THE LAW SOCIETY of the AUSTRALIAN CAPITAL TERRITORY & the LEGAL PRACTITIONER (Occupational Discipline)
[2010] ACAT 69
•7 October 2010
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
THE LAW SOCIETY OF THE AUSTRALIAN CAPITAL TERRITORY & THE LEGAL PRACTITIONER (Occupational Discipline) [2010] ACAT 69
LP 5 of 2008
Catchwords: OCCUPATIONAL DISCIPLINE – LEGAL PRACTITIONER – standard of proof– altering letter and substituting file copy – holding out as copy of original letter misleading and deceptive conduct - failure to be frank and open – breach of rule 39.1 - reconstructing tax invoice – deliberate or reckless misleading representation that reconstructed invoice was a true copy of original – no deliberate misrepresentation - whether failure to check soft copy file is reckless
Legislation ACT Civil and Administrative Tribunal Act 2008
Legal Profession Act 2006, ss.386, 387, 389, 423A and 425
Legislation Act 2001, s.104
ACT Civil and Administrative Tribunal (Transitional Provisions) Regulation 2009, s.30(2),
Legal Profession (Solicitors) Rules 2007, rule 39
List of cases: Briginshaw v Briginshaw
[1938] HCA 34; (1938) 60 CLR 336
Council of the Law Society of the ACT v The Legal Practitioner[2010] ACAT 2
NSW Bar Association v Livesey[1982] 2 NSWLR 231
Re Mayes and the Legal Practitioners Act([1974] 1 NSWLR 19
Tribunal: Ms L. Crebbin, General President
Mr G. Burnett, Member
Mr G. Wright, Member
Date of Orders: 7 October 2010
Date of Reasons for Decision: 7 October 2010
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) LP 5 of 2008
BETWEEN:
THE LAW SOCIETY OF THE
AUSTRALIAN CAPITAL TERRITORYApplicant
AND:
THE LEGAL PRACTITIONER
Respondent
TRIBUNAL: Ms L. Crebbin, General President
Mr G. Burnett, Member
Mr G. Wright, Member
DATE: 7 October 2010
The Tribunal is satisfied that:
the Respondent has engaged in misleading and deceptive conduct and has breached rule 39.1 of the Legal Profession (Solicitors) Rules 2007 (ACT), and
is guilty of unsatisfactory professional conduct.
The Tribunal orders that the application be re-listed for further hearing concerning any orders to be made pursuant to s 425 of the Legal Profession Act 2006 (ACT).
The Tribunal notes that section s 423A of the Legal Profession Act 2006 (ACT) operates to restrict publication of certain identifying material from these applications.
………………………………..
Ms L. Crebbin,
General President
REASONS FOR DECISION
This application is brought by the Law Society of the Australian Capital Territory (the applicant) under the disciplinary provisions of the Legal Profession Act 2006 (the LPA). The application is dated 4 August 2008. It was filed with the Legal Practitioners Disciplinary Tribunal (the former Tribunal) on about 5 August 2008.
The ACT Civil and Administrative Tribunal Act 2008 (“the ACAT Act”) commenced operation on 2 February 2009. At the same time, the LPA was amended to provide that the ACT Civil and Administrative Tribunal should hear applications for disciplinary orders against a legal practitioner.
The effect of section 30(2) of the ACT Civil and Administrative Tribunal (Transitional Provisions) Regulation 2009 is that applications commenced in, but not heard by, the former Tribunal are taken on and after 2 February 2009, to be applications made to the Tribunal under the LPA. The former Tribunal held a directions hearing in relation to the application but the matter had not otherwise proceeded before 2 February 2009. As a consequence, the application became one to be dealt with by this Tribunal.
The application was heard on 28 May 2009. Mr Beaumont of Counsel represented the applicant. The Respondent represented himself. The Respondent was admitted to practise as a legal practitioner in 1996. He has held an unrestricted practising certificate issued by the applicant Law Society since 1998. He is the sole principal of a local legal practice.
Adjournment Application
At the start of the hearing, the Respondent asked that the hearing be adjourned. The Respondent said that, based on discussions with the applicant’s solicitor, he had formed a view that there would not be a full hearing and that counsel would not be required. He also said that his proposed counsel was concerned that he may be required as a witness. The Respondent said that because of this, he did not have counsel present to represent him and he was not prepared for a hearing in which he had to represent himself. He felt that he would be disadvantaged or prejudiced by having to represent himself in what was a very important matter to him.
In opposing the adjournment application, Mr Beaumont submitted that there had been no agreement between the Respondent and the applicant’s solicitor about how the hearing would proceed or whether counsel would be required (a proposition that the Respondent accepted). He also produced correspondence from the applicant’s solicitor telling the Respondent that his proposed counsel would not be required as a witness. The Respondent then indicated that his proposed counsel was not able to represent him in any event and that he had not made arrangements for any other representation.
After some discussion, the Respondent said that, in light of the inconvenience to all concerned, he would withdraw his request. The Tribunal wanted to ensure that the Respondent gave his position careful thought and so adjourned for a short period to allow him time to properly consider whether he could continue with the hearing.
When the hearing reconvened, the Respondent told the Tribunal that he wished to proceed.
The Application
The application arose as a result of the applicant’s investigation of a complaint made to it by a client of the Respondent. The factual background to the complaint is set out in detail below. The original application, filed in August 2008, was substantially different from the application that was considered by the Tribunal at the hearing.
The original application alleged that the Respondent’s legal practitioner was guilty of professional misconduct and/or unsatisfactory professional conduct on the grounds that he had:
(i)accepted instructions in a field of practice in which he possessed insufficient knowledge and skill to provide competent representation to clients;
(ii)failed to act honestly, fairly and with competence and diligence in the service of his clients; and
(iii)engaged in misleading and deceptive conduct.
The allegations related to work undertaken by the Respondent between December 2007 and January 2008 in respect of a conveyance.
