Perla v The Legal Services Commissioner
[2011] NSWADT 188
•21 June 2011
Administrative Decisions Tribunal
New South Wales
Medium Neutral Citation: Perla v The Legal Services Commissioner [2011] NSWADT 188 Hearing dates: 21 June 2011 Decision date: 21 June 2011 Jurisdiction: Legal Services Division Before: G Mullane, Judicial Member
N Isenberg, Judicial Member
J Butlin, Non-judicial MemberDecision: 1. The Amended Application of the legal practitioner Elena Perla filed on 21 April 2011 is dismissed.
2.The Applicant legal practitioner must pay the costs of the Legal Services Commissioner of opposing her application of 28 February 2011 and her Amended Application filed 21 April 2011
Catchwords: Solicitor- complaints of professional misconduct more than 3 years earlier- Jurisdiction of Tribunal - application by practitioner Legislation Cited: Legal Profession Act 2004, especially s506(2)(b) Cases Cited: - Texts Cited: - Category: Principal judgment Parties: Elena Perla (Applicant)
The Legal Services Commissioner (Respondent)Representation: Counsel
N Beaumont (Respondent)
E Perla (Applicant in person).
File Number(s): 112006
REASONS FOR DECISION
LEGAL SERVICES DIVISION
Before: Mullane G - Judicial member, Isenberg N - Judicial member and Butlin J - Non-judicial member.
The proceedings were commenced by the applicant Elena Perla filing an application on 28 February 2011. The application was headed "Application for Review of a Reviewable Decision", and says out the grounds for the application are:
The Law Society and Legal Services Commissioner failed to understand and to implement s.506(2)(b) of the LPA. Statutory construction. The legislative intent of the subsection was ignored or not given proper weight.
The respondent Legal Services Commissioner filed an application on 14 April 2011 to strike out the application of the applicant legal practitioner.
On 21 April 2011 the Applicant filed a document titled "Amended Application for Review of a Reviewable Decision". The description of the decision sought to be reviewed was:
The Legal Services Commissioner failed to properly monitor and advise the Law Society upon the proper construction of Section 506(2)(b) of the Legal Profession Act.
THE EVIDENCE
The evidence before us comprised:
1)The Application for Review of a Reviewable Decision filed on 28 February 2011;
2)The Application to Strike Out filed on 14 April 2011.
3)The Amended Application for Review of a Reviewable Decision filed on 21 April 2011.
4)Affidavit of the applicant Elena Perla sworn on 18 April 2011.
5)Submission of the applicant Elena Perla dated 6 June 2011.
6)Affidavit of Steven Anthony Mark sworn 13 April 2011.
7)Submission of N.J. Beaumont, Counsel for the respondent Commissioner dated 20 June 2011.
BACKGROUND
On 26 August 2008 a solicitor wrote to The Legal Services Commissioner on behalf of Insurance Australia Limited making a series of complaints regarding alleged conduct of the Applicant.
The letter of complaint was very detailed, but it is not necessary to give such detail for the purposes of our Reasons. However, it appears to us that if the allegations made by the solicitor had proved correct, several of them would have constituted professional misconduct.
The conduct complained about was alleged to have occurred in the period 2003 to 2004. Because the complaints to The Legal Services Commissioner were not made until 2008, section 506 of The Legal Profession Act, 2004, applied. Section 506 provides:
506 Complaints made over 3 years after conduct concerned
(1) A complaint may be made about conduct of an Australian legal practitioner irrespective of when the conduct is alleged to have occurred.
(2) However, a complaint cannot be dealt with (otherwise than to dismiss it or refer it to mediation) if the complaint is made more than 3 years after the conduct is alleged to have occurred, unless a determination is made under this section that:
(a) it is just and fair to deal with the complaint having regard to the delay and the reasons for the delay, or
(b) the complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.
(3) A determination under this section:
(a) in the case of a complaint made to or by the Commissioner-is to be made by the Commissioner, or
(b) in the case of a complaint made by a Council-is to be made by the Council.
(4) A determination made under this section is final and cannot be challenged in any proceedings by the complainant or the Australian legal practitioner concerned.
On 11 September 2008 The Legal Services Commissioner wrote to the applicant providing her with a summary of the various allegations made against her, and advising her of the provision of Section 506 and inviting her to make any submission she wished to make in respect of whether or not he should exercise his discretion under section 506 and determine that the out of time complaint could be made.
The applicant made submissions in response to that letter and her submissions are dated 15 September 2008. The complainant made submissions by letter dated 9 October 2008, including submissions in relation to issue of delay.
The Legal Services Commissioner made a determination under Subsection 506 that eight of the complaints made should be dealt with. It appears he relied upon para 506(2)(b). But in his letters of 16 March 2009 to the applicant and to the complainant, the Commissioner said:
I consider that the seriousness of the conduct complained of renders it worthy of investigation. There is a possibility that the allegations, when put at their highest and if proven, could amount to professional misconduct and that it is in the public interest to deal with the complaint. I have therefore determined to accept the complaint out of time.
This misstates the test in paragraph 506(2)(b) on which the Commissioner apparently relied. The words of that provision are:
The complaint involves an allegation of professional misconduct and it is in the public interest to deal with the complaint.
