Legal Services Commissioner v Tsalidis
[2012] NSWADT 160
•08 August 2012
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Legal Services Commissioner v Tsalidis [2012] NSWADT 160 Hearing dates: 7 June 2012 Decision date: 08 August 2012 Jurisdiction: Legal Services Division Before: M Chesterman, Deputy President
M Riordan, Judicial Member
C Bennett, Non-judicial MemberDecision: 1. The Respondent is guilty of professional misconduct under Ground 1.
2. The claim of professional misconduct under Ground 2 is dismissed.
3. A further hearing on the question of consequential orders is to take place in conjunction with a hearing, on a date to be fixed, relating to two disciplinary applications (files 112028 and 122013) that the Council of the Law Society of New South Wales has instituted in the Tribunal against the Respondent.
Catchwords: Solicitor - disciplinary proceedings - failure to comply with statutory notice requiring information and documents - whether notice served for purpose of 'complaint investigation' Legislation Cited: Legal Profession Act 1987
Legal Profession Act 2004
Legal Profession Rules 2005Cases Cited: Gridiger v Council of the Law Society of NSW [1999] NSWSC 904
Law Society of New South Wales v Konstantinidis [1999] NSWADT 109
Law Society of New South Wales v McGrath [2000] NSWADT 45Category: Principal judgment Parties: Legal Services Commissioner (Applicant)
Charles Kiriakos Tsalidis (Respondent)Representation: Counsel
P Kintominas (Respondent)
A Matalani (Applicant)
File Number(s): 112024
decision
Introduction
On 2 September 2011, the Legal Services Commissioner ('the Commissioner') filed an Application in the Tribunal alleging that the Respondent, Charles Kiriakos Tsalidis ('the Practitioner'), had engaged in professional misconduct on two Grounds. Each of them was to the effect that, without reasonable excuse, he had failed to respond to a Notice issued in writing pursuant to section 660(1) of the Legal Profession Act 2004 (hereafter 'the Act'). The dates of the two Notices were respectively 29 September 2010 and 2 December 2010. Particulars were supplied in relation to each Ground.
The orders sought by the Commissioner were formulated in the Application as follows:-
A finding that the Respondent is guilty of professional misconduct.
1. In the alternative, a finding that the Respondent is guilty of unsatisfactory professional conduct.
2. Order that the Respondent's name be removed from the roll of practitioners.
3. Further, and in the alternative, order that the respondent be publicly reprimanded.
4. In the alternative, order that the Respondent be fined.
5. Order that the Respondent pay the costs of and incidental to the filing and hearing of the Information (sic).
6. Such other orders as the Tribunal sees fit (sic).
Also on 2 September 2011, an affidavit sworn on 30 August 2011 by Mr Steven Mark, who occupies the position of Commissioner, was filed.
The Practitioner did not file a Reply.
At the hearing of this matter on 7 June 2012, Mr Matalani appeared for the Commissioner and Mr Kintominas for the Practitioner. At this hearing, we also dealt with proceedings of a similar nature that the Council of the Law Society of New South Wales had commenced against the Practitioner.
We indicated that at this stage we would go no further than to receive evidence and submissions on the question whether the Practitioner had engaged in professional misconduct, or in the alternative unsatisfactory professional conduct, as alleged in the Application. The question of what consequential orders, if any, would be required would be deferred to a later hearing.
The Commissioner's affidavit was tendered and admitted. The Practitioner did not tender any evidence relating to the matters being dealt with at the hearing.
Annexed to the Commissioner's affidavit was a certificate of the Legal Practitioners Admission Board stating that the Practitioner had been admitted as a Solicitor of the Supreme Court on 22 December 1982 and that his name remained on the Roll of Local Lawyers.
Mr Kintominas advised us that the Practitioner did not oppose a finding of professional misconduct on Ground 1, but that he did oppose such a finding on Ground 2. In so doing, he relied on aspects of the documentary evidence annexed to the Commissioner's affidavit.
We may therefore deal briefly with Ground 1, while Ground 2 requires more extended discussion.
Ground 1: Failure to respond to Notice dated 29 September 2010
In summary, the Particulars to Ground 1 alleged as follows: (a) on 24 March 2010, Mr Graham Carlon lodged a complaint against the Practitioner at the Office of the Commissioner; (b) on 28 May and 1 June 2010, the Practitioner provided initial responses to this complaint; (c) the Practitioner did not respond, however, to a letter dated 9 July 2010, in which the Commissioner had requested further information, or to a letter dated 9 August 2010 in which the Commissioner repeated this request; (d) on 29 September 2010, the Commissioner issued a Notice under section 660 of the Act ('the First Notice') requiring a response from the Practitioner by 5 p.m. on 15 October 2010; (e) on 5 October 2010, this Notice, together with a covering letter, was served personally on the Practitioner; (f) the Practitioner failed, without reasonable excuse, to respond to the Notice; (g) in letters dated 18 November 2010 and 13 January 2011, the Commissioner asked the Practitioner for his reasons for failing to comply with it; and (h) as at the date of filing of the Application, the Practitioner had not communicated further with the Commissioner.
The Particulars also stated that in a decision delivered by the Tribunal on 14 December 2010 (Council of the Law Society of NSW v Tsalidis (No 2) [2010] NSWADT 297), the Practitioner was reprimanded and fined $4,000 for failing, without reasonable excuse, to comply with a Notice issued by the Law Society pursuant to section 660(1) of the Act.
The provisions of the Act pertaining specifically to Ground 1 form part of sections 660 and 676. They state:-
660 Requirements in relation to complaint investigations
(1) For the purpose of carrying out a complaint investigation in relation to an Australian lawyer, an investigator may, by notice served on the lawyer, require the lawyer to do any one or more of the following:
(a) to produce, at a specified time and place, any specified document (or a copy of the document),
(b) to provide written information on or before a specified date (verified by statutory declaration if the requirement so states),
(c) to otherwise assist in, or co-operate with, the investigation of the complaint in a specified manner.
(3) A person who is subject to a requirement under subsection (1) or (2) must comply with the requirement.
Maximum penalty: 50 penalty units.
(4) A requirement imposed on a person under this section is to be notified in writing to the person and is to specify a reasonable time for compliance.
676 Obligation of Australian lawyers
(3) An Australian lawyer who is subject to:
(a) a requirement under section 660 (Requirements in relation to complaint investigations), or
(b) a requirement under provisions of a corresponding law that correspond to that section,
must not, without reasonable excuse, fail to comply with the requirement.
(4) An Australian lawyer who contravenes subsection (2) or (3) is guilty of professional misconduct.
