Staffa v Legal Profession Complaints Committee
[2022] WASCA 83
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
TITLE OF COURT : THE COURT OF APPEAL (WA)
CITATION: STAFFA -v- LEGAL PROFESSION COMPLAINTS COMMITTEE [2022] WASCA 83
CORAM: QUINLAN CJ
VAUGHAN JA
TOTTLE J
HEARD: 8 NOVEMBER 2021
DELIVERED : 13 JULY 2022
FILE NO/S: CACV 72 of 2020
CACV 131 of 2020
BETWEEN: KEVIN COLIN BENEDICT STAFFA
Appellant
AND
LEGAL PROFESSION COMPLAINTS COMMITTEE
Respondent
ON APPEAL FROM:
Jurisdiction : STATE ADMINISTRATIVE TRIBUNAL
Coram: JUDGE K GLANCY (DEPUTY PRESIDENT)
MR D AITKEN (SENIOR MEMBER)
MS M CONNOR (MEMBER)
File Number : VR 25 of 2019
Catchwords:
Professions and Trades – Legal practitioner – Disciplinary proceedings before State Administrative Tribunal – Findings of professional misconduct and unsatisfactory professional conduct – Conflict of interest – Failure to be open and candid with Legal Profession Complaints Committee
Legislation:
Legal Profession Act 2008 (WA)
Legal Profession Conduct Rules 2010 (WA)
Rules of the Supreme Court 1971 (WA)
State Administrative Tribunal Act 2004 (WA)
Result:
Leave to appeal granted
Appeal allowed in part
Category: B
Representation:
Counsel:
| Appellant | : | In person |
| Respondent | : | M D Cuerden SC |
Solicitors:
| Appellant | : | In person |
| Respondent | : | Legal Profession Complaints Committee |
Cases referred to in decision:
Alexander v Minister for Home Affairs [2022] HCA 19
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336
Collins v Minister for Immigration and Ethnic Affairs [1981] FCA 147; (1981) 58 FLR 407
Fidock v Legal Profession Complaints Committee [2013] WASCA 108
Khosa v Legal Profession Complaints Committee [2017] WASCA 192
Legal Profession Complaints Committee and Staffa [2020] WASAT 58
Legal Profession Complaints Committee and Staffa [2020] WASAT 58 (S)
Legal Profession Complaints Committee v Rayney [2017] WASCA 78; (2017) 51 WAR 142
Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149
Nobarani v Mariconte [2018] HCA 36; (2018) 265 CLR 236
Ord Irrigation Cooperative Ltd v Department of Water [2018] WASCA 83; (2018) 232 LGERA 331
Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361
Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141
Table of Contents
Introduction and overview
Factual background
Mr Staffa's conduct in 2016
Mr Staffa's dealings with the Committee
Proceedings in the Tribunal
Ground 1 of the application
Ground 2 of the application
Ground 3 of the application
Ground 4 of the application
Evidence before the Tribunal
Conduct reasons
Reasons as to Ground 1 of the application
Reasons as to Ground 2 of the application
Reasons as to Ground 3 of the application
Reasons as to Ground 4 of the application
Hearing as to penalty
Penalty reasons
Grounds of appeal
Ground of appeal 1 – the finding that Mr Staffa acted in a position of conflict
Grounds of appeal 2 and 2A – Mr Staffa's advice to 'take and park' money
Ground of appeal 3 – misleading the Committee
Ground of appeal 4 – the Tribunal's reliance on Mr Staffa's withdrawn submissions
Ground of appeal 5 – the Tribunal's recommendation that Mr Staffa's name be removed from the roll
Conclusion
JUDGMENT OF THE COURT:
Introduction and overview
The appellant, Kevin Staffa, is a legal practitioner.
On 15 December 2020, the State Administrative Tribunal (Tribunal) determined to make and transmit a report to the Supreme Court (full bench) with a recommendation that Mr Staffa's name be removed from the roll of practitioners.[1] That recommendation was made following disciplinary proceedings brought by the Legal Profession Complaints Committee (Committee), in which the Tribunal found that Mr Staffa had engaged in professional misconduct and unsatisfactory professional conduct within the meaning of the Legal Profession Act 2008 (WA) (Legal Profession Act).[2]
[1] Legal Profession Complaints Committee and Staffa [2020] WASAT 58 (S) (Penalty reasons).
[2] Legal Profession Complaints Committee and Staffa [2020] WASAT 58 (Conduct reasons).
The disciplinary proceedings related to Mr Staffa's conduct in providing legal services to a Mr W (W), a former director and employee of a company (Australian Company) that had been a client of Mr Staffa for many years.[3] The Committee brought the proceedings on four grounds, which were in summary that:
(a)Mr Staffa, having been engaged to provide legal services to the Australian Company, also provided legal services to W for his personal benefit in circumstances where there was a conflict or potential conflict of Mr Staffa's duty to act in the best interests of each of the Australian Company and W (Ground 1);
(b)Mr Staffa, by his incorporated legal practice, rendered bills to the Australian Company for legal services performed by Mr Staffa for the personal benefit of W (Ground 2);
(c)Mr Staffa advised W to transfer money from the Australian Company's bank account to a personal account controlled by W in anticipation of W's entitlements upon the termination of W's employment with the Australian Company (Ground 3); and
(d)Mr Staffa was not open and candid in his dealings with the Committee and failed to provide a full and accurate account of his conduct in relation to the matters requested by the Committee (Ground 4).
[3] So as to be consistent with the Conduct reasons and Penalty reasons, we have adopted the pseudonyms for the various persons and entities used by the Tribunal.
The Tribunal concluded that the conduct the subject of Grounds 1, 3 and 4 amounted to professional misconduct and that the conduct the subject of Ground 2 amounted to unsatisfactory professional conduct.
Mr Staffa now appeals the finding of professional misconduct in relation to counts 1, 3 and 4 (CACV 72 of 2020). He also appeals from the recommendation that his name be removed from the roll of practitioners (CACV 130 of 2020).
To be clear, these appeals are not concerned with whether the Tribunal's recommendation in that regard should be accepted. Whether Mr Staffa's name should be removed from the roll of practitioners is a matter for the Full Bench, having regard to the circumstances existing at such time, if any, that the Full Bench hears a motion for such an order. Rather, these appeals are concerned with whether the Tribunal was in error in making the findings of professional misconduct and with whether the Tribunal made a material error in making the recommendation that it did.
For the reasons that follow, while Mr Staffa has identified appellable error, we are not satisfied that the Tribunal's conclusions as to its findings of professional misconduct and its recommendation were affected by material error. While we accept, as indeed the Committee conceded, that the Tribunal fell into error in two respects, those errors were not, in the circumstances, material. One of the errors could not possibly have led to a different outcome. The other, while necessitating that the appeal be allowed in part, requires only a minor modification to the terms on which the Tribunal's report is to be transmitted to the Supreme Court (full bench).
Whether the Full Bench accepts the Tribunal's recommendation that Mr Staffa's name should be removed from the roll of practitioners is, as we have said, a matter for the Full Bench.
Before turning to the Tribunal's Conduct reasons and Penalty reasons, it is convenient to set out the relevant factual background and procedural history.
Factual background
Much of the factual background before the Tribunal was not contentious.
Mr Staffa was admitted to legal practice on 14 February 1978 and had practiced continuously from that time until the events the subject of the disciplinary proceedings. At all material times he was the sole legal practitioner director of an incorporated legal practice, Legal Success Pty Ltd, trading as Legal Success (Practice).[4]
[4] Conduct reasons [14].
The Australian Company was registered on 16 May 2012 and was a wholly owned subsidiary of a limited liability company incorporated under the laws of Germany (German Company). The German Company in turn was owned to the extent of 75% by another German company, of which MH was the managing director. The remaining 25% of the German Company was owned by HB, a resident of Germany.[5] The Australian Company was the Australian agent of the German company for the sale in Australia of equipment and parts made by the German company.[6]
[5] Conduct reasons [15].
[6] Conduct reasons [16].
Mr Staffa had acted for the Australian Company in respect of various matters since its incorporation in May 2012. Mr Staffa took instructions, on the Australian Company's behalf, from W who was the Australian Company's managing director.[7]
Mr Staffa's conduct in 2016
[7] Conduct reasons [18].
Between on or around 24 June 2016 to at least on or around 28 June 2016, Mr Staffa was engaged by W on behalf of the Australian Company to provide legal advice to the Australian Company with respect to various issues concerning its management, including advising the Australian Company as to the rights and entitlements of its employees, including W, against the Australian Company.[8]
[8] Conduct reasons [19].
On 28 June 2016, for example, Mr Staffa provided advice to the Australian Company which concluded in the following terms:[9]
I strongly recommend that if the shareholders or [MH] purport to terminate the employment of any of the employees it should be treated as a redundancy. If for whatever reason [the Australian Company] wants to reach a compromise agreement you should probably seek my advice and the matter should be the subject of a Deed of Settlement for each of the employees.
Queries
Please let me know if you have any queries in relation to any of the above.
[9] GAB 408 - 409.
By letter dated 7 July 2016, W was advised, by MH, that the German Company, as the sole shareholder of the Australian Company, had resolved to terminate W's employment with the Australian Company (with effect from 4 January 2017) and to remove W as managing director (with immediate effect). W was asked to sign a director's resignation to that effect.[10] MH also provided W with a Record of Resolution of the Australian Company recording W's removal as a director.[11]
[10] GAB 412 - 413.
[11] GAB 414.
The next day, on 8 July 2016, W resigned as a director of the Australian Company but remained as an employee, as general manager.[12]
[12] Conduct reasons [19].
On 8 July 2016, W also contacted Mr Staffa by email. The email was from W's private email address and was headed '[W] – Request for Services – Termination'. In the email, W:[13]
(a)informed Mr Staffa that he received the documentation from MH giving notice of termination of his employment and removal as a director of the Australian Company on 7 July 2016;
(b)provided Mr Staffa with copies of documents that he had received in respect of the termination or purported termination of his directorship of, and employment with, the Australian Company. He also provided a copy of his employment contract with the Australian Company;
(c)sought Mr Staffa's advice about the validity of his termination and about other matters relevant to the termination of his employment;
(d)asked Mr Staffa to send all correspondence to his private email address, and to invoice him personally on the matter rather than the Australian Company 'unless an outcome is found whereby [the Australian Company] settles all legal fees'.
[13] Conduct reasons [20]; GAB 415 - 416.
In a further email to Mr Staffa dated 11 July 2016, W:[14]
(a)attached calculations as to the approximate amount of his employment entitlements as provided by the Australian Company's accountants, based on W's instructions (the amount being stated as $350,158.62);
(b)stated that his 'objectives' were to obtain confirmation from the Australian Company's shareholder as to his entitlements, to determine if the circumstances of his termination qualified for a redundancy package, to clarify the period of notice he would be paid, and to explore on what grounds, if any, he could leave the Australian Company prior to the expiry of the 6 months' notice period; and
(c)asked Mr Staffa to review and advise if there was legal justification for any of his objectives.
[14] Conduct reasons [21]; GAB 417.
In a letter dated 13 July 2016 sent by email to W's email address at the Australian Company, Mr Staffa advised W that he was preparing his advice in relation to W's email of 8 July 2016, a lengthy telephone discussion on 8 July 2016 and W's email of 12 July 2016 (which appears to be a reference to the email of 11 July 2016). The letter, which was headed 'Termination of Employment', included the following advice from Mr Staffa to W:[15]
However, there is one issue I think you need to deal with immediately. My assumption is that you are at present the only signatory on the bank accounts for [the Australian Company], [P] having resigned as a director some weeks ago. I also assume that you have the user name and password for [the Australian Company's] bank accounts.
