisting ­ see:  Longstaff and Another v Birtles and Others [2002] 1 WLR 470.

2. The respondent argued that there was no 'real and sensible possibility of conflict between his personal interest as a beneficiary under Mr Argentieri's will and his fiduciary duties to Mrs Argentieri because the money used to purchase the Forrest Street Property did form part of Mr Argentieri's estate.

3. The Tribunal considers that even if Mr Argentieri's estate was in fact the owner of all the funds used to purchase the Forrest Street Property, that would not be a complete answer to the allegation of a conflict of interest.  Lord Upjohn considered the circumstances in which a conflict of interest exists in Phipps v Boardman [1967] 2 AC 46 (Phipps) at [124]. This test was approved by the Court of Appeal in Settlement Agents Supervisory Board v Property Settlement Services Pty Ltd [2009] WASCA 143 at [1], [75] and at [121]. In Phipps, Lord Upjohn said:

   The rule about the duty of fiduciaries is perhaps stated most highly against trustees or directors in the celebrated speech of Lord Cranworth LC in Aberdeen Railway v Blaikie, where he said:

   "And it is a rule of universal application, that no one, having such duties to discharge, shall be allowed to enter into engagements in which he has, or can have, a personal interest conflicting, or which possibly may conflict, with the interests of those whom he is bound to protect".

   The phrase "possibly may conflict" requires consideration.  In my view it means that the reasonable man looking at the relevant facts and circumstances of the particular case would think that there was a real and sensible possibility of conflict; not that you could imagine some situation arising which might, in some conceivable possibility in events not contemplated as real sensible possibilities by any reasonable person, result in a conflict.

4. The expression 'theoretical or rhetorical conflict' has also been used to describe the type of situation which does not give rise to a conflict of interest.

5. A consideration of the circumstances of the respondent as at 6 July 2006 by a reasonable person would have indicated that there was, at least, genuine room for disagreement about the ownership of the wardrobe monies, the Telenet Account funds and the Bond Refund.  Although the Tribunal has concluded that the wardrobe monies and the Bond Refund were in fact the property of Mr Argentieri, this conclusion was by no means obvious at the time.  In particular, ownership of the Bond Refund depended upon the application of a presumption in circumstances where there was no evidence that Mr and Mrs Argentieri had specifically addressed the possibility of a refund from Greenfields.  An independently minded executor of Mrs Argentieri's estate might have pursued a claim for the Bond Refund on behalf of the estate.  The Tribunal considers that this degree of uncertainty gives rise to a real and sensible possibility of conflict between the interests of the respondent and the interests of Mrs Argentieri.  The position is, of course, clearest in the case of the Telenet Account funds, where the Tribunal has concluded that the Telenet Account funds did not belong exclusively to Mr Argentieri.

6. The respondent also argued that Mrs Argentieri had given informed consent to the respondent treating the funds as the property of Mr Argentieri.  The respondent relied upon the advice of Mr Tatchell to show that her consent was informed.

7. The Tribunal has found that Mr Tatchell's advice extended to the desirability of transferring assets into Mr Argentieri's name.  However, the Tribunal considers that Mr Tatchell's advice is not sufficient to establish that Mrs Argentieri gave informed consent in December 2005.  It reaches this conclusion because:

   (a)Mr Tatchell's advice was given in March/April 2004, more than a year earlier.  Mr and Mrs Argentieri had changed their wills three times in the months before March 2004.  Had they been given independent advice in December 2005, they may have changed their wills again;

   (b)the arrangements made by the respondent in December 2005 involved considerable discretion on the part of the respondent about how Mrs Argentieri's estate would be dealt with.  Had Mr and Mrs Argentieri  persisted in arranging their affairs to defeat a claim by Mrs Hoey, they may have adopted a strategy which did not involve simply transferring funds into an account in Mr Argentieri's name; and

   (c)there is evidence that Mrs Argentieri's mental condition had deteriorated in the period between April 2004 and December 2005.  The respondent was aware that Mrs Argentieri had a 'memory loss problem' as at December 2005.

8. It is clear that the respondent was advantaged because the funds were treated as falling within the estate of Mr Argentieri, rather than being the property of Mrs Argentieri. Only Mrs Argentieri's estate was liable to a claim under the Inheritance Act by Mrs Darby.

9. The Tribunal is satisfied, therefore, that Ground 3 of the complaint is made out.  This conduct is professional misconduct.