The documents annexed to the Commissioner's affidavit show that the complaint made by Mr Graham Carlon to the Commissioner concerned the Practitioner's discharge of his duties as a solicitor in administering the estate of the late Claude Carlon. This was the topic of a letter from the Commissioner to the Practitioner on 1 April 2010 and of the Practitioner's responses dated 28 May and 1 June 2010. The Commissioner, in his letter of 9 July 2010, set out nine questions relating to this matter, three of which were accompanied by requests to produce relevant documents, and sought a response within 14 days. In his letter of 9 August 2010, he repeated his request for a response to the preceding letter.
In the First Notice, the information sought by the Commissioner was the Practitioner's response to the nine questions set out in the Commissioner's letter of 9 July 2010. The Notice also required production of the documents identified in that letter.
As stated in the Particulars, the First Notice was served on the Practitioner on 5 October 2010. It required his response by 5 p.m. on 15 October 2010.
As also stated in the Particulars, the Practitioner did not comply with the Notice within the period stipulated. He also did not respond to the Commissioner's letters dated 18 November 2010 and 13 January 2011 asking for his reasons for failing to comply.
On 30 August 2011, the Commissioner made a complaint under section 504 of the Act relating to the Practitioner's failure to comply with the First Notice.
Mr Matalani advised us at the hearing that on 2 April 2012 the Practitioner complied with this Notice.
Having regard to this evidence, and to the absence of any evidence from the Practitioner regarding these matters, we make the following findings. The First Notice was served on the Practitioner for the purpose of carrying out a 'complaint investigation' relating to the complaint made against him by Mr Carlon. Since the requirements that it imposed upon him to provide information and produce documents had been communicated to him nearly three months earlier, in the Commissioner's letter of 9 July 2010, the time specified in this Notice for compliance - a period of ten days - was 'reasonable' in the circumstances. The Practitioner failed to comply with the Notice. There is no evidence of matters that might constitute a reasonable excuse for his non-compliance.
It follows that the Practitioner contravened subsection (3)(a) of section 676 of the Act and was guilty of professional misconduct under subsection (4) of this section.
We add the following observation. Both this Notice and the notice under section 660 to which Ground 2 related (hereafter 'the Second Notice') nominated a specific time and day as the deadline for compliance. This created a risk that service might occur too late to permit a finding that the period of time allowed for compliance was 'reasonable'. This risk may be averted by requiring compliance by the recipient within a specified period after the notice has been served. In determining the length of this period, account should be taken of the amount of time that the recipient is likely to need in order to comply fully.
The matters alleged in Ground 2
Ground 2 of the Application was formulated in the following terms:-
The practitioner, without reasonable excuse, failed to respond to a Notice dated 2 December 2010 and issued in writing pursuant to section 660(1) of the Legal Profession Act 2004.
The Particulars to this Ground, as amended in one minor respect at the hearing, were as follows:-
2.1 Ms Manuela Cid lodged a complaint by email on 13 October 2009.
2.2 The practitioner responded to this complaint on 11 November 2009 and 15 February 2010.
2.3 Further allegations in relation to the practitioner's conduct were made on 17 May 2010.
2.4 The practitioner responded by letter dated 4 June 2010.
2.5 The complaint related to a probate matter arising from the death of the brother of the complainant who died in Australia on 23 April 2009.
2.6 As a result of the delay in dealing with the estate, by letter dated 22 June 2010, the OLSC sought from the practitioner monthly progress reports.
2.7 By letter dated 6 September 2010, the OLSC sought further information within 14 days, as well as monthly progress reports from the practitioner.
2.8 The original of the letter dated 6 September 2010 was resent to the practitioner on 13 September 2010, having been returned to the OLSC because the practitioner's DX had been closed.
2.9 The letter from the OLSC to the practitioner dated 13 September 2010 extended the time for a response to 27 September 2010.
2.10 In the absence of a response from the practitioner, the Commissioner issued a Notice pursuant to section 660(1) of the Legal Profession Act requiring a response by 5.00 pm on 24 December 2010.
2.11 That Notice along with a covering letter was personally served on the Practitioner on 13 December 2010
2.12 By letter dated 15 December 2010 the practitioner provided some information in response to that Notice but did not provide all the information sought. Monthly reports for July, August, September, October and November in relation to the progress of the estate were not provided.
2.13 By letter dated 13 January 2011, the OLSC asked the practitioner for his reasons for failing to comply fully with the Notice.
2.14 As at the date of filing of this Application, the practitioner has not communicated further with the OLSC.
Mr Matalani advised us at the hearing that on 1 May 2012 the Practitioner complied with the Second Notice. Mr Kintominas stated that the Practitioner had complied without prejudice to his right to argue, as indeed he did at the hearing, that the Commissioner did not have jurisdiction to supervise or investigate his conduct in his capacity as an executor administering the estate of the late Mr Cid (hereafter 'the Estate').
The evidence relating to Ground 2
The documents annexed to the Commissioner's affidavit demonstrated the following matters.
Ms Cid's complaint, made in an email dated 13 October 2009, stated as follows: (a) the Practitioner had been appointed as sole executor and trustee of the will of her late brother, Mr Severino Cid, under his will dated 10 February 2005; (b) Mr Cid died in Australia on 23 April 2005 (it was agreed at the hearing that this date was in fact 23 April 2009); (c) her attempt to repatriate his body to Spain had been 'fruitless' because the Practitioner had not given the requisite approval; (d) she 'begged' the Commissioner to 'urge' the Practitioner to 'accelerate' this process; and (e) the Spanish consulate in Sydney had put her in touch with a lawyer, Ms Adriana Navarro, who spoke Spanish. Attached to Ms Cid's complaint was the will of the late Mr Cid.
On 14 October 2009, following a telephone conversation on that day between Mr Jim Milne, an Assistant Commissioner in the Office of the Legal Services Commissioner, and Ms Adriana Navarro, of Navarro & Associates (hereafter 'Navarro'), Navarro sent various documents to the Commissioner. These included a copy of a Direction and Authority to Release Documents dated 10 June 2009, which was signed by Ms Cid and addressed to the Practitioner. In this document, Ms Cid stated that she was the sole surviving beneficiary of the Estate and that she had appointed Ms Navarro as her solicitor to deal with all matters pertaining to it. She also authorised and directed the Practitioner to furnish Ms Navarro with 'information and arrangements made concerning the transportation of the body of my late brother to Spain as directed by him in his Last Will and Testament, lodgement of the Application for Probate, inventory of assets, financial records and any other documents or information she may require regarding this matter, without any limitation'.
The documents sent by Navarro to the Commissioner also included copies of letters from Navarro to the Practitioner dated 12 June, 26 June and 6 August 2009. Each of them was headed 'Estate of the late Severino Cid'.
In the first of these letters, Navarro stated that while Ms Cid could not herself pay the costs of transporting her brother's body to Spain, the Estate had readily available assets. Navarro asked for urgent advice from the Practitioner as to what steps he had taken to obtain probate, secure access to the assets in order to arrange the transfer of Mr Cid's body and prepare an inventory of the assets.