For reasons I will explain in my detailed advice, I recommend that you immediately change the password for [the Australian Company's] bank accounts and not divulge the new password to any third parties, including officers of [the German Company]. I realise that this may sound like a drastic step, but at least you have the comfort of knowing that you are acting on legal advice.
[15] Conduct reasons [22]; GAB 423 - 424.
Mr Staffa sent W a second letter on 13 July 2016, again by email to W's email address at the Australian Company. That letter said:[16]
I had meant to mention in my urgent email sent to you this morning that I recommend against you giving legal advice or pointers to [the German Company] (e.g. [MH]).
If you alert them to the things that may work to your disadvantage it will potentially undermine our efforts to protect your position.
My suggestion is that you leave [the German Company] to obtain whatever advice it chooses, as a shareholder, except to the extent that I consider it beneficial, from your perspective, to draw any legal issues to their attention. The upshot is, unless you can see a clearly tangible benefit to you from giving such information to [the German Company], or unless you are obliged to do so in the course of your duties as manager (and my view is you are under no duty to give a shareholder legal advice) you should let matters work themselves out.
[16] Conduct reasons [23]; GAB 425.
By letter dated 14 July 2016, Mr Staffa provided a detailed advice to W 'in relation to the termination of your employment with [the Australian Company]'. The letter was sent to W's email address at the Australian Company. In the letter, Mr Staffa gave advice to W about various issues including the issues raised in W's emails to Mr Staffa of 8 and 11 July 2016 and W's rights and entitlements as an employee of the Australian Company.[17]
[17] Conduct reasons [24].
Mr Staffa's advice of 14 July 2016 included the following:[18]
[18] GAB 428 - 436.
4.The pressing important practical issue, from your perspective, at this stage, is the proper management of [the Australian Company].
It is crucial that [the Australian Company] not be allowed to trade while insolvent. As I understand it, it presently has adequate cash at bank to ensure that it can meet all its employee and lease obligations up to 4 January 2017.
As its director, you must ensure that the bank account is not depleted to the point where that ability may be compromised as it would not only potentially adversely affect employees but might leave you personally exposed as a director of [the Australian Company].
…
14.I share your concern that [the German Company's] plan is to remit funds from [the Australian Company's] account back to Germany. Once that occurs, it would likely be extraordinarily difficult, and possibly very costly, for you to try to recover your employment entitlements. More than likely, [the Australian Company] would be put into voluntary liquidation, and you would be left high and dry.
15.My advice is that you should not sign a resignation as director of [the Australian Company], at this stage.
It follows from this advice that you should also not resign as an employee – as the unavoidable consequence of that would be that you cease to be a director in fact even if you still appear as a director on ASIC searches.
…
Conclusions and Strategy
36.I suggest that you write to [the German Company] giving an outline of your termination entitlements and requesting confirmation that they will pay.
You could also mention that your calculations of payment entitlements reflects the accounting and legal advice to [the Australian Company].
You should point out that you are entitled to redundancy pay in addition to the payment under clause 13(c) of your employment contract.
You could ask [the German Company] to confirm its agreement to this within seven days.
37.If [the German Company] refuses to confirm you could then write a letter advising that you have not received a response and that unless you receive a response within a further, say, seven days you will need to consider your options. However, we should not rush into a resignation.
38.If you still do not receive a response you could then put a proposal to [the German Company] that you resign and [the Australian Company] pay you all the entitlements you have claimed and you will make yourself available to work as a consultant to assist [the Australian Company] for a specified period.
It is apparent, from the terms of his advice of 14 July 2016, that Mr Staffa was not, at that time, aware that W had in fact already resigned as director of the Australian Company.
On or about 15 July 2016, Mr Staffa, through the Practice, billed the Australian Company in respect of his legal services for the period between 8 and 14 July 2016 inclusive.[19]
[19] Conduct reasons [25]; GAB 439 - 440.
Also on 15 July 2016, in accordance with Mr Staffa's advice that W should write to the German Company, W wrote to MH seeking confirmation as to W's entitlements upon termination of his employment.[20] MH responded by letter dated 20 July 2016, to the effect that W's entitlements could not be calculated until the final date of W's employment was known and the circumstances of the Australian Company were clear.[21]
[20] Conduct reasons [26].
[21] GAB 443 ‑ 444.
By email dated 21 July 2016, W sent Mr Staffa copies of his letter to MH of 15 July 2016 and MH's response of 20 July 2016. He asked to meet with Mr Staffa 'to clarify the options that I may have to determine the possibilities of having my entitlements paid'.[22]
[22] Conduct reasons [28]; GAB 445.
On 22 July 2016, Mr Staffa met with W. Mr Staffa made a note of the meeting. At the meeting:[23]
(a)Mr Staffa and W discussed steps that could be taken to protect and advance W's personal interests in obtaining his anticipated termination entitlements;
(b)W informed Mr Staffa that he had resigned as a director of the Australian Company on 8 July 2016; and
(c)W discussed 'taking and parking' money from the Australian Company in an amount sufficient to cover W's anticipated termination entitlements.
[23] Conduct reasons [30]; GAB 449 - 450.
In a letter of the same date, 22 July 2016, sent by email to W at W's personal email address, Mr Staffa confirmed their meeting earlier that day. The letter included the following:
Given the evasive response in the letter of 20 July 2016 from [MH], I see no option but for you to take proactive steps to protect your entitlements. I therefore confirm that my advice to you is that you immediately transfer into a bank account controlled only by you the full amount of your employment entitlements from today up to and including 4 January 2017 as per the advice you have received from PKF and my office.
…
Unfortunately the urgency of this matter precludes me from going into further detail in this advice; but I am now aware that you resigned as a director on or about 8 July 2016 and that the current directors of [the Australian Company] are [MH] and [PL] – but that does not alter my advice.
Mr Staffa's letter of 22 July 2016 also attached a draft letter for W to send to MH. That draft letter stated that there was doubt about whether W would be paid his employee entitlements and included the following:
[I]t is patently obvious that the agenda of [the German Company] (the shareholder) is to siphon off the funds of [the Australian Company] to prop up [the German Company's] ailing business in Germany; …
[The German Company's] correspondence has wrongly asserted or implied that [the Australian Company] has failed to meet its budget (when that is plainly not the case) and that I should bear some responsibility for that. The correct position is that [the Australian Company] has performed above budget notwithstanding the horrendous downturn in the resources sector in Australia over the last eighteen months. …
In the circumstances, and on the basis of advice I have received, I have transferred the sum of $[[W] to insert] from [the Australian Company's] account into a holding account controlled by me, to ensure that I receive my full termination entitlements.
On or about 22 July 2016, Mr Staffa through the Practice billed the Australian Company in respect of his legal services provided on 21 and 22 July 2016.[24]
[24] Conduct reasons [33].
Also on 22 July 2016, W transferred $378,000 from the Australian Company's bank account into a bank account controlled by W.[25]
[25] Conduct reasons [34].
On 25 July 2016, W wrote to MH in terms based on (but not identical to) the draft letter which Mr Staffa had prepared. In the letter W informed MH that, having taken advice and on the basis of that advice, he had transferred the sum of $378,000 from the Australian Company's account 'into a holding account controlled by me, to ensure that I receive my full termination entitlements'.[26]
[26] Conduct reasons [35].
By email to Mr Staffa on 27 July 2016, WM, a legal practitioner engaged by the German Company, asked Mr Staffa to confirm who Mr Staffa's client was at the time he advised W regarding the transfer of funds from the Australian Company's account. Mr Staffa responded in an email that same day, to the effect that he was 'at all times taking instructions from and providing advice to [the Australian Company], via its manager [W]; as I have done on numerous occasions over many years in relation to matters involving staff and third parties'.[27]
[27] Conduct reasons [36]; GAB 464.
By letter dated 27 July 2016, Mr Staffa wrote to W, referring to two lengthy telephone discussions he had had with W on the afternoon of 26 July 2016. The letter included the following:[28]
[28] Conduct reasons [37]; GAB 460 - 463.
5.The current position is as follows:
(a)as a result of your concerns, which I share, I have agreed with your idea of putting the funds into the holding account and in fact I have stated clearly that that is my advice. This should give you some comfort as no matter how matters unfold, you will be able to state, categorically, that you sought legal advice and acted only in accordance with legal advice;
(b)furthermore, you can take comfort in the fact that you arranged for PKF to provide you with advice on your termination pay entitlements (based on your understanding of your employment agreement), which means it cannot be asserted that you dreamt up the calculations; and
(c)my view remains that you are currently (unless you bring forward your resignation to make it operate instantly) the sole manager of [the Australian Company] – a position you have held since the company was incorporated.
(d)In that capacity, it is one of your functions to facilitate the calculation and payment of termination payments to employees – as you have just recently done in the case of [F] and [M]. In other words, I see it as a legitimate role for you to calculate your own termination pay given that there is no-one else who can do so – and this is all the more so if you decide to bring your resignation forward.
…
8.As I see it, as we discussed, your choices are:
(a)trust the fellows at [the German Company] to deal fairly with you, in which case the funds can be paid back into the account for [the Australian Company];
(b)if you do not trust your German colleagues then your choices are:
(i)keep the funds in the holding account and do not bring your resignation forward. The risk you will face in this scenario is that [the German Company] may persuade the Supreme Court to order that the funds be paid back to [the Australian Company's] account, which would put you in the same position as choice (a) above.
The problem you have with this option is that you are almost certainly not entitled to receive the termination payments until your employment actually ends (i.e. on 4 January 2017), which means a Court may well order you to pay the funds back into [the Australian Company's] account. If the funds are then remitted to Germany then you can only hope that you will be paid your entitlements; or
(ii)bring forward your resignation so it operates immediately and this would then give you the argument that you are immediately entitled to the termination payments because your employment has ceased.
…
15.There is one other matter we need to sort out. If you now leave [the Australian Company] I will be obliged to open a file in your name and charge you for my time, including the teleconferences on 26 July 2016 and this advice. Please let me know whether that is agreeable to you.
On 27 July 2016, following receipt by W of a letter by email from MH accusing W of misconduct and criminal behaviour with respect to the transfer of the funds and demanding the return of those funds that day, Mr Staffa had a telephone discussion with W in which he advised W, with respect to the allegations of misconduct and criminal behaviour made against W, that he (Mr Staffa) disagreed with those allegations.[29]
[29] Conduct reasons [38].
By letter dated 28 July 2016 sent by email to W at his personal email address, Mr Staffa advised: [30]
[MH] demands that the funds be returned to [the Australian Company]. I have stated to you on numerous occasions that this is a decision for you to make. I have said that if you trust your German colleagues to deal fairly with you then the funds can be returned. On the other hand, if you do not trust them then you need to decide whether or not you are prepared to take the risk of returning the funds and missing out on termination payments to which you are entitled.
I am mindful of the fact that it was you, who, initially, suggested that the funds be transferred into a holding account. I readily agreed that that was appropriate if you had reason to believe that the funds would be transferred overseas and might result in you not being paid. As I see it, as manager of [the Australian Company], you have an obligation to ensure that employees (including yourself) receive termination payments to which they are lawfully entitled.
[30] Conduct reasons [39]; GAB 471 - 473.
The letter of 28 July 2016 concluded:
Please note, as discussed, I believe we are now at the stage where [the Australian Company] will not pay for any of my ongoing work in this matter and I am proceeding on the basis that you will ensure that my tax invoices are paid. Please confirm that this is the case.
On 1 August 2016, Mr Staffa through the Practice billed W in respect of his legal services provided between 27 July and 1 August 2016.[31]
Mr Staffa's dealings with the Committee
[31] Conduct reasons [40].