In March 2009, the Law Society filed an amended application. Grounds (i) and (ii) were abandoned. Ground 3 was continued but, with one exception, the particulars were changed. The amended application alleged that the Respondent was guilty of professional misconduct and/or unsatisfactory professional conduct in that he had engaged in conduct in breach of rule 39 of the Legal Profession (Solicitor) Rules 2007 as well as misleading and deceptive conduct.
The focus of the amended application was quite different from the original. It was no longer concerned with the Respondent’s competence and the work undertaken by him in relation to the conveyance, but rather, with an action he took in respect of his file before he delivered it to the client and with the content of a letter written to the Law Society a few months after the original application was filed with the former Tribunal.
The amended application contained the following particulars:
3.2 The Practitioner, at a time when his clients had terminated his retainer, deliberately reconstructed for his file, which he then delivered to his clients, a duplicate of a letter sent to the solicitors acting for the vendor in the particular property transaction, by omitting a paragraph which was contained in the original letter with the intent of concealing from his clients and their new solicitors, and misrepresenting, the terms of the letter actually sent.
3.3 The Practitioner deliberately or recklessly made misleading representations to, and deliberately attempted to mislead and deceive, the Tribunal and the Society after the filing of the Application with the Tribunal by:
(a)falsely representing to the Society by his letter dated 5 November 2008 a reconstructed account as genuine, when in truth the Practitioner had deliberately reconstructed the account so that it differed from the account which he had in truth presented to his clients for payment, and against which his clients had paid him, in significant respects and, in particular, as to the amount of sundry expenses;
(b)falsely representing to the Society, by his letter dated 5 November 2008, that he had charged his clients $30 for disbursements, when in truth he had charged them $60; and
(c)falsely representing to a forensic examiner engaged by the Society that the reconstructed account referred to in 3.3(b) above had been created by the practitioner in that form on 9 January 2008, when in truth the practitioner had only created it at some time after the filing of the Application, and when the practitioner had at some time prior to the inspection, deliberately altered, or caused to be altered, electronic information, recording the date of creation of the said account.
All of particular 3.3 and the underlined parts of particular 3.2 were new. The amended application was served on the Respondent in late March 2009. Directions were made on 9 April 2009 requiring both parties to file the material on which they wished to rely in relation to the amended application. The applicant’s material included the report of an expert relating to particular 3.3(c). The Respondent also engaged an expert who provided a report in response.
Mr Beaumont, informed the Tribunal at the hearing that the allegation in 3.3(c) would not be pressed and that the applicant would not rely on its expert’s report.
By the time of the hearing, the Respondent had had the amended application for about two months. While this was a relatively short period, the Tribunal is satisfied that the Respondent had sufficient time to fully consider the new allegations and to respond to the material relied on by the applicant in support of them.
The significant changes to the applicant’s case muddied the waters somewhat. On several occasions during the hearing, the Respondent sought to give evidence or make submissions about his knowledge of conveyancing practice and the work he had undertaken for his clients. This was no longer relevant. He was offended by the original allegations relating to his competence and wanted to have an opportunity to refute them. He was upset that he had been put to the expense and inconvenience of obtaining an expert report when ground 3.3(c) was not pursued. These things appeared at times to impact on his demeanour during the hearing and on the way in which he gave evidence. We refer to this in greater detail below.
Legislative Framework
The amended application alleges that the Respondent has acted in a way that constitutes unsatisfactory professional conduct or professional misconduct. Those terms are defined in sections 386 and 387 of the LPA as follows:
386 ....
In this Act:
unsatisfactory professional conduct includes conduct of an Australian legal practitioner happening in connection with the practice of law that falls short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent Australian legal practitioner.
387...
(1) In this Act:
professional misconduct includes—
(a) unsatisfactory professional conduct of an Australian legal practitioner, if the conduct involves a substantial or consistent failure to reach or maintain a reasonable standard of competence and diligence; and
(b) conduct of an Australian legal practitioner whether happening in connection with the practice of law or happening otherwise than in connection with the practice of law that would, if established, justify a finding that the practitioner is not a fit and proper person to engage in legal practice.
(2) For a finding that an Australian legal practitioner is not a fit and proper person to engage in legal practice as mentioned in subsection (1), regard may be had to the suitability matters that would be considered if the practitioner were an applicant for admission to the legal profession under this Act or for the grant or renewal of a local practising certificate.
Section 389 of the LPA lists specific behaviours that can constitute either unsatisfactory professional conduct or professional misconduct. Paragraph (a) is relevant. It provides:
Without limiting section 386 or section 387, the following conduct can be unsatisfactory professional conduct or professional misconduct:
(a) conduct consisting of a contravention of this Act;
Section 104 of the Legislation Act provides that a reference to an Act includes a reference to any statutory instruments made, or in force, under the Act. For the purposes of the LPA, this includes the Legal Profession (Solicitors) Rules 2007 (ACT)-(the Rules). Accordingly, a contravention of those rules may constitute either unsatisfactory professional conduct or professional misconduct.
The amended application alleges that the Respondent has breached rule 39 of the Rules. Rule 39 provides:
39.1 Subject only to his or her duty to the client, a practitioner should be open and frank in his or her dealings with the Law Society.
39.2A practitioner should respond within a reasonable time and in any event within 14 days (or such extended time as the Society may allow) to any requirement of the Society for comments or information in relation to the practitioner’s conduct or professional behaviour and in doing so the practitioner should furnish in writing a full and accurate account of his or her conduct in relation to the matter.
Standard of Proof
It is accepted that the formulation of the civil standard of proof expressed by the members of the High Court in Briginshaw v Briginshaw[1], is the standard of proof that should be adopted for disciplinary proceedings[2].