The second letter indicated that the Practitioner had not replied to the first letter or to a telephone request to contact Navarro urgently. It stated also that if the Practitioner had not sent a 'favourable reply' by 30 June 2009, Navarro would obtain instructions to apply for the appointment of a new executor.
In the third letter, Navarro referred again to failure by the Practitioner to reply to earlier letters and telephone calls and advised as follows: (a) the morgue in Australia was planning to give Mr Cid's body a 'destitute burial', since the Practitioner had failed to arrange for it to be transported to Spain; and (b) the Public Trustee was prepared to apply to be appointed as executor, provided the Practitioner was prepared to renounce his position as executor. The letter went on to ask the Practitioner to confirm within seven days that he would resign this position.
The third letter concluded as follows:-
We regret to advise that unless we receive your reply within 7 days, we will also refer this matter to the ethics department of the Law Society regarding your failure to respond to the letters of a colleague, and to the Legal Services Commissioner, for investigation.
Please give this matter your urgent consideration.
On 28 October 2009, the Commissioner forwarded to the Practitioner copies of Ms Cid's complaint and of the documents that Navarro had sent to Mr Milne. A covering letter, headed 'Complaint by Manuela Cid', commenced by referring to 'conversations' between the Practitioner and Mr Milne. It went on to point out that the accompanying correspondence disclosed 'considerable delay' on the Practitioner's part in handling the Estate, notably in relation to the transporting of Mr Cid's body to Spain, but that arrangements had apparently now been made for this to happen. The Commissioner then requested that 'in order to finalise this element of the complaint', the Practitioner should provide 'written confirmation within seven (7) days of the steps taken to arrange for the transfer of the body'. The Commissioner further requested the Practitioner to supply within seven days a 'brief chronology' and an 'outline' of his handling of the Estate and urged him to 'communicate clearly with Ms Cid as soon as possible to reassure her that steps are being taken to resolve her concerns'.
The Practitioner replied to the Commissioner by a letter dated 11 November 2009, which was headed 'Complaint by Manuela Cid'. He stated that on 26 October 2009 he had signed the final authority for Mr Cid's body to be transported to Spain and that he had recently been informed of its safe arrival and subsequent burial. He supplied what he described as 'a brief chronology of my handling of this estate'. This comprised a list of the steps taken by him with regard to the repatriation of Mr Cid's body and an outline of the situation regarding the selling of three strata units that Mr Cid had owned. This outline included statements that two of the units were tenanted and that the Practitioner anticipated selecting a real estate agent for the sale by 20 November 2009. He also confirmed that he would 'communicate clearly with Ms Cid' and asked whether he should send letters directly to her or to Navarro.
In a reply to the Practitioner, dated 20 November 2009 and headed 'Complaint by Manuela Cid', the Commissioner observed that there had been a 'significant delay in dealing with this matter' and that there had been 'complaints of your failure to communicate clearly, or at all', with Ms Cid or with 'any other relatives or beneficiaries'. The letter then advised that the Practitioner should communicate from now on with 'the Spanish relatives' through Navarro. It stated that there now appeared to be 'no barrier' to applying for probate and that he should provide to Navarro 'a consolidated document setting out the assets of the estate', adding that if there was in fact any 'barrier' to his taking these steps he should notify this to Navarro and to the Commissioner. The letter observed also that the tenanting of two of the units owned by the Estate 'should not prevent their sale'. Its penultimate paragraph stated:-
Given your commitment to communicate clearly with Ms Cid, or in this case, her legal representative, and your clear commitment to finalising the estate, I intend to take no further action at the present time. Nevertheless, I intend to keep my file open until the estate is finalised and ask that you provide copies of your updates to Ms Navarro to this office.
In a letter dated 27 November 2009 to the Practitioner, Navarro required him to supply the following within seven days: (a) details of the estate agent that he had selected to sell the units; (b) documentation relating to this sale; (c) a full inventory of the Estate's assets; (d) the Practitioner's proposals for securing and selling these assets; and (e) the status of the application for probate.
In a letter to the Practitioner, dated 23 December 2009 and headed 'Complaint by Manuela Cid', the Commissioner stated first that he had received no reply to his letter of 20 November. He asked for the following to be provided to him by 11 January 2010: (a) an indication of the steps that the Practitioner had taken to finalise the Estate: (b) a copy of any correspondence that the Practitioner had sent to Ms Cid or to Navarro; (c) an update on the proposed sale of the units; and (d) a copy of the consolidated document that the Practitioner should by now have sent to the beneficiaries setting out the assets of the Estate. The Commissioner further stated that if he did not receive this information as required, he would consider whether or not he should 'upgrade this matter to an investigation'.
In a letter dated 15 February 2010 to Navarro, responding to Navarro's letter of 27 November 2009, the Practitioner provided information (with accompanying documents) regarding the sale of the Estate's units and the nature of its other assets. He also indicated that he would file the application for probate during March 2010 and that he expected probate to be granted and the administration of the estate to be completed by the end of April 2010.
In a letter to the Commissioner also dated 15 February 2010 and headed 'Estate of the late Severino Cid', the Practitioner enclosed a copy of this letter to Navarro. In a reply dated 3 March 2010, the Commissioner noted the 'timeframes' that the Practitioner had set for progress to be made and stated that he 'looked forward' to receiving confirmation that the matter had been finalised.
In a letter to the Practitioner dated 23 March 2010, Navarro noted the delay in his furnishing a reply to their letter of 27 November 2009, requested further particulars of the Estate's assets, pointed out that the estate agent whom he had selected had not yet received instructions to sell the units and asked for either (a) his confirmation that he had applied to the Supreme Court for probate and his estimate regarding the date of completion of distribution or (b) his reasons for not having applied and the date on which he would apply.
In a further letter to the Practitioner dated 28 April 2010, Navarro enclosed a copy of their letter of 23 March and stated that if he did not furnish a reply within seven days they would refer the matter to the Commissioner without further notice to him.
In a letter to the Commissioner dated 17 May 2010, Navarro stated that they still encountered 'difficulties in securing Mr Tsalidis' prompt and diligent processing of probate'. They enclosed copies of the correspondence between them and the Practitioner since 27 November 2009, adding that the Practitioner had not communicated with them since 15 February 2010. They pointed out that according to this correspondence the Practitioner did not sign agency agreements for the sale of the units until 12 February 2010 (despite having promised to select an agent by 20 November 2009) and that the agent, as at 23 March 2010, was still awaiting instructions to advertise them for sale. This letter concluded with a request that the Commissioner should either secure the Practitioner's 'immediate and urgent action to secure probate and proceed to distribution' or obtain his resignation as executor so that the Public Trustee could take over the matter.
