Legal Services Commissioner v Flynn

[2007] NSWADT 186

CITATION:	Legal Services Commissioner v Flynn [2007] NSWADT 186
DIVISION:	Legal Services Division
PARTIES:	APPLICANT Legal Services Commissioner RESPONDENT Mark Joseph Flynn
FILE NUMBER:	072008
HEARING DATES:	16 July 2007
SUBMISSIONS CLOSED:	16 July 2007
EXTEMPORE DECISION DATE:	16 July 2007
DATE OF DECISION:	17 August 2007
BEFORE:	Clisdell RJ - Judicial Member; Pheils J - Judicial Member; Hayes E - Non Judicial Member
CATCHWORDS:	Solicitor – Disciplinary application
MATTER FOR DECISION:	Principal matter
LEGISLATION CITED:	Legal Profession Act 2004
CASES CITED:	Law Society of NSW v Byrne [2000] NSWADT 20 Law Society of NSW v Andreone [1999] NSWADT 14 Law Society of NSW v Sui Kay Michael Lee [2005] NSWADT 242
REPRESENTATION:	APPLICANT L Muston, solicitor RESPONDENT G Bellew, SC
ORDERS:	1. That the Solicitor be publicly reprimanded.; 2. That the Solicitor pay a fine of $4,000.00 within 3 months from the date of publication of these reasons and in default of payment that the solicitor’s practicing certificate be suspended until the fine is paid.; 3. That the Solicitor pay the costs of the Legal Services Commissioner in the agreed sum of $2,500.00.

1 This application is brought by the Legal Services Commissioner (“the Commissioner”) against Mark Joseph Flynn (“the Solicitor”) who was admitted as a practitioner on 19 December 1986.

2 The application filed on 9 March 2007 alleged that the Solicitor:

a) Ground 1 - falsely attested documents not signed in his presence;

b) Ground 2 - accepted a Real Property Act transfer as the solicitor for the transferee when the transferee was not his client and he did not have the authority of the transferee to accept the transfer;

c) Ground 3 - acted in a conflict of interests;

d) Ground 4 - appropriated, in satisfaction of costs and disbursements, monies held on trust for his client without her effective authority to do so.

3 The application filed by the Commissioner stated four grounds of complaint as set out above. The particulars of complaint were as follows: -

Ground 1.

4 On 14 May 2002 the Solicitor received instructions to seek transfer of files from Hyczka Partners to the Solicitor’s firm in respect of Ms Tredrea. On 15 May 2002 the Solicitor prepared an authority for the file transfer to be signed by Ms Tredrea. On or about 17 June 2002 the Solicitor had a conference with Ms Tredrea at her home in Ballina. Her daughter Mrs Tower was present at that conference. Certain instructions were given to the Solicitor to prepare documents that day. On 21 June 2002, the Solicitor received instructions which differed from those given on 17 June 2002 and in accordance with advice received that day, prepared a revised Will, Power of Attorney appointing Mrs Tower as Attorney and an appointment of Enduring Guardian appointing Mrs. Tower as guardian.

5 On 26 June 2002 the Solicitor forwarded the appointment of guardian and power of attorney to Ms Tredrea by fax to an address in Innisfail in Queensland.

6 Those documents were executed by Ms Tredrea and Mrs Tower and purported to be witnessed by the Solicitor. The Solicitor conceded that he was not in Innisfail on 26 June 2002 and did not witness Ms Tredrea’s or Mrs Tower’s signatures on that day.

Ground 2

7 At all relevant times the Solicitor was acting for Ms Tredrea and not Mr or Mrs Tower. On 13 August 2002, the Solicitor was contacted by Mr Tower and asked to prepare a Transfer of Ms Tredrea’s property in Ballina to Mrs Tower. On 16 August 2002 the Transfer was dated and the Respondent accepted the Transfer on Mrs Tower’s behalf when she was not his client. On 20 August 2002 the Solicitor wrote to Ms Tredrea confirming that the Transfer had been registered. On 30 August 2002 the Solicitor wrote to Mrs Tower enclosing a copy of the title deed registered in her name.

Ground 3

8 On 2 May 2003 the Guardianship Tribunal in NSW issued an Interim Financial Management Order over Ms Tredrea’s Estate appointing the Protective Commissioner to manage her affairs.

9 On 8 July 2003 the Protective Commissioner lodged on Ms Tredrea’s behalf a caveat over Ms Tredrea’s beneficial Interest in the property that had been transferred to Mrs Tower.

10 On 21 July 2003 the Guardianship Tribunal made final orders in the same terms as the Interim Orders.

11 On 5 August 2003 the Respondent met with Mr Tower who instructed him to advise on the prospects of having the Caveat removed. Between 5 August and 20 August 2003 the Respondent briefed Mr Roger Marshall of Counsel to advise as to the prospects of success in having the Caveat removed. On 1 September 2003 the Solicitor provided and advice to this effect to Mr Tower. In doing so, the Solicitor was acting contrary to the interests of his client Ms Tredrea.