[1] [1938] HCA 34; (1938) 60 CLR 336
[2] See NSW Bar Association v Livesey [1982] 2 NSWLR 231 at 237-8 and the cases discussed therein
The standard has been helpfully described by this Tribunal in other proceedings:
Rich J’s test of “comfortable satisfaction” provides a succinct description of the standard to be applied in such cases. Proof beyond reasonable doubt is not required; but the standard requires more than a mere balancing of the scales. The evidence must be weighed, according to the gravity of the facts to be proved, to the extent that a conclusion is reached about those facts with a feeling of comfortable satisfaction that it is just and correct.[3]
The Complainants
[3] Council of the Law Society of the ACT v The Legal Practitioner [2010] ACAT 2
Several times during cross-examination, the Respondent challenged statements or questions referring in general terms to his “client”. He responded to some questions by insisting that his client was a Mr Dexter and not Mr Dexter’s partner, Ms Swift. He queried whether the complaint to the Law Society was made by Ms Swift rather than by Mr Dexter and implied that he thought that there was no basis for the applicant’s investigation of him because his client, Mr Dexter, did not express any unhappiness about his work. He said that it was only Ms Swift who was unfriendly to him. She had, he said, yelled at him whereas Mr Dexter had shaken his hand. Neither the identity of the client nor the identity of the complainant is relevant to the issues to be decided on the amended application. In any event, it was clear from the terms of the complaint made to the Law Society that it was made by both people.
Evidence
Mr Beaumont tendered the following documents: –
Exhibit A1 – Affidavit of Robert Anthony Reis sworn 6 March 2009
Exhibit A2 – Affidavit of Kelly Swift sworn 6 March 2009
Exhibit A3 – Affidavit of Michael James Phelps sworn 6 March 2009
Exhibit A4 – Letter from the Respondent to Mr Phelps dated 5 November 2008
Exhibit A5 – Reasons For Decision by Professional Conduct Board of the Law Society of the Australian Capital Territory in the matter of a complaint against the Respondent dated 21 December 2006.
The Respondent tendered the following documents –
Exhibit R1 – Affidavit of the Respondent sworn 5 May 2009
Exhibit R2 – Affidavit of Gary John Colthart sworn 4 May 2009
The Respondent gave oral evidence and was cross-examined. Specific comment needs to be made about the manner in which the Respondent gave evidence. His answers to questions were often non-responsive and tangential. At times he interrupted and talked over the top of counsel for the applicant and members of the Tribunal. At times he was argumentative. Sometimes he refused to answer questions and had to be directed to do so. He was deeply affronted by the initial allegations about his competence. He had a strong emotional reaction to any suggestion that he was lying when giving evidence or to any suggestion that any of his actions were dishonest.
The Tribunal recognises that it is very difficult for a person to be both a witness and their own counsel. The line between evidence and submissions can easily blur. We accept that these proceedings were very stressful for the Respondent and that he was anxious about his professional practice and its future. We understand that an allegation that a person is lying is a serious allegation and that it is upsetting.
Even allowing for these things, the manner in which the Respondent gave evidence did him little credit and did not assist his case.
The following extract from the transcript of the hearing relates to a line of questioning about the information the Respondent believed the applicant Law Society had when he wrote a letter on 18 February 2008. It illustrates the way in which the Respondent gave his evidence:
Beaumont: You told the Tribunal earlier that you saw nothing misleading (in what you did) because the Law Society always had the letter, didn’t you?---Yes, I thought the Law Society always had the letter but the Law Society when – when they received this letter and this letter and I wasn’t really thinking specifically about this letter and I want to hide this letter, I wasn’t – my mind was not that. If they asked me I would have said straight away because this is – this is a stupid thing I did, but you know it’s not something, you know that personally I got a personal benefit or I didn’t try to do any detriment to the client. I tried to peace, make peace, you see this is harmony letter, so I would have been glad to explain. I mean this is not something that I had to go and hide and make big attempt to hide from everybody, see. But I thought the Law Society had everything basically by that time.
Beaumont: That is a lie, isn’t it Mr X? When you replied to the Law Society in your letter of February 2008, you did not think that the Law Society knew that you’d altered the letter, did you?---You have to be – you have to be very careful when you accuse me of lying. You see I take it very offensive.
President: Mr X, Mr X, I want you to answer the question ---Yes.
I want you to answer the question ---Yes, maybe incorrect. Incorrect is the better---
Well, we don’t know because you’re not answering the question, you’re telling us – you’re chastising Mr Beaumont for putting a suggestion to you, so what I want you to do is to answer the question, because we will never know whether you think that it’s (interrupted)---Because in my culture, in my upbringing to call somebody a liar is a very serious thing.
(the witness is asked again to answer the question and then asks if the question can be repeated)….
Beaumont: Mr X you had formed no belief by the time you responded to the complaint on 18 February, that the Law Society already knew that you’d altered the letter, had you?---I have to check when the Law Society received the PBL (file).
President: That’s not what Mr Beaumont’s question to you is.
Beaumont: I am asking you about your belief when you responded to the complaint on 18 February. You had no belief that the Law Society already knew that you’d altered the letter when you responded to the complaint on 18 February, did you?---Well again I have to check, if the Law Society had already received the PBL file, then I knew that the law Society had the two letters. But I don’t know when the PBL letters were received, because this happens very fast, very quick succession.
Well, Mr X?--- The Law Society received everything I think in February, I don’t know. I have to check the file, I don’t know maybe, you see I’m not Einstein can remember everything, but I have to check the file.
Well, Mr X the fact is that the Law Society received the file on 19 March 2008. ---Yes, then – then obviously when I wrote 18 February the Law Society didn’t know the second letter.
And you had no belief to the contrary, did you?---Yes, as I said, you see there’s nothing really major for me to cover up because---
Mr X please answer the question. Please listen to the question and just answer the question. The question was, you had no belief when you replied to the Law Society in 18 February 2008 that the Law Society already knew about the alteration in the letter, did you?---Yes, if the PBL …documents were received on 19 March then there’s no reason for me to believe that Law Society already had the two letters. But I again reiterate I ought to have gone and - gone one step above and said to the Law Society about this.
In this passage of evidence, the Respondent initially answered a question with a positive statement about what he thought on a particular date. His evidence appeared to be given on the basis of actual knowledge. He was outraged by the suggestion that he was lying. He did not respond to the suggestion that he was lying by either agreeing with the suggestion or denying it. When asked the question again, he sought to check other information. When provided with the information he agreed that there was no objective basis for him to have thought as he had said that he did, leaving open a question about why his initial evidence was otherwise.
