Victorian Legal Services Commissioner v Horak
[2016] VSC 780
•15 December 2016
| IN THE SUPREME COURT OF VICTORIA | Not Restricted |
AT MELBOURNE
COMMON LAW DIVISION
CIVIL LIST
S CI 2015 03280
| VICTORIAN LEGAL SERVICES COMMISSIONER | Plaintiff |
| v | |
| JAN ANTONIN ALOIS HORAK | Defendant |
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JUDGE: | McMillan J |
WHERE HELD: | Melbourne |
DATE OF HEARING: | 7 November 2016 |
DATE OF JUDGMENT: | 15 December 2016 |
CASE MAY BE CITED AS: | Victorian Legal Services Commissioner v Horak |
MEDIUM NEUTRAL CITATION: | [2016] VSC 780 |
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LEGAL PRACTITIONERS — Disciplinary proceedings — Roll of practitioners — Where plaintiff regulator brought charges against defendant lawyer in the Victorian Civil and Administrative Tribunal — Where Tribunal recommended defendant be removed from the roll — Whether defendant should be removed from the roll — Whether defendant a fit and proper person — Protection of the public and public confidence in the courts and the administration of justice — Legal Services Board v McGrath (2010) 29 VR 325 — Legal Profession Uniform Law (Victoria), s 23
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APPEARANCES: | Counsel | Solicitors |
| For the Plaintiff | Ms L Hannon | Victorian Legal Services Board & Commissioner |
| For the Defendant | No appearance | — |
HER HONOUR:
Introduction
The plaintiff filed an originating motion and summons on 24 June 2015 seeking, inter alia, that the defendant’s name be removed from roll of persons admitted to the legal profession maintained by the Court (‘the roll’).
The present proceeding has arisen from a decision made by Member Wentworth of the Victorian Civil and Administrative Tribunal (‘the Tribunal’) on 13 May 2014 in which the Member:
(a) found the defendant guilty of seven charges of professional misconduct and one charge of unsatisfactory conduct;
(b) cancelled the defendant’s practising certificate effective from 13 May 2014;
(c) disqualified the defendant from being granted a local practising certificate until 13 May 2020, and made a condition of any such certificate that it be an employee practising certificate for a period of six years; and
(d) made a recommendation to this Court that the defendant’s name be removed from the roll.[1]
[1]Legal Services Commissioner v Horak (Legal Practice) [2014] VCAT 539 (13 May 2014) (‘Tribunal’s Reasons’).
Preliminary matters
Effects of legislative change
On 1 July 2015, after this proceeding had commenced, the name of the plaintiff was changed, following the commencement of Part 3, Division 3 of the Legal Profession Uniform Law Application Act 2014 (‘the 2014 Act’). The plaintiff is now known as the Victorian Legal Services Commissioner. The plaintiff sought leave to amend the title of this proceeding accordingly, which leave was granted at the hearing of the application on 7 November 2016.
Counsel for the plaintiff also drew the Court’s attention to a further consequence of the commencement of the 2014 Act. Counsel for the plaintiff succinctly explained the present position thus:
At the date of commencement of the proceeding, Rule 3 provided for the making of this application to the Court consequent upon an order having been made by the Victorian Civil and Administrative Tribunal (‘the Tribunal’) under section 4.4.17(a) of the Legal Profession Act 2004 (‘the 2004 Act’), recommending that the name of a practitioner be removed from the local roll.
At the date of commencement of this proceeding, applications for removal from the roll upon referral from the Tribunal were made inviting the exercise of the Court’s inherent jurisdiction.
However, it is also noted that following the commencement of the 2014 Act and, in particular, Schedule 1 of the Act (the Legal Profession Uniform Law or ‘LPUL’) on 1 July 2015, Parliament has conferred express statutory power on the Court pursuant to s 23 to order removal from the roll in the same circumstances.
Section 23(1) of the LPUL provides as follows:
The Supreme Court may order the removal of the name and other particulars of a person from the Supreme Court roll, on –
(a) its own motion;(b)the recommendation of the designated local regulatory authority; or
(c) the recommendation of the designated tribunal.
For the purposes of that section, the Victorian Legal Services Board is the ‘designated local regulatory authority’, and the Tribunal is the ‘designated tribunal’.
In those circumstances, the orders sought by the plaintiff may be made in either the exercise of the Court’s inherent jurisdiction or, in this case, on the recommendation of the Tribunal pursuant to s 23(1)(c) of the LPUL.
It is submitted that in either case, the relevant test to be applied by the Court in exercising its discretion to remove a person from the roll is the same. The test, and its application in this case, is set out below. In short, the Court is called upon to determine whether the defendant is now a fit and proper person to remain on the roll. The plaintiff contends that he is not.
In short, the Court now has the power to remove the defendant from the roll:
(a) in the exercise of its inherent jurisdiction; or
(b) pursuant to section 23(1) of the Legal Profession Uniform Law (Victoria).[2]
Service on the defendant
[2]The Legal Profession Uniform Law (Victoria) is contained in Schedule 1 to the 2014 Act and is given effect to by s 4 of that Act.
