LEGAL SERVICES AND COMPLAINTS COMMITTEE and GINBEY
[2023] WASAT 113
•30 NOVEMBER 2023
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
ACT: LEGAL PROFESSION ACT 2008 (WA)
CITATION: LEGAL SERVICES AND COMPLAINTS COMMITTEE and GINBEY [2023] WASAT 113
MEMBER: JUDGE K GLANCY, DEPUTY PRESIDENT
MS P LE MIERE, SENIOR MEMBER
MR R POVEY, MEMBER
HEARD: 9 MARCH 2023
DELIVERED : 30 NOVEMBER 2023
FILE NO/S: VR 80 of 2022
BETWEEN: LEGAL SERVICES AND COMPLAINTS COMMITTEE
Applicant
AND
HOWARD JOHN GINBEY
Respondent
Catchwords:
Vocational regulation – Legal practitioner – Allegations of professional misconduct – Whether the practitioner engaged in professional misconduct by failing to follow clients' instructions, by misappropriating estate funds into personal accounts, by failing to comply with Court orders, by invoicing and receiving payments from clients' for work not performed, by failing to operate a trust account, and by failing to deliver legal services diligently or at all – Findings of professional misconduct
Legislation:
Evidence Act 1906 (WA)
Interpretation Act 1984 (WA), s 37
Legal Profession Act 2008 (WA), Pt 13, s 3, s 205, s205(1), s214, s 214(1), s 215(2), s 216, s 216(1), s 220, s 220(1), s 223, s 224(1), s 224(2), s 226(1), s 226(1)(b), s 336, s 402, s 403, s 403(1)(a), s 403(1)(b), s 404, s 428, s 428(1), s 434(c), s 438,
s 438(1), s 438(2), s 439, s 440, s 441, s 442, s 448(1), s 448(2), s 449(1), s 449(2), s 482, s 520, s 520(1)(a), s 520(1)(d), s 520(5)
Legal Profession Conduct Rules 2010 (WA), r 6(1)(c), r 6(1)(9)(e), r 7(e), r 50, r 50(2), r 50(3)
Legal Profession Rules 2009 (WA), s 6
Legal Profession Uniform Law Application Act 2022 (WA), s 6, s 260(a), s 313, s 313(2), s 421
Non-Contentious Probate Rules 1967 (WA), r 37
State Administrative Tribunal Act 2004 (WA), s 87(2)
Trustees Act 1962 (WA), s 63
Result:
Practitioner found to have engaged in professional misconduct
Category: B
Representation:
Counsel:
| Applicant | : | CR Bailey |
| Respondent | : | No appearance |
Solicitors:
| Applicant | : | Legal Services and Complaints Committee |
| Respondent | : | N/A |
Cases referred to in decision(s):
Briginshaw v Briginshaw (1938) 60 CLR 336
Ginbey v Commonwealth Bank of Australia [2021] WASCA 116
Goldsmith v Legal Services Complaints Committee [2023] WASCA 136
Jones v Dunkel (1959) 101 CLR 298
Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115; 21 WAR 56
Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198
Legal Profession Complaints Committee and Lee-Steere [2010] WASAT 189
Legal Services and Complaints Committee and Lourey [No 2] [2023] WASAT 77
Legal Services Complaints Committee and Goldsmith [2022] WASAT 43 (S)
New South Wales Bar Association v Meakes [2006] NSWCA 340
re H A O'Donnell [1895] 12 WN (NSW) 42
Re Simersall (1992) 35 FCR 584
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction and Outcome
This disciplinary proceeding against Howard John Ginbey (Practitioner) was referred to the State Administrative Tribunal (Tribunal) by application dated 8 September 2022 for determination pursuant to s 428 of the Legal Profession Act 2008 (WA) (LP Act).
Several allegations were made about the Practitioner's conduct. The overarching allegation is that the Practitioner engaged in professional misconduct within the meaning of s 403 and s 438 of the LP Act and in a way that meets both limbs of the common law test of professional misconduct, in the course of acting in three separate matters. Nine Grounds, or separate allegations, were set out in Annexure A to the application (the Allegations). Ground 8 was abandoned at the hearing.[1]
[1] ts 6, 9 March 2023 and Applicant's submissions dated 2 March 2023, para 121.
The Legal Services and Complaints Committee (Applicant) seeks the following orders:
1.A finding that the Practitioner engaged in professional misconduct pursuant to s 438(1) of the LP Act;
2.Consequential orders pursuant to s 438(2) of the LP Act; and
3.An order that the Practitioner pay the Applicant's costs pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act).
For reasons which we set out below, we have found that the facts underpinning each Ground have been proved to the requisite standard and we find that the Practitioner's conduct in each case is to be characterised as professional misconduct.
As a consequence of those findings, we propose to make the orders set out in [282].
Amendment of the Applicant's grounds
On 15 November 2023 (sometime after the hearing was concluded), we granted the Applicant leave to amend the Grounds upon which it alleges that the Practitioner engaged in professional misconduct. We appreciate that that was an unusual step to take, but we determined it was appropriate in circumstances where:
(a)the Practitioner has taken no part in the proceedings;
(b)the Practitioner had been served, by leaving the documents at his residential address, with notice of the proposed amendment and, separately, personally served with notice at the hearing at which the leave to amend was to be determined; and
(c)the amendments were sought merely to clarify the basis upon which the Applicant submits that the conduct of the Practitioner amounted to professional misconduct – i.e. that they rely on the definition in the LP Act and on particular limbs of the Kyle v Legal Practitioners' Complaints Committee[2] test and, in our view, no prejudice was occasioned to the Practitioner by the amendments because the Applicant's case did not change at all.
[2] Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115; 21 WAR 56 (Kyle).
We made an order which, regrettably, only granted the Applicant leave to amend the Grounds of its application when we clearly intended to allow it to amend both the Grounds and the Contentions in accordance with its Minute of Proposed Amended Annexure A filed 11 September 2023. When that was brought to our attention by the Applicant on 22 November 2023, we made an order revoking the order we made on 15 November 2023 and substituting an order granting the Applicant leave to amend its application on the terms set out in its Minute of Proposed Amended Annexure A dated 11 September 2023 as was always our intention.
Jurisdiction of the Tribunal and applicable law
This matter commenced when the Legal Profession Complaints Committee (LPCC) received three separate complaints about the Practitioner's conduct as a legal practitioner. As the complaints were being investigated, other matters that were not the subject of the three complaints were identified and investigations into those matters were commenced at the LPCC's own initiative.[3] Then, on a date prior to 1 July 2022, the LPCC resolved to refer allegations about the Practitioner's conduct to the Tribunal under s 428(1) of the LP Act.
[3] The LPCC may investigate, on its own initiative, the conduct of an Australian legal practitioner if the LPCC has reasonable cause to suspect that the Practitioner has been guilty of unsatisfactory professional conduct or professional misconduct: s 421(1) of the LP Act.
The application was ultimately lodged with the Tribunal on 8 September 2022.
On 1 July 2022, the LP Act was repealed by s 260(a) of the Legal Profession Uniform Law Application Act 2022 (WA) (Application Act), which also, by s 6, provides that the Legal Profession Uniform Law (WA)[4] (Uniform Law) applies as a law of Western Australia on and from 1 July 2022.
[4] The Uniform Law is identified in s 6 of the Application Act.
The timing of the referral and the commencement of the Application Act means that we need to determine whether the application is to be resolved under the LP Act or the Application Act.
The Applicant submits that the matter is to be determined under the LP Act. The Applicant submits that there are two alternative basis upon which we could reach that conclusion. The first is that s 37 of the Interpretation Act 1984 (WA) (Interpretation Act) applies with the result that the LP Act continues to apply to the proceeding. The second is that s 313 of the Application Act applies with the same result. The Applicant contends that they are alternatives and that both cannot apply. The Applicant contends that the Tribunal may not need to resolve upon which basis the matter proceeds under the LP Act because they both have the same result.
Section 37 of the Interpretation Act provides as follows:
37.General savings on repeal
(1)Where a written law repeals an enactment, the repeal does not, unless the contrary intention appears-
(a)revive anything not in force or existing at the time at which the repeal takes effect;
(b)affect the previous operation of the enactment repealed or anything duly done or suffered under the enactment;
(c)affect any right, interest, title, power or privilege created, acquired accrued, established or exercisable or any status or capacity existing prior to the repeal;
(d)affect any duty, obligation, liability, or burden of proof imposed, created, or incurred prior to the repeal;
(e)subject to section 11 of the Criminal Code and section 10 of the Sentencing Act 1995, affect any penalty or forfeiture incurred or liable to be incurred in respect of an offence committed against that enactment;
(f)affect any investigation, legal proceeding or remedy in respect of any such right, interest, title, power, privilege, status, capacity, duty, obligations, liability, burden of proof, penalty or forfeiture
and any such investigation, legal proceeding or remedy may be instituted, continued, or enforced, and any such penalty or forfeiture may be imposed and enforced as if the repealing written law had not been passed or made.
(2)The inclusion in the repealing provisions of an enactment of any express saving with respect to the repeals effected thereby shall not be taken to prejudice the operations of this section with respect to those repeals.
Section 313 of the Application Act provides as follows:
313.Investigations not finalised before commencement day to be dealt with under old Act
(1)This section applies to any of the following matters under the old Act that were not completed before commencement day —
(a)a complaint or inquiry being dealt with by the Complaints Committee under the old Act because of section 621 of that Act;
(b)a complaint being dealt with by the Complaints Committee under Part 13 of the old Act;
(c)an investigation by the Complaints Committee under section 421 of the old Act.
(2)Unless the local regulations provide that another person is to deal with the matter, the Legal Services and Complaints Committee may deal with the matter under the provisions of the old Act dealing with the matter, including provisions necessary to give effect to those provisions, as if —
(a)those provisions had not been repealed; and
(b)a reference to the Complaints Committee in those provisions were a reference to the Legal Services and Complaints Committee.
(3)If the local regulations provide that another person is to deal with the matter —
(a)the person must have regard to the steps taken by the Complaints Committee before the person deals with the matter; and
(b)the person must deal with the matter in accordance with the procedure prescribed by the local regulations.
The Applicant submits that even though the LPCC had resolved to refer the matter before the commencement of the Application Act, because it had not done so before July 2022, they may still be regarded as having been investigating the matter under s 421 of the Application Act until 8 September 2022, the date on which the application was made to the Tribunal. It submits that it would then follow that the matter is to be dealt with under the provisions of the LP Act in accordance with s 313(2) of the Application Act.
We do not accept that submission for two reasons. First, in our view, the LPCC is to be regarded as having finalised its investigation into a complaint when it resolves to refer and then refers the matter to the Tribunal. The precise formulation of the allegations is not, having regard to the natural meaning of the word investigation, part of the investigation but is the outcome of the investigation and part of the legal process that occurs upon referral of the complaint to the Tribunal. Second, if the Applicant's construction were adopted, the investigation would not be concluded until such time as the Tribunal's hearing was concluded because the allegations can be amended with leave of the Tribunal at any stage in the proceeding.
In our view, s 37 of the Interpretation Act is the provision which operates to preserve the operation of the LP Act in respect of this proceeding. Because we have found that s 313 of the Application Act does not apply, the Application Act says nothing about how matters commenced in the Tribunal before 1 July 2022 are to be resolved. The result of that is that s 37 of the Interpretation Act then applies.[5] That is because there is nothing in the Application Act from which we could discern an intention that s 37 would not apply.
[5] Legal Profession Uniform Law Application Act Commencement Proclamation 2022 (WA) cl.2 Western Australia, Western Australian Government Gazette, No 94, 30 June 2022, 3921.
We note that in Legal Services and Complaints Committee and Goldsmith[6] a matter which concerned conduct which had been referred to the Tribunal before 1 July 2022, the Tribunal held that the LP Act continued to apply to those proceedings. The facts of that matter were not exactly the same as this case. In that case, the conduct had been referred to the Tribunal and findings as to liability had been made by the Tribunal before 1 July 2022, leaving only penalty and costs to be determined after 1 July 2022. Nevertheless, it is a case where the Tribunal analysed the Application Act and found:
(a)there was nothing in the Application Act which gave rise to a 'contrary intention' for the purposes of s 37 of the Interpretation Act;
(b)those proceedings dealt with an inchoate liability of Mr Goldsmith which arose under the terms of the LP Act; and
(c)by reason of s 37, the referral must continue to be dealt with pursuant to the terms of the LP Act, including questions of penalty, costs and compensation.