The Tribunal was left with the impression that the Respondent was obfuscating. Sometimes he gave evidence as though he was speaking from knowledge but then indicated that he had no particular recollection of the subject about which he had given evidence. It was clear that on those occasions the Respondent’s evidence was reconstructed and was given on the basis of a belief about what might have or should have happened rather than what actually did happen.
At times the Respondent contradicted his oral evidence and/or evidence contained in his affidavit. His evidence was often confused and confusing.
Agreed Facts
There was little disagreement about the material facts. The applicant’s case focussed on a letter dated 8 January 2008 and on an account.
The Altered Letter
Between late December 2007 and early January 2008, the Respondent was acting for the buyer in a Queensland conveyancing transaction. A Queensland firm, Payne Butler Lang (PBL), represented the vendor.
On about 3 January 2008 the Respondent sent PBL a facsimile with a number of questions. PBL responded by sending a letter by facsimile on 7 January 2008. The second paragraph of the PBL letter read:
It would appear from the enquiries that you have made that you are unfamiliar with the Queensland conveyancing practice and we respectfully suggest that you might engage Queensland agents to assist you.
On 8 January 2008, the Respondent caused a letter to be sent to PBL (the 1st letter) that read:
We refer to your letter dated 7 January 2008.
We regret the para 2 of your letter. Exposition of such arrogance is quite unnecessary.
We have instructions that the following special conditions be inserted in the contract.
Yours faithfully
(Name of Firm)S G…..
The special conditions were contained on a separate page. The letter bears the name “SG” and an indecipherable signature. This was the name of a person employed by the Respondent. Nothing turns on that. The Respondent accepted that he was responsible for the letter.
On the same day, the client telephoned the Respondent and told the Respondent that he was going to engage another solicitor. The client asked for the contracts for sale and an invoice.
The following day, the client’s partner met the Respondent. She was handed an invoice[4][5] showing professional fees of $380, disbursements (sundry expenses) of $60 with a total amount owing, including GST, of $494. The invoice had the words “But say” on it and a reduced amount of $296. After negotiation about the fees, she paid an agreed amount of $266 and was given the contracts. The Respondent amended the invoice by hand, by crossing out the total, changing the total to “266.00” and adding “Paid in cash”. The total amount paid was not broken up into an amount for costs or disbursements.
[4] Exhibit A2 - Affidavit of Kellie Swift sworn 6 March 2009, Annexure A
On the next day, the Respondent handed his file to the client’s partner. He did not make a hard copy of the file to keep for himself. The file had contained a copy of the unamended invoice and of the 1st letter. Before handing the file over, the Respondent created another version of the letter (the altered letter). He removed the copy of the 1st letter from the file and replaced it with the altered letter. The altered letter read:
We refer to your letter dated 7 January 2008.
We have instructions that the following special conditions be inserted in the contract.
Yours faithfully
(Name of Firm)
The second paragraph containing the sentence “Exposition of such arrogance is quite unnecessary” was omitted. There were some other minor changes. The name S G… was omitted and one of the special conditions that had been on the separate page appeared at the very bottom of the page. This altered letter, rather than a copy of the original was given to the clients with the Respondent’s file.
On examination of the file and contracts, the client and his partner were of the opinion that the Respondent had done little work on the transaction. They believed that he had overcharged them. Thus, on 30 January 2008, they emailed a lengthy letter of complaint to the applicant Law Society. The letter detailed discussions and meetings between the Respondent and Mr Dexter and Ms Swift. At about this time the Law Society obtained the Respondent’s original file.
The Law Society sent a copy of the letter of complaint to the Respondent and asked for his response. The Respondent replied by letter dated 18 February 2008.
We emphasise that at the conclusion of its investigation, the Law Society was not satisfied that either the complaint about the work undertaken by the Respondent, or the complaint that he had overcharged for the work done, was substantiated. This application does not concern the matters about which Mr Dexter and Ms Swift complained.
On about 19 March 2010, PBL sent the applicant Law Society a copy of material from its file including the 1st letter[6] dated 8 January 2008 from the Respondent. It became apparent to the Law Society that the letter sent to PBL was different from the file copy of the letter given by the Respondent to the clients when he handed his file to them.
[6] Exhibit A1 - Affidavit of Robert Anthony Reis sworn 6 March 2009, Annexure C
This forms the basis of ground 3.2.
The Reconstructed Account Allegation
After a Directions Hearing in October 2008, the solicitor for the Society advised the Respondent that the $60 he charged for disbursements was excessive. The solicitor’s comment was based on the copy of the invoice contained in the Respondent’s file that was in the possession of the Law Society. The Respondent indicated that the amount he charged for sundries was $30. Subsequently, by letter[7] dated 5 November 2008, the Respondent confirmed that the amount charged for sundries was $30. He attached a copy of an invoice, dated 9 January 2008 showing sundries as being $30 of a total of $296.
[7] Exhibit A4 – Letter from the Respondent to Mr Phelps dated 5 November 2008
The invoice[8] attached to the Respondent’s 5 November 2008 letter to the Society is different from the invoice[9] presented to the client. The invoice sent to the Society by the Respondent includes professional fees of $237.50, sundry expenses of $30 and an amount owing of $296 whereas the equivalent amounts in the invoice presented to the client were $380, $60 and $494 respectively. In addition, the invoice attached to the Respondent’s 5 November 2008 letter does not have a “But say” reduction.
The Respondent’s Evidence – The Altered Letter
[8] Ibid, Annexure A
[9] Exhibit A2 - Affidavit of Kellie Swift sworn 6 March 2009, Annexure A
In both his affidavit[10] and in his oral evidence[11], the Respondent admitted that he had deliberately altered the letter and that he had removed the original file copy of the letter and put the altered letter on his file before giving the file to Ms Swift.