Ground 4

12 The Solicitor was made aware of the Interim Orders made by the Guardianship Tribunal on 2 May 2003 by his employed Solicitor Mr Perkins. On 20 May 2003 the Solicitor sent Ms Tredrea an Interim Tax Invoice for work undertaken to date which enclosed an authority for monies held on trust to be used to satisfy the amount claimed I the Tax Invoice. The signed authority was returned to the Solicitor on the 2 June 2003. The Solicitor paid his Invoice out of trust monies held on Ms Tredrea’s behalf. In the light of the Interim Orders made by the Guardianship Tribunal, the Respondent had no authority to appropriate Ms Tredrea’s Trust monies.

13 By a reply filed on 11 May 2007, the Solicitor admitted each of the grounds and the particulars alleged.

14 The Commissioner relied on an Affidavit sworn by Stephen Anthony Mark of 9 March 2007. That Affidavit had attached to it a large number of documents including lengthy excerpts from the transcript of proceedings between the Protective Commissioner and Leonie Tower, which were conducted in the Supreme Court before Justice Barrett. The Solicitor gave evidence in those proceedings and it is transcripts of the evidence given by the Solicitor that are annexed to Mr Marks’ Affidavit.

15 The Solicitor made full and frank admissions in the course of his evidence in the Supreme Court of the conduct, which is before the Tribunal in these proceedings. To the Solicitor’s credit, he has always accepted that his conduct was wrong and he has not made any effort to deny those factual matters.

16 Somewhat unusually, the matter proceeded before the Tribunal on the basis of Affidavits filed on behalf of the Commissioner and the Solicitor. No one was required for cross-examination. So far as it is possible in these types of proceedings, this matter proceeded in a fashion similar to a guilty plea in Court with the only issue of contention between the parties being whether or not the conduct of the Solicitor was in all the circumstances professional misconduct or unsatisfactory professional conduct. The other matters dealt with in the submission went to the issue of penalty.

17 The Solicitor relied on an Affidavit filed by himself and a number of supporting Affidavits. The Solicitor’s Affidavit of 16 July set out general personal background and education details together with his professional background. The Solicitor dealt with the Tredrea proceedings at paragraphs 26 to 33 of his Affidavit. The Commissioner did not take issue with any of the matters raised in the Solicitor’s Affidavit, nor in any of the Affidavits filed on his behalf.

18 By way of explanation, but not excuse, the solicitor deposed in his Affidavit about problems that had arisen in his practice and personal problems that were affecting him at the time these events took place. In paragraph 31 the Solicitor says “my singular focus, perhaps obsessively so, became to acquire and process as much work as possible. It was at this point that I began to be absent from the office on a more regular basis as a result of taking instructions from all over Australia and, although I found that my levels of stress were increasing significantly, I thought I could simply work through it. It was in these circumstances that I committed the various acts which are the subject of the current proceedings; I do not seek to excuse the conduct on this basis but merely hope to explain some of this background.”

19 The Solicitor had earlier in his Affidavit referred to a complex case in the District Court at Lismore, which ultimately was lost. The Solicitor had funded the case on behalf of the client for more than $100,000.00 and in addition to the lost professional fees, he was also out of pocket to that extent. As a result of his financial pressures, he began attempting to accept more and more work. The Solicitor’s practice was primarily one dealing with civil liability and his practice was adversely affected by the changes to the law in 2002.

20 The Solicitor further deposed in paragraph 32. about his health problems as a result of increasing stress and anxiety. He said, “despite increasing stress and anxiety, I had convinced myself that I remained able to properly service my clients, despite an obviously increasing workload. It was not until August 2006 that I confronted the issue and obtained medical help. I initially consulted Peter Stoker, a Psychologist in Brisbane, following which I consulted Dr. Chris Jambor, a General Practitioner in Ballina. He referred me to Dr. Mark Scurrah, a Psychiatrist in Bangalow.” Despite seeking medical help, the Solicitor further deposed that he felt overwhelmed and unable to conduct his practice. The stress and anxiety also placed a strain on his marriage.

21 The Tribunal was provided with evidence of the medical assistance the Solicitor had sought including a report from Peter Stoker dated 3 July 2007, a confirmation from Dr Scurrah that he was treating the Solicitor and a report from Dr Jambor dated 7 July 2007.

22 The Solicitor also relied on a number of Affidavits as to his character filed in the proceedings. The Affidavits were from

Clement Anthony Guy, a Solicitor.

Terrance John Willis, a Barrister.

John Hamilton Maxwell, a Solicitor.

Ian Malcolm Lord, a Solicitor.