The Committee first wrote to Mr Staffa on 14 October 2016, raising a number of preliminary concerns, including concerns as to an apparent conflict of interest in acting for concurrent clients and as to whether his invoices had been paid, and by whom.[32]
[32] GAB 482 ‑ 484.
Mr Staffa responded by letter dated 17 October 2016.[33] He stated that he had not had time to review the materials referred to by the Committee in its letter but said:
Without reviewing the file, I am satisfied that I had no conflict of interest, and will expand on that in due course when given the opportunity.
[33] GAB 485 ‑ 486.
Mr Staffa said that he was not in a position to consider alternatives to secure the funds and that the decision to transfer the funds was W's. The letter also confirmed that 'all the invoices sent to [the Australian Company] were paid'.
By letter dated 10 April 2017, the Committee wrote to Mr Staffa:[34]
(a)advising Mr Staffa that the Committee was investigating a complaint made in respect of his conduct, including that Mr Staffa advised W to transfer the funds from the Australian Company's account to a holding account in circumstances in which Mr Staffa was aware, or ought to have been aware, that W was not presently entitled to the funds and had no authority to transfer the funds and that the transfer may be regarded as an unlawful act by W;
(b)informing Mr Staffa that he had the right to make submissions to the Committee in respect of the conduct complained of;
(c)requesting that Mr Staffa provide his entire original file and all documents relating to the matter; and
(d)reminding Mr Staffa that he must be open and candid in his dealings with the Committee and must provide a full and accurate account of his conduct, and referred to r 50(2) and (3) of the Legal Profession Conduct Rules 2010 (Conduct Rules).
[34] Conduct reasons [40].
Mr Staffa responded by letter dated 2 May 2017. The letter was 22 pages long. Mr Staffa also provided a lever arch file with 104 documents relating to the Australian Company and W.
In his letter of 2 May 2017, Mr Staffa said:[35]
[35] Conduct reasons [42]; GAB 489 - 510.
7.… In brief response to those allegations I say:
(a)(i) I dispute that there was any conflict of interest;
(ii)I had given legal advice to [the Australian Company] ('AA') since its inception and much of that advice had involved employee advice including employee advice relating to [W]. That was a practice that AA adopted in its instructions to me;
(iii)the only directors of AA were [W] and a German resident, [PW], who I met in Australia on several occasions;
(b)(i) you are mistaken to state that I advised the employee to transfer an amount of $378,000.00 ('funds') from the employer's account;
(ii)that decision was made by [W];
(iii)nonetheless, I do not agree that, in the circumstances, the transfer would be considered an unlawful act by [W];
The letter of 2 May 2017 also included a table of comments with respect to the documents provided in the file to the Committee. In that table:
(a)with respect to his letter to W of 14 July 2016, Mr Staffa commented that:
note: none of the advice given by me suggested that [W] remove funds from any accounts of [the Australian Company] – that suggestion came from him, and it was no doubt a decision made by him in his capacity as managing director;
(b)with respect to his letter to W of 22 July 2016, Mr Staffa stated 'No comment'; and
(c)with respect to his letter to W of 27 July 2016, Mr Staffa commented that:
in paragraph 5(a), I confirmed that it was [W] whose idea it was to put funds of [the Australian Company] into a holding account, and that this had been done without any input from me.
By letter dated 5 February 2018, the Committee requested that Mr Staffa provide further submissions as to, inter alia, the reference in Mr Staffa's notes of the meeting with W of 22 July 2016 that he 'take and park the money'.[36]
[36] Conduct reasons [43].
Mr Staffa responded to the Committee by letter dated 5 March 2018.[37] Mr Staffa said that W could either confirm or deny that he initially transferred the funds of his own volition without Mr Staffa's advice or input. He also said that W had already made a decision to put funds into a holding account to cover his anticipated employee entitlements prior to Mr Staffa's meeting with W on 22 July 2016.
[37] Conduct reasons [44].
On 4 April 2018, the Committee again wrote to Mr Staffa, seeking further submissions.[38] It specifically posed the following allegation of professional misconduct for his response:[39]
2.Advising [W] to transfer an amount of $378,000 (the funds) from [the Australian Company's] account to a holding account in circumstances where you were aware, or ought to have been aware, that [W] was not presently entitled to the funds and had no authority to transfer the funds and that the transfer may be regarded as an unlawful act.
[38] Conduct reasons [45].
[39] GAB 521.
Mr Staffa responded to the Committee by letter dated 27 April 2018. He repeated and supplemented the answer he provided to the Committee in his letter of 5 March 2018, and said that:[40]
(a)W made the decision to transfer the funds;
(b)W actually effected the transfer before seeking advice from Mr Staffa; and
(c)he did not advise W to transfer the funds from any account or to any account and that that was a decision that W made.
[40] Conduct reasons [46].
In that context, Mr Staffa responded to the specific allegation set out at [49] above in the following terms:[41]
4.Your paragraph 2 advises that the amount transferred by [W] was $378,000.00.
This amount was not discussed with me or disclosed to me by [W]. He told me that he calculated amounts due to him with the assistance of the accountants for [the Australian Company].
Your mention of the figure of $378,000.00 suggests that the LPCC has obtained information which has not been disclosed to me, but which has had a bearing on the LPCC's decisions in this matter. That may be information that I suggested (paragraph 1.2 of my letter to you of 5 March 2018) should be obtained from [W].
[41] GAB 526.
Proceedings in the Tribunal
As noted at the beginning of these reasons, the Committee's application to the Tribunal (the application) made four allegations of professional misconduct against Mr Staffa. The nature of those allegations and Mr Staffa's formal response to them (as reflected in his Amended Statement of Facts and Contentions) may be briefly summarised.
Ground 1 of the application
Ground 1 of the application alleged that between on or about 8 July 2016 and on or about 28 July 2016 Mr Staffa engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act, in that:
his conduct fell short consistently and by a substantial degree of the standard of professional conduct observed and approved by members of the legal profession of good repute and competence and would be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence, in that, having been engaged by [the Australian Company] through its managing director [W] to provide legal services to [the Australian Company], namely legal advice with respect to issues concerning the management of [the Australian Company] including advising [the Australian Company] as to the rights and entitlements of the employees of [the Australian Company] (including [W]) against [the Australian Company], [Mr Staffa] provided legal services to [W] for the personal benefit of [W] and pursuant to [W's] instructions in his personal capacity with respect to the same or related matters, namely legal advice to [W] in relation to the termination or purported termination of his employment by [the Australian Company], his rights and entitlements consequential upon the termination of his employment and recovery of his entitlements from [the Australian Company] consequential upon the termination of his employment, in circumstances in which the interests of [the Australian Company] and [W] were adverse and there was a conflict or potential conflict of his duties to act in the best interests of each of [the Australian Company] and [W], contrary to Rule 14(2) of the Legal Profession Conduct Rules 2010.
As can be seen, Ground 1 specifically alleged that Mr Staffa's conduct was contrary to r 14(2) of the Conduct Rules. Rule 14(2) and (3) provide:
(2)A practitioner must not provide, or agree to provide, legal services for a client if –
(a)the practitioner or the practitioner's law practice is engaged by another client in the same or a related matter; and
(b)the interests of the client and the other client are adverse; and
(c)there is a conflict or potential conflict of the duties to act in the best interests of each client.
(3)Subrule (2) does not apply if –
(a)each client is aware that the practitioner or the practitioner's law practice is also providing legal services to each other client; and
(b)each client has given informed consent to the practitioner or the practitioner's law practice providing the legal services to each other client; and
(c)an effective information barrier has been established to protect the confidential information of each client.
Paragraphs 5, 6, 7 and 8 of the Committee's Statement of Facts alleged:
5.Since its registration on 16 May 2012, the practitioner had acted for the Company in respect of various matters on instructions from Mr W on the Company's behalf.
6.Between on or about 24 June 2016 and on or about 28 June 2016, the practitioner was engaged by Mr W on behalf of the Company to provide legal advice to the Company with respect to various issues concerning the management of the Company, including advising the Company as to the rights and entitlements of employees of the Company (including Mr W) against the Company.
7.Thereafter, the practitioner continued to be engaged by the Company in respect of the matter or matters referred to in the preceding paragraph.
8.As to the proposition in the preceding paragraph that the practitioner continued to be engaged by the Company after 28 June 2016 in respect of the matter or matters referred to in paragraph 5 herein, the Committee relies on the following matters: … [matters 8.1 to 8.12 omitted]
The Committee's Statement of Facts, after reciting much of the background facts set out above, including the advice provided to W, alleged:
28.In providing advice to Mr W … , the practitioner provided legal advice to Mr W in relation to the termination or purported termination of his employment by the Company, his rights and entitlements consequential upon the termination of his employment and recovery of his entitlements from the Company consequential upon the termination of his employment.
29.The practitioner provided that advice to Mr W in his (Mr W's) personal capacity, for Mr W's personal benefit and not for the benefit of the Company.
In his Amended Statement of Facts and Contentions, Mr Staffa admitted paragraphs 5 and 6 of the Committee's Statement of Facts. He also admitted paragraphs 28 and 29 of the Committee's Statement of Facts.
In relation to the Committee's specific allegation (in paragraphs 7 and 8 of the Committee's Statement of Facts) that Mr Staffa continued to be engaged by the Australian Company in relation to the matter or matters concerning W after 28 June 2016, Mr Staffa's Amended Statement of Facts and Contentions provided:
18.The Respondent:
(a)save that the Respondent denies that he billed [W] on 1 August 2016 because there was no prospect of the respondent being paid by the Company, admits paragraph 8 of the Applicant's Statement of Facts and Contentions;
(b)denies that the matters identified in paragraph 8 of the Applicant's Statement of Facts and Contentions lead to the conclusion asserted in paragraph 7 of the Applicant's Statement of Facts and Contentions, and says that the Respondent did not provide advice to or otherwise act for [the Australian Company] regarding [W's] employment after 28 June 2016;
(c)says that after 28 June 2016 the Respondent is to be properly regarded as having provided advice to and otherwise having acted on behalf of [W] in his personal capacity;
(d)in the premises, denies paragraph 7 of the Applicant's Statement of Facts and Contentions;
(e)acknowledges that, notwithstanding the matters stated in paragraphs [18(b), (c) and (d)] above, it was inappropriate for the Respondent to both act on behalf of [W] in respect of his employment by [the Australian Company] after 28 June 2016 and to issue the invoices identified in paragraphs 8.1 and 8.2 of the Applicant's Statement of Facts and Contentions to [the Australian Company], and admits that he should not have acted in that manner.
As will be apparent, Mr Staffa's substantive response to Ground 1 was, in essence, that from 28 June 2016 he was not acting for the Australian Company in relation to the issues concerning W and so was not, technically, in breach of r 14(2) of the Conduct Rules.
As we will come to later, given Mr Staffa's obvious conflict of interest in acting for W in relation to the termination of his employment by the Australian Company in any event (i.e. regardless of whether he was formally acting for the Australian Company as well), the dispute before the Tribunal in relation to Ground 1 reflected something of a triumph of form over substance. Nevertheless, that is how the case was run and that is how the Tribunal approached it.
Even still, while it referred to previous occasions upon which Mr Staffa had express instructions to act for W notwithstanding a potential conflict with his duties to the Australian Company, Mr Staffa's Amended Statement of Facts and Contentions did not contend that r 14(3) of the Conduct Rules applied to his conduct after 28 June 2016. On the contrary his pleaded case was that he did not act for the Australian Company after 28 June 2016.