10. The Committee contended in Ground 4 that the respondent treated the funds used to purchase the Forrest Street Property as property of the estate of Mr Argentieri in circumstances where he knew that Mrs Argentieri was or may have been the owner of those funds.  For the reasons given in respect of Ground 2, the Tribunal considers that the respondent did not have actual knowledge that the Telenet Account funds were not the exclusive property of Mr Argentieri.  However, again for those reasons, the Tribunal considers that the respondent was reckless whether Mrs Argentieri was the owner of the Telenet Account funds.  Accordingly, the Tribunal considers that the respondent acted recklessly purchasing the Forrest Street Property with funds derived from the estate of Mr Argentieri.  Applying Royal Brunei, the respondent's conduct must be regarded as dishonest.

11. The Tribunal considers that this conduct falls within the definition of 'professional misconduct' as explained in Kyle.  Ground 4 of the application is made out.

Ground 5:  withdrawal of Mrs Darby's complaint

1. The fifth ground relates to settlement negotiations of a claim brought by Mrs Darby under the Inheritance Act against the estate of Mrs Argentieri. The Committee alleges that the respondent required Mrs Darby to withdraw a complaint she had made to the Committee as a condition of settlement of her Inheritance Act claim. The Committee alleges that the respondent made this requirement on 25 September 2007, 11 December 2008 and 10 February 2009.

2. At the commencement of the hearing the respondent conceded that the respondent's conduct constituted 'unsatisfactory behaviour' within s 403 of the Act, but not 'professional misconduct'. The task before the Tribunal is therefore one of evaluating the seriousness of the respondent's conduct.

Factual background

1. The relevant factual background is as follows.

2. On 9 May 2007, Mrs Darby commenced an Inheritance Act claim seeking further provision from the estate of Mrs Argentieri. Mrs Argentieri's estate comprised her half interest as a tenant in common in the Property, and a small amount of money.

3. In a letter dated 23 September 2007, Haynes Legal wrote to Mrs Darby's solicitor offering a compromise of her claim on the basis that Mrs Darby write to the Committee withdrawing her complaint.  The offer was for a payment from the estate of $175,000 plus $10,000 costs.

4. On 15 November 2007, Mrs Darby commenced further proceedings in relation to the severance of the joint tenancy and the monies.

5. An increased offer was made by email dated 11 December 2008 from Haynes Legal to the joint solicitor acting for Mrs Darby and Mr Hoey.  The offer was expressed to be 'subject to agreeing the final terms for withdrawal of the actions and complaints' and was for $450,000 all inclusive.  This settlement was effectively the whole of Mrs Argentieri's estate.

6. A mediation took place on 10 February 2009, which resolved both proceedings.  It was a term of the settlement that Mrs Darby withdrew her complaint and took no further action in relation to the complaint, except to the extent that she was legally obliged to do so.

1. There was a factual dispute between the parties whether the respondent made an offer to settle Mrs Darby's claim at Mrs Argentieri's funeral.  The respondent asserted that he was approached by Mrs Darby's aunt at the requiem mass Ms Ensor arranged for Mrs Argentieri.  The respondent gave evidence that he told the aunt to tell Mrs Darby to approach him and he 'would be pleased to arrange to transfer her grandmother's estate to her and [her husband]'.  He also gave evidence that Mrs Darby's legal representative confirmed, at the final mediation conference, that Mrs Darby was aware of this offer.  Mr Bates, who was Mrs Darby's legal representative, gave evidence.  His understanding was that Mr Fidock had said that he would make an offer.

2. Whether the respondent made the offer as he alleges or whether it fell something short of an offer, as Mr Bates asserted, it is clear that the respondent did not simply transfer Mrs Argentieri's estate to Mrs Darby.  Although he did eventually make a payment to Mrs Argentieri, he did so in the context of a Court mediation after proceedings had been commenced against the estate by Mrs Darby.  The settlement negotiated between the parties was an arm's length commercial settlement.  The effect of the settlement was to enable the respondent to retain the benefit of the wardrobe money, the Telenet Account funds and the Bond Refund.  He also retained Mr Argentieri's half interest in the Property.

3. At the hearing, the respondent conceded that he had engaged in unsatisfactory professional conduct in requiring, as a condition of settlement, Mrs Darby to withdraw her complaint and not assist the Committee further.  The Committee maintained its contention that the conduct was professional misconduct.

4. The definition of 'professional misconduct' is set out at [125] above. The definition of 'unsatisfactory professional conduct' appears in s 402 of the LP Act:

   unsatisfactory professional conduct includes conduct of an Australian legal practitioner occurring in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.

5. The operation of s 402 and relationship between 'unsatisfactory professional conduct' and 'unprofessional conduct' was considered in Caine.The Tribunal considers that the respondent's conduct the subject of this ground, although clearly inappropriate and warranting censure, would not be regarded by legal practitioners of good repute and competence as 'disgraceful' or 'dishonourable'.  The respondent's counsel pointed out that the final settlement was reached at a Court mediation conducted by a Supreme Court registrar.  There were a number of experienced practitioners at the mediation.  Neither the registrar nor any or the practitioners queried the inclusion of this term in the settlement agreement.