David ter Hedde, an Accountant.

23 Mr Guy had known the Solicitor since he was ten years of age and spoke very highly of him. He had in effect been the Solicitor’s first employer and deposed that he had no hesitation in saying that the misconduct of the Solicitor was completely out of character.

24 Mr Willis was the Barrister in the case referred to by the Solicitor in his Affidavit, which was conducted in the District Court at Lismore. The Barrister has known the Solicitor since 1999 and confirmed the extreme stress of that case. He also noticed a change in the Solicitor’s conduct and behaviour over the years that he had known him. He concluded by saying “whilst I obviously do not condone the behaviour which has lead to the Respondent’s appearance before the Tribunal, I can assure the Tribunal, from my conversations with him, that he is extremely remorseful for what happened. It was a culmination of events that he recognizes should have been controlled and managed by him but were not. I can assure the Tribunal that he has thought long and hard about the possible consequences of his actions and that, if given the opportunity, he will not offend again”.

25 John Maxwell and Ian Lord are Solicitors practicing in the Lismore/Ballina area and both know the Solicitor very well. Although they might be referred to as his opposition, both Mr Maxwell and Mr Lord spoke highly of the Solicitor and concluded that the behaviour that lead to him appearing before the Tribunal was out of character.

26 Mr ter Hedde is an Accountant at Armidale. He and the Solicitor have had a relationship where each have been clients of the other and charged each other appropriate professional fees. Mr ter Hedde deposed that he would be continuing to engage Mr Flynn as his Solicitor and would continue to refer clients, friends and relatives to him, notwithstanding the current case of misconduct. He had no hesitation in stating that the case was an aberration of character.

27 The Solicitor also relied on an Affidavit from his wife Carolyn Flynn. Mrs Flynn deposed about the stresses that the Solicitor had been subject to, that he was working at least seventy-six hours each week and sometimes was sleeping only four hours a night. She said that there had been a strain on their marriage but she would continue to support the Solicitor.

28 As the result of these proceedings and the medical assistance that the Solicitor has sought, he said in paragraph 38 of his Affidavit that he would no longer accept referrals of work from persons who reside outside of the far north coast of NSW or southeast Queensland area. This will significantly limit his workload and allow him to spend time in the office, also reducing the amount of time he will have to spend in the office on weekends. He has also agreed to delegate more work to his employed Solicitor Mr Perkins and to streamline the performance and delegation of paralegal/secretarial work.

Submissions on behalf of the Solicitor

29 Mr Bellew on behalf of the Solicitor made it clear from the outset that the Solicitor was not offering any excuses for his behaviour, merely explanations. He categorized the Solicitor’s conduct as unsatisfactory professional conduct and indicated that the Solicitor did not oppose the imposition of a fine but that he would be seeking a private rather than public reprimand.

30 Mr Bellew submitted that the proper approach on penalty was a four step one. The first step was to look at the entirety of the conduct including the circumstances of the Respondent’s personal life and practice in the years 2002 and 2003. Secondly we should look at the background of the Solicitor’s reputation and reach a conclusion as to where his conduct sits in the level of seriousness. Thirdly, look at the steps that the Solicitor has taken to address the issues that gave rise to the conduct and fourthly, we should have regard to subjective factors.

31 In addressing those issues Mr Bellew submitted that the four allegations should really be treated as one as they all arise from the same set of circumstances, that is the Solicitor acting for Ms Tredrea. Mr Bellew submitted that the conduct was objectively serious, but there was no conscious dishonesty in anything the Solicitor did. In respect of ground 4, this was a technical breach and that the Solicitor was not acting in any way dishonestly. Accordingly these were matters of unsatisfactory professional conduct, rather than misconduct. He submitted that it was clear on the evidence that the Solicitor was motivated by a misguided desire to help everyone and that the Solicitor would put clients first even over his own family. His motivation may have been misguided and wrong, but it was done with the best of intentions. He also referred to the Tribunal to the personal tragedies in the life of Mr Flynn, in particular the suicide death of Mr Flynn’s father in 1995 and the serious health problems of the Solicitor’s son. It was quite clear that when Mr Bellew raised these matters (which were set out in Mr Flynn’s affidavit), that Mr Flynn was visibly upset by those references. Mr Bellew’s submission that the Solicitor is still traumatised by those events was noted and accepted by the Tribunal.

32 In respect of the second issue, Mr Bellew submitted that the Solicitor was otherwise a practitioner of outstanding character and honesty. The Tribunal accepts that the character evidence on behalf of the Solicitor was compelling and to his credit.

33 On the third matter to be taken into account, Mr Bellew submitted that the Solicitor had taken significant steps to ensure that this type of conduct will not occur again. Firstly, he had sought professional help, and is continuing to undergo that professional help with a favourable prognosis. Secondly, he has now taken steps to decrease his workload. He submitted that the rehabilitation process that the Solicitor had undertaken was well underway.