Ground 2 of the application
Ground 2 of the application alleged that on or about 15 and 22 July 2016 respectively Mr Staffa engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act, in that he caused the Practice to render bills to the Australian Company for services performed by Mr Staffa for the personal benefit of W and pursuant to W's instructions in his personal capacity, and further in circumstances in which:
(a)W had expressly requested Mr Staffa to bill him personally with respect to the legal services the subject of those bills;
(b)the legal services the subject of those bills were adverse to the interests of the Australian Company; and
(c)on 22 July 2016, before Mr Staffa caused the Practice to render the bill on that date, W informed Mr Staffa that W was no longer a director of the Australian Company.
As will be apparent from paragraph 18(e) of his Amended Statement of Facts and Contentions (see [58] above), Mr Staffa accepted that it was inappropriate for him to bill the Australian Company for the services provided to W. His case before the Tribunal was that this conduct was simply an error on his part and should only be characterised as unsatisfactory professional conduct, rather than professional misconduct.
Ground 3 of the application
Ground 3 of the application alleged that on or about 22 July 2016 Mr Staffa engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act, in that
his conduct fell short by a substantial degree of the standard of professional conduct observed and approved by members of the legal profession of good repute and competence and would be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence, in that he advised [W] to transfer money from the [Australian] Company's bank account to a personal account controlled by [W] in an amount equivalent to the estimated amount of [W's] potential entitlements consequential upon the termination or potential termination of his employment with the [Australian] Company (the Funds) in circumstances in which [Mr Staffa] knew that [W] had resigned as a director of the Australian Company on or about 8 July 2016 and:
(a)[Mr Staffa] knew or ought to have known that [W] had no entitlement to, or interest in, the Funds;
(b)[Mr Staffa] knew or ought to have known that [W] had no authority from the [Australian] Company to transfer the Funds to a personal account controlled by him or at all;
(c)[Mr Staffa's] advice exposed [W] to the possibility of being charged with the offence of stealing contrary to s 378 of the Criminal Code (WA).
In his Amended Statement of Facts and Contentions, Mr Staffa responded to this allegation to the effect that he believed that W did have an interest in the whole or part of the funds arising out of his employment with the Australian Company and that he believed that W had authority to transfer the funds to a personal account by reason of W's continued employment as the general manager of the Australian Company and W's entitlement to the whole or part of the funds.[42]
[42] Respondent's Amended Statement of Facts and Contentions, paragraph 35 (BAB 116).
Ultimately, however, Mr Staffa accepted that his advice to W to 'take and park' sufficient funds was negligent. In his Closing Submissions, it was submitted that he failed to appreciate that, notwithstanding the Australian Company's indebtedness, W could not engage in 'self-help' and that W's authority did not extend to transferring the funds.[43] Mr Staffa contended that the conduct the subject of Ground 3 should be characterised as unsatisfactory professional conduct, rather than professional misconduct.
[43] Respondent's Closing Submissions, paragraph 37 (BAB 158).
In that context, Mr Staffa maintained that W was not exposed to being charged with stealing as W did not intend to permanently deprive the Australian Company of any money to which he was not entitled.
Ground 4 of the application
Ground 4 of the application alleged that between on or about 2 May 2017 and on or about 27 April 2018 Mr Staffa engaged in professional misconduct within the meaning of s 403 and s 438 of the Legal Profession Act, in that
his conduct fell short consistently and by a substantial degree of the standard of professional conduct observed and approved by members of the legal profession of good repute and competence and would be reasonably regarded as disgraceful or dishonourable to practitioners of good repute and competence, in that by his correspondence to the Committee dated 2 May 2017, 5 March 2018 and 27 April 2018, [Mr Staffa] was not open and candid in his dealings with the Committee and failed to provide a full and accurate account of his conduct in relation to matters covered by requests by the Committee to provide comments or information in relation to [Mr Staffa's] conduct or professional behaviour contrary to r 50 of the Conduct Rules, in that [Mr Staffa] told the Committee that [Mr Staffa] did not advise [W] to transfer the Funds from the [Australian] Company's bank account to a personal account controlled by [W] (Statement) in circumstances in which:
(a)the Statement was false or misleading, or both, as in fact [Mr Staffa] did advise [W] to so transfer the Funds;
(b)[Mr Staffa] well knew that the Statement was false or misleading, or both, in a material respect and/or that it had the potential to mislead the Committee and [Mr Staffa] intended that the Committee be misled;
(c)alternatively to (b), [Mr Staffa] acted with reckless disregard or indifference as to whether or not the statement was false or misleading, or both, and/or had the potential to mislead the Committee and as to whether the Committee would be misled by the Statement;
(d)further alternatively to (a) and (b), [Mr Staffa] was grossly careless in failing to ensure that the Statement was not false or misleading, or both, in a material respect, and/or had the potential to mislead the Committee.
As can be seen, Ground 4 of the application also drew upon Mr Staffa's obligations under the Conduct Rules; in this instance r 50(2). Rule 50(2) of the Conduct Rules provides:
A practitioner must be open and candid in his or her dealings with a regulatory authority.
In his Amended Statement of Facts and Contentions, Mr Staffa accepted that his statement to the Committee that he did not advise W to transfer funds from the Australian Company's bank account to a personal account controlled by W was incorrect. He maintained, however, that his response reflected his best recollection.
Mr Staffa contended that Ground 4 could not be made out in circumstances in which:
(a)he had provided his entire file to the Committee;
(b)he had suggested to the Committee that it verify what had occurred with W; and
(c)his correspondence with the Committee reflected his best recollection of the events.
Evidence before the Tribunal
In addition to the documentary record, both W and Mr Staffa gave evidence before the Tribunal and were cross-examined. It will be necessary to refer to aspects of Mr Staffa's evidence, in particular, later in these reasons.
One particular aspect of Mr Staffa's evidence that may be noted at the outset is that, notwithstanding his defence of the allegations (particularly Ground 1) on the basis that, after 28 June 2016, he was not acting for the Australian Company, it was nevertheless Mr Staffa's evidence that, at the time, he did consider himself to be acting for the Australian Company. It was in that context that Mr Staffa raised, in cross-examination, the notion that he had the informed consent of the Australian Company to act in a position of conflict.
It is appropriate to set out some of that evidence in detail. Mr Staffa was asked:[44]
[D]o I take it that you did perceive there to be a conflict between the interests of Mr W and the interests of [the Australian Company]?---There was a conflict from the very first time I acted for [the Australian Company] and [W]. There was a conflict between the two companies, [the German Company] and [the Australian Company], and there was a conflict between each of them and [W], and this was discussed at a meeting that I had at O'Connor Partners …
I understand that. That's in your statement. I understand you say that?---Yes.
I take it – because you haven't produced anything in writing, I take it there's no written record of this discussion that you have?---No.
No?---Not that I – I mean, it might be in the files of O'Connor Partners, but that firm has been wound up for years.
When you started your firm, do I understand you to be saying that you proceeded on the basis that you had full and unqualified consent of [the German Company] and [the Australian Company] to act in a position of conflict between Mr – Mr W and [the Australian Company] or [the German Company] in any situation and you were to prefer the interests of Mr W? Is that what you're saying?---I was expressly told that I was to protect [W] because he was their king man. They needed [W] in Australia. He was the one person they could not live without.
[44] GAB 73.
The cross-examination returned to the events after 8 July 2016:[45]
[45] GAB 74 - 75.
I understand that, but you understand that when we're looking at the question of a conflict, a party – a party is entitled to get legal advice; correct?---Yes.
You are – what you are telling this Tribunal is that you considered yourself to be the lawyer for [the Australian Company]?---Yes, because I asked [MW] whether he was - - -
Yes?--- - - - and he said, 'No. I'm the lawyer for [the parent company of the German Company], acting on instructions from [TK],' and that's why I was concerned to get out from – from him who he thought he was acting for.
Okay. Let's just try and focus on what I'm asking you rather than these tangential issues. You're – what you're telling the tribunal is that you considered at the time that you were the lawyer for [the Australian Company]?---Yes.
Okay. And you were also the lawyer for Mr W?---In his –well, at the time, in my mind, I'm his lawyer in the capacity of him being the manager director who is responsible for all the employees. He had dealt with termination payments for other employees and he was no different, as far as I was concerned.
Okay. Although in this case, the sole shareholder of the company has, on the face of it, made a decision to terminate his directorship and his employment. Now – and you didn't see that as changing the position at all that you understood?---No. He was still managing director.
Let me just test this proposition a little bit further, Mr Staffa. Let us imagine for the moment that Mr W had said to you, 'Mr Staffa, look, I think this termination is invalid. I would like to get an injunction against the company to stop it from giving effect to this termination,' what would you have done then?---I've got no idea. I would have to [go] back in time, sit at my desk at that moment in time and think my way through it and advise him – and I might well have advised him as I did on a couple of occasions that really what we needed was a second opinion, but we didn't have time.
Mr Staffa, if you are the lawyer for [the Australian Company], who wishes to terminate the employment and directorship of one of its employees, and that employee comes to you looking for an injunction, does that not strike you as being the most clear and obvious possible case of a conflict that one could possibly imagine that would prevent you from acting for both the company and the employee?---It never arose.
No. I'm asking – I'm trying to – I'm just trying to explore the limits of this so-called agreement or consent that you say existed, and we're not – I mean, you were telling Mr W that you thought there were issues about the validity of the terminations; correct?---Yes. I spelled it out to him.
It's not beyond the realms of possibility that one of the options might have been an application for an injunction to restrain [the Australian Company] from giving effect to those decisions; correct?---Hypothetically, yes.
Yes. Now, if that had arisen, does it not strike you as the most obvious thing in the world that you're in a position of a conflict of interests in acting for both [the Australian Company], and the employee who may have wanted to seek an injunction to restrain [the Australian Company], from giving effect to the termination?---But I had always been in a conflict of interest from day 1, when I prepared the employment agreement that they amended. I was in a position of conflict of interest and everybody knew it. We had discussed it.
A little later, the issue of informed consent was taken up again:[46]
[46] GAB 76 - 77.
Where is an email from you to the German lawyer, … at any time after 8 July 2016 in which you said to her, 'I've been approached by Mr W for some advice about the validity of the termination of his directorship and employment and advice on his rights. I want to confirm that [the German Company] consents to me giving that advice against its interest'?---I didn't see any need for that.
No. Do you understand, Mr Staffa, that when a lawyer wishes to act in a position of conflict, they are required to obtain the fully informed consent of both parties?---Talking about rule 7.
I'm asking about your understanding. I mean, if you want to tell me what rule you think it is – I'm asking about your – do you understand at a basic level- - -?---Professional conduct rule 7, I think.
Do you understand at a basic level that a lawyer who wishes to act in a position of concurrent conflicts must obtain the fully informed consent of both parties to the conflict?---Yes, and as far as I was concerned, I had it.
Okay?---I had had it for years.
What basis do you have for contending that [the German Company], the sole shareholder of [the Australian Company], knew that you were advising Mr W about the validity of the termination and his employment entitlements?---Well, Harry – Heri – Mr HB, who was the fellow who founded the German company, he was still in Duisburg, as far as I'm aware, where the German HQ of the – the German company was, and likewise he had my contact details, as did [PW].
Let me ask the question again. What basis did you have for believing that [the German Company] knew that you were giving advice to Mr W from 8 July 2016 about the validity of the terminations of his directorship and his employment and advice about his entitlements and strategic advice?---All right. Well, I was instructed back in 2014 to prepare his employment agreement and that, as I recall, had a lot of clauses dealing with termination, all sorts of things. They then – between Mr W and Duisburg, they extensively amended it, which I didn't know about until 18 months, two years later, and as far as I was concerned, my instructions were never withdrawn. I was to advise Mr W on all and any aspects of his employment.
Can I - - -?---There was no qualification put on it.