In a letter to the Practitioner dated 31 May 2010, headed 'Complaints by Graham Carlon & Manuela Cid', the Commissioner referred to a conversation between Mr Milne and the Practitioner on 24 May and insisted that the Practitioner comply with an undertaking given by him on 31 May to Ms Paul (an employee of the Commissioner) to provide responses to these complaints by 1 June 2010,
In two separate letters to Navarro dated 4 June 2010, the Practitioner provided answers to the questions asked by them in their letter of 23 March 2010. He enclosed relevant documents, including drafts of a Summons and Grant of Probate and an Affidavit of Executor.
In two separate letters to the Commissioner, also dated 4 June 2010 and headed 'Complaint by Navarro and Associates', the Practitioner enclosed copies of his two letters of the same date to Navarro.
In a letter to the Practitioner dated 16 June 2010, Navarro made several criticisms of the draft documents that he had sent to them and pointed out that he had not made any costs disclosure relating to his work as executor and solicitor. They also asked a number of questions about the units and other assets owned by the Estate, including whether he had established a bank account for it and whether he had made any enquiries about its tax liabilities.
In a letter to the Practitioner dated 22 June 2010, headed 'Complaint by Navarro & Associates obo Manuela Cid', the Commissioner stated that he had written to Navarro stating that 'as the estate now seems to be progressing I intend to close my file'. He added, however, that he felt impelled to draw attention to the Practitioner's 'substantive and entirely unjustified delay' in both dealing with the Estate and corresponding with the Commissioner and the Practitioner's 'lack of courtesy' to Navarro. He sought an assurance that the Practitioner would provide monthly reports on the progress of the Estate to both Navarro and the Commissioner.
In a letter to the Commissioner dated 23 August 2010, Navarro stated that they still encountered 'unexplained delays' in the Practitioner's processing of probate and replying to their letters. They advised that an application for probate had still not been lodged and that the Practitioner had not corresponded with Ms Cid. They again requested the Commissioner's support in securing the Practitioner's resignation as executor.
In a letter to the Practitioner dated 6 September 2010, again headed 'Complaint by Navarro & Associates obo Manuela Cid', the Commissioner referred to assertions by Navarro that the Practitioner had failed to reply to their letter of 16 June 2010 and had not yet applied for probate. The Commissioner noted also that the Practitioner had not provided the monthly progress reports requested in his letter of 22 June. He asked that the Practitioner should respond to this letter and to Navarro's letter of 16 June, provide an update on progress with the Estate and either confirm that probate had been applied for or indicate that this would be attended to within 14 days. The Commissioner further stated that if the Practitioner failed to do 'any or all of what is requested above within 14 days', he would 'reopen this file and upgrade it to an investigation into your conduct'.
As stated in the Particulars, this letter of 6 September 2010 was resent on 13 September, with a substituted deadline of 27 September for the Practitioner's reply.
In a letter to the Practitioner dated 5 October 2010, again headed 'Complaint by Navarro & Associates obo Manuela Cid', the Commissioner repeated the questions asked in the letter of 6 September. After referring to his statement that he would 'upgrade' the file on this matter to an investigation, he stated: 'I have now reopened your file and consider this matter to be an investigation.' He concluded by saying that if the Practitioner did not respond to the questions already asked, he would issue a notice in terms of section 660 of the Act.
On 2 December 2010, the Commissioner issued the Second Notice. Its heading included the phrase 'Complaint made by Manuela Cid about Charles Tsalidis'. It stated as follows:-
I Steve Mark, Legal Services Commissioner, hereby require you to provide me with the following information and documents pursuant to section 660 of the Legal Profession Act 2004:
1. Your monthly reports for July, August, September, October and November in relation to the progress of the estate;
2. A copy of your letter to Navarro & Associates, advising them of progress in the matter;
3. Confirmation that you have now lodged Mr Cid's probate documents with the Supreme Court and a copy of those documents;
4. Confirmation that you have replied to the specific issues raised by Navarro & Associates in their letter to you of 16 June 2010 and a copy of your letter dealing with those issues.
Your response to this notice must be received by my Office by 5.00pm on 24 December 2010. The address of my Office is:...
Please note that a failure to comply with this Notice by the specified date without reasonable excuse may result in the institution of proceedings against you by way of information in the Legal Services Division of the Administrative Decisions Tribunal.
We would observe at this point that the use of the term 'information' in the final sentence of this Notice (as also, it may be added, in the Application filed by the Commissioner: see clause 5 of the orders sought) is incorrect. Since the Act came into operation on 1 October 2005, disciplinary proceedings under it have been instituted by an application, not (as previously under the Legal Profession Act 1987) by an 'information'.
In a covering letter to the Practitioner, dated 2 December 2010 and headed 'Complaint by Navarro & Associates obo Manuela Cid', the Commissioner referred to various aspects of his and Navarro's dealings with the Practitioner and pointed out that in his most recent letter he had required the Practitioner to attend to various matters by 27 September. He stated that although a reminder letter was sent on 5 October and Mr Milne had spoken to the Practitioner on 12 November, the required information and documents had not been provided. It was 'against this background', the Commissioner stated, that the Second Notice was issued.
On 13 December 2010, the Second Notice and the covering letter were personally served on the Practitioner.
In a letter to Navarro dated 15 December 2010, the Practitioner advised that probate of Mr Cid's will had been granted on 2 November and enclosed a copy of the grant. He also provided answers to a number of the questions contained in Navarro's previous letters to him.
In a letter to the Commissioner dated 15 December 2010 and headed 'Complaint by Navarro & Associates (obo Manuela Cid)', the Practitioner enclosed a copy of his letter to Navarro and of the grant of probate. In addition to apologising for his 'unreasonable delay', he stated that he had made a note in his diary to report further to the Commissioner during the week commencing 17 January 2011, and he provided some specific information about realisation of the Estate's assets.
A letter from the Commissioner to the Practitioner, dated 13 January 2011 and headed 'Complaints by Manuella (sic) Cid, Graham Carlon and the Legal Services Commissioner', included an assertion that the Practitioner, in this letter of 15 December 2010, 'failed to respond to all the issues' in the Second Notice. The reason given was in these terms: 'It appears that you have not provided the monthly reports sought.' The letter then asked the Practitioner to provide 'a chronology' of his activity on the Cid file 'by way of the monthly reports sought for July, August, September and October 2010' as requested in paragraph 1 of the Notice, and also to give his reasons for 'not providing these reports on a monthly basis and in accordance with the Notice by the due date'. The date stipulated for compliance with this request was 11 February 2011.
In a further letter to the Practitioner dated 14 March 2011, the Commissioner noted that he had received no reply to his previous letter and stated that he would now commence proceedings in the Tribunal in relation to the Practitioner's 'partial failure' to comply with the Second Notice. The letter also enclosed correspondence from Navarro complaining again about the Practitioner's performance of his duties in relation to the Estate and his failure to respond to questions that they had put to him.