[6] Legal Services Complaints Committee and Goldsmith [2022] WASAT 43 (S).
While not directly on point, we find that the analysis in that case provides support for our conclusion in relation to the operation of s 37 of the Interpretation Act in this case.[7]
[7] We note that in Goldsmith v Legal Services Complaints Committee [2023] WASCA 136, the Court of Appeal set aside the Tribunal orders and remitted the matter for determination by a differently constituted Tribunal. The reasons for doing so do not touch upon the Tribunal's findings in relation to the applicable law.
Section 438(1) of the LP Act provides that the Tribunal has jurisdiction to make a finding that an Australian legal practitioner has engaged in unsatisfactory professional conduct or professional misconduct. Section 438(2) provides that if, after it has completed a hearing in relation to a referral under Part 13, the Tribunal is satisfied that the Practitioner is guilty of misconduct, the Tribunal may –
(a)make and transmit a report on the finding to the Supreme Court (full bench); or
(b)make any one or more of the orders specified in ss 439, 440 and 441 of the LP Act.
It is not presently necessary to set out the orders which can be made pursuant to s 439, s 440 and s 441 of the LP Act because we are, in these reasons, only dealing with the liability aspect of the proceeding. A further hearing will be held in relation to penalty in the event that we find that the Practitioner is guilty of unsatisfactory professional conduct or professional misconduct.
While the effect of the Application Act is that Applicant in this matter is the Legal Services and Complaints Committee (LSCC),[8] where we refer to things which were, as a matter of fact, done by the LPCC before the Application Act commenced, we will refer to it as the LPCC, and where we refer to provisions of the LP Act we will do so in the present tense for the sake of convenience.
[8] Section 269 of the Application Act provides that the LPCC continues as the LSCC under the Application Act.
Onus and standard of proof
As the Tribunal recently restated in Legal Profession Complaints Committee and Goldsmith, the procedure in disciplinary proceedings is in substance, adversarial. Accordingly, it is 'appropriate to apply rules relating to the standard of proof that would apply to the proof of matters in civil proceedings'.[9] That is, the LSCC has the onus of proving the allegations against the Practitioner to the civil standard (i.e. on the balance of probabilities).
[9] Legal Profession Complaints Committee and Goldsmith [2022] WASAT 43 at [30].
Further, as the allegations against the Practitioner are serious, the Tribunal must have regard to the nature and consequences of the facts sought to be established, the seriousness of the allegations made against the Practitioner, the inherent unlikelihood of an experienced Practitioner behaving in the manner alleged and the gravity of the consequences that might flow from a finding of professional misconduct in determining whether that standard as been met.[10]
[10] Briginshaw v Briginshaw (1938) 60 CLR 336 (Briginshaw).
In these reasons, when we express ourselves to be satisfied, and make a finding, we do so on the balance of probabilities and on the basis of evidence which we regard as clear and cogent, having regard to what was said in Briginshaw v Briginshaw.[11]
[11] Briginshaw.
Meaning of 'professional misconduct'
The expression 'professional misconduct' is defined in s 403 of the LP Act as follows:
(1)For the purposes of this Act –
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.
(2)For the purposes of finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the Practitioner were an applicant for admission or for the grant or renewal of a local practising certificate.
It is apparent from its terms that the definition is inclusive rather than exhaustive.
The expression 'unsatisfactory professional conduct', used in paragraph (a) of the definition of professional misconduct is set out in s 402 of the LP Act. It is defined as follows:
For the purposes of this 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.
Again, the definition is expressed to be inclusive rather than exhaustive. That is, the case is reinforced by the terms of s 404 of the LP Act, which identifies particular conduct which is capable of constituting unsatisfactory professional conduct or professional misconduct. Those examples are said to be given 'without limiting s 402 or s 403'. The matters identified in that section are:
(a)conduct consisting of a contravention of the LP Act or previous Act of that kind;
(b)charging excessive legal costs in connection with the practice of the law;
(c)conduct in respect of which there is a conviction for –
(i)a serious offence;
(ii)a tax offence;
(iii)an offence involving dishonesty;
(d)conduct of an Australian legal practitioner as or in becoming an insolvent under administration;
(e)conduct of an Australian legal practitioner in becoming disqualified from managing or being involved in the management of any corporation under the Corporations Act;
(f)conduct of an Australian legal practitioner consisting of a failure to comply with an order of the Complaints Committee, or the State Administrative Tribunal or Supreme Court exercising jurisdiction under this Act or an order of a corresponding disciplinary body made under a corresponding law (including but not limited to a failure to pay wholly or partly a fine imposed under this Act, a previous Act or a corresponding law);
(g)conduct of an Australian legal practitioner in failing to comply with a compensation order made under this Act or a corresponding law.
The position in Western Australia is that the two limbs of the common law test of professional misconduct, which were identified in Kyle,[12] but with reference to 'unprofessional conduct' (which we now call professional misconduct), still apply as separate bases for a finding of professional misconduct. That position was recently explained in detail by the Tribunal in Legal Services and Complaints Committee and Lourey [No 2].[13] We adopt that reasoning without repeating it.
[12] Kyle at [61].
[13] Legal Services and Complaints Committee and Lourey [No 2] [2023] WASAT 77, see particularly [219] – [234] (Pritchard P, Jackson DP, Povey OM).
Section 442 of the LP Act permits the Tribunal to make a finding that a Practitioner has engaged in unsatisfactory professional conduct even though the referral to it alleged professional misconduct.
The hearing and the consequence of the absence of the Practitioner
The Practitioner took no part in the hearing. In fact, he took no part in the proceeding at all.
We proceeded in the Practitioner's absence after satisfying ourselves that he had been personally served with the application[14] and with the witness statements, the Applicant's Book of Documents and the orders made by the President on 16 December 2022 listing the application for hearing.[15]
[14] Affidavit of Stephen John Walker sworn 31 October 2022.
[15] Affidavit of Mr Hassan dated 2 March 2023.
The Applicant submitted that although the Tribunal is not bound by the rules of evidence,[16] we should nevertheless apply the rule in Jones v Dunkel,[17] with the result that, where evidence or explanation which would assist the Practitioner is purely within his knowledge, his failure to give that evidence would lead us to conclude that the evidence would not have assisted his case in resisting a finding of professional misconduct. The Applicant pointed out that such an approach in disciplinary proceedings was expressly approved by New South Wales Court of Appeal in New South Wales Bar Association v Meakes [2006] NSWCA 340.[18]
[16] SAT Act, s 32(2).
[17] Jones v Dunkel (1959) 101 CLR 298.
[18] New South Wales Bar Association v Meakes [2006] NSWCA 340 at [70] – [78].
We accept the Applicant's submission that the rule of evidence in Jones v Dunkel applies so that where the Practitioner failed to give evidence of matters uniquely within his own knowledge, we may draw inferences against him.
The evidence, the witnesses and credibility
The following witnesses gave oral evidence in the proceeding on behalf of the Applicant:
1.Narelle Helen Pierce;
2.Mary Anne Tennent; and
3.Mr MC.
The oral evidence given by Ms Pierce and Ms Tennent, supplemented the evidence contained in their witness statements which were admitted into evidence as exhibits.[19]
[19] Exhibit 1, Witness Statement of Narelle Helen Pierce dated 23 February 2023 and Exhibit 3 Witness Statement of Mary Anne Tennent dated 23 February 2023.
The Applicant also tendered various documents which were admitted into evidence as exhibits.
Given that the Practitioner did not participate in the proceeding, the evidence of the witnesses called by the Applicant (and the contents of the tendered witness statements) was unchallenged.
Ms Pierce is a solicitor employed in the office of the Public Trustee. Her witness statement[20] set out her evidence about the Public Trustee's attempts to communicate with the Practitioner in relation to the N-N matter and what the Public Trustee did in relation to that matter after he was appointed plenary administrator of Mrs N-N's estate, including making a complaint about the Practitioner's conduct to the LPCC and instructing external solicitors to prepare and lodge the Survivorship Applications with Landgate in relation to Mrs N-N's properties. She produced copies of various documents which became exhibits in the proceeding. She gave oral evidence that the statement that she made to the Practitioner at their meeting on 12 February 2018 that Mrs N-N was in dire financial circumstances was correct.[21] We accept her evidence.
[20] Exhibit 1.
[21] ts 9, 9 March 2023.
Ms Tennent is a paralegal at the Legal Practice Board of Western Australia and until 16 January 2023 worked in the investigations team dealing with investigations and proceedings being conducted by the LSCC.[22] Her evidence consisted largely of producing various documents relied upon by the Applicant in the proceeding which were held by the Board. For example, the Practitioner's applications for practising certificates and communication which the LSCC had with the Practitioner in the course of its investigations. She also gave oral evidence that the applications for practising certificates had been granted by the Board, that she had recently attended the Supreme Court to examine the Court's file concerning the estate of the late Mrs P and gave evidence about what she had seen on that file. Ms Tennent also gave evidence that she had inspected the Practitioner's file related to the C matter and about what she found on that file. We accept her evidence.
[22] Exhibit 3, para 1.
Mr WC was one of two brothers who engaged the Practitioner to deal with their father's affairs following his death. We found Mr C to be an honest witness who had a good recollection of events. He did not exaggerate his evidence. It was consistent with the documentary evidence. In Mr C's case, although he was not a reluctant witness as such, he appeared to us to be very disappointed to be in a position where he was having to give evidence about the conduct of the Practitioner who, he said, his family and other friends had regarded as a friend and, we infer from his evidence, a trusted adviser for many years. In his evidence, Mr C said:[23]
I don't know what happened. This was a very nice bloke. We used to go out for lunch. It wasn't just myself. There was other friends who used him for in business for many, many years, and he was a hardworking, studious bloke. None of us can work this out. We don't know. After all this period of time, well, sorry, I don't know …
[23] ts 28 – 29, 9 March, 2023.
In determining the application, the Tribunal is not required to apply the Evidence Act 1906 (WA) and is not bound by the rules of evidence.[24] We have admitted into evidence as proof of their contents, copies of various documents. We have also had regard to evidence which in other jurisdictions might be inadmissible as hearsay. As the Practitioner did not participate in the hearing, there was of course no objection taken to us doing so and no submissions made as to the weight we should give to that evidence. Nevertheless, we have considered that issue for ourselves and have not given the evidence any less weight than we otherwise would have for that reason.
[24] SAT Act, s 32(2).
The allegations
In its application dated 8 September 2022, the Applicant set out nine grounds on which it relies to establish that the Practitioner engaged in professional misconduct.
At the hearing on 9 March 2023, the Applicant abandoned Ground 8 on the basis that it was duplicitous with at least one of the other grounds.[25]
[25] ts 6, 9 March 2023.
The application arises from three separate complaints made by the Practitioner's former clients.
Grounds 1 – 3 concern actions of the Practitioner in relation to his client Mrs N-N. Grounds 4 – 6 relates to clients Mr WC and Mr GC, brothers who instructed the Practitioner in respect of their late father's estate. Grounds 7 and 9 relate to the Practitioner's conduct in respect of the estate of the late Mrs P.
We have set out the specifics of each Ground where we make findings in relation to it.
The Practitioner
We are satisfied of and make the following general findings of fact in relation to the Practitioner.
The Practitioner has held a practising certificate since 1981.[26]
[26] Exhibit 2.48, Applicant's Bundle of Documents (ABD) pages 143 – 145.
The Practitioner has no disciplinary record.[27]
[27] Applicant's submissions dated 2 March 2023, para 27.
The Practitioner has practiced as a sole practitioner under the name Ginbey & Co since 1991.[28]
[28] Exhibit 2.48, ABD pages 143 – 145.
At all material times up until 30 June 2019, the Practitioner held an unrestricted practicing certificate.[29]
[29] Exhibit 3, para 4 and ts 12, 9 March 2023.