Let me ask – I will ask you one more time. I want to give you one more chance, Mr Staffa. What basis did you have for believing that [the German Company] was aware from 8 July 2016 that you were advising Mr W on the validity of the termination of his directorship and employment on his entitlements and on strategic issues in respect of the termination?---Well, I – I know they knew because … – Mr W was writing to them, telling them. So I know they knew he was getting legal advice. As far as me getting specific instructions from the German company from 8 July – if you're asking me did they instruct me, the answer is, no, they did not.
Conduct reasons
In the Conduct reasons, the Tribunal addressed each of the grounds of the application separately.
Reasons as to Ground 1 of the application
The Tribunal identified the contentious issue in relation to Ground 1 as being whether Mr Staffa was acting for the Australian Company between 8 July 2016 and 28 July 2016.[47] In relation to that issue, the Tribunal relevantly reached the following conclusions:
[47] Conduct reasons [101].
[102]The fact that the Practitioner at all relevant times both before and after 8 July 2016 was taking instructions from W himself is not determinative as to whether at any point in time the Practitioner was continuing to act for the Australian Company or acting for W as an individual. It is not in dispute that the Practitioner almost invariably took his instructions from the Australian Company through W.
[103]The Tribunal considers that the Practitioner was acting for the Australian Company when he wrote to the Australian Company on 28 June 2016; Committee's book pages 94-101. That is also not in dispute. The Practitioner says however that from this date forward there was 'no suggestion that the [Australian Company] thereafter requested further advice in relation to the matters addressed' in that letter of 28 June 2016; PCS para 5. The Practitioner says that while he believed that he was still acting for the Australian Company over the days between 8 July 2016 and when he ceased to act on 29 July 2016, 'on any objective analysis he was not'; PCS para 7.
[104]The Tribunal accepts that the Australian Company had not requested any further advice from him but otherwise does not agree with that analysis.
[105]The Practitioner told the Tribunal that he 'considered at the time that [he was] the lawyer for [the Australian Company]'; ts 74, 30 January 2020.
[106]The existence of this belief is supported by the fact that the Practitioner, in an email on 27 July 2016 to WM (Committee's book page 162), expressly confirmed to WM, in response to a query from WM about who the Practitioner was advising with regard to the transfer of funds from the Australian Company, that the Practitioner was 'at all times taking instructions from and providing advice to [the Australian Company], via its Manager [W]'.
[107]It is apparent in any event that, as at 27 July 2016, W was clearly of the view that the Practitioner continued to act for the Australian Company. In a letter of that date (Committee's book page 168) to MH, W refers to the Practitioner as the Australian Company's lawyer. This letter was reviewed and approved by the Practitioner; ts 145, 31 January 2020.
[108]Further, when the Practitioner wrote to W on 28 July 2016 (Committee's book pages 169-171), confirming advice that he had given to W verbally, he included the paragraph:
I advised you not to meet with [WM] on your own. I suggested that you immediately write to [MH] informing him that you will only meet with [WM] in company with [the Australian Company's] legal advisor (meaning me).
[109]In a letter from the Practitioner to WM dated 28 July 2016 (Committee's book pages 173-174), the Practitioner said that '[W] has asked that I be present at any meeting he has with you to resolve the matter, given that I have been acting as legal advisor to [the Australian Company] for many years'.
…
[112]The Committee says that the Practitioner was an argumentative witness (CCS para 9) and counsel for the Practitioner agreed; PCS para 1 and ts 276, 6 March 2020. The inconsistencies between the Practitioner's evidence in his written submissions, in his witness statement and under crossexamination may be explained at least in part by this. However, whatever the reason, the Practitioner's evidence on the point of whether he was acting for the Australian Company during the relevant period in July 2016 is certainly inconsistent. It was the Practitioner's oral testimony that at the relevant time he was acting for the Australian Company through its managing director; ts 80, 30 January 2020. This is in contrast to what the Practitioner said in his written submissions (Practitioner's amended statement paras 18(c) and (d)) and inconsistent with what he said under cross‑examination when he told the Tribunal that he now believed that he was acting, during the relevant time, for W alone and not for the Australian Company; ts 84, 30 January 2020. It is also inconsistent with what the Practitioner said in his witness statement, namely that 'I did not hear from [the other director of the Australian Company or HB] during the period relevant to the complaints against me. My instructions concerning [W] and his employment matters were never withdrawn'; PWS para 36. There was a further inconsistency when the Practitioner, under cross-examination, in response to the question '… as at 26 July you considered that you were the lawyer only for [the Australian Company]', said 'I was engaged by [the Australian Company]; ts 143, 31 January 2020. He had already told the Tribunal (ts 112, 31 January 2020) that '[t]here was no other lawyer acting for the [Australian Company]'.
[113]Some of the Practitioner's other answers under crossexamination show that it was the Practitioner's clear understanding that W was instructing him both in W's personal capacity and in W's capacity as managing director (and subsequently manager) of the Australian Company; ts 97 & 104, 30 January 2020 and 115 & 132, 31 January 2020.
[114]The Tribunal agrees with the Committee that, in the words of counsel for the Committee, there is 'no neat divide before and after 28 June 2016'. The Practitioner had been acting for the Australian Company for a number of years (since 2012) and, up to 28 June 2016, he was providing advice to the Australian Company through W on employment issues. That is not in contest. When the Practitioner received written instructions from W on 8 July 2016, it was clear from the express terms of W's email and the nature of the advice being sought that the Practitioner was being asked by W for advice on W's personal behalf rather than on behalf of the Australian Company. The Tribunal has already accepted that the Practitioner was not expressly asked by the Australian Company for further advice about employment matters after 28 June 2016. However, the Practitioner on his own admission (see [112] above) says that he believed at that time that he was still acting for the Australian Company. The fact that he now takes the view that he was not acting for the Australian Company does not assist him. At the time when he took instructions from W as an individual, he considered that he was acting for the Australian Company on the same matter.
[115]The Tribunal concludes that, on the balance of probabilities, and with the comments of Dixon J in Briginshaw in mind, it is more likely than not that during the relevant period the Practitioner was acting for both the Australian Company and W in respect of the same or related matters, namely W's rights and entitlements in relation to the termination or purported termination of his employment by the Australian Company.
Notwithstanding that it was not raised in Mr Staffa's Amended Statement of Facts and Contentions or in his Closing Submissions, the Tribunal addressed the potential application of r 14(3) of the Conduct Rules:
[116]Even though the Practitioner before the Tribunal denied that he was acting for the Australian Company from and after 8 July 2016, he also argued before the Tribunal, presumably, although not expressly, in reliance on the exception in r 14(3) of the Conduct Rules, that he had full and unqualified consent of the Australian Company and the German Company to act in a position of conflict between W and the Australian Company in any situation and that he was to prefer the interests of W. W 'was the one person they could not live without'; ts 73, 30 January 2020. When asked whether he understood that 'a lawyer who wishes to act in a position of concurrent conflicts must obtain the fully informed consent of both parties to the conflict', he replied '[y]es, and as far as I was concerned, I had it'; ts 76, 30 January 2020.
[117]For r 14(3) of the Conduct Rules to apply, an information barrier needs to have been established to protect the confidential information of each client. There is no evidence of any such information barrier having been established. In any event, even if the Practitioner had the consent of the Australian Company on an ongoing basis to act for both W and the Australian Company, it is the Tribunal's view that that consent would no longer apply in circumstances where W had been or was about to be removed as both a director of the Australian Company and its manager. Further, even if the Australian Company had consented to its lawyer acting for another party, this could not be described as an informed consent, because the Australian Company was entirely unaware that the Practitioner was acting for W in his personal capacity; ts 75-76 and 78, 30 January 2020.
[118]The Tribunal concludes that the Practitioner had not obtained the informed consent of the parties.
Finally, in relation to Ground 1, the Tribunal addressed the characterisation of Mr Staffa's conduct:
[121]The Practitioner's conduct represents a clear breach of r 14(2) of the Conduct Rules.
[122]The Conduct Rules are subsidiary legislation as defined in the Interpretation Act 1984 (WA) (Interpretation Act). Accordingly, a reference to 'this Act' in the LP Act includes a reference to the Conduct Rules (s 46 of the Interpretation Act). It follows that a contravention of the Conduct Rules is conduct capable of constituting unsatisfactory professional conduct or professional misconduct; s 404(a) of the LP Act.
[123]The Tribunal considers that the Practitioner's conduct in breach of r 14(2) of the Conduct Rules is at least unsatisfactory professional conduct, in that it is conduct that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
[124]The issue is then whether the Practitioner's unsatisfactory professional conduct involved a substantial failure to reach or maintain a reasonable standard of competence and diligence and is thus professional misconduct.
[125]The Tribunal concludes, and we find, that this conduct is professional misconduct. The conflict was, to use the Committee's words, 'obvious and blatant'; CCS para 43. The Practitioner put himself in a position where he could no longer perform his duties to the Australian Company. He knew what it was that W intended to do to protect his claimed entitlements and gave advice in that regard. He was therefore conflicted because he was unable to protect the interests of his client the Australian Company, by at least informing his client the Australian Company of the transfer of funds and advising the Australian Company appropriately, without breaching his duty of confidentiality to his client W. It was, in the Tribunal's view, a substantial failure on his part.
Accordingly, the Tribunal concluded that Mr Staffa's conduct the subject of Ground 1 amounted to professional misconduct.
Reasons as to Ground 2 of the application
In relation to Ground 2, the Tribunal concluded:
[126]The Practitioner acknowledges, and the Tribunal finds, that it was inappropriate conduct on his part to cause the Practice to render bills to the Australian Company on 15 July 2016 and 22 July 2016 respectively; Practitioner's Amended Statement para 18(e).
[127]The Practitioner accepts that it is clear that W had asked him to bill him personally for the advice and that it was an error on the part of the Practitioner to bill the Australian Company instead. The Practitioner says that the invoices should have been sent to W 'because there's no reason not to'; ts 255, 6 March 2020. In the Practitioner's witness statement, by way of explanation he says that, at that time, he 'did not see [W's] request' and in any event regarded the Australian Company as his client. He 'did not have any reason not to invoice [W], instead of [the Australian Company]'; PWS paras 75-76.
[128]The Tribunal does not, however, accept the Practitioner's claim that this conduct should be regarded as no more than simply an error on his part. We agree with the Committee's submission that the Practitioner's conduct under Ground 2 must be seen in the context that the Practitioner had in fact been asked, clearly and expressly, by W to bill him personally and that the Practitioner was aware that at the relevant time W, while an employee of the Australian Company, was no longer a director. The description of the work carried out, contained in the two invoices, makes it clear that the relevant work being billed for was in respect of advice about W's termination of employment. It was more than a simple error and the Tribunal finds that it was careless of the Practitioner to bill the Australian Company for that work.
[129]The Tribunal does, however, accept the Practitioner's concession that his conduct should be characterised as unsatisfactory professional conduct rather than professional misconduct. The Tribunal finds that the conduct falls short, but not substantially short, of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner. The Tribunal finds that the Practitioner's conduct under Ground 2 is unsatisfactory professional conduct.
Thus, the Tribunal concluded that Mr Staffa's conduct the subject of Ground 2 amounted to unsatisfactory professional conduct.
Reasons as to Ground 3 of the application
In relation to Ground 3, the Tribunal concluded as follows:
[130]The Tribunal has found … that the Practitioner on or about 22 July advised W to transfer money from the Australian Company's bank account to an account controlled by W, in an amount equivalent to the estimated amount of W's potential entitlements consequential upon the termination or potential termination of his employment with the Australian Company. The circumstances of the transfer, the Tribunal has also found, was that the Practitioner knew at the time of that advice that W had resigned as a director of the Australian Company. Further, the Practitioner has conceded (PCS para 37) and the Tribunal finds that the Practitioner knew that W had no entitlement to the money in question and that the Practitioner knew that W had not been authorised by the Australian Company to make that transfer.