After filing the summons and originating motion, a number of unsuccessful attempts were made to serve the defendant over a period of several months. Consequently, the plaintiff made an application for substituted service of the originating process and related documents, which was granted by Judicial Registrar Gourlay on 10 May 2016. These orders were then varied by a further order made 13 May 2016. Service in accordance with these orders was confirmed by the affidavit of Michelle Jane Harper affirmed 15 June 2016.
No response was received from the defendant, nor did the defendant take any steps in the proceeding. Accordingly, the matter was listed for directions on 21 July 2016. The defendant did not appear.
On 8 August 2016, orders were made fixing the final hearing of the plaintiff’s summons for 7 November 2016, and requiring the plaintiff to serve a copy of those orders on the defendant on or before 15 August 2016 by:
(a) registered and ordinary post to a specified address:
(b) email to a specified email address; and
(c) SMS to a specified mobile number.
Although the plaintiff was able to serve the defendant by email and SMS in accordance with the 8 August 2016 orders, it was subsequently discovered that the plaintiff had sent the orders to an incorrect postal address. The plaintiff then sent the orders to the correct postal address on 29 August 2016. On application by the plaintiff, the Court made further orders on 8 September 2016 extending the time for compliance with the requirement to serve the defendant by registered and ordinary post to 29 August 2016.
Service pursuant to each of these orders was confirmed by the affidavits of Michelle Jane Harper affirmed 15 August 2016 and 7 September 2016 respectively.
Again, the defendant did not respond to the plaintiff, nor communicate in any fashion with the Court. The defendant also did not appear at the hearing on 7 November 2016.
I am satisfied that all appropriate avenues of service have been complied with by the plaintiff, and that the defendant was given notice not only of the issuing of the proceeding, but also the orders sought, the evidence by which the plaintiff’s application was to be proved, and the date set down for the trial of the proceeding.
From the material contained in the affidavits of service and attempted service, the inference can be drawn that the defendant has evaded service, and has voluntarily chosen not to communicate in any respect with the plaintiff or the Court. For reasons that will become apparent, this is relevant to the Court’s consideration of the plaintiff’s application.
The substantive application
The present application is made pursuant to r 14.13 of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 which provides:
14.13 Removal from Supreme Court roll
(1) If VCAT makes an order under section 302(1)(f) of the Legal Profession Uniform Law (Victoria) recommending that the name of a lawyer be removed from the Supreme Court roll, the Victorian Commissioner (within the meaning of the Act) shall forthwith apply to the Court by originating motion for the Court to determine whether the name of the lawyer should be removed from the Supreme Court roll.
The plaintiff conducted seven disciplinary investigations into the professional conduct of the defendant pursuant to Part 4 of the Legal Profession Act 2004 (‘the Act’). As a result of those investigations, on 2 October 2012 the plaintiff filed an application against the defendant in the Tribunal.
Approximately one year later, the plaintiff filed an amended application in the Tribunal, which alleged seven separate charges of professional misconduct and one charge of unsatisfactory misconduct under the Act (‘the amended application’). At the hearing of the amended application on 20 and 21 February 2014, the defendant pleaded guilty to each of the eight charges and admitted each of the facts alleged in the amended application.
An application for leave to appeal from the decision of the Tribunal was dismissed by consent on 4 September 2014.
The charges
The Tribunal found the defendant guilty of the following charges:
(a) professional misconduct within the meaning of s 4.4.3 of the Act, namely misconduct at common law in that he conducted and concluded settlement negotiations on behalf of his client in circumstances where it was proposed and concluded as a term of the settlement agreement that the disciplinary complaint against him by a legal practitioner be withdrawn, being conduct that would reasonably be regarded by legal practitioners of good repute and competency as dishonourable and disgraceful (‘charge 1’);[3]
[3]Tribunal’s Reasons [46].
(b) professional misconduct within the meaning of s 4.4.4(a) of the Act, in that in the period 16 January 2007 to 14 December 2007, his law practice failed to keep trust records in accordance with s 3.3.25(2) of the Act (‘charge 2’);[4]
[4]Ibid [69].
(c) professional misconduct within the meaning of s 4.4.4(a) of the Act in that the failure of his law practice to furnish to his client a trust account statement from 28 September 2007 to date contravened reg 3.3.28(1) of the Legal Profession Regulations 2004 and thereby s 3.3.14(3) of the Act (‘charge 3’);[5]
[5]Ibid [70].
(d) unsatisfactory professional conduct within the meaning of s 4.4.4(a) of the Act in that his conduct between 20 March 2008 and May 2008, and between 13 March 2009 and 20 June 2009, in failing to provide relevant documents and a statutory declaration in response to a written requirement of the Law Institute of Victoria (‘the LIV’) during the course of an investigation under Division 3 of Part 4.4 of the Act contravened s 4.4.11(1) of the Act (‘charge 4’);[6]
[6]Ibid [71].
(e) professional misconduct within the meaning of s 4.4.4(a) of the Act in that on or about 18 May 2007 a withdrawal of $49,574.38 was made by him for his law practice’s trust account on account of his law practice’s professional costs, in circumstances where the withdrawal gave rise to a breach by his law practice of s 3.3.14(1) of the Act (‘charge 5’);[7]
[7]Ibid [80].