On 9 July 2013, the Practitioner informed the Board that he had closed his trust account with effect from 3 July 2013.[30] We find that he did so.[31]
[30] Exhibit 2.03, ABD page 9.
[31] Exhibit 2.03, ABD pages 9 – 20.
On 7 August 2018, the Practitioner sent an email to the Board in which he informed the Board he had been winding down his practice and considered it 'for all intents, closed'.[32]
[32] Exhibit 2.46, ABD pages 140 – 141, particularly ABD page 140.
For the purposes of obtaining his practising certificate for the years ending 30 June 2018 and 30 June 2019 the Practitioner advised the Board of the following matters:[33]
1.that he was practising as a sole practitioner under the name Ginbey & Co (the Firm);
2.that his residential address was [XXXX], Kalamunda 6076 (Residential Address);
3.the street address of Ginbey & Co was 12 Duro Place, West Perth, 6005 (the Firm's Address);
4.the PO Box address for Ginbey & Co being PO Box 1462, West Perth, 6872 (the Firm's PO Box); and
5.his business email address was [XXXXX X] (the Firm's email address).
[33] Exhibit 2.29, ABD page 77. Exhibit 2.43, ABD page 123.
At no time during the years ending 30 June 2018 and 30 June 2019 did the Practitioner notify the Board of any change to any of those contact details.[34]
[34] Exhibit 3, para 5.
On 12 December 2019, the Board appointed a manager to the Firm pursuant to s 482 of the LP Act.[35]
[35] Exhibit 2.71, ABD page 207.
The relevant provisions of the LP Act and the Rules
The allegations against the Practitioner concern contraventions of the LP Act and the Legal Profession Conduct Rules 2010 (WA) (Rules). It is, therefore, convenient to set out next the relevant provisions of the LP Act and the Rules.
The terms 'transit money' and 'trust money' are defined in s 205 of the LP Act as follows:
transit money means money received by a law practice subject to instructions to pay or deliver it to a third party, other than an associate of the practice.
trust money means money entrusted to the law practice in the course of or in connection with the provision of legal services by the practice, and includes -
(a)money received by the practice on account of legal costs in advance of providing the services; and
(b)controlled money received by the practice; and
(c)transit money received by the practice; and
(d)money received by the practice that is the subject of a power, exercisable by the practice or an associate of the practice, to deal with the money for or on behalf of another person.
Section 214(1) of the LP Act provides as follows:
214.Maintenance of general trust account
(1)A law practice that receives trust money to which this Part applies must maintain a general trust account in this jurisdiction.
Penalty: a fine of $10 000.
Section 215(2) of the LP Act provides:
215.Certain trust money to be deposited in general trust account
(2)Subject to s 222, as soon as practicable after receiving trust money, a law practice must deposit the money in a general trust account of the practice unless –
(a)The practise has a written direction by an appropriate person to deal with it otherwise then by depositing it in the account; or
(b)the money is controlled money; or
(c)the money is transit money; or
(d)the money is the subject of a power given to the practise or an associate of the practise to deal with the money for or on behalf of another person.
Penalty: a fine of $10 000.
The expression 'appropriate person' used s 215(2) is defined in s 215(1) to mean a person legally entitled to give the law practise concerned directions in respect of dealings with the trust money.
Section 216(1) of the LP Act provides that a law practice must:
216.Holding, disbursing and accounting for trust money
(1)A law practice must –
(a)hold trust money deposited in a general trust account of the practice exclusively for the person on whose behalf it is received; and
(b)disburse the trust money only in accordance with a direction given by the person.
Penalty: a fine of $5 000.
Section 220 of the LP Act is concerned with transit money. Subsection 220(1) provides as follow:
220.Transit money
(1)Subject to section 222, a law practice that has received transit money must pay or deliver the money as required by the instructions relating to the money –
(a)within the period (if any) specified in the instructions; or
(b)subject to paragraph (a), as soon as practicable after it is received.
(2)The law practice must account for the money as required by the regulations.
Penalty: a fine of $10 000.
Section 223 of the LP Act provides as follows:
223. Protection of trust money
(1)Money standing to the credit of a trust account maintained by a law practice is not available for the payment of debts of the practice or any of its associates.
(2)Money standing to the credit of a trust account maintained by a law practice is not liable to be attached or taken in execution for satisfying a judgment against the practice of any of its associates.
(3)This section does not apply to money to which the law practice or associate is entitled.
Section 224(1) of the LP Act is concerned with intermixing of money. It provides that a law practice must not, otherwise than as permitted by subsection (2), mix trust money with other money. The penalty for breaching s 224(1) is a fine of $10,000. Subsection 224(2) provides that mixing of trust money with other money is permitted to the extent only that it is authorised by the Board and in accordance with any conditions imposed by the Board in relation to the authorisation.
Section 226(1) of the LP Act provides:
226.Deficiency in trust account
(1)An Australian legal practitioner commits an offence if the Practitioner, without reasonable excuse, causes –
(a)a deficiency in any trust account or trust ledger; or
(b)a failure to pay or deliver any trust money.
Penalty: a fine of $25 000.
Section 226(3) provides that in subsection (1) the word 'cause' includes 'to be responsible for' and the word 'deficiency' in a trust account or trust account ledger includes the non-inclusion or exclusion of the whole or any part of an amount that is required to be included in the account.
Section 520 of the LP Act provides:
520. Requirement in relation to complaint investigation
(1)For the purpose of carrying out a complaint investigation in relation to an Australian lawyer, an investigator may, by notice or summons served on the lawyer, require the lawyer to do any one or more of the following -
(a)to produce, at a specified time and at a specified place, any specified document (or a copy of the document);
(b)to produce, at a specified time and at a specified place, any specified document (or a copy of the document);
(c)to provide written information on or before a specified date;
(d)to otherwise assist in, or cooperate with, the investigation of the complaint in a specified manner.
Rule 50 of the Rules provides as follows:
50.Dealing with regulatory authority
(1)In this rule –
regulatory authority means a local regulatory authority and an interstate regulatory authority.
(2)A practitioner must be open and candid in his or her dealings with the regulatory authority.
(3)A practitioner who is requested a regulatory authority to provide comments or information in relation to the Practitioner's conduct or professional behaviour must -
(a)respond to the request within a reasonable time and in any event within 14 days (for such extended time as the regulatory authority may allow); and
(b)provide in writing a full and accurate account of his or her conduct in relation to the matters covered by the request.
Grounds 1 – 3: the N-N matter
Grounds 1 – 3 concern the Practitioner's actions in matter where he received instructions from Mrs N-N and in his dealings with the LPCC in relation to that matter.
Ground 1
The allegation
By Ground 1 the Applicant alleges that the Practitioner engaged in professional misconduct within the meaning of s 403(1)(a) and (b) and s 438 of the LP Act which conduct would also be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence and/or fell short to a substantial degree, of the standards observed or approved by members of the profession of good repute and competence in the course of acting for Mrs N-N and, later, the Public Trustee (at a time when the Public Trustee was her plenary administrator) by:
1.receiving from Mrs N-N the sum of $37,704.14 (DVA money) which was transit money and trust money in circumstances where he operated no trust account and in doing so he contravened s 214 of the LP Act;
2.receiving the DVA money into an overdraft account which was at the time in debit, and in doing so he contravened s 223 and s 224(1) of the LP Act;
3.failing to pay the DVA money to the Department of Veterans' Affairs as instructed by his client as soon as practicable after it was received, or at all, and in doing so he contravened s 220(1) of the LP Act; and
4.after the instructions to pay the DVA money to the Department of Veterans' Affairs were revoked by the Public Trustee and repayment was demanded by the Public Trustee on 11 October 2017, failing to repay the funds to the Public Trustee until around 29 March 2018, in contravention of s 216(1) and s 226(1) of the LP Act.
Findings of fact
We are satisfied on the evidence and make the following findings of fact in respect of Ground 1.
Mr N-N died on 24 October 2012.[36] In or about June 2014, the Practitioner began acting for his widow, Mrs N-N, in relation to Mr N‑N's estate.
[36] Exhibit 2.36, ABD page 102 and Exhibit 2.37 ABD pages 99 – 108, specifically page 107.
From the Practitioner's invoices dated 30 June 2014[37] and his letter to Mrs N‑N dated 15 July 2014,[38] we find that the scope of his instructions included:
1.acting for Mrs N-N in relation to debts owed by her and her late husband to the Department of Veterans' Affairs; and
2.preparing and lodging Survivorship Applications for her in relation to properties in Midland and Bickley.
[37] Exhibit 2.04, ABD pages 21 – 24 and Exhibit 2.05, ABD pages 23 – 24.
[38] Exhibit 2.06, ABD pages 25 – 26.
In his letter dated 15 July 2014,[39] the Practitioner informed Mrs N‑N that the amount claimed by the Department of Veterans' Affairs was $37,704.14. He asked her to remit that sum and said:
Upon receipt of your funds I will then arrange to have the monies paid to the Department of Veterans' Affairs.
[39] Exhibit 2.06, ABD pages 25 – 26.
In that letter, the Practitioner gave Mrs N-N the details for the account into which the funds were to be transferred. It was described as the 'Ginbey & Co General Account conducted at the ANZ Bank, Allendale Square, Perth' with the Account No. 'BSB XXX XXX Account No. XXXX XXXXX ' (the Firm's General Account).[40]
[40] Exhibit 2.06, ABD pages 25 – 26.
The Firm's General Account was a business overdraft account. This is seen from statement no. 627[41] which described the account as 'Business Classic Statement with Business Overdraft Facility'.
[41] Exhibit 2.07, ABD page 28.
In his letter of 15 July 2014, the Practitioner did not inform Mrs N‑N that the account into which he sought her to transfer the requested funds was his Firm's General Account or that it as an overdraft account.[42]
[42] Exhibit 2.06, ABD pages 25 – 25.
From Mrs N-N's bank records and the Firm's General Account statement no. 627, we find that between 31 July 2014 and 4 August 2014, Mrs N‑N transferred the $37,704.14 to the Firm's General Account. She did so in three tranches. A sum of $15,000 was transferred on 31 July 2014, a further sum of $15,000 was transferred on 4 August 2014 and a final sum of $7,704.14 was also transferred on 4 August 2014.[43] The bank statement for the Firm's General Account show the first tranche being received into the account on 1 August 2014 and the second two on 4 August 2014.[44]
[43] Exhibit 2.08, ABD pages 29.
[44] Exhibit 2.07, ABD page 28.
The Firm's General Account was in debit at the time Mrs N-N transferred the money to that account.[45]
[45] Exhibit 2.07, ABD page 28.
On 28 January 2016, the Tribunal appointed the Public Trustee as plenary administrator of Mrs N-N's estate.[46]
[46] A copy of the Tribunal's orders appointing the Public Trustee as plenary administrator is an attachment to the affidavit of service of David Mackay sworn 16 August 2022, Exhibit 2.74, ABD pages 213 – 216 specifically page 216.
As part of its administration of Mrs N-N's estate the Public Trustee communicated with the Department of Veterans' Affairs and was informed by the Department, in letters dated 3 November 2016[47] and two further letters dated 24 March 2017,[48] that it had waived its claim to the $37,704.14.
[47] Exhibit 2.16, ABD page 52.
[48] Exhibit 2.27, ABD pages 74 – 76.
On 11 October 2017, the Public Trustee wrote to the Practitioner informing him that the Department of Veterans' Affairs had waived its claim to the money and demanding the $37,704.14 transferred to him by Mrs N-N be repaid.[49]
[49] Exhibit 2.74, ABD pages 214 – 215.
The letter from the Public Trustee to the Practitioner dated 11 October 2017 was personally served upon him.[50]
[50] Exhibit 2.74, ABD pages 213.
The Public Trustee made a complaint about the conduct of the Practitioner to the LPCC on 21 December 2017.[51]
[51] Exhibit 1, para 6 and Exhibit 2.35, ABD page 98.
On 12 February 2018, Ms Narelle Peirce, of the Public Trust Office, met with the Practitioner about this matter. Her file note which was attached to her witness statement[52] records that the Practitioner informed her that he was unaware that the Department of Veterans' Affairs had waived the debt until he was informed of that fact at the meeting. We accept the contents of that contemporaneous file note and find that this was what the Practitioner said at that meeting.