6. Pursuant to s 442 of the LP Act, the Tribunal makes a finding of unsatisfactory professional conduct in respect of this ground.

Conclusion

1. The Tribunal has concluded that the respondent engaged in professional misconduct and unsatisfactory professional conduct.

2. The Tribunal will hear the parties on penalty.

Orders

1.The Tribunal finds that the respondent engaged in professional misconduct in that:

(i)he swore misleading affidavits on 16 June 2006, 23 June 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 Mr Argentieri, 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)he treated monies used to purchase a property in Forrest Street, South Perth as the property of the estate of Mr Argentieri when there was a conflict between his personal interest as the beneficiary of Mr Argentieri's estate and his fiduciary duties to Mrs Argentieri;

(iii)he treated the funds deposited with BankWest in the Telenet account of the estate of Mr Argentieri when he purchased the Forrest Street property, South Perth and that he did so recklessly whether Mrs Argentieri was or may have been the owner of those funds;

and further that

(iv)the respondent engaged in unsatisfactory professional conduct when he required Mrs Argentieri's granddaughter, Mrs Darby, to withdraw her complaint to the Committee and not take any part in prosecution of that complaint, as a condition of a settlement of Supreme Court proceedings brought by her.

2.The matter is adjourned for directions at 10 am on 3 June 2011 in order to make directions as to determination of the question of penalty.

I certify that this and the preceding [164] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

___________________________________

JUDGE T SHARP, DEPUTY PRESIDENT

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

19 SEPTEMBER 2011

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

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

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

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 June 2006, 23 June 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, Mr Argentieri, 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 Forrest Street, South Perth as the property of the estate of Mr Argentieri when there was a conflict between his personal interest as the beneficiary of Mr Argentieri's estate and his fiduciary duties to his client, Mrs Argentieri; and

   (iii)treated the funds deposited with BankWest in the Telenet Account of the estate of Mr Argentieri when he purchased the Forrest Street property, South Perth and that he did so recklessly whether Mrs Argentieri 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 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:

   (i)the practitioner be suspended from legal practice for a period of two years; and

   (ii)a condition be imposed on the practitioner's practicing certificate for the period of a year to the effect that he must practise under the supervision of the holder of an unconditional local practising certificate.

   (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

1. 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):

   45The 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 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].

   46The 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].

2. 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.

3. In Legal Practitioners Complaints Committee v Camp [2010] WASC 188, the Full Bench said at [80]:

   … A suspension indicates a serious breach 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

1. 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.

2. 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.

3. It is convenient to deal with the issue by reference to these topics.

Nature and circumstances of the contraventions

1. 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.

2. 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.  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.

3. 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. 

4. 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 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.

5. 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.

6. 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.

1. 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.

2. 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 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.

3. 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 Davenizia was part of a broader pattern of serious criminal behaviour.

4. 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. 

5. 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 

1. 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.

2. 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.

3. 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. 

4. 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. 

5. 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

1. 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 

1. Separate penalties should be imposed in respect of the unprofessional conduct and the unsatisfactory conduct.

2. 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.

3. 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.

Costs

1. 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.

2. 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.

3. 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:

(a)swore misleading affidavits on 16 June 2006, 23 June 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 Mr Argentieri, when those funds were not the exclusive property of the estate.  The practitioner made those misleading statements recklessly whether they were true or not;

(b)treated monies used to purchase a property in Forrest Street, South Perth as the property of the estate of Mr Argentieri when there was a conflict between his personal interest as the beneficiary of Mr Argentieri's estate and his fiduciary duties to Mrs Argentieri;

(c)treated the funds deposited with BankWest in the Telenet Account of the estate of Mr Argentieri when he purchased a property in Forrest Street, South Perth, and that he did so recklessly whether Mrs Argentieri was or may have been the owner of those funds

the practitioner's local practising certificate is suspended for a period of two years, commencing on 13 May 2011 and for a period of one year after the practitioner resumes practice, the practitioner's local practising certificate be subject to a condition that the practitioner must practice under the supervision of the holder of an unconditional local practising certificate.

2.In respect of the finding that the practitioner engaged in 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 Supreme Court proceedings brought by her, the practitioner must pay a fine to the Legal Practice Board of $3,000, to be paid within one month of the date of these orders.

3.The practitioner is to pay the Legal Profession Complaints Committee's costs fixed at $25,000, to be paid within three months of the date of these orders.

I certify that this and the preceding [34] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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JUDGE T SHARP, DEPUTY PRESIDENT