(f) misconduct at common law in that the defendant’s conduct in:
(i) drawing and sending ‘the 6 October 2008 letter’, making ‘the 8 October 2008 statements’, making ‘the 23 April 2009 statements’; and
(ii) over the period June 2008 to December 2010 repeatedly proposing settlement of the taxation and related proceedings by making offers conditional or subject to the withdrawal of disciplinary complaints;
was conduct (whether considered separately or when taken together) that would reasonably be regarded by legal practitioners of good repute and competency as dishonourable and disgraceful (‘charge 6’);[8]
(g) professional misconduct being conduct in connection with legal practice falling substantially short of the standard of competence and diligence that a member of the public is entitled to expect of a reasonably competent legal practitioner, by persistently failing to comply with court orders without reasonable excuse and repeatedly failing to appear or arrange for another practitioner to appear at hearings (‘charge 7’);[9] and
(h) guilty of professional misconduct within the meaning of s 4.4.4(b) of the Act by charging excessive legal costs in connection with the practice of law (‘charge 8’).[10]
[8]Ibid [104].
[9]Ibid [122].
[10]Ibid [137].
The facts admitted by the defendant and which form the basis of these charges were comprehensively set out in Tribunal’s Reasons. It is necessary to briefly set out some of the background to each charge in order to convey the full picture of the defendant’s impugned conduct.
Charge 1
The defendant was engaged to represent a Mrs Ginzburg in proceedings brought against her in the County Court. During that proceeding, Mr Helman, the legal practitioner for the opposing party, made a disciplinary complaint against the defendant regarding the defendant’s conduct during the course of the proceeding (‘the Helman complaint’).
Settlement negotiations were initiated, in which the defendant negotiated on behalf of Mrs Ginzburg. An agreement was reached, a term of which was that the Helman complaint would be withdrawn. Mr Helman did indeed write to the plaintiff to withdraw the complaint. However, the plaintiff informed Mr Helman that, notwithstanding the withdrawal of the complaint, the plaintiff would continue to investigate the defendant’s conduct under s 4.4.8 of the Act.
Charges 2, 3 and 4
Charges 2, 3 and 4 arose from a complaint made by Dr O’Sullivan about the legal costs charged by the defendant. The defendant had acted for Dr O’Sullivan in a number of proceedings between January and September 2007. Dr O’Sullivan was subsequently represented by Galbally & O’Bryan, who sought to obtain from the defendant all bills of costs and a trust account statement relating to Dr O’Sullivan.
The defendant did not provide the documents requested, nor did he provide Dr O’Sullivan with a trust account statement as soon as practicable after the end of the retainer, thereby breaching reg 3.3.28 of the Regulations.
The defendant also failed:
(a) to keep a separate trust account ledger for Dr O’Sullivan in breach of reg 3.3.17; and
(b) failed to carry out monthly reconciliations of the trust records regarding that trust account between January and December 2007 in breach of reg 3.3.19.
On 21 December 2007, the LIV requested the defendant provide a proper accounting of the fees charged to, and the money paid by, Dr O’Sullivan, and a statement of account. A response was required of the defendant within sixteen days. The defendant did not respond. The LIV sent further letters to the defendant on 23 January 2008, 26 February 2008 and 3 March 2008.
On 20 March 2008, the defendant responded to the LIV, enclosing a number of bills of costs. These could not be reconciled by the LIV investigator with the payments made by Dr O’Sullivan to the defendant.
In May 2008, the defendant provided a further invoice, dated 28 January 2008, to the LIV investigator (‘the January invoice’). The prior failure to produce this invoice constituted a breach of s 4.4.11(1)(b) of the Act.
Accordingly, on 24 February 2009, the plaintiff wrote to the defendant requiring an explanation verified by statutory declaration regarding various matters concerning the late production of the January invoice within sixteen days. When the defendant failed to respond, a further letter was sent by the plaintiff in April 2009 advising that the defendant’s failure to respond may amount to professional misconduct. The defendant responded in June 2009, providing a written explanation, which was not verified by statutory declaration. The defendant instead sought to have the plaintiff justify the request for verification by statutory declaration. By failing to provide the statutory declaration the defendant breached s 4.4.11(1)(b) of the Act.
Charge 5
The defendant was engaged to represent Mr Crosswell in relation to:
(a) patent litigation in Western Australia (‘the patent litigation’); and
(b) finalising a workers compensation claim with Mr Crosswell’s employer’s work cover insurer (‘the compensation claim’).
The settlement of the compensation claim included payment of an agreed sum, and payment of Mr Crosswell’s costs, which were to be assessed.
Section 3.3.14(1) of the Act requires a law practice to hold trust moneys deposited in the trust account exclusively for the benefit of the person on whose behalf it was received and disburse it only in accordance with the direction of, in this instance, Mr Crosswell. However, when the defendant received a settlement cheque from the insurer for $58,500, the defendant deposited the cheque into the trust account and wrote to Mr Crosswell:
(a) advising that he had deducted from the settlement sum $49,574.38, said to be the defendant’s professional costs and disbursements regarding the patent litigation; and
(b) enclosing for the first time his bill of costs for the patent litigation for the period 1 January 2007 to 5 May 2007.