[10] Exhibit R1 – Affidavit of the Respondent sworn on 5 May 2009, paras 3-13
[11] Transcript, page 69, 4-8
In his affidavit[12], the Respondent stated that his motivation for recreating the letter and giving the recreated version to the client was only “to calm down the tensions that prevailed in the matter at that time between me and the Queensland solicitors, and to avoid inflaming the situation further”. He thought that by deleting the paragraph, the letter would reflect more positively on the way he had handled the matter rather than highlighting the tension that prevailed between the PBL and himself. He believed that the omission would have no bearing on the conduct of the conveyance. He believed that the only advantage to him would be “the protection of my emotional reputation”.
[12] Exhibit R1 – Affidavit of the Respondent sworn on 5 May 2009, paras 9-10
Under cross-examination, the Respondent said, - “(I) didn’t want the clients to know that I had, you know, some unfriendly or sort of, some hostile. I don’t know what’s the correct word, relationship with the other solicitor. Because they were going and I didn’t want to create further confusion in their minds”.[13]
[13] Transcript, page 81.21-24
He stated[14],“I now realize I hid the full picture of the matter from the client, and his new solicitor. I regret my conduct…. I have learnt a good lesson from my action” and ”as soon as the allegation of ‘reconstruction ‘… was put to me, I admitted to it. During the complaint investigation process the issue of ‘preparing’ the … letter was never put to me as an issue; if I were asked, I would have promptly answered and admitted to my conduct”.
[14] Exhibit R1 – Affidavit of the Respondent sworn on 5 May 2009, para 12-13
Mr Beaumont put[15] to the Respondent that he had regarded the paragraph that was deleted from the letter as alleging, rightly or wrongly, that the Respondent was unfamiliar with Queensland conveyancing practice and that he needed an agent to assist him. The Respondent agreed.
[15] Transcript, page 56.11
Mr Beaumont then put[16] to the Respondent that he (the Respondent) had believed that PBL were alleging, rightly or wrongly, that the Respondent was not competent to handle Queensland conveyancing transactions. The Respondent’s initial response to this submission was stricken as non-responsive. Mr Beaumont then asked the Respondent if he could remember that he had commenced the stricken answer with the word “yes”. The Respondent agreed that he had answered “yes” but said that he wanted to qualify his answer.[17] The qualification was that he could not know what was in the mind of the author of the PBL letter. The qualification was irrelevant[18]as the question was about the Respondent’s own belief about the letter.
[16] Ibid, page 56.19
[17] Ibid page 58.13-16 and page 59.32-35
[18] Ibid, page 57.12-39 and page 59.26-28
During a lengthy exchange,[19] the Respondent admitted that he thought the PBL letter was “too arrogant”,[20] that he was annoyed and not happy with the relevant paragraph,[21] that it was unnecessary[22] and that it was a slight on his professional abilities.[23] He also agreed that his reply to the PBL letter had been emotive.[24]
[19] Ibid, pages 56-61
[20] Ibid, page 57.3 and page 60.39
[21] Transcript, page 57.33
[22] Ibid, page 60.41
[23] Ibid, page 61.1
[24] Ibid, page 61.8
The Respondent agreed that for his clients to want to take the file to another solicitor, they must have lost confidence in him.[25] He acknowledged that the client’s partner was angry with him,[26] dissatisfied with his services and felt that they hadn’t got value for their money.[27]
[25] Ibid, page 66.4-7
[26] Ibid, page 66.38 and page 68.10
[27] Ibid, page 68.37-41
In his oral evidence, the Respondent denied that he knew that his client was engaging another solicitor to work on the conveyance. However, in his affidavit, the Respondent stated, “I knew the omission could not in any way mislead the client or the new solicitor in relation to the smooth continuation of the matter, or the new solicitor’s acting on [sic] the client…”[28] The Respondent’s explanation of the apparent contradiction between the statement in his affidavit and his oral evidence was that when he wrote his affidavit, he knew that the clients had engaged another solicitor because the new solicitor was mentioned in the Society’s application.
[28] Exhibit R1 – Affidavit of the Respondent sworn on 5 May 2009, para 10
Mr Beaumont submitted that the words “I knew” in the affidavit referred to the Respondent’s state of mind when he altered the letter. The Respondent agreed with this but still cavilled about whether he knew there was a new solicitor involved at the time.[29] The Tribunal finds that the Respondent knew, when he handed his file to Ms Swift, that the client intended to take the file to another solicitor to complete the conveyance.
[29] Transcript, page 75.44 – page 77.6
The Respondent said that he didn’t volunteer to the Society that he had altered the letter until he was confronted with the allegation because when responding to the complaint, he was addressing the complaint issue by issue. The altered letter was not mentioned in the complaint. He said when the Society asked him about the allegation, he immediately admitted to it.[30] He agreed that he should have disclosed that he had altered the letter rather than wait until he was asked about it and that he had a duty to do so.[31]
[30] Ibid, page 81.43 – page 82.45
[31] Ibid, page 85.15, page 86.14, page 86.32, page 87.3 and page 88.15
In his response to the Law Society dated 18 February 2008, the Respondent wrote that when the client’s partner asked for all the documents, “the full file with all the original documents was immediately given to her”. This was not true. The file contained the altered letter. The Respondent had removed the copy of the original letter from the file. The Respondent agreed that the statement that he had given Ms Swift “the full file with all the original documents” was false.[32]
[32] Ibid, page 97.5-16
Mr Beaumont asked the Respondent if he thought he had misled the Society by not making a disclosure about the altered letter. The Respondent replied that he had always thought that the Society had the two letters and so, could not be misled by his omission.[33] When Mr Beaumont put to the Respondent that the Society did not receive the original letter from PBL until 19 March 2008, a month after his response to the Society the Respondent agreed that there was no objective basis for him to think that the Society knew about both letters.[34]
[33] Ibid, page 89-94
[34] Ibid, page 94.15
When pressed about whether he had turned his mind to the fact that he had not given the original letter to the client, the Respondent said that he couldn’t remember what was on his mind at the time so he didn’t know whether he intentionally or unintentionally failed to disclose the alteration.
The Respondent’s Evidence – Reconstructed Account
In both his affidavit[35] and under cross-examination,[36] the Respondent agreed that he had created a second invoice that differed from the one given to the client.