[131]The Practitioner accepts that on 22 July 2016, he advised W to transfer money to cover his entitlements from the Australian Company's account to an account controlled by him; ts 89-90, 30 January 2020.
[132]The Practitioner further accepts that, as a 'fairly basic proposition', the fact that a person might be owed money by a third party does not of itself give that person a legal interest in funds or assets of that third party; ts 135-136, 31 January 2020. Inexplicably though, the Practitioner did not, and does not, accept the proposition that W had no authority to transfer those funds; ts 136, 31 January 2020.
[133]The Tribunal accepts that it may have been W who first proposed that such a transfer be made, but the Tribunal also accepts W's evidence (WWS para 36) that the transfer was not 'a course of action I was prepared to take unless on [the Practitioner's] advice'.
[134]We note the Practitioner's assertion that, at the time of the advice, the Practitioner may not have been aware of the precise amount of W's entitlement. However, this does not affect the outcome of the Tribunal's deliberations on Ground 3.
[135]We do not accept the Practitioner's submission at para 33(b) of the Practitioner's amended statement that the Practitioner merely 'agreed' with the proposal to transfer the funds. In his written advice to W dated 22 July 2016, the Practitioner clearly told W that he saw no option for W but 'to take proactive steps to protect your entitlements'; Committee's book page 150. He advised W to immediately transfer the full amount of his employment entitlements into a bank account controlled by W. The Tribunal does not characterise that advice as merely 'agreeing' with W's proposed action if, indeed, it was W who proposed the action in the first place.
[136]As the Committee has pointed out, it is not the case that W had no alternative, in order to protect any right he may have to receive money from the Australian Company, other than to make that transfer to his own account. The Tribunal considers that it was entirely open to W to apply to the Supreme Court for a freezing order which, in the Tribunal's view, would have been the preferable approach. The Practitioner's evidence in that regard was that he had in fact 'fleetingly' considered the possibility of applying for a freezing order but thought that 'there was another way that was preferable'; ts 137 and 138, 31 January 2020. He said that his reservation about the approach of applying for a freezing order was that he would have difficulty effecting service and he had some doubt as to whether the order would be made ex‑parte. A little later, he told the Tribunal that his concerns were 'Time, cost. Just time and cost'; ts 138, 31 January 2020.
[137]In contrast to this evidence, he told the Committee in response to its enquiry that he 'was not in a position to consider alternatives to secure the funds'; Committee's book page 186. That was, of course, in the context of the Practitioner then maintaining that W had already transferred the funds at the time when he sought the Practitioner's advice but, nonetheless, it still highlights the Practitioner's inconsistencies in his account of his conduct.
[138]The Tribunal does not consider that the Practitioner applied his mind at all to the issue beyond the advice to transfer the money to another bank account.
[139]The Practitioner concedes that his advice was negligent (PCS para 37), but considers that his conduct should be characterised as unsatisfactory professional conduct rather than professional misconduct.
[140]The Tribunal does not agree. The Practitioner gave advice to W to the effect that W should transfer money, which did not belong to him and in which he had no interest, to an account in the sole name of W. Even if it had been established that W was owed that money by the Australian Company (which it had not), it was entirely inappropriate to advise W to take that money.
[141]There is no relevant conduct rule, nor was any evidence led as to what the legal profession considers to be the relevant standard to be observed. However, in the Tribunal's view, derived from the Tribunal Members' own knowledge and experience, the Practitioner's conduct, in giving that advice to W, is conduct that could be reasonably regarded as disgraceful and which, to a substantial degree, falls short of the standard of professional conduct observed or approved by members of the legal profession of good repute and competence. The Tribunal concludes that the Practitioner's conduct constitutes professional misconduct under the LP Act.
[142]The Committee has also alleged that the Practitioner's advice exposed W to the possibility of being charged with the offence of stealing contrary to s 378 of the Criminal Code. However, the Tribunal does not accept the Committee's submission that the Tribunal should find that by giving that advice to W, the Practitioner was putting W at risk of being charged with an offence under the Criminal Code. A finding of that nature is beyond the jurisdiction of the Tribunal to make and in any event would be entirely speculative.
Thus, the Tribunal concluded that Mr Staffa's conduct the subject of Ground 3 amounted to professional misconduct.
Reasons as to Ground 4 of the application
The Tribunal's reasons in relation to Ground 4 relevantly included the following:
[143]The allegation made by the Committee is that, in the Practitioner's correspondence to the Committee dated 2 May 2017, 5 March 2018 and 27 April 2018 respectively, he was not open and candid in his dealings with the Committee, in breach of the Conduct Rules.
…
[145]The Tribunal has found that the Committee wrote to the Practitioner on 10 April 2017 advising the Practitioner that the Committee was investigating a complaint made in respect of the Practitioner's conduct and asking that the Practitioner provide his entire original file and all documents relating to the matter under investigation.
[146]The Practitioner on 2 May 2017 provided the Committee with certain documents, along with a table of comments in respect to those documents. He said specifically that the Committee was mistaken to state that the Practitioner had advised W to transfer an amount of $378,000 from the Australian Company's account to W's account and said that 'that decision was made by [W]'; Committee's book page 192.
[147]The Practitioner, in his table of comments where he refers to the letter from the Practitioner to W of 27 July 2016, notes that he had expressly stated that it was W's idea to put money from the Australian Company into a holding account and that 'this had been done without any input from me'; Committee's book page 206(c).
[148]The Practitioner then responded to the Committee on 5 March 2018, suggesting that the Committee approach W for whatever information it was seeking. He repeated this suggestion in his letter to the Committee on 27 April 2018. He said in that letter that 'it is a simple matter for the [Committee] to ask [W] whether or not he transferred the funds before seeking advice from [the Practitioner]'.
[149]The Practitioner continued to maintain that he did not advise W to transfer money 'from any account or to any account'. The Practitioner, however, agreed that he did 'subsequently tell [W] that in the peculiar circumstances that appertained he was probably justified in doing so'; Committee's book page 232.
[150]The Practitioner has admitted that his statement to the Committee that it was W's idea to put money from the Australian Company into a holding account, without any input from the Practitioner, was incorrect; Practitioner's Amended Statement at para 38(a).
[151]The Tribunal finds that this part of Ground 4 is made out. The Practitioner did advise W to transfer that money to another account and so his statement to the Committee that he did not do so was false. The issue for the Tribunal is therefore whether or not the Committee has established as true its allegation that the Practitioner, in contravention of r 50 of the Conduct Rules, knew that this statement was false or misleading, or both, in a material respect and that it had the potential to mislead the Committee and that the Practitioner intended that the Committee be misled.
[152]The Practitioner accepted in cross-examination that his statements to the Committee that he had not given such advice to W or that W had transferred the funds before seeking advice from the Practitioner were wrong or incorrect and therefore false; ts 159 and 185, 31 January 2020.
[153]The Practitioner told the Tribunal that he met with W on 22 July 2016 and W raised the possibility of paying money out of the Australian Company's account into an account controlled by him.
[154]The Practitioner accepted that in his letter of 22 July 2016 his advice to W was that it was appropriate for W to transfer the money in the way proposed. He agreed that there was nothing in that letter to suggest that W had already transferred that money before seeking the Practitioner's advice; ts 129, 31 January 2020.
[155]The Practitioner agreed that he considered that it was a matter of some importance that W transfer the money as soon as possible; ts 135, 31 January 2020. He also agreed that he knew W was waiting for the Practitioner's written advice before he effected the transfer; ts 135, 31 January 2020. The Practitioner conceded that if W had in fact come to him and told him that he had already transferred the funds before obtaining the Practitioner's advice, the Practitioner would not have given advice in those terms; ts 140, 31 January 2020.
[156]The Practitioner also concedes that he approved the proposed letter from W to WM of 27 July 2016, which contained the statement that W had acted upon legal advice, and that the Practitioner would not have approved that letter in those terms if he had thought that this was not the case; ts 146, 31 January 2020.
[157]The Practitioner said that he had 'readily agreed' that it was appropriate for W to transfer the funds into a holding account; ts 147, 31 January 2020.
[158]From this, the Tribunal concludes that when the Practitioner wrote to the Committee on 2 May 2017, he did not hold the view that W had transferred the funds before obtaining the Practitioner's advice to do so.
[159]Further, when the Practitioner was asked by the Committee about his possible failure to consider other alternatives to achieve W's purpose, such as a freezing order, the Practitioner told the Committee that he was not in a position to consider such alternatives. This was on the basis that the decision to transfer the funds was a decision of W's, which the Tribunal has rejected, and it is also inconsistent with the Practitioner's evidence that he had in fact considered the possibility of applying for a freezing order but that it presented difficulties.
[160]The Practitioner conceded that what he said to the Committee 'could have been worded better'; ts 157, 31 January 2020.
[161]Before the Tribunal, the Practitioner referred to his statement that the Committee was mistaken to state that the Practitioner had advised W to transfer an amount of $378,000 from the Australian Company's account. The Practitioner explained that the Committee was mistaken to state that he had advised W to transfer that amount, on the basis that he had never advised W to transfer that particular amount of money; ts 162, 168 and 169, 31 January 2020. It is readily apparent from a reading of the Committee's enquiry that the particular amount of money involved was not the issue which the Committee wished the Practitioner to address.
[162]The Practitioner stated that his response may be open to some misinterpretation; ts 169, 31 January 2020. That explanation is disingenuous. Further, in the Tribunal's view, the Practitioner's response was a deliberate attempt to mislead the Committee and to cover up the true state of affairs, which was that the Practitioner had advised W to transfer money, of whatever amount, belonging to the Australian Company to an account controlled by W to protect W's personal interests. When the Practitioner considered what he was being asked about by the Committee, he could not in any circumstances have believed that the Committee's concern was the actual figure involved.
[163]The Tribunal notes that in the table of comments beside the entry identifying the letter of 22 July 2016, the Practitioner wrote 'no comment'; Committee's book page 205. That would, in fact, have been the opportunity for the Practitioner to provide whatever explanation he considered appropriate in order to deal with the Committee's investigation.
[164]The Tribunal can only conclude that the Practitioner knew the true position, as he conceded (ts 172, 31 January 2020) and thus misled the Committee. Such conduct brings the profession into disrepute and is below the standard of practice which members of the public and the legal profession can expect from a legal practitioner.
[165]As to the Practitioner's suggestion that the Committee take the matter up with W direct, this is not in the Tribunal's view how the Practitioner should have dealt with the Committee's enquiries. Of course, it would have been, and was, open to the Committee to make enquires of W but the Committee was seeking the Practitioner's own explanation, not that of W. This in the Tribunal's view demonstrates a failure by the Practitioner to appreciate his obligations to the Committee under the Conduct Rules and generally.
[166]The Tribunal concludes that the Practitioner knew that his statement to the Committee was false and that he intended to mislead the Committee. We repeat what the Tribunal said in Legal Profession Complaints Committee and Lee-Steere [2010] WASAT 189 at [24], namely that 'it is unacceptable, both to members of the public and to the profession, for a practitioner to undermine the authority of a regulatory body by ignoring its requests for information or failing to respond to those requests with alacrity and with complete honesty. To flaunt that authority is to fly in the face of the legislative intent and disables the body from executing its statutory functions. Such conduct is viewed by this Tribunal in a most serious light and will not be countenanced'.
[167]It follows that the Practitioner is guilty of professional misconduct.
Grounds of appeal 2(b) and 2(c) are without merit.
The challenge to the Tribunal's conclusion that Mr Staffa's conduct in advising W to transfer the funds amounted to professional misconduct (grounds of appeal 2(a) and 2(d)) focused primarily on the absence of any relevant rule in the Conduct Rules or elsewhere proscribing that conduct.