[52] Exhibit 1, para 7 and Exhibit 2.39, ABD page113.
At no time before 27 March 2018, did the Practitioner transfer the sum of $37,704.14, or any money to the Department of Veterans' Affairs on Mrs N-N's behalf. We make that finding based on the inference we draw from the following combination of facts:
1.That the bank statement for the Firm's General Account for the period 31 July 2014 to 29 August 2014 shows no funds being transferred to the Department of Veterans' Affairs;[53]
2.That the Department of Veterans' Affairs informed the Public Trustee that it had waived its claim to the funds;[54]
3.The inference we draw, in reliance on the rule in Jones v Dunkel that if the Practitioner had transferred all or any part of the sum to the Department of Veterans' Affairs before that time he would have made that known to the LPCC in his response to its inquiries and would have given evidence to that effect;
4.That on 27 March 2018, the Practitioner repaid the sum of $37,704.14 to the Public Trustee as administrator of the estate of Mrs N-N.[55] He would have been unlikely to have done so if any part of that sum had been paid to the Department of Veterans' Affairs at an earlier time; and
5.That on 31 August 2018, the Practitioner explained to the LPCC that he had not actioned the demand for the repayment of the money before 27 March 2018 because he was 'away from his practice until January 2018'.[56]
[53] Exhibit 2, ABD page 28.
[54] Findings at [84] and [85].
[55] Exhibit 1, para 8.
[56] Exhibit 2.48, ABD pages 143 – 145.
The money paid into the Firm's General Account by Mrs N-N was transit money as that term is defined in s 205(1) of the LP Act. This is because it was received by the Practitioner's law practice subject to instructions that it be paid to a third party, being the Department of Veterans' Affairs.
The transit money was also trust money for the purposes of the LP Act: s 205(1) LP Act.
Characterisation of the conduct
As we have set out above, s 220(1) of the LP Act requires that a law practice that receives transit money pay or deliver the money as required by the client's instructions within the period specified in the instructions or as soon as reasonably practicable after it is received.
In this case, we have found that $15,000 of the total transit money of $37,704.14 was received by the Practitioner on 1 August 2014 and the remainder, by 4 August 2014. At that time the Practitioner had instructions to transfer it to the Department of Veterans' Affairs in repayment of a debt owed by Mrs N-N's late husband. It was never so transferred by the Practitioner and was only returned to Mrs N‑N on 27 March 2018.
The Practitioner has offered no explanation to the LPCC the Tribunal for his failure to transfer the transit money in accordance with his instructions.
In the absence of any explanation for the failure to transfer the transit money, we find that failing to transfer the transit money at all constitutes a failure to transfer it as soon as reasonably practicable after its receipt, particularly in light of the Practitioner's communication to his client that he would arrange to have the monies paid to the Department 'upon receipt of [the] funds'.[57] We find that the Practitioner's failure in this regard amounts to a breach of s 220(1) of the LP Act.
[57] Exhibit 2.06, ABD page 25.
Further, it follows from the fact that we have found that the money was deposited into the Firm's General Account rather than into a trust account that we also find that the Practitioner breached s 224(1) of the LP Act by intermixing the transit money with other money.
By contravening those provisions of the LP Act the Practitioner has committed an act which is capable of constituting unsatisfactory professional conduct or professional misconduct: s 404 LP Act.
When the Public Trustee informed the Practitioner, by letter dated 11 October 2017, that the Department of Veterans' Affairs had waived the debt and thus demanded repayment of the money, the sum of $37,704.14 ceased to be transit money because it was no longer to be transferred from the client via the Practitioner to a third party. Rather, from that point on, it was merely trust money held by the Practitioner on behalf of his client within the meaning of s 205(1) of the LP Act. That trust money was not repaid until 27 March 2018, some six months after the Public Trustee's letter of demand had been personally served on the Practitioner and after the Public Trustee had made a complaint to the LPCC about his conduct.
Trust money held by a practitioner belongs to the client who is entitled to call for it and have it repaid to them at any time. Section 216 of the LP Act provides that trust money is to be deposited into a general trust account of the practice exclusively for the person on whose behalf it was received and provides that it must be disbursed only in accordance with the direction of the client. The Practitioner did neither of those things in that the money was not paid into a trust account but into his Firm's General Account thereby reducing the Firm's overdraft. For those reasons we find that the Practitioner was in breach of s 216(1) of the LP Act.
Section 226(1)(b) provides that an Australian legal Practitioner commits an offence if they fail to pay or deliver any trust money. The funds were not returned when demanded by Mrs N-N's administrator. Accordingly, we are satisfied that the Practitioner was in breach of s 226(1)(b) of the LP Act.
While we are not making a finding that the Practitioner committed an offence in this case, the seriousness with which the Practitioner's conduct can be viewed is seen from the maximum penalty provided for each breach: In the case of s 216(1), a fine of $5,000 in the case of an offence under s 220, a fine of $10,000, in the case of an offence under s 224(1) a fine of $10,000 and in the case of an offence under s 226(1)(b), a fine of $25,000.
The Practitioner has not offered any explanation for his failure to pay the money to the Department of Veterans' Affairs in accordance with his client's instructions.
As we have found at [88], on 12 February 2018, the Practitioner told Ms Peirce that he was not aware that the Department of Veterans' Affairs had waived the debt until being informed of the waiver at the meeting with officers of the Public Trust Office on that day. Given that the Practitioner had acknowledged that he had received the letter from the Public Trustee dated 11 October 2017, which had been personally served on him, the only way he could not have known of the waiver was if he did not open and read the correspondence which he had received. In any event, even if he genuinely did not know that the debt had been waived, that fact would not greatly assist the Practitioner's position because it does not explain why it had not been transferred by him to the Department of Veterans' Affairs in a timely manner as he had been instructed to do.
His explanation for not actioning the Public Trustee's demand for repayment until he did was that he was 'away from his practice'.[58]
[58] Exhibit 2.48, ABD page 144.
The Applicant says that we can infer that the real reason he did not transfer the money in accordance with his instructions or return it when its return was demanded was because he was experiencing financial difficulties at the time.
On 22 October 2019, the Supreme Court of Western Australia had made orders requiring the Practitioner to give vacant possession of two of his properties to the Commonwealth Bank and had ordered that he pay the bank's debt in full, with interests and costs. In its decision,[59] the Court of Appeal sets out that the bank had obtained an order for the payment of an amount it claimed it was owed pursuant to an agreement (Loan Agreement) which had been entered into in 2009 between the bank, and the Practitioner and his wife. The bank had claimed that Mr and Mrs Ginbey (the Ginbeys) secured the amount borrowed under the Loan Agreement by granting to the bank a first registered mortgage over each of the Properties (Mortgage).
[59] Ginbey v Commonwealth Bank of Australia [2021] WASCA 116 in which the Court of Appeal dismissed Mr Ginbey's appeal by which he sought to have those orders set aside.
The Applicant says that we can find from that case that the Practitioner was under financial stress at the time he was dealing with Mrs N‑N's matter.
We accept that, at the time the money was paid to the Practitioner by Mrs N-N, the Practitioner's General Account was in debit. From that alone, we would not be prepared to infer that the Practitioner was experiencing financial difficulties. The orders made by the Supreme Court were made following a summary judgment application. The Practitioner applied to have that judgment set aside. The Court of Appeal refused his appeal. Because the orders were made following a summary judgment application, we do not know when the Ginbeys ceased making the required loan repayments. The Court of Appeal decision refers to the fact that the Practitioner asserted that the loan agreement had been varied, but that he had claimed to be unable to locate the records he had kept which would have established his defence.
While we cannot be precise as to when the Ginbeys began experiencing financial difficulties, we do, however find that, given that in 2014 his General Account was in debit and that in 2019 he was in default on his loan agreement with the Commonwealth Bank, it is reasonable to infer that over the time when the Practitioner had received and neither transferred to the Department of Veterans' Affairs or returned to Mrs N‑N the $37,704.14 he was experiencing some financial difficulty.
We accept the Applicant's submission that this was not a minor breach of the Practitioner's obligations. The Practitioner had received a significant sum as transit money and did not pay it to the Department of Veterans' Affairs in accordance with his instructions or return it to the client for several years. The funds had been co-mingled with his business funds and were dissipated in paying the Firm's debts in that Mrs N‑N's money reduced the overdraft on the Practitioner's General Account.
The Applicant submits that, in determining the seriousness of the conduct we should have regard to the fact that the client, Mrs N‑N, was particularly vulnerable and self-evidently had a sufficient lack of mental capacity as to justify the appointment of the Public Trustee as her plenary administrator. The Applicant also submits that the evidence establishes that Mrs N-N was 'in dire financial circumstances' and had 'very limited income'.[60]
[60] ts 9 and 53, 9 March 2023.
From the contents of Ms Pierce's file note made on 12 February 2018, and her oral evidence on the issue to which we earlier referred, we find that, at that time, she considered that Mrs N-N was in 'dire financial circumstances' and that she told the Practitioner at their meeting that although Mrs N-N had property, she had very limited income and was in need of funds.[61] We have no reason to question Ms Pierce's characterisation of Mrs N-N's financial position at that time. Accordingly, we are satisfied and find that, as at 12 February 2018, Mrs N‑N had property but lacked income and was in need of funds.
[61] Exhibit 1, para 7 and Exhibit 2.39, ABD page 113.
It must also be the case that the Public Trustee was appointed plenary administrator of Mrs N-N's estate because the Tribunal found that she lacked the capacity to make reasonable judgments in respect of matters related to all of her estate because of a mental disability and that she was in need of an administrator.[62] A person who lacks capacity to make reasonable judgments in relation to their estate by reason of mental disability and who is in need of an administrator of their estate is self‑evidently, vulnerable to financial exploitation and abuse.
[62] An administrator can only be appointed where the Tribunal is satisfied of matters set out in s 64 of the Guardianship and Administration Act 1990 (WA).
While those were the facts in relation to Mrs N-N at the time the administration order was made, we do not make any finding that the Practitioner knew that Mrs N-N lacked capacity, or that he was aware of her financial position or vulnerability before he was informed by Ms Pierce of the appointment of the administrator and of her dire financial position. That he had that knowledge has not been established by the Applicant to the requisite standard.
Whether he knew of her vulnerability or whether he was experiencing financial difficulty or not, the fact of the matter is that the Practitioner had the benefit of his client's money for a period of four years. At no time was he entitled to it. Whether he was aware of the specific provisions of the LP Act or the Rules that governed his conduct, he was aware that the funds were transferred to him for a specific purpose, that he did not give effect to that purpose and that the funds were not his.
The prohibition on the co-mingling of trust funds with other funds is intended to protect client funds. His actions brought about precisely the problem which the relevant provisions of the LP Act were designed to prevent.
The Practitioner's retention, for his own benefit, of money that was not his persisted over four years. In our view, the conduct, the subject of Ground 1, was very serious and we find that it is readily characterised as professional misconduct within the meanings of s 403(1)(a) and s 403(1)(b) of the LP Act and is conduct that would be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence and which fell short, to a substantial degree, of the standards observed or approved by members of the profession of good repute and competence.
Ground 2
The allegation
In Ground 2 the Applicant alleges that from around 30 June 2014, the Practitioner engaged in professional misconduct within the meaning of s 403(1)(a), s 403(1)(b) and s 438 of the LP Act, which conduct would also be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence and/or fell short, to a substantial degree, of the standards observed or approved by members of the profession of good repute and competence by:
1.invoicing and accepting payment from the client of the costs of preparing and lodging two Survivorship Applications, which to the Practitioner's knowledge was work he had not performed;
2.alternatively to Ground 2.1, requesting and receiving from Mrs N-N into an overdraft account which was at the time in debit, the sum of $2,021 which was at least in part 'trust money' within the meaning of s 205(1) of the LP Act in circumstances where the Practitioner operated no trust account, in contravention of s 214(1), s 215(2), s 216(1) and s 223 of the LP Act;
3.failing to account to the Public Trustee for the sum paid in relation to the work which was not performed; and
4.failing to lodge the Survivorship Applications diligently or at all.