[35] Exhibit R1 - Affidavit of the Respondent sworn on 5 May 2009, para 20
[36] Transcript, pages 118.39-119.20
In his affidavit, the Respondent said, “After I came back to office (after giving the invoice to Ms Swift) I quickly prepared the 2nd Tax Invoice. I prepared it to be given to the client as I thought I had an obligation to give them another Tax Invoice as the 1st Tax Invoice showed the amount of $494, with a ‘But say’ amount of $296, and the client only paid $266 in cash. Furthermore, I believe during the meeting [Mr Swift] questioned me intently as to why I charged $494 and then sought a ‘But say’ amount of $296. She was hostile and harsh towards me; I wanted to prepare another Tax Invoice to show her and the client the breakdown of the $296. At the meeting I told her I charged her partner for 2.5 hours of work at the rate of $95 per hour (including GST)…”.[37] However, as he never gave this new invoice to his clients[38], the Respondent’s explanation is difficult to accept.
[37] Ibid, para 22
[38] Transcript, page 120.1
The Respondent gave oral evidence to the effect that when he wrote to the Society some months later on 5 November 2008, [39] he honestly believed that the second invoice was a copy of the one he had given to the client. He had forgotten that he had prepared a second invoice. He no longer had his file. He thought that the second invoice was the only invoice, but that he now knew that he had been mistaken.[40]
[39] Exhibit A4 - Letter from the Respondent to Mr Phelps dated 5 November 2008
[40] Transcript, pages 120-122
Mr Beaumont put to the Respondent that when, on 18 February 2008, he responded to the Society’s letter of 6 February 2008, he must have remembered the heated negotiation on 9 January 2008 with the client’s partner over the invoice and amount owing. The Respondent said that when he responded to the Society’s letter, he could remember the conversation with the client and could remember the amount of $296 and the final payment of $266 but as he didn’t have a copy of the original invoice, and he didn’t remember that there were two invoices. He didn’t remember that there were two invoices until the Society’s solicitor gave him a copy of the first invoice.[41] He stated that when he wrote to the Society on 5 November 2008, he had forgotten about having created the first tax invoice and that even when the Society’s solicitor told him that he had charged $60 for disbursements, he did not recall the invoice that showed a charge of $60 for disbursements.[42]
[41] Ibid, pages 122-124
[42] Ibid, pages 125-126
In his letter dated 5 November 2008 to the Society’s solicitor, the Respondent stated, “I can confirm that the amount charged for sundries was $30.00, and not $60.00 as stated by you”.[43] When asked by Mr Beaumont if the words “I can confirm” in a letter to the Society during an investigation should only be used when reasonable steps have been taken to confirm the position, the Respondent did not answer the question.[44] He said that his words indicated that he was very confident[45] about what he was writing and that his confidence arose as a result of him looking at the hard copy of the invoice in his possession.
[43] Exhibit A4 - Letter from the Respondent to Mr Phelps dated 5 November 2008, para 2
[44] Transcript, page 127.41 – 129.4
[45] Ibid, page 128.28
The Respondent agreed that as a matter of practice he always kept a soft copy of all his files. He said it was a straightforward matter for him to open his soft copy file to check it but that when he responded to the Society, he had checked his hard copy documents and not the file on his computer.[46] The Respondent disagreed that it was reckless to have failed to check his soft copy file because he checked his hard copy file.[47]
The Law Society’s Submissions
[46] Ibid, page 129.6 – 130.5
[47] Ibid, page 131.29-45
Mr Beaumont submitted that the Respondent’s alteration of the letter and the placement of the altered letter on the file constitute professional misconduct.[48] He submitted that the Tribunal should find that the Respondent’s motivation for altering the letter was to avoid highlighting an allegation of incompetence to angry and disgruntled clients.[49]
[48] Ibid, page 133.38
[49] Ibid, page 133.41-134.8
He characterized it as an act intended to deceive the client by concealing or drawing attention away from, allegations of incompetence.[50]
[50] Ibid, page 134.36
In relation to particular 3.3 and the reconstructed account, Mr. Beaumont submitted that the Respondent’s representations about the account were deliberately false and intended to mislead.
He submitted that the Tribunal should reject the Respondent’s evidence about his motivation in relation to the altered letter and his evidence that he had made an innocent mistake in relation to the account for the following reasons:
(i)the Respondent was first required to recall what had happened, shortly after 6 February 2008 - only about four weeks after the meeting with Ms Swift relating to payment of the account and the handing over of the file. At the time the Respondent prepared his response to the Law Society, on 18 February, these were relatively recent events. The Respondent’s own evidence was that there was a heated discussion about costs. It is unlikely that the Respondent would forget the conversation and the actions he took as a result, in a hurry;
(ii)re-doing a tax invoice is, Mr. Beaumont submitted, an extraordinary thing, not likely to be forgotten by the Respondent, either on 18 February 2008 when responding to the complaint or when asked about the account in October 2008;[51]
(iii)the manner in which the Respondent gave evidence was such that his evidence should be regarded as unreliable.
(iv)on his own admission, the Respondent had deliberately altered the letter;
(v)in a previous matter involving the Respondent, he was found to have filed documents showing that he was not the solicitor on record for an applicant in proceedings when in fact, he was, That finding goes to the Respondent’s truthfulness even there was also a finding that he had no intention of misleading the court.[52]
[51] Ibid, page 136
[52] Ibid, page 136.28
Mr Beaumont referred the Tribunal to the decision of the NSW Court of Appeal in Re Mayes and the Legal Practitioners Act ([1974] 1 NSWLR 19.) in support of his submission in relation to ground 3.3.