Accordingly the defendant breached ss 3.3.14(1) and 3.3.20(1)(b) of the Act, as well as reg 3.3.34 of the Regulations.
Charges 6 and 7
Charges 6 and 7 arise from conduct of the defendant in the course of a dispute between the defendant and Mr Crosswell regarding the fees charged by the defendant for the patent litigation.
In essence, charge 6 arises from what the Tribunal, in my view correctly, described as ‘extraordinary’ statements made by the defendant between 2008 and 2010 in settlement negotiations of the fee dispute with Mr Crosswell.
Charge 7 arises from an investigation conducted by the plaintiff upon referral from Wood AsJ, upon the repeated failure of the defendant to comply with court orders made during taxation proceedings and repeated failure to appear or to arrange for a practitioner to appear.
The defendant commenced proceedings in the Magistrates’ Court in January 2008, seeking payment of alleged outstanding legal fees from the patent litigation of $44,657.19.
Mr Crosswell commenced taxation proceedings in the Supreme Court in March 2008 against the defendant and the defendant’s firm.
Both proceedings, amongst other disputes between the defendant and Mr Crosswell, were ultimately settled in December 2010 on the basis that the defendant would pay Mr Crosswell $85,000.
By June 2008 the defendant had become aware that Mr Crosswell had made a complaint to the plaintiff about the defendant’s conduct in both the compensation claim and the patent litigation. On 2 June 2008, the defendant wrote to Mr Crosswell’s lawyers, Heath Legal, offering to accept $40,969.95 in settlement of the costs dispute on the condition that all proceedings and complaints were withdrawn.
On 6 October 2008, the defendant sent another letter to Heath Legal (‘the 6 October 2008 letter’). A sample of the statements contained in that letter is contained in the Tribunal’s Reasons. In essence, the letter suggests that Mr Crosswell dishonestly obtained and continued to receive WorkCover payments. The letter also suggests that the defendant has in his possession material to prove this that ‘may’ need to be reported to the Victorian WorkCover Authority and other ‘relevant authorities’. The letter also observes that Mr Crosswell has ‘proferred a very defamatory and libelous [sic] complaint’ to the plaintiff. Mr Crosswell subsequently made a further complaint to the plaintiff about the 6 October 2008 letter.
On each of the following two days, the defendant then made offers to settle the taxation proceedings by payment to him of, on 7 October 2008, $21,734.70, and, on 8 October 2008, $30,000.
On the afternoon of 8 October 2008, the defendant had a telephone call with Mr Ruschena of Heath Legal, in which the defendant made the ‘8 October 2008 statements’. In summary, the defendant indicated that it would not be in Mr Crosswell’s interests not to accept his offer of settlement, and intimated that he would have to seek a ruling from the LIV as to whether he should report his allegations against Mr Crosswell to the Victorian WorkCover Authority. The offer was not accepted, and the matter proceeded to taxation.
After an adjournment, the taxation proceedings recommenced on 23 April 2009, at which stage the defendant made ‘the 23 April 2009 statements’. These consisted of the defendant reiterating his belief that Mr Crosswell had behaved improperly or illegally with respect to his WorkCover payments, and then indicating to Mr Ruschena that if Mr Crosswell withdrew his complaints to the plaintiff then the defendant would ‘take no further action’.
On 23 April 2009, and on several subsequent occasions, the defendant made a number of further offers to settle, usually on terms which required:
(a) Mr Crosswell to withdraw his complaints to the plaintiff; and
(b) a substantial payment to the defendant.
Charge 7 arises from defendant’s conduct in the taxation proceeding itself. Namely, the defendant’s persistent failure to comply with court orders between June 2008 and August 2010.
Charge 8
The facts underlying charge 8 are slightly unusual, and consist of the defendant charging clients his full professional rate for tasks which were either administrative in nature or should never appear in a bill of costs. For example, the defendant charged clients for:
(a) drawing cheques for Counsel’s fees;
(b) leaving telephone messages;
(c) hand delivering a brief to counsel; and
(d) a parking ticket the defendant received whilst hand delivering the brief.
This is but a brief snapshot of a large number of inappropriate charges to clients.
The defendant’s prior disciplinary history
The defendant signed the roll on 23 February 1988. It was not long thereafter that what would become an extensive disciplinary history began. I adopt the summary of the defendant’s disciplinary history comprehensively set out by the Tribunal.[11]
[11]Ibid [140]–[181].
The Tribunal’s recommendation for removal from the roll
As the plaintiff observed, the Tribunal’s recommendation was based on the admitted conduct, as well as the defendant’s ‘long and serious disciplinary history commencing shortly after he obtained his first practising certificate’.[12]
[12]Ibid [5].
The Tribunal made the following observations about the relevance of the defendant’s prior disciplinary history to the task before it, which the plaintiff submits are also relevant to the present question of whether the defendant is a fit and proper person:
In looking to the future, however, past disciplinary findings may provide useful information about matters including the following:
oa practitioner’s capacity to learn from his or her mistakes, which is relevant to an assessment of character;
othe extent to which past sanctions have deterred the practitioner from re-offending, which is relevant to consideration of specific deterrence in fixing a penalty; and
oany patterns of repeated behaviour, which may be relevant to an assessment of a practitioner’s capacity to understand the requirements of professional practice, and to specific deterrence.