However, Subsection 506(4) provides that a determination made under Section 506 is final. It says that such a determination "cannot be challenged in any proceedings by the complainant or the Australian legal practitioner concerned."
The Commissioner then referred the 8 complaints to the Law Society of NSW for investigation.
After investigation of the complaints, including consideration of further submissions sought and obtained from the applicant, the Professional Conduct Committee of the Law Society of NSW (to which the Council of the Law Society of NSW has under Section 699 of the Act delegated the Council's functions to deal with complaints and disciplinary matters) considered the complaints on 2 December 2010 and resolved as follows:
1.The Committee Is satisfied that:
(i) there is a reasonable likelihood ELENA PERLA ('the legal
practitioner") would be found by the Tribunal to have engaged in
unsatisfactory professional conduct; and
(ii) the legal practitioner Is generally competent and diligent; and
(iii) the taking of action is justified having regard to all the
circumstances of the case (including the seriousness of the conduct concerned) and to whether any other substantiated complaints have been made against the legal practitioner.
2. The Committee hereby reprimands the legal practitioner. (Section 540(1) and (2)(b) of the Legal Profession Act. 2004).
Unsatisfactory Professional Conduct
1. The solicitor failed to provide costs disclosure In writing.
3. The solicitor acted in a conflict of Interest
7. The solicitor failed to conduct her practice in compliance with
regulations.
Reasons for Decision
1. The solicitor failed to provide costs disclosure In writing.
In relation to costs disclosure the solicitor pointed out that at the
time she was In practice the governing Act was the Legal
Profession Act, 1987 (the 1987 Act), Section 180 of which
provided as follows:
"A disclosure Is not required to be made under this division when it would not be reasonable to be required to do so."
The solicitor expressed the view that it was not reasonable to provide the cl ients with a costs disclosure in circumstances where they w ere never burdened with any costs as there was no intention to charge them. She stated, however, as to the costs cha rged by the panel beaters, that they were In possession of the schedule of fees.
The complainant noted the reasons for judgment of Lulham J In
the Tu matter at paragraph 53:
"I am satisfied that it was completely inappropriate for the respondent to commence legal proceedings on the basis of instructions obtained in the manner as Indicated in this matter. Moreover, I am satisfied that Ms Perla did not comply with the requirements of the Legal Profession Act in relation to costs disclosure. There was absolutely no attempt to do so ..."
The Committee is of the view that it was inappropriate for the solicitor to consider that her obligation to provide disclosure was obviated by s.l80 of the 1987 Act. There is no Indication of why it 'would not be reasonable' to provide such disclosure in the circumstances and the Committee observes that the making of such a disclosure would have militated against the problems that arose in both the Rees and Tu matters. It is also noted that the former Solicitors Rules set out in detail (at 1.2 and 1.3) possible circumstances In which a solicitor might not be required to make a costs disclosure under the 1987 Act. Although not exhaustive the
Rules provide no support for the solicitor's contention.
3. The solicitor acted in a conflict of Interest.
The solicitor responded to this allegation noting: "I now understand that I could have simply commenced litigation in the name of the repairer. I really only required an assignment of debt document.
My client would then have rightfully been the repairer, who had the proper knowledge and interest in the litigation to provide me with instructions, and to whom accounted to for my fees. I did not inform Ms Rees or Ms Tu of my fees, because I was never to bill them anyway. My defact (sic) client was the panel beater! I did disclose my fees to the panel beaters and provided them with a schedule of fees. There was never a conflict of interest of any description."
The complainant submitted that by her actions the solicitor was attempting to serve two or more Interests that were not compatible being that of the repairers and that of her clients. It was submitted that the solicitor was therefore in breach of a fiduciary duty owed to her clients. It was noted that the solicitor and the repairer could potentially benefit financially from Ms Rees and Ms Tu "choosing"' to appoint the solicitor to act on their behalf to recover the cost of their vehicles' repairs from the insurer. The complainant claimed that the solicitor therefore had a greater incentive to be loyal to and serve the interests of the repairers.
In further submissions of 6 October 2009 the solicitor stated: " I am
still convinced that all my clients retained my services. They wanted their vehicle to be repaired by their preferred panel
beater, i.e. the panel beater of their choice, not that of the NRMA." The solicitor indicated her view that there was never any difference between the interests of the client and that of the repairer as they both wanted payment for the repairs to the client's vehicle.
The Committee considers that the particular circumstances of the retainer were such as to result in a conflict of interest. The solicitor has acknowledged that it would have been more appropriate to work on the basis of an assignment to the repairer who would then have been her client. Whilst the solicitor claimed that there was no conflict as both parties (repairer and client) wanted the repairs done to the vehicle, the Committee considers that there was the possibility of a divergence of interests between the repairer and the client to an extent to raise a conflict.
7. The solicitor failed to conduct her practice In compliance with regulations.
In the reasons for decision of Dillon LCM in the Rees matter the
Complainant noted it was stated:
"First, she provided no satisfactory explanation for the fact that no trust account had been established in the name of Ms Rees but had been in the name of OJ which was not a client in these proceedings.