As is alleged in the Particulars, between 15 December 2011 and 2 September 2011 (the date of filing of the Application), the Practitioner did not communicate with the Commissioner regarding this matter.
On 30 August 2011, the Commissioner initiated a complaint under section 504 of the Act relating to the Practitioner's failure to comply with the Second Notice. Paragraph 1 of this complaint by the Commissioner described the Notice as a 'notice under section 660(1) relating to a complaint made by Ms Manuella Cid about the solicitor'.
Also on 30 August 2011, the Commissioner recorded a determination that proceedings should be commenced in the Tribunal with respect to his complaint, 'without the need to commence or complete an investigation'.
The parties' submissions
As indicated above, the Practitioner, relying on aspects of the evidence contained in the Commissioner's affidavit, claimed that we should not make a finding of professional misconduct under Ground 2 because there were defects in the case brought by the Commissioner.
At the hearing on 7 June 2012, both Mr Kintominas and Mr Matalani addressed us on this question. At the end of the hearing, we gave leave for the Commissioner to file further submissions relating to it within a period of 14 days and for the Practitioner to file submissions in reply within a further 14 days. On 21 June 2012, the Commissioner filed submissions in accordance with this grant of leave. In preparing the ensuing outline of the parties' arguments, we have taken account of these written submissions by Mr Matalani. As at the time of completing these reasons, the Practitioner had not filed any submissions in reply.
In his submissions at the hearing, Mr Kintominas argued that the Notice was invalid for three reasons.
The first of these was that the complaint initially made by Ms Cid and reinforced by Navarro on her behalf related to the PR's performance of his duties as executor of the Estate, not to any duty imposed on him in the capacity of a solicitor. Mr Kintominas maintained that the functions of arranging the burial of the body of a deceased testator, making an application for probate and selling the assets of a deceased estate were functions attached to executorship and did not fall within the scope of a solicitor's duties. The remedy available to dissatisfied beneficiaries if these tasks were not fulfilled in a timely manner was to act in the manner threatened from time to time by Navarro: i.e., to apply to the Supreme Court for the executor to be removed and another executor to be appointed. Accordingly, the fact that in this case the executor was a solicitor did not justify the invocation of disciplinary procedures against him through the making of a complaint under the Act.
In this connection, Mr Kintominas submitted also that because an executor was normally given one year, at least, in which to deal with all aspects of the administration of the estate, the Commissioner's insistence that in this case the Practitioner should complete his work in a shorter period of time was unjustifiable.
The second argument advanced by Mr Kintominas was that the Commissioner had had no power to require, either in any of his letters to the Practitioner or in the Second Notice, that the Practitioner should prepare monthly reports on the progress achieved in administering the Estate and should send them to Navarro and to the Commissioner. Mr Kintominas pointed out that some of these letters were written during the period when the Commissioner was also indicating that he was not conducting an investigation within the meaning of the Act.
This period, we may add, ran from 20 November 2009 (when the Commissioner stated in a letter to the Practitioner that he intended to 'take no further action at the present time') until 27 September 2010 (being the date on which he said, in his letter of 13 September, that he would 'reopen this file and upgrade it to an investigation into your conduct' if the Practitioner had not replied in the meantime).
Thirdly, Mr Kintominas argued that the conduct of the Practitioner to which the Second Notice related occurred much later than the conduct described in Ms Cid's complaint and that this of itself gave grounds for treating the Notice as invalid.
In opposing the first of these contentions, Mr Matalani argued that various documents prepared by the Practitioner contained express or implicit indications that he treated his conduct of the affairs of the Estate as an aspect of his practice as a solicitor. These indications were: (a) the appearance of a 'matter number' at the head of his letter of 15 February 2010 to the Commissioner; (b) the inclusion of the statement 'Liability limited by a Scheme approved under Professional Standards Legislation' at the foot of this letter; (c) the inclusion, under the heading 'Principal's Solicitor', of his name and contact details in the agency agreement relating to the sale of the Estate's units; and (d) his statement, in his letter of 15 December 2010 to Navarro, that he proposed to charge fees in accordance with the scale set out in Schedule 4 of the Legal Profession Rules 2005.
Mr Matalani referred also to section 329(1)(e) of the Act, which authorises regulations 'fixing the costs payable for legal services provided in respect of probate or the administration of estates', and to clause 114 of the Legal Profession Rules, which states that the amounts specified in Schedule 4 are the amounts fixed for 'costs for legal services provided in respect of the granting of probate or administration, or the resealing of probate or letters of administration'.
Before outlining the rest of Mr Matalani's argument, it is convenient to reproduce a number of provisions of the Act to which (in addition to sections 660 and 676, set out above at [13]) he made reference. They are as follows:-
503 Complaints
(1) A complaint may be made under this Part about an Australian legal practitioner's conduct.
(3) A complaint that is duly made is to be dealt with in accordance with this Part.
504 Making of complaints
(1) A complaint about an Australian legal practitioner may be made by:
(a) a client of the practitioner, or
(b) a Council, or
(c) the Commissioner, or
(d) any other person.
(2) A complaint must be in writing.
(3) A complaint must:
(a) identify the complainant, and...
(c) describe the alleged conduct the subject of the complaint.
514 Definition
In this Part:
a consumer dispute is a dispute between a person and an Australian legal practitioner about conduct of the practitioner to the extent that the dispute does not involve an issue of unsatisfactory professional conduct or professional misconduct.
525 Complaints to be investigated
(1) Each complaint must be investigated under this Part.
(2) This section does not apply to:...
(c) a complaint that is a separate complaint under section 534 (Conduct that may be investigated) and that under subsection (7) of that section need not be the subject of a separate or further investigation, or
(d) a complaint that is a modified complaint under section 535 (Modified complaints) and that under subsection (4) of that section need not be the subject of a separate or further investigation, or...
534 Conduct that may be investigated
(1) An investigation may extend to conduct of the Australian legal practitioner concerned revealed during the investigation where:
(a) the conduct is related to the subject-matter of the complaint and involves the complainant but is not within an allegation contained in the complaint, or
(b) the conduct is not related to the subject-matter of the complaint but involves the complainant, or
(c) the conduct is related to the subject-matter of the complaint but does not involve the complainant, or
(d) the conduct is not related to the subject-matter of the complaint and does not involve the complainant.
(2) The Australian legal practitioner must be informed in writing of the extended investigation as soon as practicable after the investigation is extended and must be given a reasonable opportunity to make submissions regarding the additional matters.
(4) Matters arising in connection with subsection (1) (a) may be made the subject of a separate complaint under section 503 (Complaints) or of modification of a complaint under section 535 (Modified complaints).