Mr Staffa's challenge to the Tribunal's conclusion, in this respect, misunderstands the very nature of lawyers' professional and ethical duties. As with the focus on r 14 of the Conduct Rules in relation to Ground 1 of the application, the focus on whether there was a specific rule that captured his conduct in advising W to transfer company funds without authority misses the wood for the trees.
The terms 'unsatisfactory professional conduct' and 'professional misconduct', are defined by the Legal Profession Act (inclusively) by reference to standards (i.e. norms of conduct) to be observed by legal practitioners, not by reference to the mechanical application of rules.
As this Court said in Fidock v Legal Profession Complaints Committee:[79]
[T]he proceedings before the Tribunal and in this court have been conducted on the basis that the approach taken to the identification of conduct which constitutes professional misconduct should be that enunciated in Kyle v Legal Practitioners' Complaints Committee [1999] WASCA 115; (1999) 21 WAR 56 [61] 2008. In that case, 'unprofessional conduct' (being the expression used in the legislation then in force) was taken to mean conduct that would be reasonably regarded as disgraceful or dishonourable by practitioners of good repute and competence, or that, to a substantial degree, fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competence.
…
It is to be noted that the definition of 'professional misconduct' in s 403(1) of the 2008 Act is an inclusive definition.
The test of professional misconduct was originally formulated in relation to medical practitioners in Allinson v General Council of Medical Education and Registration (1894) 1 QB 750. It was held that professional misconduct consisted in behaviour on the part of the practitioner which would reasonably be regarded as disgraceful and dishonourable by his professional brethren of good repute and competency. That criterion has been applied in relation to both solicitors and barristers: Prothonotary of the Supreme Court of NSW v Costello [1984] 3 NSWLR 201, 203. The Allinson test, so formulated, was not, however, intended to be, or to provide, an exhaustive definition of what could constitute professional misconduct: Prothonotary v Costello (207).
The Allinson formulation is not dissimilar to the first limb of the test of 'unprofessional conduct' in Kyle [61]. The second limb in Kyle [61] is not dissimilar to the definition of professional misconduct found in s 403(1)(a) of the 2008 Act.
[79] Fidock v Legal Profession Complaints Committee [2013] WASCA 108.
While, according to their terms, a breach of the Conduct Rules may constitute unsatisfactory conduct or professional misconduct,[80] the Conduct Rules in no way exhaust the meaning of those terms, which remain tethered to the practice and conscience of members of the profession of good repute and competence. On the contrary, as Sir Gerard Brennan said, extrajudicially:[81]
The first, and perhaps the most important, thing to be said about ethics is that they cannot be reduced to rules. … If ethics were reduced merely to rules, a spiritless compliance would soon be replaced by skilful evasion.
[80] Conduct Rules, r 4(2).
[81] F G Brennan, Ethics and the Advocate, in Corones et al, Professional Responsibilities and Legal Ethics in Queensland, (Law Book Co, 2008), 340.
In the present case Mr Staffa advised his client, W, to use his position as general manager of a company to place a substantial sum of money out of the control of that company, where the manager had no authority to do so in order to gain leverage in a dispute with the company. Even if the company had not also been (as the Tribunal found that it was) Mr Staffa's client, to so advise W was entirely inappropriate and without any reasonable justification. It was, as the Tribunal correctly concluded, disgraceful conduct.
This was conduct that, to a substantial degree, fell short of the standard of professional conduct observed or approved by members of the profession of good repute and competence. The Tribunal was correct to so conclude.
There is no merit in grounds of appeal 2(a) and 2(d).
Ground of appeal 3 – misleading the Committee
Ground of appeal 3 challenges the Tribunal's conclusion, in relation to Ground 4 of the application, that Mr Staffa was guilty of professional misconduct in knowingly misleading the Committee, when he said, on a number of occasions, that he did not advise W to transfer money from the Australian Company's bank account to his own bank account. In that regard, the Tribunal's critical finding was that Mr Staffa 'knew that his statement to the Committee was false and … he intended to mislead the Committee'.[82]
[82] Conduct reasons [166].
The submissions in support of ground of appeal 3 were difficult to follow. The submissions in support of ground of appeal 3(a), for example, appeared to contend that the Tribunal erred in applying r 50(2) of the Conduct Rules by failing to determine whether Mr Staffa's conduct was attended by a mental element, such as intention, reckless or wilful indifference.[83] Similarly, submissions in support of ground of appeal 3(b) referred to various authorities in relation to the meaning of those different mental elements.[84]
[83] Consolidated Appellant's Submissions [32] (BAB 21 - 22).
[84] Consolidated Appellant's Submissions [32] (BAB 21 - 22).
Yet, this is precisely what the Tribunal did. It concluded that when Mr Staffa advised the Committee that he had not advised W to transfer the money the subject of Ground 3 of the application, he knew the true position[85] and that Mr Staffa's statements to the Committee were a 'deliberate attempt to mislead the Committee and cover up the true state of affairs'. [86]
[85] Conduct reasons [164].
[86] Conduct reasons [162].
Ultimately, when asked to identify the 'wrong legal test' said to have been applied by the Tribunal (ground of appeal 3(c) and ground of appeal 3(d) so far as the finding was said to be based on an adverse presumption unsupported by evidence), Mr Staffa identified the Tribunal as having failed to apply the 'test' enunciated by the High Court in Briginshaw v Briginshaw.[87] That is, that the Tribunal failed to approach the standard of proof (the balance of probabilities) having regard to the seriousness of the allegations made against Mr Staffa such that it must feel an actual persuasion of the occurrence or existence of the relevant facts before being satisfied that those facts have been made out.[88]
[87] Briginshaw v Briginshaw [1938] HCA 34; (1938) 60 CLR 336 (Briginshaw); Appeal ts 45.
[88] Briginshaw, 361 (Dixon J).
There can be no question that the Tribunal was aware of the need, in determining whether on the evidence this standard had been satisfied, to recognise that '[t]he seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal'.[89] The Tribunal discussed the principles identified in Briginshaw towards the beginning of the Conduct reasons,[90] and returned to it in the course of its findings.[91]
[89] Briginshaw, 362 (Dixon J).
[90] Conduct reasons [52] - [54].
[91] Conduct reasons [115].
The Tribunal having correctly identified the standard of proof necessary to determine the issues before it, we are not satisfied that it then neglected to apply that standard of proof, including the approach identified in Briginshaw.
Ultimately, there appeared to be three matters relied upon by Mr Staffa in this context.
First, he referred to the fact that the Committee did not call evidence from an officer of the Committee, responsible for the investigation, who was misled or capable of being misled.[92] The absence of a witness testifying to the fact that they were misled was, however, irrelevant, for two reasons.
[92] Consolidated Appellant's Submissions [33.1] (BAB 22); Appeal ts 46 - 47.
It was, first, irrelevant because the proceedings before the Tribunal did not concern whether any person or persons relied upon Mr Staffa's statement to the Committee that he did not advise W to transfer money from the Australian Company's bank account to his own bank account. The proceedings were concerned with Mr Staffa's conduct. In any event, there was no real contest before the Tribunal that Mr Staffa's statement was misleading, in the sense that it was false. Indeed, at the hearing of the appeal, Mr Staffa said 'that's perfectly correct. The initial statement was false'.[93] The real issue, as the Tribunal correctly identified,[94] concerned whether Mr Staffa knew that the statement was false. That was a matter about which any reliance on the misleading statement was irrelevant.
[93] Appeal ts 43.
[94] Conduct reasons [115].
Secondly, Mr Staffa emphasised the fact that he had 'handed over his whole file' and that the incorrectness of his statements would be apparent from 'the very material that the practitioner had given [the Committee]'.[95] This does not, in our view, demonstrate any error on the part of the Tribunal. Mr Staffa provided the entirety of his file (104 documents) together with a detailed written explanation. That written explanation was false in an important respect. The fact that the falsity might be revealed by a careful examination of the documents, does not prevent the conclusion that the false statement was made with knowledge of its falsity.
[95] Appeal ts 47.
Indeed, in the present case, Mr Staffa did not simply make the misleading statement once. As the Tribunal recognised, in his subsequent letters to the Committee dated 5 March 2018 and 27 April 2018,[96] Mr Staffa continued to maintain the accuracy of his account of events even after the documents revealing the falsity were identified by the Committee.[97] As the evidence before the Tribunal revealed, those letters provided compelling evidence of Mr Staffa's intention to mislead the Committee.
[96] See [47] - [50] above.
[97] Conduct reasons [147] ‑ [149].
In that regard, as became clear in his evidence to the Tribunal, in explaining his responses to the Committee, Mr Staffa laid great stress on the reference in the Committee's correspondence to the precise amount of money transferred by W (i.e. $378,000).
It is to be recalled that the terms of Mr Staffa's original denial of advising W to make the transfer, contained in paragraphs 7(b)(i) and (ii) of his letter dated 2 May 2017, was as follows:[98]
(i)[Y]ou are mistaken to state that I advised the employee to transfer an amount of $378,000.00 ('funds') from the employer's account;
(ii)that decision was made by [W] …
[98] See [45] above.
The amount of $378,000 was also the focus of Mr Staffa's subsequent response to the Committee in relation to the allegation concerning his advice to W to transfer the funds.[99]
[99] See [51] above.
Mr Staffa was taken to his responses to the Committee in the course of cross-examination. In relation to paragraphs 7(b)(i) and (ii) of his letter dated 2 May 2017, he was asked:[100]
[100] GAB 168 - 169.
Let me ask you this: you do accept that paragraphs 7(b)(i) and (ii) read in isolation for the moment – do not convey to the reasonable reader that you had given advice to Mr W to transfer funds?---Yes. If you take (i) and (ii) in isolation out of the letter, yes.
Yes. And the reason you responded in the way that you did at paragraphs 7(b)(i) and (ii) was because they had nominated an amount – that is, the committee had nominated an amount – in the formulation of the complaint, and you hadn't known what the amount was going to be that was to be transferred. Correct?---Well, I think that's right.
That's the reason - - -?---I mean, I answered the question.
That's the reason you expressed it in that way. Can I ask you this? Look at the question at - look at page 188. If, at paragraph (b), hypothetically, if it had said 'advising the employee to transfer an amount from AA's account to a whole new account in circumstances', etcetera, would you have responded in the same way, or differently?---It would have been a different response.
What would your response have been then?---I probably would have referred them to documents 71 and 72 as the - as the evidence of the instructions and evidence of the advice, and said, 'There's the answer'.
So the point of your answer at 7(b)(i) was they nominated an amount and you hadn't known the amount to be transferred. Therefore, you didn't give that advice?---Yes. I - - -
Okay?---I believed I was answering the question.
And can I take it that sitting here today, you still don't- well, I shouldn't say - yes. Sitting here today, you don't consider that to answer the question in that way was evasive?---No. It's not evasive.
You don't consider to answer the question in that way was misleading?---No, it's not misleading.
And you don't consider - you don't consider to have answered the question in that way was to fail to be open and candid?---No.
And you don't consider that to answer the question in that way was to fail to provide a full and accurate account of your conduct?---No. I've done - I've done exactly that, provided a full and accurate account.
The reference in this passage to documents 71 and 72 are references to documents provided by Mr Staffa to the Committee, being his memorandum of 22 July 2016 and his email of that date respectively.[101]
[101] See [28] - [29] above.
A little later in the cross-examination Mr Staffa was asked again about his responses to the Committee:[102]
But the committee wasn't asking you whose idea it was. The committee was asking you whether you had given that advice, weren't they?---Yes. Advising the employee to transfer 378,000.
And you knew you had given that advice. Sorry. You knew you had given advice to the employee, Mr W, on 22 July to transfer funds to cover his entitlements. Correct?---Yes.