Second, she failed to explain why no information was provided to Ms Rees about the payment of $2,500.00 in costs by the defendant. She sought to suggest that if was an oversight that would have been dealt with in due course. The truth, however, was that the practice had every reason not to account to clients because it did not charge clients for the legal services provided. The clients were merely vehicles for claiming costs from defendants and their insurers."
In relation to the trust ledger keeping matters, the solicitor stated:
"I disagree that the trust ledgers were In the incorrect name. She (her accountant) wrote the name of the panel beater on the ledger and cross referenced it with the name of the particular client. In the case of Jennifer Rees it was CR17. This means client reference 17. The clients were listed on another page of the ledger."
In relation to trust monies in the Rees' case the solicitor stated:
" However, for the record, I did not appropriate the amount of $2,500.00 received in the Rees case. It was a cost order received when the hearing date was vacated. The order was made for costs thrown away" as a result of the adjournment. The cost order was disbursed and monies were applied to costs accrued. Both the client's written instructions and the Legal Profession Act permitted me to do so."
The Committee considers that the trust Iedger did not adequately identify the client. A further issue arises in relation to the costs order being absorbed in costs in circumstances where the client was not made aware of recept [stet] of the funds.
THE ISSUE THE APPLICANT SEEKS TO RAISE
From the documents, the written submissions, and her oral submissions at the hearing, the applicant assured us that she was not seeking a review of the determination by The Legal Services Commissioner under Subsection 506(2)(b) that the complaints should be dealt with.
She repeatedly assured us that she accepts that the effect of Subsection 506(4) is to prevent any review of that determination.
She did not seek to review the decision of The Professional Conduct Committee of 2 December 2010 to reprimand her for unsatisfactory professional conduct.
But what she did submit was that the intention of paragraph 506(2)(b) was to allow the investigation of complaints of professional misconduct out of time and that did not provide a basis on which the Law Society could then make a determination against her of unsatisfactory professional conduct, rather than any professional misconduct. It was an argument such as someone might raise in respect of a search warrant where a warrant was obtained to search for pornography, but when the search occurred no pornography was found, but illegal drugs were found, and based upon the search, charges were laid in respect of illegal drugs, rather than pornography.
JURISDICTION OF THE TRIBUNAL
It is common ground that the Tribunal has no power to review the decision of the Legal Services Commissioner to refer the complaints to the Law Society for investigation. That is the only relevant decision the Legal Services Commissioner made, and it is not a reviewable decision.
The Applicant, when asked, could not identify any provision of the Legal Profession Act that permitted her to bring this application.
Chapter 4 of the Act deals with Complaints and Discipline of legal practitioners. Part 4.6 of that Chapter deals with Reviews of decisions by the Council of the NSW Bar Association or the Law Society of NSW. It provides in section 543 for a complainant to be able to apply to the Legal Services Commissioner to review a decision of one of those Councils in respect of the complaint, where the decision is one that falls within one of the 3 categories specified in subsection 543(1). This is not such a decision. Part 4.6 does not provide for a legal practitioner to apply for a review of such a decision against the legal practitioner. Also it does not provide for any review of such a decision by the Tribunal.
Part 4.8 deals with Proceedings in the Tribunal. Section 551 of that part provides that proceedings regarding "the whole or part of a complaint against an Australian legal practitioner" may be commenced in the Tribunal by "the Commissioner" (the Legal Services Commissioner) or "a Council" ( the Council of the NSW Bar Association or the Council of the Law Society of NSW).
We could find no provision in the Act for proceedings in the Tribunal to be initiated by the legal practitioner against whom there has been a complaint or an adverse decision by a Council.
REVIEW OF DECISION OF PROFESSIONAL CONDUCT COMMITTEE
The decision of the Professional Conduct Committee was made exercising delegated powers of the Council of the Law Society. It seems that what the applicant seeks to do is to challenge or review that decision. In effect she seeks to argue that a decision finding her to have committed 3 grounds of unsatisfactory professional conduct was defective, because the complaints were each entertained out of time because they involved alleged professional misconduct and section 506(2)(b) authorised only investigation of, and findings of, professional misconduct, not less serious matters of unsatisfactory professional conduct.
A further difficulty is that even if the Tribunal had jurisdiction to entertain such a challenge to a decision of the Law Society, justice and fairness would require the Law Society to be a Respondent to the application and be served with the applicant's documents. But it is not a party and it has not been served with the applicant's documents.
CONCLUSIONS
Accordingly the application should be dismissed for want of jurisdiction.
Given the reasons for the dismissal and the fact that the applicant is or has been a legal practitioner and could be expected to have ensured that the application was competent before filing it, or at least before filing the amended application, the applicant should pay the costs of the Legal Services Commissioner.
ORDERS
The orders therefore are:
1. The Amended Application of the legal practitioner Elena Perla filed on 21 April 2011 is dismissed.
2.The Applicant legal practitioner must pay the costs of the Legal Services Commissioner of opposing her Application of 28 February 2011 and her Amended Application filed 21 April 2011.
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Decision last updated: 05 August 2011
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