(5) Matters arising in connection with subsection (1) (b), (c) or (d) may be made the subject of a separate complaint under section 503 (Complaints).
(6) The making of the separate complaint or the modification of the complaint as referred to in subsection (4) or (5) need not occur until the extended investigation has been completed.
(7) If matters arising in connection with subsection (1) (a)-(d) are made the subject of a separate complaint under section 503 (Complaints), the separate complaint need not be the subject of a separate or further investigation if the Commissioner or Council investigating the original complaint is satisfied that the matter has already been sufficiently investigated during the investigation of the original complaint.
535 Modified complaints
(1) The Commissioner or Council investigating a complaint may, during or after completion of the investigation, by instrument in writing, modify the complaint by doing either or both of the following:
(a) omitting or altering any allegations or details in the complaint,
(b) adding additional allegations or details to the complaint.
(2) A modification of a complaint:
(a) must relate to the subject-matter of the original complaint...
(3) Before taking action under subsection (1), the Commissioner or Council is to consult the original complainant (except where the Commissioner or Council proposing to take the action is the complainant).
(4) A modified complaint need not be the subject of a separate or further investigation if the Commissioner or Council investigating the original complaint is satisfied that the matter has already been sufficiently investigated during the investigation of the original complaint.
561 Procedural lapses and defects in appointments
(1) The Tribunal may order that a failure by the Commissioner or a Council, or a person acting for them or under their direction, to observe a procedural requirement in relation to a complaint (including the making, investigation or referral of a complaint, the giving of notice in connection with a complaint, or the making of a decision in connection with a complaint) is to be disregarded, if satisfied that:
(a) the failure has not caused substantial injustice to the parties to the hearing, or
(b) any substantial injustice caused by the failure is outweighed by the public interest in having the complaint dealt with by the Tribunal, or
(c) any substantial injustice caused by the failure can be remedied by an order of the Tribunal.
(2) Subsection (1) applies to a failure occurring before proceedings were commenced in the Tribunal in relation to the complaint as well as to a failure occurring afterwards.
Mr Matalani's responses to the second and third contentions advanced by Mr Kintominas commenced with the proposition that the complaint by Ms Cid, as first communicated to the Commissioner, was not confined to the Practitioner's delay in arranging for the body of Mr Cid to be transported to Spain, but also covered his delay in applying for probate and his failure to reply to correspondence from Navarro. Mr Matalani pointed out that these additional matters were expressly raised in the bundle of letters and documents that the Commissioner received from Navarro and forwarded to the Practitioner on 28 October 2009, in the course of advising him, for the first time, of the making of the complaint.
The next proposition put by Mr Matalani was that the general scope of the complaint, as so formulated, did not change between the date on which it was first notified to the Practitioner (28 October 2009) and the date of issue of the Second Notice (2 December 2010). He pointed out that the Practitioner during this period continued to engage in the two additional forms of conduct that received prominence in Navarro's letters - delay in applying for probate and failure to reply to correspondence. Accordingly, the Commissioner's investigation of the complaint as initially made was extended under section 534 of the Act to include the subsequent behaviour of the Practitioner that fell within the scope of these two forms of conduct.
Mr Matalani acknowledged that no formal notice of the extension of the Commissioner's investigation, as required by section 534(2), was conveyed to the Practitioner. But the Practitioner, he said, was well aware of this extension. The issue of the Second Notice accordingly formed part of the Commissioner's investigation of the extended complaint, and we should therefore hold that it took place 'for the purpose of carrying out a complaint investigation', as required by the opening words of subsection (1) of this section.
Mr Matalani acknowledged also that the Commissioner did not 'modify' the complaint pursuant to section 535 of the Act or make a new complaint under section 503. But he maintained that if the Commissioner was found to have failed to observe procedural requirements such as these, the Tribunal could and should order under section 561 that this failure be disregarded.
A further matter acknowledged by Mr Matalani was that the only source of any power exercisable by the Commissioner to require that the Practitioner should provide 'monthly reports in relation to the progress of the estate' was section 660 of the Act. But he maintained that this section was clearly sufficient to confer such a power.
Finally, Mr Matalani submitted that the Commissioner's indications to the Practitioner that between 20 November 2009 and 27 September 2010 he was not conducting an 'investigation' should be interpreted to mean that during this period he was treating the matter as a 'consumer dispute' only under section 514 of the Act. According to Mr Matalani, the 'upgrade' that then occurred should be viewed an investigation of conduct that now appeared to involve 'an issue of unsatisfactory professional conduct or professional misconduct' and therefore fell outside the definition in section 514.
Discussion and conclusions
We may deal relatively briefly with the first argument made by Mr Kintominas. In our opinion, the matters to which Mr Matalani adverted demonstrate clearly that, in addition to being appointed as executor of the Estate, the Practitioner was expected to act as its solicitor and did so act. This conclusion receives further support from clause 8 of Mr Cid's will, which declared that the Practitioner, or any other trustee of the will who was also a solicitor, would be entitled to recover usual professional fees and reasonable amounts on account of disbursements. It follows that any of the beneficiaries, if dissatisfied with the Practitioner's performance of his duties, were entitled to lodge a complaint with the Commissioner.
The remaining two grounds of objection put forward by Mr Kintominas call for careful consideration.
We are inclined to disagree with Mr Matalani's contention that the complaint, as initially made, related not only to the Practitioner's delay in arranging for Mr Cid's body to be transported to Spain, but also to his delay in applying for probate and his failure to answer communications from Navarro. In Ms Cid's email of 14 October 2009 to the Commissioner, she herself was identified as the complainant, under paragraph (a) of section 504(3) of the Act, and the Practitioner's delay in repatriation of her brother's body constituted the 'alleged conduct the subject of the complaint' that she described pursuant to paragraph (c). She did not mention his delay in applying for probate or his failure to answer communications from Navarro. These two additional matters first came to the Commissioner's notice at a later stage, either during the conversation between Mr Milne and Ms Navarro on 24 October 2009 or when the documents forwarded on that day by Navarro came into the Commissioner's hands.
A further aspect of the evidence supporting this conclusion is that the Commissioner, in all his correspondence with the Practitioner until June 2010, described the complaint as a 'Complaint by Ms Manuela Cid' only. It was not until his letter of 22 June 2010 that he adopted the formulation 'Complaint by Navarro & Associates obo Ms Manuela Cid'.
In partial agreement with Mr Matalani, however, we consider that it was legitimate for the Commissioner to canvass these two additional matters in correspondence with the Practitioner (as also with Navarro). This fell within the scope of his power, conferred by section 534(1), to 'extend' the investigation of Ms Cid's complaint that he had commenced under section 525(1). Although in his letters to the Practitioner he did not expressly identify this as an 'extension' of his investigation, he did provide sufficient information in writing and a sufficient opportunity to make submissions regarding the additional matters to satisfy the requirements of section 534(2). Furthermore, the Practitioner's letters to the Commissioner did not refer to the complaint as a complaint by Ms Cid. They were headed 'Estate of the late Severino Cid' or 'Complaint by Navarro and Associates'.