Findings of fact
We are satisfied of and make the following findings of fact in relation to Ground 2.
On 30 June 2014, the Practitioner issued to Mrs N-N an invoice for the sum of $1,298.50.[63] In the heading of the invoice, the Practitioner identified that the amount invoiced was for work done in connection with dealing with the Department of Veterans' Affairs and the Survivorship Application for the Bickley property. The invoice itself stated:
To our professional costs of and incidental to receiving instruction to act for you in this matter including telephone attendance upon [redacted], taking instructions to prepare a fresh Survivorship Application with supporting Statutory Declaration; arranging search of the Midland land at Landgate, reviewing search; drawing and engrossing Survivorship Application; checking on draft Survivorship Application; finalising the Survivorship Application; drawing Statutory Declaration; reviewing draft of Statutory Declaration; finalising Statutory Declaration; drawing and engrossing letter to you to accompany the Survivorship Application and Statutory Declaration with instructions on signing both documents; follow up email letters to [redacted]; attendance upon [redacted]; reviewing documents signed by you and delivered by us to [redacted]; meeting you for identification purposes; completing Verification of Identification documentation; reviewing mortgage prepared by the Australian Government Solicitor to be registered over [XXXX] Bickley; telephone attendance upon the Australian Government Solicitor regarding payout of claim; reporting to you; liaising with the Australian Government Solicitor regarding joint lodging of documents at Landgate; attending at Landgate lodging documents; reporting to you; attending at Landgate filing Survivorship Application for registration; uplifting Duplicate Certificate of Title; forwarding Duplicate Certificate of title to you following registration of the Survivorship Application: all care an attention in the matter including all necessary telephone attendances, attendances, correspondence and photocopying herein.
[63] Exhibit 2.04, ABD pages 21 – 22.
The invoice did specifically identify the value of the work allegedly done in dealing with the Department of Veterans' Affairs matter or the work allegedly done in connection with the Survivorship Application.
The invoice also identified that the amount charged included the following matters:
1.a $160 Landgate fee;
2.a $20 photocopying fee;
3.a $16 facsimile fee;
4.a $30 fee for postage and petties.
The invoice indicated that the sum charged was payable on receipt and provided bank details for payment. The bank account into which the invoice said the payment should be made was the Firm's General Account.
On 30 June 2014, the Practitioner also issued Mrs N-N a second, separate invoice for $722.50.[64] The heading to that invoice indicated it was in connection with the Survivorship Application for her property in Midland. That invoice stated as follows:
To our professional costs of and incidental to receiving instructions to act for you in this matter including telephone attendance upon [redacted]: email letters to [redacted]: reviewing papers provided by [ redacted]: providing comments to [redacted]: taking instructions to prepare a fresh Survivorship Application with supporting Statutory Declaration: arranging search of the Midland land at Landgate: reviewing search: drawing and engrossing Survivorship Application: checking on draft Survivorship Application: finalising the Survivorship Application: drawing Statutory Declaration: reviewing drat of Statutory Declaration: finalising the Statutory Declaration: drawing and engrossing letter to you to accompany Survivorship Application and Statutory Declaration with instructions on signing both documents: follow up email to [redacted] attendance upon [redacted]: reviewing documents signed by you and delivered to us by [redacted] meeting you for identification purposes: completing Verification of Identification documentation: attending at Landgate filing Survivorship Application for registration: reporting to you: uplifting Duplicate Certificate of Title: forwarding the Duplicate Certificate of Title to you following registration of the Survivorship Application: all care and attention in the matter including all necessary telephone attendances, attendances, correspondence and photocopying herein.
[64] Exhibit 2.5, ABD pages 23 – 24.
The invoice was expressed to include the following disbursements:
1.a $160 Landgate fee;
2.a $20 fee for photocopying;
3.a fee for postage and petties of $20.
As with the first invoice, this invoice as expressed to be payable upon receipt and provided bank details for payment. The bank account into which the invoice said the payment should be made was the Firm's General Account.
Mrs N-N transferred the sum of $2,021 into the Firm's General Account on 31 July 2014.[65]
[65] Exhibit 2.07, ABD page 28 and Exhibit 2.08 ABD page 29.
In her witness statement, Ms Pierce stated that she had checked the records of the Public Trustee and could confirm that: [66]
As Mr Ginbey had not done so, the Public Trustee's Office instructed external solicitors to prepare and lodge Survivorship Applications with Landgate in relation to Mrs N-N's properties at … Bickley and … Midland.
[66] Exhibit 1, para 10.
The two Landgate Application by Survivor applications (Survivorship Applications) completed on instructions from the Public Trustee were dated 21 December 2017.[67]
[67] Exhibit 2.36, ABD pages 99 – 103 and Exhibit 2.37, ABD pages 104 – 108.
On the basis of Ms Pierce's evidence and the completed Survivorship Applications we find that the Practitioner did not complete, and therefore did not lodge, a Survivorship Application in respect of either the Bickley property or the Midland property. The Applicant accepts, however, that some part of the amount paid in relation to the Survivorship Application for the Bickley property may have been expended for the purpose for which it was paid. That portion being a sum which was said to be work dealing with the Australian Government Solicitor. Therefore, it accepts that we should find that a material portion of the work that the invoice charged for was inappropriately charged. On the basis of the facts, we so find.
On 11 October 2017, the Public Trustee wrote to the Practitioner as plenary administrator of Mrs N-N's estate and made a demand for repayment of the sums received by him in connection with the two Survivorship Applications.[68] On 14 October 2017, that letter was served personally upon the Practitioner.[69]
[68] Exhibit 2.32, ABD pages 93 – 94.
[69] Exhibit 2.74, ABD page 214 – 216.
The Practitioner has never repaid the any part of the $2,021. We make that finding of fact as the only reasonable inference to be drawn from the following circumstances:
1.Ms Pierce's evidence, which we accept, that she had checked the records of the Public Trustee and confirmed that the Public Trustee never received repayments of any part of the other amounts demanded in her letter of 11 October 2017, being the amounts of $1,298.50 and $722.50;[70]
2.the absence of any assertion by the Practitioner in his correspondence with the LPCC matter that he had paid back any portion of those funds; and
3.the inference we draw to that effect from the application of the rule in Jones v Dunkel in relation to the issue. Had the Practitioner paid back any portion of those funds, he would have given evidence of that fact.
[70] Exhibit 1, para 9.
On the basis of the facts, as we have found them, we find that the Applicant has made out its allegations that:
1.the Practitioner invoiced the client for work which he did not perform and must have known he did not perform; and
2.failed to lodge the Survivorship Applications diligently or at all.
The Applicant's alternate case was that the invoice was a clumsy way of requesting funds on trust and that he did so when not operating a trust account in breach of various provisions of the LP Act. The Applicant submitted that that alternate case is no longer advanced because the Practitioner has not ever indicated to the LPCC or in evidence that the invoices could be seen in that light. We accept that submission.
The Applicant alleges that the Practitioner failed to account to the Public Trustee for the $2,021 which was paid but not used for the purpose for which it was paid.
Given that in Ground 2.2, the Applicant no longer advances as the alternative to Ground 2.1 that the invoices should be construed as a request for trust funds and the payment as a payment of trust funds, Ground 2.3 cannot succeed. A duty to account is a duty which arises in relation to trust funds. In this case, as it is no longer said that the funds are trust funds, there can have been no failure to account for them even though the Practitioner had no entitlement to retain those funds.
Characterisation of the conduct
As a result of those findings, we find that the Practitioner's conduct, by failing to prepare and lodge Survivorship Applications in over 3 years can be nothing less than a failure to be diligent in the provision of legal services, amounted to a breach of the following professional obligations:
1.the duty set out in rule 6(1)(c) of the Rules to deliver legal services competently and diligently; and
2.the duty in rule 7(e) of the Rules to perform the work required on behalf of the client diligently.
We also find that the Practitioner's failure to return the money to his client in circumstances where he knew he had not performed the work for which the money was paid is, in our view a serious act of dishonesty.
In our view, no conduct rule is required in order for practitioners to understand that lying to a client about having performed work which was not performed, charging for it, receiving the money as payment for the work and subsequently retaining those funds even after a specific demand was made for its return were all acts of dishonesty.
Honesty is a touchstone of our legal system and the honesty of practitioners to the court and to clients is essential to the administration of justice and to the maintenance of the public's confidence in the profession.
In our view, the Practitioner's conduct meets both limbs of the test of professional misconduct which were identified in Kyle[71] in that it was both:
1.conduct that would reasonably be regarded as disgraceful and dishonourable to practitioners of good repute and competence (Kyle limb 1).
2.conduct which fell short, to a substantial degree, of the standard of professional conduct observed or approved by members of the profession of good repute and competence (Kyle limb 2); and
[71] Kyle at [61] (Parker J with Ipp J and Steytler J agreeing).
We also find that the conduct meets the definition of professional misconduct set out in s 403(1)(a) and s 403(1)(b) of the LP Act.
Ground 3
The allegation
By Ground 3, the Applicant alleges that from around 12 October 2018, the Practitioner engaged in professional misconduct within the meaning of s 403(1)(a), s 403(1)(b) and s 438 of the LP Act, which conduct would also be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence and/or fell short, to a substantial degree, of the standards observed or approved by members of the profession of good repute and competence by:
1.failing to respond to communications and requests for information from the LPCC in connection with the N‑N matter in breach of r 50 of the Rules; and
2.failing to comply with the summons issued by the LPCC pursuant to ss 520(1)(a) and (d) of the LP Act in respect of the N‑N matter by the date for compliance, or at all, in breach of s 520(5) of the LP Act and r 50 of the Rules.
Findings of fact
As we have found at [87], on 21 December 2017 the Public Trustee made a complaint to the LPCC about the Practitioner's conduct.
As a result, the LPCC endeavoured to make contact with the Practitioner to investigate that complaint.
On 4 October 2018, the following documents were personally served on the Practitioner:[72]
1.a letter from the LPCC to the Practitioner dated 27 September 2018 regarding the N-N matter;[73] and
2.a letter form the LPCC to the Practitioner dated 27 September 2018 regarding the C matter;[74] and
3.a summons relating to the N-N matter dated 27 September 2018 which was issued pursuant to ss 530(1)(a) and (d) of the LP Act.[75]
[72] Exhibit 2.59, ABD pages 176 – 192.
[73] Exhibit 2.59, ABD pages 177 – 182.
[74] Exhibit 2.59, ABD pages 183 – 188.
[75] Exhibit 2.59, ABD pages 189 – 192.
In her witness statement, Ms Tennent stated, and we find, that the Practitioner did not respond to the letter of 27 September 2018 or comply with the summons.[76]
[76] Exhibit 3, paras 7 and 9.
The LPCC made further endeavours to correspond with the Practitioner about the complaint and the Practitioner's conduct in relation to this matter. That involved sending copies of the following letters both to the Practitioner's Residential Address and to the Firm's email address:
1.a letter dated 18 October 2018 in which the LPCC requested that the Practitioner comply with the summons;[77]
2.a letter of 24 October 2018 requesting that the Practitioner comply with the summons;[78] and
3.a letter dated 7 January 2019 requiring the Practitioner to provide the LPCC with submissions in response to its investigation.[79]
[77] Exhibit 2.52, ABD pages 164 – 165.
[78] Exhibit 2.55, ABD pages 169 – 170.
[79] Exhibit 2.63, ABD pages 197 – 198.
Ms Tennent's evidence, which we accept, was the Practitioner did not comply with the summons or respond to any of the correspondence we so find.[80]
[80] Exhibit 3, paras 7 and 9.
The Practitioner's Residential Address and the Firm's email address were addresses which the Practitioner had supplied on his application for renewal of his practising certificate. Each of the letters were sent while the Practitioner held a current practising certificate.
Characterisation
As the Applicant identified in its submissions, the failure to comply with the summons was a breach of s 520(5) of the LP Act.
Further, his conduct also amounted to a breach of r 6(1)(e) of the Rules which imposes a professional duty upon practitioners to comply with the Rules and the law.