Although the facts were different to the current matter, the decision contains some useful principles. The case involved two partners of a law firm whose relationship was so acrimonious that they worked from different offices in different parts of the city. One partner took responsibility for keeping the accounts. The other partner, Mr Mayes, did not know that his partner was misappropriating funds from the Trust Account. It was found that Mr Mayes failed to look at ledger cards to verify information provided to him by his partner concerning the transfer of a large sum of money. The failure constituted a wilful failing and wilful default of trust accounting provisions. Mr. Beaumont submitted that the Respondent had the same duty of candour to the Society and that failing to check the copy of the tax invoice on his soft copy file was a reckless disregard of his obligations to disclose.[53]
The Respondent’s Submissions
[53] Ibid, page 136.33 – 137.9
The Respondent submitted that the Tribunal should find that his conduct was neither professional misconduct nor unsatisfactory professional conduct and that the application should be dismissed.[54]
[54] Ibid, page 144.21
In relation to particular 3.2 the Respondent re-iterated his admission that he had altered and substituted the letter but urged the Tribunal to find that in doing so, he had not intended to deceive the client but rather intended only to calm things down and to protect his personal or emotional reputation. He said that the evidence did not support the motive that the Law Society ascribed to him. The Respondent said that if he had wanted to hide the fact that PBL had accused him of incompetence, he would have removed PBL’s letter and his response from the file altogether before giving it to Ms Swift.
The Respondent described the alteration and substitution of the letter as stupid however, he said he had he had not benefited from the actions and the client had not suffered a detriment, and therefore his behaviour was not of the degree of seriousness that warranted a finding of professional misconduct. Indeed, it was not so serious as to warrant a finding of unsatisfactory professional conduct.
He submitted that the letter he had written to PBL was his letter and that once the client had terminated his retainer, he was entitled to change it.
In regard to the reconstructed tax invoice, the Respondent submitted that, although Mr. Beaumont said his conduct was deliberate or reckless, “I very clearly showed that on 5 November when I wrote that letter, that is the absolute, honest, genuine opinion I had because I never had that first tax invoice in my file. The Law Society should have given me that tax invoice, the first tax invoice, then there was no dispute”. He also said, “With regard to that allegation, what I can say, at Woodstock, I always [had] in mind that she paid me $266. She paid me $266 and here I have a tax invoice for $266, so that matches”.[55] The Tribunal notes that the invoice that the Respondent says was on his hard copy file was for a total of $296, not $266 and that the only invoice which contained the $266 was the original on which “266 Paid in cash” had been hand written.
[55] Transcript, page 141.39
The Respondent agreed with the President’s summation that the submission he was making was that his “failure to go to look at the soft copy in the computer…. was neither deliberate, problematic nor reckless. It wasn’t a reckless thing to do”.[56]
[56] Ibid, page 142.35
In discussing what ‘reckless’ means, the Respondent submitted that reckless was more serious than negligence so it required a high standard of proof. He said that his failure to go to his computer file after the issue was raised by the Society’s solicitor was not reckless because he had the copy of the second invoice on his hard file and he was entitled to rely on it.[57]
[57] Transcript, page 143.1-11
The Respondent relied on his immediate acceptance of the two invoices when the solicitor for the Law Society brought them to his attention as support for his proposition that he had made a simple mistake and that he did not seek or intend to be duplicitous. Again, he submitted that the failure to disclose the reconstruction of the account (and the reconstruction itself) caused no detriment to the client. He asserted that the ordinary Canberra citizen would not think that his actions were serious although he did not indicate the basis for this opinion.
The Respondent re-iterated his submission that a solicitor is entitled to do what he wants in relation to his own document, including altering accounts. This submission misses the point that ground 3.3 relates to representations made about the account and not to the act of reconstructing the account.
He referred the Tribunal to several authorities none of which were of particular relevance to his case.
Findings
The Altered Letter
The Tribunal makes the findings that follow.
The Respondent altered the file copy of a letter he had sent to another solicitor and placed the altered letter on his file in substitution for the real letter before handing the file to Ms Swift. The Respondent’s evidence to the Tribunal on this point was consistent and clear.
The altered letter was held out by the Respondent to be a true copy of the original to the extent to which Ms Swift and the client were told that they had been given the documents that constituted the Respondent’s file.
The alteration and substitution were deliberate acts. The Respondent’s evidence about the way in which he created the altered letter and placed it on the file makes that clear.
The Respondent made the alteration and substitution because he did not want his client to see what he had written to the other solicitor. The Respondent gave evidence to this effect.
The Respondent’s actions were intended to give the client an impression that was different from the truth, in other words, a false impression. The actions must be characterised, as actions intended to mislead and deceive the client, regardless of the reason for the actions or the Respondent’s motivation. The Tribunal is concerned that the Respondent does not appear to understand that this constitutes deceit. In asserting that his intention was not to deceive but rather to calm tensions, the Respondent conflates intention and motivation. He focuses on the end he wished to achieve - an easing of tension and protection of his emotions – and overlooks that the means he chose to achieve the end involved a deceit.
Although the client became aware of the deceit and was not misled in the long term, he was misled about the nature and extent of the correspondence between the Respondent and PBL for a short period.
The Tribunal acknowledges that the alteration was minor in nature. The alteration itself was not skilful. The Tribunal accepts that the client did not suffer any loss or detriment as the result of the alteration. The alteration did not and was never likely to bring the Respondent any benefit. As the Respondent submitted, he gave the client the original letter from PBL with its inference that the Respondent did not know what he was doing and needed an agent to help him. He did not seek to hide that letter or remove that letter from the file. These things do not make the Respondent’s conduct any less deceitful.
On balance, the Tribunal finds that the Respondent’s actions were at least partially driven by a desire to minimise the conflict between him and PBL and to draw the client’s attention away from PBL’s suggestion that he did not know what he was doing. He may also have desired to calm tensions as he submits, but it is not clear how he thought that the alteration would do that. The Respondent’s evidence about his motivation was weakened by the manner in which he gave his evidence. He was unconvincing.
The Tribunal rejects the Respondent’s submission that he was entitled to do what he wanted with the letter and entitled to alter it if he wished, because it was his document and the client had terminated his retainer. While it may be true that a lawyer can do some things with his own documents, such an “entitlement” does not extend to holding out that an altered document is a true copy of the original. Again, the Tribunal is concerned that this submission suggests that the Respondent does not understand that his actions involved deceit.