What the Commissioner did not do, however, was to make a separate complaint or modify the initial complaint, as provided for in subsections (4) and (5) of section 534. By virtue of subsection (6), there was no requirement for him to do so until he had completed his 'extended investigation'. But because he brought into the investigation the two additional grounds of complaint that Navarro put before him - delay in applying for probate and failure to reply to communications - and also chose to investigate contemporaneous and continuing conduct by the Practitioner - i.e., during the period from October 2009 (when Ms Cid made her complaint) to December 2010 (when the Second Notice was issued) - a very substantial 'extension' of the investigation took place.
In our experience of disciplinary proceedings commenced in the Tribunal under the Act, the Commissioner, the Council of the Bar Association or the Council of the Law Society has often, in similar circumstances, considered it appropriate to add to the initial complaint its own further complaint or complaints, relating to matters disclosed during its investigation. This formal step has the advantage of clarifying for the legal practitioner the scope and nature of the allegations that might, if the occasion arises, be included in a disciplinary application made against him or her. But it was not taken in the present case.
By virtue, however, of these provisions within section 534, we accept Mr Matalani's submission that the Second Notice was issued 'for the purpose of carrying out a complaint investigation', as required by the opening words of section 660(1). This 'complaint investigation' was a very substantially extended investigation of the complaint made by Ms Cid nearly 14 months earlier.
We do not think that this conclusion is undermined by the fact that between 20 November 2009 and 27 September 2010 the Commissioner, on his own showing, was not conducting an 'investigation'. As far as we are aware, the Act does not state or imply that an investigation may not be temporarily suspended in this way. We do not agree with Mr Matalani that during this period the Commissioner was treating the matter as a 'consumer complaint'. There was nothing in the evidence to support such a finding.
It remains for us to deal with a submission that Mr Kintominas advanced but did not develop at any length: namely, that the Commissioner had no power to require, in any of his letters to the Practitioner or in the Second Notice, that the Practitioner should prepare monthly reports on the progress achieved in administering the Estate and should send them to Navarro and to the Commissioner.
This submission is important because, if successful, it leads to the conclusion that the Practitioner did sufficiently comply with the Second Notice. As indicated above at [58], the only basis on which the Commissioner claimed that the Practitioner failed to comply with it, and was therefore guilty of professional misconduct, is that none of the five progress reports required by clause 1 was provided within the time specified.
As mentioned above, Mr Matalani conceded that the only source of any power that the Commissioner might have to require the provision of monthly progress reports was section 660. This concession appears to us to be correct, for the following reasons.
Section 688 of the Act is headed 'Functions of Commissioner'. In paragraphs (a) to (q) of subsection (1), a number of specified 'functions' are listed. The only listed function that might be relevant to the matter now being considered is in paragraph (d). It is in the following terms: 'to investigate, or take over the investigation of, a complaint if the Commissioner considers it appropriate'. But with the possible exception of section 660 (to which we will return), the Act does not appear to us to contain any provision relating to the Commissioner's investigation of complaints whereby he is authorised to require or directing a legal practitioner to furnish to the Commissioner, let alone to the legal representatives of a third party, documents in the nature of periodical reports on progress being achieved by the practitioner in a matter which is the subject of a complaint investigation.
Subsection (3) of section 688 states that the Commissioner 'has such other functions as are conferred or imposed on the Commissioner by this or any other Act'. We are not aware of any such 'other functions' that might be relevant to the particular question being discussed.
According to this reasoning, the Commissioner's direction to the Practitioner, in letters preceding the issue of the Second Notice, that he should prepare monthly reports on the progress of the Estate and submit them both to the Commissioner and to Navarro lacked statutory authorisation. This direction, together with a number of other directions or instructions given by the Commissioner to the Practitioner, amounted to monitoring, on a continuing basis, the Practitioner's fulfilment of his duties towards a complainant. The Commissioner did not merely investigate the extent to which the Practitioner had failed in the past execution of these duties, but also prescribed what the Practitioner should do in the future. This, according to our understanding, is not a function conferred by the Act on the Commissioner. We have also not observed it to be a role actually played by the Commissioner, or indeed by the Council of the Bar Association or the Council of the Law Society, following the making of a complaint.
In our judgment, therefore, the Practitioner's failure to comply with the Commissioner's direction to prepare and submit monthly progress reports could not, of itself, provide the basis for a claim (for example, under section 671(1)) that he had contravened the Act. At most, it might (depending on the circumstances) lend support to a claim that his performance of his duties as a solicitor and executor was unsatisfactory.
As we have said, however, Mr Matalani submitted that section 660 provided sufficient authorisation to the Commissioner to stipulate in the Second Notice that the documents provided should include the documents specified in clause 1, namely, 'your monthly reports for July, August, September, October and November in relation to the progress of the estate'. Mr Matalani relied here on the requirement to 'otherwise assist in, or co-operate with, the investigation of a complaint' stated in paragraph (c) of subsection (1) of section 660, as well on as the requirement to produce documents in paragraph (a) of this subsection. He did not cite any authority in support of this submission.
Our researches have unearthed three decisions of relevance, each of which relates to the statutory predecessor to section 660(1), i.e., section 152(1) of the Legal Profession Act 1987. For present purposes, these two provisions may be regarded as identical.
The first in point of time is a decision of the Supreme Court, Gridiger v Council of the Law Society of NSW [1999] NSWSC 904. In this case, a notice was served on a solicitor under section 152(1), in the course of the investigation of a complaint against him alleging overcharging. It required him, amongst other things, to provide information as follows:-
1. The following particulars in chronological order and numbered sequentially:
(a) short details of each item of work whether by letter, telephone attendance, perusal, drafting, conference and so on, for which Mr Cardakaris or "the Cardakaris interests" have been charged fees or are responsible pursuant to the terms and conditions of the security documents;
(b) the date each item of work was done;
(c) the time (in minutes) engaged in doing each item of work (or an estimate) and where possible, the commencing and concluding times of such engagement;
(d) who did each item of work;
(e) the amount charged for doing each item of work;
(f) the basis for calculating the amounts charged for doing each item of work.
The solicitor challenged the validity of this notice. One of his arguments (see the decision at [25]) was that section 152 'only permits the committee to require information or the production of documents and that duty does not encompass a requirement to create a document such as a bill of costs'.
Master Harrison rejected this argument in the following brief passage (also at [25]):-
The defendants submitted that the compiling of information may involve the plaintiff putting pen to paper and compiling a document. It is my view that s 152(1)(a) requires the legal practitioner to provide written information. To provide such information may require the plaintiff to compile information and commit that information to writing.