It also constituted a breach of rules 50(2) and (3) of the Rules, which required the Practitioner to be open and candid in his dealing with the regulatory authority, to respond to the request for information about his practice within a reasonable time and in any event within 14 days (subject to any extension permitted by the regulatory authority), and to provide in writing a full and accurate account of his conduct in relation to the matters covered by the request. His behaviour, in failing to respond, self‑evidently met none of those obligations.
Had there been any reasonable excuse for his non-compliance the Practitioner would have given evidence of it. We infer from his failure to do so that there was no reasonable excuse.
As the Tribunal stated in Legal Professional Complaints Committee and Lee-Steere,[81] the reputation of the profession depends to a large extent upon the power and the ability of the regulatory authority to regulate effectively the activities of legal practitioners. The Tribunal said that in order to ensure that the regulatory authority can achieve that purpose, practitioners are obligated to cooperate with the reasonable requests of their regulatory body to the fullest extent and held that the duty owed to the Board and to the Committee 'in a measure not less than the duty owed by a practitioner to his or her client and to a Court or Tribunal'.[82]
[81] Legal Profession Complaints Committee and Lee-Steere [2010] WASAT 189 at [22] – [27] (Lee-Steere).
[82] Lee-Steere at [23].
In that case the Tribunal found that the conduct of the Practitioner, who had failed to answer requests for information over a period of more than two years, flew in the face of the legislative intent and precluded the regulatory authority from executing its statutory functions and was viewed in a most serious light.
We adopt those statements which apply equally in this case and we find that the Practitioner's conduct was a serious failure to comply with his professional obligations. His conduct has the capacity to bring the profession into disrepute and does not constitute a standard of practice which members of the public and his colleagues of good repute and competence can reasonably expect of a member of the legal profession.
We find that the Practitioner's conduct:
1.fell short, to a substantial degree, of the standard of professional conduct observed or approved by members of the profession of good repute and competence; and
2.was of a kind which would be regarded as by disgraceful or dishonourable by practitioners of good repute and competence.
We also find that the Practitioner's conduct meets the statutory definitions of professional misconduct set out in s 403(1)(a) and s 403(1)(b) of the LP Act.
Grounds 4 and 5 – the C matter
Grounds 4 and 5 concern the Practitioner's dealing with the estate of the late Mr MC on instructions from Mr WC and Mr GC.
Ground 4 – the allegation
The allegation in Grounds 4 is that, from around 20 December 2016, the Practitioner engaged in professional misconduct within the meaning of s 403(1)(a), s 403 (1)(b) and s 438 of the LP Act, which conduct would also be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence and/or fell short, to a substantial degree, of the standards observed or approved by members of the profession of good repute and competence, in the course of acting for Mr WC and Mr GC (the Clients) by:
1.requesting and receiving from or on behalf of the clients into an overdraft account which was at the time in debit, the sum $4,360 which was 'trust money' within the meaning of s 205(1) of the LP Act in circumstances where the Practitioner operated no trust account, in contravention of s 214(1) and s 215(2) and s 216(1) of the LP Act;[83]
2.failing to account to the clients for the sum of $4,360.[84]
Ground 5 – The allegation
[83] The Grounds set out in the annexure to the application also alleged that this amounted to breach of s 216(1) of the LP Act but the Applicant at the hearing the Applicant informed the Tribunal that it no longer relied upon s 216 of the LP Act. See ts 70, 9 March 2023.
[84] The grounds set out in the Annexure to the application included a ground 4.2, alleging professional misconduct for invoicing the clients in circumstances where work to the value invoiced had not been performed, but that was discontinued at the hearing. See ts 67 – 68, 9 March 2023.
The allegation in Ground 5, is that from around 1 December 2016 the Practitioner engaged in professional misconduct within the meaning of s 403(1)(a) and s 438 of the LP Act which conduct fell short, to a substantial degree, of the standards observed or approved by the members of the profession of good repute and competence in the C matter, by failing to deliver legal services diligently or at all in circumstances where the Practitioner had already accepted payment for those services as set out in Ground 4.
Grounds 4 and 5 – Findings of fact
We are satisfied and make the following findings of fact in relation to Grounds 4 and 5.
Mr MC died on 15 September 2016.[85]
[85] Exhibit 2.76, ABD pages 218 – 219.
His sons, Mr WC and Mr GC, were the named executors of their father's estate in his Last Will and Testament of 3 September 2003.[86]
[86] Exhibit 2.01, ABD pages 1 – 5.
Mr WC and Mr GC engaged the Practitioner to assist with legal matters and decided to engage him to deal with their fathers' estate.[87]
[87] ts 20 – 21, 9 March 2023 and Exhibit 2.20, ABD pages 58 – 59.
By letter dated 1 December 2016,[88] the Practitioner wrote to Messrs W and GC confirming his instructions. From that letter we find that the Practitioner was engaged by Mr WC and Mr GC to do the following:
1.to act as the executor of their father's estate;
2.to obtain a grant of probate; and
3.to administer the estate.
[88] Exhibit 2.20, ABD pages 58 - 59.
Although the instructions were to obtain a grant of probate, in fact what was required was the obtaining of letters of administration. Nothing turns on the distinction.
Mr WC's evidence was, and we find, that Practitioner did not indicate either to him or his brother that he would have any difficulty in carrying out their instructions. In his evidence, Mr WC was asked 'did Mr Ginbey indicate to you that he would have any difficulties in carrying out those instructions?'[89] His answer was:
Not at all. Can I add there, as I said, Howard was our solicitor both in – in – for business and – and private, And he was always very, very efficient. A very personable man. We put him down as a – as a colleague. So no. To answer your question, not at all.
[89] ts 21, 9 March 2023.
Mr WC's evidence was, and we find, that because of the relationship his family had with the Practitioner and the trust they had in him, they asked him to nominate a price for the completion of the works which they would pay in full at the beginning of the engagement. In relation to this, Mr WC's evidence was as follows:[90]
We paid it in full with this. Again, Howard, because of his relationship with us – I don't normally do it, but because there was a trust, I told Howard Don't muck around until the end of the job". I said "Work out a price, you know, and we will pay you in full at the beginning of the job". So that's what that was about, and we paid him in full. I went halves with my brother Graeme, which, again, you have the documentation. The bank accounts show that it was a fifty-fifty deal between two brothers.
[90] ts 23, 9 March 2023.
On 20 December 2016, the Practitioner issued to Mr WC and Mr GC an invoice for the sum of $4,360 inclusive of GST.[91] The invoice was expressed to be 'for funds on account of estimated costs'. Those costs included a sum of $510 which was said to be an estimate of disbursements identified as $450 for the Supreme Court filing fee, $35 for photocopying and $25 for postages and petties. The bank details for payment were for the Firm's General Account.[92] The invoice made no mention of the Firm's General Account being an overdraft account.
[91] Exhibit 2.23, ABD page 69.
[92] The invoice does not expressly say that, but the BSB and Account number are those of the Firm's Business Account.
7.Subject to further order of the Tribunal, the issues of penalty and costs is to be determined on the papers unless by 8 March 2024 either party informs the Tribunal that they consider an oral hearing in relation to penalty and/or costs should be held.
8.If Mr WC and/or Mr GC wish to proceed with an application for compensation under s 448 of the Legal Profession Act 2008 (WA), they are to file an application with the Tribunal by 19 January 2024 and must file in the Tribunal and serve on the Respondent the application and any affidavit or affidavits addressing the issues to which the Tribunal must have regard under s 448 and s 449 of the Legal Profession Act 2008 (WA), together with any written submission on which it intends to rely.
9.If a compensation application is made, the Respondent has until 9 February 2024 to file in the Tribunal and provide to the applicant(s) for compensation any responsive material or submissions.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS
Associate to Judge Glancy
30 NOVEMBER 2023
JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL
CITATION: LEGAL SERVICES AND COMPLAINTS COMMITTEE and GINBEY [2023] WASAT 113 (S)
MEMBER: JUDGE K GLANCY, SUPPLEMENTARY PRESIDENT
MS P LE MIERE, SENIOR MEMBER
MR R POVEY, MEMBER
HEARD: DETERMINED ON THE DOCUMENTS
DELIVERED : 22 MARCH 2024
FILE NO/S: VR 80 of 2022
BETWEEN: LEGAL SERVICES AND COMPLAINTS COMMITTEE
Applicant
AND
HOWARD JOHN GINBEY
Respondent
Catchwords:
Vocational regulation - Legal practitioners - Professional misconduct - Practitioner misappropriated estate funds into personal accounts, failed to comply with notices and summonses issued by the Applicant, invoiced and received payments from clients' for work not performed, failed to operate a trust account and failed to deliver legal services diligently or at all - Penalty and costs - Report to Supreme Court with recommendation that name of practitioner be removed from roll of practitioners - Order that practitioner pay applicant's costs fixed at $18,537.59 - Compensation application by clients in the C Matter - Failure to provide required information to Tribunal - Application dismissed
Legislation:
Legal Profession Act 2008 (WA) s 403(1), s 438, s 439, s 440, s 441, s 448, s 449
State Administrative Tribunal Act 2004 (WA) s 60(2), s 87
Result:
The Tribunal to make and transmit a report to the Supreme Court (full bench) with a recommendation that the name of the practitioner be removed from the roll of persons admitted to the legal profession under the Legal Profession Act 2008 (WA)
The practitioner to pay the applicant's costs fixed at $18,537.59
Compensation application dismissed
Category: B
Representation:
Counsel:
| Applicant | : | C R Bailey |
| Respondent | : | No appearance |
Solicitors:
| Applicant | : | Legal Services and Complaints Committee |
| Respondent | : | No appearance |
Cases referred to in decision:
Khosa v Legal Profession Complaints Committee [2017] WASCA 192
Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115
Law Society of New South Wales v Sullivan [2000] NSWADT 167
Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198
Legal Profession Complaints Committee and Lourey [No 2] [2023] WASAT 77
Legal Services and Complaints Committee and Ginbey [2023] WASAT 113
Legal Services Commission v Turner [2012] VSC 394
Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S)
Medical Board of Australia and Tan [2022] WASAT 57 (S)
Motor Vehicle Industry Board and Dawson (2006) 41 SR (WA) 343; [2006] WASAT 8
Nesci-Lawrence as Executor of the Estate v Ginbey [2023] WASC 339
Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302
Rae and Prima Homes Nominees Pty Ltd [2020] WASAT 24
re HA O'Donnell (1895) 12 WN (NSW) 42
Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32
Young v Legal Profession Complaints Committee [2022] WASCA 52
REASONS FOR DECISION OF THE TRIBUNAL:
Introduction
These reasons deal primarily with the question of the penalty which we are to impose upon Mr Ginbey (Practitioner) for the professional misconduct of which we have already found him guilty[171] and with the question of costs of the disciplinary proceeding against him.
[171] Legal Services and Complaints Committee and Ginbey [2023] WASAT 113 (Liability Reasons).
They also deal with an application for compensation made by the clients in the C Matter.[172]
[172] The C Matter is dealt with in our Liability Reasons at [160] - [227].
On 14 December 2023, the State Administrative Tribunal (Tribunal) made orders reflecting the findings of professional misconduct which we reached in the Liability Reasons which were published on 30 November 2023. The explanation for the time between publishing the Liability Reasons and the making of orders in relation to liability is that, because the Practitioner had not participated in the hearing which led to the findings of professional misconduct, at the time of handing down our Liability Reasons we made orders giving him time to provide any written submissions as to the form our orders should take, and as to the orders we would make programming the matter to hearing as to penalty and costs.
The Practitioner did not avail himself of the opportunity to make submissions as to any of those matters. Nevertheless, we are satisfied that he was served with a copy of the judgment and the orders permitting him to be heard in relation to the final orders regarding liability and as to penalty and costs.[173] It would also have been apparent to him from our Liability Reasons that Mr WC and Mr GC, the clients in the C Matter, were seeking compensation under s 448 of the Legal Profession Act 2008 (WA) (LP Act).
[173] Affidavit of Graeme Robert Coates sworn 5 December 2023.
We are also satisfied that the Practitioner was served with the Applicant's Submissions on Penalty and Costs and its Minute of Proposed Orders, both of which are dated 16 February 2024, and with the affidavit of Mr Francis Hall of 15 February 2024 which was filed in support of the Applicant's costs application.[174] Accordingly, as we did with the liability aspect of the complaint, we have proceeded to determine the outstanding issues of penalty and costs and the question of compensation in the Practitioner's absence.