The Tribunal is satisfied that the statement made by the Respondent in his letter to the Law Society of 18 February 2008, to the effect that the client had been given the full file with all the original documents, was a misleading statement that was intended to continue the deception. The Respondent agreed that the statement was false but downplayed any suggestion that it was also misleading and deceptive. We accept that the letter was written sufficiently soon after the event for the Respondent to have remembered what he had done. Altering and substituting a file copy of a letter is not a commonplace event that is easily forgotten, even in the rush of a busy practice. The Respondent described the distressing meeting with Ms Swift confidently and clearly in his oral evidence over 12 months after the event. He described the steps he had taken to alter the letter. We do not accept that he had forgotten or overlooked the alteration and substitution when writing to the Law Society approximately 6 weeks after the event. Seen in that context, the positive and clearly expressed assertion that the client had the full file with all original documents was neither open nor frank.
The Tribunal finds that particular 3.2 is made out. The Respondent’s conduct in relation to the altered letter was both misleading and deceptive and a breach of rule 39.1.
The Tribunal is comfortably satisfied that the Respondent’s conduct should be characterised as being at the higher end of unsatisfactory professional conduct. It falls short of the standard of diligence that a member of the public is entitled to expect of a reasonably competent practitioner. The element of deception of both the client and the Law Society adds to the seriousness of the conduct.
The Tribunal acknowledges that the Respondent admitted that he had altered the letter but, the credit that should be given to him for that, is somewhat countered by the fact that his admission came once the alteration was obvious and was put to him by the applicant. It could not be described as a voluntary disclosure.
The Tribunal considered whether the deceit was so significant that it should be characterised as disgraceful conduct justifying a finding that the Respondent is not a fit and proper person to practice law. That is the most serious finding that should be reserved for the most serious of conduct. While there was deceit, and the Respondent’s apparent failure to recognise it is worryingly deficient, we are not satisfied that the deceit was of such a nature and perpetrated at such a level that it is a finding that could be made.
The Reconstructed Account
Particular 3.3 as amended alleged, “the Practitioner deliberately or recklessly made misleading representations to, and deliberately attempted to mislead and deceive, the Tribunal and the Society after the filing of the Application with the Tribunal by:
(a)falsely representing to the Society by his letter dated 5 November 2008 a reconstructed account as genuine, when in truth the Practitioner had deliberately reconstructed the account so that it differed from the account which he had in truth presented to his clients for payment, and against which his clients had paid him, in significant respects and, in particular, as to the amount of sundry expenses;
(b)falsely representing to the Society, by his letter dated 5 November 2008, that he had charged his clients $30 for disbursements, when in truth he had charged them $60;
The Respondent admits that he reconstructed the tax invoice he gave to the client shortly after the original account was given to the client. His evidence explaining why he re-created the account was confused. At paragraph 22 of his affidavit he said that he prepared it because he thought he had an obligation to provide the corrected invoice to the client. He agreed in cross-examination that he had not done so and there was no evidence of any attempt to do so.
During cross-examination he said that he had reconstructed the invoice to reflect the amount the client actually paid. However, it doesn’t.
The reconstruction is not adequately explained. The Tribunal was left with the impression that the Respondent’s understanding of accounts and tax invoices was rudimentary. But it is not the fact of the reconstruction that is the basis of the charge in particular 3.3. The charge relates to what the Respondent told the Law Society and, because this application was on foot at the time; the Tribunal, about the account.
The Respondent was adamant that when he wrote to the Law Society on 5 November 2008, he genuinely believed that the reconstructed account was a true copy of the original account. There was no deliberate misrepresentation. With the passage of time and the pressure of business, he said he had forgotten about the account given to the client. He believed that the hard copy reconstructed account in his possession was the original.
While the way in which the Respondent gave his evidence generally was unsatisfactory, the evidence falls short of allowing the Tribunal to be comfortably satisfied that the Respondent’s representation about the account was deliberately misleading. The Tribunal accepts that he genuinely believed what he had said in his letter.
Particular 3.3 charges in the alternative that the Respondent’s representation was reckless. The duty of candour imposed on a legal practitioner in the context of the investigation of, or an action about a complaint is so significant that a practitioner should be thorough in his approach to responding to a complaint.
Mr Beaumont submitted that it was, in that context, reckless of the Respondent not to check his soft copy files to see what account if any, was saved. The Respondent submitted that he was entitled to rely on the hard copy file and that it was not reckless to fail to check the soft copy files on the chance that it might contain something different.
The Tribunal accepts that the Respondent’s position is reasonable. The legal profession still predominantly regards and relies on hard copy files as the repository of the authoritative record. We are not satisfied that a failure to go behind a hard copy record, in the absence of something to alert a practitioner to the possibility that the hard copy file might be different from the soft copy file, should be characterised as reckless and a breach of professional obligation.
The Tribunal finds that the charges in particular 3.3 are not made out.
Conclusion
The application will be re-listed for submissions about the penalty that should be imposed as a result of the finding that the Respondent’s behaviour constitutes unsatisfactory professional conduct.
………………………………..
Ms L. Crebbin
General President
PUBLICATION DETAILS
TO BE PUBLISHED
To be completed by Tribunal Staff
PART A
FILE NUMBER: | LP 5 of 2008 |
PARTIES, APPLICANT: | THE LAW SOCIETY OF THE ACT |
PARTIES, RESPONDENT: | THE LEGAL PRACTITIONER |
COUNCEL APPEARING, APPLICANT | N/A |
COUNCEL APPEARING, RESPONDENT | N/A |
SOLICITORS FOR APPLICANT | |
SOLICITORS FOR RESPONDENT | |
TRIBUNAL MEMBERS: | MS CREBBIN, GENERAL PRESIDENT |
DATES OF HEARING: | 28 & 29 May 2010 |
PLACE OF HEARING: | CANBERRA |
PART B
RECOMMENDATION:
FULL REPORT ( ) CASE NOTE ( ) UNREPORTED DECISION ( )
COMMENTS:
[5]
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