In Law Society of New South Wales v Konstantinidis [1999] NSWADT 109, three out of five notices under section 152 that were served by the Law Society on the respondent solicitor required him to provide within a specified time a 'response' to the complaint to which the notice related. He had previously been sent a copy of the complaint. Each of the remaining two notices required him to provide a 'response' to a specified letter that the Law Society had previously sent to him.
The solicitor challenged the validity of this notice on the ground that it failed to identify sufficiently the information being sought. In upholding this challenge, the Tribunal said, at [26 - 31]:-
27 ... [Section 152(1)] does not expressly stipulate requirements as to the form of the notice or letter which is made pursuant to s.152(1) of the Act. In particular there is no express requirement that the information which is being sought by the Council must be specifically identified in that notice or letter. It was submitted by Mr Brezniak that s.152(1) could not operate effectively unless the Council specifically identified the information which is being sought:
"Section 152 has a role in the relationship between the Law Society and the legal practitioner and the need for clearness, the need for clarity, the need for proper formal adherence to the requirements which section 152 may be read as requiring...the Law Society of New South Wales in its handling of complaints regarding solicitors and, in those circumstances, our submission is that it falls to the Society to have its notices and formal requirements in a sufficiently clear and particularised way to be amenable to valuable response, valuable information from the Solicitor."
28 There is much credibility to this proposition. If s.152(1) of the Act is to operate effectively, then the Council must identify the information which they require. How is the Legal Practitioner to know what it is that the Council requires? Any other construction would lead to inefficacious situations where the Legal Practitioner does not know what information is required or provides the incorrect information.
29 Counsel also directed the Tribunal to the recent decision in Gridiger v Council of the Law Society of NSW [1999] NSWSC 904 (8 September 1999), where the Council of the Law Society had similarly required the plaintiff to provide information, pursuant to s.152(1) of the Act. The plaintiff in that case claimed that the information and documents which had been required by the Council constituted a fishing expedition. Harrison MR disagreed, finding that:
"The documents sought are specifically identified and are relevant to the issues of the nature of the work for which Mr Cardakaris was liable to pay whether the amount charged was excessive. They are relevant to the issues in the complaint. It is my view the defendants are not embarking on a fishing expedition."
30 Although the decision related to the question of 'a fishing expedition', it nevertheless stresses the need to 'specifically identify' the information which is being sought under s.152(1). It is clear that Harrison MR placed some weight on the fact that, in that case, the documents being sought by the Council were 'specifically identified'.
31 It is the opinion of this Tribunal that for s.152(1) of the Act to operate effectively the Council, when requiring a practitioner to provide information, must specifically identify that information which is being sought.
Later in its reasons - for example, at [48] and [51] - the Tribunal described a request for a 'response' to a complaint or a letter as 'too broad and vague to be characterised as a specific request for information for the purposes of s.152(1)'.
In Law Society of New South Wales v McGrath [2000] NSWADT 45, the Tribunal, citing Konstantinidis, arrived at the same conclusion on essentially the same facts. In addition, it rejected a submission by the Law Society that the requirement imposed by the notice was a requirement to 'otherwise assist in, or co-operate with, the investigation of the complaint in a specified manner' within the meaning of section 152(1)(c). It held (at [57 - 58]) that a requirement to provide a written response to a complaint was not a requirement to assist or co-operate 'in a specified manner'.
Having regard to (a) our earlier ruling (at [95]) that the Commissioner lacked statutory authority to direct the Practitioner, prior to the issue of the Second Notice, to prepare monthly reports on the progress of the Estate and submit them to the Commissioner and to Navarro, and (b) to the decisions that we have just outlined, we conclude that the Second Notice was invalid in so far as it required the Practitioner to provide the documents described in clause 1. Our reasons for so concluding are as follows.
First, the documents identified in clause 1 were documents whose preparation by the Practitioner had been previously required by the Commissioner in circumstances where the Commissioner lacked statutory authority. The phrase 'Your monthly reports' (emphasis added) clearly conveys this implication.
Secondly, the phrase 'your monthly reports' did not identify with sufficient particularity what information (under paragraph (a) of subsection (1)) and/or what assistance or co-operation (under paragraph (c)) was required. Although in Gridiger the Supreme Court held that a notice under section 152(1) of the Act of 1987 could require the recipient to 'compile information and commit that information to writing', the notice in that case set out precisely what information was required. The term 'monthly report' lacks any such precision. It is 'broad and vague' in the same general way as the requirements that were held invalid in Konstantinidis and McGrath.
Thirdly, we do not believe that the defect thus identified in the Second Notice is such as might be 'disregarded' by us under section 561(1) of the Act. We do not think that the inclusion of an unduly broad and vague requirement in a notice under section 660 can be characterised as a failure to observe a 'procedural requirement' within the meaning of section 561(1). In each of the three decisions that we have cited, it was accepted that the matter in issue went to the validity of the notice, not just to the correctness of the procedure adopted in serving it.
If we are wrong in this view of the scope of section 561(1), we would still hesitate to make an order under the subsection. It has been emphasised in many cases under both section 660 and its predecessor that compliance with notices under these provisions is a very important component of the professional duties of a practitioner. But it is also important to bear in mind that a finding of non-compliance without reasonable excuse leads directly to a finding of professional misconduct against the practitioner concerned. He or she is entitled to expect that a notice issued under section 660 will conform fully to the specifications set out in the section. It is not just a matter, as the Tribunal suggested in Konstantinidis, of the section operating 'effectively'. It must also operate fairly vis-à-vis the practitioner.
A final consideration of some weight here is that, as we pointed out earlier, the Second Notice was issued at the end of a significant period during which the investigation of a relatively narrow complaint was very substantially extended without any formal step being taken by the Commissioner to set new boundaries to the matters complained of. He did not modify the initial complaint, nor did he make a new complaint.
For the foregoing reasons, our conclusion is that the Second Notice was invalid in so far as it required the Practitioner to provide the documents described in clause 1.
Since non-compliance with this clause was the only basis on which the Commissioner alleged failure to comply with the Notice, the claim of professional misconduct under Ground 2 must be dismissed.
We have however made a finding of professional misconduct under Ground 1. The question of what consequential orders, if any, should be made under section 562 of the Act therefore remains to be determined. It was agreed at the hearing on 7 June 2012 any such further hearing should be joined with the hearing relating to consequential orders, if such is required, relating to two disciplinary applications instituted by the Council of the Law Society of New South Wales against the Practitioner.
We accordingly direct as follows. A further hearing on the question of consequential orders in this matter is to take place in conjunction with a hearing, on a date to be fixed, relating to two disciplinary applications (files 112028 and 122013) that the Council of the Law Society of New South Wales has instituted in the Tribunal against the Respondent.
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Decision last updated: 08 August 2012
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