[174] Affidavit of Xavier Francis Hall sworn 7 March 2024.
Determination on the documents
We have determined, as we are permitted to do by s 60(2) of the State Administrative Tribunal Act 2004 (WA) (SAT Act), that it is appropriate to determine the part of the disciplinary proceeding concerned with penalty and costs on the documents.
The documents to which we have had regard are:
(i)the Applicant's submissions on Penalty and Costs dated 16 February 2024;
(ii)the Applicant's Minute of Proposed Orders dated 16 February 2024;
(iii)the affidavit of Mr Francis Hall dated 15 February 2024;
(iv)the Statutory Declaration of Mr WC made 12 January 2024;
(v)the Statutory Declaration of Mr GC made 12 January 2024.
Outcome
For the reasons set out below, we have concluded that:
(1)it is appropriate to make and transmit a report on the finding to the Supreme Court (full bench) pursuant to s 438 of the LP Act, with the report to include both a record of the evidence taken at the hearing and a recommendation that the Practitioner be removed from the local roll;
(2)it is appropriate to make an order that the Practitioner pay the Applicant's costs assessed in the sum of $18,537.59. The costs are to be paid to the Legal Practice Board within 30 days of the date of this order or in such other time as may be agreed by the parties; and
(3)the compensation application made by the clients in the C Matter should be dismissed.
Summary of findings on liability
The findings on liability are set out in the Liability Reasons. In summary, we found the Practitioner guilty of eight separate instances of professional misconduct. In seven instances, we found that the professional misconduct was of a kind that satisfied both limbs of the Kyle v Legal Practitioners' Complaints Committee[175] test and both limbs of s 403(1) of the LP Act. That is, among other things, the conduct justified a finding that he was not a fit and proper person to engage in legal practice.[176] In the case of the one remaining instance of professional misconduct, we found it satisfied the second limb of the Kyle test and s 403(1)(a) of the LP Act.[177] That is, we found it was conduct that involved a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence.
[175] Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115 (Kyle).
[176] Grounds 1 - 4, 6, 7 and 9. See Liability Reasons at [117], [141], [142], [158], [159], [207], [208], [209], [227], [249] and [271].
[177] Ground 5, see Reasons at [209].
The Practitioner's professional misconduct occurred across three separate client matters. They were the N‑N Matter, the C Matter and the Estate of Mrs P Matter. It spanned the period from 2014 to 2019.
Penalty
Applicable legislation and legal principles
While the LP Act was repealed on 1 July 2022, the effect of s 37 of the Interpretation Act 1984 (WA) is that the Tribunal retains the power to deal with this matter pursuant to the LP Act as if it has not been repealed.
Section 438(2) of the LP Act provides that if, after it has completed a hearing in relation to a referral in respect of an Australian Legal practitioner, the Tribunal is satisfied that the practitioner is guilty of unsatisfactory professional conduct or professional misconduct, the Tribunal may:
(a)make and transmit a report on the finding to the Supreme Court (full bench); or
(b)make any one or more of the orders specified in s 439, s 440 and s 441 of the LP Act.
Section 439 of the LP Act provides that the Tribunal may make the following orders:
(a)an order that the practitioner's local practising certificate be suspended for a specified period or cancelled;
(b)an order that a local practising certificate not be granted to the practitioner before the end of a specified period;
(c)an order that:
(i)specified conditions be imposed on the practitioner's practising certificate granted or to be granted under this Act;
(ii)the conditions be imposed for a specified time; and
(iii)specifies the time (if any) after which the practitioner may apply for the conditions to be amended or removed;
(d)an order publicly reprimanding the practitioner or, if there are special circumstances, privately reprimanding the practitioner.
Section 440 of the LP Act empowers the Tribunal to make orders which need to be implemented in another jurisdiction, such as an order recommending that the practitioner's name be removed from an interstate roll. That suite of possible orders is not relevant in the Practitioner's case.
Section 441 of the LP Act empowers the Tribunal to make any one or more of the following orders:
(a)an order that the practitioner pay a fine to the Board of a specified amount not exceeding $25,000;
(b)an order that the practitioner undertake and complete a specified course of further legal education;
(c)a compensation order;
(d)an order that the complainant pay the amount of legal costs in dispute or that the amount of legal costs be reduced by a specified amount (not exceeding the amount in dispute);
(e)an order that the practitioner provide specified legal services to the complainant either free of charge or at a specified cost;
(f) an order that the practitioner undertake a specified period of practice under specified supervision;
(g) an order that the practitioner do or refrain from doing something in connection with the practice of law;
(h) an order that the practitioner's practice, or the financial affairs of the practitioner or of the practitioner's practice, be conducted for a specified period in a specified way or subject to specified conditions;
(i) an order that the practitioner's practice be subject to periodic inspection for a specified period;
(j) an order that the practitioner undergo counselling or medical treatment or act in accordance with medical advice given to the practitioner;
(k) an order that the practitioner use the services of an accountant or other financial specialist in connection with the practitioner's practice;
(l) an order that the practitioner seek advice in relation to the management of the practitioner's practice from a specified person;
(m) an order that the practitioner not apply for a local practising certificate before the end of a specified period.
The purpose of disciplinary proceedings is not to punish the Practitioner but to ensure the protection of the public and the maintenance of appropriate standards within the profession and the reputation of the profession.[178] The protection of the public includes elements of personal and general deterrence.[179]
[178] Khosa v Legal Profession Complaints Committee [2017] WASCA 192 (Khosa) at [188].
[179] Khosa at [189].
Where a practitioner's conduct has undermined the reputation of the profession, denunciation of that conduct may be required in order to assure the public that departure from appropriate standards will not be countenanced.[180]
[180] Legal Services Commission v Turner [2012] VSC 394 at [24].
The question of the appropriate penalty, and of any fitness to practise for the purpose of penalty orders, is to be determined at the time of the relevant hearing and is not judged at the time of the misconduct.[181]
[181] Khosa at [195].
In determining the appropriate penalty to be imposed, the Tribunal has regard to the following non-exhaustive factors:
(1)the seriousness of the conduct;
(2)any remorse or insight shown by the practitioner;
(3)the need to protect the public from the risk of further misconduct by the practitioner;
(4)the need to ensure that appropriate standards of conduct are maintained by other members of the profession and to protect the public and maintain confidence in the profession by reinforcing professional standards and denouncing transgressions through the imposition of a penalty that serves as general deterrence;
(5)whether the practitioner's conduct can be addressed through further education;
(6)whether the conduct was isolated, such that the Tribunal can be satisfied of the practitioner's worthiness or reliability for the future;
(7)the practitioner's personal circumstances at the time of the conduct and at the time of imposing the penalty;
(8)the practitioner's prior disciplinary record;
(9)whether the practitioner breached any Act, regulations or Code of Conduct; and
(10)whether, if the practitioner is presently considered unfit to practise, the practitioner will once again become fit to practise after a period of time.
Where the Tribunal concludes that a practitioner is presently unfit to practise, a choice must be made between suspension or cancellation of a practising certificate on the one hand and striking off, on the other hand. Suspension is appropriate where the Tribunal is satisfied that, at the conclusion of the suspension period, the practitioner will no longer be unfit to practise.[182]
[182] Khosa at [191].
Where the present unfitness to practise reveals that the practitioner lacks the character and trustworthiness necessary to discharge the responsibilities of legal practice, or where the practitioner is permanently and indefinitely unfit to practise, striking off will ordinarily be the appropriate penalty.[183]
Application of factors in Practitioner's case
Remorse/insight
[183] Khosa at [192].
Where a practitioner is remorseful for their misconduct and shows insight into its impropriety, the need for personal deterrence may be diminished. Conversely, a lack of insight and remorse increases the risk of recurrence of the conduct.[184]
[184] Khosa at [193].
In this particular case, the Practitioner did not participate in the proceeding and has offered no explanation for his misconduct. Nor has he provided any evidence to suggest that he is in any way remorseful for his misconduct. In the absence of any such evidence, we proceed on the basis that there is no mitigation of penalty arising from remorse.
Seriousness
The misuse of client funds has been said to be conduct of the utmost seriousness, generally warranting striking off.[185]
[185] Legal Practitioners Complaints Committee v De Alwis [2006] WASCA 198 (De Alwis) at [105] - [110].
The failure to operate a trust account so as to ensure that client's funds were not comingled with his own funds and therefore could only be used in accordance with the client's instructions or returned to the client, was undoubtedly a serious failing. What was worse, however, was that the Practitioner retained his clients' funds without doing any significant part of the work for which he was engaged and refused to return the funds for lengthy period of time or at all despite being asked to do so.[186]
[186] As found in our Liability Reasons in the C Matter, the money was never repaid. In the N‑N Matter, a significant amount of the money was repaid after some four years and in the Estate of Mrs P Matter, the money was repaid after four years.
The failure to respond to notices and summons issued by the Applicant was also serious misconduct. We have already referred to the obligations of legal practitioners to respond to notices and summonses issued by their regulatory authority.[187] Legal practitioners are expected to uphold the law. The disregard of a statutory direction from the regulatory authority is, as was said in Law Society of New South Wales v Sullivan,[188] a prima facie indication of unfitness to practise.
Prior disciplinary history
[187] Liability Reasons at [155]. See also Legal Profession Complaints Committee and Lourey [No 2] [2023] WASAT 77 at [240] - [243].
[188] Law Society of New South Wales v Sullivan [2000] NSWADT 167 at [80].
The Practitioner has no prior disciplinary history.[189]
[189] Applicant's Submissions on Penalty and Costs dated 16 February 2024 at [30].
The Applicant says that despite that lack of disciplinary history, we ought to have regard to the fact that the Practitioner has been the subject of very serious adverse findings in Nesci-Lawrence v Ginbey.[190]The Applicant submits that the decision is relevant in that it involved the Practitioner diverting to himself an amount in excess of $1.2 million in estate funds from an estate of which he was the executor. As the Applicant itself notes, 'some caution is required in relation to that decision because it was an ex parte application for freezing orders and involved no final findings of fact'. In circumstances where the most we can say is that the Practitioner's conduct at around this time referred to in Nesci-Lawrence v Ginbey seems to have been similar to that involved in some of the misconduct which was found in this disciplinary proceeding, we have decided that it is neither necessary nor appropriate for us to take those findings into account.
Personal deterrence
[190] Nesci-Lawrence as Executor of the Estate v Ginbey [2023] WASC 339Error! Bookmark not defined..
It appears that the Practitioner no longer practises as a legal practitioner. He certainly does not have a current practising certificate.[191] If that position remains, the need for personal deterrence might be said to be reduced. However, the Practitioner remains on the roll of practitioners and we find that in the absence of any explanation for his conduct, we have no confidence that the conduct would not be repeated if he were practising. Accordingly, we consider that the penalty imposed on him for the professional misconduct involved in this matter needs to have some element of personal deterrence.
General deterrence/protection of the public and maintenance of public confidence in the profession and denouncing transgressions
[191] Witness Statement of Mary Tenant at [6].
The general deterrence which is to be achieved through the imposition of a penalty upon the Practitioner is a significant factor in this case. The use of client funds for one's own purposes is relatively easy to achieve and relatively difficult to detect. The statement of Simpson J in re HA O'Donnell,[192] which was approved of in De Alwis[193] that:
[It must be] thoroughly understood by the public and the profession that an attorney who receives money of his client and misappropriates it should not be allowed to remain a single hour the member of an honourable profession, no matter what the amount may be …
speaks to both the seriousness with which the conduct is viewed and the importance of the need to ensure that such conduct is generally deterred.
Fitness to practise
[192] re HA O'Donnell (1895) 12 WN (NSW) 42 at [43].
[193] De Alwis at [107].
We have already found that the conduct in which he engaged, when viewed in its entirety, was conduct which might justify a finding that the Practitioner is unfit to practise.
We have also already referred to the fact that the Practitioner does not currently hold a practising certificate.