Mr Horak’s past disciplinary history is relevant in each of these respects, in my view.
First, it indicates that Mr Horak has had a limited capacity to learn from his mistakes.
The nature and breadth of the conduct the subject of this proceeding, of themselves raise the issue of whether he has any real understanding of what it is a legal practitioner must and must not do. When put against the background of a past disciplinary history replete with clear statements about what is required, repeated warnings about the consequences of re-offending, and two substantial periods of cancellation, his re-offending strongly indicates a significant defect in character.
Second, his past disciplinary history is highly relevant to specific deterrence and increases its importance here.
Mr Horak’s disciplinary history demonstrates that even two significant periods of disqualification have not been sufficient to deter Mr Horak from re-offending.
The 1990 findings of the Solicitors’ Board and the cancellation of his right to practice as a principal for 6 years and as an employee for 4 years ought to have been enough.
The opportunity Hedigan J gave him in 1995 to resume practise [sic] as an employee, and the observations made by His Honour, ought to have signalled clearly to Mr Horak that he was being given a chance to start afresh, one not to be taken lightly or squandered. The only restriction imposed, that he practise as an employee for two years, was the very one Mr Horak sought to circumvent.
As the Tribunal observed in 1998, almost the only sanction not yet imposed on Mr Horak is a recommendation to the Supreme Court that he be struck off the roll.
Third, in each of his three periods of practice since admission in 1988, Mr Horak has engaged in professional misconduct, most of it serious misconduct. This pattern of behaviour squarely raises the issue of whether he has or will ever have any sufficient understanding of the requirements of professional practice.
Not only has he re-offended, but he has repeated certain categories of conduct;
ovituperative and intemperate letters (1990 and these proceedings);
oimproper attempts to have complainants withdraw disciplinary complaints (1990 and these proceedings); and
oimproper threats in an attempt to persuade another party to withdraw or cease defending proceedings (1990 – threats to Mr Reid, these proceedings – threats to Mr Crosswell).
There is a great deal about the current proceedings that can fairly be described as history repeating itself. Mr Horak has demonstrated a capacity to repeat the very misconduct for which he has previously been sanctioned. This is relevant both to character and to specific deterrence.
There are also elements of the charges in this proceeding which represent a new form of misconduct for Mr Horak – the extraordinary nature of the way in which he overcharged Mr Crosswell and Mr Styles, the repeated failure to comply with Court orders. It is of great concern that by doing so he has expanded the boundaries of his professional misconduct.[13]
[13]Ibid [288]–[300].
The Tribunal had regard to the following factors in considering whether to make such a recommendation to this Court:
oThe misconduct in this case is serious;
oIt demonstrates a fundamental breach of Mr Horak’s professional obligations;
oHis conduct is of such kind that, if tolerated, would bring the legal profession into disrepute;
oThe conduct amounted to an abuse of the privileges which accompany a practitioner’s admission to the Court;
oThere is a need to protect the public from unprofessional practitioners; and
oThe public must be protected from legal practitioners who are ignorant of the basic rules of public professional practise [sic] or indifferent to rudimentary professional requirements.[14]
[14]Ibid [333].
The Tribunal concluded that:
With that in mind, my overall assessment is that Mr Horak has demonstrated over a long period that he lacks some of the essential qualities of a legal practitioner, and either has not learned to acquire them or does not have the capacity to do so.[15]
[15]Ibid [337].
The plaintiff’s submissions
In summary, the plaintiff submitted that:
Six of the 7 professional misconduct charges to which the Defendant pleaded guilty were very serious, going to the heart of his conduct as a legal practitioner, and traversing a great part of the spectrum of possible misconduct. The admitted facts demonstrate breaches the fundamental duties owed by a solicitor to both this Court and the administration of justice more generally, to his clients, and to the Plaintiff in its capacity as the professional regulator.
The plaintiff submitted that the charges could be viewed as falling into three categories:
(a) conduct involving a serious breach of duties owed to the Court and administration of justice (charges 1, 6, and 7);
(b) conduct involving a serious breach of duties owed to a client (charges 2, 3, 5 and 8); and
(c) conduct involving a breach of obligations owed to the plaintiff as professional regulator (charge 4).
The plaintiff further submitted that:
[T]he Defendant’s conduct over an extended period demonstrates egregious breaches of the trust and confidence reposed in him as a legal practitioner. It is wholly incompatible with him holding that office in the foreseeable future. The matters before the Court demonstrate that he lacks not only the requisite knowledge of the duties and responsibilities devolving upon him as legal practitioner, but also the moral integrity and rectitude of character necessary to permit him to be safely accredited to the public as a person to be entrusted with the duties and responsibilities of a barrister and solicitor of this Court (to paraphrase Walters J in Sobey).
This Honourable Court can be satisfied on the balance of probabilities that the Defendant is not now a fit and proper person to be a legal practitioner, and will likely remain so for the indefinite future.