34 Fourthly, Mr Bellew looked at the subjective factors. The Solicitor had accepted that his behaviour was wrong from day one. That is clear from the evidence that he gave in the Supreme Court. It was also submitted that in assessing the penalty, we should take account of what happens in criminal cases where people plead guilty and that there should be a significant discount as a result of his genuine remorse and contrition. It was clear from a number of the character Affidavits that the Solicitor was both repentant and remorseful.

35 Finally, Mr Bellew referred to the significant financial penalty that the Solicitor had already paid as a result of the action taken against him by the Protective Commissioner for recovery of their costs in the Supreme Court proceedings. The Solicitor’s evidence in his Affidavit was that he had paid some $63,000 to the Protective Commissioner in respect of those costs.

36 Mr Bellow submitted that the Solicitor was unlikely to offend again and that there was no need for public protection. Accordingly he submitted that a private reprimand would be appropriate. To assist in determining the fine he referred the Tribunal to the cases of Law Society of NSW v Byrnes [2000] NSW ADT 20 and Law Society of NSW v Andreone [1999] NSW ADT 14. In both of those cases, the conduct was far more serious than that of Mr Flynn.

Submissions on behalf of the Commissioner

37 On behalf of the Commissioner, Ms Muston did not disagree with the approach taken by Mr Bellew but submitted that this was more than one instance of misjudgement. She submitted that there were four specific instances of conduct, which could be classified as follows:

In respect of grounds 2 and 4 – the conduct was unsatisfactory professional conduct and

In respect of allegations 1 and 3 the conduct was professional misconduct.

38 As to the submission on behalf of the Solicitor that there was no conscious dishonesty, Ms Muston submitted that, bearing in mind what is required to be certified on a Power of Attorney and a Guardianship document, that the witnessing of a document in that fashion is of itself dishonest. In any event, if there was no conscious dishonesty, it amounted to reckless indifference and that of itself would be the grounds for finding of professional misconduct.

39 On the question of a reprimand, Ms Muston submitted that it should be a public reprimand and referred the tribunal to the case of the Law Society of NSW v SuiKay Michael Lee [2005] NSWADT 242 determined on 28 September 2005. She submitted that the reprimand must be published, as there were no special circumstances to warrant a private reprimand. She further submitted that under the new Act, it was probably not open to the Tribunal to issue a private reprimand. The Tribunal agrees that a private reprimand is no longer available under the new Act.

40 On the question of a fine, Ms Muston agreed that the Solicitor’s behaviour was not at the upper end of the scale but at the lower to middle end.

Findings

41 The Tribunal took into account the submissions of both Mr Bellew and Ms Muston. Notwithstanding the Commissioner’s submission that ground 4 was only unsatisfactory professional conduct, the Tribunal is of the view that although the Solicitor’s conduct may have been technical (and in that respect both Mr Bellew and Ms Muston conceded that ground 4 was a technical breach), because it is a breach of the trust account regulations, it amounts to statutory misconduct, albeit at the absolute bottom end of the scale. Accordingly the Tribunal made the following findings –

In respect of Grounds 1 3 & 4 – the Solicitor was guilty of professional misconduct.

In respect of Ground 2 - the Solicitor was guilty of unsatisfactory professional conduct.

42 Although the Tribunal has found three grounds of professional misconduct, this was not a case where the Commissioner sought any protective order by way of striking off or suspension. The Tribunal agrees that the penalties proposed by the Commissioner in respect of the conduct of Mr Flynn are appropriate. The Tribunal was satisfied that Mr Flynn clearly recognised the error of his conduct and at no time has sought to cover up or deny what he had done. That is to the Solicitor’s credit.

43 The Tribunal is satisfied on the basis of the character evidence tendered on behalf of the Solicitor that he is otherwise a competent, honest and diligent practitioner. The Tribunal accepts that his behaviour on this occasion was out of character. The Tribunal further notes that the Solicitor at the time the conduct took place was almost certainly suffering from an undiagnosed depressive illness and was working extremely long hours under considerable stress and anxiety. Again the Tribunal does not excuse his behaviour because of those factors but accepts that they are an explanation, which the Tribunal can take into account, particularly in relation to the penalty being imposed. Finally, the Tribunal is of the view that the Solicitor’s contrition was genuine and a discount should apply to the fine to be imposed by the Tribunal.

44 Accordingly the Tribunal makes the following orders:

1. That the Solicitor be publicly reprimanded.

2. That the Solicitor pay a fine of $4,000.00 within 3 months from the date of publication of these reasons and in default of payment that the solicitor’s practicing certificate be suspended until the fine is paid.

3. That the Solicitor pay the costs of the Legal Services Commissioner in the agreed sum of $2,500.00.