We are satisfied that the Practitioner has demonstrated, by his conduct that he is not presently possessed of the personal characteristics which are required of persons entitled to practise as legal practitioners. Given that he has not offered any explanation for his conduct, we cannot be satisfied that after a period of disqualification from practice or a period of time during which he was not permitted to apply for a local practising certificate, the Practitioner would ever be found to be fit to return to legal practice.
Was the conduct isolated?
The Practitioner's conduct cannot be regarded as an isolated act of professional misconduct. It occurred over several years and involved three client matters and generally similar conduct.
Disposition
In each of the three client matters, the Practitioner's conduct involved generally similar conduct. While some of the instances of professional misconduct may individually justify the making of a referral for strike off, that must certainly be the case when they are considered in combination. In the circumstances of this case, we find that it is appropriate to impose a global penalty. That approach also addresses the fact that the reason for the conduct which was found in relation to Ground 9 is unknown to us.
In the circumstances, we have no doubt that the penalty which we consider appropriate to impose is that set out in s 438(2) of the LP Act, being the making and transmission of a report to the Supreme Court (full bench) with a recommendation that the Practitioner's name be removed from the roll of practitioners.
The appropriateness of a global penalty is reinforced in our minds by the penalty we have resolved to impose. The significance of this penalty has the result that no other penalty is required.
Given that the Practitioner does not presently hold a practising certificate, there is no need for us to make an order under s 438(3) of the LP Act.
Costs
The Applicant seeks an order pursuant to s 87(2) of SAT Act that the Practitioner pay its costs fixed in the sum of $18,537.59.
Section 87 of the SAT Act relevantly provides as follows:
(1)Unless otherwise specified in this Act, the enabling Act, or an order of the Tribunal under this section, parties bear their own costs in a proceeding of the Tribunal.
…
(3)The power of the Tribunal to make an order for the payment by a party of the costs of another party includes the power to make an order for the payment of an amount to compensate the other party for any expenses, loss, inconvenience, or embarrassment resulting from the proceeding or the matter because of which the proceeding was brought.
Principles in relation to the award of costs in regulatory proceedings in the Tribunal
The starting point in relation to any application for costs in the Tribunal is that, subject to any contrary provision in an enabling Act, the parties to proceedings bear their own costs unless the Tribunal orders otherwise.[194]
[194] SAT Act, s 87(1).
However, the Tribunal has a discretion to order a party to pay all or any of the costs of another party.
The legal rationale for an order for costs under s 87(2) of the SAT Act is that an order for costs is not to punish the person against whom the order is made, but to compensate or reimburse the person in whose favour it is made. Therefore, even in the statutory context where the presumptive position is that no costs will be ordered, the question is whether, in the particular circumstances of the case, it is fair and reasonable that a party should be reimbursed for the costs it incurred.[195]
[195] Western Australian Planning Commission v Questdale Holdings Pty Ltd [2016] WASCA 32 (Questdale) at [51] (Murphy JA, Corboy J agreeing).
In vocational regulatory proceedings, where a regulatory body is successful in obtaining relief for misconduct, unprofessional conduct or unsatisfactory professional performance by a respondent, it is common for the Tribunal to order that the respondent pay all or some of the costs of the regulatory body. However, that does not mean that costs inevitably follow the event. The onus is on the party seeking an order in its favour.[196]
[196] Questdale at [51] (Murphy JA, Corboy J agreeing).
While the Tribunal's discretion in relation to the award of costs is a wide one, it is to be exercised judiciously and not capriciously.[197]
[197] Medical Board of Australia and Tan [2022] WASAT 57 (S) (Tan) at [129].
In Young v Legal Profession Complaints Committee,[198] Buss P said:
The proper exercise of the Tribunal's discretionary power under s 87(2) of the SAT Act to make an award of costs depends, of course, upon all the circumstances of the particular case. Ordinarily, as a matter of fact, the Tribunal will make an award of costs in favour of a regulatory body which is successful in bringing a complaint of misconduct in professional disciplinary proceedings. However, in each case, the discretionary power to make an award of costs must be exercised having regard to the circumstances of the particular case.
[198] Young v Legal Profession Complaints Committee [2022] WASCA 52 at [261].
As the President, Justice Pritchard, recently observed in Medical Board of Australia and Tan,[199] when the Tribunal exercises its discretion to award costs in favour of a regulatory body, it reflects the public policy that regulatory bodies perform functions which promote the public interest, usually with limited resources, and the concern that the financial burden of bringing disciplinary action, if the regulatory body has no capacity to recover some or all of its costs, might act as a disincentive to bring such disciplinary action, or to ensure that all allegations against a practitioner are properly and thoroughly presented.
[199] Tan at [132].
In contrast, when a regulatory body is not successful in a disciplinary proceeding, it is common for the Tribunal to refuse to make an order that the regulatory body pay the costs of the respondent. Quite apart from the no costs approach in s 87(1) of the SAT Act, the Tribunal is informed by the public policy consideration that the prospect of a costs order may dissuade or inhibit regulatory bodies from commencing proceedings that should be commenced and maintained in the public interest, despite the fact that success cannot be guaranteed.
It is for that reason that the Tribunal's general approach is that 'unless it can be demonstrated that an application made by a vocational regulatory body lacked any reasonable basis or was not made in good faith, costs should not be awarded against [that body] simply because the application was not successful'.[200]
[200] Tan at [133]; citing with approval Motor Vehicle Industry Board and Dawson (2006) 41 SR (WA) 343; [2006] WASAT 8 at [47].
Considerations such as whether a party has acted unreasonably or inappropriately in its conduct of the proceedings, has conducted itself in a way that has unnecessarily prolonged the hearing or has been capricious or whether the proceedings in some way amount to an abuse of process, are factors which may give rise to an exercise of the general discretion to award costs.
Having determined that it is appropriate to make an order that one party pay some or all of another party's costs, the Tribunal must make an assessment of the costs to be paid. An assessment of costs should be approached in a broad fashion and should not descend into an inquiry into small items of expenditure.[201] Although the assessment of costs involves a relatively broad and robust approach, the Tribunal must be satisfied that the costs claimed are reasonable and necessary.[202] The Tribunal must also be satisfied that the costs claimed are not excessive.[203] Furthermore, the Tribunal must explain why an award of costs is reasonable, and if so, in what amount.
Disposition
[201] Tan at [136]; citing with approval Perth Central Holdings Pty Ltd and Doric Constructions Pty Ltd [2008] WASAT 302 at [67].
[202] Tan at [137]; citing with approval Marvelle Investments Pty Ltd and Argyle Holdings Pty Ltd [2010] WASAT 125 (S) at [48] - [49].
[203] Tan at [137]; citing with approval Rae and Prima Homes Nominees Pty Ltd [2020] WASAT 24 at [69].
Having regard to the policy considerations set out above, the fact that the Applicant made good its allegations that the Practitioner engaged in professional misconduct in his dealings with the three sets of clients and our view that there was nothing in the Applicant's conduct of the proceedings that we regard to have been unreasonable or which in our view unnecessarily delayed the resolution of this matter, we are satisfied that it is appropriate that the Practitioner should be ordered to pay the Applicant's reasonable costs of the proceeding.
As to the amount of costs claimed, the Applicant is entitled to recover the costs of its employed solicitors at scale. The Applicant submitted that it is content for the Tribunal to determine and fix a reasonable amount based on the modest amounts claimed in its submissions, and identified in the affidavit of Mr Francis Hall affirmed on 15 February 2024.
The disbursements incurred are deposed to in Mr Hall's affidavit. They total the sum of $1,356.69 for filing fees and the engagement of process servers. We are satisfied that the respondent should pay those disbursements.
The Applicant seeks costs of $8,558 for the costs of a senior practitioner attending two directions hearings and for one day's preparation for and one day's attendance at the hearing of this matter at scale rates. We are satisfied that those costs are reasonable and ought to be paid by the Practitioner.
The Applicant also seeks costs in the amount of $8,622.90 for the general conduct of the matter. That encompasses the costs involved in the drafting of the application itself, drafting of written submissions on penalty, the preparation of affidavits and witness statements and the proofing and corresponding with witnesses and summonsing witnesses and the preparation of the bundle of documents used at the hearing. All that work, bar the preparation of an affidavit in support of the submissions on costs and penalty was said to have been undertaken by a senior practitioner and is charged at the costs of $429 per hour. The Applicant also seeks the cost of the preparation of the affidavit at the junior practitioner rate of $341 per hour. Taking a broad-brush approach to the matter, we are satisfied that the work undertaken was reasonable and the costs associated with it are also reasonable bearing in mind the complexity of the matter.
Accordingly, we will make an order that the Practitioner pay the Applicant's costs of the proceedings in the amount of $18,537.59.
Compensation application
On 14 December 2023, we ordered the clients in the C Matter to file and serve an application for compensation under s 448 of the LP Act and any affidavit or affidavits addressing the issues to which the Tribunal must have regard under s 448 and s 449 of the LP Act together with any submissions upon which they intend to rely if they wished to proceed with the application for compensation which had been made orally by Mr WC in the course of the liability hearing.
We did so because:
(i)only Mr WC had given evidence and indicated he wanted compensation but he had only paid half of the amount paid to the Practitioner in connection with the C Matter. We wanted to ascertain whether his brother, Mr GC, also wished to seek compensation;
(ii)we were of the view that a separate application for compensation needed to be made; and
(iii)we needed to be satisfied that the prerequisite to the making of a compensation order identified in s 449 of the LP Act had been met in this case.
Mr WC and Mr GC each filed a statutory declaration in identical terms. They state that they are seeking 'the maximum compensation under s 448 of the LP Act as compensation for hundreds of hours of lost time and personal stress in locating the only will and testament to finalise our late father's estate'.
It appears that the declaration was witnessed by a family member. That is something which is to be avoided but not fatal to the making of the declaration.
The making of a statutory declaration is not the appropriate way to make a compensation application. It should have been lodged in the proper form. Despite that, we are prepared to treat the statutory declaration as a formal application for compensation given Mr WC and Mr GC are not lawyers.
However, there is no evidence before us to indicate that the statutory declarations were served on the Practitioner as required by our orders. Consequently, the Practitioner may be unaware that the compensation application foreshadowed in the hearing and our orders of 14 December 2023 was being made.
Additionally, neither Mr WC or Mr GC have addressed in their statutory declarations the question of whether they have received or are entitled to receive:
(a)compensation under an order that has been made by a court; or
(b)compensation from the Guarantee Fund or from a fidelity fund of any jurisdiction; or
(c)whether they have made a claim for compensation from the Guarantee Fund or any fidelity fund.
Those are matters to which the Tribunal must have regard under s 449 of the LP Act because a compensation order cannot be made in respect of any loss for which the applicant has received or is entitled to receive:
(a)compensation received or receivable under an order that has been made by a court; or
(b)compensation paid or payable from the Guarantee Fund or from a fidelity fund of any jurisdiction, where a relevant claim for payment from the fund has been made or determined.
Given that Mr WC and Mr GC were specifically directed to those issues in our Liability Reasons and in the orders, we think it appropriate to bring an end to this matter by dismissing the application on the basis that we are not satisfied that the preconditions to the making of a compensation claim have been met.
We understand the frustration that this decision may cause Mr WC and Mr GC. However, we note that our decision to refuse the application would not itself preclude them from making an application to the Guarantee Fund.
Orders
As a consequence of the findings which we have made above, we will make the following orders:
The Tribunal orders:
1.Pursuant to s 438(2)(a) and s 438(2)(b) of the Legal Profession Act 2008 (WA), the Tribunal is to make and transmit a report to the Supreme Court (full bench) with:
(a)a record of the evidence taken at the hearing; and
(b)a recommendation that the name of the Practitioner be removed from the roll of practitioners.
2.Pursuant to s 87(2) of the State Administrative Tribunal Act 2004 (WA), the Practitioner pay the Applicant's costs fixed in the sum of $18,537.59, such costs to be paid to the Legal Practice Board within 30 days of this order or as otherwise agreed between the parties.
3.The application for compensation under s 448 of the Legal Practitioner's Act 2008 (WA) made by Mr WC and Mr GC are dismissed.
I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.
MS
Associate to the Honourable Justice Glancy
22 MARCH 2024
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