To lend further support to this contention, it is of significance that the orders of the Tribunal have the effect that the Defendant is disqualified from being granted any form of practising certificate until 13 May 2020.
In all of the circumstances, the name of the Defendant ought to be removed from the Roll.
Consideration
The role of the Court on referral
The Court is not bound by the recommendation of the Tribunal, and must conduct its own assessment of the fitness of the defendant to remain on the roll. Bell J explained this position in Legal Services Commissioner v Rushford:
However, only the court possesses statutory and inherent jurisdiction to make a removal order. The court must independently exercise that jurisdiction and, to state the obvious, it is not bound by the tribunal’s recommendation. As we have seen, the court’s inherent jurisdiction to make a removal order is not qualified or limited by the recommendation provisions. As we will see, the court’s statutory and inherent jurisdiction must be exercised on the evidence or other material which is before the court, which may be different to that which was before the tribunal.[16]
[16]Legal Services Commissioner v Rushford (2012) 38 VR 141, 144–5 [13].
In order to exercise its discretion to remove a practitioner from the roll, the Court must be satisfied at the time of the hearing that the practitioner is not a fit and proper person to be a legal practitioner, and is likely to remain so for the indefinite future.
The purpose of such an order, whilst primarily concerned with protection of the public, is also intended to protect public confidence in the profession and the administration of justice more generally. As the plaintiff submitted ‘[a]n unfit practitioner poses a direct risk to the public, to the profession, to the courts, to the system of co-operation and trust on which they depend, and the administration of justice.’
In Legal Services Board v McGrath, Warren CJ explained the rationale thus:
On occasion, the court’s inherent power to discipline members of the legal profession has been mistakenly characterised as simply “protective of the public”, an approach which may gain undeserved strength from the comments of McHugh J in Rich v Australian Securities and Investments Commission. While the authorities indicate that the disciplinary power in question is entirely protective, that protection extends beyond protection of the public to include the legal profession as a group, the courts, the justice system and community confidence in that system. It is for this reason that striking off may follow where a practitioner’s conduct shows “a defect of character incompatible with membership of a self-respecting profession” or where a conviction carries:
such a stigma that judges and members of the profession may be expected to find it too much for their self-respect to share with the person convicted the kind and degree of association which membership of the Bar entails.
However, this protective rationale follows, rather than anticipates, the court’s inquiry. A practitioner is deemed unfit to remain on the roll; therefore, they pose a direct risk to the public, to the legal fraternity, to the courts, to the system of professional cooperation and trust on which they both depend, and to the administration of justice, not vice versa. The fundamental issue is whether the practitioner in question is fit and proper, or not.[17]
[17] Legal Services Board v McGrath (2010) 29 VR 325, 329 [10]–[11] (‘McGrath’) (citations omitted).
The High Court considered the meaning of ‘fit and proper’ in the seminal decision of Hughes and Vale Pty Ltd v New South Wales (No 2):
The expression “fit and proper person” is of course familiar enough as traditional words when used with reference to offices and perhaps vocations. But their very purpose is to give the widest scope for judgment and indeed for rejection. “Fit” (or “idoneus”) with respect to an office is said to involve three things, honesty knowledge and ability: “honesty to execute it truly, without malice affection or partiality; knowledge to know what he ought duly to do; and ability as well in estate as in body, that he may intend and execute his office, when need is, diligently, and not for impotency or poverty neglect it”. When the question was whether a man was a fit and proper person to hold a licence for the sale of liquor it was considered that it ought not to be confined to an inquiry into his character and that it would be unwise to attempt any definition of the matters which may legitimately be inquired into; each case must depend upon its own circumstances.[18]
[18]Hughes and Vale Pty Ltd v New South Wales (No 2) (1955) 93 CLR 127, 156–7 (Dixon CJ, McTiernan and Webb JJ) (citations omitted).
The standard required is amorphous. In Sobey v Commercial and Private Agents Board, Walters J gave some more content to the phrase:
The issue whether an appellant has shown himself to be "a fit and proper person" … is not capable of being stated with any degree of precision. But for the purposes of the case under appeal, I think all I need to say is that, in my opinion, what is meant by that expression is that an applicant must show not only that he is possessed of a requisite knowledge of the duties and responsibilities devolving upon him as the holder of the particular licence under the Act, but also that he is possessed of sufficient moral integrity and rectitude of character as to permit him to be safely accredited to the public, without further inquiry, as a person to be entrusted with the sort of work which the licence entails.[19]
[19]Sobey v Commercial and Private Agents Board (1979) 22 SASR 70, 76 (citation omitted).
The Court does not demand perfection of practitioners. Nor is it particularly helpful to attempt to draw a defining line between conduct which demonstrates that a practitioner is not a ‘fit and proper person’ and conduct which does not—the enquiry is a holistic one which depends on undertaking often a difficult exercise of weighing competence, knowledge, and integrity, amongst other factors. A lack of competence and knowledge may be paired with a great deal of honesty, and vice versa. The disciplinary consequences will naturally differ. As always, the result turns on the facts of the particular case.