And you don't mention in this summary of documents specifically the draft letter that you had prepared, although it's picked up indirectly at 72. Is that right?---71 and - well, I suppose 71 and 72.
No. 72 refers to the proposed letter from Mr W to AG. Correct?---Yes.
[102] GAB 172.
It is this evidence that formed the basis for the Tribunal's conclusions at Conduct reasons [161] to [164].
What that evidence reveals, and what the Tribunal concluded, was that, when the Committee asked Mr Staffa to address the complaint that he had advised W to transfer an amount of $378,000 from the Australian Company's account Mr Staffa knew that he had advised W to transfer an amount to cover his entitlements. Nor did Mr Staffa believe that the Committee's concern was with the actual figure involved. In responding to the Committee, however, Mr Staffa provided a response that while technically correct (insofar as Mr Staffa did not know the precise amount when he advised W) he deliberately answered in a way that was intended to mislead and 'cover up' the true state of affairs.
Despite Mr Staffa's protestation to the contrary, Mr Staffa's conduct in this regard was properly characterised as knowingly false and intended to mislead. The Tribunal did not err in reaching that conclusion.
There is no merit in ground of appeal 3.
Ground of appeal 4 – the Tribunal's reliance on Mr Staffa's withdrawn submissions
Ground of appeal 4 is the first of the grounds of appeal concerning the Tribunal's Penalty reasons. It concerns the Tribunal's reliance on Mr Staffa's submissions dated 22 September 2020, notwithstanding that he had not identified those submissions as documents upon which he relied prior to the penalty hearing.[103] The ground of appeal contends that to have relied upon those submissions was a denial of procedural fairness (as given statutory effect by s 32 of the State Administrative Tribunal Act 2004).
[103] See [88] - [89] above.
It will be recalled that the Tribunal relied upon Mr Staffa's submissions of 22 September 2020 as showing a lack of appreciation for his wrongdoing and were demonstrative of a lack of remorse.[104]
[104] Penalty reasons [43].
In the appeal, the Committee accepted that the Tribunal ought to have given Mr Staffa notice of its intention to rely upon the submissions dated 22 September 2020. To that extent the Committee accepted that there had been a denial of procedural fairness. It submitted, however, that any breach of procedural fairness was immaterial as it did not deprive Mr Staffa of the possibility of a successful outcome.[105]
[105] Stead v State Government Insurance Commission [1986] HCA 54; (1986) 161 CLR 141, 147; Nobarani v Mariconte [2018] HCA 36; (2018) 265 CLR 236 [38]; Mijatovic v Legal Practitioners Complaints Committee [2008] WASCA 115; (2008) 37 WAR 149 (Mijatovic) [15], [73], [250].
For the reasons that follow, we accept the Committee's submission in this regard.
First, the substance of the matters relied upon by the Tribunal from the submissions dated 22 September 2020 – namely, that Mr Staffa had not reimbursed the Australian Company the fees improperly billed to it and that he adopted the position that he could simply retain the money unless the Australian Company was proactive in asking for it back – was evidence that he had given at the hearing of the application.[106] The attitude reflected in the submissions dated 22 September 2020 was already in evidence before the Tribunal.
[106] GAB 85 - 86.
Secondly, the Tribunal had, in any event, concluded based on Mr Staffa's evidence before the Tribunal that he lacked remorse for his wrongdoing, including the dishonest behaviour giving rise to Ground 4 of the application. The opportunity to specifically address the matters relied upon by the Tribunal from the submissions dated 22 September 2020 could not have affected that finding.
Thirdly, the fact that Mr Staffa had made the statements in the submissions dated 22 September 2020 was not contested by him. In the circumstances, there was no additional explanation Mr Staffa could have offered for the statements if he had been given notice that the Tribunal intended to have regard to the submissions dated 22 September 2020. Indeed, at the hearing of the appeal, Mr Staffa was invited to identify what material effect the opportunity to have made comments on those matters could have had. Mr Staffa made no submission on that issue.[107]
[107] Appeal ts 51.
Finally, and most significantly, the 'outcome' with which the Court is concerned in relation to this issue is the decision of the Tribunal to recommend to the Full Bench that Mr Staffa's name be removed from the roll of practitioners. As Martin CJ said in Mijatovic v Legal Practitioners Complaints Committee:[108]
The 'outcome' in this context is the decision of the Tribunal to recommend to the Full Bench of this Court that the practitioner be struck from the Roll of Practitioners.
However, the Full Bench of this Court is not bound to accept the recommendation of the Tribunal. When the Full Bench of this Court comes to consider the proper disposition of the reference from the Tribunal, it will be necessary to identify precisely which findings made by the Tribunal adverse to the practitioner should be acted upon by this Court.
[108] Mijatovic [15] - [16] (Martin CJ).
As the majority concluded in Mijatovic,[109] in our view, it is clear that the 'outcome' in the hearing before the Tribunal in this case would have been the same if the Tribunal had given notice of its intention to rely upon Mr Staffa's submissions dated 22 September 2020. As we have concluded above, Mr Staffa did not identify any additional matter that could have been put to the Tribunal by way of explanation for those submissions and, in any event, it is clear that the Tribunal's recommendation was independently based upon its findings as to Ground 4 of the application.[110]
[109] See also Mijatovic [73] (Buss JA).
[110] See [96] above.
The breach of procedural fairness the subject of ground of appeal 4 was immaterial. Ground of appeal 4 must therefore be dismissed.
Ground of appeal 5 – the Tribunal's recommendation that Mr Staffa's name be removed from the roll
Ground of appeal 5 contends that the Tribunal applied the wrong 'test' for the penalty determination. Mr Staffa submitted that the Tribunal incorrectly applied a test of 'punishing' him rather than protecting the public. The particular passage that was the focus of ground of appeal 5 was as follows (Penalty reasons [51]):
Third, in the event that the Practitioner's practising certificate were conditioned in the way the Practitioner proposes and the three actions are concluded before the decision of the Supreme Court (full bench) in respect of the referral (as he acknowledges might be the case), and the Practitioner then does not renew his practising certificate and so ceases to be entitled to practice on 30 June 2021, the Practitioner will, in effect, have suffered no consequence for the conduct in question. That is because he will have been allowed to conclude his practice in accordance with his presently expressed intentions. In our view the Tribunal ought to be slow to put in place a regime which would deliver such an outcome.
As will be apparent, this particular passage appears in the context of the Tribunal's consideration of Mr Staffa's submission to the Tribunal that he be permitted (by a condition on his practising certificate) to continue to act in relation to a particular matter then pending before the Supreme Court.[111]
[111] See [97] above.
In that context, in our view, the Tribunal's reference to being slow to put in place a regime in which Mr Staffa 'suffered no consequence for the conduct in question', is not to be understood as adopting a punitive, rather than a protective, approach to the determination of the appropriate disciplinary action. That is all the more so where, elsewhere in the Penalty reasons, the Tribunal made it plain that it well understood the protective purpose of the jurisdiction it was exercising (see e.g. the Penalty reasons at [11](a) - (b) and [12](b) as reproduced at [91] above).
The operating principle that the purpose of a disciplinary proceeding against a legal practitioner is the protection of the public by the maintenance of proper standards within the profession rather than the punishment of the practitioner, should not be understood to suggest that the action taken by the Tribunal may not have a punitive effect. As Gageler J recently observed in Alexander v Minister for Home Affairs:[112]
Long recognised as protective in a constitutionally meaningful sense has been the purpose of upholding standards of integrity and competence amongst professionals and others who engage in activities involving elements of public trust . That protective purpose has accordingly been recognised to have the potential to justify conferral of a power to revoke or suspend a statutory status of a person found to have contravened a statutory norm on a decision-maker other than a court. When undertaken as an incident of a legislative scheme designed to uphold such standards, 'it is not readily to be assumed that disciplinary action, however much it may hurt the individual concerned, is personal and retributive rather than corporate and self-respecting'.
[112] Alexander v Minister for Home Affairs [2022] HCA 19 [108] (Gageler J) (footnotes omitted).
Indeed, as the cases recognise, the protection of the public to be achieved by the imposition of disciplinary sanctions includes personal deterrence and general deterrence. Personal and general deterrence necessarily import the need for misconduct to have consequences, even if those consequences are not intended to reflect the retributive aspect of the criminal law.[113]
[113] See also, in a similar context, Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 [14] - [17] (Kiefel CJ, Gageler, Keane, Gordon, Steward & Gleeson JJ).
For the Tribunal to refer to the need for Mr Staffa to suffer a 'consequence' for his misconduct, in context, is simply a recognition that the protection of the public in the discipline of legal practitioners requires that there be consequences for wrongdoing in order that standards may be maintained. It reflects no error.
In any event, the context in which the impugned passage appeared is now of no consequence. At the hearing of the appeal Mr Staffa confirmed that the Supreme Court proceedings in relation to which he sought to continue acting had proceeded to trial and that, as he foreshadowed at the hearing before the Tribunal, Mr Staffa has in fact retired from practice.[114] As Mr Staffa accepted, the only live aspect of the Tribunal's orders was the recommendation that Mr Staffa's name be removed from the roll of practitioners.
[114] Appeal ts 54.
At the hearing of the appeal, Mr Staffa submitted that the decision to refer the matter to the Full Bench seemed out of all proportion, in light of his prior good standing, favourable personal antecedents and that he had been practising for over 40 years.[115]
[115] Appeal ts 51 - 52.
As we said at the beginning of these reasons, however, these appeals are not concerned with whether the Tribunal's recommendation should be accepted and, as Martin CJ said in Mijatovic, the Full Bench is not bound to accept that recommendation. It is for the Full Bench to consider the Tribunal's recommendation and any matters that Mr Staffa wishes to put before it as to why the recommendations should not be accepted.
Ground of appeal 5 is without merit.
Conclusion
For the above reasons, we would make orders to the effect that:
(a)the appellant has leave to amend the grounds of appeal by adding the new ground of appeal 2A;
(b)leave to appeal is granted; and
(c)the appeals are allowed to the following extent, namely, par 1.3 of the orders of the State Administrative Tribunal made 19 December 2020 in matter VR/25/2019 is varied as follows (with the underlining designating the variation):
orders that the Tribunal's report to the Supreme Court (full bench) is to comprise the Tribunal's reasons in Legal Profession Complaints Committee and Staffa [2020] WASAT 58 (save that those reasons are to delete the words 'the Practitioner knew that' on the two occasions that those words appear in the last sentence of [130] thereof), the Tribunal's orders made on 2 June 2020 in the application, the Tribunal's reasons in Legal Profession Complaints Committee and Staffa [2020] WASAT 57(S), the transcript of the hearing of the Tribunal on 30 and 31 January 2020 and 6 March 2020 and copies of the exhibits tendered at that hearing, the transcript of the hearing of 4 November and the copies of exhibits and affidavits tendered at that hearing and these orders.
(d)otherwise the appeals are dismissed.
As we have said, it is a matter for the Full Bench, having regard to the circumstances existing at the time that the Full Bench hears a motion that Mr Staffa's name be removed from the roll of practitioners, whether the Full Bench accepts the Tribunal's recommendation in that regard. Consistent with our conclusions in relation to ground of appeal 2A, for the purposes of any such hearing, the Tribunal's finding in relation to Ground 3 of the application is to be understood as a finding that Mr Staffa gave the relevant advice to W to transfer the funds negligently rather than knowing that it was incorrect.
The parties should be heard as to the form of orders, including as to the costs of the appeals.
I certify that the preceding paragraphs comprise the reasons for decision of the Supreme Court of Western Australia.
LH
Principal Associate to the Honourable Chief Justice Quinlan
13 JULY 2022
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