The burden of proof
The plaintiff must satisfy the Court to the Briginshaw standard that the defendant is not a fit and proper person to remain on the roll, and is likely to remain so for the indefinite future. As Warren CJ observed in McGrath:
As was set out in Briginshaw v Briginshaw, that standard is not a fixed or simple one, but depends upon the matters before the court. While the onus of proof is a civil one, the court approaches the making of such decisions with caution and “meticulous care”, and with a great appreciation for “the possibly disastrous consequences of disbarment to the individual concerned”.[20]
[20]McGrath (2010) 29 VR 325, 329 [9] (citations omitted).
This standard was described by Dixon J in Briginshaw v Briginshaw:
The 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. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences.[21]
[21]Briginshaw v Briginshaw (1938) 60 CLR 336, 362 (‘Briginshaw’).
Nonetheless, the defendant’s failure to engage with these proceedings or to contact the plaintiff or the Court in any respect is a relevant consideration for the Court. As was explained by the New South Wales Court of Appeal in Prothonotary of the Supreme Court of New South Wales v Nikolaidis:
In circumstances where the respondent chooses not to come forward to assist by giving evidence in the disciplinary proceeding, the failure to provide an exculpatory statement or explanation means that inferences from proved facts can be drawn more safely because the defendant has failed to give any explanation of matters peculiarly within his knowledge. Similarly, in the context of assessing whether reformation may or may not have occurred, in circumstances where the respondent does not give evidence, it is difficult to see how it can be concluded that the reflection upon the underlying character of the respondent by the commission of a planned offence of dishonesty does not reflect on him over ten years later.[22]
[22]Prothonotary of the Supreme Court of New South Wales v Nikolaidis [2010] NSWCA 73 (12 April 2010) [25] (Allsop P, McColl and Young JJA) (citations omitted).
Referring to this extract, Warren CJ made the following observations in Legal Services Board vMcGrath (No 2):
The first of these points is apposite to the instant application. I have only had the benefit of the submissions of the plaintiff and must proceed accordingly. I am more circumspect with respect to the final sentence set out above. The reasons for not attending a hearing of this nature, arising out of offences of this type, may be manifold. The court should be slow to draw any conclusive inferences from such a decision. It may result from a disregard for a lawyer’s obligations to the court, equally it may be the result of shame. In a case in which no effort has been made to contact the court in any fashion, I am more inclined to believe that it is the result of something approaching the former of these two concepts. At the very least, it bespeaks a disturbing degree of indifference to the seriousness of the application which I am required to decide upon. It suggests that that individual does not properly understand or take seriously their obligations of candour to the court, or value sufficiently the benefits and trust conferred on them by being placed on the roll, to overcome whatever reluctance they may feel to appear before the bench, brief another practitioner to make submissions on their behalf, or at least contact the court to explain their decision not to appear in any capacity.[23]
[23]Legal Services Board vMcGrath (No 2) (2010) 29 VR 325, 339 [21] (emphasis added).
Her Honour concluded as follows:
The defendant has displayed a continuing lack of candour to both this court and the plaintiff. He has failed to involve himself in these proceedings in even the most minimal fashion. The presumption of his unfitness having been raised by his conduct, only his appearance before this court to explain that conduct and his behaviour since it occurred could preclude me from regarding him as presently and indefinitely unfit to remain on the roll. His unwillingness or inability to do so indicates a fatal lack of understanding or capacity to fulfil his obligations towards this court, the profession and the general public as a legal practitioner and as an officer of the court.[24]
[24]Ibid 341 [27].
In Stanoevski v Council of the Law Society of New South Wales, Campbell JA explained how taking such considerations into account is not an impermissible reversal of the onus of proof:
The starting point of one strand of the reasoning of the Appeal Panel was that the actions of the Appellant that were the subject of the information were all acts of serious professional misconduct. The next step was that the collective effect of the acts of professional misconduct was that, as at the time the last of them had been committed, the Appellant was not fit to remain on the roll. That conclusion was not argued against, nor could it be. I accept that the Appeal Panel then looked to see whether the Appellant had provided any basis for the Appeal Panel believing that the situation had changed. The Appeal Panel was not satisfied that any such basis existed.
In my view, in proceeding in this way the Tribunal was not improperly casting an onus of proof onto the Appellant. All it was doing was recognising that the proved facts of the various acts of professional misconduct led to the Appellant being under an onus of adducing evidence. That is an entirely proper way of proceeding. In Johns v Law Society of NSW [1982] 2 NSWLR 1 Moffit P (with whose reasons Hope JA agreed) dealt with a situation where a solicitor had engaged in acts of professional misconduct some years before proceedings for his removal were heard. He said, at 9-10:
Where there is misconduct prima facie requiring at that time a striking off order on the basis of then unfitness, the substance of the question whether when the matter comes for decision some years later is not dissimilar to the question arising upon an application for re-admission, namely whether it appears that there is material before the court to lead it to conclude that the past proved unfitness has been changed to fitness. The ultimate onus is on the Law Society, but where there is admitted professional misconduct and a claim of rehabilitation or of fitness replacing unfitness, the court will look to what evidence there is to establish this change and will expect he who claims there is such a change to point to the evidence that there is.[25]
[25]Stanoevski v Council of the Law Society of New South Wales [2008] NSWCA 93 (14 May 2008) [59]–[60].
Returning to the judgment of Warren CJ in McGrath, these considerations do not alter the requirement that the Court satisfy itself to the Briginshaw standard:
The court did not have the benefit of the defendant’s appearance at the hearing of the application. On one view, this is a breach, and a potentially serious one, of the defendant’s obligation of candour to the court. The charges are serious, as is the application. In light of those facts, the court would expect the practitioner to appear to defend, or at least try to explain, the convictions out of which this application arises and his continuing fitness and properness to remain on the roll. As Pagone J observed in Frugtniet v Board of Examiners:
A legal practitioner, upon being admitted to practice, assumes duties to the courts, to fellow practitioners, as well as to clients. At the heart of all those duties is a commitment to honesty and, in those circumstances, when it is required, to open candour and frankness, irrespective of self interest or embarrassment.
However, the onus is on the plaintiff to prove that the defendant is not a fit and proper person. The question remains: has it satisfied that onus to the Briginshaw standard?[26]
[26]McGrath (2010) 29 VR 325, 332 [26]–[27].
Of course, even had the defendant consented to the plaintiff’s application, that would not have absolved the Court of its responsibility to conduct the present enquiry.[27] Nonetheless, the authorities, as well as the natural process of fact finding, indicate that a defendant’s voluntary failure to appear or attempt to refute the plaintiff’s application, is a relevant factor in the Court’s analysis.
[27]See, eg, Legal Services Commissioner v Rushford (2012) 38 VR 141.
Conclusion
The undisputed conduct is serious. In particular, charges 1 and 6 are of a most serious and reprehensible kind. I agree with the Tribunal that charge 1 can be ‘characterised as conduct that would be regarded as disgraceful and dishonourable by legal practitioners of good repute and competency.’[28] The facts forming the basis of charge 6 are truly extraordinary. Again, I refer to the findings of the Tribunal:
On any view, it is extraordinary behaviour by a legal practitioner. It shows, in my view, a profound lack of understanding of what a legal practitioner must not do. It also shows a disturbing lack of understanding of what is proper for any person to do. It would be serious enough if such a threat were made by a layperson. It is much more serious for such a threat to be made by a lawyer to his former client, and in the context of taxation or any other proceedings.[29]
[28]Tribunal’s Reasons [53].
[29]Ibid [107].
None of the above should in any way be seen to diminish the seriousness of the other charges found against the defendant.
The defendant’s conduct, both as admitted and as evident from his prior disciplinary hearings, indicates a fundamental lack of understanding of the obligations and duties of a legal practitioner. This lack of understanding extends across a broad range of conduct, and has extended over almost the entirety of the defendant’s legal career. The conduct displayed also indicates a total absence of understanding, if not complete disregard, of a practitioner’s obligations to:
(a) clients;
(b) other practitioners;
(c) the regulator; and
(d) the courts.
The defendant has been sanctioned before, evidently to no avail. The periods of suspension and conditions placed upon the defendant in the past have not, as the various tribunals and courts have hoped, tempered the behaviour of the defendant.
As the plaintiff submitted regarding the reasons of the Tribunal, the Court is ‘not looking back and seeking to inflict further punishment on the defendant, but looking to the future with past experience in mind.’ There is no persuasive evidence to suggest that the defendant will be a fit and proper person at some foreseeable stage in the future. Although I have taken into consideration the references provided in support of the defendant in the course of the hearing before the Tribunal, there is a somewhat disturbing lack of candour in the information provided to certain of these references that strongly suggests the defendant does not have insight into the gravity of his conduct.[30]
[30]See Tribunal’s Reasons [231]–[234] regarding Mr Wray, and [239]–[245] regarding Professor Zablud.
There comes a point where to allow a practitioner to remain on the roll in spite of their behaviour would be to indicate a tolerance or condonation of the impugned behaviour. To do so would bring the legal profession into disrepute. These considerations lead to the conclusion that, at the present time the defendant is not a fit and proper person to remain on the roll, and is unlikely to be a fit and proper person for the indefinite future.
In light of the defendant’s persistent gross departures from the standard expected of a legal practitioner, the only remedy that would sufficiently protect the public and the administration of justice through the maintenance of professional standards and public confidence in those standards is to remove the defendant’s name from the roll.
The personal circumstances of the defendant
The personal circumstances of the defendant are also relevant. From the reasons of the Tribunal and the material put before the Tribunal, I am aware that there are members of the defendant’s family who are dependent upon him. I also understand that the defendant will not be able to continue his notarial work without a practising certificate. However, I am also aware that by the orders of the Tribunal cancelling the defendant’s practising certificate, the defendant will in any event be unable to work as a notary until, at the earliest, 2020.
I also take into consideration the personal circumstances of the defendant at the time of the offending as noted by the Tribunal.[31]
[31]Tribunal’s Reasons [15].
The sanction imposed is not by way of punishment. However, orders intended to protect can have effects that may be punitive to the individual concerned. This is an unavoidable consequence, and does not alter the protective motivation of such orders.
Orders
I will order that the defendant’s name be removed from the roll.
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